Final Order 4

Order Details: Other
Pdf Text: 1 Comm. Suit 249/2019
MHCC010118492019 Presented on : 22/11/2019
Registered on : 09/12/2019
Decided on : 12/10/2022
Duration : 2Y 10M 3D
IN THE CITY CIVIL COURT AT MUMBAI.
COMMERCIAL SUIT NO.249 OF 2019
Jitendra Meghji Chhadva
Karta of Jitendra Meghji Chhadva, HUF,
aged about 58 years, Occu. business,
Residing at D703, Gundecha Garden,
Dattaram Khamkar Road, Old Gas
Compound Lane, Lalbaug, Mumbai
400012
…PLAINTIFF
Versus
Bharat Shivaji Udeshi
Age about 68 years, occu. Business,
Proprietor of M/s Shiv Sneha Associates,
Dolat Manzil, 1st floor, Next to Parsee
Gymkhana, 607A, Dr. B. Ambedkar
Road, Dadar (East), Mumbai 400014. ... DEFENDANT
Shri. P.N. Vira, learned Advocate for Plaintiff.
Shri. R.J. Ghag, learned Advocate for Defendant.
CORAM : SHRI.N.P.TRIBHUWAN, ADHOC DISTRICT JUDGE
(C.R.NO.32)
J U D G M E N T
(Delivered on 12/10/2022)
This is a suit for recovery of sum of Rs.24,71,392/ and
interest @ 18% on sum of Rs.19,04,000/ from the date of suit till
realization of entire amount.
2. It is case of plaintiff that he is businessman and dealing in
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business of readymade garments for women. Defendant is
businessman. Prior to 12/4/2017 he was partner of registered
partnership firm viz. M/s Shiv Sneha Associates. The said partnership
firm dissolved on 12/4/2017. Thereafter, defendant become sole
proprietor of the said firm.
3. In the month of March, 2017, defendant approached to the
family of plaintiff and requested him to advance loan for business. In
pursuance of request of defendant, on 30/03/2017 the plaintiff gave
loan of Rs.25,00,000/ to the said partnership firm. Defendant being
partner and authorized signatory of M/s Shiv Sneha Associates with the
consent of other partners has signed and executed a writing in favour of
plaintiff and thereby acknowledged the receipt of the said amount of
loan. Defendant with the consent of other partners of the said firm
issued three cheques for Rs.8,00,000, Rs.8,00,000/ and Rs. 9,00,000/
respectively in favour of plaintiff HUF for repayment of the said loan
amount. The cheque for Rs.8,00,000/ has been honoured on
06.09.2017 and therefore sum of Rs.17,00,000/ remained due and
payable as on 06.09.2017.
4. Thereafter, on demand of plaintiff to repay the said balance
loan amount, the defendant replaced above remaining two cheques
and thus issued fresh cheque. On 05.01.2018 defendant given in writing
that the said partnership firm has been dissolved and he issued two post
dated cheque for Rs.8,00,000/ and Rs.9,00,000/, dated 01.02.2018
and other two cheques for interest of Rs.75,133/ dated 01.02.2018 and
Rs.1,03,200/ 01.03.2018/. However, aforesaid cheques have been
dishonored. Again defendant has given fresh two cheques of
Rs.8,00,000/ and Rs.9,00,000/ towards repayment of the loan amount
along with interest for a period from 1.9.2017 to 28.2.2018. These
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cheques also came to be dishonoured.
5. Despite repeated reminders and demands the defendant
neglected to make payment of aforesaid loan amount. On 7/4/2018 the
plaintiff through advocate sent notice to defendant and called upon him
to pay Rs.19,04,000/. However, defendant by letter dt.24.4.2018
denied the demands of plaintiff and raised false defence that the
transaction of advancement of loan was a professional money lending
transaction within the meaning of Maharashtra Money Lending and
Regulation Act, 2004. He has accepted and admitted the receipt of the
said loan amount of Rs.25,00,000/. Defendant has undertaken to repay
the said loan amount with interest. Defendant is liable to pay the
amount as under :
Outstanding admitted amount of loan and interest :
Cheque No.081141 dt. 2/3/2018 Rs.19,04,000/
Interest @ 18% p.a. from the date of dishonour of
cheque till filing suit i.e. 4/4/2018 to 20/11/2019
Rs.5,67,392/
TOTAL Rs.24,71,392/
6. Plaintiff contended that since the transaction is a
commercial transaction, it applied for preinstitution mediation
settlement but the matter could not settle in the pre institution
mediation process. Hence, this suit.
7. Defendant has filed written statement (Exh.7) and
contended that the dispute/claim raised by plaintiff is not a
“Commercial Dispute” and hence not tenable as “Commercial Suit”
under commercial division of this court.
