The plaintiff is the appellant herein. The appeal has been preferred challenging the judgment and decree rendered in O.S. No.63 of 1989 on the file of Sub Court, Srivilliputtur, wherein, a preliminary decree for a sum of Rs.58,200/-/- has been granted with 15% interest on the principal amount of Rs.15,000/-from the date of filing of the suit till realisation. In view of the fact that the appellant has asked for a recovery of an amount of Rs.1,98,212.43/- with subsequent 24% interest, the appeal has been preferred by the appellant challenging the said judgment and decree.
2. The brief case of the plaintiff is as follows:
A sum of Rs.15,000/- was obtained by the first defendant for improvement of the joint family business from the plaintiff by executing a registered mortgage deed. The plaintiff is a money lender doing money lending business. Even though a period of two years has been fixed for the repayment of the amount and redemption of the mortgage, the defendants have neither paid the interest nor the principal amount and hence the suit. It is further stated in the plaint that the defendants are not entitled to get the benefit under the Tamil Nadu Debt Relief Act and they are paying sales tax apart from having immovable properties and receiving rent from them
3. The case of the defendants are as follows:
It is true that Ex.A1, mortgage deed was executed by the first defendant but the amount mentioned in the said document is not true since only a sum of Rs.9,000/- alone was executed by the first defendant. It is further stated that in any case, the defendants are entitled to get the relief under the Tamil Nadu Money Lenders Act (26 of 57) and under Tamil Nadu Debt Relief Act 1978 (40 of
78). It was further pleaded that the interest sought for is higher excessive in any case. Hence the defendants sought for the dismissal of the suit.
4. Thereafter an additional written statement has been filed specifically raising the plea that under Section 9 and 10 of the Tamil Nadu Money Lenders Act. The suit is liable to be dismissed.
5. The following issues have been framed
1.Is the plaintiff entitled to get the amount mentioned in the plaint based upon the mortgage?
2.Is the plaintiff entitled to get the interest asked for?
3.What other relief, the plaintiff is entitled to ?
Additional Issue:
Is the suit hit by Tamil Nadu Money Lenders Act (26 of 57). On the side of the plaintiff as well as the defendants no one was examined. Ex.A1 has been marked on the side of the plaintiff which is the registered mortgage deed executed by the defendants on behalf of the plaintiff.
6. The Trial Court has rejected the contentions of the defendants that under the Tamil Nadu Money Lenders Act, the plaintiff is not entitled to the relief sought for by holding that under the even of any irregularity committed by the plaintiff only a action can be taken against the plaintiff but no relief can be granted in favour of the defendants. The Trial Court has further held that the plaintiff is entitled only for Simple Interest. The Trial Court has granted 24% interest from 16.11.1976 to 16.11.1988 and thereafter 15% interest was granted from the date of the petition to the date of realisation. The learned counsel for the appellant has submitted that at the outset, that the contentions raised in so far as the applicability of the Tamil Nadu Debt Relief Act is not pressed and he may be permitted to make his submissions on the applicability of the Tamil Nadu Money Lenders Act (26 of 57) alone is concerned.
7. The learned counsel for the appellant submitted that the definition contained in Section 2(8) of the Tamil Nadu Money Lenders Act would include any person whose main or subsidiary occupation is the business of the advancing and realising loan. Hence according to the learned counsel, the said definition is exhaustive and also in view of the admission made in the plaint by the plaintiff that she is doing money lending business, the provisions of the Act are applicable to the present case.
8. The learned counsel for the appellant further submitted that Section 9(a) of the Act provides for regular recording and maintenance of the account for each debtor indicating the date of loan, principal amount and the rate of interest charged. It also indicates that the receipt to be given to the debtor. Similarly Section 9(5) says that in a suit if the Court finds that the money lenders has not maintained the account as required under Section 9(a) of the Act, he is not entitled to get the cost of the suit. Secondly, the learned counsel for the appellant submitted that Section 20(a) of the Act provides that there cannot be any amount ordered by the Court for a sum which is higher than the principal loan. Therefore, the learned counsel submitted that there can only be at a maximum of 15,000/- towards interest which is equivalent to the principal amount. The third submission of the learned counsel for the appellant is that Section 7 of the said Act provides for interest to be charged by the money lender. Accordingly, no money lender shall charge interest at a rate exceeding the amount fixed by the Government by Notification. According to the learned counsel that the Government by Notification has fixed only a maximum of 9% and therefore using the description, the Court has to fix the interest less than the same.
9. On the contrary, the learned counsel for the respondent submitted that the duty caused under Section 9(a) is equally on the debtor in issuing receipts. The learned counsel further submitted that Section 9(5) of the Act would not be applicable since there is no finding about the non-maintaining of the accounts. The learned counsel further submitted that Section 7 also would not be applicable since the defendants has admitted to pay the accrued interest. Therefore, the learned counsel sought for the dismissal of the suit.
