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TMI Blog2024 (10) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... king them compoundable. The Hon ble Supreme Court in the case Electronics Trade Technology Development Corporation Ltd., Secunderabad v. Indian Technologists Engineers (Electronics) (P) Ltd. [ 1996 (1) TMI 398 - SUPREME COURT ], observed that the object of bringing section 138 on statute appears to inculcate the faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments and section 138 intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a book and induce the payee or holder in due course to act upon it. The Bengal Money Lenders Act, 1940 and Chapter XVII of the Negotiable Instruments Act, 1881 which was incorporated by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 for providing penalties in case of dishonour of cheques with an objective to encourage the culture of use of cheques and enhancing the credibility of the instrument. Both statutory provisions were enacted with different objectives and intent and are operational in independent and separate legal spheres. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated 10.04.2019 under Section 138 of the Negotiable Instruments Act, 1881 and amendment thereto to the petitioner/accused intimating about the dishonour of the cheque and further demanded to pay the said amount within 15 days from the date of receipt of a demand notice. Demand notice was received by the petitioner/accused on 11.04.2019. 2d. After receiving the said notice, the petitioner/accused did not pay the said amount of Rs. 25,00,000/- (Rupees Twenty-Five Lakhs) only within the stipulated period of time mentioned in the demand notice. Accordingly, the complainant has compelled to file a complaint under Section 138 of the Negotiable Instruments Act, 1881 and same was registered as Complaint Case being No. CS-21353 of 2019. The Learned Judge issued summons upon the petitioner/accused after taking cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 2e. After receiving summon from the Court, the petitioner duly entered his appearance before the Learned Trial Court and granted bail. He pleaded not guilty and claimed to be tried. Subsequently, on 03.02.2020, the petitioner filed an application under Section 205 of the Code of Crim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in cases of money lending business conducted without licence, a complaint case under Section 138 of Negotiable Instruments Act, 1881 are not attracted and any contract thereof is forbidden by law and same is void contract. 4. On the other hand, none represented the opposite party on call. Even on earlier occasion i.e. on 05.07.2024, none represented the opposite party. No accommodation had been sought for. Accordingly, heard learned advocate appearing on behalf of the Petitioner. DISCUSSION AND FINDINGS OF THIS COURT: 5. In the light of the submissions and arguments presented by the learned counsel appearing for the petitioner and upon perusal of the contents of the complaint as well as judgment referred by the learned counsel for the petitioner, this Court would like to refer some relevant provisions for ready reference and for proper assessment before entering into the merits of this case. Those Sections read as under: 6. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecree or order in favour of a money-lender in any suit instituted by a money-lender for the recovery of a loan advanced after the date notified under section 8, or in any suit instituted by a money-lender for the enforcement of an agreement entered into or security taken, or for the recovery of any security given, in respect of such loan, unless the Court is satisfied that, at the time or times when the loan or any part thereof was advanced, the money-lender held an effective licence. (2) If during the trial of a suit to which sub-section (1) applies, the Court finds that the money-lender did not hold such licence, the Court shall, before proceeding with the suit, require the money-lender to pay in the prescribed manner and within the period to be fixed by the Court such penalty as the Court thinks fit, not exceeding three times the amount of the licence fee specified in section 10. (3) If the money-lender fails to pay the penalty within the period fixed under sub-section (2) or within such further time as the Court may allow, the Court shall dismiss the suit: if the money-lender pays the penalty within such period, the Court shall proceed with the suit. (4) The provisions of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 8. In view of the arguments made by the learned counsel for the Petitioner and considering the aforesaid provisions of the Bengal Money Lenders Act, 1940, I may refer to the provisions of the Bombay Money Lenders Act, 1946. Section 5 of the said Act lays down that no money lender shall carry on business of money lending except in the area for which he has been granted a licence and except in accordance with the terms and conditions of such 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 doin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect 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 compoundable. 