M.M. Yohannan & M.J. Sebastian v. State of Kerala (Crl.R.P.No.1452/2017)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI** **WEDNESDAY, THE 04TH DAY OF DECEMBER 2019 / 13TH AGRAHAYANA, 1941** **Crl.Rev.Pet.No.1452 OF 2017** **AGAINST THE ORDER DATED 17.10.2017 IN C.M.P.NO.8/2017 IN CC 2252/2015 OF JUDICIAL MAGISTRATE OF FIRST CLASS, THALASSERY** **CRIME NO.615/2014 OF Thalassery Police Station, Kannur** ## **PETITIONERS/ACCUSED NO.1 & 2:** **1 M.M.YOHANNAN AGED 54 YEARS, S/O.MATHAI, MATTATHIL HOUSE, FAIRLAND COLONY, SULTHAN BATHERY. 2 M.J.SEBASTIAN AGED 40 YEARS, S/O.JOSEPH, MUTHIRAKKALAYIL HOUSE, CHERUKATTOOR, PANAMARAM, WAYANAD.** **BY ADVS. SRI.TONY THOMAS (INCHIPARAMBIL) SRI.P.THOMAS GEEVERGHESE SRI.E.S.FIROS** ## **RESPONDENT/STATE:** **STATE OF KERALA** **REP. BY SUB INSPECTOR OF POLICE, (CRIME NO.615/2014),THALASSERY POLICE STATION, THALASSERY, KANNUR DISTRICT,REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** ## **SMT M K PUSHPALATHA -SR PP** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 24.10.2019, THE COURT ON 04.12.2019 PASSED THE FOLLOWING:** Crl.R.P.No.1452/2017 2 **“CR”** ## **R.NARAYANA PISHARADI, J** ************************ Crl.R.P.No.1452 of 2017 ----------------------------------------------Dated this the 4[th] day of December, 2019 ## **O R D E R** The revision petitioners are the first and the second accused in the case C.C.No.2252/2015 on the file of the Court of the Judicial First Class Magistrate, Thalassery. 2. The allegation against the petitioners is that they have committed an offence punishable under Section 17 of the Kerala Money-Lenders Act, 1958 (hereinafter referred to as 'the Act'). 3. The petitioners are the directors of the company by name 'Dhankodi Chits Private Limited'. On 26.04.2014, at 16.00 hours, the Sub Inspector of Police, Thalassery police station conducted search at the office of the aforesaid company. The Sub Inspector seized blank cheque leaves, stamp papers, certificates etc. as per a search list and registered Crime No.615/2014 against the petitioners for the offence punishable Crl.R.P.No.1452/2017 3 under Section 17 of the Act. 4. After completing the investigation, final report was filed against the petitioners for committing the offence under Section 17 of the Act. The learned Magistrate took cognizance of the offence. 5. As per the chargesheet filed by the police, the case against the petitioners/accused is as follows: The accused had obtained licence to conduct chitty business from the competent authority. Under the guise of conducting chitty business, the accused unauthorisedly permitted four persons (CW6, CW9, CW11 and CW14) to subscribe to the chitty. The accused obtained blank cheque leaves and stamp papers from the aforesaid persons as security for the chitty amount given to them and thereby, they have committed an offence punishable under Section 17 of the Act. 6. The petitioners filed an application for discharge before the trial court under Section 239 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'the Code'). As per the impugned order, the learned Magistrate dismissed the Crl.R.P.No.1452/2017 4 aforesaid application. The aforesaid order is challenged in this revision petition. 7. Heard learned counsel for the petitioners and the learned Public Prosecutor. 8. Section 2(7) of the Act defines who is a money-lender. It states that '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. Section 3(1) of the Act prohibits conducting of business as a money-lender without a licence obtained under the Act or in contravention of the terms of the licence obtained. Section 17 of the Act provides that, whoever carries on the business of moneylending without a licence or in violation of the conditions of the licence or otherwise than in conformity with the terms and conditions of the licence, shall be punished. 9. The specific allegation against the petitioners is that they unauthorisedly permitted four persons to subscribe to the chitty conducted by the company and that they obtained blank cheque leaves and stamp papers from them as security for the Crl.R.P.No.1452/2017 5 chitty amount paid to them. 10. Money lending business is not defined under the Act. As noticed earlier, Section 2(7) of the Act defines who is a money lender. Only a person who conducts the business of advancing and realising loans or accepting deposits in the course of such business would come under the definition of money-lender. What is loan is defined under Section 2(5) of the Act. It states that, 'loan' means an advance whether of money or in kind at interest and includes any transaction which the Court finds in substance to amount to such an advance. However, clause (ix) of Section 2(5) of the Act specifically excludes an advance made under any chit fund scheme or kuri or chitty from the purview of loan. Therefore, if money is advanced under any chit fund scheme or kuri or chitty, it does not amount to a transaction of loan. 11. The specific case put forward by the prosecution against the petitioners is that they paid chitty amount to the subscribers of the chitty and obtained signed blank cheque leaves and stamp papers from them as security. Payment of chitty amount to the subscribers of the chitty, is not a transaction of Crl.R.P.No.1452/2017 6 loan. Therefore, the offence under Section 17 of the Act is not attracted against the petitioners. 