SANT SARANLAL AND ANOTHER versus PARSURAM SAHU AND OTHERS

Citation: [1966] 1 S.C.R. 335 · Decided: 06-08-1965 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

335 
A 
SANT SARANLAL AND ANOTIIER 
v. 
PARSURAM SAHU AND OTIIERS 
August 6, 1965 
B 
[K. SuBBA RAo, RAGHUBAR DAYAL AND R. s. BACHAWAT, JJ.] 
' 
Bihar Money Lenders Act (3 of 1938), s. 5 and Bihar Money 
~ 
Lenders (Regulation of Transactions) Act (Vil of 1939), s. ~Money-
lender lending money in excess of mnount in registration certificate-
Sult for recovery-Maintainability. 
c 
The appellants sued the respondents for recovery of money advanced 
to them, and the suit was decreed. On appeal by one of the respondents, 
tlte High Court held that only the 2nd appellant had lent the money, 
that out of the money lent, Rs. 6000 was borrowed by the 3rd res-
pondent and the balance by the 5th respondent against whom a decree 
was not sought, that the 2nd appellant was registered as a moneylender 
under s. 5 ( 4) of the Bihar Moneylenders ,'\ct, 1938 and r. 5 of the 
rules made thereunder, and that since the registration certificate men-
D 
tioned that he could transact money-lending business up to a maximum 
of Ri. 4999, he could get a decree only for that sum. 
In their appeal to this Court, the appellants contended that the High 
Court erred in holding that a registered money-lender could not recover 
by suit loans advanced in excess of the maximum amount mentioned in 
• 
the registration certificate . 
E 
HELD : A money-lender who has been registered under the Act 
can sue for the recovery of a loan advanced by him during the period 
his registration certificate is in force, even if at the time of advancing 
the loan he had exceeded the limit of the amount mentioned in the 
registration certificate as the amount up to which he could transact 
money-leniling business, because, under s. 4 of the Bihar Money-lenders 
• 
(Regulation of Transactions) Act, 1939, it is the de facto 
registration 
of the money-lender under the 1938 Act which entitles him to sue for 
F 
the loan and not the contents of the registration ceriificate. [344 D-F] 
The mere ground that a certain construction of a rule or considera-
tion of its effect will defeat the purpose or object of the Act is not a 
good ground for taking away the rights of the money-lender to sue 
for the recovery of a debt due to him, when the Act itself contains 
no provision authorising any limit to the loan which a money-lender 
may lend. [340 EJ 
G 
There is no justification for holding that the object of the Act would 
be defeated if the registesed money-lender could be held competent to 
lend money in excess of the maximum amount mentioned in the certi-
ficate. 
The various. provisions of the Act indicating the kinds of 
relief which the legislature considered necessary to provide for the good 
• 
of debtors and the absence of any discretion in the Sub-Registrar to 
refuse registration for whatever figure the money-lender wants the certi-
ficate, indicate that the limit of . the Joans to be advanced does not 
H 
llgure u a factor in either regulating the money-lendina transaction or 
in giving relief to a debtor. [341 G; 342 A.CJ 
The State Government is not competent to mako a rule fixina 
the 
maximum Ull01lll1 under ita rulHDalting power, and the rules framad 
SUPREME COURT REPORTS 
[196ti] I S.C.R. 
do not, in fact, provide that a money-lender properly registcr<d as such 
A 
under the Act will cease to be a money-lender so registered, if he ad-
vances a loan in excess or the limit mentioned in the ccrtifi.:ate. 
The 
classification of moncy·lenders according to the amount of mcncy up to 
which they wanted to lend. for the purposes c>f registratior fee, can 
be no justification for placing any limil on the maximum ;1mount of 
Jo;ins. [343 F, G) 
CtVll. Al'PFLLATE Jt.'R!SDICTI0:-0 : 
Civil Appeal No. 248 of 
1964. 
Appeal from the jud:'.menl and order dated March 3 t. l 960 
of the Patna High Court in Fir't Appeal No. 65 of 1954. 
N. C. C/Jarrerjee and A. K. Nag, for the appellants. 
R. C. Prasad. [or respondent No. I. 
The Judgment of th~ Court w:is ddivered by 
Raghubar DaJal, J. 
The sole point urged in this appeal under 
certificate from High Court is whether a money-lender registered 
under the Bihar Money-Lenders Act, 1938 
(Bihar Act III of 
1938). hereinafter called the Act, can sue his debtor for a loan 
in excess of the amount mentioned as the maximum amc-unt up to 
which he could transact business under the registration certificate 
issued to him. 
The facts of the case may be briefly stated. 
Sant Saranlal 
and Bhanuprakash Lal, plaintiffs Nos. 1 and 2 respec

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