Karnataka High Court
Shivanand Shambulingayah ... vs The State Of Karnataka on 12 September, 2022
Bench: J.M.Khazi
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CRL.P No. 100984 of 2017
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 12TH DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MS. JUSTICE J.M.KHAZI
CRIMINAL PETITION NO. 100984 OF 2017 (482-)
BETWEEN:
SHIVANAND SHAMBULINGAYYA HIREMATH
AGE: 35 YEARS, OCC: AGRICULTURE,
R/O: RABAKAVI, TQ: JAMKHANDI,
DIST: BAGALKOTE.
...PETITIONER
(BY SRI. MANOJ BIKKANNAVAR, ADV., FOR
SRI. ANAND.R.KOLLI, ADVOCATE)
AND:
THE STATE OF KARNATAKA,
REP. BY ITS SPP,
HIGH COURT OF KARNATAKA,
DHARWAD BENCH, DHARWAD,
(THROUGH PSI, TERDAL POLICE STATION,
TQ: JAMKHANDI, DIST: BAGALKOTE).
...RESPONDENT
ANNAPURNA
CHINNAPPA (BY SMT. GIRIJA S HIREMATH, HCGP)
DANDAGAL
Digitally signed by
ANNAPURNA
CHINNAPPA DANDAGAL
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
Location: HIGH COURT
OF KARNATAKA,
DHARWAD BENCH,
DHARWAD.
OF CR.P.C., SEEKING TO QUASH THE ENTIRE PROCEEDINGS
PERTAINING TO CRIME NO. 31 OF 2017 REGISTERED BEFORE
TERDAL POLICE STATION TQ: JAMKHANDI, DIST: BAGALKOT FOR
AN OFFENCE PUNISHABLE UNDER SECTION 3 AND 4 OF
KARNATAKA PROHIBITION OF CHARGING EXORBITANT INTEREST
ACT 2004 AND SEC. 37 AND 38 AND 39 OF KARNATAKA MONEY
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CRL.P No. 100984 of 2017
LENDERS ACT 1961 THERE BY ALLOWING THE CRIMINAL
PETITION, IN SO FAR AS PETITIONER IS CONCERNED.
THIS CRIMINAL PETITION COMING ON FOR HEARING, THIS
DAY, COURT PASSED THE FOLLOWING:
ORDER
Being aggrieved by registering of case in Crime
No.31/2017 for the offences punishable under sections 3 and
4 of the Karnataka Prohibition of Charging Exorbitant
Interest Act, 2004 (for short "Prohibition of Charging
Exorbitant Interest Act") and sections 37 and 38 of the
Karnataka Money Lenders Act, 1961 (for short "Money
Lenders Act"), at the instance of trial Court in
O.S.No.70/2016 on the file of the Civil Judge and JMFC,
Banahatti while disposing of the said suit, petitioner, who is
arraigned as accused has filed this petition under Section
482 of Cr.P.C.
2. It is the case of the petitioner that his friend
Imtiyaz Suleman Lengre borrowed Rs.25,000/- from him.
When he failed to repay the same, he filed a suit in
O.S.No.70/2016 for recovery of the same. Though the Trial
Court decreed the suit to pay a sum of Rs.25,000/- with
CRL.P No. 100984 of 2017
interest @6% per annum, it directed the SHO, Terdal Police
Station, to register a criminal case against the petitioner
under the provisions of Money Lenders Act and Prohibition of
Charging Exorbitant Interest Act and to submit a report. On
the said direction, the SHO Terdal has registered the case in
Crime No.31/2017 for the offences punishable under sections
3 and 4 of the Prohibition of Charging Exorbitant Interest Act
and sections 37 and 38 of the Money Lenders Act. In fact,
against the said judgment and decree in O.S.No.70/2016,
petitioner has filed R.A.No.7/2017 and obtained stay order.
3. The respondent has appeared through HCGP.
4. During the course of arguments, learned counsel
for the petitioner submits that the Trial Court has erred in
exercising suo-moto powers directing respondent-police to
register a criminal case against the petitioner. Section 15 of
the Money Lenders Act contemplates the procedure wherein
the Registrar is having powers to enquire into the matter.
Similarly, Section 5 of the Prohibition of Charging Exorbitant
Interest Act, also requires a debtor to approach the Court by
filing a necessary petition. In view of the same, the Trial
CRL.P No. 100984 of 2017
Court has erred in bypassing the said procedure and
directing the police to register case and hence, prays to allow
the petition.
