Code of Criminal Procedure, 1973 – s.190(1)(b) – Allegation of cheating/ siphoning of huge amounts of money through Hawala – A complaint was filed by the ICICI Bank against a company alleging that they hatched a conspiracy and as a part of this conspiracy submitted false and bogus bill of entry in the Bank and forwarded huge sum through Hawala to Dubai and Hong Kong to different companies and thereby cheated Government of India – FIR registered against the said company – Respondent’s name did not appear in the FIR – During course of investigation, statements of various persons were recorded and as per the prosecution, these statements, implicated the respondent and other accused persons – Charge-sheet was filed wherein the respondent was referred to as a suspect – In the first supplementary charge sheet, the respondent was not added as an accused – Based on further investigation, second supplementary charge sheet was filed and relying on it, the Magistrate took cognizance of offence against accused including respondent – Issuance of process – High Court granted bail to respondent – Respondent filed revision challenging the order taking cognizance of offence – High Court allowed the revision holding that there was no material either direct or circumstantial to point out any connection of respondent with alleged offences of forgery, cheating, conspiracy etc. – State challenged the order of High Court by filing instant appeal – Held: The offence alleged to have been committed was a complex economic offence of sending foreign exchange to Dubai and Hong Kong through Hawala by setting up a web of companies and was not a simple case of forged Bills of Entry – High Court erred in proceeding to examine the case as if it was a simple case of submission of forged Bills of Entry by observing that the case was not related to any import or export of diamonds – When the satisfaction of the Magistrate was based on the charge sheet and the materials placed before him, the satisfaction cannot be said to be erroneous or perverse and the satisfaction ought not to have been interfered with – While taking cognizance of an offence based upon a police report, it is the satisfaction of the Magistrate that there is sufficient ground to proceed against the accused – Along with the second supplementary charge sheet, number of materials like statement of witnesses, Bank statement of the respondent-accused and his company and other Bank Statement, Call Detail Records and other materials were placed and the Magistrate satisfied himself that there was sufficient ground to proceed against the respondent and issued summons – When the prosecution relied upon the materials, strict standard of proof was not to be applied at the stage of issuance of summons nor to examine the probable defence which the accused may take – All that the court was required to do is to satisfy itself as to whether there are sufficient grounds for proceeding – High Court ought not to have gone into the merits of the matter when the matter was at nascent stage – Impugned order is liable to be set aside – The order of the Magistrate taking cognizance of the second supplementary charge sheet for the offences and issue of process to the respondent-accused restored – Penal Code, 1860 – ss.420, 465, 467, 468, 471, 477A and 120-B – Economic Offence.
Code of Criminal Procedure, 1973 – s.190(1)(b) – Cognizance of offence and issue of summons based on police report – Whether the Magistrate has to record reasons for its satisfaction of sufficient grounds for issuance of summons – Held: In so far as taking cognizance based on the police report, the Magistrate has the advantage of the charge sheet, statement of witnesses and other evidence collected by the police during the investigation – Evidence and materials so collected are sifted at the level of the Investigating Officer and thereafter, charge sheet is filed – In appropriate cases, opinion of the Public Prosecutor is also obtained before filing the charge sheet – Thereafter, Magistrate is only required to pass an order issuing summons to the accused – Such an order of issuing summons to the accused is based upon subject to satisfaction of the Magistrate considering the police report and other documents and satisfying himself that there is sufficient ground for proceeding against the accused and the Magistrate is not required to record any reason – In the instant case, cognizance of the offence was taken by taking into consideration the charge sheet filed by the police for the offence under ss.420, 465, 467, 468, 471, 477A and 120B IPC – Order for issuance of process without explicitly recording reasons for its satisfaction for issue of process did not suffer from any illegality.
Code of Criminal Procedure, 1973 – s.190, 204 – Issuance of process – Held: For issuance of process against the accused, it has to be seen only whether there is sufficient ground for proceeding against the accused – At the stage of issuance of process, the Court is not required to weigh the evidentiary value of the materials on record – The Court must apply its mind to the allegations in the charge-sheet and the evidence produced and satisfy itself that there is sufficient ground to proceed against the accused – The Court is not to examine the merits and demerits of the case and not to determine the adequacy of the evidence for holding the accused guilty – The Court is also not required to embark upon the possible defences – Likewise, ‘possible defences’ need not be taken into consideration at the time of issuing process unless there is an exfacie defence such as a legal bar or if in law the accused is not liable.
Code of Criminal Procedure, 1973 – s.397 – Revisional jurisdiction – Scope of – While hearing revision under s.397, the High Court does not sit as an appellate court and will not reappreciate the evidence unless the judgment of the lower court suffers from perversity – In the instant case, Magistrate was satisfied that there were sufficient grounds for proceeding, based on the charge sheet and the materials produced thereon – High Court was not justified in examining the merits and demerits of the case and substitute its own view – Penal Code, 1860 – ss.420, 465, 467, 468, 471, 477A and 120-B.
