Bombay HC Nagpur bench quashes moneylending case against businessman Tapan Jaiswal

The Nagpur bench of the Bombay High Court has given major relief to businessman Tapan Jaiswal in a much-discussed moneylending case in Nagpur. The court quashed the FIR registered against him, the chargesheet filed and the criminal proceedings under way in the lower court. The order said that continuing criminal proceedings without following the provisions of law and the prescribed procedure is an abuse of the process of law. During the hearing, the court examined the provisions of the relevant law, the delay in registering the offence and the manner of the police investigation.

The case had been registered at Pratap Nagar police station under the Maharashtra Money-Lending (Regulation) Act on the complaint of Vimal Dinesh Kalmegh. Jaiswal had petitioned the High Court challenging the FIR and the chargesheet filed on its basis, seeking quashing of the criminal proceedings. Senior advocate Subodh Dharmadhikari and advocate Sameer Sonwane appeared for him. The defence placed before the court the facts of the case, the provisions of law and the flaws in the criminal procedure.

The complainant alleged that in December 2013 his son Rahul Kalmegh borrowed Rs 2.5 lakh from Jaiswal to build a house. According to the complaint, interest of 17.5 per cent a year was fixed on the transaction. It was also alleged that Rs 35,000 was deducted from the principal in the name of interest and Rs 2.15 lakh was handed over.

The complainant further alleged that pressure was later applied to recover the principal and interest. Serious allegations were also made, including assault, threatening with a pistol and forcibly getting a plot registered. On these grounds, the police initially acted under serious sections of the Indian Penal Code and the Arms Act. According to the available details of the case, the investigation did not find sufficient evidence for these allegations, and the police dropped those sections. A chargesheet was then filed under the provisions of the Maharashtra Money-Lending Act.

In the High Court, the petitioner strongly raised the issues of the time limit and the legality of the investigation. The court found that the alleged last incident was stated to have taken place on March 21, 2015, while the FIR was registered on July 31, 2020. The complaint was thus delayed by more than five years.

The licence issue was also significant. Considering the charges under Section 39 of the Maharashtra Money-Lending (Regulation) Act, 2014, the court treated the fact of the petitioner's licence as important. According to the order, the petitioner held a valid moneylending licence issued by the competent authority during the period in question. In that situation, the offence of moneylending without a licence was not made out at all. Under the moneylending law, the allegations in a complaint alone are not enough to prove an offence. The law in force at the time, the licence status and the essential legal elements of the offence must also be examined.

The harassment allegations were made under Section 45 of the Money-Lending Act. On this, the High Court also looked at Section 468 of the CrPC. The alleged last incident was in March 2015 and the complaint was filed in July 2020. According to the legal analysis given in the order, the general time limit for taking cognisance in offences punishable with up to two years is three years. By the time the FIR was registered, considerable time had passed, so it was necessary to keep in mind the nature of the offence, the provision on punishment and the limit for cognisance.

The aspect of the police investigation also came up. The High Court said that offences under Sections 43, 44 and 46 of the Money-Lending Act are non-cognisable. In such offences, the police must obtain the permission of a competent magistrate under Section 155(2) of the CrPC before starting an investigation. The question was whether the investigation was conducted without taking this permission. An investigation carried out without the permission required by law can raise serious questions about the validity of the entire proceedings.

The Supreme Court's well-known judgment in State of Haryana vs Bhajan Lal was also cited during the hearing. In that judgment, the Supreme Court laid down the circumstances in which an FIR or criminal proceedings can be quashed. The general principle is that where the allegations and the available material do not make out the essential elements of an offence, or the proceedings are contrary to clear provisions of law, the High Court can exercise its powers. Every case is decided on its own facts and the applicable law.

In Jaiswal's case, issues such as the licence, the delay in the FIR and the permission needed for investigation were examined. Considering all of these together, the court allowed the petition. The High Court quashed not only the FIR and the chargesheet but also the proceedings in the criminal case pending before the 11th Joint Civil Judge, Junior Division, and Judicial Magistrate First Class.

The matter had been in dispute for a long time. Serious allegations were made at the start, but the chargesheet was ultimately filed only under sections of the Money-Lending Act. The ruling makes clear that even after criminal action begins on a complaint, the police and prosecution must follow the procedure laid down by law. Proceedings cannot be taken forward by ignoring the nature of the offence, the permission needed for investigation and the time limit. The court also said it is not proper to prosecute anyone in a criminal case without following the procedure laid down by law.