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of <h1>Court affirms acquittal due to lack of enforceable debt. Importance of proof highlighted.</h1> <h3>Krishnam Raju Finances Versus Abida Sultana and Ors.</h3> The Court upheld the lower court's decision to acquit the accused under Section 255(1) of the Code of Criminal Procedure. The appeal was dismissed as the ... - Issues Involved:1. Legally enforceable debt or liability.2. Requirement of a money lending license.3. Validity of the statutory notice under Section 138 of the Negotiable Instruments Act.Detailed Analysis:1. Legally Enforceable Debt or Liability:The primary issue for consideration was whether the prosecution could connect the respondent-accused to the offence under Section 138 of the Negotiable Instruments Act by proving a legally enforceable debt or liability. The complainant, a financial business entity, alleged that the accused had taken a loan of Rs. 30,000 and issued cheques which were dishonored due to insufficient funds. The Court emphasized that to establish an offence under Section 138, the complainant must prove the existence of a legally enforceable debt or liability.2. Requirement of a Money Lending License:The complainant claimed to be a licensed money lender but failed to produce the money lending license in court. The Court noted that without a valid money lending license, the complainant could not legally recover the loan. This was supported by the precedent in BABA FINANCE CORPORATION v. MOHD.NAYEEM AND ANOTHER, which stated that a money lender without a license cannot claim debt or liability. The Court concluded that the absence of a money lending license meant the complainant did not have a legally enforceable debt against the accused.3. Validity of the Statutory Notice:The statutory notice issued by the complainant demanded the cheque amount along with interest at 24% per annum. The respondent's counsel argued that this made the notice vague and insufficient, citing RAJ V. RAJAN, which held that a notice demanding an unspecified amount of interest is invalid. Conversely, the appellant's counsel referred to G.L.MODI v. XEDD FINANCE & INVESTMENTS PVT.LTD., which held that a demand for the cheque amount along with interest does not invalidate the notice, as the drawer could comply by paying the cheque amount alone. The Court, however, did not find this argument sufficient to overcome the primary issue of the legally enforceable debt.Conclusion:The Court held that since the complainant did not have a valid money lending license, there was no legally enforceable debt or liability. The judgment of the lower court, which acquitted the accused under Section 255(1) of the Code of Criminal Procedure, was upheld. The Criminal Appeal was dismissed, affirming that without a legally enforceable debt, the requirements of Section 138 of the Negotiable Instruments Act were not met.
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