Calcutta High Court
Dutta Vinimay Private Limited vs Dinesh Singh on 28 April, 2026
Author: Aniruddha Roy
Bench: Aniruddha Roy
In the High Court at Calcutta
Commercial Division
Original Side
Judgment (2)
PRESENT :
THE HON'BLE JUSTICE ANIRUDDHA ROY
IA NO. GA-COM/4/2025
In CS-COM/76/2025
DUTTA VINIMAY PRIVATE LIMITED
Vs
DINESH SINGH
For the Plaintiff : Mr. Varun Kothari, Adv.
Ms. Sayani Das, Adv.
Ms. Sreetama Biswas, Adv.
Mr. Arya Bhattacharyya, Adv.
For the Defendant : Mr. Shiv Shankar Banerjee, Adv.
Mr. Jitesh Sah, Adv.
Ms. Aishwarya Gopalakrishnan, Adv.
Mr. Siddharth Chamaria, Adv.
Heard on : April 28, 2026
Judgment on : April 28, 2026
[In Court]
ANIRUDDHA ROY, J :
FACTS :
1. The plaintiff claims to have lent and advanced money to the
defendant by virtue of several agreements. The plaint case is that
while lending money, the defendant tendered post-dated cheques by
way of security to secure the money lent and advanced by the
plaintiff. Three separate agreements are there, as the plaint case
2runs, executed by and between the parties under which the
defendant has received and accepted money lent and advanced by
the plaintiff.
2. The further plaint case is that the defendant has defaulted in paying
back the money lent and advanced by the plaintiff, which led the
plaintiff to file the instant suit.
3. The particulars of claim is mentioned in paragraph 48 to the plaint
and the reliefs show the plaintiff has claimed decree for a sum of
Rs.3,44,95,551/- and then interest thereupon.
4. This is a commercial suit. The defendant has filed its written
statement.
5. The defendant has filed three applications. The first one claiming
vacating of an interim order. Second one is for rejection of plaint
being the instant application. Third one, praying for stay of suit.
6. The instant application being IA No. GA-COM/4/2025 praying for
rejection of plaint has been taken up for consideration first.
7. Affidavits are exchanged.
SUBMISSIONS:
8. Mr. Shiv Shankar Banerjee, learned advocate appearing for the
defendant in support of his application for rejection of plaint has
taken the plea that from a plain reading of the plaint, it appears that
the plaintiff has allegedly lent and advanced money to the defendant
arising out of a commercial transaction. When the plaintiff carries
on a business of money lending, the plaintiff must have the requisite
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A.R., J.
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licence under the provisions of Bengal Money Lenders Act, 1940
(hereinafter, BML Act), which the plaintiff does not have.
9. Learned advocate, Mr. Shiv Shankar Banerjee submits that neither
in the plaint nor in any disclosure thereto, has the plaintiff disclosed
the requisite licence under the BML Act. He submits that when this
specific issue has been raised through the instant application,
claiming rejection of plaint, there also though the plaintiff has filed
its affidavit in opposition but has not come up with a case to show
that it has the requisite licence under the BML Act.
10. Referring to the definition from the BML Act, Mr. Banerjee submits
that the transaction pleaded in the plaint coupled with the three
agreements pleaded therein, would squarely show that the plaintiff
is a money lender by business within the meaning of the BML Act.
He then refers to the provisions laid down under Sections 13 and
27 of the BML Act and submits that when the plaintiff does not
have and has not produced the requisite licence, instant suit is not
maintainable and the plaint should be liable to be rejected
forthwith. He further submits that this Court should not proceed
with the suit any further and stay it immediately.
