Karnataka High Court
Sri. K M Dharmappa vs The Assistant Director on 15 December, 2020
Author: John Michael Cunha
Bench: John Michael Cunha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF DECEMBER 2020
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
WRIT PETITION NO.44850 OF 2017 (GM-RES)
BETWEEN
1. SRI. K M DHARMAPPA
S/O LATE. K C MALLEGOWDA
AGED ABOUT 62 YEARS
RETIRED MUNICIPAL COMMISSIONER
S.S. MANSION, 3RD CROSS
BASAVESHWARA NAGAR
SHIMOGA 577 201
2. SMT. BEERAMMA
W/O LATE. K C MALLEGOWDA,
AGED ABOUT 85 YEARS
SS MANSION, 3RD CROSS.
BASAVESHWARA NAGAR
SHIMOGA 577 201.
REP BY GPA HOLDER.
SRI. K M DHARMAPPA
S/O LATE K C MALLEGOWDA,
AGED ABOUT 62 YEARS,
RETIRED MUNICIPAL COMMISIONER,
S.S. MANSION, 3RD CROSS,
BASAVESHWARA NAGAR,
SHIMOGA 577 201
...PETITIONERS
(BY SRI: M S BHAGWAT, ADVOCATE)
AND
1. THE ASSISTANT DIRECTOR
DIRECTORATE OF ENFORCEMENT
GOVERNMENT OF INDIA
III FLOOR, 'B' BLOCK
2
BMTC SHANTHI NAGAR
TTMC, K.H. ROAD
BANGALORE 560027
2. THE DEPUTY DIRECTOR
DIRECTORATE OF ENFORCEMENT
GOVERNMENT OF INDIA
III FLOOR, 'B' BLOCK
BMTC SHANTHI NAGAR
TTMC, K.H. ROAD
BANGALORE 560027
3. THE CHAIRPERSON
ADJUDICATING AUTHORITY
4TH FLOOR
JEEVAN DEEP BUILDING
PARLIAMENT STREET
NEW DELHI 110001
...RESPONDENTS
(BY SRI : M.B. NARGUND, ASG A/W
SRI : P KARUNAKAR, STANDING COUNSEL FOR R1-R2;
NOTICE TO R3 HELD SUFFICIENT V/O DATED 3.7.2018)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA READ WITH SECTION 482 OF
CR.P.C, 1973 PRAYING TO CALL FOR RECORDS FROM THE
RESPONDENTS AND QUASH THE (a) PROVISIONAL ORDER OF
ATTACHMENT DTD: 30.3.2015 (ANNEXURE-A) ISSUED BY THE
R-2 (b) ORIGINAL COMPLAINT NO.472/2015 (ANNEXURE-B)
GIVEN BY THE R-2, (c) THE CONFIRMATION ORDER DTD:
26.8.2015 IN O.C.NO.472/2015 (ANNEXURE-C) ISSUED BY THE
R-3, (d) POSSESSION NOTICE DATED: 23.8.2015 (ANNEXURE-
D) ISSUED BY THE R-1 (e) COMPLAINT IN P.C.R. NO.37/2016
(ANNEXURE-E) AND ALL PROCEEDINGS IN SPECIAL
C.C.NO.293/2017 INITIATED UNDER SECTIONS 3 AND 4 OF THE
PREVENTION OF MONEY LAUNDERING ACT, 2002 PENDING ON
THE FILE OF THE PRINCIPAL CITY CIVIL AND SESSIONS JUDGE,
BANGALORE (ANNEXURE-F).
