STATE OF KARNATAKA vs KARNATAKA PAWN BROKERS ASSN. .

The Supreme Court examined the constitutional validity of amendments to the Karnataka Money Lenders Act, 1961 and the Karnataka Pawn Brokers Act, 1961, which stated that security deposits made by money lenders and pawn brokers shall not carry interest. The Court held that the lack of provision for interest on these deposits is arbitrary and violates Article 14 of the Constitution, as it imposes an unreasonable restriction on the fundamental right to carry on business under Article 19(1)(g). The amendments were deemed unconstitutional, affirming the need for interest on such deposits.