Bombay High Court
Shankar Apparao Mate And Anr vs Jagganath Jayram Shinde Thr Power Of ... on 7 August, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:31496
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.10916 OF 2023.
Shankar Apparao Mate and Anr. ...Petitioners.
Versus
Jagganath Jayram Shinde
Through Power of Attorney and Ors. ...Respondents.
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Mr. Ajay Joshi for the petitioners.
Ms. Seema S. Dighe a/w. Mr. Shubham Sane and Mr. Rajesh Ranlani h/f.
Ms. Priya Sarda for the respondent.
Ms. Sulbha Chipade, AGP for respondent-State.
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Coram : Sharmila U. Deshmukh, J.
Reserved on : 25th July, 2024.
Pronounced on : 07th August, 2024.
JUDGMENT :
1. RULE. Rule made returnable forthwith and taken up for final
hearing with the consent of the parties.
2. By this petition, the challenge is to the order dated 31 st May
2023 passed by Respondent No 3 in Money Lending Appeal No.5 of
2021 arising out of judgment and order dated 13 th September 2021
passed by the Respondent No 2 in Money Lending Suit No.23 of 2017.
3. The facts required to be exposited are that agricultural land
bearing Gat No.182/3 and 187/2 situated at village Chikhali, Taluka
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Mohol, District Solapur, were owned by Respondent No.1 and
accordingly his name was mutated in the record of rights. Vide
registered sale deed dated 21st March 2013 and 10th June, 2016 the
respondent No.1 sold Gat No.182/3 ad-measuring about 40 Are and
Gat No 187/2 admeasuring 28 Are to Petitioner No.1. Pursuant to the
execution of the sale deeds, the name of Petitioner No 1 was entered
in the 7/12 extract by certifying mutation entry No.1738 and 1860
respectively. By registered sale deed dated 20th March 2017, the
Petitioner No.1 sold the subject land to Petitioner No.2.
4. On 14th April, 2017 an application came to be filed by the
Respondent No 1 alleging money lending transaction on part of the
Petitioner No 1 under the Maharashtra Money-Lending (Regulation)
Act, 2014 (for short Money Lending Act). The Assistant Registrar
submitted report dated 12th June, 2017 under Section 16 of Money
Lending Act. The report stated that spot inspection was carried out of
Gat No 182/3 and statements were recorded. The report states that
the Respondent No 1 had executed sale deed dated 21 st March, 2013
in favour of the Petitioner No 1 out of money lending transaction and
on stamp paper of even date, the Petitioner No 1 had agreed to
reconvey the property after two years, which was not done. The
Respondent No 1 and the villagers claim that the subject property is
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in possession and cultivation of Respondent No 1. The report
concluded that the Petitioner No.1 had agreed to reconvey the
property by the deed executed on stamp paper of Rs 100/, which was
not done and it appears that the sale transaction was out of money
lending transaction.
5. Money Lending Suit No.23/2017 was filed by respondent No.1
through his daughter in law and Constituted Attorney Rupali Kisan
Shinde, under Money Lending Act on 6 th October, 2017. It was
contended that Gat No.182/3 was mortgaged on 21 st March 2013 for a
period of 2 years for sum of Rs.1 lakh whereas Gat No.187/2 was
mortgaged on 10th June 2016 till repayment of sum of Rs.1,60,000/- .
The Petitioner No.1 is carrying out money lending business without
license. In the year 2013 respondent No.1 was in financial need and
had approached petitioner No.1 for financial assistance of Rs. 1 Lakh
which was given on interest rate of 8% and as security for the loan
transaction Gat No.182/3 was mortgaged with petitioner No.1. On the
same date a Return Sale receipt was executed on stamp paper of
Rs.100/- by the petitioner No.1 in the presence of witnesses i.e.
Rajaram Pandurang Shirsat and Gunappa Eknath Yadav. As noted in
the Return Sale Receipt the sum of Rs.1,00,000/- at the rate of 8%
was advanced to respondent No.1 and within a period of 2 years the
sum of Rs. 3,00,000/- had to be repaid to the petitioner No.1 upon
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which re-conveyance deed was to be executed. The amount of
Rs.1,00,000/- along with accrued interest as on 20 th March 2015
amounting to Rs.2,00,000/- was paid and the principal sum of
Rs.1,00,000/- was tried to be repaid to the petitioner No.1 in the year
2015. However petitioner No.1 did not accept the same and on 10 th
June 2016 got executed sale deed in respect of Gat No.187/2 to which
the Respondent No.1's son is a consenting party without any
consideration and by luring the Respondent No.1 with false assurance
of assistance in obtaining bank loan.
