Bombay High Court
Ashok Chaudhary vs The State Of Maharashtra And Anr on 5 May, 2017
Bench: A.S. Oka
1 crwp-3123.14
pmw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
WRIT PETITION NO.3123 OF 2014
WITH
CRIMINAL APPLICATION NO. 178 OF 2016
1. Nirmal Bang Securities Private Limited )
(Formerly M/s. Nirmal Bang) )
a private limited company incorporated )
under Companies Act, 1956, Having its )
registered office at 38-B, Khatau Bridge )
2nd Floor, Alkesh Dinesh Mody Marg )
2. Kishore Bang, )
residing at Flat No.501, 5th Floor, )
Hamilton Co. Operative Housing Society, )
Laburnum Road, Gamdevi, )
Mumbai - 7, )
Occupation : Director of Petitioner No.1. )
3. Shri Dilip Bang, )
38B, Khatau Building )
2nd Floor, Alkesh Dinesh Modi Marg )
Fort, Mumbai - 400 001 )
Occupation : Director of Petitioner No.1. ) ... Petitioners
Versus
State of Maharashtra )
Through )
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1. Mumbai Police, MRA Marg, Mumbai, )
And )
2. Ashok Chaudhry )
R/A 8/1A, Little Russel Street, )
Kolkata - 700 071. ) ... Respondents
Mr. Satish ManeShinde a/w Mr. Ravichandra Hegde and Ms. Aashni
Dalal i/by J. Sagar Associates for the Petitioners.
Mr. K.V. Saste, APP for the Respondent No.1.
Mr. Subhash Jha a/w Ms. Sanjana Pardeshi i/by Law Global Advocate
for the Respondent No.2 and for Applicant in APPW/178/2016.
CORAM : A.S. OKA &
SMT. ANUJA PRABHUDESSAI, JJ.
DATE ON WHICH SUBMISSIONS WERE HEARD : 16th MARCH, 2017
DATE ON WHICH JUDGMENT IS PRONOUNCED : 5th MAY, 2017
JUDGMENT (PER A.S. OKA, J.):-
1 By this Petition under Article 226 of the Constitution of
India read with Section 482 of the Code of Criminal Procedure, 1973
(for short "Cr.P.C"), a prayer is made for quashing the order dated 23 rd
December, 2013 passed by the learned Additional Metropolitan
Magistrate, 47th Court, Esplanade, Mumbai on a complaint filed by the
second respondent. By the said order, action under Section 156(3) of
the Cr. P.C was ordered to be taken. There is also a prayer for quashing
the First Information Report (FIR) registered with MRA Marg Police
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Station for the offence punishable under Section 409 read with Section
34 of the Indian Penal Code registered on the basis of the impugned
order. On 5th February, 2015, Rule was issued and after hearing the
learned counsel appearing for the second respondent and the learned
APP. An interim order was passed directing that charge sheet shall not
be filed without leave of this Court and that no coercive action shall be
taken against the petitioners. However, investigation was ordered to be
continued. We may note here that on 4th November, 2015 an order was
passed by the Additional Chief Metropolitan Magistrate, 38 th Court,
Ballard Pier, Mumbai which reads thus :-
"ORDER BELOW EXH.1 IN NOTICE NO.40/2015
As I am passing this order just below this notice itself, I
need not reproduce its contents.
2] Perused the petition and the documents along with.
Issue notice to the Investigating Officer that, if the
offences of forgery as contended in this notice
application are made out, he may take appropriate
action in accordance with the provisions of law, in the
course of his investigation, and do the needful."
2 By order dated 16th December, 2015 this Court permitted
amendment to be carried out for incorporating a reference to the
aforesaid order and accordingly, amendment has been carried out.
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3 The second respondent in his complaint stated that he was
a Director of a Company SIYA Financial Services Pvt. Ltd. The said
company was engaged in the business of trading and investment of
shares. In the complaint it was alleged that the first petitioner -
Company was formerly known as M/s. Nirmal Bang and the second and
third petitioners are the Directors of the first petitioner - Company. It is
alleged that the first petitioner - Company is engaged in the business of
share trading and is a registered broker of NSE and BSE. The allegation
is that in the year 1995, the second and third petitioners along with
their deceased brother Nirmal Bang had approached the second
respondent and requested him to invest in shares and do trading
through them. They represented to the second respondent that they
were registered brokers of NSE and BSE and it was represented that it
would be profitable for the second respondent to get associated with
them. On the basis of the representations made by the second and third
petitioners and their deceased brother (Nirmal Bang), the second
respondent agreed to invest. According to the case made out in the
complaint, the second respondent started investing from the year 1995
and numerous transactions in huge amounts running into Crores of
rupees were made. It is alleged that the second and third petitioners
along with their brother Nirmal Bang were also the Directors of Bama
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Securities Limited. The said Company was also trading in shares.
