# SANT SARANLAL AND ANOTIIER v. PARSURAM SAHU AND OTIIERS

- **Citation:** [1966] 1 S.C.R. 335
- **Court:** Supreme Court of India
- **Decided:** 1965-08-06
- **Bench:** K. SuBBA RAo, Raghubar Dayal, R. s. BACHAWAT
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sant-saranlal-and-anotiier-v-parsuram-sahu-and-otiiers-3567
- **Pages:** 10

## Headnote

'
Bihar Money Lenders Act (3 of 1938), s. 5 and Bihar Money
~
Lenders (Regulation of Transactions) Act (Vil of 1939), s. ~Moneylender lending money in excess of mnount in registration certificateSult for recovery-Maintainability.
c
The appellants sued the respondents for recovery of money advanced
to them, and the suit was decreed. On appeal by one of the respondents,
tlte High Court held that only the 2nd appellant had lent the money,
that out of the money lent, Rs. 6000 was borrowed by the 3rd respondent and the balance by the 5th respondent against whom a decree
was not sought, that the 2nd appellant was registered as a moneylender
under s. 5 ( 4) of the Bihar Moneylenders ,'\ct, 1938 and r. 5 of the
rules made thereunder, and that since the registration certificate menD
tioned that he could transact money-lending business up to a maximum
of Ri. 4999, he could get a decree only for that sum.
In their appeal to this Court, the appellants contended that the High
Court erred in holding that a registered money-lender could not recover
by suit loans advanced in excess of the maximum amount mentioned in
•
the registration certificate .
E
HELD : A money-lender who has been registered under the Act
can sue for the recovery of a loan advanced by him during the period
his registration certificate is in force, even if at the time of advancing
the loan he had exceeded the limit of the amount mentioned in the
registration certificate as the amount up to which he could transact
money-leniling business, because, under s. 4 of the Bihar Money-lenders
•
(Regulation of Transactions) Act, 1939, it is the de facto
registration
of the money-lender under the 1938 Act which entitles him to sue for
F
the loan and not the contents of the registration ceriificate. [344 D-F]
The mere ground that a certain construction of a rule or consideration of its effect will defeat the purpose or object of the Act is not a
good ground for taking away the rights of the money-lender to sue
for the recovery of a debt due to him, when the Act itself contains
no provision authorising any limit to the loan which a money-lender
may lend. [340 EJ
G
There is no justification for holding that the object of the Act would
be defeated if the registesed money-lender could be held competent to
lend money in excess of the maximum amount mentioned in the certificate.
The various. provisions of the Act indicating the kinds of
relief which the legislature considered necessary to provide for the good
•
of debtors and the absence of any discretion in the Sub-Registrar to
refuse registration for whatever figure the money-lender wants the certificate, indicate that the limit of . the Joans to be advanced does not
H
llgure u a factor in either regulating the money-lendina transaction or
in giving relief to a debtor. [341 G; 342 A.CJ
The State Government is not competent to mako a rule fixina
the
maximum Ull01lll1 under ita rulHDalting power, and the rules framad
SUPREME COURT REPORTS
[196ti] I S.C.R.
do not, in fact, provide that a money-lender properly registcr<d as such
A
under the Act will cease to be a money-lender so registered, if he advances a loan in excess or the limit mentioned in the ccrtifi.:ate.
The
classification of moncy·lenders according to the amount of mcncy up to
which they wanted to lend. for the purposes c>f registratior fee, can
be no justification for placing any limil on the maximum ;1mount of
Jo;ins. [343 F, G)
CtVll. Al'PFLLATE Jt.'R!SDICTI0:-0 :
Civil Appeal No. 248 of
1964.
Appeal from the jud:'.menl and order dated March 3 t. l 960
of the Patna High Court in Fir't Appeal No. 65 of 1954.
N. C. C/Jarrerjee and A. K. Nag, for the appellants.
R. C. Prasad. [or respondent No. I.
The Judgment of th~ Court w:is ddivered by
Raghubar DaJal, J.
