JUDGMENT : M.G. UMA, J. 1. The appellants being defendants in O.S. No. 49 of 2006 have preferred this appeal being aggrieved by the judgment and decree dated 27.10.2009 passed in R.A. No. 336 of 2007 on the file of the learned II Additional District Judge, Tumakuru (hereinafter referred to as ‘First Appellate Court’ for brevity) wherein, the suit of the plaintiff was decreed by allowing the appeal and setting aside the judgment and decree dated 27.09.2007 passed in O.S. No. 49 of 2006 on the file of learned Civil Judge, Senior Division Turuvekere (hereinafter referred to as 'the Trial Court' for brevity), which has dismissed the suit filed by the plaintiff. 2. For the sake of convenience, parties are referred to as per their status and rank before the Trial Court. 3. The appeal was admitted vide order dated 28.07.2010 and the following substantial question of law was formulated: “Whether the lower Appellate Court was justified in decreeing the suit when the plaintiff who was doing money lending business had no required licence to carry on such business?” 4. Brief facts of the case are that, the respondent-plaintiff filed O.S. No. 49 of 2006 against the defendants-appellants for recovery of money of Rs. 2,60,000/- with interest at the rate of 18% per annum from the date of filing of suit till the date of realization. It is contended by the plaintiff that late S.T. Kumaraswamy, the husband of defendant No. 1 and father of defendant Nos. 2 and 3 had borrowed hand loan of Rs. 2,00,000/- from the plaintiff on 08.01.2003, agreeing to repay the same with interest at 18% per annum. Towards repayment of the hand loan, the said S.T. Kumaraswamy had issued the cheque bearing No. 924291 dated 08.02.2003 for Rs. 2,00,000/-. When the cheque was presented for encashment, same was dishonoured as there was insufficient funds in the account of the drawer, as per endorsement dated 18.07.2003. When the legal notice was issued calling upon the borrower to repay the loan amount, he failed to repay the same. Therefore, private complaint in PCR No. 57 of 2003 was filed for the offence punishable under Section 138 of the Negotiable Instruments Act (for short 'the NI Act'). 5. It is stated that during the pendency of private complaint, the said S.T. Kumaraswamy died on 21.01.2004. Therefore, private complaint in PCR No. 57 of 2003 was filed for the offence punishable under Section 138 of the Negotiable Instruments Act (for short 'the NI Act'). 5. It is stated that during the pendency of private complaint, the said S.T. Kumaraswamy died on 21.01.2004. The defendants are the wife and children who succeeded to the estate of the deceased S.T. Kumaraswamy. Therefore, they are liable to repay the loan to the plaintiff. It is stated that the plaintiff was demanding S.T. Kumaraswamy to repay the loan amount and after his death, he demanded the defendants to repay the same. But in spite of that, they have not repaid the loan amount. Therefore, the plaintiff sought for recovery of principal amount of Rs. 2,00,000/- and interest of Rs. 60,000/- from the defendants. 6. On service of notice, the defendants have entered appearance before the Trial Court and defendant Nos. 2 and 3 have filed common written statement denying the contention taken by the plaintiff. It is contended that the plaintiff is the money lender and had not followed the Rules and Regulations as contemplated under the Karnataka Money Lenders Act, 1961 (for short ‘the Act of 1961’). He has not served all account extract of the statement of account to the defendants. Since he was not having any licence, the suit of the plaintiff is not maintainable. 7. It is also contended that late S.T. Kumaraswamy was running areca nut Mandi at Sampige Village, Turuvekere Taluk just in front of the house of the plaintiff. About a year earlier, there was fire accident in the house of the plaintiff and the plaintiff shifted his house hold articles to the areca Mandi of the deceased S.T. Kumaraswamy. Thereafter, he arranged his house and shifted the articles. In the meantime, S.T. Kumaraswamy found that his cheque leaves were missing. Accordingly, the said S.T. Kumaraswamy intimated his banker about the missing of cheque leaves. In the meantime, the said S.T. Kumaraswamy suffered paralysis on his right hand. Therefore, he was not in a position to execute