Reliance is placed on contract notes which are annexed to the complaint
by way of illustration. It is alleged that on 26 th February, 1998 the
petitioners had bought on behalf of the second respondent, 1,09,700
shares of BFL Software at the rate of Rs.86/-. A copy of the statement of
the said transaction has been annexed as Exhibit - B to the complaint.
The second respondent relied upon an entry dated 30 th June, 1998
which shows the purchase of 1,09,700 shares of BFL Software on 26 th
February, 1998. It is alleged that in addition to the aforesaid shares, the
petitioners were holding other shares on behalf of the second
respondent. Details of the said shares are annexed as Exhibit - C to the
Petition.
4 The second respondent stated in the complaint that BFL
Software was taken over by a foreign company and therefore, price of
the shares of BFL Software Company went up. When the second
respondent contacted the petitioners to know the status of his shares
which were lying with the petitioners and to discuss about the future
course of action in trading, the petitioners showed an indifferent and
evasive attitude. It is alleged in the complaint that on 11 th October,
1998 the second respondent filed a complaint with the Commissioner of
Police at Mumbai a copy of which is annexed as Exhibit-E to the
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complaint. The material averments in the complaint are in paragraphs 7
to 11 of the pages 32 and 33 which read thus :-
"7. The complainant thus decided to put his foot down and
demanded the accused to hand over all his shares
which the Accused had purchased on his behalf in the
course of the trade and which the accused were holding
on his behalf. The Accused instead of returning the
shares back to the complainant threatened the
complainant with dire consequences if he ever
demanded my shares from them. The complainant was
thus constrained to file a complaint before the
Commissioner of Police, Mumbai narrating the facts
and requesting for appropriate action as per Law.
Annexed hereto and marked as Exhibit E is the copy of
the complaint dated 11.10.98 filed before the
Commissioner of Police, Mumbai.
8. The matter was sent before the General branch, Crime
Branch, C.I.D., Mumbai for investigation. Surprisingly
no investigation came to be carried out at the instance
of General Branch, Crime Branch, C.I.D., Mumbai and
without even registering any crime the Inspector of
Police, General branch, Crime Branch, C.I.D., Mumbai
wrote a letter to me dated 29.06.99 stating that no
action was feasible in the matter and that I may redress
my grievances in arbitration before Board of Bombay
Stock Exchange or National Stock Exchange. Annexed
hereto and marked as Exhibit F is the copy of the letter
dated 29.06.99 of the Inspector of Police, General
branch, Crime Branch, C.I.D., Mumbai. Aggrieved by
the approach of the Inspector of Police, General branch,
Crime Branch, C.I.D., Mumbai, the complainant
pursued the matter with higher officers and made
various complaints to them. Annexed hereto and
marked as Exhibit G Colly are the copies of the
complaints.
9. The complaint was then being pursued by the Office of
the Addl. Commissioner of Police, Economic offences
Wing, Mumbai and on 13.04.2010 the complaint was
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marked to the Dy. Commissioner of Police, Zone-1,
Mumbai for necessary action. Annexed hereto and
marked as Exhibit H is the copy of the letter dated
13.04.2010.
10. The matter if of a serious nature and of wide
repercussions. The accused above named have together
conspired and have committed serious criminal
offences and a huge fraud running in crores of rupees.
The accused have in connivance with each other and
with dishonest intentions, since inception, induced the
complainant to part with his hard earned monies by
representing him that they would invest the said
amount in shares. However, inspite of repeated requests
and reminders, the accused have not given delivery of
those shares as well and have sold off the said shares
and appropriated profits generated to their own use.
The were holding the shares in trust for the
complainant and being the sub-brokers, they were
agents of the complainant. The shares belonging to the
Complainant are worth about sixty crores which had
been entrusted to the accused above named and which
the Accused are holding in their capacity as a broker.
The Accused above named have committed the offence
of criminal breach of trust under section 409 of the
Indian Penal Code.
11. Till date no Crime has been registered in the matter by
the Economic Offences Wing despite the matter
warranted for a prompt and effective investigation by
the Economic Offences Wing as the fraud committed is
in crores of rupees."
5 A prayer was made in the complaint praying that an order
under Sub-Section (3) of Section 156 of the Cr.P.C be issued directing
the concerned officer of Economic Offence Wing to register a crime. The
impugned order passed on the complaint reads thus :-
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"Complainant is present considering the allegation
herein, police is directed to investigate into the matter
U/s.156(3) of CRPC and report within (illegible) days."