12. Learned counsel for the petitioners cited an unreported decision of this Court in **A.M.Gopalan v. Sub Inspector of Police** (order dated 25.07.2016 in Crl.M.C.No.4204/2016) in which it has been held as follows: _“The learned Public Prosecutor has fairly conceded that the statements of the witnesses concerned, have revealed that they were subscribers of various chitties being conducted by the petitioner and at the time when the auction amounts in the chitty were obtained, such documents were obtained from them by the petitioner as security for the chitty amount. Even if such documents are seized from the possession of the petitioner, unless and until it is shown that he is conducting money lending, either Section 420 IPC or Section 17 of the Kerala Money Lenders Act cannot be attracted. Here, even if securities are obtained through whatever means for disbursing chitty amounts, Section 17 of the Kerala Money Lenders Act can be attracted only in a case wherein a person has been conducting money lending without licence or he has been violating the terms of licence for money lending.”_ Crl.R.P.No.1452/2017 7 What is stated above squarely applies to the facts of the present case. 13. As noticed earlier, CW6, CW9, CW11 and CW14 are the persons who had allegedly obtained chitty amount from the petitioners by giving blank cheque leaves and stamp papers. The statements of these witnesses show that they had given blank cheque leaves and stamp papers of themselves and also other persons (CW7, CW8 and CW10) as security when they received chitty amount from the petitioners. The statements given by these witnesses show that CW9, CW11 and CW14 had subscribed to the chitty conducted by the petitioners or their company. Of course, CW6 has not specifically stated that he had subscribed to the chitty. But, the specific case of the prosecution is that CW6 was a subscriber to the chitty conducted by the petitioners. 14. The trial court has not adverted to the statements of the witnesses given to the police. The trial court has stated that “whether the petitioners/accused were/are doing the business of money lending in terms of the licence/permission obtained by Crl.R.P.No.1452/2017 8 them, is a matter to be decided on merits.” The trial court has failed to examine whether the allegations raised against the petitioners attract the offence punishable under Section 17 of the Act and whether the statements of the witnesses and other materials produced by the prosecution would support such allegation. 15. The court, while considering the question of framing the charge, has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a _prima facie_ case against the accused has been made out (See **Union of India v. Prafulla Kumar Samal : AIR 1979 SC 366** ). If the evidence which the prosecutor proposes to adduce to prove the guilt of the accused even if fully accepted before it is challenged in cross-examination or rebutted by the defence evidence, if any, cannot show that the accused committed the offence, then there will be no sufficient ground for proceeding with the trial (See **State of Bihar v. Ramesh Singh: AIR 1977 SC 2018** ). The court has to consider the broad probabilities of the case, the total effect of the statements and the documents Crl.R.P.No.1452/2017 9 produced before the Court, any basic infirmities appearing in the case and so on for the limited prayer of finding out whether or not a prima facie case against the accused has been made out. (See **State v. S. Selvi : AIR 2018 SC 81** ) 16. In the instant case, the trial court has not undertaken the aforesaid exercise to find out whether a _prima facie_ case has been made out against the petitioners. The impugned order is liable to be set aside. The petitioners are entitled to get an order of discharge. 17. In the result, the revision petition is allowed. The impugned order is set aside. The application filed by the petitioners before the trial court under Section 239 of the Code is allowed and it is found that the charge against the petitioners is groundless and they are discharged. ## (sd/-) ## **R.NARAYANA PISHARADI, JUDGE** jsr/3/12/19 **True Copy** **PS to Judge**