apeal259of2014.odt 1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
CRIMINAL APPEAL NO.259 OF 2014
Ganesh s/o. Narayan Badwaik,
Aged about 50 years,
Occupation : Busines,
R/o. Rajendra Nagar, Tumsar,
Tahsil & District Bhandara ...APPELLANT
...V E R S U S...
1 Lokchand Shriram Bondre,
Aged about 44 yars,
Occupation : Cultivator,
R/o. Dhorwada,
Po. Madgi, Tahsil Tumsar,
District Bhandara
2 State of Maharashtra. ...RESPONDENTS
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Mr. Mahesh Rai, counsel for the Appellant.
Mr. R.H. Chandurkar, counsel for Respondent 1.
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CORAM
:ROHIT B. DEO, J.
DATE :16.11.2017 ORAL JUDGMENT:
Challenge is to the judgment and order dated 6.7.2012 in Criminal Complaint Case 685 of 2006, delivered by Judicial Magistrate First Class, Tumsar, by and under which, the ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 2 respondent (hereinafter referred to as "the accused") is acquitted of offence punishable under section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as "the Act"). 2 Heard Shri. Mahesh Rai, learned counsel for the appellant and Shri. R.H. Chandurkar, learned counsel for the respondent 1.
3 The judgment of acquittal is entirely based on the premise that the appellant (hereinafter referred to as "the complainant") has not proved the licence-76 which the complainant allegedly has obtained under the provisions of The Bombay Money Lenders Act, 1946.
4 The learned Magistrate has recorded a finding of fact that although, the complainant has produced and proved on record Exh. 37 which is an application for renewal of licence under the provisions of The Bombay Money Lenders Act, 1946 for the period 2003-2004, the complainant has not proved the licence. Reliance is placed on the judgment in Criminal Appeal 467 of 2009 in the case of Smt. Nanda w/o.Dharam Nandanwar...vs...Nandkishor s/o. Talakram Thaokar, and ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 3 particularly on paragraphs 9 and 10 which reads thus: Paragraph 9:-
"9. The complainant in the present case, is a money lender who had advanced loan to the accused on the basis of the two promissory notes dated 3.2.2006 and 8.4.2006 respectively for loan of Rs. 18,000/ and Rs. 19,000/ respectively, at interest at the rate of 21 per cent per annum. It is thus case of the complainant that the accused had issued cheque No. 767789 drawn upon Canara Bank, Sadar Bazar, Nagpur for Rs. 40,000/ towards repayment of loan amount and interest. Thus, it was incumbent upon the complainant to establish the fact that she held valid money lending license in accordance with the provisions of Bombay Money Lenders Act, 1946 for the relevant period of the transaction. The complainant money lender did not produce such a valid money lending license at the time when complaint was instituted nor till it is decided although required. Furthermore, no such valid money lender's license is produced even during pendency of this Appeal. Section 10 of the Bombay Money Lenders Act, 1946 runs thus:
::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 4 10(1) No Court shall pass decree in favour of money lender in any suit to which this Act applies including such suit pending in the Court before the commencement of the Bombay Money Lenders (Amendment ) Act, 1975 unless the Court is satisfied that at the time when loan or any part thereof to which the suit relates was advanced the money lender held a valid license and if the Court is satisfied, the money lender did not hold a valid license, it shall dismiss the suit.
