Bombay High Court
Sanjay Gopallal Mour vs Motilal Laxmichand Salecha Huf on 15 April, 2025
Author: N.J. Jamadar
Bench: N.J. Jamadar
2025:BHC-AS:17230
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 3896 OF 2025
1. Gopallal Madanlal Mour }
Aged 64 years, of Mumbai, Indian }
Inhabitant, residing at 501-502, }
Krishna Alankar, Tejpal Scheme, }
Road No. 5, Vile Parle (E), Mumbai- } .....Petitioner
400 057. } (Orig. Defendant)
V/s.
Motilal Laxmichand Salecha HUF, }
VARSHA Proprietor of M/s Mala Investment, }
DEEPAK
GAIKWAD through its Karta Motilal }
Digitally signed by
VARSHA DEEPAK
GAIKWAD
Date: 2025.04.16
Laxmichand Salecha, Occu. }
17:29:09 +0530
Business, Hindu, Indian Inhabitant, }
having its address at 44/2, Suresh }
Bhavan, Road No. 6, Jawahar }
Nagar, Goregaon (W), Mumbai-400 } ....Respondent
062. (Orig. Plaintiff)
WITH
WRIT PETITION NO. 3900 OF 2025
1. Ashadevi Gopallal Mour }
Aged 61 years, of Mumbai, Indian }
Inhabitant, residing at 501-502, }
Krishna Alankar, Tejpal Scheme, }
Road No. 5, Vile Parle (E), Mumbai- } .....Petitioner
400 057. } (Orig. Defendant)
V/s.
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Motilal Laxmichand Salecha HUF, }
Proprietor of M/s Mala Investment, }
through its Karta Motilal }
Laxmichand Salecha, Occu. }
Business, Hindu, Indian Inhabitant, }
having its address at 44/2, Suresh }
Bhavan, Road No. 6, Jawahar }
Nagar, Goregaon (W), Mumbai-400 } ....Respondent
062. (Orig. Plaintiff)
WITH
WRIT PETITION NO. 4255 OF 2025
1. Sanjay Gopallal Mour }
Aged 42 years, of Mumbai, Indian }
Inhabitant, residing at 501-502, }
Krishna Alankar, Tejpal Scheme, }
Road No. 5, Vile Parle (E), Mumbai- } .....Petitioner
400 057. } (Orig. Defendant)
V/s.
Motilal Laxmichand Salecha HUF, }
Proprietor of M/s Mala Investment, }
through its Karta Motilal }
Laxmichand Salecha, Occu. }
Business, Hindu, Indian Inhabitant, }
having its address at 44/2, Suresh }
Bhavan, Road No. 6, Jawahar }
Nagar, Goregaon (W), Mumbai-400 } ....Respondent
062. (Orig. Plaintiff)
-------------------
Mr. Girish Kedia with Krushan Kedia, for the petitioners.
Mr. Anil R. Mishra with Rihen Mishra, for the respondents.
---------------------
CORAM : N.J. JAMADAR, J.
DATED : 15TH APRIL, 2025
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JUDGMENT :
1. Rule.
2. Rule made returnable forthwith and, with the consent of
the counsel for the parties, heard finally.
3. The challenge in these petitions is to an order dated 29 th
November 2024, whereby the learned Judge, City Civil Court rejected
the Notices of Motion taken out by the petitioners / defendants for
rejection of the plaint under the Provisions of Order VII Rule 1 (d) of
the Code of Civil Procedure, 1908, on the ground that the suits were
barred by the provisions of the Maharashtra Money Lending
(Regulation) Act, 2014 (‘Money Lending Act, 2014).
4. Since these petitions raise identical questions of fact and
law, the petitions were heard together and are being decided by this
common judgment.
5. The facts in Writ Petition No. 3896 of 2025 are noted as a
lead petition.
6. The plaintiff is the Karta of Motilal Laxmichand Salecha,
HUF and proprietor of M/s Mala Investment. The plaintiff had known
the defendant who deals in the business of Marble. The plaintiff
claimed to have advanced friendly loans to the defendant, over a
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period of time, and as of 31st March 2025, the outstanding amount
towards the friendly loan was Rs.85,87,208/- The defendant had
confirmed the balance by executing balance confirmation letters at the
end of every financial year.
7. On 17th February 2016, the plaintiff addressed a notice to
the defendant demanding the repayment of the outstanding amount,
alongwith interest @ 12% pa. As the defendant denied the liability
vide reply dated 5th March 2016 and raised false contentions, the
plaintiff was constrained to institute the summary suit for recovery of
the outstanding amount alongwith interest @ 12% p.a. from the date
of institution of the suit till payment and realisation.
