BAGMAR FINANCE LIMITED Vs. STATE OF GUJARAT
LAWS(GJH)-2008-12-6
HIGH COURT OF GUJARAT
Decided on December 16,2008

Bagmar Finance Limited Appellant
VERSUS
STATE OF GUJARAT Respondents

JUDGEMENT

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). 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.
(3.) 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.;


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