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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, AURANGABAD BENCH AT AURANGABAD
S.S. SHINDE, A.I.S. CHEEMA, JJ.
Mandubai Vitthoba Pawar - Petitioner
Versus
The State of Maharashtra & Ors. - Respondents
Criminal Writ Petition No. 627/2015
Decided on : 22.09.2015
Money Lending - Quashing of FIR - Maharashtra Money Lending (Regulation) Act, 2014, Section 39
Fact of the Case:
The petitioner, an accused, filed a writ petition seeking to quash FIR No.21/2015 registered against her under Section 39 of the Maharashtra Money Lending (Regulation) Act, 2014. The petitioner claimed that the FIR was based on a transaction from 1982 and was time-barred.
Finding of the Court:
The court found that the single transaction claimed to be money lending did not constitute a 'business of money lending' as defined by the Act. The court also noted the lack of evidence of multiple transactions or a systematic course of money lending by the petitioner.
Issues: The main issue was whether the single transaction could be considered as 'business of money lending' under the Act, and whether the FIR could be maintained based on this transaction.
Ratio Decidendi: The court held that for an activity to be considered 'business of money lending', there must be continuous and systematic lending with the purpose of earning income. The FIR did not establish that the petitioner was engaged in such a business.
Final Decision: The writ petition was allowed, and FIR No.21/2015 was quashed.
The Maharashtra Money Lending (Regulation) Act, 2014, defines the "business of money lending" as the activity of advancing loans, whether in cash or kind, and whether or not in connection with other businesses. For an activity to be considered the "business of money lending" under this Act, it must involve continuous and systematic lending with the purpose of earning income, rather than isolated or single transactions (!) (!) .
The Act makes it an offence to carry on the business of money lending without obtaining a valid license, with penalties including imprisonment and fines (!) . However, the key element is that the activity must be organized and habitual, not just a one-time or isolated transaction. Merely engaging in a single transaction, especially an old one, does not constitute the "business of money lending" under the Act (!) .
In the context of enforcement, the Court clarified that the presence of a single transaction, without evidence of a continuous or systematic course of lending, does not satisfy the criteria for the "business of money lending." Therefore, such isolated transactions cannot support the maintenance of a prosecution under the Act. The Act emphasizes the importance of ongoing, organized activity aimed at earning income through lending, rather than sporadic or incidental transactions (!) .
Additionally, the Court noted that the provisions of the Act, including the change to cognizable offences, do not automatically apply to transactions that are old or isolated, especially if civil litigation or other proceedings are pending or have been concluded. The initiation of criminal proceedings based solely on a single, old transaction without evidence of a habitual course of lending is not sustainable under the Act (!) (!) .
In summary, under the Maharashtra Money Lending (Regulation) Act, 2014, the activity must involve ongoing, organized lending activities with the purpose of earning income to be considered "business of money lending." Single or isolated transactions, especially those from the distant past, do not meet this criterion and cannot, on their own, justify criminal prosecution under the Act.
A.I.S. Cheema, J.
1. This writ petition has been filed by the petitioner – original accused against the FIR No.21/2015 registered against her at Police Station Shiradhon, Tq. Kallamb Distt. Osmanabad under Section 39 of the Maharashtra Money Lending (Regulation) Act, 2014.
2. The cooperative officer Grade-I Kallamb – respondent no.3, original complainant, has filed the offence alleging that the petitioner committed offence under the Maharashtra Money Lending (Regulation) Ordinance, 2014. As per the FIR, the petitioner purported to purchase the suit land No.196 by way of registered saledeed but actually it was money lending transaction of the year 1982. Writ Petition however claims that petitioner had actually purchased the land from Pandurang for consideration in 1982. The FIR has been registered after 33 years. There is civil litigation pending between Pandurang and the petitioner. The petitioner is 85 years old lady and is being harassed by the filing of the FIR. She claims that the FIR needs to be quashed.
3. On behalf of the respondent nos.1 and 3, affidavit-in-reply has been filed. The respondent no.3 is working as cooperative officer GradeI Assistant Registrar, Cooperative Societies, Kallamb. It is claimed that one Babasaheb gave affidavit against the petitioner claiming that the petitioner had given loan of Rs.9,000/- to the original complainant Pandurang Ghogare and agreement was executed on 7.10.1982 that land admeasuring 40 R would be given back after repayment of Rs.9,000/with interest. Subsequently, yet another agreement dated 13.8.1991 was executed regarding payment of Rs.9,000/- and that land would be returned to the complainant. There was Regular Civil Suit filed as R.C.S. No.161/1992 regarding the saledeed in dispute. Copy of the judgment in Regular Civil Suit No.161/1992 is filed finding that the saledeed dated 7.10.1982 executed by Pandurang in favour of defendant (petitioner) was towards security of loan amount. Respondent no.3 has claimed in affidavit-in-reply that District Level Committee Forum of the State Government has concluded that the petitioner indulged in money lending. Copy of the report filed by the Committee is annexed with the petition. According to the respondents, the petitioner, the complainant and other witnesses were heard and it was concluded that the petitioner had indulged in money lending. Consequently, the complaint was made and offence has been registered vide Crime No.21/2015.
4. We have heard the learned Counsel for both sides finally. It has been argued by the learned Counsel for the petitioner that now the Maharashtra Money Lending (Regulation) Act, 2014 has come into force which makes business in money lending without licence an offence under Section 39 of the Act. According to him, relevant Section was 32 B under the earlier Bombay Money Lenders' Act, 1946. Earlier, under Sections 35 A and 32 B the offence was noncognizable. However, Section 48 of the new Act makes the offence cognizable. According to him, considering the punishment as was earlier provided under the old Act the punishment being of one year, even if a transaction of 1982 was to be said to be of money lending, the same would be time barred under Section 468 of the Code of Criminal Procedure, 1973. According to him, even otherwise whether the said transaction was money lending or what is still to be decided, as, against the judgment of the civil Court in Regular Civil Suit No.161/1992, the petitioner has filed Regular Civil Appeal No.67/2008 which is pending as can be seen from Exh.E filed with the petition. According to the Counsel, for such old transaction, the provisions of new Act could not have been invoked to file complaint to the police station only because the new Act makes the offence cognizable.
5. The learned Additional Public Prosecutor submitted that although the offence is of 1982, after the new Act has come into force, the respondent no.3 could register offence and looking to the provisions of Se
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