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TMI Blog2020 (9) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... of Money Lenders Act, Whether the findings of Ld. Court below holding that the suit is barred by section 3 of H.P. Registration of Money Lender Act is legally sustainable? With the consent of Learned Counsel for the parties, the present appeal was taken up for disposal. Parties hereinafter are being referred to as they were before the learned trial Court. Succinctly put, facts of the case are:- 2(i) Plaintiff pleaded that during the year 2006 he had advanced a loan amount of Rs. 3,00,000/- (Rupees three lacs) to the defendant. The loan was advanced to enable the defendant to meet the expenses incurred on his marriage. In lieu of this loan, the defendant had handed him a post dated cheque No. 143009 dated 31.8.2006. Plaintiff presented the cheque on 18.9.2006 for encashment in the bank, however, it was returned with the remarks 'insufficient funds'. Subsequent requests of the plaintiff to the defendant for making the payment went in vain. The legal notice issued by the plaintiff in this regard on 12.10.2006 also did not yield the desired result. Hence, the suit for recovery of a sum of Rs. 3,00,000/- principal amount alongwith interest of Rs. 1,08,000/-was instituted. 2(ii) In h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f learned Civil Judge (Senior Division), Rohru, District Shimla who had brought the original record relating to the cheque in question, on the basis of which, the plaintiff had also filed a complaint against the defendant under Section 138 of Negotiable Instruments Act. At the time of recording of the evidence in the instant civil suit, the complaint preferred by the plaintiff under Section 138 of Negotiable Instruments Act was pending adjudication before learned Civil Judge, Rohru, District Shimla. 3(ii) Defendant along with his father appeared in the witness box in support of his defence. Assertions made in the written statement were reiterated. While appearing as DW1 defendant in cross-examination admitted that cheque in question i.e. Ext.PW2/A bore his signatures. However, he further stated that the date and the amount on the cheque were not filled by him. He denied himself handing over the cheque to the plaintiff. Father of the defendant stepped in the witness box as DW2 and stated that marriage of his son (defendant) was solemnized in a simple manner in the year 2003. He further stated that his son had not taken any loan much less loan of Rs. 3,00,000/- from the plaintiff ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellantcomplainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration. There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent-accused of the charge under Section 138 of the Negotiable Instruments Act. 39. In our considered opinion, the High Court patently erred in holding that the burden was on the appellant complainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellant-complainant became highly doubtful or not beyond reasonable doubt is patently erroneous for the reasons discussed above." 5(ii) The above extracted observations of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Blue gel pen and on the other hand rest contents of the cheque appears to be in blue ball pen it is further observed while perusing the said cheque, that one zero has been added on the cheque amount with different ink. It altogether create suspicious circumstances regarding the alleged cheque. Therefore, statement of the PW-1 as well as cheque Ex.PW2/A has failed to proved the alleged transaction between the plaintiff and defendant and the liability cannot be fastened on the mere statement of the plaintiff and suspicious cheque." The photocopy of the cheque is on the record. A bare perusal of the same does indicate that last '0' (zero) has been added subsequently in an attempt to change the amount figure from Rs. 30,000/- to Rs. 3,00,000/-. 5(iii) Defendant has though not disputed his signature over the cheque but he has explained the circumstances in which the cheque was handed over to the plaintiff. His defence is that his father in the year 2004 had borrowed an amount of Rs. 30,000/- from the plaintiff and in lieu of this loan, a blank cheque, signed by him, was handed over by his father to the plaintiff. Though the loan amount of Rs. 30,000/- was cleared by his father, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e defendant on mere statement of plaintiff when presumption attached to the cheque under Sections 118 and 139 of the Negotiable Instruments Act has been effectively rebutted by the defendant. Question is answered accordingly. 6. Second Point: Applicability of the H.P. Registration of Money Lenders Act, 1976. Learned Senior Counsel for the appellant argued that there was no evidence before the learned Courts below to apply The Himachal Pradesh Registration of Money Lenders Act, 1976 (hereinafter referred to as the 'Act') to the facts of the case to hold that the suit was not maintainable. 6(i) In his written statement, the defendant had pleaded that plaintiff was engaged in 42 criminal and civil proceedings against various persons for recovery of money. Lending of money was alleged to be plaintiff's profession. A preliminary objection was also raised in the written statement that plaintiff was not entitled to file the suit in view of provisions of the Himachal Pradesh Registration of Money Lenders Act. In replication, but for one line denial, nothing else was stated. A specific issue was framed by learned trial Court in this regard as under: "6. Whether the plaintiff is not en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is registered; and (i) holds a valid licence, in such form and in such manner as may be prescribed; or (ii) holds a certificate from a Commissioner granted under section 10, specifying the loan in respect of which the suit is instituted, or the decree in respect of which the application for execution is presented; or (b) if he is not already a registered and licensed money-lender, satisfies the court that he has applied to the Collector to be registered and licensed and that such application is pending: Provided that in such a case, the suit or application shall not be finally disposed of until the application of the money-lender for registration and grant of licence pending before the Collector is finally disposed of." Thus a money lender at the time of institution of the suit for recovery of loan amount should be duly registered as such under the Act and should hold a valid license of money lending as prescribed in the Act. In case a money lender is not registered and licensed under the Act then he should satisfy the Court that his such application in that regard is pending before the concerned authority, which should be disposed of before the disposal of recovery sui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able instrument as defined in the Negotiable Instruments Act, 1881, (26 of 1881) other than a promissory note." 6(iv) Definition of 'loan' assumes significance in determining the applicability of H.P. Registration of Money Lenders Act, to the facts of the case. Not all kinds of loans are covered under Section 2(8) of the Act. Reference in this regard can be made to following para from 1970(2) SCC 360, titled Gajanan and Others vs. Seth Brindaban, where provisions of Central Provinces and Berar Moneylenders Act were being considered:- "5........"Moneylender" as defined in cl. (v) of S. 2 means a person who in the regular course of business advances a loan as defined in this Act and it includes his legal representatives and successors in interest. "Loan" as defined in cl. (vii) means an actual advance whether of money or in kind at interest and it includes any transaction which the court finds to be in substance a loan. It does not include inter alia an advance made on the basis of negotiable instrument other than a promissory note.........." Advances/loans falling within the exceptions (a) to (g) of Section 2(8), fall outside the ambit of the Act. Advancing such kinds of loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be held to be not maintainable under Section 3 of the H.P. Registration of Money Lenders Act as the defendant failed to prove that plaintiff falls within the definition of 'money-lender' under the Act and also failed to prove that various recovery suits instituted by the plaintiff pertained to that kind of loan which is included under the definition of loan in terms of the Act ibid. Therefore, findings in that regard of both the learned Courts below holding the suit to be not maintainable are quashed and set aside. (b) However, separate findings recorded by both the learned Courts below in dismissing the suit of appellant on merits are based upon correct interpretation of law and facts. Plaintiff has not been able to prove that he had loaned Rs. 3,00,000/- to the defendant or that towards satisfaction of this loan amount, the defendant had handed him the cheque in question. The defendant has explained the circumstances under which the blank cheque in question signed by him was handed over by his father to the plaintiff. Defendant has also highlighted various suspicious aspects regarding manipulations in the cheque including filling of the amount, account number, name and si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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