THIS WRIT PETITION COMING ON FOR DICTATING
ORDERS, THIS DAY, THROUGH PHYSICAL HEARING/VIDEO
CONFERENCING HEARING, THE COURT MADE THE FOLLOWING:
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ORDER
Petitioners have sought for a writ or order quashing
(a) the provisional order of attachment bearing No.09/2015 dated 30.3.2015 (Annexure-A) issued by the Respondent-2;
(b) Original Complaint No.472/2015 (Annexure-B) given by the Respondent-2;
(c) the confirmation order dtd: 26.8.2015 in O.C.No.472/2015 (Annexure-C) issued by the Respondent-3;
(d) possession notice dated: 23.8.2015 (Annexure- D) issued by the Respondent-1; and
(e) Complaint in P.C.R. No.37/2016 (Annexure-E) and all proceedings in Special C.C.No.293/2017 initiated under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 pending on the file of the Principal City Civil and Sessions Judge, Bangalore (Annexure-F).
2. Brief facts of the case are as follows:-
A F.I.R. in Crime No.12/2009 came to be registered against petitioner No.1 - Sri.K.M.Dharmappa alleging commission of offences punishable under Sections 13(1)(e) r/w 13(2) of Prevention of Corruption Act, 1988 (hereinafter referred 4 to as "PML Act" for brevity) on 22.09.2009. After investigation, charge sheet was filed against him for the above offences and the matter was pending trial before the Special Court, Shivamogga in Spl.C.C.No.2/2013. During the pendency of this proceeding, respondents initiated action against the petitioners under the provisions of Sections 5 and 8 of the PML Act on the ground that the properties traced by the Lokayukta Police in the course of investigation in Crime No.12/2009 were the "proceeds of crime" within the meaning of section 2(1) (u) of the PML Act.
3. The main contention urged by learned counsel for the petitioners is that the allegations made in the charge sheet reveal that the properties which are subject matter of the attachment were acquired much before the PML Act came into force. The last acquisition was made in the year 2004, whereas the PML Act came into force only on 01.07.2005 and therefore the provisions of the PML Act cannot be made applicable to the properties held by the petitioners. It is contended that a penal statute will not have retrospective effect or retroactive operation. If the offence is complete before enactment came into force, invoking the penal provisions would be illegal and violative of Article 20(1) of the Constitution of India. It is contended that the alleged offences were inserted in the 5 schedule only by virtue of the amendment which came into force with effect from 1.06.2009 and therefore the PML Act must be held to have a prospective operation only. Thus it is argued that the action initiated against the petitioners is illegal, ultra vires and abuse of process of Court.
4. In support of the above contentions, learned counsel for petitionersss has placed reliance on the following judgments:-
i) J SEKAR vs. UNION OF INDIA & ORS. rendered by the High Court of Delhi in W.P. (C) No.5320/2017 dated 11.01.2018 [Paras 74 to 78 and Para 87]
ii) M/s MAHANIVESH OILS & FOODS PVT. LTD. vs. DIRECTORATE OF ENFORCEMENT rendered by the High Court of Delhi in W.P.(C) No.1925/2014 dated 25.01.2016 [Para 21 onwards]
iii) SHRI AJAY KUMAR GUPTA vs. ADJUDICATING AUTHORITY rendered by the High Court of Madras in Crl.O.P.Nos.10497 and 10500/2017 [Paras 8 to 9]
iv) RITESH AGARWAL AND ANOTHER vs. SECURITIES AND EXCHANGE BOARD OF INDIA AND OTHERS reported in (2008)8 SCC 205 [Para 25]
v) C.J.PAUL AND OTHERS vs. DISTRICT COLLECTOR AND OTHERS reported in (2009)14 SCC 564 {Para 13}
vi) SUKHDEV SINGH vs. STATE OF HARYANA reported in (2013)2 SCC 212 [Para 18]
vii) VARINDER SINGH vs. STATE OF PUNJAB & ANOTHER reported in (2014)3 SCC 151 [Para 10]
viii) MOHAN LAL vs. STATE OF RAJASTHAN reported in (2015)6 SCC 222 [Para 23] 6
ix) CHAIRMAN AND MANAGING DIRECTOR, FOOD CORPORATION OF INDIA AND OTHERS vs. JAGDISH BALARAM BAHIRA AND OTHERS reported in (2017)8 SCC 670 [PARAS 63, 64, 69.9]
