IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 04/09/2003
CORAM
THE HONOURABLE MR.JUSTICE V.KANAGARAJ
CRIMINAL ORIGINAL PETITION No.22438 OF 2003
AND
CRL.M.P.No.6397 OF 2003.
Devi Padmanabhan ... Petitioner
-Vs-
State, rep.by
The Inspector of Police,
EOW-II (Headquarters)
Chennai-600 002. ... Respondent
Criminal Original Petition filed under Section 482 of the Code of
Criminal Procedure for the relief as stated therein.
For petitioner : Mr.K.Rajasekaran
For respondent : Mr.A.N.Thambidurai,
Govt.Advocate (crl.side)
:O R D E R
The petitioner, who is the first accused, has filed the above
criminal original petition under Section 482 of the Code of Criminal Procedure
praying to call for the records and quash the F.I.R. in Crime No.8 of 2003 on
the file of the Inspector of Police, E.O.W.( Headquarters), Chennai.
2. The petitioner would allege that on a private complaint
filed by one P.Venu, Personnel Manager of Amaravathi Finance and Investments,
30, Kutchery Road, Mylapore, Chennai-4 alleging commission of offences
punishable under Sections 420 and 506(II) IPC on the file of the Court of XI
Metropolitan Magistrate, Saidapet, Chennai-15 against the petitioner and her
husband Padmanabhan, the said Court forwarded the same to the respondent under
Section 156(3) Cr.P.C. with an endorsement to register the case and
investigate into; that on receipt of the same, the respondent has registered
the FIR in his Cr.No.8/2003, dated 6.6.2003 and started investigating into, in
which the petitioner and her husband moved this Court for anticipatory bail in
Crl.O.P.No.18 616 of 2003, which was dismissed by this Court on 25.6.2003.
3. The petitioner would further submit that the private
complaint for civil dispute per se is ill-motivated; that the highlight of the
complaint is that the petitioner and her husband have borrowed a sum of Rs.1
crore on promise that they would create a charge on the property situate at
Ramanathan Street, T.Nagar, Madras; that the complainant being a leading
non-banking finance company, without verification of the title deeds of the
property and without even looking into the same and the relevant documents
relating to the transaction, would not have parted with such huge amounts;
that the E.O.W. being an organisation specially created to investigate into
matters relating to NonBanking Finance Companies, who had accepted deposits
from the general public under pretext of deceiving the general public, no
action could be initiated against the petitioner since no depositor has come
forward to lodge the complaint and in fact the complaint should have been
referred only to the Central Crime Branch, Egmore, for their investigation and
report; that the complainant did not file any complaint before any police
station and that the Magistrate, without even verifying the same, has
forwarded the private complaint to the respondent under Section 156(3) Cr.P.C.
On such grounds, the petitioners would pray for the relief extracted supra.
4. During arguments, the learned counsel appearing on behalf
of the petitioners would not only cite an order passed by this Court reported
in 2003 (2) CTC 270 (M/s.PASUMAI IRRIGATION LIMITED vs. M/s. MANSI FINANCE
(CHENNAI) LIMITED) but also two other judgments, the first one delivered by
the Karnataka High Court reported in 1999 Criminal Law Journal 53 (STATE OF
KARNATAKA vs. THAMMAIAH AND OTHERS) and the other judgment of the Honourable
Apex Court reported in (2001) 3 SCC 333 (CENTRAL BUREAU OF INVESTIGATION vs.
STATE OF RAJASTHAN AND ANOTHER).
5. So far as the first judgment cited above, passed by this
Court is concerned, the learned counsel would lay emphasis on the aspect dealt
with by this Court to the effect that the Magistrates, cannot, so easily,
usurp the jurisdiction of the civil Court and that of the powers of the
police, immediately after a private complaint is filed before it and refer the
same under Section 156(3) Cr.P.C. to any investigating agency for registering
the case and investigating into the complaint.
6. In the second judgment cited on the part of the
petitioners, reported in 1999 Crl.L.J.53, a single Judge of the Karnataka High
Court, on a petition filed by the Superintendent of Police, COD, Bangalore,
questioning the order passed by the Magistrate in directing the petitioners to
investigate and report the matter under Section 156(3) Cr.P.C., has held:
“It is also reported that large number of Courts are directing the COD without
there being any reason whatsoever to investigate under S.15 6(3) Cr.P.C. It
is also noticed that the offences for which the Magistrate direct them to
investigate by the COD also are not the offences which come under the scheme
to be specially investigated. Ordinary cases wherein the dispute between two
individuals or group of individuals if referred to the COD and if they are to
conduct the investigation, their valuable service and time would be lost.
