MAHANGOO LAL v. KALYAN CHAND — 1994 DIGILAW 957 (ALL)

R. B. MEHROTRA, J. Heard learned Counsel for the appellants Sri D. N. Mishra and for the respondent Sri Santosh Kumar. 2. Plaintiff-respondent Kalyan Chand filed Suit No 591 of 1977 in the Court of the Munsif, Allahabad. On the basis of the pleadings of the parties, following issues were framed: (1) Whether the plaintiff had advanced loan to the defendants as alleged and executed the pronote acknowledging the receipt of loan as alleged in the plaint? (2) Whether the suit is barred by limitation? (3) Whether the suit is barred by Order VI, Rule 15 of the Code of Civil Procedure as alleged in paragraph 13 of the written statement? (4) Whether the suit is barred by Section 18 of the U. P. Act No. 29 of 1976? (5) Whether any cause of action arose of filing the suit? (6) Whether the rate of interest claimed is excessive and is not in accordance with law? (7) Whether the plaintiff is entitled to special cost under Section 35-A of the Code of Civil Procedure? (8) To what relief, if any, the plaintiff is entitled? 3. The trial court decided issue No. 3 in favour of the plaintiff. While deciding issue No. 1 the trial court held that the plaintiff has failed to prove that the pronote was executed by the defendants and the defendants had signed the pronote on its back. Issue No. T was decided against the plaintiff. While deciding the same issue, the trial court also held that since on the back of the pronote, only Bhola Nath Singh signed, the acknowledgment of loan made by Bhola Nath Singh alone cannot be binding on the other defendant, namely, Mahangoo Lal. The trial court also recorded a finding that the plaintiff has failed to prove that the loan was jointly taken by both the defen dant. The trial court while deciding Issues No. 2, 4, 5 and 6 held that since Issue No. 1 has been decided against the plaintiff, no cause of action arose for the plaintiff to file the suit. The trial court itself did not decide Issue No. 2 and neither decided Issue No. 4 as to whether the suit is barred by Section 18 of the U. P. Act No. 29 of 1976. 4. Aggrieved by the aforesaid judgment and decree of the trial court, the plaintiff respondent filed an appeal. The trial court itself did not decide Issue No. 2 and neither decided Issue No. 4 as to whether the suit is barred by Section 18 of the U. P. Act No. 29 of 1976. 4. Aggrieved by the aforesaid judgment and decree of the trial court, the plaintiff respondent filed an appeal. The lower appellate court, by its judgment, dated 23-8-1979, allowed the appeal and held that the plaintiff has fully proved the execution of the pronote and thereby arrived at a finding that the alleged loan was given by the plaintiff to the defendants and the plaintiff proved paying of the loan and execution of the pronote. However, while deciding Issue No. 2, the lower appellate court also recorded a finding that the loan was alleged to have been given by the plaintiff in the year 1971. The suit was filed in the year 1971, The defen dant Bhola Nath Singh had made an endorsement in his hand-writing 90 1- 12-1974 that Rs. 50 are deposited towards interest. On the basis of the aforesaid endorsement, the lower appellate court recorded a finding that since the loan was acknowledged on 1-12-1974, the limitation for filing the suit will be computed from the said date, as such the suit was not barred and on the basis of the aforesaid endorsement, the lower appellate court also recorded a finding that since the loan was jointly taken by Bhola Nath Singh and Mahangoo Lal both, it was their joint liability and acknowledgment of loan by one of the defendants was sufficient for extending the period of limitation as the acknowledgment has to be construed on behalf of both the defendants. 5. The present appeal was admitted by this court on 15-2-1990 and following substantial question of law was found to be involved in the present appeal: "whether acknowledgment made by Bhola Nath, appellant saved the limitation for filing the suit as against Mahangoo Lal, appellant as well?" 6. 5. The present appeal was admitted by this court on 15-2-1990 and following substantial question of law was found to be involved in the present appeal: "whether acknowledgment made by Bhola Nath, appellant saved the limitation for filing the suit as against Mahangoo Lal, appellant as well?" 6. The learned counsel for the appellants has challenged the finding of the lower appellate court on the point of construing the alleged acknowledg ment by Bhola Nath as acknowledgement on behalf of both the appellants, He has further contended that in any case, the lower appellate court fell in apparent error in decreeing the suit without deciding Issue No. 4, namely, whether the suit is barred by Section 18 of the U. P. Act No. 29 of 1976. 