6. It was further contended that petitioner No.1 upon being
asked to execute reconveyance deed by accepting payment of Rupees
One Lakh, refused to do so and therefore the present application was
filed. The subject properties were in possession of respondent No.1
and that the sale deeds executed by petitioner No.1 in favour of
petitioner No.2 are nominal sale deeds. By said application the
Respondent No.1 sought relief of cancellation of sale deeds and
release of the subject land from mortgage.
7. The suit came to be resisted by the petitioners contending that
there was no money lending transaction between the Petitioner No.1
and the Respondent No.1. On 21 st March 2013 there was no Return
Sale receipt executed by the petitioner No.1 and the said receipt is a
forged and fabricated document which is not signed by petitioner
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No.1. The stamp paper does not indicate that the transaction was
money lending transaction. It was contended that the Sale Deeds
dated 21st March 2013 and 10th June 2016 are legal and valid sale
deeds and their names have been mutated in the revenue records. The
Assistant Registrar had no authority to pass an order directing to file
the suit.
8. The parties led evidence. The District Deputy Registrar vide
judgment and order dated 13th September 2021 came to the following
findings:
(a) The witnesses for the Respondent No 1 have deposed about
the execution of the Return Sale Receipt on stamp paper of
Rs.100/- by the Petitioner No.1 on 21 st March, 2013. The
Stamp papers has been purchased by the Petitioner No.1
and bears his signature.
(b) The Petitioner No.1 had agreed to execute the return sale
deed in favour of the Respondent No.1.
(c) As the return sale deed was agreed to be executed by the
Petitioner No.1, the sale deed executed in respect of Gat
No.182/3 is illegal and arises out of money lending
transaction.
(d) The sale deed executed on 10 th June, 2016 was executed for
the reasons that the amount noted in the stamp paper of
Rs.100/- was not repaid and by luring the Respondent No.1
with the assurance of assistance in securing the bank loan
amount which is evident from the fact that the electricity
connection, Well and the motor pump stands in the name of
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the Respondent No.1.
9. The District Deputy Registrar -Respondent No 2 declared that
the sale deed dated 21st March 2013 registered at Sr. No.114/2013
and sale deed dated 10th June 2016 registered at Sr. No. 2107/2016
has arisen out of money lending transaction and declared the same as
illegal and cancelled the same. Respondent No.2 further directed the
Petitioners to handover the possession of the subject property to
respondent No.1.
10. Being aggrieved by the decision of respondent No.2 dated 13 th
September 2021, appeal was preferred before respondent No.3
bearing No.5 of 2021 under sub-section (4) of Section 8 of Money
Lending Act. Respondent No.3 by order dated 31 st May 2022 held that
the Gat No.182/3 was mortgaged for a sum of Rs.1 Lakh vide
document dated 21st March 2013 and thereafter for arrears of the
payment, petitioner No.1 has taken possession of Gat No.187/2. It
further held that the petitioner No.1 has executed Return Sale
Receipt and respondent No.2 does not have the jurisdiction to decide
the authenticity of signatures and validity of the deeds. It further
held that as per the Return Sale Receipt, the petitioner No.1 has not
executed the reconveyance Deed and thus the sale transactions
appears to be money lending transactions. Vide order dated 31 st May
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2023, the Respondent No 3 dismissed the Appeal.
