High Court of KeralaSingle Judge2019-02-25Crl.MC stands allowed.

Dominic Peter v. State of Kerala and Simon Varghese

Case / Petition Number:Crl.MC.No. 1089 of 2019

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: B. Sudheendra Kumar
Judgment Date: 2019-02-25
Court Decision / Holding: Quashing of the final report and all further proceedings against the petitioner in CC 162/2017, on the basis that the petitioner cannot be said to be a money lender and there is no material to support the charged offences under the Kerala Money Lenders Act and the Kerala Prohibition of Charging Exorbitant Interest Act; the court holds that the proceedings appear to be mala fide and an abuse of process, citing Bhajan Lal and Mahindra & Mahindra Financial Services Ltd. v. Rajiv Dubey; the petition is allowed under Section 482 Cr.P.C.
Final Disposition: Crl.MC stands allowed.

Parties to the Case

Appellants / Petitioners

Dominic Peter, S/o Peter, Kizhakakkayil House, Valillapuzha P.O., Malappuram District

Respondents

The State of Kerala, represented by the Public Prosecutor, High Court of Kerala, Ernakulam
Simon Varghese, S/o Varghese, Kossery House, Mysormala P.O., Kozhikode District

Legal Representation & Advocates

Counsels for Petitioners

• Sri K. Rakesh

Counsels for Respondents

• Public Prosecutor, High Court of Kerala (Smt. V. Sreeja)

Case Synopsis & Summary

Dominic Peter, the petitioner, challenges the final report in CC 162/2017 arising from Crime No. 641/2015 of Areacode Police Station before the High Court of Kerala. The offences alleged are under Section 3 read with Section 17 of the Kerala Money Lenders Act, 1958 and Section 2(c) read with Section 9(a) of the Kerala Prohibition of Charging Exorbitant Interest Act, 2012. The petitioner contends that he is not a money lender as defined and that there is no material establishing that money lending is his main or subsidiary business, nor any seized document supporting such a claim. The court notes the absence of material to show the petitioner is engaged in lending and thus cannot be said to be a money lender, providing the basis to quash the proceedings. The second respondent (de facto complainant) is described as having filed Annexures A and C, allegedly as counterblast to shield a separate prosecution under Section 138 of the Negotiable Instruments Act, which the court views as possible abuse of process. Relying on principles from Bhajan Lal and Mahindra & Mahindra Financial Services, as well as the inherent powers under Section 482 Cr.P.C., the court quashes the final report and further proceedings against the petitioner. The Section 138 NI Act case against the second respondent remains pending.

Provisions of Law Cited

Kerala Money Lenders Act, 1958, Sec. 3 read with Sec. 17Kerala Prohibition of Charging Exorbitant Interest Act, 2012, Sec. 2(c) read with Sec. 9(a)Negotiable Instruments Act, 1881, Sec. 138Code of Criminal Procedure, 1973, Sec. 482 (inherent powers)

Legal Doctrines & Maxims

Mala fide / malicious initiation of proceedings (Bhajan Lal doctrine)
Inherent powers of the High Court under Section 482 Cr.P.C. to quash

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that he cannot be categorized as a money lender since there is no material showing that money lending is his main or subsidiary business, nor any seized documents to establish such. The KMLA requires a business in loaning or deposit-taking; a single instance of lending does not suffice (Balakrishna v. Babu, 1994(1) KLT 947). There is no material to connect the petitioner with the alleged offences. The final report and proceedings should be quashed under the inherent powers of the Court (Section 482 Cr.P.C.), particularly in light of mala fide counterblast allegations against the second respondent to shield the NI Act proceedings.

Contentions of Respondents

The respondents argue that the case is maintainable and the allegations require thorough scrutiny in trial; however, the court recognizes the lack of material to prove money lending and notes the counterblast nature of Annexure A in aiding the NI Act case; invoking Bhajan Lal and related principles, the court may exercise its inherent power to prevent abuse of process and premature proceedings.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Balakrishna v. Babu	1994(1) KLT 947	Positive	Cited to support the proposition that a single instance of lending is insufficient to constitute a money lender.
State of Haryana v. Bhajan Lal	1992 Suppl (1) SCC 335	Positive	Used to justify quashing where mala fide or ulterior motive is evident.
Mahindra and Mahindra Financial Services Limited v. Rajiv Dubey	(2009) 1 SCC 706	Positive	Cited to support the use of inherent powers of the High Court to quash in mala fide circumstances.

Diagnostic Tool

Beta

Does this judgment govern your specific facts?

Don't risk relying on a distinguishable precedent. Enter your facts or proposition below. We will test it against Dominic Peter v. State of Kerala and Simon Varghese and instantly map out authorities that support, challenge, or govern your position.

Extracted Judgment Text

Exact text extracted from official judgment records.