The sole point urged in this appeal under
certificate from High Court is whether a money-lender registered
under the Bihar Money-Lenders Act, 1938
(Bihar Act III of
1938). hereinafter called the Act, can sue his debtor for a

## Text

335
A
SANT SARANLAL AND ANOTIIER
v.
PARSURAM SAHU AND OTIIERS
August 6, 1965
B
[K. SuBBA RAo, RAGHUBAR DAYAL AND R. s. BACHAWAT, JJ.]
'
Bihar Money Lenders Act (3 of 1938), s. 5 and Bihar Money
~
Lenders (Regulation of Transactions) Act (Vil of 1939), s. ~Moneylender lending money in excess of mnount in registration certificateSult for recovery-Maintainability.
c
The appellants sued the respondents for recovery of money advanced
to them, and the suit was decreed. On appeal by one of the respondents,
tlte High Court held that only the 2nd appellant had lent the money,
that out of the money lent, Rs. 6000 was borrowed by the 3rd respondent and the balance by the 5th respondent against whom a decree
was not sought, that the 2nd appellant was registered as a moneylender
under s. 5 ( 4) of the Bihar Moneylenders ,'\ct, 1938 and r. 5 of the
rules made thereunder, and that since the registration certificate menD
tioned that he could transact money-lending business up to a maximum
of Ri. 4999, he could get a decree only for that sum.
In their appeal to this Court, the appellants contended that the High
Court erred in holding that a registered money-lender could not recover
by suit loans advanced in excess of the maximum amount mentioned in
•
the registration certificate .
E
HELD : A money-lender who has been registered under the Act
can sue for the recovery of a loan advanced by him during the period
his registration certificate is in force, even if at the time of advancing
the loan he had exceeded the limit of the amount mentioned in the
registration certificate as the amount up to which he could transact
money-leniling business, because, under s. 4 of the Bihar Money-lenders
•
(Regulation of Transactions) Act, 1939, it is the de facto
registration
of the money-lender under the 1938 Act which entitles him to sue for
F
the loan and not the contents of the registration ceriificate. [344 D-F]
The mere ground that a certain construction of a rule or consideration of its effect will defeat the purpose or object of the Act is not a
good ground for taking away the rights of the money-lender to sue
for the recovery of a debt due to him, when the Act itself contains
no provision authorising any limit to the loan which a money-lender
may lend. [340 EJ
G
There is no justification for holding that the object of the Act would
be defeated if the registesed money-lender could be held competent to
lend money in excess of the maximum amount mentioned in the certificate.
The various. provisions of the Act indicating the kinds of
relief which the legislature considered necessary to provide for the good
•
of debtors and the absence of any discretion in the Sub-Registrar to
refuse registration for whatever figure the money-lender wants the certificate, indicate that the limit of . the Joans to be advanced does not
H
llgure u a factor in either regulating the money-lendina transaction or
in giving relief to a debtor. [341 G; 342 A.CJ
The State Government is not competent to mako a rule fixina
the
maximum Ull01lll1 under ita rulHDalting power, and the rules framad
SUPREME COURT REPORTS
[196ti] I S.C.R.
do not, in fact, provide that a money-lender properly registcr<d as such
A
under the Act will cease to be a money-lender so registered, if he advances a loan in excess or the limit mentioned in the ccrtifi.:ate.
The
classification of moncy·lenders according to the amount of mcncy up to
which they wanted to lend. for the purposes c>f registratior fee, can
be no justification for placing any limil on the maximum ;1mount of
Jo;ins. [343 F, G)
CtVll. Al'PFLLATE Jt.'R!SDICTI0:-0 :
Civil Appeal No. 248 of
1964.
Appeal from the jud:'.menl and order dated March 3 t. l 960
of the Patna High Court in Fir't Appeal No. 65 of 1954.
N. C. C/Jarrerjee and A. K. Nag, for the appellants.
R. C. Prasad. [or respondent No. I.
The Judgment of th~ Court w:is ddivered by
Raghubar DaJal, J.
