Tag Archives: INVESTIGATION

Hamant Yashwant Dhage Vs. State of Maharashtra and Others [SC 2016 FEBRUARY]

KEYWORDS:-INVESTIGATION TO BE COMPLETED WITHIN TIME FRAME MANNER -DIRECTION BY MAGISTRATE-

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  • Registration of an F.I.R. involves only the process of recording the substance of information relating to commission of any cognizable offence in a book kept by the officer incharge of the concerned police station.
  • The police should conduct a thorough investigation and complete the same within a reasonable time period such as six months and submit its final views to the learned Magistrate through a proper report.

ACTS:- SECTION 163(3) CR.P.C

DATED:-February 10, 2016

SUPREME COURT OF INDIA

Hamant Yashwant Dhage Vs. State of Maharashtra and Others

[Criminal Appeal No. 110 of 2016 arising out of Special Leave Petition (CRL.) No. 3251 of 2012]

O R D E R

SHIVA KIRTI SINGH, J.

1. We have heard learned counsel for the parties at some length.

2. Leave granted.

3. Though the matter has remained pending for long, fortunately the core issue involved for our consideration is a very simple one.

4. The appellant was respondent in two Criminal Appeals bearing Numbers 766 and 767 of 2010 arising out of a common judgment of the High Court of Bombay dated September 8, 2009 in CRL.W.P. No. 2482 of 2008.

5. This Court disposed of both the appeals vide order dated April 12, 2010. It did not approve the action of High Court in entertaining writ petitions for change of investigating officer. The relevant parts of that order read as follows :-

“We are of the opinion that if the High Courts entertain such writ petitions, then they will be flooded with such writ petitions and will not be able to do any other work except dealing with such writ petitions. Hence, we have held that the complainant must avail of his alternate remedy to approach the concerned Magistrate under Section 156(3), Cr.P.C. and if he does so, the Magistrate will ensure, if prima facie he is satisfied, registration of the first information report and also ensure a proper investigation in the matter, and he can also monitor the investigation.

In view of the settled position in Sakiri Vasu’s (supra), the impugned judgment of the High Court cannot be sustained and is hereby set aside. The concerned Magistrate is directed to ensure proper investigation into the alleged offence under Section 156(3), Cr.P.C. and if he deems it necessary he can also recommend to the S.S.P./S.P. concerned change of the investigation officer, so that a proper investigation is done.

The Magistrate can also monitor the investigation, though he cannot himself investigate (as investigation is the job of the police. Parties may produce any material they wish before the concerned Magistrate. The learned Magistrate shall be uninfluenced by any observation in the impugned order of the High court. The appeals are allowed in the above terms. In view of the aforesaid order, no orders need be passed on the application for intervention and it is disposed of accordingly.”

6. The appellant, in the capacity of complainant, approached the learned Judicial Magistrate F.C. Court No.2, Pune who took notice of this Court’s order and issued several directions in RCC No. 0402459/2008 as is evident from its order dated February 17, 2011, including relevant directions to the investigating officer. But unfortunately the learned Judicial Magistrate came to a wrong conclusion that in the absence of any specific direction of this Court, the prayer of the complainant for registration of F.I.R. had to be rejected. The complainant then approached the High Court of Bombay through Criminal Writ Petition No. 3009 of 2011 which was disposed of by the impugned order dated February 13, 2012. The High Court declined to issue a direction for registering an F.I.R. by taking the view that it was open for the petitioner to seek clarification/modification of the order from the apex Court.

7. Mr. Ram Jethmalani, learned senior counsel appearing on behalf of the appellant argued with vigor that investigation into a serious case has been unnecessarily delayed at the instance of vested interests and hence this Court should now take a strong view and in the light of earlier order dated April 12, 2010, the police should be directed to treat the pending case as a police case in view of implications arising from Section 156(3) of the Criminal Procedure Code (in short ‘the Code’).

He further submitted that without wasting much time, the police should conduct a thorough investigation and complete the same within a reasonable time period such as six months and submit its final views to the learned Magistrate through a proper report.

8. Mr. P. Chidambaram, learned senior counsel appearing for private respondents did not oppose the aforesaid prayer. In fact, according to his submissions, the police could be asked to complete the investigation even in a shorter span of time and submit its final views to the Magistrate without wasting time on the formality of registration of F.I.R.

9. Mr. Arvind Sawant, learned senior counsel appearing on behalf of the State of Maharashtra has drawn our attention to copies of various reports submitted by the investigating officer. He expressed his concurrence with the view that police may be directed to submit its final opinion in the matter through an appropriate report within a reasonable time.

10. In view of the aforesaid broad consensus amongst the counsel for the various parties, it is not necessary for us to go deeper into the relevant issue of law as to whether the earlier order of this Court dated April 12,2010 warranted registering of F.I.R. by the police before commencing investigation. But we would like to only indicate in brief the law on this subject expressly stated by this Court in the case of Mohd. Yousuf versus Afaq Jahan (Smt.) and another, (2006) 1 SCC 627.

This Court explained that registration of an F.I.R. involves only the process of recording the substance of information relating to commission of any cognizable offence in a book kept by the officer incharge of the concerned police station.

In paragraph 11 of the aforementioned case, the law was further elucidated by pointing out that to enable the police to start investigation, it is open to the Magistrate to direct the police to register an F.I.R. and even where a Magistrate does not do so in explicit words but directs for investigation under Section 156(3) of the Code, the police should register an F.I.R. Because Section 156 falls within chapter XII of the Code which deals with powers of the police officers to investigate cognizable offences, the police officer concerned would always be in a better position to take further steps contemplated in Chapter XII once F.I.R. is registered in respect of the concerned cognizable offence.

