M.R. Shah, J.
1. Rule. Mr. M.R. Mengdey, learned A.P.P. waives service of Rule on behalf of the respondent-State. With the consent of the learned Advocates appearing on behalf of the respective parties, this application is taken up for final hearing today.
2. By way of this petition, under Section 482 of the Criminal Procedure Code ('Cr.P.C.' for short), the petitioners-original accused have prayed for an appropriate writ, direction and/or order quashing and setting aside the Criminal Case No. 302 of 2008 pending in the Court of learned Metropolitan Magistrate, Court No. 20, Ahmedabad against the petitioners for the offence under Sections 5, 18, 19, 25 read with Section 34 of the Bombay Money-Lenders Act, 1946 ('the Act' for short).
3. A criminal complaint/criminal case being 302 of 2008 is filed by the Inspector of the Money-lenders, Ahmedabad in the Court of learned Metropolitan Magistrate, Ahmedabad against the petitioners-original accused for the offences under Sections 5, 18, 19, 25 read with Section 34 of the Bombay Money-lenders Act, 1946 alleging inter alia that the petitioners, more particularly petitioner No. 1 has committed offence under Sections 5, 18, 19 and 25(3) of the Act and is doing business of finance without obtaining any licence as required under the Act. It was further averred that petitioners are engaged in the business of disbursing loan without obtaining licence as required under the provisions of the Money-lenders Act and in the said complaint the learned Metropolitan Magistrate took cognizance of the complaint and directed issuance of summons against the petitioners. Hence, present petitioners have preferred present application under Section 482 of the Cr.P.C. to quash and set aside the complaint.
4. Mr. Sanjay Gupta, learned Advocate for the petitioners has vehemently submitted that the petitioners have not committed any offence as alleged under Sections 5, 18, 19 and 25 of the Act. It is submitted that respondent No. 2-original complainant has unilaterally assumed jurisdiction under the Act by holding that the provisions of the Act are applicable to the petitioner No. 1-Company and has wrongly recorded the finding that hire-purchase agreement is in fact a loan transaction, therefore, it was obligatory on the part of petitioner No. 1-Company to obtain necessary licence from the concerned authority under the Act and since petitioner No. 1 has failed and neglected to keep accounts and furnish accounts in the prescribed form, it has violated the provisions of Sections 5, 18 and 19 of the Act. It is submitted that in the present case, loan was advanced to a trader doing transport business and it cannot be termed as a loan as per the definition of 'loan' under Section 2(9) of the Act. It is further submitted that so far as the allegations in the complaint that petitioner No. 1-Company is charging interest exceeding 18%, and therefore, has acted in contravention of the provisions of the Act, by holding that petitioner No. 1-Company is a 'money-lenders' is concerned, in a given case, if it is found that the loan was given to a trader, in civil proceedings, the Court while passing the decree can limit the interest under Section 23 of the Act. It is further submitted that as per Section 25 of the Act, the State can issue notification limiting the rate of interest. It is submitted that loan to 'trader' is not covered under the Act. It is submitted that in the present case, concerned hirer/trader took financial assistance from petitioner No. 1-Company for the purpose of transport business and there was agreement entered into between the parties for payment of installments and rate of interest is also specified. Said document is duly signed and executed by the hirer and when he has agreed for paying interest at a particular rate and when all throughout he has paid such monthly installments, it cannot be said that any offence is made out more particularly when such advancement of money cannot be said to be 'loan' as defined under the Act. It is further submitted by Mr. Gupta, learned Advocate for the petitioners that 'hire-purchase agreement' cannot be equated with 'loan agreement'. It is further submitted that even procedure as required to be followed under Section 200 of the Cr.P.C. are not followed and complainant is not examined on oath, and therefore, the learned Magistrate ought not to have taken cognizance. It is submitted that so far as petitioner No. 2 is concerned, there is no whisper in the complaint that he was in charge of and responsible for the affairs of the Company at the time when alleged offence is committed. Sum and substance of submission made on behalf of the petitioners is that (i) financial assistance/loan to person for purchase of vehicle in the present case for purchase of Rickshaw can be said to be loan to 'trader', and therefore, considering Section 2(18) of the Act same cannot be said to be 'loan' so as to attract provisions of the Act (ii) that hire-purchase agreement cannot be equated with loan agreement (iii) there is no verification on oath of the complainant as required under Section 200 of the Cr.P.C. Mr. Gupta, learned Advocate for the petitioners has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Sundaram Finance Ltd. v. State of Kerala and Anr. reported in : AIR 1966 SC 1178 and decision of the learned single Judge of this Court dated 20-2-2006 rendered Misc. Criminal Application No. 255 of 2001 (Sundaram Finance Ltd. v. State of Gujarat) in support of his above submissions. Relying upon aforesaid decisions and making above submissions, it is requested to quash and set aside the impugned complaints.