SUBMISSIONS:
11. Mr. Joshi, learned counsel appearing for the Petitioners has
taken this Court through the recitals of sale deed of 21 st March 2013
and 10th June 2016 and would point out in the sale deed of 10 th June,
2016, the Respondent No 1's son was consenting party. He submits
that while holding that the transaction of 2013 and 2016 are in the
nature of mortgage there is no finding by either respondent No.2 or
respondent No.3 about existence of debtor creditor relationship or
about amount being advanced as loan. He submits that in the absence
of any such findings, the respondent No.3 could not have held that the
sale deeds are result of money lending transactions. He has taken this
Court through the provisions of the Money Lending Act and
particularly Sections 16 to 18. He would submit that the inquiry which
is contemplated under Section 18 of Money Lending Act is that the
immovable property should have come in the possession of money
lender by way of sale etc. in the nature of the property offered by the
debtor as security for loan advanced by the money lender during the
course of money lending. He submits that it is only upon such a
finding being arrived at, that the instrument of conveyance can be
declared as invalid and possession will be directed to be restored. He
submits that the document stated to have been executed on Rs.100
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stamp paper on 21st March 2013, has not been signed by Petitioner No
1 as the document is signed by one Shankar Bapparao Mate whereas
petitioner No.1 is Shankar Apparao Mate and there is no finding
rendered about the discrepancy in the signature. He submits that the
said document was not executed by the petitioner No.1.
12. He would submit that the Sale Deeds would disclose that the
transactions were pure sale transactions and even if it is held that
agreement for recoveyance of the land has not been executed,
specific performance can be sought. He submits that it will have to be
considered whether term "Sale" used in Section 18 of the Money
Lending Act can be read in isolation by ignoring Section 58 (c) of the
Transfer of Property Act.
13. He would further submit that the evidence has been led by
respondent No.1's daughter-in-law who is the constituted attorney
and she cannot depose in place of the respondent No.1 as per the
settled position in law. He points out to the cross examination of the
constituted attorney wherein she has admitted that in the registered
sale deeds of 2013 and 2016 she has not signed the documents, that
in these two documents there is no evidence of money lending
transaction, that the Respondent No 1's son has consented to the
Sale Deeds, and, that she has no personal knowledge of the
transactions. In support he relies upon the following decisions:
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1. Prakash (Dead) by Lr. vs. G. Aradhya and Ors., [Civil
Appeal No.706 of 2015] ;
2. Rajabhau Raosaheb Gund vs. Ramchandra Tukaram
Mane, [Writ Petition No.9828 of 2022];
3. The Authorized Officer, Central Bank of India vs.
Shanmugavelu, [Civil Appeal NO(S).235- 236 of 2024];
and
4. Man Kaur (Dead) by Lrs. vs. Hartar Singh Sangha, [(2010)
10 SCC 512.]
14. Per contra, Mr. Sarda, learned counsel appearing for the
respondent would point out the consideration clause in the
registered sale deeds of 2013 and 2016 and would submit that the
sale consideration is shown to have been paid two hours before
execution of the sale deeds. According to him the same is an indicator
of the transaction being money lending transaction. He would further
submit that as petitioner No.1 did not reconvey the property as per
the agreement entered into, application was made under money
lending regulation for cancellation of the documents and in the
application it is specifically pleaded that financial assistance of Rs. 1
lakh at the rate of 8% interest was given by Petitioner No 1. He
submits that the Assistant Registrar has conducted the inquiry under
Section 16 of Money Lending Act and has stated that the property is in
possession of respondent No.1. He submits that it is therefore clear
that the document was mortgage and not sale. He would further
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point out the affidavit executed by the witness in which witnesses has
specifically deposed that the suit property even as of today are in
possession and cultivation of respondent No.1. He would point out
the admission of the Petitioner No 1 in cross- examination that he
does not have any documentary evidence to show the sale- purchase
of the crops which are cultivated. He submits that subject property is
uncultivable and no crop could been grown. He tenders the order of
Division Bench of this Court in Writ Petition No 11744 of 2017
challenging the vires of Section 15 to 18 of Money Lending Act.
15. To counter the said submissions, Mr. Joshi would point out to
the 7/12 extract which is annexed at page 73 to 79 and would submit
that the same is in name of petitioner No.1 and the crop cultivation
column does not show the name of respondent No.1.
16. Upon query by this Court as to how the witness for respondent
No.1 has stated that the suit property is in possession of respondent
No.1 and is cultivating the same and taking income therefrom, when
submission is that the land is uncultivable, Mr. Sarda is unable to offer
any explanation.
REASONS AND ANALYSIS:
17. Before adverting to the facts of the present case it would be
apposite to refer to the statutory scheme of the Money Lending
Regulation Act, 2014 which was enacted as the existing legislation
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was found inadequate to protect the farmers from the harassment of
the money lenders. The increase in the death of the farmers by suicide
to evade harassment at the hands of the money lenders prompted the
legislature to make better provisions for the regulation and control of
money lending in the State of Maharashtra.
