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Sha Damji Deraj Vs. Megraj Bhikumchand and Co. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberCivil Revision Application No. 862 of 1958
Judge
Reported in(1958)60BOMLR1366
AppellantSha Damji Deraj
RespondentMegraj Bhikumchand and Co.
Excerpt:
civil procedure code (act v of 1908), order xxxvii - bombay money-lenders act (bom. xxxi of 1947), sections 18, 19, 21, 29, 30--summary suit by plaintiffs-money-lenders on promissory note--bombay money-lenders act applicable to suit--whether court should grant unconditional leave to defendant to defend suit.;in a suit filed under order xxxvii of the civil procedure code, 1908, to which the bombay money-lenders act, 1946, applies, the court must give unconditional leave to the defendant to defend the suit. - - the scheme of order xxxvii is well known. assuming they failed to do so, under order xxxvii the plaintiff would he entitled to a decree for rs. the defendant cannot appear under order xxxvii and yet the court must frame issues under section 21 and decide those issues in the absence..........of mr. shah is that the summary suit procedure is not applicable to a suit to which the bombay money-lenders act of 1946 applies, and in this case it is not disputed that the money-lenders act does apply to the suit. the respondents are money-lenders and they have obtained a license as money-lenders and they are governed by all the provisions of the act. mr. shah has drawn my attention to certain provisions of the money-lenders act. section 18 casts certain duties upon a money-lender with regard to keeping accounts, furnishing copies, etc., and section 19 casts certain duties upon a moneylender with regard to delivery of statement of accounts and copies to the debtor. section 21 provides:notwithstanding anything contained in any law for the time being in force, in any suit to which.....
Judgment:

M.C. Chagla, C.J.

1. The respondents filed a summary suit in the City Civil Court on a promissory note of Rs. 12,000. The learned Judge gave the petitioners leave to defend conditionally on their depositing a sum of Rs. 6,000 within a particular time, and the petitioners have come here challenging the order in this revision application.

2. The main contention of Mr. Shah is that the summary suit procedure is not applicable to a suit to which the Bombay Money-lenders Act of 1946 applies, and in this case it is not disputed that the Money-lenders Act does apply to the suit. The respondents are money-lenders and they have obtained a license as money-lenders and they are governed by all the provisions of the Act. Mr. Shah has drawn my attention to certain provisions of the Money-lenders Act. Section 18 casts certain duties upon a money-lender with regard to keeping accounts, furnishing copies, etc., and Section 19 casts certain duties upon a moneylender with regard to delivery of statement of accounts and copies to the debtor. Section 21 provides:

Notwithstanding anything contained in any law for the time being in force, in any suit to which this Act applies:

(a) a Court shall, before deciding the claim on merits, frame and decide the issue whether the money-lender has complied with the provisions of Sections 18 and 19;

(b) if the Court finds that the provisions of Section 18 or Section 19 have not been complied with by the money-lender, it may, if the plaintiff's claim is established in whole or in part, disallow the whole or any portion of the interest found due, as may seem reasonable to it in the circumstances of the case and may disallow costs.

Then Section 29 again casts a duty upon the Court and that duty is:

Notwithstanding anything contained in any law for the time being in force, the Court shall, in any suit to which this Act applies, whether heard ex parte or otherwise-

and then follow various sub-clauses which makes it incumbent upon the Court to reopen any transaction, or any account already taken between the parties; take an account between the parties; reduce the amount charged to the debtor in respect of any excessive interest; and if on taking accounts it is found that the money-lender has received more than what is due to him pass a decree in favour of the debtor in respect of such amount. Section 30 permits a debtor to make an application at any time to the Court for taking accounts and for declaring the amount due to the money-lender. It has been held in Govind Dhondo v. Mannabai : (1954)56BOMLR470 , that the application contemplated by this section is an application in. a pending suit.

