The Supreme Court has declined to clarify its May 2026 judgment in M/s Mansi Finance (Chennai) Ltd. v. M. Lalitha, holding that the ruling did not deal with the Tamil Nadu or Maharashtra money-lending laws. Whether a pronote loan by an unlicensed money lender in Maharashtra is a legally enforceable debt under Section 138 of the Negotiable Instruments Act is for the concerned court to examine.
A Bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria disposed of a miscellaneous application filed by Vyomesh Mahipatray Shah seeking the clarification.
Background
In its judgment dated 26.05.2026 in Criminal Appeal No. 2849 of 2026, the Court dealt with proceedings under Sections 138 and 141 of the NI Act. There, loans were backed by promissory notes, and cheques issued for repayment were dishonoured. The High Court had quashed the complaint against four accused, but the Supreme Court restored the proceedings against three of them.
The Clarification Sought
The applicant argued that the Tamil Nadu Money-lenders Act, 1957 excludes advances made on negotiable instruments, so such debts remain enforceable there. The Maharashtra Money-Lending (Regulation) Act, 2014, however, does not exclude advances at interest against a promissory note, which are hit by the bar on unlicensed money lending under Section 4. He sought a clarification that the May judgment does not apply to Section 138 proceedings by unlicensed money lenders in Maharashtra. He contended that such cases should remain governed by the Court’s order dated 06.04.2026 in MA No. 1176 of 2026.
Ashok Commercial Enterprises, an intervenor, opposed the application as not maintainable. It argued that it is for courts across the country to examine the ratio and apply it to individual cases.
Court’s Observations
The Court noted that Section 2(13)(j) of the Maharashtra Act excludes advances on a negotiable instrument “other than a promissory note”, unlike the Tamil Nadu Act. It observed that unlicensed lending against a promissory note is prohibited under Section 4 and is not enforceable under Section 13. It added:
“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.”
The Bench also referred to its order of 06.04.2026, which had directed that such proceedings by private money lenders be nipped in the bud unless a licence is produced at the threshold.
However, the Court pointed out that in the May judgment there was no occasion to examine the applicability of either State law. It said that any bar under Section 13 of the Maharashtra Act shall be examined by the concerned court on its own merits if the plea is raised. The Bench held:
“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.”
Outcome
With these observations, the Court disposed of the application seeking clarification and the Miscellaneous Application.
Case Title: M/s Mansi Finance (Chennai) Ltd. v. M. Lalitha & Ors.
Case No.: Miscellaneous Application No. 3002 of 2026 in Criminal Appeal No. 2849 of 2026
Bench: Justice Prashant Kumar Mishra and Justice N.V. Anjaria
Date: 29.10.2026
