RAM GOPAL Vs. KAILASH NARAIN MISRA

JUDGEMENT

(1.) These two second appeals are between the same parties and can, therefore, be conveniently dealt with together. Kailash Narain Misra filed suit No. 234 of 1966 in the Court of City Munsif, Farrukhabad for recovery of a sum of Rs. 4572/- on the basis of pronote and receipt dated 21st July, 1963. This suit was decreed by the trial Court and the decree was affirmed by the lower appellate Court. Ram Gopal has filed second appeal No. 119 of 1971 in this Court. Ram Gopal had also filed suit No. 253 of 1966 against Kailash Narain Misra for mandatory injunction directing the defendant to deliver the promis sory note and the receipt dated 21 st July, 1963. This suit was dismissed by the trial Court and the judgment and decree were affirmed by the lower appellate Court. Ram Gopal has filed second appeal No. 169 of 1971 in this Court. In Second Appeal No. 119 of 1971 Mr. J. N. Chatterji, learned counsel for the appellant, contended that after coming in force of the Uttar Pradesh Regulation of Money-Lending Act, 1976, hereinafter referred to as the Act, the claim of the plaintiff must fail. He referred to the provisions of Section 26 of the Act and in particular to sub-section (4) thereof. It will be relevant to reproduce Section 26 (1) to (4) of the Act: "26. Particulars of debts and deposits to be furnished by every money len der: (1) Every money lender carrying on the business of money lending from before the commencement of this Act shall submit to the Regis trar, a statement in the prescribed form within a period of three months from the date of such commencement. (2) The statement referred to in sub-section (1) shall contain the particulars of debts due to each money lender and of deposits made with him and such other particulars as may be prescribed. (3) Every such statement shall be counter-signed, dated and sealed by the Registrar, and shall be kept and maintained in the manner prescribed. (4) Notwithstanding anything contained in any contract, decree or order or any other law for the time being in force, no money-lender shall be entitled to claim any amount from a debtor in respect of any loan advanced before the commencement of this Act, unless the name of such debtor and the amount due from him has been speci fied in the statement referred to in sub-section (1 ). " It is incumbent on every money lender carrying on the business of money lending from before the commencement of the Act to submit a statement in the prescribed form within three months of the commencement of the Act. In the present case, the appellant made an application under Order 41, Rule 27 Civil Procedure Code for filing a certified copy of a statement furnished by the respondent before the Registrar under Section 26 (1) of the Act. This application was allowed after hearing counsel and the certified copy of the statement has been taken on the record. This certified copy does not show the name of the appellant or the amount that he had taken as loan on the basis of the promissory note from the respondent. It is on the basis of this paper that the learned counsel for the appellant contended that the claim of the respondent has to be rejected. Learned counsel also argued that the appeal is a continuation of the suit and the word 'claim' as used in Section 26 (1) of the Act is wide enough to embrace within its fold even the decree passed by the Courts below. However, Mr. Sudhir Narain Agarwal, learned counsel for the respon dent, raised a number of contentions. He contended that the provision con tained in Section 26 (4) of the Act was not applicable to a case where a decree has already been passed. He further contended that it would be applicable only in cases where the claim has yet to be adjudicated upon. His second contention was that the word 'decree' used in this sub-section did not pertain to a decree passed in a suit but has reference to a decree on the basis of which a suit could be filed. His third contention was that the word 'entitle' used in sub-section (4) of Section 26 of the Act connoted a stage prior to the filing of a suit. His fourth contention was that the provision was not retrospective in operation and would not affect any pending suit. His fifth contention was that the point could not be pressed in this appeal, but could only be taken in the execution proceedings. His last contention was that even if the claim was barred, the decree remained. The first three contentions can be taken up together. The Act came in force from 20th July, 1976. Sub-section (2) specifies as to what should be in the statement. The statement should contain particulars of debts due to each money lender and of deposits made with him. Form No. 10 shows that the name, address, occupation of the debtor, date of advance of the money and the amount as well as the rate of interest have to be indicated in the form. It has also to be indicated whether the amount is secured or unsecured, and the details of the security have also to be furnished. Sub-section (4) makes it clear that where such particulars have not been filed with the Registrar within the period as indicated in sub-section (1), the money lender shall not be entitled to claim any amount from a debtor in respect of any loan advanced before the commencement of the Act. Sub section (4) starts with non-obstante clause. It says: "notwithstand ing anything contained in any contract, decree or order or any other law for the time being in force" no money lender shall be entitled to claim any amount from a debtor in respect of any loan advanced prior to the enforce ment of the Act, unless there is a compliance with the requirements of sub-sec tion (1) of Section 26 of the Act. The non- obstante clause makes it clear that not withstanding any contract, decree or order or any law, the provisions of Section 26 (4) of the Act would prevail. In other words, sub-section (4) has an over riding effect over all other provisions of law, contract, decree or order. The plain interpretation of the provision of sub-section (4) is that a money lender shall not be entitled to recover any amount from a debtor, advanced as a loan, prior to the enforcement of the Act, unless