1982 Supreme(MP) 659

IN THE HIGH COURT OF MADHYA PRADESH
G.P. SINGH, B.C. VARMA, JJ.
Milapchand - Petitioner
Versus
Sunderbai - Respondent
F.A. No. 20 of 1980 (J)
Decided On : 30-07-1982

Headnote:(1) Money Lenders Act, 1934 (M.P.) – S. 2 (v) – money lender – who is – person advancing five loans to a debtor who is neither his friend nor relation – such person is a money lender as defined under.

       (2) Money Lenders Act, 1934 (M.P.) – S. 3 (i) and 7 provisions of S.3 (1) not complied with – interest disallowed.

        Short Note

       1. The case of the plaintiffs respondents was that five loans were advanced to the appellant by respondent No. 1 Sunderbai on promissory notes. Rs. 5000/ – were advanced on 1st November 1973, Rs. 4,000/ – on 11th November 1973, Rs.5,000/ – on 7th December 1973, Rs.5,000/ – on 25th December 1973 and Rs.5,000/ – on 1st January 1974. The appellant on each of these occasions executed a promissory note. The rate of interest agreed upon on these loans was 12 percent per annum. The respondents claimed recovery of Rs. 24,000/ – as principal and Rs. 1273/ – as interest upto the date of the suit i.e. 15th January 1975. The appellant admitted execution of the promissory notes. He, however, pleaded that the promotes were executed on account of some earlier loans. He also pleaded re – payments of two loans. The trial Court decreed the suit.

       Held: Learned counsel for the appellant submitted before us that the finding reached by the trial Court that the respondents were not money lenders is incorrect. We are here essentially concerned with respondent No. 1, in whose favour the promotes were executed and who is said to have advanced the loans to the appellant. Respondent No.2 is the husband of respondent No.1 and he simply acted as agent of respondent No.1. Although there is no evidence to show that respondent No.1 advanced any loan other than the suit loans to any other person, we find that the five loans advanced from time to time to the appellant were advanced in the course of business of money – lending. The definition of money lender is given in section 2 (v) of the Madhya Pradesh Money – lenders Act, 1934. In so far as relevant money – lender is defined to mean a person who in the regular course of business advance a loan. The appellant is not a relation or friend of respondent No.1, The five loans advanced on the dates mentioned in the promotes have requisite continuity – and show a course of dealing to impress upon them the character of having been advanced in the regular – course of business making respondent No.1 a money lender. The suit however cannot fail on this ground for respondent No.1 has obtained a licence under the Act during the pendency of the suit The only question is whether the respondents should he deprived of interest – and Costs u/s 7 for non – compliance with the provisions of section 3 (1) of the Act It is not in dispute that no account as a money – lender was kept and no statement of accounts was served On the appe1lant as required by section 3 (1). Having regard to the circumstances of the case we feel that the entire amount of interest due up to the date of the – decree passed by the tria1 Court should be disallowed. We are however not inclined to disallow cost. Appeal partly allowed.