Bombay High Court


Bombay High Court: In a unique case where the officers exercising powers under the Maharashtra Money Lending (Regulation) Act, 2014 have effectively sought to ignore the order passed by the Civil Court deciding the very same issue, Sandeep V. Marne, J. held that orders passed by the authorities exercising powers under the Act, 2014 must yield to the judgment and order delivered by the Civil Court.

Question of Law

The moot question before the Court was whether an authority exercising powers under the provisions of the Maharashtra Money Lending (Regulation) Act, 2014 (the Act, 2014) can pass an order contrary to a decree passed by a Civil Court.

Factual Matrix

The genesis of the case is that two sale deeds came to be executed by respondent 5 in favour of the petitioner transferring the right, title, and interest in respect of land for a consideration of Rs. 3,00,000 each (total consideration of Rs. 6,00,000). While the petitioner considered the transaction as a sale deed, respondent 5 assumed the same to be a mortgage by conditional sale. Hence, despite respondent 5 being willing to return the amount of Rs. 6,00,000, the petitioner failed to reconvey the land. Therefore, respondent 5 made a representation before the Minister for Agriculture and Marketing alleging that the petitioner had been acting as an unauthorized money lender and been transferring the land of poor farmers in his own name.

Pertinently, on account of respondent 5 approaching the Minister, the District Registrar (Money Lending) initiated proceedings against the petitioner under the provisions of the Act of 2014, despite the fact that respondent 5 had already instituted Special Civil Suit No. 20/2012 in the Court of 2nd Joint Civil Judge, Senior Division seeking reconveyance of the lands and a declaration that the transaction was in the nature of mortgage by conditional sale.

Impugned Order

The District Registrar and District Deputy Registrar, Cooperative Societies passed the impugned order under the provisions of Section 18(2) of the Act of 2014 declaring that the sale deeds executed by respondent 5 in favour of the petitioner were void and it consequently restored the ownership of the land in the name of respondent 5. Though the petitioner had preferred an appeal before the Divisional Joint Registrar, Co-operative Societies, the same had been dismissed.

In the meantime, the Special Civil Suit instituted by respondent 5 came to be dismissed by the vide judgment holding that the transaction that took place between petitioner and respondent 5 was that of sale and not of a mortgage by conditional sale. The prayer of respondent 5 for reconveyance of the land was accordingly rejected.

Observations and Findings

  • Respondent 5 initiated parallel proceedings for the same cause of action under the Act, 2014 by suppressing the fact that he had already filed a special civil suit. Further, he has succeeded in restoration of ownership of the land in his favour in proceedings initiated under the Act, 2014 without refunding the consideration amount. Hence, it can safely be drawn that respondent 5 instituted parallel proceedings under the Act of 2014 subsequently with a view to avoid the refund of the consideration amount.

  • The District Registrar could not have entertained the complaint of respondent 5 once his attention was invited to pendency of civil suit arising out of the same cause of action.

  • By the time the proceedings came up for final decision before the District Registrar, the civil suit was decided holding that the transaction was that of sale. Hence, once the transaction was declared as a sale by the Civil Court, District Registrar could not have exercised jurisdiction under Section 18 of the Act, 2014.

  • Despite the attention of the Divisional Joint Registrar, Co-operative Societies being invited to the judgment and order passed by the Civil Court, he has unfortunately proceeded to ignore the same while passing the impugned order.

  • Unless District Registrar comes to a conclusion that the property came in possession of a moneylender by way of security for loan, he cannot exercise power of restoration of property under Section 18(2) of the Act, 2014.

  • It cannot be said that the District Registrar acted on dictum of the Minister and was not left with any choice but to pass an order against the petitioner, since the Minister had not issued any direction to take any particular decision in the matter, he had merely called for a report.


In the backdrop of above, the Court held that the District Registrar has erroneously refused to take cognizance of the judgment and order passed by the Civil Court on the ground that the suit was not filed under the provisions of the Act, 2014; and serious illegalities have crept in on account of the authorities exercising jurisdiction under the Act, 2014 in ignoring the judgment and order delivered by the Civil Court delivered at a prior point of time. The Court opined,

“Once the nature of the document is determined by the Civil Court and the same is held to a transaction of absolute sale, it is no longer open for such authorities to record a contradictory opinion to the effect that the transaction was a mortgage and the land was offered by way of security.”

Resultantly, the Court concluded that since the Civil Court has already determined the nature of the transaction, the order passed by the Civil Court would prevail over the findings recorded by the authorities exercising powers under the Act, 2014. Consequently, the impugned order was held to be illegal and was accordingly set aside.

However, the Court clarified that in the event respondent 5 succeeds in the appeal filed against the order of the Civil Court, he would obviously be entitled to the relief of reconveyance of the land in his favour; and all questions in that regard are still left open. Further, the Court added that the authorities under the Act, 2014 may still come to an independent conclusion as to whether the petitioner is engaged in the business of money lending or not.

[Bhanudas v. State of Maharashtra, 2022 SCC OnLine Bom 5004, decided on 15-11-2022]

Advocates who appeared in this case :

K. N. Shermale, Advocate, for the Petitioner;

S.S. Dande, AGP, for the State of Maharashtra;

S.K. Shinde, Advocate, for the Respondent 5.

*Kamini Sharma, Editorial Assistant has put this report together.

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