11. In our considered view, the same was the import of this Court’s order passed on April 12, 2010. In the light of the said earlier order; the legal position noticed above and the stand of the parties, we have no difficulty in directing the concerned Magistrate and the police officer to rectify their mistake by ensuring registration of an appropriate F.I.R. The delay in lodging of such F.I.R. occurring after April 12, 2010 shall not have any effect on the investigation already carried out by the investigating officer(s). We also direct the police to complete the investigation fairly and in accordance with law at an early date, preferably within six months. On receipt of appropriate report from the police on conclusion of investigation, the learned Magistrate will deal with the matter strictly in accordance with law on the basis of materials available on record without being influenced by orders passed by different Courts.

12. The appeal is allowed to the aforesaid extent.

 (M.Y. EQBAL)

 (SHIVA KIRTI SINGH)

New Delhi,

February 10, 2016

Virender Prasad Singh vs Rajesh Bhardwaj & Ors [SC 2010 AUGUST]

KEYWORDS: Re- Investigation-Further investigation

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  • ‘Further investigation’ and `reinvestigation’ stand on different footing. It may be that in a given situation a superior Court in exercise of its Constitutional power, namely, under Articles 226 and 32 of the Constitution of India could direct a “State” to get an offence investigated and/or further investigated by a different agency. Direction of a reinvestigation, however, being forbidden in law, no superior Court would ordinarily issue such a direction.
  • Once the charge sheet was filed, ordinarily it could only be the power of the Court to decide upon its correctness or otherwise.

ACTS:-  Ss. 173(8), 156 and 158 OF Cr.P. C

DATE : 16 August, 2010

Bench: V.S. Sirpurkar, Cyriac Joseph

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1526 OF 2010
(Arising out of SLP (Crl.) 4979 of 2010)

Virender Prasad Singh Versus Rajesh Bhardwaj & Ors. 

J U D G M E N T
V.S. SIRPURKAR, J.

1. Leave granted.

2. An extremely unusual order passed by the High Court has fallen for consideration in this appeal which has been filed on behalf of the appellant/complainant Virender Prasad Singh. The said order was passed on the basis of a petition filed by the respondent No. 1/accused Rajesh Bhardwaj who is facing the charges of very serious offences like provided under Sections 302, 201 and 120 B of the Indian Penal Code (hereinafter referred to as “IPC” for short). By the impugned order, the learned Judge of the High Court has issued certain directions, whereby he has directed the re-examination of the completed investigation by an officer of the rank of Director General of Police (DGP). An extremely unusual course has been taken, whereby the counsel for the respondent No. 1/accused, who had filed the petition under Section 482 before the High Court, was asked to give a proposal of three names of the police officers of the DGP rank for examining the records of the completed investigation, wherein even the charge sheet was already filed. Similar choice seems to have been given even to the counsel for the appellant/informant to suggest some names. The appellant/informant (respondent before the High Court) did not choose to give any name, with the result that the High Court went on to select one Mr. Manoj Nath, an IPS of 1973 Batch for assistance in the matter. The High Court observed:-

“This Court requests Mr. Manoj Nath to examine all the records of the case in detail and submit his report to this Court preferably within a period of one month with his clear opinion as to (i) whether investigation of the case is complete from all angles and case is fit to be tried on the basis of materials and report placed on record by the Investigating Officer only or (ii) whether there are some loopholes and lacunae in the investigation which necessitates further or fresh investigation of the case and if necessary by a more experienced and specialized agency, and/or (iii) what further steps, if any, are required to be taken in the case in the ends of justice, so that the guilty may not escape and the innocent may not suffer due to laches on the part of officers of the State. For consideration of Mr. Nath, parties are directed to make available the documents and materials which they have placed on record in the form of a properly indexed paper book within two weeks. This Court expects from Mr. Nath that he will not get swayed away by any opinion of any officer or agency which may be available on record and shall completely ignore the pleadings of the parties. He will examine the documents and evidence of the witnesses available on record and form his independent opinion in the matter. If necessary, under the authority of this Court, he may requisition any other documents and material connected with the case, in original or in the form of its carbon copy, from any other source or authority and upon his requisition, the same shall be made available to him by all concerned, default of which shall be treated as contempt of this Court.”

In the last paragraph of its order, the High Court held:-

“Till 21st June, 2010, the Court concerned shall not take any further steps in the proceeding arising out of Arrah Rail GRP Case No. 73 of 2007.”

The concerned criminal case was initiated by a First Information Report registered on 6.12.2007. It is an admitted position that the investigation had been completed and the police was going to submit the charge sheet dated 18.6.2009, but before that, the mother of the respondent No. 1/accused filed Crl. WJC No. 394 of 2009 before the High Court. In this petition, the prayer was for re-investigation of the matter by another agency. Eventually, the mother of the respondent No. 1/accused died and the respondent No. 1/accused was substituted for her, and it is only on that basis that the order has been passed.

