Karnataka High Court
Icici Bank Limited vs Mr.Shashikant Thimmapur on 8 May, 2020
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
:1:
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 8TH DAY OF MAY, 2020
BEFORE
THE HON'BLE MR.JUSTICE SURAJ GOVINDARAJ
CRL.P.NO.101035/2019 C/W CRL.P.NO.100295/2019
CRL.P.NO.101035/2019
BETWEEN:
ICICI BANK LIMITED
(LAS DEPARTMENT ARRAIGNED
AS ACCUSED NO.5) FOR ITSELF AND ITS
CHAIRMAN AND MANAGING DIRECTOR,
REGISTERED ADDRESS AT
ICICI BANK TOWER
NEAR CHAKLI CIRCLE,
OLD PADRA ROAD, VADODARA,
GUJARAT-390007,
REPRESENTED BY ITS
AUTHORIZED SIGNATORY,
MR.VYSHAK KANNAN.
... PETITIONER
(By Sri.: MRUTYUNJAYA S HALLIKERI, ADV.)
AND
MR.SHASHIKANT THIMMAPUR
R/AT: "SIDDHA GANGA NIVAS"
11758/B, SUBHASH GALLI,
2ND CROSS, MAIN ROAD,
:2:
OLD GANDHI NAGAR,
BELAGAVI-590016.
... RESPONDENT
(By Sri. : SHASHIKANT THIMMAPUR, PARTY-IN-PERSON
SERVED)
THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C.
SEEKING TO (A) QUASH THE IMPUGNED ORDER DATED
11.09.2018 PASSED BY THE JMFC IV-COURT, BELAGAVI,
ISSUING SUMMONS TO THE ACCUSED NOs.5 & 3 THE
PETITIONER AND ITS CHAIRMAN AND MANAGING DIRECTOR;
AND ETC.
IN CRL.P.NO.100295/2019
BETWEEN:
THE BRANCH MANAGER
ICICI BANK LIMITED,
SHREE KRISHNA TOWN,
NO.14, KHANAPUR ROAD,
R.P.D. CROSS, TILAKWADI,
BELGAUM-590006.
... PETITIONER
(By Sri : MRUTYUNJAYA S HALLIKERI, ADV.)
AND:
1. MR.SHASHIKANT.S.TIMMAPUR
RESIDING AT: SIDDHA GANGA NIVAS,
11758/B, SUBHASH GALLI,
2ND CROSS, MAIN ROAD,
OLD GANDHI NAGAR,
BELAGAVI-590016.
2. THE STATE OF KARNATAKA
THROUGH TILAKWADI POLICE,
:3:
GURUWAR PETH, TILAKWADI,
BELGAUM, KARNATAKA-590006.
... RESPONDENTS
(By Sri.: SHASHIKANT S. TIMMAPUR, PARTY-IN-PERSON)
THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C.
SEEKING TO (A) QUASH THE IMPUGNED ORDER DATED
11.09.2018 PASSED BY THE JMFC IV-COURT, BELAGAVI,
ISSUING SUMMONSES TO THE ACCUSED, INCLUDING THE
PETITIONER (ANNEXURE 'B'); AND ETC.
THESE CRIMINAL PETITIONS BEING HEARD AND
RESERVED FOR ORDERS ON 20.02.2020 AND FURTHER
LISTED FOR "FUTHER HEARING", THIS DAY, SURAJ
GOVINDARAJ J. , THROUGH VIDEO CONFERENCE MADE THE
FOLLOWING:
ORDER
1. The petitioners in both the above petitions are before this Court seeking for quashing the interim order dated 11.09.2018 passed by JMFC-IV Court, Belagavi issuing summons to the accused in C.C. No.796/2018 for the offences punishable under Sections 403, 406, 418, 420, 424, 477, 477A and 120B of the IPC.
2. The petitioner in Crl.P.NO.101035/2019 is accused No.1 in C.C.No.796/2018. The petitioner is :4: represented in this court as the Branch Manager, ICICI Bank Limited.
3. The petitioner in Crl.P.No.100295/2019 is accused No.1 and accused No.3 and 5 in Crl.P.No.101035/2019 in C.C.No.796/2018.
4. The facts of the matter as per the petitioners in both the matters are as under:
4.1. It is stated that respondent No.1 Sri. Shashikant S. Timmapur had availed a loan of Rs.18,50,000/- in the year 2006 from ICICI Bank Limited ( 'the Bank' for short) by pledging various shares which he held in certain listed companies.
