Sunday, 12 June 2016

Whether prosecution for dishonour of cheque issued to money lender is permissible?

On   going   through   the   complaints,   the   evidence
adduced, I  find that the view taken by the Magistrate was a
reasonable one and based on the evidence adduced before him.
There were a number of suspicious features about the case of the
complainant which have been reflected in the judgments delivered
by the learned Magistrate.  On considering the facts of the case,
even this Court feels that the possibility of the complainant having
taken blank signed cheques from the accused, is apparent, and in
any case, cannot be ruled out.   Moreover, since the complainant
has   advanced   a   similar   loan   to   a   number   of   persons,   the
transactions in the present two cases are quite likely to be of the
type which   the provisions of the  Bombay Money Lenders Act
prohibit.   The conclusion arrived at by the learned Magistrate that
the cheques in question could not be said to have been issued for
the discharge of a legally enforceable debt or other liability,  does
not appear to be suffering from any infirmity or illegality.
16 The complainant vehemently contended that the loan
was   advanced   on   the   basis   of   a   bill   of   exchange,   and   that
therefore, in view of clause (f) of sub­section (9) of section 2 of
the Bombay Money Lenders Act 1946, it could not be termed as a
loan to which the provisions of the Bombay Money Lenders, 1946
would apply.  However, on a careful consideration on the facts of

the   case,   it   appears   that   in   reality,   there   was   no   genuine
transaction on the basis of any bill of exchange.  The complainant
simply   had   advanced   some   amounts   to   the   accused   no.1   on
interest, and had in all probability, taken the blank hundies and
blank signed cheques at that time itself.   There is a reason to
believe that the complainant was advancing money as and by way
of a business of money lending without having a valid licence.
This   conclusion   that   was   arrived   at   by   the   learned   Magistrate
cannot be said to be suffering from any infirmity or illegality.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.19 OF 2005
WITH
CRIMINAL APPEAL NO.21 OF 2005
Girdhari Parmanand Motiani .. Appellant
Versus
Vinayak Bhagwan Khavnekar

­­­
   CORAM :   ABHAY M. THIPSAY, J.
DATED  :    14th AUGUST, 2015
­­­
Citation: 2016 ALLMR(CRI)1909

1 These two Appeals can be conveniently disposed of by
this common order as the parties are same, and the points needing
determination are also the same.
2 The appellant is the original complainant.     He had
filed two complaints against the respondent nos.1 and 2 herein,
alleging commission of an offence punishable under section 138 of
the Negotiable Instruments Act by them.  One of the complaints
was   numbered   as   C.C.No.2/S/2003   and   the   other   as
C.C.No.4/S/2003.   The C.C.No.2/S/2003 related to a cheque in
the sum of Rs.3,00,000/­ while the other related to a cheque of
Rs.96,000/­.   According to the appellant, cheques in both these

cases   had   been   given   to   him   by   the   respondent   no.1   herein
towards   the   repayment   of   friendly   loan   advanced   by   the
complainant   to   him.     That,   since   both   the   cheques   were
dishonored, and that inspite of the notice of demand with respect
to the dishonor of each cheque, the payments were not made, the
aforesaid two separate complaints were filed by the appellant.
3 The learned Magistrate tried both the cases, and in
both the cases passed an order of acquittal.   The appellant is
aggrieved by the said orders of acquittal, and has therefore, after
obtaining special leave of this Court, filed the present two Appeals.
According to the appellant, the orders of acquittal, as passed by
the learned Metropolitan Magistrate, being not in accordance with
law, are liable to be set aside, and the respondent nos.1 and 2 are
liable to be convicted.
4 For the sake of convenience and clarity, the appellant
shall be referred to as 'the complainant', and the respondent nos.1
and 2  as 'the accused nos.1 and 2' respectively.
5 Before proceeding further, it must observed that in
both the cases, the cheques had been signed by the accused no.1 –
Vinayak Khavnekar.   The accused no.2 – Vinayak Kheur had not
signed the cheque, nor were the cheques drawn on an account
maintained by him.  He could not be called as the drawer of the
cheques   in   question.     As   such,   there   was   nothing   even   for
proceeding  against the  said  Accused  no.2  Vinayak  Kheur.   His
acquittal,   therefore,   is   proper,   and   does   not   call   for   any
examination or discussion.

