Case Note & Summary
The Bombay High Court, Nagpur Bench, heard a writ petition under Article 226 challenging orders passed by the Divisional Joint Registrar, Cooperative Societies, Amravati, and the District Deputy Registrar, Cooperative Societies, Akola, under the Maharashtra Money Lending (Regulation) Act, 2014. The dispute involved a sale deed dated 02/07/2012 executed by respondent Nos. 1 and 2 in favour of the petitioner. Respondent No.1 alleged that after her husband's death in 1998, she needed funds for her daughter's marriage and son's business, and one Damodhar Uttam Umale introduced her to the petitioner, who advanced a loan of Rs.7,00,000 at 3.5% interest on condition that she execute a nominal sale deed of agricultural land as security. She contended that despite repayment, the petitioner refused reconveyance. She filed an application under Section 18 of the Act before the District Deputy Registrar. The Assistant Registrar submitted an enquiry report on 29/09/2018, and the District Deputy Registrar by order dated 27/02/2019 held the sale deed illegal and directed return of the land. The petitioner's appeal was dismissed on 24/02/2020, leading to the writ petition. The petitioner argued that the authorities erred in treating the registered sale deed as a security for a money lending transaction. He claimed the burden lay on the respondents to prove the deed was not genuine and that their failure to enter the witness box warranted an adverse inference, relying on Martin Cashin, Ishwar Bhai C. Patel, and Jamila Begum. He also contended that the authorities improperly relied on electronic evidence without a certificate under Section 65-B(4) of the Indian Evidence Act, citing Ravinder Singh, and that they gave undue weight to 39 sale deed transactions involving the petitioner and his relatives. The respondents supported the findings, asserting that the authorities correctly relied on admissions in the petitioner's cross-examination and that there was no perversity. The court examined the statutory background and provisions. It observed that the Act was enacted to prevent harassment of farmer-debtors by money lenders, following frequent suicides and the inadequacy of earlier laws. Section 15 confers civil court powers on Registrars for certain purposes; Section 16 allows production of records; Section 17 deals with disposal of pledged property; and Section 18 provides for return of immovable property acquired in the course of unlicensed money lending, empowering the District Registrar to hold an enquiry. Rule 17(10) of the Maharashtra Money Lending (Regulation) Rules, 2014 permits the District Registrar or inquiry officer to examine the applicant or any other person and inspect documents to ascertain the real nature of the transaction. The court held that this statutory enquiry could not be equated with a civil suit. Consequently, the petitioner's contention that non-examination of the respondents should lead to an adverse inference was rejected, and the three cited authorities on burden of proof were found inapplicable. The court noted that seven witnesses were examined, five of whom deposed in favour of the respondents, and the petitioner's cross-examination contained admissions. The available text ends during the court's analysis, and no final operative order is included in the provided excerpt. However, the court's reasoning indicated that the challenge to the enquiry procedure and burden-of-proof arguments lacked merit.
Headnote
A) Money Lending - Regulatory Objective - Prevention of Farmer Harassment - Maharashtra Money Lending (Regulation) Act, 2014, Sections 15, 16, 17, 18 - The Act was enacted to protect farmer-debtors from harassment by money lenders following frequent farmer suicides and the inadequacy of prior legislation. It empowers statutory authorities to conduct enquiries and order return of immovable property acquired in the course of unlicensed money lending. The court noted that the enquiry is distinct from a civil suit (Paras 21-30). B) Evidence - Adverse Inference - Non-Examination of Debtor - Maharashtra Money Lending (Regulation) Rules, 2014, Rule 17(10) - The petitioner argued that non-examination of the respondent debtors warranted an adverse inference. The court rejected this, holding that the statutory enquiry under Rule 17(10) permits examination of any person and inspection of documents, and such an enquiry cannot be equated with a civil suit. The judgments in Martin Cashin and Others v. Peter J. Cashin, AIR 1938 PC 103; Ishwar Bhai C. Patel v. Harihar Behra, (1999) 3 SCC 457; and Jamila Begum v. Shami Mohd., (2019) 2 SCC 727 were held to be of no assistance to the petitioner (Para 34). C) Evidence - Electronic Evidence - Certification Requirement - Indian Evidence Act, 1872, Section 65-B(4) - The petitioner objected to reliance on mobile conversation electronic evidence in absence of a certificate under Section 65-B(4). Although this issue was raised with reliance on Ravinder Singh v. State of Punjab, (2022) 7 SCC 581, the provided excerpt does not record a specific finding on this contention (Para 13). D) Money Lending - Unlicensed Transaction - Sale Deed as Security - Maharashtra Money Lending (Regulation) Act, 2014, Section 18 - The core issue was whether the sale deed dated 02/07/2012 was executed as security for a loan advanced without valid license. The court examined the statutory scheme and noted that the District Registrar may hold an enquiry if there is reason to believe that immovable property came into the possession of a money lender as security. The court considered witness testimony and was in the process of evaluating the evidence when the provided excerpt ended (Paras 19, 26-33, 35-36).
Issue of Consideration
Whether the authorities below rightly concluded that the sale deed dated 02/07/2012 was executed by respondent Nos.1 and 2 by way of security for a loan advanced by the petitioner in the course of his business of money lending without valid licence
Law Points
- Statutory enquiry under Section 18 of Maharashtra Money Lending (Regulation) Act
- 2014 cannot be equated with a civil suit
- adverse inference for non-examination of debtor not warranted in summary enquiry under Rule 17(10)
- electronic evidence requires certificate under Section 65-B(4) of Indian Evidence Act
- 1872
- sale deed can be cancelled if executed as security for loan advanced without valid money lending licence
- Registrar has power to hold enquiry and order return of immovable property acquired in course of unlicensed money lending