4.2. An agreement dated 07.06.2006 was entered into between the parties, in terms of which certain interest was to be paid on the amount borrowed and the timeline in which the :5: amounts were to be repaid among other terms and conditions. Respondent No.2 failed to repay the amount to the bank, despite the bank having given ample opportunity to him and having provided due notice to him, the bank acting in accordance with terms of the agreement dated 17.06.2006 sold some of the shares owned by respondent No.1 to adjust the same towards the interest accrued on account of the default committed by Respondent No.1.
4.3. According to the petitioners, thereafter respondent No.1 initiated a series of criminal proceedings in order to delay and evade liability towards the bank. As an afterthought respondent No.1 had also commenced the present litigation by filing a complaint in the year 2015.:6:
4.4. Though initially the State was arrayed as respondent No.2, on the petitioner filing a memo for deletion of respondent No.2, this court vide order dated 22.02.2019 deleted respondent No.2 from the present proceedings.
4.5. On the filing of the complaint, the Investigating Officer has after investigation filed 'B' closure report before the trial Court.
However, the trial court without examining the same and perusing the reasons stated therein has rejected the said 'B' report upon considering that protest petition filed by respondent No.1 herein and passed the order dated 13.04.2018 taking cognizance of various offences against the petitioner. It is also stated that vide order dated 11.09.2018, the trial court registered the same as a :7: criminal case and issued summons to the accused arraigned therein, including summons to the petitioners. It is aggrieved by these two orders that the petitioners are before this court.
5. Apart from the above averments, there are various averments made as regards the facts of the matter, the nature of transactions entered into between the parties and certain other proceedings which have been filed, inter-se between the parties. In that:
5.1. Initially respondent No.1 had filed a suit in O.S. No.851/2007 before the learned Civil Judge and JMFC, Belagavi seeking for injunction restraining the bank from selling the shares pledged by him with the bank which subsequently came to be dismissed on 02.06.2009.:8:
5.2. Aggrieved by the same, respondent No.1 had preferred a regular appeal in R.A. No.109/2009, which came to be allowed on 30.06.2010.
5.3. Respondent No.1 had also filed a complaint in complaint No.109/2009 before Karnataka State Consumer Dispute Redressal Commission for deficiency of service rendered by the Bank. The said complaint came to be allowed on 16.12.2011.
5.4. In the meanwhile, the petitioner filed a private complaint in PCR No.111/2012 before the JMFC-IV, Belagavi seeking for the prosecution of respondent No.1 for offences of forgery and cheating alleging that certain documents produced by respondent No.1 in RA No.109/2009 were forged and fabricated by respondent No.1.:9:
5.5. Aggrieved by the award passed by the Karnataka State Consumer Dispute, Commission, the Bank has challenged the said award in F.A.No.159/2012 before the National Consumer Dispute Redressal Commission. 5.6. The petitioners have also challenged the judgment passed in R.A.No.109/2009 by filing RSA No.5072/2013.
5.7. In the meanwhile, on 11.06.2015 respondent No.1 has filed the impugned complaint before the respondent No.2 Police on 11.06.2015 alleging that the persons arraigned therein have committed the offences under Sections 416, 418, 420, 403, 405, 406, 424, 477, 477A, 191, 192, 193, 95, 196, 205 and 120B of the IPC. The same was registered as P.S. Crime No.99/2015 by Tilakwadi Police. : 10 : 5.8. On 18.03.2016 the Tilakwadi Police Investigating Officer of Tilakawadi Police Station has filed a 'B' Closure report in summary No.15/2016 before the JMFC-IV, Belagavi stating that the prosecution is liable to be closed.
5.9. Respondent No.1 filed his objections i.e., Protest petition on 26.09.2016 to the said 'B' Report.
5.10. In the meanwhile, RSA No.5022/2013 filed by the Bank came to be dismissed; the subsequent Special Leave Petition in SLP No.16709/2017 was also dismissed by the Apex Court on 05.07.2017.
5.11. On 11.10.2017 the sworn statement of the complainant was recorded under Section 200 of Cr.P.C., and further evidence of CW1 was : 11 : deferred for want of time. Thereafter, further evidence was led, certain documents produced and it is after hearing the respondent that order dated 13.04.2018 came to be passed by the Magistrate rejecting the 'B' report.
5.12. The Protest petition filed as regards the above complaint was handled by the Magistrate and vide order dated 13.04.2018 on the basis of the documents produced by the complainant held that the Investigating Officer had not given an opportunity to the complainant to produce evidence before him and that the Investigation had not been carried out properly and rejected the 'B' report, took cognizance of the offences punishable under Sections 403, 405, 406, 416, 418, 420, 424, 477A and 120B of the IPC. The matter was : 12 : posted for recordal of sworn statement on 14.05.2018. On 14.05.2018 the complainant-
respondent No.1 herein filed a memo stating that the evidence that the complainant had led as regards the objections filed by the respondent No.1 to the 'B' report on 11.10.2017 be regarded as the sworn statement subsequent to the taking of cognizance.