6 The   complainant   who   is  a  Senior   citizen   appeared
before the Court in person.  He had earlier engaged an Advocate,
but as that Advocate did not remain present before the Court, the
complainant   had   requested   the   Court   to   appoint   an   Advocate
under the Free Legal Aid Scheme to prosecute these Appeals.  On
two occasions, therefore, Advocates were appointed to prosecute
the Appeals filed by him, but the complainant was not happy with
them, and the Advocates so appointed sought a discharge, which
was given.   Ms.Anamika Malhotra, the learned Additional Public
Prosecutor, who was at the material time, attached to this Court,
was   appointed   as  amicus   curiae  to   assist   the   Court   as   the
complainant pleaded that due  to  old  age, he  had  difficulty in
hearing.   Nevertheless, later the complainant stated that he would
argue the Appeals in person and that he was ready to go on with
the matter.  Since the complainant was raising a grievance about
delay in disposal of the Appeal, the same were taken up for final
hearing, and since today the complainant expressed his readiness
to go ahead with the final hearing of the Appeals without the
assistance of any Advocate, the same were finally heard today.
7 I have heard the complainant.  I have carefully gone
through the complaint in both the cases.   I have also carefully
gone through the impugned judgments.   The learned APP was
asked to  provide   assistance  to  the  complainant  in  arguing the
Appeal which has been done by the learned APP.
8 The cheque which is the subject matter of Criminal
Appeal No.19 of 2005 which arises out of C.C.No.2/SS/2003 is in

the sum of Rs.3,00,000/­.   The cheque in the other Appeal i.e.
Appeal No.21 of 2005 which arises out of C.C.No.4/SS/2003 is in
the sum of Rs.96,000/­.  According to the complainant, the cheque
in the sum of Rs.3,00,000/­ had been given by the accused no.1
towards the repayment of a temporary loan of equal amount given
to him by the complainant.  The other cheque which is in the sum
of Rs.96,000/­ was given to the complainant by the accused no.1
towards the repayment of a loan of Rs.80,000/­ together with
interest.
9 The record shows that according to the complainant,
the loan of Rs.80,000/­ was given to the accused no.1 on 4th June
1994.  The loan of Rs.3,00,000/­ was given on 11th August 1994.
The cheque in the sum of Rs.96,000/­ is bearing No.354161 and is
dated 31/3/1995.   The cheque in the sum of Rs.3,00,000/­ is
bearing 354162 and is dated 24/5/1996.  The cheque in the sum
of Rs.96,000/­ was dishonored on 9/4/1995, whereas the cheque
in the sum of Rs.3,00,000/­ was dishonored on 25/5/1996.  The
complaint in respect of the cheque of Rs.96,000/­ was filed on 9th
August 1995  and the complaint in respect of the cheque in the
sum of Rs.3,00,000/­ was filed on 5th July 1996.
10 The   defence   of   the   accused   no.1   was   that   the
complainant was illegally doing the business of money lending.  It
was   submitted   that   the   complainant   had   advanced   loan   with
exorbitant rate of interest to some other persons who were also,
like the accused no.1, working in Reserve Bank of India.   It was
submitted that at the time of advancing the loans, the complainant
used to obtain the signatures on blank bills of exchange, and also

used to take blank signed cheques from the person to whom he
would advance the loan.   It is submitted that in this case, some
loan transaction had indeed taken place between the complainant
and   the   accused   no.1,   but   the   amount   borrowed   was   only
Rs.30,000/­ which had been paid along with the interest.   The
defence   was   that   the   blank   cheques   and   the   blank   bills   of
exchange taken by the complainant at the time of advancing the
loan have been misused by him by filling the particulars, later.  It
is submitted that no amount as mentioned in the cheques was
actually due and payable by the accused no.1 to the complainant.
It  was   also   submitted   that  the   transaction   essentially   being  of
money lending, the amount advanced by the complainant was not
legally recoverable by virtue of the provisions of Bombay Money
Lenders Act, 1946. 
11 A perusal of the impugned orders in both the cases
indicates   that   the   Magistrate   doubted   the   truth   of   the
complainant's version.     The Magistrate considered the evidence
adduced by the complainant by examining himself and an Officer
from   the   Abhyudaya   Co­operative   Bank   on   which   the   cheques
were   drawn.     The   Magistrate   also   considered   documentary
evidence that was tendered by the complainant during the trial.
The   Magistrate   observed   that   it   was   revealed   in   the   crossexamination
of the complainant that he had filed cases in respect
of   offences   punishable   under   section   138   of   the   Negotiable
Instruments Act not only against the accused in the present case,
but also against some other persons with whom he claimed he had
entered into transactions of similar nature.

