In a landmark ruling, the small claims court in Penang has ordered a pawnshop owner to compensate two clients for the cash value of their pawned jewellery, which was lost when the shop was robbed in 1997 of RM2.65 million worth of items.

Magistrate Shahrizat Ismail said in his decision last Friday that the owner of the Thai Sun Pawnshop could deduct the amount owed to him by the clients, and pay them the balance. He was also told to pay the legal costs.

Shahrizat also ordered the owner to pay 25 percent interest based on the amount loaned to the plaintiffs, K Achuran and HL Shubita Rani. The decision took immediate effect.

The plaintiffs had filed separate affidavits last July to claim better compensation when the pawnshop owner had offered to pay only 25 percent of the ticket value of each item pawned.

While the total value of the items they lost exceeded RM3,000, they had pawned the jewellery for half this amount.

Both the plaintiffs and defendant represented themselves in the court. Under the Pawnbrokers Act 1972, clients are entitled to compensation in the event that pawned items are lost - in the case of loss through a fire, pawnshops are obliged to repay 25 percent of the ticket value.

Shahrizat ruled that the compensation should be higher in the event of losses suffered during a robbery.

Shubita Rani said later that she was delighted that she would get the full cash value of her jewellery.

"I am happy that the case is over. I would like thank the court for its decision," she told malaysiakini.

'Insure against loss'

The Consumers Association of Penang (CAP) welcomed the verdict as a decision that would help the association to compel the government to amend the law.

Its president, SM Mohamed Idris, said the decision could set a precedent for better compensation for other clients affected by this particular robbery, as well as another in Bidor (Perak) recently.

He called on the housing and local government ministry to amend the Pawnbrokers Act to increase the quantum of compensation for loss of pawned items.

"It's grossly unfair for the clients to be compensated only 25 percent of the loaned sum, which is (usually) 50 percent of the total value of jewellery pawned," he said.

"The ministry should understand that clients would already be facing financial constraints when they pawn their jewellery. They would be further disadvantaged by the loss of their valuables."

CAP also wants the government to compel pawnbrokers to insure the items against losses, since the Act states that they must exercise care and diligence over these.

Although CAP had raised such issues in a memorandum submitted to the ministry several years ago, these were not included in recent amendments to the Act.