Criminal proceedings under Section 420 IPC are misplaced when the conduct of a licensed money lender is governed by special statutes, and charges under money-lending acts cannot be sustained without specific evidence of victims or prohibited acts like molestation.

Digitally signed by HEMALATHA J HIGH COURT OF KARNATAKA

Location: HIGH COURT BUILDING

HIGH COURT BENGALURU-560 001

OF KARNATAKA

THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 CR.P.C PRAYING TO QUASH THE PROCEEDINGS LAUNCHED AGAINST THE PETITIONER IN C.C.NO.673/2016 (CR.NO.425/2015) (POLICE CRIME NO.283/2015 FOR THE ALLEGED OFFENCE PUNISHABLE UNDER SECTIONS 5, 38 AND 39 OF KARNATAKA MONEY LENDERS ACT, 1961 AND SECTIONS 3 AND 4 OF KARNATAKA PROHIBITION OF CHARGING EXORBITANT INTEREST ACT, 2004 AND SECTION 420 OF IPC, PENDING ON THE FILE OF THE LEARNED ADDITIONAL J.M.F.C., SAGAR AND AWARD THE COST OF THESE PROCEEDINGS.

THIS CRIMINAL PETITION IS COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE R. NATARAJ

ORAL ORDER

The petitioner has challenged the charge sheet filed by the respondent No.1 in C.C. No.673/2016 on the file of the Additional Civil Judge (Jr. Dn.) and JMFC - 1 Court, Sagara and the order dated 19.10.2016 taking cognizance for the offence punishable under Section 420 of Indian Penal Code, 1860 (henceforth referred to as 'IPC' for short), Sections 5 , 38, 39 of the Karnataka Money Lenders Act, 1961 (henceforth referred to as 'Act, 1961' for short) and Sections 3 and 4 of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 (henceforth referred to as 'Act, 2004' for short).

2. The petitioner, a money lender licensed under the provisions of the Act, 1961 has filed this petition challenging the registration of the case against him on the complaint of respondent No.2. The respondent No.2 has alleged that an anonymous complaint was received by him stating that the petitioner was indulging in money-lending activities, charging exorbitant interest and obtaining unconscionable documents, thereby cheating the general public. Based on the said anonymous complaint, respondent No.2 sought an order of search and seizure in the house of the petitioner. The Court granted permission, pursuant to which the house of the petitioner was searched and certain documents were seized.

3. Based on the same, respondent No.1 registered Cr.No.283/2015 for the offences punishable under Section 420 of IPC, Sections 5 , 38, 39 of the Act, 1961 and Sections 3 and 4 of the Act, 2004. Thereafter, investigation was conducted and a charge sheet was filed in C.C. No.673/2016. The Trial Court took cognizance of the aforesaid offences and issued process.

4. The petitioner being aggrieved by the same is before this Court.

5.

(i) The learned counsel for the petitioner submits that the petitioner is a registered money lender holding a licence duly issued by the office of the Deputy Registrar of Co-operative Societies and Registrar of Moneylenders, Shivamogga. The said licence was in force from 01.04.2013 to 31.03.2018 and is thereafter renewed for the period 01.04.2018 to 31.03.2023. He therefore, contends that the petitioner cannot be accused of an offence punishable under Section 5 of the Act, 1961. He further contends that the petitioner has not indulged in any act punishable under Sections 38 and 39 of the Act, 1961, as he had not molested any defaulter or borrower during the process of recovery of money. He therefore contends that the Trial Court without application of mind, has cursorily taken cognizance of the offences punishable under Sections 5 , 38 and 39 of the Act, 1961.

(ii) He also contends that there is no material to justify the allegation that the peti