TMI Blog1997 (5) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... of the limit prescribed by this section in respect of a loan to them and this they are not liable to do. The question that arises on this contention is whether what the appellants are sought to be made liable to pay is in respect of a loan within the meaning of the Act. 2. The litigation but of which this appeal arises started in 1923 and the proceedings in it have been exceedingly numerous. For the purpose of this appeal, however, it is necessary to refer to a very few of those proceedings. The respondent Durga Prasad Chamria--purchased at a Court sale in execution of a decree a property in Howrah in West Bengal for a sum of ₹ 8,61,000. He paid 1/4th of the price, namely ₹ 2,15,250 on July 14, 1920, which perhaps was the date of the purchase and the balance, ₹ 6,45,750, on August 20, 1920. Later on in the same year an agreement was arrived at between him and the appellants Radha Kissen Chamria and Moti Lal Chamria and their mother Anardeyi Sethani since deceased for the sale of the property to the latter for the same sum at which he had purchased it himself, namely, ₹ 8,61,000 but with interest at 6 3/4% per annum with annual rests calculated on the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h payment thereof. But the plaintiff will be at liberty at his option to have the decree executed without enforcing the charge. 4. It is declared that the said property shall belong to Anardeyi Sethani from the date of the decree. 5. The Receiver appointed in this suit will be discharged at once and will pass his accounts before this Court. 6. Each party will bear his or her own costs and expenses of and incidental to this suit. The Schedule 'A' above referred to. Date of payment by the plaintiff Amount. 14th July, 1920 Rs. 2,15,250-0-0 20th August, 1920 ₹ 6,45,750-0-0 --------------- Total Rs. 8,61,000-0-0 3. On March 17, 1932, after large sums had been paid under the decree the respondent Durga Prasad transferred it to the respondent Keshardeo. On October 10, 1936, Keshardeo as the assignee commenced a proceeding in execution against Radha Kissen, Moti Lal and Anardeyi. This proceeding was registered as Tit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Now a loan has been defined in Section 2(12) of the Act and the relevant portion of it is in the following terms : Loan means an advance whether of money or in kind, made on condition of repayment with interest and includes any transaction which is in substance a loan. This is admittedly not a case of an advance in kind. Nor is it a case in which there was an actual advance of money. Mr. Chatterjee appearing for the appellants, therefore, concerned himself in establishing that his clients were being made to pay moneys in respect of a transaction which is in substance a loan to them. 6. The first question is what is the transaction in this case which is in substance a loan ? On this question all that Mr. Chatterjee said was that the consent decree was itself such a transaction. He said that what had happened was that there was the agreement for sale under which Durga Prasad as the vendor was entitled to receive the stipulated price from the purchasers Radha Kissen, Moti Lal and Anardeyi and the compromise decree was really a transaction by which Durga Prasad agreed to treat the moneys due to him on account of price as a loan by him to the purchasers and repayab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were and remained unpaid purchase moneys and had not at all been converted from that character into a loan. 7. In support of his contention Mr. Chatterjee referred us to two decisions of the High Court at Calcutta. The first was Fateh Chand Mahesri v. Akimuddin Chaudhury (A). We are unable to see that this case helps Mr. Chatterjee. What had happened there was that the respondent Akimuddin had borrowed from the appellant Fateh Chand ₹ 7,000/- and as security for the repayment of that loan had executed a mortgage in favour of the latter. He had employed a large part of this loan in purchasing shares in a certain jote. Fateh Chand himself had a share in that jote. As a result of the purchase by Akimuddin, he and Fateh Chand became co-sharers. Subsequently, Fateh Chand filed a Suit for partition of the jote and that suit ended in a compromise. By that compromise Akimuddin agreed to purchase Fateh Chand's share in the jote for ₹ 2,000/- and to pay a further sum of ₹ 330/- on account of mesne profits and the costs of the suit. Pursuant to the compromise a conveyance was executed in favour of Akimuddin by Fateh Chand but Akimuddin could not pay the amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rate of money-lending. I accordingly hold that the mortgage Ex. 2 amounts in substance to a loan transaction. Mitter J., therefore, was clearly led to the conclusion to which he arrived by consideration of the fact that the parties had treated the moneys secured by the mortgage as a loan and not as unpaid price which they originally were. This was clearly established by the fact that Fateh Chand had made entries in his accounts showing that the purchase money due to him had been paid off and the same amount had become due to him on a loan. It may be that when money is due from one party to another not on an advance actually made but on other accounts a debt comes into existence but, as said by Sen J., in this very case a debt is not necessarily a loan. The parties, however, may agree to treat the money as a loan and then the transaction may in substance be a loan for the purpose of the Bengal Money Lenders Act. But there is no such agreement here. There is nothing to show that it had been intended that the original character of the moneys, namely, as unpaid price had been changed into a loan. In our view, therefore, Fateh Chand's case does not assist the appellants. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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