Case Note & Summary
The appellant, Gulabrao Mahadeo Ghorpade, filed a criminal appeal against the acquittal of the respondent, Chandrakant Pandharinath Nehate, by the Additional Judicial Magistrate First Class, Pune, for an offence under Section 138 of the Negotiable Instruments Act, 1881. The trial court had acquitted the accused on the ground that the complainant was carrying on a money lending business without a license under the Bombay Money Lenders Act, 1946. The complainant alleged that the accused had issued a cheque for repayment of a loan, which was dishonoured. The accused contended that the complainant was a money lender without a license and produced certified copies of previous complaints and judgments (Exhibits 25-29) to support this claim. The trial court accepted this defence and acquitted the accused. On appeal, the High Court examined whether the documents produced by the accused were sufficient to prove that the complainant was carrying on a money lending business. The court noted that the term 'business' under the Bombay Money Lenders Act implies systematic and regular lending, and the mere filing of a few complaints does not establish such a business. The court held that the accused failed to rebut the presumption under Section 139 of the NI Act that the cheque was issued for a legally enforceable debt. Consequently, the High Court allowed the appeal, set aside the acquittal, and convicted the accused under Section 138 of the NI Act, sentencing him to pay a fine of Rs. 1,10,000, with Rs. 1,00,000 as compensation to the complainant.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Section 139 - The accused failed to rebut the presumption that the cheque was issued for discharge of a legally enforceable debt. The trial court erred in relying on previous complaints and judgments to conclude that the complainant was a money lender without license, as those documents did not prove systematic lending. (Paras 10-17) B) Bombay Money Lenders Act - Business of Money Lending - Definition - The mere filing of a few complaints does not establish that the complainant was carrying on the business of money lending. The term 'business' implies systematic and regular activity, not isolated transactions. (Paras 10-17) C) Evidence Act - Rebuttal of Presumption - Section 118(a) - The accused must produce credible evidence to rebut the presumption under Section 139 of the NI Act. The certified copies of complaints and judgments (Exhibits 25-29) were insufficient to prove that the complainant was a money lender without license. (Paras 10-17)
Issue of Consideration
Whether the trial court was correct in acquitting the accused under Section 138 of the Negotiable Instruments Act, 1881 on the ground that the complainant was carrying on money lending business without a license under the Bombay Money Lenders Act, 1946.
Final Decision
Appeal allowed. The judgment and order of acquittal dated 30th July, 2012 passed by the Additional Judicial Magistrate First Class, Pune is set aside. The respondent-accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay a fine of Rs. 1,10,000/- (Rupees One Lakh Ten Thousand only), in default to undergo simple imprisonment for three months. Out of the fine amount, Rs. 1,00,000/- (Rupees One Lakh only) shall be paid to the appellant-complainant as compensation.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act
- 1881
- Burden of proof on accused to rebut presumption
- Definition of 'business of money lending' under Bombay Money Lenders Act
- 1946
- Requirement of systematic and regular lending for money lending business