5.13. In furtherance of the adoption of the sworn statement of 11.10.2017 on 14.05.2018 the matter was posted for arguments and upon hearing the complainant-respondent No.1 vide order dated 11.09.2018, the JMFC, Belagavi directed registration of offences committed against accused Nos.1 to 5 for offences punishable under Sections 403, 406, 418, 420, 424, 477, 477A and 120B of the IPC. : 13 :
The court also directed for issuance of summons to accused Nos.1 to 5 if the process fee and necessary copies were furnished. The matter was adjourned to 22.12.2018. It is this order dated 11.09.2018 which is under challenge before this court.
6. Sri. C.V. Nagesh, learned Senior counsel appearing for Sri. Mruthyunjay Hallikeri would submit that the entire process and procedure followed by the Magistrate is improper, not in accordance with the procedure as prescribed under the Cr.P.C. he elaborated the same by submitting that:
6.1. In terms of Section 190 of the Cr.P.C., Cognizance for the offences can be taken by Magistrate in three circumstances. 6.1.1. Upon receiving a complaint of facts which constitute such offences; : 14 : 6.1.2. Upon a Police report of such facts; 6.1.3. Upon information received from any person other than a Police Officer, or upon his own knowledge, that such an offence has been committed.
6.2. The methodology of taking cognizance is in terms of Section 190(2)(b) Cr.P.C.
whereunder the report of the Investigating Officer as regards the offences having been committed in terms of Section 173(2) or a further investigation report submitted in terms of Section 173(8) could be the basis for a Magistrate to take cognizance. In this case, the private complaint having been filed and on investigation 'B' report having been filed, the Magistrate could have directed for further investigation and submission of a report instead of rejecting the 'B' report on the basis : 15 : of a protest memo filed by the complainant/Respondent No1.
6.3. The Magistrate has taken cognizance twice, once on 13.04.2018 and again on 11.09.2018. Hence, there is material irregularity committed by the Magistrate.
6.4. At the time of taking cognizance on 13.04.2018, the Magistrate has not recorded the sworn statement, but evidence of the complainant was recorded which is not as per the requirements of law.
6.5. That initially the complaint had been filed against accused Nos.10, 11 and 12 who are the Investigating Officer, Assistant Commissioner of Police and the State represented by Tilakawadi Police Station. Subsequently, the complainant had deleted : 16 : accused Nos.10, 11 and 12 from the proceedings.
6.6. That accused Nos.10 to 12 have been deleted from the proceedings and no cognizance being taken in respect of accused Nos.6 to 10, the proceedings could not continue in respect of accused Nos.1 to 5. Accused Nos.2 and 4 are companies and accused Nos.1 and 3 are Branch Manager and Chairman, Managing Director by designation of the ICICI Bank Limited and therefore no complaint can be filed against the designated officers without a particular individual being made a party. 6.7. That no complaint could be filed against the Chairman and Managing Director of the Company since Chairman and Managing Director cannot be held to be vicariously liable : 17 : for offences of any officers of the company, if at all so committed by them.
7. On all the above grounds Sri C.V.Nagesh, learned Senior Counsel would submit that the cognizance as taken by the Magistrate needs to be quashed. He further submits that the entire proceedings are to be quashed because there is no offence which has been made out against accused Nos.1 to 5.
8. Learned Senior Counsel further submits that in terms of Section 202(2) in the event of summons were to be issued as regards an accused not residing within the jurisdiction of the Magistrate, an enquiry has to be conducted and the Magistrate has to arrive at a conclusion that sufficient cause is made out to issue such notice, no such enquiry having been conducted by the Magistrate in the present case, the proceedings have to be quashed. : 18 :
9. Learned Senior counsel relies on the following decisions:
Sl. Particulars Para Nos.
No.