x) SIDDALINGAPPA vs. BANGALORE DEVELOPMENT AUTHORITY reported in ILR 1986 KAR 3023 [Paras 48 and 49]
xi) 2019 SCC ONLINE RAJ 1640 [RAJASTHAN HIGH COURT] NIHARIKA JAIN AND OTHERS vs. UNION OF INDIA AND OTHERS (Paras 93 AND 94)
xii) T.N.BETTASWAMAIAH vs. STATE OF KARNATAKA (Paras 23,24,25,26) (Order in WRIT PETITION.NO.29176/2019 DATED 20.12.2019)
xiii) 2019 AIR SCC 3817 - G J RAJA vs. TEJRAJ SURANA [PARAS 14, 16, 17, 18, 19, 24]
xiv) STATE OF TELANGANA vs. POLEPAKA PRAVEEN @ PAWAN IN SPECIAL LEAVE PETITION (CRIMINAL) NO.9597/2020 (Order dated 15.06.2020)
5. Next, it is contended that the total value of the properties which are alleged to have been acquired out of the proceeds of the crime is of the value Rs.12,31,500/- which is beyond the limit prescribed in section 2(1)(y) of the PML Act and therefore, the respondents did not derive jurisdiction to proceed against the petitioners or against the properties standing in the name of petitioners and on that ground also, the impugned proceedings are liable to be quashed.
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6. Lastly, referring to the order of cognizance taken by the Special Judge, learned counsel for the petitioners would submit that it suffers from total lack of application of mind and is contrary to the law laid down by this Court in Sunil Bharti Mittal vs. Central Bureau of Investigation reported in (2015) 4 SCC 609 and the order dated 13.11.2014 passed by this Court in Criminal Petition No.5177/2014 in the case of Sri M.Girisha vs. The State of Karnataka by Lokayuktha Police and State by A.Mahadeva vs. Papireddy reported in ILR 1988 KAR 666.
7. Learned counsel for petitioners has also placed reliance on a Division Bench judgment of this Court in the case of M/S.OBULAPURAM MINING COMPANY PRIVATE LIMITED vs. JOINT DIRECTOR and Others (W.P.No.5962/2016 decided on 13.03.2017) with reference to paragraph 12; however, it is submitted that this matter is pending before the Hon'ble Supreme Court and the Hon'ble Supreme Court has directed that the said judgment and order shall not be treated as a precedent. On these grounds, the proceedings are sought to be quashed.
8. Insofar as the decision relied on by learned counsel for petitioners in M/s.OBULAPURAM MINING COMPANY PRIVATE LIMITED (referred supra) is concerned, learned ASG has 8 produced copy of the order passed by the Hon'ble Supreme Court in Special Leave to Appeal (Crl.) No.4466/2017 dated 24.07.2017 whereby the Hon'ble Supreme Court has ordered that the impugned judgment and order will not operate as a precedent.
9. Insofar as the various other decisions relied on by learned counsel for petitioners in support of the first contention urged in support of the prayer made in the petition, I have considered this issue in similar matters disposed of on 14.12.2020 in Criminal Petition No.5698 of 2019 and connected petitions and have held that in the context of the provisions of PML Act, the prosecution under section 3 of the PML Act and the confiscation proceedings resorted by the respondent under sections 5 and 8 of the PML Act are not hit by the prohibition contained under Article 20(1) of the Constitution of India. Following the view taken in the said judgment, the first contention urged by learned counsel for petitionersss is rejected.
10. Coming to the second contention urged by learned counsel for petitioners based on the valuation of the properties is concerned, it has to be noted that the valuation prescribed in Section 2(1)(y) of the PML Act is applicable only to the offences 9 specified under Part B of the Schedule. The section reads as under:-
2(1)(y). "Scheduled offence" means -
(i) the offences specified under Part A of the Schedule; or
(ii) the offences specified under Part B of the Schedule if the total value involved in such offences is thirty lakh rupees or more;
(iii) the offences specified in Part C of the Schedule.
