2008 (12) TMI 783 - HC - Indian Laws

Summary

Issues Involved:
1. Applicability of the Bombay Money-Lenders Act, 1946 to the petitioners.
2. Whether the hire-purchase agreement constitutes a loan under the Act.
3. Compliance with procedural requirements u/s 200 of the Cr.P.C.
4. Responsibility of petitioner No. 2 in the alleged offence.

Summary:

1. Applicability of the Bombay Money-Lenders Act, 1946:
The petitioners sought to quash Criminal Case No. 302 of 2008 pending against them for offences u/s 5, 18, 19, 25 read with Section 34 of the Bombay Money-Lenders Act, 1946. The petitioners argued that the loan given for purchasing a rickshaw was to a trader and hence not covered under the Act. The court rejected this argument, stating that a rickshaw driver does not fit the definition of a 'trader' u/s 2(18) of the Act. Consequently, the petitioners were required to obtain a license as per Section 5 of the Act, which they failed to do, thereby contravening the provisions of the Act.

2. Hire-Purchase Agreement as a Loan:
The petitioners contended that a hire-purchase agreement should not be equated with a loan agreement. The court, referencing the Supreme Court decision in Sundaram Finance Ltd. v. State of Kerala, held that a hire-purchase agreement can be considered a loan agreement. The agreement in question involved the recovery of the loan amount with interest in installments, thus attracting the provisions of the Act.

3. Compliance with Procedural Requirements u/s 200 of the Cr.P.C.:
The petitioners argued that the original complainant was not examined on oath, as required u/s 200 of the Cr.P.C. The court dismissed this contention, noting that the complainant was a government public servant. According to Section 200 of the Cr.P.C., when a complaint is made in writing by a public servant acting in the discharge of official duties, the Magistrate need not examine the complainant and witnesses on oath.

4. Responsibility of Petitioner No. 2:
The petitioners claimed that there were no specific allegations against petitioner No. 2 regarding his responsibility for the company's affairs at the time of the alleged offence. The court found this argument baseless, as the complaint contained specific averments that petitioner No. 2 was a responsible Director of the Company.

Conclusion:
The court concluded that the petitioners had advanced loans as defined under the Act without obtaining the necessary license, thereby violating the Act. The application to quash the complaint was dismissed, and the petitioners were to be tried for the alleged offences.