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2025 Supreme(Online)(MP) 8953

HIGH COURT OF MADHYA PRADESH
Gajendra Singh, J
Kiran Sharma – Appellant
Versus
Abhishek Jain – Respondent
CRIMINAL REVISION No. 2433 of 2025 | CRIMINAL REVISION No. 2429 of 2025 | CRIMINAL REVISION No. 2430 of 2025 | CRIMINAL REVISION No. 2432 of 2025 | CRIMINAL REVISION No. 2790 of 2025

Advocates:
For the Appellants/Petitioners: Deeptanshu Shukla
For the Respondents: Sudhanshu Vyas

Cheques issued in the context of an unlicensed money lending transaction, which violates state money lending regulations, do not constitute a 'legally enforceable debt' and consequently cannot form the basis for a criminal conviction under Section 138 of the Negotiable Instruments Act, 1881.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Money Lenders Act, 1934 - Section 11-H - Dishonour of cheque - Legally recoverable debt - Where complainant admitted business of money lending without valid license, transaction violates state money lending regulations - Any person, who is indulged in money lending business cannot recover the loan amount through Court if unlicensed - Cheques issued in such context cannot form basis for criminal conviction under S. 138 of N.I. Act.

(B) Appellate Courts - Duty - Courts must appreciate evidence on record and legal bar created by state statutes regarding recovery of debt in absence of valid registration - Failure to consider the admission of money lending business without license renders convictions legally unsustainable.

Facts of the case:
The revision petitioner was convicted under Section 138 of the N.I. Act for the dishonour of cheques issued to the respondent. The petitioner contended that the respondent was an unlicensed money lender, the loan was not a legally recoverable debt, and the financial capacity and authenticity of the transactions were not proved.

Findings of Court:
The court found that the respondent had admitted in evidence to being in the business of advancing money on loan without a valid license. Based on S. 11-H of the M.P. Money Lenders Act, 1934, and current judicial precedents, the court held that unlicensed money lending transactions do not create a legally enforceable debt for the purposes of the N.I. Act.

Issues: Whether the conviction under S. 138 of the N.I. Act is sustainable for transactions arising from the business of unlicensed money lending.

Ratio Decidendi: An unlicensed money lending transaction violates local money lending regulations, thereby disqualifying the debt from being classified as a 'legally enforceable debt' under the N.I. Act, rendering criminal liability under S. 138 inapplicable.

Result: Revision petitions allowed; convictions set aside and petitioner acquitted.

Table of Content
1. procedural context and summary of trial court findings. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. arguments regarding illegality of unlicensed money lending. (Para 7 , 8 , 10 , 11)
3. analysis of money lenders act and enforceability of debt. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22)
4. final acquittal based on lack of legally recoverable debt. (Para 23 , 24 , 25 , 26)

Heard On: 20.08.2025

Delivered On: 24.11.2025

ORDER

1. In all revision petitions, parties are the same and issues for determination are common, all these revisions petitions heard analogously and are being disposed off by this common order.

2. In all the revision petitions, the conviction under Section 138 of Negotiable Instruments Act, 1881 awarded by Judicial Magistrate First Class, Shajapur has been affirmed by First Additional Judge to the Court of Additional Sessions Judge, Shajapur, but the sentence has been modified as under:-

Sr.	CRR No.	Date of Judgment by Appellate Court	Date of Judgement by JMFC	Conviction U/s	Sentence by trial Court	Sentence by appellate Court	Fine/compensation	Default stipulation
1	2433/25	22.04.2025 Passed in CRA No.97/2024	08.08.2024 Passed in SCNIA No.43/21	138 of N.I.Act	06 Months S.I	Nil	Rs.6,67,500/-	01 Month S.I.
2	2429/25	22.04.2025 Passed in CRA No.94/2024	08.08.2024 Passed in SCNIA No.135/21	138 of N.I.Act	06 Months S.I.	Nil	Rs.6,67,917/-	01 Month S.I.
3	2430/25	22.04.2025 Passed in CRA No.98/2024	08.08.2024 Passed in SCNIA No.27/21	138 of N.I.Act	06 Months S.I.	Nil	Rs.6,66,667/-	01 Month S.I.
4	2432/25	22.04.2025 Passed in CRA No.96/2024	08.08.2024 Passed in SCNIA No.23/21	138 of N.I.Act	06 Months S.I.	Nil	Rs.6,67,917/-	01 Month S.I.
5	2790/225	22.04.2025 Passed in CRA No.95/2024	08.08.2024 Passed in SCNIA No.42/21	138 of N.I.Act	06 Months S.i.	Nil	Rs.7,99,500/-	01 Month S.I.