12 During the trial, since the accused persons disputed
and   challenged   the   writings   on   the   bills   of   exchange   and   the
cheques, the documents in question were forwarded to an expert
for examination of the writings and his opinion thereof.  However,
the expert could not give definite opinion on the identity of the
hand­writing on the said documents.  The learned Magistrate felt
suspicious   about   the   truth   of   the   version   of   the   complainant
because of a number of factors, including the fact that the cheques
in these two cases were of consecutive serial numbers, but one had
been issued on 31st March 1995 and the other had been issued on
24th May 1996 i.e. after a period of more than one year.  
13 When the cheque of Rs.96,000/­ was dishonored on
5
th April 1995, the complainant had given a notice demanding the
payment thereof on 21st April 1995 in which he had not mentioned
anything about the subsequent loan given by him to the accused in
the sum of Rs.3,00,000/­.  It is difficult to believe that the accused
who had been in difficulties due to the dishonor of the earlier
cheque, would create further difficulties for himself by giving one
more cheque which was going to be dishonored.   The case of the
accused no.1, as aforesaid, was that blank cheques had been given
to the complainant which was felt quite probable because of this
aspect   of   the   matter   and   because   the   cheques   were   having
consecutive serial numbers, but still the difference in the date on
which they were drawn was of more than one year.
14 The   Magistrate   came   to   the   conclusion   that   the
version of the complainant could not relied upon, and that, the
complainant   had   advanced   a   loan   in   contravention   of   the

provisions   of   Bombay   Money   Lenders   Act.     According   to   the
Magistrate, therefore, the amount advanced by the complainant to
the accused no.1 was not legally recoverable and as such, the
accused no.1 could not be held guilty of an offence punishable
under section 138 of the Negotiable Instruments Act.
15 On   going   through   the   complaints,   the   evidence
adduced, I do not find that the view taken by the Magistrate was a
reasonable one and based on the evidence adduced before him.
There were a number of suspicious features about the case of the
complainant which have been reflected in the judgments delivered
by the learned Magistrate.  On considering the facts of the case,
even this Court feels that the possibility of the complainant having
taken blank signed cheques from the accused, is apparent, and in
any case, cannot be ruled out.   Moreover, since the complainant
has   advanced   a   similar   loan   to   a   number   of   persons,   the
transactions in the present two cases are quite likely to be of the
type which   the provisions of the  Bombay Money Lenders Act
prohibit.   The conclusion arrived at by the learned Magistrate that
the cheques in question could not be said to have been issued for
the discharge of a legally enforceable debt or other liability,  does
not appear to be suffering from any infirmity or illegality.
16 The complainant vehemently contended that the loan
was   advanced   on   the   basis   of   a   bill   of   exchange,   and   that
therefore, in view of clause (f) of sub­section (9) of section 2 of
the Bombay Money Lenders Act 1946, it could not be termed as a
loan to which the provisions of the Bombay Money Lenders, 1946
would apply.  However, on a careful consideration on the facts of

the   case,   it   appears   that   in   reality,   there   was   no   genuine
transaction on the basis of any bill of exchange.  The complainant
simply   had   advanced   some   amounts   to   the   accused   no.1   on
interest, and had in all probability, taken the blank hundies and
blank signed cheques at that time itself.   There is a reason to
believe that the complainant was advancing money as and by way
of a business of money lending without having a valid licence.
This   conclusion   that   was   arrived   at   by   the   learned   Magistrate
cannot be said to be suffering from any infirmity or illegality.
17 Moreover, it ought to be kept in mind that these are
Appeals against Acquittals.   It is well settled that while dealing
with Appeal from the order of acquittal, this Court would not
interfere with the view taken by the trial Court, if the same would
be a possible view.  It is well settled that when two views of the
matter are possible on the basis of the evidence adduced before
the trial court, and the trial court has taken one of them leading to
acquittal, then the appellate Court would not interfere with the
order of acquittal. 
17 The   view   of   the   matter   as   taken   by   the   learned
Magistrate   in   both   the   cases   is   certainly   a   possible   view,
warranting no interference.
18 The Appeals are dismissed.
(ABHAY M.THIPSAY, J)

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