Patna High Court. Shridhar Singh vs Manu Singh on 5 September, Author: S Hussain Bench: S Hussain JUDGMENT S.N. Hussain, J.

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1 Patna High Court Shridhar Singh vs Manu Singh on 5 September, 2007 Author: S Hussain Bench: S Hussain JUDGMENT S.N. Hussain, J. 1. This Second Appeal has been filed by the plaintiff against the Judgment and decree of the learned court of appeal below allowing the money appeal and reversing the judgment and decree of the learned trial court by which the suit of the plaintiff-appellant was decreed. 2. Money Suit No. 24 of 1982 was filed by the sole plaintiff-appellant for realisation of Rs. 4, with interest (both pendentelite and future) and cost from defendant No. 1 (original respondent No. 1) claiming that at the instance of defendant No. l, the plaintiff gave him a loan of Rs. 3, for purchase of bullocks and for repair of his house and in token thereof defendant No. 1 executed a hand note on in favour of the plaintiff. He further claimed that the said loan was only an accommodation loan and he was not in money lending business. It was also asserted that defendant No. 2 undertook to repay the said amount with interest but inspite of plaintiff's demand and lapse of a long time the loan remained unpaid, hence the plaintiff had to file the said suit for recovery of the above mentioned principal amount of loan with interest totally amounting to Rs. 4, Defendant-respondent No. 2, who was the nephew of defendant-respondent No. 1, was subsequently added as defendant No. 2 in the suit after defendant-respondent No. 1 gifted his property to him. 3. Defendant No. 1 contested the claim of the plaintiff and asserted that mandatory provisions of the Bihar Money Lenders Act 1974 (Bihar Act XXII of 1975) (hereinafter referred to as 'the new Act' for the sake of brevity) were not complied by the plaintiff, although he and his father were professional money lenders, who cannot advance any accommodation loan and that his claim was also not maintainable under the provisions of the Debt Relief Act, because defendant No. 1 was not a scheduled debtor as he had no land of his own. He completely denied that he ever took any money as loan from the plaintiff or his father, or that he ever executed any hand note in plaintiff's favour and claimed that the entire allegation is false and concocted. He further claimed that the hand note is a fabricated document and the plaintiff might have obtained his signature in his intoxicated condition on blank paper for creating such a document collusively and fraudulently. Defendant No. 2 also filed his written statement contesting the plaintiff's claim on the same grounds and further asserting that he had no concern with any such loan or payment as he was not a party to the alleged loan or hand note. 4. Learned Munsif 3rd Court, Arrah decreed the money suit and the claim of plaintiff by his judgment and decree dated finding that the evidence proved that defendant No. 1 had taken loan from the plaintiff and even the witnesses of the defendant did not deny this fact and that the khatians of revisional survey (Ext.3 and 3/A) proved that plaintiff and his father had separate lands and the plaintiff had given accommodation loan to defendant No. 1. Accordingly the learned trial court held that the plaintiff was entitled to recover the amount mentioned in the hand note i.e. Rs. 3, from defendant No. 1. Indian Kanoon - 1

