Patna High Court
Basudeo Singh vs Munshi Purushottam Prasad on 11 May, 1988
Equivalent citations: AIR1989PAT56, 1988(36)BLJR646, AIR 1989 PATNA 56, 1988 BBCJ 396, (1988) BLJ 753, 1988 BLJR 646, (1988) PAT LJR 642, 1988 BLJR 394
JUDGMENT S. Ali Ahmad, J.
1. The plaintiff-respondent filed the suit giving rise to this second appeal by the defendant for recovery of Rs. 7,120/- on the basis of usufructuary mortgage bond The suit was decreed by the trial Court. The lower appellate Court affirmed the decree. Thereafter this second appeal has been filed.
2. The plaintiffs case, in short, is that he advanced Rs. 3000/- to the defendant on the basis of two mortgage deeds dt. 23-1-1970 and again Rs. 4,000/- on the basis of two other mortgage deeds dated 31-5-1973. The plaintiff accepted the position that he was put in possession on 23-1-1970, but it is said that he was dispossessed from the mortgaged lands on 18-11-1975 after the enforcement of the Bihar Money-Lenders Act, 1974. The plaintiff in para 5 of the plaint stated that he was not a professional money-lender and that the loans in question were accommodative loans. On these facts, the plaintiff asserted that he was entitled to the mortgage amount along with the stipulated rate of interest.
3. The fact that the plaintiff had advanced the loans as aforesaid was not disputed by the defendant-appellant. His case, on the other hand, inter alia, was that the defendant had never dispossessed the plaintiff and that after enforcement of the Bihar Money Lenders Act, 1974 (for short 'the Act') he wanted to redeem the mortgage after paying the mortgage amount. This the plaintiff did not like and filed the present suit with a view to put pressure on him. The fact that the loans were accommodative loans was disputed by the defendant According to him, the plaintiff was a professional money lender and no decree could be passed on the basis of the mortgage bonds until the plaintiff produced the licence under the Act.
4. The two courts below have concurrently found that the plaintiff was dispossessed as alleged by him. The plaintiff produced the licence granted under the Act. The trial Court on that basis after holding the suit to be maintainable decreed it. Before the lower appellate court, the finding that the plaintiff was dispossessed as alleged by him was challenged. The lower appellate court rejected the same. It did not consider the question regarding maintainability of the suit by. virtue of Section 8 of the Act as the same was not pressed.
5. There are four mortgages on the basis of which the suit giving rise to this appeal was filed. The first two mortgages were executed on 23-1-1970 and the remaining two on 31-5-1973. The Act came into force on 20-3-1975. Sub-section (5) to Section 7 of the Act reads as follows : --
(5) A money-lender shall in a suit for recovery of money advanced by him as loan file a copy of the relevant extracts from his register of accounts relating to the said loan and he shall not be entitled to maintain any claim beyond the entries made in his register of accounts."
On the basis of this sub-section it was argued before a learned single Judge that admittedly the plaintiff had not filed a copy of the relevant extract from his register of accounts relating to the said loan and, as such, he is not entitied to get any decree on the basis of those advances. Although the point was not raised in either of the two courts below, the learned single Judge, if I can say so withgreat respect, rightly entertained it as it was a pure question of law and did not require any investigation of fact. The learned single Judge, in view of two conflicting single Judge decisions of this Court, referred the case to a Division Bench by his order dt. 22-5-1986.
