Sm2BaCoO5, a spin chain based polycrystalline compound which crystallize in orthorhombic structure (space group, Immm), is known to order antiferromagnetically close to 38 K. As motivated by 1) its Tb analogues [1] which show giant magneto-dielectric coupling and a new type-II multiferroic and 2) recently discovered multiferroicity in Sm2BaMO5 (M=Ni and Cu) compounds [2,3], detailed dielectric, ferroelectric and magneto-electric measurements have been carried out for Sm2BaCoO5. Magnetic and heat capacity measurements confirm the antiferromagnetic ordering at around 38 K. Interestingly ferroelectric transition also occurs around 38 K as revealed by frequency independent dielectric data as well as pyro-current measurements in various protocols. Therefore, the presented experimental results show that spin chain oxide Sm2BaCoO5 is new type-II multiferroic and we have identified R2BaCoO5 (R=Tb, Sm)- spin chain based cobaltates, is the new multiferroic series, so far unexplored.