Anil K. Sen, J.
1. This is an appeal from an appellate decree at the instance of the defendant in a suit under Sections 36, 37A and 38 of the Bengal Money Lenders Act, 1940 (hereinafter referred to as the said Act). The appeal is directed against the decree dated August 4, 1972, passed by the learned Additional District Judge, 3rd Court. Howrah in Title Appeal No. 36 of 1972.
2. The plaintiff/respondent instituted Title Suit No. 153 of 1970 renumbered as Title Suit No. 74 of 1971 in the 3rd Court, of the learned Munsiff, Howrah seeking relief under Sections 36, 37A and 38 of the said Act upon a declaration that a sale executed by her in favour of the defendant on July 29, 1968, in respect of premises No. 17/2, Khetra Mitra Lane. Howrah followed by an agreement for repurchase really constitutes a mortgagein respect of which the plaintiff is entitled to the reliefs under the said Act as prayed for. The plaintiff's case shortly was that she was the owner of the said premises by purchase. She was in need of money to help her Dharmaputra Netai Charan Patra to carry on his business in fish. She approached the defendant for a loan of Rs. 7,000/- through the defendant's husband who agreed to advance the loan provided the plaintiff executed a sale deed in respect of the suit property by way of security. In view of her extreme need the plaintiff had to agree and on June 29, 1968, three documents were executed between the parties. The first one was a conveyance in favour of the defendant. The second one was an agreement by the defendant for reconveyance and the third one was a lease of the suit property by the defendant in favour of Netai on a monthly rental of Rs. 175/- which really represents the interest on the money advanced by way of loan. According to the plaintiff, the whole transaction constitutes mortgage and she having paid a total sum of Rupees 1,400/- towards interest approached the defendant to allow her to repay the loan in easy instalments as she was not in a position to pay the entire sum at a time. The defendant having refused, the plaintiff filed the above suit for the aforesaid reliefs.
3. The suit was contested by the defendant. The defendant admitted that the plaintiff was in need of money for the business of her Dharmaputra. But he denied that the agreement between the parties was really one for advancing a loan on a security furnished in the manner alleged by the plaintiff. The defendant claimed that it was an out and out sale. The defendant no doubt executed an agreement to reconvey the property to the plaintiff on certain terms which the plaintiff never fulfilled.
4. On the pleadings as aforesaid and on the evidence adduced by the parties, the learned Munsif found that even upon the plaintiff's own case and evidence the loan incurred being one to meet the need of her Dharmaputra in carrying on his business in fish was a commercial loan not coming within the purview of the said Act. In holding as such, the learned Munsif overruled a contention put forward on behalf of the plaintiff to the effect that when the plaintiff had not incurred the loan for her own business it cannot be said that the loan was used by the plaintiff for the purpose of anybusiness relating to trade, commerce, industry etc., as proprietor or principal or agent or guarantor. He overruled the said contention by holding that in view of the relationship between the plaintiff and her Dharmaputra Netai either the plaintiff was the actual borrower and Netai was her surety or Netai was the actual borrower and the plaintiff was his surety and in either case according to the learned Munsiff it would come within the definition of commercial loan as in the Act The learned Munsif further found that, in view of the provision of the proviso to Section 58(c) of the T.P. Act, the transaction cannot be held to be a mortgage. The learned Munsif accordingly concluded :
'So the relief for declaration that the transaction was a mortgage or a mortgage by conditional sale is not maintainable in this suit. So, also the reliefs prayed for under Section 36 of the Bengal Money Lenders Act for reopening of the transaction and for relieving the plaintiff of all liabilities in excess of the limits specified in Section 30 are not maintainable.'