11. In the instant case, undisputedly, the scheduled offence related to section 13(1)(e) read with section 13(2) of the Prevention of Corruption Act, 1988 which falls under Part A of the Schedule appended to the PML Act. In view of this provision, the pecuniary limit prescribed in 2(1)(y)(ii) does not apply to the facts of this case. As a result, even this contention deserves to be rejected and is accordingly rejected.
12. The main challenge in the petition relates to the validity of the provisional order of attachment bearing No.09/2015 dated 30.03.2015 passed by the Deputy Director, Enforcement Directorate (Annexure-'A'); original complaint No.472/2015 given by the second respondent (Annexure-'B'); the confirmation order dated 26.08.2015 in O.C.No.472/2015 10 (Annexure-'C') issued by the third respondent and possession notice dated 23.09.2015 (Annexure-D).
13. Petitioners have challenged these orders on the ground that the impugned orders have been passed without application of mind and without consideration of the fact that the subject properties were acquired much prior to the PML Act came into force. It is specifically contended that the properties mentioned in the table were acquired in the year 1985, 1999, 2000 and 2004 and therefore, the respondents could not have assumed jurisdiction over the subject property and therefore the action initiated by the respondents is without authority of law and suffer from the vice of ex post facto penal laws which are not permissible under the scheme of the Constitution of India.
14. Even this issue is answered by me in the above decisions and as such, I do not find it necessary to burden the record reiterating the very same reasons and the judicial precedents to arrive at the conclusion that what is made punishable under section 3 of the PML Act is the activity connected with the proceeds of crime either by getting oneself involved in the process or activity connected thereto or directly or indirectly attempting to indulge or knowingly assist or 11 knowingly be a party to the alleged activities and projecting it as untainted property. The prosecution under section 3 of the PML Act is not based on the outcome of the predicate offences. What is necessary to constitute the offence of money laundering is the existence of proceeds of crime and not the pendency of the predicate offence as contended by the learned counsel for petitioners. A reading of section 3 of the PML Act would clearly indicate that even without there being any conviction of the accused in a predicate offence and even if the offender under section 3 of the PML Act is not a party to the predicate offence, still the prosecution could be launched against him and the property held by him could be attached if found involved in any process or activity connected with the 'proceeds of crime'. As such, there is no illegality whatsoever in the criminal prosecution launched against the petitioners. Article 20(1) of the Constitution of India would get attracted only when any penal law penalises with retrospective effect. When no penal action is initiated against the petitioners based on the offences inserted in the Schedule to the PML Act, the question of Article 20(1) of the Constitution of India getting attracted does not arise at all. Therefore, the challenge laid by the petitioners based on the plea 12 of violation of Article 20(1) of the Constitution of India is liable to be rejected and is accordingly rejected.
15. Coming to the action initiated against the petitioners for attachment and consequent adjudication of the properties involved in the money laundering is concerned, section 5 of the PML Act deals with the elaborate procedure as to the attachment of the properties. As per the said provision, Director or any other officer not below the rank of Deputy Director authorized by the Director for the said purpose is entitled to make an order in writing, provisionally attaching such property for a period not exceeding 180 days when he has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that -
(a) any person is in possession of any proceeds of crime;
(b) such person has been charged of having committed a scheduled offence; and
(c) such proceeds of crime are likely to be concealed, transferred to dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter.
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16. The petitioners do not dispute the authority of the Deputy Director to pass the impugned provisional order of attachment. The constitutional validity of the above provision is not under challenge. The said order as well as the records indicate that based on the report forwarded to the Magistrate under section 173 of Cr.P.C., provisional order of attachment under Section 5(1) of the PML Act has been made. The order reflects application of mind and contains elaborate reasons to arrive at the conclusion that the property in question was the proceeds of crime within the meaning of section 2(1)(u) of the PML Act. The said order therefore is beyond challenge in a writ proceeding as no error of law or jurisdiction is reflected in the impugned order.
