Final Order 1

Order Details: Copy of Judgment
Pdf Text: 1 Comm.SU No.07/2020
MHCC010005892020
Presented on : 05122019
Registered on : 14012020
Decided on : 31.03.2022
Duration : Y2, M3, D26
IN THE CITY CIVIL COURT FOR GR.BOMBAY AT MUMBAI
COMMERCIAL SUIT NO.07 OF 2020
PRAFUL SUKANRAJ JAIN, ]
Age 46 years, Of Mumbai an adult Indian Inhabitant ]
Carrying on business as a Sole Proprietor in the ]
name and style of Harsh Gems ]
At and from Shop No.15, 1st floor, L.K. Maket ]
Zaveri Bazar, Mumbai400 002. ].....Plaintiff
Vs.
PULKESH @ PHULKESH KISANLAL MAHAJAN ]
Age not known, of Mumbai carrying on business ]
as a Sole Proprietor in the name and style of ]
Divesh Exim at and from 91J87, Raut Estate, ]
Fanaswadi, Koliwadi, 3rd Floor, Mumbai400 002. ].....Defendants
APPEARANCE:
Adv.Rameshwar Totala for the plaintiff.
Adv.Asha Chetan Shah for the defendant.
CORAM : RAJESH A. SASNE
ADHOC JUDGE
(C.R.No.32)
DATED : 31st March, 2022.
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JUDGMENT
This is commercial suit for recovery of amount from the
defendant.
In brief, the plaintiff's case is as under :
2. It is the case of the plaintiff that in the month of April
2019, the defendant requested him for extending financial assistance by
way of business loan of Rs.15,00,000/. Accordingly, the plaintiff
extended financial assistance of Rs.11,15,875/ to the defendant. Apart
from this transaction, as the plaintiff has returned the goods purchased
from the defendant vide invoice No.2/1718, he is entitled to recover
from the defendant, an amount of GST Rs.93,476/ paid by him on
17.08.2018. The plaintiff time to time demanded said amount of
Rs.11,15,875/ and Rs.93,476/ (Total Rs.12,09,351/) from the
defendant. However, the defendant avoided to pay the same. Instead of
paying said amount, the defendant with a view to create false record,
forwarded demand notice dated 04.05.2019 demanding the amount of
invoice of the goods which are already returned by the plaintiff to the
defendant. The plaintiff by reply dated 18.05.2019, narrated true facts
and called upon the defendant to pay amount of Rs.12,09,351/. The
defendant in spite of receipt of said reply, failed to comply with the
same. By notice dated 04.06.2019, the defendant again denied his
liability. According to the plaintiff, the defendant is liable to pay
Rs.12,09,351/ to him. Hence, to recover said amount, the plaintiff has
filed this suit.
3. The defendants by written statement filed at exhibit3,
resisted this suit contending that the suit is false and frivolous. It is
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barred by the provisions of the Bombay Money Lenders Act, 1947 as
there is no contention regarding the plaintiff holding valid money
lender's licence. The defendant denied that the plaintiff has advanced
business loan to him. It is further case of the defendant that at the
demand of plaintiff, the defendant had sold jewellery of Rs.31,15,875/
to the plaintiff and raised invoice No. 2/1718 dated 02.08.2017 for the
same. The amount of GST for the same was Rs.93,476/. The defendant
was repeatedly demanding the amount of invoice. However, the
plaintiff including the amount of GST has paid only Rs.12,09,351/,
leaving behind balance of Rs.20,00,000/. The plaintiff failed to pay
said amount to the defendant. After receipt of said letter dated
4.5.2019, the plaintiff sent reply dated 18.05.2019, making false story
that he has returned the goods to the defendant. He also sent false and
fabricated debit note dated 10.04.2019. He also made false story that
amount of Rs.11,15,875/ was paid by him as loan to the defendant.
The defendant denied that the plaintiff has returned the goods. The
defendant denied that he requested the plaintiff for extending financial
assistance. He denied that Rs.11,15,875/ was paid by the plaintiff to
the defendant as a loan. He denied that Rs.93,476/ was due in respect
of GST in respect of invoice No.2/1718. There was nothing due and
payable by the defendant to the plaintiff. The plaintiff is liable to pay
Rs.20,00,000/ with interest at the rate of 24% p.a. to the defendant.
With these contentions the defendant prays to dismiss the suit.
