SAGARMAL MARWARI Vs. BHUTHU RAM

JUDGEMENT

(1.) The petitioner in this application instituted a suit in the Court of the Munsif, first Court, Bhagalpur, against the opposite party, Bhuthu Earn and his two minor sons, for recovery of Rs. 924 on the basis of a hand-note said to have been executed by Bhuthu Ram for Rs. 600, bearing interest at the rate of 18 per cent, per annum. The allegations in the plaint, briefly, were that Bhuthu Earn, the opposite party No. 1, was the karta of the joint family and was impleaded in the suit both in his personal capacity and as the karta and representative of the said joint family.

(2.) On 30 June 1935, Bhuthu Earn as karta and representative of his joint family borrowed Rs. 600 in cash from the petitioner for cultivation and household expenses), promising to pay on demand the same with interest at 18 per cent, per annum, and in proof executed a handnote payable on demand in favour of the plaintiff on the same date and made it over to him. The opposite party as defendants alleged that the handnote in suit had been executed not for cash but on account of balance found due to the plaintiff after adjustment of accounts from 1336 Fasli Sambat in which simple and compound interest at high rates had been charged and after payment of Rs. 1500 in cash.

(3.) Therefore, under Section 8, Bihar Money-lenders Act (7 of 1939), the accounts were liable to be re-opened; and they contended that on the re-opening of the accounts and on reducing the interest to the rate admissible under the law nothing would be found due to the plaintiff. The pleader guardian of the minor defendants in addition urged that there was no legal necessity for the loan.