The sole point urged in this appeal under
certificate from High Court is whether a money-lender registered
under the Bihar Money-Lenders Act, 1938
(Bihar Act III of
1938). hereinafter called the Act, can sue his debtor for a loan
in excess of the amount mentioned as the maximum amc-unt up to
which he could transact business under the registration certificate
issued to him.
The facts of the case may be briefly stated.
Sant Saranlal
and Bhanuprakash Lal, plaintiffs Nos. 1 and 2 respectively, sued
defendants Nos. 1 to 4 for the recovery of Rs. 15,370 said to have
been advanced to them who constituted a partnership business
under the name and style of Banwarilal Kishanlal in 11>47.
Out
of this amount. Rs. 3,500 had been lent prior to January 17, 1950
and the balance of Rs. 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 finn.
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 trans:.ct moneylending business up to a maximum of Rs. 4,999 only.
It further
held that the fixing of this limit to the money-lending b Jsiness did
not debar plaintiff No. 2 from suing for amounts in excess of
Rs. 4, 999 in case he had really advanced Iha~ amount. The trial
Court accordingly decreed the suit for Rs. 11,870 p'us interest
pendente lite at 6% per annum.
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SARANLAL v. PARSURAM (Dayal, J.)
337
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 ouc of the amount of Rs. 11,870
only Rs. 6,000 had been taken on loan by defendant No. 3 and
the balance was taken on loan by defendant No. 5 against whom
the plaintiffs had not sought a decree. It further held that in
view of the various provisions of the Act and the rules framed
thereunder, the plaintiff could not get a decree for any sum over
Rs. 4,999.
The High Court accordingly allowed the appeal of
defendant No. 1 and set aside the decree passed by the trial Court
against defendants Nos. 1, 2 and 4 and passed a decree in favour
of plaintiff No. 2 for Rs. 4,999 against defendant No. 3 alone.
It also decreed simple interest at 6% per annum from the date of
the institution of the suit until realisation.
It is against this decree
of the High Court that the present appeal has been filed after
obtaining certificate from the High Court.
The only point urged by Mr. Chatterjee, for the appellants,
is that the High Court erred in holding that a registered moneylender could not recover by suit loans advanced in excess of the
maximum amount mentioned in the registration certificate .
E
To appreciate the contention, it will be helpful to refer to the
various provisions of the Bihar Acts affecting the question under
determination.
The Act of 1938 was enacted to regulate money-lending transactions and to grant relief to debtors in the Province of Bihar.
'Loan', according to cl. (f) of s. 2 means, inter alia, an advance
F whether of money or in kind on interest made by a money-lender.
'Money-lender', according to cl. (g) means a person ·who advances
a loan.
'Registered money-lender' according to cl. (j) means,
inter a/ia, a person to whom a registration certificate has been
granted under s. 5.
Section 3 empowers the State Government
to exempt any money-lender or class of money-lenders or any class
G of loans from the provisions of the Act.
Section 4 provides that
every Sub-Registrar shall maincain a register of money-lenders in
such form and containing such particulars as may be prescribed,
and such register would be deemed to be a public document within
the meaning of the Indian Evidence Act.
Section 5 deals with
H the registration of money-lenders and registration fee. An application for being registered as a money-lender is to be made by a
person and is to contain the particulars mentioned in sub-s. ( 1).
Clause ( e) of sub-s. (1) of s. 5 mentions 'such other particulars
338
SUPllEMB COURT REPORTS
(l96i] l S.C.R.
as may be prescribed'.
The application is to be accomf anied by
A
the prescribed registration fee and an application which does not
contain the particulars specified in sub-s. (I) is to be rejet;tcd 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 rui:ecs to be
paid by an applicant for registration. Sub-s. ( 4) makes t 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 forc1! for five
years from the date on which it is granted unless cancelkd earlier
under s. 19.
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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 ce11ain cirD
cumstances.
Section 20 provides for penalty for t·he contravention of the provisions of s. 7. Section 27 empowers Ilic State
Government to make rules prescribing the form of the re:iistration
certificate mentioned in sub-s. ( 4) of s. 5 and the parti:ulars to
be contained in an application made under sub-s. (I) of ~. 5.
