Bombay High Court
Hind Finanace Industries & ... vs Vinayakrao Gopalrao Deshmukh ... on 2 March, 2016
Bench: A.B. Chaudhari
J-sa286.02.odt 1/13
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
SECOND APPEAL No.286 OF 2002
Hind Finance Industries &
Investment Limited,
having its registered Office
at Dhanwate Chambers,
Sitabuldi, Nagpur 440 012,
and its Branch Office at
Rajkamal Chowk, Amravati. : APPELLANT
...VERSUS...
1. Shri Vinayakrao s/o. Gopalrao
Deshmukh, Aged about 63 years,
Occupation : Agriculturist,
Resident of Vijay Colony, Amravati.
2. Shri Nilkanth s/o. Gopalrao
Deshmukh, Aged about 49 years,
Occupation : Agriculturist,
R/o. Jarud, Taluka Wardu,
District - Amravati.
3. Shri Bhaskar s/o. Gopalrao
Deshmukh, Aged about 61 years,
Occupation : Agriculturist,
(since deceased by L.R's)
3(i) Smt. Bharati wd/o. Bhaskarrao
Deshmukh, Aged about 58 years,
Occupation : Household.
(ii) Shri Amar s/o. Bhaskarrao
Deshmukh, Aged about 36 years,
Occupation : Agriculturist.
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(iii) Shri Ajay s/o. Bhaskarrao
Deshmukh, Aged about 34 years,
Occupation : Agriculturist,
No.(i) to (iii) R/o. Jarud,
Tahsil Warud, Distt. Amravati.
(iv) Mrs. Shubhangi w/o. Jitendra
Kuche (Shubhangi d/o. Bhaskarrao
Deshmukh) Aged about 38 years,
Occupation : Household, R/o. Krushna
Apartment, Plot No.4, Friends Colony
Near Super Bazar, Katol Road,
Nagpur. : RESPONDENTS
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Mr. V.G. Bhonsule, Advocate for the Appellant.
Mr. K.N. Dadhe, Advocate for the Respondents.
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CORAM : A.B. CHAUDHARI, J.
nd MARCH, 2016.
DATE : 2
ORAL JUDGMENT :
1. This Court on 5th September, 2005 framed the following
substantial questions of law :
"1. Whether the renewal of the licence
under the Bombay Money Lenders Act is required
to be obtained before the date of advancing of the
loan ?
2. Whether subsequent renewal of licence
under the Bombay Money Lenders Act specifically
covering under the date on which the loan was
advanced is enough compliance ?
3. Whether in respect of the suit on a
J-sa286.02.odt 3/13
mortgage, licence under Bombay Money Lenders
Act is required ?"
2. This Second Appeal is directed against the judgment and
decree dated 30.9.1996, passed by the Joint Civil Judge, Senior
Division, Amravati and confirmed by order dated 1.3.2002, passed
by the 2nd Ad-hoc, Additional District Judge, Amravati, in Regular
Civil Appeal No.378/2000.
3. In support of the appeal Mr. V.G. Bhonsule, learned
counsel for the appellant submitted that renewal of licence under
the Money Lenders Act is on an application to be filed for renewal
thereof every year within 3 weeks after the expiry of licence. He
contended that both the Courts have concurrently found that the
licence Exh.-36 having been issued on 28.8.1985 for the period
from 1.8.1984 to 31.7.1985 and the transaction of lending the
money to the dependents having taken place on 14.5.1985 the
Courts below could not have held that there was no money lending
licence on the date of advancement of loan. According to
Mr. Bhonsule, grant or renewal of licence under the Money Lenders
Act is an official act to be performed by the concerned officers
entrusted with the official duty and the applicant-appellant could
not have any control in getting the licence renewed. According to
J-sa286.02.odt 4/13
him, it is a well-known fact despite making application for renewal
within time prescribed by law the actual issuance thereof takes its
own time but then that does not mean that there is no valid licence
on the date of advancement of loan. The licence Exh.-36 clearly
indicates that validity of the licence from 1.8.1984 to 31.7.1985
whereas the advancement of loan on 14.5.1985. The reasons given
by the Courts below that it was essential for the appellant to show
the date on which the application for renewal of licence was
submitted and upon failure thereof it was presumed that on the
date of transaction namely 14.5.1985 there was no licence at all.
He submits, Section 10 of the the Bomby Money Lenders Act, 1946
speaks of only requirement of licence and nothing more, therefore,
even if the licence was actually issued on a posterior date but for
the period relevant in question the same would not nullify the
transaction particularly when it is not a case of the respondents that
the application was not made within time and no rebuttal evidence
was tendered by the respondent in rebuttal to the licence Exh.-36.
He, therefore, submitted that the Courts below have committed an
error in law causing miscarriage of justice to the appellant and
therefore prayed for allowing the appeal.