7. Before adverting to the first submission of the appellants counsel, namely, that the lower appellate court has committed an error in construing the alleged acknowledgment by Bhola Nath on behalf of both the appellants, it is necessary to examine the second submission of the appellants counsel as to whether the suit of the plaintiff-respondent could have been decreed without recording any finding on issued No. 4, namely, whether the suit is barred by Section 18 of the U. P. Act No. 29 of 1976 (hereinafter referred to as the Act ). Some provisions of the Act are being referred for examining the afore said contention. "18. Bar on certain suits by money-lenders.- (1) No suit on the basis of any loan, agreement or security referred to in sub-section (1) of Section 15 shall be instituted by a money-lender, unless at the time of advancing such loan or making such agreement or taking such security - (a) such money-lender held a valid certificate of registration; or (b) such money-lender had applied for such certificate and the same had not been refused; or (c) the period specified in the proviso to sub-section (1) of Section 7 had not expired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "26. Particulars of debts and deposits to be furnished by every money- lender: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Notwithstanding anything contained in any contract, decree or order or any other law for the time being in force, no money, lender shall be entitled to claim any amount from a debtor in respect of any loan advanced before the commence ment of this Act, unless the name of such debtor and the amount due from him has been specified in the statement referred to in sub-section (1 ). " 8. For appreciating the contentions of the parties in relation to Sec tion 26 (4) of the Act, Rule 19 of the Rules framed under the Act is also to be taken note of. "19. Statement of debts and, deposits [section 26].- (1) The state ment-referred to in Section 26 (1) shall be submitted by every money-lender to the Registrar in Form No. 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) A certified copy of any entry in the registers hereinbefore mention ed shall be admissible in evidence before any court or authority, without production of any such register in original. " 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) A certified copy of any entry in the registers hereinbefore mention ed shall be admissible in evidence before any court or authority, without production of any such register in original. " 9. Form No. 10, referred to in Rule 19 (1) requires that unless the name of such debtor and the amount due from him have been specified in the state ment recorded under sub-section (1) of Section 26, no money-lender shall be entitled to claim any amount from a debtor in respect of a loan advanced before the commencement of the Act. 10. The U. P. Regulation of Money-lending Act, 1976 came into force on July 17, 1976. The debt was admittedly given sometime in the year 1971 and the alleged acknowledgment is of the year 1974, so the provisions of Section 26 (4) of the Act are squarely attracted and unless the plaintiff satisfies that those provisions were complied with, the decree passed in favour of the plaintiff cannot be enforced against the defendants. This is a vital point which should have been decided by the lower appellate court. The lower appellate court committed patent error of law in decreeing the suit only on the ground that the plaintiff has proved execution of the pronote and payment of debt. The suit could not have been decreed without adverting to the question regarding compliance of Section 26 (4) of the Act. 11. Learned counsel for the respondent, however, drew my attention to the provisions of Order XLI, Rule 24 of the Code of Civil Procedure and submitted that since the entire evidence is on record, so instead of remitting the issue back to the court below, which is likely to take sometime, this court should itself examine the record and decide the issue itself as it is purely a legal question and can be decided on the basis of evidence adduced by the parties in the court below. 12. On the first hearing, the counsel for the respondent was not able to point out the documents filed by the plaintiff before the trial court satisfying the requirement of Section 18 of the Act. The judgment of the appeal was reserved. 12. On the first hearing, the counsel for the respondent was not able to point out the documents filed by the plaintiff before the trial court satisfying the requirement of Section 18 of the Act. The judgment of the appeal was reserved. However, on scrutiny, it was found that the documents filed, by the plaintiff for compliance of Section 18 of the Act are available on record which show that the plaintiff was registered under the provisions of the Act for the period 1-12-1976 to 30-11-1977 and 1-9-1977 to 31-8- 1978. Before adverting to the question as to whether the aforesaid documents complied the require ments of Section 18 of the Act, the appeal was placed for further hearing as to permit the parties to address on the question of the consequence of non-compliance of the