In our considered opinion, a stage has come in this
country where Section 156(3) Cr.P.C. applications are to
be supported by an affidavit duly sworn by the applicant
who seeks the invocation of the jurisdiction of the
Magistrate. That apart, in an appropriate case, the
learned Magistrate would be well advised to verify the
truth and also can verify the veracity of the allegations.
This affidavit can make the applicant more responsible.
We are compelled to say so as such kind of applications
are being filed in a routine manner without taking any
responsibility whatsoever only to harass certain persons.
That apart, it becomes more disturbing and alarming
when one tries to pick up people who are passing orders
under a statutory provision which can be challenged
under the framework of said Act or under Article 226 of
the Constitution of India. But it cannot be done to take
undue advantage in a criminal court as if somebody is
determined to settle the scores. We have already
indicated that there has to be prior applications under
Section 154(1) and 154(3) while filing a petition under
Section 156(3). Both the aspects should be clearly spelt
out in the application and necessary documents to that
effect shall be filed. The warrant for giving a direction
that an the application under Section 156(3) be supported
by an affidavit so that the person making the application
should be conscious and also endeavour to see that no
false affidavit is made. It is because once an affidavit is
found to be false, he will be liable for prosecution in
accordance with law. This will deter him to casually
invoke the authority of the Magistrate under Section
156(3).
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.781 OF 2012
Mrs. Priyanka Srivastava V State of U.P. and Others
Bench: Dipak Misra, Prafulla C. Pant Dated;March 19, 2015.
which is not only disturbing but also has the potentiality
to create a stir compelling one to ponder in a perturbed
state how some unscrupulous, unprincipled and deviant
litigants can ingeniously and innovatively design in a
nonchalant manner to knock at the doors of the Court, as
if, it is a laboratory where multifarious experiments can
take place and such skillful persons can adroitly abuse
the process of the Court at their own will and desire by
painting a canvas of agony by assiduous assertions made
in the application though the real intention is to harass
the statutory authorities, without any remote remorse,
with the inventive design primarily to create a mental
pressure on the said officials as individuals, for they
would not like to be dragged to a court of law to face in
criminal cases, and further pressurize in such a fashion
so that financial institution which they represent would
ultimately be constrained to accept the request for
“one-time settlement” with the fond hope that the
obstinate defaulters who had borrowed money from it
would withdraw the cases instituted against them. The
facts, as we proceed to adumbrate, would graphically
reveal how such persons, pretentiously aggrieved but
potentially dangerous, adopt the self-convincing mastery
methods to achieve so. That is the sad and unfortunate
factual score forming the fulcrum of the case at hand,
and, we painfully recount.
2. The facts which need to be stated are that the
respondent No.3, namely, Prakash Kumar Bajaj, son of
Pradeep Kumar Bajaj, had availed a housing loan from
2CRL.A.781/12
the financial institution, namely, Punjab National Bank
Housing Finance Limited (PNBHFL) on 21st January,
2001, vide housing loan account No.IHL-583. The loan
was taken in the name of the respondent No.3 and his
wife, namely, Jyotsana Bajaj. As there was default in
consecutive payment of the installments, the loan account
was treated as a Non-Performing Asset (NPA) in
accordance with the guidelines framed by the Reserve
Bank of India. The authorities of the financial institution
issued notice to the borrowers under Section 13(2) of the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, (for short, 'the
SARFAESI Act') and in pursuance of the proceedings
undertaken in the said Act, the PNBHFL, on 5th June,
2007, submitted an application before the District
Magistrate, Varanasi, U.P. for taking appropriate action
under Section 13(4) of the SARFAESI Act.
3. At this juncture, the respondent No.3 preferred W.P.
No.44482 of 2007, which was dismissed by the High
Court on 14th September, 2007, with the observation that
it was open to the petitioner therein to file requisite
3CRL.A.781/12
objection and, thereafter, to take appropriate action as
envisaged under Section 17 of the SARFAESI Act. After
the dismissal of the writ petition with the aforesaid
observation, the respondent No.3, possibly nurturing the
idea of self-centric Solomon’s wisdom, filed a Criminal
Complaint Case No.1058 of 2008, under Section 200
Cr.P.C. against V.N. Sahay, Sandesh Tiwari and V.K.
Khanna, the then Vice-President, Assistant President and
the Managing Director respectively for offences punishable
under Sections 163, 193 and 506 of the Indian Penal
Code (IPC). It was alleged in the application that the said
accused persons had intentionally taken steps to cause
injury to him. The learned Magistrate vide order dated 4th
October, 2008, dismissed the criminal complaint and
declined to take cognizance after recording the statement
of the complainant under Section 200 Cr.P.C. and
examining the witnesses under Section 202 Cr.P.C.
4. Being grieved by the aforesaid order, the respondent
No.3 preferred a Revision Petition No.460 of 2008, which
was eventually heard by the learned Additional Sessions
Judge, Varanasi, U.P. The learned Additional Sessions
4CRL.A.781/12
Judge after adumbrating the facts and taking note of the
submissions of the revisionist, set aside the order dated
4
th October, 2008 and remanded the matter to the trial
Court with the direction that he shall hear the complaint
again and pass a cognizance order according to law on the
basis of merits according to the directions given in the
said order. Be it noted, the learned Additional Sessions
Judge heard the counsel for the respondent No.3 and the
learned counsel for the State but no notice was issued to
the accused persons therein. Ordinarily, we would not
have adverted to the same because that lis is the subject
matter in the appeal, but it has become imperative to do
only to highlight how these kind of litigations are being
dealt with and also to show the respondents had the
unwarranted enthusiasm to move the courts. The order
passed against the said accused persons at that time was
an adverse order inasmuch as the matter was remitted. It
was incumbent to hear the respondents though they had
not become accused persons. A three-Judge Bench in
Manharibhai Muljibhai Kakadia and Anr. v.
5CRL.A.781/12
Shaileshbhai Mohanbhai Patel and others1
has opined
that in a case arising out of a complaint petition, when
travels to the superior Court and an adverse order is
passed, an opportunity of hearing has to be given. The
relevant passages are reproduced hereunder:
46. .......If the Magistrate finds that there is no
sufficient ground for proceeding with the
complaint and dismisses the complaint under
Section 203 of the Code, the question is
whether a person accused of crime in the
complaint can claim right of hearing in a
revision application preferred by the
complainant against the order of the dismissal
of the complaint. Parliament being alive to the
legal position that the accused/suspects are
not entitled to be heard at any stage of the
proceedings until issuance of process under
Section 204, yet in Section 401(2) of the Code
provided that no order in exercise of the power
of the revision shall be made by the Sessions
Judge or the High Court, as the case may be,
to the prejudice of the accused or the other
person unless he had an opportunity of being
heard either personally or by pleader in his
own defence.
xxxxx xxxxx xxxxx
48. In a case where the complaint has been
dismissed by the Magistrate under Section 203
of the Code either at the stage of Section 200
itself or on completion of inquiry by the
Magistrate under Section 202 or on receipt of
the report from the police or from any person
1
(2012) 10 SCC 517
6CRL.A.781/12
to whom the direction was issued by the
Magistrate to investigate into the allegations in
the complaint, the effect of such dismissal is
termination of complaint proceedings. On a
plain reading of sub-section (2) of Section 401,
it cannot be said that the person against whom
the allegations of having committed the offence
have been made in the complaint and the
complaint has been dismissed by the
Magistrate under Section 203, has no right to
be heard because no process has been issued.
The dismissal of complaint by the Magistrate
under Section 203—although it is at
preliminary stage—nevertheless results in
termination of proceedings in a complaint
against the persons who are alleged to have
committed the crime. Once a challenge is laid
to such order at the instance of the
complainant in a revision petition before the
High Court or the Sessions Judge, by virtue of
Section 401(2) of the Code, the suspects get
the right of hearing before the Revisional Court
although such order was passed without their
participation. The right given to “accused” or
“the other person” under Section 401(2) of
being heard before the Revisional Court to
defend an order which operates in his favour
should not be confused with the proceedings
before a Magistrate under Sections 200, 202,
203 and 204. In the revision petition before the
High Court or the Sessions Judge at the
instance of the complainant challenging the
order of dismissal of complaint, one of the
things that could happen is reversal of the
order of the Magistrate and revival of the
complaint. It is in this view of the matter that
the accused or other person cannot be
deprived of hearing on the face of the express
provision contained in Section 401(2) of the
Code. The stage is not important whether it is
pre-process stage or post process stage.
7CRL.A.781/12
xxxxx xxxxx xxxxx
53. We are in complete agreement with the
view expressed by this Court in P.
Sundarrajan2, Raghu Raj Singh Rousha3 and
A.N. Santhanam4. We hold, as it must be, that
in a revision petition preferred by the
complainant before the High Court or the
Sessions Judge challenging an order of the
Magistrate dismissing the complaint under
Section 203 of the Code at the stage under
Section 200 or after following the process
contemplated under Section 202 of the Code,
the accused or a person who is suspected to
have committed the crime is entitled to hearing
by the Revisional Court. In other words, where
the complaint has been dismissed by the
Magistrate under Section 203 of the Code,
upon challenge to the legality of the said order
being laid by the complainant in a revision
petition before the High Court or the Sessions
Judge, the persons who are arraigned as
accused in the complaint have a right to be
heard in such revision petition. This is a plain
requirement of Section 401(2) of the Code. If
the Revisional Court overturns the order of the
Magistrate dismissing the complaint and the
complaint is restored to the file of the
Magistrate and it is sent back for fresh
consideration, the persons who are alleged in
the complaint to have committed the crime
have, however, no right to participate in the
proceedings nor are they entitled to any
hearing of any sort whatsoever by the
Magistrate until the consideration of the
matter by the Magistrate for issuance of
process.”