17. Even otherwise, the PML Act has provided for adequate safeguards to protect the rights of the accused by providing that the order of attachment shall cease to have effect after the expiry of the period specified in the said section or the date of order made under sub-section (3) of section 8 of PML Act. An adjudicatory mechanism is provided under section 8 of the PML Act. It is borne on record that the petitioners have availed the remedy provided under Section 8 of the PML Act and have participated in the proceedings before the Adjudicating 14 Authority. Considering the contentions urged by the petitioners, the Adjudicating Authority has come to the conclusion that the petitioners have committed the scheduled offences, generated proceeds of crime, laundered them and consequently, the provisional attachment has been confirmed subject to the condition that the order shall continue during the pendency of the proceedings relating to any offence under the PML Act before the court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India as the case may be and become final after an order of confiscation is passed under sub-section (5) to sub-section (7) of section 8 or section 58-B or sub-section 2A or section 60. Sub-section 5 of section 8 of PML Act provides that, "Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of money-laundering has been committed, it shall order that such property involved in the money-laundering or which has been used for commission of the offence of money-laundering shall stand confiscated to the Central Government."
Sub-section 7 of section 8 of PML Act reads as under:
"Where the trial under this Act cannot be conducted by reason of death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by 15 the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3) of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of money- laundering after having regard to the material before it."
These provisions, therefore, make it clear that the properties attached by the Director or the Deputy Director and adjudicated by the Adjudicating Authority shall be dealt with as per the orders passed by the Special Court trying the offence of money laundering. Since the prosecution initiated against the petitionersss under section 3 of the PML Act is pending and the provisional order of attachment and confirmation order passed by the authorities constituted under the Act being in accordance with law and no error of law or violation of law or principles of natural justice having been pointed out by learned counsel for petitionersss vitiating the said procedure, I do not find any ground to interfere with the said orders in exercise of jurisdiction under Article 226 of the Constitution of India.
18. The next contention urged by the petitionersss that the "confiscation" provided under section 8(5) of the PML Act is in the nature of punishment and that the power of confiscation conferred under the PML Act to confiscate the properties 16 acquired prior to the Amendment Act 21 of 2009 came into force, suffer from the vice of prohibition contained in Article 20(1) of the Constitution, does not merit acceptance.
19. First and foremost, confiscation is not prescribed as a 'punishment' either under the provisions of PML Act or under the provisions of the Code. As per Section 53 of IPC, the punishments to which the offenders are liable under the provisions of the Code are:
(First) -- Death;
1[Secondly.--Imprisonment for life;] 2[***] (Fourthly) --Imprisonment, which is of two descriptions, namely:--
(1) Rigorous, that is, with hard labour; (2) Simple;
(Fifthly) --Forfeiture of property;
(Sixthly) --Fine.
20. This Court while considering the scope and ambit of sections 5 and 8 of the PML Act, in the case of Vinod Ramnani and Another vs. State House Officer and Another (referred supra) has observed thus:-
"Going by the text & context of the provisions of PML Act and the construction placed thereon by the Co- ordinate Bench of this court coupled with a broad consensual view emerging from the aforesaid decisions of other High Courts in the country, some lone voices in variance notwithstanding, the legal position can be concised thus: the scheme of the Act envisages two parallel streams of action which are distinguishable by their nature, scope & object; one 17 stream is the criminal proceedings before the Special Courts for the trial of offences u/s.3 r/w Sec.4, that are governed by the provisions of Chapter VII, and the other stream is the departmental proceedings apparently civil in nature, instituted by the competent authorities, that are governed by the provisions of Chapter III; the object of former is punitive, whereas that of the latter is confiscatory; obviously, the proceedings under one chapter are independent of those under the other, and therefore, the determination of proceedings under one stream does not ipso facto affect or influence those in the other; thus, even the closure of criminal proceedings would not determine the departmental proceedings, the offence of money laundering u/s.3 being completely a stand alone event; in other words, the departmental proceedings for the purpose of confiscating the proceeds of crime and the criminal proceedings for punishing the offender, can run concurrently and that they need not converge at any point."
