2023 (9) TMI 859 - HC - Indian Laws

Dishonour of Cheque - money lending business - 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? HELD THAT - The Delhi Court in DHANJIT SINGH NANDA VERSUS STATE ANR. 2009 (2) TMI 852 - DELHI HIGH COURT rejected the argument that the complainant is debarred from recovering loan amount as he is not a registered money lender. This court in Guddo Devi @ Guddi V Bhupender Kumar 2020 (2) TMI 676 - DELHI HIGH COURT observed that there is no material to conclude that the respondent was carrying on the business of advancing loans. Merely because the respondent had lent money to three or four persons, did not lead to the inference that the respondent had been carrying out the activity of money lending as a business. It is acceptable proposition of law that section 3 of Punjab Registration of Money Lenders Act, 1938 does not limit operation of section 138 of the Act and both are independent and mutually exclusive to each other. If a person advances a loan even without having a valid money lending licence or certificate he can institute and prosecute complaint under section 138 of the Act on basis of cheques and he has to satisfy only the mandatory requirements of section 138 of the Act. The trial court dismissed the complaints at pre-trial stage without giving an opportunity to the petitioner to lead evidence. The IN RE EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138 OF N.I. ACT 1881. 2021 (4) TMI 702 - SUPREME COURT as argued and cited by the counsel for the petitioner has held that Section 258 of Cr. P.C. is not applicable to a summons case instituted on a complaint and as such section 258 Cr. P.C does not have any role to play in respect of the complaints filed under Section 138 of the Act. The trial court is not vested with inherent power either to review or recall the order of issuance of process. Petition allowed.

Summary

Issues Involved:
1. Whether a person can be debarred from filing and prosecuting a complaint under section 138 of the Negotiable Instruments Act if he is doing business of money lending without holding a valid license.
2. Whether there is an apparent conflict between section 3 of the Punjab Registration of Money Lenders Act, 1938 and section 138 of the Negotiable Instruments Act.
3. The maintainability of the revision petitions directly before the High Court without invoking the jurisdiction of the Sessions Court.

Summary:

Issue 1: Debarment from Filing and Prosecuting Complaint under Section 138 of the Negotiable Instruments Act
The petitioner filed multiple complaints under section 138 of the Negotiable Instruments Act against various respondents for dishonored cheques. The trial court dismissed these complaints on the grounds that the petitioner was engaged in money lending without a valid license, thus violating the Punjab Registration of Money Lenders Act, 1938. The trial court concluded that the petitioner was a money lender within the meaning of Section 2(9) of the Punjab Registration of Money Lenders Act, 1938, and dismissed the complaints based on this interpretation.

The High Court, however, disagreed with this conclusion, stating that section 3 of the Punjab Registration of Money Lenders Act, 1938 does not limit the operation of section 138 of the Negotiable Instruments Act. The court emphasized that both statutes operate independently and are mutually exclusive. The court cited various judgments to support the view that a person can still institute and prosecute complaints under section 138 of the Negotiable Instruments Act even if they do not hold a valid money lending license.

Issue 2: Conflict between Section 3 of the Punjab Registration of Money Lenders Act, 1938 and Section 138 of the Negotiable Instruments Act
The High Court addressed the potential conflict between the two statutes by applying the Doctrine of Harmonious Construction. The court noted that the legal provisions in different statutes should be read in a way that gives maximum effect to both. The court concluded that there is no apparent conflict between section 3 of the Punjab Registration of Money Lenders Act, 1938, which bars civil remedies for unlicensed money lenders, and section 138 of the Negotiable Instruments Act, which provides criminal remedies for dishonored cheques.

Issue 3: Maintainability of Revision Petitions Directly before the High Court
The respondents argued that the revision petitions were not maintainable as the orders were in the nature of dismissal of complaints and acquittal of the respondents, and the petitioner should have filed an appeal. The High Court, however, held that the trial court had dismissed the complaints without concluding the trial, which does not amount to acquittal. The court further noted that Section 397 of the Code of Criminal Procedure, 1973 gives concurrent jurisdiction to both the High Court and Sessions Court, making the revision petitions maintainable directly before the High Court.

Conclusion:
The High Court allowed the revision petitions, set aside the orders dated 15.07.2015 and 20.08.2015, and remanded the complaints back to the concerned trial court for expeditious trial in accordance with law. The petitioner and the respondents were directed to appear before the Chief Metropolitan Magistrate for further assignment to a competent court on 23.09.2023 at 2:30 pm.