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8. According to defendant the plaintiff has admitted that he is
carrying on business of professional money lending and he did not and
does not hold money lending license under the Maharashtra Money
Lenders Regulation Act. Hence, suit is not maintainable as per section
13 of the said Act.
9. Defendant denied that he met plaintiff either prior to
12/4/2017 or thereafter. He denied that he has accepted liabilities of
M/s Shiv Sneha Associates and responsible for dues and liabilities of the
said firm. He denied that he has requested the plaintiff to advance the
loan. According to defendant after receipt of said amount of
Rs.25,00,000/, he surprised to know that same has been paid by
plaintiff by falsely representing that plaintiff is holding valid license of
money lending and therefore insisted upon the defendant to keep the
said amount as loan from plaintiff. Hence, defendant had no choice but
to issue said three cheques for Rs.8,00,000/, 8,00,000/ and 9,00,000/
respectively. In view of above pleading defendant denied all other
adverse contents of plaint.
10. In view of rival pleading of parties, learned predecessor
Shri S.N. Yadav has framed issues (Exh.12) and I recorded findings
thereon for the reasons stated as under.
ISSUES FINDINGS
1. Whether the plaintiff is entitled for
recovery of amount of Rs.24,71,392/ with
interest @ 18% p.a. on Rs.19,04,000/
from the date of filing of the suit till its
realization?
…Nil
2. Whether defendant proves defendant
proves that the plaintiff is carrying on
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money lending business without license in
violation of section 13 of the Maharashtra
Money Lending (Regulation) Act,2014?
…Nil
3. Whether this court has jurisdiction to try
the suit?
…No
4. What order and decree? …As per final order
REASONS
AS TO ISSUE No.3:
11. In order to prove its case, plaintiff has examined four
witnesses as under :
PW1 Mr. Jitendra Meghji Chhadva Plaintiff
PW2 Mr. Nikhil Kailashchandra
Sirsat
Sr. Manager, Canara Bank,
Byculla (E) Branch
PW3 Ms. Jyotsnarani Nayak Officer, Canara Bank, Dadar
(W) Branch
PW4 Mr. Aspi Adi Kerawalla Manager, The Zoroastrian Co
op. Bank Ltd.
12. In rebuttal defendant has not examined himself or any
witness on his behalf. Heard learned counsel of both parties. PW1/
plaintiff has reproduced all contents of plaint in his chiefexamination.
Plaintiff has filed documentary evidence : certified copies of (i)
certificate dt.29/8/2018 issued by Canara Bank, (ii) Writing dt.
5.1.2018 issued by defendant, (iii) Dishonoured cheques bearing no.
081141 & 081143, (iv) four cheques return memo dt. 4/4/2018, (v)
Notice dt.7/4/2018 issued by plaintiff, (vi) Reply dt. 24/4/2018 sent by
advocate of defendant, (vii) Bank statement of account of plaintiff.
13. Heard learned counsel of both parties. Perused written
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argument filed by learned counsel of defendant. According to plaintiff
the subject matter is commercial dispute and hence this Commercial
Court has jurisdiction. Defendant submitted that the alleged
dispute/claim is not a commercial dispute/suit and hence not
maintainable as commercial suit under the commercial division of this
court. On this point, learned counsel of plaintiff relied on case law of
Base Industries Group and anr. vs Mahesh P. Raheja and others,
Chamber Summons No.488/2018 in Comm. Execution Application
No. 63/2017 in Suit no.119/2016, dt.13th/22nd July 2018, wherein
held,
36. From this discussion the following propositions emerge :
(a) Not every loan is axiomatically a moneylending transaction
for the purposes of the 1946 or the 2014 Acts. There is no such
presumption in law.
(b) It is doing of the ‘business of moneylending’ that attracts the
provisions of the statute. In interpreting the phrase, the correct
emphasis is on the word ’business’ not ‘moneylending’. It is the
word ‘business’, and not the expression ‘moneylending’. That is
determinative. Simply but, every instance of lending money is not
moneylending. Not every lender is a Shylock.
(c) To constitute ‘business’, a single isolated instance does not,
and even several isolated stray instances do not, constitute ‘the
business of moneylending’. To be engaged in the ‘business of
moneylending’. 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’.
(d) A loan recovery action is not barred merely because there is a
loan. It has to be shown that the loan was part of ‘the business of
moneylending’.
(e) A plaintiff seeking a recovery of a loan is not required to show
that his suit is not barred by the Money Lenders Act. It is always
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for the defendant who puts up moneylending as a defence to
show that the transaction is forbidden by the Money Lenders Act.
14. On the point of “commercial dispute” the Hon’ble Supreme
Court in case law of Ambalal Sarabhai Enterprises Limited Vs. K. S.
