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Hon'ble C. V. RAMULU, J.
Crl. A. No. 333 of l998
Decided on 16.3.2004
Krishnam Raju Finances, Hyderabad
versus
Abida Sultana and another
The judgment establishes that the absence of a required license and the inclusion of interest in a statutory notice can invalidate the claim of a legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act, 1881.
Headnote:
Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Andhra Pradesh (Telangana Area) Money Lenders Act, 1349 Fasli - Section 9(2) - Section 2(4) - Section 138 of the Act
Fact of the Case:
The complainant, a licensed money lender, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, alleging that the accused issued cheques that were returned due to insufficient funds. The accused denied the allegations, and the court acquitted the accused, finding that the complainant failed to prove the legally enforceable debt or liability.
Finding of the Court:
The court found that the complainant did not prove the existence of a legally enforceable debt or liability, as the complainant did not possess a money lending license as required by the Andhra Pradesh (Telangana Area) Money Lenders Act, 1349 Fasli. The court also held that the statutory notice issued by the complainant was invalid due to the inclusion of interest, and the complainant's claim of a legally enforceable liability was not established.
Issues: The main issue was whether the complainant could establish a legally enforceable debt or liability against the accused under Section 138 of the Negotiable Instruments Act, 1881, considering the requirements of the Andhra Pradesh (Telangana Area) Money Lenders Act, 1349 Fasli.
Ratio Decidendi: The court held that the complainant's failure to possess a money lending license as required by the Andhra Pradesh (Telangana Area) Money Lenders Act, 1349 Fasli, rendered the debt or liability legally unenforceable. Additionally, the inclusion of interest in the statutory notice was deemed invalid, further undermining the claim of a legally enforceable liability.
Final Decision: The court dismissed the criminal appeal, upholding the lower court's decision to acquit the accused, as the complainant failed to establish a legally enforceable debt or liability.
This appeal is filed under Section 378(4) of the Code of Criminal Procedure aggrieved by the Judgment dated 18.8.1997 in C.C. No.165 of 1997 on the file of the Court of XV Metropolitan Magistrate, Hyderabad, wherein the complaint filed by the appellant herein to punish the accused under Section 138 of the Negotiable Instruments Act, 1881 (for short `the Act') was rejected and the accused was acquitted under Section 255(1) of the Code of Criminal Procedure.
2. The case of the complainant, in brief, is as under:
3. The complainant was dealing with financial business and the accused obtained a loan of Rs.30,000/- from it. Since the loan amount was not paid within a specific period, on demand, the accused issued cheques bearing Nos.0175036 and 0175038 for Rs.1,000/. and for Rs.34.927/- respectively on 30.11.1996 drawn on the Andhra Pradesh State Co-operative Bank Limited, Hyderabad. The cheques were presented for collection on 7.12.1996, but they were returned with endorsement "insufficient funds'. On this, the complainant demanded for payment of amount through a notice dated 13.12.1996 with a demand to pay the said amount of Rs.35,927/- along with Rs.500/- towards legal fee within 15 days from the date of receipt of the notice. The respondent-accused having received the said notice, failed to make the payment and thus committed the offence punishable under Section 138 of the Act.
4. The plea of the respondent-accused was one of total denial and claim to be tried.
5. On behalf of the complainant, P.W.l was examined and Exs.P1 to P12 were marked. For the defence, none was examined and no documents were marked. After considering the entire evidence on record, the Court below came to the conclusion that the complainant was not able to prove guilt against the accused for the offence under Section 138 of the Act beyond all reasonable doubt and acquitted him under Section 255(1) of Cr.P.C. Aggrieved by the same, the complainant filed the present appeal.
6. Heard both sides and perused the entire material on record and also the Judgment of the Court below.
7. Now, the point that arises for consideration in this appeal is whether the prosecution is able to connect the respondent-accused for the offence under Section 138 of the Act?
8. In a case like this, the first thing, which needs to be examined, to connect the accused to the offence is as to whether there was any legally enforceable debt or liability. When the complainant is able to prove Krishnam Raju Finances, Hyderabad versus Abida Sultana
that there is a legally enforceable debt or liability, then only he is entitled for the relief claimed. Now, this Court will examine, whether the complainant is able to establish that there is a legally enforceable debt.
9. It is in the evidence of P.W.l that the complainant is a licensed money lender and according to Ex.P3, it is a partnership firm doing money lending business. Ex.P2 is the firm registration certificate. P.W.l stated that on 19.8.1994, the accused availed a loan of Rs.30,000/-, but failed to repay the amount and on 21.8.1995 issued Ex.P5 confirmation letter dated 21.8.1995. Further, on demand, the accused issued two cheques .Exs.P6 and P7. When the cheques were presented for collection, they were returned with the endorsement `insufficient funds'. Thereafter, Ex.P10 notice was issued.
10. Though it is stated that the complainant was doing money lending business, no such money lending licence was filed into the Court. P.W. 1 in his cross-examination stated that the complainant has got money lending licence, but it was not filed in the Court and was not also mentioned in the complaint. In fact, once a person claims that he/it is a money lender, unless the licence is filed and proved, such a person is not entitled to recover the loans lent by him/it. In this regard, the learned Counsel for the respondent-accused brought to the notice of this Court, a decision reported in Baba Finance Corporation v. Mohd. Nayeem and another,
