2022 (12) TMI 1444 - HC - Indian Laws

Suit for recovery - misreading the relevant and admissible evidence available on record - in the absence of respondent/plaintiff being registered and licensed money lender, the suit for recovery filed at his instance was liable to be dismissed or not? HELD THAT - Once the Courts below recorded concurrent findings as regards the validity of execution of Ex.D-1 i.e. receipt dated 15.10.2007 by Balkar Singh, the same was required to be read and considered in conjunction with the cross-examination of respondent/plaitniff Mukhtiar Singh who specifically stated therein that the calculations with regard to the principal money as well as interest were being done by his brother Balkar Singh. He even further deposed that he along with his brother Balkar Singh were jointly calculating the principal amount as well as interest. He was not even specific and categoric while denying the receipt Ex.D-1 except for a vague and uncertain assertion in this regard - in view of the deposition made by the respondent, it can easily be traced out that the amount of loan taken by the appellant-defendant was duly returned against the receipt Ex.D-1 which even binds the respondent/plaintiff as well. Based thereupon, it is apparent that the most relevant admissible evidence in the shape of deposition of plaintiff No.1 himself being PW-1 had not been taken into consideration by Courts below while passing the impugned judgments and decrees which itself compells this Court to interfere with the same. Maintainability of suit - HELD THAT - A perusal of Section 3 of the Act makes it clear that a suit by money lender for recovery of loan based on a pronote after the commencement of the 1938 Act can t be entertained and is thus liable to be dismissed unless the money lender, at the time of institution of the suit or at the time of decreeing the same or deciding the execution application, is registered and holds a valid license as required under Section 4 of the 1938 Act. In the facts and circumstances of the present case, from the deposition of PW-1 plaintiff himself it has been duly established on record that he was regularly and consistently lending money on interest and thus, was not merely a casual or occasional lender - Admittedly, in the present case respondent/plaintiff though running the business of money lending neither got himself registered under Section 4 of the 1938 Act nor even possesses any license under the said Act. Accordingly, the suit for recovery filed at his instance being based on pronote and a receipt itself was liable to be dismissed being not maintainable, in the facts and circumstances of the present case. The impugned judgments and decrees passed by the Courts below are hereby set aside thereby resulting in dismissal of the suit filed at the instance of respondent/plaintiff - appeal allowed.

Summary

Issues involved:
1. Misreading of relevant evidence by the lower courts.
2. Maintainability of the suit due to lack of registration and license by the plaintiff as a money lender.

Analysis:

Issue 1: Misreading of relevant evidence by the lower courts
The case involved a dispute over a loan amount, where the plaintiff filed a suit for recovery against the defendant based on a pro-note and a receipt. The defendant claimed that the loan amount was already paid to the plaintiff's brother. The trial court and the district court upheld the execution of the receipt but decreed the suit in favor of the plaintiff, disregarding the defendant's defense. The defendant appealed, arguing that the courts failed to consider the evidence properly. The High Court analyzed the evidence, particularly the cross-examination of the plaintiff, which indicated that both brothers were involved in money lending, and the calculations were primarily done by the plaintiff's brother. The court found that the lower courts did not adequately consider this crucial evidence, leading to an incorrect judgment. The High Court referred to a Supreme Court decision emphasizing the importance of considering all relevant admissible evidence before reaching a conclusion.

Issue 2: Maintainability of the suit due to lack of registration and license
The second issue raised was whether the suit filed by the plaintiff, who was engaged in money lending without proper registration or license, was maintainable. The appellant argued that as per the Punjab Registration of Money Lenders Act, a suit for recovery by a money lender without registration and a valid license is not sustainable. The High Court referred to a previous case to support this argument. It noted that the plaintiff admitted to engaging in money lending without the required registration or license. Therefore, the suit filed by the plaintiff based on the pronote and receipt was deemed not maintainable under the law. The High Court ruled in favor of the appellant on this issue, highlighting the legal requirement for money lenders to be registered and licensed for their suits to be valid.

In conclusion, the High Court allowed the appeal, setting aside the judgments and decrees of the lower courts and dismissing the suit filed by the plaintiff. The court addressed both issues raised by the appellant, emphasizing the importance of considering all relevant evidence and upholding legal requirements for money lenders to be registered and licensed.