TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 859
X X X X Extracts X X X X
X X X X Extracts X X X X
....n bearing no 228/2017) titled as Hansraj Bansal V Abdul Ahad on basis of cheque bearing no. 188868 dated 05.04.2009 amounting to Rs. 11,71,600/- drawn on ICICI Bank which returned unpaid due to Payment Stopped by Drawer; 346/13 (subject matter of Crl. Rev. Petition bearing no 229/2017) titled as Hansraj Bansal V Abdul Ahad on basis of cheque bearing no 176236 dated 15.03.2009 amounting to Rs. 11,10,000/- drawn on ICICI Bank which returned unpaid due to Payment Stopped by Drawer; 265/13 (subject matter of Crl. Rev. Petition bearing no 230/2017) titled as Hansraj Bansal V Farooq @ Bablu on basis of cheque bearing no. 911692 dated 24.06.2012 amounting to Rs. 5,00,000/- drawn on Punjab National Bank which returned unpaid due to Signature of the Drawer was not according to Mandate; 298/13 (subject matter of Crl. Rev. Petition bearing no 233/2017) titled as Hansraj Bansal V Sarfaraz Ahmed on basis of cheque bearing no 078864 dated 05.04.2009 amounting to Rs. 3,32,500/- drawn on Standard Chartered Bank which returned unpaid due to Insufficiency of Funds; 725/13 (subject matter of Crl. Rev. Petition bearing no 234/2017) titled as Hansraj Bansal V Arshad Ahmedon basis of cheque bearing no 7....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere stated to be replied by the petitioner. 2. The petitioner in complaint bearing no 346/13 titled as Hansraj Bansal V Abdul Ahad vide proceedings dated 04.09.2013 conducted by the court of Sh. Sunil Gupta, MM, North East, Karkardooma Courts, Delhi was examined under section 165 of Indian Evidence Act, 1872. The petitioner in examination under section 165 of Indian Evidence Act, 1872 stated that he has filed around 15-20 complaints under section 138 of the Act against 12 persons. He had given money to the respondents Sarfaraz and Ahad for their chit funds activities and money was given to rest of the respondents due to friendly relations. Thereafter a show cause notice was also ordered to be issued to the petitioner to explain as to whether he is engaged in business of money lending and if he is so engaged, whether he has any statutory licence for doing money lending business. All the complaints pertaining to the petitioner as complainant were ordered to be placed on same day. The petitioner replied to the show cause notice wherein the petitioner stated that he is not engaged in business of money lending. 3. The court of Sh. Sunil Gupta, MM, North East, Karkardooma Courts, Delhi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ders Act, 1938. 3.4.2 The trial court in order dated 15.07.2015 in respect of three complaints bearing no.478/13 titled as Hansraj Bansal V Shish Pal Tomar; 948/13 titled as Hansraj Bansal V Faruq @ Babloo and 387/13 titled as Hansraj Bansal V Sabir Ali observed that the petitioner in these complaints alleged that amounts were advanced as financial assistance to the respondents no. 2 for a definite period and after completion of the period, the respondents no. 2 stated to have issued the cheques in discharge of liabilities. So it cannot be said that the amounts were advanced by the petitioner on the basis of a negotiable instrument but on oral assurance by the respondents no. 2 to repay within the agreed time period. Accordingly amount advanced is covered within the term 'loan'. 3.4.3 The trial court in order dated 15.07.2015 in respect of three complaints bearing no. 265/13 titled as Hansraj Bansal V Faruq @ Babloo, 100/13 titled as Hansraj Bansal V Komal Prasad and 725/13 titled as Hansraj Bansal V Arshad Ahmad observed that the petitioner alleged that the amount was given to the respondents no. 2 against a promissory note and after completion of the time period and on demand o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, the suit or application shall not be finally disposed of until the application of the money-lender for registration and grant of licence pending before the Collector is finally disposed of. 2(8) "Loan" means an advance whether secured or unsecured of money or in kind at interest and shall include any transaction which the court finds to be in substance a loan, but it shall not include - (i) an advance in kind made by a landlord to his tenant for the purposes of husbandry; Provided the market value of the return does not exceed the market value of the advance as estimated at the time of advance. (ii) a deposit of money or other property in a Government Post Office Bank, or any other Bank, or with a company, or with a co-operative society or with any employer as security from his employees; (iii) a loan to, or by, or a deposit with any society or association registered under the Societies Registration Act, 1860, or under any other enactment; (iv) a loan advanced by or to the Central or any [State] Government or by or to any local body under the authority of the Central or any [State] Government; (v) a loan advanced by a bank, a co-operative Society or a company whose....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... case of present applicant-complainant that he has any money lending licence. Section 10 of the Act lays down that no court shall pass a decree in favour of a money-lender in any suit to which said Act applies unless the court is satisfied that at the time when the loan or any part thereof, to which the suit relates was advanced, the money-lender held a valid licence, and if the court is satisfied that the money-lender did not hold a valid licence, it shall dismiss the suit. In other words, carrying on money lending business without licence debars a person from doing money lending and recovering the amount through court. As per explanation to Section 138 of the Negotiable Instruments Act "debt or other liability" means a legally enforceable debt or other liability. So, a loan advanced by a money lender who is doing business of money lending without licence is not a debt or other liability and provisions of Section 138 of the Act will not apply to such transaction. In the light of above, it cannot be said that in the present case, that the cheque issued by the Respondent in favour of the applicant was for the liability enforceable in law. The Bombay High Court in Tinki Nagpur V Unk....