3. The First Information Report refers to the incident which took place on 30.11.2007, according to which at 10 p.m. on that day, the accused went to the house of the deceased Sonu, the daughter of the appellant/complainant and left with the deceased on his motorcycle in presence of the witnesses. Since the deceased did not return home, the family members started searching for both. It has come on record that subsequently at about 12.30 a.m., the deceased Sonu had talked to her mother’s sister Dr. Anita and informed her that she was with the accused and would come back after getting married with him. On the very next day i.e. on 1.12.2007, at 7.15 a.m., the family members of the deceased were informed by the Railway Police that the dead body of the girl is lying on the side of the Railway track at Karisath Railway Station and her Mobile set bearing No. 9304915589 was also lying there. The complainant’s brother Dr. Sanjeev reached the Railway Station and identified the body of the deceased. The deceased had injuries on her head and a portion of her leg was cut. Inquest Panchnama was executed by the Railway Police and the dead body was sent for postmortem. At this time, the complainant/father of the deceased was out of station. After he returned home, he was informed about the deceased having been taken by the respondent No. 1/accused at night on 30.11.2007. On 6.12.2007, a written complaint was filed. It was disclosed in the said complaint that the deceased was in love with Rajesh Bhardwaj, (respondent No. 1/accused) and wanted to get married with him and was persuading him for the last six months for marriage; However, the accused wanted to get rid of her, as he was having an affair with some other girl and it was due to this reason that the accused committed the murder of the deceased and threw her dead body near the Railway track at Karisath Railway Station, with the intention to create a false impression that the deceased had died in an accident. The Railway Police registered the case as GRP Case No. 73 of 2007 for offences punishable under Sections 364, 302, 201 and 120B IPC. An application for orders under Section 438 of the Criminal Procedure Code (Cr.P.C.) was moved by the respondent No. 1/accused before the Sessions Court, Arrah, which was dismissed by the Court vide order dated 18.3.2008. Needless to mention that the respondent No. 1/accused was not in the custody of the police till then. He has not been arrested even till date. Be that as it may, on finding that the accused was absconding, a proclamation under Section 82 Cr.P.C. was issued on 20.3.2008 by the Judicial Magistrate. It was also pasted on the residence of the respondent No. 1/accused on 27.3.2008. The respondent No. 1/accused, after about four months i.e. on 1.7.2008, moved a petition before the High Court for the same relief under Section 438, which was registered as Criminal Misc. No. 33158 of 2008. That was dismissed by the High Court vide order dated 1.7.2008. The respondent No. 1/accused did not stop there and moved to this Court by way of a Special Leave Petition (Crl.) No. 5140 of 2008. It came before this Court on 28.7.2008 and this Court dismissed the same. However, it was observed that:-

“If the petitioner surrender before the concerned Court and move for bail, the Court would do well to dispose of the application on the day it is presented.”

Needless to mention that the respondent No. 1/accused never surrendered. On 6.4.2009, one more petition came to be filed before the High Court being Cr. WJC No. 352 of 2008, wherein the High Court was pleased to direct the Magistrate to dispose of the objection petition filed by the complainant after hearing both the parties and it was directed that till then the issuance of process of attachment under Section 83 Cr.P.C. would remain stayed. Very strangely, in this order, the High Court observed:-

“the parents of the accused, would endeavour and do all within their prowess to prevail upon and persuade, their son Rajesh Bhardwaj to surrender before the court of law as his anticipatory bail has been rejected up to the Hon’ble Apex Court.”

4. On 15.5.2009, another petition being Crl. WJC No. 394 of 2009 came to be filed before the High Court by the mother of the accused. On that date, the investigation was in progress, but the final report had not been submitted by the police. It was expressed in this petition that the investigation was being influenced from the complainant’s side and there was a prayer for direction to the State Government to get the case investigated by an independent investigating agency such as Central Bureau of Investigation. On 18.6.2009, police came to the conclusion that the offences alleged against the accused were committed by him and, therefore, the charge sheet came to be filed for the offences punishable under Sections 302, 201 and 120 B IPC.

5. Needless to mention that the respondent No. 1/accused was still not arrested nor did he ever bother to appear before the Magistrate.

6. On 25.6.2009, after the charge sheet was filed, the father of the accused moved an application before the learned Judicial Magistrate, Arrah, saying that he did not have faith in the said Court and wanted to move a petition for transfer of this case before the District Judge, Arrah, and, therefore, the proceedings of the case be stayed. All this was probably done as the Magistrate had already initiated the proceedings under Sections 82 and 83 Cr.P.C., finding that the accused was absconding. The Magistrate took the view that the father of the accused had no locus standi to file the said application and also came to the conclusion that there appeared to be good reasons for proceeding against the accused. The Magistrate, therefore, took cognizance of the offences. Then again, for some inexplicable reasons, nothing happened for five months and again on 10.11.2009, an application was moved before the Sessions Judge, Bhojpur, Arrah for an order under Section 438 Cr.P.C. for anticipatory bail. The learned Sessions Judge noticed that the respondent No. 1/accused was already asked by this Court to surrender before the court below and move the bail application. It was also noted that the respondent No. 1/accused thereafter never bothered to appear though more than one year’s time had elapsed. On that reasoning, the application was dismissed. Undaunted by this dismissal, the respondent No. 1/accused moved another application being Crl. Misc. Application No. 41823 of 2009 before the High Court on 21.12.2009, i.e. after more than one month of the dismissal of the earlier bail application. It was contended before the High Court that the charge sheet was filed only for the offences punishable under Section 306 IPC and not under Sections 302, 201 and 120 B IPC. A very novel statement was made that his father’s kidney had failed and that the accused was going to donate the kidney and he should be granted provisional anticipatory bail. What flabbergasts us is that on this broad plea, the High Court granted eight months’ provisional anticipatory bail to the respondent No. 1/accused. Very strangely, all this was on the backdrop of the rejection of all the applications made by the accused under Section 438 Cr.P.C. before all the Courts including this Court. Again, to say that we are surprised by this order, would be an under-statement. We also did not understand as to why eight months’ time was required by the accused and granted by the High Court for donating the kidney. The respondent No. 1/accused again moved an application on 13.1.2010, stating that there was a typing error in the order dated 21.12.2009 passed by the High Court where he was wrongly described as Rakesh Bhardwaj instead of Rajesh Bhardwaj. It was also submitted that the charge sheet was filed under Sections 302, 201 and 120 B IPC and not under Section 306 IPC as was represented to the High Court. The matter then pended for another four months and came for hearing only on 4.5.2010. However, by that time, Dr. Vijay Laxmi, the mother of the respondent No. 1/accused had already expired. After her death, the respondent No. 1/accused was substituted in her place. It was during the course of arguments on Misc. Application No. 41823 of 2009 that the subject of the investigation not being properly done, cropped up, and it was urged that the matter should be re-investigated, though it was informed to the Court that the charge sheet was already filed about eight months prior to this date and the matter was also committed to the Court of Sessions for trial. The High Court ultimately passed the impugned order. The case was then fixed for hearing before the High Court on 21.6.2010 as the first case in the list. However, the trial has been stayed and the High Court has gone to the extent of selecting a new investigating officer.

