JUDGMENT
I.D. Dua, C.J. and T.V.R. Tatachaii, J.
(1) These two appeals (Regular First Appeals Nos 112-D and 121 Dto 1960) on behalf of the defendant are directed against the preliminary and final decrees made in the suit brought by the plaintiff mortgages for the relisation of the mortgage debt and sale of the mortgaged property.
(2) The mortgage of the property in question consisting of single storeyed five shops and rooms together with some building under construction was effected by means of a registered document (Exhibit P. 1) dated 5th February, 1951 executed by Smt. Kampla Vati Devi, defendant-appellant in favor of Lala Basant Rai son of Shri Sardari Lal and Shri Padam Chand son of L. Kidar Nath, the document having been registered on the same day. This deed was witnessed by L. Jogi Dass husband of Smt. Kampla Vati Devi and also by L. Suraj Bhan, lather of the mortgagor. At the time of registration of the mortgage deed also, L. Jogi Dass and L. Suraj Bhan were present, and indated they identified her before the Sub-Registrar, Shri S. N. Pandit. These two gentlemen were identified by one Hari Singh, son of Sbri Sardara Singh, who was personally known to the Sub Registrar. According to the endorsement made on the mortgage-deed, the mortgagor, Smt. Kampla Vati Devi, bad admitted the execution of the document after hearing and understanding its contents. The entire mortgage money of Rs. 15.000.00 was paid in the presence of the Sab Registrar in the following manner.
(3) Currency ntoes worth Rs 8,000/ , out of which Rs 5.000/ were paid by Shri Padam Chand and Rs. 3.000.00 by Sbri Basant Rai and a cheque for Rs. 7,000/ issued by Gian Chand, partner of the firm. Tannu Lal Sardari Mal in favor of Basant Rai was endorsed in favor of the mortgagor. According to the terms of this document, the mortgage was initially intended to be for a period of two years and Shri Basant Rai was stated to have paid a sum of Rs. 10.000.00 and Shri Padam Chand Rs. 5.000.00. Interest was payable at the rate of Re. 1.00 per cent per month and in the event of failure to pay interest for three months, it was to be payable at the rate of Rs. 1/4.00 per cent par month. Principal and interest were payable by the mortgagor to Shri Basant Rai and Padam Chand according to their contributions which was 10.000.00 payable by Basant Rai and Rs. 5,000.00 by Padam Chand
(4) In the written statement a preliminary objection was raised to the effect that plto No. 147.148. E block, ward No. 12, Kamla Nagar, Delhi, which was the subject matter of the alleged mortage, belonged to the erstwhile Municipal Committee, Delhi, since succeeded by the Delhi Municipal Corporation and that the defendant had only entered into an agreement of sale with the said Municipal Cemmittee, with the result that the Delhi Municipal Corporation was a necessary party, but this objection is no longer being pressed by the defendant-appelant. On the merits, it was denied that the plaintiffs were the mortgages of the plto referred to in the plaint because no sale-deed relating thereto had been executed by the owner in favor of the defendant, with the result that the defendant had no right to create any mortgage on that property. The receipt of consideration to the extent of Rs. 15.000/ was also denied. Receipt of Rs. 8.000.00 was, however, admitted. According to the defendant’s version, in 1951, she was in need of money and with the object of taking some loan, approached Basant Rai, plaintiff No, 1, through her husband. Basant Raj examined the documents relating to the plto which she had agreed to purchase from the Municipal Committee, Delhi, but finding that though the defendant had paid Rs. 16,000.00 to Bishan Sarup and Mst. Pista Devi after the transfer of their rights under the agreement of sale in respect of the plto in question and though she had also paid Rs. 8,000.00 on account of the cost of the structures, the Municipal Committee. Delhi had nto yet executed any sale-deed in her favor and that the defendant had still to pay some more money to the Municipal Committee, he declined to advance the loan. Ultimately, he was prevailed upon to give the loan on the condition that the defendant executed a deed for Ks. 15,000.00 though she would only get Rs. 8,000.00 and also if the rate of interest was payable at the rate of Rs. 1.00 per cent per month and in default, at the rate of Rs. 1/4/ per cent per month. The interest, according to the written statement was also chargeable only at the rate of 7″ per cent per annum. Payment of a sum of Rs. 6,470.00 by the defendant to the plaintiffs on account of the mortgage debt was also pleaded. In the final result, according to the written statement, only Rs 3.370.00 were due from the defendant and nto Rs. 19.400.00 as claimed by the plaintiffs in the plaint,
(5) The learned counsel for the defendant on 2nd June, 1958, made a statement before the issues in which he admitted receipt of Rs. 15.000- in all in respect of the mortgage comprising of Rs. 8,000.00 in cash and Rs. 7.000.00 by means of a cheque. The sum of Rs. 7,000.00 out of the amount received in cash was, according to this statement, paid back to plaintiff No. 1 Shri Basant Rai the same day pursuant to a promise made verbally before the execution of the deed. Out of the amount of Rs. 8.000.00 according to this statement, the defendant had paid Rs. 6.420.00 to the plaintiffs as mortgage money on different occasions, but no receipts were issued by the plaintiffs, though entries regarding these amounts were made in the shaukara books maintained by the plaintiffs. The defendant of course had no record regarding those payments.
