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Loan Recovery Suit Without Written Contract Can Be : Calcutta HC
Justice Aniruddha Roy of the has held that a suit seeking recovery of money lent by a company cannot be as non-commercial merely because the plaint does not expressly refer to a or . The Court dismissed an application by to reject the plaint filed by for recovery of ₹65 lakhs, ruling that the nature of the transaction requires a .
When a Suit Survives the
The defendant had moved an application under , arguing that the suit was not a "" within the meaning of the , and was barred under the . The defendant contended that the plaint contained no averment regarding a or to support the transaction, and the plaintiff had not disclosed possessing a .
The plaintiff, however, pleaded that it was engaged in financial intermediation and had advanced ₹65 lakhs to the defendant through bank transfers between January and , repayable at 12% interest per annum. The plaint relied on a ledger, bank statements, and the plaintiff's Form 26AS showing TDS deposits by the defendant.
No Shortcut to Dismissal
Rejecting the defendant's plea, Justice Roy observed that the definition of "" under does not stipulate that the transaction must be founded on a written contract. The Court noted:
"On a conjoint and harmonious reading of these two provisions of CC Act in the light of the averments made in the plaint, this Court finds that the financial transaction between the parties, as pleaded in the plaint on the basis of the available documents disclosed and mentioned in the plaint, the nature of transaction between the parties is required to be ascertained first."
The Court emphasized that from the case made out in the plaint, it could not be said
that the transaction was not commercial.
"Plaintiff cannot be
, at the
, in a
so loosely and hastily if an arguable and a
is pleaded in the plaint,"
the judgment stated.
The Principle Stated
On the objection under the Bengal Money-Lenders Act, the Court relied on its earlier decision in , holding that since contains a allowing a money-lender to pay a penalty, the plaintiff should be given an opportunity before the plaint is rejected.
The Court distinguished the 's orders in , noting those were passed in criminal proceedings and not concerning of a civil suit. Similarly, the Court distinguished and , observing that those cases involved for rejection, whereas the present case required factual examination at trial.
Verdict
The application for rejection of plaint was dismissed without any order as to costs. The Court clarified that the defendant remains at liberty to raise all issues of , including those under the Bengal Money-Lenders Act, during the trial. The Court also left open the question of the written statement filed beyond 120 days, which is subject to a separate pending application by the plaintiff.