5. The petition is opposed by Mr. Mengdey, learned A.P.P. appearing on behalf of the respondent-State and original complainant. It is submitted that admittedly in the present case, finance/loan is given to a person for purchase of Rickshaw, and therefore, same cannot be said to be a loan to a trader and/or for transport business, and therefore, same would come within the definition of 'loan' attracting provisions of the Act, and therefore, licence as required under the provisions of the Act is required and as admittedly the petitioners have not obtained licence, there is clear breach of provisions of the Act. Now, so far as the contention on behalf of the petitioners that 'hire-purchase agreement' cannot be equated with 'loan agreement', it is submitted that even 'hire-purchase agreement' is 'loan agreement', but so far as 'hire-purchase agreement' is concerned, there person who has taken loan has agreed to repay loan as per installments mentioned in the said agreement, and therefore, it is said 'hire-purchase agreement', however, in substance, it is 'loan agreement'. Mr. Mengdey, learned A.P.P. for the respondents has also relied upon the decision of the Hon'ble Supreme Court in the case of Sundaram Finance Ltd. v. State of Kerala and Anr. reported in : AIR 1966 SC 1178.
6. So far as the submission on behalf of the petitioners that as original complainant is not examined on oath, and therefore, learned Magistrate could not have taken cognizance is concerned, it is submitted that Section 200 of the Cr.P.C. is very clear and as the complainant is a Government Officer, he was not required to be examined on oath. So far as reliance placed upon decision of the Hon'ble Supreme Court and this Court referred to hereinabove is concerned, it is submitted that on facts same are not applicable. It is submitted that in the case before this Court admittedly loan was given for transport business, and therefore, considering definition of loan, it was found that provisions of the Money-lenders Act would not be attracted. It is submitted that so far as the present case is concerned, provisions of Money-lenders Act is attracted.
Now, so far as the submission on behalf of the petitioners that so far as petitioner No. 2 is concerned, there are no allegations that he was in-charge of the Company at the relevant time, it is submitted that there are specific averments in the complaint that petitioner No. 2 was in fact responsible and in-charge of the affairs of the Company. It is submitted that those averments are sufficient at this stage and further things are required to be considered at the time of trial on leading proper evidence. Therefore, it is requested to dismiss the present applications.
7. Heard the learned Advocates appearing on behalf of the respective parties.
8. At the outset, it is required to be noted that allegations against the petitioners are for contravention of Sections 5, 18, 19 and 25(3) of the Act. It is alleged in the complaint that the petitioners are doing business of finance and/or giving loan without obtaining licence as required under the provisions of the Act. In the present case, loan/finance has been given to a person for purchasing rickshaw and hire-purchase agreement has been entered into between petitioner No. 1-Company and person who has taken loan/finance. Relevant provisions of the Act which are relevant are as under:
Section 5 - Money-lender not to carry on business of money-lending except for area under licence and except in accordance with terms of licence.
No money-lender shall carry on the business of money-lending except in the area for which he has been granted a licence and except in accordance with the terms and conditions of such licence.
