When prosecution for offence under Money lending Act is not maintainable?

The above discussion makes it clear that for it to be a
business there has to be a continuous and systematic activity by
application of labour or skill with a view of earning income when it
could   be   called   “business”.   In   order   to   do   business   of   money
lending, it would be necessary for the State to point out multiple
activities of money lending done by the petitioner. Merely referring
to   one   isolated   transaction   claimed   to   be   a   loan   transaction   or
money lending would not be enough to show that the petitioner was

involved in “business of money lending” without licence. The FIR in
the present matter read as a whole does not spell out that the
petitioner was doing “business of money lending”. This being so, on
the basis of such FIR the prosecution cannot be maintained. 
We have gone through the various documents put on
record by the petitioner as well as the respondents. There are not
even vague allegations, apart from the present transaction of 1982,
that petitioner was advancing loans to people and getting properties
transferred. This is apart from the fact that it would be necessary for
the FIR itself to spell out in clear terms the transactions which
would prima facie show that business as such of money lending was
being involved into without there being a valid licence. 
 For   such   reasons,   the   FIR   as   it   is   filed   cannot   be
maintained. 
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
AURANGABAD BENCH AT AURANGABAD
CRIMINAL WRIT PETITION NO.627/2015
 Mandubai Vitthoba Pawar 

V
 The State of Maharashtra
    
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
       CORAM  :  S.S. SHINDE AND
                        A.I.S. CHEEMA, JJ.

Date of pronouncing the judgment    :  22.09.2015

Citation;2016 CRLJ(NOC)55 Bom

1. This writ petition has been filed by the  petitioner –
original accused against the FIR No.21/2015 registered against her
at Police Station Shiradhon, Tq. Kallamb Distt. Osmanabad under
Section  39 of  the  Maharashtra Money­Lending (Regulation) Act,
2014. 
2. The co­operative officer Grade­I Kallamb – respondent
no.3, original complainant, has filed the offence alleging that the
petitioner   committed   offence   under   the   Maharashtra   MoneyLending
  (Regulation)   Ordinance,   2014.   As   per   the   FIR,   the
petitioner purported to purchase the suit land No.196 by way of
registered sale­deed but actually it was money lending transaction
of the year 1982. Writ Petition however claims that petitioner had
actually purchased the land from Pandurang for consideration in
1982. The FIR has been registered after 33 years. There is civil
litigation   pending   between   Pandurang   and   the   petitioner.   The
petitioner is 85 years old lady and is being harassed by the filing of
the FIR. She claims that the FIR needs to be quashed.

3. On behalf of the respondent nos.1 and 3, affidavit­inreply
has been filed. The respondent no.3 is working as co­operative
officer Grade­I Assistant Registrar, Co­operative Societies, Kallamb.
It is claimed that one Babasaheb gave affidavit against the petitioner
claiming that the petitioner had given loan of Rs.9,000/­ to the
original   complainant   Pandurang   Ghogare   and   agreement   was
executed on 7.10.1982 that land admeasuring 40 R would be given
back after repayment of Rs.9,000/­ with interest. Subsequently, yet
another   agreement   dated   13.8.1991   was   executed   regarding
payment   of   Rs.9,000/­  and  that   land  would  be   returned  to  the
complainant.   There   was   Regular   Civil   Suit   filed   as
R.C.S. No.161/1992 regarding the sale­deed in dispute. Copy of the
judgment in Regular Civil Suit No.161/1992 is filed finding that the
sale­deed   dated   7.10.1982   executed   by   Pandurang   in   favour   of
defendant   (petitioner)   was   towards   security   of   loan   amount.
Respondent no.3 has claimed in affidavit­in­reply that District Level
Committee Forum of the State Government has concluded that the
petitioner indulged in money lending. Copy of the report filed by
the   Committee   is   annexed   with   the   petition.   According   to   the
respondents, the petitioner, the complainant and other witnesses

were heard and it was concluded that the petitioner had indulged in
money lending. Consequently, the complaint was made and offence
has been registered vide Crime No.21/2015. 
4. We   have   heard   the   learned   Counsel   for   both   sides
finally. It has been argued by the learned Counsel for the petitioner
that now the Maharashtra Money­Lending (Regulation) Act, 2014
has come into force which makes business in money lending without
licence an offence under Section 39 of the Act. According to him,
relevant Section was 32 B under the earlier Bombay Money­Lenders'
Act, 1946. Earlier, under Sections 35 A and 32 B the offence was
non­cognizable.  However,  Section  48  of  the  new  Act  makes the
offence cognizable. According to him, considering the punishment
as was earlier provided under the old Act the punishment being of
one year, even if a transaction of 1982 was to be said to be of money
lending, the same would be time barred under Section 468 of the
Code   of   Criminal   Procedure,   1973.   According   to   him,   even
otherwise whether the said transaction was money lending or what
is still to be decided, as, against the judgment of the civil Court in
Regular Civil Suit No.161/1992, the petitioner has filed Regular
Civil Appeal No.67/2008 which is pending as can be seen from

