Money Lending Judgment

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CRIMINAL APPLICATION NO.630 OF 2009
IN
CRIMINAL APPEAL (STAMP) NO. 139 OF 2009
Anil s/o Baburao Kataria,
age 42 years, occup.trading,
r/o Shivneri Marg, Station
Road, Ahmednagar, Taluka .. Applicant/
and District Ahmednagar. ori.complainant.
versus
Purshottam s/o Prabhakar Kawane
age 50 years, occup. service,
r/of M.E.S. Colony, Solapur Rd.
Ahmednagar. .. Respondent.
Shri
P.S. Pawar, Advocate for applicant.
Shri Amol N.Kanade, Adv. for Respondent.
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Coram: P.R. Borkar J.
Date : 21.11.2009.
ORAL JUDGMENT
1. This is an application for leave to file
appeal against the judgment and order of acquittal
passed by the learned Judicial Magistrate, First
Class (1st Court), Ahmednagar in S.T.C. No.3528 of
2005 decided on 11.12.2008.
2. Briefly stated, in or about SeptemberOctober
2004, present Respondent was in need of
financial help and, therefore, he requested the
present applicant to give him amount of Rs.4.00
lakhs and assured to repay the same within one or
two months. The applicant paid the amount.
However, according to the applicant, the
respondent failed to repay the amount and
therefore demand was raised by applicant pursuant
to which the present respondent issued cheque
dated 24.5.2005 drawn on Post Office Savings Bank,
Ahmednagar Branch, for Rs.2.00 lakhs. On
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25.5.2005, the applicant deposited that cheque in
the said bank for encashment, but the same was
dishonoured on the ground of insufficiency of
funds.
3. Thereafter on 4.6.21005, the applicant
issued notice to the Respondent calling upon him
to pay the amount within fifteen days and since
the amount was not paid, the complaint under
Section 138 of the Negotiable Instruments Act was
filed. The trial court took cognizance of the
complaint and issued notice to the present
Respondent who then appeared in the matter. The
trial was conducted and ultimately the order of
acquittal was passed which is sought to be
challenged by seeking leave of this court to file
appeal.
4. Heard Shri P.S.Pawar, learned Advocate
for the applicant and Shri Amol N. Kakade Advocate
for the respective parties. Both have taken me
through various documents and the judgment of the
trial court. The trial court has taken into
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consideration the admission given by the applicant
in his cross examination that he had filed
criminal cases for commission of offence
punishable under Section 138 of the Negotiable
Instruments Act, against the persons mentioned in
paragraph 20 of the judgment. Those persons are
(1) Ananda Gahile, (2) Vijay Kale, (3), Rajendra
Dake, (4) Vinay Khisti, (5) Shivaji Chaure, (6)
Santosh Malwade, (7) Akrur Kaspate, (8) Kanhayalal
Rathod, (9) Sachin Joshi and (10) Prakash late.
The applicant denied that the cases involved the
amounts total of which is more than Rs.80.00
lakhs.
5. It is argued on behalf of the Respondent
that the transactions with so many persons clearly
indicate that the transaction with the Respondent
was not of a hand loan transaction, but it was a
money lending transaction and the
complainant/applicant is doing money lending
business without licence.
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6. In paragraph 16 of the judgment, the
learned trial court referred to evidence of DW1
Premlata Balasaheb Parkhe at Exh.50 who is an
employee of the Incometax
Department. She
produced incometax
returns of the present
applicant at Exhibits 52 and 53 and in paragraph
16 of the judgment, the trial court noted that the
total income of the applicant in the year 200203
was Rs.60,000/= and for the year 200304,
it was
Rs.57,989/= and it is amply clear that the person
having such income could not have lent amount of
Rs.4.00 lakhs in lumpsum
to the respondentaccused.
There is no other documentary evidence
led by the complainant to prove that he actually
lent Rs.4.00 lakhs. It is the case of present
Respondent that he borrowed amounts of Rs.10,000/=
and Rs.20,000/= from the applicant and repaid Rs.
50,000/=. However, while giving loan, the
applicantcomplainant
had obtained blank cheques
from the respondent and taking advantage of the
same, the present case is filed.
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7. The trial court has come to the
conclusion that the complainant could not have an
amount of Rs.4.00 lakhs in lump sum at a time and
there is nothing on record that he got some
windfall after March 2004 so that he could give
loan of Rs.4.00 lakhs at a time to the accusedrespondent
in SeptemberOctober
2004. Moreover, it
appears from the admission of the complainant in
his cross examination referred to above that he
is doing money lending business. He admitted to
have money transactions with ten persons named
which ultimately resulted in their prosecution for
offence punishable under Section 138 of the
Negotiable Instruments Act.
8. Shri Amol Kakade, learned Counsel for
the Respondent has filed affidavitinreply
and
produced xerox copy of criminal M.A. No.16 of 2009
filed by present applicant, whereby he has sought
transfer of as many as 60 cases from one court to
another. There is no denial of this document.
Averments in affidavit in reply and said document
clearly shows that the applicant was doing money
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lending business and therefore, inference drawn
by the trial court cannot be said to be
unreasonable, but it is proper inference based on
admission before it.
09. Here, I may refer to the provisions of
the Bombay MoneyLenders
Act, 1946. Section 5 of
the said Act lays down that no money lender shall
carry on business of money lending except in the
area for which he has been granted a licence and
except in accordance with the terms and conditions
of such licence. It is not the case of present
applicantcomplainant
that he has any money
lending licence. Section 10 of the Act lays down
that no court shall pass a decree in favour of a
moneylender
in any suit to which said Act applies
unless the court is satisfied that at the time
when the loan or any part thereof, to which the
suit relates was advanced, the moneylender
held a
valid licence, and if the court is satisfied that
the moneylender
did not hold a valid licence, it
shall dismiss the suit. In other words, carrying
on money lending business without licence debars a
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person from doing money lending and recovering the
amount through court. As per explanation to
Section 138 of the Negotiable Instruments Act
"debt or other liability"means a legally
enforceable debt or other liability. So, a loan
advanced by a money lender who is doing business
of money lending without licence is not a debt or
other liability and provisions of Section 138 of
the Act will not apply to such transaction. In the
light of above, it cannot be said that in the
present case, that the cheque issued by the
Respondent in favour of the applicant was for the
liability enforceable in law.
10. I may also refer to Section 32B(b) of the
said Act,which lays down that whoever carries on
the business of moneylending
at any place without
holding a valid licence authorising him to carry
on such business at such place, shall, on
conviction, be punished for the first offence with
imprisonment of either description which may
extend to one year or with fine which may extend
to rupees one thousand and five hundred or with
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both and for the second or subsequent offence, in
addition to, or in lieu of, the penalty specified
in clause (i) with imprsonment which shall not be
less than two years, where such person is not a
company, and with fine which shall not be less
than rupees five thousand, where such person is a
company.
11. In light of facts and circumstances as
above, this is not a case wherein application for
leave to file appeal can be granted. Hence,
application rejected.
pnd/criap630.09 (P.R.BORKAR, J.)

 

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Mukul Aggarwal 
on 30 November 2009
Published in Criminal Law
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