Calcutta High Court
Al Amin Garments Haat Pvt. Ltd vs Jitendra Jain And Anr on 5 January, 2024
Author: Moushumi Bhattacharya
Bench: Moushumi Bhattacharya
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
(Commercial Division)
Present :
Hon'ble Justice Moushumi Bhattacharya
SCO 1 of 2023
Al Amin Garments Haat Pvt. Ltd.
vs
Jitendra Jain and Anr.
For the petitioner : Mr. Rajeev Kumar Jain, Adv.
Mr. Sounak Sengupta, Adv.
Ms. Sreyasi Chatterjee, Adv.
Ms. Reitambhara P. Adv.
For the respondent : Mr. S. N. Mitra, Sr. Adv.
Mr. Rajarshi Dutta, Adv.
Mr. Deepak Kr. Jain, Adv.
Last heard on : 18.12.2023
Delivered on : 05.01.2024
2
Moushumi Bhattacharya, J.
1. The petitioner has taken out an application under section 340 of The
Code of Criminal Procedure, 1973 for a preliminary enquiry into the alleged
fraudulent and illegal acts of the respondents in connection with AP 124 of
2023. AP 124 of 2023 was filed under section 11(6) of The Arbitration and
Conciliation Act, 1996 for appointment of arbitrator.
2. The only point which falls for adjudication is whether the respondents
have a right to be heard in the proceedings.
3. Learned counsel appearing for the respondents urges, with considerable
vehemence and industry that the proceedings under section 340 of the CrPC
allows an opportunity of hearing to the proposed accused and places emphasis
on the words used in the said provision. According to counsel, the word
"inquiry" in section 340(1) contemplates intervention by the Court and hence
envisages that the proposed accused be heard before an inquiry is ordered into
the offence referred to in section 195(1)(b) of the CrPC.
4. Learned counsel appearing for the petitioner, on the other hand, relies on
several decisions of the Supreme Court including that of Pritish vs. State of
Maharashtra; (2002) 1 SCC 253 to contend that there is no scope of granting
any opportunity of hearing to the proposed accused at the pre-referral stage.
5. Before the Court considers the import of the decisions pronounced by the
Supreme Court in respect of section 340 of the CrPC, the relevant part of the
section should be extracted below:
"340.(1) When upon an application made to it in this behalf or otherwise,
any Court is of opinion that it is expedient in the interests of justice that
an inquiry should be made into any offence referred to in clause (b) of
sub-section (1) of section 195, which appears to have been committed in
or in relation to a proceeding in that Court or, as the case may be, in
respect of a document produced or given in evidence in a proceeding in
that Court, such Court may, after such preliminary inquiry, if any, as it
thinks necessary, -
(a) record a finding to that effect;
(b) make a complaint thereof in writing;
(c) send it to a Magistrate of the first class having jurisdiction;
(d) take sufficient security for the appearance for the accused before
such Magistrate, or if the alleged offence is non-bailable and the Court
thinks it necessary so to do, send the accused in custody to the
Magistrate; and
(e) bind over any person to appear and give evidence before such
Magistrate. "
6. The Supreme Court comprehensively explained the implications of the
provision in Pritish vs. State of Maharashtra (supra). The Supreme Court was
unequivocally of the opinion that there is no statutory requirement to afford an
opportunity of hearing to persons against who the Court might make a
complaint and send it to the Magistrate for initiating prosecution proceedings.
The primary reason for the opinion was that section 340 of the CrPC does not
contemplate deciding the guilt or innocence of the party against who
proceedings are to be taken before the Magistrate. At that stage the Court
simply considers whether it is expedient in the interest of justice that an
inquiry should be made into any offence affecting administration of justice. The
Supreme Court relied on M.S. Sheriff vs. State of Madras; AIR 1954 SC 397
where the Constitution Bench of the Supreme Court cautioned that no
expression on the guilt or innocence of the persons should be made by the
Court while passing an order under section 340 of the CrPC.
7. The other reasons expressed by the Supreme Court in Pritish are of equal
relevance and are summarised below.
8. Section 340(1) essentially envisages formation of an opinion by the
Court that it is expedient that an inquiry should be made in the interest of
justice into an offence which appears to have been committed under section
195(1)(b) of the CrPC. The Court is empowered to hold a preliminary inquiry in
order to form such opinion. It is therefore not mandatory that such preliminary
inquiry should be held and the Court can form an opinion even without such
preliminary inquiry. Second, it is also not mandatory that the Court should
make a complaint even where the Court forms the opinion referred to in section
340(1). This is in view of the fact that the provision confers the power on the
court to form an opinion. Forming an opinion by itself, might not result in the
Court making a complaint but once the Court decides to do so, the Court
should make a finding to the effect that it is expedient on the facts and in the
interest of justice that the offence should be probed.
