Case Note & Summary
The High Court of Judicature at Bombay heard an interim application filed by the defendant under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) seeking rejection of the plaint in a commercial suit for recovery of money. The defendant contended that the plaintiff was engaged in unlicensed money lending business and the suit was barred by Section 13 of the Maharashtra Money Lending (Regulation) Act, 2014. The plaintiff claimed to have advanced loans to the defendant from 2011-2012 at interest rates up to 36% per annum, with the amount increasing from approximately Rs. 48 Crores to Rs. 510 Crores, and based the suit on dishonoured cheques and promissory notes. The Court examined whether the transactions qualified as 'loans' under the Act or were excluded as 'advances' under Section 2(13)(j). After analyzing the pleadings and statutory provisions, the Court held that the plaintiff was engaged in money lending business without a license, the transactions involved interest and were based on promissory notes, and thus were not excluded from the definition of 'loan'. Consequently, the suit was barred by Section 13 of the Act, and the plaint was rejected under Order VII Rule 11(d) CPC.
Headnote
The defendant filed an application under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) seeking rejection of the plaint on the ground that the suit was barred by Section 13 of the Maharashtra Money Lending (Regulation) Act, 2014 -- The plaintiff filed a suit for recovery of money based on dishonoured cheques and promissory notes executed by the defendant -- The plaintiff pleaded advancing loans to the defendant from 2011-2012 at interest rates up to 36% per annum, with the loan amount increasing from approximately Rs. 48 Crores to Rs. 510 Crores -- The defendant contended that the plaintiff was engaged in the business of money lending without a mandatory license as required under the Maharashtra Money Lending (Regulation) Act, 2014 -- The defendant argued that Section 13 of the Act bars courts from passing decrees in favour of unregistered money-lenders -- The defendant submitted that the exclusion under Section 2(13)(j) of the Act for 'advances' did not apply since the transactions involved interest and were based on promissory notes -- The Court held that on a meaningful reading of the plaint, the plaintiff was engaged in the business of money lending without a license -- The Court found that the transactions were not mere 'advances' excluded under Section 2(13)(j) but were 'loans' with interest components -- The plaint was rejected under Order VII Rule 11(d) CPC as the suit was barred by Section 13 of the Maharashtra Money Lending (Regulation) Act, 2014
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Issue of Consideration: Whether the plaint is liable to be rejected under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) on the ground that the suit is barred by Section 13 of the Maharashtra Money Lending (Regulation) Act, 2014
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Final Decision
The Court allowed the defendant's application and rejected the plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) -- Held that the suit was barred by Section 13 of the Maharashtra Money Lending (Regulation) Act, 2014 as the plaintiff was engaged in unlicensed money lending business
2026 LawText (BOM) (01) 94
Interim Application (L) No. 27175 of 2021 in Commercial Suit No. 1532 of 2018
Mr. Navroz Seervai, Senior Advocate a/w Mr. Prateek Sakseria, Senior Advocate a/w Mr. Nishit Dhruva, Mr. Yash Dhruva, Ms. Niyati Mechant, Mr. Harsh Sheth i/b MDP Legal for the Applicant/Defendant, Mr. Gaurav Joshi, Senior Advocate a/w Mr. Gaurav Mehta, Mr. Chaitanya D. Mehta, Ms. Sonali Aggarwal i/b M/s. Dhruve Liladhar & Co. for the Plaintiff
Ashok Commercial Enterprises
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Nature of Litigation: Commercial suit for recovery of money based on dishonoured cheques and promissory notes
Remedy Sought
Defendant sought rejection of plaint under Order VII Rule 11(d) CPC
Filing Reason
Plaintiff filed suit for recovery of approximately Rs. 510 Crores allegedly loaned to defendant with interest up to 36% per annum
Previous Decisions
Interim application filed by defendant pending before High Court
Issues
Whether the plaint is liable to be rejected under Order VII Rule 11(d) CPC on the ground that the suit is barred by Section 13 of the Maharashtra Money Lending (Regulation) Act, 2014
Whether the transactions between plaintiff and defendant qualify as 'loans' under the Act or are excluded as 'advances' under Section 2(13)(j)
Submissions/Arguments
Plaintiff engaged in money lending business without mandatory license under Maharashtra Money Lending (Regulation) Act, 2014 -- Section 13 bars courts from passing decrees in favour of unregistered money-lenders -- Transactions involved interest up to 36% per annum and were based on promissory notes -- Exclusion under Section 2(13)(j) for 'advances' does not apply to interest-bearing transactions -- Plaintiff suppressed fact of not having money-lending license in plaint -- Suit is abuse of judicial process
Ratio Decidendi
A plaint can be rejected under Order VII Rule 11(d) CPC if the suit appears from the statements in the plaint to be barred by any law -- Section 13 of the Maharashtra Money Lending (Regulation) Act, 2014 bars courts from passing decrees in favour of money-lenders who do not hold valid licenses -- The exclusion under Section 2(13)(j) for 'advances' does not apply to transactions that involve interest components and are based on negotiable instruments like promissory notes -- When a plaintiff is engaged in the business of money lending without a license, the suit for recovery is barred under the Act
Judgment Excerpts
This application is filed by the defendant under Order VII Rule 11(d) of the Civil Procedure Code ('CPC') for the rejection of the plaint on the ground that the suit is barred in view of Section 13 of the Maharashtra Money Lending (Regulation) Act, 2014
Under Section 13 of the said Act, there is a bar to pass a decree in favour of a money-lender when the money-lender does not hold a valid licence
Thus, Section 13 of the said Act bars a Court from passing a decree in a suit filed by an unregistered money-lender
The exclusion under Section 2(13)(j) would not assist the plaintiff in the facts of the present case
Procedural History
Plaintiff filed Commercial Suit No. 1532 of 2018 for recovery of money -- Defendant filed Interim Application (L) No. 27175 of 2021 under Order VII Rule 11(d) CPC seeking rejection of plaint -- Application heard by High Court -- Judgment reserved on 16th October 2025 -- Judgment pronounced on 21st January 2026
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