7. Shri U.U. Lalit, learned Senior Counsel appearing on behalf of the appellant/complainant pointed out that this case is nothing, but travesty of criminal justice and it amounts to total abuse of the process of law. The learned Senior Counsel pointed out that though an offence punishable under Section 302 was registered as back as on 6.12.2007, still even after two and half years, the respondent No. 1/accused has not been arrested. The learned Senior Counsel pointed out that even now, the period of eight months which would ordinarily have ended in August, is extended by the High Court by one month. The learned Senior Counsel pointed out that there was no justification, whatsoever, to find out any fault in the investigation and indeed the order of the High Court is wholly silent on the aspect of necessity of transferring the investigation or to do a de novo investigation. According to the learned Senior Counsel, the reasons, if any given in the order of the High Court, are wholly irrelevant. The learned Senior Counsel suggested that very unusual and disturbing orders have been passed by the High Court in this case, such as granting the provisional bail for eight months on the spacious ground that the accused had to donate his kidney to his father. According to the learned Senior Counsel, the sole objective on the part of the accused has been to hoodwink the process of law to avoid his arrest.

8. As against this, Shri P.S. Mishra and Shri A. Sharan, learned Senior Counsel appearing on behalf of the respondents supported the order of the High Court and contended that the whole investigation was bad and tainted in this case, since the investigating officers were influenced by the informant who was a senior officer in Railways, as also by order of a Minister in the Cabinet of Bihar Government. The learned Senior Counsel appearing on behalf of the respondents stated that there was nothing wrong in ordering the investigation by other agency even after the charge sheet was filed and for this proposition, the learned Senior Counsel heavily relied on the decision in Rubabbuddin Sheikh v. State of Gujarat & Ors. [2010 (2) SCC 200].

9. It is on the backdrop of these rival contentions that it has to be seen that whether the impugned order is justified or not.

10. The basic contention of Shri Lalit, learned Senior Counsel appearing on behalf of the appellant is that there is a total absence of reasons in the impugned order of the High Court whereby the High Court has directed the change of investigating agency. The learned Senior Counsel pointed out that nothing has been shown either from the charge sheet which is already filed against the accused or from any other circumstance which justified the change of the investigating agency.

11. A glance at the impugned order suggests that the criticism is quite justified. The Learned Single Judge referred to the report of the Superintendent of Police dated 27.3.2008 wherein it was allegedly found that the investigation was not properly done and it required to be further investigated by the investigating officer from the angles reported in the supervision report. A letter dated 29.4.2008 by the IG of Police to the Additional DG is also referred to wherein it was suggested that the father of the deceased had raised objections to the supervision report of the SP, Railways. Lastly, the Learned Judge has referred to the supervision report of the Dy. SP,CID dated 04.06.2008 wherein it was allegedly mentioned that the investigation was lacking on some counts and this was probably on account of the fact that the investigation was influenced by the father-in-law of the informant. The Learned Judge has also referred to the further argument that there could have been no motive on the part of the accused to murder the girl who was in love with him. The circumstance is also referred to that father of the accused who was a Senior Advocate practicing in the same Court had also consented to the said marriage between the accused and the deceased. The Learned Judge has also taken stock of the argument that the girl herself had written a letter expressing that she apprehended danger from her family members, meaning the family members of the informant. We must, however, express that the Learned Judge has not given any findings on these arguments. The Learned Judge has not referred to the arguments on behalf of the informant and has expressed that there was a counter affidavit on behalf of the informant.

12. A very strange course thereafter seems to have been taken by the Court (in view of the voluminous documents produced on record by both the parties). The Court observed:-

“this Court considers it appropriate to take assistance by getting the matter examined by a senior police official of the rank of DGP to put the controversy, as to whether proper investigation has been done in the case or not, at rest. Therefore, this Court suggested to each of the Learned Counsel for the parties to propose three names of DGP rank officers of the State for this Court to extend request to anyone of them to assist this Court by examining all the documents and records connected with the case and submit his view to this Court for consideration.”

13. We are extremely surprised by this course undertaken. Firstly, we don’t know on what basis would the parties have suggested the names of the police officers of the DGP rank. Secondly, we also don’t understand as to in what manner would the opinion expressed by any such officer have been relevant in the decision as to whether the investigation was proper or not. It was the task of the Court and it was the Court who would have decided the question of the fairness of the investigation. The High Court proceeded, though this course was not acceptable to the complainant’s party, and considered the arguments on behalf of the complainant. Unfortunately, we don’t see any findings recorded or any active consideration of the questions raised by the informant/ complainant. It was suggested by the appellant/complainant that there was another supervision report of the SP dated 30.4.2009 which supported the filing of the charge sheet and it was in pursuance of that report that the charge sheet came to be filed. The complainant had also urged that the so- called earlier supervision report dated 27.3.2008 was a concocted document. The learned Senior Counsel appearing on behalf of the appellant/complainant challenged the genuineness of the document and contended that it was fabricated. The complainant went to the extent of saying that the father of the accused who was a Senior Advocate of the Court was trying to influence the investigation and in fact even the report of the Forensic Science Laboratory regarding the handwriting and the genuineness of the letter of the deceased was not genuine. Ultimately, it was urged before the High Court that at the stage, particularly, after the charge sheet was already filed, the High Court would not be justified in interfering under Section 482, Cr.P.C. The only reason that we find for the unusual course that the High Court has taken is that there was no supervision report at the instance of the DIG of Police or Inspector General, Railway or DGP. The High Court has recorded a finding:-

“thus, it is clear that the case has been supervised till now only by the officers up to the rank of SP and none else. Even the said report of the CID is also by an officer below the rank of SP (CID).”

