1. The petitioner who is the sole accused in Crime No. 859/2014 of Sooranadu Police Station, Kollam registered for the offences under Section 420 IPC and Section 17 read with Rule 3 of the Money Lenders Act, 1958 approached this court with this petition to invoke the inherent jurisdiction to quash the FIR.
2. The prosecution case is that on 5.2.2008 the de facto complainant had borrowed an amount of Rs.50,000/- from this petitioner agreeing to repay the same with interest. At the time of availing the loan, this petitioner had received a blank cheque as well some signed blank papers as security for the loan. Though he repaid the entire amount on 06.06.2008, there was an illegal demand for a further sum of Rs.15,000/-.When he refused to yield to his illegal demand, the cheque was presented, but it was dishonoured due to insufficiency of funds. Thereafter by misusing the cheque, he filed a Criminal case against him before the Judicial First Class Magistrate Court, Sasthamcotta and a civil suit before the Sub Court, Karunagapally. The petitioner had thus cheated the de facto complainant and committed the
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3. Heard the learned counsel for the petitioner, the learned counsel for 2nd respondent and the learned Public Prosecutor.
4.The learned counsel for the petitioner has submitted that he is not a money lender as defined under the Kerala Money-lenders Act and he has not committed any offence as alleged. In fact, the de facto complainant is his neighbour. As a neighbour he approached him in the year 2008 for financial assistance to meet some contingency and borrowed a sum of Rs.5 lakhs on 21.12.2008 agreeing to repay the same within a month. He had also handed over a cheque dated 21.1.2009 as security. On failure to repay the amount, the petitioner presented the cheque for encashment. But it was returned with an endorsement as 'funds insufficient'. Thereafter he proceeded against him under Section 138 of the Negotiable Instruments Act and the case is pending as S.T.No.439/2009. It is further submitted by the learned counsel for the petitioner that he had also filed a suit for realisation of money before the Sub Court, Karunagapally. Though the de facto complainant entered appearance and filed written statement denying the transaction, remained absent subsequently and hence the suit was decreed ex parte as per Annexure A3. After the decree, the de facto complainant moved a petition before that court to set aside the ex parte order as well the ex parte decree. That was also dismissed. That order was challenged before this Court as FAO No.103/2014, which was allowed by this Court as per judgment dated 18.06.2014 and the decree was set aside and the parties were directed to appear before the civil court where the civil suit was pending. Learned counsel for the petitioner submitted that in fact he is not a money lender and he has absolutely no business of money lending. He had only paid an amount of Rs.5 lakhs to the 2nd respondent on his request considering the fact that he was his neighbour. But he has been falsely implicated in this case as a money lender which is only an abuse of process of the court. It is also pointed out by the learned counsel for the petitioner that after initiation of the criminal proceedings in question a search was conducted by the investigating agency, but nothing has been seized as revealed by Annexure-A5. Learned counsel has submitted that there was absolutely no intention to cheat the de facto complainant/the 2nd respondent at the time of handing over the amount of Rs.5 lakhs on his request and so the essential ingredients to attract an offence under Section 420 IPC is also lacking in this case. Hence he seeks to quash the entire proceedings initiated on the basis of registration of FIR No. 859/2014 of Sooranadu Police Station.
5. The learned Public Prosecutor, on the other hand, contended that there is a strong case to be proceeded with and the investigation of the case is well in progress. Learned Public Prosecutor has also submitted the report of the Sub Inspector of Police who is investigating the case for perusal.
6. At the outset it is to be noted that in the report filed by the investigating officer it is specifically mentioned that nothing has been seized from the residence of the petitioner though a search was conducted by him, as revealed by Annexure-A5. The case filed by the petitioner under Section 138 of the Negotiable Instruments Act as S.T.No.439/2009 before the Judicial First Class Magistrate, Sasthamcottah is still pending. This case is registered against the petitioner treating him as a money-lender.
