Karnataka High Court
Shivaputrappa S/O Irappa Shidenur vs Smt. Parvatevva on 1 December, 2023
Author: Hanchate Sanjeevkumar
Bench: Hanchate Sanjeevkumar
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NC: 2023:KHC-D:14072
RSA No. 5443 of 2009
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 1ST DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR
REGULAR SECOND APPEAL NO.5443/2009
BETWEEN:
SHIVAPUTRAPPA
S/O. IRAPPA SHIDENUR,
AGE: MAJOR,
OCC : AGRICULTURE,
R/AT HEDIGONDA,
BYADAGI TALUK,
HAVERI DISTRICT - 581 104.
...APPELLANT
(BY SRI F. V. PATIL, ADVOCATE)
AND:
1. SMT. PARVATEVVA
W/O SANGAPPA GADAD,
Digitally signed
by
VIJAYALAKSHMI VIJAYALAKSHMI
AGE: MAJOR,
OCC : HOUSEHOLD,
M KANKUPPI M KANKUPPI
Date: 2023.12.19
15:06:56 +0530
R/AT: HAVERI,
HAVERI DISTRICT - 581 104.
2. SHIVALINGAPPA
S/O SANGAPPA GADAD,
AGE: MAJOR,
OCC: HOUSEHOLD,
R/AT: HAVERI,
HAVERI DISTRICT - 581 104.
3. MALLIKARJUN
S/O SANGAPPA GADAD,
AGE: MAJOR,
OCC: BUSINESS,
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NC: 2023:KHC-D:14072
RSA No. 5443 of 2009
R/AT: HAVERI,
HAVERI DISTRICT - 581 104.
4. HONAPPA
S/O SANGAPPA GADAD,
OCC : BUSINESS,
R/AT: HAVERI,
HAVERI DISTRICT - 581 104.
5. RAJSHEKAR
S/O. SANGAPPA GADAD,
AGE: MAJOR,
OCC: BUSINESS,
R/AT: HAVERI,
HAVERI DISTRICT - 581 104.
6. SMT. VIJAYALAXMI(SHARADA)
W/O. SHIVASHETTY ANISHET,
AGE: MAJOR,
OCC: HOUSEHOLD WORK,
R/AT: VARADAHALLI,
HAVERI DISTRICT - 581 104.
...RESPONDENTS
(BY SRI SABHUL AHMED, ADVOCATE FOR
A. S. PATIL, ADVOCATE FOR R1TO R6)
THIS RSA IS FILED UNDER SECTION 100 OF THE CODE OF
CIVIL PROCEDURE, SET ASIDE THE JUDGMENT AND DECREE OF THE
COURT OF ADDL. CIVIL JUDGE (SR.DN) HAVERI, PASSED IN
R.A.NO.25/2007 DATED 26TH JUNE 2009 RESTORE THE JUDGMENT
AND DECREE OF THE COURT OF ADDITIONAL CIVIL JUDGE (JR DN)
AND JMFC AT HAVERI PASSED IN O.S.NO.221/2002 DATED
01.02.2007 AND CONSEQUENTLY THE SUIT OF THE PLAINTIFFS MAY
KINDLY BE DISMISSED.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
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NC: 2023:KHC-D:14072
RSA No. 5443 of 2009
JUDGMENT
The regular second appeal is filed by the defendant
challenging the judgment and decree passed in RA No.25/2007
dated 26.06.2009 by the Addl. Civil Judge (Sr.Dn), Haveri(for
short "First Appellate Court") by which reversed the judgment
and award passed in OS No.221/2002 dated 01.02.2007 by
Addl. Civil Judge (Jr.Dn) & JMFC at Haveri (for short, "trial
court") against the divergent opinions by both the courts below,
the present second appeal is filed.
2. For the purpose of convenience, ranking of the parties is
referred to as per their status before the trial Court.
3. It is the case of the plaintiffs that the plaintiff No.1 is the
wife of the deceased Sangappa and the Plaintiff Nos.2 to 6 are
children of deceased Sangappa (deceased Sangappa is
propositus). The deceased Sangappa has advanced loan of
Rs.30,000/- to the defendant. The defendant has executed
promissory note. But, the defendant has not repaid the amount
of Rs.30,000/- to the plaintiff. Therefore, plaintiff is constrained
to file suit for recovery of money of Rs.30,000/-.