4. Per contra, Mr. K.N. Dadhe, the learned counsel for the
J-sa286.02.odt 5/13
respondents-borrower submitted that Section 100 of C.P.C. does not
enable this Court to interfere into the findings of facts concurrently
recorded by the two Courts and, therefore, there is no need to
interfere into the judgment and decree of dismissal of the suit filed
by the appellant-plaintiff. According to him, even if a third view is
possible, this Court cannot interfere in the second appellate
jurisdiction. He then contended that the licence itself being issued
on 28.8.1985 and the advancement of loan being made on
14.5.1985, it is crystal clear that there was no licence on the date of
advancement of loan and that is the sine quo non for
maintainability of the suit in the light of prohibition contained in
Section 10 of the Bombay Money Lenders Act, 1946 and, therefore,
both the Courts have rightly found that what is required is the
existence of licence on the date of advancement of loan, whereas
the admitted position is that the licence came into being 3 months
after the advancement of loan i.e. 28.8.1985 and, therefore, no
fault can be found with the finding of facts recorded by the Courts
below.
5. He invited my attention to Section 10 of the Bombay
Money Lenders Act, 1946 and Rule 5(2) of the Bombay Money-
Lenders Rules, 1959 and submitted that Sub-Rule (2) of Rule 5 in
J-sa286.02.odt 6/13
terms provide for a particular time limit when the application is
required to be made and the burden to show that the application
was made within time and was declined is on the plaintiff and that
is the reason why according to Mr. Dadhe, learned counsel the
Courts below have rightly held that the plaintiff ought to have
produced the application or disclosed the date on which the
application was made for renewal of licence, since that is the
special knowledge of the plaintiff as to when the application was
made for renewal of licence and the burden cannot be thrown on
the defendants. He, therefore, submitted that no interference is
required in the present appeal and should be dismissed with costs.
6. After hearing the learned counsel for the rival parties
and upon perusal of the entire record, so also the reasons recorded
by the Courts below, I frame additional substantial question of law
as under :
"Whether in the light of Section 114 illustration
(e) of the Indian Evidence Act, 1872 the Money
Lending licence at Exh.-36 dated 28.8.1985 for
the period from 1.8.1984 to 31.7.1985 was issued
pursuant to the official act regularly performed
and whether the Court can presume existence of
valid issuance of Exh.-36 upon compliance of the
provisions of the Bombay Money-Lenders Rules,
1959 and in particular Rule 5(2) of the Rules ?
J-sa286.02.odt 7/13
7. For answering question Nos.1 & 2, it is necessary to
reproduce Section 9 of the Bombay Money-Lenders Act, 1946,
which reads thus :
"9. Term of Licence.- A license shall be
valid from the date on which it is granted to the
31st day of July following:
[Provided that when an application for
renewal of a licence has been received by an
Assistant Registrar within the prescribed period, the
licence shall, until the application is finally
disposed of, be deemed to be valid.]"
8. Proviso to Section 9 in terms provide for the licence to
be valid after making of application for renewal and until the
application is finally disposed of. The Rule 5(1) and (2) of the
Bombay Money-Lenders Rules, 1959 reads thus :
"5. Application for licence.- (1) A
money-lender desiring to carry on the business of
money-lending in any area shall make an
application in Form No.2 to the Assistant Registrar
concerned. The application shall be delivered at the
office of the Assistant Registrar during office hours
either personally by the applicant or through an
agent authorised in writing in this behalf or sent by
registered post addressed to the Assistant Registrar.
(2) An application for the grant of a
licence for the first time may be made on any date
and an application for renewal of licence may be
made on any date within three months prior to the
expiry of the licence."
J-sa286.02.odt 8/13
9. It is clear from the conjoint reading of Section 9 and
Rule 5 that what is required is that a money lender has to apply for
licnece or for renewal and obviously it is beyond the control of the
money lender to have the actual licence in his hand, since it is for
the concerned competent officers to issue licence. The proviso
appears to have been inserted with a view to take care of the
situation where despite receipt of application within time the
application remains pending and is not finally disposed of. This is
obviously to stop gap of the continuity or the validity of licence.
Therefore, question No.1 is answered by saying that the
requirement is that the money lender is required to apply for
licence or renewal of licence, but there is no requirement for him to
get the licence issued. Hence, the question No.1 is answered
accordingly.
10. Coming to question No.2, it is seen that this question
would again fall within the ambit of Section 9 of the Act
particularly its proviso. The fact that the period namely 1984-85 is
mentioned in the licence Exh.-36 issued on 28.8.1985 clearly
validates the transaction in question that took place on 14.5.1985
and, therefore, even if renewal of licence was subsequent to
advancement of loan, with the help of proviso to Section 9 the
J-sa286.02.odt 9/13
transaction is clearly protected. Hence, I answer the question No.2
in the affirmative.
11. Now I take up the additional question before recording
answer to question No.3. Mr. K.N. Dadhe, learned counsel for the
respondents has forcefully argued that it was incumbent on the part
of the appellant to produce the application for renewal of licence in
order to show the date on which the application was made because
the application has to be made within 3 weeks from the date of
expiry of licence. For this, Mr. K.N. Dadhe has taken support of
Rule 5(2) of the Rules. This is exactly the line of thinking of the
two Courts below. The submission made by Mr. K.N. Dadhe is
attractive but does not appeal to me. It would be appropriate to
quote Section 10 of the Bombay Money-Lenders Act, 1946, which
reads thus :
"10. Stay of suits by money-lenders
not holding licence.- [(1) No Court shall pass a
decree in favour of a money-lender in any suit to
which this Act applies [including such suit pending
in the Cort before the commencement of the
Bombay Money-Lenders (Amendment) Act, 1975]
(Mah. LXXVI of 1975) unless the Court is satisfied
that at the time when the loan or any part thereof,
to which the suit relates was advanced, the money-
lender held a valid licence, and if the court is
satisfied that the money-lender did not hold a
valid licence, it shall dismiss the suit.]
