TMI Blog2008 (8) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... f any, found due to the respondent in any appropriate proceeding that may be initiated by the respondent, as indicated earlier.For the reasons discussed hereinabove, we are satisfied that the appellant has been able to make out a case for interference. Accordingly, the impugned judgment and order dated September 18, 2007, passed in Company Petition No. 16 of 2005 by the learned single Bench is hereby set aside. However, it is open to the respondent-company the petitioner to move such appropriate forum for the recovery of money claimed by him. - COMPANY APPEAL NO. 5 OF 2007 - - - Dated:- 1-8-2008 - JASTI CHELAMESWAR AND ASOK POTSANGBAM, JJ. A. K. Bhattacharjee, A. Choudhury, N. Seikh, N. Deka and S. Dutta for the Appellant . R. Banerjee, K. Goswami, P. Khrime and J. Saikia for the Respondent . JUDGMENT Asok Potsangbam, J. Heard Mr. A. K. Bhattacharjee, learned senior counsel assisted by Mr. N. Deka and others, learned counsel appearing on behalf of the appellant and Mr. R. Banerjee, learned counsel for the respondent. This appeal is directed against the judgment and order dated September 18, 2007, passed by the learned single Bench in Company Petition No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent, per annum at quarterly rest thereby meaning that interest so accrued on quarterly rests shall be capitalised and thereafter the interest for the next quarterly rest would be against the principal sum plus interest which has already been capitalised, and this capitalisation and compound interest is to go on till the total outstanding amount is liquidated. As a result of the aforesaid practice, it is stated and claimed by the respondent in the company petition that the amount indicated below had become due for payment by the appellant to the respondent : Rs. ( i ) Admitted outstanding sum as on 31-3-2004 : 1,04,16,326.84 ( ii ) Further interest at the rate 22% per annum : 24,92,831.83 Total 1,29,09,158.67 5. It is noticeable from the records that a sum of Rs. 35 lakhs was offered by the appellant to settle the outstanding due, but the same was not accepted by the respondent and the respondent, in its turn, made another offer for an amount of Rs. 70 lakhs for a one-time settlement but that was not acceptable to the appellant. After having failed the effort for one-time settlement, the respondent-company fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : ( a ) With regard to the contention of the respondent in its rejoinder-affidavit that there was an agreement dated January 5, 2000, between the parties providing interest at 24 per cent, per annum with quarterly rests against an advance/loan of Rs. 15 lakhs to the appellant, it was explained and clarified by the appellant that the aforesaid loan of Rs. 15 lakhs had already been liquidated in 2000 itself by paying a sum of Rs. 15,08,956.33 and as such the aforesaid agreement is confined only to the advance of Rs. 15 lakhs, not to any other advance/loan. The case of the appellant is that there existed no agreement at all enabling the respondent-company to charge 22 per cent, interest per annum with quarterly rests against money/ loan advanced by the respondent to the appellant except in the case of aforesaid Rs. 15 lakhs. ( b ) The claim of the respondent that the statement of accounts relating to the outstanding due was already acknowledged by the manager (accounts) of the appellant, is strongly denied by the appellant on the ground that the manager (accounts) was not a person authorised for confirmation of statement of accounts and that it was only an acknowledgment of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be considered as confirming/admitting the statement of accounts as the manager (accounts) who received the statement of accounts was not a person authorised by the appellant-company either to confirm or admit the statement of accounts referred to above. The learned single Bench also held that the statement of accounts referred to above, was duly admitted and confirmed without any ambiguity by the appellant by acknowledging the outstanding dues with interest at 22 per cent, per annum. 10. Despite recording a clear finding that there was no agreement between the parties on the chargeable interest either compound or otherwise, the learned single Bench held that the transaction was a part of the continuing process of business relationship by which money was advanced and repaid against supply of manufactured tea from time to time. The learned single Bench also relied upon a judgment of the apex court reported in [2001] 104 COMP. Cas. 569 ; [2001] 3 SCC 71 ( Solidaire India Ltd. v. Fairgrowth Financial Services Ltd., wherein the apex court held that even if there is no agreement between the parties on the rate of interest, interest claimed by one of the parties in the trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not at all been decided by the learned single Bench, leave alone any discussion on this issue in any part of the impugned order and as such, submits the appellant, the impugned order is liable to be set aside. 14. We have perused the impugned judgment and order and we find that the issue referred to above was neither discussed nor decided by the learned single Bench. We find sufficient force in the submission of learned counsel for the appellant. 