4. Heard the learned Advocates for the plaintiff and the
defendant. Issues framed at exhibit7 are reproduced herein below for
my consideration, to which I record my findings thereon with reasons as
follows:
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ISSUES FINDINGS
1. Whether the plaintiff proves that, he has
advanced business loan of Rs.11,15,875/ to
the defendant ?
No
2. Whether the plaintiff proves that, in respect of
return of goods to the defendant, the plaintiff
is entitled to recover an amount of Rs.93,476/
from the defendant in respect of GST.
No
3. Whether the defendant failed to pay the
aforesaid due amount to the plaintiff ?
No
4. Whether the suit is maintainable in view of Bar
of the provisions of The Money Lenders Act ?
Yes
5. What order and decree ? Suit is dismissed.
REASONS
AS TO ISSUE NO.4 :
5. It is the contention of the defendant that the plaintiff
alleges lending of money to the defendant and as there is no valid
Money lending licence, suit is barred under the provisions of Bombay
Money Lenders Act, 1947. In fact, said objection is in view of Section 13
of the Maharashtra Money Lending (Regulation) Act, 2014 (in short
“The Money Lenders Act”).
6. Section 13 of the Money Lenders Act reads as follows:
Section 13 : Suits by money lenders not holding licence
(1) No court shall pass a decree in favour of a moneylender in
any suit unless the court is satisfied that at the time when the
loan or any part thereof, to which the suit relates was lent, the
moneylender held a valid licence, and if the court is satisfied
that the moneylender did not hold a valid licence, it shall
dismiss the suit.
(2) xxxx.
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7. Admittedly the plaintiff has no money lender's licence and
there is also no case that the plaintiff is a money lender. Not every loan
is axiomatically a money lending transaction for the purpose of the
Money Lenders Act. Only doing the business of money lending can
attracts the provision of the Money Lending Act. What is prohibited is
doing the business of money lending without licence. Therefore, every
instance of money lending without licence cannot be money lending
business /transaction under the Money Lenders Act. To constitute the
business of money lending, a single isolated instance does not constitute
and even several isolated instances do not, constitute the business of
money lending. A loan recovery action is not barred, merely because
there is a loan. The crucial aspect to determine the money lending
transaction to attract the said bar is that the transaction must be out of
business of money lending. Therefore, what is prohibited is doing
money lending business without licence and only in such cases on the
date of making advance of loan, if there is no money lending licence,
then the suit for recovery of such amount, is not maintainable.
8. In case before me, there are no series of transaction to held
that the plaintiff was carrying business of money lending. It is clear case
of the plaintiff that on the demand of the defendant for loan of
Rs.15,00,000/, the plaintiff has advanced loan of Rs.11,15,875/ by
RTGS. This transaction cannot be termed as business of money lending
and therefore, in my view there is no bar of Section 13 of the Money
Lending Act.
9. For the aforesaid observations, I rely on the judgment of
the Hon'ble Bombay High Court in case of Ganga Taro Vazirani Vs.
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Deepak Raheja (2021 SCC Online Bom 195). In this case the loan was
advanced by cheque and as the defendant failed to make the repayment
of the same, the plaintiff filed suit for recovery of the said amount. The
objection was raised by the defendant regarding maintainability of the
suit, contending that, on the date of advance, the plaintiff was not
holding valid money lenders licence. The Hon'ble Bombay High Court
by interpreting the term 'loan' held that, such transaction is not within
the meaning of 'loan' under the Money Lending Act and suit is
maintainable as there is no bar of Section 13 of the Money Lenders Act.
10. In case of Sitaram Shrawan Koshti Vs. Bajya Parnya Bhoi
[(28) AIR 1941 Nagpur 177], it is held that, the Act only applies to
money lenders and therefore, before it can be applied it must be shown
by the person seeking to apply it and seeking to take advantage of its
provisions that the plaintiff is a money lender.
11. In case of Ganesh Vs. Mithalal, (AIR 1999 Bombay 120),
it is held that, mere one or two casual transactions of money lending do
not make a person as a professional money lender. With these
observations the Hon'ble High Court held that, the plaintiff not being a
money lender was not required to comply with the mandatory
provisions of the Bombay Money Lenders Act. In view of judgment of
Ganga Taro Vazirani's case (supra), mere advancement of amount by
way of loan on one or two occasions cannot be held as transaction of
money lending and in such cases, it will not be expected that there
requires money lenders' licence.