7. A money lender is defined in Section 2(7) of the 'The Kerala Money- Lenders Act ,1958 as :
2. (7).'money-lender' means a person whose main or subsidiary occupation is the business of advancing and realising loans or acceptance of deposits in the course of such business and includes any person appointed by him to be in charge of a branch office or branch offices or a liaison office or any other office by whatever name called, of his principal place of business and a pawn broker, but does not include―
(a) a bank or a co-operative society; or
(b) the Life insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (Central Act 31 of 1956); or
(bb) the industrial Credit and Investment Corporation of India Limited incorporated under the Indian Companies Act, 1913 (7 of 1913);
(c)the industrial Finance Corporation established under section 3 of the Industrial Finance Corporation Act, 1948 (Central Act 15 of 1948)
(e) the State Financial Corporation established under section 3 of the State Financial Corporation Act, 1951 (Central Act 63 of 1951); or
(f) any institution established by or under an Act of Parliament or the Legislature of a State, which grants any loan or advance in pursuance of the provisions of that Act, or
(g) any other institution in the public sector, whether incorporated or not exempted by the Government by notification.
Explanation I.― Where a person, who carries on in the State of Kerala the Business of advancing and realising loans is resident outside the State, the agent of such person resident in the State of Kerala shall be deemed to be the money-lender in respect of that business for the purposes of this Act.
Explanation II.― For the purposes of this Clause, clause (7A), proviso to sub-section (1) of section 3, clause (a) of sub-section (3) of section10, [section 16B] and section 17, the word 'person' shall include 'a firm or a joint family;'
8. Prima facie, it is to be noted no materials are available as such to show that the petitioner carries on or continues business or occupation as a money lender or is engaged with the business of money lending or accepts deposit of money as business. The word business means an activity carried on continuously and systematically by a person to earn income. The definite case of the petitioner is that the respondent is his neighbour and he had borrowed money in the year 2008 to overcome some emergency. That fact has not been denied by him and it has been specifically stated in the complaint that he had borrowed the money in the year 2008 and he repaid it . But the FIR was registered in the year 2014 at the time of implementation of' operation Kubera' carried out by the State Government to curtail the illegal money lending business of persons who are engaged with illegal money lending business. It could be seen that only at the time of this particular investigation under the name 'operation Kubera' by the State Government, this complaint has been lodged by the 2nd respondent, though the transaction was in the year 2008. Needless to say that Section 17 of the Act can be applied only if the petitioner comes under the definition of a money lender. If only, he is a person engaged with the activity of advancing money and realising or accepting deposits and return the same as business for income/profit he can be termed as a money-lender. If a person render financial assistance to a friend or neighbor or to anyone having acquaintance or not, to assist or to render help to him in a contingency and then receive back the same on demand or when it is returned, cannot be called as a 'money lender' within the meaning under the Money-Lenders Act.
9. As FIR is registered under Section 420 IPC also, it is apposite to reiterate the same which reads as follows:
'420. Cheating and dishonestly inducing delivery of property- Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
Hence the essential ingredients to attract Section 420 IPC are:
i) The accused must have deceived someone
ii) The accused must induce a person
a) to deliver property;
b) or to make, alter or destroy whole or part of any valuable security or anything which is signed or sealed and which is capable of being converted into a valuable security
iii) mens rea of the accused at the time of making the inducement; that the accused did so dishonestly.
10. Therefore, the intention to cheat another person must be there from the very beginning of the transaction. In fact it is not prima facie discernible from the materials before this court that this petitioner had any such intention when the defacto complainant borrowed an amount of Rs.5 lakhs from him. That be so the essential ingredients to attract an offence under Section 420 IPC are also lacking in this case.
11. It is well settled that the statutory power under Section 482 Cr.P.C. has to be exercised judiciously and sparingly with great caution. It is also to be noted that to secure justice as well to prevent abuse of process of any court, the inherent jurisdiction vested with the court under Section 482 Cr.P.C. can be exercised. In short, when the court is convinced that no purpose will be served by proceeding with the prosecution it should not hesitate to quash the criminal proceedings initiated against the party. Here on a perusal of the entire records, it is clear that none of the ingredients to attract any of the offence under the provisions of the Money Lenders Act or under Section 420 of the Indian Penal Code is available in this case so as to proceed against this petitioner on the basis of the crime registered against him in the year 2014 based on a transaction which took place in the year 2008.
12. To meet the ends of justice,in my view, this petition is only to be allowed. Crime No.859/2014 of Sooranadu Police Station registered against this petitioner is hereby quashed.