The condition of registration under the C.P. and Berar Money Lenders Act, 1934 is imposed for merely administrative purposes and does not render individual money-lending transactions void.

1. This application for revision is referred to a Division Bench for disposal as it raises a question of law of general importance.

2. The Applicant-Defendant had executed a bond and a promissory note in favour of the non-Applicant-piaintiff who is found by the lower Court to be a money-lender. The latter did not hold the registration certificate required by Section 11-B, C.P. and Berar Money-lenders Act, 1934, hereinafter referred to as the Act, either on the dates of these transactions or on the date of the institution of the suit, but he applied for it during the pendency of the suit and produced it before the delivery of judgment. Ha did not maintain accounts nor did he furnish annual statements of accounts as required by the Act. The trial Court, therefore, disallowed costs and interest and decreed the claim for the principal amounts.

3. The Applicant contends that as the Plaintiff had no valid registration certificate at the time the transactions were entered into the suit should have been dismissed as the two agreements in suit are void because they are forbidden by the following provisions of the Act or they are of such a nature that if permitted they would defeat them:

11-F. (1) No person shall carry on the business of money-lending in any district unless he holds a valid registration certificate in respect of chat district.

(2) Whoever contravenes the provisions of Sub-section (1) shall be punishable with fine which may extend to one hundred rupees, or, if he has previously been convicted of an offence under that sub-section, with fine which may extend to two hundred rupees.

4. The question then is, do these provisions forbid a person, who does not hold a valid registration certificate, from entering into any transaction of money-lending? They are expressed in words which apply directly to the money-lender rather than to the transaction. They do not say that the money-lending transaction shall be void but say that no person shall carry on the business of money-lending unless he holds a valid registration certificate, and if he contravenes these provisions he shall be punished with fine. There is thus no express prohibition of the transaction. We have then to see if there is an implied prohibition of the transaction, or if the transaction is of such a nature that, if permitted, it would defeat the abovementioned provisions of the Act. That would depend upon the intention of the legislature because ... the intention of the legislature as embodied in the statute constitutes the law thereof." (Page 246, Section 160, Statutory Construction by Crawford).

Pollock and Mulla in their Indian Contract Act (Edn. 7) at page 138 say: ...; so the kind of question which arises in practice under this head is whether an act," or some part of a series of acts agreed upon between parties, does or does not contravene some legislative enactment or regulation made by lawful authority. The decision may turn on the construction of the agreement itself, or of the terms of the Act or other authoritative document in question, or on both. In particular it may have to be considered whether the intention of the legislature was to prevent certain things from being done, or only to lay down terms and conditions on which they might be done. It is easy to say that properly drawn Acts or Regulations ought to leave no doubt on that point, but experience has shown that such doubts are possible and have not been uncommon. Broadly speaking, that which has been forbidden in the public interest cannot be made lawful by paying the penalty for it; but an act which is in itself harmless does not become unlawful merely because some collateral requirement imposed for reasons of ' administrative convenience has been omitted.

The learned authors further observe at p. 139:

It is possible for a statute to attach a penalty to making a particular kind of agreement, and at the same time to provide that such an agreement, if made, shall not be, therefore, void. x x x

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