M/S Mansi Finance (Chennai) Ltd vs Lalitha

Court
Supreme Court

NON-REPORTABLE
2026 INSC 1174

IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

MISCELLANEOUS APPLICATION NO.3002 OF 2026
IN
CRIMINAL APPEAL NO. 2849 OF 2026

M/S MANSI FINANCE (CHENNAI) LTD. …APPELLANT(S)

VERSUS

M. LALITHA & ORS. …RESPONDENT(S)


IN THE MATTER OF:
VYOMESH MAHIPATRAY SHAH …APPLICANT(S)


J U D G M E N T


PRASHANT KUMAR MISHRA, J.

1. By way of present Miscellaneous Application, the applicant – Vyomesh
Mahipatray Shah seeks clarification of the judgment dated 26.05.2026
rendered by this Court in Criminal Appeal No.2849 of 2026 ( M/s. Mansi
Finance (Chennai) Ltd. vs. M. Lalitha & Others ). It is pleaded that the said
judgment does not apply in case of proceedings under Section 138 of the
1
Negotiable Instruments Act, 1881 initiated by unlicensed money lenders in
the State of Maharashtra advancing money at interest against promissory
note, whether or not accompanied by cheque or any other security, in view of
the threshold bar on enforceability of a loan, inter alia , against promissory
note which is not excluded from the definition of ‘loan’ in Section 2(13)(j) of
Signature Not Verified
Digitally signed by
SACHIN
Date: 2026.10.29
16:04:27 IST
Reason:

1
For short, ‘the NI Act’
MA No. 3002/2026 Page 1 of 5


2
the Maharashtra Money-Lending (Regulation) Act, 2014 , and shall continue
to be governed by the order dated 06.04.2026 passed by this Court in MA No.
1176/2026 in SLP (Crl.) No.5485/2024.
2. Heard the learned senior counsels appearing for the parties and
perused the papers.
3. The judgment dated 26.05.2026 in Criminal Appeal No.2849 of 2026
has dealt with the proceedings under Sections 138 and 141 of the NI Act. The
appellant/complainant therein extended loans to the accused persons for
which promissory notes were executed by the accused persons in favour of
the appellant/complainant therein. For repayment of said loan, cheques were
issued by the accused persons which came to be dishonoured giving rise to
the subject proceedings. The accused persons approached the High Court
seeking quashment of the complaint on the ground inter alia that they were
neither signatories to the cheque nor in-charge of the day-to-day affairs of the
Society and that the complaint lacked the necessary foundational averments
to attract vicarious liability under Section 141 of the NI Act. The High Court
allowed the plea and quashed the proceedings. However, this Court partly
allowed Criminal Appeal No.2849 of 2026 and restored the proceedings
against three out of four accused persons who had approached the High
Court.
4. The present applicant - Vyomesh Mahipatray Shah seeks clarification
of our judgment dated 26.05.2026 in Criminal Appeal No.2849 of 2026 on the
plea that the loans advanced through a promissory note in the State of Tamil

2
For short, ‘the Maharashtra Act’
MA No. 3002/2026 Page 2 of 5


3
Nadu is dealt under the Tamil Nadu Money-lenders Act, 1957 which excludes
the advance made on the basis of a negotiable instrument. Thus, a debt
secured by a negotiable instrument, including against a promissory note,
remains a legally enforceable debt under the Tamil Nadu Act. However, the
applicant’s case pending in the State of Maharashtra is governed by the
Maharashtra Act which does not exclude an advance at interest made against
a promissory note. Therefore, in Maharashtra, advance at interest against a
promissory note, even when accompanied by cheques, being a loan, is hit by
the prohibition on unlicensed money lending under Section 4 of the
Maharashtra Act. Since the judgment dated 26.05.2026 being premised on
advance of loan on promissory notes, the same may be treated as having pan-
India application. Therefore, clarification of the judgment dated 26.05.2026
is necessary.
5. Objecting to the prayer made by the applicant - Vyomesh Mahipatray
Shah in this Miscellaneous Application, it is argued on behalf of Ashok
Commercial Enterprises, intervenor, that the Miscellaneous Application is not
maintainable inasmuch as the judgment dated 26.05.2026 of this Court is
not required to be clarified and it is for the concerned Court anywhere in the
country to examine the ratio and apply the same to the facts and
circumstances of the individual matters.
6. It is to be noted that Section 2(13)(j) of the Maharashtra Act clearly
shows that unlike the Tamil Nadu Act, it excludes an advance on a negotiable
instrument “other than a promissory note”. Consequently, unlike the Tamil

3
For short, ‘the Tamil Nadu Act’
MA No. 3002/2026 Page 3 of 5


Nadu Act, in the Maharashtra Act, an advance at interest against a
promissory note is not excluded and would indeed be a loan governed under
the Maharashtra Act. Such money lending against a promissory note without
a licence is prohibited under Section 4 of the Maharashtra Act and such loan
is not enforceable under Section 13 of the Maharashtra Act. Consequently,
unlike Tamil Nadu, in the State of Maharashtra, such debt is not legally
enforceable debt for the purpose of Explanation to Section 138 of the NI Act.
In any proceedings filed on dishonour of cheque or recovery proceedings, the
money lender in the State of Maharashtra has to produce a licence to satisfy
the Court at the threshold.
7. This Court in MA No. 1176/2026 in SLP (Crl.) No.5485/2024, vide order
dated 06.04.2026 (Annexure A-8), has held thus in paragraphs 4 and 5:
“4. It is pertinent to note that for unlicensed money lending
against the promissory notes, whether accompanying with any
other security such as cheque, title deeds or not, there already
exists a Statutory Bar in State Money Lending Law. There is also
a bar of “Dam Dupat” even under a money-lending licence i.e.
against charging interest more than the principal amount
actually disbursed. There is a further statutory disability against
enforceability of such loan amount by unlicensed money lender.
Moreover, such money lending is a punishable offence under the
State Money-Lending Law.

5. Therefore, the Courts should ensure that the proceedings
instituted by such private money lender are nipped in bud,
whether Civil or Criminal, unless the money lender at the
threshold produces license for money lending or shows that
money was not advanced by him at interest.”

8. It is to be noticed that this Court has already observed in paragraph 11
of the judgment dated 26.05.2026 the principal contention of the parties
seeking quashment of the proceedings before the High Court and in this
Court, and there was no occasion for this Court to examine and render a
finding on the applicability of the Tamil Nadu Act or the Maharashtra Act, as
the case may be. If there is any bar under Section 13 of the Maharashtra Act
MA No. 3002/2026 Page 4 of 5


on initiation of proceedings for recovery of loan by an unlicensed money lender
on the ground that the loan advanced involving a pronote in favour of an
unlicensed money lender in Maharashtra, being contrary to statute, does not
constitute a legally enforceable debt in terms of the Explanation to Section
138 of the NI Act, the same shall be examined by the concerned Court if any
plea is taken before the Court where the matter is pending or before any
superior Court, on its own merits. Since the judgment dated 26.05.2026 has
not dealt with the provisions of the Tamil Nadu Money-lenders Act, 1957 or
the Maharashtra Money-Lending (Regulation) Act, 2014, the clarification, as
sought for, is not required and the parties would be at liberty to raise the
issue before the concerned Trial Court or the superior Courts.
9. With the above observations, IA No.183707 of 2026 seeking clarification
is disposed of.
10. The Miscellaneous Application stands disposed of accordingly.


………………….........................J.
(PRASHANT KUMAR MISHRA)

………………............................J.
(N.V. ANJARIA)

NEW DELHI;
OCTOBER 29, 2026.
MA No. 3002/2026 Page 5 of 5