The validity of the money lending license and the liability of the defendants to make payment as per the financial discipline laid down between the parties were the central legal points established in the judgment.

SHEKHER DHAWAN, J.

For the reasons recorded in the application bearing CM NO. 1837C of 2016, which is supported by an affidavit, delay of 89 days in filing the appeal is condoned.

CM stands disposed of.

Main Appeal

Challenge in the present Regular Second Appeal is to the judgment and decree dated 29.7.2015 passed by Additional District Judge, Chandigarh, whereby the suit filed by Hari Krishan, plaintiff was decreed while reversing the judgment and decree dated 3.5.2014 passed the Court of first Instance.

2. For the sake of convenience, parties are being referred to as per their status before the Court of first Instance.

3. Relevant facts of the case for the purpose of decision of this appeal; that the plaintiff had filed a suit for recovery of Rs.40,000/on account of Principal and interest, on the ground that the defendant No.1 had obtained loan of Rs.45,000/on 11.10.2002 and in consideration thereof, he had executed agreement as well as other necessary document. Defendants No. 2 to 4 stood guarantors for defendant No.1. Thereafter, repayment was not made as per financial discipline laiddown between the parties. Legal notice was also issued on 10.9.2005, but the defendants failed to make repayment and as such suit before the Court of first instance.

4. Defendant No.2 appeared and contested the suit taking the plea that the plaintiff is a money lender without having required license and he was not competent to advance any loan. Interest claimed was in violation of directions of Reserve Bank of India and it was prayed that the suit be dismissed.

5. On the pleadings of the parties, issues were framed. Parties led their respective evidence and after appreciating the entire oral as well as documentary evidence brought on record by the parties, the Court of first instance dismissed the suit of the plaintiff. The appeal filed before the Court of first Appeal was accepted and the suit of the plaintiff for recovery was decreed vide judgment and decree dated 29.7.2015. As such, the present Regular Second Appeal.

6. Learned counsel for the appellant mainly submitted that the loan was advanced to defendant No.1 and the appellant – defendant No.2 is guarantor. The present litigation is on the basis of connivance between defendant No.1 and the plaintiff and that is why, defendant No.1 chose to be proceeded against exparteso that suit be decreed against guarantors and recovery be effected from the present appellant. More so, the plaintiff had already filed different litigation before different Courts and the modus operandi of the plaintiff is to seek repayment from the guarantors only while leaving aside the principal borrower.

7. Learned counsel for the appellant further submitted that the Court of first Appeal has not considered the fact that the plaintiff was not having license for money lending and thus, he was not authorized to file the present suit. The interest was charged at excessive rate, which is not permissible and all these facts have been completely ignored by the Court of first Appeal and as such the impugned judgment and decree are liable to be setaside and the present appeal be accepted.

8. Having considered the submissions made by learned counsel for the appellant and appraisal of the case file, this Court is of the considered view that the plea taken by the appellant that the present litigation is in collusion with plaintiff and defendant No.1, does not find any basis on the record. The decree has been passed against the defendants including defendant No.1, who is the principal borrower. Admittedly, the present appellant is a guarantor and he had executed documents of his own and on the basis of his guarantee, loan was advanced to defendant No.1. Now, he cannot take such a plea that defendant No.1 is in collusion with the plaintiff without therebeing any basis on the file.

9. As regards to the plea taken by the appellant that the plaintiff is carrying on money lending business without any license, this aspect has been dealt