6 The learned counsel appearing for the petitioners invited
our attention to the complaint dated 11 th October, 1998 addressed by
the second respondent to the Commissioner of Police. He pointed out
that the allegations of cheating and fraud have been made in the said
letter only as against the said Nirmal. He pointed out that an enquiry
was made into the said complaint addressed to the Commissioner of
Police and by a letter dated 29 th June, 1990, the Inspector of Police,
General Branch, Crime Branch, C.I.D., Mumbai informed the second
respondent that no action can be taken on the basis of his complaint
and he may redress his grievances by resorting to arbitration
proceedings. He pointed out that on 25th September, 2002 another
complaint was addressed by the second respondent to the Joint
Commissioner of Police, Mumbai. In the said complaint, he urged that
the second and the third petitioners threatened to kill him on the same
day. He pointed out that thereafter the second respondent kept quiet
and only on 22nd March, 2010 he addressed a letter to the Joint
Commissioner of Police-Crimes alleging cheating and threatening by the
second and third petitioners by describing them as Bang Brothers of
M/s. Nirmal Bang. He pointed out that on 13 th April, 2010 the office of
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the Additional Commissioner of Police, Economic Offence Wing
forwarded the complaint by the second respondent to the Deputy
Commissioner of Police. He pointed out a letter addressed by the second
petitioner on 28th November, 2002 to the Joint Commissioner of Police.
He pointed out that the complaint was belatedly filed on 5 th June, 2013.
He urged that the complaint is completely malafide. He relied upon
several decisions of the Apex Court and this Court. He relied upon a
decision of the Apex Court in the case of Priyanka Srivastava and
another Vs. State of U.P. and Another1. He submitted that apart from the
fact that the averments regarding compliance with Sub-Section (3) of
Section 154 of the Cr.P.C are not made, the order under Section 156(3)
appears to have been passed in mechanical manner as the said order
runs into only one sentence which does not contain any reasons. He
submitted that the aspect of delay has not been considered. He also
invited our attention to the decision of the Apex Court in the case of
M/s Thermax Ltd.& Ors. vs. K.M.Johny & Ors 2. He also relied upon well-
known decision of the Apex Court in the case of State Of Haryana And
Ors vs Choudhary Bhajan Lal And Ors.3 He also relied upon a decision of
the Apex Court in the case of Ramdev Food Products Private Limited vs.
State Of Gujarat4. He also relied upon well-known decision of the Apex
1 (2015) 6 SCC 287
2 (2011) 13 SCC 412
3 Suppl(1) SCC 335
4 (2015) 6 SCC 439
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Court in the case of Mehmood Ul Rehman and Ors. Vs. Khazir
Mohammad Tunda and Ors5. He submitted that the order on the basis of
which the FIR is registered shows complete non-application of mind. He
urged that application of mind is not reflected from the said order.
Hence, the order and the FIR registered on the basis of the order be
quashed and set aside.
7 The learned counsel appearing for the second respondent
has made detailed submissions. He submitted that the view that order
passed under Sub-Section (3) of Section 156 of Cr.P.C must contain
reasons in brief needs reconsideration. He relied upon a decision of the
Apex Court of three Hon'ble Judges in the case of Devarapalli
Lakshminarayana Reddy and Ors. Vs. V. Narayana Reddy and Ors. 6 He
submitted that an order made under Sub-Section (3) of Section 156 is
in the nature of a peremptory reminder or intimation to the Police to
exercise their plenary power of investigation. He submitted that
therefore, the learned Magistrate is not expected to apply his mind in
detail and pass a reasoned order. He relied upon a decision of the Apex
Court in the case of Mohindro Vs. State of Punjab and Ors.7 He also
relied upon the decision of the Apex Court in the case of Lalita Kumari
5 (2015) 12 SCC 420
6 (1976) 3 SCC 252
7 (2001) 9 SCC 581
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Vs. State of Uttar Pradesh and Others 8. He submitted that once a case of
commission of a cognizable offence is made out, the police have no
option but to register the FIR and that is the reason why an order under
Sub-Section (3) of Section 156 is in the nature of a reminder. He
submitted that the subsequent decisions of the Apex Court in the case of
Priyanka Srivastava, Ramdev Food Products and Mehmood Ul Rehman do
not consider the law laid down in the decision of the larger Bench in the
case of Devarapalli Reddy. He relied upon a decision of the learned
Single Judge of Andhra Pradesh High Court in the case of Raman
Srikanth vs State of Telangana9. He submitted that even assuming that
the impugned order passed by the learned Magistrate is not proper, on
that ground, the FIR cannot be quashed especially when a prima facie
case of commission of cognizable offence is made out. He also relied
upon a recent decision of the Apex Court in the case of HDFC Securities
Limited and Ors. Vs. State of Maharashtra and Anr. 10 He submitted that
as held by the Apex Court, an order under Sub-Section (3) of Section
156 requiring investigation by the police cannot be said to have caused
any injury of irrevocable nature. He submitted that the stage of
cognizance would arise only after a final report is submitted by the
police and therefore, as held by the Apex Court, this Petition is
8 2014 (2) SCC 1
9 Manu /A.P./0385/2015
10 2011 SCC Online Bom 1986
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premature. He submitted that powers under Section 482 of the Cr.P.C
will have to be used very sparingly. He submitted that at this stage, the
power under Section 482 cannot be exercised and investigation must
proceed.
