BANK OF BIHAR vs STATE OF BIHAR & ORS.

The Supreme Court held that the seizure of sugar by the State of Bihar was illegal as it was in the possession of the Bank as a pledgee under the cash credit agreement. The Court emphasized that the Bank had a rightful claim to the sugar and was entitled to recover either the sugar itself or its market value, amounting to Rs. 1,81,700-9-3. The judgment of the Patna High Court was set aside, and the plaintiff's claims were upheld, establishing the principle that a pledgee's rights must be respected against unlawful state actions.