Bombay High Court
Gyanchand Chothmalji Varma vs The State Of Maharashtra, Thr Pso ... on 5 May, 2022
Bench: V.M. Deshpande, Amit B. Borkar
1 apl-863-20j.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
CRIMINAL APPLICATION (APL) NO. 863 OF 2020
Shri Gyanchand Chothmalji Varma,
Aged about 50 years, Occupation- Business,
Cinema Chowk, Dhamangaon Railway,
District- Amravati. . . . APPLICANT
...V E R S U S..
1. The State of Maharashtra through
Police Station Officer,
Police Station Dattapur,
Tahsil Dhamangaon Railway,
District Amravati.
2. The Assistant Registrar for Co-operative
Societies Shri G. P. Raut,
Dhamangaon Railway, Dattapur,
Amravati Rural, Amravati. . . NON-APPLICANTS
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Shri Akshay A. Naik, Advocate for applicant.
Mrs. M. A. Barabde, APP for non-applicant/State.
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CORAM :- V. M. DESHPANDE AND
AMIT B. BORKAR, JJ.
DATED :- 05.05.2022
JUDGMENT (PER : AMIT B. BORKAR, J.) :-
1. Heard.
2. Rule. Rule made returnable forthwith. Heard finally by
consent of the parties.
2 apl-863-20j.odt
3. By this application under Section 482 of the Code of
Criminal Procedure, the applicant has challenged the Final
Report/Charge-sheet in Crime No.110/2018 before the learned
Judicial Magistrate First Class, Dhamangaon Railway, for the offence
under Sections 41 & 48 of the Maharashtra Money Lending
(Regulation) Act, 2014.
4. The First Information Report came to be registered against
the applicant with the allegation that the applicant had advanced loans
to the persons, who are residing outside the area of licence granted to
the applicant. It is alleged that due to disbursement of loan to the
persons outside area of licence, many farmers are denied the benefit of
loan waiver scheme of the State Government. With the said
allegations, an offence under Section 41 of the Maharashtra Money
Lending (Regulation) Act, 2014 (for short "the Act of 2014") was
registered against the applicant.
5. The applicant, therefore, filed application challenging
registration of the the Final Report/Charge-sheet. This Court on
22.12.2020 issued notice to the non-applicants for final disposal.
6. We have carefully considered the contents of the First
Information Report. After meaningful scrutiny of the Final
3 apl-863-20j.odt
Report/Charge-sheet, in our view, the point involved in the present
application is, whether advancing of residing outside the area of loans
to the borrowers licence, can attract penal consequences as
contemplated by Section 41 of the Act of 2014.
7. To address the question formulated by us and for better
appreciation of the contentions urged by the learned Advocates
appearing for the parties, it would be advantageous to reproduce the
provisions of Section 2(3) of the Act of 2014, which defines
expression, "business of money-lending" and the definition of " debtor"
under Section 2(7) of the Act of 2014. The definition of "business of
money-lending" in the Act of 2014, reads thus:
"Section 2 (3) - "business of money-lending means the business
of advancing loans whether in cash or kind and whether or not
in connection with, or in addition to any other business. "
The definition of "debtor" in the Act of 2014 reads thus:
"Section 2 (7) - "debtor" means a person to whom a loan is
advanced whether in cash or kind and includes his successor in
interest or surety".
8. Section 4 of the Act of 2014, which puts an embargo on
carrying on of the business of money-lending except in the area for
which the money-lender has been granted a licence. Section 4 of the
Act of 2014 reads as under:
4 apl-863-20j.odt
"4. Money-lender not to carry on business of money-lending
except for area under licence and except in accordance with
terms of licence - No money-lender shall carry on the 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."
9. The offence registered against the applicant is under
Section 41 of the Act of 2014, which reads as under:
"41. Obtaining licence under fictitious name, carrying on
money-lending at a place not mentioned in licence, etc.