10. I have heard the counsel for the appellant as well as the respondents. The only question to be decided in the appeal is that as to whether the defendants are entitled to get the benefit under the Tamil Nadu Money Lenders Act or not more so when the learned counsel for the appellant has given up his arguments and contention regarding the applicability of Tamil Nadu Debt Relief Act.
11. Section 2(8) of Tamil Nadu Money Lenders Act is extracted hereunder: "Money Lender means a person whose main or subsidiary occupation is the business of advancing and realising loans, but excludes a bank or a Co-operative society."
Similarly Section 7, 9(a) and 20(a) of the said Act are extracted hereunder: Section 7:
"Interest of charges allowed to money lenders:
(1) No money lender shall charge interest on any loan, at a rate exceeding such rate as the Government may by Notification fix from time to time. Provides that the rate of interest has may be fixed by the Government correlated to the current bank rates of lending as may be fixed by the Reserve Bank of India from time to time.
(2) A money lender may demand and take from the debtor such charges and in such cases as may be prescribed.
(3) A money lender shall not demand or take form the debtor any interest, profit or the same whatever in excess of that payable under Sub Section (1). Section 9 (a) (1) "Money lender to keep books, give receipts etc. (1)Every money lender shall -
(a) Regularly record and maintain cause to be recorded and maintain an account showing for each debtor separately-
(i) The date of the loan, principal amount of the loan, the rate of interest charged on the loan and the nature of security taken, if any,
(ii) The amount of every payment received by the money lender in respect of the loan and the date of such payment.
Section 20 (a) The power of Court to limit interest recoverable in certain cases:- Notwithstanding anything contained in any agreement or in law for the time being in force, no Court shall in respect of loan where advanced before or after the date of the publication of the Tamil Nadu Money Lenders (amendment) Act, 1979, in the Tamil Nadu Government Gazette, decree on account of interest a sum greater than the principal of the loan due on the date of the decree.
12. On a perusal of Section 2(8) of the Tamil Nadu Money Lenders Act would clearly show that any person who does money lending business would be attracted by the provisions of the Act. In other words the said Section is exhaustive to include any person who indulge in the money lending business. Therefore on a reading of the said Section read with the specific averments made in the plaint that the plaintiff is doing money lending business, this Court is of the view that the plaintiff would come under the purview of the provisions of the Act.
13. In so far as the application of Section 9(1)(5) of the Act is concerned a reading of Section 9(1) makes it clear that it is mandatory on the part of the money lender to maintain the records. The very object of the Act itself is to impose certain duties and liabilities on the money lender. In other words, the Act is to protect the interest of the debtors. Therefore the word every money lender shall, as mentioned in Section 9 of the Act should be construed as mandatory and not directory. Further Section 9(1)(a) should be read with Section 9(1)(5) which would make it very clear that a duty is cast upon the money lender to prove before the Court of law that he has maintained all the records correctly in accordance with Section 9. Hence in the absence of the same and also in view of the specific plea taken in the written statement this Court is of the opinion that the defendants are entitled to get the relief under Section 9(5) of the Act.
14. In so far as the application of Section 20(a) is concerned, it is again a beneficial Section in favour of the debtor as against the money lender. In specific terms the said Section mandates that there cannot be a decree for the interest for an amount which is beyond the principal amount. Section 20(a) clearly states that notwithstanding anything contained in the agreement or any other law. Hence on a reading of the said Section, this court is of the opinion that the decree passed by the Court fixing the interest beyond the principal amount of Rs.15,000/- cannot be sustained since the same is in contravention of Section 20(a) of the Act.
15. In so far as the third contention regarding the application of Section 7 of the Act is concerned it again says that no money lender shall charge interest on any loan at a rate exceeding the amount fixed by the Government by Notification. The word shall again be construed as mandatory. Therefore there cannot be any interest of 15% on the loan amount. In this connection, the Notification produced by the learned counsel for the appellant states that in so far as secured loan there shall not be any interest not exceeding 9% p.a and the interest will be a Simple interest. The said Notification has been published in pursuant to the power conferred under Section 7(1) of the Tamil Nadu Money Lender Act, 1957. This Court finds that there is considerable force in the contention raised by the learned counsel for the appellant that when there cannot be any interest and more than 15% from the date of decree chargeable on any loan, the same will have to be made applicable to the interest to be charges after the decree. Therefore by construing the said provision, this Court is of the opinion that only a interest of 9% can be charges after the decree on the amount decreed from the date of filing of the petition till its realisation. Hence the judgment and decree of the Court below is set aside by holding that the appellant is liable to pay a sum of Rs.30,000/- and the appellant is further liable to pay the interest at a rate of 9%p.a from the date of the decree to the date of realisation. The decree of the Court below is further set aside in so far as the payment of cost is concerned. The appeal is allowed to the extent indicated above. No costs. Consequently, the connected C.M.P is closed.
cs To The Sub Court, Srivilliputtur.