Final Order 1

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MHCC010030932020
Presented on : 12032020
Registered on : 12032020
Decided on : 06092021
Duration : Y M D
01 05 24
BEFORE THE CITY CIVIL COURT, MUMBAI
( Court No.14 )
(Presided Over by S. U. Hake)
SUMMONS FOR JUDGMENT NO.53 OF 2020
IN
COMMERCIAL SUIT NO.325 OF 2021
(SUMMARY SUIT NO.752 OF 2019)
Jagdish Kumudchandra Chheda
Through POA holder,
Mr.Manish Jagdish Chheda
Age 71 years, Occ: Retired
Residing at: 3/10, Mayfair Building,
3rd Floor, V.N.Road, Churchgate
Mumbai400 020. ..Plaintiff
Versus
Bharani Bros, proprietary firm
Through proprietor Nilesh Bharani
Having office at: 5, Sharda Sadan,
7, S.G.Marg, Dadar(East),
Mumbai400 014
And residing at,
803, Ekta Residency, B wing
Building No.: 79
Tilak Nagar, Chembur(West),
Mumbai400 089 ..Defendant
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___________________________________________________
Ld. Advocate Rajvi Shah for plaintiff
Ld. Advocate Mamta alongwith Adv. Lix Thachet i/b. Adv. Dhiren
Shah for defendant
______________________________________________________
ORAL ORDER
(Dated this 6th day of September 2021)
1. Suit is filed under Order 37 Rule 2 of C.P.C. for
recovery of Rs.16,00,000/ together with interest thereon @ 18%
p.a.
2. Relevant facts in the plaint may be summarized as
under:
On 01/07/2016, defendant approached plaintiff for
loan of Rs.16 lacs. Defendant stated that he needs said amount
for his business of money lending. Defendant agreed to repay loan
amount within six months alongwith interest @ 1% per month.
Relying upon the representations made by defendant, plaintiff
advanced loan amount to defendant. As against the loan amount,
defendant issued three Promissory notes dated 01/07/2016 each
amounting to Rs.5 lacs and one Promissory Note of Rs.1 lac.
Promissory Notes were duly signed by defendant. By issuing
these Promissory Notes, defendant promised to pay the amount of
Rs.16 lacs. Defendant though appeared, but, failed to raise
substantial defence in the reply affidavit. By making these
submissions, plaintiff prayed to decree the suit.
3. Writ of Summons was duly served and defendant
filed his appearance as contemplated u/o. 37 Rule 2(3) of C.P.C.
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Thereafter, plaintiff has taken out Summons for judgment.
Defendant strongly opposed the Summons for Judgment by filing
reply affidavit. It is submitted that suit is barred by The
Maharashtra Money Lending(Regulation) Act, 2014. Plaintiff is
carrying on business of money lending without obtaining requisite
license as per The Maharashtra Money Lending(Regulation) Act,
2014. Therefore, he is not entitled to get decree as per The
Maharashtra Money Lending(Regulation) Act, 2014. Defendant
has specifically denied all the avernments in the plaint and
affidavit of Summons for Judgment. It is submitted that plaintiff
has forged bills of exchange. By making these submissions,
defendant prayed for unconditional leave to defend the suit.
4. Considered the submissions advanced on behalf of
both the sides. Defendant in his reply affidavit challenged the suit
claim mainly on two grounds i.e. (1) suit is barred by The
Maharashtra Money Lending(Regulation) Act, 2014 and (2) Bill
of exchanges are forged.
5. Firstly, I shall consider the defence of money lending
raised by defendant. Defendant submits that from plain reading
of the plaint, it is clear that plaintiff is claiming to be carrying on
business of money lending. Plaintiff was not having requisite
license and therefore this Court cannot pass decree as per Sec. 13
of The Maharashtra Money Lending(Regulation) Act, 2014.
6. Defendant claims that from the reading of plaint,
plaintiff is claiming to carry on business of money lending, but,
this submission is wrongly grounded on facts. Plaintiff nowhere
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claims that he does the business of money lending. In paragraph
no.3 of the plaint, it is stated that defendant does money lending
business. Defendant was facing financial problem and was in need
of cash to maintain and survive in the business. Thus, on perusal
of the plaint, it is clear that plaintiff has not claimed that he is
carrying money lending business. On the contrary, it is contended
that defendant is carrying out the business of money lending.
7. It is well settled that if defendant takes the defence
of money lending, he has to show that the transaction is
forbidden by The Maharashtra Money Lending(Regulation) Act,
2014. Thus, the burden would be on defendant to show that
plaintiff does money lending business and transaction is hit by
The Maharashtra Money Lending(Regulation) Act, 2014. Ld.
Counsel appearing for defendant relied upon Section 13 of The
Maharashtra Money Lending(Regulation) Act, 2014 and
submitted that no Court shall pass a decree in favour of a money
lender 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. Ld. Counsel for defendant further
submitted that plaintiff is not coming with the case that he is
holding a valid licence for money lending and therefore suit is
liable to be dismissed.