On the conclusion as aforesaid, instead of dismissing the suit the learned Munsif proceeded to consider whether the transaction between the parties would still amount to a loan in substance or not, Proceeding as such relying on certain surrounding circumstances, namely, that all the documents were executed on the same date, that the plaintiff continued to remain in possession, that the lease in favour of Netai was for the same period as specified in the deed for reconveyance and that the defendant took no steps to have her name mutated in the municipal records, concluded that the transaction between the parties was really a loan In that view after obtaining necessary court-fees from the plaintiff for a suit for declaration the learned Munsif passed a decree declaring the transaction to constitute a loan transaction.
5. Feeling aggrieved, the defendant preferred an appeal, being Title Appeal No 36 of 1972 and the plaintiff filed a cross objection, The learned Judge in the court of appeal below allowed the cross objection by setting aside the finding that the loan was a commercial loan and dismissed the appeal. The learned Judge in the court of appeal below in setting aside the finding that it was not a commercial loan held that though the loan was advanced to the plaintiff to be used by herSolely for the purpose of business relating to trade, yet according to him the learned Munsiff was wrong in thinking that it was to be so used by her as a guarantor or a surety. According to the learned Judge in the court of appeal below as the loan was not incurred by the borrower to be used for the purpose of business either as a proprietor or principal or agent or a guarantor it would not come within the definition of commercial loan as in the said Act to exclude the operation of that Act. The learned Judge in the court of appeal below, however, affirmed the finding of the learned Munsiff that in view of the attending circumstances the transaction between the parties is a loan in substance. Strangely, though the learned Judge in the court of appeal below upon his own findings should have allowed the reliefs claimed by the plaintiff in the suit he merely affirmed the decree of the learned Munsiff declaring the transaction to be a loan in substance.
6. Feeling aggrieved, the defendant has preferred the present second appeal to this court.
7. Mr. Mitter appearing in support of this appeal has first contended that the court of appeal below wholly misconstrued the definition clause in Section 2(4) of the said Act in holding that though the loan was upon his own finding incurred solely for the purpose of business yet it would not constitute a commercial loan. According to Mr. Mitter the ultimate conclusion of the learned Munsiff in this regard was right though all his reasons may not be supportable. Secondly, it has been contended by Mr. Mitter that if the loan was a commercial loan as rightly found by the learned Munsiff the antire suit should have been dismissed since neither in law nor on the pleadings was it open any further to the court to investigate whether the transaction is otherwise a loan in substance or not. Mr. Mukherjee appearing on behalf of the plaintiff/respondent has contested both the points raised by Mr. Milter and he contended further that the learned Judge in the court of appeal below was right in his conclusion that the loan not being a commercial loan the plaintiff is entitled to a declaration that the transaction is a loan in substance.
8. We have carefully considered the rival contentions put forward before us. It is not in dispute that relief under the provisions of the said Act would be admissible only if the transaction is in substance a loan and such a loan is not a commercial loan, Commercial loan has been defined by Section 2(4) to mean :
'A loan advanced to any person to be used by such person solely for the purposes of any business, or concern relating to trade, commerce, industry, mining, planning, insurance, transport, banking or entertainment or to the occupation of wharfinger, warehouseman or contractor or any other venture of a mercantile nature whether as proprietor, principal or agent or guarantor,'
9. Now in the present case both the learned Munsiff and the learned Judge in the court of appeal below have concurrently found that the plaintiff incurred the loan to be used by her solely for the purpose of a business relating to trade. As a matter of fact, even in the plaint the plaintiff pleaded;
