TaxTMI 
TaxTMI 
2014 (11) TMI 1273
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....be honoured on presentation. 3. The appellant, however, contends that the claim is barred in view of the provisions of Bombay Money Lenders Act, 1946 (hereinafter referred to as "the Act or the BML Act"). To substantiate the contention, the appellant also contends that the suit is based only on the loan and not on the cheques and bills of exchange admittedly drawn and accepted by the appellant. The respondents / plaintiffs answer to the contention under the BML Act is based, inter-alia, upon the cheques and the bills of exchange issued in their favour by the appellant. We will, therefore, deal with the second contention first. 4. The contention that the cause of action in the summary suit is based on the loan and not on the cheques, bills of exchange and agreements in writing to pay is totally misconceived. It would be necessary to recite a few facts before dealing with the appellant's contentions. 5. Between 20th January, 2012 to 31st July, 2012, the respondents lent and advanced an aggregate sum of Rs.67 crores to the appellant by RTGS transfers. The appellant in turn issued several cheques from the period 30th November, 2012 to 31st December, 2012. Almost all the....
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....ted 2nd January, 2013 the respondents also stated that there was an interest due on the said sum of Rs. 6 crores from 1st December, at 12% per annum as was agreed. Accordingly, the respondents called upon the appellant to repay the same forthwith, failing which, it is stated that the respondents would be constrained to take steps in order to secure the said amount. A similar letter dated 2nd January, 2013, was also sent claiming the repayment of the short term loan of a sum of Rs. 61 crores, which fell due for payment on 31st December, 2012. In fact, it may be noted that the respondents addressed another letter to the appellant on 4th January, 2013, calling upon the appellant to repay the short term loan which was due and payable and which was the admitted liability, for which cheques were drawn in favour of the respondents by the appellant. It was further stated in the said letter that they would be depositing the cheques, which they held towards repayment of the loan, retaining their right to recover the interest. Thereafter, on 16th January, 2013, as no reply was received from the appellant, the respondents addressed another letter stating therein that they were constrained to d....
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....dant and also on letters of Defendant admitting acceptance of loan and promising and agreeing to repay the said loan to the Plaintiffs, which constitutes a written contract between the Plaintiffs and the Defendant. The Defendant has therefore no defence on the merits of the case. This suit is filed as a Summary Suit under Order XXXVII Rule 2 of the Code of Civil Procedure 1908 and no relief not falling within the suit. This suit is required to be tried as a Summary Suit." (emphasis supplied) 10. Thus, from a perusal of the entire plaint and the documents relied upon by the respondents, it is clearly beyond doubt that the suit is also based on the dishonoured cheques, the bills of exchange and the promises in writing to repay the loan. From a perusal of the plaint, it cannot be said that there are only stray sentences claiming repayment on the basis of dishonoured cheques. 11. The second contention is, therefore, rejected. This brings us to Mr. Chinoy's first contention that the claim is barred in view of the provisions of the Bombay Money Lenders Act, 1946. 12. It may also be noted that the summary suit was filed on 28th February, 2013; that the respondents pr....
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....Section 2(9)(f), a loan made on the basis of a negotiable instrument must mean a negotiable instrument given at the time of the loan and not subsequently or later. He submitted that giving of a loan and issuance of cheque must be contemporaneous. He relied on the judgments in the case of Khyati Realtors Pvt. Ltd. v. M/s. Zenal Construction Pvt. Ltd. [Company Petition No. 243/2012 dated 29th August, 2013], Kaloji Talusappa Gangavathi v. Khyanagouda & Ors. 1970 (3) SCC 862 and Nanda w/o Dharam Nandanwar v. Nandkishor s/o Talakram Thaokar 2010 (3) Mh.L.J. 268, in support of his contention. 14. Mr. Sen, learned Senior Counsel for the respondents refuted the submissions. He submitted that Section 2(17) cannot be read in isolation only with Section 10 of the Bombay Money-Lenders Act and that it will necessarily have to be read with Section 2(9)(f) of the said Act, in order to give it a harmonious construction. He submitted that if the interpretation as sought to be contended by Mr. Chinoy is accepted, Section 2(9)(f) including certain acts/documents from the term `loan' the provision will be rendered otiose. He submitted that it is not necessary that the negotiable instrument has ....
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....uit to which this Act applies" means any suit or proceeding- (a) for the recovery of a loan made after the date on which the Act comes into force; (b) for the enforcement of any security taken or any agreement, made after the date on which this Act comes into force in respect of any loan made either before or after the said date; or (c) for the redemption of any security given after the date on which this Act comes into force in respect of any loan made either before or after the said date." Section 10 reads thus; "10. (1) No court shall pass a decree in favour of a money-lender in any suit to which this Act applies [including such suit pending in the court before the commencement of the Bombay Money-lenders (Amendment) Act, 1975] unless the court is satisfied that at the time when the loan or any part thereof, to which the suit relates was advanced, the money-lender held a valid licence, and if the court is satisfied that the money-lender did not hold a valid licence, it shall dismiss the suit." (2) Nothing in this section shall affect - (a) suits in respect of loans advanced by a money-lender before the date on which ....
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....ure stipulated in clauses (a) to (f2) thereof. The above suit is not hit by the Bombay Money Lenders Act in view of clause (f) of section 2(9) of the Bombay Money Lenders Act. In view of clause (f), the loans do not fall within the purview of the Act as they were advances made on the basis of the negotiable instrument as defined in the Negotiable Instruments Act, 1881 viz. the cheques and the bills of exchange. 19. In our view, in the present case, the loans were advanced by the respondents to the appellants on the basis of negotiable instruments other than promissory notes. This is clear from the facts and circumstances of this case especially the manner in which the amounts were advanced and cheques were drawn. The fact that the cheques were forwarded by the appellants to the respondents after the loans were advanced by RTGS transfers makes no difference. The amounts were advanced by the respondents to the appellants and the cheques and the bills of exchange were issued by the appellant to the respondents as a part of one composite agreement. In other words, this agreement was entered into at the same time. This is not a case where the amounts were first advanced and thereafte....