9. The Supreme Court in Pritish further opined that it is always open to the
Court to conduct a preliminary inquiry to reach the finding as stated above,
though, absence of any such preliminary inquiry would not vitiate a finding
reached by the Court regarding its opinion. The Supreme Court concluded that
the preliminary inquiry contemplated in section 340(1) is not for finding of guilt
or innocence of the particular person but only for deciding whether it is
expedient in the interest of justice to inquire into the offence which appears to
have been committed.
10. The ratio of Pritish is that the person against who a complaint is made
has a legal right to be heard only when the Magistrate calls the accused to
appear before him. The person concerned will thereafter have the right to
participate in the pre-trial inquiry envisaged in section 239 of the CrPC and it
is open to the accused to satisfy the Magistrate that the allegations against him
are without basis and he is entitled to be discharged.
11. Besides the dictum of the Court in Pritish, it is important to consider the
other decisions of the Supreme Court pronounced on the subject.
12. In State of Punjab vs. Jasbir Singh; (2020) 12 SCC 96, the Supreme Court
relied on the ratio in Pritish but referred the issue to a larger Bench in view of a
subsequent decision of the Supreme Court in Sharad Pawar vs. Jagmohan
Dalmiya; (2010) 15 SCC 290. Jasbir Singh notes that the 3-Judge Bench in
Sharad Pawar did not take note of the dictum in Pritish and proceeded to hold
that the proposed accused should be given an opportunity of hearing before the
Court directs a preliminary inquiry under section 340(1) of the CrPC.
13. The decision in Pritish was affirmed by the larger Bench, in reference, in
State of Punjab vs. Jasbir Singh; 2022 SCC OnLine SC 1240 (decided on
15.9.2022). The larger Bench in Jasbir Singh relied on the Constitution Bench
decision in Iqbal Singh Marwah vs. Meenakshi Marwah; (2005) 4 SCC 370 to
hold that there is no question of opportunity of hearing being given to a
proposed accused under section 340(1) of the CrPC. The Supreme Court
further opined that the law enunciated by the Constitution Bench in Iqbal
Singh Marwah was in line with the dictum in Pritish. The Supreme Court thus
answered the reference formulated in Jasbir Singh (Pre reference) as to whether
an opportunity of hearing should be given to the would-be accused before a
complaint is made under section 195 of the CrPC, in the negative.
14. This is the law as it stands today. In other words, a proposed accused
does not have a right to be heard before the Court sends the complaint to the
Magistrate for initiating prosecution proceedings under section 340 (1) of the
CrPC. As stated above, section 340(1) does not wipe out the defence of the
proposed accused or his/her right to participate in the proceedings before the
Magistrate. The principles of natural justice are hence preserved in the
proceedings before the Magistrate where the proposed accused has full
opportunity to disprove the charges / allegations against him / her.
15. The dictum in Pritish was also followed by a Division Bench of this Court
in Tarulata Mondal vs. State of West Bengal; 2013 SCC OnLine Cal 12913 where
the Division Bench set out the relevant paragraphs from Pritish on the aspect of
natural justice and was of the view that there is no violation thereof.
16. This Court is bound by the law laid down and is accordingly not inclined
to depart from the said view in view of the law pronounced by the Supreme
Court in Pritish and the answer given by the larger Bench to the reference in
State of Punjab vs. Jasbir Singh,
17. State (NCT of Delhi) vs. Pankaj Chaudhary; (2019) 11 SCC 575 relied on
behalf of the respondents, did not consider Pritish and was in any event
pronounced before the 3-Judge Bench decision in Jasbir Singh. Anil Kumar
Agarwal vs. State of Jharkhand; CRMP No. 2223 of 2021 cannot be taken into
consideration or relied on for the same reasons, that is, for being contrary to
the larger Bench decision in Jasbir Singh.
18. The above reasons are good grounds to hold that the respondents /
proposed accused do not have a right of hearing at the stage of inquiry that is
under section 340(1) of the CrPC. The Court accordingly proposes to hear the
petitioner in the present proceeding and dispose of the same in accordance
with the mandate of section 340(1) of the CrPC. The respondents do not have a
right to be heard in this application.
19. The petitioner shall be at liberty of mentioning the matter at an early
date for hearing on merits.
Urgent photostat certified copies of this judgment, if applied for, be
supplied to the parties upon fulfillment of requisite formalities.
(Moushumi Bhattacharya, J.)
