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TMI Blog2008 (8) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, inter alia, are to carry on the business of planters, growers and manufacturers of tea, coffee, jute, cinchona, paddy, sugar cane, fruits, cocoa, rubber, bamboo, citronella and to acquire by purchase, lease, grant, assignment transfer, sale or otherwise deal in any tea garden or plantation and premises from any person or persons, firm, company, municipality or Government. The appellant is the owner of a tea estate called as "Tezalpatty Tea (P.) Ltd." and the appellant manages the tea estate with a workforce of about 200 workers. 3. The respondent is also a company incorporated under the provisions of the Companies Act, 1956, under the name and style as "Eastern Tea Brokers (P.) Ltd." and it has its registered office at Maniram Dewan Road, Guwahati-3, Assam. The stated objects of the respondent-company which can be gathered from the statement and documents available before the court, is to carry on the business of brokerage as a tea broker and the nature of business of tea broker is to procure and sell tea manufactured from various tea gardens through the respondent-company at the Tea Auction Centre at Gauhati. It is also the further case of the respondent that the company used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey used to make advance of money to the tea planters/growers/manufacturers on the assurance and commitment that the tea manufactured by such loanees is to be sold only through the respondent at the Tea Auction Centre, Guwahati and money so advanced is to be realised from such sale proceeds at the Tea Auction Centre. Such practice has been carried on between the respondent and the appellant from 1996 onwards, on condition that money so advanced by the respondent at the request of the appellant would carry interest at 22 per cent, per annum with quarterly rests and money so advanced will be paid out of the said sale proceeds of the manufactured tea which would be sold through the respondent at the Tea Auction Centre, Guwahati. It is also contended that the parties are required to maintain an open, mutual current account. The respondent sought to establish and substantiate the aforesaid terms and conditions including the rate and nature of interest from the course of conduct between the parties and also from the documents on record. As a result of such transaction of advancing money/loan, a total sum of Rs. 1,29,09,158.67 with interest, as indicated above, has become due for payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-company indulges/engages itself without any authority or a valid licence to carry on money lending business at exorbitant interest chargeable with compound interest, the names of 19 companies which are recipients of advance money or loanees of the respondent-company are cited in the additional-affidavit of the appellant and the same is not disputed by the respondent. Name of 19 companies of which 18 are tea growing companies of Assam, are reproduced herein below : (1) Auro Tea Co. (P.) Ltd. ; (2) Bhuyankhat Tea Co. (P.) Ltd. ; (3) Buragohain Tea Co. (P.) Ltd. ; (4) Savitri Seuj Tea (P.) Ltd. ; (5) Rangoli Tea Enterprise ; (6) Gobindapore Tea Co. (P.) Ltd. ; (7) Barmajan Tea Co. (P.) Ltd. ; (8) Dalsajoori Tea (P.) Ltd. ; (9) Agarwal Tea Co. ; (10) The Dolaguri Tea Co. (P.) Ltd. ; (11) Duliabam Tea Estate ; (12) Hautley Tea Estate ; (13) Hingarajan Tea Estate ; (14) Lakhibari Tea Co. ; (15) Nilpur Tea Co. (P.) Ltd. ; (16) Shyampore Tea Co. (P.) Ltd. ; (17) Shreemoni Tea Co. (P.) Ltd. ; (18) Choudhury Tea and Agro Industries (P.) Ltd. ; and (19) Manas Products (Protein) (P.) Ltd. (d) It is also contended that the business of the appellant-company is agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... single Bench. Thereafter the learned single Bench came to the conclusion that the appellant has failed to pay due debt and consequently directed the appellant to pay its outstanding dues inclusive of interest at 22 per cent. i calculated in the manner indicated above, within 3 months failing which the order directing to wind up the company will start operating and in that event, the official liquidator is to proceed with the winding up process. Case before this court 11. The aforesaid impugned judgment and order of the learned single Bench has been assailed by the appellant in this company appeal by repeating almost all the grounds taken before the learned single Bench and also questioning the correctness or legality of the findings arrived by the learned single Bench. 12. It is submitted by Mr. A. K. Bhattacharjee, learned senior counsel appearing for the appellant that despite raising a specific issue that the loan advanced by the respondent to the appellant is for agricultural purposes inasmuch as tea plantation, tea production and its allied activities are agricultural in nature and as such charging compound interest is impermissible in view of the law laid down by a Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom capital sum and be treated only as interest and dealt with accordingly." 