Research › Search › Judgment

Andhra High Court · body

2006 DIGILAW 338 (AP)

Venkatesh Shinde v. P. Rameshchand Bhandari

2006-03-09

V.V.S.RAO

body2006
( 1 ) THE petitioner is the defendant in o. S. No. 332 of 2002 on the file of the Court of xiv Additional Chief Judge, City Civil Court, hyderabad. The respondents herein filed the suit for recovery of a sum of Rs. 20,00,000/- based on a promissory note. The petitioner filed a written statement and opposed the suit, inter alia, on the ground that the suit is not maintainable. While the suit is pending, the petitioner filed I. A. No. 763 of 2004 under order XIV Rule 5 of the Code of Civil procedure, 1908, to frame additional issues as under. (1) Whether the plaintiff is doing money lending business without any valid licence? (2) Whether any demand was made by the plaintiff for the alleged promissory note, dated 10-6-2000? ( 2 ) BY the impugned order, dt. 10-9-2004, the trial Court rejected the application on the ground that the petitioner in his written statement did not make such plea. ( 3 ) THE learned Counsel for the petitioner, g. Kalyan Chakravarthi, placed strong reliance on Section 9 of the Andhra Pradesh (Telangana Area) Money Lenders Act, 1349 F. (for short the Act ), and submits that whether or not the pleadings are present, the court is bound to frame an issue as to whether the plaintiff has complied with the provisions of Section 3 (1), (5) (a) and (b), Section 5 (1) and Section 6 (1) and (2) of the Act. He also placed reliance on the decision of this Court in Sunkara Srilakshmi v. Sudireddy Sarojini devi. ( 4 ) THE matter was listed yesterday. After hearing the learned Counsel forthe petitioner, the matter was adjourned as the Counsel for the respondents was absent. Today the matter is coming up under the caption for judgment . Inspiteofthe same, none appears for the respondents. ( 5 ) ANDHRA Pradesh (Telangana Area) money Lenders Act is an Act to regulate the transactions of money lending. As per section 3 (5) of the Act, unless and until, a person is registered as money-lender under section 3 (2) of the Act, such person shall not carry on the business of money lending. Sections 5 and 6 of the Act require the money-lenders to maintain accounts and furnish statements thereon to the licensing authority. As per section 3 (5) of the Act, unless and until, a person is registered as money-lender under section 3 (2) of the Act, such person shall not carry on the business of money lending. Sections 5 and 6 of the Act require the money-lenders to maintain accounts and furnish statements thereon to the licensing authority. ( 6 ) THE plaintiffs in their suit, being o. S. No. 332 of 2002, specifically pleaded that they are doing finance business in hyderabad. This would be sufficient to attract section 9 of the Act. Section 9 of the Act reads as under. 9. Procedure of Court in suits for recovery of loans:- not withstanding anything contained in any law for the time being in force, in every suit relating to a loan: (1) the Court shall frame and decide the issues whether the money-lender is a money-lender as defined in sub- section (7) of Section 2, and whether he has complied with the provisions of Section 3 and of Clauses (a) and (b) of sub-section (1) of Section 5 and sub-sections (1) and (2) of section 6. (2) If it is proved that the plaintiff is a money-lender as defined in subsection (7) of Section 2, but does not hold a licence granted under Sec. 3, the Court shall dismiss his suit. (2-A) if it is proved that the money-lender has not complied with the provisions of clause (a) of sub-section (1) of section 5, or of sub-section (1) of section 6, or of Section 8 and the plaintiff s claim is established in whole or in part, the Court may, in the circumstances of the case, disallow the whole or any portion of the interest due and may disallow the cost wholly or in part; (3) if it is proved that the money-lender has not furnished the debtor with a statement of account in accordance with the provisions of clause (b) of sub-section (1) of Section 5 or of sub-section (2) of Section 6, the court shall, in computing the amount of interest, exclude the interest in respect of every period for which the money-lender has not furnished the debtor with the statement of account. Provided that if the money-lender, has, after the prescribed time, furnished the statement of account and the Court is satisfied that there was sufficient cause for not furnishing the statement earlier, the Court may, in spite of such default, include such period or periods for computing the interest. ( 7 ) SUB-SECTION (1) of Section 9 of the Act casts an obligation on the Court to frame and decide whether a person is registered as a money-lender and whether he has complied with the provisions of Sections 3, 5 and 6 of the Act. The effect of non-registration of a person as a money-lender is stipulated in sub-sections (2), (2-A) and (3) of Section 9 of the Act. As per sub-section (2) of Section 9 of the Act, the suit by a person for recovery of money is liable to be dismissed if such person does not hold a licence granted under section 3 (2) of the Act. ( 8 ) THEREFORE, as rightly pointed out by the learned Counsel, in every suit for recovery of money filed by a person engaged in the business of lending of money, it is mandatory under Section 9 (1) of the Act to frame and decide the issue whether the plaintiff is a money lender under Section 2 (7) of the Act, and whether he has complied with section 3 (2) of the Act. It is no doubt true, in sunkara Srilakshmi v. Sudireddy Sarojini devi (supra), the defendants made a statement that the plaintiff was doing money lending business. But, in the present case, the absence of such allegation in the written statement filed by the petitioner does not make any difference in view of the admission of the plaintiff himself in paragraph 1 of the plaint. In that view of the matter, the impugned order suffers from an error, which would cause prejudice to the petitioner. ( 9 ) IN view of the above, this Civil Revision petition is allowed, and the lower Court is directed to frame the two additional issues proposed by the petitioner herein. No costs.