J-sa286.02.odt 10/13
(2) Nothing in this section shall affect-
(a) suits in respect of loans
advanced by a money-lender before the date on
which this Act comes into force;
[(b) the powers of a Court of
Wards, or an Official Assignee, a receiver, an
administrator or a Court under the provisions of
the Presidency-towns Insolvency Act, 1909 (III of
1909), or the Provincial Insolvency Act, 1920 (V
of 1920) or any other law in force corresponding
to that Act, or of a liquidator under the
Companies Act, 1956 (I of 1956), to realise the
property of a money-lender.]"
12.
Section 10 of the Bombay Money-Lenders Act, 1946 is a
substantive provision providing for a prohibition on a Court to pass
a decree in favour of money lender who does not have a valid
licence, Thus, the requirement is solitary, namely, holding of a
valid licence when the loan was advanced. Section 10 cannot be
read in isolation qua Section 9 and will have to be read in juxtaex
position with Section 9. Rule 5(2) on which the learned counsel for
the respondents has placed heavy reliance, undoubtedly shows that
the application for renewal of licence may be made on a date within
3 months prior to the expiry of the licence. It is true that the
appellant did not produce the application to show the date for
renewal of licence. But then in the wake of Exh.-36 licnece for the
relevant period covering the date of transaction namely 14.5.1985,
the requirement of holding a valid licence on the date of
J-sa286.02.odt 11/13
advancement of loan provided in Section 10 is fully satisfied. This
is not to say that the provision of Sub-Rule (2) of Rule 5 should be
made redundant by this Court but then Rule 5 provides for a
modality or procedure and what is substantive requirement is of
holding a valid licence. Obviously Rule 5 is subordinate to Sections
9 and 10. At this juncture, it would be appropriate to have a look
at Exh.-36 licence. Reading of this licence shows that it was issued
on 28.8.1985 and the period covered therein is 1.8.1984 to
31.7.1985. Needless to say that the licence was issued during the
course of official business by the concerned competent officer and
that is not under challenge. Therefore, it will have to be deemed
that the competent officer issuing licnece must have had regard to
the compliance of Rule including Rule 5(2) of the Rules. It was
certainly open for the respondents-defendants to show to the
contrary by producing evidence in rebuttal. The submission that
initial burden to prove that the application was made 3 months
prior to the expiry of licnece, will have to be read in the context of
the official duty performed by the officer issuing Exh.-36, which
would be an answer to this submission, that the licence Exh.-36 was
issued in the official course of business and the existence of the said
fact will have to be presumed that it was in compliance of Rule 5(1)
J-sa286.02.odt 12/13
and (2) of the Rules.
13. Section 114 and illustration (e) of the Indian Evidence
Act, 1872 read thus :
"Section 114 :
Court may presume existence of certain facts.- The
Court may presume the existence of any fact which it thinks likely to
have happened, regard being had to the common course of natural
events, human conduct and public and private business, in their
relation to the facts of the particular case.
Illustration (e) :
That judicial and official acts have been regularly
performed;"
14. In my opinion taking aid of Section 114(e) and looking
at Exh.-36 money lending licence that was issued during the course
of official business unless contrary is proved it will have to be
presumed that the application for renewal contemplated by Section
5(2) must have been made in accordance with the Rules.
Therefore, the money lending licence Exh.-36 statutorily issued
under the Act and the Rules could not have been ignored by the
Courts below treating the same as invalid. The submission that the
date of licence is post dated i.e. 28.8.1985 renewal being for the
earlier period also does not appeal to me since the licence is not
under challenge nor was shown to have been vitiated by illegality
or fraud or as the case may be. Therefore, giving due presumption
to Exh.-36 I think the Courts below have mechanically acted on the
J-sa286.02.odt 13/13
fact that the licence was issued at a later date and that the same
should have been issued earlier is not contemplated by Section 10
which is a substantive provision. I, therefore, answered the
additional question accordingly.
15. Taking up question No.3, I find that it is not now
necessary to deal with this question in view of the answers given by
me to the earlier questions. In the result, the appeal must succeed.
Hence, following order is passed :
ig O R D E R
(i) Second Appeal No.286/2002 is allowed.
(ii) The judgment and decree dated 1.3.2002,
passed by the 2nd Ad-hoc Additional District Judge, Amravati, in
Regular Civil Appeal No.378/2000 is set aside.
(iii) There shall be decree in terms of prayer (1)
of the suit.
(iv) The respondents shall be at liberty to apply to
the Court executing decree, for installments.
(v) No order as to costs.
JUDGE
okMksns