Under those circumstances, as rightly pointed out by the learned S.P.P. the
order passed by the learned Magistrate directing the COD to investigate in
this particular case is beyond its jurisdiction is liable to be set aside.”
7. In the third judgment cited above, reported in (2001) 3
SCC 333, while considering the question, `whether the Magistrate can direct
the CBI to conduct investigation in exercise of his powers under Section
156(3) Cr.P.C.’, the Honourable Apex Court has held:
“The magisterial power cannot be stretched under Section 156(3) beyond
directing the officer in charge of police station to conduct the
investigation.”
On such arguments, the learned counsel appearing on behalf of the petitioner
would pray for the relief extracted supra.
8. On the contrary, the learned Government Advocate
representing the respondent would submit that based on the complaint forwarded
by the learned Magistrate under Section 156(3) Cr.P.C., the respondent, in
compliance of the directions of the Magistrate, has rightly registered the
case in his Cr.No.8/2003 for the offences punishable under Sections 420 and
506(II) IPC and started investigating into the same. Regarding the judgments
cited on behalf of the petitioner, the learned Government Advocate would
assail them saying that none of the judgments is applicable to the facts of
the case in hand since under different circumstances, the judgments cited
first and second above have been delivered and so far as the third judgment
relating to the Honourable Apex Court is concerned, it has only discredited
the Magistrate directing the superior police officer other than the
jurisdictional officer to conduct the investigation and such investigation
would be deemed to be one conducted by the Officer in charge of the police
station and it is only meant to supplement the powers of the officer in charge
of the police station and therefore no illegality is attached in the
Magistrate directing the very jurisdictional officer, the respondent having
jurisdiction to take up the investigation and deal with the same since the
offence is one falling under the purview of the respondent. On such
arguments, the learned Government Advocate would seek to dismiss the above
criminal original petition.
9. In consideration of the facts pleaded, having regard to
the materials placed on record and upon hearing the learned counsel for the
petitioner and the learned Government Advocate contra, what could be assessed
by this Court is that the defacto-complainant viz. Amaravathi Finance and
Investments, said to be a non-banking finance institution, lending financial
assistance to several prospective parties under various heads, has filed a
private complaint before the Court of XI Metropolitan Magistrate, Saidapet,
Chennai on allegations that taking into confidence of the false representation
made on the part of the accused, they have parted with huge sums of money to
the extent of Rs.1 crore without even emphasizing the production of the
original documents on the collateral security offered and on verification,
they came to know that the properties were not at all belonging to the
accused, thus both the accused have made false promises to cheat the
complainant and thus have requested the learned Magistrate to forward the
complaint to the Superintendent of Police, EOW-II, Madras under Section 156(3)
Cr.P.C. and the learned Magistrate, on receipt of the said complaint, has
forwarded the same to the respondent, based on which the respondent has
registered the case for the offences punishable under Sections 420 and 506(II)
IPC against the petitioner and her husband and have taken up the case for
investigation.
10. In such a situation, the first accused in the said case
has come forward to file the above criminal original petition praying to quash
the above proceeding on grounds extracted supra particularly on the ground
that the Magistrate should not have either received or forwarded the complaint
without the complainant approaching the jurisdiction police. They would also
cite the above three judgments, the first one delivered by this Court itself,
the second one by a learned single Judge of the Kerala High Court and the last
one by the Honourable Apex Court, the relevant portions of which have been
extracted while discussing the arguments of the learned counsel for the
petitioner.
11. So far as the first order passed by this Court reported
in 2003 (2) CTC 270 is concerned, it must be clarified that the attitude of
the complainant therein in filing the private complaint before the Court
without recoursing to file the complaint of such sort before the jurisdiction
police, was discredited therein since, in the normal course, the complainant
should have filed the complaint before the jurisdiction police and only if the
police either refuse to receive the complaint or on receipt of the complaint
and registering a case referred the same on grounds known to law, the
complainant if aggrieved, could resort to file a private complaint before the
jurisdiction Magistrate, testifying the stand taken by the police either
refusing to register the case or on registering the case referring the same
filing a referred charge sheet.