Though the present controversy is different, we have
8CRL.A.781/12
dealt with the said facet as we intend to emphasize how
the Courts have dealt with and addressed to such a
matter so that a borrower with vengeance could ultimately
exhibit his high-handedness.
5. As the narration further proceeds, after the remand,
the learned Magistrate vide order dated 13th July, 2009,
took cognizance and issued summons to V.N. Sahay,
Sandesh Tripathi and V.K. Khanna. The said accused
persons knocked at the doors of the High Court under
Section 482 Cr.P.C. and the High Court in Crl. Misc.
No.13628 of 2010, by order dated 27th May, 2013, ruled
thus:
“A perusal of the complaint filed by the
respondent no.2 also indicates that the issues
were with regard to the action of the bank
officers against respondent no.2 on the ground
of alleged malafide and as such an offence
under sections 166/500 I.P.C. was made out.
Both the sections are non cognizable and
bailable and triable by Magistrate of First
Class. For the foregoing reasons the 482
Petition deserves to be allowed and the
criminal complaint filed by the respondent
no.2 being Complaint Case No.1058 of 2009 is
liable to be quashed.
Accordingly the application under section 482
Cr.P.C. is allowed and the Criminal Complaint
Case No.1058 of 2009, Prakash Kumar Bajaj
9CRL.A.781/12
versus P.N.B. Housing Finance Ltd. And
others, pending in the Court of Additional
Chief Judicial Magistrate, Court No.2 Varanasi
is quashed.”
6. Presently, we are required to sit in the time machine
for a while. In the interregnum period the borrowers filed
an objection under Section 13(3A) of the SARFAESI Act.
Be it noted, as the objection was not dealt with, the
respondent No.3 preferred W.P. No.22254 of 2009, which
was disposed of on 5th May, 2009 by the High Court,
directing disposal of the same. Eventually, the objection
was rejected by the competent authority vide order dated
June 1, 2009. Being grieved by the aforesaid order of
rejection, the respondent No.3 filed Securitisation Appeal
No.5 of 2010, before the Debt Recovery Tribunal (DRT),
Allahabad, U.P., which was rejected vide order dated 23rd
November, 2012. The non-success before the DRT
impelled the borrowers to prefer an appeal before the
Debts Recovery Appellate Tribunal (DRAT), Allahabad,
U.P.
7. At this stage, it is apposite to state that the third
respondent, if we allow ourselves to say so, have possibly
10CRL.A.781/12
mastered how to create a sense of fear in the mind of the
officials who are compelled to face criminal cases. After
the High Court had quashed the earlier proceeding, the
third respondent, in October, 2011, filed another
application under Section 156(3) CrPC against V.N.
Sahay, Sandesh Tripathi and V.K. Khanna alleging
criminal conspiracy and forging of documents referring to
three post-dated cheques and eventually it was numbered
as Complaint Case No. 344/2011, which gave rise to FIR
No. 262 of 2011 under Sections 465, 467, 468, 471, 386,
506, 34 and 120B IPC. Being not satisfied with the same,
on 30.10.2011, he filed another application under Section
156(3) against the present appellants alleging that there
has been under-valuation of the property. It was
numbered as Complaint Case No. 396/2011 wherein the
Trial Magistrate directed the SHO to register FIR against
the present appellants. Pursuant to the said order, FIR
No. 298/2011 was registered.
8. At this juncture, it is imperative to state that the
third respondent made the officials agree to enter into one
time settlement. The said agreement was arrived at with
11CRL.A.781/12
the stipulation that he shall withdraw various cases filed
by him on acceptance of the one time settlement. As the
factual matrix would reveal, the third respondent did not
disclose about the initiation of the complaint cases no.
344/2011 and 396/2011. On 28.11.2011, the one time
settlement was acted upon and the third respondent
deposited Rs.15 lakhs.
9. At this stage, it is apt to mention that V.N. Sahay
and two others approached the High Court of Allahabad
in Writ (C) No. 17611/2013 wherein the learned Single
Judge heard the matter along with application under
Section 482 CrPC in Crl. Misc. No. 13628/2010. We have
already reproduced the relevant part of the order passed
therein. Be it noted, the writ petition has also been
disposed of by the High Court by stating thus:
“Heard Mr. Manish Trivedi, learned counsel for
the petitioner, Mr. Vivek Kumar Srivastava,
learned counsel appearing on behalf of
respondent no.3 and learned AGA.
It is submitted by learned AGA that in the
present case investigation has been completed
and final report has been submitted,
considering the same, this petition has become
infructuous.
12CRL.A.781/12
The interim order dated 2.12.2011 is hereby
vacated.
Accordingly, this petition is disposed of.”
10. At this juncture, we are impelled to look at the past
again. The respondent had preferred, as has been stated
before, an appeal before the DRAT. The said appeal was
numbered as Appeal No. 5 of 2013. In the said appeal,
the following order came to be passed:
“During the pendency of the said application, a
proposal was submitted by the borrower to
settle the claim for an amount of Rs.15.00
lacs. The said proposal was accepted by the
Bank by its letter dated 15.11.2011 and the
appellant also deposited the full amount, for
which the settlement was arrived at i.e.
Rs.15.00 lacs. Thereafter, the grievance of the
appellant was that since the full amount of the
settlement has been paid by the appellant,
therefore, the bank should be directed to
return the title deed, as the title deed was not
returned.
The Tribunal was of the view that since the
matter has been settled, therefore, the
securitization application was dismissed as
infructuous and the Tribunal did not pass any
order for return of the title deed. Therefore,
the appellant being aggrieved of the judgment
dated 23.11.2011 passed by the Tribunal has
filed the present appeal.
Learned counsel for the appellant submitted
that after when the full amount under the
settlement has been paid, the
13CRL.A.781/12
respondent-Bank was duty bound to return
the title deed, which has not been returned to
the appellant.
It is contended on behalf of the
respondent-Bank that the settlement was
accepted by letter dated 14.11.2011, wherein
the condition was mentioned that the
appellant shall withdraw the complaint case
which he has filed before the Criminal Court.
Learned counsel for the appellant submitted
that he has no objection to withdraw the
complaint case but the title deed must be
returned to the appellant.
The title deed shall be returned by the
respondent-Bank to the appellant within seven
days from today and thereafter, the appellant
shall move an application to withdraw the
Criminal Case No.1058/09 which is pending
before the Chief Judicial Magistrate, Varanasi.”
11. The labyrinth maladroitly created by the respondent
No.3 does not end here. It appears that he had the
indefatigable spirit to indulge himself in the abuse of the
process of the Court. The respondent No.3 had filed an
application under Section 156(3) Cr.P.C. before the
learned Additional Chief Judicial Magistrate on 30th
October, 2011, against the present appellants, who are
the Vice-President and the valuer respectively. In the
body of the petition, as we find in the paragraphs 19 and
14CRL.A.781/12
20, it has been stated thus:
“That the aforesaid case was referred to the
Deputy Inspector General of Police, Varanasi
through speed post but no proceeding had
been initiated till today in that regard.
That the aforesaid act done by the aforesaid
accused prima-facie comes in the ambit of
section 465, 467, 471, 386, 504, 34 & 120B
IPC and in this way cognizable offence is made
out and proved well.”
12. On the basis of the aforesaid application the learned
Additional Chief Judicial Magistrate, Varanasi, U.P.,
called for a report from the concerned police station and
received the information that no FIR had been lodged and
hence, no case was registered at the local police station.
Thereafter, the learned Additional Chief Judicial
Magistrate observed as follows:
“It has been stated clearly in the application by
the applicant that it is the statement of
applicant that he had already given 3
postdated cheques to the financial bank for
payment and despite the availability of the
postdated cheques in the financial society,
even a single share in the loan account has not
been got paid. The opposite parties
deliberately due to conspiracy and prejudice
against applicant have not deposited
previously mentioned postdated cheques for
payment and these people are doing a
conspiracy to grab the valuable property of the
applicant. Under a criminal conspiracy,
15CRL.A.781/12
illegally and on false and fabricated grounds a
petition has been filed before District Collector
(Finance & Revenue) Varanasi, which comes
under the ambit of cognizable offence. Keeping
in view the facts of the case, commission of
cognizable offence appears to be made out and
it shall be justifiable to get done the
investigation of the same by the police.”
After so stating it directed as follows:
“In the light of the application, SHO Bhelpur,
Varanasi is hereby directed to register the case
and investigate the same.”
13. On the basis of the aforesaid order, F.I.R. No.298 of
2011 was registered, which gave rise to case Crime
No.415 of 2011 for the offences punishable under
Sections 465, 467, and 471 I.P.C. Being dissatisfied with
the aforesaid order, the appellants moved the High Court
in Crl. Misc. No.24561 of 2011. The High Court in a
cryptic order opined that on a perusal of the F.I.R. it
cannot be said that no cognizable offence is made out.