Allowing the appeal, the Court
HELD: 1.1 It is well-settled that at the stage of issuing process, the Magistrate is mainly concerned with the allegations made in the complaint or the evidence led in support of the same and the Magistrate is only to be satisfied that there are sufficient grounds for proceeding against the accused. When issuing summons, the Magistrate need not explicitly state the reasons for his satisfaction that there are sufficient grounds for proceeding against the accused. [Para 15][1117-G-H; 1118-A]
Pepsi Foods Ltd. and Another v. Special Judge
Magistrate and Others (1998) 5 SCC 749 : [1997] 5 Suppl. SCR 12; Bhushan Kumar and another v. State (NCT of Delhi) and another (2012) 5 SCC 424 : [2012]
2 SCR 696; Mehmood Ul Rehman v. Khazir Mohammad Tunda and others (2015) 12 SCC 420 : [2015] 4 SCR
841 – held inapplicable.
1.2 Section 190(1)(b) Cr.P.C. deals with taking cognizance of any offence on the basis of police report under Section 173(2) Cr.P.C. A complaint filed before the Magistrate may be dismissed under Section 203 Cr.P.C. if the Magistrate is of the opinion that there is no sufficient ground for proceeding and in every such case, he shall briefly record his reasons for so doing. If a complaint is not dismissed under Section 203 Cr.P.C., the Magistrate issues process under Section 204 Cr.P.C. A combined reading of Section
203 and Section 204 Cr.P.C. shows that for dismissal of a complaint, reasons should be recorded. In the present case, cognizance has been taken on the basis of police report. In a case instituted on a police report, in warrant cases, under Section
239 Cr.P.C., upon considering the police report and the documents filed along with it under Section 173 Cr.P.C., the Magistrate after affording opportunity of hearing to both the accused and the prosecution, shall discharge the accused, if the Magistrate considers the charge against the accused to be groundless and record his reasons for so doing. [Paras 18, 19][1120-D, F-G; 1121-A]
Raj Kumar Agarwal v. State of U.P. and another 1999 Cr.LJ 4101 – approved.
1.3 In summoning the accused, it is not necessary for the Magistrate to examine the merits and demerits of the case and whether the materials collected is adequate for supporting the conviction. The court is not required to evaluate the evidence and its merits. The standard to be adopted for summoning the accused under Section 204 Cr.P.C. is not the same at the time of framing the charge. For issuance of summons under Section 204 Cr.P.C., the expression used is “there is sufficient ground for proceeding…..”; whereas for framing the charges, the expression used in Sections 240 and 246 IPC is “there is ground for presuming that the accused has committed an offence…..”. At the stage of taking cognizance of the offence based upon a police report and for issuance of summons under Section 204 Cr.P.C., detailed enquiry regarding the merits and demerits of the case is not required. The fact that after investigation of the case, the police has filed charge sheet along with the materials thereon may be considered as sufficient ground for proceeding for issuance of summons under Section 204 Cr.P.C. [Para 21][1122-E-H]
1.4 In so far as taking cognizance based on the police report, the Magistrate has the advantage of the charge sheet, statement of witnesses and other evidence collected by the police during the investigation. Investigating Officer/SHO collects the necessary evidence during the investigation conducted in compliance with the provisions of the Criminal Procedure Code and in accordance with the rules of investigation. Evidence and materials so collected are sifted at the level of the Investigating Officer and thereafter, charge sheet was filed. In appropriate cases, opinion of the Public Prosecutor is also obtained before filing the charge sheet. The court thus has the advantage of the police report along with the materials placed before it by the police. Under Section 190(1)(b) Cr.P.C., where the Magistrate has taken cognizance of an offence upon a police report and the Magistrate is satisfied that there is sufficient ground for proceeding, the Magistrate directs issuance of process. In such case, the Magistrate is not required to record reasons for issuing the process. In the instant case, cognizance of the offence was taken by taking into consideration the charge sheet filed by the police under Sections 420, 465, 467, 468, 471, 477A and 120B IPC, the order for issuance of process without explicitly recording reasons for its satisfaction for issue of process did not suffer from any illegality. [Para 22][1123-A-F]
2. Whether revision under Section 397(2) Cr.P.C. against order of issue of process is maintainable:-
2.1 The Single Judge was not right in proceeding under the footing as if the case was a simple case of presenting forged Bills of Entry. The case of prosecution was a complex economic offence of sending foreign exchange to companies based in Dubai and Hong Kong through Hawala by setting up a web of companies. These companies approached the ICICI Bank and other banks and opened Letters of Credit and by presenting fake Bills of Entry on the fraudulent misrepresentation that these Bills of Entry were genuine and that there had been genuine import of diamonds. The ICICI Bank and other banks were fraudulently induced to remit this amount in foreign exchange to foreign companies in Dubai and Hong Kong. [Para 26][1126-C-F]