13. The Hon ble Supreme Court in the case Electronics Trade Technology Development Corporation Ltd., Secunderabad v. Indian Technologists Engineers (Electronics) (P) Ltd. (1996) 2 SCC 739 , observed that the object of bringing section 138 on statute appears to inculcate the faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments and section 138 intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a book and induce the payee or holder in due course to act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability (ii) That cheque has been presented to the bank within a period of six months from the date on which it is drawn of within the period of its validity, whichever is earlier (iii) That cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank (iv) The payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid (v) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course within 15 days of the receipt of the said notice (vi) The complaint is to be filed within one month from the date of expiry of the 15 days from the receipt of the notice. 17. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09/2009 decided on 09.02.2009 rejected the argument that the complainant is debarred from recovering loan amount as he is not a registered money lender. It was observed as under: The next argument addressed by the petitioner that the respondent was debarred from recovering the loan amount being not a registered money lender does not lie in the mouth of the petitioner for two reasons: The petitioner took the loan from the respondent voluntarily and even executed an agreement in this regard whereby he agreed to repay the same after ninety days with interest. At the same time, he also issued the cheque in question for the repayment of the loan but became dishonest when the cheque was presented for encashment. The second reason to reject the argument of the petitioner is that the proceedings under Section 138 of NI Act are not recovery proceeding but are proceedings to punish a person who after issuing a cheque fails to honour the same and also commits a default in paying the said amount on receipt of the notice. 23. The Hon ble Delhi High Court in the case Virender Singh v. Deepak Bhatia, Crl.L.P. 491/2011 decided on 08.04.2011 observed that the instant cases relate to an advance made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equest, the complainant had lent an advance a sum of Rs. 25,00,000/- (Rupees Twenty-Five Lakhs) only to the petitioner/accused by way of short-term unsecured loan for the purpose of business. It was agreed that the Petitioner/accused shall pay the said loan amount along with interest @ 14% per annum. The Petitioner had issued a cheque in discharge of his liability. Accordingly, amount advanced to the petitioner is covered within the term of loan . 26. The proceedings should not be quashed at a pre-trial stage without any leading evidence by the parties. With regard to issue that can be decided without evidence being led to show that the petitioner was a money lender or he does not have licence or the Bengal Money Lenders Act, 1940 is bar for initiating the complaint under Section 138 of the N.I. Act. This Court would like to rely upon the following judgments Samarendra Nath Das v. Supriyo Maitra 2005 SCC OnLine Cal 628 and Jupiter Brokerage Services Ltd. v. Ektara Exports Pvt. Ltd. 2015 SCC OnLine Cal 10514 decided by the Calcutta High Court, Dhanjit Singh Nanda v. State 2009 SCC OnLine Del 261 , decided by the Hon ble Delhi High Court and Ravinder Paul v. Ashwani Kumar 2020 SCC On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Act is present sufficient to issue process this, Court would not interfere into the order of the learned Magistrate and would not quash the criminal proceeding or set aside the order of the learned Magistrate. The accused petitioner has remedy only to lead evidence by examining witnesses and producing documents to prove that there was no transaction with complainant or that he did not issue any cheque in favour of the complainant and that there was no existing debt or liability at the time of his entering into defence and leading his evidence. 12. The point for consideration before the learned Magistrate would be whether act or omission of the accused petitioner completed offence u/s 138 of the NI Act. It would not be a matter for consideration before the learned Magistrate whether the complainant had money lending licence or not. This is not a suit or proceeding under Money Lenders Act and accordingly provisions of Money Lenders Act are not at all relevant for consideration in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner. The complainant led pre-summoning evidence and thereafter cognizance for offence punishable under section 138 of the Act was taken against the petitioner/accused. The Petitioner was ordered to be summoned for offence under section 138 of the Act. Notice under section 251 Cr. P.C. was given to the Petitioner to which he pleaded not guilty and claimed trial. 33. The Learned counsel for the petitioner placed reliance on decision delivered by the Bombay High Court was misplaced under given facts and circumstances of present case. There are no merits in arguments advanced by the counsel for the petitioner that without Money lending license a complaint cannot be filed under the N.I. Act and the complaint can be decided without evidence being led to show that petitioner was a Money Lender. The arguments advanced by the counsel for the Petitioner on aforesaid issues are without any legal basis and are legally unsustainable. Therefore, there are insufficient reasons placed before this court that no proceedings can be initiated or continued and it would be gross abuse of process of law. The revisional application filed by the Petitioner has devoid of merits. 34. Accordingly, C.R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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