6. Admittedly the loans were advanced prior to enforcement of the Act. Also admittedly the suit was instituted in the year 1976 after the enforcement of the Act. In the case of Bishwanath Jha v. Chandeshwar Jha, 1983 BBCJ 388 : (AIR 1983 Patna 267), a Bench of this court has held that Section 7(5) of the Act is not retrospective and that it does not apply to loans advanced prior, to coming into force of the Act. In that case not only the loan was advanced prior to the enforcement of the Act but the suit also for recovery of the amount was filed prior to enforcement of the Act. On these facts, the learned Judges were of the view that Section 7(5) of the Act was not a bar but in the case at hand although the loans were advanced prior to the enforcement of the Act, the suit was filed subsequent to it. This situation was considered by Hari Lal Agrawal, J. (as he then was) in the case of Ram Lakhan Prasad v. Narain Prasad, AIR 1986 Patna 154, who was of the view that the suit is not hit by Section 7(5) of the Act. B. P. Sinna, J., on the other hand, was of the view in the case of Kripal Rai v. Ram Lakhan Rai, AIR 1986 Patna 156 that although the loan was advanced prior to the enforcement of the Act but the plaintiff had to comply with the requirement of Section 7(5) of the Act if the suit was instituted after 20-3-1975, the day when the Act came into force. Learned counsel for the respondent has strongly relied on the judgment given by Hari Lal Agrawal, J. (as he then was) whereas counsel for the defendant-appellant bases his stand on the judgment by B. P. Sinha, J. Hari Lal Agrawal, J. was of the view that although there was a provision for maintenance of regular records on account of each debtor mentioning the details provided in the section yet the noncompliance of that could not result in the dismissal of the suit. In that view of the matter Hari Lal Agrawal, J. was of the view that there may be cases where the money lenders did not keep the records as provided under Section 7 of the Act and in case the view was taken that in such cases also money-lender will have to file extract of entries relating to loans in question then the suit will fail because it will not be possible to comply with the requirement. With great respect to the learned Judge, I am not able to agree with the view. Section 7 of the old Act did make mandatory provision for maintenance of the accounts in the manner prescribed. It isa different matter that there was no provision for filing of the extracts relating to the entries of the loans in question in a suit for recovery of the loans advanced. But there were other penalties provided under the Act. The new Act in addition to Sections 33, 34 and 35 also included Section 7(5) prescribing that the money-lender shall file a copy of the relevant extract from his register of accounts relating to the loan in question andshall not be entitled to maintain any claim beyond the entry made in his register of accounts. This provision like other provision of the Act which was enacted, inter alia, "to grant relief to debtor in the State of Bihar" (as appears from the preamble) was included with a view to put a brake on manipulation exercised by the money-lenders. Since there was no provision like Section 7(5) of the new Act in the old Act, the money-lenders were free to manipulate the accounts, but with the introduction of Section 7(5) the moneylenders have been left with no option but to maintain the accounts in case they intend to go in action for recovery of the loan advanced. Therefore, in my view, Section 7(5) of the Act will apply to such cases also where the loans might have been advanced prior to the enforcement of the Act but the suit was filed after the enforcement of the Act. I am conscious of the difficulty posed by Hari Lal Agrawal, J. in his judgment referred to above. But that can easily be solved. Section 7 of the Act does not provide that the entry regarding the date of loan, etc. should be made contemporaneously. It can be made subsequently also within a reasonable period. Therefore, if a particular money-lender did not maintain the account on the date when the new Act came into force, he could very well have prepared the account after I he Act came into force and could file the exlrael of the same in the suit as prescribed under Sub-section (5) to Section 7 of the Act. Therefore, in conclusion, I am in respectful agreement with B. P. Sinha, J. In this case admittedly extracts as required under Section 7(5) of the Act were not filed. The plaintiff, therefore, cannot maintain any claim for recovery of the loans said to have been advanced by him.
7. Learned counsel for the respondent urged that the question regarding non-filing of the extract as required under Section 7(5) of the Act was not raised in either of the two Courts below. He, therefore, said that this question should not be allowed to Be raised for the first time in second appeal. I do not think, learned counsel can legitimately raise this point. This is a pure question of law not involving investigation of fact. The appeal was admitted on 15-5-1985. The Court formulated this very question as a substantial question of law. The appeal was heard by a single Judge on 22-5-1986 and the same has been referred to a Division Bench for a decision on this point. We, therefore, heard learned counsellor both sides in great detail as we were of the opinion that the appellant was justified in raising this question even for the first time in second appeal also.
8. For these reasons, the appeal is allowed, the judgments and decrees passed by the Courts below are set aside and the suit filed by the plaintiff-respondent is dismissed. Parties will bear their own costs.
Ram Nandan Prasad, J.
9. I. agree.