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.

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 request, the defendant did not repay the loan amount. The plaintiff issued a legal notice on 17.01.2012 to the defendant, calling him to repay the loan amount with interest. The defendant did not reply to the legal notice. Hence, a cause of action arose for the plaintiff to file a suit for recovery of money. Accordingly, prays to decree the suit.

4. The defendant filed a written statement denying the averments made in the plaint, and it is contended that the plaintiff colluding with one H. Puttanna S/o. Yallappa, who is the uncle of the plaintiff, has filed a false suit against several persons. The plaintiff is unknown to him, and he has never engaged in any monetary transaction with the plaintiff and not executed any promissory note. The plaintiff is a money lender, and the plaintiff does not possess any valid money lending license. It is contended that the suit filed by the plaintiff is not maintainable.Hence, prays to dismiss the suit.

5. The trial Court, based on the pleadings of the parties, framed the following issues and additional issues:

ISSUES

1) Whether the Plaintiff proves that the Defendant borrowed a loan of Rs.1,00,000/- from the Plaintiff for his land development on 06.02.2009 and executed a promissory note dated 06.02.2009 in favour of Plaintiff agreeing to repay the same with interest at the rate of 2% per month?

2) Whether the Defendant proves that the Plaintiff has obtained signature of Defendant on blank promissory note being security for the treatment amount which was due by the Defendant to the plaintiff?

3) Whether the Defendant further proves that the Plaintiff has concocted promissory note after obtaining the signature of the Defendant on blank promissory note?

4) Whether the Defendant proves that suit is barred by law of limitation?

5) Whether the Plaintiff is entitle for the relief as sought for?

6) What Order or Decree?

ADDITIONAL ISSUE

1) Whether the Defendant proves that the plaintiff is doing money lending business without any money lending license, hence the suit is not maintainable?

6. The plaintiff, to substantiate his case, examined himself as PW-1, examined two witnesses as PW-2 and PW-3, and marked 4 documents as Ex.P1 to Ex.P.4. On the other hand, the defendant was examined as DW-1, and marked 13 documents as Ex.D.1 to Ex.D.13.

7. The trial Court, after recording the evidence, hearing both sides, and on assessing the verbal and documentary evidence, answered issue No.1, and