Mysuru:  With rules to implement the Debt Relief Act coming into force in the second week of August, setting the stage for its implementation across the State, city pawnbrokers have decided not to return the pledged gold or jewellery until Government compensates their loss.

The decision was taken at the meeting organised by Pawnbrokers and Jewellers Association at Mahaveer Nagar (Halladakeri). It was also decided to put up boards in front of shops showing messages that no jewellery would be returned unless the money that has been handed over to people who have pledged their gold is returned.

Under the Act, introduced by H.D. Kumaraswamy Government, agriculture labourers, landless labourers and small farmers having 2 acres of rain-fed land or less, whose annual income is less than Rs. 1.2 lakh and had taken loan from money-lenders, pawnbrokers or from any other private source, will get relief. It will be only a one-time relief and their loan will be waived off. Under the scheme, lenders would not be entitled for any compensation.

Speaking at the meeting, Pawnbrokers and Jewellers Association State President Mahendra Kumar Vaishnav said that the Karnataka High Court has given interim stay against the Coalition Government’s order. “We have been given justice for which we are happy” he said and added that if the Government does not compensate, the pledged jewellery will not be returned.

“We feel bringing pawnbrokers under the Act is unfair as we have paid licence fees and follow all the procedures laid down by the government. While we charge 14% interest as fixed by the government, there are several Non-Banking Financial Companies that charge up to 36% interest. But they have been exempted from the Act,” he said.

Continuing, he said that pawnbrokers had faced difficulties in conducting business since one month and were facing problems in receiving jewellery. “Now that the Court has given its ruling in our favour, we would receive jewellery from customers and give them loan,” he added.

“We are doing our work lawfully. We too have children and family, the previous Government had ordered us to return the pledged jewellery by going against our business, how right is it as we have invested crores of rupees,” he asked.

Association Secretary Bavarao Kunigal, District President Beraram Solanki, Deepak Jain, Babulal, Himaram, Kesarimal and others were present.

The Karnataka High Court has directed the State Government not to take any coercive action until further orders against pawnbrokers under Section 5 of the Karnataka Debt Relief Act. The Court passed the interim order hearing petitions filed by Karnataka Pawnbrokers’ Association and more than 300 individual pawnbrokers, who have challenged the constitutional validity of the Act.

The petitioners contended that the new Act “has the effect of destroying their business or trade” and their “vested right in the monies owed to them” contrary to the right guaranteed under the Constitution to practice any profession or to carry on any occupation, trade or business.