TMI Blog2014 (11) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... ns were advanced by the respondents to the appellants on the basis of negotiable instruments other than promissory notes. This is clear from the facts and circumstances of this case especially the manner in which the amounts were advanced and cheques were drawn. The fact that the cheques were forwarded by the appellants to the respondents after the loans were advanced by RTGS transfers makes no difference. The amounts were advanced by the respondents to the appellants and the cheques and the bills of exchange were issued by the appellant to the respondents as a part of one composite agreement. In other words, this agreement was entered into at the same time. This is not a case where the amounts were first advanced and thereafter the parties agreed that the borrower would draw the cheques and bills of exchange and execute the said writings. The entire arrangement was agreed upon at the same time. There is nothing on record that militates against this view. The appellant has not even pleaded anything to the contrary. It is not the appellant's case that the cheques and the bills of exchange were drawn and the writings were executed independent of the loan pursuant to any unders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased, inter-alia, upon the cheques and the bills of exchange issued in their favour by the appellant. We will, therefore, deal with the second contention first. 4. The contention that the cause of action in the summary suit is based on the loan and not on the cheques, bills of exchange and agreements in writing to pay is totally misconceived. It would be necessary to recite a few facts before dealing with the appellant's contentions. 5. Between 20th January, 2012 to 31st July, 2012, the respondents lent and advanced an aggregate sum of Rs.67 crores to the appellant by RTGS transfers. The appellant in turn issued several cheques from the period 30th November, 2012 to 31st December, 2012. Almost all the cheques were dated 31st December, 2012 with the exception of four cheques which were dated 30th November, 2012. The factum of receipt of the loan amount and issuance of cheques has been admitted to by the appellant. As is evident, a major part of the amount was to be repaid by 31st December, 2012, and some amount on 30th November, 2012. Bills of exchange were also drawn by the appellant payable to the respondents. The same were accepted. 6. Letters were addressed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment on 31st December, 2012. In fact, it may be noted that the respondents addressed another letter to the appellant on 4th January, 2013, calling upon the appellant to repay the short term loan which was due and payable and which was the admitted liability, for which cheques were drawn in favour of the respondents by the appellant. It was further stated in the said letter that they would be depositing the cheques, which they held towards repayment of the loan, retaining their right to recover the interest. Thereafter, on 16th January, 2013, as no reply was received from the appellant, the respondents addressed another letter stating therein that they were constrained to deposit the cheques held by them towards repayment and requested the appellant to ensure that the said cheques are honoured. Respondent No. 2 addressed yet another letter to the appellant dated 30th January, 2013 stating therein that the cheques towards repayment of the loan were dishonoured on presentation, for insufficiency of funds. As no response was received from the appellant, a legal notice dated 1st February, 2013 came to be addressed by the respondents' advocate to the appellant calling upon them to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a perusal of the entire plaint and the documents relied upon by the respondents, it is clearly beyond doubt that the suit is also based on the dishonoured cheques, the bills of exchange and the promises in writing to repay the loan. From a perusal of the plaint, it cannot be said that there are only stray sentences claiming repayment on the basis of dishonoured cheques. 11. The second contention is, therefore, rejected. This brings us to Mr. Chinoy's first contention that the claim is barred in view of the provisions of the Bombay Money Lenders Act, 1946. 12. It may also be noted that the summary suit was filed on 28th February, 2013; that the respondents preferred the summons for judgment in the said suit on 8th April, 2013; that in the said summons for judgment, the appellant herein filed its affidavit in reply on 20th May, 2013; and that thereafter, three more affidavits came to be filed by the appellant herein i.e. the affidavit in sur-rejoinder dated 10th July, 2013, further affidavits dated 25th July, 2013 and 4th September, 2013. For the first time in the further affidavit dated 4th September, 2013, the appellant raised the defence that the respondents were carryin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Talakram Thaokar 2010 (3) Mh.L.J. 268, in support of his contention. 14. Mr. Sen, learned Senior Counsel for the respondents refuted the submissions. He submitted that Section 2(17) cannot be read in isolation only with Section 10 of the Bombay Money-Lenders Act and that it will necessarily have to be read with Section 2(9)(f) of the said Act, in order to give it a harmonious construction. He submitted that if the interpretation as sought to be contended by Mr. Chinoy is accepted, Section 2(9)(f) including certain acts/documents from the term `loan' the provision will be rendered otiose. He submitted that it is not necessary that the negotiable instrument has to be handed over at the time when the loan is advanced as long as it is agreed by the parties to hand over the same later. He further submitted that the letters acknowledging the amount due and payable to the respondents constitute a contract and as such would make the appellant liable to pay the amounts under the dishonoured cheques. 15. The relevant provisions of the Bombay Money-Lenders Act relied upon by the parties are as follows :- 2. Definitions. (9) loan means an advance at interest whether of mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h this Act applies [including such suit pending in the court before the commencement of the Bombay Money-lenders (Amendment) Act, 1975] unless the court is satisfied that at the time when the loan or any part thereof, to which the suit relates was advanced, the money-lender held a valid licence, and if the court is satisfied that the money-lender did not hold a valid licence, it shall dismiss the suit. (2) Nothing in this section shall affect - (a) suits in respect of loans advanced by a money-lender before the date on which this Act comes into force; (b) the powers of a Court of Wards, or an Official Assignee, a receiver, an administrator or a Court under the provisions of the Presidency-towns Insolvency Act 1909, or the Provincial Insolvency Act, 1920, or any other law in force corresponding to that Act, or of a liquidator under the Companies Act, 1956, to realise the property of a money-lender. 16. The Bombay Money-Lenders Act was intended to do away with a very serious evil in our society. It was intended to keep control over money-lending transactions and to see that excessive rate of interest was not charged by money-lenders and the only way that such control co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the amounts were advanced and cheques were drawn. The fact that the cheques were forwarded by the appellants to the respondents after the loans were advanced by RTGS transfers makes no difference. The amounts were advanced by the respondents to the appellants and the cheques and the bills of exchange were issued by the appellant to the respondents as a part of one composite agreement. In other words, this agreement was entered into at the same time. This is not a case where the amounts were first advanced and thereafter the parties agreed that the borrower would draw the cheques and bills of exchange and execute the said writings. The entire arrangement was agreed upon at the same time. The cheques and bills of exchange were forwarded subsequently in accordance with and pursuant to this agreement which had already been arrived at. There is nothing on record that militates against this view. The appellant has not even pleaded anything to the contrary. It is not the appellant's case that the cheques and the bills of exchange were drawn and the writings were executed independent of the loan pursuant to any understanding arrived at subsequently. It follows therefore that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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