High Court

Legal Reasoning

(1) appln-3763-2022.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADCRIMINAL APPLICATION NO.3763 OF 20221.Sandip s/o Uttam Shinde,Age: 39 years, Occu. Actor,2.Arti w/o Sandip ShindeAge: 35 years, Occu. Housewife,Both R/o Jamkhed, Tq. Jamkhed, District: Ahmednagar. ..Applicants(Orig. Accused Nos.1 & 2)Versus1.The State of MaharashtraThrough Investigating Officer Jamkhed Police Station, Tq. Jamkhed, Dist. Ahmednagar.2.Devidas s/o Bansi ShindeAge: 52 years, Occu. Business, R/o Near State Bank Icon City, Jamkhed, Tq. Jamkhed, District: Ahmednagar...Respondent (Resp. No.2-Orig. Informant) …Mr. S. D. Jayabhar h/f Mr. D. R. Jayabhar, Advocate for theApplicants.Mr. A. R. Kale, APP for Respondent No.1.Mr. A. S. More, Advocate for Respondent No.2. … CORAM : SMT. VIBHA KANKANWADI AND S. G. CHAPALGAONKAR, JJ. DATED : 04th SEPTEMBER, 2024.JUDGMENT (Per S. G. Chapalgaonkar, J.):-1.The applicants seek to quash and set aside criminalproceeding in S.C.C. No.198/2022 pending before JudicialMagistrate First Class, Jamkhed, which is arising out of CrimeNo.77/2022 registered with Jamkhed Police Station, Dist.Ahmednagar for offences punishable under Section 39 of the (2) appln-3763-2022.odtMaharashtra Money Lending (Regulation) Act, 2014 (for short ‘Actof 2014’) and Sections 504, 506 of the Indian Penal Code.2.The respondent no.2 herein lodged report dated 04.02.2022with Police Station Jamkhed alleging that he runs sugarcane juicebusiness at Bus Stand. In the year 2018, he was in need of moneyfor establishment of hotel business. He had obtained loan ofRs.1,00,000/- at the interest rate of 10% per month from applicantno.1-Sandip Uttamrao Shinde. By way of security of loan a chequeof Rs.1,00,000/- was drawn on account of son of informant in thename of applicant no.1. On 01.01.2019 total amount ofRs.1,50,000/- was deposited with Mrs. Arti Sandip Shinde i.e.applicant no.2 towards repayment of loan alongwith interest.Although entire amount of loan was repaid, applicant no.1 raiseddispute and pressurized informant to transfer his plot admeasuring2887 sq. ft.. Accordingly, a notarized document was executed in hisfavour. On the basis of aforesaid, Crime No.77/2022 dated04.03.2022 came to be registered against applicants with PoliceStation Jamkhed, Dist. Ahmednagar for offence punishable underSection 39 of the Act of 2014 as well as Sections 504, 506 of theIndian Penal Code. The investigation progressed in pursuance ofaforesaid crime and finally charge-sheet has been filed in the Courtof Judicial Magistrate First Class, Jamkhed. It has beenculminated in S.C.C No.198/2022.3.Mr. S. D. Jayabhar, learned Advocate appearing for theapplicants vehemently submits that applicants have been falselyimplicated in aforesaid crime. The alleged advancement of amountis of the year 2018. The alleged refund of amount is on 01.01.2019.However, present FIR is lodged on 04.03.2022. There is noplausible explanation for such inordinate delay in reporting (3) appln-3763-2022.odttransactions. He would submit that entire case of respondent no.2is based on false and frivolous allegations. He would submit thatapplicant no.1 has instituted criminal proceeding in S.C.C.No.97/2019 against son of respondent no.2 under Section 138 of theNegotiable Instrument Act towards dishonor of cheque ofRs.1,00,000/-. Consequently, process has been issued against son ofrespondent no.2 vide order dated 22.02.2019. Mr. Jayabjhar wouldalso invite attention of this Court to the notarized agreement tosale dated 08.02.2021, by which respondent no.2 has agreed to saleproperty bearing no.3260/7262 situated in Gut No.1080 atJamkhed for total consideration of Rs.9,50,000/-, out of whichRs.1,00,000/- was paid by applicant no.1 towards earnest amountand Rs.8,50,000/- was balance that was to be paid at the time ofexecution of sale deed within a period of one year. Mr. Jayabharwould invite attention of this Court to the legal notice served uponrespondent no.2 on behalf of applicant no.1, by which, respondentno.2 was called upon to execute sale deed in pursuance ofagreement to sale. The said notice was duly replied by respondentno.2 