requirement of Section 26 (4) of the Act. On the date of further hearing, the counsel for the plaintiff-respondent submitted that since there was no issue regarding non-compliance of Section 26 (4), the plaintiff did not produce any evidence to that effect and in the aforesaid background filed an application in this court for seeking permission to file additional evidence under Order XLI, Rule 27, C. P. C. Along with the aforesaid application, a certified copy of Form No. 10 showing the details of the loan advanced by the plaintiff to the defendants has been filed. Before considering the question as to whether the aforesaid application should be allowed or the matter should be remitted back to the lower appellate court for deciding a fresh issue regarding compliance of Section 26 (4) of the Act, a reference may again be made to the provisions of Order XLI, Rule 24, and Order XLI, Rule 25 of the Code of Civil Procedure. Order XLI, Rule 24, C. P. C. provides that where the evidence on the record is sufficient to enable the appellate court to pronounce judgment, the appellate court, may finally determine the suit, notwithstanding that the court below has proceeded wholly upon some ground other than that on which the appellate court proceeds. This provisions contemplates that if the evidence is on the record, the court should decide the suit itself instead of remanding back the matter to the appellate court or remitting the issue. This provisions contemplates that if the evidence is on the record, the court should decide the suit itself instead of remanding back the matter to the appellate court or remitting the issue. However, Order XLI, Rule 25, C. P. C. refers to a situation where necessary issue has not been framed by the court below, which appears to the appellate court essential to the right decision of the suit upon the merits, the appellate court may, if necessary, frame issues, and refer the same for trial to the court from whose decree the appeal is preferred. 13. It is true that there was no issue framed by the court below that the suit is bad for non-compliance of Section 26 (4) of the Act and for this reason, the plaintiff might have been deprived of filing the requisite evidence to show compliance of the aforesaid provision. However, a bare reading of the provi sions of Section 26 (4) of the Act make it obligatory on every court to ensure that the provisions of the aforesaid section are complied with before decreeing a suit or a money lender against a debtor, as such it is necessary for the ends of justice that the aforesaid question should be gone into in the matter and a fresh issue be framed as below: "whether the suit barred for non-compliance of the provisions of Sec tion 26 (4) of the U. P. Regulation of Money-Lending Act, 1976?" 14. Under the provisions of the rules, the certified copy filed by the plain tiff-respondent is admissible in evidence and the same can be taken into consideration for the purposes of decision of the present appeal. In the appli cation under Order XLI, Rule 27, C. P. C. is allowed, the requirement of the aforesaid provision is that the defendants will be required to file evidence in re buttal. The defendants may like to lead such evidence in rebuttal as they think fit and proper and since a new issue has been framed, it is but appropriate that the issue itself should be remitted to the lower appellate court for its finding on the fresh issue permitting the parties to lead evidence on fresh issue so framed by this Court as above. The interest of justice requires that the defendants should be given full opportunity to lead oral or documentary evidence in rebut tal of the additional evidence filed in this Court as they think fit and proper. Therefore, I am not inclined to allow the application under Order XLI, Rule 27, C. P. C. filed by the plaintiff-respondent. The application is rejected. The issue is remitted back to the lower appellate court for giving its finding, within three months of the receipt of the certified copy of this order. The counsel for both the parties are present at the time of delivery of the order. Both the parties are directed to appear before the District Judge, Allahabad on 9-1-1995. The District Judge, Allahabad will either himself record a fresh finding on the issue so framed above or nominate it to any other court of competent appellate jurisdiction, for the aforesaid purpose. 15. The present appeal should be listed before me after receipt of the finding of the lower appellate court on issue framed by this Court. The appeal will be decided after receiving the finding of the lower appellate court on the issue framed by this court. The counsel for the plaintiff-respondent is permit ted to withdraw the document which he has filed along with the application under Order XLI, Rule 27 of the Code of Civil Procedure. The Registrar will permit him to withdraw this document after taking his endorsement that he has withdrawn the document. Decided accordingly. .