11. Referring to the provisions laid down under Order VII Rule 11 of
Code of Civil Procedure, 1908 (hereinafter, CPC), Mr. Banerjee,
learned advocate submits that on reading of the statements made in
the plaint, the plea taken by the defendant should be adjudged. At
this stage, the plea taken by the defendant in the written statement
and the application for rejection of plaint on the merits, would be
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In CS-COM/76/2025
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irrelevant and cannot be taken into consideration. He submits that
the test for exercising the power under Order VII Rule 11 of CPC is
that if the averments made in the plaint are taken in entirety, in
conjunction with the documents relied upon, would the same result
in a decree being passed. This test has been laid down by the
Hon’ble Supreme Court time and again in various judgments. The
power under Order VII Rule 11 of CPC may be exercised by the
Court at any stage of the suit. He further submits that the
provisions of Order VII Rule 11 of CPC is mandatory in nature. It
states that the plaint “shall be rejected” if any of the grounds
specified in clauses (a) to (e) are made out. If the Court finds that
the plaint does not disclose any cause of action or that the plaint is
barred by any law or that the plaint clearly shows there is no right
to sue exist in favour of the plaintiff, the Court has no option but to
reject the plaint. In support, he has relied upon a decision of this
Hon’ble Court In the Matter of: Dahiben vs. Arvindbhai Kalyanji
Bhanusali (Gajra), reported at (2020) 7 SCC 366.
12. To demonstrate that in absence of money lending licence under the
BML Act, the suit should be dismissed and should not be proceeded
with and/or stayed, Mr. Banerjee has relied upon the following
judgments:
(i) In the Matter of: Swaika Vanaspati Products Ltd. vs.
Canbank Financial Services Ltd., reported at 2000 SCC
OnLine Cal 234 = (2000) 2 Cal LJ 185 and
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(ii) In the Matter of: Urmila Kumari Bothra vs. Mr. Ashok
Chaudhury, a judgment of a co-ordinate Bench dated
November 27, 2024, rendered in GA/1/2021, CS/163/2020.
13. In the light of the above submissions, learned advocate Mr. Banerjee
appearing for the defendant prays for rejection of plaint.
14. Mr. Varun Kothari, learned advocate appearing for the plaintiff
submits that while adjudicating an application under Order VII Rule
11 of CPC, the Court shall take the statements made in the plaint to
be true and correct. Unless a clear case is made out that the plaint
is barred by law, the power under Order VII Rule 11 of CPC shall
not be exercised and the suit shall stand for trial.
15. Referring to various paragraphs from the plaint, Mr. Kothari
submits that the plaint case as it stands unless tried at the trial,
cannot be rejected summarily.
16. Mr. Kothari further submits that the judgment In the Matter of:
Urmila Kumari Bothra (Supra) is under review being RVW No.49
of 2025.
DECISION:
17. Since this is an application filed under Order VII Rule 11 of CPC,
the cardinal principle for adjudication of the same is repeated once
again. The statements made in the plaint are to be taken as correct,
true and sacrosanct. The defence, if any, taken in the written
statement or to be taken by the defendant would have no relevance
while adjudicating an application for rejection of the plaint.
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A.R., J.
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18. The defendant has raised, in the instant case, that the instant suit
is barred by law under Section 13 of BML Act. For convenience, the
provision is quoted below:
“13. Stay of suit when money-lender does not hold
licence.
(1) No Court shall pass a decree or order in favour of a money-
lender in any suit instituted by a money-lender for the
recovery of a loan advanced after the date notified under
section 8, or in any suit instituted by a money-lender for the
enforcement of an agreement entered into or security taken, or
for the recovery of any security given, in respect of such loan,
unless the Court is satisfied that, at the time or times when
the loan or any part thereof was advanced, the money-lender
held an effective licence.
(2) If during the trial of a suit to which sub-section (1) applies,
the Court finds that the money-lender did not hold such
licence, the Court shall, before proceeding with the suit,
require the money-lender to pay in the prescribed manner and
within the period to be fixed by the Court such penalty as the
Court thinks fit, not exceeding three times the amount of the
licence fee specified in section 10.