8 He invited our attention to the decision of the Apex Court
in the case of Rajesh Bajaj vs NCT Of Delhi And Others 11. He submitted
that complaint cannot be quashed only on the ground that ingredients
of the offences are not made out. He pointed out that there is a
material on record to show that business of M/s. Nirmal Bang and
Nirmal Bang Securities Pvt. Ltd. was controlled by the entire family of
Nirmal Bang as well as the second and third petitioners who are his
brothers. He submitted that there are two letters on record to show that
Nirmal Bang Securities Private Limited delivered the shares to the
second respondent which show that assets and liabilities of M/s. Nirmal
Bang were taken over by M/s. Nirmal Bang Securities Pvt. Ltd. on its
incorporation. He invited our attention to various letters placed on
record and the statements of account. He submitted that there is
enough material to show complicity of the second and third petitioners.
He submitted that the delay by itself is no ground to quash the
proceedings.
11 (1999) 3 SCC 259
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9 We have given careful consideration to the submissions. As
far as the provision of Sub-Section (3) of Section 156 is concerned, the
law is summarised by this Bench in the case of Sayed Anwar Ahmed and
another Vs. State of Maharashtra and another in Criminal Writ Petition
No.924 of 2016 decided on 27th and 28th February, 2017. This Court has
extensively considered the decision of the Apex Court in the case of
Priyanka Srivastava as well as Lalita Kumari Vs. State of Uttar Pradesh.
The law has been summarised in paragraph 25 of the said decision
which reads thus :-
"25. To summarise,
(a) While dealing with a Complaint seeking an action
under Sub-Section (3) of Section 156 of Cr.P.C, the
learned Magistrate cannot act mechanically. He is
required to apply his mind to the contents of the
Complaint and the documents produced along with the
Complaint ;
(b) An Order passed on the said Complaint must
record reasons in brief which should indicate
application of mind by the Magistrate. However, it not
necessary to record detailed reasons;
(c) The power under Sub-Section (3) of Section 156
is discretionary. Only because on plain reading of the
Complaint, a case of commission of cognizable offence
is made out, an Order of investigation should not be
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mechanically passed. In a given case, the learned
Magistrate can go in to the issue of the veracity of the
allegations made in the Complaint. The learned
Magistrate must also consider the other relevant
aspects such as the inordinate delay on the part of the
Complainant. The nature of the transaction and
pendency of civil proceedings on the subject are also
relevant considerations;
(d) When a Complaint seeking an action under Sub-
Section (3) of Section 156 is brought before the
learned Metropolitan Magistrate or the learned Judicial
Magistrate, it must be accompanied by an affidavit in
support as contemplated by the decision of the Apex
Court in Priyanka Srivastava. The affidavit must
substantially comply with the requirements set out in
Chapter VII of the Criminal Manual and especially
paragraphs 5 and 8 which are quoted above; and
(e) Necessary averments recording compliance with
Sub-Sections (1) and (3) of Section 154 of the CrPC
should be incorporated with material particulars.
Moreover, the documents in support of the said
averments must filed on record."
10 The submission of the learned counsel appearing for the
second respondent is that the decision of a Bench of the Apex Court of
three Hon'ble Judges in the case of Devarapalli Reddy holds that an
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order made under Sub-Section (3) of Section 156 is in the nature of a
reminder or intimation to police to exercise their plenary power of
investigation under Section 156(1). We have perused the said
judgment. Firstly, we must mention here that in the case of Priyanka
Srivastava, the Apex Court has considered the decision of the three
Judge Bench in the case of Devarapalli. In fact, relevant part of
paragraph 17 of the said decision which is relied upon by the second
respondent is quoted in the said decision. Paragraph 17 of the said
decision in the case of Devrapalli Reddy is relevant. It reads thus :-
"17. Section 156(3) occurs in Chapter XII, under the
caption: "Information to the Police and their powers to
investigate"; while s.202 is in Chapter XV which bears
the heading "Of complaints to Magistrates". The power
It order police investigation under s.156(3) is different
from the power to direct investigation conferred by
s.202(1). The two operate in distinct spheres at
different stages. The first is exercisable at the pre
cognizance stage, the second at the post-cognizance
stage when the Magistrate is in seisin of the case. 'That
is to say in the case of a complaint regarding the
commission of a cognizable offence, the power under
s.156(3) can be invoked by the Magistrate before he
takes cognizance of the offence under s.190(1)(a). But
if he once takes such cognizance and embarks upon the
procedure embodied in Chapter XV, he is not competent
to switch back to the pre-cognizance stage and avail of
s.156(3). It may be noted further that an order made
under sub-section (3) of s.156, is in the nature of a
peremptory reminder or intimation to the police to
exercise their plenary powers of investigation under
s.156(1). Such an investigation embraces the entire
continuous process which begins with the collection
of evidence under s.156 and ends with a report or
chargesheet under s.173. On the other hand s.202
comes in at a stage when some evidence has been
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collected by the Magistrate in proceedings under
Chapter XV, but the same is deemed insufficient to take
a decision as to the next step in the prescribed
procedure. In such a situation, the Magistrate is
empowered under s.202 to direct within the limits
circumscribed by that section, an investigation "for the
purpose of deciding whether or not here is sufficient
ground for proceeding ". Thus the object of an
investigation under s.202 is not to initiate a fresh case
on police report but to assist the Magistrate in
completing proceedings already instituted upon a
complaint before him."