12. What this Court observed in the said order is that such
an attitude or procedure followed in directly approaching the Magistrate on a
private complaint without resorting to the jurisdiction police is improper
since bypassing the jurisdiction Police who have got every right to entertain
the complaint or register the case and investigate into the same need not have
to be routed through the Magistrate without any reason offered on the part of
the complainant to have resorted to the Magistrate’s Court praying to refer
the same to the Police under Section 156(3) Cr.P.C. in which this Court never
held that entertaining such complaints by the Magistrate is either illegal or
in excess of its jurisdiction. It is ascertained that in the general
parlance, there could be no such restrictions imposed by law restraining the
Magistrate from entertaining any private complaint filed under Section 200
Cr.P.C. direct.
13. What this Court emphasizes is that in adopting such a
procedure, bypassing the regular procedure prescribed by law, it would only
give a wrong signal that the police are put under such pressure by the
Magistrate in forwarding the complaints under Section 156(3) Cr.P.C, since
once such complaints are forwarded, the police have to carry out the
instructions of the Magistrate wherein the independence of the police are
often curtailed and sidelined but at any cost, such practice cannot be held
either illegal or irregular or even acting in excess of the jurisdiction of
the Magistrates and such a procedure adopted could only be termed improper.
For adopting such improper procedure particularly without assigning proper
reasons and setting at naught the powers of the police to entertain such
complaints, at no stretch of imagination it would become erroneous or
irregular nor would it warrant quashing of the FIR as it has been resorted to
on the part of the petitioner/accused.
14. So far as the second judgment of the learned single Judge
of the Karnataka High Court is concerned, this Court, even though is of the
similar thinking in condemning the attitude of the complainants in bypassing
the regular procedure of lodging the complaints before the police in spite of
it being a case of such nature, and directly filing the case before the
Magistrate as a private complaint, still, this Court is not in agreement with
the Karnataka High Court holding that the order passed by the Magistrate
directing the police to investigate under Section 156(3) Cr.P.C. is ‘beyond
its jurisdiction and the same is liable to be set aside.’ Though an irregular
procedure is adopted by the Magistrate, the same would not lead to the
conclusion holding that the same is either beyond the jurisdiction of the
Magistrate or would the same become liable to be set aside since such
procedural irregularity is a remedial one and there is no such restriction
imposed on a Magistrate by law. But for practice and procedure, they are
advised to exercise utmost restraint in admitting such complaints and to avoid
entertaining the same normally unless under exceptional circumstances, for
reasons to be recorded in writing.
15. So far as it is concerned with the third judgment by the
Honourable Apex Court, the approach of the Honourable Apex Court is entirely
on a different footing wherein the Magistrate has directed a superior police
officer or a special establishment viz. CBI, wherein it has been held that
the Magisterial power cannot be stretched beyond directing the officer in
charge of a police station to conduct the investigation whereas in the given
case since the Magistrate has directed only the respondent over whom the
Magistrate has jurisdiction, the facts of the case decided by the Honourable
Apex Court do not apply to the facts of the case in hand and hence this Court
is not in a position to apply the said proposition to the facts of the case in
hand.
16. Again coming to the facts of the case in hand, the
transaction that the complainant had with the accused since being purely a
civil transaction, they should be resorted only to file a suit before a civil
Court having jurisdiction to entertain the same for the recovery of the sum
lent in favour of the accused based on such materials such as the
hypothecation of properties or the collateral securities or the guarantee
obtained from the lonee in proof of their case. But, since they failed in
their duties in getting proper security, to cover up their follies, giving a
criminal coating for the civil transaction either taking shelter under Section
406 or 420 IPC, as though in spite of their diligence exercised, they have
been cheated playing fraud on them, which is beyond their control or capacity,
they have lodged the criminal complaint against the accused, so as to make use
of the criminal Court and the Police to initiate prosecution with the view to
create fear psychosis in the minds of the lonees keeping them under the threat
of arrest and detention and ultimately with conviction and sentence thereby
collecting the money lent on a civil transaction often times making use of the
Magistrates and the Police as their collecting agents. Some of the
Magistrates and Police are also falling prey in the evil net spread by the
financiers wherein the net result will be erosion of the values of the
institutions such as the judiciary and the police establishments and therefore
it is high time that the Magistrates and the Police were cautioned against
such a cunning and crooked move made by the financiers.