21. I am in respectful agreement with the view taken in the above decision. The regime of attachment and forfeiture of the properties procured by commission of the offence is not a new phenomenon. The Criminal Law (Amendment) Ordinance, 1994 provided for a fullfledged mechanism for attachment of money or other properties which were believed to have been procured by means of the schedule mentioned offences. Considering the question as to whether the forfeiture provided under the said Ordinance violated Article 20(1) of the Constitution of India, the Constitution Bench of the Supreme Court of India in the case of State of West Bengal v. S.K. Ghosh, AIR 1963 SCC 255 has held as under:-
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"The word 'forfeiture' has been used in other laws without importing the idea of penalty or punishment within the meaning of Art. 20(1). Reference in this connection may be made to s. III (g) of the Transfer of Property Act (No. 4 of 1882) which talks of determination of a lease by forfeiture. We are therefore of opinion that forfeiture provided in, a. 13(3) in case of offences which involve the embezzlement etc. of government money or property is really a speedier method of realising Government money or property as compared to a suit which it is not disputed the Government could bring for realising the money or property and is not punishment or penalty within the meaning of Art. 20(1). Such a suit could ordinarily be brought without in any way affecting the right to realise the fine that may have been imposed by a criminal court in connection with the offence."
22. As observed by the Hon'ble Supreme Court in Biswanath Bhattacharya v. Union of India and Others, (2014) 4 SCC 392 , penalty is a generic term which includes fine and penalty. Fine is pecuniary penalty; forfeiture is a penalty by which one looses his right and interest over the property; whereas, confiscation is condemnation of the property to the public treasury. It is not considered as punishment either under the scheme of PML Act or under Section 8(5) of the Act. Keeping in view the object of the PML Act, a speedy mechanism has been provided under the PML Act for recovery and confiscation of the property laundered by the offenders. No subject has an inviolable right to enjoy the wealth acquired by him by 19 illegitimate means, the legitimate source of which cannot be explained by him. That being the object and purpose sought to be effectuated by sections 5 and 8 of the PML Act and a well oiled machinery having been provided with all safeguards to protect the right and interest of the offender as well as those who are not parties to the predicate offence, there is absolutely no basis for the petitioners to seek quashment of the attachment and consequent confiscation proceedings initiated against them on the purported plea that the same is violative of Article 20(1) of the Constitution of India. No legal right having been accrued in favour of the petitioners to hold on or to enjoy the proceeds of crime, the source of which cannot be explained by them, the argument of the learned counsel for the petitioners that the attachment proceedings initiated against them are unjust and bad in law is without any substance. In the light of the above discussion, relief Nos.(a) and (b) claimed by the petitioners are liable to be rejected and are accordingly rejected.
23. Coming to the prayer made in the petition for quashing the proceedings in Spl.C.C.No.293/2017 initiated under sections 3 and 4 of the PML Act is concerned, though the legal contentions urged by learned counsel for petitioners are already answered by me in similar matters disposed of on 14.12.2020 in 20 Crl.P.No.5698/2019 and connected matters, yet, on going through the cognizance order passed by learned Principal City Civil and Sessions Judge, Bangalore City, I am left with no other alternative than to remand the matter to the Trial Court to consider the complaint afresh. The copy of the order sheet maintained by learned Principal City Civil & Sessions Judge, Bengaluru in PCR.No.37/2016 indicates that the complaint filed by the Assistant Director, Directorate of Enforcement was placed before the Court on 23.08.2016. On that day, the Presiding Officer passed the following order:-
"Complainant present and submitted the complaint on 23.08.2016. Perused the averment of the complaint with documents. Hence office shall register the case as PCR in accordance with law and call on 20.09.2016."
Thereafter, the matter appears to have been put up on three occasions and on all the three dates of hearing, learned SPP for complainant sought time. The subsequent order dated 23.06.2017 reads as under:-
"The learned SPP is present.
