AKULA KONDIAH Vs. ALAMPALLI BALAKISHTIAH

JUDGEMENT

(1.) The plaintiff is the appellant and has filed this second appeal against the decree of the lower appellate court, whereby his suit has been dismissed. He has on April 4, 1953, claimed Rs. 2,052/- against the respondent on the basis of a document in favour of his father. By the document the debtor has agreed to pay Akala Ramanna, the father. Rs. 1520/- and mortgaged a house and a vacant land as security for the debt. But as the transaction was unregistered, the suit was filed to recover the debt amount with interest on the personal covenant contained in the document. The defence is that there was a partnership between the appellant's father and the respondent in repair works of certain bunds and godown that the partners equally contributed money for the aforesaid repairs; that the bund broke and losses were incurred : that when the respondent went with the accounts to satisfy the appellant's father about the losses he was forced to execute the document on May 8. 1950. The next plea taken for dismissing the suit is that the creditor was a moneylender, had no licence and that the suit should be dismissed under Section 9 of the Moneylenders Act due to his failure of not having a licence on the relevant dates. The trial court found the Plea of undue influence false. It further held that though a moneylender the failure to have licence on the date the document was written, was not fatal to the claim. Licences of May 27. 1950 and of June 10, 1953 were produced and the Court held the appellant to be disentitled only to interest and half the costs. Accordingly it gave a decree for the main sum of Rs. 1520/- with half the costs. The lower appellate court has allowed the appeal only on the ground that the defence of undue influence was proved in the case. It appears that before the lower appellate court the objection regarding the suit being liable to dismissal due to the failure of having a licence when the transaction sued upon was entered into, was pressed mainly because there was then a Full Bench authority of the Hyderabad High Court in Shamshir Ali v. Ratnaji ILR (1952) Hyd 95 : A.I.R. 1952 Hyderabad 58, that failure to have a licence would result in the suit being dismissed. During the pendency of the second appeal there was another decision by a larger Bench in Mohd. Bin Salim v Umaji, ILR (1955) Hyd 169 : A.I.R. 1955 Hyderabad 113 (FB) . In the latter Full Bench decision Section 9 of the Hyderabad Money-lenders Act has been construed as vitiating the loan in the absence of a licence. It follows that the failure to have a licence on the date the contract was entered into makes the agreement of loan void and the creditor cannot file a suit to recover the debt on the basis of a subsequent licence. Consequently the appellant's suit under the later Full Bench decision must be dismissed on the ground that his lather had no licence when the document sued upon was written, though he had a licence later in the month of May of the same year. Had this objection been not available the appeal would have been remanded because avoidance of contract on ground of undue influence necessitates return of benefits under the void able contract and there was no finding as to whether the respondent had any benefit which he would be liable to return.

(2.) The learned advocate for the appellant does not challenge the correctness of the later Full Bench decision, but he argues that due to the earlier Full Bench decision his client could not plead exempting circumstances under which the particular loan would not require a licence. He urges that according to the respondent's case the father of the appellant was his partner in certain contracts, and therefore the deceased would be a trader within the meaning of Section 2 (9) of the Act. This sub-section reads as follows :

(3.) According to this argument the loan between two such traders would be exempt; for under Section 2 (4) (g) of the same Act a loan advanced by one trader to another in the ordinary course of business has been excluded from the definition of 'loan'. Admittedly the plaint is one for the recovery of a loan and an amendment specifying the circumstances as to why such a loan should be exempt from the operation of the Act, would not change the cause of action. Then there is force in the argument that the appellant could not plead these circumstances, because according to the Full Bench decision which then existed, failure to have a licence was not fatal. There are, however, objections against giving permission for any such amendments. Firstly because the appellant in his deposition has definitely stated that there was no partnership between his father and the respondent in the repair works of the bund. Secondly, this partner-ship would be dissolved soon after the death of the appellant's father which was in 1951, and permitting an amendment of the plaint in 1957 would work injustice to the respondent because claim under a dissolved partnership would become barred by lapse of three years under Article 106 of the Limitation Act. The case of Pirgonda Hongonda Patil v. Kaleonda Shidgonda Patil, A.I.R. 1957 Supreme Court 363, is decisive that no amendment of pleading should be allowed which would work injustice to the other side. The Advocate of the appellant says that Article 120 would be applicable and he should be allowed to amend. i am clearly of the opinion that Article 106 of the Limitation Act is applicable to such suits and Article 120 is therefore excluded. In these circumstances, I do not think that this appeal should succeed, and is dismissed with costs of this court. Leave granted. Appeal dismissed.