8. In Writ Petition No. 3900 of 2025, the Petitioner –
defendant is the wife of the Petitioner in Writ Petition No. 3896 of
2025. The facts are identical with the change that as of 31 st March
2015, the outstanding amount was allegedly Rs. 46,50,000/-.
9. In Writ Petition No. 4255 of 2025, the Petitioner –
defendant is the son of the petitioner in Writ Petition No. 3896 of
2025. In the said case, the plaintiff claimed that, as of 31 st March
2015, the total outstanding loan amount was Rs. 67,25,830.
10. The defendants took out Notices of Motion, in the
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respective suits, seeking rejection of the plaint on the ground that the
transactions in question were of illegal money lending and the plaintiff
did not have a valid money lending licence when the loans were
advanced, commencing from the year 2011. Secondly, the summary
suit to recover the amount of loan to which provisions of the Money
Lending Act, 2014 applied, is not maintainable.
11. The Notices of Motion were resisted by the plaintiff.
12. By the impugned order, the learned Judge City Civil Court,
was persuaded to reject the Notices of Motion observing, inter alia,
that at the stage of consideration for rejection of the plaint under
Order VII Rule 11 of the Code, the Court was only required to consider
the averments in the plaint and not evidence. The issues which were
sought to be raised by defendants were in the nature of defences to the
plaintiff’s claim. From the perusal of the averments in the plaint, it did
not appear that the Plaintiff was dealing in money lending business
and the provisions of the Maharashtra Money Lending Act, 2014, had
any application to the facts of the case. Therefore, the Notices of
Motion for the rejection of the plaints did not merit countenance.
13. Being aggrieved, the defendants have invoked the writ
jurisdiction.
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14 Mr. Kedia, learned counsel for the petitioners, would
submit that the learned Judge, City Civil Court, failed to appreciate the
ground of bar to the tenability of the suit, in view of the provisions
contained in the Maharashtra Money Lending Act, 2014, in a correct
perspective. Incontrovertibly, the plaintiff had advanced huge amount
on interest not only to the defendants, but to a number of persons.
From the very documents annexed to the plaint, especially the
Annexture for loans and advances, it becomes evident that a huge
amount of over Rs.19 Crores was lent on interest by Motilal
Laxmichand Salecha, HUF. The learned Judge, City Civil Court,
therefore, ought to have taken into account the documents annexed to
the plaint itself, to appreciate as to whether the transaction was one of
illegal money lending. If those documents are considered in the light of
the averments in the plaint, a clear case of money lending is made out,
urged Mr. Kedia.
15. Secondly, Mr. Kedia would urge, the learned Judge, City
Civil Court, lost sight of the fact that the plaintiff was relying upon the
licences issued under the provisions of the Money Lending Act, 2014
which indicate that the licence was first issued on 16 th January 2013. If
it was the case of the plaintiff that, the loans were advanced armed
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with the license under Money Lending Act, 2014, then the provisions
of said Act, 2014 would govern the suit for recovery of the loans so
advanced, and, in that event, the suit to recover the loans to which the
provisions of the Money Lending Act, 2014 applied, is not
maintainable as a Summary Suit.
16. To buttress this submission, Mr. Kedia placed reliance on
the judgments of this Court in the cases of ‘Sha Damji Deraj Vs. Megraj
Bhikumchand and Co.1, and ‘Vithal Krishna Shanbhag Vs. Sogmal
Nathmal and Co. Bombay’2.
17. Mr. Mishra, the learned counsel for the respondents-
plaintiffs, supported the impugned order. It was submitted that in the
income tax returns and the balance confirmations, executed by the
defendants, there was a clear acknowledgment of the liability. The
question as to whether the transaction was one of illegal money
lending cannot be decided, in the abstract. It would warrant
appreciation of evidence. Therefore, the learned Judge, City Civil
Court, was fully justified in rejecting the Notices of Motion which were
filed with an oblique motive to delay the disposal of the Summons for
Judgment taken out by the plaintiff. Therefore, the petitions deserve
1 (1958) SCC Online Bom 110
2 (1957) SCC Online Bom 72
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to be dismissed, urged Mr. Mishra.
18. At the outset, it is necessary to note that there is not much
controversy over the jural relationship between the parties. The
plaintiff claimed to have advanced friendly loans to Gopallal Mour, his
wife and son, since the year 2011. In the case of Gopallal Mour,
(Summary Suit No. 219 of 2016 @ Writ Petition No. 3896 of 2025) the
ledger account indicates that the first advance was made on 7 th June
2011. In the case of Smt Ashadevi Gopallal Mour, (Summary Suit No.
220 of 2016 @ Writ Petition No. 3900 of 2025), the first advance was
made on 9th June 2011 and in the case of Sanjay Gopallal Mour,
(Summary Suit No. 218 of 2016 @ Writ Petition No. 4255 of 2025),
the first advance was purportedly made on 18th June 2011. Nor is there
much dispute over the fact that the loans were advanced on interest.