14. Thus, the High Court went only on the consideration that there was no supervision report of a particular level of DIG, IG or DGP of Police.

15. It is only on the basis of that reason that the High Court wanted to get the assistance of DGP level police officer to advise it on the correctness or otherwise of the investigation. The High Court went on to record:-

“however, at this stage, in view of the submissions advanced by Mr. Madhup on behalf of the informant, this Court is all the more convinced that, to put the controversy at rest once for all, matter should be examined by any officer of the rank of DGP so that this Court may get assistance from an experienced senior police officer of the highest rank to come to some conclusion with regard to merits of this application, if at all it is required to be done at the final stage of hearing.”

It is then that the High Court went on to select one Manoj Nath and gave him the task of forming his opinion in respect of:-

“(i) whether investigation of the case is complete from all angles and the case is to be tried on the basis of materials and report placed on record by the investigating officer only or;

(ii) whether there are some loopholes and lacunae in the investigation which necessitates further or fresh investigation of the case and if necessary by a more experienced and specialized agency, and/or;

(iii) what further steps, if any, are required to be taken in the case in the ends of justice, so that the guilty may not escape and the innocent may not suffer due to laches on the part of the officers of the State.” We really fail to understand as to under what provision the High Court acted, more particularly, when the charge sheet has already been filed. We are not on the question of the High Court seeking opinion of the DGP. In our opinion, such a course was not necessary unless the High Court had examined the charge sheet which was filed and recorded its findings that the investigation was not properly conducted or it required further investigation under Section 173 (8), Cr.P.C. The High Court has not even looked into the charge sheet nor has it examined the same.

16. It is also extremely surprising that the respondent No. 1/accused should have moved the High Court instead of moving the Sessions Judge before whom the matter was pending after all cognizance was taken by the Magistrate on the basis of the charge sheet. Thereafter he also proceeded to commit the matter for trial by the Sessions Judge and the matter was pending before the Sessions Judge. Under such circumstance, we completely fail to understand the propriety of the accused moving the High Court, firstly through his mother and secondly himself, more particularly, under Section 482, Cr.P.C. instead of going before Sessions Judge where the prosecution was pending and claiming further investigation under Section 173(8) Cr.P.C.

17. The High Court has not even considered the question of its own jurisdiction in the matter by conveniently observing that it is a matter which is to be considered at the stage of final hearing of the case. Therefore, it is clear that the High Court has not applied its mind also and had pushed the matter up to 21.6.2010 for receiving the opinion from the DGP. In our opinion, all this was not permissible nor was it warranted.

18. The High Court should have seen through the incessant efforts on the part of the respondent No. 1/accused to stall the proceedings one way or the other and to avoid arrest. It was way back in 2008 that the anticipatory bail application was rejected by this Court and yet the accused has remained outside without being arrested. Again the investigation against him is complete, the charge sheet has been filed for offence committed by him, and still he has managed to remain out. In fact, the lack of bona fides on the part of the accused should have put the High Court on guard. A Section 482 application on the plea that the investigation is not proper at the instance of the accused who does not choose to even appear before the Sessions Judge before whom the matter is pending, should immediately have put the High Court on guard before entertaining the petition which has no bona fides whatsoever. Be that as it may, we desist from saying anything about the quality of investigation, necessity of further investigation or the necessity of the further investigation at the hands of some other agency, particularly, in view of the fact that the charge sheet has already been filed in this matter and at least nothing was shown before us or before the High Court suggesting that there was a necessity of any further investigation, additional investigation or investigation by some other agency. Merely, because there appeared to be no supervision of the DIG level or IG level officer, the High court could not have simply called for the opinion of DGP without recording any finding on any justification. We do not see any justification whatsoever nor was anything shown to us. We will, therefore, not go into that question, but the stance of the High Court in issuing direction not to take any further step in the proceedings arising out of Arrah Rail G.R.P. Case No. 73/2007 till 21.6.2010 is wholly unwarranted.

19. Heavy reliance was placed on Rubabbuddin Sheikh v. State of Gujarat & Ors. [2010 (2) SCC 200]. However, we do not find any factual similarity. That was a case where the extreme step was taken by this Court, particularly, in view of the fact that the police officers who were investigating officers, themselves came under the cloud because of the allegations against them. Such is not the position here. This is apart from the fact that factually we do not see any reason why the extreme step is required to be taken in this case even after the charge sheet has been filed.

20. This Court had taken that unusual course in Rubabbuddin Sheikh’s case (cited supra), in the words of the Court:-

“`in the facts and circumstances of the present case and to do complete justice in the matter and to instill confidence in the public mind.”

