TMI Blog1965 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 11,870 was lent between January 21, 1950 and May 14, 1951. The suit was contested on various grounds. The trial court found that the various amounts were advanced for the purposes of the firm. It found that plaintiff No. 2, Bhanuprakash Lal, was a registered money-lender under the Act and the registration certificate dated January 17, 1950 stated that he had been registered as a money-lender on that day to transact money lending business up to a maximum of ₹ 4,999 only. It further held that the fixing of this limit to the money-lending business did not debar plaintiff No. 2 from suing for amounts in excess of ₹ 4,999 in case he had really advanced that amount. The trial Court accordingly decreed the suit for ₹ 11,870 plus interest pendente lite at 6% per annum. Defendant No. 1 alone filed an appeal against this decree. The High Court disagreed with the finding of the trial Court that the loans had been taken for the firm Banwarilal Kishanlal and held that they were taken by defendants Nos. 3 and 5 from plaintiff No. 2. It further held that out of the amount of ₹ 11,870 only ₹ 6,000 had been taken on loan by defendant No. 3 and the bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the prescribed registration fee and an application which does not contain the particulars specified in sub-s. (1) is to be rejected summarily. Sub-s. (3) provides that the State Government may, by rules, prescribe for different classes of money-lenders and for different areas a registration fee not exceeding twenty-five rupees to be paid by an applicant for registration. Sub-s. (4) makes it incumbent on the Sub-Registrar to whom an application is presented, to grant the registration certificate in the prescribed form to the applicant. The Sub-Registrar is to refuse grant of a certificate only where a certificate previously granted to the applicant had been cancelled under s. 19 and the order of cancellation is in force. A registration certificate granted under s. 5 remains in force for five years from the date on which it is granted unless cancelled earlier under s. 19 Section 7 lays down the duties of the registered money- lenders to maintain accounts and to give receipts. Section 19 provides for the cancellation of the registration certificate in certain circumstances. Section 20 provides for penalty for the contravention of the provisions of s. 7. Section 27, empowers the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held to have lent the money, obtained registration certificate under s. 5 (4) and r. 5 on January 17, 1950. The certificate said that he had been registered as a money- lender under sub-s. (1) of s. 5 of the 1938 Act on that day to transact money-lending business up to a maximum of ₹ 4,999 only. The High Court accepted the contention for the respondent that in view of the terms of the registration certificate and r. 3 (3 ) of the rules, Bhanuprakash must be considered to have been registered as a moneylender under the Act for advancing loans whose total amounts outstanding on any day during the period of the validity of the registration certificate was not to exceed ₹ 4,999, that in case the amount of any loan on the date it was advanced exceeded the total of the loans outstanding that day, the money-lender would not be considered to be a registered money-lender for the amount lent in excess of ₹ 4,999 and therefore, in view of s. 4 of the 1939 Act, could not sue for such excess amount. The High Court accordingly granted a decree to plaintiff No. 2 for ₹ 4,999 only and did not decree his suit for the difference between ₹ 6,000, the amount actually len ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is apparent from the contents of the Act itself. The debtor is not granted relief by any provision with respect to the amount of loan he can borrow. He is to borrow an amount he actually requires. He is not given relief by statutorily curtailing his requirement for a loan but by enacting provisions which tend to protect him from being charged exorbitant interest from any malpractice at the time of advancing money, from not accounting payments made by him and from other matters against his interests. Several sections of the Act indicate the measures for the relief of the judgment debtor which the legislature thought proper to enact. Section 7 lays down the duties of registered money-lenders to maintain accounts and give receipts. None of the duties mentioned in this section points to the registered moneylender not lending money in excess of any amount fixed for him as the maximum total amount of the loans lie could advance at any time. The duties do not even require him to maintain an),, such register of account as would indicate to him at any point of time what the total outstanding amount of the loans is. Surely he cannot be expected to check up his accounts, find out the total a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the maximum amount mentioned in the registration certificate. We have referred to the fact that the Act does not anywhere provide for the fixing of the upper limit for the loans remaining outstanding at any particular time. The rule-making power of the Government does not extend to the fixing of such a limit. Section 27 empowers the State Government to prescribe inter alia the form of the registration certificate and the particulars to be contained in an application made for the purpose of being registered as a money-lender. It is significant to note that the rule making power given to the State-Government is not expressed in the usual form, i.e., is not to the effect that the State Government may make rules for the purposes of the Act. The rulemaking power is limited to what is stated in clauses (a) to (e) of s. 27 and these clauses do not empower the State Government to prescribe the limit up to which the loans advanced by a money lender are to remain outstanding at any particular moment of time. It is contended for the respondents that s. 5(1 )(e) provides that every application for being registered as a money-lender is to state such other particulars as may be prescri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money up to which they wanted to; lend. The classification of money-lenders for the purposes of registration fee can be no justification for placing any limit on the maximum amount of loans they could have outstanding on a certain day, on penalty of being deprived of a right to sue for an amount lent in excess of such a maximum. We therefore hold that the State Government is not competent to make a rule fixing a maximum amount of outstanding loans on any day and that the rules framed do not provide that a money-lender properly registered as such under the Act will cease to be a money-lender so registered if he advances a loan in excess of the limit mentioned in the registration certificate. It has been urged for the respondent that the expression in s. 4 of the 1939 Act to the effect 'unless such money-lender was registered under the Bihar Money-Lenders Act, 1938' means ' unless such money-lender was properly registered under the Bihar Money-Lenders Act, 1938'. There is nothing wrong in this view, but there is no impropriety in the registration of Bhanuprakash Lal as a money-lender. His application must have been in accordance with the requirements of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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