The central legal point established in the judgment is the requirement for money-lenders to obtain a certificate from the Sub-Divisional Officer in respect of mortgage transactions under Section 18-B of the Orissa Money-Lenders Act, 1939.

JUDGMENT :

S.G. Mohapatra, J. - Defendant No. 1 is Appellant against the preliminary decree in the suit for realisation of money based on simple mortgage.

2. Case of Plaintiff is that Defendant No. 1 and his father took a loan of Rs.3.400/-- from Defendant No. 6 furnishing security by way of simple mortgage properties incorporated in the registered mortgage deed dated 11-12-1965 stipulating to pay interest at the rate of 12 per cent per annum. While the mortgage was subsisting, Defendant No. 6 was in need of money and transferred the mortgage receiving Rs.3.400/- from Plaintiff conveying all his rights and claims under the mortgage deed by executing a registered deed of transfer on 24-1-1967. When despite demand Defendants did not pay back the amount, the suit was filed.

3. Defendant No. 6 has accepted the case of the Plaintiff in his written statement. Defendant Nos. 1 to 5 in a joint written statement accepted execution of the mortgage deed for an amount of Rs. 3,400/-. It is their case that grocery articles supplied by Defendant No. 6 were for a sum of Rs. 1,000/-. At the time of mortgage deed, Defendant No. 6 advanced Anr. sum of Rs. 1,500/- in cash. Advance interest at the rate of 12 per cent per annum amounting to Rs. 900/- was calculated and the mortgage deed was executed for a sum of Rs. 3,400/-.

4. In order to prove his case, Plaintiff examined two witnesses and proved documents marked Exts. 1 to 4. Defendants examined one witness and proved documents, marked Exts. A and B. Considering the aforesaid documents, trial Court has decreed the suit which is grievance of Defendant No. 1.

5. Mr. B.L.N. Swamy, learned Counsel for Appellant, submitted that the suit has abated in view of Section 18-B of the Orissa Money-lenders Act, 1939 as amended, in 1975. He submitted that admittedly Plaintiff is a money-lender in regular course of business. When he got the mortgage transferred from Defendant No. 6, he became the money-lender in respect of the loan advanced by Defendant No. 6 also. Accordingly, he was required to obtain a certificate from the Sub-Divisional Officer as required u/s 18-B failing which the suit, which was pending, was not entertainable. Mr. Swamy submitted that trial Court is not correct in its finding that Section 18-B not being retrospective would not be attracted to the suit transaction.

6. In a decision reported in 65 (1983) CLT 399 Sara Bai and Ors. v. Kamala Lochan Pujari, it has been held that Section 18-B applies to transactions prior to notifications under Sub-section (1) thereof. Accordingly, trial Court is not correct in excluing operation of Section 18-B of the Act to have effect on the suit. Though Plaintiff did not-advance the loan on the basis of mortgage by transfer of the right, title and interest in the mortagage, he accepted to be the lender and therefore, a certificate from the Sub-Divisional Officer in respect of the mortgage was necessary to continue the suit. No certificate having been obtained, the suit is not entertainable as provided u/s 18-B of the Orissa Money Lenders Act.

7. In result, appeal is allowed. Suit is dismissed being barred u/s 13-B of the Orissa Money-Lenders Act, 1939. In the peculiar circumstances of the case, both parties shall bear their costs throughout.

Final Result : Allowed