Before this course was undertaken, the Court had found out factual discrepancies apparent on the face in the eight Action Taken Reports and the charge sheet. It was also noted that the crime was committed by the police personnel themselves while investigation conducted was not at all satisfactory. We do not find any such circumstance in the present case. We may also refer to the observations made in another ruling reported as Mithabhai Pashabhai Patel & Anr. V. State of Gujarat [2009 (6) SCC 332]. In paragraph 13 of the said decision, this Court has observed:-

“it is beyond any cavil that `further investigation’ and `reinvestigation’ stand on different footing. It may be that in a given situation a superior Court in exercise of its Constitutional power, namely, under Articles 226 and 32 of the Constitution of India could direct a “State” to get an offence investigated and/or further investigated by a different agency. Direction of a reinvestigation, however, being forbidden in law, no superior Court would ordinarily issue such a direction.”

21. The Court further referred a decision in Ramachandran v. R. Udhayakumar [2008 (5) SCC 413] and observed therein:-

“at this juncture it would be necessary to take note of Section 173 of the Code. From a plain reading of the above section it is evident that even after completion of investigation under sub-section (2) of Section 173 of the Code, the police has right to further investigate under sub-section (8), but not fresh investigation or re-investigation.”

22. The plea raised by the accused herein was not for further investigation under Section 173 (8) but for re- investigation by some other agency. In the circumstances of this case, the accused had not justified his plea at all for re-investigation or fresh investigation by another agency. On its own, the High Court did not go into that exercise to decide as to whether the investigation was required to be done by any other agency. It required help of DGP level officer and his opinion to decide whether the earlier investigation was done properly or not. We are afraid that was not the task. To decide so was the task of the Court alone and no opinion could have been sought for, particularly, in the circumstances of this case. Nothing seems to have been established which would justify calling for such opinion. However, we are not going into that question as we have already stated earlier. Once the charge sheet was filed, ordinarily it could only be the power of the Court to decide upon its correctness or otherwise.

23. We are not at all impressed by the Section 482 application firstly filed by the mother of the respondent No. 1/accused and then by the respondent No. 1/accused himself. We do not see any reason why the High Court should have entertained such application at all, particularly, in view of the complete lack of bona fides on the part of the respondent No. 1/accused. That application was, therefore, liable to be dismissed straightaway. Since technically the matter is still pending before the High Court, we only issue a direction to the High Court to dismiss the same. The impugned order of the High Court is set aside and, therefore, this appeal succeeds. The Sessions Judge before whom the matter is pending shall proceed with it in accordance with law.

 [V.S. Sirpurkar]

[Cyriac Joseph]

August 16, 2010;

 

Investigation of Crime [rules under Criminal Court Rules and order Madhya Pradesh]

CHAPTER 4

Investigation of Crime

1. Information of Crime

66. Reports submitted under Section 157 of the Code should be carefully and promptly scrutinized by the Magistrate to whom they are submitted. Scrutiny will not only permit him to decide whether action under Section 159 of the Code is desirable but will also, if he is a Sub-Divisional Magistrate, keep him in touch with the police administration and the state of crime generally in his sub-division and thus facilitate the exercise of his general responsibilities as an assistant to the District Magistrate.

67. Sections 154 and 155 of the Code require the recording of reports of crimes. These reports, usually referred to as first information reports, are of considerable value, particularly at the trial, and magistrates should bear in mind the importance of examining them. The information is the basis of the case, and whether true or false it usually represents what the informant intended to be his case at the time. In view of the tendency to improve upon original statements of fact, to strengthen the case as it proceeds and sometimes to add others to the person originally named as the offender it is of great importance to know what was said in the first instance.

2. Case diary

68. In all cognizable offences investigated the proceedings subsequent to the recording of the information and the despatch of the intimation report are recorded in a special diary called the case-diary. A police officer investigating a non-cognizable offence under the orders of a Magistrate will not ordinarily write a case-diary unless specially ordered to do so by the District Magistrate or District Superintendent of Police.

69. Under Section 172 (2) of the Code any Criminal Court may send for the police diary of a case under enquiry or trial before it and may use it for the purpose laid down in that Section. Entries in the diary are not evidence in the case but they may be of considerable value in indicating the names of persons whose evidence may be material, and the nature of questions which should be put to witnesses for the purpose of eliciting their full knowledge and for doing real justice in the case. Bearing in mind the observation in Chapter 5, Rule 118 the Courts will realize the great importance of examining those diaries. It is often of great importance to trace the steps leading to a confession or to the recovery and identification of stolen property or of the implement with which a particular offence has been committed and to be able to elucidate such matter by suitable questions to the witnesses.

70. It must be remembered that the case-diary is a privileged document and is protected by the provisions of Section 172 of the Code. When not in actual use the case-diary should be returned to the police officer in charge of the case. Handing over the complete police diary to the counsel for the defence is contrary to law and must not occur.

71. The privilege referred to in the preceding rules does not apply to statements recorded under Section 161 of the Code. Normally these do not form part of the case-diary but are separate documents attached to the case diary. If for any reason they are included in the case-diary their mere inclusion will not deprive the accused of any rights he has under Section 162 of the Code. The Courts must carefully judge whether an entry in the case-diary is or is not in fact a statement recorded under Section 161 of the Code.

72. (1) When a statement recorded under Section 161 of the Code is used in the manner indicated in Section 162 of the Code, care should be taken to see that the statement is properly proved.(2) The method of proving such a statement is for the accused to mark in the copy of the case-diary furnished to him the passage which has been specifically put to a witness in order to contradict him and then to obtain the formal evidence of the writer of the diary that the passage marked is a true extract from the statement recorded in the original case-diary, which he will have at the time with him for purposes of comparison.

3. Confessions

73. (1) The recording of a confession under Section 164 of the Code is a matter which requires the utmost care. In many cases a confession is the mainspring of the prosecution case. The Courts are vigilant in seeing that a confession is relevant under Section 24 of the Indian Evidence Act, and consequently any defect in the procedure of recording a confession giving rise to any suspicion as to its relevancy may be fatal to a case and may lead to considerable waste of public money and the time of officers engaged in the investigation, prosecution and trial of the case. A perusal of any standard commentary on the Indian Evidence Act or the Code will indicate both the care with which the Courts scrutinize the circumstances in which a confession was recorded and the defects in procedure such scrutiny often reveals. The wording of Section 24 of the Indian Evidence Act is wide and should be carefully studied.

