( 1 ) THIS Bench is constituted to decide the following question referred to a Larger Bench by a learned single Judge of this Court :

"whether the accounts are settled and a fresh entry is made after settlement of accounts, whether the court can reopen the accounts prior to the date of the settled account in order to give benefit to a debtor under Section 7 of the Money Lenders Act. ?"

( 2 ) THE material facts are these : On 15-9-1964 Dulesingh, father of the defendant settled his earlier accounts with the plaintiffs and signed Khata entry acknowledging his liability to pay a sum of Rs. 2. 899. 70 p. to the plaintiffs. Dulesingh, thereafter obtained a further loan of Rs. 134. 50 p. and signed the khata entry for a sum of Rs. 3034. 20 p. The plaintiffs filed the present suit for recovery of Rs. 4100. 00 which was inclusive of interest amounting to Rs. 1065. 00.

( 3 ) THE defendant contested the suit. He inter alia pleaded that the plaintiffs were money lenders and had not complied with the provisions of Section 3 of the Money Lenders Act. The accounts were therefore liable to be reopened and interest and costs were liable to be disallowed.

( 4 ) THE trial court accepted the plea of the defendant and after reopening the accounts for the last 12 years before the date of the Khata entry disallowed the interest and adjusted repayments made by the debtor towards the principal amount. After this adjustment the trial Court passed a decree for Rs. 254-83 p. in favour of the plaintiffs. On appeal the appellate Court accepted the contention of the plaintiffs that the accounts settled on 15-9-1964 could not be reopened under the Money Lenders Act. The appellate court, therefore, decreed the plaintiffs' claim for the principal amount of Rs. 3034. 20 p. with corresponding costs and interest pendente lite. The defendant preferred this second appeal to this court. On behalf of the appellant it was contended before the learned single Judge that the appellate court committed an error of law in holding that the accounts which were settled on 15-9-1964 could not be reopened. The learned counsel for the plaintiffs supported the view taken by the first appellate court

( 5 ) THE learned single Judge observed that there was a conflict of view in the single Bench decisions of this court on the aforesaid question. He referred to certain decisions in which the view taken was that settled accounts cannot be reopened for disallowing interest under Section 7 of the Money Lenders Act and certain decisions in which a contrary view was taken.

( 6 ) IN view of the conflicting single Bench decisions and according to learned single Judge there is no authoritative decision by a Larger Bench of this Court he referred the aforesaid question for decision by a Larger Bench of this Court. That is how this question has come up for decision before this Bench.

( 7 ) AT the outset it would be useful to refer to the relevant provisions of M. P. Money Lenders Act 1934 (Act No. 13 of 1934) (for short 'the Act' ).

( 8 ) THE object of the Act as disclosed from its preamble is to make better provision for the regulation and Control of the transaction of money-lending.

( 9 ) THE term 'loan' has been defined by Section 2 (vii) of the Act to mean an actual advance made within twelve years from the date of the last transaction whether of money or in kind at interest and shall include any transaction, which the Court finds to be in substance a loan. The rest of the definition excluding certain transactions from the term loan is not relevant for our purpose.

( 10 ) SECTION 3 (1) (a) of the Act requires the money lender to regularly maintain an account for each debtor separately of all transactions in respect of any loan advanced to that debtor. Section 3 (1) (b) of the Act requires the money lender to furnish such debtor every year statement of account in the prescribed manner containing the details specified in that sub-section.

( 11 ) SECTION 6 of Act provides that ev