1 Sunil Bharti Mittal vs. Central Bureau of Investigation 40, 42 - 45,
(2015) 4 SCC 609 48, 51 - 54
2 Maharashtra State Electricity Board vs. Datar Switchgear 30
Limited
(2010) 10 SCC 479
3 Maksud Saiyed vs. State of Gujarat 13
(2008) 5 SCC 668
4 S.K.Alagh vs. State of Uttar Pradesh and others 9
(2008) 5 SCC 662
5 Keki Hormusji Gharda vs. Mehervan Rustom Irani 16, 17 & 19
(2009) 6 SCC 475
6 GHCL Employees' Stock Option Trust vs. India Infoline 17 - 19
Limited
(2013) 4 SCC 505
7 Sharon Michael and others vs. State of Tamil Nadu and 17
another
(2009) 3 SCC 375
8 Punjab National Bank vs. Surendra Prasad Singh 6
1993 Supp (1) SCC 499
9 K.V.Kamath vs. Pradip Kr. Sureka and others 11 - 13
2009 SCC Online Cal 2504
10 Pepsi Foods Ltd., vs. Special Judicial Magistrate 28
(1998) 5 SCC 749
11 Mallikarjuna vs. State of Karnataka 11, 12
ILR 2018 KAR 354
12 Sarah Mathew vs. Institute of Cardio Vascular Diseases 34
(2014) 2 SCC 62
13 Vasanti Dubey vs. State of Madhya Pradesh 20 & 21
(2012) 2 SCC 731
: 19 :
14 Basappa vs. State of Karnataka 4
ILR 1987 KAR 994
15 Vijay Dhanuka vs. Najima Mamtaj 14
(2014) 14 SCC 638
16 K.S.Joseph vs. Philips Carbon Black Ltd., 7
(2016) 11 SCC 105
17 Udai Shankar Awasthi vs. State of U.P. and others 40
(2013) 2 SCC 435
18 Birla Corporation Limited vs. Adventz Investments and 64
Holdings Limited
2019 SCC Online 682
19 Prof. R.K.Vijayasarathy vs. Sudha Seetharam 30 & 31
2019 SCC Online 208
20 Kishan Singh vs. Gurpal Singh 20 - 25
(2010) 8 SCC 775
10. Per contra, Sri Shashikant Thimmapur, party-in-
person would contend that 10.1. Respondent/complainant has made out a prima case as regards the offences alleged against the accused, the complainant had entered into a loan agreement on 07.06.2006 with the Bank and availed a loan of a sum of Rs.18,50,000/- as regards which he had been : 20 : making regular payment of interest amounts until the year 2007.
10.2. When he had requested the Bank to issue a user login ID and authenticated password so as to enable him to transact/trade on the shares taking advantage of the highs and lows of the market to recover the losses caused and make payment all his dues to the bank. Despite repeated requests, no such ID and password were furnished; finally when they were furnished they turned out to be wrong, towards which the petitioner in CRL.P.NO.100295/2019 i.e., the Branch Manager of ICICI Bank had stated that they had furnished the proper ID vide his letter dated 25.09.2007. Based on the above Sri Shashikant Thimmapur, would submit that during this time when the complainant : 21 : respondent No.1 has been requesting for the password and user login ID which was not provided, that on 13.09.2017, the Bank and its officers have sold his shares without his consent which came to his knowledge only in the year 2012 when the petitioner produced the loan account statement. Hence he filed a complaint as regards the criminal acts committed by the Bank and its officers. 10.3. The investigating officer did not carry out his duties despite repeated requests and constant follow up no investigation was carried out. Finally without carrying out a proper investigation a 'B' report was submitted by the Investigating Officer without serving any notice or collecting any evidence from himself when it was but required on the part of Investigating Officer for the purpose of : 22 : enquiring into the complainant to at least call upon the complainant to furnish the necessary documents as also to place his say in the matter on record.
10.4. The documents submitted by the respondent No.1-complainant including CDs were not even opened by the Investigating Officer for the reason that none of the information available on those CDs are reflected in the 'B' report.
10.5. In view of the above he approached the Magistrate challenging the 'B' report and took up those contentions in the protest memo which was accepted by the Magistrate. Therefore, there is no error committed by the Magistrate.
: 23 :10.6. The order dated 11.09.2018 passed by the Magistrate is proper and correct, there is no cause for interference with the said order. The usage of the word evidence is being misconstrued what was only recorded was his statement on oath, which would qualify to be a sworn statement and it is after recording of such a statement that cognizance has been taken and summons issued. Therefore, the procedure followed is proper.
10.7. Sri. Shashikant Thimmapur, Party-in-person relies on following decisions:
Sl. Particulars Para Nos. No. 1 Vijay Dhanuka and others vs. Najima Mamtaj and others 12 (2014) 14 SCC 638 2 Ram Singh vs. Madhuri Singh 7
Crl.Misc.Case No.1713/2016 & 7262/2016 3 Shivjee Singh vs. Nagendra Tiwary and others 11, 12, 13, (2010) 7 SCC 578 18, 30, 32 4 Abhijit Pawar vs. Hemant Madhukar Nimbalkar and another 16, 26 (2017) 3 SCC 528 : 24 : 5 U.P.Pollution Control Board vs. Dr.Bhupendra Kumar Modi 39, 40 and another (2009) 2 SCC 147 6 Ranjan Dwivedi vs. CBI through the Director General Though the AIR 2012 SC 3217 said decision was produced along with memo, the same was not relied upon.
