Full Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 10TH DAY OF JANUARY 2024 / 20TH POUSHA, 1945 CRL.MC NO. 3966 OF 2016 AGAINST THE ORDER/JUDGMENT CC 204/2015 OF CHIEF JUDICIAL MAGISTRATE ,KOLLAM PETITIONER: SREEKUMAR, AGED 51 YEARS, S/O VELAPPAN PILLAI, IN CHARGE OF MAGMA FINCORP LIMITED, KADAPPAKADA BRANCH, KOLLAM, RESIDING AT DEVI PRASAD, 108 A, NEAR WOMEN’S ITI, MANAYIL KULANGARA, KOLLAM WEST VILLAGE. BY ADV NIRMAL. S RESPONDENT: STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM (ON BEHALF OF THE INVESTIGATING OFFICER IN CRIME NO.936/2014 OF KOLLAM EAST POLICE STATION WHO HAS SUBMITTED THE FINAL REPORT IN C.C.NO.204/2015 ON THE CHIEF JUDICIAL MAGISTRATE COURT, KOLLAM) SRI. T.R. RANJITH (SR. G.P) THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 10.01.2024, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: BECHU KURIAN THOMAS, J ......…............................................. Crl.M.C.No.3966 of 2016 …................................................ Dated this the 10th day of January, 2024
ORDER
Petitioner challenges the proceedings in C.C No.204/2015 on the files of the Chief Judicial Magistrate, Kollam.
2. As per the final report filed in the above said case, petitioner is indicted for the offences under sections 420 and 511 of 468 of the Indian Penal Code, 1860 apart from section 13 of the Kerala Money Lenders Act, 1958.
3. According to the prosecution, the accused, who is the branch
manager of Magma Fincorp Limited had collected blank cheque leaves and stamped documents contrary to law, for the purpose of forging documents and imposing exorbitant interest and disbursed loans at exorbitant rates thereby committing the offences alleged.
4. Sri. S.Nirmal, learned counsel for the petitioner contended that the Magma Fincorp Limited is a non-banking financial company
registered with the Reserve Bank of India as per Annexure A3 and therefore they do not come within the purview of the Kerala Money Lenders Act, 1958. It is further submitted that the signed blank cheque leaves given by the borrowers are not without authority of law. On the other hand, as long as the possessor of such blank cheques or negotiable instruments, act within the limits of the authorization granted, he cannot be said to commit any offence. Learned counsel also contended that persons who had given such cheques and other documents have not raised any complaint and the crime has been registered mala fide, at the instance of the police officer, who had no authority to initiate any proceedings.
5. Sri.T.R.Ranjit, learned Senior Government pleader, on the other
hand contended that the jurisdiction under Article 482 cannot be invoked by the petitioner especially when there are various factual disputes requiring adjudication after trial.
6. Annexure-A3 is the certificate of registration issued by the Reserve Bank of India permitting Magma Fincorp Limited to commence and carry on the business as a non-banking financial
institution. The date of registration is 19.11.2007 and the same has not been cancelled. Petitioner is the manager of one of the branches of the said non-banking financial institutions.
7. In the decision in Nedumpilli Finance Company Ltd. v. State of
Kerala (2022) 7 SCC 394, the Supreme Court has observed that the non-banking financial companies are registered under the Reserve Bank of India Act, 1934 and regulated by the Reserve Bank of India. The Kerala Money Lenders Act, 1958 cannot have any application. It is further observed in the said decision that “the fact that RBI generally leaves it to the market forces to determine the rate of interest, without any direct intervention, is not something that could be taken advantage of by the State of Kerala to step in and prescribe the maximum rate of interest chargeable by NBFCs on the loans advanced by them.”
8. In view of the above decision and the observations extracted
therein, it is evident that the petitioner cannot be stated to have attempted to charge exorbitant interest or commit any offence under the Kerala Money Lenders Act,1958 especially since there is no reference at all to the rate of interest charged or permitted by the RBI during the relevant period.
9. Further, the possession of blank cheques by itself cannot be
indicative of any attempt to cheat as the Negotiable Instruments Act, 1881 confer power upon the holder of a blank cheque to fill up the same. As long as holder of the cheque acts in accordance with the authorization given to him, no offence can be said to be committed merely by possessing blank cheques. Therefore, the prosecution against the petitioner is an abuse of the process of the court.
10. In view of the above, the proceedings against the
petitioner in C.C. No.204/2015 on the files of the Chief Judicial Magistrate, Kollam shall stand quashed. The Crl.M.C. is allowed as above. sd/- BECHU KURIAN THOMAS JUDGE AMV/12/01/2024
APPENDIX OF CRL.MC 3966/2016 PETITIONER ANNEXURES ANNEXURE A1: TRUE COPY OF THE FINAL REPORT WHICH WAS ACCEPTED BY THE LEARNED CHIEF JUDICIAL MAGISTRATE, KOLLAM ON THE FILE AS CC NO.204/2015 DATED 16.7.2015. ANNEXURE A2: TRUE COPY OF THE SEARCH LIST PRODUCED BY THE INVESTIGATING OFFICER BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, KOLLAM DATED 13.5.2014. ANNEXURE A3: TRUE COPY OF REGISTRATION CERTIFICATE ISSUED BY THE RESERVE BANK OF INDIA IN RESPECT OF MAGMA FIN CORP LIMITED DATED 23.9.2008. ANNEXURE A4: TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN WPC NO.1269/2014 DATED 2.7.2014. TRUE COPY