Back
IN THE HIGH COURT AT CALCUTTA
KRISHNA RAO, J.
Smt. Mita Surana - Plaintiff
Versus
Surendra Singh Bengani - Defendant
IA No. GA 1 of 2021 In CS 13 of 2021
Decided On : 07-07-2023
MONEY LENDING - BUSINESS - LOAN - LICENSE - ADMISSION - JUDGMENT ON ADMISSION - C.P.C. ORDER XII RULE 6 : Plaintiff's claim for recovery of loan amount from defendant admitted by defendant through documents such as cheques, promissory note, confirmation of accounts, and admission of receipt of notice for repayment. Defendant's defense that account was in his name but operated by another person is not credible. Court holds plaintiff is not involved in money-lending business and loan was a one-time accommodation. Judgment on admission passed in favor of plaintiff.
Fact of the Case:
Plaintiff lent Rs. 50 lakhs to the defendant as a one-time financial accommodation for his business. The defendant issued a promissory note confirming the receipt of the loan and made partial payments. The plaintiff filed a suit for recovery of the balance amount, relying on the admission of the defendant through various documents.
Finding of the Court:
The court found that the defendant admitted to receiving the loan amount and executing the promissory note. The court also found that the defendant's defense that the account was in his name but operated by another person was not credible.
Issues: 1. Whether the plaintiff requires a license to lend money under the Bengal Money Lenders Act, 1940? 2. Whether there is an admission on the part of the defendant that allows the court to pass a final judgment on admission?
Ratio Decidendi: 1. The court held that the plaintiff's isolated act of lending money to the defendant did not constitute a money-lending business, and therefore, the plaintiff was not required to have a license under the Bengal Money Lenders Act, 1940. 2. The court found that the defendant's admission through the promissory note, confirmation of accounts, and receipt of notice for repayment was sufficient to pass a judgment on admission under Order XII Rule 6 of the Code of Civil Procedure, 1908.
Final Decision: The court allowed the plaintiff's application for final judgment on admission and decreed the suit in favor of the plaintiff for the recovery of the loan amount.
JUDGMENT :
(Krishna Rao, J.) :
1. The plaintiff has filed the present application praying for final judgment upon admission for a sum of Rs. 35,32,534/-. The plaintiff has filed the suit being CS No. 13 of 2021 praying for following reliefs:
(b) Interim interest and interest upon judgment at the rate of 15 % per annum.”
2. The plaintiff in her plaint contended that the defendant having long time acquaintance with the plaintiff and sometimes in the first week of October, 2016, the defendant approached the plaintiff for one time financial accommodation of Rs. 50,00,000/-for his business purpose. Pursuant to the discussion between the plaintiff and the defendant, the plaintiff agreed to pay Rs. 50 lakhs to the defendant, as a short time financial accommodation which shall carry interest at the rate of 15% per annum and the defendant shall repay the said loan amount within a period of three months of demand of such refund.
3. The plaintiff relying upon the assurance of the defendant had lent and advance an amount of Rs. 50 lakhs to the defendant on October 3, 2016 by way of a cheque being No. 059968 drawn on Oriental Bank of Commerce, Brabourne Road Branch, Kolkata-700001, and the same was received by the defendant through Axis Bank Sarat Bose Road Branch, Kolkata. On receipt of the said amount, the defendant had executed a Promissory Note by confirming the receipt of the amount of Rs. 50 lakhs on October 3, 2016.
4. The defendant had issued confirmation of accounts for the period April 1, 2016 to March 31, 2017 and from April 1, 2017 to March 31, 2018. As promised by the defendant, the defendant has paid interest to the plaintiff from October 3, 2016 to November 30, 2016 and further period from December 1, 2016 to March 31, 2017.
5. On April 3, 2017, the defendant refunded Rs. 25,00,000/-a part of the principal amount of Rs. 50,00,000/-by RTGS directly to the banker of the plaintiff.
6. The defendant had informed the plaintiff that he is facing financial crisis and requested the plaintiff to extend the period of repayment of balance principal amount of Rs. 25,00,000/-until March 31, 2018 to which the plaintiff agreed for the proposal. The defendant thereafter paid interest as and when the same became due and last on June 28, 2018, a sum of Rs. 1,11,883/-after deduction of TDS Rs. 12,432/-for the period from December 1, 2017 to March 31, 2018 was paid.
7. The defendant thereafter defaulted in making payment inspite of several requests made by the plaintiff. The plaintiff had also sent notice through an advocate calling upon the defendant for making payment but the defendant failed to make any payment or any part thereof.
8. Mr. Reetobroto Mitra, learned Advocate representing the plaintiff submits that the claim made by the plaintiff is admitted by the defendant which is evident from the following documents:
b. Promissory Note issued by the defendant dated October 3, 2016 for an amount of Rs. 50 lakhs.
c. The defendant has refunded an amount of Rs. 25,00,000/-out of total amount of Rs. 50,00,000/-by way of RTGS on 3rd April 2017.
d. Confirmation of accounts issued by the defendant to the plaintiff from April 1, 2016 to March 31, 2017 and April 1, 2017 to March 31, 2018.”
9. Mr. Mitra relied upon the following judgments :
ii. 2018 SCC OnLine BOM 19972 (Bipin Vazirani –vs- V. Raheja Design Construction Private Limited & Anr.).
iii. AIR 2021 Cal 212 (Prabha Surana –vs- Jaideep Halwasiya).
iv. (2020) SCC OnLine Cal 2123 (Ajay Kumar Agarwal – vs-Green Concretex Global Ltd.).
v. (2015) 1 CHN 476 (Barnwall Marketing & Ors. –vs-Gee Pee Infotech Pvt. Ltd.).”
10. Mr. Rohit Benerjee, learned Advocate representing the defendan
A single isolated instance of lending money does not constitute a money-lending business requiring a license under the Bengal Money Lenders Act, 1940.
A court can pass Judgment and Decree on admission based on admissions made by a party, even if the defendant raises a defence, if the defence is insufficient or illusory.
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.
A judgment upon admission requires clear and unequivocal acknowledgment of debt, which was not established in this case.
A party seeking judgment on admission must demonstrate clear and unequivocal admissions, and failure to establish a prima facie case precludes injunction relief.
The central legal point established in the judgment is that a money lender without a license is barred from maintaining a suit under the Karnataka Money Lenders Act, 1961.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
