Sri C Balwanth Kumar & Brothers vs M/S Shanthi Drug House
2022 Latest Caselaw 5161 Kant

                          1



  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 22ND DAY OF MARCH, 2022

                      BEFORE

THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

    REGULAR FIRST APPEAL NO. 2616 OF 2007(MON)


BETWEEN:

SRI C. BALWANTH KUMAR & BROTHERS,
MONEY LENDERS,
REP: BY ITS PROPRIETOR,
SRI C. JAICHAND, S/O CHAMPALAL,
AGED ABOUT 53 YEARS,
NO.458, SAMPIGE ROAD,
MALLESHWARAM,
BANGALORE-3.

ALSO AT : -

NO.141, PIPADE COMPLEX,
COCONUT AVENUE ROAD,
MALLESWARAM,
BANGALORE-3.

                                         ...APPELLANT

(BY MISS. ARCHITHA, ADVOCATE FOR
    SRI K.V.NARASIMHAN, ADVOCATE (PH))

AND:

M/S. SHANTHI DRUG HOUSE,
REP: BY ITS PROPRIETOR,
SRI D. UTTAM CHAND,
1ST FLOOR, NO.70. SHIVAJI ROAD,
                              2



BANGALORE-560 051.

                                          .....RESPONDENT

(BY SRI S. VIVEKANANDA, ADVOCATE (PH))

     THIS REGULAR FIRST APPEAL IS FILED UNDER
SECTION 96 OF CPC AGAINST THE JUDGMENT AND
DECREE      DATED     08.08.2007    PASSED      IN
O.S.NO.16395/2003 ON THE FILE OF THE IV ADDL. CITY
CIVIL AND SESS. JUDGE, MAYO HALL UNIT, BANGALORE,
DISMISSING THE SUIT FOR RECOVERTY OF MONEY.
     THIS REGULAR FIRST APPEAL COMING ON FOR
HEARING THIS DAY, THE COURT DELIVERED THE
FOLLOWING:

                       JUDGMENT

The captioned Regular First Appeal is filed by the

unsuccessful plaintiff wherein the suit filed by the

plaintiff seeking recovery of a sum of Rs.2,05,000/- is

dismissed by the Court below on the ground that the

plaintiff, who is a money lender did not possess valid

licence as on the date of filing of the suit.

2. For the sake of convenience, the parties

are referred to as per their rank before the Trial Court.

3. The facts leading to the case are as under:

The plaintiff filed a suit against the defendant for

recovery of a sum of Rs.3,10,000/-. The plaintiff

claims that he is a money lender and the defendant is

the proprietor of M/s.Shanthi Drug House dealing in

drugs. The plaintiff has specifically pleaded that the

defendant was badly in need of finance and therefore,

he approached the present plaintiff and borrowed a

sum of Rs.2,05,000/- on 7.11.2000 and executed the

demand promissory note and consideration receipt for

having received the loan with an assurance that he

would repay the same with interest at 18% p.a. The

plaintiff claims that inspite of repeated demand, the

defendant failed to pay the amount and therefore, the

plaintiff was compelled to issue a legal notice on

7.2.2003. The plaintiff was compelled to file a suit as

defendant neither replied to the legal notice nor came

forward to repay the amount.

4. On receipt of summons, the defendant

entered appearance and contested the proceedings

and stoutly denied the entire averments made in the

plaint. The defendant has specifically denied availing

of loan of Rs.2,05,000/- from the plaintiff as alleged in

the plaint. He has specifically denied that he has

executed the demand promissory note and

consideration receipt as alleged in the plaint. The

defendant claim that he has put signature on pronote

and on some blank papers on the premise that

plaintiff was ensuring to secure membership in the

chits. The defendant specifically contended that he

has no money transactions with the plaintiff.

5. Based on the rival contentions of plaintiffs

and defendants, the Trial Court has formulated the

following issues:

"(1) Whether plaintiff is a money lender and if, so whether he is having valid money lending licence?

(2) Whether the plaintiff proves that the defendant borrowed a sum of Rs.2,05,000/- on 7.11.2000 and duly executed on demand promissory note and consideration receipt?

(3) Whether defendant proves that he has not received consideration on suit pronote?

(4) Whether the defendant proves that the transaction between the plaintiff and the defendant was only a chit transaction as contended at para 5 of his written statement?

(5) To what decree or order?"

6. The plaintiff, to substantiate his claim, led

in ocular evidence by examining himself as PW-1 and

adduced documentary evidence vide Exs.P-1 to P-10.

The defendant in support of his contention, led in

ocular evidence by examining himself as DW-1 and did

not chose to produce any documentary evidence.