17. Yet another aspect that requires attention and discussion
is the Managers of the financial institutions, whether the private or public,
colluding with undeserving persons on illegal terms with the view to obtain
kickbacks or percentage in freely releasing lumpsums of money in their favour
without even observing the basic norms in lending such money thus betraying
their own financial institutions for promoting their personal ends without
either emphasizing or receiving proper guarantee or hypothecation of property
security while lending such huge amounts, as it has been done in the case in
hand wherein both the loaner and the lonee would be committing criminality as
it is evident in the case in hand. The defacto-complainant officials, with
the dishonest intention of entering into the criminal nexus with the
petitioner/accused herein and without even observing the basic norms of
obtaining proper and enforceable security, have thrown more than a crore of
rupees at the feet of the accused thus not only betraying their own
institution but also exposing themselves for criminal prosecution along with
the accused in which event, the Managers of such financial institutions in
releasing such lumpsums knowingly in favour of undeserving persons without
proper security or safeguard for the recovery of the same as one which has
happened in the case in hand in the whole of such operation, the ultimate
loser is the magisterial institution and the police force. Having committed
all such illegalities, knowingly and for personal gains, acting hand-in-glove
with the loanees, those who are occupying responsible positions in the
financial institutions for the release of the funds as loans in favour of
parties like the accused in the case in hand, the complainants commit no less
offence than the accused and they equally become liable to be prosecuted and
punished.
18. In the above circumstances, it could only be decided that
the officials of the defacto-complainant, who are responsible for releasing
the loan amount in favour of the accused have connived with the accused for
their personal gains and acting hand-in-glove with each other, betraying the
trust and confidence entrusted with them by the institution and the general
public thus all of them jointly indulging in such manipulations, fraud and
cheating of the defacto-complainant institution in setting at naught the
regular safeguards and safety measures provided for lending and recovery of
the sums transacted. Having done all such activities, the officials
responsible for the commitments of the defacto-complainant company have also
attempted to burden the police officials and the Court in their scheme of
collecting the money back giving a criminal colour for their money lending
business as though it is none of their business to get all such materials
necessary to be obtained from the borrower thus forcing the police officials
and the criminal courts to act as their collecting agents, often making use of
Sections 406 and 420 IPC, forgetting the fact that they are at the bottom of
the criminality, without whom, in the scheme of things, perpetration of
criminal act, in the manner alleged herein, is an impossibility.
19. In such circumstances, this Court is of the firm view
that the net of prosecution has to be spread still wider so as to cover up the
criminal acts perpetrated on the part of of the officials of the
defacto-complainant also, who were responsible for lending the said amount of
more than a crore of rupees in favour of the present accused in the case
without proper security obtained, as discussed supra, and therefore it is only
desirable to issue further direction to the respondent Police and hence the
following order:
In result,
(i)the above criminal original petition for quash, since being bereft of
merit, is dismissed.
(ii)The Inspector General of Police, Economic Offences Wing ( Headquarters)
Chennai is directed to withdraw the case registered in Cr.No.8/2003 from the
file of the respondent and entrust the same with a responsible Officer of
independent stature and proven ability and integrity to investigate into not
only the complaint as given on the part of the defacto-complainant but also
against all the officials of the defacto-complainant, who were responsible for
releasing the sum of Rs.1 crore in favour of the accused, deliberately
flouting the norms and procedures to be adopted in lending of such money, on
bogus and false records, enlisting all of them as accused and investigate into
the acts of conspiracy, breach of trust and cheating and expedite the
investigation and file the final report at the earliest in the manner required
under law.
Consequently, Crl.M.P.No.6397 of 2003 is also dismissed.
Index: Yes
Internet: Yes
Rao
To
1.The XI Metropolitan Magistrate,
Saidapet,
Chennai-15.
2.The Inspector General of Police,
Headquarters,
Chennai-600 002.
3.The Inspector of Police,
EOW-II (Headquarters),
Chennai-600 002.
4.Mr.A.N.Thambidurai,
Government Advocate (crl.side)
High Court, Madras.
5.The Public Prosecutor,
High Court, Madras.