A MONEY LENDER IS REQUIRED TO OBTAIN A LICENSE UNDER THE RAJASTHAN MONEY LENDERS ACT, 1963 AND FAILURE TO DO SO WILL RESULT IN THE DISMISSAL OF ANY SUIT FILED BY THE MONEY LENDER.

1. - Rajasthan Money Lenders Act, 1963 (for short 'the Act') was intended to put down a very serious evil in the society. It was enacted to keep control over money lending transactions and to see that excessive rate of interest was not charged by money lenders, and the only way that such control can be maintained is by providing penalties for doing money lending business without a proper licence from the State.

2. Pivotal question that arises for consideration is whether the plaintiff was a money lender at the time he advanced the loan?

3. A few background facts leading to this appeal deserve to be noted at the out set.

4. Plaintiff Moti Lal (since deceased) instituted a suit for recovery of Rs. 1,88,700/- (one lac eighty thousand and seven hundred) along with interest against the defendant respondent in the trial Court. The money was borrowed by the defendant on 23.4.1985 and promissory note was executed. In the written statement filed by the defendant one of the objections was that the plaintiff was involved in money lending business without having money lending licence. The learned trial Court framed as many as six issues which have been incorporated in the judgment of the trial Court.

5. The learned trial Court decided issues No. 1, 2 & 3 in favour of the plaintiff and observed that the defendant borrowed money from the plaintiff and executed pro-note agreeing to pay interest. However, issue No. 5 which was in respect of doing business without money lending licence was decided against the plaintiff and it was observed by the trial Court that the plaintiff was money lender and was doing business without money lending licence therefore was not entitled for money and interest claimed by him. The suit of the plaintiff therefore was ordered to be dismissed vide judgment and decree dated 13.5.1996. Hence this appeal.

6. What was vehemently argued, however to assail the impugned judgment and decree was that the provisions contained in the Act were not properly appreciated. The plaintiff was not a money lender therefore it was not necessary for him to obtain money lending licence under the Act. The mere fact that the money was advanced on interest on more than one occasion would not necessarily import that he was engaged in the business of advancing loans, nor does a man become money lender merely because he may on one or several isolated occasions lend money to the persons. Reliance was placed on Ka Icilda Wallang v. U. Lokkendra Suiam, AIR 1987 SC 2047 and Gauri Shanker v. Megharam, 1974 RLW 106 .

7. Strenuous efforts were made on the other hand, supporting the judgment and decree impugned.

8. In order to thrash out the rival submissions, a look at the relevant statutory provisions, is necessary.

9. Section 2(2) of the Act defines Business of Money Lending'. It reads as under:- "(2) 'Business of money lending' means the business of advancing loans, whether or not in connection with or in addition to any other business.'

10. Section 11 of the Act was amended by the Amending Act No. 13 of 1976, it runs as under :

"11. Dismissal of suit by money lender not holding licence-(1) Where a suit to which this Act applies is filed by a money lender and the Court in which it is filed is satisfied that at the time when the loan or any part thereof to which the suit relates was advanced, the money lender did not hold a valid licence, it shall dismiss the suit forthwith without going into merits of the claim and shall order the refund of the security, if any, without repayment of the loan.

2. xxxxxxx

(a) xxxxxxx

(b) xxxxxxx

(c) xxxxxxx

11. In the case on hand the plaintiff died during the pendency of the suit and his legal representatives were brought on record. Ram Gopal (PW 1) the son of the plaintiff in his statement admitted that Karan Singh, Somota, Dulhe Ram, Manohar Lal and Rajendra borrowed money from his father Moti Lal. When suggestion was made to him that Giriraj, Govind and Mohan Lal also borrowed money from his father, witness Ram Go