'As the said Netai Charan Patra had no other means to secure money to carry on with his business and requested the plaintiff to arrange money for him to save his drowning business, the plaintiff out of love and affection for her said son approached the defendant's husband through her Dharmaputra Netai Charan Patra and another Sadananda Chatterji, since deceased, for loan of Rs. 7,000/-.' The evidence of the plaintiff and her husband at her trial was also to the same effect. Therefore, the two courts below are fully justified in coming to a concurrent finding that even accepting the case of the plaintiff that the transaction was a loan it was incurred to be used solely for the purpose of her son's business in fish. The two courts, however, were proceeding upon a misapprehension that the fact that the loan was so incurred for being used solely for the purpose of a business would not by itself be sufficient to bring it within the definition clause unless it is further found that the borrower is to use it either as a proprietor or as a principal or as an agent or as a guarantor. While the learned Munsiff thought that in view of the relationship between the borrower and her son it may be taken that the borrower had incurred the loan to use it in the business as a guarantor for her son, the learned Judge in the court of appeal below held that no such inference could be made, In our view, however, the two courts below misread the definition clause in thinking that in order to constitute commercial loan, the loan incurred must not only be one used solely for the purpose of business but that it must be so used in either of the four capacities, namely, proprietor or principal or agent or guarantor. On plain reading of the definition clause, the terms : 'Whether as proprietor or principal or agent or guarantor' are explanatory and are not words of limitation so that if the borrower does not use the loan in either of the aforesaid four categories, it goes out of the definition clause. According to this definition a loan would be commercial when it is incurred with the object of using the same solely for the purpose of any business or concern relating to trade, commerce etc., irrespective of whether it is so used as a proprietor, principal, agent or a guarantor. Those words only elucidate the fact that what is important is the user for the purpose specified, it being wholly immaterial in whatever capacity it might have been so used. Such being the position, upon the concurrent finding of the two courts below even if the transaction was a loan as claimed by the plaintiff it would not come within the purview of the said Act, and as such, the plaintiff was not entitled to any of the reliefs claimed.
10. This takes us to the second point raised by Mr. Mitter. The learned Munsiff having found that the plaintiff is not entitled to any of the reliefs claimed under the provisions of the said Act still proceeded to consider whether she would get a declaration that the transaction is yet a loan in substance as if in a declaratory suit. Here, the learned Munsiff first failed to appreciate that on the frame of the suit, the plaintiff was not entitled to such a declaration and a mere payment of the court-fee for such a declaration does not convert the suit into a suit for declaration. But that apart the learned Munsiff failed to appreciate that there exists a more fundamental objection to such a claim for declaration. It is not in dispute that the deed of sale (Ext. A) is an out and out sale. On its terms there is nothing to show that the transaction was anything other than a sale. So far as the deed of reconveyance is concerned (Ext. 3) the position is similar These are two independent documents though executed on the same date. It appears to us that the learned Munsiff was quite conscious of the added proviso to Section 58(c) of the T.P. Act which lays down:
'Provided that no transaction shall be deemed to be a mortgage unless the condition is embodied in the document which effects or purports to effect the sale.'
11. The learned Munsiff being aware of the implication of such a statutory amendment held that the plaintiff is not entitled to a declaration that the transaction constitutes a mortgage by conditional sale. Even finding as such, he went on further to consider whether the plaintiff could yet claim a declaration that the transaction is a loan in substance. In our view, if it is not for the purpose of giving relief under the provisions of the said Act, then the proviso to Section 58(c) of the T.P. Act itself would debar any such investigation. The reason, in our view, is quite obvious. The plaintiff by the deed of sale (Ext. A) conveyed her right, title and interest in the property in favour of the defendant. But for the proviso to Section 58(c) it would have been open to the court to investigate whether such transfer constitutes the transfer of the entire right, title and interest of the plaintiff in favour of the defendant or it merely constituted transfer of an interest of the nature of a mortgage to constitute mortgage by conditional sale. But it is not open to the court to ignore the transfer altogether and hold that the transaction was merely a loan subject to a charge as held by the learned Munsiff. The object behind the legislative enactment in the matter of adding the proviso to Section 58(c) would be wholly frustrated if it be considered open to a court to make an investigation as done by the learned Munsiff and then grant a declaration that the transaction though on its face is an out and out sale is merely a loan subject to a charge over the property. Such being the position, the decree as passed is clearly unsustainable in law.
12. This appeal, therefore, succeeds and is allowed. The decrees passed by the two courts below being set aside the plaintiff's suit is dismissed. We would, however, direct the parties to bear their costs throughout.
B.C. Chakrabarti, J.
13. I agree.