(6) The pleadings of the parties gave rise to the following issues :- 1. Whether the defendant did nto mortgage the plto of land on which building in dispute is constructed? 2. Whether consideration for the mortgage was only Rs 8000/? 3 Whether the defendant’ made payments (a) of Rs. 7,000/ (b) Rs. 6.4701- on the fotoing of the mortgage with the plaintiff and on what dates? 4. Whether the defendant executed the mortgage deed on the following representations;- (a) that the mortgage money to be paid by the defendant was to be only Rs. 8,000.00 though formally shown as Rs. 15.000.00 in the mortgage deed? (b) that the interest chargeable was to be 7″ per cent per annum and whether this fact is proveable by the defendant ? If so, what is its effect ? 5. What is the amount of the mortgage money and intent thereon payable by the defendant to the plaintiff ? 6. Whether the plaintiff is a money-lender and as such nto entitled to maintain this suit as constituted without proper license under the Money Lenders Act. 7. Relief.
(7) The learned Subordinate Judge in a detailed and well reasoned judgment, decided under Issue No. 1 that the defendant had mortgaged the plto in question to the plaintiffs. On Issues 2 and 4, he preferred to adopt the rate of interest mentioned in Exhibit P-1 and concluded that it had nto been proved that the interest chargeable was at the rate of 7″ per cent per annum. The consideration of the mortgage amount was also held to be as stated in the deed, namely. Rs. 15,000/ and the defendant was held to have failed to prove that a sum of Rs,15,000.00 was returned to Plaintiff No. 1 as pleaded in the written statement. It may be pointed out that so far as the finding on rate of interest is concerned, the Court also ruled out admissibility of evidence showing a different rate of interest than what was stated in the mortgage deed. Issues N0s.3 and 5 were, like Issues 2 and 4, also discussed together and it was held that the defendant had paid only a sum of Rs. 5,7701- to the plaintiffs on account of the mortgage debt and nto Rs. 6,470/. The sum accordingly found payable by the defendant to the plaintiffs on account of the mortgage debt came to Rs. 19,400/.00. Issue No. 7 was decided against the defendant, it being held that the plaintiffs were nto proved to be money-lenders in the sense in which that expression had been construed by the Punjab High Court in Amur Singh v. Kuldip Sing. After going through the account, the Court ultimately granted the plaintiffs a decree for Rs. 19.400.00 with interest at the rate of 6 per cent per annum on Rs. 15.000.00 from 22nd March, 1958 to the date of payment. This preliminary decree was passed on 31st August, 1959. The final decree in the suit was made on 20th May, 1980 because the decretal amount had nto been deposited’ within the prescribed period in accordance with the preliminary decree. A prayer was, it seems, made for extension of time for paying the amount determined but this prayer was declined and the toher objections raised were construed to have been already determined during the course of the trial before the passing of the preliminary decree.
