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2025 Supreme(SC) 777
SUPREME COURT OF INDIA
VIKRAM NATH, SANDEEP MEHTA, JJ.
Rajendra Anant Varik – Appellant
Versus
Govind B. Prabhugaonkar – Respondent
Criminal Appeal No(S). 2476 of 2025 (Arising out of SLP (Crl.) No (s). 4728 of 2023)
Decided On : 06-05-2025
For the Petitioner(s): Mr. Sahil Tagotra, AOR
For the Respondent(s): None
The applicability of local money-lending regulations can serve as a valid defense in prosecution under Section 138 of the Negotiable Instruments Act.
Headnote:(A) Negotiable Instruments Act, 1882 - Section 138 - Code of Criminal Procedure, 1973 - Section 357 - Goa Money-Lenders Act, 2001 - The High Court quashed the acquittal by the First Appellate Court and restored the conviction of the accused-appellant under Section 138, imposing compensation of Rs. 2,00,000/- and costs of Rs. 30,000/-; however, the Supreme Court found that the High Court erred by not addressing the applicability of the Goa Act, which was a valid defense for the accused. (Paras 4, 5, 8, and 10)
Facts of the case:
The accused-appellant was convicted by the trial Court for issuing a dishonored cheque, but the First Appellate Court acquitted him on the basis that the complainant-respondent was acting as an unlicensed money lender. The High Court reinstated this conviction.
Findings of Court:
The Supreme Court noted that the accused-appellant had settled the cheque amount and fines prior.
Issues: The primary issue was whether the Goa Act provided a valid defense for the accused-appellant.
Ratio Decidendi: The court emphasized that the High Court failed to consider significant defenses related to the Goa Act, thereby rendering its judgment unsustainable.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. high court reversal and acquittal details (Para 3 , 4 , 5) |
| 2. consideration of defense under goa act (Para 7 , 8) |
| 3. compounding offense and acquittal (Para 9 , 10) |
| 4. final judgment and order (Para 11 , 12) |
JUDGMENT :
Mehta, J.
1. Heard.
2. Leave granted.
3. The accused-appellant has approached this Court, through this appeal by special leave, assailing the judgment dated 7th January, 2023, passed by the High Court of Judicature at Bombay at Goa,1[Hereinafter, being referred to as the ‘High Court’.] in Criminal Appeal No. 53 of 2017 whereby the High Court quashed and set aside the judgment dated 6th February 2017, passed by the First Appellate Court being the Court of Sessions Judge, South Goa at Margao,2[Hereinafter, being referred to as the ‘First Appellate Court’.] in Criminal Case No. 29/NI/2014. The First Appellate Court had allowed the Criminal Appeal No. 72 of 2016 filed by the accused-appellant against the conviction order dated 5th August, 2016 passed by the learned Judicial Magistrate First Class, Canacona,3[Hereinafter, being referred to as the ‘trial Court.’], and acquitted him while setting aside his conviction for the offence punishable under Section 138 of the Negotiable Instruments Act, 1882,4[Hereinafter, being referred to as ‘NI Act’.] as recorded by the trial Court.
4. While reversing the acquittal of the accused-appellant, the High Court restored the judgment dated 5th August, 2016, passed by the trial Court in Criminal Case No. 29/NI/2014, convicting the accused-appellant for the offence punishable under Section 138 of the NI Act and directing that he shall pay compensation to the tune of Rs. 2,00,000/- to the complainant-respondent under Section 357 of Code of Criminal Procedure, 1973,5[Hereinafter, being referred to as ‘CrPC’.] towards the cheque amount and further compensation to the tune of Rs. 30,000/- in the form of cost and, in default, shall undergo sentence of simple imprisonment for a period of three months. In addition, the accused-appellant was directed to undergo sentence till the rising of the Court.
5. The First Appellate Court had allowed the appeal, preferred by the accused-appellant, holding that the complainant-respondent was indulging in money lending activities, without acquiring a license and was thereby acting in breach of the provisions of the Goa Money-Lenders Act, 2001,6[Hereinafter, being referred to as the ‘Goa Act’.] and hence, he was precluded from prosecuting the accused-appellant under NI Act.
6. No one has put in appearance on behalf of the respondent-complainant despite service of notice.
7. Learned counsel appearing for the accused-appellant, urged that the accused-appellant had returned the entire amount of loan taken from the complainant-respondent between January 2012 to July 2013. He further submitted that since the accused-appellant has returned the amount of the cheque to the complainant-respondent with interest payable thereupon, he is entitled to be acquitted by compounding the offence.
8. Upon having considered the entirety of the facts and circumstances as emerging from the record, we find that the High Court, while reversing the acquittal of the accused-appellant, as recorded by the First Appellate Court, did not advert to the important issue regarding applicability of the Goa Act which provided a valid defense available to the accused-appellant. Thus, apparently, the judgment rendered by the High Court does not stand to scrutiny.
9. Furthermore, it is an admitted position that the cheque amount to the tune of Rs. 2,00,000/- and the compensation amount to the tune of Rs. 30,000/-, as imposed by the trial Court, has already been paid by the accused-appellant.
10. In view of the facts noted above and considering the aspect that the accused-appellant has already paid the cheque amount and the fine of Rs. 30,000/- imposed by the trial Court, we hereby, exercise our powers under Article 142 of the Constitution of India, to compound the offence and acquit the