Section 18 - Duty of money-lender to keep accounts, and furnish copies.
Every money-lender shall keep and maintain a cash book and a ledger in such form and in such manner as may be prescribed.
(2) Every money-lender shall:
(a) deliver or cause to be delivered:
(i) to the debtor within 30 days from the date on which a loan is made, a statement in any recognized language showing in clear arid distinct terms the amount and date of the loan and of its maturity the nature of the security, if any, for the loan, the name and address of the debtor and of the money-lender and the rate of interest charged; (ii) to the Assistant Registrar, within the said period (a statement containing the particulars referred to in Clause (a) (i))(3) No money-lender shall receive any payment from a debtor on account of any loan without giving him a plain and complete receipt for the payment.
(4) No money-lender shall accept from a debtor any article as a pawn, pledge or security for a loan without giving him a plain signed receipt for the same with its description, estimated value, the amount of loan advanced against it and such other particulars as may be prescribed.
Section 19. Delivery of statement of accounts and copies thereof by moneylender.
(1) Every money-lender shall deliver or cause to be delivered every year to each of his debtor a legible statement of such debtor's accounts signed by the moneylender or his agent of any amount that may be outstanding against such debtor. The statement shall show:
[(i) the amount of principal, the amount of interest and the amount of fees referred to in Section 19A, separately, due to the money-lender at the beginning of the year;
(ii) the total amount of loan advanced during the year;
(iii) the total amount of repayments received during the year; and
(iv) the amounts of principal and interest due at the end of the year.]
The statement shall be signed by the moneylender, or his agent, and shall be in any recognized language. It shall be in such form and shall be supplied to the debtor on or before such date as may be prescribed;
The money-lender shall on or before the aforesaid date deliver or cause to be delivered [a statement containing the particulars specified in Clauses (i) to (iv)] to the Assistant Registrar.
(2) In respect of any particular loan, whether advanced before or after the date on which this Act comes into force, the money-lender shall, on demand in writing being made by the debtor at any time during the period when the loan or any part thereof has not been repaid, and on payment of the prescribed fee supply to the debtor, or if the debtor so requires to any person specified in that behalf in the demand, a statement, in any recognized language, signed by the money-lender or his agent, and containing the relevant particulars specified in Sub-section (1).
(3) A money-lender shall, on a demand in writing by the debtor and tender of the prescribed sum of expenses, supply a copy of any document relating to a loan made by him or any security thereof to the debtor, or if the debtor so requires to any person specified in that behalf in the demand.
(4) For the purposes of this Section 'year' means year for which the accounts of the money-lender are ordinarily maintained in his own books.
Section 25 [(3) [If any money-lender or a person advancing a loan specified in Sub-clause (g) of Clause (9) of Section 2 makes an oral or written demand or charges or receives] from a debtor interest at rate exceeding the maximum rate fixed by the (State) Government under Sub-section (1), he shall, for the purpose of Section 34, be deemed to have contravened the provisions of this Act.]
Section 2(2) which defines business of money lending is as under:
(2) 'business of money-lending' means the business of advancing loans whether or not in connection with or in addition to any other business.
Section 2(6) which defines interest is as under:
(6) 'interest' includes any sum by whatsoever name called, in excess of the principal paid or payable to a money-lender in consideration of or otherwise in respect of a loan, but does not include any sum lawfully charged by a moneylender for or on account of costs, charges or expenses in accordance with the provisions of this Act, or any other law for the time-being in force.