admitting execution of document and transaction, further,called upon applicant no.1 to complete the transaction on or before08.02.2022. Mr. Jayabhar would, therefore, submit that entirestory in FIR in Crime No.77/2022 leading to criminal proceeding inS.C.C. No.198/2022 is false and improbable. He would, therefore,urge to quash the proceeding by invoking powers under Section 482of the Criminal Procedure Code.4.Per contra, Mr. A. R. Kale, learned APP appearing for theState and Mr. A. S. More, learned Advocate for respondent no.2vehemently opposes the prayers in the application. They wouldsubmit that applicant no.1 had advanced loan at the interest rateof 10% per month. The cheque towards security of such loan was (4) appln-3763-2022.odttaken which was drawn on account of son of respondent no.2. Onthe basis of such cheque, false criminal case has been lodged by theapplicants. The respondent no.2 was forced to execute agreementto sale in pursuance of money lending business and recovery ofamount and interest. They would, therefore, submit that there issufficient material for trial of applicants for offence punishableunder Section 39 of the Act of 2014.5.We have considered submissions advanced by learnedAdvocates appearing for respective parties. We have carefullyconsidered contents of FIR and other material placed into serviceby parties. We observed that respondent no.2 filed report dated04.03.2022 with Police Station Jamkhed leading to registration ofCrime No.77/2022. The gist of allegation can be summarized asunder:The applicant no.1 advanced loan of Rs.1,00,000/- torespondent no.2. The interest rate of 10% per month was charged.A cheque towards security of repayment of loan amount wasobtained from respondent no.2. The said cheque was drawn on theaccount standing in the name of son of respondent no.2. The loanamount alongwith interest i.e. Rs.1,50,000/- was deposited withapplicant no.2, who is wife of applicant no.1. The applicants raiseddemand of additional amount towards principle and interest. Theapplicant no.1 has further insisted for transfer of plot owned byrespondent no.2. Upon such insistence, respondent no.2 hasexecuted notarized agreement to sale in favour of applicant no.1.Accordingly, it is alleged that applicant no.1 is dealing in moneylending business and committed offence punishable under Section39 of the Act of 2014. (5) appln-3763-2022.odt6.To test the veracity of aforesaid contents in the FIR, whichaccording to applicants are palpably false and concocted, we haveconsidered uncontroverted documents placed on record before us.It appears that, son of respondent no.2 namely Sudarshan DevidasShinde has issued a cheque of Rs.1,00,000/- dated 01.01.2019 in thename of applicant no.1. On presentation, the said cheque wasdishonored on 11.01.2019. The applicant no.1 issued legal noticedated 15.01.2019 raising demand of amount under dishonoredcheque. On failure to make payment in terms of demand notice,the applicants instituted S.C.C. No.97/2019 in the Court of JudicialMagistrate First Class at Jamkhed against son of respondent no.2.On 22.02.2019 the process has been issued.7.On 08.02.2021 respondent no.2 has executed agreement tosale in favour of applicant no.1 in respect of land bearing no.3260/7262 situated within the limits of Municipal Council Jamkhedin favour of applicant no.1. The respondent no.2 agreed to transferplot admeasuring 55 ft. x 52 ft. in favour of applicant no.1 forconsideration of Rs.9,50,000/-. The amount of Rs.1,00,000/- is paidin cash towards earnest money. The balance of Rs.8,50,000/- wasto be paid within a period of one year from the date of agreement,then sale deed was to be executed. Before execution of sale deed,measurement of plot was to be carried and after leaving 30 ft. wideroad on Eastern side, the actual possession was to be handed overto applicant no.1. Since transaction was not completed withinstipulated period, applicant no.1 issued legal notice dated28.01.2022 calling upon respondent no.2 to execute sale deed. Therespondent no.2 replied said notice on 03.02.2022 and acceptedtransaction and shown his readiness to complete transaction on orbefore 