Heard.
Perused.
Cognizance is taken.
It is ordered to register it as Special Criminal Case. Issue summons to both accused, by 7.8.2017."
This order, apart from being bald and unreasoned, does not disclose application of mind to the facts of the case nor does it 21 indicate the offences in respect of which the cognizance is taken by learned Presiding Officer.
24. A reading of the complaint (Annexure-E) indicates that it was filed under section 200 of Cr.P.C. 1973 read with section 45(1), 3 and 4 of the PML Act. It is alleged therein that accused Nos.1 and 2 have committed offence under section 3 of the PML Act and are liable to be punished under section 4 of the PML Act. But the order of cognizance dated 23.06.2017 passed in Spl.C.C.No.293/2017 does not reveal as to the offences for which the accused have been summoned to appear before the court. In this context, it may be apt to refer to the observations of the Apex Court in Sunil Bharti Mittal vs. CBI, (2015) 4 SCC
609.
"48. Sine qua non for taking cognizance of the offence is the application of mind by the Magistrate and his satisfaction that the allegations, if proved, would constitute an offence. It is, therefore, imperative that on a complaint or on a police report, the Magistrate is bound to consider the question as to whether the same discloses commission of an offence and is required to form such an opinion in this respect. When he does so and decides to issue process, he shall be said to have taken cognizance. At the stage of taking cognizance, the only consideration before the Court remains to consider judiciously whether the material on which the prosecution proposes to prosecute the accused brings out a prima facie case or not.22
49. Cognizance of an offence and prosecution of an offender are two different things. Section 190 of the Code empowered taking cognizance of an offence and not to deal with offenders. Therefore, cognizance can be taken even if offender is not known or named when the complaint is filed or FIR registered. Their names may transpire during investigation or afterwards.
50. xxxxxxxxxx
51. xxxxxxxxx
52. A wide discretion has been given as to grant or refusal of process and it must be judicially exercised. A person ought not to be dragged into Court merely because a complaint has been filed. If a prima facie case has been made out, the Magistrate ought to issue process and it cannot be refused merely because he thinks that it is unlikely to result in a conviction.
53. However, the words "sufficient grounds for proceeding" appearing in the Section 204 are of immense importance. It is these words which amply suggest that an opinion is to be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no reason is given therein while coming to the conclusion that there is prima facie case against accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect."
25. As the order passed by the learned Special Judge taking cognizance and issuing summons to the petitioners does not satisfy the basic legal requirements, the impugned order to 23 that extent has turned out to be ex-facie perverse and bad in law. It is shocking to note that the Presiding Officer might have put in considerable length of service in judiciary and who is either in the verge of retirement or in the process of elevation to the High Court has not even bothered to consider even basic principles of criminal jurisprudence and has casually and callously passed the impugned order which cannot be sustained on any ground. As a result, there being no other alternative, I am constrained to remand the matter to the Trial Court to consider the complaint afresh in accordance with law.
Accordingly, petition is allowed-in-part. The prayer sought for by the petitioners for quashing
(a) provisional order of attachment bearing No.09/2015 dated 30.03.2015 (Annexure-'A'); (b) the original complaint No.472/2015 (Annexure-'B'); (c) the confirmation order dated 26.08.2015 in O.C.No.472/2015 (Annexure-'C'); (d) possession notice dated 23.09.2015 (Annexure-'D'); and (e) the complaint in PCR.No.37/2016 (Annexure-'E') are rejected.
The cognizance order dated 23.06.2017 in Spl.C.C.No.293/2017 passed by the Principal City Civil and Sessions Judge at Bangalore is set-aside. The matter is 24 remanded to the Principal City Civil and Sessions Judge at Bangalore to consider the complaint filed under section 200 Cr.P.C. read with section 45(1), 3 and 4 of the PML Act by the respondent No.1 - the Assistant Director, Directorate of Enforcement, Bangalore afresh in accordance with law.
Sd/-
JUDGE Bss/mn