AZIZ AHMED KHAN Vs. I.A. PATEL

JUDGEMENT

(1.) This appeal arises out of a suit brought against the appellant herein for recovery of amounts together with interest thereon alleged to have been advanced to him by way of accommodation on two occasions for which separate receipts were obtained. The suit was registered on 13-9-1963. On 5-10-1963 which was the date fixed for the appearance of the defendant, the 3rd Additional Judge, City Civil Court at Secunderabad set the proceedings against him ex parte as he did enter appearance in spite of service of summons and fixed the date for plaintiff's evidence as 9-10-1963, The plaintiff was the lone witness and the suit was decreed on that very day, Later the defendant applied for setting aside the ex parte decree by filing I.A. 489 of 1963 which was allowed. He filed his written statement on 14-2-1964 wherein he denied that any amount was advanced to him either on 29-10-1960 or on 30-11-1960 by way of loan or any interest was agreed to be paid thereon. He did however, deny the receipts, which showed that the amounts were received "on account ". He stated that the plaintiff had suppressed the true facts and circumstances under which the said receipts came into being and had instituted a false suit. The true state of facts, according to him the defendant is as follows: The State Talkies at Aurangabad was owned by Shah Nawaz Khan, the brother-in-law of the defendant, along with others. The defendant's wife also had interest therein. The defendant looked after the affairs of the Talkies along with his brother-in-law. The plaintiff was interested in taking on lease the said talkies. He therefore approached the defendant at Aurangabad in October 1960. But the Talkies was already given on lease to one Babubhai Patel. The defendant explained to him that it was possible to give the said talkies on lease to him as it was already leased out to others. The plaintiff then told him that he would arrange with the lessee. Thereafter, one day he called the defendant to Hyderabad and on 29-10-1960 it was agreed that the plaintiff would get the theatre vacated within 6 months whereupon the theatre would be leased out to him. The plaintiff offered to pay Rs. 3,000/- by way of advance to enable the owners of the talkies to meet the incidental expenses in getting the lease terminated. It was one of the terms of the agreement that in case his attempts in getting the theatre vacated by the tenant failed, the said amount should stand forfeited and the plaintiff would have no right to claim back the same. The amount of Rs. 3,000/- was paid on 29-10-1960 and it was utilised for the purpose for which it was paid. Later on 30-11-1960 the plaintiff again approached the defendant told him that he incurred an expenditure of Rs. 4,000/- in attempting to get the lease terminated and also for purchase of equipment for the talkies in anticipation of getting the lease. He said that the whole amount would be adjusted later and requested the defendant to pass receipts for both the amounts. The defendant took the plaintiff at his word that they were needed for adjustment of accounts and executed the receipts. The efforts of the plaintiff to prevail upon the lessee to terminate the lease failed as a result of which the amount which was paid to the owners under the terms of the agreement became a forfeit, Some time thereafter, the plaintiff revived his efforts. He sent a letter of a common friend in August, 1962 by registered post which was acknowledged by the defendant. A doubt was expressed therein that the defendant had a secret hand in the failure of the lease deed In reply to the said registered letter, the defendant sent the telegram relied on by the plaintiff dated 14-9-1962. saying that 'he required two months' time to come and explain. Accordingly the defendant went to Hyderabad in November along with some common friends and businessmen and explained to the plaintiff that he had nothing to do with the failure of the lease deed. The plaintiff, thereupon, told him that he had already lost Rs. 7,000/- and that he was very much interested in the said theatre. He then put forth a fresh proposal of equal partnership. The terms and conditions of equal partnership were settled but they were to be implemented only if the tenant vacates the premises and settles accounts for which it was agreed that both parties should make efforts. It is the case of the defendant that after the defendant left the place after this settlement typed agreement along with a carbon copy was sent by the plaintiff to the defendant for his signature and the defendant retained the carbon copy and sent back the original to the plaintiff after affixing his signature on behalf of the State Talkies, Aurangabad. The defendant tried his best but the lease could be terminated The plaintiff sent various letters to the defendant asking about his efforts in getting the tenant vacated by consent. As the efforts for terminating the lease could fructify, the lease in favour of the existing tenant had to be renewed. As a result it is said that this false suit has been brought. The defendant raised an objection with regard to the admissibility of the receipts and pleaded further that on the averments of the plaintiff the suit transaction falls within the purview of the A.P. (Telangana Area) money Lenders Act (Act V of 1349 F.) and as the plaintiff had no money lending licence during the period the loan is alleged to have been advanced and has maintained accounts in accordance with the provisions of the Act, the suit is liable to be dismissed.

(2.) Thus, the defence raised against the suit, in short is that the transaction in question by its nature is one of loan nor were the receipts which in terms show "on account " executed on that basis. The telegram relied on also did contain any promise to pay; nor the question of interest did ever arise. The transaction was altogether different from the one as described in the plaint The defendant is in no way liable for refund of Rs. 3,000/- under the terms of the contract and he has at all received Rs. 4,000/-. The receipts are inadmissible in evidence and the suit is liable to be dismissed under the clear provisions of the A.P. (Telangana Area) Money Lenders Act.

(3.) On the basis of these pleadings, the following issues were settled -