';!F'iS;i:ini F'ii<wu(;,t'-!t'!Wil"'Ll^!-!^^!ii?ISllS 1^ ^'y ,€— HIGH COURTOF CHHATTISGARH AT BILASPUR Appelkint FIRSTAPPEALNo. 174 of 2009 : Rukmandhwaj Patel ^ Respondent Versus Dr. Chandrashekhar Sharma ORDER Postfor j 2—-7-2010 Sd/- N.K.Agarwal Judge '|.;!tlli 1?"P :•luiS!!R'ls'''s'8"""' •?l??'l'm*^ ^ 'r" HIGH COURTOF CHHAmSGARH AT BILASPUR Appellant FIRST APPEAL No. 174 of 2009 Rukmandhwaj Patel ^ Respondent Versus Dr. Chandrashekhar Sharma ORDER Postfor il—-7-2010 Sd/- N.K.Agarwal Judge i'?»»~ HIGH COURT OF CHHATTISGARH AT BILASPUR Appellant Defendant Respondent Plaintiff FIRSTAPPEAL No. 174 of 2009 Rukmandhwaj Patel, S/o Shri Devdhar Patel, aged about 51 years, Occupation Govt. Servant (Tahsil Office) Raigarh (CG) Versus Dr. Chandrashekhar Sharma, S/o late Shri Janardan Sharma, aged about 54 years, Occupation Doctor, R/o Seva Kunj Marg, Raigarh (CG) FIRST APPEAL UNDER SECTION 96 OF THE CODE OF CIVIL PROCEDURE (SB: Hon'ble Mr. N.K. Aearwal, J.) Present : Shri S.C. Verma, Advocate for the appellant. Shri Devendra Patel, Advocate for respondent. ORDER (Passed on (^day ofJuly, 2010) This is defendant's appeal under Section 96 of the Code of Civil -Procedure (briefly, 'the Code') against the judgment and decree dated 3-2-2009 passed by 1st Additional District Judge, Raigarh in Civil Suit No. 5-B/2008 whereby and whereunder, the respondent's suit has been decreed. Facts of the case in brief are as under:- • i. There is no material point of fact which is now in dispute. The suit out of which this appeal arises was brought on 27-3-2008 by the respondent/plaintiff for-recovery of Rs. 1,50,000/- as principal, Rs. 99,000/- as interest and Rs. 1,000/- as notice expenses on the basis of promissory note dated 16-6-2005 executed by the ^ jji^ureid aip £qpsjnoojd SBM souaon aqj, •^ins s^ jo Sui^y jo 3fBp 9Vft U.O JO UOIIOBSUBJ^ jo aysp sqi uo souaon PITBA AUB §utpioq^ou SBMjji^ureid aq; 'AipanimpB 'SSBO IIIB^SUI SLR ui •souson pipA sppq aq ysvft payspBs si ^jnoo ax^ piun ^jnoo IIAIO ^ ui pssoojd ywp japuai Asuoui Aq psoireApB ireoi B jo AisAooaj joj iins ou '^ov aLpjo (H)TT uopoag jad SB fev^ ^sjy :spunoj§OA^ uo ssjosp av^ p3\vassv ^wayaddv SLp joj psunoo psLLreoi 'BuuaA, uiIS •^ins aqi jo ^soo pue ^saja^ui sjn^nj ^vcejS o^ pauipsp jaAaAvoq -/OOO'OS'Z 'SH •iojJJR"TBId aq^ jo moABj m aajoap B psss^d sap-red aq^ Xq p30^];d {eua^ui pLre pSOnppB 30U3pIA3 JO SIS^q 3LR uo ^-tno^ IBL4 sqj, •AI passimsip sq o^ siqren si f.nns av^ snq^ puB (^oy si-l^ SB o^ pajjsjaj jsyBmajaq '^joqs JOJ) ^£61 jo ^oy aq^ jo (l)e uoi^oag jo (q) asn^o jo ('e) ssnB^ jo luauisjrnbaj avp. vffiM. paiiduioo ^ou svq Saouaon ^noq^iM sssuisnq guipusi-A'auom Suiop japuai-A'auoia B si jjpureid/iuspuodssj av^ ysv^ aousjap oypsds v •S[OQI yieyaddis sqj, •in •sindsip ui ^ou os^e SJG jo3j3L[i ^oadssj ui ^unoooB jo luauia^^s Aue ^irensddB aqi o^ paqsiujnj jou ireoi av^ jo lunoooB XUB psure^ureui ^ou p^q 'f.m.s sip jo §mnj aq; o^ ^uanbasqns a^Bp B uiojj pi{BA SV/A qoiqM ^ms aqi jo Xouspuad aq^ Suunp souaoii §uipus{ -Asuoui aq^ pajnoojd jji^ureid aqj, •u •mnuire jad o/g^g jo aysj. avft ~pe ^saja^ui paujeo weo\ 3L[J- "JJRureid/iuspuodsaj aip jo jnoA^j u; ^uensdd^ "sSPfiS'RBS-a-8'"'"^^"?'"''*-;'. r"?;^ c : ••"?^. ^ ;-€h £ \ /'• '^ A-' during the pendency of the suit which was valid from a date subsequent to the filing of the suit and, therefore, for the present transaction, it is not in conformity with the provision and therefore, learned trial Court has erred in decreeing the suit 5. Secondly as the plaintiff had not maintained any account of loan nor fumished to the appellant any statement of account in respect there of, as required under Section (l)(a) and 3(l)(b) of the Act, therefore the trial Court has erred in awarding the amount of Rs. 99,000/- as interest over the principal amount of Rs. 1,50,000/-. 