8. Considering the issue of money lending raised by
defendant, a reference with profit can be made to the case of
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Ganga Taro Vazirani V/s Deepak Raheja, 2921 SCC OnLine
Bom 195. Similar issue regarding money lending was raised
before Hon'ble Bombay High Court. Relying upon the judgment
of Bipin Vazirani V/s Raheja Design Construction Pvt.Ltd, Hon'ble
Bombay High Court held that every loan is not a money lending
transaction for the purposes of Money Lenders Act. There is no
such presumption in law. It is doing the 'business of money
lending' that attracts the provisions of the statute. It is further
held that in interpreting that phrase, the correct emphasis is on
the word 'business' and not 'money lending'. It is the word
'business' and not expression 'money lending' i.e. determinative.
Simply put, every instance of lending money would not amount to
money lending transaction as contemplated under The Money
Lending Act.
9. Hon'ble Bombay High Court further held that to
constitute 'business', of money lending, a single isolated instance
does not and even several isolated stray instances do not
constitute the business of money lending. To be engaged in the
business of money lending, the activity must be systematic,
regular, repetitive and continuous and must generate an
appreciable revenue. The fact that the borrower is a stranger to
the lender does not on its own make the latter a 'moneylender'.
10. From the aforesaid case law, it is clear, as crystal,
that loan recovery action is not barred merely because there is a
loan. Defendant has to show that loan was part of the business
money lending. Plaintiff seeking recovery of loan is not required
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to show that his suit is not barred by The Maharashtra Money
Lending(Regulation) Act, 2014. However, as discussed supra,
defendant has to show that transaction is forbidden by the
provisions of The Maharashtra Money Lending(Regulation) Act,
2014. Defendant has not stated that plaintiff is carrying out
business of money lending. He has not pleaded that plaintiff has
advanced loan regularly and continuously. He has not cited
repeated instances of advancement of loan which is generating
appreciable revenue to plaintiff. Thus, the contents in the affidavit
reply falls too short to substantiate the defence of money lending
taken out by defendant.
11. Defendant further contended that there is no
relationship between plaintiff and defendant. Suit is filed at the
fag end of limitation period. There is no correspondence on
record to show that plaintiff made demand of money to defendant
prior to filing of suit. Promissory notes filed on record are forged.
12. Defendant is contending that Promissory Notes filed
on record are forged. However, the avernments in reply affidavit
regarding forgery of Promissory Notes are vague. Plaintiff has
filed on record four Promissory Notes. Three Promissory Notes are
of Rs.5 lacs each and One Promissory Note is of Rs.1 lac. All the
Promissory Notes bear stamp of the defendant in address column.
All the Promissory Notes appear to have been signed on Revenue
stamp. The stamp of defendant is also affixed on Revenue stamp.
No circumstance has been pointed out by defendant indicating
probability of forgery of Promissory Notes. As held in the above
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case law, borrower is a stranger to the lender does not on its own
make the latter a 'money lender'. There is no statutory
requirement to issue notice in writing before filing the suit.
13. Court is cautious of the fact that, it is unfair to form a
particular opinion, before giving opportunity of adducing
evidence to the parties. But, it is well settled that for making out
the case of leave to defend unconditionally, defendant has to
satisfy the Court that he has substantial defence or defendant has
to raise triable issues indicating that he has fair and reasonable
defence although not positively good defence. Defendant, as
stated above, raised the issue of money lending and forgery of the
Promissory Notes, but, failed to make out the case for these
defences. Under such circumstances, ordinarily, plaintiff is
entitled to leave to sign judgment, however,considering the facts
of the case discussed above, to allow defendant to file written
statement and contest the suit, conditional leave to defend can be
granted. In the result, following order:
ORDER
1. Defendant shall deposit a sum of Rs.16,00,000/(Rs.Sixteen
Lacs only) in Court within a period of 12 weeks from today.
If this condition is compiled with, defendant is granted
leave to defend the suit and he shall file Written Statement
within a period of 8 weeks from the date of deposit.
2. If aforesaid condition of the deposit is not followed by
defendant within stipulated time, plaintiff shall be at
liberty to apply for exparte decree.
3. There shall be no order as to costs.
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4. S/J No.53/2020 is accordingly disposed of.
06/09/2021 S.U.HAKE
JUDGE,
CITY CIVIL COURT,
GR.MUMBAI.
Dictated on : 06/09/2021
Transcribed on : 06/09/2021
Signed on : 07/09/2021
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'CERTIFIED TO BE TRUE AND CORRECT COPY OF THE
ORIGINAL SIGNED JUDGMENT/ORDER”.
07/09/21 at 05.30 pm.
Mrs.Tanushree C.Kamble
Name of the Judge HHJ SHRI SU Hake
Date of Pronouncement of
judgment/order
06/09/21
Judgment and order signed by P.O. 07/09/21
Judgment/order uploaded on 07/09/21
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