Being of this view, it has declined to interfere with the
order. Hence, this appeal by special leave.
14. In course of hearing, learned counsel for the State of
U.P. has submitted that the investigating agency has
already submitted the final report on 21st November,
16CRL.A.781/12
2012. The said report reads as follows:
“Complainant in the present case has not
appeared before any of the investigators, even
after repeated summoning. And that the
action of Smt. Priyanka Srivastava has been
done as per her legal rights in 'good faith',
which is protected under Section 32 of the
SARFAESI Act, 2002. With the abovestated
investigations, the present report is
concluded.”
15. On a query being made, learned counsel for the State
would contend that the learned Magistrate has not passed
any order on the final report. Mr. Ajay Kumar, learned
counsel appearing for the appellants would submit that
the learned Magistrate has the option to accept the report
by rejecting the final form/final report under Section 190
Cr.P.C. and may proceed against the appellants or may
issue notice to the complainant, who is entitled to file a
protest petition and, thereafter, may proceed with the
matter and, therefore, this Court should address the
controversy on merits and quash the proceedings.
16. We have narrated the facts in detail as the present
case, as we find, exemplifies in enormous magnitude to
take recourse to Section 156(3) Cr.P.C., as if, it is a
routine procedure. That apart, the proceedings initiated
17CRL.A.781/12
and the action taken by the authorities under the
SARFAESI Act are assailable under the said Act before the
higher forum and if, a borrower is allowed to take
recourse to criminal law in the manner it has been taken
it, needs no special emphasis to state, has the inherent
potentiality to affect the marrows of economic health of
the nation. It is clearly noticeable that the statutory
remedies have cleverly been bypassed and prosecution
route has been undertaken for instilling fear amongst the
individual authorities compelling them to concede to the
request for one time settlement which the financial
institution possibly might not have acceded. That apart,
despite agreeing for withdrawal of the complaint, no steps
were taken in that regard at least to show the bonafide.
On the contrary, there is a contest with a perverse sadistic
attitude. Whether the complainant could have withdrawn
the prosecution or not, is another matter. Fact remains,
no efforts were made.
17. The learned Magistrate, as we find, while exercising
the power under Section 156(3) Cr.P.C. has narrated the
allegations and, thereafter, without any application of
18CRL.A.781/12
mind, has passed an order to register an FIR for the
offences mentioned in the application. The duty cast on
the learned Magistrate, while exercising power under
Section 156(3) Cr.P.C., cannot be marginalized. To
understand the real purport of the same, we think it apt
to reproduce the said provision:
“156. Police officer’s power to investigate
congnizable case. –(1) Any officer in charge of a
police station may, without the order of a
Magistrate, investigate any cognizable case
which a Court having jurisdiction over the
local area within the limits of such station
would have power to inquire into or try under
the provisions of Chapter XIII.
(2) No proceeding of a police officer in any such
case shall at any stage be called in question on
the ground that the case was one which such
officer was no empowered under this section to
investigate.
(3) Any Magistrate empowered under section
190 may order such an investigation as
above-mentioned.”
18. Dealing with the nature of power exercised by the
Magistrate under Section 156(3) of the CrPC, a
three-Judge Bench in Devarapalli Lakshminarayana
Reddy and others v. V. Narayana Reddy and others2
,
had to express thus:
2
(1976) 3 SCC 252
19CRL.A.781/12
“It may be noted further that an order made
under sub-section (3) of Section 156, is in the
nature of a peremptory reminder or intimation
to the police to exercise their plenary powers of
investigation under Section 156(1). Such an
investigation embraces the entire continuous
process which begins with the collection of
evidence under Section 156 and ends with a
report or chargesheet under Section 173.”
19. In Anil Kumar v. M.K. Aiyappa3
, the two-Judge
Bench had to say this:
“The scope of Section 156(3) CrPC came up for
consideration before this Court in several
cases. This Court in Maksud Saiyed [(2008) 5
SCC 668] examined the requirement of the
application of mind by the Magistrate before
exercising jurisdiction under Section 156(3)
and held that where jurisdiction is exercised
on a complaint filed in terms of Section 156(3)
or Section 200 CrPC, the Magistrate is
required to apply his mind, in such a case, the
Special Judge/Magistrate cannot refer the
matter under Section 156(3) against a public
servant without a valid sanction order. The
application of mind by the Magistrate should
be reflected in the order. The mere statement
that he has gone through the complaint,
documents and heard the complainant, as
such, as reflected in the order, will not be
sufficient. After going through the complaint,
documents and hearing the complainant, what
weighed with the Magistrate to order
investigation under Section 156(3) CrPC,
should be reflected in the order, though a
detailed expression of his views is neither
required nor warranted. We have already
extracted the order passed by the learned
3
(2013) 10 SCC 705
20CRL.A.781/12
Special Judge which, in our view, has stated
no reasons for ordering investigation.”
20. In Dilawar Singh v. State of Delhi4
, this Court
ruled thus:
“18. ...11. The clear position therefore is that
any Judicial Magistrate, before taking
cognizance of the offence, can order
investigation under Section 156(3) of the Code.
If he does so, he is not to examine the
complainant on oath because he was not
taking cognizance of any offence therein. For
the purpose of enabling the police to start
investigation it is open to the Magistrate to
direct the police to register an FIR. There is
nothing illegal in doing so. After all registration
of an FIR involves only the process of entering
the substance of the information relating to
the commission of the cognizable offence in a
book kept by the officer in charge of the police
station as indicated in Section 154 of the
Code. Even if a Magistrate does not say in so
many words while directing investigation
under Section 156(3) of the Code that an FIR
should be registered, it is the duty of the
officer in charge of the police station to register
the FIR regarding the cognizable offence
disclosed by the complainant because that
police officer could take further steps
contemplated in Chapter XII of the Code only
thereafter.”
21. In CREF Finance Ltd. v. Shree Shanthi Homes
(P) Ltd.5
, the Court while dealing with the power of
Magistrate taking cognizance of the offences, has
4
(2007) 12 SCC 496
5
(2005) 7 SCC 467
21CRL.A.781/12
opined that having considered the complaint, the
Magistrate may consider it appropriate to send the
complaint to the police for investigation under Section
156(3) of the Code of Criminal Procedure.
And again:
“When a Magistrate receives a complaint he is
not bound to take cognizance if the facts
alleged in the complaint disclose the
commission of an offence. The Magistrate has
discretion in the matter. If on a reading of the
complaint, he finds that the allegations therein
disclose a cognizable offence and the
forwarding of the complaint to the police for
investigation under Section 156(3) will be
conducive to justice and save the valuable time
of the Magistrate from being wasted in
enquiring into a matter which was primarily
the duty of the police to investigate, he will be
justified in adopting that course as an
alternative to taking cognizance of the offence
itself. As said earlier, in the case of a
complaint regarding the commission of
cognizable offence, the power under Section
156(3) can be invoked by the Magistrate before
he takes cognizance of the offence under
Section 190(1)(a). However, if he once takes
such cognizance and embarks upon the
procedure embodied in Chapter XV, he is not
competent to revert back to the pre-cognizance
stage and avail of Section 156(3).”
22. Recently, in Ramdev Food Products Private
Limited v. State of Gujarat6
, while dealing with the
6 Criminal Appeal No. 600 of 2007 decided on 16.03.2015
22CRL.A.781/12
exercise of power under Section 156(3) CrPC by the
learned Magistrate, a three-Judge Bench has held that:
“.... the direction under Section 156(3) is to be
issued, only after application of mind by the
Magistrate. When the Magistrate does not take
cognizance and does not find it necessary to
postpone instance of process and finds a case
made out to proceed forthwith, direction under
the said provision is issued. In other words,
where on account of credibility of information
available, or weighing the interest of justice it
is considered appropriate to straightaway
direct investigation, such a direction is issued.
Cases where Magistrate takes cognizance and
postpones issuance of process are cases where
the Magistrate has yet to determine “existence
of sufficient ground to proceed.”
23. At this stage, we may usefully refer to what the
Constitution Bench has to say in Lalita Kumari v. Govt.
of U.P.7
in this regard. The larger Bench had posed the
following two questions:-
“(i) Whether the immediate non-registration of
FIR leads to scope for manipulation by the
police which affects the right of the
victim/complainant to have a complaint
immediately investigated upon allegations
being made; and
(ii) Whether in cases where the
complaint/information does not clearly
disclose the commission of a cognizable
offence but the FIR is compulsorily registered
then does it infringe the rights of an accused.”
7
(2014) 2 SCC 1
23CRL.A.781/12
Answering the questions posed, the larger Bench
opined thus:
“49. Consequently, the condition that is sine
qua non for recording an FIR under Section
154 of the Code is that there must be
information and that information must
disclose a cognizable offence. If any
information disclosing a cognizable offence is
led before an officer in charge of the police
station satisfying the requirement of Section
154(1), the said police officer has no other
option except to enter the substance thereof
in the prescribed form, that is to say, to
register a case on the basis of such
information. The provision of Section 154 of
the Code is mandatory and the officer
concerned is duty-bound to register the case
on the basis of information disclosing a
cognizable offence. Thus, the plain words of
Section 154(1) of the Code have to be given
their literal meaning.