3. Now, when we turn to the provisions of Order XXXVII of the Civil Procedure Code, it is clear that those provisions are entirely inconsistent with the provisions to which I have just drawn attention. The scheme of Order XXXVII is well known. In a summary suit the defendant cannot defend the suit unless he has obtained leave from the Court. The leave may be unconditional, in which case the defendant has not to do anything further, or the leave may be conditional, in which case unless the condition is complied with the defendant cannot appear and defend at the hearing of the suit. What is more, if the defendant does not comply with the condition or if leave to defend is refused, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree. Therefore, to use popular language, in a summary suit if leave to defend is not given to the defendant, or if conditional leave is given and the defendant does not comply with the conditions, his mouth is shut and the plaintiff is entitled to proceed as if the averments in the plaint were proved or admitted and to get a decree as prayed for in the plaint. Take this very case. The defendants have been given conditional leave and they had to deposit Rs. 6,000 within a certain time. Assuming they failed to do so, under Order XXXVII the plaintiff would he entitled to a decree for Rs. 12,000 with interest. But if the plaintiff were to get such a decree, it would be inconsistent with the provisions of the Money-lenders Act. The Court cannot pass a decree without framing the necessary issues under Section 21; the Court cannot pass a decree without discharging various obligations cast upon it under Section 29. A rather faint suggestion was made by Mr. Karanee that this, could be done in the absence of the defendant, if the defendant did not obtain leave to defend or did not comply with the conditions on which leave was granted. In my opinion, that contention is wholly untenable. It is true that Section 29 casts that duty upon the Court even if the suit is heard ex parte; but ex parte here means and can only mean the absence of the defendant when the defendant could have been present to defend but fails to be present in Court. It is, in other words, a voluntary absence. But the summary procedure does not permit the defendant to defend even if he wants to defend. It is, as it were, a compulsory or coercive absence. The law shuts his mouth and eliminates him, as it were, from the hearing of the suit. It is. untenable to suggest that although the Act in all solemnity calls upon the Court to frame certain issues, when those issues are framed the defendant should be compulsorily prevented from appearing in the trial of those issues, because that would be the result if the suggestion made by Mr. Karanee were to be carried out. The defendant cannot appear under Order XXXVII and yet the Court must frame issues under Section 21 and decide those issues in the absence of the defendant, although the defendant would very much like to be present and help the Court in deciding those issues. Similarly, Section 29 cannot possibly contemplate the compulsory absence of the defendant which Order XXXVII brings about on the failure of the defendant to get leave from the Court or to comply with the conditions on which leave was granted. Therefore, it is clear to my mind that in a suit to which the Money-lenders Act applies, it is difficult, if not impossible, to apply the procedure of Order XXXVII. It is possible to take the view that in every suit to which the Money-lenders Act applied and which is filed under Order XXXVII unconditional leave should be granted. If that were done, undoubtedly the provisions of the Money-lenders Act may be given effect to. The other view is that the procedure under Order XXXVII does not and cannot apply at all to a suit to which the Bombay Money-lenders Act applies.

4. Mr. Karanee has strongly relied on a decision of Mr. Justice Tendolkar and Mr. Justice Kotval in Vithan Krishna v. Sogmal Nathumal : AIR1958Bom92 . That was a summary suit. The defendant in that case had obtained conditional leave but had not complied with the conditions. He then made an application under Section 30 of the Money-lenders Act and the learned Judge held that he was not entitled to make that application inasmuch as he had not complied with the conditions for obtaining leave. The Court set aside the order of the learned Judge holding that a substantive right was conferred upon the defendant under Section 30 and that right could not be taken away by the procedure with regard to summary suits laid down in Order XXXVII. Mr. Karanee contends that if notwithstanding the failure to comply with the conditions and notwithstanding the defendant not being in a position to defend the suit, if he could make an application under Section 30 there is nothing to prevent the same procedure being followed under Sections 21 and 29. Now, Section 30 is not in pari materia with Sections 21 and 29. Now, Section 30 enables the defendant to make the application contemplated by that section. He may or may not make that application. But Sections 21 and 29 are mandatory; they have nothing to do with the defendant. It is a duty cast by the Legislature upon the Court itself, and it is impossible for me to envisage how the provisions of Sections 21 and 29 can be worked out if the defendant has not been given leave to defend.

5. It is also pointed out by Mr. Karanee that it was argued before the Bench in Vithan Krishna v. Sogmal Nathmal, that in a case to which the Money-lenders Act applied the provisions of Order XXXVII do not apply at all, and that contention was rejected by the Bench. In the first place, as far as I can see from the judgment, the attention of the Court was not drawn at all to the provisions of Sections 21 and 29, and further Mr. Justice Tendolkar in his judgment expressly says at p. 1046:

We are, therefore, unable to uphold this submission of Mr. Walawalkar; but it is really not necessary to determine it for the purpose of determining this appeal.

Therefore, this particular contention was not expressly negatived by the Court. But in my opinion, it is unnecessary in view of this observation of Mr. Justice Tendolkar expressly to decide in this revision application that the provisions of Order XXXVII do not apply to a suit to which the Bombay Money-lenders Act of 1946 applies. It would be sufficient to say that looking to the provisions of that Act if a suit is filed under Order XXXVII and if the Money-lenders Act applies to such a suit, in any view of the case unconditional leave must be given to the defendant.

6. I would, therefore, set aside the order of the learned Judge and grant unconditional leave to the defendant to defend the suit. Mr. Shah also wanted to make certain submissions on the merits of the matter. In view of my decision with regard to the provisions of the Money-lenders Act it is unnecessary to consider that aspect of the matter.

7. Rule absolute. Costs of the revision application costs in the cause.


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