Ram Chandra Nayek vs Netai Charan Das

Bhaskar Bhattacharya, J.—This second appeal is at the instance of a Plaintiff in a suit under Bengal Money Lenders'' Act for a declaration that the disputed transaction was a loan in substance and for accounts and is directed against the judgment and decree dated June 5, 1991 passed by the learned Assistant District Judge, 3rd Court, Midnapore in Title Appeal No. 322 of 1987 thereby affirming those dated June 29, 1987 passed by the learned Munsif, 2nd Court, Tamluk in Title Suit No. 159 of 1975 thereby dismissing the suit.

The Appellants field the aforesaid suit for declaration that an apparent sale deed dated March 9, 1975 and an agreement of reconveyance dated March 10, 1975 executed by their predecessor and the Defendant No. 1 respectively constituted a loan in substance and thus prayed for relief under Sections 36, 37 and 38 of the Bengal Money Lenders'' Act. According to the Plaintiffs although Rs. 6,000.00 was mentioned as consideration, in fact their predecessor obtained a sum of Rs. 2,000.00 only as a loan. Their predecessor and after his death, they are all along in possession of the suit property.

The said suit was contested by the Defendant No. 4, the subsequent purchasers of the property from Defendant No. 1 and Defendant Nos. 2 and 3 by filing written statement thereby denying the material allegations made in the plaint and his defence was that the transaction was out and out sale with an agreement of repurchase and subsequently the Defendant No. 1 even purchased the right of predecessor of the Plaintiffs of repurchase. According to him, after the disputed transaction neither the Plaintiffs nor their predecessor possessed the suit property. The further defence of the Defendant No. 4 was that the property was sold for business purpose and as such the Bengal Money Lenders'' Act had no application.

The learned trial Judge on consideration of the materials on record held that the transaction was out and out sale and thus dismissed the suit.

Being dissatisfied, the Plaintiffs preferred an appeal being Title Appeal No. 322 of 1987 which has been dismissed by the judgment and decree impugned in the instant second appeal.

After hearing Mr. Dutta appearing in support of the appeal and Mr. Shau appearing on behalf of the Respondent, I find that the learned first appellate court while affirming the findings of the learned trial Judge did not apply the correct tests which are required to be followed in deciding such type of cases and overlooked two very important provisions contained in the Bengal Money Lenders'' Act.

Firstly, the learned first appellate court below held that the parties are bound by the statements made in the disputed deed and in view of Section 92 of the Evidence Act, parties are estopped from deviating and/or challenging the contents of the deed by oral evidence. The learned court of appeal below in making such observation totally overlooked the provision contained in Section 40(6) of the Bengal Money Lenders'' Act which authorises a Plaintiff to adduce oral evidence or make statement contradicting, varying, adding to or subtracting from the terms of the disputed document notwithstanding anything contained in Evidence Act. Therefore, the learned appellate court below did not appreciate the oral evidence in tune with Section 40(6) of the said Act and thus the finding arrived by him cannot be said to a proper finding in accordance with the provisions contained in Bengal Money Lenders'' Act.

Secondly, the learned first appellate court below held that the property was sold for purchasing a pump machine in addition to the reason of repaying loan as it appears from the deed itself. Thus, he concluded that the money was needed partly for business purpose and therefore the provisions contained in Sections 36 to 38 of the said Act have no application. In my opinion, in coming to such finding the learned court of appeal below totally misread the definition of ''commercial loan'' given in Section 2(3) of the said Act and the explanation added to the said Sub-section. The said provision is quoted hereunder:

''Commercial loan'' means a loan advanced to any person to be used by such person solely for the purpose of any business or concern relating to trade, commerce, industry, mining, planting, insurance, transport, banking or entertainment or to the occupation of wharfinger, warehouseman or contractor or any other venture of a mercantile nature whether as proprietor or principal or agent or guarantor;

Explanation - Notwithstanding anything contained in any agreement relating thereto, a loan shall not be deemed to be a commercial loan unless it is in substance loan to be used solely for any of the purposes referred to in this clause.''

As indicated earlier it is mentioned in the deed that the Plaintiffs'' predecessor was in need of money for purchasing a pump set and for repaying loan. Thus, money was taken not solely for the purpose of purchasing a pumpset so as it bring it within the definition of commercial loan. Moreover, the evidence indicates that Amulya was a cultivator. Purchase of a pumpset by a cultivator cannot be said to be an act for business purpose unless there is any evidence to show that he had business of letting out pumpsets to different persons. No such evidence is forthcoming in this case. Therefore, the learned first appellate court wrongly held that it was a case of commercial loan by totally misreading the said definition.

Under the aforesaid circumstances, the judgment delivered by the court of appeal below is vitiated by wrong application of law affecting the final conclusion and is thus liable to be set aside. The matter is thus remanded back to the court of appeal below for reconsidering the same in accordance with law on the basis of materials on record. Since the proceeding is pending for the last 24 years, the learned first appellate court is directed to dispose of the appeal within a month from the date of communication of the order.

The second appeal is thus allowed. The judgment and decree passed by the court of appeal below are se aside and the matter is remanded to the court of appeal below for fresh decision in accordance with law.

No order as to costs.