Section 2(9) defines loan which is as under : 'Loan' means an advance at interest ***** whereof money or in kind, but does not include:
(a) a deposit of money or other property in a Government Post Office Bank or in any other Bank or in a company or with a co-operative society;
(b) a loan to, or by, or a deposit with any society or association registered under the Societies Registration Act, 1860, (XXI of 1860) or any other enactment relating to a public, religious or charitable object;
(c) a loan advanced by Government or by any local authority authorised by Government;
*((cc) a loan advanced to a Government servant from a fund, established for the welfare or assistance of Government servants, and which is sanctioned by the State Government;)
((d) a loan advanced by a co-operative society;
(d1) an advance made to a subscriber to, or a depositor in, a Provident Fund from the amount standing to his credit in the fund in accordance with the rules of the fund;
(d2) a loan to or by an Insurance Company as defined in the Insurance Act, 1938 (VI of 1938));
(e) a loan to, or by Bank;
(f) an advance made on the basis of a Negotiable Instrument as defined in the Negotiable Instruments Act, 1881 (XXVI of 1881), other than a promissory note;
[(g) except for the purposes of Sections 23 and 25:
(i) a loan to a trader;
(ii) a loan to a money-lender who holds, a valid licence; or
(iii) a loan, by a landlord to his tenant for financing of crops or seasonal finance, of not more than Rs. 50 per acre of land held by the tenant;
(iv) a loan advanced to an agricultural labourer by his employer;] Section 2(10) defines money-lender which is as under:
(10) 'money-lender' means (i) an individual, or (ii) an undivided Hindu family or (iii) a company, or (iv) an unincorporated body of individuals, who or which - (a) carries on the business of money-lending in the [State] or (b) has his or its principal place of such [business in the State and includes a pawn broker but does not include - (i) Government, (ii) a local authority (iii) a Bank (iv) the Agricultural Refinance Corporation constituted under the Agricultural Refinance Corporation Act, 1963 or (v) any other Banking financial or any institution which the State Government may, by notification in the Official Gazette, specify in this behalf].
Section 2(18) defines trader which is as under:
(18) 'trader' means a person who in the regular course of business buys and sells goods or other property, whether movable or immovable, and includes -a wholesale or retail merchant, a commission agent, a broker, a manufacturer, a contractor, a factory owner, but does not include an artisan or a person who sells his agricultural produce or cattle or buys agricultural produce or cattle for his use.
9. As per Section 5 of the Act, no money-lender shall carry on the business of money-lending except in the area for which he has been granted a licence and except in accordance with the terms and conditions of such licence. On conjoint reading of relevant provisions referred to hereinabove, business of money-lending means business of advancing loan whether in cash or in kind. ' LOAN' means an advance at interest whether of money or in kind, but does not include - loan to 'TRADER'. 'MONEY-LENDER' means (i) an individual, or (ii) an undivided Hindu family or (iii) a company, or (iv) an unincorporated body of individuals, who or which - (a) carries on the business of money-lending in the (State) or (b) has his or its principal place of such business in the State. 'TRADER' means a person who in the regular course of business buys and sells goods or other property, whether movable or immovable, and includes - a wholesale or retail merchant, a commission agent, a broker, a manufacturer, a contractor, a factory owner, but does not include an artisan.
10. In the present case, it is the case on behalf of the petitioners that loan has been given to person for purchasing Rickshaw, therefore, same is given to 'TRADER'. It is further submitted by Mr. Gupta, learned Advocate appearing for the petitioners that looking to the definition of 'LOAN' and 'TRADER' it cannot be said that while giving finance/loan to person for purchasing Rickshaw provisions of Money-lender Act are attracted, and therefore, licence is not required. Mr. Gupta, learned Advocate for the petitioners has relied upon definition of 'TRADER' by submitting that person who has taken loan/finance for purchasing rickshaw can be said to be contractor. Therefore, petitioners are not required to obtain any licence as required under the Act. Aforesaid submission is required to be rejected outright. Person who has taken loan/finance for purchasing rickshaw cannot be said to be 'contractor' at all. Such person cannot come within the definition of 'TRADER'. 'Trader' means person who in the regular course of business buys and sells goods or other property, whether movable or immovable, and therefore, rickshaw driver cannot be said to be person who in the regular course of business buys and sells goods or other property, whether movable or immovable. Certainly, he cannot be said to be 'contractor'. It is the contention on behalf of the petitioners that when loan is given to person to buy Rickshaw it can be said to be 'loan to trader', and therefore, provisions of the Act would not be attracted and/or licence is not required cannot be accepted. Giving finance/loan to a person to purchase Rickshaw can be said to be within the definition of 'LOAN' attracting Section 5 and other relevant provisions of the Act for which licence is required. It cannot be disputed that the petitioner No. 1 cannot be said to be 'moneylender' within the definition of 'MONEYLENDER' under the Act. It is admitted position that petitioner No. 1 has not obtained any licence as required under the Act. Therefore, it appears that petitioners have committed breach/contravention of the provisions of the Act for which the petitioners are to be tried.
