NAGrALINGAM. J.—^Jayasinghe v. Ramanathan Chet liar
1948Present: Canekeratno and Nagallngam JJ.
JAYASINGHE, Appellant, and RAMANATHAN CHETTIAR,
S. C. 351—D. G. Colombo, 910
Money Lending Ordinance—Boohs of account—Loan of 1,500 rupees—Entryshouting debt by defendant for 750 ru/pees—Non-compliance withOrdinance—Inadvertence—Section 8.
Plaintiff, a money lender, lent to the defendant a sum of Re. 1,500.In the book of account, however, the entry made by the plaintiff showedonly a debit of Rs. 750 against the defendant, his case being that theother Rs. 750 had been contributed by some other firm although thebond was in his name.
Held, that the plaintiff had not kept proper books of account andthat the facts disclosed no inadvertence within the meaning of section 8of the Money Lending Ordinance.
A.PPEAL from a judgment of the District Judge, Colombo.
N.E. Weerasooria, K.C., with S. W. Jayasuriya, for defendantappellant.
A. Hayley, K.C., with C. Renganathan, for plaintiff respondent.
Cur. adv. milt.
September 3, 1948. Nagaungam J.—
This appeal involves a short point of law under the Money LendingOrdinance. The plaintiff who is admittedly a money lender and hasbeen carrying on the business of money lending for a number of yearssues the defendants for the recovery of a sum of Rs. 2,485-88, being theprincipal and interest alleged to be due upon a mortgage bond datedAugust 10,1939, and executed by the defendants in favour of the plaintiff.
The plaintiff’s case is that he lent a sum of Rs. 1,500 upon the mortgagebond sued upon, while the defendants’ case is that only a sum of Rs. 750was received by them. The learned Judge has rejected the defence onthis point and has held with the plaintiff that a sum of Rs. 1,500 was infact lent to the defendants. The defendants, however, take the pleathat the plaintiff being a money lender and being under an obligation byvirtue of section 8 of the Money Lending Ordinance to keep a regularaccount of the loan in a proper book of account, has failed to do so, andthat he is thereby incapacitated from maintaining an action in respect ofthe loan.
The plaintiff in fact has kept proper books of account which fullycomply with the requirements of the Ordinance. In the books of account,
NAGALINGAM J.—Jayctsinghe v. Ranianathan Ghettiar
however, the entry made by the plaintiff shows only a debit of Es. 750against the defendants and the extract from his books of account showsthat the account of the plaintiff with the defendants is in regard to thesum of Its. 750 and not in respect of a sum of Rs. 1,500 alleged to havebeen lent as set out in the mortgage bond.
Mr. Hayley on behalf of the plaintiff contended that the loan ofRs. 1,500 need not necessarily appear under any particular column butthat it would be a sufficient compliance with the requirements of theOrdinance if the sum lent is written down on some page in the book ofaccount. I do not think anybody would quarrel with this contention.There is certainly no magic in writing the particulars of a loan under aspecial heading and under a particular column, for one can well conceiveof a Chinaman who carries on the business of money lending in Ceylonand who is obliged by the provisions of the Ordinance to keep books ofaccount and to keep regular accounts therein entering his accounts fromright to left and from bottom to top. But the essence of the requirementconsists in having a proper record entered in plain words and numeralsof the items relating both to the loan and the repayments made inreduction of the loan.
It is true that in the account kept by the plaintiff of his transactionwith the defendants there is a reference to the bond having been executedfor a sum of Rs. 1,500 but this appears in the description given by theplaintiff of the transaction that was entered into by him with the defen-dants. While he says, no doubt, that a sum of Rs. 1,500 was the amountof the mortgage bond he distinctly and clearly sets forth in the selfsamedescription that a half share has been deducted for the firm of M. S. P.,namely a sum of Rs. 750, and that for “ our half ”, meaning thereby theplaintiff’s own half, he shows a debit against the defendants of onlyRs. 750.
The entry itself in the plaintiff’s books therefore establishes beyondany doubt that the only amount lent by the plaintiff at the date of theexecution of the mortgage bond and in respect thereof was a sum ofRs. 750 and not a sum of Rs. 1,500. The plaintiff, however, refers to thedescription of the transaction in his books of account and has also givenoral testimony to the effect that in fact a sum of Rs. 1,500 was lent, ofwhich only a half was contributed by him while the other half was contri-buted by another firm by the name of M. S. P. Supramaniampulle butthat the mortgage bond was taken “ in his own name and not in thejoint name of M. S. P. and himself because the original bond was in hisfavour ”. But this is only an attempt to explain one unknown by anotherunknown.
The plaintiff’s account, however, shows that he had lent a sum ofRs. 2,250 on the ‘‘ original mortgage bond ” to thedefendants on July 19,but one fails to understand why, if the original bond was in favour of theplaintiff, the subsequent mortgage bond should not have been taken infavour of the persons actually lending the money. The entry may havevalue as showing that the plaintiff is only a trustee for the firm of M. S. P.in regard to a sum of Rs. 750 out of the sum of Rs. 1,500 alleged to havebeen lent to the defendants but as between the plaintiff and the defendants
NAG-AX.rNG.AM J.—Jayasinghe v. Ramart^Uhan Chettiar
the entry is capable of no other interpretation bnt that the plaintiffhimself lent only a sum of Es. 750 on the transaction entered into by himwith the defendants on that date and evidenced by the mortgage bond.At one stage the plaintiff in the course of his evidence suggested that thedefendants were aware at the date of the execution of the mortgagebond of the fact of the loan having been made to him by the plaintiffand the firm of M. S. P. "Under cross-examination on an earlier dateof these proceedings he admitted that the letter written by his Proctoron May 22, 1945, to the defendants’ Proctor was the first intimationthat the defendants had that the account was not with the plaintiff alonebut with also another firm. In view of this admission by the plaintiffit is unnecessary to consider the legal question as to whether the plaintiffcould be permitted to vary the terms of the mortgage bond under whichthe contracting parties are set out as the plaintiff and the defendantsonly and to show that the contracting parties were not merely these butthat there was in addition a third party, viz., the firm of M. S. P. Sufficeit to say on the facts admitted by the plaintiff that the transaction wasentered into as a case of lending by the plaintiff alone to the defendantsand a borrowing by the defendants solely from the plaintiff.