7 Dr.Uma Gangadhar vs. M/s.Classic Coffee and Spices Private 7 Limted 2001 (3) KCCR 2050 8 M/s. Satish and Company vs. M/s.S.R.Traders and others 23, 24, 25 1998 Crl.L.J. 419 9 Shri.Ashok Bampto Pagui vs. Agencia Real Canacona Pvt. 21 Ltd., 2007 (4) Bom CR 465 10 K.Kalaikottudayam and another vs. Rajendran 9 2010 Crl.L.J. 681 11 Vidavaluru Balaramaiah and others vs. State of A.P. and 9 another 2003 Crl.L.J. 3192 12 Mohd. Yousuf vs. Smt.Afaq Jahan & another 14, 15 2006 Crl.L.J. 788 13 Reji Michael vs. M/s.Vertex Securities Ltd., and another 9, 10 1999 Crl.L.J. 3787 14 Suresh and another vs. State of U.P. 44 (2001) 3 SCC 673 15 Sanofi India Limited vs. State represented by Central Bureau 22 of Investigation 2019 Crl.R. 341 (Kant) 16 Sri.T.Nagaraju vs. State of Karnataka Though the Crl.R.P. Nos.935/2016, 1040/2016 & 1233/2016 said decision was produced along with memo, the same was : 25 : not relied upon.
17 Virendra Singh vs. State of Madhya Pradesh 36, 37, 38 (2010) 8 SCC 407 18 Assistant Commissioner, Assessment-II, Bangalore and 60 others vs. M/s. Velliappa Textiles Ltd., and others 2004 Crl.L.J. 1221 19 Sunil Bharti Mittal vs. Central Bureau of Investigation Though the (2015) 4 SCC 609 said decision was produced along with memo, the same was not relied upon.
20 Radhey Shyam Khemka and Another Vs. State of Bihar 7, 8 (1993) 3 Supreme Court Cases 54 21 R. Kalyani vs. Janak C. Mehta and Others 32, 33, 34, (2009) 1 Supreme Court Cases 516 43 22 J.K. Industries Ltd. and Others vs. Chief Inspector of 58, 59, 61 Factories and Boilers and Others (1996) 6 Supreme Court Cases 665 23 M/s Vardhman Stamping Pvt. Ltd. vs. M/s IMP Power Ltd. & 24, 25, 26 Ors.
2007 CRI.L.J 273 (Gujarat High Court) 24 Food Inspector, Cuttack Municipality vs. M/s B.P. Ol Mills 9, 10 Limited 1995 CRI.L.J 3043 (Orissa High Court) 25 State of Orissa and Others vs. Ujjal Kumar Burdhan 9, 10 (2012) 4 Supreme Court Cases 547 26 Rumi Dhar (smt). Vs. State of West Bengal and Another 13, 22 (2009) 6 Supreme Court Cases 364 27 K. Sitaram and another vs. CFL Capital Financial Service Ltd. 13, 21 and Another (2017) Apex Criminal Reports 413 Supreme Court of India 28 Central Bureau of Investigation vs. Maninder Singh 18, 19 (2016) 1 Supreme Court Cases 389 29 Ram Suresh Singh vs. Prabhat Singh Alias Chhotu Singh and Though the Another said : 26 : (2009) 6 Supreme Court Cases 681 decision was produced along with memo, the same was not relied upon.
30 Shubh Shanti Services Ltd. vs. mnjula S. Agarwalla and 16, 20, 22 others (2005) 5 Supreme Court Cases 30 31 Kishore Samrite vs. State of Uttar Pradesh and Others 37, 38, 47 (2013) 2 Supreme Court Cases 398 32 Sharad Kumar Sanghi vs. Sangita Rane 10, 11 (2015) 12 Supreme Court Cases 781 33 J. & K. Bank & Anr. Vs. J. & K. State Consumer Protection & Though the Ors. said AIR 2010 Jammu and Kashmir 93 decision was produced along with memo, the same was not relied upon.
34 Bharat Bank Ltd vs. Sheoji Prasad Though the
AIR 1955 Patna 288 said
decision was
produced
along with
memo, the
same was
not relied
upon.