Whoever,-
(a) obtains a licence in the name which is not his true name or
carries on the business of money-lending under the licence so
obtained; or
(b) carries on the business of money-lending at any place not
mentioned in the licence authorizing him to carrying on such
business; or
(c) enters into any agreement in the course of business of
money-lending without a valid licence, or under a licence
obtained in the name which is not his true name, shall, on
conviction, be punished,-
(i) for the first offence, with imprisonment of either description
which may extend to one year or with fine which may extend to
rupees fifteen thousand or with both, and
(ii) for the second and subsequent offence, in addition to or in
lieu of, the penalty specified in clause (i) with imprisonment of
either description which shall not be less than five years, where
such person is not a company, and with fine which shall not be
less than rupees fifty thousand, where such person is a
company".
10. Section 41 of the Act of 2014 creates offence for carrying
on the business of money-lending at the place not mentioned in the
licence authorising him to carry on such business.
5 apl-863-20j.odt
11. The expression "business of money-lending" has been
defined to mean the business of advancing loan. The expression
"carries on business" implies that there must be some real systematic
and organized course of activities or conduct with a set purpose of
monetary profit. There must exist the characteristic of volume,
frequency, continuity and system indicating an intention to make a
profit . No single test is decisive of the intention to carry on a business.
The expression "carrying on business", has to be interpreted taking
into consideration the object and scheme of the Act of 2014. The Act of
2014 and in particular, sub-section (3) of Section 2 defines the
business of money lending to mean the business of advancing loans.
The Act has defined word "debtor" but neither Section 41 nor Section
4 of the Act of 2014 has any reference to the word 'debtor'. The
essential ingredient of offence is the term "carries on business", which
is defined as the business of advancing loans. Therefore the expression
"carries on business" needs to be interpreted in relation to the place of
advancing of loan and not in relation to where the debtor resides. To
constitute a business as contemplated by sub-section (3) of Section 2
of the Act of 2014, the act of advancing of loan is necessary. It is not
dependent on the residence of the debtor. The expression "place"
mentioned in the licence in sub-clause (b) of Section 41 of the Act of
2014 cannot be interpreted in relation to the residence of the debtor
6 apl-863-20j.odt
since the business as contemplated in the provisions of the Act of 2014
is restricted to advancing of loan.
12. In the facts of the present case, the allegations and the
material placed on record by the non-applicants, is not that the
applicant went outside the district and advanced loans to the debtors
residing outside the area of licence. Merely because the applicant had
advanced loans to the debtors residing outside the area of licence
would not attract the provisions of sub-section (b) of Section 41 of the
Act of 2014. Even, in the reply filed by the non-applicants, it is not the
case of the non-applicants that the applicant has advanced loan by
opening a place of business outside the area of licence.
13. The parameters of exercise of powers conferred on this
Court under Section 482 of the Code of Criminal Procedure being
settled, that in order to prevent abuse of process of Court and to
secure ends of justice, this power can be exercised, then there is no
doubt that this is one case where this power needs to be exercised. In
terms of the decision of the Apex Court in the case of State of Haryana
Vs. Bhajanlal [1992 Supp (1) SCC 335], the power under Section 482
of the Code of Criminal Procedure can be exercised by this Court,
where the allegations made in the First Information Report, even if
they are taken at their face value and accepted in their entirety, do not
7 apl-863-20j.odt
prima facie constitute an offence under sub-section (b) of Section 41 of
the Act of 2014. Therefore, the continuance of the proceedings against
the applicant would amount to abuse of the process of Court. We,
therefore, pass the following order:-
ORDER
i) Final Report/Charge-sheet in Crime No.110/2018 before
the learned Judicial Magistrate First Class, Dhamangaon Railway, for
the offence under Sections 41 & 48 of the Maharashtra Money Lending
(Regulation) Act, 2014 is quashed and set aside.
ii) Rule is made absolute in the aforesaid terms.
(AMIT B. BORKAR, J.) (V. M. DESHPANDE, J.)
RR Jaiswal
Digitally signed
by JAISWAL
JAISWAL RAJNESH
RAJNESH RAMESH
Date:
RAMESH 2022.05.06
11:13:57 +0530
