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Karamsingh Nihalsing Vs. Mankuji Zivaji - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 1112 of 1954
Judge
Reported inAIR1957Bom12; (1956)58BOMLR382; ILR1956Bom532
ActsBombay Money-lenders Act, 1947 - Sections 14, 14(1) and 39; Constitution of India - Article 226; Debt Law
AppellantKaramsingh Nihalsing
RespondentMankuji Zivaji
Advocates:G.S. Gupte, Adv.
Excerpt:
.....before exercising jurisdiction under section 14(1)(ii) whether must give notice to money-lender calling upon him to show cause--procedure to be followed by court in such cases.;a court trying a suit to which the bombay money-lenders act, 1946, applies, before exercising its jurisdiction under section 14(1)(ii) of the act, must issue a notice to the party against whom the said jurisdiction is sought to be exercised.;the proper procedure to follow in such cases would be to give notice to the offending money-lender calling upon him to show cause why appropriate orders should not be passed against him under section 14 of the act. this notice should be followed by an enquiry in which the money-lender should get a clear idea as to the allegations made against him and he should..........an order under section 14 without holding a further enquiry into the allegations made against the moneylender. it is quite likely that in many cases of this character the previous conduct of the money-lender would be invoked against him.indeed, in the present case, the learned judge has referred to the previous conduct of the petitioner. he has pointed out that in an earlier suit filed by him in 1952 his licences had been suspended for a period of sis months and that in another suit filed by him the promissory-note produced by him and his sworn testimony in its support had been rejected. indeed, these matters can reasonably and legitimately come on the record only when an enquiry is held against the money-lender under section 14.in the present case, no such notice appears to have been.....
Judgment:

1. This revision application raises a short procedural point of some importance under Section 14, Money-lenders Act 31 of 1947. The petitioner had sued to recover Rs. 938/- from the opponent in the Court of the Civil Judge, Senior Division, Ahmednagar. The claim had been made on two promissory-noted alleged to have been executed by the opponent on 6th September and 12-10-1950 respectively.

The opponent resisted the claim on the ground that the promissory-notes had not been executed by him and that he had received no consideration under them. This suit was tried by the learned trial Judge as a small cause suit. On-evidence the learned Judge found that the promissory-notes had not been executed by the opponent and that no consideration had been received by him. That is why the plaintiff's suit was dismissed.

While dismissing the plaintiff's suit, the learned Judge has ordered that all the licences held by the petitioner as a money-lender in the province should be cancelled and that a copy of his order should be sent to the Registrar of Money-lenders by whom licences have been granted for the purpose of entering such particulars in the registers. It is the validity of this order which is disputed before me by Mr. Gupte and his contention is that the learned trial Judge should have given an opportunity to the petitioner to show cause why action against him should not be taken under Section 14 before the learned Judge decided to cancel his licences.

That is how the only point which calls for decision in the present revisional application is whether, before exercising its jurisdiction under Section 14 (1) (ii), a Court trying a suit to which the Money-lenders Act applies is not required to issue a notice to the party against whom the said jurisdiction is sought to be exercised.

2. Section 14 confers power on the Courts mentioned in that section to cancel or suspend a licence. Section 14 Sub-section (1) (ii) provides that a Court trying a suit to which the Act applies, if it comes to the conclusion that the money-lender before the Court is unfit to carry on the business of money-lending because he has committed serious contraventions of the provisions of the Act or the rules framed thereunder, may order that all the licences held by such money-lender be cancelled or suspended for such time as it may think fit.

The Court may also, if it thinks fit, declare any such money-lender to be disqualified from holding any licence in the State for such time as the Court may think fit. It would be clear that, under the-provisions of Section 14 Sub-section (1) (ii) Clauses (a) and (b), wide powers have been given to the Court trying civil suits to which the Act applies to protect debtors from the menace of unscrupulous money-lenders,

Unfortunately, neither Section 14 nor any other section of the Act prescribes the procedure which should be followed in exercising the powers conferred by Section 14. Section 39 of the Act confers upon the State Government authority to make rules for carrying on the purposes of this Act. It docs not appear that any rule has been made by the State Government laying down the procedure which should be followed in dealing with a money-lender under Section 14.

The letter of the law, therefore, does not seem to require any notice to be given to the offending money-lender. But I am disposed to take the view that the failure to provide for the issue of a notice to the offending money-lender before action is taken under Section 14 really represents a lacuna in the Act. Legislature no doubt wanted to check the mischief of unscrupulous money-lenders and the power conferred on the Courts to deal with such money-lenders is undoubtedly a salutory power.

But there can be no doubt that, even if the money-lender is unscrupulous and deserves to be punished under Section 14, he is entitled to be heard in his defence before final orders are passed against him. The principle that no judicial order should be passed against a person unless he is heard in self-defence is of such paramount importance that, even without any specific provision in the statute or in the rules framed thereunder requiring such notice, natural justice would seem to require that notice should be given to the party against whom an order is proposed to be passed under Section 14. I do not think that Legislature intended that the need to give notice (o a party proceeded against, which is founded on paramount considerations of equity, justice and fairness, should be inapplicable to the proceedings under Section 14, Money-lenders Act. I would, therefore, hold that Mr. Gupte is right when he contends that no order can be validly made against an offending money-lender under Section 14 unless he is given a clear notice of the proceedings intended to be taken against him under the said section and is afforded reasonable opportunity to make his defence.

But apart from this theoretical aspect of the matter, it seems to me that it would be inexpedient to make an order under Section 14 without holding a further enquiry into the allegations made against the moneylender. It is quite likely that in many cases of this character the previous conduct of the money-lender would be invoked against him.

Indeed, in the present case, the learned Judge has referred to the previous conduct of the petitioner. He has pointed out that in an earlier suit filed by him in 1952 his licences had been suspended for a period of sis months and that in another suit filed by him the promissory-note produced by him and his sworn testimony in its support had been rejected. Indeed, these matters can reasonably and legitimately come on the record only when an enquiry is held against the money-lender under Section 14.

In the present case, no such notice appears to have been given to the money-lender and from the record Mr. Gupte is unable to say how the learned Judge has referred to the prior conduct of the petitioner. Presumably the earlier proceedings in question were tried before the learned Judge himself; and he has drawn on his personal knowledge of the moneylender's past conduct without putting it to him in the witness-box. I have no doubt that this procedure is highly irregular and is inconsistent with the requirements of natural justice,

3. It seems to me that the proper procedure to follow in such cases would be to give notice to the I offending money-lender calling upon him to show cause why appropriate orders should not be passed against him under Section 14 of the Act. This notice should he followed by an enquiry in which the money-lender should get a clear idea as to the allegations made against him and he should be given an opportunity to meet the said allegations and make his defence.

4. I must, therefore, hold that the order passed by. the learned Judge directing that the licence held by the petitioner in the province should be cancelled and that copy of his judgment should be sent to the Registrar of Money-lenders should be set aside and the matter sent back to the learned trial Judge with a direction that notice of the proceedings proposed to he taken against the petitioner should be given to him and an enquiry held under Section 14. If after hearing the petitioner the learned Judge is satisfied that the petitioner deserves the penalty contemplated by Section 14, then the learned Judge should pass appropriate orders in that behalf.

5. In the result, the order passed by the learned Judge dismissing the plaintiff's suit is confirmed, but the consequential order passed against the petitioner under Section 14 is set aside and the matter is sent back to the trial Court for disposal in accordance with law. There will be no order as to costs of this revisional application.

6. Order accordingly.


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