Case: SURESH CHANDRA ROY (D) THR. LRS. &amp; ANR Vs. SUDHIR CHANDRA BISWAS (D) THR.LRS

1. The plaintiffs suit for declaration of title and injunction against interference with possession and further for redemption of the security under the Bengal Money-Lenders Act, 1940 (?1940 Act? for short) was dismissed by the learned trial Court. In First Appeal, the decree was reversed which reversal was maintained in Second Appeal by the High Court. Aggrieved, the defendants are in appeal before this Court3. The bone of contention between the parties is whether the Kabala i.e. written agreement dated 28th October, 1970 was a loan transaction as claimed by the plaintiff or an outright sale as claimed by the defendants. The plaintiffs suit, as noticed, was also for redemption of the security offered against the loan, as claimed by the plaintiff. Such redemption was sought under the provisions of the 1940 Act4. The First Appellate Court and the High Court recorded a conclusive finding that the plaintiff continued to remain in possession notwithstanding the execution of the aforesaid Kabala/agreement. In coming to the said finding the learned courts took into account the order of the Revenue Authority dated 3rd April, 1975 by which the application for mutation made by the defendant No.2, who is the subsequent purchaser from the defendant No.1, was rejected. That order was not challenged by the defendant No.2. The learned courts, therefore, did not accept the defendants case in view of the finding of possession in favour of the plaintiff5. The First Appellate Court and the High Court also recorded a finding that the price mentioned in the Kabala was not only low but it was shockingly disproportionate.

Court's reasoning:
6. Though the Kabala which we have perused may indicate that the transaction is in the nature of a sale, taking into account the case projected in the plaint and the relief of redemption sought, as noted above, resort to the provisions of Section 2(12) of the 1940 Act and Section 40(6) thereof by the learned courts cannot be said to be misplaced. Under Section 2(12) of the 1940 Act, the term loan may include any transaction which is in substance a loan though may not appear to be so in form. Under Section 40(6) of the 1940 Act, in suits to which the 1940 Act applies, oral evidence to dispute the contents of a written agreement could be adduced notwithstanding the provisions of Section 92 of the Evidence Act. It is on the basis of the aforesaid provisions of law and the oral evidence of the parties that the High Court affirmed the findings of fact recorded by the First Appellate Court, namely, that the factum of possession of the plaintiff and the price of the transaction would seem to indicate that the transaction was a loan transaction as claimed by the plaintiff and not a sale as claimed by the defendants7. In view of what has been stated above we can find no fundamental error in the order passed by the High Court so as to warrant interference.