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE B.SUDHEENDRA KUMAR** **MONDAY ,THE 25TH DAY OF FEBRUARY 2019 / 6TH PHALGUNA, 1940** ## **Crl.MC.No. 1089 of 2019** **AGAINST THE ORDER/JUDGMENT IN CC 162/2017 of CHIEF JUDICIAL MAGISTRATE, MANJERI** **CRIME NO. 641/2015 OF Areacode Police Station, Malappuram** ## **PETITIONER/S:** **DOMINIC PETER, AGED 62 YEARS S/O PETER, KIZHAKKAYIL HOUSE, VALILLAPUZHA P.O.MALAPPURAM DISTRICT** **BY ADV. SRI.K.RAKESH** ## **RESPONDENT/S:** **1 THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OR KERALA, ERNAKULAM KOCHI 682 031- FOR THE SUB INSPECTOR OF POLICE, AREACODE POLICE STATION, MALAPPURAM DISTRICT 2 SIMON VARGHESE, S/O VARGHESE, KOSSERY HOUSE, MYSOORMALA P.O.KOZHIKODE DISTRICT, PIN 673 602.** ## **OTHER PRESENT:** **SMT.V.SREEJA,PP** **THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 25.02.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **Crl.MC.No. 1089 of 2019** -2- ## **ORDER** The petitioner is the accused in C.C. No. 162 of 2017 on the files of the court below. The offences alleged are punishable under Section 3 read with Section 17 of the Kerala Money Lenders Act, 1958 and Section 2 (c) read with Section 9 (a) of the Kerala Prohibition of Charging Exorbitant Interest Act, 2012. 2. The petitioner has filed this Criminal M.C. praying for quashing the final report and further proceedings against the petitioner in the above said case. 3. Heard both sides. 4. The prosecution allegation is that the de facto complainant, who is the 2nd respondent herein, borrowed an amount of Rs. 1,00,000/- and the 2nd witness in the ## **Crl.MC.No. 1089 of 2019** police charge borrowed an amount of Rs.20,000/- from the petitioner and thereafter, the de facto complainant repaid an amount of Rs. 1,09,000/- after three months and the other person repaid an amount of Rs. 26,000/after five months. However, the petitioner did not return the cheques entrusted by them with the petitioner. 5. In order to be a money lender as provided under Section 2 (7) of the Kerala Money Lenders Act, the main or subsidiary occupation of that person must be the business of advancing and realising loans or acceptance of deposits in the course of such business. A single instance of lending money is not sufficient for a person to be a money lender [see Balakrishna v. Babu 1994(1) KLT 947]. 6. In this case, there is absolutely no allegation that the main or subsidiary occupation of the petitioner is ## **Crl.MC.No. 1089 of 2019** -4- the business of advancing and realising loans or acceptance of deposits. No document as alleged by the second respondent was also seized from the possession of the petitioner. There is absolutely no material before the Court to indicate that the main or subsidiary occupation of the petitioner is advancing and realising loans or acceptance of deposits in the course of such business In view of the above reasons, the petitioner cannot be said to be a money lender. Since the petitioner is not a money lender, the provisions under the Kerala Money Lenders Act and the Prohibition of Charging Exorbitant Interest Act, are not applicable against the petitioner. Having gone through the relevant inputs, I am satisfied that there is no material before the court against the petitioner constituting the ingredients of the offences alleged. For ## **Crl.MC.No. 1089 of 2019** -5- the said reason alone, the final report and further proceedings against the petitioner are to be quashed. 7. It is not disputed that the prosecution initiated against the 2nd respondent at the instance of the petitioner under Section 138 of the Negotiable Instruments Act is still pending before the Magistrate Court concerned. Having gone through Annexure -A petition filed by the 2nd respondent against the petitioner, in the light of Annexure-C complaint, it appears that Annexure-A petition was filed by the 2nd respondent only as a counterblast to shield the prosecution against the 2 nd respondent initiated by the petitioner under Section 138 of the N.I.Act. Therefore, the registration of the crime and the filing of the final report against the petitioner on the basis of Annexure-A petition would amount to abuse ## **Crl.MC.No. 1089 of 2019** -6- of process of Court. 8. The Apex court in Mahindra and Mahindra Financial Services Limited and Another v. Rajiv Dubey [(2009) 1 SCC 706] relied on the decision in State of Haryana v. Bhajan Lal [1992 suppl (1) SCC 335] and held that where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge, proceeding initiated, is to be quashed. 9. In this case, the present complaint was instituted maliciously as a counter blast to shield the proceedings initiated against the second respondent by the petitioner under Section 138 of the N.I.Act. In the said ## **Crl.MC.No. 1089 of 2019** -7- circumstances also, the final report and further proceedings against the petitioner in the above case are to be quashed. Consequently, I am inclined to quash the final report and further proceedings against the petitioner in the above said case, in exercise of the inherent power under Section 482 Cr.P.C., to meet the ends of justice. It is ordered accordingly. In the result, this Crl. M.C. stands allowed. ## **Sd/-B.SUDHEENDRA KUMAR** ## **JUDGE** ani/ /true copy/ ## **Crl.MC.No. 1089 of 2019** -8- ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **ANNEXURE A TRUE COPY OF THE FIR ALONG WITH THE COMPLAINT IN CRIME NO 641/2015 OF THE AREAKKODE POLICE STATION** **ANNEXURE B TRUE COPY OF THE FINAL REPORT/CHART IN CRME NO 641/2015 OF THE ARTEAKODE POLICE STATION.** **ANNEXURE C TRUE COPY OF THE COMPLAINT IN ST NO 151/2012 OF THE J.F.C.M. 11, MANJERI (EARLIER IT WAS FILED BEFORE THE C.J.M.MANJERI AND MADE OVER TO J.F.C.11, MANJERI.** **ANNEXURE D TRUE COPY OF THE LAWYER NOTICE DATED 9.8.2012 ISSUED BY THE ADVOCATE OF THE PETITIONER TO THE 2ND RESPONDENT** **ANNEXURE E** **TRUE COPY OF THE REPLY NOTICE SENT BY THE 2ND RESPONDENTS ADVOCATE ON 3.9.2012**