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IN THE SUPREME COURT OF INDIA

CIVIL  APPELLATE JURISDICTION

CIVIL  APPEAL  NO. 4715   OF 2009 [Arising out of SLP(C) No. 742/2005]

  REGISTERED PARTNERSHIP FIRM ... APPELLANT(S)

:VERSUS:

  VALI MOHAMMAD ... RESPONDENT(S)

O R D E R

Leave granted.

The core question which arises for consideration in this appeal is as to  

whether the respondent is a money lender within the meaning of the provisions  

of  M.P.  Money Lenders  Act,  1934 (for  brevity  'the  Act').  Before  us  it  is  not  

denied or disputed that in the event it is held that the provisions of the said Act  

are applicable in the instant case, the impugned judgment must be sustained.  

Ostensibly,  the appellant  is  a  partnership firm.  It  inter  alia  carries  

business  in  seeds,  medicines,  agricultural  implements  etc.  The  appellant,  

however, accepts that whenever a person is in need of money, plaintiff lends him  

the same.  The learned Trial Judge opined that only because as and when loan is  

advanced to persons who approached the plaintiff-appellant therefor, the same  

would not mean that it is a money lender.  The High Court, however, by reason

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of  the  impugned  judgment,  noticing,  inter  alia,  that  the  plaintiff  himself  has  

admitted in paragraph 10 of  the cross-examination that he had given loan to  

about 60-70 villagers of Village Malvasa on interest at the rate of 2% per month,  

is  itself  a pointer that he is  a money lender.   It  was, therefore,  held that the  

provisions  of  Section  7  of  the  Money  Lenders  Act  were  attracted  and  in  its  

conclusion the plaintiff was found entitled to a sum of Rs.16,650/- with interest at  

the rate of 6% per annum from the date of filing of the suit.   

The appellant herein filed the aforementioned suit for recovery of a sum  

of Rs. 24,630/-. Indisputably, the suit amount was calculated on the basis of the  

interest  charged from the defendant – respondent at the rate of 2%  per month  

i.e. 24 per cent per annum.    

Mr. H.K. Puri, learned counsel for the appellant has taken us through  

the evidence. From the evidence of the appellant's witness Shri Kantilal itself, it  

would appear that a separate account book is  maintained which is  known as  

debtors' book.  He accepted that in that debtors' book, there were about 60-70  

accounts.  The debtors  mentioned in the said book of  account are villagers  of  

Village Malvasa although the partners of the appellant firm have been living in  

Ratlam.  

It has furthermore been brought on record that separate accounts are  

being maintained in respect of other persons who have not been produced before  

the Court. The partner of the appellant firm has furthermore accepted in his

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evidence that when they go for recovery of money, accounts are written on a  

piece of paper, consisting bill No. and interest. As indicated hereinbefore, it has  

furthermore been accepted that whenever persons approach the appellant firm  

for loan, the same is granted. Plaintiff's partner Kantilal has admitted that he is  

a  money  lender.  Consequently,  the  plaintiff  would  not  be  entitled  to  get  the  

interest and cost of the suit as it has not complied with the provisions of Section 7  

of the Act.  

In view of the materials brought on record and having  regard to the  

fact  that  the  High  Court  has  arrived  at  a  finding  of  fact  in  exercise  of  its  

jurisdiction under Section 96 of the Code of Civil Procedure, we find no reason  

to differ therewith.  Consequently, this appeal is dismissed with costs. Counsel's  

fee is assessed at Rs. 10,000/-.   

.......................J (S.B. SINHA)

.......................J   (DEEPAK VERMA)    NEW DELHI, JULY 27, 2009.