“Shall”
xxx xxx xxx xxx
72. It is thus unequivocally clear that
registration of FIR is mandatory and also
that it is to be recorded in the FIR book by
giving a unique annual number to each FIR
to enable strict tracking of each and every
registered FIR by the superior police officers
as well as by the competent court to which
copies of each FIR are required to be sent.
“Information”
xxx xxx xxx xxx
111. The Code gives power to the police to
close a matter both before and after
24CRL.A.781/12
investigation. A police officer can foreclose
an FIR before an investigation under Section
157 of the Code, if it appears to him that
there is no sufficient ground to investigate
the same. The section itself states that a
police officer can start investigation when he
has “reason to suspect the commission of an
offence”. Therefore, the requirements of
launching an investigation under Section
157 of the Code are higher than the
requirement under Section 154 of the Code.
The police officer can also, in a given case,
investigate the matter and then file a final
report under Section 173 of the Code seeking
closure of the matter. Therefore, the police is
not liable to launch an investigation in every
FIR which is mandatorily registered on
receiving information relating to commission
of a cognizable offence.
xxx xxx xxx xxx
115. Although, we, in unequivocal terms,
hold that Section 154 of the Code postulates
the mandatory registration of FIRs on receipt
of all cognizable offences, yet, there may be
instances where preliminary inquiry may be
required owing to the change in genesis and
novelty of crimes with the passage of time.
One such instance is in the case of
allegations relating to medical negligence on
the part of doctors. It will be unfair and
inequitable to prosecute a medical
professional only on the basis of the
allegations in the complaint.”
After so stating the constitution Bench proceeded to state
that where a preliminary enquiry is necessary, it is not for
25CRL.A.781/12
the purpose for verification or otherwise of the information
received but only to ascertain whether the information
reveals any cognizable offence. After laying down so, the
larger Bench proceeded to state:-
“120.6. As to what type and in which cases
preliminary inquiry is to be conducted will depend
on the facts and circumstances of each case. The
category of cases in which preliminary inquiry may
be made are as under:
(a) Matrimonial disputes/family disputes
(b) Commercial offences
(c) Medical negligence cases
(d) Corruption cases
(e) Cases where there is abnormal delay/laches in
initiating criminal prosecution, for example, over 3
months’ delay in reporting the matter without
satisfactorily explaining the reasons for delay.
The aforesaid are only illustrations and not
exhaustive of all conditions which may warrant
preliminary inquiry.
120.7. While ensuring and protecting the rights
of the accused and the complainant, a preliminary
inquiry should be made time-bound and in any case
it should not exceed 7 days. The fact of such delay
and the causes of it must be reflected in the General
Diary entry.”
We have referred to the aforesaid pronouncement for the
purpose that on certain circumstances the police is also
required to hold a preliminary enquiry whether any
cognizable offence is made out or not.
26CRL.A.781/12
24. Regard being had to the aforesaid enunciation of law,
it needs to be reiterated that the learned Magistrate has to
remain vigilant with regard to the allegations made and
the nature of allegations and not to issue directions
without proper application of mind. He has also to bear
in mind that sending the matter would be conducive to
justice and then he may pass the requisite order. The
present is a case where the accused persons are serving
in high positions in the bank. We are absolutely
conscious that the position does not matter, for nobody is
above law. But, the learned Magistrate should take note
of the allegations in entirety, the date of incident and
whether any cognizable case is remotely made out. It is
also to be noted that when a borrower of the financial
institution covered under the SARFAESI Act, invokes the
jurisdiction under Section 156(3) Cr.P.C. and also there is
a separate procedure under the Recovery of Debts due to
Banks and Financial Institutions Act, 1993, an attitude of
more care, caution and circumspection has to be adhered
to.
25. Issuing a direction stating “as per the application” to
27CRL.A.781/12
lodge an FIR creates a very unhealthy situation in the
society and also reflects the erroneous approach of the
learned Magistrate. It also encourages the unscrupulous
and unprincipled litigants, like the respondent no.3,
namely, Prakash Kumar Bajaj, to take adventurous steps
with courts to bring the financial institutions on their
knees. As the factual exposition would reveal, he had
prosecuted the earlier authorities and after the matter is
dealt with by the High Court in a writ petition recording a
settlement, he does not withdraw the criminal case and
waits for some kind of situation where he can take
vengeance as if he is the emperor of all he surveys. It is
interesting to note that during the tenure of the appellant
No.1, who is presently occupying the position of
Vice-President, neither the loan was taken, nor the default
was made, nor any action under the SARFAESI Act was
taken. However, the action under the SARFAESI Act was
taken on the second time at the instance of the present
appellant No.1. We are only stating about the devilish
design of the respondent No.3 to harass the appellants
with the sole intent to avoid the payment of loan. When a
28CRL.A.781/12
citizen avails a loan from a financial institution, it is his
obligation to pay back and not play truant or for that
matter play possum. As we have noticed, he has been
able to do such adventurous acts as he has the embedded
conviction that he will not be taken to task because an
application under Section 156(3) Cr.P.C. is a simple
application to the court for issue of a direction to the
investigating agency. We have been apprised that a
carbon copy of a document is filed to show the compliance
of Section 154(3), indicating it has been sent to the
Superintendent of police concerned.
26. At this stage it is seemly to state that power under
Section 156(3) warrants application of judicial mind. A
court of law is involved. It is not the police taking steps
at the stage of Section 154 of the code. A litigant at his
own whim cannot invoke the authority of the Magistrate.
A principled and really grieved citizen with clean hands
must have free access to invoke the said power. It
protects the citizens but when pervert litigations takes
this route to harass their fellows citizens, efforts are to be
made to scuttle and curb the same.
29CRL.A.781/12
27. In our considered opinion, a stage has come in this
country where Section 156(3) Cr.P.C. applications are to
be supported by an affidavit duly sworn by the applicant
who seeks the invocation of the jurisdiction of the
Magistrate. That apart, in an appropriate case, the
learned Magistrate would be well advised to verify the
truth and also can verify the veracity of the allegations.
This affidavit can make the applicant more responsible.
We are compelled to say so as such kind of applications
are being filed in a routine manner without taking any
responsibility whatsoever only to harass certain persons.
That apart, it becomes more disturbing and alarming
when one tries to pick up people who are passing orders
under a statutory provision which can be challenged
under the framework of said Act or under Article 226 of
the Constitution of India. But it cannot be done to take
undue advantage in a criminal court as if somebody is
determined to settle the scores. We have already
indicated that there has to be prior applications under
Section 154(1) and 154(3) while filing a petition under
Section 156(3). Both the aspects should be clearly spelt
30CRL.A.781/12
out in the application and necessary documents to that
effect shall be filed. The warrant for giving a direction
that an the application under Section 156(3) be supported
by an affidavit so that the person making the application
should be conscious and also endeavour to see that no
false affidavit is made. It is because once an affidavit is
found to be false, he will be liable for prosecution in
accordance with law. This will deter him to casually
invoke the authority of the Magistrate under Section
156(3). That apart, we have already stated that the
veracity of the same can also be verified by the learned
Magistrate, regard being had to the nature of allegations
of the case. We are compelled to say so as a number of
cases pertaining to fiscal sphere, matrimonial
dispute/family disputes, commercial offences, medical
negligence cases, corruption cases and the cases where
there is abnormal delay/laches in initiating criminal
prosecution, as are illustrated in Lalita Kumari are being
filed. That apart, the learned Magistrate would also be
aware of the delay in lodging of the FIR.
28. The present lis can be perceived from another angle.
31CRL.A.781/12
We are slightly surprised that the financial institution has
been compelled to settle the dispute and we are also
disposed to think that it has so happened because the
complaint cases were filed. Such a situation should not
happen.
29. At this juncture, we may fruitfully refer to Section 32
of the SARFAESI Act, which reads as follows :
“32. Protection of action taken in good faith.-
No suit, prosecution or other legal proceedings
shall lie against any secured creditor or any of
his officers or manager exercising any of the
rights of the secured creditor or borrower for
anything done or omitted to be done in good
faith under this Act.”
30. In the present case, we are obligated to say that
learned Magistrate should have kept himself alive to the
aforesaid provision before venturing into directing
registration of the FIR under Section 156(3) Cr.P.C. It is
because the Parliament in its wisdom has made such a
provision to protect the secured creditors or any of its
officers, and needles to emphasize, the legislative
mandate, has to be kept in mind.
32CRL.A.781/12
31. In view of the aforesaid analysis, we allow the appeal,
set aside the order passed by the High Court and quash
the registration of the FIR in case Crime No.298 of 2011,
registered with Police Station, Bhelupur, District
Varanasi, U.P.
32. A copy of the order passed by us be sent to the
learned Chief Justices of all the High Courts by the
Registry of this Court so that the High Courts would
circulate the same amongst the learned Sessions Judges
who, in turn, shall circulate it among the learned
Magistrates so that they can remain more vigilant and
diligent while exercising the power under Section 156(3)
Cr.P.C.
.......................J.
[Dipak Misra]
.......................J.
[Prafulla C. Pant]
New Delhi
March 19, 2015.
Print Page
country where Section 156(3) Cr.P.C. applications are to
be supported by an affidavit duly sworn by the applicant
who seeks the invocation of the jurisdiction of the
Magistrate. That apart, in an appropriate case, the
learned Magistrate would be well advised to verify the
truth and also can verify the veracity of the allegations.
