Suffian FJ:

The plaintiff (respondent) lent $1,700 to the defendant (appellant). The defendant did not pay, and so the plaintiff sued him. The plaintiff won, and the defendant has appealed to this Court

The main ground of appeal has to do with sub-section (1) of s. 16 of the Moneylenders Ordinance No. 42 of 1951. The material part of that sub-section provides -

No contract for the repayment by a borrower .... of money lent to him.... by a moneylender ... after the commencement of this Ordinance ... and no security given by the borrower ... in respect of such contract, shall be enforceable unless a note or memorandum in writing of the contract ... be signed by the parties to the contract ...

The facts as found by the learned president were that the plaintiff was at the material time a licensed moneylender (he admitted it), that he lent money to the defendant on three separate occasions without interest, that on each occasion he took a cheque from the defendant as security, and that on no occasion was a note or memorandum in writing of the contract ever signed by the parties. The learned president nevertheless gave judgment for the plaintiff on the ground that each of the loans was a friendly loan. He rejected Counsel for the defendant's argument that as the plaintiff was admittedly a moneylender the transactions were caught by sub-section (1) of s. 16 and, there being no written note or memorandum of the contracts signed by the parties, they were not enforceable.

The same argument was advanced before me by Mr. Devadason for the defendant, but neither Counsel was able to produce any authority in support of or in opposition to this argument. During the course of the argument I asked this question: if the plaintiff had lent money interest free to his father or brother, could he not recover if in fact there was no written note or memorandum of the transaction? Mr. Devadason submitted not. This seemed to me a rather startling proposition, but after anxious consideration I have to conclude that he was right.

The answer to the question posed must be determined simply by reference to the language of sub-section (1) of s. 16. The operative words in it are "No contract for the repayment by a borrower of money lent to him by a moneylender". There is no doubt that each of these three transactions was a contract for the repayment by a borrower of money, the defendant clearly being a borrower. Was it also a contract for the repayment by a borrower of money lent to him by a moneylender?

The word "money lender" is defined by the Ordinance. Much stress was laid in the trial Court on the fact that each of the loans was interest free. This was because, I think, of the presumption under s. 3 which says that -

any person who lends a sum of money in consideration of a larger sum being repaid shall be presumed until the contrary be proved to be a moneylender.

In the event the learned president found that, as the parties were in fact friends (they served on the committee of the MIC branch at Bentong, the plaintiff being its President) and the loans were interest free and friendly loans, subsection (1) of s. 16 did not apply.

With respect I do not agree with him. Section 3 only raises a presumption in the circumstances mentioned in it. It is still open for the defendant to prove by other means that the plaintiff was moneylender within the meaning of the Ordinance. Not every one who lends money is a moneylender. He must be a person who is in the business of money-lending, for s. 2 of the Ordinance says that -

'moneylender' includes every person whose business is that of moneylending or who carries on or advertises or announces himself or holds himself out in any way as carrying on that business ...

The section goes on to exclude certain categories of persons who lend money from the definition.

I do not see how the Court can hold that a person who is a licensed moneylender is not a person whose business is that of moneylending. What was th