19. The question that arises for consideration is, whether the
advances by the plaintiff to the defendants fall within the ambit of
loan, as defined under Section 2(13) of the Maharashtra Money
Lending Act, 2014. Under Sub Section (13) of Section 2, “loan” means
an advance at interest whether of money or in kind, except the
advances or loans which are excluded by clauses (a) to (m) contained
therein. Under Sub-Section (14) of Section 2 of the Maharashtra
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Money Lending Act, 2014, “money lender” means a person who carries
on the business of money-lending in the State or has his or its principal
place of such business in the State and includes a pawn-broker but
does not include the entities described in sub-clauses (i) to (xi).
20. If there is prima facie material to show that the advance is
at interest and it falls within the ambit of loan, then the enquiry
proceeds to determine whether the loan is excluded by any of the
clauses (a) to (m) of Section 2(13) of the Money Lending Act, 2014.
One of the clauses is clause (j), to which a reference was made by the
learned Judge, City Civil Court. It reads as under:
“an advance of any sum exceeding Rs.3,000/- made on the
basis of a negotiable instrument as defined in the Negotiable
Instrument Act, 1881, other than a promissory note is not the
loan under Money Lenders Act“.
21. On its plain reading, it becomes abundantly clear that to
take an advance out of the purview of the “loan”, as defined under
Sub-Section (13) of Section 2 of the Money Lending Act, 2014, it has
to be shown that the advance was on the basis of a negotiable
instrument. Thus, the advance has to be against the negotiable
instrument. If an advance is by the negotiable instrument, in
contradistinction to the advance against the negotiable instrument,
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then clause (j) of sub-Section (13) of Section 2 does not save the
advance from the ambit of the ‘loan’ governed by the provisions of
22. I am also conscious of the fact that to constitute money
lending it has to be shown that the person has been carrying on the
business of money lending. It has to be shown that there is an element
of system, continuity and repetition in transactions of lending money.
Mere multiple transactions of advances at interest do not, by
themselves, justify an inference of money-lending.
23. In the case at hand, however, the learned Judge, City Civil
Court, does not seem to have examined the challenge to the tenability
of the suits, with the seriousness and adequacy it deserved. From
perusal of the impugned order, it becomes clear the learned Judge was
of the view that the contention of the defendants that the transaction
was one of illegal money lending was in the nature of the defence of
the defendants, and, thus, cannot be taken into account.
24. It is trite that while considering the application for rejection
of the plaint, the Court is enjoined to have a meaningful and not
formalistic reading of the plaint, as a whole, including the documents
which are annexed to the plaint. To put it in other words, the
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averments in the plaint are required to be read, in the context of the
documents annexed to the plaint, to ascertain whether there is a cause
of action or suit is barred by any provision of law. ‘(Dahiben vs
Arvindbhai Kalyanji Bhanusali (Gajra) dead through legal
representative and Ors.3)
25. In the case at hand, on a reading of the plaints, alongwith
documents annexed with the plaints, it becomes evident that not only
there is a reference to the advances of money at interest to the
defendants therein, over a period of time, commencing from the year
2011 but also a list of loans and advances made by the plaintiff/HUF to
as many as 25 persons / entities aggregating to an amount of Rs.
19,13,44,541/-, including the advances to the defendants herein. This
fact was not at all examined by the learned Judge, City Civil Court.
26. At this stage, it is necessary to note that section 13 of the
Money Lending Act, 2014, contains an interdict against passing of a
decree in favour of a money-lender in any suit unless the Court is
satisfied that at the time when the loan or any part thereof, to which
the suits relates, was lent, the money-lender held a valid licence and,,
if the Court is satisfied that the money – lender did not hold a valid
licence, it shall dismiss the suit.
3 (2020) 7 SCC 366
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27. In view of the aforesaid provisions, the learned Judge, City
Civil Court ought to have examined whether on the basis of the
documents relied upon by the plaintiff himself, an inference of money
lending could be drawn.
28. This takes me to the second limb of the submission of Mr.
Kedia that the ledger accounts indicate that advances were made since
the month of June 2011 and licence under Bombay Money Lending
Act, 1946, was first issued on 16 th January 2013, ex-facie, the plaintiff
had no money lending licence. Secondly, if the plaintiff had money
lending licence w.e.f. 16 January 2013, as is evident from the licence
issued on 16 January 2013, then the advances during the said period
would be covered by the provisions of the Money Lending Act, 2014
and, resultantly, a summary suit under Order 37 of the Code would not
be maintainable.
