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2024 DIGILAW 31 (CAL)

Al Amin Garments Haat Pvt. Ltd. v. Jitendra Jain

2024-01-05

MOUSHUMI BHATTACHARYA

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JUDGMENT : Moushumi Bhattacharya, J. 1. The petitioner has taken out an application under section 340 of The Code of Criminal Procedure, 1973 for a preliminary enquiry into the alleged fraudulent and illegal acts of the respondents in connection with AP 124 of 2023. AP 124 of 2023 was filed under section 11(6) of The Arbitration and Conciliation Act, 1996 for appointment of arbitrator. 2. The only point which falls for adjudication is whether the respondents have a right to be heard in the proceedings. 3. Learned counsel appearing for the respondents urges, with considerable vehemence and industry that the proceedings under section 340 of the CrPC allows an opportunity of hearing to the proposed accused and places emphasis on the words used in the said provision. According to counsel, the word “inquiry” in section 340(1) contemplates intervention by the Court and hence envisages that the proposed accused be heard before an inquiry is ordered into the offence referred to in section 195(1)(b) of the CrPC. 4. Learned counsel appearing for the petitioner, on the other hand, relies on several decisions of the Supreme Court including that of Pritish vs. State of Maharashtra; (2002) 1 SCC 253 to contend that there is no scope of granting any opportunity of hearing to the proposed accused at the pre-referral stage. 5. 4. Learned counsel appearing for the petitioner, on the other hand, relies on several decisions of the Supreme Court including that of Pritish vs. State of Maharashtra; (2002) 1 SCC 253 to contend that there is no scope of granting any opportunity of hearing to the proposed accused at the pre-referral stage. 5. Before the Court considers the import of the decisions pronounced by the Supreme Court in respect of section 340 of the CrPC, the relevant part of the section should be extracted below: “340.(1) When upon an application made to it in this behalf or otherwise, any Court is of opinion that it is expedient in the interests of justice that an inquiry should be made into any offence referred to in clause (b) of sub-section (1) of section 195, which appears to have been committed in or in relation to a proceeding in that Court or, as the case may be, in respect of a document produced or given in evidence in a proceeding in that Court, such Court may, after such preliminary inquiry, if any, as it thinks necessary, - (a) record a finding to that effect; (b) make a complaint thereof in writing; (c) send it to a Magistrate of the first class having jurisdiction; (d) take sufficient security for the appearance for the accused before such Magistrate, or if the alleged offence is non-bailable and the Court thinks it necessary so to do, send the accused in custody to the Magistrate; and (e) bind over any person to appear and give evidence before such Magistrate.” 6. The Supreme Court comprehensively explained the implications of the provision in Pritish vs. State of Maharashtra (supra). The Supreme Court was unequivocally of the opinion that there is no statutory requirement to afford an opportunity of hearing to persons against who the Court might make a complaint and send it to the Magistrate for initiating prosecution proceedings. The primary reason for the opinion was that section 340 of the CrPC does not contemplate deciding the guilt or innocence of the party against who proceedings are to be taken before the Magistrate. At that stage the Court simply considers whether it is expedient in the interest of justice that an inquiry should be made into any offence affecting administration of justice. At that stage the Court simply considers whether it is expedient in the interest of justice that an inquiry should be made into any offence affecting administration of justice. The Supreme Court relied on M.S. Sheriff vs. State of Madras; AIR 1954 SC 397 where the Constitution Bench of the Supreme Court cautioned that no expression on the guilt or innocence of the persons should be made by the Court while passing an order under section 340 of the CrPC. 7. The other reasons expressed by the Supreme Court in Pritish are of equal relevance and are summarised below. 8. Section 340(1) essentially envisages formation of an opinion by the Court that it is expedient that an inquiry should be made in the interest of justice into an offence which appears to have been committed under section 195(1)(b) of the CrPC. The Court is empowered to hold a preliminary inquiry in order to form such opinion. It is therefore not mandatory that such preliminary inquiry should be held and the Court can form an opinion even without such preliminary inquiry. Second, it is also not mandatory that the Court should make a complaint even where the Court forms the opinion referred to in section 340(1). This is in view of the fact that the provision confers the power on the court to form an opinion. Forming an opinion by itself, might not result in the Court making a complaint but once the Court decides to do so, the Court should make a finding to the effect that it is expedient on the facts and in the interest of justice that the offence should be probed. 