Sansar v. Rizwan) dated

3. Learned counsel for the applicant submits that a complaint was lodged by the opposite party no. 2 against the applicant on

22.03.2022, under Section 138 of the N.I. Act with an allegation that an amount of Rs. 2,50,000/- was extended as a financial assistance by the opposite party no. 2 to the applicant wherein the interest and the principal component was Rs. 2,000/- per month (the schedule for the re-payment), a cheque bearing no.786613 was also drawn on 07.02.2022 of an amount of Rs. 2,50,000/- by the applicant in favour of the opposite party no. 2 which on presentation in the Bank on 07.02.2022 was dishonoured on

08.02.2022 and a statutory demand notice was also issued on

19.02.2022 which is stated to have been served upon the applicant on 21/22.02.2022 followed by the complaint on 22.03.2022. Thereafter the applicant has been summoned under Section 138 of the N.I. Act on 07.06.2022.

4. Submission of the learned counsel for the applicant is that first of all there is no legal enforceable debt or liability upon the applicant for the simple reason that as per the bare reading of the complaint itself it would be more than evident that the opposite party no. 2 had extended the monetary benefits of Rs. 2,50,000/- in the capacity of a money lender. Contention is that as per the complaint, the amount so extended in cash and as per Section 14 of the U.P. Regulation of Money Lending Act, 1976 and the rules framed thereinunder, the loans is to be advanced only by way of a cheque and by no other means and further there is a specific procedure provided in the Act itself under Chapter-V for institution of the suits for releasing the claim by the money lenders. He also submits that the entire transaction if so made by cash, would be void. Reliance has been placed upon the decision of the Bombay High Court in Girdhari Parmanand Motiani v. Vinayak Bhagwan Khavnekar and others; 2015 LawSuit (Bom) 1644.

5. Learned AGA on the other hand submits that whatever might be the case of the applicant but the crucial factor would be presumption under Section 139 of the Act, once the cheque is drawn and the same stood dishonored then the presumption would always be in favour of the holder.

6. I have heard learned counsel for the parties and gone through the records carefully.

7. The present proceedings at the instance of the applicant questions the summoning order, summoning the applicant under Section 138 of the N.I. Act. Apparently, the allegations contained in the complaint under Section 138 of the N.I. Act is relatable to dishonouring of a cheque of an amount of Rs. 2,50,000/-. On

08.02.2022 followed by a statutory demand notice dated

19.02.2022 which is stated to have been served upon the applicant on 21/22.02.2022 followed by a complaint dated 22.03.2022. As regards, the submission of the learned counsel for the applicant that in view of the provisions contained under Section 14 of the U.P. Regulations Money Lending Act, 1976 that loans have to be advanced only by way of a cheque and not by cash and since as per the allegations in the complaint, the same was given in cash, thus, no enforceable, debt or liability is concerned, this Court at the stage of summoning is not required to delve into the said issue as the same may be factor, post conduction of the trial. What the Court is concerned at the stage of summoning is the fact as to whether there has been infraction of the procedural aspects under Section 138 read with Section 142 of the N.I. Act or not. May be the stand of the applicant, is that the loan could not be advanced by mode of cash but the same is also a matter of trial which would assume significance when the case is proceeded with.

8. As regards, reliance has been placed upon the judgment in the case of Girdhari Parmanand Motiani (supra) is concerned, the case therein involved the interpretation of the provisions of Money Lenders Act (Bombay), 1947 in the matter of offences punishable under Section 138 of the N.I. Act but that was a case wherein culminated into acquittal against which proceedings lodged, however, in the present facts, the Court is confronted with the summoning order. Insofar as the submissions so sought to be canvassed by the learned counsel for the applicant that the adequate remedy would be available to the opposite party No. 2 by virtue of institution of a suit is concerned, the Court is not required to be gone into as what the Court is concerned at this stage the dishonoring of a cheque and presumption under Section 139 of the N.I. Act.