E
The Bihar Money-Lenders Rules, 1938, hereinafter referred
to as the rules, defines in cl. ( c) of r. I 'maximum anount of
loans' to mean the highest total amount of loans which may remain
outstanding on any day during the period of the validi1y of the
registration certificate.
Rule 2 prescribes the form in \''hich the
register of money-lenders is to be kept.
Ruic 3 presc :ibes the
F
further particulars to be mentioned in the application for registration and one of these particulars is the amount of loans for which
certificate is wanted. Rule 4 lays down the registration fee payable.
I~ is according to the maximum amount of loans i1 respect
of which an application for certificate is made.
Rule 6 provides
that the registration certificate would be in Form TI. The relevant
G
portion of Form II for the purposes of this appeal is :
"I hereby certify that . . . has been registercc. as
a money-lender under sub-section (I) of section 5 ...
to transact money-lending business up to the maximum
amount of rupees . . . on this . . . day of ... "
H
In 1939, the Bihar Money-Lenders (Regulation of Transactions) Act, 1939 (Bihar Act VII of 1939), hereinafter <ailed the
'
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SARANLAL v. PARSURAM (Dayal, I.)
339·
A
1939 Act, was enacted to provide for the regulation of moneylending ~ransactions in the province of Bihar and to remove doubts
which had arisen regarding the validity of certain provisions of
the 1938 Act.
Section 4 of the 1939 Act is as follows :
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"Suit for recovery of loan only maintainable by registered money-lenders :-No Court shall entertain a suit
by a money-lender for the recovery of a loan advanced
by him after the commencemen~ of this Act unless such
money-lender was registered under the Bihar MoneyLenders Act, 1938, at the time when such loan was
advanced:
Provided that such a suit shall be entertainable if
the loan to which the suit relates was advanced by the
money-lender at any time before the expiration of six
months after the date of commencement of this Act and
if he is granted a certificare of registration under section
5 of the Bihar Money-Lenders Act, 1938, at any time
before the expiration of the said six months."
Of the two plaintiffs, Bhanuprakash Lal, plaintiff No. 2, wha
is held to have lent the money, obtained registration certificate
E
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.
( l) of s. 5 of the 1938 Act on that day to transact money-lending
business up to a maximum of Rs. 4,999 only. The High Court
accepted ~he contention for the respondent that in view of the
terms of the registration certificate and r. 3 (3) of the rules, BhanuF
prakash 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 Rs 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
G not be considered to be a registered money-lender for the amount
lent in excess of Rs. 4,999 and therefore, in view of s. 4 of the
1939 Ac~, could not sue for such excess amount. The High
Court accordingly granted a decree to plaintiff No. 2 for Rs. 4,999
only and did not decree his suit for the difference between
Rs. 6,000, the amount actually lent, and the limit of the loan
H
mentioned in the registration certificate.
The High Court was of
this view as it thought that allowing the money-lender to sue for
the excess amount would defeat the purpose and object of the Act.
SUPREME COURT REPORTS
[1%6] l S.C.R.
The correctness of this view of the High Court is questioned
for the appellant on the ground that there is no provis on in the
1938 Act or even in the 1939 Act which provides that a moneylender who has been registered under s. 5 of the Act can lend
money up to the limit mentioned in the registration 1:ertificate.
In fact it is urged that the Act nowhere provides that an over-all
limit to the loan advanced by a registered money-lend !r can be
fixed by the Government.
When the Act docs not p:·ovide so.
the Government cannot, by rule, fix such a limit.
Rule 3 requiring the money-lender to mention in his application the 11aximum
amount oi loan. i.e., the total amount of loans which may remain
outstanding on any day during the period of the valid:ty of the
registration certificate and r. 3 ( 3) providing for an a)plication
for the registration certificate to mention the amount of loans for
which the certificate is wanted, cannot, therefore, be said to be
rules made for carrying out the purposes of the Act but were
rules made for fiscal purposes.