18. The Act provides for issuance of money lending license and for
regulation of the terms and conditions of the license. Section 16 of
the Act empowers the authorized officer to cause to be produced any
record or document by the money lender or any person and at the
same time authorizes them to enter and search without warrant any
premises where he believes such record or document is kept, for the
purpose of verifying whether the business of money lending is carried
out in accordance with the provisions of the Act. Under Section 17 of
the Act if upon inspection of record and documents made under
Section 16, the Inspecting Officer is satisfied that money lender is in
possession of the property by a debtor as security for loan advanced
by money lender in the course of his business of money lending
without a valid license, he shall require the money lender to deliver
forthwith possession of the property. Section 18 which provides for
return of immovable property acquired in the course of money
lending and reads thus:
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(1) If, on the basis of facts disclosed, during verification
under section 16 or inspection under section 17, or by an
application from a debtor or otherwise, the District
Registrar has reason to believe that any immovable
property, which has come in possession of the money-
lender by way of sale, mortgage, lease, exchange or
otherwise, within a period of [fifteen years] [These words
were substituted for the words 'five years' by Mah. 23 of
2014, section 8.] from the date of verification or the
inspection or the date of receipt of application from debtor,
in the nature of the property offered by the debtor to the
moneylender as a security for loan advanced by the money-
lender in course of money-lending, the District Registrar
may, himself or through an inquiry officer, to be appointed
for the purpose, in the manner prescribed, hold further
inquiry into the nature of the transaction.
(2) If upon holding the inquiry as per sub-section (1), the
District Registrar is satisfied that the immovable property
came in possession of the money-lender as a security for
loan advanced by the money-lender during the course of
money-lending, the District Registrar may, notwithstanding
anything contained in any other law for the time being in
force, after recording the reasons, declare the instrument
or conveyance as invalid and may order restoration of
possession of the property to the debtor who has executed
the instrument or conveyance as a security or to his heir or
successor, as the case may be.
(3) Before passing an order or giving decision as per
subsection (2), the District Registrar shall give an
opportunity to the person concerned to state his
objections, if any, within fifteen days from the date of
receipt of notice by him and may also give personal
hearing, if he so desires.
(4) Any person aggrieved by the order or decision of the
District Registrar under sub-section (2) may, within one
month from the date of order or decision, appeal to the
Divisional Registrar :
Provided that, the Divisional Registrar may admit the
appeal after expiry of the period of one month, if the
appellant satisfies him that he had sufficient cause for not
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preferring the appeal within the period.
(5) The order passed by the Divisional Registrar in appeal
preferred under sub-section (4) shall be final.
(6) Subject to the appeal provided under sub-section (4),
the order passed or decisions given by the District Registrar
under sub-section (2), shall be sufficient conveyance and it
shall be the duty of every officer entrusted with the work
relating to maintenance of land records under the
Maharashtra Land Revenue Code, 1966 (Mah. XLI of 1966),
or under any other law for the time being in force, to give
effect to such order in his records.
19. The statutory scheme of Section 18 makes it clear that the
inquiry contemplated is firstly on the aspect of possession of the
immovable property and secondly on the nature of possession i.e. it
must be established that the possession is by way of security for loan
advanced by the money lender during the course of money lending
transaction. It is only where the twin tests are satisfied that the
instrument can be declared as invalid and possession can be directed
to be restored.
20. Coming to the facts of the present case, in respect of Gat NO
182/3, the Respondent No 1's case is that loan of Rs 1 lakh was taken
@ 8% interest and the sale deed dated 21 st March, 2013 is in fact
mortgage deed evidenced from the Return Sale Receipt executed on
the same day in respect of Gat No 182/3. As far as Gat No 187/2 is
concerned, the case is that without payment of consideration and
fraudulently the sale deed of 2016 was executed which is also
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mortgage deed.
21. Firstly dealing with the Sale deed dated 10th June, 2016
executed in respect of Gat No 187/2, it is not even the case of the
Respondent No 1 that there was any money lending transaction
between the Petitioner No 1 and Respondent No 1 leading to the
execution of the sale deed and the case is of fraud.
