1 IN THE HIGH COURT OF BOMBAY AT GOA CIVIL REVISION APPLICATION NO. 17 OF 2009 Kedar Ramakant Kakodkar, Son of Shri Ramakant Kakodkar, residing at Flat Nos. F-3 & F-4, Building C-4, Models Complex, Taleigao Market, Talegao, Goa .. Applicant Versus Auduth Timblo, Son of late Shri Modu Timblo, age 55 years, residing at House No.G-9, La Marvel Colony, Dona Paula, Panaji, Goa .. Respondent. Mr. Rajendra V. Pai with Mr. A. R. Pai with Samir Taleigaonkar, Advocates for the applicant. Mr. J. E. Coelho Perriera, Senior Advocate with Mr. V. Braganza, Advocate for the respondent. CORAM :- U. D. SALVI, J. DATE OF RESERVING THE ORDER : 14/01/2010 DATE OF PRONOUNCING THE ORDER : 05/02/2010. ORDER : Legality and propriety of the order dated 17.9.2009 rejecting the application under Order VII, Rule 11 of C.P.C. moved by the petitioner/ defendant in Special Civil Suit No.90/2007/B and passed by the learned CJSD, Panaji is 2 questioned in this civil revision application. 2. The said suit for the recovery of the sums advanced to the petitioner/ defendant under the loan agreements with interest aggregating to Rs.49,41,169.24/- along with further interest @ Rs.2% per month compounded yearly from 1st September, 2007 till its realisation has been instituted in the Court of the learned CJSD, Panaji, Goa at Panaji by the respondent/ plaintiff professedly a businessman from Panaji, Goa. The respondent plaintiff pleaded that the petitioner/ defendant approached him on four occasions i.e. on 26.4.2001, 28.01.2002, 6.11.2002 and 24.1.2003 and sought money loan on every occasion, and after discussions the agreements advancing loans to the petitioner/ defendant following every such occasion came to be executed between them, and the following amounts were advanced as under : Sr. No. Agreemen- ts dated Amounts advanced Terms of agreement 1) 04/05/01 Rs.7 Lacs The repayment of the loan to be made within 90 days along with interest @ Rs.18 % p.a. and on failure to make such repayment by 4.8.2001, the compound interest @ 2 % per month to be charged on the same loan. 2) 04/02/02 Rs.1,50,000 The repayment of the loan to be made within 90 days along with interest @ Rs.18 % p.a. 3 and on failure to make such repayment by 4.5.2002, the compound interest @ 2 % per month to be charged on the same loan. 3) 15.11.2003 Rs. 1 Lac The repayment of the loan to be made within 30 days along with interest @ Rs.18 % p.a. and on failure to make such repayment by 15.12.2002, the compound interest @ 2 % per month to be charged on the same loan. 4) 27.1.2003 Rs.450000/- The repayment of the loan to be made on or before 31.3.2003 along with interest @ Rs.18 % p.a. and on failure to make such repayment by 31.03.2003, the compound interest @ 2 % per month to be charged on the same loan. 3. The loans were disbursed, the plaint reveals, simultaneously with the execution of the said agreements by the respondent / plaintiff as under : Sr. No. Cheque No. Date Drawn on Amount 1) '035121 04/05/01 United Westered Bank Ltd. Panaji branch. Rs.7 lacs 2) '0146384 04/02/02 United Westered Bank Ltd. Panaji branch. Rs.1,50,000/- 3) '0026003 19.11.2002 Bank of Baroda, Panaji Rs.1 Lac 4 Branch 4) 721834 31.1.2003 United Westered Bank Ltd. Panaji branch. Rs.4,50,000/- 4. The plaint further reveals that simultaneously on every occasion of execution of the said agreements 2 cheques – one towards repayment of the principal and other towards repayment of the interest - were issued by the petitioner/ defendant with the understanding that the cheques were not to be presented for payment and, thereafter, from time to time the respondent / plaintiff acceded to the requests of the petitioner/ defendant to grant further time to effect repayment of the said advances i.e. the principal and interest amount, and ultimately the petitioner/ defendant acknowledged his liability to pay to the respondent/plaintiff the sums borrowed under the said agreements and forwarded a cheque bearing No.616112 dated 1.10.2004 drawn on Uco Bank, Panaji Goa in the sum of Rs.26,13,500/- being the consolidated sum due and payable to the respondent/ plaintiff as on 1.10.2004 under the said agreements. The plaint further reveals that the petitioner / defendant was unable to arrange funds for the payment of the said cheque dated 1.10.2004 and requested the 5 respondent/ plaintiff to give him further accommodation for effecting repayment by 29.3.2005 and asked for handing over the said cheque to him for making suitable alterations in the date of the