35 Sri. Raja Kakarlapudi Venkata Sudarsana Sundara Though the
Narasayyamma Garu (died) and others. Vs. Andhra Bank said
Ltd., Vijayawada and others. decision was
AIR 1960 Andhra Pradesh 273 produced
along with
memo, the
same was
not relied
upon.
36 Mallinath Maharaj alias Mallyya vs. State of Karnataka and 8, 10
Another
2017 (4) KCCR 3345 (Kalaburgi High Court) : 27 : 37 Sciemed Overseas Inc. (M/s) vs. BOC India Limited and 30, 31 others (2016) SCCR 239 Supreme Court Of India 38 State Bank of Travancore vs. Kingston Computers India Though the Private Limited said (2011) 11 Supreme Court Cases 524 decision was produced along with memo, the same was not relied upon.
39 Sardar Estates vs. Atma Ram Properties Private Limited. Though the (2009) 6 Supreme Court Cases 609 said decision was produced along with memo, the same was not relied upon.
40 Criminal Miscellaneous No. M-17043 of 2008 Decide on Last para at 27.08.2009 by the Hon'ble Punja-Haryana High Court, internal Chandigarh between M/s Mount Everst Mineral Water page 6 Limited Vs. Food Inspector, Chandigarhdecide on 27 August, 2009.
41 Criminal Revision Case No.377 of 2019 and Criminal MP 11 No.5570 of 2019 decide on 29.04.2019 by the Hon'ble Mdras High Court, between Vijayraj Surana Vs. Surana Corporation Limited decided on 29 April, 2019.
11. The points that would arise for consideration for this Court are:
11.1. What is the procedure to be adopted by the Magistrate while rejecting 'B' report and taking cognizance of the offences? : 28 : 11.2. In the present case has the Magistrate followed the applicable procedure in rejecting 'B' report and taking cognizance of the matter.
11.3. What is the procedure to be followed by the Magistrate before issuance of summons to an accused who is not residing within its jurisdiction?
11.4. Could summons be issued and the proceedings be continued as regards corporal entities and/or officers by the designation of a particular company?
11.5. Is this is a fit and proper case for this Court to interfere in the order passed by the Magistrate under Section 482 of Cr.P.C.? 11.6. What order?
POINT NO.1 and 2:
: 29 :
12. When a 'B' Summary report is furnished by the Investigating Officer as held by the Apex Court in Vasanti Dubey's case supra, three options are available to the Magistrate:
12.1. To accept the report and drop further action;
or 12.2. On consideration of 'B' report, direct the police to make further investigation; or 12.3. Take cognizance of the offences, if any on the basis of the protest memo filed.
13. In the present case, the complainant who is the respondent herein filed a complaint before the Tilakwadi Police Station alleging various offences of cheating, etc., on 11.06.2015 on which basis FIR in P.S.Crime No.99/2015 was registered.
14. On 18.03.2016, Tilakwadi police filed a 'B' closure report in Summary No.58/2016 before the : 30 : Magistrate inter alia stating that no offence had been made out.
15. The complainant thereafter filed a detailed Protest Memo refuting the contents of 'B' report requesting the Magistrate to reject the 'B' report and take cognizance of the offences alleged/committed.
16. In fact on the filing of the complaint, when the matter had come up before the Magistrate on 28.10.2015, the complainant had filed an application contending that no proper investigation was been made by the Investigating Officer and the investigation was being unnecessarily delayed. Hence, the Magistrate on 28.10.2015 directed the SHO, Tilakwadi to submit as regards the progress in the investigation by 04.11.2015. On 04.11.2015 at the request of Investigating Officer, the period for investigation was extended by a period of three months and the Investigating Officer was directed : 31 : to submit the report by 04.02.2016 which was not so submitted. On that day and subsequent dates, the matter was adjourned by the Magistrate awaiting the report.
17. On the 'B' report being submitted notice was issued to the complainant. The complainant filed his detailed objection on 26.09.2016. The Magistrate on the basis of the said objections posted the matter for evidence on 04.11.2016. Then it came to be adjourned to 19.11.2016 and on 19.11.2016, the complainant filed several documents and thereafter the matter was adjourned for various reasons.
18. On 17.01.2017, the complainant filed a memo stating that he is not pursuing the case against accused Nos.10, 11 and 12 who are police officers. Hence, case against accused Nos.10, 11 and 12 was dismissed.
: 32 :
19. On 01.02.2017, arguments were heard on behalf of the complainant. A paper book was filed on behalf of complainant on 14.02.2017. On the basis of the arguments submitted by the complainant on various dates, the Magistrate was convinced that a sworn statement was to be recorded which was so recorded on 11.10.2017.