(emphasis added)
We must note here that the portion highlighted above has
been quoted by the Apex Court in the case of Priyanka Srivastava. The
issue in the said decision in the case of Devarapalli was whether a
Magistrate who receives a complaint disclosing an offence exclusively
triable by the Court of Session, is debarred from sending the same to
the police for investigation under Sub-Section (3) of Section 156. If
paragraphs 18 and 19 of the said decision are perused, it is apparent
that the issue regarding the manner of exercise of the power under Sub-
Section (3) of Section 156 did not arise for consideration before the
Apex Court. The issue whether an order under Sub-Section (3) of
Section 156 must contain reasons did not fell for consideration of the
Apex Court. The Apex Court was considering the matter in a different
context as indicated by paragraphs 18 and 19 which read thus :-
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"18. In the instant case the Magistrate did not apply his
mind to the complaint for deciding whether or not there
is sufficient ground for proceeding; but only for
ordering an investigation under s.156(3). He did not
bring into motion the machinery of Chapter XV. He did
not examine the complaint or his witnesses under
s.200, Cr.P.C., which is the first step in the procedure
prescribed under that Chapter. The question of taking
the next step of that procedure envisaged in s.202 did
not arise. Instead of taking cognizance of the offence he
has., in the exercise of his discretion, sent the complaint
for investigation by police under s.156.
19. This being the position, s. 202(1), 1st Proviso was not
attracted. A Indeed, it is not necessary for the decision
of this case to express any final opinion on the ambit
and scope of the 1st Proviso to S.202(1) of the Code of
1973. Suffice it to say, the stage at which S.202 could
become operative was never reached in this case. We
have therefore in keeping with the well-established
practice of the Court, decided only that much which
was essential for the disposal of this appeal, and no
more."
11 The Apex Court held that the first proviso of Sub-Section
(1) of Section 202 was not attracted as the stage at which the first
proviso could become operative had never reached as before examining
the complainant under Section 200 of the Cr.P.C, the learned Magistrate
ordered investigation under Sub-Section (3) of Section 156. Therefore,
the decision in the case of Devarapalli, in our view, is not an authority
for the proposition that the learned Magistrate is not required to record
any reasons while passing an order under Sub-Section (3) of Section
156 of Cr.P.C. The Apex Court in the case of Priyanka Srivastava, after
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considering what is held in paragraph 17 of the decision of the larger
Bench in the case of Devarapalli, in paragraph Nos.27 to 30 held thus :-
"27. Regard being had to the aforesaid enunciation of law, it
needs to be reiterated that the learned Magistrate
has to remain vigilant with regard to the allegations
made and the nature of allegations and not to issue
directions without proper application of mind. He
has also to bear in mind that sending the matter
would be conducive to justice and then he may pass
the requisite order. The present is a case where the
accused persons are serving in high positions in the
Bank. We are absolutely conscious that the position
does not matter, for nobody is above the law. But, the
learned Magistrate should take note of the allegations
in entirety, the date of incident and whether any
cognizable case is remotely made out. It is also to be
noted that when a borrower of the financial institution
covered under the SARFAESI Act, invokes the
jurisdiction under Section 156(3) CrPC and also there
is a separate procedure under the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993, an
attitude of more care, caution and circumspection has
to be adhered to.
28. Issuing a direction stating "as per the application"
to lodge an FIR creates a very unhealthy situation in
society and also reflects the erroneous approach of
the learned Magistrate. It also encourages
unscrupulous and unprincipled litigants, like
Respondent 3, namely, Prakash Kumar Bajaj, to take
adventurous steps with courts to bring the financial
institutions on their knees. As the factual exposition
would reveal, Respondent 3 had prosecuted the earlier
authorities and after the matter is dealt with by the
High Court in a writ petition recording a settlement, he
does not withdraw the criminal case and waits for some
kind of situation where he can take vengeance as if he
is the emperor of all he surveys. It is interesting to note
that during the tenure of Appellant 1, who is presently
occupying the position of Vice-President, neither was
the loan taken, nor was the default made, nor was any
action under the SARFAESI Act taken. However, the
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action under the SARFAESI Act was taken on the
second time at the instance of the present Appellant 1.
