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TMI Blog2014 (11) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, however, contends that the claim is barred in view of the provisions of Bombay Money Lenders Act, 1946 (hereinafter referred to as "the Act or the BML Act"). To substantiate the contention, the appellant also contends that the suit is based only on the loan and not on the cheques and bills of exchange admittedly drawn and accepted by the appellant. The respondents / plaintiffs answer to the contention under the BML Act is based, inter-alia, upon the cheques and the bills of exchange issued in their favour by the appellant. We will, therefore, deal with the second contention first. 4. The contention that the cause of action in the summary suit is based on the loan and not on the cheques, bills of exchange and agreements in writing to pay is totally misconceived. It would be necessary to recite a few facts before dealing with the appellant's contentions. 5. Between 20th January, 2012 to 31st July, 2012, the respondents lent and advanced an aggregate sum of Rs.67 crores to the appellant by RTGS transfers. The appellant in turn issued several cheques from the period 30th November, 2012 to 31st December, 2012. Almost all the cheques were dated 31st December, 2012 with the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, at 12% per annum as was agreed. Accordingly, the respondents called upon the appellant to repay the same forthwith, failing which, it is stated that the respondents would be constrained to take steps in order to secure the said amount. A similar letter dated 2nd January, 2013, was also sent claiming the repayment of the short term loan of a sum of Rs. 61 crores, which fell due for payment on 31st December, 2012. In fact, it may be noted that the respondents addressed another letter to the appellant on 4th January, 2013, calling upon the appellant to repay the short term loan which was due and payable and which was the admitted liability, for which cheques were drawn in favour of the respondents by the appellant. It was further stated in the said letter that they would be depositing the cheques, which they held towards repayment of the loan, retaining their right to recover the interest. Thereafter, on 16th January, 2013, as no reply was received from the appellant, the respondents addressed another letter stating therein that they were constrained to deposit the cheques held by them towards repayment and requested the appellant to ensure that the said cheques are honoured. Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch constitutes a written contract between the Plaintiffs and the Defendant. The Defendant has therefore no defence on the merits of the case. This suit is filed as a Summary Suit under Order XXXVII Rule 2 of the Code of Civil Procedure 1908 and no relief not falling within the suit. This suit is required to be tried as a Summary Suit." (emphasis supplied) 10. Thus, from a perusal of the entire plaint and the documents relied upon by the respondents, it is clearly beyond doubt that the suit is also based on the dishonoured cheques, the bills of exchange and the promises in writing to repay the loan. From a perusal of the plaint, it cannot be said that there are only stray sentences claiming repayment on the basis of dishonoured cheques. 11. The second contention is, therefore, rejected. This brings us to Mr. Chinoy's first contention that the claim is barred in view of the provisions of the Bombay Money Lenders Act, 1946. 12. It may also be noted that the summary suit was filed on 28th February, 2013; that the respondents preferred the summons for judgment in the said suit on 8th April, 2013; that in the said summons for judgment, the appellant herein filed its affidavit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later. He submitted that giving of a loan and issuance of cheque must be contemporaneous. He relied on the judgments in the case of Khyati Realtors Pvt. Ltd. v. M/s. Zenal Construction Pvt. Ltd. [Company Petition No. 243/2012 dated 29th August, 2013], Kaloji Talusappa Gangavathi v. Khyanagouda & Ors. 1970 (3) SCC 862 and Nanda w/o Dharam Nandanwar v. Nandkishor s/o Talakram Thaokar 2010 (3) Mh.L.J. 268, in support of his contention. 14. Mr. Sen, learned Senior Counsel for the respondents refuted the submissions. He submitted that Section 2(17) cannot be read in isolation only with Section 10 of the Bombay Money-Lenders Act and that it will necessarily have to be read with Section 2(9)(f) of the said Act, in order to give it a harmonious construction. He submitted that if the interpretation as sought to be contended by Mr. Chinoy is accepted, Section 2(9)(f) including certain acts/documents from the term `loan' the provision will be rendered otiose. He submitted that it is not necessary that the negotiable instrument has to be handed over at the time when the loan is advanced as long as it is agreed by the parties to hand over the same later. He further submitted that the lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of any loan made either before or after the said date; or (c) for the redemption of any security given after the date on which this Act comes into force in respect of any loan made either before or after the said date." Section 10 reads thus; "10. (1) No court shall pass a decree in favour of a money-lender in any suit to which this Act applies [including such suit pending in the court before the commencement of the Bombay Money-lenders (Amendment) Act, 1975] unless the court is satisfied that at the time when the loan or any part thereof, to which the suit relates was advanced, the money-lender held a valid licence, and if the court is satisfied that the money-lender did not hold a valid licence, it shall dismiss the suit." (2) Nothing in this section shall affect - (a) suits in respect of loans advanced by a money-lender before the date on which this Act comes into force; (b) the powers of a Court of Wards, or an Official Assignee, a receiver, an administrator or a Court under the provisions of the Presidency-towns Insolvency Act 1909, or the Provincial Insolvency Act, 1920, or any other law in force corresponding to that Act, or of a liquidator under the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Negotiable Instruments Act, 1881 viz. the cheques and the bills of exchange. 19. In our view, in the present case, the loans were advanced by the respondents to the appellants on the basis of negotiable instruments other than promissory notes. This is clear from the facts and circumstances of this case especially the manner in which the amounts were advanced and cheques were drawn. The fact that the cheques were forwarded by the appellants to the respondents after the loans were advanced by RTGS transfers makes no difference. The amounts were advanced by the respondents to the appellants and the cheques and the bills of exchange were issued by the appellant to the respondents as a part of one composite agreement. In other words, this agreement was entered into at the same time. This is not a case where the amounts were first advanced and thereafter the parties agreed that the borrower would draw the cheques and bills of exchange and execute the said writings. The entire arrangement was agreed upon at the same time. The cheques and bills of exchange were forwarded subsequently in accordance with and pursuant to this agreement which had already been arrived at. There is nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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