Tirath Singh Thakur, J.—The Petitioners are carrying on business as Commission Agents in the sale and purchase of arecanuts. They have in these petitions assailed the correctness of an order dated 10th of May, 2000 passed by the Licensing Authority, under the Karnataka Moneylenders' Act, 1961, holding that the Petitioners are carrying on business in money lending within the meaning of Section 5 of the said Act, and are therefore liable to pay the additional security deposited in terms of Section 7(2) thereof.

2. The controversy arises in the following circumstances:

In connection with their business as Commission Agents, carried on in the APMC Yard, at Shimoga, the Petitioners advance loans to the arecanut growers which is then recovered out of the sale proceeds of the produce supplied by the latter. Apart from getting registered with the Commercial Department the Petitioners have been securing licenses under the Money Lenders' Act, 1961 also. Consequent upon the decision of this Court in Manakchand Motilal Vs. State of Karnataka, ILR (1991) KAR 1928 upholding the constitutional validity of Section 7-A of the Act, the Respondents issued a Circular dated 6th day of September, 1994, setting out guidelines for calculation of the security deposit and interest on the same. Demands for deposit of security deposit were thereafter made from the Commission Agents/Traders, who assailed the validity thereof in Writ Petition No. 3683 of 1994 filed in the name of Shimoga Arecanut Mandi Merchant Association in a representative capacity. The challenge to the Circular proceeded primarily on the ground that the relationship between the Commission Agents/traders and the growers to whom they advance money was that of an 'Agent and Principal' or 'Purchaser and Seller' and not of a 'Lender and Borrower' so as to make the transaction between them a 'money lending transaction' attracting the provisions of Karnataka Money Lenders' Act. It was contended that the Traders were liable neither to obtain a licence nor to pay the Security Deposit demanded. Raveendran J., disposed of the said writ petition holding that the nature of the transaction between the Traders and the Growers depended on the terms and conditions of the transactions, which could not be determined in the writ jurisdiction of this Court. The members of the Association could however file their objections before the Registrar General, and the Licensing Authority explaining the nature of their business and if the Respondents were satisfied that the traders are not money lenders they will not insist upon the latter obtaining licenses and depositing the security. The Court also noticed that the validity of Circular dated 6th of September, 1994 had already been upheld in Karnataka Pawn Brokers Association and Anr. v. State of Karnataka and Ors., Writ Petition Nos. 360611 - 12 of 1994 and connected matters D.D. on 30th of July, 1996.

3. Pursuant to the above direction objections appear to have been filed by the Traders including the Petitioners herein culminating in the issue of an endorsement dated 10th of November, 1997 issued by the Licensing Authority holding that the Petitioners were carrying on Money Lending Business and were therefore liable to not only secure a license but also to make a security deposit. The said endorsement was challenged in Writ Petition Nos. 35987- 29 of 1997 and connected matters, which were disposed of by a single bench of this Court by order dated 26th of August, 1999. This Court held that the licensing Authority had not given any finding on whether or not the amounts advanced by the traders was by way of loans covered by the money lenders' Act or mere advance of funds for supply of goods as Agents or purchasers. The endorsement was accordingly quashed and the matter remitted back to the Licensing Authority for a fresh consideration. The licensing authority has now examined the issue once again and by the impugned endorsement dated 7th March, 2000 concluded t