9. The Supreme Court in Pritish further opined that it is always open to the Court to conduct a preliminary inquiry to reach the finding as stated above, though, absence of any such preliminary inquiry would not vitiate a finding reached by the Court regarding its opinion. The Supreme Court concluded that the preliminary inquiry contemplated in section 340(1) is not for finding of guilt or innocence of the particular person but only for deciding whether it is expedient in the interest of justice to inquire into the offence which appears to have been committed. 10. The Supreme Court concluded that the preliminary inquiry contemplated in section 340(1) is not for finding of guilt or innocence of the particular person but only for deciding whether it is expedient in the interest of justice to inquire into the offence which appears to have been committed. 10. The ratio of Pritish is that the person against who a complaint is made has a legal right to be heard only when the Magistrate calls the accused to appear before him. The person concerned will thereafter have the right to participate in the pre-trial inquiry envisaged in section 239 of the CrPC and it is open to the accused to satisfy the Magistrate that the allegations against him are without basis and he is entitled to be discharged. 11. Besides the dictum of the Court in Pritish, it is important to consider the other decisions of the Supreme Court pronounced on the subject. 12. In State of Punjab vs. Jasbir Singh; (2020) 12 SCC 96 , the Supreme Court relied on the ratio in Pritish but referred the issue to a larger Bench in view of a subsequent decision of the Supreme Court in Sharad Pawar vs. Jagmohan Dalmiya; (2010) 15 SCC 290 . Jasbir Singh notes that the 3-Judge Bench in Sharad Pawar did not take note of the dictum in Pritish and proceeded to hold that the proposed accused should be given an opportunity of hearing before the Court directs a preliminary inquiry under section 340(1) of the CrPC. 13. The decision in Pritish was affirmed by the larger Bench, in reference, in State of Punjab vs. Jasbir Singh; 2022 SCC OnLine SC 1240 (decided on 15.9.2022). The larger Bench in Jasbir Singh relied on the Constitution Bench decision in Iqbal Singh Marwah vs. Meenakshi Marwah; (2005) 4 SCC 370 to hold that there is no question of opportunity of hearing being given to a proposed accused under section 340(1) of the CrPC. The Supreme Court further opined that the law enunciated by the Constitution Bench in Iqbal Singh Marwah was in line with the dictum in Pritish. The Supreme Court thus answered the reference formulated in Jasbir Singh (Pre reference) as to whether an opportunity of hearing should be given to the would-be accused before a complaint is made under section 195 of the CrPC, in the negative. 14. This is the law as it stands today. The Supreme Court thus answered the reference formulated in Jasbir Singh (Pre reference) as to whether an opportunity of hearing should be given to the would-be accused before a complaint is made under section 195 of the CrPC, in the negative. 14. This is the law as it stands today. In other words, a proposed accused does not have a right to be heard before the Court sends the complaint to the Magistrate for initiating prosecution proceedings under section 340 (1) of the CrPC. As stated above, section 340(1) does not wipe out the defence of the proposed accused or his/her right to participate in the proceedings before the Magistrate. The principles of natural justice are hence preserved in the proceedings before the Magistrate where the proposed accused has full opportunity to disprove the charges/allegations against him/her. 15. The dictum in Pritish was also followed by a Division Bench of this Court in Tarulata Mondal vs. State of West Bengal; 2013 SCC OnLine Cal 12913 where the Division Bench set out the relevant paragraphs from Pritish on the aspect of natural justice and was of the view that there is no violation thereof. 16. This Court is bound by the law laid down and is accordingly not inclined to depart from the said view in view of the law pronounced by the Supreme Court in Pritish and the answer given by the larger Bench to the reference in State of Punjab vs. Jasbir Singh, 17. State (NCT of Delhi) vs. Pankaj Chaudhary; (2019) 11 SCC 575 relied on behalf of the respondents, did not consider Pritish and was in any event pronounced before the 3-Judge Bench decision in Jasbir Singh. Anil Kumar Agarwal vs. State of Jharkhand; CRMP No. 2223 of 2021 cannot be taken into consideration or relied on for the same reasons, that is, for being contrary to the larger Bench decision in Jasbir Singh. 18. The above reasons are good grounds to hold that the respondents/proposed accused do not have a right of hearing at the stage of inquiry that is under section 340(1) of the CrPC. The Court accordingly proposes to hear the petitioner in the present proceeding and dispose of the same in accordance with the mandate of section 340(1) of the CrPC. The respondents do not have a right to be heard in this application. 19. The Court accordingly proposes to hear the petitioner in the present proceeding and dispose of the same in accordance with the mandate of section 340(1) of the CrPC. The respondents do not have a right to be heard in this application. 19. The petitioner shall be at liberty of mentioning the matter at an early date for hearing on merits. Urgent photostat certified copies of this judgment, if applied for, be supplied to the parties upon fulfillment of requisite formalities.