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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Ashok S.Kinagi
N G Basavaraj, S/O Gundappa – Appellant
Versus
Palaiah, S/O Thammaiah, Dead By Legal Representatives – Respondent
JUDGMENT :
Ashok S.Kinagi, J.
This Regular Second Appeal is filed by the appellant challenging the judgment and decree dated 24.07.2013 passed in R.A.No.10/2013 by the learned Senior Civil Judge, Challakere, and the judgment and decree passed in O.S.No.31/2012 dated 28.01.2013 passed by the learned Civil Judge and JMFC, Molakalmuru.
2. For convenience, the parties are referred to based on their rankings before the trial Court. The appellant was the plaintiff, and the respondent was the defendant.
3. Brief facts, leading rise to the filing of this appeal are as follows:
The plaintiff filed a suit against the defendant for the recovery of money. It is the case of the plaintiff that the plaintiff and defendant are well known to each other. The defendant approached the plaintiff with a request to advance a hand loan of Rs.1.00 lakh for family necessity. The plaintiff, considering the need of the defendant, agreed to advance a hand loan of Rs.1.00 lakh on 06.02.2009 in the presence of the witnesses. The defendant also executed a demand promissory note. It was agreed to pay the interest @ 2% per month. The plaintiff requested the defendant to repay the loan amount with interest. Despite the r
Lending money on rare occasions does not constitute a money-lending business under the Karnataka Money Lenders Act, thus affecting the maintainability of related suits.
Promissory notes require evidence to challenge validity; mere allegations are insufficient to avoid liability for repayment under a loan agreement.
A sporadic money lending does not constitute a business; appropriate evidence must be presented to challenge loan authenticity.
Engaging in the business of money lending without a license under the Bengal Money Lenders Act, 1940 renders the lender ineligible for obtaining a decree for loan recovery.
The prosecution must provide substantial evidence to establish that an individual is engaged in money lending as a business to sustain charges under the Money-Lenders Act.
The Moneylenders Act 1951 does not prohibit personal loans between individuals; it regulates the business of moneylending, requiring a license for such activities.
To constitute an offence under the Money Lenders Act, there must be a demonstration of continuous business activity, not merely a single instance of money lending.
A money-lender can recover a loan if they obtain a valid registration certificate during litigation, although not required at the time of the loan.
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