(3) If the money-lender fails to pay the penalty within the
period fixed under sub-section (2) or within such further time
as the Court may allow, the Court shall dismiss the suit: if the
money-lender pays the penalty within such period, the Court
shall proceed with the suit.
(4) The provisions of this section shall apply to a claim for a
set-off by or on behalf of a money-lender.
(5) In this section, the expression “money-lender” includes an
assignee of a money-lender, if the Court is satisfied that the
assignment was made for the purposes of avoiding the
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payment of licence fee and penalty which may be ordered to
be paid under this section.”
19. Sub-section 1 to Section 13 of BML Act, inter alia, provides that
no Court shall pass a decree or order in favour of a money lender in
any suit instituted by a money lender for the recovery of a loan
advanced after the date notified under Section 8, or in any suit
instituted by a money lender for the enforcement of an agreement
entered into or security taken, or for the recovery of any security
given, in respect of such loan, unless the Court is satisfied that, at
the time or times when the loan or any part of it was advanced, the
money lender held an effective licence.
20. On a meaningful reading of this provision, it appears to this Court
that the Court first must come to its satisfaction that the money
lender, in the instant case the plaintiff, held an effective licence. The
averments made in the plaint, inter alia, at paragraphs 3 to 9, 12,
14 and 48 read with the other paragraphs in the plaint would show
that the plaintiff has lent and advanced money by virtue of three
agreements and the defendant has received and accepted the loan
from the plaintiff. The defendant secured the loan by way of placing
post-dated cheques. It is true that the averments made in the
plaint do not specifically show that at the time of advancing the loan
whether the plaintiff had or had not the requisite effective licence
under the BML Act. Through the instant application the defendant
took a specific plea that the plaintiff does not have the requisite
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licence and as such, the instant suit is barred by law under the
provisions of the BML Act.
21. The application under Order VII Rule 11 of CPC filed by the
defendant does not contain any denial of the loan transaction. The
defendant has only questioned whether the plaintiff had requisite
licence under the BML Act at the time of advancing the loan. This
itself, in the considered view of this Court, is a triable issue, which
cannot be gone into in a summary adjudication without holding a
proper trial.
22. Inasmuch as, sub-section 2 to section 13 of the BML Act, inter
alia, provides that if during the trial of a suit to which sub-section 1
applies, the Court finds that the money lender did not hold the
requisite licence, the Court shall, before proceeding with the suit,
require the money lender to pay in the prescribed manner and
within the period to be fixed by the Court such penalty as the Court
thinks fit, not exceeding three times the amount of the licence fees
specified under Section 10. On a meaningful reading of the said
provision, it appears to this Court that there is no absolute bar
created under the statute to maintain a suit. Before rejecting the
plaint, it is the obligation of the Court to give an opportunity to the
plaintiff lender to cure the defect. However, before granting an
opportunity to the plaintiff to cure the defect, if any, the Court must
come to a specific finding that the money lender plaintiff did not
hold such licence at the time of advancing loan.
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23. On a harmonious reading of the said two provisions, this Court is of
the firm and considered view that, there is no absolute bar at the
threshold to maintain a suit. Sub-section 3 to Section 13 of BML
Act provides, if the money lender fails to pay the penalty within the
time fixed sub-Section 2 or within such further time as the Court
may allow, the Court may dismiss the suit. This specifically shows
that Court has the obligation to allow the money lender to cure the
defect, if any, at least once or even more than once by exercising its
discretion before dismissing the suit and if the money lender cures
the defect by paying penalty, as provided under the statute, the
Court is not empowered to dismiss the suit on the ground of
absence of requisite licence.
24. Thus, on a harmonious and meaningful reading of the provisions
laid down under Section 13 of BML Act, this Court is of the firm
and considered view that, the instant application claiming rejection
of plaint is not maintainable.