or issue the cheque as contended by the plaintiff. It is also contended that the plaintiff being the money lender had concocted several documents. Therefore, the said documents cannot be the basis for passing the decree and hence, the defendants prayed for dismissal of the suit. 8. Therefore, he was not in a position to execute or issue the cheque as contended by the plaintiff. It is also contended that the plaintiff being the money lender had concocted several documents. Therefore, the said documents cannot be the basis for passing the decree and hence, the defendants prayed for dismissal of the suit. 8. On the basis of these pleadings, the following substantial questions of law were formulated: “1. Whether the plaintiff proves that on 08.01.2003 Sri S.T. Kumaraswamy had borrowed a hand loan of Rs. 2,00,000/- from him for his legal necessity and for the benefit of his family, agreeing to repay the same together with interest at the rate of 18% p.a.? 2. Whether the plaintiff proves that the said Sri S.T. Kumaraswamy had issued a cheque bearing No. 924291 dated 8.3.2003 drawn on State Bank of Mysore, Sampige Branch towards repayment of the loan amount? 3. Whether the defendants prove that they had lost cheque book with signed cheque leaves? 4. Whether the defendants prove that the date of cheque in question Sri S.T. Kumaraswamy was not in a position to sign any paper on account of serious paralytic stroke? 5. Whether the plaintiff is entitled for the reliefs claimed? 6. What order or decree?” 9. The plaintiff examined himself as PW-1 and got examined PW-2 and got marked Exs.P1 to P20 in support of his contention. Defendant No. 3 is examined as DW-1 and got marked Exs.D1 to D12 in support of his defence. The Trial Court after taking into consideration all these materials on record answered the issues in Negative and held that the plaintiff has not proved lending of hand loan of Rs. 2,00,000/- in favour of late S.T. Kumaraswamy and issuance of cheque in question by him towards discharge of loan amount. Accordingly, the suit came to be dismissed. 10. Being aggrieved by the same, the plaintiff has preferred R.A. No. 336 of 2007 before the First Appellate Court, which has considered the materials on record once again and came to the conclusion that the plaintiff has proved lending of the amount and issuance of cheque by late S.T. Kumaraswamy towards repayment of loan amount and therefore, the plaintiff is entitled for a decree. Accordingly, the appeal was allowed and the suit filed by the plaintiff was decreed in part for Rs. Accordingly, the appeal was allowed and the suit filed by the plaintiff was decreed in part for Rs. 2,00,000/- with interest at 9% p.a. from the date of loan till the date of suit and thereafter, at the rate of 6% p.a. from the date of suit till recovery with costs throughout against the property of deceased S.T. Kumaraswamy devolved on the defendants. Being aggrieved by the same, the defendants have preferred this appeal before this Court. 11. Heard Sri A.V. Gangadharappa, learned counsel for the appellants. Learned counsel for the respondent has not addressed his arguments in spite of giving sufficient opportunity. Hence, his arguments is taken as NIL. Perused the materials including the Trial Court records. 12. Learned counsel for the appellants submitted that there is glaring discrepancies in stating the date of lending of loan by the plaintiff in favour of late S.T. Kumaraswamy. There is no explanation as to why the cheque Ex.P1 was presented only during July 2003, even when it is the contention that the cheque was issued by late S.T. Kumaraswamy on 08.02.2003. PW-1 categorically admitted that he is doing money lending business through Siddalingeshwara Finance and he is not having any licence. Under such circumstances, the suit filed by the plaintiff should not have been entertained. The Trial Court rightly dismissed the suit with costs. The First Appellate Court ignoring the fatal admission given by PWs. 1 and 2, proceeded to decree the suit. The reasons assigned by the First Appellate Court is not sustainable. Hence, he prays for allowing the appeal. 