Akula Kondiah vs Alampalli Balkishtiah

Mohammed Ahmed Ansari, J.—The plaintiff is the appellant and has filed this second appeal against the decree of the lower appellate court, whereby (sic) suit has been dismissed. He has on April 4, 19(sic) claimed Rs. 2,052/- against the respondent on basis of a document in favour of his father (sic) the document the debtor has agreed to pay Ak(sic) Ramanna, the father, Rs. 1520/- and mortgage (sic) a house and a vacant land as security for (sic) debt. But as the transaction was unregistered the suit was filed to recover the debt amount w(sic) interest on the personal covenant contained (sic) the document.

The defence is that there was a partners (sic) between the appellant''s father and the respondents in repair works of certain bunds and godowns that the partners equally contributed mo(sic) for the aforesaid repairs; that the bund b(sic) and losses were incurred: that when the respondent went with the accounts to satisfy the appellant''s father about the losses he was forced to execute the document on May 8, 1950. The (sic) plea taken for dismissing the suit is that (sic) creditor was a moneylender, had no licence that the.suit should be dismissed under S. (sic) the Moneylenders Act due to his failure of (sic) having a licence on the relevant dates.

The trial court found the plea of undue influence false. It further held that though a moneylender the failure to have licence On the (sic) the document was written, was not fatal to (sic) claim. Licences of May 27, 1950 and of June 1953 were produced and the Court held the appellant to be disentitled only to interest and (sic) the costs. Accordingly it gave a decree for (sic) main sum of Rs. 1520/- with half the costs. (sic) lower appellate court has allowed the appellant only on the ground that the defence of undue influence was proved in the case. It appears that before the lower appellate court the objection regarding the suit being (sic) to dismissal due to the failure of not having (sic) licence when the transaction sued upon was red into, was not pressed mainly because there as then a Full Bench authority of the Hyderabad High Court in Shamshir Ali v. Ratnaji ILR 952) Hyd 95: (AIR 1952 Hyd 58) (A), that failure to have a licence would not result in the suit being dismissed. During the pendency of case second appeal there was another decision by (sic) larger Bench in Mohd. Bin Salim v Umaji, AIR (1955) Hyd 169: ( (S) AIR 1955 Hyd 113) (sic)B) (B).

In the latter Full Bench decision S.9 of the Hyderabad Money-lenders Act has been constructed as vitiating the loan in the absence of a licence. It follows that the failure to have a licence on the date the contract was entered into takes the agreement of loan void and the credits cannot file a suit to recover the debt on the basis of a subsequent licence. Consequently the appellant''s suit under the later Full Bench decision must be dismissed on the ground that his (sic)her had no licence when the document sued (sic)on was written, though he had a licence later (sic)the month of May of the same year.

Had this objection been not available the appeal would have been remanded because avoid-(sic)e of contract on ground of undue influence (sic)ssitates return of benefits under the void(sic)e contract and there was no finding as to whether the respondent had any benefit which he (sic)lid be liable to return.

The learned advocate for the appellant (sic)s not challenge the correctness of the later (sic)1 Bench decision, but he argues that due to (sic) earlier Full Bench decision his client could (sic)plead exempting circumstances under which (sic) particular loan would not require a licence, (sic)urges that according to the respondent''s case (sic)father of the appellant was his partner in (sic)ain contracts, and therefore, the deceased (sic)d be a trader within the meaning of S. 2 (9) of the Act. This sub-section reads as follows:

Trader means a person who in the ordinary (sic)se of his business buys and sells goods and property and shall also include the following (sic)on.......... a contractor.

According to this argument the loan between two such traders would be exempt; for (sic)er Section 2 (4) (g) of the same Act a loan (sic)nced by one trader to another in the ordinary course of business has been excluded from (sic) definition of ''loan''. Admittedly the plaint is (sic) for the recovery of a loan and an amendment (sic)fying the circumstances as to why such a (sic) should be exempt from the operation of the Act, would not change the cause of action, (sic) there is force in the argument that the appellant could not plead these circumstances, (sic)use according to the Full Bench decision (sic)h then existed, failure to have a licence was (sic)fatal.

There are, however, objections against giving (sic)ssion for any such amendments. Firstly (sic)se the appellant in his deposition has definitely stated that there was no partnership between his father and the respondent in the re(sic)works of the bund. Secondly, this partner(sic) would be dissolved soon after the death of (sic) appellant''s father which was in 1951, and (sic)itting an amendment of the plaint in 1957 (sic)i work injustice to the respondent because (sic)i under a dissolved partnership would be-(sic) barred by lapse of three years under Act. of the Limitation Act. The case of Pirgonda Hongonda Patil Vs. Kalgonda Shidgonda Patil and Others, , is decisive that no (sic)dment of pleading Should be allowed which would work injustice to the other side. The Advocate of the appellant says that Art. 120 would be applicable and he should be allowed to amend. I am clearly of the opinion that Art. 106of the Limitation Act is applicable to such suits and Art. 120 is therefore excluded. In these circumstances, I do not think that this appeal should succeed and is dismissed with costs of this court. Leave granted.