3. Above conviction and sentence has been awarded regarding dishonour of cheques issued by the revision petitioner in favour of the respondent/complainant and after serving the notice within statutory period, revision petitioner did not make the payment. The details of the cheques are being mentioned as below:-

Sr. No.	Cheque No.	Cheque Amount	Date of Loan	Due date of repayment	Date of Dishonour of Cheque	Date of Legal Notice
1	80	Rs.5 Lakhs	10.02.2017	15.09.2019	12.12.2019	03.01.2020
2	81	Rs.5 Lakhs	05.01.2017	15.09.2019	12.12.2019	03.01.2020
3	83	Rs.5 Lakhs	25.01.2017	20.09.2019	17.12.2019	11.01.2020
4	84	Rs.6 Lakhs	10.01.2017	23.09.2019	17.12.2019	11.01.2020
5	86	Rs.5 Lakhs	30.12.2016	30.09.2019	26.12.2019	20.01.2020

4. Before trial Court, only evidence of complainant/respondent Abhishek Jain as PW-1 and documents cheque issued by the revision petitioner Ex.P/2, cheque return memo Ex.P/2, notice to the revision petitioner Ex.P/3, Postal receipt Ex.P/4, acknowledgement of service of notice Ex.P/5 and acknowledgement of receiving of amount by revision petitioner Ex.P/6 in all cases are on record.

5. In examination under Section 313 of Cr.P.C. 1973, all the facts are denied and the cheques mentioned in para no.3 of this order were not issued for discharging in whole or in part of any debt or other liability. It was stated that she did not issue the cheques, she did not acknowledged the amount through Ex.P/6, cheques does not bear her signatures and no evidence was adduced. Further defense of the revision petitioner/accused is that the cheques were torn by complainant/respondent from the cheque book that was kept in the shop.

6. Appreciating the evidence, the learned trial Court as well as the appellate court recorded the conviction of revision petitioner under Section 138 of Negotiable Instruments Act, 1881 but sentence was modified as mentioned in table no.1 above.

7. Challenging the conviction as well as the sentence, these revision petitions are preferred on the ground that learned trial Court has committed the illegality in not appreciating the fact that the respondent/complainant is engaged in

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2025 Supreme(Online)(MP) 8953

HIGH COURT OF MADHYA PRADESHGajendra Singh, JKiran Sharma – AppellantVersusAbhishek Jain – RespondentCRIMINAL REVISION No. 2433 of 2025 | CRIMINAL REVISION No. 2429 of 2025 | CRIMINAL REVISION No. 2430 of 2025 | CRIMINAL REVISION No. 2432 of 2025 | CRIMINAL REVISION No. 2790 of 2025

Cheques issued in the context of an unlicensed money lending transaction, which violates state money lending regulations, do not constitute a 'legally enforceable debt' and consequently cannot form the basis for a criminal conviction under Section 138 of the Negotiable Instruments Act, 1881.

HIGH COURT OF MADHYA PRADESH
Gajendra Singh, J
Kiran Sharma – Appellant
Versus
Abhishek Jain – Respondent
CRIMINAL REVISION No. 2433 of 2025 | CRIMINAL REVISION No. 2429 of 2025 | CRIMINAL REVISION No. 2430 of 2025 | CRIMINAL REVISION No. 2432 of 2025 | CRIMINAL REVISION No. 2790 of 2025