Kerala High Court
Sebastian Joseph vs State Of Kerala on 11 July, 2024
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
THURSDAY, THE 11TH DAY OF JULY 2024 / 20TH ASHADHA, 1946
CRL.MC NO. 8850 OF 2022
CRIME NO.750/2014 OF KEEZHVAIPUR POLICE STATION, PATHANAMTHITTA
CC NO.36 OF 2016 OF JUDICIAL MAGISTRATE OF FIRST CLASS, THIRUVALLA
PETITIONER/ACCUSED NO.1:
SEBASTIAN JOSEPH
AGED 73 YEARS
KAILATH FINANCE, MALLAPPILLY WEST P.O,
PATHANAMTHITTA DISTRICT, PIN - 689585
BY ADVS.
ANOOP.V.NAIR
E.ADITHYAN
MEENAKSHY S DEV
RESPONDENTS/STATE/DEFACTO COMPLAINANT:
1 STATE OF KERALA
REPRESENTED BY PUBLIC PROSECUTOR,
HIGH COURT OF KERALA, PIN - 682031
2 THE SUB INSPECTOR OF POLICE
KEEZHVAIPUR POLICE STATION,
KEEZHVAIPUR P.O,
PATHANAMTHITTA DISTRICT, PIN - 689587
3 SUSAMMA ABRAHAM
W/O. ABRAHAM VARGHESE,
RESIDING AT KUNNEL HOUSE,
MALLAPPALLY WEST P.O,
PATHANAMTHITTA, PIN - 689565
4 ABRAHAM VARGHESE
S/O. VARGHESE,
RESIDING AT KUNNEL HOUSE,
MALLAPPALLY WEST P.O,
PATHANAMTHITTA DISTRICT, PIN - 689565
BY SRI.RENJIT GEORGE, SR. PUBLIC PROSECUTOR
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
19.06.2024, THE COURT ON 11.07.2024 PASSED THE FOLLOWING:
CRL.MC NO. 8850 OF 2022
2
CR
ORDER
Dated this the 11th day of July, 2024 This Criminal Miscellaneous Case has been filed under Section 482 of the Code of Criminal Procedure to quash Annexure-II Final Report in Crime No.750/2014 of Keezhvaipur Police Station, now pending as C.C.No.36/2016 on the files of the Judicial First Class Magistrate Court, Thiruvalla. The petitioner herein is the sole accused in the above case.
2. Heard the learned counsel for the petitioner and the learned Public Prosecutor in detail.
3. In this matter, the prosecution alleges commission of offences punishable under Sections 420 and 506(i) of IPC, Section 3 r/w Section 17 of the Kerala Money Lenders Act, 1958 and Section 3 r/w Section 9(a) of the Kerala Prohibition of Charging Exorbitant Interest Act, 2012 (hereinafter referred to as 'the Act, 2012' for short). CRL.MC NO. 8850 OF 2022 3
4. The prosecution allegation is that the accused herein gave chitty loan to the defacto complainant and thereafter demanded exorbitant interest for the same. The further allegation is that the accused, who runs 'Kailath Chitty Fund', had collected 16 blank cheques, 16 signed stamp papers and 16 white papers affixed with the revenue stamps towards security for the said chitty transaction amounting to Rs.1 lakh by threat and cheating. On this premise, the prosecution alleges commission of the above said offences by the accused.
5. According to the learned counsel for the petitioner, going by the prosecution records, none of the offences would attract in the facts of this case, and he also argued that on similar facts, the Apex Court as well as this Court quashed similar crimes. The learned counsel for the petitioner has placed decision of the Apex Court dated 28.01.200 in Appeal(Crl) 91/2000 (G.Sagar Suri and Another vs. State CRL.MC NO. 8850 OF 2022 4 of UP and Others).
6. In G.Sagar Suri's case (supra), the allegation was that the finance company gave Rs.50 lakh by means of cheque and the complainant issued two cheques for the repayment of the same, viz., one cheque for Rs.50 lakh and the other cheque was for Rs.86,625/- towards interest. In the said decision, the Apex Court found that the prosecution is clearly an abuse of process of law in a case where the prosecution under Section 138 of the Negotiable Instruments Act already pending against the appellants and the other accused.
7. The learned counsel for the petitioner also placed decision of this Court dated 18.03.2020 in Crl.M.C.No.3090/2015 (Varghese Kurian vs.State of Kerala), where the prosecution alleged commission of offences punishable under Section 420 r/w Section 34 of IPC as well as Section 3 r/w Section 17 of Kerala Money Lenders Act and Section 9(a) of the Act, 2012. In the said case, this CRL.MC NO. 8850 OF 2022 5 Court, after analysing the facts of the case, stated in paragraph Nos.13 and 14 as under:
"13. The contention that the petitioners are moneylenders is also not acceptable because Section 17 of the Kerala Money-Lenders Act will not be attracted in solitary transactions, even if the alleged transaction between the petitioners and the defacto complainant is accepted to be a loan advanced by the petitioners. In a catena of decisions, the Kerala High Court has held that to define a person as a money-lender, it must be proved by the prosecution that he is a person engaged in the business of money-lending as his primary or secondary business.(See Vimal v. State of Kerala and other 2015(1)KLT524) There is not a scintilla of material produced by the prosecution in this regard.
