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Lachmi Lal and anr. Vs. Babu NaraIn Das and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Case NumberFirst Appeal No. 483 of 1944
Judge
Reported inAIR1950All152
ActsUttar Pradesh Agriculturists Relief Act, 1934 - Sections 30, 34, 39 and 39(1); Debt Law
AppellantLachmi Lal and anr.
RespondentBabu NaraIn Das and anr.
Appellant AdvocateShankar Sahai Verma, Adv.
Respondent AdvocateK.L. Misra, Adv.
Excerpt:
- - that argument cannot have much substance as a loan not only includes a cash advance but also a transaction which is, in substance, a loan, and if a transaction, which is in substance a loan, came into existence for the first time after 1935 when this act came into force it was clearly governed by section 39 of the act......1940, rs. 4,000/- had remained due to the creditors. on 26th september 1940, and 1st october 1940, fresh sarkhats were executed by the defendants for rs. 2,100/- and rs. 4,000/- the amounts due under the previous sarkhats. after these renewals, a sum of rs. 78-12-0 was paid towards the sarkhat for rs. 2,100/- and a sum of rs. 150/- towards the sarkhat for rs. 4,000/-. the claim was, therefore, for rs. 2,122-12-0 principal and interest due under one sarkhat and rs. 4,038-6-0 principal and interest due under the other sarkhat, the total claim being for rs. 6.161-2-0. the two sarkhats were executed for firm damodar lal, manohar lal by madho lal as proprietor of the firm. the joint family apparently consisted of madbo lal and his son lakehmi lal; lakshmi lal was impleaded as a defendant to.....
Judgment:

Malik, C.J.

1. This is a defendants' appeal against a decree passed by the learned Civil Judge of Banaras in a suit for recovery of money due on two sarkhats. On 29th December 1931, the defendants had borrowed a sum of Rs. 6,000/-from the plaintiffs on the basis of a sarkhat, carrying interest at 10 annas per cent. per mensem. The interest was regularly paid and Rs. 3,900/- was paid towards the principal, with the result that on 25th September 1940, the amount that had remained due under this sarkhat was only Rs. 2,100/-. On 1st July 1932 a second sarkhat had been executed for Rs. 4,000/-and the amount was payable with interest at 10 annas per cent. per mensem. Interest on this sarkhat was also paid regularly on the due dates, but nothing was paid towards the principal and on 1st October 1940, Rs. 4,000/- had remained due to the creditors. On 26th September 1940, and 1st October 1940, fresh sarkhats were executed by the defendants for Rs. 2,100/- and Rs. 4,000/- the amounts due under the previous sarkhats. After these renewals, a sum of Rs. 78-12-0 was paid towards the sarkhat for Rs. 2,100/- and a sum of Rs. 150/- towards the sarkhat for Rs. 4,000/-. The claim was, therefore, for Rs. 2,122-12-0 principal and interest due under one sarkhat and Rs. 4,038-6-0 principal and interest due under the other sarkhat, the total claim being for Rs. 6.161-2-0. The two sarkhats were executed for Firm Damodar Lal, Manohar Lal by Madho Lal as proprietor of the firm. The joint family apparently consisted of Madbo Lal and his son Lakehmi Lal; Lakshmi Lal was impleaded as a defendant to the action, but he was exempted on 7th December 1942. The parties to the suit in the trial Court were, therefore, Firm Damodar Lal Manohar Lal and Babn Madho Lal. Madho Lal is dead, and this appeal was filed by Lakshmi Lal, son of Madho Lal as the legal representative of his father and Firm Damodar Lal Manohar Lal through Madho Lal was impleaded as pro forma defendant, but after the death of Madho Lal the Firm was transposed from the array of respondents to the array of appellants.

2. Firm Damodar Lal Manohar Lal did not enter appearance. Modho Lal contested the suit and claimed that he was an agriculturist and the plaintiffs were creditors, and as no accounts were maintained and copies of accounts not sent as required under the U. P. Agriculturists' Relief Act, the plaintiffs were not entitled to get any interest. The trial Court held in defendants' favour that the plaintiffs were creditors and Madho Lal was an agriculturist, and the plaintiffs, not having maintained proper accounts as required by the Agriculturists' Relief Act nor having sent copies of accounts to the debtors, they were not entitled to claim interest or costs. The result was that the suit was decreed for the principal sum due, that is Rs. 6,100/- with future interest at 3 per cent. per annum. It is not clear why the learned Judge disallowed pendente life interest, but because no party has made a point of it we need not consider this matter.