20. On 06.02.2018, complainant led further evidence, he sought for further time to file additional documents, on 05.04.2018, it was realized by the Court that without setting aside the 'B' report, the matter had progressed. Hence, the Magistrate posted the matters for orders on 13.04.2018 and after perusing the 'B' report filed by the Investigating Officer, the objections filed by the complainant to 'B' report as also the documents produced by the complainant, the Magistrate realizing that Investigating Officer had not given an : 33 : opportunity to the complainant to produce evidence before him, the Investigating Officer had not conducted the investigation properly, rejected the 'B' report and took cognizance of the alleged offences and posted the matter for recordal of the sworn statement on 14.05.2018. On 14.05.2018, the complainant filed a memo stating that he is adopting the sworn statement already tendered to this Court which was permitted by the Magistrate. Pertinent to observe here that on the earlier occasion, the Magistrate without setting aside the 'B' report proceeded to record the sworn statement. Hence, in order to comply with the procedure and not to waste any further time, the Magistrate permitted the complainant to adopt the sworn statement earlier recorded. Thereafter, the matter was posted for arguments on several occasions, after hearing the parties, the Magistrate on : 34 : 11.09.2018 was pleased to direct the registration of a criminal case against accused Nos.1 to 5 in register No. III for the offences punishable under Sections 403, 406, 418, 420, 424, 477, 477(A) and 120(B) of IPC. It is this process which is adopted by the Magistrate which is called in question.
21. Learned Senior Counsel, Sri.C.V.Nagesh, would submit that the entire procedure adopted by the Magistrate is incorrect. Without rejecting 'B' report, recordal of the sworn statement is not permissible. The subsequent order permitting the complainant to adopt the earlier sworn statement after rejection of 'B' report is also not permissible and therefore, he has submitted that the order dated 13.04.2018 rejecting the 'B' report has to be quashed as also the order dated 11.09.2018 directing for registration of the criminal case has to be quashed. : 35 :
22. Having perused the order sheet and the process adopted, though it would seem that there is a lacuna in the procedure adopted by the Magistrate, the said lacuna is rectified by the Magistrate vide his order dated 05.04.2018. Though initially without rejecting 'B' report, evidence on behalf of the complainant was led on the basis of the protest memo filed, the Magistrate realizing that 'B' report had not been set aside, posted the matter for orders on 13.04.2018. The Magistrate set aside the 'B' report on 13.04.2018 and posted the matter for recordal of sworn statement. Since evidence had already led and was on record, the complainant having produced necessary documents in support of his protest memo, the Magistrate on a memo filed by the complainant - party in person accepted it and permitted him to adopt the evidence already recorded on oath as his sworn statement. There is : 36 : a procedural irregularity in the same. Though it cannot be said that it goes to the root of the matter, but in criminal proceedings, the procedure has to be strictly complied. On the filing of 'B' report as held by Apex Court in Vasanti Dubey's case supra the Magistrate had three options:
22.1. To accept and drop the further action; or 22.2. On consideration of 'B' report, direct the police to make further investigation; or 22.3. Take cognizance of the offences, if any on the basis of the protest memo filed.
23. The Magistrate has chosen the third option.
However, he ought not to have permitted the adoption of an earlier sworn statement because no such sworn statement could have been recorded without rejecting the 'B' report. The procedure therefore adopted by the Magistrate being : 37 : incorrect, the order dated 14.05.2018 being improper, the order dated 11.09.2018 directing for registration of criminal case would therefore be required to be set aside. However, the order dated 13.04.2018 rejecting the 'B' report cannot be questioned. In view of the above finding, order dated 11.09.2018 is set aside with a direction to the Magistrate to record the sworn statement of the complainant afresh and proceed thereafter. POINT NO. 3:
24. In view of this Court's opinion on Point No.1 and 2, the finding on Point No.3 would be academic. It is however dealt with in order to avoid any future issue arising therefrom.
25. Sri.C.V.Nagesh, learned Senior Counsel submitted that insofar as the accused residing outside the jurisdiction of the Magistrate Court, the Magistrate : 38 : ought not to issue summons without holding an enquiry in terms of Section 202(1) more particularly in view of Cr.P.C Amendment Act, 2005. In the event of issuance of process against an accused residing beyond the area in which the Magistrate exercises his jurisdiction, the Magistrate is to postpone the issuance of such process against the said accused and enquire into the case himself and/or direct the investigation to be made by a police officer or by such other person as he thinks fit for the purpose of deciding whether or not there is sufficient ground for proceeding.