he has furnished a statement in the prescribed form with the Registrar under Section 26 (1) of the Act. Where this has not been done, the money lender shall not be able to claim any such amount. This provision, is therefore, in respect of loan taken before the commencement of the Act. The debtors have been given a protection under the provisions of this Act. The only thing that has to be seen is whether the money lender has included the debt in the form filed with the Registrar. If he has not, he will not be able to recover the amount. In other words, it is sine qua non for every money-lender, who claims any amount from a debtor in respect of loan advanced prior to 20th July, 1976, to furnish a statement in the prescribed form with the Registrar. Where he has not done so, he is not entitled to recover the amount. In view of the above, the first contention of the learned counsel appears to be misconceived. The provision of Section 26 (1) is a special provision in respect of loans taken or contracted before the commencement of the Act A money lender must comply with the requirements of Section 26 (1) before he is entitled to recover the amount. The contention that since a decree has been passed and the claim has been adjudicated upon by the Courts below, the provisions of Section 26 (1) of the Act would have no application to the decree is again misconceived. The non-obstante clause makes it clear that even a decree is not sacrosanct. Even if a decree has been passed by a Court below, this Court in second appeal can set aside that decree, if it finds that the decree has wrongly been passed. In view of the fact that the provisions of Section 26 (1) have not been complied with in as much as the name of the debtor and the debt have not been entered in the statement furnished by the money-lender under Section 26 (1) of the Act the money lender is not entitled to realise the amount claimed in the suit. The second contention of the learned counsel for the respondent that the word 'decree' used in sub- section (4) of Section 26 did not pertain to a decree passed in a suit but has reference to a decree on the basis of which a suit could be filed is wholly misconceived. The word 'decree' used in Section 26 (4) of the Act refers to a decree passed in the suit for the realization of the amount It must be borne in mind that the word 'decree' here has been mentioned in the non-obstante clause. The third contention that the word 'entitled' used in sub-section (4) of Section 26 of the Act connotes a stage prior to the filing of the suit is again misconceived. The words used are 'no money-lender shall be entitled to claim any amount from a debtor in respect of any loan. These words make it clear that the money lender is not entitled to recover the loan. One of the modes of recovery of loan is by filing a suit. Section 26 (4) is so wide in its application that unless the requirements set out therein are fulfilled, any loan contracted by a debtor prior to the commencement of the Act cannot be recovered The word 'entitled' has been used to cover all possible stages in the suit including appeals. The fourth contention that the provision was not retrospective in opera tion is also misconceived. It is well settled that the Legislature has got ample power to make a provision applicable with retrospective effect. Section 26 (4) is retrospective in the sense that it applies to loans taken before the com mencement of the Act and which have not been recovered till the date of the commencement of the Act. The suit for recovery of such a loan whether pending in the trial stage or in the appellate stage on the date of the commence ment of the Act would come within the purview of Section 26 (4) of the Act The contention that if once the suit has been filed and a decree has been obtained therein, the provisions of Section 26 (4) of the Act would not be appli cable is, therefore, untenable. The fifth contention that the point could not be passed in the appeal but could only be taken in the execution proceeding is also not correct The amplitude of sub-section (4) of the Section 26 of the Act is so wide that the objection can be taken in second appeal and where necessary even in execution proceedings. If the objection is raised in the second appellate stage it is the duty of the Court to examine the position and if it finds that no decree could have been passed, the Court must correct the record If however a decree has been passed and an objection is taken in the execution proceedings, the execution Court would also be justified to consider the matter. If a decree cannot be passed at all for the recovery of the amount in view of the provisions of Section 26 (4) of the Act, such a decree would be clearly a nullity. Consequently, objections can also be taken in the execution proceedings. The sixth and the last contention that even if the claim was barred, the decree remained, is again misconceived. If the claim is barred, the decree must go. How does the decree survive in that case ? For the reasons indicated above, I find no force in any of the contentions raised by the learned counsel for the respondent. The fact of the matter is that the loan for the recovery of which the suit was filed is not recoverable in view of the provisions of sub-section (4) of Section 26 of the Act, for it has been found that it was not included in the statement filed before the Registrar under Section 26 (1) of the Act. Consequently, the objection of the appellant must prevail, and the decree passed by the lower appellate Court for the recovery of the amount must be set aside. In view of the above, it is not necessary to go into the questions raised in Second Appeal No. 169 of 1971. Since the Second Appeal No. 119 of 1971 filed by the defendant succeeds, learned counsel has not pressed Second Appeal No. 169 of 1971. In the result, therefore, Second Appeal No. 119 of 1971 succeeds and is allowed. The judgment and decree of the lower appellate Court are set aside and the suit of the plaintiff shall stand dismissed. The Second Appeal No. 169 of 1971 is also dismissed. In the circumstances of the case, I direct the parties to bear their own costs in these two appeals. .