5. Heard the arguments and perused the records.
6. It is an undisputed fact that the respondent-police
have registered a case against the petitioner only based on
the direction given by the Trial Court. Alleging that defendant
i.e. one Imtiyaz Suleman Lengre has borrowed a sum of
Rs.25,000/- from him, the petitioner has filed
O.S.No.70/2016 for recovery of the said amount with
interest @ 18% per annum. The Trial Court though accepted
the case of the petitioner that defendant has borrowed the
said amount, by observing that interest charged is
exorbitant, the Trial Court has given direction to the
respondent-police to register a case against the petitioner.
Against the said judgment and decree, the petitioner has
approached the First Appellate Court in R.A.No.7/2017 and
secured stay.
CRL.P No. 100984 of 2017
7. Section 15 of the Money Lenders Act deals with
the power of authorized officer to require production of
records or documents and power of entry, inspection and
seizure. It reads as follows:
"15. Power of authorized officer to require
production of records or documents and power
of entry, inspection and seizure. - (1) The
Registrar, Assistant Registrar or any Officer authorized
by the State Government in this behalf may, for the
purpose of verifying whether the business of money-
lending is carried on in accordance with the provisions
of this Act, enter the premises of the money lender or
any person who in his opinion is carrying on the
business of money-lending and call upon him to
produce any record or document relating to such
business and every such money lender or person shall
allow such inspection and produce such record or
document.
(2) The Registrar, Assistant Registrar or the other
officer referred to in sub-section (1) may, for the
purposes of the said sub-section, search the premises
and seize any record and document as may be
necessary. The record or document seized shall be
retained only for such period as may be necessary for
the purposes of examination, prosecution or other
legal action:
CRL.P No. 100984 of 2017
Provided that the provisions of sections 100 and 102
of the Code of Criminal Procedure, 1973 (Central Act 2
of 1974) shall, so far as may be, apply to such search
and seizure:
Provided further that for every record or document
seized, appropriate acknowledgement shall be given to
the person from whose custody it is seized.
(3) The Registrar, Assistant Registrar or the other
officer referred to in sub-section (1) shall also have
power to summon and examine the money lender or
any person who in his opinion is in a position to
furnish relevant information."
8. Similarly, Section 5 of the Prohibition of Charging
Exorbitant Interest Act enables a debtor to approach the
court with a petition with prayer to examine whether the
repayment of the amount made by him is in full or part,
satisfaction of the loan including the interest thereof. On
receipt of such petition, the Court is required to issue notice
to the person concerned calling upon him to give reply.
Section 5 reads as under:
"5. Deposit of money and presentation of
petition to court and the procedure thereof. - (1)
A debtor may deposit the money due in respect of a
CRL.P No. 100984 of 2017
loan received by him from any person together with
interest at the rate fixed by the State Government
under section 28 of the Karnataka Money Lenders Act,
1961 into the Court having jurisdiction, along with a
petition to record that the amount deposited is in full
or part, satisfaction of the loan including the interest
therefor, as the case may be.
(2) The Court shall, on receipt of a petition under sub-
section (1), refer a copy of the petition to the person
mentioned in the petition, directing him to give his
replies within a period of fifteen days as may be
granted by the Court. The Court may, after due
inquiry and after considering the versions of both the
parties, pass orders recording the satisfaction of the
loan and interest therefor in full or in part, as the case
may be."
9. Perusal of these provisions make it evident that
specific procedure is contemplated to proceed under the
respective Acts. When a specific procedure is provided,
bypassing the same and registering a criminal case against
the petitioner is illegal and improper. Had the Trial Court
come to the conclusion that the transaction of petitioner is
contrary to these provisions, it could have directed the
concerned authorities to look into the matter, rather than
CRL.P No. 100984 of 2017
directing the respondent-police to register a criminal case
against the petitioner. Therefore, I hold that the continuation
of the said proceedings would amount to abuse of process of
the Court and as such, the petition is required to be allowed.
Accordingly, I pass the following:
ORDER
The petition is allowed.
The entire proceedings pertaining to crime
No.31/2017 of Terdal Police Station, Jamakhandi
Taluk, Bagalkot District, for offence punishable
under sections 3 and 4 of Karnataka Prohibition of
Charging Exorbitant Interest Act, 2004 and Sec.
37, 38 and 39 of Karnataka Money Lenders Act,
1961, is hereby quashed.
In view of disposal of the matter, pending
interlocutory applications, if any, do not survive for
consideration and are disposed of accordingly.
Sd/-
JUDGE
YAN
