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N. Kamala Mani Vs. O.V. Subramanyam - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revn. Petn. No. 1236 of 1976
Judge
Reported inAIR1981AP241
ActsAndhra Pradesh (Relangana Area) Money Lenders Act, 1349 - Sections 2(4), 2(7) and 9(2)
AppellantN. Kamala Mani
RespondentO.V. Subramanyam
Appellant AdvocateN.C.V. Ramanujachary, Adv.
Respondent AdvocateK. Nagaraja Rao, Adv.
DispositionPetition allowed
Excerpt:
.....of legislature has to be seen in determination of true nature of money advanced - held, such intention demanding omission of money advanced without interest out of scope of section 2 (4). - - 1. this revision petition raises an interesting question as to the scope and amplitude of the definition of 'loan' under section 2 (4) of the andhra pradesh (telangana area) moneylenders act (act no. when the defendant failed to pay the amount in spite of several demands the plaintiff filed the suit. therefore, the loan in that case fell clearly within the scope of section 2 (4) of the act......pleaded by the defendant was not true and was unworthy of acceptance. on the second question the learned judge held that unless interest was charged the transaction cannot be termed as a loan within the meaning of section 2 (4) of the act and that when the moneylender advances such debt or loan a licence is required under the provisions of the act. for so holding the learned judge relied on a decision of this court in dwarkadas v. habib mohammad jaffer, (1962) 1 andh wr 144. but the court below proceeded further to consider the question whether the plaintiff is still a moneylender as defined under section 2 (7) of the act and held that the plaintiff is a moneylender and does not possess a licence for doing money-lending business and the suit was therefore liable to be dismissed......
Judgment:

Chennakesav Reddy, J.

1. This revision petition raises an interesting question as to the scope and amplitude of the definition of 'loan' under Section 2 (4) of the Andhra Pradesh (Telangana Area) Moneylenders Act (Act No. 5 of 1349 Fasli) (hereinafter referred to as 'the Act'). The question is whether money lent without interest is loan. As the question involved is one of considerable importance and as there was an apparent conflict between the decisions of this Court rendered in Dwarkadas v. Habib Mohammad Jaffer, (1962) 1 Andh WR 144; Khaja Begum v. Gulam Mohiuddin, : AIR1976AP65 (DB) on the one hand and the decision in Lohori Seethayya v. Malgireddy Mattareddy, (1974) 1 Andh WR 42 on the other on the question one of us (Chennakesav Reddy, J.) referred the case to a Division Bench for resolution of the apparent conflict in the decisions of this Court.

2. Before we proceed to answer the question it would be profitable to state the relevant facts which are not in dispute.

The plaintiff in a small cause suit is the petitioner. The defendant borrowed a sum of Rs. 1,000/- and executed a pronole Exhibit A-1 dated 1-2-73. The loan was without any interest. When the defendant failed to pay the amount in spite of several demands the plaintiff filed the suit. It was resisted by the defendant contending inter alia that he borrowed a sum of Rs. 1,200/- from Raj Reddy; the husband of the plaintiff, and executed four pronotes, two pronotes each for Rs. 1,000/- and two others, one for Rs. 300/-, another for Rs. 200/- in favour of the plaintiff. According to him he also gave withdrawal forms to the plaintiff to pay back to Raj Reddy to enable him to withdraw the amount in 12 instalments at the rate of Rs. 100/- per month. The plea of the defendants was one of total discharge.

3. The learned Additional Chief Judge posed two questions for consideration --

1. Whether the discharge pleaded by the defendant is true?

2. Whether the plaintiff is a professional moneylender doing moneylending business without licence?

4. On the first question the learned Addl. Chief Judge on a careful appraisal of the entire evidence in the case held that the discharge pleaded by the defendant was not true and was unworthy of acceptance. On the second question the learned Judge held that unless interest was charged the transaction cannot be termed as a loan within the meaning of Section 2 (4) of the Act and that when the moneylender advances such debt or loan a licence is required under the provisions of the Act. For so holding the learned Judge relied on a decision of this Court in Dwarkadas v. Habib Mohammad Jaffer, (1962) 1 Andh WR 144. But the Court below proceeded further to consider the question whether the plaintiff is still a moneylender as defined under Section 2 (7) of the Act and held that the plaintiff is a moneylender and does not possess a licence for doing money-lending business and the suit was therefore liable to be dismissed. Accordingly he dismissed the suit.

