JUDGMENT :

1. The only issue arisen in this Appeal is whether solitary transaction of lending money can be said to be money lending transaction within purview of the Bombay Money Lenders Act, 1946 because carrying on business of money lending without obtaining license amounts to offence under the provisions of section 32B of the Act. So also the provisions of section 10 of the said Act put fetters on the power of Court to pass decree in favour of money lender in any suit unless a money lender holds valid license. In other words, if money is lent without license as part of money lending business and if the cheque is issued towards discharge of that debt, it cannot be said as legally recoverable debt and the prosecution under section 138 of NI Act will not be maintainable.

2. This issue has arisen in Summary Case No.811 of 2002 filed before the Court of 5th Judicial Magistrate, First Class, Thane. The Appellant was complainant and present Respondent was accused therein. The trial Court has not treated money advanced by the complainant as part of money lending business and on proof of other ingredients, convicted Respondent No.2- accused for offence punishable under section 138 of NI Act to rigorous imprisonment for one month and fine for Rs.5,000/-.

3. There was an Appeal filed by the accused against this order of conviction whereas the complainant preferred revision for enhancement. The Court of Additional Sessions Judge as per judgment dated 28th June 2004, was pleased to set aside the conviction and dismiss the complaint consequently, revision was also dismissed. The correctness of this judgment is challenged by original complainant before this Court.

4. I have heard learned Advocate Mr. Jha for the Appellant and learned Advocate Ms. Ilsa Sheikh for Respondent No.2- accused. Most of the factual aspects are admitted. Both of them have taken me through evidence part and findings of the Appellate Court. I must say that the findings recorded by the Appellate Court were wrong. It is for two reasons. The ingredients required for invoking the provisions of said Act were not satisfied and the Appellate Court has not considered relevant provisions of the said Act in totality. Few of the provisions are considered and factual aspects were not considered. This order certainly deserves to be set aside. I will give reason for said decision.

Facts

5. The complainant M/s. Raj Exports, is a proprietary firm and proprietor Arun Joshi is its proprietor and he is in the export business. The Appellate Court referred his business as exporter of tobacco. Learned Advocate Mr. Jha expressed his surprise for reference to his business as exporter of tobacco. The complaint was filed by the proprietor through Power of Attorney Shri Babu Singh Purohit and he too gave evidence. Whereas the accused is proprietor of Dhanesha Jewellers. The complainant lent an amount of Rs.4,00,000/- to accused. There are two documents.

They are as follows :

(i) Agreement dated 24th July 2001, thereby evidencing lending of amount of Rs.4,00,000/-.

(ii) Promissory note dated 24th July 2001, executed by accused in favour of Proprietor Arun Joshi.

6. In fact when cheque is issued and signature is admitted, presumption comes into picture that there is consideration for which the cheque is issued. Accused has not denied signature and issuance of cheque. In this case the complainant has not only relied upon the said presumption but supports it by way of above two documents.

7. Learned Advocate Ms. Ilsa Shaikh for Respondent No.2 with all her humility tried to support the order of the Appellate Court. She invited my attention to the agreement dated 24th July 2001, wherein there is reference of issuance of cheque in question as security. According to her, after the cheque is issued for guarantee, it is to be presumed that it is by way of security.

8. Appellate Court observed that cheque was issued not towards liability but by way of security. While doing that the Appellate Court relied upon the