08.02.2022. (6) appln-3763-2022.odt8.The aforesaid sequence of events would clearly reveal civildispute subsists between parties as regards to the transfer of land.Similarly, applicant no.1 has instituted criminal proceeding fordishonor of cheque against son of respondent no.2. If the contentsof reply given by respondent no.2 to the legal notice of applicantno.1 is perused, it is evident that nature of transaction to be of out-and-out sale has been clearly admitted. In this background, it isapparent that FIR in Crime No.77/2022 is apparently improbableand patently false. The story of advancement of loan ofRs.1,00,000/- or repayment of said amount and transfer of land as apart of such loan transaction is inconsistent with the case ofrespondent no.2 put forth in his reply to the legal notice. Further,pendency of criminal proceeding under the provision of NegotiableInstrument Act against son of respondent no.2 is convenientlysuppressed in the FIR.9.In the aforesaid background, if we look to the languageemployed in Section 39 of the Act of 2014, it is discernible thatbusiness of money lending without obtaining valid license is madepunishable with imprisonment for five years with fine ofRs.50,000/-. At this stage, it would be apposite to make referenceto Section 39 of the Act of 2014, which reads thus:“39.Whoever carries on the business of money-lendingwithout obtaining a valid licence, shall, on conviction, bepunished with imprisonment of either description for a termwhich may extend to five years or with fine which may extendto fifty thousand rupees or with both.”10.This Court in case of Mandubai Vitthoba Pawar Vs. Stateof Maharashtra through Superintendent of Police andOthers1 considered scope of term “business of money lending” asdefined in Sub Section (3) of Section (2) of the Act of 2014 andconcluded that unless there is continuous and systematic activity12016 (1) Bom. C.R. (Cri.) 794. (7) appln-3763-2022.odtwith a view to earning income, the existence of money lendingbusiness cannot be presumed. It is also observed that isolatedtransaction of money lending would not be enough to meet outrequirement of term “business of money lending”. In yet anotherjudgment in case of Anup Niranjan Dodiya and Another Vs.State of Maharashtra and Another2 it is observed that the veryfoundation of offence of carrying on business of money lending isregular business activity of advancing loan to different persons andgain profit or claim some advantage for earning money. 11.Bearing in mind aforesaid parameters of law andinterpretation of term “ business of money lending”, if contents ofFIR in present case are appreciated, the singular transaction oflending amount of Rs.1,00,000/- to respondent no.2 would notconstitute business of money lending. From the FIR or othermaterial, there is nothing to gather that applicant no.1 iscontinuously involved in lending money and earning profit out ofsuch business. In absence of foundation of material to termactivity of applicants as money lending business, the prosecutionunder Section 39 of the Act of 2014 cannot be sustained. So far asoffences under Sections 504 and 506 of the Indian Penal Code areconcerned, we do not find specific allegations in the FIR that wouldconstitute such offences. In that view of the matter, we areconvinced that in light of guidelines laid down by the SupremeCourt of India in case of State of Haryana and Ors. Vs. Ch.Bhajan Lal and Ors.3 this is a fit case to exercise powers underSection 482 of the Criminal Procedure Code. Hence, we proceed topass following order:ORDERa.Criminal Application is allowed.22020 All.M.R.(Cri) 2497.3AIR 1992 SC 604. (8) appln-3763-2022.odtb.The FIR in Crime No.77/2022 registered with JamkhedPolice Station, Dist. Ahmednagar for offences punishable underSection 39 of the Maharashtra Money Lending (Regulation) Act,2014 and Sections 504, 506 of the Indian Penal Code and criminalproceeding in S.C.C. No.198/2022 pending before JudicialMagistrate First Class at Jamkhed, are hereby quashed and setaside.c.Criminal Application is disposed of. (S. G. CHAPALGAONKAR) (SMT. VIBHA KANKANWADI) JUDGE JUDGEDevendra/September-2024