9. Interestingly, the applicant has not questioned the fact that the signatures are not of the applicant in the cheque or he is not drawn the cheque, accordingly no case is made out at the stage of summoning, the application is consigned to record. Order Date :- 26.5.2025 A. Prajapati ASHUTOSH KUMAR PRAJAPATI ASHUTOSH KUMAR PRAJAPATI ASHUTOSH KUMAR PRAJAPATI High Court of Judicature at Allahabad High Court of Judicature at Allahabad High Court of Judicature at Allahabad

3. Learned counsel for the applicant submits that a complaint was lodged by the opposite party no. 2 against the applicant on

22.03.2022, under Section 138 of the N.I. Act with an allegation that an amount of Rs. 2,50,000/- was extended as a financial assistance by the opposite party no. 2 to the applicant wherein the interest and the principal component was Rs. 2,000/- per month (the schedule for the re-payment), a cheque bearing no.786613 was also drawn on 07.02.2022 of an amount of Rs. 2,50,000/- by the applicant in favour of the opposite party no. 2 which on presentation in the Bank on 07.02.2022 was dishonoured on

08.02.2022 and a statutory demand notice was also issued on

19.02.2022 which is stated to have been served upon the applicant on 21/22.02.2022 followed by the complaint on 22.03.2022. Thereafter the applicant has been summoned under Section 138 of the N.I. Act on 07.06.2022.

4. Submission of the learned counsel for the applicant is that first of all there is no legal enforceable debt or liability upon the applicant for the simple reason that as per the bare reading of the complaint itself it would be more than evident that the opposite party no. 2 had extended the monetary benefits of Rs. 2,50,000/- in the capacity of a money lender. Contention is that as per the complaint, the amount so extended in cash and as per Section 14 of the U.P. Regulation of Money Lending Act, 1976 and the rules framed thereinunder, the loans is to be advanced only by way of a cheque and by no other means and further there is a specific procedure provided in the Act itself under Chapter-V for institution of the suits for releasing the claim by the money lenders. He also submits that the entire transaction if so made by cash, would be void. Reliance has been placed upon the decision of the Bombay High Court in Girdhari Parmanand Motiani v. Vinayak Bhagwan Khavnekar and others; 2015 LawSuit (Bom) 1644.

5. Learned AGA on the other hand submits that whatever might be the case of the applicant but the crucial factor would be presumption under Section 139 of the Act, once the cheque is drawn and the same stood dishonored then the presumption would always be in favour of the holder.

6. I have heard learned counsel for the parties and gone through the records carefully.

7. The present proceedings at the instance of the applicant questions the summoning order, summoning the applicant under Section 138 of the N.I. Act. Apparently, the allegations contained in the complaint under Section 138 of the N.I. Act is relatable to dishonouring of a cheque of an amount of Rs. 2,50,000/-. On

08.02.2022 followed by a statutory demand notice dated

19.02.2022 which is stated to have been served upon the applicant on 21/22.02.2022 followed by a complaint dated 22.03.2022. As regards, the submission of the learned counsel for the applicant that in view of the provisions contained under Section 14 of the U.P. Regulations Money Lending Act, 1976 that loans have to be advanced only by way of a cheque and not by cash and since as per the allegations in the complaint, the same was given in cash, thus, no enforceable, debt or liability is concerned, this Court at the stage of summoning is not required to delve into the said issue as the same may be factor, post conduction of the trial. What the Court is concerned at the stage of summoning is the fact as to whether there has been infraction of the procedural aspects under Section 138 read with Section 142 of the N.I. Act or not. May be the stand of the applicant, is that the loan could not be advanced by mode of cash but the same is also a matter of trial which would assume significance when the case is proceeded with.

8. As regards, reliance has been placed upon the judgment in the case of Girdhari Parmanand Motiani (supra) is concerned, the case therein involved the interpretation of the provisions of Money Lenders Act (Bombay), 1947 in the matter of offences punishable under Section 138 of the N.I. Act but that was a case wherein culminated into acquittal against which proceedings lodged, however, in the present facts, the Court is confronted with the summoning order. Insofar as the submissions so sought to be canvassed by the learned counsel for the applicant that the adequate remedy would be available to the opposite party No. 2 by virtue of institution of a suit is concerned, the Court is not required to be gone into as what the Court is concerned at this stage the dishonoring of a cheque and presumption under Section 139 of the N.I. Act.

9. Interestingly, the applicant has not questioned the fact that the signatures are not of the applicant in the cheque or he is not drawn the cheque, accordingly no case is made out at the stage of summoning, the application is consigned to record. Order Date :- 26.5.2025 A. Prajapati ASHUTOSH KUMAR PRAJAPATI ASHUTOSH KUMAR PRAJAPATI ASHUTOSH KUMAR PRAJAPATI High Court of Judicature at Allahabad High Court of Judicature at Allahabad High Court of Judicature at Allahabad