said cheque; and accordingly, the cheque was handed over to the defendant and suitable alterations were made. Cause of action in this suit, according to the statement in the plaint at para 28 thereof, arose on 28.9.2005 when the said cheque bearing altered date dated 29.3.2005 was dishonoured. The respondent/ plaintiff made further assertions in the plaint that he is entitled to receive further interest till realisation on the contractual rate of Rs.3 % per month compounded yearly on the sum of Rs.49,41,169.24 ps. being aggregate amount due from the defendant under the said loan agreements as the transactions contained in the said loan agreements were commercial transactions. 5. These pleadings, according to the petitioner/ defendant, actuated his application dated 18.10.2008 Exh.20 for rejection of the plaint under Order VII, Rule 11 of CPC, 1908. The petitioner/ defendant submitted before the Trial Court that the statements made in the plaint admittedly revealed that the respondent/ plaintiff was/ is carrying on the business of money lending and by advancing loans has 6 carried on the activity of lending finance; and thus, the plaintiff is a money lender within the meaning of Section 2(L) of the Goa Money Lenders Act 2001. The petitioner/ defendant further submitted that non-disclosure of the fact of holding a valid licence under the said Act in the plaint, rendered the plaint liable to be rejected under Order VII, Rule 11 of CPC. 6. The respondent/ plaintiff resisted the said application for rejection of plaint with the say dated 22.1.2009. The respondent/ plaintiff contended that he is neither a money lender nor carrying on business of money lending as contemplated in the said Act and the fact that he is a money lender within the meaning of the said Act needs to be established by cogent evidence. It was further contended while resisting the said application for rejection of the plaint that the said Act does not absolutely bar or prohibit suits by money lender. After hearing the parties, the learned CJSD, Panaji examined the definition of money lender under the said Act and tried to interpret it as under : “14. The definition of 'money lender' appearing in Section 2(l) of the Goa Money Lenders Act came up for interpretation before the Hon'ble 7 Bombay High Court in the case of M/s Armstrong Builder and Developers V/s Mr. Vishvanath Naik reported in 2007(1) All MR 167. As observed by the Hon'ble High Court the expression 'activity' is not defined under the Goa Money Lenders Act and the ordinary dictionary meaning, as per Black's Law Dictionary of 'activity' is an occupation or pursuit in which a person is active and, as per Oxford English Dictionary, it is the condition in which things are happening or being done. The Hon'ble High Court held that the very subject of activity suggests continuity and therefore a single act of giving a loan would not come within the definition of sub-clause (a) of clause (l) of Section 2 of the Goa Money Lenders Act. The Hon'ble High Court also referred to the Judgment of the Andhra Pradesh High Court wherein it was observed that 'money lender' envisages only those persons whose regular business is to advance monies and not those who advance monies casually. ” 7. The learned CJSD, Panaji thereupon concluded that the averments in the plaint do not bring out a fact that the plaintiff was a money lender within the meaning of Section 2(l) of the said Act. He observed as follows : “15. Considering the above interpretation given to the definition of 'money lender' under the Goa 8 Money Lenders Act, I am of the view that the averments in the plaint, which bring out four transactions of granting loan by the plaintiff to the defendant with interest, do not bring out that money lending was an occupation or the pursuit in which the plaintiff was active or that it was the regular business of the plaintiff to advance monies. Therefore, it cannot be concluded that the plaint discloses that the plaintiff was a money lender within the meaning of Section 2(l) of the Goa Money Lenders Act. Consequently, it cannot be held that the averments in the plaint bring out that the plaint is barred by the Goa Money Lenders Act.” 8. These conclusions of the learned CJSD, Panaji, learned Advocate Pai for the petitioner/ defendant argued, are completely erroneous in as much as the proposition formulated by the learned CJSD, Panaji are invented and not warranted by the plain reading of the plaint. To elaborate his arguments, learned