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Sm. Chhabi Barui and ors. Vs. Debendra Nath Das - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberC.R. No. 3300 of 1978
Judge
Reported inAIR1980Cal16
ActsBengal Money-Lenders Act, 1940 - Sections 2(12) and 38; ;Code of Civil Procedure (CPC) , 1908 - Section 115
AppellantSm. Chhabi Barui and ors.
RespondentDebendra Nath Das
Appellant AdvocateNirmala Chaturvedi and ;Hemkumari Chaturvedi, Advs.
Respondent AdvocateTarak Nath Roy, Adv.
DispositionApplication dismissed
Cases ReferredSatish Chandra Nag v. Riyasat Hussain
Excerpt:
- .....kobala deed and as such the transactions by these two deeds of the same date were in substance a loan transaction.3. the opposite party grew paddy in six bighas of kanali lands from 1970 to 1977, and after deducting the cost of cultivation he had got more than what he was entitled to.4. this application was opposed by the opposite party on the averment that the transaction was not at all a loan transaction but an out and out sale with an option to repurchase.5. the learned munsif upheld the defence contention and rejected the application. this order has been challenged under the instant revision.6. the petitioner contended that the land had been sold at a price much less than the prevailing market rate. but in support of such contention no sale deeds were produced. the opposite party.....
Judgment:
ORDER

Sudhindra Mohan Guha, J.

1. This application for revision is directed against the order dated 19-8-78 passed by the learned Munsif, Raghunathpur, rejecting the application under Section 38(1), of the Bengal Money-Lenders Act, 1940 praying for taking accounts of the loan described in the petition and for declaring the amount due to the lender.

2. The case of the petitioner was as follows:--

The applicants, being in need of money, approached the Opposite Party for a loan of Rs. 2,999 and secured that loan after executing Kobala Deed in favour of the Opposite Party, who in his turn executed a Deed for reconveyance of the property mentioned in the Kobala Deed and as such the transactions by these two Deeds of the same date were in substance a loan transaction.

3. The Opposite Party grew paddy in six bighas of Kanali lands from 1970 to 1977, and after deducting the cost of cultivation he had got more than what he was entitled to.

4. This application was opposed by the Opposite Party on the averment that the transaction was not at all a loan transaction but an out and out sale with an option to repurchase.

5. The learned Munsif upheld the defence contention and rejected the application. This order has been challenged under the instant revision.

6. The petitioner contended that the land had been sold at a price much less than the prevailing market rate. But in support of such contention no Sale Deeds were produced. The Opposite Party on the other hand, filed Ext. A to Ext- A (2) to show that the transfer was not at a price less than the market value.

7. The question whether a given transaction is a loan in substance or a sale outright with a condition of re-purchase depends on the facts of each case, In such a case the intention of the parties is the determining factor. The following are the tests on which lies the nature and character of such a transaction:--

(1) the existence of a debt (2) the period of payment (3) the possession of the property (4) a stipulation for payment of interest, if any, (5) a price below the true value indicates a mortgage, a fair market value is strong evidence that the transaction is a sale.

8. According to the petitioner the opposite party was in possession. It transpires in evidence that the transfer was made at a fair market value. There was no evidence as to the motive of loan. In the above circumstances the learned Munsif refused to hold that the transaction was a loan in substance. On consideration of the materials on record it would not appear that the learned Munsif committed an error in appreciating the evidence or there was an illegal exercise of jurisdiction; In this view of the matter no interference is called for in this revision.

9. Mr. Tarak Nath Roy, the learned Advocate for the Opposite Party questions the propriety of the present application for revision, as according to him, an appeal is provided against an order passed under Section 38 of the Bengal Money-Lenders Act.

10. Miss Nirmala Chaturvedi, the learned Advocate for the petitioner relies on the decision in the case of Hub Lal Shaw v. Premraj Lalla, reported in (1952) 56 Cal WN 381. It was held therein that a revision would lie against an order holding that the application under Section 38 of the Bengal Money-Lenders Act was not maintainable

11. Mr. Tarak Nath Roy on the other hand, places reliance in the case of Biraj Kumar Banerjee v. Indu Bala Gupta, reported in (1956) 60 Cal WN 31. It is held therein that an appeal lies against an order passed on an application under Section 38 of the Bengal Money-Lenders Act appointing a Commissioner to take accounts between the lenders and the borrowers of the transaction in question.

12. In the case reported in (1952) 56 Cal WN 381 a Division Bench of this Court held that there was no right of appeal against an order refusing to make a declaration under Section 38 of the Bengal Money-Lenders Act. But according to Mr. Roy an appeal would lie from a decision of a Civil Court under Sec. 38 of the Bengal Money-Lenders Act on the principle that such decision would come within the definition of a decree. In the case of Satish Chandra Nag v. Riyasat Hussain, reported in ILR (1949) 1 Cal 487, it was held that an appeal would lie under general law viz., the Code of Civil Procedure, although the proceedings were originated in the Civil Court, though not on a plaint but on an application. Under Section 38 of the Bengal Money-Lenders Act, the Court can make a de-claration after taking accounts, and the amount due and payable by the applicants. But in the present case no declaration was made in favour of the applicants on the clear rinding that the applicants were not borrowers. In this view of the matter the declaration sought for was refused. The impugned order was passed in deciding a dispute between the parties by a Civil Court and as such an appeal would lie from such decision. In this view of the matter I would hold in agreement with Mr. Roy that the present application for revision is not maintainable,

13. In view of the foregoing findings this application fails. The application is rejected and the Rule is discharged. There will be no order as to costs.


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