11. Learned Advocate for the petitioners has relied upon the decision of the Hon'ble Supreme Court in the case of Sundaram Finance Ltd. (supra), however, the said decision would not be helpful to the petitioners as controversy before the Hon'ble Supreme Court was with respect to definition of sale in Section 2(f) of Hire-Purchase, Sale of Goods Act and Travancore-Cochin General Sales Tax Act.
12. Now, so far as the reliance placed upon decision of this Court rendered in Misc. Criminal Application No. 255 of 2001 is concerned, said judgment will not be applicable to the facts of the present case as admittedly in the said case it was found that complainant had taken financial assistance from the Company and said loan was utilized for transport business. Therefore, on facts considering definition of 'TRADER' learned single Judge found that 'LOAN' given to such person was not 'LOAN' attracting the provisions of the Act which required licence. In the present case, as stated above loan/finance is not for transport business and person who has taken loan cannot be said to be 'TRADER' or 'Contractor'. Therefore, the contention on behalf of the petitioners that the petitioners have not committed any offence and/or are required to obtain licence under the Act, cannot be accepted.
Now, so far as the contention on behalf of the petitioners that there is non-compliance of Section 200 of the Cr.P.C. inasmuch as original complainant is not examined on oath is concerned, same also has no substance. It cannot be disputed that original complainant is a Government Public Servant, and therefore, considering Section 200 of the Cr.P.C, when the complaint is made in writing, the Magistrate need not examine the complainant and the witnesses, if a public servant acting or purporting to act in the discharge of his official duties or a Court has made the complaint. Under the circumstances, it cannot be said that requirement of Section 200 are not complied with. In the facts and circumstances of the case, it cannot be said that the learned trial Court has committed any error in taking cognizance.
So far as the contention on behalf of the petitioners that petitioner No. 2 is concerned, impugned complaint deserves to be quashed and set aside as there is no whisper in the complaint that he was in charge and responsible for the affairs of the company at the time when alleged offence was committed is concerned, same has, also no substance as there are specific averments in the complaint that petitioner No. 1 is responsible Director of the Company.
13. Now, so far as the contention on behalf of the petitioners that 'hire-purchase agreement' cannot be equated with 'loan agreement' is concerned, same has also no substance. As held by the Hon'ble Supreme Court in the case of Sundaram Finance Ltd. (supra), 'hire purchase agreement' can be said to be 'loan agreement'. It is not in dispute that agreement entered into between petitioner No. 1-Company and the person who has taken loan/finance is for recovery of loan amount with interest, but in instalments. Therefore, it can be said that same is to advance loan with interest and attracting provisions of the Act. Now, so far as the contention on behalf of the petitioners that condition under Section 35 of the Act has not been complied with has also no substance. In Para 14 of the complaint there are specific averments which are required under Section 35 of the Act.
14. In view of above facts and circumstances of the case and observations, it cannot be said that the petitioners have not advanced loan as contemplated under the provisions of the Act which requires licence under the Act. Admittedly, in the present case licence is not obtained and the petitioners are doing business of money-lending attracting provisions of Money-Lenders Act. Therefore, when the impugned complaint/criminal case has been filed same is not required to be quashed and set aside in exercise of powers under Section 482 of the Cr.P.C.
15. For the reasons stated above, the application fails, deserves to be dismissed and accordingly it is dismissed.