Advocate Pai for the petitioner drew the attention of this Court to the specific pleadings in the plaint in respect of four transactions of money lending carrying interest @ Rs.18 % p.a. and further compound interest @ Rs.2 % per month and taking of cheques as security for repayment of the said advances with interest. Inviting the Court's attention to the judgments reported in 1998(2) SCC 9 70 ITC Ltd. Versus Debts Recovery Appellate Tribunal and others, 2005(7) SCC 510 Popat and Kotecha Property Versus SBI Staff Association and 2007(5)SCC 614 Hardesh Ors Pvt. Ltd. Versus Hede and Company, he submitted that it is the duty of the Court to look into the pleadings and construe as it stands in order to weed out irresponsible law suits and in doing so, the Court must make an endeavor to weed out such irresponsible suits at the first hearing by examining the party searchingly in order to see through the clever drafting creating illusions of cause of action. 9. Adverting to the Goa Money Lenders Act, 2001, learned Advocate Pai for the petitioner submitted that the said Act was enacted to make better provisions for the regulation and control of transaction of money lending in the State of Goa and, therefore, the definition of money lender under Section 2(l) of the Act is found widened in his scope than one found on the parallel legislations, particularly the Bombay Money Lenders Act, 1946. He further submitted that the suit in question was primarily filed for recovery of loan lent as an advance at interest to the defendant and only an advance made bonafide in the regular course of business by any person carrying on any business, not having for its 10 primary object the lending of money stood excluded from the meaning of the term loan expressed in Section 2(k) of the said Act. He added that looking to the nature of advance made, particularly the advance at exorbitant usurious rate of interest, the loan in question was capable of being construed as a loan advanced in the course of the business of money lending and as such by all means the role of the respondent plaintiff could be seen as that of the money lender within the meaning of Section 2(l) of the Act. Referring to the provisions of Sections, 4, 5, 24 and 31 of the Act, he pointed out the manner in which the business of money lending was regulated, and the control exercised by the Courts on the interest recoverable in certain cases. All these, he submitted, enjoyed sanction of legislature to curb transaction of money lending at unconscionable rates of interest. 10. According to the learned Advocate Pai for the petitioner, the Court must not only have jurisdiction to try the suit brought but also have the authority to pass the orders sought for, and if the express provision of law had taken away the authority to pass the orders sought for then the litigation under such enactments is meaningless and bound to be abortive and, therefore, it should not be 11 permitted to occupy the time of the Court and exercise the mind of the respondent. Purposefully, he argued, to nip such abortive litigation in bud that the provision of Order VII, Rule 11 of CPC has been made. In this context, he relied upon the judgments reported in CDJ 1987 SC 713 (1987 AIR(SC) 1926) – Samar Singh Versus Kedar Nath @ K. N. Singh and Others and AIR 1969 SC 823 – Official Trustee W.B. Verus Sacchindra Nath. He further argued that authority to pass order or decree sought for by the respondent plaintiff in the suit in question is taken away by Section 14 of the said Act as from the plain reading of the plaint it is clear that the respondent plaintiff did not hold a valid licence under the Act when the suit loan was advanced. 11. Learned Senior Advocate J. E. Coelho Perreira for the respondent plaintiff reminded this Court of the limited scope of revision. He submitted that much remains to be seen about the alleged usurious money lending transaction in order to decide therefrom whether the respondent plaintiff was money lender or not within the meaning of Section 2(l) of the Act. Only at the end of the Trial and not from the reading of the plaint it can be said, he argued, whether it is any transaction of investment or any other business between the 12 parties. For this purpose, he submitted that a glance at a written statement filed by the petitioner/ defendant purportedly for revealing true nature of the controversy is sufficient to assess gravity of the lis requiring adjudication on the basis of evidence led by the parties. It