Case Note & Summary
The applicant, Prashant Belsare, filed a criminal application under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of Summary Criminal Case No. 549 of 2009 pending before the Judicial Magistrate, First Class (Court No. 6), Akola. The case was filed by the respondent, Hasmukh Waghela, under Section 138 of the Negotiable Instruments Act, 1881, alleging dishonour of a cheque issued by the applicant. The applicant contended that the respondent was engaged in illegal money lending transactions without authorization and had instituted multiple complaints against various persons. It was argued that since the loan was advanced in cash exceeding Rs. 25,000, it violated Section 269SS of the Income Tax Act, 1961, and therefore there was no legally enforceable liability. The applicant relied on an unreported judgment of the Bombay High Court in Criminal Application No. 1693 of 2010 to support the quashing. The respondent opposed the application, arguing that the question of legally enforceable liability is a mixed question of fact and law that cannot be decided under Section 482 CrPC. The Court, after hearing both sides, held that the presumptions under Sections 118 and 139 of the Negotiable Instruments Act operate in favour of the holder of the cheque. The defence of illegal money lending requires evidence and cannot be a ground for quashing at the initial stage. The Court dismissed the application, observing that the proceedings should continue before the trial court.
Headnote
A) Criminal Procedure Code - Quashing of Criminal Proceedings - Section 482 CrPC - Legally Enforceable Liability - The applicant sought quashing of complaint under Section 138 NI Act alleging illegal money lending by complainant. The Court held that the question whether there was a legally enforceable liability is a mixed question of fact and law which cannot be decided in proceedings under Section 482 CrPC. The presumptions under Sections 118 and 139 of the NI Act operate in favour of the holder of the cheque. The Court dismissed the application, observing that the defence of illegal money lending requires evidence and cannot be a ground for quashing at the initial stage. (Paras 1-5) B) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumptions under Sections 118 and 139 - The Court noted that the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 operate in favour of the holder of the cheque. The applicant's defence that the complainant was engaged in illegal money lending and that there was no legally enforceable liability is a matter of evidence and cannot be decided without trial. The Court relied on the principle that quashing under Section 482 CrPC is not warranted when the defence requires evidence. (Paras 4-5)
Issue of Consideration
Whether the proceedings under Section 138 of the Negotiable Instruments Act, 1881 can be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the ground that the complainant was engaged in illegal money lending and therefore there was no legally enforceable liability.
Final Decision
The Court dismissed the criminal application, holding that the question whether there was a legally enforceable liability is a mixed question of fact and law which cannot be decided in proceedings under Section 482 CrPC. The presumptions under Sections 118 and 139 of the Negotiable Instruments Act operate in favour of the holder of the cheque. The defence of illegal money lending requires evidence and cannot be a ground for quashing at the initial stage. The proceedings in Summary Criminal Case No. 549 of 2009 shall continue before the trial court.
Law Points
- Legally enforceable liability is a mixed question of fact and law
- cannot be decided under Section 482 CrPC
- Presumptions under Sections 118 and 139 of NI Act operate in favour of holder
- Quashing at initial stage not warranted when defence requires evidence
