Appeal No 167 of 1964
Appeal by special leave from the judgment and decree dated April 11 1962 of the Orissa High Court in First Appeal No 61 of 1959
A V Viswanatha Sastri and T V R Tatachari for the appellant
A N Sinha and B P Jha for respondents Nos 1 and 2
The Judgment of the Court was delivered by Raghubar Dayal J
This appeal by special leave is against the decree of the High Court of Orissa reversing the decree of 346 the Court of the Subordinate Judge Berhampur and dismissing the plaintiff s suit for recovery of Rs 8216 due on a promissory note executed by Kontaru Naiko defendant No 1 for Rs 6000
The plaintiff money lender obtained a registration certificate under section 54 and r 5 of the Orissa Money Lenders Act 1939 Act III of 1939 hereinafter called the Act and the rules thereunder on March 31 1952
He obtained another registration certificate in 1955 which said that the maximum capital for which the certificate is granted is Rs 8000
The plaintiff advanced the loan to defendant No 1 on May 19 1954 and sued for the recovery of the amount due on this loan
It was contended for the defendant that the suit was not maintainable as the maximum capital for which the plaintiff had required the registration certificate in 1952 was Rs 2000 and under the provisions of the Act
and the rules framed thereunder he could not have advanced loan in excess of that amount and that his doing so made the registration of the appellant as a money lender void and therefore the suit for recovery of Rs 2000 even was not maintainable
These contentions were not accepted by the trial Court which decreed the suit against the defendants with the direction that defendants Nos 2 and 3 sons of defendant No 1 were not personally liable and were liable to the extent of the assets of their father in their hands
The High Court however took a different view accepted the aforesaid contentions of the defendants and dismissed the suit
The sole contention for the appellant is that the High Court was in error in holding that the registration of the appellant as a registered money lender in March 1952 became void when he advanced a loan in suit in excess of Rs 2000 in 1954 and that the High Court was also in error in holding that he could not have advanced the loan in excess of the maximum capital for which the registration certificate was wanted
The relevant provisions of the Act may now be set out Capital  is defined in section 2c to mean that which a moneylender invests in the business of money lending whether in money or in kind Registered money lender  according to section 2m means a person to whom a registration certificate has been granted under section section Section 5 provides for the registration of moneylenders and a registration fee
Sub section
1 thereof requires the applicant for registration to mention in the application particulars mentioned in  that sub section and such other particulars as may be Sub section
3 empowers the Provincial Government 3 47 to prescribe by rules for different classes of money lenders and for different areas a registration fee not exceeding Rs 25 to be paid by an applicant for registration
Sub section
4 empowers the Sub Registrar to grant a registration in the prescribed form to the applicant except where the certificate previously granted to him has beencancelled under section 18 and the order of cancellation is in force
Section 6 enacts that the registration certificate granted willbe in force for 5 years from the date on which it is granted
Section 7 provides for the registered money lender to maintain accounts and to give receipts
Section 8 which provides for suits for recovery of loans by registered money lenders reads  Suit for 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 advanced  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 the 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
 Section 9 provides for the maximum rates at which interest may be decreed
Various other sections deal with other matters which the legislature thought fit to provide for in order to achieve the object of the Act which according to the preamble is to regulate money lending transactions and to grant relief to debtors in the State of Orissa
Rule 1 clause c of the Orissa Money Lenders Rules 1939 defines maximum capital  to mean the highest total amount of the capital sums which may remain invested in a money lending business on any day during the period of the registration certificate
Rule 3 cl
iii requires every application for the registration of a money lender to mention the maximum capital for which the certificate is wanted
Rule 4 lays down the registration fees payable and fixes the fees according to the maximum capital in respect of which an application for such certificate is made
Rule 5 provides that registration certificate would be in Form in and that during the currency of a registration certificate application may be made for a registration certificate of a higher 348 denomination and the provisions of rr
3 to 5 shall as far as may be apply to it credit being given to the registration fee already paid by the applicant
The question for decision in this case is practically the same as came up for decision before this Court in Sant Saranlal vs Parsuram Sahu1 judgment
in which has been delivered today
The relevant provisions of the Bihar Money Lenders Act 1938 and the Bihar Money Lenders Regulation of Transactions Act Act mentioned above
What we have said in that case appropriately covers the contentions of the panics in this case
We do not therefore consider it necessary to repeat the discussion of the various contentions in this case
We hold that in the absence of any specific provision in the Act in this case providing for the fixing of the maximum capital which a money lender can invest in money lending business it was not open to the State Government to frame a rule in that regard and that the rules framed by it about mentioning in the application the maximum capital for which the registration certificate was wanted and the mention in the certificate of the amount of the maximum capital for which the certificate is granted do not lead to the conclusion that the registration of the money lender will become void if he exceeds the limit of the maximum capital laid down in the registration certificate
We do not consider it necessary now to decide the other point raised with respect to the retrospective operation of the registration certificates of higher denomination obtained during the currency of a registration certificate
We accordingly allow the appeal set aside the decree of the Court below and restore the decree of the trial Court
We direct the respondents to pay the costs of the appellant in the High Court and this Court
Appeal allowed
1 1966 SCR335


Summary:
The appellant filed a suit against the respondents for the recovery of Rs 8216 due on a promissory note executed by respondent No 1 for a sum of Rs 6000
The plea taken in defence was that the suit was not
maintainable because the registration of the appellant under section 54 and r 5 of the Orissa Money Lenders Act 1939 had become void on account of the money lent being in excess of the maximum amount of Rs 2000 which the appellant was authorised to invest in the business by his registration certificate
The contention was not accepted by the trial court but the High Court
accepting it dismissed the suit
In appeal before this Court by special leave it was urged on behalf of the appellant that the main Act did not provide for any restriction on the amount of capital that could be invested and that the rules went beyond the Act in making such a provision
HELD  In the absence of any specific provision in the Act providing for the fixing of the maximum capital which a money lender can invest in money lending business it was not open to the State Government to frame a rule in that regard and the rules framed by it about mentioning in the application the maximum capital for which the registration certificate was wanted and the mention in the certificate of the amount of the maximum capital for which the certificate is granted do not lead to the conclusion that the registration of the money lender will become void if be exceeds the limit of the maximum capital laid down in the registration certificate
348 D Sant Saranlal vs Parsuram Sahu  relied on