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts. The orders dated 15.07.2015 and 20.08.2015 caused miscarriage of justice and if the trial court was of the view that the complaints are hit under any provisions of the law then the trial court should have dismissed the complaints and acquitted the respondents no. 2 after conclusion of trial. 6. The counsel for the petitioner advanced oral arguments and also submitted written arguments. 6.1 The counsel for the petitioner argued that the trial court should not have dismissed the complaints at a pre-trial stage without evidence having been led by the petitioner and cited decision of the Supreme Court In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act, 1881, AIR 2021 SC 1957 wherein it was held that section 258 Cr.P.C. is not applicable to a summons case instituted on a complaint and as such section 258 Cr. P.C. cannot be applied in respect of the complaints filed under Section 138 of the Act. The Trial Court is not conferred with inherent power either to review or recall the order of issuance of process. The counsel for the petitioner also referred Court on its Own Motion V State, Neutral Citation No: 2022/DHC/001932 wherein it was held that the court of a Magistrat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... multiple complaints against the various persons i.e. the respondents. He further argued that if money lending is prohibited without license then it cannot be legally enforceable under the Act. The counsel for the respondents argued that the present petitions are liable to be dismissed. 8. It is reflecting that the petitioner being complainant filed various complaints under section 138 of the Act against the respondents no. 2 as detailed herein above primarily on allegations that he had given money to the respondents no 2. The petitioner is not a licence holder of money lending. The petitioner led pre-summoning evidence and thereafter cognizance for offence punishable under section 138 of the Act was taken against the respondents no. 2 being accused. The respondents were ordered to be summoned for offence under section 138 of the Act. In all complaints as detailed herein above, notice under section 251 Cr.P.C. was given to the respondents no. 2 to which they pleaded not guilty and claimed trial. The trial court before recording evidence post notice under section 251 Cr.P.C., examined the petitioner under section 165 of Indian Evidence Act, 1872 in complaint bearing no 346/13 title....
X X X X Extracts X X X X
X X X X Extracts X X X X
....asual or occasional lender. The plaintiff though running the business of money lending neither got registered under Section 4 of the 1938 Act nor even possesses any license under the said Act. Accordingly, the suit for recovery filed on basis of pronote and a receipt itself was liable to be dismissed being not maintainable. 10. The Negotiable Instruments Act, 1881 was enacted to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques. The Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 has inserted new Chapter XVII comprising sections 138 to 142 with effect from 01.04.1989 in the Act. Section 138 of the Act provides the penalties in case of dishonour of cheques due to insufficiency of funds etc. in the account of the drawer of the cheque. However sections 138 to 142 of the Act were found deficient in dealing with dishonour of cheques. The Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 amended sections 138, 141 and 142 and inserted new sections 143 to 147 in the Act aimed at speedy disposal of cases relating to dishonour of cheque through their summary trial as well as making them c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 whereby a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque to encourage the culture of use of cheques and enhancing the credibility of the instrument. 10.2 Section 138 of the Act reads as under:- 138 Dishonour of cheque for insufficiency, etc., of funds in the account. -Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1. Issues which need judicial consideration in context of present petitions is that whether a person can be debarred from filing and prosecuting complaint under section 138 of the Act if he is doing business of money lending without holding a valid licence and whether there is apparent conflict between section 3 of Punjab Registration of Money Lenders Act, 1938 and section 138 of the Act. 11.1 Every statute is enacted for specific purpose and intent and should be read as a whole. The legislature enacts statutes and legislation and takes appropriate precautions at time of drafting and enacting different legal provisions but sometimes conflicts appears in interpretation of different statutory provisions. In this eventuality Doctrine of Harmonious Construction needs to be adopted. The legal provisions contained in one particular statute cannot be read to defeat legal provisions contained in another statute and both legal provisions contained in different statute should be given maximum effect in their operation and applicability. The Punjab Registration of Money Lenders Act, 1938 and Chapter XVII of the Negotiable Instruments Act, 1881 which was incorporated by the Banking, Public Fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s which admittedly are negotiable instrument and as such bar of section 3 of the Act of 1938 is not attracted to a loan given on the basis of a negotiable instrument like a cheque. A Coordinate Bench of this court in Kajal V Vikas Marwah, Crl.A. 870/2013 decided