14. In order to attract an offence under the Interest Act, it must be proved that the accused was charging interest at a rate higher than the maximum rate of interest charged by commercial Banks on loans granted by them. It is also pertinent to note that the Interest Act had come into effect only on 27.8.2012 and the alleged transactions between the petitioners and the defacto complainant in the instant case took place in 2003, 2004 and 2006. There is no other material CRL.MC NO. 8850 OF 2022 6 indicating that the petitioners had actually demanded or realised any interest. Being a penal consequence, the Interest Act which came into effect only in the year 2012 cannot be attracted as it does not have any retrospective effect, in this case. The contention that the prosecution is barred by limitation under section 468 Cr.PC; is however not acceptable as the allegation is one of cheating punishable under section 420 IPC. After having bestowed my anxious considerations to all the materials produced in this case, I find that the case against petitioners is not sustainable as it would only amount to abuse of process of law."
8. Similar view has been taken by this Court in the order dated 30.09.2015 in Crl.M.C.6308/2014 (P.B. Sudhakaran V. State of Kerala and Another) and in the order dated 12.03.2020 in Crl.M.C.2729/2017 (Muhammed Basheer V. State of Kerala and Another).
9. The learned Public Prosecutor though attempted to justify the prosecution case, the learned counsel for the petitioner pointed out Annexure III statement, form part of the final report prepared by the Investigating Officer Sri.Anilraj, CRL.MC NO. 8850 OF 2022 7 stating that after registration of this Crime, the Investigating Officer had conducted search at the residence of the accused but he could not trace out anything to support the prosecution.
10. Since the prosecution alleges commission of offences punishable under Sections 420 and 506(i) IPC, under Section 3 r/w 17 of the Kerala Money Lenders Act and under Section 3 r/w 9(a) of the Act, 2012, it is apposite to refer Sections 3 and 17 of the Money Lenders Act and Sections 3 and 9 of the Act, 2012 and the same are as under:
Kerala Money Lenders Act "3. Money-lender to obtain licence. -
(1) From the date on which the provisions of this Act are brought into force in any area no person, firm or joint family or unincorporated association of individuals shall commence or carry on or continue business as a money lender at any place in such area without a licence obtained under this Act or in contravention of the terms thereof:
Provided that nothing in this section shall be deemed to prohibit a person who has applied for a licence to carry on or to continue business CRL.MC NO. 8850 OF 2022 8 as a money-lender pending orders on his application.
(2) Where a money-lender has more than one shop or place of business, whether in the same town or village or in different towns or villages he shall obtain a separate licence respect of each shop or place of business.
(3) (a) Where a money-lender is a registered firm the licence shall be obtained in the firm's name.
(b) Where a money-lender is an undivided joint family, the licence shall be obtained in the name of the manager or the karanavan or the yajaman, as the case may be, described as such in the licence.
(c) Where a money-lender is any other association of individuals, not required to be registered under the Indian Companies Act, 1956, (Central Act 1 of 1956), a separate licence shall be obtained by each such individual in his name describing himself as a member of the association:
Provided that nothing contained in this sub-section shall affect the operation of Section 69 of the Indian Partnership Act, 1932 (Central Act IX of 1932) Section 17 of the Money Lending Act is extracted hereunder:
17. Penalty for carrying on business without license or in violation of the conditions of licence. - Whoever carries on the business of money-lending without a licence or in violation of CRL.MC NO. 8850 OF 2022 9 the conditions of the licence or otherwise than in conformity with the terms and conditions of the licence shall be punished with imprisonment for a term which, in the absence of special reasons to be recorded in the judgment of the Court, shall not be less than three months but which may extend to three years and with fine which, may extend to five lakh rupees."
Section 3 of the Act, 2012 reads as under:
3. Prohibition of charging exorbitant interest. - No person shall charge exorbitant interest on any loan advanced by him.