6. On the other hand, Shri Devendra Patel, learned counsel appearing for the respondent supported the decree and vehemently argued that learned trial Court has passed the decree in conformity with the provisions contained in Section 11 (F), (G) and (H) of the Act of 1934 and the appeal deserves to be dismissed. 7. I have heard leamed counsel for the parties and perused the impugned judgment and decree of the trial Court. 8. The questions arise for consideration of fhis Court are:- ' i. whether the suit of plaintiff/money lender is liable to be dismissed if he does not hold registration certificate relating to the period when the money lending transactions were entered irito or whether it is sufficient if the plaintiff/money lender produces during the pendency of the suit a registration certificate relating to the period subsequent to the money lending transactions ? |i:E!(s^?^TP?K ..// ^t^- _'^' l '^ft ! ^ 'ff } < ~"&«-/" ^ ^ ii. Where the money-lender has not complied with the requirement of Clause (a) or Clause (b) of Section 3(1) of the Act, whether the Court has power under Section 7 of the Act to reopen the account so as to traverse the entire period frora the date of the loan to the date of the suit and under Clause (b) of Section 7 to disallow the whole or any interest fo,und due, as may be seem reasonable to it, in the circumstances of the case, in case of non- compliance of Section 3(l)(a) and under Clause (c) of Section 7 exclude every period for which he had failed to fumish account as required by Section 3(1) (b) subject to proviso to section 7. 9. According to Section 2(v) ofthe Act, "Money-lender" means a person, who in the regular coizrse of business, advances a loan. as defined in this Act dnd shall include, subject to the provisions of Section 3, legal representatives and the successors in interest whether by inheritance, assignment or othenvise of the person who advanced the loan and money-lending shall be construed accordingly. Section 3 of the- Act obliges every money-lender to (a) regularly maintain an account for each debtor separately of all transactions in respect of any loan advanced to that debtor; and (b) furnish to him annual statements of account in the manner therein provided. Under Section 7 of the Act, the Court trying any suit or proceeding relating to a loan is required before considering the claim on merits, to frame and decide the issue whether the money- lender has complied with the 10. ^ aforesaid two provisions of Section 3. If it is found that a separate account as enjoined was not raaintained, the Court has to disallow the whole or such portion of interest found due as may, in the circumstances, appear reasonable and it may also disallow the costs. Section 11-F, 11-G and 11-H of the Act which are relevant reads as under:- "ll.-F. Bar to carry on business without registration certificate-(l) No person shall carry on the business of money-lending in any district unless he holds a valid registration certificate in respect of that district. (2) Whoever contravenes the provisions of sub- section (1) shall be punishable with fine which may extend to two hundred rupees or if he has previously been convicted of an offence under that sub-section, with fine which may extend to five hundred rupees. 11-G. Conaposition of ofTences - The sub Divisional officer may accept from any person who has committed an offence against sub-section (1) of section 11-F or section 11-FF a sum of money not exceeding five hundred rupees by way of compensation for such offence. . (2) On payment of such sum of money, no further proceedings shall be taken against such person in respect of such offence, and if in custody he shall be discharged. 