Case Note & Summary
The petitioners, M/s. Ashok Commercial Enterprises and Ramesh Uttamchand Ramchandani, filed a commercial suit for recovery of Rs.50,00,000/- with interest against the respondent, Rajesh Jugraj Madhani. The petitioners claimed that the respondent approached them for a loan, which was paid via RTGS on May 27, 2015. The respondent executed a Bill of Exchange and issued post-dated cheques, which were dishonoured. The petitioners filed a summary suit under Order XXXVII CPC, which was registered as a commercial suit. The respondent raised a defence that the petitioners were money-lenders without a license under the Maharashtra Money-Lending (Regulation) Act, 2014. The trial court rejected the petitioners' application for summary judgment, holding that the defence raised a triable issue. The petitioners challenged this order in the present writ petition. The High Court examined the provisions of the Maharashtra Money-Lending (Regulation) Act, 2014 and the definition of 'money-lending' and 'loan'. It held that the transaction fell within the ambit of the Act and the petitioners did not possess a license. The court found that the defence was not moonshine or sham and raised a triable issue. Consequently, the High Court dismissed the writ petition, upholding the trial court's order.
Headnote
A) Civil Procedure - Summary Judgment - Order XXXVII CPC - Triable Issue - The court considered whether the defendant's defence that the plaintiffs were money-lenders without a license under the Maharashtra Money-Lending (Regulation) Act, 2014 constituted a triable issue entitling the defendant to leave to defend. Held that the defence raises a triable issue and the trial court correctly rejected the summary judgment application (Paras 1-20).
Issue of Consideration
Whether the trial court erred in rejecting the plaintiffs' application for summary judgment under Order XXXVII CPC on the ground that the defendant raised a triable issue regarding the plaintiffs' lack of license under the Maharashtra Money-Lending (Regulation) Act, 2014.
Final Decision
The High Court dismissed the writ petition, upholding the trial court's order rejecting the summary judgment application.
Law Points
- Summary judgment under Order XXXVII CPC
- Triable issue
- Money-lending without license
- Maharashtra Money-Lending (Regulation) Act
- 2014
- Commercial Courts Act
- 2015 Section 12A
Case Details
2023 LawText (BOM) (01) 82
WRIT PETITION NO.10573 OF 2022
Mr. Darshit Jain a/w Ms. Neuty Thakkar a/w Ms. Parichehr Zaiwalla i/b Mr. Tushar Goradia for Petitioners. Mr. Anoshak Davar a/w Mr. Nirav Shah a/w Mr. Nishant Tanna i/b M/s. Little & Co. for Respondent.
M/s. Ashok Commercial Enterprises and Ramesh Uttamchand Ramchandani
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Nature of Litigation
Commercial suit for recovery of money with interest
Remedy Sought
Petitioners sought summary judgment under Order XXXVII CPC against the respondent for recovery of Rs.50,00,000/- with interest
Filing Reason
Respondent failed to repay loan amount despite execution of Bill of Exchange and issuance of post-dated cheques which were dishonoured
Previous Decisions
Trial court rejected petitioners' application for summary judgment on August 11, 2021, holding that the defence of lack of money-lending license raised a triable issue
Issues
Whether the trial court erred in rejecting the summary judgment application under Order XXXVII CPC on the ground that the defendant raised a triable issue regarding the plaintiffs' lack of license under the Maharashtra Money-Lending (Regulation) Act, 2014.
Submissions/Arguments
Petitioners argued that the transaction was a commercial loan and not money-lending, and that the Maharashtra Money-Lending Act did not apply.
Respondent argued that the petitioners were money-lenders without a license and the suit was not maintainable.
Ratio Decidendi
The defence that the plaintiffs were money-lenders without a license under the Maharashtra Money-Lending (Regulation) Act, 2014 raises a triable issue, and therefore the trial court correctly rejected the summary judgment application under Order XXXVII CPC.
Judgment Excerpts
Order dated August 11, 2021 passed by the City Civil and Sessions Court, Mumbai, rejecting Petitioners/Plaintiffs’ application for summary judgment is the subject matter of challenge in the present Petition.
Defendant replied the notice on August 9, 2019 disputing the notice and raising the defence of Plaintiffs not possessing licence under the provisions of Maharashtra Money-Lending (Regulation) Act, 2014.
Procedural History
Petitioners filed summary suit under Order XXXVII CPC before City Civil Court, Bombay on August 30, 2019, which was registered as Commercial Suit No.134 of 2019. Defendant moved Notice of Motion for dismissal for non-compliance of pre-institution mediation under Section 12A of Commercial Courts Act, 2015, which was dismissed. Trial court rejected petitioners' application for summary judgment on August 11, 2021. Petitioners challenged this order by way of writ petition before the High Court.
Acts & Sections
- Code of Civil Procedure, 1908: Order XXXVII
- Maharashtra Money-Lending (Regulation) Act, 2014:
- Commercial Courts Act, 2015: Section 12A
