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2003 DIGILAW 1398 (MAD)

Devi Padmanabhan v. State

2003-09-04

V.KANAGARAJ

body2003
Judgment :- The petitioner, who is the first accused, has filed the above criminal original petition under Section 482 of the Code of Criminal Procedure praying to call for the records and quash the F.I.R. in Crime No.8 of 2003 on the file of the Inspector of Police, E.O.W.(Headquarters), Chennai. 2. The petitioner would allege that on a private complaint filed by one P.Venu, Personnel Manager of Amaravathi Finance and Investments, 30, Kutchery Road, Mylapore, Chennai-4 alleging commission of offences punishable under Sections 420 and 506(II) IPC on the file of the Court of XI Metropolitan Magistrate, Saidapet, Chennai-15 against the petitioner and her husband Padmanabhan, the said Court forwarded the same to the respondent under Section 156(3) Cr.P.C. with an endorsement to register the case and investigate into; that on receipt of the same, the respondent has registered the FIR in his Cr.No.8/2003, dated 6.6.2003 and started investigating into, in which the petitioner and her husband moved this Court for anticipatory bail in Crl.O.P.No.18616 of 2003, which was dismissed by this Court on 25.6.2003. 3. The petitioner would further submit that the private complaint for civil dispute per se is ill-motivated; that the highlight of the complaint is that the petitioner and her husband have borrowed a sum of Rs.1 crore on promise that they would create a charge on the property situate at Ramanathan Street, T.Nagar, Madras; that the complainant being a leading non-banking finance company, without verification of the title deeds of the property and without even looking into the same and the relevant documents relating to the transaction, would not have parted with such huge amounts; that the E.O.W. being an organisation specially created to investigate into matters relating to Non-Banking Finance Companies, who had accepted deposits from the general public under pretext of deceiving the general public, no action could be initiated against the petitioner since no depositor has come forward to lodge the complaint and in fact the complaint should have been referred only to the Central Crime Branch, Egmore, for their investigation and report; that the complainant did not file any complaint before any police station and that the Magistrate, without even verifying the same, has forwarded the private complaint to the respondent under Section 156(3) Cr.P.C. On such grounds, the petitioners would pray for the relief extracted supra. 4. 4. During arguments, the learned counsel appearing on behalf of the petitioners would not only cite an order passed by this Court reported in 2003 (2) CTC 270 (M/s.PASUMAI IRRIGATION LIMITED vs. M/s.MANSI FINANCE (CHENNAI) LIMITED) but also two other judgments, the first one delivered by the Karnataka High Court reported in 1999 Criminal Law Journal 53 (STATE OF KARNATAKA vs. THAMMAIAH AND OTHERS) and the other judgment of the Honourable Apex Court reported in (2001) 3 SCC 333 (CENTRAL BUREAU OF INVESTIGATION vs. STATE OF RAJASTHAN AND ANOTHER). 5. So far as the first judgment cited above, passed by this Court is concerned, the learned counsel would lay emphasis on the aspect dealt with by this Court to the effect that the Magistrates, cannot, so easily, usurp the jurisdiction of the civil Court and that of the powers of the police, immediately after a private complaint is filed before it and refer the same under Section 156(3) Cr.P.C. to any investigating agency for registering the case and investigating into the complaint. 6. In the second judgment cited on the part of the petitioners, reported in 1999 Crl.L.J.53, a single Judge of the Karnataka High Court, on a petition filed by the Superintendent of Police, COD, Bangalore, questioning the order passed by the Magistrate in directing the petitioners to investigate and report the matter under Section 156(3) Cr.P.C., has held: "It is also reported that large number of Courts are directing the COD without there being any reason whatsoever to investigate under S.156(3) Cr.P.C. It is also noticed that the offences for which the Magistrate direct them to investigate by the COD also are not the offences which come under the scheme to be specially investigated. Ordinary cases wherein the dispute between two individuals or group of individuals if referred to the COD and if they are to conduct the investigation, their valuable service and time would be lost. Under those circumstances, as rightly pointed out by the learned S.P.P. the order passed by the learned Magistrate directing the COD to investigate in this particular case is beyond its jurisdiction is liable to be set aside." 7. Under those circumstances, as rightly pointed out by the learned S.P.P. the order passed by the learned Magistrate directing the COD to investigate in this particular case is beyond its jurisdiction is liable to be set aside." 7. In the third judgment cited above, reported in (2001) 3 SCC 333 , while considering the question, `whether the Magistrate can direct the CBI to conduct investigation in exercise of his powers under Section 156(3) Cr.P.C.', the Honourable Apex Court has held: "The magisterial power cannot be stretched under Section 156(3) beyond directing the officer in charge of police station to conduct the investigation." On such arguments, the learned counsel appearing on behalf of the petitioner would pray for the relief extracted supra. 