is only in cases of admitted facts, he argued, it can be decided whether any relief was barred by any law or not; and particularly the provisions of Section 14 of the Money Lenders Act does warrant adjudication and consequent satisfaction of the Court in that regard. Merely giving loan or any finance referred to in sub clause (a) of Clause (l) of Section 2 of the Act cannot be related to the business of money lending as defined under Section 2(b) of the Act. To demonstrate how the adjudication of the material issues in a full-fledged trial in the suit is important, he cited judgments reported in AIR 2002 Rajasthan 231 – Mangusingh Versus Mehra Ram, AIR 1983 Patna 308 – Baijnath Prasad and another Versus R. Nandan Mahato and another, AIR 1979 Calcutta 197 – Satyanarayan Kamalkumar Versus Virendra Prasad Singh and another, AIR 2008 SC 416 – M/s. P Vaikuntha Shenoy and Company Versus P. Hari Sharma, AIR 1970 SC 2007- Gajanan and others Versus Set Brindavan, 2003 (Supplement 2) Bombay Cases Reporter 361- Arjun Vishram Raut and 13 another Versus Balkrishna Chaturbhuj Charkha since deceased by his LR's and unreported judgment in F.A. No.211/2003 – Smt. Bina Alhad Nayak Versus Devu Keshwav Nayak and 3 others passed by Division Bench of this Court at Panaji on 6.8.2008, 1994 Mh.L.J. 380 Nandram Kaniram and others Versus N. B. Rahatekar and AIR 1974 Rajasthan 238 – Gaurishankar Versus Magharam. Drawing to his aid the observations of the Apex Court made in para 19 in Popat Kotecha Property's case (supra), he submitted, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense, and the intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole without adopting pedantic approach, and such course as advised by the Hon'ble Apex Court, if adopted in his view, did not warrant any conclusion that money lending was an occupation or the pursuit of the respondent plaintiff. In such situation, he argued, the exercise of discretion by the Trial Court did not warrant any interference, and the revision deserves to be rejected. 12. In this clash of arguments and the counter arguments, it is essential to see while exercising revisional 14 jurisdiction whether the learned CJSD, Panaji acted in the exercise of its jurisdiction illegally or with material irregularity in rejecting the application under Order VII,Rule 11 of CPC. In assessing the act of the learned CJSD, Panaji, it would be appropriate to keep in mind the real object of Order VII, Rule 11 of CPC. Time and again, the Apex Court pointed out that the provision under Order X of the CPC is a tool in the hands of the Courts by resorting to which and by searching examination of the party in case the Court is prima facie of the view that the suit is an abuse of the process of the Court, the jurisdiction under Order VII, Rule 11 of CPC can be exercised vide para 20 in Popat Kotecha Property's case (supra). In the instant case, learned Civil Judge tried to assign meaning to the pleadings in the plaint vis-a-vis the meaning of the expression 'activity' used in sub clause (a) of the clause (l) of Section 2 in the said Act. In Popat Kotecha Property's case (supra), the Hon'ble Apex Court required the Courts below to construe the pleading as a whole to warrant its true import and to gather intention of the party concerned from the tenor and terms of his pleadings taken as a whole without adopting pedantic approach. Taking these words as a chartered course for construing the pleading, it is necessary to scrutinise the pleadings in question. 15 13. Plainly speaking the plaint reveals four consecutive commercial transactions of lending money loan at monetary interest within the meaning of the word 'interest' defined under Section 2(h) of the said Act. Nowhere in the plaint, there is utterance of the fact that such monetary advance was made bonafide in the regular course of the business of the plaintiff. The plaint is also silent about the nature of business the plaintiff was carrying on. No statement that the plaintiff was carrying on business the primary object of which was not lending of money figures any where in the plaint. Patently, the loans referred to in the plaint do not fall in any of the categories under sub clauses (i) to (xiii) of clause (k) in Section 2 of the said Act, which exclude the loans referred to in the said categories from the meaning of the loan expressed in the said provision and consequently, the loans referred to in the plaint fall within the meaning of term 'loan' defined under Section 2(k) of