Back
High Court Of Rajasthan
Judgename : Arun Madan
Nizamuddin - Appellant
Versus
Jugal Kishore - Respondent
Civil Second Appeal No. 15 of 1994
Decided On : 03/27/1996
NEGOTIABLE INSTRUMENTS ACT - Hundi - Suit for Recovery - Maintainability - Money Lending Licence - Applicability - Rajasthan Money Lending Act, 1963 - Interpretation.
Fact of the Case:
Plaintiff filed a suit under Order 37, CPC for recovery of Rs. 11,200/- on the basis of a hundi executed by the defendant. Defendant contended that the suit was not maintainable as the plaintiff was not a money lender and did not have a money lending license. The trial court decreed the suit, and the first appellate court upheld the decree.
Finding of the Court:
The court held that the suit was maintainable under Order 37, CPC, as the hundi was a negotiable instrument and the plaintiff was not required to have a money lending license. The court also held that the defendant had failed to establish that the hundi was not genuine or that he had not received the loan amount.
Issues: 1. Whether the suit was maintainable under Order 37, CPC, as the hundi was a negotiable instrument and the plaintiff was not required to have a money lending license? 2. Whether the defendant had established that the hundi was not genuine or that he had not received the loan amount?
Ratio Decidendi: 1. The court held that the suit was maintainable under Order 37, CPC, as the hundi was a negotiable instrument and the plaintiff was not required to have a money lending license. The court relied on the definition of 'negotiable instrument' in the Negotiable Instruments Act, 1881, which includes a hundi. The court also held that the Rajasthan Money Lending Act, 1963, which requires money lenders to have a license, does not apply to suits based on negotiable instruments. 2. The court held that the defendant had failed to establish that the hundi was not genuine or that he had not received the loan amount. The court relied on the evidence of the plaintiff and the fact that the defendant had not produced any evidence to support his claims.
Final Decision: The court dismissed the appeal and affirmed the judgment and decree of the trial court and the first appellate court.
Certainly. Based on the provided legal document, here are the key points:
The suit for recovery of money based on a hundi is maintainable under Order 37 of the Civil Procedure Code, as a hundi is classified as a negotiable instrument. The plaintiff is not required to possess a money-lending license for such a suit (!) (!) .
The defendant's contention that the suit is not maintainable due to the absence of a money-lending license is rejected because the law states that suits based on negotiable instruments like hundis do not require such a license (!) .
The court found that the hundi was duly executed and signed by the defendant, who also acknowledged his signatures, indicating acceptance and acknowledgment of the debt (!) .
The evidence on record supports that the defendant received the loan amount, and the plaintiff successfully proved the genuineness of the hundi, discharging the burden of proof (!) .
The argument that the hundi does not qualify as a negotiable instrument under the Negotiable Instruments Act was rejected. The hundi is considered a negotiable instrument within the scope of the Act (!) .
The defendant's claim that the document was interpolated or that the date and amount were added later was not substantiated with sufficient evidence, and the courts below rightly dismissed such contentions (!) .
The defendant's objections regarding the applicability of the Money Lending Act and the requirement of a license were not entertained since these issues were not raised at the appropriate stages and the suit was filed under the proper legal provisions (!) .
The courts observed that the primary purpose of the legal provisions for suits based on hundis and similar instruments is to facilitate quick and efficient recovery of debts and to prevent frivolous defenses that could obstruct justice (!) .
The procedural requirements for leave to defend under Order 37 were properly applied, and the defendant failed to establish a substantial or justifiable defense, leading to the rejection of his application for leave to defend (!) .
The overall legal position affirms that a hundi, when executed properly and proven in court, constitutes a valid negotiable instrument, and suits for recovery based on such instruments are properly maintainable without the necessity of a money-lending license (!) .
Please let me know if you need further assistance or clarification on any of these points.
Arun Madan, J.-This second appeal has been preferred to this Court by the above-named defendant-appellant against the Judgment and decree dated 29-10-93 passed by Additional District Judge No. 2, Baran in Civil Regular Appeal No. 10/93 whereby the Judgment and decree dated 16-8-93 passed by Munsiff and Judl. Magistrate, Baran in Civil Suit No. 140/93 has been upheld.
2. The facts giving rise to the filing of this appeal, briefly stated, are that the plaintiff-respondent had filed a suit under Order 37, C.P.C, against the defendant-appellant for recovery of Rs. 11,200/-in the Court of District Judge, Baran. In the said suit a sum of Rs. 10,000/-has been claimed towards principal amount and Rs. 1200/-on account of interest. The said suit was transferred to the Court of Additional District Judge No. 2, Baran who thereafter again transferred the same to the Court of Munsiff and Judicial Magistrate, Baran for disposal in accordance with law.
3. In the plaint presented before the trial Court the plaintiff-respondent alleged that the defendant had taken Rs. 10,000/-in cash for which he had executed a ‘Shahjog Darshani Hundi’ on Miti Baisakh Budi 2 samvat 2048 wherein it was alleged that after affixing the revenue stamp the signatures had been put thereon and the same was handed over to the plaintiff It was further alleged in the plaint that the defendant-appellant when contacted by the plaintiff-respondent, had refused to acknowledge the same and he did not pay the amount due to the plaintiff on account of hundi and even thereafter the amount of hundi had not been paid and as a result thereof the plaintiff was constrained to file a suit against the defendant for the recovery of Rs. 11,200/-with interest @ 2% per month. After the registration of the suit the defendant-appellant was duly noticed by the trial Court. On 2-11-199 1 an application for leave to defend was filed on behalf of the appellant which was allowed by the trial Court on 4-1-1992. Subsequently written statement was filed on behalf of the appellant in which he denied the averments made in the plaint by the respondent in totality and by way of additional pleas
contended inter-alia that the defendant was in need of Rs. 1,00,000/ - in lieu of which the defendant had agreed to mortgage his three shops situated in ‘Gadi Adda Baran’. In this regard the defendant had contacted the agent, Kasim Dalal who in turn intimated that the plaintiff-respondent was ready to advance a sum of Rs. 1,00,000/-in lieu of mortgage of three shops in his favour. The transaction of mortgage was settled through Kasim Dalai who told the plaintiff that stamp papers were required to be purchased for execution of mortgage deed which was to be typed thereon and for which expenses were to be incurred and for this purpose a hundi of Rs. 10,000/-was executed and both parties affixed their signatures in token of acknowledgement. But neither the stamps were affixed nor the date was mentioned on the hundi.
4. In the written statement filed on behalf of the appellant, it was contended that on 4-4-199 1 two cheques of Rs. 50,000/-each were issued by the latter in his favour totalling Rs. 1,00,000/-and the plaintiff accompanied the defendant at his house where the plaintiff told the defendant that execution of mortgage deed will take some time and, therefore, he may take Rs. 80,000/-at first instance, while the balance of Rs. 20,000/-shall be paid before the sub-registrar at the time of registration of the mortgage deed and out of the sum of Rs. 80,000/-the plaintiff took Rs. 3,000/-for the purchase of Court-fee stamps for registration and paid a sum of Rs. 77,000/ - to the defendant as against a sum of Rs. 1,00,000/-and in lieu of the said advance a hundi of Rs. 10,000/ -was executed by the defendant in favour of the plaintiff in which the defendant had agreed for re-payment of loan amount and the said document was signed through the agent Kasim Dalai. The plaintiff purchased stamp-papers in his name
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
