2023 (8) TMI 1287 - HC - Indian Laws

Dishonour of Cheque - Quantum of sentence / Fine - whether on the basis of the documents produced by the accused, can it be said that the complainant was carrying a money lending business and without license? - HELD THAT - The accused tried to take defence about re-payment, however, he could not substantiate it. There is due compliance about issuance and service of notice. So finding of the trial Court requires to be set aside. The complainant has proved the ingredients for offence under Section 138 of Negotiable Instruments Act. The accused needs to be dealt with as per law. Mr. Sawant submitted that instead of remanding the matter this Court can decide this matter. He submitted that there is a punishment in the form of imprisonment and fine being twice amount of the cheque. The sentence is optional, either it may be imprisonment for two years or fine which may be twice amount of the cheque or both - it is not felt proper to impose sentence of imprisonment but the complaint is pending since 2011 - the respondent can be imposed with the fine being twice the amount of the cheque. There is a request for leniency from imposing twice the amount of the cheque. It can t be accepted when this Court is not imposing the sentence of imprisonment. Appeal allowed.

Summary

Issues involved:
The issue involved in this case is whether the complainant was carrying out a money lending business without a license based on documents produced by the accused.

Comprehensive details of the judgment:

Issue 1: Money lending business without license
The trial Court acquitted the Respondent for the offence under section 138 of the Negotiable Instruments Act, except for the point about carrying out a money lending business without a license. The Appellant's contention was that the trial Court did not consider the provisions of the Bombay Money Lenders Act in its entirety. The Respondent argued that certified copies of documents filed were sufficient. The Appellant argued that advancing a loan through a negotiable instrument does not fall within the meaning of 'business of money lending.' The trial Court's opinion was that the complainant is a money lender, making the prosecution under section 138 of the Negotiable Instruments Act not maintainable.

Issue 2: Repayment and liability
The accused claimed to have repaid the entire amount by installments, but this theory was not substantiated with evidence. The trial Court found that the accused failed to prove repayment and upheld the receipt showing the advances made by the complainant. The issuance of the cheque was not disputed, and the presumption under section 139 of the Act was applied.

Issue 3: Legal interpretation and application
The provisions of the Bombay Money Lenders Act were analyzed, emphasizing the definitions of 'business of money lending' and 'loan.' The exclusion clauses under section 2(9) were discussed, highlighting that advancing money through negotiable instruments falls within the definition of a loan. The judgment in Parekh Aluminex Limited case was cited to support this interpretation. The trial Court's decision was deemed erroneous as the money advanced through negotiable instruments constituted a loan, not a money lending business.

Conclusion:
The Appellate Court allowed the appeal, setting aside the trial Court's judgment and convicting the Respondent under section 138 of the Negotiable Instruments Act. The Respondent was directed to pay a fine of twice the amount of the cheque, with specific instructions for payment within a specified timeframe. The Court considered the request for leniency but ultimately imposed the fine as prescribed by law.