26. He further states that no such summons could be issued without first examining the complainant and his witness if any on oath in terms of Section 200 of Cr.P.C. He further submits that since in the present case, the petitioners are not resident within the territorial jurisdiction of the magistrate, the : 39 : above procedure ought to have been complied with.
The registration of complaint and issuance of summons to the accused vide order dated 11.09.2018 is violative of Section 202(1) and 202(1) proviso (b) of Cr.P.C.
27. The question that would arise in regard to the above contention is what is the enquiry that the Magistrate would have to lead. The Magistrate having already rejected the 'B' summary report and on the basis of sworn statement of the complainant deciding to take cognizance of the offence that would necessarily imply that there are sufficient grounds for proceeding against the accused.
28. Be that as it may, there would have to be an order passed under Section 202(1) of Cr.P.C. to indicate as to why process is being issued by the Magistrate to an accused who is not residing within the jurisdiction of that Court and for this purpose, : 40 : sworn statement of the complainant as also the affidavit evidence if any of the complainant's witnesses could be recorded leading to an order by the Magistrate based on his satisfaction that there are sufficient grounds for issuing summons to such accused residing outside its jurisdiction. Such order not having been passed by the magisterate, the summons could not have been so issued. Point No.3 is answered accordingly.
POINT NO.4:
29. Sri.Nagesh, learned Senior Counsel would contend that since a company has been made as an accused as also the other officers like branch officer and director having been made as accused by their designation, the complaint is not maintainable and ought to be dismissed. In this regard, he relied on the decision of the Hon'ble Apex Court in the case of SUNIL BHARTI MITTAL VS. CENTRAL : 41 : BUREAU OF INVESTIGATION reported in (2015) 4 SCC 609, more particularly, Para 40 thereof. In that case, while monitoring the investigation by the CBI into certain irregularities committed by a telecom company, the Hon'ble Apex Court had directed for preliminary enquiry and on the basis thereof, a case was registered against certain officers under the Prevention of Corruption Act for actions taken by such persons benefiting certain telecom companies and hence, those companies were named as accused persons in the charge sheet. The Hon'ble Apex Court after examining the facts was of the opinion that the Managing Director of the company cannot be made liable for the offences alleged and that the Managing Director of a company cannot be arrayed as an accused in the said proceedings.
: 42 :
30. In the present case, the accused are calling upon the complainant to array a specific person as an accused instead of by their designation. It is under the premise that the complainant is aware as to who those officers are and what the particular acts are that are committed by them. A perusal of the entire documents produced by the petitioner and the complainant would indicate that the correspondence on behalf of the company has been signed by the officer by his designation and not in his/her name, infact the name of the officer is not even mentioned. It is therefore for the complainant to identify as to who are those persons and arraign them as accused. Such a contention cannot be accepted, a private complainant cannot be expected to have knowledge of the names of those officers. Infact these details had to be stated in the investigation by the Investigation Officer and the : 43 : Investigation Officer ought to have identified the persons involved and or the persons responsible. The investigation not having been conducted properly and a B report having been filed, the magistrate has rejected the same. It is now for the company to place on record who are those officers who were in charge of that office at that point of time. Hence, the request made by the complainant
- party in person is accepted. The petitioner company is directed to furnish the names and details of the persons who were acting in the position of the office stated in the complaint during that point of time. The Court could always lift the corporate veil in order to ascertain who are the persons responsible during the course of trial. More so, when the complainant is not in a position to know the actual persons who have committed the crime. A person aggrieved cannot be denied : 44 : necessary reliefs under criminal law, merely because a particular person has not been named, a company cannot seek and try to escape from its liability hiding behind the corporate veil. If so required, Magistrate can also direct for further investigation in the matter. In view of the above, point No. 5 is answered accordingly. Point No.6
31. In view of the above discussion and finding I pass the following order:
ORDER 31.1. Petitions are allowed in part. 31.2. The impugned order of the magisterate dated 11.09.2018 directing the registration of a criminal case against accused Nos.1 to 5 in register No. III for the offences punishable : 45 : under Sections 403, 406, 418, 420, 424, 477, 477(A) and 120(B) of IPC is set aside. 31.3. The Magistrate is directed to record the sworn statement of the Complainant pursuant to the setting aside of the B Report and proceed thereafter.
31.4. In the event of process beng required to be issued as against the accused, the magistrate shall specifically record reasons as to why such a process is required to be issued to persons not residing within his jurisdiction. 31.5. In view of disposal of these petitions, pending IAs, if any, do not survive for consideration. 31.6. Parties to bear their costs.
Sd/-
JUDGE MSR/Prs*