Case Note & Summary
The applicant, Sainath Dhannalal Javheri, a partner of the firm Tikamdas Girdhardas Saraf, was a licensed money lender under the Maharashtra Money Lending (Regulation) Act, 2014, with a licence to carry on business in Amravati district. The Registrar for Money Lending (non-applicant no.3) lodged an FIR alleging that the applicant had advanced loans to persons residing outside Amravati district, thereby denying farmers the benefit of a loan waiver scheme. An offence under Section 41 of the Act was registered. The applicant challenged the FIR under Section 482 CrPC before the Bombay High Court, Nagpur Bench. The Court examined the provisions of the Act and found that Section 41 penalizes carrying on money lending business without a licence or in contravention of licence conditions, but the Act does not contain any provision prohibiting a money lender from advancing loans to borrowers residing outside the licence area. The licence only restricts the area where the business can be carried on, not the residence of borrowers. The Court held that the FIR did not disclose any offence and quashed it, allowing the application.
Headnote
A) Criminal Law - Quashing of FIR - Section 482 CrPC - Interpretation of Penal Provision - The issue was whether advancing loans to borrowers outside the licence area attracts Section 41 of the Maharashtra Money Lending (Regulation) Act, 2014 - The Court held that the Act does not prohibit a money lender from advancing loans to persons residing outside the licence area; the restriction is only on carrying on business outside the area - Therefore, the FIR was quashed (Paras 7-8).
Issue of Consideration
Whether advancing loans to borrowers residing outside the area of licence granted under the Maharashtra Money Lending (Regulation) Act, 2014 constitutes an offence under Section 41 of the said Act.
Final Decision
The application is allowed. FIR No.0157/2018 registered with Police Station, Amravati City, and all proceedings arising therefrom are quashed.
Law Points
- Section 41 of Maharashtra Money Lending (Regulation) Act
- 2014
- territorial restriction on money lending licence
- interpretation of penal provision
- quashing of FIR under Section 482 CrPC
Case Details
2021 LawText (BOM) (01) 86
Criminal Application (APL) No.581 of 2018
Shri R.L. Khapre, Senior Advocate assisted by Shri Digvijay Khapre for applicant; Shri N.S. Rao, Additional Public Prosecutor for non-applicants
Sainath S/o. Dhannalal Javheri
State of Maharashtra through Ministry of Home, Police Station Officer, Amravati City, and Registrar for Money Lending & Deputy Registrar, Co-operative Societies, Amravati
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Nature of Litigation
Criminal application under Section 482 CrPC for quashing of FIR
Remedy Sought
Quashing of FIR No.0157/2018 registered under Section 41 of the Maharashtra Money Lending (Regulation) Act, 2014
Filing Reason
Allegation that applicant advanced loans to persons residing outside the area of his licence, thereby denying farmers benefit of loan waiver scheme
Issues
Whether advancing loans to borrowers residing outside the licence area constitutes an offence under Section 41 of the Maharashtra Money Lending (Regulation) Act, 2014
Submissions/Arguments
Applicant argued that the Act does not prohibit advancing loans to persons outside the licence area; only carrying on business outside the area is prohibited.
Non-applicant no.3 argued that the licence was for Amravati district, and advancing loans to non-residents violated the licence conditions.
Ratio Decidendi
The Maharashtra Money Lending (Regulation) Act, 2014 does not contain any provision prohibiting a money lender from advancing loans to persons residing outside the area of his licence. The restriction under the licence is only on carrying on the business of money lending outside the specified area, not on the residence of borrowers. Therefore, the FIR under Section 41 of the Act does not disclose any offence and is liable to be quashed.
Judgment Excerpts
After meaningful scrutiny of the First Information Report, in our view, the point involved in the present application is, whether advancing of loans to the borrowers residing outside the area of licence granted to the applicant would attract the provisions of Section 41 of the Act of 2014.
The Act of 2014 does not contain any provision which prohibits a money lender from advancing loans to the persons residing outside the area of licence granted to him. The restriction is only on carrying on the business of money lending outside the area of licence.
Procedural History
FIR No.0157/2018 was registered on 25.5.2018 against the applicant under Section 41 of the Maharashtra Money Lending (Regulation) Act, 2014. The applicant filed Criminal Application (APL) No.581 of 2018 under Section 482 CrPC before the Bombay High Court, Nagpur Bench. On 1st August 2018, notice was issued to the non-applicants for final disposal. The non-applicant no.3 filed a reply. The application was heard and disposed of on 21.01.2021.
Acts & Sections
- Maharashtra Money Lending (Regulation) Act, 2014: 41
- Code of Criminal Procedure, 1973 (CrPC): 482
