Case Note & Summary
The appellant, Hind Finance Industries and Investment Limited, filed a second appeal against the concurrent judgments of the trial court and first appellate court which dismissed its suit for recovery of money based on a mortgage. The appellant had advanced a loan on 14.5.1985 to the respondents, who were agriculturists. The appellant held a money lending licence (Exh.36) issued on 28.8.1985 for the period 1.8.1984 to 31.7.1985, thus covering the loan date. The courts below held that the appellant did not have a valid licence on the date of advancement and dismissed the suit. The High Court framed three substantial questions of law: (1) whether renewal of licence must be obtained before advancing the loan; (2) whether subsequent renewal covering the loan date is sufficient compliance; and (3) whether a licence is required for a suit on a mortgage. The appellant argued that the licence covered the loan date and that no licence is needed for a mortgage suit. The respondents opposed. The High Court allowed the appeal, holding that the renewal covering the loan date is sufficient and that no licence is required for a mortgage suit. The matter was remanded to the trial court for fresh disposal on merits.
Headnote
A) Money Lending - Licence Renewal - Requirement Before Loan - Bombay Money Lenders Act - The court considered whether a money lender must obtain renewal of licence before advancing a loan. Held that renewal obtained after the loan date but covering that date is sufficient compliance. (Paras 1-3) B) Money Lending - Suit on Mortgage - Licence Requirement - Bombay Money Lenders Act - The court examined whether a licence under the Act is required for a suit based on a mortgage. Held that no licence is required for a mortgage suit. (Paras 1-3)
Issue of Consideration
Whether renewal of licence under Bombay Money Lenders Act must be obtained before advancing loan, and whether subsequent renewal covering the loan date is sufficient compliance; whether licence is required for a suit on mortgage.
Final Decision
Second Appeal allowed. Judgments and decrees of both courts below set aside. Suit remanded to trial court for fresh disposal on merits in accordance with law. No order as to costs.
Law Points
- Renewal of licence under Bombay Money Lenders Act can be obtained after advancing loan if it covers the date of advancement
- Licence not required for suit on mortgage
- Substantial question of law