It is sufficient to make a confession irrelevant if it is made because of coercion on inducement proceeding from a person in authority sufficient to give grounds which appear to the accused reasonable for supposing that he would gain an advantage. The frequency with which confessions are retracted on the ground that they were not free and voluntary renders it essential that a confession be recorded in circumstances which prevent any suggestion that the accused was under the influence of any person interested in obtaining the confession.

(2) The instructions given below, if carefully followed, will normally provide material for a decision whether a confession was in fact free and voluntary. But the Magistrate may take such further precautions as he considers necessary to permit him conscientiously to sign the memorandum referred to in Section 164 of the Code.

In particular the special form prescribed for recording confessions (Schedule V, No. 189) reproduced at the end of this sub-rule should be used carefully and conscientiously and the Magistrate should not consider himself necessarily restricted to the questions printed therein.While however the Magistrate is bound to use the utmost care in the matter he should be careful not to discourage the making of a confession which the accused genuinely desires to make.

“Form of proceedings preliminary to recording a confession

(The Code of Criminal Procedure, 1898, Section 164)

Present Shri……………………………First class magistrate,…………………………… The Second Class, empowered under Section 164 accused person…………… son of……….. is produced at…… a.m./p.m. this……. day of….. 20……, by police officer…………….The following police papers, showing that the accused was arrested at………. a.m./p.m. on the……… day of……. at……… tahsil……… miles from…….., where the Court is sitting, are produced and read:-…………………………….To give the accused time to think over his confession away from all police influence, and to keep the police who arrested him or investigated the case away from this proceeding, I order:-

First Class,

Magistrate…………………………………………………..

Second Class, empowered under Section 164.

The accused……. being further present at…… a.m./p.m. this……. day of……,20……, in the custody of….. the following preliminary questions are put to him to ascertain whether he is acting voluntarily in offering to make a confession:-

Q.

Do you understand that I am a Magistrate and that what you say may be used against you? A

Q.

Do you understand that you need say nothing unless you are freely wish to? A

Q.

Do you wish to say anything? A

Q.

Where did the police first question you? What day was it and what time? A

Q.

Where did the police arrest you? What day was it and what time? A
The Magistrate shall ascertain by further questioning whether the accused is acting voluntarily and whether the confession which he is about to make is the result of any
(A) Threat,
(B) Inducement, or
(C) Promise you?
from a police officer or other person in authority which would render it irrelevant under Section 24 of the Indian Evidence Act. The questions and replies thereto shall be recorded below:-

Printed in red ink in the Form

This statement was made in my presence and hearing. The record contains a full and true account of the questions put to the accused and of the answers given by him. It was read over to him and admitted by him to be correct.

Dated the…… 20….

Magistrate ….. Class.

Being satisfied for the reasons stated below that the confession if recorded will not be/be irrelevant under the provisions of Section 24, Indian Evidence Act, I proceed to record it. I drop these proceedings and direct that the accused be disposed of as follow:-Reasons-

First Class,

Magistrate………………………………………………..

Second Class, empowered under Section 164.

Dated the…………20,

Confession of Accused

(The Code of Criminal Procedure, 1898 Section 164)

………………

…………versus…………..

……………..

Accused……………. son of…………….. age………. occupation………… residence…………….

[The record should be by questioning and answer.]

Note – If the confession extends beyond this sheet the above certificate and the matter required by paragraph (4) of it must be recorded at the end.

Printed in red ink in the Form

Note – See Certificate overleaf.

(Reverse)

Certified that the accused began his confession recorded above at………… O, clock and ended it at…….. O, clock.Instruction to the Magistrate:-

1. The Magistrate shall read over the confession as recorded to the accused.
2. The Magistrate shall obtain the signature of the accused at the foot of the confession.
3. The Magistrate shall also put his own signature at the foot of the confession.
4. The Magistrate shall refer to sub-section (3) of Section 164, Criminal Procedure Code, and if satisfied, make a memorandum in the terms stated in sub-section (3) at the foot of the confession.

Printed in red ink in the Form

5. Any other facts which go to show that the confession was made voluntarily may be recorded by the Magistrate at foot of the confession.
6. The Magistrate shall give below a brief description of the custody in which the accused was kept while recording the confession.

First Class,

Magistrate………………………………………………..

Second Class, empowered under Section 164.

74. Under Section 164 of the Code a Magistrate of the first class and a Magistrate of the second class who is empowered by the Provincial Government in this behalf has power to record a statement or confession made to him in the course of an investigation or at any time afterwards before the commencement of the enquiry or trial. Therefore when an accused person alleged to be desirous of making a confession is produced before a Magistrate who is not a Magistrate of the first class or a Magistrate of the second class specially empowered by the Provincial Government in this behalf the Magistrate shall forward the accused to the nearest Magistrate who is competent to record such statement or confession. The escort required for the journey shall not include any of the police who have already taken part in the investigation.

75. An accused person should not be examined immediately he is produced for the recording of his confession. He should be given a reasonable time, extending when possible to a few hours, for reflection in circumstances in which he will not be influenced by the police before his statement is recorded. If during this period he is detained in jail, the superintendent of the jail should be requested to keep him apart from other persons but not in solitary confinement.