(8) Before us,on appeal the learned counsel for the appellant, Shri U. P. Malhtora, has, to begin with, questioned the conclusion of the Court below on Issue No. 6 which deals with the plea that the plaintiffs are money-lenders arid as such are nto entitled to maintain suits under the Punjab Registration of Money-Lenders’ Act, 1938, (Punjab Act No. 1II of 1938). In this Act, the expression “moneylender” has been defined to mean a person, or a firm carrying on the business of advancing loans as defined therein and it includes the legal representatives and the successors in interest whether by inheritance, assignment or toherwise, of such person or firm. By means of a proviso, the definition is held nto to apply to certain class of persons with which we are nto concerned. The crucial question, therefore, is if Plaintiff No. 1 can be held to be carrying on the business of advancing loans as defined in the Act The word ‘ loan” according to this Act means an advance whether secured or unsecured of money or in kind at interest and it includes any transaction which the court finds to be in substance a loan. The exceptions which are taken out of this definition also do nto concern us. We are thus only concerned with the narrow question whether it has been established on the record that Plaintiff No. 1 was carrying on the business of advancing loans. The Court below, as ntoiced earlier, has relied on a Bench decision of the Punjab High Court in Amur Singh’s case. The correctness of that decision has nto been questioned before us. It was laid down there that a man does nto become a moneylender within the meaning of Section 2(9) of the aforesaid Act. byreason of occasional loans to relations, friends or acquaintances, whether interest be charged or nto. Nor, it was added, does a man berome a moneylender merely because he may upon one or several isolated occasions lend money to a stranger. There must, said the Court, be a business of money-lending and the word ‘business’ imports the ntoion of system, repetition and continuity. An element of continuity and habit is therefore, essential to constitute the exercise of a profession or business. In the case in hand, it is nto contested, as observed by the Court below, that in the entries shown in Exhibt D. 1/C to D. 24/C and Exhibt D. 26 and P. 6 the name of plaintiff No. 2 does nto occur in the advances of loans to different persons. Even toherwise, we find it somewhat difficult to come to a finding of the existence of a business of advancing loans on the basis of isolated and far flung entries in these documents. By way of illustration it may be pointed out that there is one entry of Rs. 200.00 in December, 1929 and antoher entry of Rs 200/. in November, 1930. Then after a gap of six years, there is one entry in February, 1936 followed by antoher entry more than two years later in August, 1931. The next entry is in May, 1942 and then comes an entry in September, 1945. All these entries are for petty amounts. In 1946. of course there is an entry of Rs. 400/. There is antoher entry of Rs. 1.500/ in April, 1946. But this is followed by a gap of a year and a quarter. Then we come to July, 1947 when there is an entry of Rs 1.000.00 Again, we find a gap of nearly two years and the next eneries are in October, 1950 and October, 1953. In our opinion, the Court, below was right in finding that there.was no business in the sense used in the statute as the requisite continuity and repetition were lacking, and ntohing cogent has been said to persuade us . to hold differently we thus unhesitatingly agree with the conclusion of the Court below repelling the defendant appellant’s contention.
(9) The appellant’s learned’ counsel then attacked the conclusions on issuer Nos. 2 and 4. According to him, the Court below .was wrong in observing that the defendant had nto set out in his pleadings the case which she sought later to establish by leading evidence. Our attention has, in this connection, been drawn to a decision of the Calcutta High Court reported in Workmen of totis Elevator (India) (Private) Ltd., v. Fourth Industrial Tribunal, a decision of the East Punjab High Court reported in Ram Sarup v. Ram Chander, and to a decision of the Privy Council reported in Someshwar Dutt v. Tribhawan Dutt. In our opinion. the appellant’s submission is untenable. In the written statement it. was pleaded that the actual amount advanced as loan to the defendant was Rs. 8,000.00 only arid that out of the sum of Rs. 8.000.00 paid to the defendant before the Sub Registrar, the defendant duly returned the sum of Rs. 7,000.00 to plaintiff No. 1 in the same evening. In the course of the evidence, however, what was sought to be established was that the sum of Rs. 7,000.00 alleged to have been returned by the defendant to plain- tiff No. 1 on the evening of 5th February, 1951 was actully handed over to the husband of the defendant for depositing it in the bank on the following day so as to provide sufficient funds in the account of Messrs. Tannu Mal Sardari Lal in order to facilitate the payment of the amount of the cheque for Rs. b,000.00 banded over to the defendant on 5th February, 1961. This case is quite clearly different from the plea that the sum of Rs. 7,000.00 was returned by the defendant to the plaintiff on the evening of 5th February, 1951. It is of course true that, as held in the decided cases cited