This affidavit can make the applicant more responsible.
We are compelled to say so as such kind of applications
are being filed in a routine manner without taking any
responsibility whatsoever only to harass certain persons.
That apart, it becomes more disturbing and alarming
when one tries to pick up people who are passing orders
under a statutory provision which can be challenged
under the framework of said Act or under Article 226 of
the Constitution of India. But it cannot be done to take
undue advantage in a criminal court as if somebody is
determined to settle the scores. We have already
indicated that there has to be prior applications under
Section 154(1) and 154(3) while filing a petition under
Section 156(3). Both the aspects should be clearly spelt
out in the application and necessary documents to that
effect shall be filed. The warrant for giving a direction
that an the application under Section 156(3) be supported
by an affidavit so that the person making the application
should be conscious and also endeavour to see that no
false affidavit is made. It is because once an affidavit is
found to be false, he will be liable for prosecution in
accordance with law. This will deter him to casually
invoke the authority of the Magistrate under Section
156(3).
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.781 OF 2012
Mrs. Priyanka Srivastava V State of U.P. and Others
Bench: Dipak Misra, Prafulla C. Pant Dated;March 19, 2015.
Dipak Misra, J.
Citation; AIR2015SC1758, 2015CriLJ2396, 2015(2)Crimes179(SC), 2015(2)Crimes209(SC), (2015)6SCC287,
The present appeal projects and frescoes a scenarioCitation; AIR2015SC1758, 2015CriLJ2396, 2015(2)Crimes179(SC), 2015(2)Crimes209(SC), (2015)6SCC287,
which is not only disturbing but also has the potentiality
to create a stir compelling one to ponder in a perturbed
state how some unscrupulous, unprincipled and deviant
litigants can ingeniously and innovatively design in a
nonchalant manner to knock at the doors of the Court, as
if, it is a laboratory where multifarious experiments can
take place and such skillful persons can adroitly abuse
the process of the Court at their own will and desire by
painting a canvas of agony by assiduous assertions made
in the application though the real intention is to harass
the statutory authorities, without any remote remorse,
with the inventive design primarily to create a mental
pressure on the said officials as individuals, for they
would not like to be dragged to a court of law to face in
criminal cases, and further pressurize in such a fashion
so that financial institution which they represent would
ultimately be constrained to accept the request for
“one-time settlement” with the fond hope that the
obstinate defaulters who had borrowed money from it
would withdraw the cases instituted against them. The
facts, as we proceed to adumbrate, would graphically
reveal how such persons, pretentiously aggrieved but
potentially dangerous, adopt the self-convincing mastery
methods to achieve so. That is the sad and unfortunate
factual score forming the fulcrum of the case at hand,
and, we painfully recount.
2. The facts which need to be stated are that the
respondent No.3, namely, Prakash Kumar Bajaj, son of
Pradeep Kumar Bajaj, had availed a housing loan from
2CRL.A.781/12
the financial institution, namely, Punjab National Bank
Housing Finance Limited (PNBHFL) on 21st January,
2001, vide housing loan account No.IHL-583. The loan
was taken in the name of the respondent No.3 and his
wife, namely, Jyotsana Bajaj. As there was default in
consecutive payment of the installments, the loan account
was treated as a Non-Performing Asset (NPA) in
accordance with the guidelines framed by the Reserve
Bank of India. The authorities of the financial institution
issued notice to the borrowers under Section 13(2) of the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, (for short, 'the
SARFAESI Act') and in pursuance of the proceedings
undertaken in the said Act, the PNBHFL, on 5th June,
2007, submitted an application before the District
Magistrate, Varanasi, U.P. for taking appropriate action
under Section 13(4) of the SARFAESI Act.
3. At this juncture, the respondent No.3 preferred W.P.
No.44482 of 2007, which was dismissed by the High
Court on 14th September, 2007, with the observation that
it was open to the petitioner therein to file requisite
3CRL.A.781/12
objection and, thereafter, to take appropriate action as
envisaged under Section 17 of the SARFAESI Act. After
the dismissal of the writ petition with the aforesaid
observation, the respondent No.3, possibly nurturing the
idea of self-centric Solomon’s wisdom, filed a Criminal
Complaint Case No.1058 of 2008, under Section 200
Cr.P.C. against V.N. Sahay, Sandesh Tiwari and V.K.
Khanna, the then Vice-President, Assistant President and
the Managing Director respectively for offences punishable
under Sections 163, 193 and 506 of the Indian Penal
Code (IPC). It was alleged in the application that the said
accused persons had intentionally taken steps to cause
injury to him. The learned Magistrate vide order dated 4th
October, 2008, dismissed the criminal complaint and
declined to take cognizance after recording the statement
of the complainant under Section 200 Cr.P.C. and
examining the witnesses under Section 202 Cr.P.C.
4. Being grieved by the aforesaid order, the respondent
No.3 preferred a Revision Petition No.460 of 2008, which
was eventually heard by the learned Additional Sessions
Judge, Varanasi, U.P. The learned Additional Sessions
4CRL.A.781/12
Judge after adumbrating the facts and taking note of the
submissions of the revisionist, set aside the order dated
4
th October, 2008 and remanded the matter to the trial
Court with the direction that he shall hear the complaint
again and pass a cognizance order according to law on the
basis of merits according to the directions given in the
said order. Be it noted, the learned Additional Sessions
Judge heard the counsel for the respondent No.3 and the
learned counsel for the State but no notice was issued to
the accused persons therein. Ordinarily, we would not
have adverted to the same because that lis is the subject
matter in the appeal, but it has become imperative to do
only to highlight how these kind of litigations are being
dealt with and also to show the respondents had the
unwarranted enthusiasm to move the courts. The order
passed against the said accused persons at that time was
an adverse order inasmuch as the matter was remitted. It
was incumbent to hear the respondents though they had
not become accused persons. A three-Judge Bench in
Manharibhai Muljibhai Kakadia and Anr. v.
5CRL.A.781/12
Shaileshbhai Mohanbhai Patel and others1
has opined
that in a case arising out of a complaint petition, when
travels to the superior Court and an adverse order is
passed, an opportunity of hearing has to be given. The
relevant passages are reproduced hereunder:
46. .......If the Magistrate finds that there is no
sufficient ground for proceeding with the
complaint and dismisses the complaint under
Section 203 of the Code, the question is
whether a person accused of crime in the
complaint can claim right of hearing in a
revision application preferred by the
complainant against the order of the dismissal
of the complaint. Parliament being alive to the
legal position that the accused/suspects are
not entitled to be heard at any stage of the
proceedings until issuance of process under
Section 204, yet in Section 401(2) of the Code
provided that no order in exercise of the power
of the revision shall be made by the Sessions
Judge or the High Court, as the case may be,
to the prejudice of the accused or the other
person unless he had an opportunity of being
heard either personally or by pleader in his
own defence.
xxxxx xxxxx xxxxx
48. In a case where the complaint has been
dismissed by the Magistrate under Section 203
of the Code either at the stage of Section 200
itself or on completion of inquiry by the
Magistrate under Section 202 or on receipt of
the report from the police or from any person
1
(2012) 10 SCC 517
6CRL.A.781/12
to whom the direction was issued by the
Magistrate to investigate into the allegations in
the complaint, the effect of such dismissal is
termination of complaint proceedings. On a
plain reading of sub-section (2) of Section 401,
it cannot be said that the person against whom
the allegations of having committed the offence
have been made in the complaint and the
complaint has been dismissed by the
Magistrate under Section 203, has no right to
be heard because no process has been issued.
The dismissal of complaint by the Magistrate
under Section 203—although it is at
preliminary stage—nevertheless results in
termination of proceedings in a complaint
against the persons who are alleged to have
committed the crime. Once a challenge is laid
to such order at the instance of the
complainant in a revision petition before the
High Court or the Sessions Judge, by virtue of
Section 401(2) of the Code, the suspects get
the right of hearing before the Revisional Court
although such order was passed without their
participation. The right given to “accused” or
“the other person” under Section 401(2) of
being heard before the Revisional Court to
defend an order which operates in his favour
should not be confused with the proceedings
before a Magistrate under Sections 200, 202,
203 and 204. In the revision petition before the
High Court or the Sessions Judge at the
instance of the complainant challenging the
order of dismissal of complaint, one of the
things that could happen is reversal of the
order of the Magistrate and revival of the
complaint. It is in this view of the matter that
the accused or other person cannot be
deprived of hearing on the face of the express
provision contained in Section 401(2) of the
Code. The stage is not important whether it is
pre-process stage or post process stage.
7CRL.A.781/12
xxxxx xxxxx xxxxx
53. We are in complete agreement with the
view expressed by this Court in P.
