1970 (7) TMI 78 - SC - Indian Laws

Supreme Court Upholds High Court Decision on Moneylender's Act Exemption

Gajanan And Ors. Versus Seth Brindaban

The Supreme Court upheld the High Court's decision, ruling that the isolated transaction did not fall under the C.P. & Berar Moneylenders' Act and did ... - Issues Involved:1. Applicability of the C.P. & Berar Moneylenders' Act.2. Requirement of a moneylender's license for Chanda District.3. Attestation and registration of documents.4. Entitlement to claim interest due to failure to send statements of account.5. Application of the principle of res judicata.6. Validity of the registration of the three instruments.7. Liability of defendants 2 and 3.8. Decree against respondent No. 5 after attaining majority.Issue-wise Detailed Analysis:1. Applicability of the C.P. & Berar Moneylenders' Act:The trial court held that the suit was governed by the C.P. & Berar Moneylenders' Act, as the Bombay Act was prospective and inapplicable to pending cases. The High Court disagreed, stating that the plaintiff was doing moneylending business in Yeotmal District and had the requisite license for that district, making the transaction an isolated one not covered by the C.P. & Berar Moneylenders' Act.2. Requirement of a Moneylender's License for Chanda District:The defendants argued that the plaintiff needed a moneylender's license for Chanda District. The High Court found that the transaction was an isolated one and not part of a regular moneylending business in Chanda District. The plaintiff had the necessary license for Yeotmal District, where the accounts were maintained.3. Attestation and Registration of Documents:The trial court found the documents to be properly registered and lawful. The High Court upheld this, stating that the documents were duly executed and registered, binding defendants 1, 4, and 5.4. Entitlement to Claim Interest:The trial court held that the plaintiff was disentitled to claim interest due to non-compliance with the C.P. & Berar Moneylenders' Act. The High Court disagreed, noting that the Act did not apply to the isolated transaction in question.5. Application of the Principle of Res Judicata:Both the trial court and the High Court upheld that the decision in the previous suit operated as res judicata, barring re-litigation of the same issues.6. Validity of the Registration of the Three Instruments:The High Court found the three instruments to be validly registered, binding defendants 1, 4, and 5, and upheld the trial court's conclusion on this matter.7. Liability of Defendants 2 and 3:The trial court suggested that a money decree could be passed against defendants 2 and 3 if the claim was otherwise legally enforceable. The High Court, however, concluded that even a money decree could not be passed against them, and the suit against them must fail entirely.8. Decree Against Respondent No. 5 After Attaining Majority:The High Court held that a decree could be passed against respondent No. 5 even after attaining majority, as his share was bound by the mortgages.Conclusion:The Supreme Court upheld the High Court's judgment, agreeing that the isolated transaction did not require a moneylender's license for Chanda District. The suit was competent, and the plaintiff was entitled to a decree for Rs. 1,60,000 against defendants 1, 4, and 5. The appeal was dismissed without costs, and the request for separate mortgage decrees was denied as a matter of procedure and form.