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4. The defendant has filed written statement and denied all
the averments in the complaint and totally denied the case of
the plaintiffs by stating that propositus Sangappa has not
advanced loan to the defendant.
5. The trial court has held that the plaintiffs have proved
that the propositus Sangappa has advanced loan of Rs.30,000/-
to the defendant as per Ex.P1-promissory note but denied the
decree on the ground that the propositus Sangappa was not
having license of doing money lending business as per Section
11 of Karnataka Money Lenders Act, 1961 (for short "KML
Act"). Hence, dismissed the suit.
6. The First Appellate Court has reversed the judgment and
decree passed by the trial court and decreed the suit of the
plaintiffs on the reason that Ex.P1-promisory note does not
carry an obligation on the part of the defendant to pay interest
on the loan amount. Therefore, the transaction between the
plaintiffs and defendant is not coming within the preview of
KML Act. Hence, the provisions of KML Act are not applicable.
Hence, decreed the suit.
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7. This court on 28.05.2010 while admitting the appeal has
framed following substantial questions of law:-
1) Whether the Lower Appellate Court is justified in
holding that suit is filed by the plaintiff not to hit
by Section 11 of Money Lenders Act?
2) Whether the Lower Appellate Court is in justified
in reversing the finding of the trial Court?
3) Whether the Lower Appellate Court is justified in
holding that the respondent is Money Lending
business without collecting the interest in the
business?
8. Heard the arguments of learned counsel for the parties
and perused the records.
9. The trial court though held that money transaction
between propositus Sangappa and defendant is proved and
defendant has borrowed sum of Rs.30,000/- from the
propositus Sangappa which is amounting to money lending
business, for which propositus Sangappa did not have money
lending business hit by Section 11 of KML Act, thus dismissed
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the suit. This opinion formed by the First Appellate Court that
since in Ex.P1-promissory note, there is no stipulation that
defendants has to pay interest on the said amount of
Rs.30,000/-. Thus, provisions of KML Act are not applicable.
Hence, decreed the suit.
10. First appellate court relied on the judgment of this Court
reported in ILR 2008 KTK 5175 in the case of H.R.Halappa
and Others Vs. H.Devaraju and also by placing reliance on
the decision in RSA No.933/1987 dated 04.10.1999 between
Sangappa Danappa Gadad Vs. Ningappa Patreppa and
thus, decreed the suit.
11. Ex.P1 is a promissory note. The defendant has denied the
execution of the said promissory note. The trial court has
compared the signature of the defendant on Ex.P1-promissory
note and written statement filed in the suit and came to
conclusion that the signature found on Ex.P1-promissory note is
that of the defendant.
12. Ex.P.1 is the promissory note executed by the defendant.
The defendant has denied execution of the said promissory
note. The Trial Court has compared signature of the defendant
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on Ex.P.1-promissory note, written statement filed by the
defendant in the suit, vakalath filed in the suit and came to a
conclusion that the signature found on Ex.P.1-promissory note
is that of the defendant. The Trial Court formed opinion that the
Sanagappa has advanced loan of Rs.30,000/-. Upon
considering the same, once again with reference to the
evidence, it is proved that Ex.P.1 was executed by the
defendant. But in the said Ex.P.1, there is no stipulation making
obligations on the defendant to pay interest on the said sum of
Rs.30,000/-. Therefore, there is no levying interest on the said
amount, then it cannot be said as a money lending business as
per definition of Section 2 (10) of the KML Act, 1961. When the
amount advanced do not carry interest, such transaction
cannot be termed as a money lending business or money
lending transactions. Where a person is doing money lending
business levying interest on the amount and the said advanced
amount is earning interest, then only money lending licence is
required otherwise not. Therefore, the case is clearly covered
by judgment of this Court stated (supra). In this regard, the
First Appellate Court has rightly appreciated facts and law and
accordingly, by setting aside the judgment and decree of the
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Trial Court, decreed the suit of the plaintiffs. Accordingly, the
substantial questions of law are answered. Hence, the appeal is
filed by the appellant/defendant is found to be devoid of merit.
Therefore, this appeal is liable to be dismissed accordingly.
Sd/-
JUDGE
HMB- Up to para 11
SSP- Para 12 to end.
CT-ASC