15. Mr. A. K. Bhattarjee, learned senior counsel has also raised another issue that advance of money/loan with 22 per cent, interest at quarterly rest by the respondent to the appellant and others, is nothing but money lending and such business of money lending is within the scope and meaning of money lending/money lender as defined in the Assam Money Lenders' Act, 1934 (hereinafter referred to as "the Act"). Admittedly, the respondent, in the course of its business, used to advance money to the tea planers and tea manufactures for future supply of manufactured tea with stipulation that such amount of money given as advance/loan would bear interest at 22 per cent, per annum with quarterly rest which, in fact, is indisputedly m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s more or less confined his arguments mainly on the aforesaid three issues and as such, it may not elaborately require reference to other facts and contentions. 18. Mr. R. Banerjee, learned counsel appearing for the respondent/petitioner submits that though the business of the respondent as tea broker is to procure tea manufactured by the tea planters for sale at the Tea Auction Centre, Guwahati, money is always advanced to the tea planters for the purpose of getting a commitment from the tea planters that their products would be sold only through the respondent and money so advanced to 'such tea planters is realised from the sale proceeds of tea at the Tea Auction Centre, Guwahati. 19. With regard to the interest of 22 per cent, charged against the amount advanced to the appellant with quarterly rests (compound interest), Mr. Banerjee submits that the same is not disputed in the transaction between the parties and rather it was confirmed and admitted by the appellant in its letter dated May 20, 2004 and as such the outstanding amount already accepted/confirmed by the appellant is liable to be paid to the respondent. Secondly, Mr. Banerjee has also taken us to K series anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cludes any bond bearing interest executed in respect of past liabilities and any transaction which is in substance a loan, but does not include ( a ) a loan to, or by, or a deposit with, any Society or Association registered under the Societies Registration Act, 1860 (Act 21 of 1860) or under any other law relating to public, religious or charitable objects, ( b ) a loan advanced before or after the commencement of this Act ( i ) by a Co-operative Life Insurance Society ; ( ii ) by a bank which has been declared to be a notified bank under section 2A whether or not such bank was declared to be a notified bank at the time the loan was advanced, ( c ) a loan advanced by Life Insurance Corporation of India, Financial Corporation of India or any other corporate body ;" 22. The crux of the matter rests with the understanding of the definition of "money lender" as defined in section 2(1) of the Act and whether the activities of the respondent, as discussed above, fall within the definition of "money lender" or not. We must find out whether it is possible, without any aid or reference to any other, to understand and interpret the definition of "money lender" and "loan". Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tea Auction Centre at Guwahati ; ( iv ) There will be maintained as open, mutual, current account between the parties." 23. Thus, the respondent, a tea broker, whose stated object does not include advancing of money/loan/money lending with compound interest, admittedly engaging itself in advancing money/loan with interest higher than the interest fixed by the RBI for banks and financial institutions and that too with compound interest. Further, it is also noticed from the record that indisputedly the respondent-company had advanced money/loan with interest to 19 other companies, 18 of whom are tea planters in Assam and from this the irresistible conclusion is that the respondent regularly indulged or engaged itself in the business of money lending with compound interest and as such the activities of the respondent are very much within the meaning of money lender as defined under section 2(1) of the Act. 24. Coming to the issue that tea plantation or tea production is agriculture or agricultural production, we do not find any specific rebuttal by the respondent to the contention of the appellant that tea cultivation or tea production is agriculture or agricultural products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of our discussions above, the claim of the respondent-company petitioner appears to be at least a partially disputed claim both on questions of fact and law. 27. On January 4, 2008, this court recorded that pursuant to an earlier interim order dated December 10, 2007, passed in Misc. Case No. 4169 of 2007 in the present appeal the appellant deposited an amount of Rs. 30,00, 000 by three cheques drawn on the Federal Bank Ltd., Fancy Bazar Branch, Guwahati with the registry. This court further recorded that the respondent-company petitioner shall be at liberty to withdraw the same. 28. In the circumstances, in view of our conclusion that the claim of the respondent-company petitioner is only a disputed claim in part the respondent shall retain the amount and the same shall be adjusted towards the amount, if any, found due to the respondent in any appropriate proceeding that may be initiated by the respondent, as indicated earlier. 29. For the reasons discussed hereinabove, we are satisfied that the appellant has been able to make out a case for interference. Accordingly, the impugned judgment and order dated September 18, 2007, passed in Company Petition No. 16 of 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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