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2015 Supreme(Cal) 444
IN THE HIGH COURT OF CALCUTTA
Tapash Mookherjee, J.
Jupiter Brokerage Services Ltd. - Appellant
Versus
Ektara Exports Pvt. Ltd. & Ors. – Respondent
C.R.A. No. 936 of 2013
Decided on :13.10.2015
Advocate Appeared:
For the Appellant :- Mr. Subir Ganguly, Advocate, Mr. H.P. Mittal, Advocate, Mr. C.B. Biswas, Advocate, Mr. Sumanta Ganguly, Advocate,
For the Opposite Parties :- Mr.V.N. Dwivedi, Advocate, Mr.Ranajit Roy, Advocate, Mr. Piyush Dwivedi, Advocate.
The presumption under Section 139 of the Negotiable Instruments Act includes the presumption of a legally enforceable debt or other liability, and money-lending without a licence is not totally barred or prohibited by the Bengal Money-Lender’s Act, 1940.
Headnote:
NEGOTIABLE INSTRUMENTS ACT - MONEY LENDING - MONEY LENDING WITHOUT LICENCE - LEGALITY - PRESUMPTION UNDER SECTION 139 OF THE N. I. ACT - SCOPE AND EFFECT - APPLICABILITY IN CASE OF MONEY LENDING WITHOUT LICENCE - LIABILITY UNDER SECTION 138 OF THE N. I. ACT - COMPENSATION UNDER SECTION 357 (3) OF THE CODE OF CRIMINAL PROCEDURE.
Fact of the Case:
The appellant, Jupiter Brokerage Services Ltd., filed a complaint under Section 138 of the Negotiable Instruments Act (N. I. Act) against the respondents, Ektara Exports Pvt. Ltd. and its two directors, for issuing five cheques amounting to Rs. 2,50,00,000/- (Rupees Two Crores Fifty Lack only) in favour of the appellant, which were dishonoured due to insufficient funds. The Trial Court acquitted the respondents on the ground that the transactions in question were loan transactions and the appellant had no licence for money lending.
Finding of the Court:
The High Court held that money-lending without a licence is not totally barred or prohibited by the Bengal Money-Lender’s Act, 1940, and that the presumption under Section 139 of the N. I. Act includes the presumption of a legally enforceable debt or other liability. The Court further held that the respondents could not escape from the liability under Section 138 of the N. I. Act, as there was no denial of the fact that they had issued the cheques in question which were dishonoured due to insufficient funds in their account.
Issues: 1. Whether money-lending without a licence is totally barred or prohibited by the Bengal Money-Lender’s Act, 1940? 2. Whether the presumption under Section 139 of the N. I. Act includes the presumption of a legally enforceable debt or other liability? 3. Whether the respondents can escape from the liability under Section 138 of the N. I. Act, in the absence of a money-lending licence?
Ratio Decidendi: 1. Money-lending without a licence is not totally barred or prohibited by the Bengal Money-Lender’s Act, 1940. 2. The presumption under Section 139 of the N. I. Act includes the presumption of a legally enforceable debt or other liability. 3. The respondents cannot escape from the liability under Section 138 of the N. I. Act, in the absence of a money-lending licence, as the presumption under Section 139 of the N. I. Act stands unrebutted.
Final Decision: The High Court set aside the order of acquittal passed by the Trial Court and convicted the respondents under Section 138 of the N. I. Act. The respondents were sentenced to six months of simple imprisonment each and were directed to pay compensation to the appellant under Section 357 (3) of the Code of Criminal Procedure.
Tapash Mookherjee, J:
1. The present appeal under Section 378 (4) of the Code of Criminal Procedure on special leave by this Court is against an order of acquittal passed on 29.06.2013 by the Metropolitan Magistrate, 6th Court, Calcutta in Case No. C-15450/2011. The case was under Section 138 of the Negotiable Instruments Act (hereinafter described in short as N. I. Act).
2. Some relevant facts necessary for the decision of the appeal, in short, are stated below :
3. Jupiter Brokerage Services Ltd. a Public Limited Company, hereinafter described as the appellant/company was the complainant in the case before the Court of the Magistrate and Ektara Exports Pvt. Ltd. and its two directors, namely, Mahendra Kumar Patni and Anjani Kumar Shahi hereinafter described as the respondents/accused were the accused in the case. Both the aforesaid companies have their respective offices in the same premises at Shakespeare Sarani, Calcutta. It has been alleged by the appellant/ complainant that the respondents/accused company to discharge its existing liabilities issued five cheques amounting to Rs. 2,50,00,000.00 (Rupees Two Crores Fifty Lack only) in total, in favour of the appellant/complainant. All those cheques were drawn on Allahabad Bank, Elgin Road Branch, Calcutta. According to the appellant/complainant all those five cheques were deposited in due course within the time, in the account of the appellant/complainant. All those cheques were dishonoured and returned with note “insufficient fund” and the appellant/complainant received such information on 02.05.2011. Immediately thereafter, appellant/complainant sent a demand notice to the respondents/accused on 10.05.2011. The said demand notice was duly served upon the respondents/accused company on 12.05.2011. But in spite of such notice the respondents/accused failed and neglected to pay the amount in the cheques dishonoured. Nor had they sent any reply to the notice. Hence, the appellant/complainant filed the present case in the Court of the Chief Metropolitan Magistrate, Calcutta under Section 138 of the N. I. Act.
4. One Ajoy Agarwal, a director of the appellant/complainant, deposed in the case for the appellant/complainant. All relevant documents were also proved and brought on record. The memorandum and Article of Association of the appellant/complainant has been admitted for the respondent/accused. Considering the evidence produced by the appellant/complainant learned Trial Court came to the conclusion that the transactions in question were loan transactions in substance and as the appellant/complainant had no licence for money lending, it is not legally entitled to realise the money from the respondents/accused and because of such reason learned Trial Court acquitted all the respondents/accused in the case. Being aggrieved by and dissatisfied with such judgment and order of acquittal the appellant/complainant filed the present appeal after obtaining special leave from the Court.
5. Learned Trial Court formulated the following points for decisions:-
1) “Whether the accused persons issued five cheques in favour of the complainant for payment of money?
2) Whether the cheques were presented to the bank within the period of six months from the date on which it was drawn or within the period of its validity?
3) Whether those cheques were returned by the bank unpaid?
4) Whether the complainant made a demand for the payment of the said amount by giving a notice in writing to the accused persons within thirty days?
5) Whether the accused did not pay the said money within fifteen days after receiving the notice?
6) Whether the accused persons drawn the cheque for the discharge of any debt or other liability?
7) Whether the loans advanced by the complainant without having a money lending licence is a legally enforceable debt or nor?”
6. The cheques in question were proved and marked Exhibit-3 to 3 / 4. In fact, the respondents/accused did not dispute the fact that all those cheques