22. The Respondent No 2 has held that the transaction of 2016
arises out of money lending transaction for the reason that the sale
deed appears to have been obtained by luring the Respondent No 1
with the assurance of securing the bank loan sanctioned for
repayment of the amount stated in the recital of the stamp paper of
Rs 100/. To support the finding, the Respondent No 2 has observed
that the electricity connection, Well and water pump is still standing
in name of Respondent No 2.
23. The Respondent No 2 failed to consider that the pleaded case
of the Respondent No 1 qua Gat No 187/2 was that of fraud and not
of money lending. The pleadings of fraud would take the transaction
out of purview of Money lending Act. There is no specific finding of
the Respondent No 2 that there was loan transaction between the
Petitioner No 1 and the Respondent No.1 or that Gat No. 187/2 was
mortgaged as security for the said amount. The Respondent No 2
failed to consider that the Respondent No 1's son was consenting
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party to the Sale Deed dated 10th June, 2016. There is no basis for the
Respondent No 2 to come to a finding that the sale deed has been
executed as Respondent No 1 has not been able to repay the amount
stated in the Return Sale Receipt when it is not the pleaded case of
the Respondent No 1. Further without any nexus between the return
sale receipt of 2013 and the registered sale deed of 10 th June 2016
respondent No.2 has arrived at a finding that registered sale deed of
2016 has been executed as there was non repayment of the sum
mentioned in return sale document.
24. Coming to the transaction in respect of Gat No 182/3, the
Respondent No 2 has held on the basis of evidence adduced that the
Petitioner No 1 had executed the Return Sale Receipt and on that
basis has come to a finding that the sale transaction in respect of Gat
No 182/3 has arisen out of money lending transaction. The Return
Sale Receipt has been executed on Rs 100/- stamp paper and states
that the sale deed has been executed in respect of Gat No 182/3 for
sum of Rs 3,00,000/- and within period of two years upon repayment
of Rs 3,00,000/- Reconveyance Deed will be executed. The Return Sale
Receipt does not speak about any payment of interest on principle
amount or the expenses to be incurred for reconveyance aggregating
to Rs.3,00,000/ which was the pleaded case of Respondent No.1.
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25. The Appellate Authority held that it does not have the
jurisdiction to decide the validity of the Return Sale Receipt and
despite the validity being under challenge has held that the Petitioner
No 1 has failed to execute the Reconveyance Deed and therefore the
transaction appears to have arisen out of money lending transaction.
26. There is no finding rendered that the Petitioner No 1 was
carrying out money lending transaction and the sale deeds are in fact
mortgage deeds and that the possession of the properties has come
in the hands of the Petitioner No 1 as security for the loans advanced.
The case of the Respondent No 1 was that the Petitioner No 1 was
carrying out money lending business in the village, however no
witness from the village has been examined to show specific instances
of money lending transactions entered by the Petitioner No 1. The
Respondent No 2 has returned a finding of the sale deed of 2013 to
have arisen from money lending transaction based on the Return Sale
Receipt executed by the Petitioner No 1. Though it is sought to be
disputed by Mr. Joshi that the said receipt is not signed by the
Petitioner No 1, in the Petition at paragraph 2.2, the contention is that
signature of Petitioner No 1 was obtained on blank stamp paper which
was used to scribe the Return Sale Receipt.
27. The issue is whether the execution of the Return Sale Receipt
would render the sale deed dated 21st June, 2013 a mortgage. The
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Apex Court in case of Prakash (Dead) by LR vs G. Aradhya & Ors
(supra) was considering the issue whether reconveyance of the
property in favour of the vendor on payment after specified period
would lead to an inference that the said transaction was Mortgage
Deed. The Apex Court considered the provisions of Section 58 of
Transfer of Property Act, 1882 (TP Act) and the catena of decisions on
the subject which had held that sale with condition of repurchase is
not a lending and borrowing arrangement. The Apex Court held that
by way of execution of Reconveyance Deed on the same day, would
only give right to the vendor to repurchase the property.
28. The decision of the Apex Court is squarely applicable to the
facts of the present case. The recital in the Sale Deed dated 21 st
March, 2013 discloses a purely sale transaction. The execution of the
Return Sale Receipt at the most would only give right to the
Respondent No 1 to repurchase the property but would not render
the Sale Deed of 21st March, 2013 a mortgage. For seeking execution
of the Reconveyance Deed, the remedy of Civil Court is available to
the Respondent No 1.