8. On the contrary, the learned Government Advocate representing the respondent would submit that based on the complaint forwarded by the learned Magistrate under Section 156(3) Cr.P.C., the respondent, in compliance of the directions of the Magistrate, has rightly registered the case in his Cr.No.8/2003 for the offences punishable under Sections 420 and 506(II) IPC and started investigating into the same. Regarding the judgments cited on behalf of the petitioner, the learned Government Advocate would assail them saying that none of the judgments is applicable to the facts of the case in hand since under different circumstances, the judgments cited first and second above have been delivered and so far as the third judgment relating to the Honourable Apex Court is concerned, it has only discredited the Magistrate directing the superior police officer other than the jurisdictional officer to conduct the investigation and such investigation would be deemed to be one conducted by the Officer in charge of the police station and it is only meant to supplement the powers of the officer in charge of the police station and therefore no illegality is attached in the Magistrate directing the very jurisdictional officer, the respondent having jurisdiction to take up the investigation and deal with the same since the offence is one falling under the purview of the respondent. On such arguments, the learned Government Advocate would seek to dismiss the above criminal original petition. 9. In consideration of the facts pleaded, having regard to the materials placed on record and upon hearing the learned counsel for the petitioner and the learned Government Advocate contra, what could be assessed by this Court is that the defacto-complainant viz. On such arguments, the learned Government Advocate would seek to dismiss the above criminal original petition. 9. In consideration of the facts pleaded, having regard to the materials placed on record and upon hearing the learned counsel for the petitioner and the learned Government Advocate contra, what could be assessed by this Court is that the defacto-complainant viz. Amaravathi Finance and Investments, said to be a non-banking finance institution, lending financial assistance to several prospective parties under various heads, has filed a private complaint before the Court of XI Metropolitan Magistrate, Saidapet, Chennai on allegations that taking into confidence of the false representation made on the part of the accused, they have parted with huge sums of money to the extent of Rs.1 crore without even emphasizing the production of the original documents on the collateral security offered and on verification, they came to know that the properties were not at all belonging to the accused, thus both the accused have made false promises to cheat the complainant and thus have requested the learned Magistrate to forward the complaint to the Superintendent of Police, EOW-II, Madras under Section 156(3) Cr.P.C. and the learned Magistrate, on receipt of the said complaint, has forwarded the same to the respondent, based on which the respondent has registered the case for the offences punishable under Sections 420 and 506(II) IPC against the petitioner and her husband and have taken up the case for investigation. 10. In such a situation, the first accused in the said case has come forward to file the above criminal original petition praying to quash the above proceeding on grounds extracted supra particularly on the ground that the Magistrate should not have either received or forwarded the complaint without the complainant approaching the jurisdiction police. They would also cite the above three judgments, the first one delivered by this Court itself, the second one by a learned single Judge of the Kerala High Court and the last one by the Honourable Apex Court, the relevant portions of which have been extracted while discussing the arguments of the learned counsel for the petitioner. 11. They would also cite the above three judgments, the first one delivered by this Court itself, the second one by a learned single Judge of the Kerala High Court and the last one by the Honourable Apex Court, the relevant portions of which have been extracted while discussing the arguments of the learned counsel for the petitioner. 11. So far as the first order passed by this Court reported in 2003(2) CTC 270 is concerned, it must be clarified that the attitude of the complainant therein in filing the private complaint before the Court without recoursing to file the complaint of such sort before the jurisdiction police, was discredited therein since, in the normal course, the complainant should have filed the complaint before the jurisdiction police and only if the police either refuse to receive the complaint or on receipt of the complaint and registering a case referred the same on grounds known to law, the complainant if aggrieved, could resort to file a private complaint before the jurisdiction Magistrate, testifying the stand taken by the police either refusing to register the case or on registering the case referring the same filing a referred charge sheet. 