A registered money-lender can sue for the recovery of a loan in excess of the maximum amount mentioned in the registration certificate.

Headnote:
MONEY LENDING - Bihar Money-Lenders Act, 1938 (Bihar Act III of 1938) - Bihar Money-Lenders (Regulation of Transactions) Act, 1939 (Bihar Act VII of 1939) - Registered money-lender - Suit for recovery of loan - Maximum amount of loans - Registration certificate - Interpretation.
Fact of the Case:

A registered money-lender under the Bihar Money-Lenders Act, 1938, advanced a loan in excess of the maximum amount mentioned in the registration certificate. The borrower defaulted on the loan, and the money-lender filed a suit for recovery of the loan. The trial court decreed the suit, but the High Court reversed the decree, holding that the money-lender could not sue for the excess amount because it exceeded the limit specified in the registration certificate.
Finding of the Court:

The Supreme Court held that the money-lender could sue for the recovery of the entire loan, even though it exceeded the limit specified in the registration certificate. The Court held that the Act did not provide for any limit on the amount of loans that a registered money-lender could advance, and that the rule-making power of the Government did not extend to the fixing of such a limit.
Issues: Whether a registered money-lender can sue for the recovery of a loan in excess of the maximum amount mentioned in the registration certificate.
Ratio Decidendi: The Court held that the Act did not provide for any limit on the amount of loans that a registered money-lender could advance, and that the rule-making power of the Government did not extend to the fixing of such a limit. The Court also held that the mere fact that the money-lender contravened any of the requirements of the license or of any rule or even any provision of the Act did not mean that his registration as a money-lender under S. 5 of the Act was an improper registration.
Final Decision: The Supreme Court allowed the appeal and ordered that the decree of the Court below be modified to the effect that plaintiff No. 2 alone is entitled to a decree for Rs. 6,000 as against defendant No. 3 alone and that plaintiff No. 2 would be entitled to simple interest at 6 per cent per annum from the date of institution of the suit until realization of the amount.

Judgement

RAGHUBAR DAYAL, J. : The sole point urged in this appeal under certificate from High Court, is whether a money-lender, registered under the Bihar Money-Lenders Act, 1938 (Bihar Act III of 1938), hereinafter called the Act, can sue his debtor for a loan in excess of the amount mentioned as the maximum amount upto which he could transact business under the registration certificate issued to him.

2. The facts of the case may be briefly stated. Sant Saranlal and Bhanuprakash Lal, plaintiffs Nos. 1 and 2 respectively, sued defendants Nos. 1 to (Sic) a registered money-lender under the Act and the registration certificate constituted a partnership business under the name and style of Banwarilal Kishanlal in 1947. Out of this amount, Rs. 3,500 had been lent prior to January 17, 1950 and the balance of Rs. 11,870 was lent between January 21, 1950 and May 14, 1951. The suit was contested on various grounds.

3. The trial Court found that the various amounts were advanced for the purposes of the firm. It found that plaintiff No. 2, Bhanuprakash Lal, was a registered money-lender under the Act and the registration certificate dated January 17, 1950 stated that he had been registered as a money-lender on that day to transact money-lending business upto a maximum of Rs. 4,999 only. It further held that the fixing of this limit to the money-lending business did not debar plaintiff No. 2 from suing for amounts in excess of Rs. 4,999 in case he had really advanced that amount. The trial Court accordingly decreed the suit for Rs. 11,870 plus interest pendente lite at 6 per cent per annum.

4. Defendant No. 1 alone filed an appeal against this decree. The High Court disagreed with the finding of the trial Court that the loans had been taken for the firm Banwarilal Kishanlal and held that they were taken by defendants Nos. 3 and 5 from plaintiff No. 2. It further held that out of the amount of Rs. 11,870 only Rs. 6,000 had been taken on loan by defendant No. 3 and the balance was taken on loan by defendant No. 5 against whom the plaintiffs had not sought a decree. It further held that in view of the various provisions of the Act and the rules framed thereunder the plaintiff could not get a decree for any sum over Rs. 4,999. The High Court accordingly allowed the appeal of defendant No. 1 and set aside the decree passed by the trial Court against defendants Nos. 1, 2 and 4 and passed a decree in favour of plaintiff No. 2 for Rs. 4,999 against defendant No. 3 alone. It also decreed simple interest at 6 per cent per annum from the date of the institution of the suit until realisation. It is against this decree of the High Court that the present appeal has been filed after obtaining certificate from the High Court.

5. The only point urged by Mr. Chatterjee, for the appellants, is that the High Court erred in holding that a registered money-lender could not recover by suit loans advanced in excess of the maximum amount mentioned in the registration certificate.

6. To appreciate the contention, it will be helpful to refer to the various provisions of the Bihar Acts affecting the question under determination.

7. The Act of 1938 was enacted to regulate money-lending transactions and to grant relief to debtors in the Province of Bihar. Loan , according to Cl. (f) of S. 2 means inter alia, an advance whether of money or in kind on interest made by a money-lender. Money-lender , according to Cl. (g) means a person who advances a loan. Registered money-lender according to Cl. (j) means, inter alia, a person to whom a registration certificate has been granted under S. 5. Section 3 empowers the State Government to exempt any money-lender or class of money-lenders or any class of loans from the provisions of the Act. Section 4 provides that every Sub-Registrar shall maintain a register of money-lenders in such form and containing such particulars as may be prescribed, and such register would be deemed to be a public document within the meaning of the Indi

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