29. The Respondent No 2 has not considered that the sale deeds
do not establish any debtor creditor relationship. The Return Sale
Receipt even if it is accepted has been executed by the Petitioner No 1
with full knowledge, the Respondent No 1 at the most is entitled to
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adopt appropriate civil remedies and the remedy under the Money
Lending Act is not available to the Respondent No 1.
30. The Respondent No 2 also failed to appreciate that the case of
the Respondent No 1 is that he is in possession of the properties. That
being so, the Petitioner No 1 being in possession of the property as
security for loan advanced which is the second requirement for
invocation of Section 18 of Money Lending Act, is not satisfied.
31. The admissions given by the constituted Attorney are also
relevant as she had admitted that she does not have any personal
knowledge about the transactions executed in the year 2013 and
2016. It is settled position in law that the constituted attorney can
depose only in respect of the facts which are personal to the
knowledge of constituted attorney or in respect of the acts which are
performed by the constituted attorney under the power of attorney.
The constituted attorney cannot depose in place of the principal and
the entire evidence in respect of the transactions once it has been
admitted to not have any personal knowledge, cannot be accepted.
The Constituted attorney has further admitted that in the return sale
receipt of 21st March 2013 there is no mention of any money lending
transaction. The Respondent No 1 has not stepped in the witness box
to give evidence of the transactions of the year 2013-2016 and
therefore adverse inference is required to be drawn against
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Respondent No 1.
32. From the cross examination of petitioner No.1 nothing has been
pointed out to show that material admissions have been elicited on
the aspect of money lending transaction.
33. Respondent No.2 has also failed to appreciate that there is no
evidence on record to show that there was any agreement for
payment of interest or interest was in fact paid which is strong
indicator of creation of debtor and creditor relationship. Respondent
No.2 has accepted the case of respondent No.1 on the solitary ground
of Return Sale Receipt having been executed by the Petitioner No 1.
The constituted attorney who had no knowledge of transactions of
2013 and 2016 could not have deposed that the Sale Deeds arose out
of money lending transactions. Though the respondent No.3
Appellate Authority has held that authenticity or validity of
documents is not within purview of respondent No.3, it has
thereafter proceeded to hold that the same is money lending
transaction.
34. Merely because in both the sale deeds, the consideration is
shown to have been paid prior to two hours of the registration cannot
be construed as an indicator of money lending transaction. What was
required to be determined is the true nature of the transaction which
is to be ascertained from the recitals of the deed in light of
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surrounding circumstances. No such exercise has been carried out by
the Respondent No 2 and Respondent No 3. Perusal of the Sale Deeds
would indicate that there is no ambiguity in the language and
therefore they must be given their true legal effect. Pursuant to the
execution of the Sale deeds, the Petitioner No 1 mutated his name in
the revenue records to which there is no challenge. The 7/12 extracts
and crop cultivation column does not show the name of the
Respondent No 1and therefore possession is shown to be with the
Petitioner No 1. There is no recital in the Sale Deeds which indicates
creation of debtor creditor relationship or that the transfer was
security for the debt. In both the Sale Deeds there are recitals
conveying the right, title and interest of the Respondent No 1 in the
properties in favour of Petitioner No 1 and there is no recital of any
other transaction of advance of any amount or any reference to
financial need of the Respondent No 1.
35. Another aspect which is to be considered is the reliance placed
by the Respondent No 2 on the inquiry report of Assistant Registrar
dated 12th June, 2017 under Section 16 of Money Lending Act. The
duty cast upon the Assistant Registrar while conducting an inquiry
under Section 16 is to verify whether the business of money lending
is being carried out and for the said purpose to seek production of any
record/document or to enter and search without warrant any
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premises where he believes such record or document is kept. In the
present case, the Assistant Registrar has conducted the site
inspection of Gat No 182/3 and recorded the statements of the
Respondent and other villagers. The opinion expressed in the report is
that as reconveyance deed was not executed by the Petitioner No 1,
the transaction arises out of money lending transaction. The exercise
contemplated under Section 16 of Money Lending Act, was not done
and based on the site inspection and statements of the Respondent
No 1 and villagers, opinion is expressed that the sale transaction is
money lending transaction, which report has been erroneously relied
upon by the Respondent Nos. 2 and 3.