Exh.­E filed with the petition. According to the Counsel, for such old
transaction, the provisions of new Act could not have been invoked
to file complaint to the police station only because the new Act
makes the offence cognizable. 
5. The   learned   Additional   Public   Prosecutor   submitted
that although the offence is of 1982, after the new Act has come
into force, the respondent no.3 could register offence and looking to
the provisions of Section 468 of the Code of Criminal Procedure,
1973 there is provision to condone delay. According to him, the civil
suit has now been decided and so the authorities could act. At the
time of arguments, this Court had posed the question to the learned
Additional   Public   Prosecutor   that   could   a   single   transaction   be
covered under the definition of “business in money lending”. The
learned Additional Public Prosecutor did not reply to the question
posed and made rest of the submissions, as discussed above. 
6. Although   various   questions   have   been   raised   by   the
learned Counsel for the petitioner, we are not entering into those
other aspects as they are not necessary to decide the same in the
present petition which can be disposed of on one point as was raised
by   this   Court   at   the   time   of   arguments.   On   going   through   the

record, it is clear that the respondent no.3 has filed the offence on
the basis of only one transaction which is claimed to be of money
lending. Section 39 of the Maharashtra Money­Lending (Regulation)
Act, 2014 relied on by the State reads as under :
“39. Whoever carries on the “business of
money­lending”   without   obtaining   a   valid   licence,
shall, on conviction, be punished with imprisonment
of either description for a term which may extend to
five   years   or   with   fine   which   may   extend   to   fifty
thousand rupees or with both.”
(Emphasis supplied)
7. The term “business of money lending” has been defined
in Sub Section 3 of Section 2 of the new Act as under :
“3. “business of money­lending” means
the business of advancing loans whether in cash or
kind and whether or not in connection with, or in
addition to any other business.”
8. The meaning of the word “business” as found in Black’s
Law Dictionary 9th  Edition  inter alia  is “a commercial enterprise

carried   on   for   profit;   a   particular   occupation   or   employment
habitually engaged in for livelihood or gain”.
9. In   the   matter   of  Ka   Icilda   Wallang   and
others...Versus...U. Lokendra Suiam (dead) by Lrs., reported in
AIR 1987 SC 2047, the Hon’ble Supreme Court while dealing with
similar matter has observed thus :
“Both the appellate court and the High Court
have found that the plaintiff was not a moneylender
  within   the   meaning   of   Assam   Money
Lenders' Act, 1934. The High Court observed that a
few disconnected and isolated transactions would
not make the plaintiff a person engaged regularly
in money lending business. The approach of the
High Court to the question was correct. ….”
10. In   the   matter   of  Central   Bureau   of
Investigation...Versus...V.C. Shukla and others, reported in (1998)
3   SCC   410,   the   Hon’ble   Supreme   Court   referred   to   the   word
“business” and observed in paragraph no.27 as follows :
“27. Coming   now   to   the   word
“business”, we need not search for its meaning in

Black's Law Dictionary, or Words and Phrases for
this Court has dealt with the word in a number of
cases.  In Narain Swadeshi Wvg. Mills v. Commr. of
Excess Profits Tax a five­Judge Bench of this Court
held that the word “business” connotes some real,
substantial and systematic or organised course of
activity or conduct with a set purpose; and the above
interpretation   was   quoted   with   approval   in
Mazagaon Dock Ltd. v. CIT and Excess Profits Tax.
Again in Barendra Prasad Ray v. ITO this Court
observed that the word “business” is one of wide
import   and   it   means   an     activity   carried   on
continuously and systematically by a person by the
application  of  his  labour  or   skill   with   a  view  to
earning an income. ...”
11. The above discussion makes it clear that for it to be a
business there has to be a continuous and systematic activity by
application of labour or skill with a view of earning income when it
could   be   called   “business”.   In   order   to   do   business   of   money
lending, it would be necessary for the State to point out multiple
activities of money lending done by the petitioner. Merely referring
to   one   isolated   transaction   claimed   to   be   a   loan   transaction   or
money lending would not be enough to show that the petitioner was

involved in “business of money lending” without licence. The FIR in
the present matter read as a whole does not spell out that the
petitioner was doing “business of money lending”. This being so, on
the basis of such FIR the prosecution cannot be maintained. 
12. We have gone through the various documents put on
record by the petitioner as well as the respondents. There are not
even vague allegations, apart from the present transaction of 1982,
that petitioner was advancing loans to people and getting properties
transferred. This is apart from the fact that it would be necessary for
the FIR itself to spell out in clear terms the transactions which
would prima facie show that business as such of money lending was
being involved into without there being a valid licence. 
13. For   such   reasons,   the   FIR   as   it   is   filed   cannot   be
maintained. We are proceeding to quash the FIR. However, we make
it clear that looking to the stage, the quashing of present FIR would
be in  the  nature  of  discharge  of the  petitioner  and in  case  the
authorities   have   evidence   of   multiple   transactions,   the   present
transaction may be claimed as one of the transactions.
14. For the above reasons, the writ petition is allowed. First
Information Report No.21/2015 registered on 26.3.2015 with Police

Station,  Shiradhon,  Tq.  Kallamb,  Distt  :   Osmanabad  against  the
petitioner is quashed. 
No order as to costs.
        (A.I.S. CHEEMA, J.)                       (S.S. SHINDE, J.)

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