Infraspace and another :(2020) 15 SCC 585 held that,
For a dispute to be a commercial dispute under S. 2(1) (c) (vii),
the agreement between the parties must refer to immovable
property used/being used exclusively in trade or commerce. The
word “used” occurring in S.2(1)(c)(vii) denotes “actually used”
and it cannot be either “ready for use” or “likely to be used” or “to
be used”. Merely because the property is likely to be used in
relation to trade and commerce, the same cannot be a ground to
attract jurisdiction of Commercial Court. Such a wide
interpretation would defeat the object of Commercial Courts Act
with regard to speedy disposal of commercial disputes
thereunder. In present case, there was nothing on record to show
that at the time when the agreement to sell concerned came to be
executed, the property was being exclusively used in trade and
commerce so as to bring the dispute within the ambit of S. 2(1)
(c)(vii) of Commercial Courts Act. Consequently, the impugned
order of High Court directing Commercial Court to return the
plaint for its presentation before the appropriate court was
proper.
15. Hon’ble Bombay High Court in case law of Glasswood
Realty Pvt. Ltd. and others .v/s. Chandravilas Kailashkumar Kothari
: 2021 SCC Online Bom 5032 : (2022) 1 Bom CR 527, held
9. The disputes which are in the nature of ordinary transactions
of merchants, business, financers and traders will fall within the
purview of ‘commercial disputes’, and particularly those relating
to merchantile documents. Thus, it covers the ordinary/normal
transactions carried out by the entities mentioned in the said
clause and the term ‘merchant’ would cover a person who buy
and trade, in any commodity and therefore, the term as explained
correspond to all sort of traders, buyers and sellers. A trader is,
necessarily a person who engages himself in trading in goods;
buying and selling them at profit and the word ‘trader’ has
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received a liberal interpretation with passage of time, being not
only one who sell goods substantially in the form in which they
are bought, but it would also cover a member of stock exchange,
who buy and sell securities on the exchange floor or one who
buys and sells commodities and commodity futures for others, in
anticipation of speculative profit. A ‘financer’ as per Oxford
Dictionary is an administrator, collector of taxes or one who
isskilled in levying and managing public money or as a capitalist
concerned in financial operations. The aforesaid is an indicator
that the goal of a financier is to secure ample revenue.
17. In the wake of the above, the impugned order which take a
view that the transaction of advancing the amount as a friendly
loan is commercial in nature, is an erroneous finding as a solitary
transaction of advancing loan, on friendly terms, unlike a
commercial lending with the prevailing market rate, would fall
short or ordinary transaction of a financer, banker. Moreso, even
the plaintiff is conscious of this position and in her response to
the Application filed for return of plaint for presentation of
appropriate court, she admit so.
16. In the present case the plaintiff is HUF dealing in business
of readymade garments. According to plaintiff, in the month of March,
2017, defendant approached to plaintiff and requested him to advance
loan to the said partnership firm – M/s Shiv Sneha Associates. In
pursuance of request of defendant, on 30/4/2017 the plaintiff has given
loan of Rs.25,00,000/ to the said partnership firm of defendant.
17. During cross examination PW1 admitted that defendant is
doing business of construction in the name of Shiv Sneha Associates.
Plaintiff has not purchased any flat from defendant.
18. Considering pleading of plaint, written statement and
evidence, the nature of transaction is not commercial transaction. There
is no trading transaction between plaintiff and defendant. Plaintiff is
not license holder money lender. The business of plaintiff is not money
lending. Thus, in view of aforesaid case law and facts of present case,
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this suit does not come under the definition of commercial dispute.
Hence, this court has no jurisdiction to entertain and try this suit.
Therefore, it is necessary to return the plaint to plaintiff to be presented
to the court in which the suit should have been instituted. The plaint
can be returned at any stage of the suit under Order VII Rule 10 and
10A of C.P.C. Hence, I answer issue no.3 in negative. Therefore, issue
no.1 & 2 are not decided & answered. I pass following order.
ORDER
The plaint stands returned to plaintiff for presentation to the
appropriate court, not being a commercial dispute.
Date : 12/10/2022.
(N.P. Tribhuwan)
Judge, City Civil Court,
Mumbai. C.R.No.32
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Dictated on : 4/10/2022.
Checked on : 4/10/2022.
Signed on : 4/10/2022.
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
12/10/2022. Mr. V. S. Shinde
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge(with CR
No.)
HHJ SHRI. N. P. TRIBHUVAN
(C.R.No.32)
Date of pronouncement of Order 12/10/2022.
Order signed by P.O. on 12/10/2022.
Order uploaded on 12/10/2022.
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