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2002 DIGILAW 634 (ORI)

K. Kantamma v. Sabitri Patrani

2002-09-27

PRADIP MOHANTY

body2002
JUDGMENT PRADIP MOHANTY, J. — The defendant is in appeal which is di¬rected against the judgment dated 25.1.1986 of the Additional District Judge, Berhampur, in T. A. No. 21 of 1985 (18/1985 GDC) who by reversing the decision of the Sub-ordinate Judge Aska, has decreed the suit. 2. At the time of admitting the appeal, the following substantial questions of law were framed : “(i) Whether in view of the amendment to the Orissa Money Lend¬ers’ Act in the year 1975 by Act 54 of 1975 and the transactions held, it can be said that the plaintiff is a money lender for the suit not being maintainable under the Orissa Money Lenders’ Act ? (ii) Whether the question of limitation can be gone into when no issue to that effect has been raised that there is an assertion in the written statement." 3. Plaintiff’s case briefly stated is that she is not a regular money-lender. The defendant took loan of Rs. 3000/- from her by executing a simple mortgage Bond on 12.5.1973. The plain¬tiff also agreed to pay a sum of Rs. 2800/- to the Land Develop¬ment Bank, Aska but could not pay the same. The defendant agreed to pay the principal and interest within three years. It was also stipulated that if the security property would be insufficient to discharge the principal and interest, then the plaintiff can recover the loan from other properties. The defendant,however, did not discharge the suit loan and maliciously reported to Patapur Police Station that she (plaintiff) is a money-lender with a view to avoid payment. Finding no other alternative, the plaintiff filed the suit for recovery of Rs. 4800/-. The claim is as follows : (i) Principal amount due under the mortgage bond dated 12.5.1974 ... Rs. 3,000/- (ii) Interest due from 12.5.1973 till 12.4.1980 at the rate of 9 per cent per annum ... Rs. 1,800/- (Rounded) Total ... Rs. 4,800.00 4. The defendant in her written statement admitted to have received the loan amount of Rs. 3,000/-. According to her, the plaintiff is a regular money-lender without having any licence and thus the suit is hit by Section 8 of the Orissa Money-Lenders’ Act, 1939 (for short, ‘the Act’). Her further case is that the charge of interest made by the plaintiff at the rate of 12 per cent per annum is not permissible. 3,000/-. According to her, the plaintiff is a regular money-lender without having any licence and thus the suit is hit by Section 8 of the Orissa Money-Lenders’ Act, 1939 (for short, ‘the Act’). Her further case is that the charge of interest made by the plaintiff at the rate of 12 per cent per annum is not permissible. She also stated that the mortgage deed is not enforceable as the plaintiff had not paid the loan to the Land Development Bank. She also pleaded that her husband had taken loan from the plaintiff for which another suit, namely, T.M.S. No. 53/1980 has been filed by the plaintiff. 5. On the basis of evidence,the trial Court found that the defendant and her husband took loan separately from the plaintiff and the husband was acting on behalf of the defendant. As such both the transactions are in regular course of business. Because the plaintiff had no licence, the suit is hit by Section 8 of the Act. In appeal preferred by the plaintiff, the lower appellate Court held that the plaintiff is not a regular money-lender but she was casually lending money and the suit is, therefore, not hit by Section 8. 6. In order to decide the question of law formulated above, it is necessary to refer to certain provisions of the Act. In appeal preferred by the plaintiff, the lower appellate Court held that the plaintiff is not a regular money-lender but she was casually lending money and the suit is, therefore, not hit by Section 8. 6. In order to decide the question of law formulated above, it is necessary to refer to certain provisions of the Act. Section 2 (i) of the Act defines ‘loan’ as follows : “loan” means an advance whether of money or in kind or interest made by a money-lender and shall include a transaction on a document bearing interest executed in respect of a past liability and any transaction which in substance, is a loan, but shall not include - (1) a loan advanced by the State Government or by any local body authorised by the State Government or by a Co-operative Society; (2) a deposit of money in a Post Office Savings Bank or a depos¬it of money or other property in any other bank or in a company or