The registration
fee
payable
under r. 4 is graded according to the maximum amoun: of loans
for which the certificate was wanted.
We consider the contention for the appellant sound.
The mere ground that a certain construction of a rule or consideration of its effect will defeat the purpose or object of the Act
is not a good ground for taking away the right of the moneylender to sue for the recovery of a debt due to him when the
Act itself contains no provision authorising any limit to the loan
which a money-lender may lend at a time or may not exceed by
lending further loan if the amounts outstanding at the particular
point of time had exceeded the limit laid down.
Further, the
preamble of the Act would not justify the inference that if the
contention for the appellant is accepted, the object of the Ac~
would be defeated.
The preamble is :
"Whereas it is expedient to regulate money-lending
transactions and to grant relief to debtors in the Province of Ribar ... "
The money-lending transactions are to be regulated in order to
grant relief to debtors.
What reliefs were to be granted to debtors 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 curtailinj!:
his requirement for a loan bu~ by enacting provisions which tend
to protect him from being charged exorbitant interest from any
malpractice at the time of advancing money, from not accountA
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SARANLAL V. PARSURAM (Dayal, J.)
341
l A mg 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 moneyB lender not lending money in excess of any amount fixed for him
as the maximum total amount of the loans he could advance at
any time.
The duties do not even require him to maintain any
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
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total amount of loans outstanding at any point of time and then
to advance or not to advance a loan to a borrower.
Chapter IV deals with penalty and procedure and consists of
ss. 19 to 2 I. Section 19 provides for cancellation of registration
certificate on the report of the court trying a suit to the Collector
D when the court is of opinion that the registered money-lender
has been guilty of fraud or of any contravention of the provisions
of the Act or is otherwise unfit to carry on the business of moneylending.
Section 20 provides penalty for the contravention of
the provisions of s. 7, and s. 21 provides penalty for the moneylender's or his agent's taking from a debtor at the time of advancE
ing a loan or deducting out of the principal of such loan any
salami, batta, gadiana or other exacti.ons of a similar nature by
whatever name called or known.
Section 23 makes any contract for the payment of the amount
due on a loan at any place outside the State of Bihar void, and
F s. 24 provides for the deposit of money du.e on a loan in court
if the money-lender refuses to receive it or refuses to issue a
receipt for the same.
These various provisions of the Act amply indicate the kinds
of relief which the legislature considered necessary
to provide
G for the good of debtors and to achieve which the money-lending
transactions were to be regulated.
Sub-s. ( 4) of s. 5 of the Act provides that on receipt of an
•
application for registration as a money-lender, the Sub-Registrar
must grant a registration certificate in the prescribed form to the
H
applicant except when a certificate which had been previously
granted to the applicant had been cancelled under s. 19 and the
order of cancellation be in force at the time he applied for registration again.
The absence of any discretion in the Sub-Registrar
342
SUPREME cxnaT l.EPORTS
[1966] I S.C.R.
who has authority to register persons as money-lenders to refuse
A
rcgL1tration in view of the applicant's mentioning any fancy figure
for the amount of loans for which he wants the certificate well
indicates that the limit of the loans to be advanced do not figure
as a fac:0~ of any significance in either regulating the moneyJending transaction or in giving relief to a debtor.
We arc therefore of opinion that the High Court was in error
in thinking that the object of the Act would be defeated if the
registered money-lender could be held competent to lend money
in excess 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 docs
not extend to the fixing of such a limit.
Section 27 empowers the State Government to prescribe inter a/ia
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 rulemaking power given to the State-Government is not expressed in
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the usual form, i.e., is not to the effect that the S:atc Government may make rules for the purposes of the Act.
The rulemaking power is limited to what is stated in clauses (a) to (e)
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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 arc to remain outstanding at any particular moment of
time.
It is contended for the respondents that s. 5( I )(c) provides
that every application for being registered as a money-lender is
to state such other particulars as may be prescribed and that
therefore an application had to mention the amount of the loan
for which the certificate is
wanted.
