Mt. Surajbansi Kuer and Others vs Mt. Larho Kuar

Ray, J.—This appeal arises out of a suit for recovery of Rs. 1132-12-7, including principal and interest. The plaintiff according to her allegation in the plaint is a timber merchant, and this allegation is not denied in the written statement. In course of her business, as a timber merchant, she had supplied some timber to the defendants, and for the purpose of ensuring payment of price of the timber she accepted a hand note for a Bum of Rs. 651 in lieu thereof on 1st June 1928. This hand-note is Ex. 1. The money due under the hand-note was not paid, and, therefore, in course of time, on 25th May 1941, another hand-note (Ex. 2) was executed, by way of renewal, for a sum of Rs. 888 as principal, and that sum included the original liability of Rs. 651 plus interest that accrued due till that date. This hand-note (Ex. 2) also carried interest, according to the stipulation, at the rate of Re. 1 per cent, pes mensem. The present suit is for recovery of the sum aforesaid due in terms of Ex. 2.

The defendants raised various pleas in their written defences, but at the trial they stuck to one only of them, namely, the plea in bar of the suit under the provisions of Section 4, Bihar Money-lenders Act, 1989. The learned Munsif who tried the suit came to the conclusion that non-compliance with the provisions of Section 4, Bihar Money-lenders Act, was a bar to the plaintiff''s suit, and, therefore, he dismissed it so far as the suit embraced the relief for recovery of the sura due under the hand-note aforesaid, but decreed the claim for another sum of Rs. 184 odd which had also been included in the same suit, being the arrears of price of further supply of timber to the defendants. The plaintiff went up in appeal, and the defendants too filed a cross-appeal.

The appellate Court, however, took a different view, and found that Section 4, Bihar Money-lenders Act, did not apply to the case. He, therefore, decreed the plaintiff''s suit, and dismissed the defendants'' cross-appeal as against the decree for recovery of Rs. 134 odd as it was not pressed.

The defendants are appellants in this second appeal, and this appeal is confined to the plaintiff''s relief for recovery of Rs. 1132 odd under the hand-note (Ex. 2), and here too the only contention raised is one based upon Section 4, Bihar Money-lenders Act. Mr. B.N. Rai, who appears for the appellants, contends that the transaction evidenced by Ex. 2 is a loan within the meaning of Section 2, Clause (f), and the plaintiff is a money-lender within the meaning of Section 2, Clause (g), and that, therefore, the transaction in suit is one which should be governed in all its different aspects by the provisions of the Bihar Money-lenders Act. He invites our attention to an Ordinance called the Provincial Debt Laws (Temporary Validation) Ordinance 11[XI] of 1945, which validates all provincial legislations, including the Bihar Money-lenders Act, applicable to loan transactions based upon hand-notes which had hithertofore been held ultra vires of the Provincial Legislature, and the Ordinance, in its present form, is to operate with retrospective effect. For the present case before us we assume the correctness of the latter proposition that the Bihar Money-lenders Act applies to transactions under hand-notes. The limited question, however, which we are called upon to decide is the question whether to a transaction like the present Section 4 and other provisions ancillary thereto are applicable. Section 4 reads:

No Court shall entertain a suit by a moneylender for the recovery of a loan advanced by him after the commencement of this Act, unless such money-lender was registered under the Bihar Money-lenders Act, 1938, ,at the time when such loan was advanced. Provided that such suit shall be entertainable if the loan to which the suit relates was advanced by the money-lender at any time before the expiration of six months after the date of the commencement of this Act and it he is granted a certificate of registration u/s 5 of the Bihar Money-lenders Act, 1938, at any time before the expiration of the said six months.

The question, therefore, arises whether the transaction evidenced either by Ex. 1 or Ex. 2 is a loan within the meaning of Section 4, and whether the plaintiff, who is a timber merchant by profession, is a money-lender for the purpose of that section. In order to understand the ambit of operation of Section 4, Bihar Money-lenders Act, 1939, you cannot dissociate it from its association with Section 5, Money-lenders Act, 1938. The Section in terms requires registration being effected under the Act of 1938. Section 5, omitting the portions not relevant for the purpose of this appeal, reads:

Any person may make an application to be registered as a money-lender. Every such application shall be in writing and shall state (b) the name and style under which he carries on or desires to carry on business as a money-lender.

It is evident, therefore, that Section 4 is intended to apply to those persons who are moneylenders by profession, or, in other words, who carry on, or desire to do, the business of money-lending. It is apparent on the very face of the above two sections, that is, Section 4 of the Act of 1939 and Section 5 of the Act of 1938, that they were never intended to apply to cases of isolated or intermittent instances of lending, nor to similar other transactions which techincally may come within the definition of "loan" and may make the beneficiaries under the transaction come within the definition of "money-lending" for general purposes of the Act. Mr. B.N. Rai insists that the relevant words "loan" and "money-lender" must be understood in the sense assigned to them in the interpretation clause of the Act, may they occur in whatever Section and in whatever context. The Court cannot narrow down their import for the purpose of giving business efficiency to particular provisions in the Act. This argument, however, overlooks the opening words of Section 2, which reads:

In this Act, Unless there is anything repugnant in the subject or context, ''loan'' means an advance, whether of money or in kind, on interest made by a money-lender, and shall include a transaction on a bond bearing interest executed in respect of past liability and any transaction which, in substance, is a loan and ''money-lender'' means a person who advances a loan and shall include a Hindu undivided family and the legal representatives and successors-in-interest, whether by inheritance, assignment or otherwise of a person who advances a loan.