13. I have considered the materials on record and the submissions made by the learned counsel for the appellants. The plaintiff in support of his contention that he had lent an amount of Rs. 2,00,000/- in favour of late S.T. Kumaraswamy examined himself as PW-1 by filing affidavit in lieu of examination-in-chief and re-iterating his contention as taken in the plaint. During cross-examination by the learned counsel for the defendants, witness admitted that he retired as Engineer. S.T. Kumaraswamy was running areca nut Mandi and therefore, he had sought for loan. There was no agreement for payment of interest. On 08.01.2003 the amount of Rs. 2,00,000/- was given to S.T. Kumaraswamy as hand loan. One Bettaiah was present at that time. On 08.02.2003 S.T. Kumaraswamy had issued the cheque in question towards repayment of loan amount. S.T. Kumaraswamy was running areca nut Mandi and therefore, he had sought for loan. There was no agreement for payment of interest. On 08.01.2003 the amount of Rs. 2,00,000/- was given to S.T. Kumaraswamy as hand loan. One Bettaiah was present at that time. On 08.02.2003 S.T. Kumaraswamy had issued the cheque in question towards repayment of loan amount. Witness admitted that he is running the finance company in the name and style of Siddalingeshwara Finance and he maintains the account book. But stated that he is not an income tax assessee. He denied the suggestion that the Assistant Registrar had issued notice against him alleging that he got blank cheques signed by the parties without giving them the account extract. Witness also stated that he had filed about 20 suits for recovery of money against various persons in the Court at Turuvekere. However, he denied the suggestion that he is doing money lending business. He admitted that he is lending loan through Siddalingeshwara Finance by getting the ornaments pledged. He also admitted that he had not given statement of account regarding the loan obtained by S.T. Kumaraswamy to him. Witness admitted that 3 to 4 years back, fire had erupted in his house, but denied the suggestion that he had stored his articles in areca nut Mandi belonging to S.T. Kumaraswamy. He also denied the suggestion that he had stolen the cheque in question while taking back his belongings. 14. The plaintiff examined one witness as Bettaiah who has filed his affidavit in lieu in examination-in-chief and stated that he knows the plaintiff and defendants. Witness stated that about 6 months earlier to 2003, S.T. Kumaraswamy had borrowed the amount of Rs. 2,00,000/- and towards repayment of said loan, S.T. Kumaraswamy had issued cheque drawn on State Bank of Mysore, Sampige Branch. Witness speaks about the criminal case registered against S.T. Kumaraswamy by the plaintiff for dishonour of cheque. Witness asserted that S.T. Kumaraswamy had obtained the loan amount in his presence. During cross-examination by the learned counsel for the plaintiff, witness sated that there were no talks between the plaintiff and S.T. Kumaraswamy for payment of interest. This witness stated that in about 4 cases, he had deposed in favour of the plaintiff and his son. He also stated that about 20 cases are registered by the plaintiff wherein he is cited as witness. This witness stated that in about 4 cases, he had deposed in favour of the plaintiff and his son. He also stated that about 20 cases are registered by the plaintiff wherein he is cited as witness. Witness specifically stated in 4 such cases, he is deposed before the Court. Again witness stated that he might have deposed in 20 cases. However, he denied the suggestion that he is deposing falsely in favour of the plaintiff. 15. Defendant No. 3 has filed his affidavit in lieu of examination-in-chief and re-iterated the contention as taken in the written statement. During cross-examination by the learned counsel for the plaintiff, witness stated that during July 2000 his father was paralysed and thereafter he was not in a position to walk or write. The health condition was never improved till his death. He pleaded his ignorance regarding issuance of cheque by his father in favour of the plaintiff. He produced Exs.D1 to D7 to contend that the plaintiff has filed various criminal complaint as money lender. Therefore, he prays for dismissal of the suit. Witness was cross-examined at length regarding inheritance of the property from his father S.T. Kumaraswamy and regarding documents that are relied on by the witness. 