2 5. Against the said judgment and decree of the learned trial court the defendants filed Money Appeal No. 10 of 1987 which was contested by the plaintiff who also filed a cross- objection. The said appeal was finally allowed by the learned Additional District Judge 8th Court, Arrah (Bhojpur) by his judgment and decree dated after arriving at the following findings: (a) The statement of father of plaintiff, namely P. W. 1, that he was present at the time of execution of the hand note was not acceptable as the said statement was not proved either by any material or by the plaintiff or the scribe and hence P.W.1 was not a competent witness. (b) The evidence adduced on behalf of the defendant fully proved that the plaintiff and his father were doing joint money lending business which fact is corroborated from the deposition of P.W.I himself as well as from the defendants witnesses. (c) The plaintiff failed to prove that defendant No. 1 had executed the alleged hand note by putting his left thumb impression on in token of loan of Rs. 3, (d) The plaintiff had failed to prove by any material whatsoever that defendant No. 2 was in any way benefited by the aforesaid loan or had any concern with the same. (e) Admittedly there is no license produced or proved in this case as required by the Act and hence the claim in the suit is not maintainable. 6. Against the aforesaid judgment and decree of the lower appellate court the plaintiff filed the instant Second Appeal which was admitted on and this Court referred the matter to a Division Bench for final hearing after framing the following substantial question of law: Whether casual money lending is saved from the restriction imposed by Section 8 of the Money Lenders Act This question was in respectful disagreement with the decision of a Division Bench of this Court in case of Baijnath Prasad and Anr. v. Harnandan Mahto and Anr. by which the Division Bench relying upon the law, as it stood prior to the amendment, had extended the definition of the word 'Money Lender' read with Section 8 of the New Money Lenders' Act, However, when this second appeal came up before an Hon'ble Division Bench of this Court on , their Lordships directed this case to be listed before a Bench of a Single Judge after obtaining the permission from Hon'ble the Chief Justice on the basis of the following observations: This matter has come up before this Court on reference made by Single Judge of this Court dated It appears that learned Single Judge of this Court showing disagreement with the judgment of a Division Bench of this Court in the case of Baijnath Prasad and Anr. v. Harnandan Mahto and Anr., referred this case for adjudication before a Division Bench itself. The ratio laid down by this Court in the case of Baijnath Prasad and Anr. (supra) since was passed by a Bench of this Court was binding upon the learned Single Judge and in our considered view, there would have been no occasion to disagree with the same. This is the requirement of judicial Indian Kanoon - 2

3 propriety and precedent of this Court. Shridhar Singh vs Manu Singh on 5 September, After the aforesaid order of the Hon'ble Division Bench, the matter has been placed before this Court for final hearing of the instant Second Appeal. In the instant second appeal, the only question which has been formulated by this Court at the time of admission of the instant Second Appeal under Order XLI Rule 11 of the Code of Civil Procedure is that whether casual money lending is saved from the restriction imposed by Section 8 of the new Act. The said question was framed in disagreement with the decision of a Division Bench of this Court in case of Baijnath Prasad and Anr. v. Harnandan Mahto and Anr., as the learned Single Judge had observed that the said Division Bench relying upon the law, as it stood prior to the amendment, had extended the definition of the word 'money lender' beyond the definition in the present Act, whereas the instant matter arises out of the new definition of 'money lender' read with Section 8 of the new Act. 9. In the instant second appeal the order of the Division Bench dated has specifically held that the ratio laid down by the earlier Division Bench of this Court in case of Baijnath Prasad and Anr (supra) was binding upon the learned Single Judge and there was no occasion to disagree with the same as per the requirement of judicial propriety and precedence of this Court. In the said circumstances, it has to be considered at this stage as to whether the question of law formulated in the instant Second Appeal vide order dated can be entertained in view of the decision of the Division Bench of this Court in the case of Baijnath Prasad and Anr (supra). 10. In essence now this Court has to decide as to whether the learned court below has correctly decided the matter under the new Act. It is not in dispute that the alleged loan was taken and the alleged hand note was executed in the year 1979 after coming into force of the aforesaid Act in the year 1975 and the suit, out of which this appeal has arisen, was also filed much thereafter in the year Hence the instant case is clearly governed by the said Act. 11. The main dispute is with respect to the term 'money lender' which is defined under Section 2(k) of the Act as follows: 2(k) Money Lender means a person advancing loan and shall include a Hindu undivided family and the legal representatives and successors in interest, whether by inheritance, assignment or otherwise of a person who advances a loan; The next provision connected with the aforementioned question of law is Section 8 of the Act which reads as follows: 8. Suit for recovery of loan maintainable only by registered money lenders.- No court shall entertain a suit filed by a money lender for recovery of loan advanced by him after the commencement of this Act, unless such money lender was registered as such under this Act or the Bihar Money-Lenders Act, 1938 (Bihar Act III of 1938) at the time when the loan was advanced. 12. The learned court of appeal below after considering the pleadings of the parties and the points raised by them came to several findings of facts and the learned lower appellate court being final Indian Kanoon - 3

