The Bombay High Court, in this case, quashed an FIR filed under Section 39 of the Maharashtra Money Lending (Regulation) Act, 2014. The Court found that the FIR was based on an isolated transaction between two parties, which did not constitute a continuous business of money lending. The Court held that to invoke Section 39, it is essential to demonstrate habitual or systematic engagement in money lending, which was absent in this case.

1. Application Filed for Quashment of FIR (Para 1)
The applicant sought to quash the FIR filed in Crime No. 242 of 2022, registered at Police Station, Murum, Osmanabad, under the Maharashtra Money Lending Act, 2014. The FIR stemmed from a report lodged by the Assistant Registrar, Cooperative Societies, Umerga, based on a complaint from respondent No. 3, alleging unauthorized money lending.

2. Allegations and Investigation (Para 2-4)
Respondent No. 3 alleged that a nominal sale deed from 2010 was a disguised money lending transaction. The Assistant Registrar conducted an inquiry and initially concluded that the transaction was a sale. However, further complaints led to the lodging of the FIR under Section 39 of the Money Lending Act.

3. Applicant’s Defense: Sale, Not Money Lending (Para 5-6)
The applicant contended that the transaction in question was an out-and-out sale, which was duly registered and reflected in official records. The applicant argued that there was no evidence linking her or her deceased father, Shankar Khajje, to any money lending business.

4. Counterarguments from Respondent (Para 7)
The respondent’s counsel argued that the sale deed was a façade for money lending, claiming that Shankar Khajje had agreed to reconvey the land upon repayment of the principal with interest. The respondent urged the Court to dismiss the application.

5. Legal Interpretation of Section 39 of the Money Lending Act (Para 8-9)
Section 39 punishes unauthorized money lending without a valid license. The Court emphasized that a single transaction does not constitute "business" as defined in the Act, which requires habitual and systematic lending for profit.

6. Lack of Evidence for Continuous Money Lending (Para 10-11)
The Court noted that no evidence supported the claim that the applicant or her father engaged in continuous money lending. The FIR was based solely on an isolated transaction, which could not attract Section 39’s penalty provisions.

7. Precedents and Legal Analysis (Para 11)
The Court referred to previous judgments, including Mandubai Vithoba Pavar vs. State of Maharashtra and Balasaheb Ramrao Bade vs. State of Maharashtra, emphasizing that isolated transactions do not amount to money lending under the Act.

8. Conclusion: FIR Quashed (Para 12)
The Court held that there was no material to support the allegation of money lending, and therefore, continuing the prosecution would be an abuse of legal process. The FIR and consequential proceedings were quashed.

Acts and Sections Discussed

1. Maharashtra Money Lending (Regulation) Act, 2014
   • Section 39: Punishes those who engage in unauthorized money lending without a valid license. The Court focused on the requirement for a continuous business of money lending to attract liability under this section.
   • Section 2(3): Defines "business of money lending" as advancing loans habitually for profit or livelihood.

Ratio Decidendi

To constitute a money lending business under Section 39 of the Maharashtra Money Lending (Regulation) Act, 2014, there must be evidence of continuous or systematic activity aimed at profit or livelihood. An isolated transaction cannot be considered a business of money lending. Therefore, the FIR based on a single transaction was quashed as it did not meet the legal threshold.

Subjects:

Subject: Criminal Law, Money Lending Regulation
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