12. In case before me, the alleged transaction is not under the
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Money Lenders Act. As held in Ganga Taro Vazirani's case supra, one
or two instances of advancement of loan cannot be termed as
transaction under the Money Lender Act. What is material is doing
business of money lenders and not money lending. In case before me,
pleadings in the plaint does not reveal that there was business of money
lending by the plaintiff. Hence, bar of Section 13 of the Money Lenders
Act, will not be applicable to this transaction. Accordingly, the suit is
maintainable. In the result, I answer issue No.4 in the affirmative.
AS TO ISSUE NO.1:
13. It is the case of the plaintiff that against the request of the
defendant for extending financial assistance of Rs.15,00,000/, the
plaintiff has paid Rs.11,15,875/ to the defendant by way of business
loan. Plaintiff Praful (PW1) at Exh.9 deposes in support of his claim.
He admits that in respect of such financial assistance, no agreement or
document as to security for the loan was executed. In the plaintiff's
documentary evidence there is no such document to show that amount
Rs.11,15,875/ was paid to the defendant as a loan. It is the contention
of the plaintiff that the defendant is well acquainted with him, they
belongs to same community and therefore, he accepted the defendant's
request for financial assistance. From these contentions it appears that
the plaintiff wants to demonstrate that there was good relations
between them and therefore, the plaintiff's was ready to pay such
amount of Rs.11,15,875/ as alleged loan without executing any
reciprocal document. Inspite of such contentions, the plaintiff is unable
to identify the defendant's signature on the defendant's notice dated
04.05.2019 Exh.14 and 04.06.2019Exh.15. Though these documents
are produced and relied upon by the plaintiff, however at the time of
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comparing these signatures with signature on debit note Exh.16, the
plaintiff showed his inability to identify the defendant's signatures on
aforesaid notices at Exh.14 and Exh.15. If the plaintiff is unaware with
the signature of the defendant how he advanced loan of such huge
amount without any document? Nonexecution of any such document
as security against the loan, raises doubt about the plaintiff's claim that
said amount was paid as a loan.
14. It is to be noted that the amount of alleged loan is
Rs.11,15,875/ and the defendant's demand as alleged was for
Rs.15,00,000/. The amount of alleged loan is odd figure and hence it
is unable to digest that such odd amount can be an amount of a loan. In
ordinary course of transaction, if any party advances the loan, it will not
advance loan of such odd figure. In the crossexamination, the plaintiff
to justify his case in that regard, deposes that he informed the
defendant that Rs.11,15,875/ is available and as the defendant
demanded same amount, it was paid to him accordingly. The plaintiff
fairly admits that there is no written document to show that amount of
Rs.11,15,875/ was paid on defendant's demand as a loan. The
explanation provided by the plaintiff for advancement of loan of such
odd amount is not probable and justifiable. The bank statement, Exh.11
shows that on 24.04.2019, the plaintiff through bank transferred
Rs.11,15,875/ to the defendant. On the said date, in his account there
was balance of Rs.12,05,940.70. Therefore, the plaintiff's statement that
only Rs.11,15,875/ was available with him is not correct. This fact also
shows that the plaintiff was able to pay Rs.11,50,000/ or
Rs.12,00,000/ as round figure of amount of loan against demand of
Rs.15,00,000/. Making payment of Rs.11,15,875/ though having
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balance of Rs.12,05,940.70 in the bank, itself shows that payment of
such odd figure is not against the loan but against any other
transaction.
15. Praful (PW1) deposes that there was only one business
transaction with the defendant and it is in respect of invoice No.2/17
18. Admittedly, said transaction is in respect of sale of gold mounting
against which invoice No.2/1718 was raised by the defendant to the
plaintiff for Rs.32,09,351/. The existence and contents of invoice
No.2/1718 are not disputed. The plaintiff admits the purchase of gold
amounting to Rs.32,09,351/ from the defendant, vide said invoice.
However, it is his case that said goods are returned to the defendant.
This invoice was called upon by the defendant to produce by the
plaintiff. Accordingly, it is produced. The defendant also admitted in his
pleading the fact about raising of such invoice by him to the plaintiff,
hence, said invoice No.2/1718 is not disputed. As aforesaid the plaintiff
admits that it is the only transaction held with the defendant.
Therefore, it is required to verify whether the said odd amount of
Rs.11,15,875/ is paid by the plaintiff against this transaction.