5. In this revision petition preferred by the plaintiff, the only question that arises and is argued by the learned counsel for the petitioner is whether money lent without interest is a loan within the meaning of the definition of 'loan' under Section 2 (4) of the Act. Section 2 (4) of the Act defines 'loan' as follows :

' 'Loan' means a loan secured or unsecured, advanced on interest in cash, or in kind, and shall include every transaction which is in substance a loan, but shall not include the following -- xx xx xx xx'

It is clear from the definition that a loan advanced without interest is not in-cluded in the definition. It is true that in normal parlance or popular sense a loan implies a thing, specially money, lent to be returned with or without interest. But the Legislature has wilfully and deliberately chosen to restrict the scope of the meaning of the expression 'loan' only to cases of advances made with interest. The paramount rule of construction is that a statute is to be expounded according to the intent of them that made it. It is not permissible for this Court to rewrite the definition under Section 2 (4) of the Act by adding or mend-ing and include a loan advanced without interest. It is safer to presume that the omission is deliberate and that it is not due to forgetfulness or made per incuriam. Therefore, money lent without interest does not fall within the ambit of the definition 'loan'.

6. The contention of the learned counsel for the respondent that even a case where interest is not provided falls within the ambit of the second limb of the definition (shall include every transaction which is in substance a loan) cannot stand a close scrutiny. Even under the second limb only when the money advanced is in substance a loan, i.e., a loan as defined in the first part of the section, namely, an advance on interest, then alone the case falls within the defi-tion. When once a transaction is not a loan within the meaning of the definition, it would be wholly unnecessary to consider the question whether the plaintiff is a moneylender or not, because 'moneylender' under Section 2 (7) of the Act is defined to mean a person including a pawnbroker, who within the meaning of the Act, only advances loan in the ordinary course of his business or does so along with other business. Therefore a person who does not advance a loan within the meaning of the Act is not a moneylender. We respectfully agree with the view expressed by Seshachalapathi, J. in Dwarkadas v. Habib Mohammad Jaffer (1962) 1 Andb WR 144. The learned Judge repelling a similar contention raised in that case observed :

'..... Normally, the meaning of the word 'loan' implies a thing, specially money, lent to be returned with or without interest The expression 'loan' therefore, takes in cases of advances made with or without interest. But the Legislature has chosen to restrict the scope of the meaning of the expression only to cases of advances where interest is provided. 1 cannot agree with the contention of the learned counsel that a case where interest is not provided is comprehended under the second limb of the definition .....

It seems to me that in a case where the suit transaction is not a loan as defined in the Act, the question whether the plaintiff is a moneylender or not will become unnecessary, and the fact that in this case there is a finding that the plaintiff is a moneylender will not by any means alter the position.'

This decision was relied upon by a Division Bench of this Court in Khaja Begum v. Gulam Mohiuddin, : AIR1976AP65 . A discordant note was, however, struck in Lohori Seethayya v. Malgireddy Matta Reddy, (1974) 1 Andh WR 42 by Krishna Rao, J. It is clear from the judgment that the decision of Seshachalapathi, J. in Dwarkadas v. Habib Mohammad Jaffer, (1962) 1 Andh WR 144, was not brought to the notice of the learned Judge. The learned Judge held that even a loan, if it is in substance a loan, falls within the definition of the word 'loan' although the debt as apparent from the promissory note was a loan without interest. With great respect to the learned Judge, we are unable to agree with his opinion as to the scope of the definition of loan undet Section 2 (4) of the Act. But the learned Judge in that case on an appraisal of the evidence held that the loan was lent by the plaintiff on interest although the promissory note showed that it was without interest. Therefore, the loan in that case fell clearly within the scope of Section 2 (4) of the Act.

7. Coming to the facts of this case it is the finding of the Court below that the debt was advanced by the plaintiff without interest as evidenced by Ext. A-1. But the learned Judge proceeded to consider still whether the plaintiff was a moneylender and came to the conclusion that he was a moneylender and dismissed the suit under Section 9 (2), of the Act as the plaintiff did not have a licence under the Act, But, as already observed by us, when once a conclusion is reached that the loan is one without interest, the further question whether the plaintiff is a moneylender or not within the meaning of Section 2 (7) of the Act does not arise. Therefore, the Court below was in error in dismissing the suit under Section 9 (2) of the Act. Accordingly, we allow this revision and decree the suit with costs throughout.


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