with a Co-operative Society; (3) the amount or the proportionate amount, as the case may be, payable under a mortgage by the purchaser at a sale, in execution of a decree of a Court or otherwise of the whole or part of the properties subject to a mortgage, the purchase having been made, prior to the coming into force of this Act; (4) any loan or loans due to a widow on the 1st February, 1930,who on that date did not own any other property; provided that the principal amount of the loan or loans does not exceed rupees two thousand;" Section 4 of the Act reads as under : “No person to carry on money-lending business without being registered - No person shall carry on the business of money-lend¬ing after the 22nd day of November, 1975 unless he is registered as a money-lender under this Act.” Section 8 of the Act provides as follows : “8. Suit of recovery of loan maintainable by registered money-lenders only - A money lender shall not be entitled to institute a suit for the recovery of a loan advanced by him after the date on which this section comes into force, unless he was registered under this Act at the time when such loan was ad¬vanced;" Provided that a money-lender shall be entitled to institute a suit to recover a loan advanced by him at any time in the course of two years after the date on which this section comes into force, if he is granted a certificate of registration under Section 5 at any time before the expiration of the said years”. 7. There is no dispute that the mortgage deed (Ext. 2) was executed for advancing the loan of Rs. 5, 800/-. The defendant admits to have received Rs. 3,000/-. The plaintiff also admitted that she had not given Rs. 2800/- to the Land Development Bank. In the circumstances, I have no hesitation to hold that the suit mortgage deed is supported by part consideration. From the mort¬gage deed (Ext.2) it is revealed that the defendant agreed to pay interest at the rate of 12 per cent per annum. Therefore, keeping in view the definition of ‘loan’ as mentioned above, it has to be held that the suit transaction is a loan bearing interest and thus a ‘loan’ within Section 2(i) of the Act. 8. It is well settled that the burden lies on the defend¬ant to establish that the plaintiff is a money-lender in regular course of business. The lower Court relying on the evidence of P.W.1 (husband of the plaintiff) has fairly held that the plain¬tiff was a regular money-lender. It is an admitted fact that the plaintiff has got no licence to run the money-lending business. The lower appellate Court observed that there was no repeated and continuous money-lending business and, therefore, it disagreed with the finding of the trial Court. The lower appellate Court failed to take note of the admission of the plaintiff, referred to above. 9. P.W.1, the husband of the plaintiff in his evidence admitted that the plaintiff was a regular money-lender. The relevant portion of the evidence of P.W.1 is quoted below for ready reference: “.....We were dealing with money lending business. Since 10 years we sold the land that my wife had got from her mother. 9. P.W.1, the husband of the plaintiff in his evidence admitted that the plaintiff was a regular money-lender. The relevant portion of the evidence of P.W.1 is quoted below for ready reference: “.....We were dealing with money lending business. Since 10 years we sold the land that my wife had got from her mother. My wife was keeping account of the interest and the capital for her money lending business through me. I give loan on behalf of my wife. I keep accounts of the capital and interest on behalf of my wife.” In view of the admission of the plaintiff coupled with the mort¬gage deed, I have no hesitation to hold that the plaintiff is a money-lender in regular course of business. Non-consideration of evidence by the lower appellate Court on this aspect has vitiated his finding. Once it is held that the plaintiff is a money-lender in regular course of business, the suit would be hit by Section 8 of the Act unless it is established that she has the licence for the purpose. Admittedly, there is no such licence in her favour. In view of the finding above, the second question posed. i.e, whether the suit is hit by limitation is not neces¬sary to be examined. For the reasons aforesaid, the decision of the lower appel¬late Court cannot be supported in law which is hereby set aside. Consequently, the judgment and decree of the trial Court are hereby restored. The appeal is accordingly allowed, No. cost. Appeal allowed.