Admittedly, the cost of goods sold by the defendant to the plaintiff is
Rs.31,15,875/. The amount paid by the plaintiff to the defendant is
Rs.11,15,875/. It is not the coincidence that last five digits of both
these amounts are same. Including the amount of GST, total amount of
invoice is Rs.32,09,351/. It is the case of the plaintiff that by cheque
No.443836 he has paid amount of GST Rs.93,476/ in respect of said
invoice. Therefore, calculating the amounts paid by the plaintiff
a)Rs.93,476/(GST) + b)Rs.11,15,875/(alleged as loan) total amount
paid by the plaintiff is Rs.12,09,351/. It is also not the coincidence that
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last five digits of this amount are same with the last five digits of
amount of invoice Rs.32,09,351/. If total amount paid Rs.12,09,351/
is deducted from the total amount of invoice of Rs.32,09,351/, the
remaining balance will be Rs.20,00,000/. In ordinary course of
transactions, the traders usually makes part payment of odd amount by
keeping balance amount in round figure. It appears that same thing is
happened in this case. The course of transaction infers that the amount
of Rs.11,15,875/ and amount of GST Rs.93,476/ total amount of
Rs.12,09,351/ has been paid as part payment against invoice
No.02/1718, leaving behind balance of Rs.20,00,000/. Making of
payment of odd amount of Rs.11,15,875/ itself shows that it was not
the amount of loan. Therefore, I am of the view that the transaction by
its nature infers that it was not in respect of advancement of loan but it
is made against invoice No.02/1718. For these reasons I am of the view
that the plaintiff is not able to establish the fact that he has advanced
loan of Rs.11,15,875/ to the defendant. Hence, I answer issue No.1 in
the negative.
AS TO ISSUE NO.2:
16. It is the case of the plaintiff that after purchase of goods
from the defendant vide invoice No.2/1718 for amount of
Rs.32,09,351/ on 17.08.2018, he returned said goods on 10.04.2019.
It is his further case that in respect of said transaction and invoice he
paid GST of Rs.93,476/. It is his further case that on return of goods to
the defendant, the plaintiff is entitled to recover said amount of GST
Rs.93,476/ from the defendant.
17. Admittedly, goods were purchased by the plaintiff. They
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were delivered to him as he pleads return of the same. Therefore, to
establish his claim the plaintiff is required to satisfy following two
things:
(a) There was no acceptance of goods.
(b) Goods were physically returned to the defendant.
18. As aforesaid fact of purchase of goods by the plaintiff from
the defendant and delivery of the same to the plaintiff is not disputed.
in respect of acceptance of the goods, Section 42 of the Sale of Goods
Act, 1930 reads as under :
Section 42 : Acceptance The buyer is deemed to have accepted
the goods when he intimates to the seller that he has accepted
them, or when the goods have been delivered to him and he does
any act in relation to them which is inconsistent with the
ownership of the seller, or when, after the lapse of reasonable
time, he retains the goods without intimating to the seller that
he has rejected them.
19. In case before me there was no written intimation of
acceptance but after receipt of the goods vide invoice No.2/1718 dated
02.08.2017, the plaintiff has paid Rs.93,476/ against the amount of
GST mentioned in the said invoice. Moreover as observed in findings to
issue No.1, payment of Rs.11,15,875/ made by the plaintiff to the
defendant is part payment against the purchase of goods. Hence, the
plaintiff by such conduct has accepted the goods. The goods were sold
to the plaintiff on 02.08.2017. According to the plaintiff he returned it
to the defendant on 10.04.2019. For near about twenty months, the
plaintiff has not communicated anything about his intention to reject
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the goods. Therefore, for more than reasonable time he retained the
goods and thereby also accepted the goods in view of Section 42 of the
Sale of Goods Act, 1930. The goods sold are precious metal that is gold,
therefore, period of twenty months taken by the plaintiff is more than
reasonable period to hold that the plaintiff after lapse of reasonable
time retains the goods and thereby accepted it.
20. Now, it is required to consider whether after period of 20
months the plaintiff has physically returned the goods to the defendant.
First of all it is to be noted that no reason for return of goods is
provided by the plaintiff. For whole period of 20 months there was
absence of any communication expressing the intention of the plaintiff
to return the goods. It is pertinent to note that after the transaction of
sale, first written communication is by the defendant vide letter dated
04.05.2019(exh.14) demanding the due payment from the plaintiff and
thereafter by notice reply dated 18.05.2019(exh.17) the plaintiff came
up with the case of return of goods by debit note dated
10.04.2019(ex.16). If on 24.04.2019, the plaintiff has made part
payment against the goods, then execution of debit note on 10.04.2019
is afterthought.
