Bombay High Court

Ganesh S/O Narayan Badwaik vs Lokchand Shriram Bondre And ... on 16 November, 2017

Bench: R. B. Deo

 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
 -------------------------------------------------------------------------------------------
          Mr. Mahesh Rai, counsel for the Appellant.
          Mr. R.H. Chandurkar, counsel for Respondent 1.
 -------------------------------------------------------------------------------------------

                                            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

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

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:

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

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

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

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

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

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