The High Court of Karnataka consolidated four criminal petitions filed by non-banking financial companies. The Court held that State Money Lenders and Pawn Brokers Acts do not apply to such companies. The impugned FIRs were registered without authority of law.
The impugned First Information Reports registered against the petitioners were quashed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 02ND DAY OF JUNE, 2022
BEFORE
THE HON'BLE MR.JUSTICE HEMANT CHANDANGOUDAR
CRIMINAL PETITION NO.5778 OF 2011 C/W. CRIMINAL PETITION NOS.3979/2012, 3980/2012 AND 3981/2012
IN CRL.P.NO.5778/2011:
BETWEEN:
SRI VENKATESH N. AGED ABOUT 32 YEARS SON OF SHRI NARAYANA BRANCH MANAGER
FEDBANK FINANCIAL SERVICES LIMITED 1ST BLOCK, FIRST FLOOR, DOOR NO.259 10TH CROSS, 1ST N BLOCK, RAJAJI NAGAR BANGALORE – 560 010
...PETITIONER
(BY SRI KIRAN J., ADVOCATE)
AND:
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8TH CROSS, MALLESHWARAM BANGALORE – 560 003
…RESPONDENTS
(BY SRI S. VISHWA MURTHY, HCGP)
THIS CRIMINAL PETITION IS FILED U/S 482 CR.P.C PRAYING TO QUASH THE FIRST INFORMATION REPORT (ANNEXURE-A) BEARING CRIME NO.0214/11 ON 04.10.2011 ON THE FILE OF THE RESPONDENT NO.1.
IN CRL.P.NO.3979/2012:
BETWEEN:
...PETITIONERS
(BY SRI KIRAN J., ADVOCATE)
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AND:
…RESPONDENTS (BY SRI S. VISHWA MURTHY, HCGP)
THIS CRIMINAL PETITION IS FILED U/S 482 CR.P.C PRAYING TO QUASH THE FIRST INFORMATION REPORT IN CRIME NO.0164 OF 2012 ON THE FILE OF 2ND ADDL. CMM COURT, NRUPATUNGA ROAD, BANGALORE CITY REGISTERED IN BASAVANAGUDI POLICE STATION, BANGALORE CITY BY THE RESPONDENT AGAINST PETITIONER COMPANY (ANNEXURE-A) AND ETC.
IN CRL.P.NO.3980/2012:
BETWEEN:
MUTHOOT FINANCE LTD. MADHUGIRI BRANCH MADHURIGI, TUMKUR ROAD MADHUGIRI TOWN,KARNATAKA REPRESENTED BY ITS BRANCH MANAGER ASHOK RAO D.J. S/O. JATTOJI RAO AGED ABOUT 27 YEARS (BY SRI KIRAN J., ADVOCATE)
...PETITIONER
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AND:
(BY SRI S. VISHWA MURTHY, HCGP)
THIS CRIMINAL PETITION IS FILED U/S 482 CR.P.C PRAYING TO QUASH THE FIRST INFORMATION REPORT IN CRIME NO.0070 OF 2012 DATED 17.05.2012 ON THE FILE OF THE ADDL. CIVIL JUDGE (JR.DN.) & JMFC COURT, MADHUGIRI, TUMKUR DISTRICT PURSUANT TO THE COMPLAINT DATED 17.05.2012 REGISTERED IN POLICE STATION MADHUGIRI, TUMKUR DISTRICT BY THE RESPONDENT AGAINST PETITION (ANNEXURE-A) AND ETC.
IN CRL.P.NO.3981/2012:
BETWEEN:
CHANDRASHEKHAR A. S/O. DHARANAPPA INDRA AGED ABOUT 59 YEARS HAVING OFFICE AT MUTHOOT FINANCE LIMITED M ROAD, CHANNARAYAPATNA
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HASSAN TOWN, HASSAN KARNATAKA
...PETITIONER
(BY SRI KIRAN J., ADVOCATE)
AND:
…RESPONDENTS (BY SRI S. VISHWA MURTHY, HCGP)
THIS CRIMINAL PETITION IS FILED U/S 482 CR.P.C PRAYING TO QUASH THE FIRST INFORMATION REPORT FILED IN 0253 OF 2012 DATED 11.06.2012 ON THE FILE OF THE PRL. CIVIL JUDGE (JR.DIVISION) AND JMFC COURT, CHANNARAYAPATNA, HASSAN DISTRICT PURSUANT TO THE COMPLAINT DATED 07.06.2012 REGISTERED IN CHANNARAYAPATNA P.S. COMPLAINT AGAINST THE PETITIONER (ANNEXURE-A) AND ETC.
THESE PETITIONS ARE COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:-
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ORDER
The petitioners herein who are all non banking financial companies registered with Reserve Bank of India, are challenging the FIR registered against them for the offences punishable under Section 18 of Pawn Brokers Act, 1961, Section 4 of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, Section 39 of Money Lenders Act, 1961, Section 3 of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, Section 40 of Karnataka Money Lenders Act, Section 20 of Pawn Brokers Act.
Since the issues involved in all the petitions are similar, they are taken together and disposed of by common order
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held that the said Acts have no application to non banking financial companies registered under Reserve Bank of India Act and regulated by the Reserve Bank of India.
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in any other law for the time being in force or any instrument having effect by virtue of any such law“has held that the Kerala Act and Gujarat Act will have no application to non banking financial registered under the RBI Act and regulated by the RBI.
Accordingly, proceeds to pass the following:
ORDER
The Criminal petitions are allowed.
The impugned First Information Report in Cr.No.0214/2011 registered by Subramanyanagar Police Station is hereby quashed.
Sd/JUDGE
MR
2 issues framed by the court
Whether the provisions of State Pawn Brokers and Money Lenders Acts have application to non-banking financial companies registered under the Reserve Bank of India Act.
Whether the FIR registered against the petitioners was tenable given the Supreme Court ruling in Nedumpilli Finance Company Limited.
Colour shows how this judgement treated each authority
Nedumpilli Finance Company Limited vs. State of KeralaFollowed¶63
Nedumpilli Finance Company Limited vs. State of Kerala & others 2022 SCC OnLine SC 588 · Who else cites this
9 provisions across 8 enactments
Sri Venkatesh N. & others (FEDB Financial Services, Muthoot Finance Ltd., Muthoot Finance Ltd. Madhugiri Branch, Chandrashekar A.)
State of Karnataka & others
Hemant Chandangoudar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