We are only stating about the devilish design of
Respondent 3 to harass the appellants with the sole
intent to avoid the payment of loan. When a citizen
avails a loan from a financial institution, it is his
obligation to pay back and not play truant or for that
matter play possum. As we have noticed, he has been
able to do such adventurous acts as he has the
embedded conviction that he will not be taken to task
because an application under Section 156(3) CrPC is a
simple application to the court for issue of a direction
to the investigating agency. We have been apprised that
a carbon copy of a document is filed to show the
compliance with Section 154(3), indicating it has been
sent to the Superintendent of Police concerned.
29. At this stage it is seemly to state that power under
Section 156(3) warrants application of judicial
mind. A court of law is involved. It is not the police
taking steps at the stage of Section 154 of the Code.
A litigant at his own whim cannot invoke the
authority of the Magistrate. A principled and really
grieved citizen with clean hands must have free
access to invoke the said power. It protects the
citizens but when pervert litigations takes this route
to harass their fellow citizens, efforts are to be
made to scuttle and curb the same.
30. In our considered opinion, a stage has come in this
country where Section 156(3) CrPC applications are to
be supported by an affidavit duly sworn by the
applicant who seeks the invocation of the jurisdiction of
the Magistrate. That apart, in an appropriate case, the
learned Magistrate would be well advised to verify the
truth and also can verify the veracity of the allegations.
This affidavit can make the applicant more responsible.
We are compelled to say so as such kind of applications
are being filed in a routine manner without taking any
responsibility whatsoever only to harass certain
persons. That apart, it becomes more disturbing and
alarming when one tries to pick up people who are
passing orders under a statutory provision which can be
challenged under the framework of the said Act or
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under Article 226 of the Constitution of India. But it
cannot be done to take undue advantage in a criminal
court as if somebody is determined to settle the scores."
(emphasis added)
12 Now, we come to the decision of the learned Single Judge
of Andhra Pradesh High Court in the case of Raman Srikanth. He held
that failure to pass a speaking order while forwarding the complaint
under Sub-Section (3) of Section 156 is not a justifiable ground to
quash the proceedings. The view taken is completely contrary to the
catena of the decisions of the Apex Court including the decision in the
case of Priyanka Srivastava. In the case of Ramdev Food Products, in
paragraph 20, the Apex Court quoted with approval its own decision in
the case of Anil Kumar & Ors vs M.K Aiyappa & Anr. 12 In paragraphs 19
and 20, the Apex Court held thus :-
19. Thus, this Court has laid down that while prompt
registration of FIR is mandatory, checks and balances
on power of police are equally important. Power of
arrest or of investigation is not mechanical. It requires
application of mind in the manner provided. Existence
of power and its exercise are different. Delicate balance
had to be maintained between the interest of society
and liberty of an individual. Commercial offences have
been put in the category of cases where FIR may not be
warranted without enquiry.
20. It has been held, for the same reasons, that
direction by the Magistrate for investigation under
Section 156(3) cannot be given mechanically. In Anil
Kumar vs. M.K. Aiyappa [5], it was observed :
"11. The scope of Section 156(3) CrPC came up for
12 2013(10) SCC 705
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consideration before this Court in several cases. This
Court in Maksud Saiyed case [(2008) 5 SCC 668]
examined the requirement of the application of mind
by the Magistrate before exercising jurisdiction under
Section 156(3) and held that where jurisdiction is
exercised on a complaint filed in terms of Section
156(3) or Section 200 CrPC, the Magistrate is
required to apply his mind, in such a case, the
Special Judge/Magistrate cannot refer the matter
under Section 156(3) against a public servant
without a valid sanction order. The application of
mind by the Magistrate should be reflected in the
order. The mere statement that he has gone through
the complaint, documents and heard the
complainant, as such, as reflected in the order, will
not be sufficient. After going through the complaint,
documents and hearing the complainant, what
weighed with the Magistrate to order investigation
under Section 156(3) CrPC, should be reflected in
the order, though a detailed expression of his views
is neither required nor warranted. We have already
extracted the order passed by the learned Special
Judge which, in our view, has stated no reasons for
ordering investigation."
The above observations apply to category of cases
mentioned in Para 120.6 in Lalita Kumari (supra)."
(emphasis added)
Ultimately in paragraph No.22.1, the Apex Court held that
the direction under Sub-Section (3) of Section 156 is to be issued only
after application of mind by the learned Magistrate. Even in this case,
the Apex Court has considered the decision in the case of Devarapalli.
13 The learned counsel appearing for the second respondent
relied upon a decision of the Apex Court in the case of Srinivas Gundluri
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and Ors. Vs. Sepco Electric Power Construction Corporation and Ors.13.