Sundarrajan2, Raghu Raj Singh Rousha3 and
A.N. Santhanam4. We hold, as it must be, that
in a revision petition preferred by the
complainant before the High Court or the
Sessions Judge challenging an order of the
Magistrate dismissing the complaint under
Section 203 of the Code at the stage under
Section 200 or after following the process
contemplated under Section 202 of the Code,
the accused or a person who is suspected to
have committed the crime is entitled to hearing
by the Revisional Court. In other words, where
the complaint has been dismissed by the
Magistrate under Section 203 of the Code,
upon challenge to the legality of the said order
being laid by the complainant in a revision
petition before the High Court or the Sessions
Judge, the persons who are arraigned as
accused in the complaint have a right to be
heard in such revision petition. This is a plain
requirement of Section 401(2) of the Code. If
the Revisional Court overturns the order of the
Magistrate dismissing the complaint and the
complaint is restored to the file of the
Magistrate and it is sent back for fresh
consideration, the persons who are alleged in
the complaint to have committed the crime
have, however, no right to participate in the
proceedings nor are they entitled to any
hearing of any sort whatsoever by the
Magistrate until the consideration of the
matter by the Magistrate for issuance of
process.”
Though the present controversy is different, we have
8CRL.A.781/12
dealt with the said facet as we intend to emphasize how
the Courts have dealt with and addressed to such a
matter so that a borrower with vengeance could ultimately
exhibit his high-handedness.
5. As the narration further proceeds, after the remand,
the learned Magistrate vide order dated 13th July, 2009,
took cognizance and issued summons to V.N. Sahay,
Sandesh Tripathi and V.K. Khanna. The said accused
persons knocked at the doors of the High Court under
Section 482 Cr.P.C. and the High Court in Crl. Misc.
No.13628 of 2010, by order dated 27th May, 2013, ruled
thus:
“A perusal of the complaint filed by the
respondent no.2 also indicates that the issues
were with regard to the action of the bank
officers against respondent no.2 on the ground
of alleged malafide and as such an offence
under sections 166/500 I.P.C. was made out.
Both the sections are non cognizable and
bailable and triable by Magistrate of First
Class. For the foregoing reasons the 482
Petition deserves to be allowed and the
criminal complaint filed by the respondent
no.2 being Complaint Case No.1058 of 2009 is
liable to be quashed.
Accordingly the application under section 482
Cr.P.C. is allowed and the Criminal Complaint
Case No.1058 of 2009, Prakash Kumar Bajaj
9CRL.A.781/12
versus P.N.B. Housing Finance Ltd. And
others, pending in the Court of Additional
Chief Judicial Magistrate, Court No.2 Varanasi
is quashed.”
6. Presently, we are required to sit in the time machine
for a while. In the interregnum period the borrowers filed
an objection under Section 13(3A) of the SARFAESI Act.
Be it noted, as the objection was not dealt with, the
respondent No.3 preferred W.P. No.22254 of 2009, which
was disposed of on 5th May, 2009 by the High Court,
directing disposal of the same. Eventually, the objection
was rejected by the competent authority vide order dated
June 1, 2009. Being grieved by the aforesaid order of
rejection, the respondent No.3 filed Securitisation Appeal
No.5 of 2010, before the Debt Recovery Tribunal (DRT),
Allahabad, U.P., which was rejected vide order dated 23rd
November, 2012. The non-success before the DRT
impelled the borrowers to prefer an appeal before the
Debts Recovery Appellate Tribunal (DRAT), Allahabad,
U.P.
7. At this stage, it is apposite to state that the third
respondent, if we allow ourselves to say so, have possibly
10CRL.A.781/12
mastered how to create a sense of fear in the mind of the
officials who are compelled to face criminal cases. After
the High Court had quashed the earlier proceeding, the
third respondent, in October, 2011, filed another
application under Section 156(3) CrPC against V.N.
Sahay, Sandesh Tripathi and V.K. Khanna alleging
criminal conspiracy and forging of documents referring to
three post-dated cheques and eventually it was numbered
as Complaint Case No. 344/2011, which gave rise to FIR
No. 262 of 2011 under Sections 465, 467, 468, 471, 386,
506, 34 and 120B IPC. Being not satisfied with the same,
on 30.10.2011, he filed another application under Section
156(3) against the present appellants alleging that there
has been under-valuation of the property. It was
numbered as Complaint Case No. 396/2011 wherein the
Trial Magistrate directed the SHO to register FIR against
the present appellants. Pursuant to the said order, FIR
No. 298/2011 was registered.
8. At this juncture, it is imperative to state that the
third respondent made the officials agree to enter into one
time settlement. The said agreement was arrived at with
11CRL.A.781/12
the stipulation that he shall withdraw various cases filed
by him on acceptance of the one time settlement. As the
factual matrix would reveal, the third respondent did not
disclose about the initiation of the complaint cases no.
344/2011 and 396/2011. On 28.11.2011, the one time
settlement was acted upon and the third respondent
deposited Rs.15 lakhs.
9. At this stage, it is apt to mention that V.N. Sahay
and two others approached the High Court of Allahabad
in Writ (C) No. 17611/2013 wherein the learned Single
Judge heard the matter along with application under
Section 482 CrPC in Crl. Misc. No. 13628/2010. We have
already reproduced the relevant part of the order passed
therein. Be it noted, the writ petition has also been
disposed of by the High Court by stating thus:
“Heard Mr. Manish Trivedi, learned counsel for
the petitioner, Mr. Vivek Kumar Srivastava,
learned counsel appearing on behalf of
respondent no.3 and learned AGA.
It is submitted by learned AGA that in the
present case investigation has been completed
and final report has been submitted,
considering the same, this petition has become
infructuous.
12CRL.A.781/12
The interim order dated 2.12.2011 is hereby
vacated.
Accordingly, this petition is disposed of.”
10. At this juncture, we are impelled to look at the past
again. The respondent had preferred, as has been stated
before, an appeal before the DRAT. The said appeal was
numbered as Appeal No. 5 of 2013. In the said appeal,
the following order came to be passed:
“During the pendency of the said application, a
proposal was submitted by the borrower to
settle the claim for an amount of Rs.15.00
lacs. The said proposal was accepted by the
Bank by its letter dated 15.11.2011 and the
appellant also deposited the full amount, for
which the settlement was arrived at i.e.
Rs.15.00 lacs. Thereafter, the grievance of the
appellant was that since the full amount of the
settlement has been paid by the appellant,
therefore, the bank should be directed to
return the title deed, as the title deed was not
returned.
The Tribunal was of the view that since the
matter has been settled, therefore, the
securitization application was dismissed as
infructuous and the Tribunal did not pass any
order for return of the title deed. Therefore,
the appellant being aggrieved of the judgment
dated 23.11.2011 passed by the Tribunal has
filed the present appeal.
Learned counsel for the appellant submitted
that after when the full amount under the
settlement has been paid, the
13CRL.A.781/12
respondent-Bank was duty bound to return
the title deed, which has not been returned to
the appellant.
It is contended on behalf of the
respondent-Bank that the settlement was
accepted by letter dated 14.11.2011, wherein
the condition was mentioned that the
appellant shall withdraw the complaint case
which he has filed before the Criminal Court.
Learned counsel for the appellant submitted
that he has no objection to withdraw the
complaint case but the title deed must be
returned to the appellant.
The title deed shall be returned by the
respondent-Bank to the appellant within seven
days from today and thereafter, the appellant
shall move an application to withdraw the
Criminal Case No.1058/09 which is pending
before the Chief Judicial Magistrate, Varanasi.”
11. The labyrinth maladroitly created by the respondent
No.3 does not end here. It appears that he had the
indefatigable spirit to indulge himself in the abuse of the
process of the Court. The respondent No.3 had filed an
application under Section 156(3) Cr.P.C. before the
learned Additional Chief Judicial Magistrate on 30th
October, 2011, against the present appellants, who are
the Vice-President and the valuer respectively. In the
body of the petition, as we find in the paragraphs 19 and
14CRL.A.781/12
20, it has been stated thus:
“That the aforesaid case was referred to the
Deputy Inspector General of Police, Varanasi
through speed post but no proceeding had
been initiated till today in that regard.
That the aforesaid act done by the aforesaid
accused prima-facie comes in the ambit of
section 465, 467, 471, 386, 504, 34 & 120B
IPC and in this way cognizable offence is made
out and proved well.”
12. On the basis of the aforesaid application the learned
Additional Chief Judicial Magistrate, Varanasi, U.P.,
called for a report from the concerned police station and
received the information that no FIR had been lodged and
hence, no case was registered at the local police station.
Thereafter, the learned Additional Chief Judicial
Magistrate observed as follows:
“It has been stated clearly in the application by
the applicant that it is the statement of
applicant that he had already given 3
postdated cheques to the financial bank for
payment and despite the availability of the
postdated cheques in the financial society,
even a single share in the loan account has not
been got paid. The opposite parties
deliberately due to conspiracy and prejudice
against applicant have not deposited
previously mentioned postdated cheques for
payment and these people are doing a
conspiracy to grab the valuable property of the
applicant. Under a criminal conspiracy,
15CRL.A.781/12
illegally and on false and fabricated grounds a
petition has been filed before District Collector
(Finance & Revenue) Varanasi, which comes
under the ambit of cognizable offence. Keeping
in view the facts of the case, commission of
cognizable offence appears to be made out and
it shall be justifiable to get done the
investigation of the same by the police.”
After so stating it directed as follows:
“In the light of the application, SHO Bhelpur,
Varanasi is hereby directed to register the case
and investigate the same.”