11-H. Suit not to proceed without registration certificate, etc. - No suit for the recovery of a loan advanced by a money-lender shall proceed in a civil court until the court is satisfied that he holds a valid registration certificate or that he is not required to have a registration certiBcate by reason of the fact that he does not carry on the business of money-lending in any of the district of Chhattisgarh, Provided that this Section shall not apply to a suit instituted before the 1st October 1940. - A bare reading of the above provision would reveal that it is not necessary for validity of the contract of loan that the money-lender must be registered on the date of transaction. He however cannot obtain a decree on his loan unless he possesses a valid registration certificate on the date on which" the decree is to be passed though the transaction of money-lending are not affected for want of registration certificate. 11. While dealing with the identical issues, the Full Bench of M.P. High Court in case of Smt. Janki Bai -v- Ratan Melu (AIR 1962 mp 117) has held if money-lender does not have and cannot produce a registration certificate covering the date on which he advanced the loan, his suit for recovery of that loan is, for that reason alone not liable to be dismissed. It will be sufficient compliance of Section 11 - H of the Act if during the pendency of the suit he produces regisfa-ation certificate which is valid at the time of its production. 12. The above judgment passed by the Full Bench of High Court of Madhya Pradesh in Smt. Janki Bai (supra) has been affirmed by the Supreme Court in Gajanan and others -v- Seth Brindaban (AIR 1970 SC 2007) in para 12 of its judgment. ,13. In view of above, I have no hesitation to hold fhat under Section 11(H) of the Act of 1934, a loan advanced by an unregistered money-lender can be recovered by him if he subsequently obtains a registration certificate relating to a period subsequent to the money-lending transaction during the pendency of the suit. *. 14. So far as second question is concerned, sub-section (2) of Section 3 speaks of the items due by way df interest which are to be shown separately from the prin'cipal sum. This evidently ineans that the amount of interest accruing due froin year to year is required to be entered in the account ^ RF ^if^k '-' \^J'/ • books. The Court has power under Section 7 to reopen the account so as to traverse the entire period from the date of the loan to the date of the suit where the money lender has not complied with the requirement of Clause (a) or (b) of Section 3(1) of the Act; and under Clause (b) of Section 7 to disallow the whole or any interest on it as may seem reasonable to it in the circumstances of the case, in case of non-complignce of Section 3(l)(a) and under Clause (c) of Section 7 exclude every period for which he had failed to fumish account as required by Section 3(1) (b) of the Act subject to proviso to Section 7. 15. Answering the identical question, the Full Bench of High Court of Madhya Pradesh in case of Rajarain Bhiwaniwala Calcutta -v- Nandkishore and others (1975 MPLJ 225) has taken the same view. 16. Now coming to the facts of the case, it is clear that the respondent had not complied with the requirement of section 3 of the Act. Therefore, looking to the facts and cu'cumstances of the case, in the considered opinion of this Court, learned trial Court has erred in awarding Rs. 99.000/- on account of interest. The decree to the extent deserves to be and is hereby set aside. 17. No other point has been raised. l "y. 18. In view .of above, the appeal is allowed in part. The judgment and decree passed by learned trial Court is modified. The respondent/plaintiff is only entitled for a decree of Rs. 1,51,000/- in stead of Rs. 2,50,000/-. The E.i ..^. :-^s £ (\ amount shall carry interest at the rate of 6% from the date of suit till its realization. 19. Parties shall bear their own costs. Sd/- N.K.Agarwal Judge •4