A.GUNASEKARAN Vs. P.VELUSAMY

JUDGEMENT

(1.) The petitioner herein is the accused in CC.No.331/2008 on the file of the Judicial Magistrate, Palladam, arising out the private complaint filed by the respondent/complainant for proceeding against the accused under Section 138 of Negotiable Instruments Act.

(2.) The complaint proceeds as if the accused approached the complainant on 10.5.2007 and borrowed Rs.2 lakhs for his family expenses and agreed to pay interest at 24%pa to the complainant and the accused has, on the same date also executed a promissory note for the above amount in favour of the complainant. Thereafter, the accused failed to pay interest for the borrowed amount, which compelled the complainant to demand entire amount with interest on 3.10.2008 on which date, the accused issued a cheque for Rs.2,66,000/- towards discharge of his liability as demanded in the promissory note. When the same was presented for collection, it was returned dishonoured for want of sufficient funds and the accused was informed the same through statutory notice and inspite of the same, he failed to pay the amount, which is the cause of action for filing the present complaint.

(3.) After having entered appearance, the accused has come forward with this petition to quash the proceedings pending against him in CC.No.331/2008 on the sole ground that as the interest chargeable at 24%pa is prohibited under Section 3 of the Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003 (hereinafter shortly referred to as Tamil Nadu Act 38/2003) r/w Section 7 of the Money Lenders Act 1957 and G.O.Ms.No.406 Co-opeation Department dated 5.7.1979, it cannot be enforced in any court of law. It is contended herein that the relevant provisions of law under section 138 of the Negotiable Instruments Act can be attracted only when the accused fails to discharge either in full or in part any legally enforceable liability and as the debt of Rs.2,66,000/- admittedly represents both principal and interest at 24%pa which is exorbitant and objectionable under interest Act, the same cannot be legally enforced against the accused, as such, ingredients for the offence under section 138 are not attracted against the accused.