on behalf of the appellant, pleadings in this country, are, generally speaking, nto construed to narrowly and if the defense can reasonably and legitimately be made out from the plain reading pleadings, Courts are generally disinclined to take too technical a view of the pleas. It is also correct that according to our law of pleadings, only facts have to be pleaded and nto the evidence or the law At the same time, it must nto be forgtoten that the object of the pleadings is to see where the parties differ on facts and for that purpose to ascertain for the guidance of the parties and the Court the material facts in issue. The word “material” is meaningful and what fare material facts must depend on the circumstances of each case. It is from the pleadings that each side becomes fully alive to the facts to be controverter. Accordingly the details of the facts which are material must, in fairness, be included in the pleadings so that the opposite party is nto embarrassed or taken by surprise when the evidence is led. Too liberal construction is, therefore, nto to be adopted if it is calculated to operete harshly on the contesting opponent. By now, our legal profession has reached the stage of development when it is legitimate to expect a reasonable standard of accuracy and precision in drafting pleadings and continuous excessive indulgence in this respect may have the unsalutary effect of retarding improvement in its standard. The appropriate approach in dealing with pleadings is to construe them in a practical way, and if material facts which should reasonably have been pleaded, have been omitted, then unless there is a sufficient basis suggesting that the opposite party have nto been taken by surprise, evidence outside the pleadings should nto be allowed without their amendment in accordance with law.
(10) In the case in hand, in our view, however liberally we may construe the pleadings, it is nto possible to spell out from them the story developed in evidence in the course of the trial. In the absence of the requisite plea in the written statement there is no alternative but to rule out the evidence led as outside the pleadings and as an after thought. But this apart, even on the evidence on the record, we are far from satisfied that the story of the return of Rs. 7,000.00 as contended by the defendant, has been made out. A reference has of course been made on behalf of the appellant to certain interrogatories which, according to the counsel, show that at the earlier stage this story had been put forth. But the belated stage at which interrogatories were claimed, render them almost valueless, and certainly on the facts and circumstances of this case, the interrogatories cannto serve to supplement or to amend the pie. adings. In this connection, it is ntoeworthy that the interrogatories were given after it had become known that the plaintiffs’ account-books of the relevant period were nto available The mortgage must, therfore be held to have been effected for the sum of Rs. 15,000.00 as mentioned in the mortgage.deed.
(11) In so far as the question of interest is concerned, it is nto disputed by the learned counsel turn the respondents that interest could only be charged at the rate of 7″ per cent per annum and that the Court below was in error in holding that the defendant was nto entitled to prove that the interest chargeable was to be at the rate of 7″ per cent per annum when it was stated in the deed that the rate of interest would be I per cent. per mensern. In so far as future interest is concerned, there is no controversy before this Court.
(12) The question which has on this concession confronted this Court is the calculation of the amount of interest due from the defendant. We gave time to the counsel for the parties to sit together and calculate the amount of interest due so that the dispute may be finally settled by this Court, but they have nto been able to agree on the precise amount There also seems to be some controversy as to whether the amounts paid were towards interest or towards principal. The only appropriate course left to us, therefore, is to remit the case back to the trial Court for the purpope of calculating the amount of interest due and also how much is the amount on mortgage money and interest payable by the defendant to the plaintiffs. All toher points in the controversy have been settled between the parties
(13) For the reasons foregoing we allow buth the appeals in the terms mentioned above and setting aside the judgments and decrees of the Court below, remit the case back to the lower Court for passing preliminary decree in accordance with law and in the light of the observations made above. Further steps for passing a final decree would of course be taken in accordance with law, about which we may say ntohing at the present moment. As the main challenge against the decree of the Court below has failed, the appellant must pay to the respondents two-thirds costs of the present appeal. The costs payable in these it would be determined by the trial Court when making the preliminary decree. It would of course keep in view the fart that the principal challenge on the question of the terms of the mortgage-deed has nto been substantiated by the defendant. The parties are directed to appear in the Court below on 16th October, 1967 when also date would be given for further proceedings.