Madhya Pradesh High Court
Jagdish Singh vs Puranlal on 10 January, 2013
Equivalent citations: AIR 2013 MADHYA PRADESH 131, (2013) 2 NIJ 613 (2014) 1 BANKCAS 271, (2014) 1 BANKCAS 271
HIGH COURT OF MADHYA PRADESH: JABALPUR
Second Appeal No. 347 / 1997
Jagdish Singh
Versus
Puranlal
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Shri V.S.Shroti, learned senior counsel with Shri Amit
Nagpal, for the appellant/plaintiff.
None for respondent.
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PRESENT : Hon'ble Shri R.S. Jha, J.:
JUDGMENT
(10-01-2013) The appellant/plaintiff has filed this appeal assailing the legal validity of the judgment and decree dated 1-3-1997 passed by the 3rd Additional District Judge, Damoh, in C.A. No. 12-B/1996, wherein the judgment and decree dated 11-7-1996 passed by the 4th Additional Civil Judge Class-II, Damoh, in C.S.No. 4-B of 1995 has been affirmed.
2. The brief facts leading to the filing of this appeal are that the appellant/plaintiff filed a suit for recovery of a sum of Rs.17,720/-. The appellant/plaintiff is a money lender duly holding a licence in that regard under the provisions of M.P. Money Lenders Act, 1934 (hereinafter referred to as the "M.P. Act of 1934") and that he had extended a loan of Rs.16,000/- alongwith interest at the rate of Rs.2/- per month per annum on 25-12-1993 to the respondent/defendant who was working as a parcel porter with the railways at Khurai and that he had executed a promissory note in that regard. It was alleged that the respondent failed to pay the interest or return the loan in spite of several demands, therefore, the appellant issued a legal notice to him on 13-5-1994 seeking repayment of the loan and as the respondent failed to do so, a suit for recovery of a total sum of Rs.17,720/- which included interest, was filed by him before the competent Court.
3. The claim of the appellant/plaintiff was denied by the respondent/defendant pursuant to which evidence was led in the case and thereafter the trial Court dismissed the suit filed by the appellant/plaintiff, by the judgment and decree dated 11-7-1996. The appeal filed by the appellant/plaintiff before the first appellate Court has also been dismissed by the impugned judgment and decree dated 1-3-1997. Hence this appeal.
4. It is submitted by the learned counsel for the appellant/plaintiff that both the Courts below have dismissed the claim of the appellant mainly on the ground that the appellant being a registered licenced money lender was required to maintain books of accounts as provided under Sections 2-A and 3 of M.P. Act of 1934 but he failed to do so, the demand for repayment was made by the appellant within five months though the loan was for a period of one year, that there was no endorsement in the alleged promissory note to the effect that the defendant had received the amount and that there were discrepancies in the promissory note.
5. The appeal filed by the appellant/plaintiff has been admitted by this Court on the following substantial questions of law :-
"Whether non-compliance with the provisions of Section 2-A and 3 of the Money Lenders Act would negative the statutory presumptions under Section 118 of the Negotiable Instruments Act and the appellant's suit could not be decreed therefor ?"
6. It is submitted by the learned counsel appearing for the appellant/plaintiff that both the Courts below have erred in dismissing the suit of the plaintiff by relying upon the provisions of Sections 2-A and 3 of of the M.P. Act of 1934, totally ignoring the provisions of Section 118 of Negotiable Instruments Act 1881 which statutorily provides for drawing a presumption in favour of the appellant who is the holder of a negotiable instrument.
7. To appreciate the submissions of the learned counsel for the appellant/plaintiff, it is appropriate to refer to the provisions of M.P. Act of 1934 and Negotiable Instruments Act. From a perusal of Sections 2-A and 3 of the M.P. Act of 1934 it is apparent that every licenced money lender is required to acknowledge the transaction of loan by a written document and that he has to maintain regular accounts in respect of each debtor separately of all transactions in respect of every loan, furnish the debtor with a legible statement of accounts signed by him and that he has to furnish to the S.D.O. concerned a copy of every statement of account furnished to a debtor under clause (b) of Section 3(1). Section 4 of M.P. Act of 1934 provides that the copies of entries in the account required to be maintained under Section 3 when certified in such manner as may be prescribed, shall be admissible in evidence for any purpose in the same manner and to the same extent as the original entries. Section 5 provides that a debtor shall not be bound to acknowledge or deny its correctness and his failure to protest shall not by itself be deemed to be an admission of the correctness of the copy. Section 7 of the M.P. Act of 1934 provides for the consequences of non-compliance of the provisions of Section 3 of the Act in any suit or proceedings relating to recovery of loan.
8. Section 118 of the Negotiable Instruments Act lays down that until the contrary is proved, a presumption as to payment of consideration for the negotiable instrument as to its date and time of acceptance, time of transfer, order of endorsements and as to stamps and holder in due course shall be drawn, provided the instrument has been obtained from its lawful owner or a person in lawful custody thereof.
9. From a joint reading of the aforesaid provisions of the M.P.Act of 1934 and the Negotiable Instruments Act it is clear that the licenced money holder is required to maintain records as prescribed under Section 2-A and Section 3 of the M.P. Act of 1934 and that he is required to furnish yearly details to the debtor and send a copy of the register to the concerned S.D.O. Section 4 of the M.P.Act of 1934 further provides that the copies issued in the prescribed manner of the register maintained under Section 3 would be admissible while Section 5 of the M.P. Act of 1934 specifies that failure on the part of the debtor shall not by itself be deemed to be an admission of the entries. Section 118 of the Negotiable Instruments Act talks about presumption in respect of various issues relating to a promissory note but does not talk about presumption of execution of the promissory note.
10. In view of the aforesaid analysis it is clear that the burden of proving and establishing the execution of the promissory note and of maintaining a register and accounts as provided under Sections 2-A and 3 of the M.P.Act of 1934 lies upon the money lender and, therefore, in view of the specific provisions of Sections 2 to 5 of the M.P. Act of 1934 the contention of the appellant that he was entitled to benefit of a presumption under Section 118 of the Negotiable Instruments Act, even in the absence of non- compliance of the provisions of Sections 2-A and 3 and the provision of Sections 4 and 5 of the M.P. Act of 1934 as far as execution of the promissory note is concerned, is misplaced and misconceived.
11. In the instant case the execution of promissory note was denied by the respondent/defendant and it was for the appellant to plead and prove the execution of the promissory note as well as the fact that the loan was extended to the defendant. The Courts below, on analysis of the evidence and documents on record, recorded a finding of the fact to the effect that the appellant/plaintiff being a licenced money lender was required to maintain accounts of the loan, if any, extended to the defendant/respondents as has been done by him in the case of other borrowers. The Courts below have held that as the appellant/plaintiff failed to demonstrate that he has made any entries in the register regarding the loan extended to the respondent/defendant, therefore, no presumption can be drawn regarding execution of the promissory note, more so, when the transaction was specifically denied by the respondent/defendant.
12. The concurrent finding of fact recorded by the Courts below does not suffer any perversity. I am also of the considered opinion that in view of peculiar facts and circumstances of the case no substantial question of law arises for adjudication in this appeal and, therefore, the same being meritless is accordingly dismissed.
(R.S.Jha)
mct Judge