29. Prima facie, it appears that the plaintiff- HUF had advanced
money to Gopallal Mour during the year 2013 – 2014 after issue of
licence on 16.01.2013. Likewise, the advances were made to Ashadevi
Gopallal Mour on 22nd September 2014 and to Sanjay Gopallal Mour in
the year 2013, 2014 and 2015 also.
31. It would be contextually relevant to note that the Money
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Lending Act 2014 makes certain provisions with regard to the recovery
of loan by a money-lender. Certain duties are cast on the money-lender,
including to keep accounts and furnish copies (Section 24) and deliver
statement of account and copies thereof to the debtors (Section 25).
Under Section 28 of the Act, 2014, notwithstanding anything
contained in any law for the time being in force, in any suit to which
the said Act, 2014 applies, filed by the money-lender against the
debtor, the Court shall before deciding the claim on merits, frame and
decide the issues whether the money-lender has complied with the
provisions of Sections 24 and 25 and if the Court finds that the
provisions of Sections 24 or 25 were not complied with, it may
disallow the whole or any portion of the interest found due on the
loan. Under Section 29, the Court is empowered to limit the interest
recoverable from the debtor. Section 30 empowers the Court to direct
payment of decreetal amount by installments, notwithstanding
anything contained in the Code, on an application of a judgment
debtor.
31. In the context of the provisions of Bombay Money-Lenders
Act, 1946, which were pari-materia Maharashtra Money Lending Act,
2014, in the case of Sha Damji Deraj, supra, this Court had observed
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that, in a suit to which the Money Lending Act, 1946, applied, it was
difficult, if not impossible, to apply the procedure of order 37. It was
possible to take a view that in every suit to which the Money Lenders
Act, 1946 applied and which was filed under Order 37, unconditional
leave should be granted. The other view was that the procedure under
Order 37 did not and cannot apply at all to a suit to which the Bombay
Money Lending Act, 1946, applied. Eventually, without delving into
question as to whether the provisions of Order 37 do not apply to the
suit to which the Bombay Money Lenders Act, 1946 applied, this Court
observed that it would be sufficient to say that looking to the
provisions of that Act if a suit is filed under Order 37 and if the Money
Lenders Act, 1946 applied to such a suit, in any view of the case,
unconditional leave must be given to the defendant.
32. The position which, thus, emerges is that, before the
question is examined on the touchstone of the provisions contained in
the Money Lending Act, 2014, it is necessary to first ascertain whether
any part of the claim is governed by the Money Lending Act, 2014. If
the court finds that the provisions of the Money Lending Act, 2014
apply to the suit, then, the issue of tenability of the suit as a summary
suit is required to be examined.
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33. In the case at hand, the learned Judge, City Civil Court, did
not at all examine the matter from the aforesaid perspective. The
Notices of Motion were rejected on the premise that question as to
whether the transaction was one of money lending was a matter of
defence of the defendants and was not required to be considered at the
stage of an application for rejection of the plaint under Order VII Rule
11 (d) of the Code. However, as noted above, from the very averments
in the plaint and, especially, the documents annexed to the plaint i.e.
ledger accounts and Annexures for loans and advances by the
plaintiff/HUF, the learned Judge, City Civil Court was required to
examine whether transactions in question fall within the mischief of
illegal money lending, on the one side of the spectrum, and whether
the provisions of the Maharashtra Money Lending Act, 2014 applied to
the recovery in question and, if that was the case, whether a summary
suit was maintainable, on the other side of the spectrum.
34. Since such an enquiry has not been embarked upon by
learned Judge, City Civil Court, this Court considers it appropriate to
set aside the impugned orders and remit the Notices of Motion back to
the learned Judge, City Civil Court for a fresh determination.
35. Hence, the following order.
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ORDER
i) The petitions stand partly allowed.
ii) Impugned orders stand quashed and set aside.
iii) The Notices of Motion for rejection of the plaint stand
restored to the file of learned Judge, City Civil Court.
iv) The learned Judge, City Civil Court is requested to hear and
decide the Notices of Motion for the rejection of the plaint
afresh on their own merits and in accordance with law
keeping in view the issues which arise for determination and
referred to hereinabove.
v) Parties shall appear before the learned Judge, City Civil Court
on 5th May 2025.
vi) Rule made absolute in the aforesaid terms.
vii) No costs.
(N.J. JAMADAR, J)
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