The said decision considers the law laid down in the case of Devarapalli
Reddy. Even in the said decision, the issue regarding the manner in
which the power under Sub-Section (3) of Section 156 should be
exercised was not considered by the Apex Court. The Apex Court
extensively considered the question "what is meant by taking
cognizance of offence".
14 Now, we turn to the decision of the Apex Court in the case
of HDFC Securities Limited. In the said case there was an order passed
under Sub-Section (3) of Section 156 of Cr.P.C on the basis of which FIR
was registered. Writ Petitions were filed by the appellants before the
Apex Court for quashing FIR. The Writ Petitions were dismissed by the
High Court by holding the same as premature. The order passed by the
learned Magistrate under Sub-section (3) of Section 156 of Cr.P.C is
quoted in paragraph 12 which records reasons in brief. The order shows
that the learned Magistrate had applied his mind to the contents of the
complaint and came to the conclusion that the complaint disclosed
commission of cognizable offence. The order was not made only on this
ground. The learned Magistrate recorded a satisfaction that considering
the nature of the offence, it needs to be sent to the police for
investigation under Sub-Section (3) of Section 156. The order records
13 (2010) 8 SCC 206
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that he has even perused the documents filed along with the complaint.
Therefore, this was not a case where a single line order was passed
ordering investigation. This was a case where the order under Sub-
Section (3) of Section 156 disclosed that the learned Magistrate had
applied his mind to the complaint. It is in the facts of the case before
the Apex Court that the observations were made in paragraph 27 that
the Petitions filed before the High Court were filed at premature stage.
We are of the view, if the order made under Sub-Section (3) of Section
156 is illegal, the FIR registered on the basis of the order can be
quashed to avoid abuse of process of law.
15 As far as the decision in the case of Sajjan Kumar Vs.
Central Bureau Investigation14 relied upon by the learned counsel
appearing for the second respondent is concerned, the same here does
not deal with the gross delay in filing a complaint. It deals with the
effect of the inordinate delay in the proceedings. The decision in the
case of Mohindro does not lay down any proposition of law which will
assist the second Respondent.
16 Now, we turn to the factual aspects of the case. As stated
earlier, the impugned order runs into a single sentence which on the
face of it does not disclose any application of mind by the learned Judge
14 (2010) 9 SCC 368
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to the facts stated in the complaint. The complaint was filed on 5th June,
2013. We have perused the annexures to the complaint. The first
complaint filed by the second respondent was on 11 th October, 1998
addressed to the Commissioner of Police. The second respondent stated
therein that he has been cheated and frauded by the said Nirmal Bang
over a deal in shares at Mumbai. There is no reference to second and
third petitioners in the said complaint. There is no allegation made
against them. By a letter dated 29th June, 1999, the Inspector of Police
of General Branch, Crime Branch, C.I.D, Mumbai informed the second
respondent that no action is feasible on the basis of his complaint and
therefore, he may take recourse to arbitration before the Stock
Exchange. The second respondent did not take recourse to any
proceedings after receiving communication dated 29 th June, 1999. He
kept mum and after three years and three months, on 25 th September,
2002, he lodged another complaint with the Joint Commissioner of
Police, Mumbai. In that complaint, he made allegations against the
second and third petitioners who were the brothers of Nirmal. Serious
allegation was made in the said complaint that on 25 th September, 2002
when the second respondent met the second and third petitioners near
Oberoi Tower at 7.00 pm, three unknown persons joined the second
and third petitioners and all of them threatened him by telling him that
if he demands his dues, he would be killed. It is not his case that on 25 th
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September, 2002 he immediately went to a Police Station and tried to
lodge a complaint. After filing the said complaint, the second
respondent did nothing for more than 7 years. On 22 nd March, 2010 he
filed a complaint with Shri Rakesh Maria, Joint Commissioner of Police
in which he stated that he was to receive shares worth more than 60
Crores from Bang brothers (second and third petitioners). He alleged
that for past six months they were promising him to either deliver the
shares or to make payment. He alleged that for past six months, the
second and third petitioners were calling him on landline and
threatening him. Here again it is not the case of the second respondent
that during the span of six months he filed any complaint with police.
17 From the letter dated 13th April, 2010 forwarded by the
office of the Additional Commissioner of Police, Economic Offences
Wing, CID, Mumbai to the Deputy Commissioner of Police, Zone - I, it
appears that complaint made by the second respondent was forwarded
to the said officer.
18 In the complaint filed before the learned Metropolitan
Magistrate on which the impugned order has been passed, the second
respondent has not stated as to what steps were taken by him from 29 th
June, 1999 to 25th September, 2002. There is no explanation for further
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inaction till 22nd March, 2010. There is no explanation as to why he
waited till June 2013 to file the complaint on which the impugned
order has been passed. There is absolutely no reason stated for this
inaction and delay from April, 2010 to June, 2013. There is a gross
unexplained delay in approaching the Court.