The power
to prescribe
certain particulars for the purpose of an application cannot be
deemed to include the power to fix the maximum amount of loans
which a money-lender can have outstanding on any day.
Rule
3 (iii) requires the application to mention the amount of loan for
which the certificate is wanted.
Strictly speaking, there is nothing
in this expre~sion to suggest to the applicant money-lender that
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he has to mention the maximum amount of loans which is to
remain outstanding on any particular day. The rules do not even
11
say that the registration of a money-lender for
advanein~ loans
up to a maximum amount mentioned in the certificate would make
hirn a registered money-lender for loans up to that amount only.
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SARANLAL V. PARSURAM (Dayal, J.)
343The facts that the rules require the amount of loans for which
the certificate is wanted and that the form of the registration
certificate provides for mentioning the limit of the money-lending
business up to which the money-lender can transact business, do.
not necessarily amount to a provision that the money-lender would
be deemed to be a non-registered money-lender for the purposes
B of the amount of loan outstanding in excess of that limit.
The
money-lender when he advanced money in excess of the maximum
limit may contravene the rule framed under the Act and if the
Act provides any penalty for such contravention, may be liable·
for that penalty.
In fact, ss. 19 to 21 do not provide for penalty
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for contravening any rule.
It is urged for the respondents that the State Government was
competent to fix the maximum amount of Joans to be advanced'
by a registered money-lender in view of sub-s. (3) of s. 5 which
provides that the State Government may, by rules, prescribe for
different classes of money-lenders and for differen~ areas a registration fee not exceeding Rs. 25 to be paid by an applicant for
registration. It is said that the State Government could create
different classes of money-lenders according to the amount of
money they want to advance in loans.
This provision does not empower the State Government to
limit the maximum amount of loans to be given by money-lenders
of any class.
It could, however, as it actually did,
prescribe
different registration fees for different classes of money-lenders
according to the amount of money up to which they wanted to
lend.
The classification of money-lenders for the purposes of
registration fee can be no jnstification for placing any limit on
the maximum amount of loans they could have outstandin~ 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
G 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.
H
rt 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,
344
SUPREME COURT REPORTS
[1966] I S.C.R.
but there is no impropriety in the registration of Bhanuprakash
A
Lal as a money-lender.
His application must
have
been
rn
accordance with the requirements of the Act and the rules.
The
re;: i1tration certificate was issued to him in the ordinary course.
No:hing has been shown why his registration as a money-lender
be considered 10 be not proper registration or why it be held
tha< he was not prope~ly regi,tercd under the Act.
TI1e mere
B
Caci that he contcavened any of the requirements of the licence
or "' any rule or even any provision of the Act doc> not mean
that his rcgis:ration as a money-lender under s. 5 of the Act w:is
an improper registration.
La5tly, it may be said that the view taken by the High Court
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necessitates the adding of the words 'and the loam advanced do
not wholly or partly exceed the maximum amount up to which
he w:is permitted by the registration certificate to tr:insact moneyJending business' in s. 4 of the 1939 Act.
There is no reason
why sucb an addition he made to s. 4 and make the provision
much more restricted in character.
D
We therefore do not agree with the view expressed hy the
High Court and hold that a money-lender who has been registered
under the Act can sue for the recovery of a loan advanced by
him during lhe period his registration certificate is in force, even
if at the time of advancing the loan he had exceeded the limil
E
of the amount mentioned in
1he registration
certificate as the
amount up to which he could 1ransact money-lending business.
Under the provisions of the Act it is the de facto regislration of
the money-lender which entitles him to sue for the Joan and not
the conlents of the registralion certificate.
We therefore allow the appeal and order that the decree of
the Court below be modified to the effect that plaintiff No. 2
alone is entitled to a decree for Rs. 6,000 as against defendant
No. 3 alone and that plaintiff No. 2 would be entitled to simple
interest at 6% per annum from the date of institution of the
suit until realisation of the amount.
We further order that plaintiff No. 2 will get his proportionate costs, from defendant No. 3
of the trial Court and full costs of the High Court and this
·Court.
Appeal allowed.
F
G
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