FULA DEVI Vs. MANGTU MAHARAJ

JUDGEMENT

(1.) This appeal, by plaintiff No. 1, had originally been referred to a Division Bench for hearing, and by order dated the 10th July, 1968, a Division Bench of this Court was of the opinion that there was conflict of views taken in two Division Bench decisions of this Court, reported in 1963 BLJR 361 = AIR 1963 Pat 350, Lakhi Narayan Sao v. Smt. Bhagwati Kuer, and 1965 BLJR 774, Dr. Nilkanth Prasad v. Bhola Nath, on the point as to the burden of proof so far as Section 4 of the Bihar Money-lenders (Regulation of Transactions) Act, 1939, is concerned, and as such, the difference should be finally resolved by the decision of a Full Bench. In these circumstances, this appeal has been placed for hearing before this Bench.

(2.) The relevant facts are as follows: The plaintiffs instituted a suit, out of which this appeal arises, for recovery of Rs. 2,000/-, besides interest, said to be due on a mortgage bond, dated the 20th April, 1954, executed by defendant No. 1, Mangtu Maharaj. Defendants second party are the subsequent purchasers of the land covered by the mortgage deed. It was alleged that Mangtu Maharaj had a partnership business with the plaintiffs second party in the name and style of Bhudar Mal Panna Lal and he used to write the Nakal Bahi and the Bilti Bahi of the firm, Mangtu Maharaj was in need of money for payment of petty creditors and for meeting the expenses of fooding, and accordingly, he had approached Ghanshyam Dass, father of plaintiff No. 2 and father-in-law of plaintiff No. 1, for some money. Plaintiff No. 1 had some personal funds of her own and she had wanted to invest the money in some Karbar in consultation with her father-in-law, and the latter agreed to advance Rs. 2,000/- to Mangtu Maharaj by taking the money from plaintiff No. 1. Thus, this money was given to Mangtu Maharaj, who executed the mortgage bond in question in favour of plaintiff No. 1, although ostensibly the name of the mortgagee was Ghanshysam Dass. It was alleged that the money advanced was a casual loan and, therefore, there was no necessity for plaintiff No. 1 to take any licence under the Money-lenders Act. The rate of interest agreed to be paid was six per cent per annum and the due date for repayment was Baisakh 1366 Fasli. It was alleged by the plaintiffs that this suit had to be instituted because the mortgage money had not been paid in spite of demands. The suit was contested by defendants first and second parties. The main defence of Mangtu Maharaj was that he was a partner in the firm Bhudar Mal Panna Lal, but it was denied that he had taken any loan as alleged. It was contended that Ghanshyam Dass had induced Mangtu Maharaj to execute the mort- gage bond in question in his favour as security for the partnership business, assuring that Rs. 2,000/- would be paid to Mangtu Maharaj, for investment towards the capital of the partnership business. It was alleged that Ghanshyam Dass had played false and had not paid anything as agreed upon. Thereafter, Mangtu Maharaj gave up the partnership business and the mortgage deed remained inoperative. It was alleged that Mangtu Maharaj had cancelled the mortgage deed by executing a registered deed of cancellation dated the 14th June, 1955, and thereafter executed a sale deed in favour of defendants second party, as he required money for starting his own shop and business. Certain allegations were made as to how the mortgage bond (Exhibit 1) had come in possession of the plaintiffs. It was alleged by Mangtu Maharaj that the suit was hit by Section 4 of the Bihar Moneylenders Act and it was not maintainable as the plaintiffs were not registered money lenders. The defence of the defendants second party was that they had validly purchased the land mentioned in the mortgage deed and had come in possession over the same. According to these defendants also, the mortgage deed in question had not been acted upon by the parties thereto.

(3.) The main issues framed by the learned Munsif, who tried the suit, on the questions which have been agitated in this Court, were issues nos. 6 and 7 which were to the following effect:-- "6 Is the suit barred under the provision of Section 4 of the Money Lenders Act? 7. Whether the mortgage bond dated 20-4-54 is genuine, valid and for consideration or the same was executed as a security bond for the partnership business as alleged by the defendant No. 1?" Under issue No. 7, the learned Munsif came to the conclusion that the plaintiffs' case was true and that the mortgage bond had been executed for consideration. Under issue No. 6, the learned Munsif held that money had been advanced to Mangtu Maharaj out of friendship and affection and by way of casual loan and, therefore, there was no necessity for the lenders to have been registered under the Money-lenders Act. It was held that neither Ghanshyam Dass, nor plaintiff No. 1, had any money-lending business after 1951 till 1957 and hence they were not money lenders by profession when this loan was given to Mangtu Maharaj. Upon the interpretation of Section 4 of the Bihar Money-lenders (Regulation of Transactions) Act, 1939 (Bihar Act VII of 1939), the learned Munsif stated thus:--