filing Suit & application by unregistered Money Lender is barred

Crl. L.P. Nos.491-513/2011 Page 1 of 15
* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 13th
March, 2013
Pronounced on: 8
th
April, 2013
+ CRL.L.P. 491/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 492/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 493/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
Crl. L.P. Nos.491-513/2011 Page 2 of 15
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 494/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 495/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 496/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
Crl. L.P. Nos.491-513/2011 Page 3 of 15
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 497/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 498/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 499/2011

VIRENDER SINGH ….. Petitioner
Crl. L.P. Nos.491-513/2011 Page 4 of 15
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 500/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 501/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 502/2011

Crl. L.P. Nos.491-513/2011 Page 5 of 15
VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 503/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 504/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
Crl. L.P. Nos.491-513/2011 Page 6 of 15
+ CRL.L.P. 505/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 506/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 507/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Crl. L.P. Nos.491-513/2011 Page 7 of 15
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 508/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 509/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates
+ CRL.L.P. 510/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus
Crl. L.P. Nos.491-513/2011 Page 8 of 15
DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates

+ CRL.L.P. 511/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus

DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates

+ CRL.L.P. 512/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus

DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates

Crl. L.P. Nos.491-513/2011 Page 9 of 15

+ CRL.L.P. 513/2011

VIRENDER SINGH ….. Petitioner
Through Mr.Medhanshu Tripathi, Mr.Harish
Sharma & Mr.Manoj Sehgal, Advocates
versus

DEEPAK BHATIA ….. Respondent
Through Mr.Randhir Jain, Mr.Dhananjai Jain &
Ms.Ruchika Jain, Advocates

CORAM:
HON’BLE MR. JUSTICE G.P.MITTAL

J U D G M E N T

G. P. MITTAL, J.
1. Leave granted.
2. The Leave Petitions be registered as Criminal Appeals
No.461/2013 – 483/2013.
3. These Appeals arise out of 23 separate judgments of even date whereby
23 complaint cases under Section 138 of the Negotiable Instruments Act,
1881(the Act) were dismissed by the learned Metropolitan
Magistrate(MM) primarily on the ground that the Petitioner was in the
Crl. L.P. Nos.491-513/2011 Page 10 of 15
business of advancing loan; he did not possess any money lending licence
and thus the complaint was barred under Section 3 of the Punjab
Registration of Money-lender’s Act, 1938 (the Act of 1938). The learned
MM opined that although the cheques were issued in discharge of
liability or debt, yet in view of the provisions of the Act of 1938, the
debts were legally not recoverable. Thus, the learned M.M. dismissed the
complaints and acquitted the Respondent.
4. In the 23 complaint cases, various cheques have been issued which are
extracted hereunder:

Crl.L.P. No. Cheque No. Date of Cheque Amount(in `)
491/2011 000048
000047
002375
10.12.2008
14.12.2008
01.09.2008
10,000/-
1,00,000/-
42,000/-
492/2011 000001
000002
000003
09.08.2008
08.09.2008
10.09.2008
30,000/-
18,000/-
18,000/-
493/2011 002423
007582
120184
24.09.2008
24.09.2008
26.11.2008
44,000/-
24,000/-
6,667/-
494/2011 000032
000050
14.11.2008
26.12.2008
7,500/-
10,000/-
495/2011 121334 06.01.2009 10,000/-
Crl. L.P. Nos.491-513/2011 Page 11 of 15
121335
121336
121340
207659
10.01.2009
14.01.2009
02.01.2009
05.10.2008
10,000/-
10,000/-
1,00,000/-
26,700/-
496/2011 000039
000041
000049
08.11.2008
02.12.2008
18.10.2008
1,00,000/-
10,000/-
10,000/-
497/2011 000033
000034
000035
000036
21.11.2008
28.11.2008
11.11.2008
26.11.2008
7,500/-
7,500/-
7,500/-
7,500/-
498/2011 002419 16.09.2008 12,000/-
499/2011 000044
000045
000046
21.11.2008
28.11.2008
07.12.2008
1,00,000/-
1,00,000/-
1,00,000/-
500/2011 007583
007584
007585
25.09.2008
28.09.2008
27.09.2008
24,000/-
48,000/-
30,000/-
501/2011 002412
002413
002411
04.09.2008
06.09.2008
05.09.2008
40,000/-
40,000/-
40,000/-
502/2011 000007
000008
000009
12.09.2008
13.09.2008
17.09.2008
48,000/-
12,000/-
12,000/-
Crl. L.P. Nos.491-513/2011 Page 12 of 15
503/2011 207697
207698
007581
15.12.2008
25.12.2008
26.11.2008
10,000/-
10,000/-
36,000/-
504/2011 000004
000004
000004
09.09.2008
10.09.2008
11.09.2008
48,000/-
48,000/-
36,000/-
505/2011 000025
000042
000043
03.10.2008
07.11.2008
14.11.2008
7,500/-
1,00,000/-
1,00,000/-
506/2011 002424
207677
207696
25.09.2008
24.10.2008
28.12.2008
40,000/-
16,500/-
10,000/-
507/2011 000018
000026
000027
000037
28.10.2008
11.10.2008
20.10.2008
20.11.2008
7,500/-
7,500/-
7,500/-
7,500/-
508/2011 000010
000012
000014
18.09.2008
25.10.2008
26.10.2008
18,000/-
11,000/-
14,000/-
509/2011 002418
002422
002420
15.09.2008
23.09.2008
19.09.2008
12,000/-
40,000/-
24,000/-
510/2011 007591
007593
007594
20.09.2008
03.10.2008
02.10.2008
10,000/-
40,000/-
40,500/-
Crl. L.P. Nos.491-513/2011 Page 13 of 15
511/2011 007586
007587
007588
28.09.2008
09.09.2008
01.10.2008
30,000/-
42,000/-
30,000/-
512/2011 000019
000021
000023
30.10.2008
03.11.2008
08.10.2008
30,000/-
16,500/-
1,00,000/-
513/2011 007595
216765
216776
008778
01.10.2008
04.10.2008
11.10.2008
26.09.2008
40,000/-
21,000/-
10,500/-
24,000/-