13. On the basis of the aforesaid order, F.I.R. No.298 of
2011 was registered, which gave rise to case Crime
No.415 of 2011 for the offences punishable under
Sections 465, 467, and 471 I.P.C. Being dissatisfied with
the aforesaid order, the appellants moved the High Court
in Crl. Misc. No.24561 of 2011. The High Court in a
cryptic order opined that on a perusal of the F.I.R. it
cannot be said that no cognizable offence is made out.
Being of this view, it has declined to interfere with the
order. Hence, this appeal by special leave.
14. In course of hearing, learned counsel for the State of
U.P. has submitted that the investigating agency has
already submitted the final report on 21st November,
16CRL.A.781/12
2012. The said report reads as follows:
“Complainant in the present case has not
appeared before any of the investigators, even
after repeated summoning. And that the
action of Smt. Priyanka Srivastava has been
done as per her legal rights in 'good faith',
which is protected under Section 32 of the
SARFAESI Act, 2002. With the abovestated
investigations, the present report is
concluded.”
15. On a query being made, learned counsel for the State
would contend that the learned Magistrate has not passed
any order on the final report. Mr. Ajay Kumar, learned
counsel appearing for the appellants would submit that
the learned Magistrate has the option to accept the report
by rejecting the final form/final report under Section 190
Cr.P.C. and may proceed against the appellants or may
issue notice to the complainant, who is entitled to file a
protest petition and, thereafter, may proceed with the
matter and, therefore, this Court should address the
controversy on merits and quash the proceedings.
16. We have narrated the facts in detail as the present
case, as we find, exemplifies in enormous magnitude to
take recourse to Section 156(3) Cr.P.C., as if, it is a
routine procedure. That apart, the proceedings initiated
17CRL.A.781/12
and the action taken by the authorities under the
SARFAESI Act are assailable under the said Act before the
higher forum and if, a borrower is allowed to take
recourse to criminal law in the manner it has been taken
it, needs no special emphasis to state, has the inherent
potentiality to affect the marrows of economic health of
the nation. It is clearly noticeable that the statutory
remedies have cleverly been bypassed and prosecution
route has been undertaken for instilling fear amongst the
individual authorities compelling them to concede to the
request for one time settlement which the financial
institution possibly might not have acceded. That apart,
despite agreeing for withdrawal of the complaint, no steps
were taken in that regard at least to show the bonafide.
On the contrary, there is a contest with a perverse sadistic
attitude. Whether the complainant could have withdrawn
the prosecution or not, is another matter. Fact remains,
no efforts were made.
17. The learned Magistrate, as we find, while exercising
the power under Section 156(3) Cr.P.C. has narrated the
allegations and, thereafter, without any application of
18CRL.A.781/12
mind, has passed an order to register an FIR for the
offences mentioned in the application. The duty cast on
the learned Magistrate, while exercising power under
Section 156(3) Cr.P.C., cannot be marginalized. To
understand the real purport of the same, we think it apt
to reproduce the said provision:
“156. Police officer’s power to investigate
congnizable case. –(1) Any officer in charge of a
police station may, without the order of a
Magistrate, investigate any cognizable case
which a Court having jurisdiction over the
local area within the limits of such station
would have power to inquire into or try under
the provisions of Chapter XIII.
(2) No proceeding of a police officer in any such
case shall at any stage be called in question on
the ground that the case was one which such
officer was no empowered under this section to
investigate.
(3) Any Magistrate empowered under section
190 may order such an investigation as
above-mentioned.”
18. Dealing with the nature of power exercised by the
Magistrate under Section 156(3) of the CrPC, a
three-Judge Bench in Devarapalli Lakshminarayana
Reddy and others v. V. Narayana Reddy and others2
,
had to express thus:
2
(1976) 3 SCC 252
19CRL.A.781/12
“It may be noted further that an order made
under sub-section (3) of Section 156, is in the
nature of a peremptory reminder or intimation
to the police to exercise their plenary powers of
investigation under Section 156(1). Such an
investigation embraces the entire continuous
process which begins with the collection of
evidence under Section 156 and ends with a
report or chargesheet under Section 173.”
19. In Anil Kumar v. M.K. Aiyappa3
, the two-Judge
Bench had to say this:
“The scope of Section 156(3) CrPC came up for
consideration before this Court in several
cases. This Court in Maksud Saiyed [(2008) 5
SCC 668] examined the requirement of the
application of mind by the Magistrate before
exercising jurisdiction under Section 156(3)
and held that where jurisdiction is exercised
on a complaint filed in terms of Section 156(3)
or Section 200 CrPC, the Magistrate is
required to apply his mind, in such a case, the
Special Judge/Magistrate cannot refer the
matter under Section 156(3) against a public
servant without a valid sanction order. The
application of mind by the Magistrate should
be reflected in the order. The mere statement
that he has gone through the complaint,
documents and heard the complainant, as
such, as reflected in the order, will not be
sufficient. After going through the complaint,
documents and hearing the complainant, what
weighed with the Magistrate to order
investigation under Section 156(3) CrPC,
should be reflected in the order, though a
detailed expression of his views is neither
required nor warranted. We have already
extracted the order passed by the learned
3
(2013) 10 SCC 705
20CRL.A.781/12
Special Judge which, in our view, has stated
no reasons for ordering investigation.”
20. In Dilawar Singh v. State of Delhi4
, this Court
ruled thus:
“18. ...11. The clear position therefore is that
any Judicial Magistrate, before taking
cognizance of the offence, can order
investigation under Section 156(3) of the Code.
If he does so, he is not to examine the
complainant on oath because he was not
taking cognizance of any offence therein. For
the purpose of enabling the police to start
investigation it is open to the Magistrate to
direct the police to register an FIR. There is
nothing illegal in doing so. After all registration
of an FIR involves only the process of entering
the substance of the information relating to
the commission of the cognizable offence in a
book kept by the officer in charge of the police
station as indicated in Section 154 of the
Code. Even if a Magistrate does not say in so
many words while directing investigation
under Section 156(3) of the Code that an FIR
should be registered, it is the duty of the
officer in charge of the police station to register
the FIR regarding the cognizable offence
disclosed by the complainant because that
police officer could take further steps
contemplated in Chapter XII of the Code only
thereafter.”
21. In CREF Finance Ltd. v. Shree Shanthi Homes
(P) Ltd.5
, the Court while dealing with the power of
Magistrate taking cognizance of the offences, has
4
(2007) 12 SCC 496
5
(2005) 7 SCC 467
21CRL.A.781/12
opined that having considered the complaint, the
Magistrate may consider it appropriate to send the
complaint to the police for investigation under Section
156(3) of the Code of Criminal Procedure.
And again:
“When a Magistrate receives a complaint he is
not bound to take cognizance if the facts
alleged in the complaint disclose the
commission of an offence. The Magistrate has
discretion in the matter. If on a reading of the
complaint, he finds that the allegations therein
disclose a cognizable offence and the
forwarding of the complaint to the police for
investigation under Section 156(3) will be
conducive to justice and save the valuable time
of the Magistrate from being wasted in
enquiring into a matter which was primarily
the duty of the police to investigate, he will be
justified in adopting that course as an
alternative to taking cognizance of the offence
itself. As said earlier, in the case of a
complaint regarding the commission of
cognizable offence, the power under Section
156(3) can be invoked by the Magistrate before
he takes cognizance of the offence under
Section 190(1)(a). However, if he once takes
such cognizance and embarks upon the
procedure embodied in Chapter XV, he is not
competent to revert back to the pre-cognizance
stage and avail of Section 156(3).”
22. Recently, in Ramdev Food Products Private
Limited v. State of Gujarat6
, while dealing with the
6 Criminal Appeal No. 600 of 2007 decided on 16.03.2015
22CRL.A.781/12
exercise of power under Section 156(3) CrPC by the
learned Magistrate, a three-Judge Bench has held that:
“.... the direction under Section 156(3) is to be
issued, only after application of mind by the
Magistrate. When the Magistrate does not take
cognizance and does not find it necessary to
postpone instance of process and finds a case
made out to proceed forthwith, direction under
the said provision is issued. In other words,
where on account of credibility of information
available, or weighing the interest of justice it
is considered appropriate to straightaway
direct investigation, such a direction is issued.
Cases where Magistrate takes cognizance and
postpones issuance of process are cases where
the Magistrate has yet to determine “existence
of sufficient ground to proceed.”
23. At this stage, we may usefully refer to what the
Constitution Bench has to say in Lalita Kumari v. Govt.
of U.P.7
in this regard. The larger Bench had posed the
following two questions:-
“(i) Whether the immediate non-registration of
FIR leads to scope for manipulation by the
police which affects the right of the
victim/complainant to have a complaint
immediately investigated upon allegations
being made; and
(ii) Whether in cases where the
complaint/information does not clearly
disclose the commission of a cognizable
offence but the FIR is compulsorily registered
then does it infringe the rights of an accused.”
7
(2014) 2 SCC 1
23CRL.A.781/12
Answering the questions posed, the larger Bench
opined thus:
“49. Consequently, the condition that is sine
qua non for recording an FIR under Section
154 of the Code is that there must be
information and that information must
disclose a cognizable offence. If any
information disclosing a cognizable offence is
led before an officer in charge of the police
station satisfying the requirement of Section
154(1), the said police officer has no other
option except to enter the substance thereof
in the prescribed form, that is to say, to
register a case on the basis of such
information. The provision of Section 154 of
the Code is mandatory and the officer
concerned is duty-bound to register the case
on the basis of information disclosing a
cognizable offence. Thus, the plain words of
Section 154(1) of the Code have to be given
their literal meaning.