16. On consideration of the oral and documentary evidence placed before the Court, it is clear that the plaintiff has categorically admitted that he is running the finance business under the name and style of Siddalingeswara Finance. He also admitted that he is lending the amount by getting the ornaments pledged. This exactly the defence taken by the defendants contending that the plaintiff being a retired employee is doing money lending business without any licence. 17. The defendants have produced Exs.D1 to D7 - various complaint filed against several persons alleging commission of offence punishable under Section 138 of NI Act. PW-2 Bettaiah admits that he has deposed in favour of the plaintiff and his son in various cases. He admits that he might have deposed in 20 such cases. All these materials clinchingly support the contention of the defence that plaintiff is a money lender without licence. 18. Section 11 of the Act of 1961 bars any suit by money lender who is not holding licence. He admits that he might have deposed in 20 such cases. All these materials clinchingly support the contention of the defence that plaintiff is a money lender without licence. 18. Section 11 of the Act of 1961 bars any suit by money lender who is not holding licence. There is a bar for the Court to pass any decree in favour of money lender, unless it is specified that he is having valid licence to carry on such business. In the present case, admittedly, the plaintiff is a money lender without licence. Under such circumstances, suit filed by the plaintiff itself was not maintainable. Therefore, I am of the opinion that suit of the plaintiff is to be dismissed by allowing the appeal and by answering substantial question of law in favour of defendants and against the plaintiff. 19. I have gone through the impugned judgment and decree passed by the Trial Court taking into consideration the evidence of PWs. 1 and 2 to hold that the plaintiff is a money lender without licence and also holding that the contention taken by the plaintiff that he lent Rs. 2,00,000/- to S.T. Kumaraswamy on 08.01.2003 for which Ex.P1 cheque was issued on 08.02.2003 and expressed suspicion as to why the cheque was kept by the plaintiff without presentation for about 5 months and the same was presented during July 2003. The Trial Court is right in its reasoning and finding against the plaintiff. 20. The First Appellate Court ignoring all these fatal admissions given by PWs. 1 and 2 shifted the burden entirely on the defendants to prove his defence and proceeded to decree the suit. The First Appellate Court also ignored the clinching admission given by PW-1 that there was no agreement for payment of interest and proceeded to award interest at 9% p.a. from the date of loan till the date of filing of suit. It is pertinent to note that even the plaintiff has not sought for payment of interest at any rate from the date of loan till filing of suit. On the other hand, plaintiff claimed the interest at the rate of 8% p.a. from the date of suit till realization. Therefore, it is clear that the First Appellate Court has not applied its mind and proceeded to allow the appeal decreeing the suit of the plaintiff erroneously. On the other hand, plaintiff claimed the interest at the rate of 8% p.a. from the date of suit till realization. Therefore, it is clear that the First Appellate Court has not applied its mind and proceeded to allow the appeal decreeing the suit of the plaintiff erroneously. Therefore, the substantial question of law is answered in favour of the defendants and against the plaintiff. Hence, I am of the opinion that the impugned judgment and decree passed by the First Appellate Court is liable to be set aside. 21. Hence, I proceed to pass the following: ORDER: The appeal is allowed with costs. The judgment and decree dated 27.10.2009 passed in R.A. No. 336 of 2007 by the learned II Additional District Judge, Tumakuru, is set aside. The judgment and decree dated 27.09.2007 passed in O.S. No. 49 of 2006 by the learned Civil Judge (Senior Division) and JMFC, Turuvekere, is restored. As a result, the suit in O.S. No. 49 of 2006 filed by the plaintiff is dismissed. Registry to send back the Trial Court records. Since the main appeal is disposed of, I.A. No. 1 of 2018 filed for additional substantial question does not survive for consideration, hence, the same stands dismissed.