12. What this Court observed in the said order is that such an attitude or procedure followed in directly approaching the Magistrate on a private complaint without resorting to the jurisdiction police is improper since bypassing the jurisdiction Police who have got every right to entertain the complaint or register the case and investigate into the same need not have to be routed through the Magistrate without any reason offered on the part of the complainant to have resorted to the Magistrate's Court praying to refer the same to the Police under Section 156(3) Cr.P.C. in which this Court never held that entertaining such complaints by the Magistrate is either illegal or in excess of its jurisdiction. It is ascertained that in the general parlance, there could be no such restrictions imposed by law restraining the Magistrate from entertaining any private complaint filed under Section 200 Cr.P.C. direct. 13. It is ascertained that in the general parlance, there could be no such restrictions imposed by law restraining the Magistrate from entertaining any private complaint filed under Section 200 Cr.P.C. direct. 13. What this Court emphasizes is that in adopting such a procedure, bypassing the regular procedure prescribed by law, it would only give a wrong signal that the police are put under such pressure by the Magistrate in forwarding the complaints under Section 156(3) Cr.P.C, since once such complaints are forwarded, the police have to carry out the instructions of the Magistrate wherein the independence of the police are often curtailed and sidelined but at any cost, such practice cannot be held either illegal or irregular or even acting in excess of the jurisdiction of the Magistrates and such a procedure adopted could only be termed improper. For adopting such improper procedure particularly without assigning proper reasons and setting at naught the powers of the police to entertain such complaints, at no stretch of imagination it would become erroneous or irregular nor would it warrant quashing of the FIR as it has been resorted to on the part of the petitioner/accused. 14. So far as the second judgment of the learned single Judge of the Karnataka High Court is concerned, this Court, even though is of the similar thinking in condemning the attitude of the complainants in bypassing the regular procedure of lodging the complaints before the police in spite of it being a case of such nature, and directly filing the case before the Magistrate as a private complaint, still, this Court is not in agreement with the Karnataka High Court holding that the order passed by the Magistrate directing the police to investigate under Section 156(3) Cr.P.C. is 'beyond its jurisdiction and the same is liable to be set aside.' Though an irregular procedure is adopted by the Magistrate, the same would not lead to the conclusion holding that the same is either beyond the jurisdiction of the Magistrate or would the same become liable to be set aside since such procedural irregularity is a remedial one and there is no such restriction imposed on a Magistrate by law. But for practice and procedure, they are advised to exercise utmost restraint in admitting such complaints and to avoid entertaining the same normally unless under exceptional circumstances, for reasons to be recorded in writing. 15. But for practice and procedure, they are advised to exercise utmost restraint in admitting such complaints and to avoid entertaining the same normally unless under exceptional circumstances, for reasons to be recorded in writing. 15. So far as it is concerned with the third judgment by the Honourable Apex Court, the approach of the Honourable Apex Court is entirely on a different footing wherein the Magistrate has directed a superior police officer or a special establishment viz. CBI, wherein it has been held that the Magisterial power cannot be stretched beyond directing the officer in charge of a police station to conduct the investigation whereas in the given case since the Magistrate has directed only the respondent over whom the Magistrate has jurisdiction, the facts of the case decided by the Honourable Apex Court do not apply to the facts of the case in hand and hence this Court is not in a position to apply the said proposition to the facts of the case in hand. 16. Again coming to the facts of the case in hand, the transaction that the complainant had with the accused since being purely a civil transaction, they should be resorted only to file a suit before a civil Court having jurisdiction to entertain the same for the recovery of the sum lent in favour of the accused based on such materials such as the hypothecation of properties or the collateral securities or the guarantee obtained from the lonee in proof of their case. But, since they failed in their duties in getting proper security, to cover up their follies, giving a criminal coating for the civil transaction either taking shelter under Section 406 or 420 IPC, as though in spite of their diligence exercised, they have been cheated playing fraud on them, which is beyond their control or capacity, they have lodged the criminal complaint against the accused, so as to make use of the criminal Court and the Police to initiate prosecution with the view to create fear psychosis in the minds of the lonees keeping them under the threat of arrest and detention and ultimately with conviction and sentence thereby collecting the money lent on a civil transaction often times making use of the Magistrates and the Police as their collecting agents. Some of the Magistrates and Police are also falling prey in the evil net spread by the financiers wherein the net result will be erosion of the values of the institutions such as the judiciary and the police establishments and therefore it is high time that the Magistrates and the Police were cautioned against such a cunning and crooked move made by the financiers. 