19 If averments made in the complaint are taken as correct, on
26th February 1998, the accused bought on behalf of the second
respondent 1,09,700 shares of BFL. It is not the case made out in the
complaint that there were any further transactions after 1998 between
the second respondent and the petitioners. It is not his case that after
the year 1998 till the year 2013, any further investment was made by
him with the Petitioners.
20 Thus, on 11th October, 1998 for the first time, the second
respondent addressed a complaint to the Commissioner of Police,
Mumbai in which the allegations were made only against Nirmal. On
29th June, 1999 he was informed that no action can be taken on the
basis of the complaint and he should take recourse to arbitration. It is
not the case of the second respondent that he took any further steps till
25th September, 2002. He did not approach either the Court of law or
higher police officers. As stated earlier, for the alleged incident of 25 th
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September, 2002, the second respondent addressed a written complaint
to the Joint Commissioner of Police, Mumbai without approaching the
concerned Police Station. Thereafter, for a period of seven years or
more, the second respondent took no steps till 22 nd March, 2010 when
he addressed a complaint to Shri Rakesh Maria, Joint Commissioner of
Police. According to the case of the second respondent, the complaint
was forwarded to the Deputy Commissioner of Police, Zone - I on 13 th
April, 2010. A copy of the communication to that effect was forwarded
even to the second respondent which is annexed to the complaint. It is
not the case made out in the complaint that thereafter the second
respondent complained about the delay in investigation or that he
approached any higher police officials. Three years and two months
thereafter, he filed the complaint before the learned Magistrate. Going
by the averments made in the complaint, after 26 th February, 1998 even
according to the case of the second respondent, there was no
transaction between him and the accused in the sense that it is not the
case that thereafter any shares or securities were purchased by the
petitioners on his behalf. Thus, by filing the complaint before the
learned Magistrate in June 2013, an action under Sub-Section (3) of
Section 156 was sought on the basis of the alleged transactions with the
said Nirmal upto the year 1998 and the alleged incident of 25 th
September, 2002. Thus, there was a gross and unexplained delay of
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several years in filing the complaint. As held by this Court in the case of
Sayed Anwar Ahmed and another, such a gross delay was a factor which
the learned Magistrate ought to have considered. The learned
Magistrate passed a cryptic impugned order on 23 rd December, 2013 on
the basis of which the impugned FIR was registered on 23th June, 2014.
21 We are not entering into the controversy whether the
allegations made in against the second and third petitioners were an
afterthought. Setting criminal law in motion after such a long lapse of
time shows the malafide intention of the second respondent. For the
transactions of 1998, he did not take any steps to avail of proper
remedy. The action of filing the complaint in June, 2013 is nothing but
an abuse of process of law.
22 On the basis of the complaint filed in 1998 by the second
respondent, the Police had declined to take any action by informing the
second respondent accordingly by a letter dated 29 th June, 1999. But
for the impugned order passed by the learned Magistrate, the Police
could not have registered the FIR. Therefore, as the impugned order is
completely illegal, the FIR registered on the basis of the same in the
year 2014 deserves to be quashed. Even by ignoring the illegality
associated with the impugned order of the learned Magistrate, at such a
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belated stage, the prosecution of the petitioners will be nothing but an
abuse of process of law.
23 It appears that an application was made by the second
respondent on 31st October, 2005 before the Metropolitan Magistrate
contending that apart from Section 409 of the IPC, the offences under
the other Sections were also attracted. On the said application, the
learned Judge passed an order dated 4th November, 2015 issuing notice
to the Investigating Officer by observing that if the offence of forgery as
contended in the application are made out, the Investigating Officer
may take appropriate action in accordance with law in the course of the
investigation. On the face of it, the said order was unwarranted and
illegal and the learned Magistrate had no power to issue any such
direction during the course of investigation to the police officer.
24 We make it very clear that we are not adjudicating upon
the rights and liabilities of the parties.
25 Accordingly, the Petition must succeed and we pass the
following order :-
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ORDER
(i) Rule is made absolute in terms of prayer clause (a) which
reads thus :-
"(a) be pleased to issue a writ, order or direction under
Article 226 and Article 227 of the Constitution of India
and Section 482 of the Criminal Procedure Code, 1973
quashing the Impugned Order dated 23rd December,
2013 and the Criminal Complaint dated June 5, 2013
and FIR dated 23/6/2014 against the Petitioners which
are filed under various provisions of the IPC."
(ii) Criminal Application does not survive and the same is
accordingly disposed of;
(iii) All concerned to act upon an authenticated copy of this
order.
(SMT. ANUJA PRABHUDESSAI, J) (A.S. OKA, J)
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