16. As already discussed above, it is not in dispute that the money so advanced, with the stipulation as mentioned above, is realised by the respondent from the sale proceeds of the tea manufactured by the appellant and sold exclusively through the respondent at the Tea Auction Centre, Guwahati. It is also submitted that the respondent-company, not being a bank or financial institution and having no licence to lend money under the Assam Money Lenders' Act, 1934, with interest and that too above the rate of interest fixed by the Reserve Bank of India, cannot indulge in advancing or lending money with compound interest and as a result, the whole transaction is illegal and the respondent has no valid and actionable claim. It is, further, submitted by learned counsel for the appellant that this issue, which goes to the root of the case, has not been adequately addressed to by the learned single Bench, instead, the learned single Bench, without assigning any cogent reason, abruptly came to the conclusion that the money given as advance/loan by the respondent to the appellant, is not loan as advanced by the ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this court in order to resolve the controversy involved in the case : "(i) Whether the fact that money/loan had been advanced with interest at 22 per cent, per annum at quarterly rest in addition to the commitment given by the appellant-company for selling tea manufactured by them at the Tea Auction Centre, Guwahati only through the respondent, would attract the provisions of the Assam Money Lenders' Act, 1934 and Rules made thereunder ? (ii) Whether tea plantation and tea production are within the ambit and meaning of agriculture and agricultural products and if so, compound interest with quarterly rest is chargeable against loan/ advance of money or not ? (iii) Whether the application for winding up of a company on the basis of disputed claim is maintainable or not ?" 21. With reference to issue No. (i), it may be necessary to understand what exactly would be the meaning of the terms money lender, interest and loan as defined in the Assam Money Lenders' Act, 1934. The expressions "money lender", "interest" and "loan" as defined under section 2(1), (2) and (3) of the Assam Money Lenders' Act, 1934, are reproduced herein below : "2. (1) 'money lender' means a person who in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng money/loan. In other words, the activities of advancing loan should be a regular affair. Therefore, it will be appropriate for us to find out whether advancing of money/loan by the respondent to the appellant and to other tea planters, etc., are of regular course of activity or casual or isolated case. We have not seen any pleading/contention indicating that advance of money/loan by the respondent to the appellant is only for 1 or 2 instances, which can be called casual or isolated cases. Admittedly, the pleaded case of the respondent is that the transaction of advancing money/loan between the parties have been going on since 1996 and a specific averment has been made in this regard in paragraph 6 of the petition that in the course of its business, the petitioner also advances moneys to tea gardens for supply of manufactured tea to be sold at the Tea Auction Centre, Guwahati and the same is repeated in paragraph 7 in the following words : "7. In the course of its business, the petitioner-company used to advance moneys to the respondent-company and the company supplied manufactured tea which was then sold at the Tea Auction Centre at Guwahati and from out of the sale proceeds, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, as extracted above, we feel that' compound interest is not permissible on agricultural loan except in the manner indicated therein. The contention of the respondent that huge amount of the money advanced as evidenced from K series annexure'/document in the rejoinder affidavit of the respondent is not relatable to agricultural activities, is not acceptable for the following reasons : "(i) It is appears that the advance of money/loan sought by the appellant as disclosed by the aforesaid documents relate to the activities of tea plantation of a tea estate, in other words purchase of essentials for tea estate and payment of wages for the tea labourers, etc., essentially form a part of the activities of tea plantation in a tea estate ; (ii) Secondly, the amount disclosed by the K series documents, perhaps, form only small portion of the loan advanced by the respondent to the appellant against which the outstanding dues, now being claimed by the respondent, arises and this is more so in the absence of any specific pleading and document to show that the outstanding amount consists only of the amount shown in the K series documents. Further, the respondent has failed to establish t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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