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Manmohan Lal Vs. Shib Shankar and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1943All194
AppellantManmohan Lal
RespondentShib Shankar and anr.
Excerpt:
- .....the facts found by the court below are that the plaintiff-respondent, shib shanker, carried on money-lending business at bareilly from 1927 to 1933, that he ceased to carry on that business after 1933 and that he had not done either of the two things required by sub-section (1) of section 32 of the act. no controversy has been raised before us about the facts as they have been found by the court below. 'creditor' is defined in section 2 (7) of the act as follows:'creditor' in chap. 5 means a person who, in the regular course of business, advances a loan as defined in this act, and includes the legal representatives and the successors-in-interest, whether by inheritance, assignment or otherwise, of a creditor.3. the view taken by the learned judge below is that the words of the.....
Judgment:

Verma, J.

1. This is an appeal by defendant 1 in a suit for sale brought on the basis of a deed of simple mortgage dated 10th September 1928 executed by the appellant in favour of the plaintiff-respondent. The amount claimed by the plaintiff was Rs. 21,604-10-6. The only defences which the appellant put forward to the claim were based on the provisions of the U.P. Agriculturists' Relief Act (27 of 1934). It was admitted on behalf of the plaintiff that the appellant was an 'agriculturist'. The first contention raised by the appellant was that the plaintiff had not complied with the mandatory provisions of Section 32 of the Act and that therefore he was liable to the penalties laid down in Section 34. The next plea taken by the appellant was that he was entitled to instalments and to a reduction of the rate of interest in conformity with the provisions of the Act. The Court below accepted the second of the contentions mentioned above and granted certain instalments and allowed interest at the rate which, according to a joint statement of the pleaders for the parties, was the proper rate. With regard to the first contention, the Court below held that the plaintiff was not a 'creditor' within the meaning of that word in the Act and that therefore chapter 5 of the Act was not applicable to the case.

2. It has been urged before us on behalf of the appellant that, on the facts found by the Court below, the plaintiff should have been held to be a 'creditor' within the meaning of the Act. The facts found by the Court below are that the plaintiff-respondent, Shib Shanker, carried on money-lending business at Bareilly from 1927 to 1933, that he ceased to carry on that business after 1933 and that he had not done either of the two things required by Sub-section (1) of Section 32 of the Act. No controversy has been raised before us about the facts as they have been found by the Court below. 'Creditor' is defined in Section 2 (7) of the Act as follows:

'Creditor' in Chap. 5 means a person who, in the regular course of business, advances a loan as defined in this Act, and includes the legal representatives and the successors-in-interest, whether by inheritance, assignment or otherwise, of a creditor.

3. The view taken by the learned Judge below is that the words of the definition suggest that the man must be carrying on money-lending business at the time when the suit is filed and then alone he can be called a creditor.

4. The finding of fact being that the plaintiff had ceased to carry on the business of money-lending after 1933, and the suit having been instituted in 1939, the decision of the learned Judge was that the plaintiff was not bound to comply with the provisions of Section 32 of the Act. Learned Counsel for the appellant has argued that the Court below is wrong in, holding that a person must be carrying on money-lending business at the time of the institution of the suit before he can be held to be a 'creditor.' He has further argued that the crucial date is the date on which the loan is advanced. Learned Counsel for the plaintiff-respondent has not found it possible to support the view of the Court below that in order that a person may be a 'creditor' within the meaning of the Act it is necessary that he should be found to be following the profession of money-lending at the date of the institution of the suit. He has, however, strenuously urged that the crucial date is the date on which the Act came into force and has argued that the plaintiff having been found to have ceased to carry on the business of money-lending before 1935 that is the year when the Act came into force he could not be held to be a 'creditor.' The question that has been raised is not quite free from difficulty. We have, however, come to the conclusion that, on the whole, the interpretation which we are asked by the appellant to put upon the definition of 'creditor' is more in consonance with the spirit of the Act. It seems to us that the words 'who, in the regular course of business, advances a loan' must have reference to the date on which the loan is advanced; in other words, that the regular course of business should exist on the date on which the particular loan with which the Court is concerned is advanced. In that view of the matter, the fact that the lender subsequently ceased to carry on the business of money-lending is of no consequence. We were invited on behalf of the plaintiff-respondent to substitute the material words of the definition for the word 'creditor' in the opening line of Section 32 and to consider the result. If the substitution is made as suggested the section would read thus :

A person who in the regular course of business, advances a loan as defined in this Act shall, after the date on which this Act comes into force....

5. We are unable to see how this solves the difficulty. It is noteworthy that it is stated in the preamble to the Act that it was expedient to make provision for the relief of 'agriculturists' from indebtedness. It is obvious that the main intention of the Legislature was to give relief to 'agriculturists' from indebtedness which existed at the time of the passing of the Act. We see no sufficient reason for accepting the contention that the lender's money-lending business must have continued down to the date on which the Act came into force before he can be held to be a 'creditor'. In our opinion the proper construction of the language of the definition of 'creditor' is that, if the lender was carrying on the business of money-lending at the date when the particular loan in question was advanced, he is a 'creditor' for the purposes of the Act, and the question whether that business of money-lending was continued up to the date on which the Act came into force, or was stopped prior to that date, is immaterial. The result of the conclusion at which we have arrived is that the case must go back to the Court below for a consideration of the question whether, under Section 34 (b), any portion of the interest found due should be disallowed and, if so, what portion. That is a matter which is within the discretion of the Court. The Court will also give effect to the mandatory provisions' of Clauses (b) and (c) of the section.

6. Learned Counsel for the appellant has also urged that the decree as framed is not quite clear so far as future interest is concerned. There does seem to be some room for doubt with regard to this matter. The Court below is accordingly directed to give proper directions with regard to future interest in accordance with the provisions of the U.P. Agriculturists' Relief Act. For the foregoing reasons, we allow this appeal, set aside the decree passed by the Court below and send the case back to that Court for disposal ac. cording to law in the light of the observations made in this judgment. The appellant is entitled to his costs in this Court. The costs in the Court below shall abide the event. The appellant shall be granted a certificate that he is entitled to a refund of the court-fee paid by him in respect of the memorandum of appeal filed in this Court.


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