5. To analyse whether the complaints under Section 138 were barred under
the provisions of the Act, it will be apposite to extract the provisions of
Section 3 of the Act of 1938, which reads as under:

“3. Suits and applications by money-lenders barred, unless
money-lender is registered and licensed. Notwithstanding
anything contained in any other enactment for the time
being in force, a suit by a money-lender for the recovery of a
loan, or an application by a money-lender for the execution
of a decree relating to a loan, shall after the commencement
of this act, be dismissed, unless the money-lender-
(a) at the time of the institution of the suit or presentation of
the application for execution; or
(b) at the time of decreeing the suit or deciding the
application for execution-
(i) is registered; and
Crl. L.P. Nos.491-513/2011 Page 14 of 15
(ii) holds a valid licence, in such form and manner as may
be prescribed; or
(iii) holds a certificate from a Commissioner granted under
section 11, specifying the loan in respect of which the suit is
instituted, or the decree in respect of which the application
for execution is presented; or
(iv) if he is not a registered and licensed money-lender,
satisfies the Court that he has applied to the Collector to be
registered and licensed and that such application is
pending; provided that in such a case, the suit or application
shall not be finally disposed of until the application of the
money-lender for registration and grant of license pending
before the Collector is finally disposed of.”

6. Thus, Section 3 of the Act of 1938 starts with a non-obstante clause and
makes the filing of any Suit or any Application for recovery of loan or
execution of a decree relating to a loan by a money lender to be not
maintainable unless the money lender is registered under the Act and
possessed a licence for the same.
7. The loan as defined in Section 2(8) of the Act of 1938 specifically
excludes an advance made on the basis of a negotiable instrument as
defined in the Negotiable Instruments Act, 1881, other than a promissory
note. The instant cases relate to an advance made by the Petitioner to the
Respondent on the basis of the cheque which admittedly is a negotiable
instrument. Thus, the bar of Section 3 of the Act of 1938 is not attracted
to a loan given on the basis of a negotiable instrument, like a cheque. I
am supported in this view by a judgment of the Supreme Court in
Gajanan & Ors. v. Seth Brindaban, 1971(1) SCR 657. Thus, the learned
MM fell into error in dismissing the complaints and acquitting the
Crl. L.P. Nos.491-513/2011 Page 15 of 15
Respondent solely on the ground that the complaint was barred under the
provisions of the Act of 1938.
8. The impugned orders, therefore, cannot be sustained; the same are
accordingly set aside.
9. The cases are remanded back to the Court of MM concerned for its
decision in accordance with law.
10. Parties are directed to appear before the learned MM concerned on
30.04.2013.
11. Trial Court record be returned immediately.
12. A copy of the order be transmitted to the Trial Court.
13. Pending Applications stand disposed of.

(G.P. MITTAL)
JUDGE
APRIL 08, 2013

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