Clarification on Section 138 Complaints and Money Lenders Act Interpretation

V. Satyanarayana Versus Sandeep Enterprises

V. Satyanarayana Versus Sandeep Enterprises - TMI Issues:
1. Clarification on whether the complaint filed under Section 138 of the Negotiable Instruments Act forms part of the record and if it needs to be marked as an exhibit.
2. Interpretation of the Karnataka Money Lenders Act in relation to a case involving the issuance of cheques for a loan.

Issue 1: Clarification on Complaint Filing under Section 138 of the Negotiable Instruments Act:

The revision petition was referred under Section 9 of the Karnataka High Court Act for clarification on the judgment in the case of G. PREMDAS v. VENKATARAM. The complainant had filed a complaint against the accused under Section 138 of the N.I. Act, alleging dishonor of cheques issued for a loan. The petitioner challenged the conviction and approached the High Court. The question arose whether the complaint needed to be marked as an exhibit for the case to proceed. The Amicus Curiae argued that the complaint filed under Section 200 of Cr.P.C. is part of the court record and can be considered without being marked as an exhibit. The court agreed, stating that the complaint is a substantive piece of evidence that can be used for corroborating or contradicting the complainant's case, regardless of whether it is marked as an exhibit. The court held that the non-marking of the complaint does not affect the case's validity, overturning the view expressed in the G. PREMDAS case.

Issue 2: Interpretation of the Karnataka Money Lenders Act:

The petitioner argued that the complainant, who admitted to being a money lender without a license, could not enforce the debt under law. The petitioner relied on Section 11 of the Karnataka Money Lenders Act, which states that a suit by an unlicensed money lender would not be decreed by a civil court. However, the court found that there was no evidence to show the transaction was part of the complainant's money lending business. Even if the cheques were issued in connection with a money lending transaction, it did not automatically invoke the provisions of the Money Lenders Act. The court emphasized that being a money lender under the Act required carrying on money lending as a profession with a profit motive, which was not established in this case. Therefore, the absence of a money lending license did not impact the complainant's case. The court dismissed the petitioner's arguments related to profit motive and the execution of a pronote as security, stating that they did not establish the complainant as a money lender under the Act.

In conclusion, the High Court clarified the status of complaints filed under Section 138 of the N.I. Act, stating that they form part of the court record and do not need to be marked as an exhibit. Additionally, the court interpreted the Karnataka Money Lenders Act in the context of a case involving dishonored cheques issued for a loan, ruling that the absence of a money lending license did not invalidate the complainant's case. The judgment in the G. PREMDAS case was deemed no longer applicable, providing guidance for future cases under similar circumstances.