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2025 Supreme(Online)(MP) 8954
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
For the Appellants/Petitioners: Deeptanshu Shukla
For the Respondents: Sudhanshu Vyas
Cheques issued in the context of an unlicensed money-lending business cannot form the basis for criminal conviction under Section 138 of the Negotiable Instruments Act, 1881, as the underlying transaction does not constitute a legally enforceable debt in view of the M.P. Money Lenders Act, 1934.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - M.P. Money Lenders Act, 1934 - Section 11-H - Criminal Revision - Conviction based on dishonoured cheques issued for loan - Complainant admitted to being in the business of money lending without producing a registration certificate - Legally recoverable debt - Held, that a transaction of a money lender without a valid registration certificate as required under the M.P. Money Lenders Act, 1934, does not qualify as a legally enforceable debt under the Negotiable Instruments Act, 1881 - Prosecution under Section 138 is not maintainable for such transactions. (Paras 14, 20, 21)
Facts of the case:
The petitioner challenged an order of conviction under Section 138 of the Negotiable Instruments Act, 1881, affirmed by the appellate court. The petitioner contended that the complainant was an unlicensed money lender and the debt was not legally recoverable, further noting that no money lending license was produced in evidence.
Findings of Court:
The Court found that the complainant admitted to being in the business of money lending in his deposition. Since the complainant failed to provide a valid registration certificate under State money lending laws, the underlying transaction lacked the legal character of an enforceable debt. Consequently, the conviction was unsustainable.
Issues: Whether the dishonour of cheques issued in the course of an unlicensed money lending business constitutes an offence under Section 138 of the Negotiable Instruments Act, 1881.
Ratio Decidendi: An unlicensed money lending activity violates state regulations, rendering the associated debt non-recoverable through court proceedings; therefore, the statutory presumption regarding a legally enforceable debt is rebutted when the complainant is proven to be an unlicensed money lender.
Result: Revision petitions allowed; conviction and sentences set aside; petitioner acquitted.
| Table of Content |
|---|
| 1. summary of trial and appellate court proceedings regarding cheque dishonor convictions. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. arguments regarding the absence of a money lending license and lack of legally recoverable debt. (Para 7 , 8 , 9 , 10 , 11) |
| 3. analysis of the legal status of unlicensed money lending under the m.p. money lenders act. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22) |
| 4. setting aside convictions and order of acquittal due to lack of enforceable 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 g