Section 9(a) of the Act, 2012 is extracted as under:
9. Penalty - (1) Notwithstanding anything contained in the Kerala Money-Lenders Act, 1958 (35 of 1958),-
(a) whoever contravenes the provisions of Section 3 shall, on conviction, be punished with imprisonment for a terms which may extend to three years and also with fine which may extend to fifty thousand rupees;"
11. Going by Section 3 of the Kerala Money Lenders Act, the same mandates the need for a license to carry on or continue business of money lending and the business shall be conducted in the licensed premises by any person, firm or CRL.MC NO. 8850 OF 2022 10 joint family or association of individuals. Section 17 of the Kerala Money Lenders Act, introduced with effect from 15.10.1985, provides penalty for carrying on business without licence or in violation of the conditions of the licence and in such event, the accused shall be punished and the period of punishment shall be not less than three months, which may extend upto three years with a fine which may extend to Rs.5 lakh.
12. Coming to Section 3 of the Act, 2012, charging exorbitant interest is prohibited and it has been provided that no person shall charge exorbitant interest on any loan advanced by him. Section 9(a) provides punishment for contravention of Section 3 and on conviction, the offender shall be punished with imprisonment for a term which may extend to three years and also with fine which may extend to Rs.50,000/-.
13. Insofar as Section 7 of the Kerala Money Lenders Act is concerned, the same came into force with effect from CRL.MC NO. 8850 OF 2022 11 01.04.2019. Prior to that Section 7(1) reads as under:
"(1) No money-lender shall charge interest on any loan at a rate exceeding two per cent above the maximum rate or interest charged by commercial banks on loans granted by them:
Provided that money-lender shall be entitled to charge a minimum of one rupees as interest on any transaction:
Provided further that the Government may specify, by notification, the rate of interest under sub-section (1) from time to time."
14. In the instant case, prosecution allegation is that the de defacto complainant joined in sixteen chitties having 'sala' of Rs.1 lakh each, starting from 2011 onwards, and thereafter obtained sixteen blank cheques, sixteen blank signed stamp papers and sixteen revenue stamps affixed in signed stamp papers. Thereafter, Rs.8 lakh was given as chitty prize and demanded interest at the rate of Rs.5,000/- for Rs.1 lakh. The further allegation is that accordingly, amounts were collected at the said rate. In the final report, financial dealings and collection of interest from witnesses Nos.1, 9 and 19 were stated. As far as the present crime is concerned, the same is pertaining to a chitty transaction of CRL.MC NO. 8850 OF 2022 12 the year 2011. But as per the final report, it has been stated that when search was conducted at the house of the accused, to trace out sixteen numbers of blank signed cheques, sixteen signed blank stamp papers and sixteen white papers affixed with revenue stamps, nothing recovered. Thus it appears that no materials collected during investigation, apart from the statement given by CW2 to the effect that the accused demanded interest at the rate of Rs.5000/- for Rs.1 lakh after joining him in sixteen chitties having 'sala' of Rs. 1 lakh and after giving Rs. 8 lakh as the chitti prize.
15. In this matter, it is discernible from Annexure V that the accused herein filed O.S.No.2/2014 before the Sub Court, Thiruvalla, to realise money from the defacto complainant. But the suit was dismissed by the trial court. Against which RFA has been pending before this Court. Thus it appears that the financial dealings in between the defacto complainant and the accused is a subject matter of civil suit, CRL.MC NO. 8850 OF 2022 13 O.S.No.2/2014 on the files of the Sub Court, Thiruvalla, now pending before RFA before this Court and in view of filing the civil suit, the petitioner sought assistance of the court to realize the amount due as per law. If so, prima facie, it could not be held that the case of the prosecution alleging collection or demand for exorbitant interest or other offences are made out. Therefore, quashment sought for is liable to be allowed.
Accordingly, this petition stands allowed. All further proceedings in Annexure-II Final Report in Crime No.750/2014 of Keezhvaipur Police Station, now pending as C.C.No.36/2016 on the files of the Judicial First Class Magistrate Court, Thiruvalla, stand quashed.
Sd/-
A. BADHARUDEEN JUDGE nkr CRL.MC NO. 8850 OF 2022 14 APPENDIX OF CRL.MC 8850/2022 PETITIONER ANNEXURES Annexure I TRUE COPY OF THE JUDGMENT IN CRL. MC NO. 3324/2014 PASSED BY THIS HON'BLE COURT DATED 01.01.2022 Annexure II CERTIFIED COPY OF THE FINAL REPORT AND FIS IN CRIME NO. 750/2014 FILED BEFORE THE JUDICIAL FIRST CLASS MAGISTRATE COURT, THIRUVALLA Annexure III CERTIFIED COPY OF THE STATEMENT OF SOME OF THE MAIN WITNESSES Annexure IV TRUE COPY OF THE FIR AND FIS IN CRIME NO.750/2014 FILED BEFORE THE JUDICIAL FIRST CLASS MAGISTRATE COURT, THIRUVALLA , Annexure V TRUE COPY OF THE RFA NO. 384/2017 FILED BY THE PETITIONER HEREIN, PENDING BEFORE THIS HON'BLE COURT RESPONDENTS ANNEXURES : NIL