2.2 A reading of the statement of Prafulbhai Patel prima facie shows that the respondent-accused was collecting cash and sending it to Prafulbhai Patel through couriers and thereby acted as a conduit for the illegal transfer of cash abroad. The Single Judge observed that the statement of Prafulbhai Patel with reference to the respondent’s business and accounts is only hearsay and he never stated that he had directly or indirectly dealt with the respondent. Whether the statement of Prafulbhai Patel is in the nature of hearsay and whether it is supported by ‘contemporaneous exposition’ and whether it would fall under ‘res gestae’ and whether it is admissible or not is to be seen only at the time of trial. The merits of the contention of either party cannot be gone into now as the same is to be raised and answered only at the time of trial. The Angadias are yet to be examined in the court. During the time of trial, at the time of examining of Angadiyas, it is open to the prosecution to confront them with the relevant materials linking the respondent with the alleged transactions. For issuance of process against the accused, it has to be seen only whether there is sufficient ground for proceeding against the accused. At the stage of issuance of process, the Court is not required to weigh the evidentiary value of the materials on record. The Court is not to examine the merits and demerits of the case and not to determine the adequacy of the evidence for holding the accused guilty. [Paras 31, 32, 35, 36 and 37][1130-EG; 1131-D, H; 1132-A-B]
Nupur Talwar v. Central Bureau of Investigation and another (2012) 11 SCC 465 : [2012] 6 SCR 723 – relied on.
Amar Nath and Others v. State of Haryana and Another (1977) 4 SCC 137 : [1978]1 SCR 222; K.K. Patel and Another v. State of Gujarat and Another (2000) 6 SCC
195 : [2000] 1 Suppl. SCR 312; Urmila Devi v. Yudhvir Singh (2013) 15 SCC 624 : [2013] 16 SCR 542; Balram Prasad Agrawal v. State of Bihar and others (1997) 9 SCC 338 : [1996] 9 Suppl. SCR 752; Bholu Ram v. State of Punjab and Another (2008) 9 SCC 140 : [2008]
12 SCR 959 – referred to.
3.1 The Single Judge was not right in saying that there was no material that the respondent has played any role in the conspiracy in making the black money in cash into white and fraudulently inducing the banks based on fake bills of entry and remitting the amount in foreign exchange to foreign banks based in Hong Kong and Dubai. The Single Judge erred in brushing aside the materials produced by the prosecution which primafacie indicated the role of the respondent that he used to collect the money from the remitters and sending it through Angadiya Firms to Prafulbhai Patel who in turn deposited the same through RTGS in the accounts of the companies operated by MJ which money was transferred abroad by foreign exchange. The brother of the respondent admitted that Rs.3,00,00,000/- were deposited in his account on the instructions of the respondent-accused from the company controlled by accused-MJ. The question whether the brother of respondent-accused received money as a genuine loan transaction or whether it was a part of the commission, could be examined only at the stage of trial when the parties adduced oral or documentary evidence. Further, a perusal of bank statement of the respondent showed four transactions for a total amount of Rs.6,30,00,000/- in the account of respondent from M/s Natural Trading Company. Further, by perusal of the bank statement of M/s Nile Trading Corporation, the proprietorship concern of respondent, showed transactions to the tune of approximately Rs.7,00,00,000/- in the account of the firm from a business concern of accused-MJ. [Paras 38, 39 and 41][1132-EH; 1133-B, F]
3.2 The contention that the two companies who had remitted an amount of Rs.16,00,00,000/- in the accounts of the respondent and his brother which amount is stated to be as ‘commission’, have not been arraigned as accused nor its Director/partner has been shown as accused does not merit acceptance. Only during the time of trial, trail of money from the above two companies to the account of the respondent could be established. Having received a huge amount of Rs.16,00,00,000/-, it is for the accused to establish his defence plea at the time of trial that the money is by way of receipt in the normal course of his business dealings. The bank statement produced by the prosecution showing the deposit of amount in the account of respondent-accused and his company and receipt of the amount by the respondent’s brother are the prima facie materials showing that there are sufficient grounds for proceeding against the accused. The evidence and materials so produced by the prosecution cannot be brushed aside on the possible defence which the respondent is taking that such credits are in the regular course of his business dealings. [Paras 42,44][1133-G-H; 1134-A, D-E]
4. While hearing revision under Section 397 Cr.P.C., the High Court does not sit as an appellate court and will not reappreciate the evidence unless the judgment of the lower court suffers from perversity. Based on the charge sheet and the materials produced thereon when the Magistrate satisfied that there are sufficient grounds for proceeding, the Single Judge was not justified in examining the merits and demerits of the case and substitute own view. [Para 49][1135-G-H; 1136-A]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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