The words "No court" and "in any suit" used in the Section are wider in scope to embrace any suit or proceeding initiated by a money lender who is required to hold and prove valid license for money lending for the relevant period of the loan transaction or transactions. The trial Court was, therefore, entitled to insist upon the complainant for production of valid license for money lending and also to infer in view of Section 114 (g) of the Evidence Act that the document withheld was unfavourable to the complainant who withheld it. Thus, the legal position cannot be disputed that Courts are bound to dismiss the suit by money lender for recovery of loans when such money lender was found carrying on business of money lending on the date or dates of the transaction ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 5 without having valid money lending license. The Court, in view of Sec. 10(1) of the Bombay Money Lenders Act, 1946 is bound to dismiss the suit instituted without production of valid money lending license operative at the time of suit loan transactions. In other words, a money lender can not enforce such loan transaction lawfully without production of valid money lending license operative at the time of transaction of loan to be recovered. Thus, no fault can be found with the trial Court as it was duty bound to dismiss the complaint by the complainant a money lender who was engaged in business of money lending without a valid money lending license at the time of transaction in view of clear provisions of Sec. 10 of the Bombay Lenders Act, 1946 as the learned Court could not have assisted the complainant to facilitate or further the illegal claim or claim prohibited by law in the complaint. Since explanation to Sec. 138 of the N.I. Act clearly stipulated that the debt or liability means legally enforceable debt or other liability the claim by money lender against her borrower without production of valid and operative money lending license covering period of ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 6 transaction was unenforceable claim under section 138 of the N.I. Act was bound to be dismissed. The complainant moneylender despite availing of sufficient opportunity in the trial Court could not produce valid and operative money lending license at the time of transaction of loan, hence dismissal of complaint can not be faulted as the complainant failed to establish legally enforceable debt or liability of the accused. Sec. 5 of the Bombay Money Lenders Act prohibits business of money lending except in accordance with terms and conditions of money lending license. In the present case, it was claimed that the loans were advanced at interest on the basis of two promissory notes executed in front of a guarantor. Thus, when transaction of money lending without valid license was prohibited by law, no court can help or assist a party money lender to enforce or recover a claim, except in accordance with law i.e. the Bombay Money Lenders Act, 1946 in this case. The complainant withheld important document without any explanation; hence presumption arose against the complainant in view of Section 114 (g) of the Evidence Act for nonproduction of license. Learned Advocate for the appellant ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 7 made a reference to ruling in Rajesh Varma vs. Aminexs Holdings and Investments and others : 2008 (3) Mah.L.J. 460 to submit that every loan is not covered by the provisions of the Act inasmuch as section 2 (g) expressly excluded advance of any sum exceeding Rs. 3000/ made on the basis of negotiable instrument other than a promissory note. In the case in hand, the money lender had advanced loans at interest on the basis of two promissory notes hence the ruling cited can not be come to the rescue of the complainant in the facts and circumstances of the present case as the complainant could not establish legally enforceable debt or liability from the accused towards complainant. Since the complainant has failed to establish salutory or basic ingredients of offence punishable under sec. 138 of the said Act or observed in Kusum Ingots 's case ( supra ), the complaint was ightly dismissed and the finding as to acquittal was correct and logical by the trial Court. No ground is made out so as to interfere in this Appeal. The acquittal of the accused is justified, as the cheque in question was, in fact, had not been issued for any legally enforceable debt or liability in view of the provisions of ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 8 the Bombay Money Lenders Act, 1946".
Paragraph 10:-
"10. It would be pertinent to note that business of money lending is invalid without licence. According to law of Contract, it would not be possible to enforce any agreement or consideration, the object of which is unlawful, within the meaning of Section 23 of the Indian Contract Act, 1872, which is couched in the following terms: "23. What considerations and objects are unlawful, and what not The consideration or object of an agreement is lawful, unless it is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful, Every agreement of which the object or consideration is unlawful,is void."
Thus, pithily put, the transaction in question, is also hit by the ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 9 provisions of Section 23 of the Indian Contract Act, 1872". 5 Shri. Mahesh Rai, the learned counsel for the appellant submits, that the complainant did possess the statutory licence and that in order to avoid miscarriage of justice, the matter may be remanded.
6 I am not inclined to remit the matter. Firstly, there is no application on record seeking permission to adduce additional evidence. Secondly, it would be inappropriate to remand the matter only to enable the complainant to fill in the lacuna. If the complainant did possess the licence as on the date of the institution of complaint, there is nothing demonstrated to justify the failure of the complainant to produce and prove the said licence, in accordance with law.
7 The view taken by the learned Magistrate is not only a possible view, it is only view which could have been taken in view of the failure of the complainant to produce and prove the licence under the The Bombay Money Lenders Act, 1946. Concededly, it is the case of the complainant himself that he is a licensed money lender and that the loan is a money lending transaction. The ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 ::: apeal259of2014.odt 10 learned Magistrate has appreciated the import and implication of section 10 of the aforesaid enactment correctly. 8 At any rate, there is no perversity in the order of the learned Magistrate. I do not see any compelling reason to interfere with the judgment of acquittal.
The appeal is sans merit and is rejected.
JUDGE RS Belkhede ::: Uploaded on - 16/11/2017 ::: Downloaded on - 18/11/2017 01:57:32 :::