25. Inasmuch as and/or in addition, the specific case of the plaintiff
pleaded in paragraph 5 of the plaint is that the plaintiff by way of
two separate cheques lent and advanced a total sum of Rs. 25
lakhs. The defendants have encashed both the said cheques and
received the amount.
26. Sub-section 12 to Section 2 of BML Act defines loan. The
definition of loan as defined under the statute shows, loan means
an advance, whether of money or in kind, made on conditions of
repayment with interest and includes any transaction which is in
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substance a loan but does not include, inter alia, an advance made
on the basis of a Negotiable Instrument as defined in the
Negotiable Instruments Act, 1881, other than a promissory note.
Section 13 of the Negotiable Instruments Act defines negotiable
Instruments, which includes cheque.
27. Therefore, on the basis of this statements made in the plaint
specifically in Paragraph 5 thereof, it, appears to this Court that,
unless rebutted by the defendants at the trial, it is the specific case
of the plaintiff that the money was lent through cheques. The
defendants have filed its written statement. The stand of the
defendants in its written statement is not be looked at, at this order
VII Rule 11 stage. Depending upon the stand that will be taken by
the defendants during the trial, the issue shall be decided in
accordance with law.
28. Inasmuch as the, other plea taken by the defendants in the instant
application that whether the plaintiff is registered as a Non-Banking
Financial Company under Section 45-IA of the Reserve Bank of
India Act, 1934 or that whether there has been any non-
compliance of statutory provisions on the part of the plaintiff under
Section 186 of the Companies Act, 2013 can only be decided upon
a detailed fact finding trial being held and not at this order VII Rule
11 stage, as these are mixed questions of law and facts.
29. The judgment In the matter: of Dahiben (Supra) was rendered on
the point of limitation. The law is well settled that if on a plain
reading of a plaint, if ex facie shows that the suit is barred by law of
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limitation, the Court is empowered to reject the plaint at the order
VII Rule 11 stage. But it is equally settled that, if the point of
limitation in an appropriate case is found to be a mixed questions of
law and fact, the suit shall stand for trial.
30. In the matter of: Swaika Vanaspati Products Ltd. (Supra), the
judgment was rendered after trial in an execution case. Hence the
ratio laid down therein would not apply in the facts of the instant
case, as the trial in the instant case has not yet commenced.
31. The judgment In the matter of Smt.: Urmila Kumari Bothra
(Supra) has also laid down the law of BML Act where opportunity
was granted to the plaintiff in terms of Section 13(2) of BML Act.
32. Therefore, first to come to a concluded conclusion whether the
plaintiff in the instant case had requisite licence under BML Act or
not, the Court must arrive at a finding only after holding a properly
constituted trial on the basis of a preliminary issue and then the
Court shall proceed further in accordance with law.
33. In view of the foregoing reasons and discussions, this Court holds
that the instant application filed under Order VII Rule 11 of CPC is
devoid of any merit and must fail.
34. The suit shall stand for trial. Whether the plaintiff had requisite
licence under BML Act on the day when the loan was advanced,
should be tried as a preliminary issue, before proceeding any further
with the suit.
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35. In the event the issues are decided in the negative during the trial,
the Court shall take further steps in the matter in accordance with
law.
36. In the event, however, the plaintiff did not have the requisite licence
on the day when the loan was advanced, the plaintiff shall be at
liberty to take steps to pay the penalty to the extent of three times
the amount of the licence fee specified in Section 10 of BML Act in
accordance with sub-Section 2 of Section 13 of the Act but
positively within a period of three months from date, failing which
if the Court comes to a conclusion that the plaintiff did not have the
requisite licence as on the date when the loan was advanced, the
Court may take steps in accordance with law. This opportunity
granted to the plaintiff shall be treated as an opportunity within the
meaning of Section 13(2) of the BML Act.
37. Accordingly, IA No. GA-COM/4/2025 stands dismissed, without
any order as to costs.
(ANIRUDDHA ROY, J.)
sm/gb/rs
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