36. In the present case the submission of Mr. Sarda is that subject
property is still in possession of respondent No.1 and if the same is
accepted the primary requirement for inquiry to be commenced that
immovable property has come in possession of money lender as
security for loan does not get satisfied. This is despite the fact that
rival claims are raised as regards possession of the property which can
only be decided in Civil Court. Although the provisions of Section 18 of
the Money Lending Act refers to the property which has come in the
possession of money lender by way of sale, what assumes significance
is that possession should be as security for loan advanced. In that
view of the matter, there has to be a finding by the concerned
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Authority that transaction was in fact of mortgage satisfying the
conditions of Section 58 (c) of the Transfer of Property Act, 1882.
37. In the case of Man Kaur (Dead) By Lrs. vs. Hartar Singh
Sangha, [(2010) 10 SCC 512] the Apex Court summarized the position
as to who should give evidence in regard to the matter involving
personal knowledge qua power of attorney holder and has held that if
the power of attorney holder cannot depose or given evidence in
place of his principal for the acts done by the principal or transactions
or dealings of the principal of which principal alone has personal
knowledge. In the present case, it is specific admission of the
constituted attorney that she has no personal knowledge of the
transactions of the year 2013-2016. The constituted Attorney has
admittedly not done any act or handled any transaction in pursuance
of power of attorney granted by the principal and had at no point of
time participated in the transaction. In that event, the evidence of the
Constituted Attorney could not have been accepted by respondent
Nos. 2 and 3.
38. As far as the decision in the case of Surya Dev Rai vs. Ram
Chander Rai and Ors. [(2003) 6 SCC 675] relied upon by learned
counsel for respondent No.1, the Apex Court has held that
supervisory jurisdiction under Section 227 of the Constitution can be
exercised where the subordinate Court has exercised jurisdiction
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available to it in a manner not permitted by law and has resulted in
failure of justice.
39. The challenge to the vires of Section 15 to 18 of Money Lending
Act pending for consideration before the Division Bench will not have
any impact on the present proceedings. The purpose of the
enactment of Money Lending Act was to prevent exploitation of
farmer-debtors at the hands of money lender. The purpose is not to
thwart the valid and legal sale transactions which may be entered into
by the agriculturists in respect of their lands in favour of third parties.
It is for this reason that Section 18 of Money Lending Act lays down
the parameters of the inquiry required to be conducted before
declaring the instrument of conveyance as invalid and restoration of
the property to the debtor. There has to be specific finding of
existence of money lending transaction and the possession being
handed over as security for loan advanced by the money lender in
course of money lending. The true character of the document is to be
ascertained by considering the recitals contained therein and viewed
in light of the attending circumstances. The nature of the document
has to be ascertained as one of mortgage. In the absence of any such
specific findings there can be no further direction for cancellation of
instrument or restoration of the possession.
40. The Sale Deeds dated 21st March, 2013 and 18th June, 2016
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cannot be construed as mortgage and there is no evidence to show
that possession of the properties were handed over as security for
loan transaction. On the contrary what is sought to be contended is
that sale deeds are loan transactions as possession of the properties
is retained by respondent No.1. Nothing has been shown to
demonstrate creation of debtor-creditor relationship by execution of
the documents.
41. Before parting, it needs to be noted that the order of the
Respondent No 2 runs in 33 pages wherein the application, reply,
evidence and the written arguments have been reproduced in 32
pages and in one and half page the issues have been framed and
findings have been rendered. The authorities are vested with the
power under the Money Lending Act to upset sale transactions if
found to be arising out of money lending transactions and considering
that the right to property is impacted, it is expected that the
authorities would render reasoned findings while declaring the
validity of the sale transactions and directing restoration of properties
to the vendors.
42. In light of the above, I am of the opinion that the respondent
Nos.2 and 3 have exceeded the jurisdiction vested in them resulting
in grave injustice being caused to the petitioners who are purchasers
of the suit property which deserves interference under Article 227 of
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Constitution of India.
43. Resultantly, Petition is allowed. The impugned order dated
31st May 2023 passed in Appeal No.5/2021 by respondent No.3 and
the judgment and order dated 13 th September 2021 passed in the
Money Lending Suit No.23/2017 by respondent No.2 are hereby
quashed and set aside.
44. In view of disposal of petition, Interim/Civil Applications, if any,
do not survive for consideration and stand disposed of.
[Sharmila U. Deshmukh, J.]
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