CHHOTULAL Vs. MANAK DEVI

JUDGEMENT

(1.) HEARD learned counsel for the appellant at length.

(2.) BY the impugned judgments and decrees, the two learned courts below have decreed the suit of the plaintiff for repayment of the principal sum of Rs. 40,000/-, alleged by the plaintiff to have advanced to the defendant by way of loan, and Rs. 8800/- by way of interest, along with pendente lite, and future interest.

(3.) THE next objection raised is, that even according to the plaintiff, the amount was advanced in cash. THE amount of loan was Rs. 40,000/-, while according to Section 269ss of the Income Tax Act, hereafter to be referred to as `the Act', such advancement of loan of an amount aggregating Rs. 20,000/-, or more, could not be made in cash, but was required to be made only by an account payee cheque, and/or account payee bank draft. That having not been done, it is a case of violation of Section 269ss of the Act, and in view of the provisions of Section 23 of the Indian Contract Act, it renders the transaction illegal, rather void, with the result, that the plaintiff is not entitled to maintain the suit for recovery of the amount.