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Issues Involved:
1. Whether a registered money-lender under the Bihar Money-Lenders Act, 1938, can sue for a loan amount exceeding the maximum limit specified in their registration certificate. 2. Interpretation and application of the Bihar Money-Lenders Act, 1938, and the Bihar Money-Lenders (Regulation of Transactions) Act, 1939. 3. Validity and scope of rules framed under the Bihar Money-Lenders Act, 1938, particularly regarding the maximum loan amount. 4. The effect of exceeding the loan limit on the money-lender's right to recover the loan through legal proceedings. Issue-Wise Detailed Analysis: 1. Registered Money-Lender's Right to Sue for Excess Loan Amount: The primary issue was whether a registered money-lender can sue for a loan amount exceeding the maximum limit specified in their registration certificate. The High Court had ruled that the money-lender could not recover any amount beyond the specified limit of Rs. 4,999. However, the Supreme Court disagreed, holding that there is no provision in the Bihar Money-Lenders Act, 1938, or the Bihar Money-Lenders (Regulation of Transactions) Act, 1939, that explicitly restricts a registered money-lender from suing for amounts exceeding the specified limit in the registration certificate. 2. Interpretation and Application of Relevant Acts: The Supreme Court examined various provisions of the Bihar Money-Lenders Act, 1938, and the Bihar Money-Lenders (Regulation of Transactions) Act, 1939. The Court noted that the Acts were enacted to regulate money-lending transactions and to provide relief to debtors, but they did not contain any provisions limiting the total amount of loans that could be outstanding at any given time. The Court emphasized that the Acts did not authorize the State Government to impose such a limit through rules. 3. Validity and Scope of Rules Under the Act: The Court scrutinized the rules framed under the Bihar Money-Lenders Act, 1938, particularly Rule 3, which required money-lenders to specify the maximum loan amount in their registration applications. The Court held that these rules were primarily for fiscal purposes, such as determining the registration fee, and did not have the authority to restrict the money-lender's right to recover loans exceeding the specified limit. The Court stated, "The rule-making power given to the State Government is not expressed in the usual form... The rule-making power is limited to what is stated in clauses (a) to (e) of s. 27." 4. Effect of Exceeding the Loan Limit: The Supreme Court concluded that exceeding the loan limit specified in the registration certificate did not invalidate the money-lender's registration or their right to sue for the recovery of the loan. The Court emphasized that the Act did not provide for any penalty or consequence for advancing loans beyond the specified limit. The Court remarked, "The mere fact that he contravened any of the requirements of the licence or of any rule or even any provision of the Act does not mean that his registration as a money-lender under s. 5 of the Act was an improper registration." Judgment: The Supreme Court allowed the appeal, modifying the decree to grant plaintiff No. 2 a decree for Rs. 6,000 against defendant No. 3, along with simple interest at 6% per annum from the date of institution of the suit until realization. The Court also awarded proportionate costs to plaintiff No. 2 from defendant No. 3 for the trial court and full costs for the High Court and Supreme Court proceedings. The judgment underscored that a registered money-lender could sue for the recovery of loans even if the loan amount exceeded the limit specified in the registration certificate.
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