On these facts it is manifest that the plaintiff’s books of account do notcontain a regular account of the loan alleged to have been made by theplaintiff of the sum of Rs. 1,500 to the defendants. On the basis of thefacts deposed to by the plaintiff he should have opened an account showingthe loan of Rs. 1,500 to the defendants and at the same time openedanother account with the firm of M.S.P. showing that he had receivedfrom M.S.P. on that date a sum of Rs. 750 which he advanced to thedefendants. The first account would then have correctly embodied thetransaction between the plaintiff and the defendants and would havebeen a proper and sufficient compliance with the requirements of section 8of the Money Lending Ordinance.
In this view of the matter, no other conclusion is possible but that theplaintiff has failed to keep a regular account in respect of the loan allegedto have been made by him upon the mortgage bond and under section8 (2) of the Money Lending Ordinance he is not entitled to enforce anyclaim, in respect of this transaction in relation to which he has madedefault, unless of course, it could be shown that the plaintiff comeswithin the terms of the proviso which enables the Court to give a moneylender who has made default relief in certain circumstances.
Mr. Hayley did in fact make application on behalf of the plaintiffthat the Court should grant him relief under the proviso. To availhimself of this proviso, the plaintiff must make out firstly that the defaultin regard to the transaction was due to inadvertence and not to anyintention to evade the provisions of the section, and secondly, that thereceipt of the loan, the amount thereof and the payments made in respectthereof and other material transactions relating thereto appear by othersatisfactory evidence. It may be that the plaintiff can make out thesecond requirement although it must be borne in mind that it was anintegral part of the lending by the plaintiff that the defendants shouldpermit the plaintiff to receive rubber coupons belonging to them and to
NAGALINGAM J.—Jayasingha v. Ramanathan Ghettiar
sell and appropriate the proceeds thereof in reduction of the debt, andthere is some dispute between the parties arising out of these transactions.But in regard to the first requirement the question is whether it couldbe said that the default was due to inadvertence. It is unnecessary forthe purpose of this case to determine precisely the meaning that should beattached to the term inadvertence. The term has been the subject ofconflict of judicial opinion. Whether the term ‘‘inadvertence” belimited to mean the opposite of deliberation or whether it be regarded asincluding a case of ignorance of the law, in neither event can the plaintiffin this case be said to have committed default by reason of inadvertence.He has kept what purports to be a regular account. '
This is not a case, therefore, of omission to enter up an account andthere is no room for ignorance of the provision of the law requiring thatan account should be kept. But it has been said that the plaintiff,though he may not have been in ignorance of the requirement of thelaw that a regular account of the loan should be kept, neverthelessmisapprehended the legal application of it because of the fact thatanother firm contributed part of the money which made up the totalamount of the loan.
The provision of the law is simple and quite clear. I can only repeat,in the words of Macdonell C. J. in the case of Devctsurendra v. de Silva1 ;that “ if a person carries on the business of money lending, it is his clearduty to fihd out what the law says as to that business.” In my opinion,the plaintiff appears to have been quite alive to the exact requirement ofthe law and to have been in no doubt in regard to it. When the defen-dants applied to the plaintiff for a copy of their accounts as appearingin his books, as they were entitled to do under section 9 of the Ordinance,the plaintiff issued a copy but without it being authenticated by anyoneand without it bearing any reference to any particular books of account,vide D5 of May 15, 1945, addressed by the defendants’ Proctor to theplaintiff’s Proctor. This account was produced and shown to. theplaintiff in the course of the earlier proceedings. The plaintiff admittedthat it was a copy that was sent by him and had to admit that that copyof the account made no mention of the fact that a half share had beenlent by any other firm. In fact that was an account showing directlyand simply the loan of Rs. 1,500 by the plaintiff to the defendants.
Now, if the plaintiff was under the impression that he had duly compliedwith the law by writing the account in respect of a half share in his hooks,and allowing the firm of M. S. P. to write the account in respect of theother half, why did he concoct—for that is the only term that can beused—an account which was intended to put the defendants off thescent or at least would have had that effect ? It was only when thedefendants insisted upon a duly authenticated copy of the account andintimated further that they should be also afforded facilities to comparethe copies that may be issued with the original, that the plaintiff for thefirst time intimated to the defendants that the transaction was not onlywith him but with a third party.
The facts, therefore, disclose that there has been no inadvertencewithin the meaning in which that term is used in section 8 of the Money
1 (1933) 34 N. L. R. 313.
NAGrAXXNGAM J.—Daniel Silva v. Vanden Drieaen
Lending Ordinance to entitle the plaintiff to relief. Furthermore, thisparticular point was raised in the trial Court but the plaintiff did neitherframe an issue suggesting that he was entitled to relief nor did he infact claim relief before the learned trial Judge. Having regard to theconduct of the plaintiff it must also be said that the application for reliefcomes too late.
As the plaintiff has failed to keep a regular account of the loan and hasnot made out a case for relief, I would allow the appeal, set aside thejudgment of the learned District Judge and dismiss the plaintiff’s actionwith costs in both Courts.
Canekeratne J.—I agree.
JAYASINGHE, Appellant, and RAMANATHAN CHETTIAR, Respondent