“Shall”
xxx xxx xxx xxx
72. It is thus unequivocally clear that
registration of FIR is mandatory and also
that it is to be recorded in the FIR book by
giving a unique annual number to each FIR
to enable strict tracking of each and every
registered FIR by the superior police officers
as well as by the competent court to which
copies of each FIR are required to be sent.
“Information”
xxx xxx xxx xxx
111. The Code gives power to the police to
close a matter both before and after
24CRL.A.781/12
investigation. A police officer can foreclose
an FIR before an investigation under Section
157 of the Code, if it appears to him that
there is no sufficient ground to investigate
the same. The section itself states that a
police officer can start investigation when he
has “reason to suspect the commission of an
offence”. Therefore, the requirements of
launching an investigation under Section
157 of the Code are higher than the
requirement under Section 154 of the Code.
The police officer can also, in a given case,
investigate the matter and then file a final
report under Section 173 of the Code seeking
closure of the matter. Therefore, the police is
not liable to launch an investigation in every
FIR which is mandatorily registered on
receiving information relating to commission
of a cognizable offence.
xxx xxx xxx xxx
115. Although, we, in unequivocal terms,
hold that Section 154 of the Code postulates
the mandatory registration of FIRs on receipt
of all cognizable offences, yet, there may be
instances where preliminary inquiry may be
required owing to the change in genesis and
novelty of crimes with the passage of time.
One such instance is in the case of
allegations relating to medical negligence on
the part of doctors. It will be unfair and
inequitable to prosecute a medical
professional only on the basis of the
allegations in the complaint.”
After so stating the constitution Bench proceeded to state
that where a preliminary enquiry is necessary, it is not for
25CRL.A.781/12
the purpose for verification or otherwise of the information
received but only to ascertain whether the information
reveals any cognizable offence. After laying down so, the
larger Bench proceeded to state:-
“120.6. As to what type and in which cases
preliminary inquiry is to be conducted will depend
on the facts and circumstances of each case. The
category of cases in which preliminary inquiry may
be made are as under:
(a) Matrimonial disputes/family disputes
(b) Commercial offences
(c) Medical negligence cases
(d) Corruption cases
(e) Cases where there is abnormal delay/laches in
initiating criminal prosecution, for example, over 3
months’ delay in reporting the matter without
satisfactorily explaining the reasons for delay.
The aforesaid are only illustrations and not
exhaustive of all conditions which may warrant
preliminary inquiry.
120.7. While ensuring and protecting the rights
of the accused and the complainant, a preliminary
inquiry should be made time-bound and in any case
it should not exceed 7 days. The fact of such delay
and the causes of it must be reflected in the General
Diary entry.”
We have referred to the aforesaid pronouncement for the
purpose that on certain circumstances the police is also
required to hold a preliminary enquiry whether any
cognizable offence is made out or not.
26CRL.A.781/12
24. Regard being had to the aforesaid enunciation of law,
it needs to be reiterated that the learned Magistrate has to
remain vigilant with regard to the allegations made and
the nature of allegations and not to issue directions
without proper application of mind. He has also to bear
in mind that sending the matter would be conducive to
justice and then he may pass the requisite order. The
present is a case where the accused persons are serving
in high positions in the bank. We are absolutely
conscious that the position does not matter, for nobody is
above law. But, the learned Magistrate should take note
of the allegations in entirety, the date of incident and
whether any cognizable case is remotely made out. It is
also to be noted that when a borrower of the financial
institution covered under the SARFAESI Act, invokes the
jurisdiction under Section 156(3) Cr.P.C. and also there is
a separate procedure under the Recovery of Debts due to
Banks and Financial Institutions Act, 1993, an attitude of
more care, caution and circumspection has to be adhered
to.
25. Issuing a direction stating “as per the application” to
27CRL.A.781/12
lodge an FIR creates a very unhealthy situation in the
society and also reflects the erroneous approach of the
learned Magistrate. It also encourages the unscrupulous
and unprincipled litigants, like the respondent no.3,
namely, Prakash Kumar Bajaj, to take adventurous steps
with courts to bring the financial institutions on their
knees. As the factual exposition would reveal, he had
prosecuted the earlier authorities and after the matter is
dealt with by the High Court in a writ petition recording a
settlement, he does not withdraw the criminal case and
waits for some kind of situation where he can take
vengeance as if he is the emperor of all he surveys. It is
interesting to note that during the tenure of the appellant
No.1, who is presently occupying the position of
Vice-President, neither the loan was taken, nor the default
was made, nor any action under the SARFAESI Act was
taken. However, the action under the SARFAESI Act was
taken on the second time at the instance of the present
appellant No.1. We are only stating about the devilish
design of the respondent No.3 to harass the appellants
with the sole intent to avoid the payment of loan. When a
28CRL.A.781/12
citizen avails a loan from a financial institution, it is his
obligation to pay back and not play truant or for that
matter play possum. As we have noticed, he has been
able to do such adventurous acts as he has the embedded
conviction that he will not be taken to task because an
application under Section 156(3) Cr.P.C. is a simple
application to the court for issue of a direction to the
investigating agency. We have been apprised that a
carbon copy of a document is filed to show the compliance
of Section 154(3), indicating it has been sent to the
Superintendent of police concerned.
26. At this stage it is seemly to state that power under
Section 156(3) warrants application of judicial mind. A
court of law is involved. It is not the police taking steps
at the stage of Section 154 of the code. A litigant at his
own whim cannot invoke the authority of the Magistrate.
A principled and really grieved citizen with clean hands
must have free access to invoke the said power. It
protects the citizens but when pervert litigations takes
this route to harass their fellows citizens, efforts are to be
made to scuttle and curb the same.
29CRL.A.781/12
27. In our considered opinion, a stage has come in this
country where Section 156(3) Cr.P.C. applications are to
be supported by an affidavit duly sworn by the applicant
who seeks the invocation of the jurisdiction of the
Magistrate. That apart, in an appropriate case, the
learned Magistrate would be well advised to verify the
truth and also can verify the veracity of the allegations.
This affidavit can make the applicant more responsible.
We are compelled to say so as such kind of applications
are being filed in a routine manner without taking any
responsibility whatsoever only to harass certain persons.
That apart, it becomes more disturbing and alarming
when one tries to pick up people who are passing orders
under a statutory provision which can be challenged
under the framework of said Act or under Article 226 of
the Constitution of India. But it cannot be done to take
undue advantage in a criminal court as if somebody is
determined to settle the scores. We have already
indicated that there has to be prior applications under
Section 154(1) and 154(3) while filing a petition under
Section 156(3). Both the aspects should be clearly spelt
30CRL.A.781/12
out in the application and necessary documents to that
effect shall be filed. The warrant for giving a direction
that an the application under Section 156(3) be supported
by an affidavit so that the person making the application
should be conscious and also endeavour to see that no
false affidavit is made. It is because once an affidavit is
found to be false, he will be liable for prosecution in
accordance with law. This will deter him to casually
invoke the authority of the Magistrate under Section
156(3). That apart, we have already stated that the
veracity of the same can also be verified by the learned
Magistrate, regard being had to the nature of allegations
of the case. We are compelled to say so as a number of
cases pertaining to fiscal sphere, matrimonial
dispute/family disputes, commercial offences, medical
negligence cases, corruption cases and the cases where
there is abnormal delay/laches in initiating criminal
prosecution, as are illustrated in Lalita Kumari are being
filed. That apart, the learned Magistrate would also be
aware of the delay in lodging of the FIR.
28. The present lis can be perceived from another angle.
31CRL.A.781/12
We are slightly surprised that the financial institution has
been compelled to settle the dispute and we are also
disposed to think that it has so happened because the
complaint cases were filed. Such a situation should not
happen.
29. At this juncture, we may fruitfully refer to Section 32
of the SARFAESI Act, which reads as follows :
“32. Protection of action taken in good faith.-
No suit, prosecution or other legal proceedings
shall lie against any secured creditor or any of
his officers or manager exercising any of the
rights of the secured creditor or borrower for
anything done or omitted to be done in good
faith under this Act.”
30. In the present case, we are obligated to say that
learned Magistrate should have kept himself alive to the
aforesaid provision before venturing into directing
registration of the FIR under Section 156(3) Cr.P.C. It is
because the Parliament in its wisdom has made such a
provision to protect the secured creditors or any of its
officers, and needles to emphasize, the legislative
mandate, has to be kept in mind.
32CRL.A.781/12
31. In view of the aforesaid analysis, we allow the appeal,
set aside the order passed by the High Court and quash
the registration of the FIR in case Crime No.298 of 2011,
registered with Police Station, Bhelupur, District
Varanasi, U.P.
32. A copy of the order passed by us be sent to the
learned Chief Justices of all the High Courts by the
Registry of this Court so that the High Courts would
circulate the same amongst the learned Sessions Judges
who, in turn, shall circulate it among the learned
Magistrates so that they can remain more vigilant and
diligent while exercising the power under Section 156(3)
Cr.P.C.
.......................J.
[Dipak Misra]
.......................J.
[Prafulla C. Pant]
New Delhi
March 19, 2015.
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