BORGU LACHMIAH Vs. KAPARTI LINGIAH

JUDGEMENT

(1.) On the basis of a promissory note the respondent herein filed a suit for recovery of Rs. 1,040. The revision petitioner who was the defendant in the trial Court, while admitting the execution of the promissory note, denied having received the consideration and stated that there was a partnership between the plaintiff and the defendant and in that connection the plaintiff had come to him and taken his signature on a blank paper and fraudulently got it prepared in the form of promissory note. He further stated that the plaintiff himself was indebted to him in connection with the parnership business. Another objection was also taken that the plaintiff did money-lending business, but it was not clear whether he has a licence and if so for what period and whether he had complied with the provisions of the Hyderabad Money-lenders Act. The trial Court did not accept the pleas of the defendant and decreed the suit. Hence this revision on behalf of the defendant, which initially came up before our learned brother Srinivasachari, J., who having regard to the importance of the question involved has referred it to a Bench.

(2.) The question that has to be considered in this revision is as to whether the respondent's suit is liable to be dismissed for the reason that admittedly he was not in possession of a licence to do money-lending transactions as required by the Hyderabad Money-lenders Act. This transaction relates to March, 1952. The first licence that has been produced is for the period 24th November, 1950 to 23rd November, 1951. The respondent applied for the renewal of the licence on 24th October, 1951, but the Collector instead of renewing the licence from the date of its expiration, i.e., 23rd November, 1951, granted him a licence for a period of six months commencing from ist May, 1952. This is clear to show that during the intervening period, viz., from 24th November, 1951 to 30th April, 1952, the respondent was not in possession of a licence. The contention of the learned counsel for the revision petitioner is that having regard to the provisions of section 9 of the Hyderabad Money-lenders Act, the fact that the respondent was not in possession of a licence would entail the dismissal of the suit. It is argued on behalf of the other side by Sri Vaidya, the learned counsel, that although the original licence was only from 1st May, 1952, but on a review application before the Collector, the previous order was set aside and licence was granted with retrospective effect to be in operation from 24th November, 1951, that is to say, the gap between 24th November, 1951 to 30th April, 1952, was made up. In other words, it is contended by the learned counsel that since the Collector had by his order dated back the licence to 24th November, 1951, it could not be said that the plaintiff was not in possession of a licence on the crucial date, viz., and March, 1952.

(3.) The question that arises is, if the money-lender applies for renewal of the licence before the expiry of the period and the licence is granted long after that period has expired but if it dates back to the period from which it has to be renewed, would the money-lender be regarded as one without a licence during the intervening period. In order to appreciate this question, a reference to the provisions of the Hyderabad Money-lenders Act is necessary. The relevant provisions are sections 3 (2), 3 (5) (a), 4, 5 and 9. Section 3 (2) reads :