on 27.03.2014 considered issue whether if the complainant is not holder of money lending licence can he be debarred from filing complaint under section 138 of the Act. It was observed as under:- In my view, even if the appellant/complainant was engaged in lending money, that would not debar her from filing a complaint under Section 138 of the Negotiable Instruments Act, if a cheque issued to her towards repayment of the loan advanced by her is dishonoured by the bank for want of funds and the drawer of the cheques fails to make payment within the prescribed time, after receipt of legal notice from the lender. Section 3 of the Punjab Registration of Money Lenders' Act, 1938, which applies to Delhi, to the extent it is relevant provides that notwithstanding anything contained in any other enactment for the time being in force, a suit by a money lender for the recovery of a loan shall, after the commencement of the Act, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... money suit instituted by the money lender for the recovery of the loan advanced by him together with interest and for accounting all these submissions would have been relevant. In a criminal proceeding u/s 138 of the NI Act these are not relevant at all. In the instant matter a Magistrate is to consider whether the offence as alleged was committed or not and whether evidence is sufficient to prove complainant's case. Legality or illegality of the contract and existence and non-existence of money lending business by the complainant is not a ground to throw the complainant's case out of Court. If it was a money suit for recovery of the money the accused petitioner would have been definitely in a better position and was entitled to the advantage of violation of Sections 23 and 24 of the Contract Act as well as non-existence of money lending business of the money lender. The accused petitioner has only remedy in the trial to rebut the presumption u/s 139 of the NI Act, and to establish his case by leading evidence when he would be asked to enter into defence after his examination u/s 313 of the Code would be over. When all the prima facie materials of offence u/s 138 of the NI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d unrebutted. The respondents/accused cannot, therefore, escape from the liability under Section 138 of the N.I. Act, especially when there is no denial of the fact that the respondents/accused issued the cheques in question which were dishonoured due to insufficient fund in the account of the respondents/accused. 12.4 A Division Bench of Karnataka High Court in V. Satyanarayana V Sandeep Enterprises, 2005 CriLJ 12 while interpreting money lender also observed as under:- Even otherwise, if assumed that the cheques were issued by the petitioner/accused in the course of money lending - business, that itself does not attract the provisions contained in Karnataka Money Lenders Act. This is because, under said Act, money lender means "a person, who carried on the business of money lending" and to say that one is a money lender, he or she must carry on business in money lending in the State and, to record an activity as business, there must be a course of dealings carried with a profit motive. In other words, money lending must be carried on as profession. If the money lending was not with profit motive or, not carried on as a profession, he or she does not become a money lender under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ey to the respondents which did not reflect in any manner his activities as professional manner. The petitioner in reply to show cause notice categorically stated that he is not engaged in business of money lending. The trial court should not have dismissed the nine complaints vide order dated 15.07.2015 and three complaints vide order dated 20.08.2015 and these orders are outcome of complete non-application of judicial mind by the trial court and in total contravention of procedure laid down in Chapter XX of the Code of Criminal Procedure, 1973. The orders dated 15.07.2015 and 20.08.2015 are illogical, abrupt and completely illegal and cannot be sustained in view of the accepted proposition of law as discussed hereinabove. The trial court should have proceeded with trial of complaints under section 138 of the Act. The trial court should not have dismissed the complaints under section 138 of the Act filed by the petitioners merely on basis of statement of the petitioners recorded under section 165 of the Indian Evidence Act, 1972 and reply given by the petitioner in response to show cause notice. The trial court reliance on two decisions delivered by the Bombay High Court was mispl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....error, non-compliance with the provisions of law, the decision is completely erroneous or where the judicial discretion is exercised arbitrarily. The legality, propriety or correctness of an order passed by the Metropolitan Magistrate is the very foundation of exercise of revisional jurisdiction. The counsel for the petitioner cited Amit Kapoor V Ramesh Chander, (2012) 9 SCC 460 and other decisions delivered by the Superior Court. 13.2.1 The trial court vide 15.07.2015 ordered dismissed nine complaints as detailed hereinabove. The trial court in order dated 20.08.2015 while dismissing the three complaints ordered for acquittal for the accused i.e. the respondents no 2 of complaints bearing no 227/13,298/13 & 401/13 titled as Hansraj Bansal V Sarfaraz Ahmad. The trial court has not dismissed the complaints and acquitted the respondent no 2 after conclusion of trial and on basis of evidence to be led by the contesting parties but on wrong assumption of legal principles and without resorting to settled legal principles which resulted into miscarriage of justice to the petitioner. Hence, the present revision petitions are maintainable without resorting to filing appeals . The argument....