4 courts of facts, the said findings cannot be legally challenged in the instant second appeal. In the said circumstances, the only question framed in the instant second appeal for being considered at the time of final hearing is the maintainability of the plaintiff's claim in view of the specific provision of the Act. No other point has been raised on behalf of the appellant. 13. While considering the aforesaid point the Hon'ble Division Bench of this Court in case of Baijnath Prasad and Anr. (supra) had specifically found that the provision of Section 2(k) of the new Act corresponds with Section 2(g) of the old Bihar Money Lenders Act of 1938 (Bihar Act III of 1938) as modified by the Act of 1939 and the difference in the language of the two statutory provisions is only this that in Section 2(g) of the Old Act, "Money Lender" has been defined as meaning "a person which advances a loan", whereas in the New Act it has been defined as meaning "a person advancing a loan", hence the said Division Bench in its considered view found that there is no difference in the spirit and the substance of the two definitions irrespective of slight grammatical variation in the participles used. 14. The provision of Sections 4 and 5 of the new Act are mutatis mutandis same as in the old Act as there is absolutely no difference in the language used in the two corresponding provisions. Hence, the said Division Bench held that there is no distinction between a series of decisions of this Court having a bearing on the question at hand, nor there is any change much less any substantial change in the language of the relevant provisions except that Section 8 has been substituted in the new Act. 15. It may be noted that Section 2(k) of the new Act read with Section 8 of the new Act have to be considered in the light of the language of Sections 4 and 5 of the new Act with respect to the term " Money Lender". In that regard, reference may be made to a decision of this Court in case of Bijaylal Agarwalla v. Prematha Nath Dutta reported in 1967 Patna LR 259, in which it had been held that for the purposes of registration under Section 4 of the old Act the word 'Money Lender" has to be used not in terms of the definition as provided under Section 2(g) of that Act, but in the sense it appears to have been used in the context of Section 5 of that Act and in that case, the term "Money Lender" used in Section 4 of the old Act, which is the same as Section 4 of the new Act, means only those money lenders who are professionals or carrying on money lending as business. 16. Another plea has been taken that even if the loan was casual and accommodatory, it had been advanced on interest and hence it would come under the purview of the new Act. But this plea also cannot be entertained as a man does not become a money lender by reason of occasional loan to relations, friends or acquaintances, whether interest be charged or not, as charity and kindliness are not the bases of usury for becoming a money lender. There must be more than occasional and disconnected loans in business of money lending which imports the notion of system, repetition and continuity. In this regard, reference may be made to a decision of this Court in case of Sano Kasinath Chaudhuri v. Pattito Sabuto reported in AIR 1942 Patna Considering the entire matter as aforesaid, the learned Division Bench of this Court in case of Baijnath Prasad and Anr. (supra) decided the issue and held that the decision of the learned Single Judge in the case of Newa Lal Rai v. Mahendra Rai reported in 1979 BBCJ 764 does not lay down a correct proposition of law and has to be overruled, only more so since the bar of non-maintainability Indian Kanoon - 4

5 of the suit on the ground of the plaintiff being not a registered money lender had never been canvassed in the two courts of facts below nor had it been pleaded. 18. In the aforesaid facts and circumstances and the settled principles of law this case is squarely covered by the aforesaid decisions and hence I do not find any merit in the instant second appeal, nor do I find that the substantial question of law framed in this appeal earlier is really a substantial question of law which can be entertained. Furthermore the judicial propriety and the precedence also requires that the matter already decided by an earlier Division Bench of this Court has to be followed by learned Single Judge covering the same point. In the said circumstances, this second appeal is devoid of any merit and is accordingly dismissed but without cost. Indian Kanoon - 5