IMPORTANT POINT
The court affirmed that a money lender must have a valid license, but the absence of a license does not invalidate a loan agreement if the lender is not engaged in money lending as a business.

JUDGMENT :

M.G. Priyadarsini, J.

Aggrieved by the judgment and decree dated 26.07.2019 in O.S.No.224 of 2013 (hereinafter will be referred as ‘impugned judgment’) passed by the learned Principal Senior Civil Judge, Kothagudem (hereinafter will be referred as ‘trial Court’), the defendant preferred the present appeal to set aside the impugned judgment.

2. For the sake of convenience, the parties hereinafter are referred to as they are arrayed before the trial Court.

3. The brief facts of the case, which necessitated the appellant to file the present appeal are that the defendant is closely acquainted with the plaintiff and out of such acquaintance the defendant borrowed Rs.7,00,000/- for his family necessities from the plaintiff on 05.09.2011 at Palvoncha and executed promissory note in favour of the plaintiff on the same day promising to repay the same together with agreed interest @ 24% per annum either to plaintiff or to her order on demand. Thereafter, the plaintiff made several oral demands for payment of amount but the defendant did not come forward. Hence, the plaintiff filed the suit for recovery of Rs.9,94,000/- with subsequent interest 24% per annum on the principle amount of Rs.7,00,000/- from the date of suit till realisation of the suit claim:

4. In reply, the defendant filed written statement contenting that he has not borrowed any amount and did not execute any promissory note in favour of the plaintiff. The cause of action is only a created one for the purpose of fling the suit to gain wrongfully. It is further contended that the defendant is working as Assistant Branch Manager, Andhra Bank, Paloncha Branch at the time of filing of the suit and getting attractive salary and thus, there is no necessity to take huge hand loan from the plaintiff. One Kodali Narmada, who is the daughter of the plaintiff, is doing illegal finance business at Paloncha town and filing false suits in the name of her mother and daughter by name Mounika and harassing employees by filing various money suits and cheque bounce cases under Negotiable Instruments Act. It is further contended that the defendant filed a complaint before the Station House Officer, Paloncha Police Station on 17.08.2013 stating that Kodali Narmada, who is the daughter of the plaintiff herein is doing illegal finance business without any valid license from the authorities concerned and filed a false suit against him so as to harass him and to cause mental agony. Based on the said complaint, a case in Crime No.302 of 2013 dated 17.08.2013 was registered for the offence under Section 420 of the Indian Penal Code and Section 3 (5)(a)(b)(c) of A.P. Telangana Area Money Lending Act, 1349 Fasli against Kodali Narmada, Kodali Mounika and Medarametla Vanajakshi and took investigation and the case is pending before the II Additional JFCM Kothagudem. Hence, prayed to dismiss the suit.

5. Based on the pleadings of both the sides, the trial Court has framed the following issues :

1. Whether plaintiff is entitled to suit amount?

2. To what relief?

6. On the application filed by the defendant under Order XIV Rule 1 and 2 of CPC, the following additional issue was framed :

Whether the suit is tenable under Section 9 of the A.AP. (T.A.) Money Lenders ACT, 1349 Fasli?

7. The plaintiff, in support of her contentions, examined PWs 1 and 2 and got marked Ex.A1. On the other hand, the defendant got examined DWs 1 to 6 and got marked Exs.B1 to B3. The trial Court on appreciating the evidence on record, has decreed the suit against the defendant for an amount of Rs.9,94,000/- with subsequent interest @ 12% per annum from the date of filing of the suit till date the of decree and thereafter interest @ 6% per annum from the date of decree till the date of realization on the principal amount of Rs.7,00,000/-.

8. Aggrieved by the judgment and decree, the defendant filed the present appeal.

9. Heard both sides and perused the record including the grounds of appeal.

10. The first and foremost contention of