21. Admittedly, there is no credit note from the defendant
regarding return and receipt of goods from the plaintiff. The plaintiff
has not referred and deposed in respect of debit note. There is no
evidence of the plaintiff to satisfy who has executed this debit note and
whether it has been signed at the instance of the defendant. The
plaintiff admits that the signature at the left hand side on the debit note
Exh.16 is different from the signatures on notices Exh.14 and Exh.15
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issued by the defendant. He further clarifies that the signature at the
left hand side of debit note is of Niketan, the employee of the
defendant. Thereby the plaintiff admits that the debit note is not signed
by the defendant and the defendant has not put stamp of seal thereon.
Moreover, the plaintiff has not adduce evidence to show that the
defendant has acknowledged the receipt of goods returned by the
plaintiff. The plaintiff alleges that the goods are returned on 10.04.2019
and on 24.04.2019, loan was advanced to the defendant, then it was
possible for the plaintiff to obtain the credit note or the
acknowledgement thereof from the defendant who was under his mercy
of financial assistance. As it is not done so, the plaintiff's story appears
to be far from the truth. As aforesaid on 24.04.2019 the plaintiff has
made payment of Rs.11,15,875/ not as a loan but as a part payment
against the goods, therefore, the debit note dated 10.04.2019 which has
no signature of the defendant appears to be created after thought.
22. The plaintiff in support of return of goods has also relied on
said debit note dated 10.04.2019 and documents as to GST Exh13
(colly.) The documents of GST are not attached with the plaint and not
relied upon with the pleadings. Said return is filed on 10.05.2019
whereas the suit is filed on 05.12.2019. Therefore, at the time of filing
of the suit these documents of GST were available with the plaintiff. If
the plaintiff is relying on these documents, he should have filed it
alongwith the plaint as per the mandate of Order XI, Rule 1 of the Code
of Civil Procedure, 1908. These documents of GST are directly
produced alongwith the evidence without taking leave of the Court. In
view of provisions of Order XI, Rule 1(5) of the Code of Civil Procedure,
1908, as applicable to the commercial suit by which Code of Civil
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Procedure has been amended with respect to the suits before
commercial court, such document cannot be read in evidence as the
plaintiff failed to disclose said document alongwith the plaint.
Moreover, before relying on such documents of GST, the plaintiff is
required to satisfy that the goods are physically returned to the
defendant.
23. If goods of precious metal like gold amounting to
Rs.32,09,351/ are to be returned physically, it was expected in
ordinary course of transactions to obtain the acknowledgement of the
right person with proper documentation. The debit note is the
document created by the plaintiff and not issued by the defendant. In
absence of acknowledgement or credit note of the defendant, there is
doubt whether goods are returned to the defendant?. In absence of
proof regarding return of such goods and in view of Section 42 of Sale
of Goods Act, 1930 it is required to held that the plaintiff has accepted
the goods and retained the same. Moreover in view of finding recorded
against issue No.1 it infers that the plaintiff has made part payment
against the goods purchased from the defendant, hence thereby he
accepted the goods. For these reasons, the plaintiff is not entitled to
recover amount of GST Rs.93,476/ from the defendant. Therefore, I
answer issue No.2 in the negative.
AS TO ISSUE NO.3:
24. In view of my findings to issue Nos.1 and 2, there is no
liability of the defendant to pay the amount of Rs.12,09,351/ to the
plaintiff. Hence, the plaintiff has not established that the defendant has
failed to pay said amount to him. In the result I answer issue No..3 in
the negative.
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AS TO ISSUE NO.5:
25. In view of my findings to issues No.1 to 4, the plaintiff has
failed to prove his claim against the defendant. Therefore, suit is liable
to be dismissed. I am of the view that the plaintiff shall bear costs of
this suit. In the result in answer to issue No.5 I pass the following order.
ORDER
1. Suit is dismissed with costs.
2. Decree be drawn up accordingly.
(Rajesh A.Sasne)
Judge,
City Civil & Sessions Court,
Date : 31.03.2022 Mumbai.
Typed directly on computer : 31.03.2022
Checked by HHJ on : 01.04.2022
Signed by HHJ on : 04.04.2022
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
05.04.2022 at 05.00 p.m.
UPLOAD DATE AND TIME
(Mrs. P.L.Parab)
NAME OF CLERKTYPIST
Name of the Judge HHJ SHRI RAJESH A.SASNE
(COURT ROOM NO.32)
Date of pronouncement of
judgment/order
31.03.2022
Judgment/order signed by P.O. on 04.04.2022
Judgment/order uploaded on 05.04.2022
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