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1974 Supreme(Gau) 1
GAUHATI HIGH COURT
BAHARUL ISLAM, J.
Dimbeshwar Barooah -Appellant
Versus
Rashik Chandra Hazarika and another -Respondent
First Appeal No. 70 of 1969
Decided On : 02-01-1974
R.C. Choudhuri and J.K. Barua, M.K. Sarma
A person who grants a loan is not necessarily a money lender within the meaning of the Assam Money-Lenders Act, 1934. The Act applies only to persons whose business is money lending.
Headnote:
MONEY LENDER - DEFINITION - ASSAM MONEY LENDERS ACT, 1934 - SECTION 2(1) - A person who grants a loan is not necessarily a money lender within the meaning of the Act. The Act applies only to persons whose business is money lending.
Fact of the Case:
Plaintiff filed a suit for recovery of money lent to Defendant No. 1, with Defendant No. 2 standing as surety. The defendants denied receiving the loan and claimed that the suit was barred by Section 7 of the Assam Money-Lenders Act, 1934. The trial court dismissed the suit, holding that the plaintiff was a money lender and the suit was hit by Section 7 of the Act.
Finding of the Court:
The court held that the plaintiff was not a money lender within the meaning of the Act, as he did not engage in money lending as a business. The court also held that the suit was not barred by Section 7(3) of the Act, as the plaintiff was not a money lender.
Issues: 1. Whether the plaintiff was a money lender within the meaning of the Assam Money-Lenders Act, 1934? 2. Whether the suit was barred by Section 7 of the Act?
Ratio Decidendi: The court held that the plaintiff was not a money lender within the meaning of the Act, as he did not engage in money lending as a business. The court also held that the suit was not barred by Section 7(3) of the Act, as the plaintiff was not a money lender.
Final Decision: The court allowed the appeal, set aside the judgment and decree of the trial court, and decreed the suit with costs.
JUDGEMENT :- This appeal by the plaintiff is from the judgement and decree passed by the Assistant District Judge, Sibsagar, Jorhat, in Money Suit No. 3 of 1564.
2. The suit is for recovery of money. The plaintiffs case is that Defendant No. 1 took a loan of Rs. 12,500/- from him by executing a bond on 14-9-63 and defendant No. 2 stood surety for the said amount. Defendant No. 1 agreed to pay the money in four equal installments, being payable on 14-11-63, 14-1-64, 14-3-64 and 14-5-64 respectively. On the date of execution of the bend defendant No. 1 executed an agreement whereby he promised to execute a deed of simple mortgage to secure the said amount of Rs. 12,500/-, The defendants failed to pay the first installment due on 14-11-63 or to execute the deed of mortgage. The plaintiff, therefore, served a registered notice upon the defendant No. 1 but to no effect. He has therefore, Sled the present suit for Rupees 12,897/- inclusive of interest.
3. The defendants Nos. 1 and 2 have filed a joint written statement. They have admitted the execution of the bond, but denied the receipt of any consideration. They have further pleaded that the suit is not maintainable, being hit by Section 7 of the Assam Money-Lenders Act, 1934 (hereinafter referred to as the Act). Their further defence is that defendant No. 1 is the settlement-holder of Amguri Stone Quarry No. 2 and he entered into a partnership with the plaintiff; that the suit is not maintainable without rendering partnership accounts and dissolution of the partnership. They aver that the bond was executed only to raise the loan for financing the working of the Quarry. They, however, further plead that they were not aware of the contents of the bond.
4. The learned trial Court dismissed the suit holding that the suit was hit by Section 7 of the Act, that there was no passing of any cash consideration of the bond, that there was a partnership business between plaintiff and defendant No. 1, and that the loan was obtained for financing and running the quarry. Hence this appeal by the plaintiff.
5. Shri R.C. Choudhuri, learned Counsel for the appellant, raises the following points before me :
(i) That the plaintiff is not a "money lender" as defined by Section 2 of the Act and as such the suit is not bit by Section 7 of the said Act; and
(ii) That the learned trial Courts finding that there was no cash consideration of the bond is contrary to the evidence on record.
In reply, Dr. M.K. Sarma, learned Counsel for the respondents, controverts the submission of the appellant. He further submits that the bond (Ext. 1) is not admissible in evidence as it has been inadequately stamped. He further submits that the plaintiffs suit is premature.
6. Let us first examine whether Ext. 1 is admissible in evidence and whether the sash consideration of the bond was paid. It, is admitted by both the parties that Ext. 1 is a bond and that the stipulated consideration is Rs. 12,500/- and the stamp fee paid is only Rs. 15/-. It is also conceded by appellants learned Counsel that the document has been inadequately stamped. He, however, submits that on that ground the document should not be discarded, but it may be impounded and the appellant may be directed to pay the deficit stamp fee.
7. Section 35 of the Indian Stamp Act provides; "35. No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duty stamped :
Provided that -
(a) any such instrument not being an instrument chargeable with a duty not exceeding ten paise only, or a bill of exchange or promissory note, shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such du
