Dishonour Of Cheque Against Valid Loan Sufficient To Prosecute U/S 138 NI Act, Drawee Need Not Have Money Lending License: Rajasthan HC

The Rajasthan High Court has made it clear that in a case of cheque dishonor, it is to be seen is if the cheque was issued in relation to a valid loan and was dishonored without payment, even after giving notice.

The bench of Justice Arun Monga said whether the complainant, that is drawee of the cheque, had a license to lend on interest is not relevant in the case of cheque dishonor.

It thus upheld an order of the trial court dismissing drawer's application under Section 91 CrPC seeking the complainant to produce his Income Tax Return and money lending license. 

Section 91 CrPC provides for summons to produce document or other thing.

The petitioner was accused of cheque dishonour under Section 138, NI Act. During the proceedings of the case, an application under Section 91, CrPC, was filed by him seeking directions to the complainant to produce his income tax return and money lending license. This application was dismissed by the trial court followed by dismissal of the revision petition filed against the order of the trial court. It was against these two orders that the petition was filed by the petitioner before the Court.

The High Court perused both the challenged orders and observed that they were premised on valid reasoning. The Court highlighted that it was noted by the sessions judge that the petitioner failed to demonstrate how the documents sought for were relevant and necessary for disposing the case. The Court further observed that in a case under Section 138 NI Act, the only fact that had to be determined was whether an offence was committed by the accused or not for which the money lending license held no relevance.

Hence, the Court noted that no irregularity was found either in facts or in law warranting no interference. Accordingly, the petition was dismissed by the Court which ruled that it was merely a dilatory tactic of the petitioner.

Title: Ishak Mohammad v State of Rajasthan & Anr.

Citation: 2024 LiveLaw (Raj) 148

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