Registered Partnership Firm vs Vali Mohammad

REGISTERED PARTNERSHIP FIRM ... APPELLANT(S)

:VERSUS:

VALI MOHAMMAD ... RESPONDENT(S)

ORDER

Leave granted.

The core question which arises for consideration in this appeal is as to

whether the respondent is a money lender within the meaning of the provisions

of M.P. Money Lenders Act, 1934 (for brevity 'the Act'). Before us it is not

denied or disputed that in the event it is held that the provisions of the said Act

are applicable in the instant case, the impugned judgment must be sustained.

Ostensibly, the appellant is a partnership firm. It inter alia carries

business in seeds, medicines, agricultural implements etc. The appellant,

however, accepts that whenever a person is in need of money, plaintiff lends him

the same. The learned Trial Judge opined that only because as and when loan is

advanced to persons who approached the plaintiff-appellant therefor, the same

would not mean that it is a money lender. The High Court, however, by reason 2

of the impugned judgment, noticing, inter alia, that the plaintiff himself has

admitted in paragraph 10 of the cross-examination that he had given loan to

about 60-70 villagers of Village Malvasa on interest at the rate of 2% per month,

is itself a pointer that he is a money lender. It was, therefore, held that the

provisions of Section 7 of the Money Lenders Act were attracted and in its

conclusion the plaintiff was found entitled to a sum of Rs.16,650/- with interest at

the rate of 6% per annum from the date of filing of the suit.

The appellant herein filed the aforementioned suit for recovery of a sum

of Rs. 24,630/-. Indisputably, the suit amount was calculated on the basis of the

interest charged from the defendant - respondent at the rate of 2% per month

i.e. 24 per cent per annum.

Mr. H.K. Puri, learned counsel for the appellant has taken us through

the evidence. From the evidence of the appellant's witness Shri Kantilal itself, it

would appear that a separate account book is maintained which is known as

debtors' book. He accepted that in that debtors' book, there were about 60-70

accounts. The debtors mentioned in the said book of account are villagers of

Village Malvasa although the partners of the appellant firm have been living in

Ratlam.

It has furthermore been brought on record that separate accounts are

being maintained in respect of other persons who have not been produced before

the Court. The partner of the appellant firm has furthermore accepted in his 3

evidence that when they go for recovery of money, accounts are written on a

piece of paper, consisting bill No. and interest. As indicated hereinbefore, it has

furthermore been accepted that whenever persons approach the appellant firm

for loan, the same is granted. Plaintiff's partner Kantilal has admitted that he is

a money lender. Consequently, the plaintiff would not be entitled to get the

interest and cost of the suit as it has not complied with the provisions of Section 7

of the Act.

In view of the materials brought on record and having regard to the

fact that the High Court has arrived at a finding of fact in exercise of its

jurisdiction under Section 96 of the Code of Civil Procedure, we find no reason

to differ therewith. Consequently, this appeal is dismissed with costs. Counsel's

fee is assessed at Rs. 10,000/-.

.......................J (S.B. SINHA)

.......................J (DEEPAK VERMA)

NEW DELHI, JULY 27, 2009.