3. It has been urged by learned counsel for the defendants appellants that the renewal of the sarkhats on 25th September 1940, and 1st October 1940, must be taken to be fresh loans and these should have been evidenced not only by written documents as required by Section 39 but also copies of these sarkhats should have been given to the debtors. It is not alleged that any copies of these sarkhats were given to the debtors. The requirements of Section 39, U. P. Agriculturists' Relief Act were, therefore, not complied with. It has been argued on behalf of the appellants that the requirements of Section 39 of the Act not having been complied with under Sub-section (3) of Section 39, no interest should be deemed to have accrued on the loans and the payments of Rs. 78-12.0 and Rs. 150/- must, therefore, go towards the payment of the principal sums due. It is not contended by learned counsel for the plaintiffs-respondents that, if the provisions of Section 39 are applicable and have not been complied with, the amounts paid cannot be taken into account towards the principal sums. The point is covered by a Single Judge decision of this Court in Chhaddami Lal v. Har Sarup : AIR1943All305 , and by an unreported decision in Abdul Rahman v. Chakhanlal, Civil Revn. No. 133 of 1946 dated 6th May 1949. Sub-clause (3) of Section 39 came up for interpretation before a Full Bench of this Court in Jamuna Prasad v. Raghunath Pd. : AIR1943All171 , and it was held that if the provisions of Sub-section (1) have not been complied with, then interest shall 'not accrue at all on the document.' In the present case, therefore, if no interest had accured due, the money paid remained in the hands of the creditors and they have to account for it.

4. Learned counsel for the plaintiffs has, however, urged that, even though a renewal of a loan may be a loan within the meaning of Section 2, Sub-section (10), U. P. Agriculturists' Relief Act, it does not 'follow that it is a loan given' as required by Section 39. The question whether a renewal of a loan may be treated as a fresh loan came up for consideration before two Full Benches of this Court--the first was Pratap Singh v. Gulzari Lal, 1942 A. L. J. 3 : (A. I. R. (29) 1942 ALL. 50 F. B.), in which there was a difference of opinion, but the majority view was that a renewal may be taken to be a payment by the debtor with one hand and a fresh borrowing with the other, and, in that view of the matter, it was held that a renewal amounted to a fresh loan; Braund J. and Sir Iqbal Ahmad C. J., were of a different opinion; the question, however, came up again for consideration before another Bench of which the Hon'ble the Chief Justice was also a member, namely, Ketki Kunwar v. Ram Saroop, 1942 A. L. J. 578 : (A. I. R. (29) 1942 ALL. 390 F. B), and in that case it was decided that a renewal was a fresh loan as it was, in substance, a loan. We are bound by these decisions and must, therefore, hold that when the two sarkhats in this case were renewed in the year 1940, two fresh transactions of loan came into existence. These transactions being of the year 1940, and Under Section 39, U. P. Agriculturists' Relief Act, they should have been evidenced by written documents and copies could have been given to the debtors.

5. Mr. Kanhaiya Lal Misra, on behalf of the plaintiffs, has urged that a renewal may be a fresh loan, but it is not a loan given as it is only a notional borrowing. In Badloo v. Inder Bikram Singh, 20 Luck. 291 : (A. I. R. (32) 1945 Oudh 242 F. B.), renewal was deemed to be covered by Section 39 and was treated as, in substance, a loan; that is a decision by a Full Bench of three Judges of the Oudh Chief Court. So long as that decision is not set aside by a larger Bench, we must follow it. Nothing has been urged by learned counsel for the plaintiffs-respondents which would justify a reference of this case to a Bench of five Judges. Learned counsel has urged that the word 'given' means that money should actually have passed hands and not a notional giving. That argument cannot have much substance as a loan not only includes a cash advance but also a transaction which is, in substance, a loan, and if a transaction, which is in substance a loan, came into existence for the first time after 1935 when this Act came into force it was clearly governed by Section 39 of the Act.

6. In Lakshmi Lal v. Joshi Girdharji, First Appeal No. 163 of 1944 : : AIR1950All49 , we have already held that Under Sections 30 and 34 of the Act the Court can only disallow interest that had remained due on the date of the suit and cannot ask the creditor to account for sums paid as interest towards the principal. This point is covered by a Division Bench Ruling of this Court, Tula Ram v. Debi Datt, : AIR1949All498 . We do not wish to add anything further to what we have already said in our judgment in Lakshmi Lal v. Josihi Girdharji, First Appeal No. : AIR1950All49 mentioned above.

7. The result of this appeal, therefore, is that the sums of Rs. 78-12/- and Rs. 150/-, which had been paid after 25th September 1940, and 1st October 1940, must be accounted for by the plaintiffs creditors. These sums should be accordingly deducted from the sum of Rs. 6,100/- and the plaintiffs' suit decreed only for the balance. Defendant 2, Madho Lal, being dead, it is now necessary to make it clear that the debt would foe recoverable only from the assets of the deceased Madho Lal or the assets of the firm Damodar Lal Manohar Lal. This only means that personal properties of Lakshmi Lal, if any, will not be liable for the debt, while the joint family property will be liable.

8. As the appeal has been allowed for only a very small sum and it was valued at Rs. 6,100/-for the purpose of jurisdiction and Rs. 3,353/- for purposes of court-fee and we have modified it only to the extent of Rs. 228-12/-, we think that the appellants should pay the costs of the respondents,


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