SHRIRAM Vs. KHKHILAL

JUDGEMENT

(1.) THE short question that arises for consideration in this' petition at the instance of creditor is whether the transaction in question can be said to be a transaction falling within the meaning of prohibited degree of transaction as defined within the meaning of section 2(7) of the M.P. Act No. 3/77 (for short Act) and whether the petitioner can be declared as lender of money as defined in section 2(d) of the Act. Facts in so far as they relate for the disposal of this petition need mention.

(2.) INVOKING the jurisdiction of the competent Authority under the Act for claiming protection of the Act, the respondent No. 1 filed an application under section 5 of the Act to the competent Authority (SDO) alleging inter alia that he is the owner of agricultural land measuring 1.338 hectares in village Gata in Tehsil Zhirnya. It was alleged that he had purchased cloth from the petitioner on credit. It was alleged that on finalisation of accounts a sum of Rs. 3,125/ - was found outstanding. It was alleged that an agreement on 2.6.1980 was reached between the parties that a sum of Rs. 1,875/ - would be paid by petitioner to the respondent No. 4, the land in question would be sold to petitioner. It was alleged that in fact, the respondent No. 1 had only purchased cloth worth Rs. 300/ - and all amount over and above Rs. 300/ - was claimed towards interest to make the bargain presentable and legal in the eyes of law. In effect, therefore, the complaint was that transaction in question is not the sale out and out and secondly it was essentially a prohibited degree transaction liable to be declared as such resulting in return of land to the respondent No. 1

(3.) HEARD Shri Y.I. Mehta, learned counsel for the petitioner, Shri P.K. Saxena with Shri Mandloi learned counsel for respondent No. 1 and Shri P. Verma, learned Govt. Advocate for respondents No. 2 and 3.