the said Act. 14. Section 2(l) of the Act defines the meaning of the term money lender in following words - 16 Section 2(l) - “money-lender” means,- (i)an individual; or (ii)an undivided Hindu Family; or (iii)a company; or (iv) an unincorporated body of individual, who or which - (a) carried on business of money-lending in the State; or does any activity of lending of any finance; (b) has his or its principal place of such business in the State, and includes a pawn-broker but does not include - (i) Government, (ii) a local authority, (iii) a bank, (iv) the Agricultural Refinance Corporation constituted under the Agricultural Refinance (AND Development) Corporation Act, 1963 (Central Act 10 of 1963); or (v) any other banking, financial or any institution which the Government may, by notification in the Official Gazette, specify in this behalf; 15. When one compares this definition with the provisions of Bombay Money Lenders Act, 1946 and such other cognate legislations, it is not difficult to notice that the scope of the definition has been widened so as to go beyond the periphery of business of money lending and to include 17 within its meaning any activity of lending of any finance. Use of word 'any' in defining phrase further widened the scope of activity of lending of finance (pecuniary resources or funds) so as to include within its sweep each and every activity of such lending. 16. Consequently, the plaint which refers not to a single act of giving a loan, but several such acts in absence of any specific pleadings regarding the nature or object of the business carried on by the plaintiff purports to clothe the plaintiff with an occupation or pursuit of lending finances, an activity in which he purports to be active. 17. It is true that written statement opens a window to a scenario projecting entirely different picture than what is projected in the plaint regarding the transactions referred to therein. However, for the purposes of rejecting the plaint under Order VII, Rule 11, it is the scrutiny of the plaint and the plaint only that matters and this can very well be seen from the relevant provision, which is quoted herein below for ready reference. Order VII, Rule 11 of CPC - Rejection of Plaint 18 – The plaint shall be rejected in the following cases :- (a) where it does not disclose a cause of action; (b) where the relief claimed is under- valued, and the plaintiff, on being required by the Court to so correct the valuation within a time to be fixed by the Court, fails to do so; (c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law; (e)where it is not filed in duplicate; (f) where the plaintiff fails to comply with the provisions of rule 9: [Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-papers shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp- papers, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.] 18. As regards the catena of reported judgments 19 cited on behalf of the respondent/ plaintiff, it needs to be stated that firstly these judgments are in context with Bombay Money Lenders Act, 1946, Rajasthan Money Lenders Act, 1964, Karnataka Money Lenders Act, 1962, C P and Berar Money Lenders' Act, 1934, Bihar Money Lenders Act, 1975 and Bengal Money Lenders Act, 1940 i.e. the enactments which do not have unique and wide definition of money lender as it appears in Goa Money Lenders' Act, 2001, and secondly, the said judgments referred to the cases wherein verdicts were given after recording the evidence in full-fledged trials and not on the point of examination of the plaint under Order VII, Rule 11 of CPC, and thirdly, the facts and circumstances in the present case do not attract the logic or the ratio expressed in the said judgments in relation to the facts mentioned therein. 19. In M/s. Armstrong Builders and Developers case (supra) this Court was confronted with fact of a single act of giving a loan to the accused, who was not connected with the business of the complainant - the complainant's business being that of builder and developer, and the complainant had categorically averred that he was not a money lender nor did have a licence to lend money, and this Court was further 20 obliged to answer whether such incident fell within the purview of expression 'activity' appearing in the sub clause (a) of clause (l) of Section 2 of the Act. It is in this context, the ordinary dictionary meaning of the expression 'activity' as per Black's Law Dictionary and Oxford English Dictionary was considered and