17. Yet another aspect that requires attention and discussion is the Managers of the financial institutions, whether the private or public, colluding with undeserving persons on illegal terms with the view to obtain kickbacks or percentage in freely releasing lumpsums of money in their favour without even observing the basic norms in lending such money thus betraying their own financial institutions for promoting their personal ends without either emphasizing or receiving proper guarantee or hypothecation of property security while lending such huge amounts, as it has been done in the case in hand wherein both the loaner and the lonee would be committing criminality as it is evident in the case in hand. The defacto-complainant officials, with the dishonest intention of entering into the criminal nexus with the petitioner/accused herein and without even observing the basic norms of obtaining proper and enforceable security, have thrown more than a crore of rupees at the feet of the accused thus not only betraying their own institution but also exposing themselves for criminal prosecution along with the accused in which event, the Managers of such financial institutions in releasing such lumpsums knowingly in favour of undeserving persons without proper security or safeguard for the recovery of the same as one which has happened in the case in hand in the whole of such operation, the ultimate loser is the magisterial institution and the police force. Having committed all such illegalities, knowingly and for personal gains, acting hand-in-glove with the loanees, those who are occupying responsible positions in the financial institutions for the release of the funds as loans in favour of parties like the accused in the case in hand, the complainants commit no less offence than the accused and they equally become liable to be prosecuted and punished. 18. 18. In the above circumstances, it could only be decided that the officials of the defacto-complainant, who are responsible for releasing the loan amount in favour of the accused have connived with the accused for their personal gains and acting hand-in-glove with each other, betraying the trust and confidence entrusted with them by the institution and the general public thus all of them jointly indulging in such manipulations, fraud and cheating of the defacto-complainant institution in setting at naught the regular safeguards and safety measures provided for lending and recovery of the sums transacted. Having done all such activities, the officials responsible for the commitments of the defacto-complainant company have also attempted to burden the police officials and the Court in their scheme of collecting the money back giving a criminal colour for their money lending business as though it is none of their business to get all such materials necessary to be obtained from the borrower thus forcing the police officials and the criminal courts to act as their collecting agents, often making use of Sections 406 and 420 IPC, forgetting the fact that they are at the bottom of the criminality, without whom, in the scheme of things, perpetration of criminal act, in the manner alleged herein, is an impossibility. 19. In such circumstances, this Court is of the firm view that the net of prosecution has to be spread still wider so as to cover up the criminal acts perpetrated on the part of of the officials of the defacto-complainant also, who were responsible for lending the said amount of more than a crore of rupees in favour of the present accused in the case without proper security obtained, as discussed supra, and therefore it is only desirable to issue further direction to the respondent Police and hence the following order: In result, (i)the above criminal original petition for quash, since being bereft of merit, is dismissed. (ii)The Inspector General of Police, Economic Offences Wing (Headquarters) Chennai is directed to withdraw the case registered in Cr.No.8/2003 from the file of the respondent and entrust the same with a responsible Officer of independent stature and proven ability and integrity to investigate into not only the complaint as given on the part of the defacto-complainant but also against all the officials of the defacto-complainant, who were responsible for releasing the sum of Rs.1 crore in favour of the accused, deliberately flouting the norms and procedures to be adopted in lending of such money, on bogus and false records, enlisting all of them as accused and investigate into the acts of conspiracy, breach of trust and cheating and expedite the investigation and file the final report at the earliest in the manner required under law. Consequently, Crl.M.P.No.6397 of 2003 is also dismissed.