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Abdul HussaIn Mohasinali Bohri Vs. Fazalbhai Taheralli Bohri - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 39 of 1951
Judge
Reported in(1957)59BOMLR296
AppellantAbdul HussaIn Mohasinali Bohri
RespondentFazalbhai Taheralli Bohri
DispositionAppeal allowed
Excerpt:
.....the money owed by the firm to the plaintiff's father. in a suit by the plaintiff on the promissory note, the defendants, who were partners of the firm, contended that the plaintiff's father was a money-lender, that as the plaintiff had succeeded to his father's interest in the loan advanced by him to the defendants, the plaintiff should be deemed to be a money-lender within the definition contained in section 2(v) of the central provinces and berar money-lenders act, 1934, and that as the plaintiff had not sent statements of account to the defendants as required by section 3 of the act, he was not entitled to interest on the amount of the promissory note:-; that the plaintiff's suit being one for the enforcement of the promissory note which was in fact a fresh contract or a novation, the..........was in error in holding that plaintiff was not entitled to any interest at all on the promissory note dated june 27, 1935, merely because that promissory note did not make any specific mention about interest. it has ignored the provisions of section 80 of the negotiable instruments act which require that in a case like this interest shall be calculated at the rate of six per cent. per annum.5. it is, however, urged on behalf of the defendants that the ground on which interest was disallowed to the plaintiff on the promissory note dated june 27, 1938, would also apply to the interest claimed on the promissory note dated june 27, 1935. this contention would in its turn depend upon whether the plaintiff is a money-lender and as such was required to comply with the provisions of section 3.....
Judgment:

Mudholkar, J.

1. This is a plaintiff's appeal from a decree disallowing him interest on the amount claimed by him from the defendants on foot of a promissory note.

2. It is common ground that the firm 'Taharali Haji Hibtullabhai' owed some money to the plaintiff's father Mohasinali. After the death of the plaintiff's father his estate was divided amongst his heirs. At that time the debt due from the firm to Mohasinali was allotted to the plaintiff. On June 27, 1935, Seth Taharali as a partner and agent of the firm and on behalf thereof executed a promissory note in favour of the plaintiff for Rs. 9,000 in respect of the money owed by the firm to Mohasinali. The promissory note did not provide for any interest. On June 27, 1938, Seth Taharali executed another promissory note in favour of the plaintiff and on behalf of the firm for Rs. 10,500 with interest at-/8/- per cent, per month. This sum of Rs. 10,500 was made up of Rs. 9,000 due on the earlier promissory note and of Rs. 1,500 as interest thereon. Only a sum of Rs. 500 was repaid by the firm. After deducting that amount from the principal amount and adding interest on that sum the plaintiff claimed in the suit Rs. 16,200 from the defendants. Defendant No. 1 is Seth Taharali's son Seth. Fazalbhai while the remaining defendants are the sons of Haji Habtullabhai who died before the institution of the suit.

3. The Court below held that the plaintiff was entitled to a decree for Rs. 9,000 only because the first promissory note did not contain any provision regarding interest, and that though the second promissory note did contain such a term, the plaintiff had not sent statements of account to the defendants as required by Section 3 of the Central Provinces and Berar Moneylenders Act. The Court did not allow any interest pendente the or interest after the date of the decree, but has not given any reason for refusing to award it.

4. There is no doubt that the Court below was in error in holding that plaintiff was not entitled to any interest at all on the promissory note dated June 27, 1935, merely because that promissory note did not make any specific mention about interest. It has ignored the provisions of Section 80 of the Negotiable Instruments Act which require that in a case like this interest shall be calculated at the rate of six per cent. per annum.

5. It is, however, urged on behalf of the defendants that the ground on which interest was disallowed to the plaintiff on the promissory note dated June 27, 1938, would also apply to the interest claimed on the promissory note dated June 27, 1935. This contention would in its turn depend upon whether the plaintiff is a money-lender and as such was required to comply with the provisions of Section 3 of the Money-lenders Act.

6. It is common ground that the plaintiff was a minor when he succeeded to his father and that he is not a money-lender in the sense that he carried on at any time the business of money-lending. It is admitted before us that at the date of the suit the debt due from the defendants was the only one which was owing to the plaintiff. It is, however, contended on their behalf that the plaintiff's father was a money-lender and that as the plaintiff had succeeded to his father's interest in the loan advanced by him to the defendants, the plaintiff must be deemed to have been a money-lender within the definition contained in Section 2(v) of the Money-lenders Act. That provision runs as follows;

'money-lender' means a person who, in the regular course of business, advances a loan as defined in this Act and shall include, subject to the provisions of Section 3, the legal representatives and the successors in interest whether by inheritance, assignment or otherwise of the person who advanced the loan and money-lending shall be construed accordingly;

7. Reliance is placed by the Court below on the latter part of the definition. In our opinion, the plaintiff does not come under this definition inasmuch as he is not seeking to recover any money due to his father but is seeking to recover the money due to himself on foot of a promissory note executed by the defendants in his favour. No doubt, the original consideration for the promissory note flowed from his father, but that fact does not make any difference. It was open to the plaintiff to sue the defendants immediately after he succeeded to his father. But instead of doing that, he was content to accept a promissory note from the defendants which was in fact a fresh contract or a novation of the old contract. The suit being one for the enforcement of such a contract the latter part of the definition of 'money-lender' contained in Section 2(v) of the Act is not attracted. In this view, disagreeing with the Court below, we hold that the plaintiff is entitled to interest at 6 per cent. per annum on the sum of Rs. 10,500 from the date of the execution of the promissory note till date of suit.

8. No reason has been given for disallowing interest pendente lite or interest subsequent to the date of decree. No doubt the granting of such interest is in the discretion of the Court but that discretion has to be exercised judicially. Ordinarily, the Court does not disallow interest to a plaintiff in such cases unless he by his conduct renders himself disentitled to the grant of such interest. The only suggestion thrown by the learned Counsel for the defendants is that the plaintiff had delayed the filing of the suit and also that instead of suing straightaway in the Court at Khamgaon within whose jurisdiction the defendants reside, he wrongly instituted the suit at Nagpur. Nothing else is urged by the learned Counsel which would disentitle the plaintiff to interest from the date of the suit till realization.

9. No doubt the plaintiff waited for a long time before filing the suit. But it must be borne in mind that he was a minor when the promissory notes were executed. He only waited till he attained majority. It is true that he should have brought the suit in the first instance in the Court at Khamgaon instead of instituting it at Nagpur. However, it does not lie in the mouth of defendants to complain about this because even today they are not in a position to pay the decretal amount and have in fact obtained instalments from the Court below. In the ericumstances, therefore, we see no valid ground for disallowing interest to the plaintiff from the date of suit till realization.

10. We may mention that while granting instalments the Court below has awarded interest on Rs. 9,000 from August 13, 1951. In view of the fact that we are allowing the plaintiff's appeal in full, he will get interest not merely on Rs. 9,000 from August 13, 1951 but on Rs. 16,200 from the date of suit till realization.

11. The appeal is accordingly allowed with costs. The order of the Court below regarding costs is not wholly in the plaintiff's favour, but as he has not challenged it in appeal nor has he paid Court-fees on the amount of costs disallowed, we are unable to interfere with it.


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