7. The learned Judge of the Trial Court having

examined the ocular and documentary evidence on

record, though answered issue Nos.1 and 2 in favour

of the plaintiff, but however, while examining issue

No.1, has recorded a categorical finding that the

plaintiff has failed to prove that he had a valid money

lending licence as on the date of filing of the suit. It is

in this background, the learned Judge has proceeded

to dismiss the suit. Being aggrieved by the judgment

and decree of the trial court, the present appeal is

filed by the plaintiff.

8. Learned counsel for the appellant-plaintiff

reiterating the grounds urged in the appeal would

submit to this Court that the finding recorded by the

trial court on issue No.1, is perverse and contrary to

clinching evidence on record. Learned counsel placing

reliance on Ex.P-1, which is a money lending licence

would submit to this Court that the plaintiff-Firm

possessed money lending licence on the day a sum of

Rs.2,05,000/- was lent to the defendant. Therefore,

she would vehemently argue and contend that if

plaintiff had a valid licence as on the date of the

transaction, the court is not precluded in passing a

money decree. Therefore, she would submit to this

Court that the judgment and decree of the court below

in dismissing the suit suffers from perverse and

warrants interference at the hands of this Court.

9. Per contra, learned counsel for the

respondent-defendant would support the reasons and

conclusions arrived at by the Trial Court. He would

submit to this Court that unless money lender holds a

valid money lending licence, not only on the date

when the loan was advanced, but also on the date

when the suit was filed, in terms of Section 11(1) of

the Karnataka Money Lenders Act, 1961, the court has

no jurisdiction to pass a decree. Reiterating the

defence set up by the defendant in the written

statement, he would contend that the learned Judge

has rightly placed reliance on the judgment rendered

by this Court in the case of K.Lakshmipathy vs.

Channaiah reported in 1996 (6) KLJ 266 and

applying the principles laid down by this Court in the

aforesaid judgment, the learned Judge was justified in

dismissing the suit. On these set of defence, he would

submit to this Court that the judgment and decree of

the Trial Court is in accordance with law and may not

warrant interference at the hands of this Court.

10. Heard learned counsel appearing for the

appellant and learned counsel appearing for the

respondent. On examination of the material on

record, the short point that would arise for

consideration:

1) Whether the Trial Court is justified in dismissing the suit by invoking

the provisions of Section 11(1) of the Karnataka Money Lenders Act, 1961 and consequently was justified in holding that since the plaintiff did not possess the money lending licence as on the date of filing the suit, no decree can be passed ?

11. The present suit is filed by the plaintiff

alleging that the firm is into money lending business

and accordingly the defendant has availed loan of

Rs.2,05,000/- on 7.11.2000 and has executed a

Pronote as per Ex.P-2. On perusal of Ex.P-1, Money

Lending Licence, this court would find that licence was

valid upto 31.03.2003. The present suit is filed on

4.11.2003. It is not in dispute that as on the date of

filing of the suit, the plaintiff-Firm did not possess a

valid Money Lending Licence. Therefore, the short

question that would arise for consideration of this

Court is "whether the plaintiff-Firm, who had not

sought for renewal of licence as on the date of filing of

the suit, would have maintained the present suit

seeking for recovery of money?".

12. The law in this regard is no more res

integra. The learned Judge has placed reliance on the

judgment rendered by this Court in the case of

K.Lakshmipathy -v- Channaiah. This Court while

examining an identical issue has held that Court has

to be satisfied that the money lender holds a vaid

licence not only when he lends money, but also when

he files a suit for recovery of money. The said

principle is also found in subsequent judgment

rendered by this Court in the case of M/s.Prasanna

Company -v- Prasanna Kumar and another reported in

2000 (5) Kar.L.J. 166. While dealing with an identical

issue in the subsequent judgment also, this Court was

of the view that if the money lender did not possess

valid money lending licence as on the date of filing the

suit, the plaintiff has to fail. Existence of a valid

money lending licence is condition precedent not only

on the date when the loan was advanced, but also on

the date when the suit was filed, for passing a decree.

The principles laid down by the judgment stated supra

still holds field.

13. In that view of the matter, on account of

expiry of licence as on the date of filing the suit,

plaintiff is not entitled for a decree for recovery of

money as held in the judgments cited supra. No

exception can be taken in the present case on hand.

The principles laid down by the coordinate Bench of

this Court are squarely applicable to the present case

on hand. Therefore, this Court would find no error

committed by the Trial Court in dismissing the suit in

terms of Section 11 of the Karnataka Money Lenders

Act. Therefore, the appeal is devoid of merits and for

the reasons stated above, the same is liable to be

dismissed.

14. Accordingly, the appeal is dismissed.

Sd/-

JUDGE

DM