On a plain reading of this section, it is clear that any particular word defined in this Section may have a meaning more limited than that given to it in this section, if it is so warranted by the nature of the subject which the Section deals with, or by its very context. It bas to be borne in mind that whenever any meaning either wider or more limited than its natural connotation is sought to be assigned to an expression occurring in a statute, it has to be defined. Such a meaning is known as "artificial meaning." The Legislature has, therefore, to be cautious to retain its plain grammatical meaning, when placed in a particular context, its artificial meaning will produce repugnancy. The opening words of Section 2 mentioned above are intended to prevent repugnancy.

I have said above how Sections 4 and 5 cannot be dissociated, and their joint operation forces me to come to the conclusion that the Legislature never intended that a casual money lending transaction entered under unforeseen circumstances could not be enforced through Court, unless the claimant happened to be a registered money-lender.

Section 4, on the very face of it, is applicable only to transactions subsequent to the passing of this Act, and the Section says that in order to get the loan enforced in Court the lender must have been registered at the time when the loan was advanced. In my judgment a case is very easily conceivable in which a man who had not the least intention of carrying on business either in money or in kind, nor even the slightest desire to enter into even a solitary transaction of lending money in cash or kind is so placed as to be bound to take either a bond or a hand-note to ensure payment. It would be absurd to think that before doing so the Legislature wants him to run to the Sub-Registrar and get himself registered as a money-lender. Further when he goes to the Sub-registrar in order to get himself registered as a money-lender he has to fill up a form in which he has to state in writing as shown above u/s 5(b), that either he is carrying on money-lending, or he desires to carry on money-lending. The Legislature, it cannot be held, ever intended that one should make a false statement in his application for registration, If, on the other hand, he does not state that, the Registrar is entitled to refuse him registration. There is a further difficulty, which as at present advised appears to me to be unsurmountable in the appellant''s way, that according to the Section the plaintiff must have been registered at the time when the loan was advanced. Let us assume for the sake of argument, that the "loan" in Section 4 means a transaction on a bond bearing interest, executed in respect of past liability, as provided in Section 2(f) of the Act. How can the word "advance" be made applicable to such a transaction? You cannot say that a transaction was advanced. Placed in this context the word "loan" must mean what can be advanced, which may be either cash or in kind. There is a further argument which strikes me that if this transaction is a loan, it is a loan not because the hand-note was executed but not "advanced" on 25th May 1941, but because something was "advanced" previous to the commencement of this Act. To such an advancement, the section, in its very terms, is inapplicable.

In my judgment, therefore, the word "loan" and the word "money-lender," as they occur in Section 4, Bihar Money-lenders Act, 1989, and Section 5, Bihar Money-lenders Act, 1938, cannot be interpreted in the more comprehensive and artificial sense assigned to them in Section 2 of "the Act. If we do it, it would be repugnant to the very subject, and it would be inconsistent with the context and may lead to absurdity. This interpretation would bring smooth transactions in business life to a standstill. In my view, therefore, the transaction in the present suit is not a loan within the meaning of Section 4.

The only contention advanced by the defendants-appellants in support of their appeal fails. The appeal thus having no merits must be dismissed with costs.

Meredith, J.

I am of the same opinion. This is a case of a timber merchant, not of a professional money-lender. It may be that the plaintiff owing to the manner in which "money-lender" has been defined in the "Money-lenders" Act of 1989 comes technically within the definition of "money-lender." But these definitions are all to be read subject to the phrase used at the head of Section 2, namely, "In this Act, unless there is anything repugnant in the subject or context." There is nothing inconsistent in holding that the plaintiff may be a money-lender for the purposes of certain Sections of the Act while not being a money-lender for the purposes of certain other sections, namely, those sections, in which there is anything repugnant in the subject or context. Section 4 of the Act of 1939 is, in my judgment, one such section. Section 4 must be read together with Section 5 of the Act of 1938, which has not been repealed by the Act of 1939, but rather has been incorporated by Section 4 of the 1939 Act for the purposes of registration.

It is, to my mind, perfectly clear reading Section 4 together with Section 6 that these provisions with regard to registration were only intended to apply to a professional money-lender. Were it otherwise, Section 5(1)(b) could not have required the applicant for registration to set out the name and style under which he carries on or desires to carry on business as a money-lender. He must be either a money-lender by profession, or one who is intending to become so. There is, therefore, clearly repugnancy in the context of these Sections to the definition in Section 2 of a money-lender as including everyone who makes a solitary loan.

I further agree with my learned brother that in any event Section 4 can only be meant to apply to loans advanced after the commencement of the Act. Section 4 as worded does not bar a Court from entertaining suits by unregistered money-lenders for the recovery of all loans but only such loans as may have been advanced after the commencement of the Act. Under the definition in Section 2(f) "loan" may, no doubt, include a transaction on a bond bearing interest executed in respect of past liability, but the use of the word "advanced" in Section 4 here again introduces repugnancy of context, and so limits the application of the word "loan."