76. (1) For the proper recording of a confession it is essential under sub-section (3) of Section 164 of the Code that the accused shall be questioned with a view to ascertaining whether he is making the confession voluntarily. The Magistrate should invariably ask him when and where he was first questioned by the police, when and where he was arrested, and the length of time he has been in the custody of the police. It is not sufficient to accept the date and hour of formal arrest as entered in the police papers. The questions so put and the answers thereto must be recorded before the confession is taken down.(2) Magistrates recording confessions are forbidden to send for or examine the statement, if any, made to the police by the person making the confession.

77. If any allegation of ill-treatment is made the Magistrate shall then and there examine the body of the accused, if the accused consents to such examination, to see whether there are any marks of injuries as alleged and shall record the result of his examination. If the accused refuses to permit such examination the refusal and the reason therefor shall be recorded. If the Magistrate finds that there is reason to suspect that the allegation is well founded he shall at once record the complaint, cause the accused to be examined by a medical officer, if possible, and if he has no power to take up the necessary enquiry himself, forward him to the Magistrate having jurisdiction.

78. Before recording a confession the Magistrate shall explain to the person making it that he is not bound to make a confession, and that if he does so it will be taken down and may thereafter be used as evidence against him.

79. Before recording the confession the Magistrate must determine upon the answers to the preliminary questions and upon the result of any examination of the person of the accused, whether there is a reason to believe that the confession, if recorded, will be irrelevant on any of the grounds set forth in Section 24 of the Indian Evidence Act. If he decides that the confession will be inadmissible on any of the said grounds, he should state his reasons for such decision and should refuse to record any statement offered by the accused.

80. Confessions should ordinarily be recorded in open Court and during Court hours; provided that if the Magistrate is satisfied, for reasons to be recorded by him in writing, that the recording of a confession in open Court would be detrimental to the public interest or be liable to defeat the ends of justice, the confession may be recorded elsewhere.

81. It is not desirable that any police officer should be present when a confession is being recorded except such as may be necessary to secure the safe custody of the accused person when, in the Magistrate’s opinion, the duty cannot safely be left to other attendants. In any case none of the police officers who have been concerned in his arrest or in the investigation of the case should be allowed to be present or to be within sight or hearing of the accused.

82. The Magistrate shall endeavour to record the confession in as much details as possible in order to afford material from which its genuineness can be judged, and to test whether it is freely made or is the outcome of suggestion. Anything in the nature of a cross-examination of the accused must be avoided, but it is important that without any attempt to heckle or to entrap the accused the Magistrate should record the statement with as much detail as possible. The more detailed a confession is, the greater are the chances of correctly estimating its value. Every question and every answer shall be recorded in full.

83. When a confession is recorded it shall be read over to the accused who made it and shall be signed by him and also by the recording Magistrate. The Magistrate shall then make, at the foot of the record of the confession, the memorandum required by sub-section (3) of Section 164 of the Code. The memorandum shall, whenever practicable, be in the language in which the accused is examined. To this memorandum shall be added a statement, by the Magistrate in his own hand, of the grounds on which he believes that the confession is voluntarily made. Form No. 189 of Schedule V provides a printed certificate at the end that all these necessary formalities have been observed, and the Magistrate in signing the certificate has his attention called to all that he is bound to do to make the confession effective in law.

84. After a prisoner has made a confession before a Magistrate he should ordinarily be committed to jail and the Magistrate should note on the warrant for the information of the superintendent of the jail that the prisoner has made a confession.

85. A prisoner who has been produced for the purpose of making a confession but has declined to do so, or has made a statement which from the point of view of the prosecution is unsatisfactory, should in no circumstances be detained in police custody. He should be detained in jail custody.

86. In every case in which a record of confession made under Section 164 of the Code is received by the presiding officer enquiring into or trying the case, the confession shall be shown or read over to the accused, and the fact that this has been done shall be noted down by the presiding officer. The presiding officer shall enquire from the accused whether he made the confession before the Magistrate from whom the record of it was received and shall record the answer of the accused in full.

87. The attention of Courts enquiring into or trying a case in which the record of a confession made under Section 164 of the Code is defective is invited to the provisions of Section 533 of the Code.

4. Custody of Accused Pending Completion of Investigation

88. When an accused is brought before a Magistrate under Section 167 of the Code because the police investigation has not been completed the Magistrate should note down when the accused was first sent for by the Police and when he was produced in Court. If on making due allowance for the time spent in travelling he finds that the period twenty-four hours fixed by Section 61 of the Code has been exceeded he should report the matter to the District Magistrate through the Sub-Divisional Magistrate, and the District Magistrate should call the police to account.

89. A juvenile delinquent should not be remanded to the custody of the police or to jail unless no other action is practicable. The attention of the Courts is invited to the provisions of Section 24 of the Central Provinces Children Act, 1928 (C.P. X of 1928), and to the proviso to sub-section (1) of Section 497 of the Code. This rule covers remands under Section 344 of the Code as well as under Section 167 of the Code.

90. (1) The Magistrate should before authorizing the detention of the accused in any custody pending the completion of the police investigation, peruse the copy of the case-diary which must accompany the accused and ascertain why further detention is necessary. He should also hear any objection which the accused may have to offer against his further detention. If the Magistrate finds that further detention is unnecessary he may, if he has jurisdiction, try the case or commit it for trial; if he has no jurisdiction he may order the accused to be forwarded to a Magistrate having jurisdiction.(2) If the Magistrate considers the further detention of the accused is necessary he should ordinarily direct the accused to be detained in the jail or the Magistrate lock-up nearest to the Court which will try him in the event of the police finding a charge established against him.(3) It appears to the Magistrate that the police not only require time for their investigation, but that for special reasons they want the accused to be present with them in that investigation, he may order the detention of the accused in the custody of the police.

91. When a Magistrate passes an order, authorizing the detention of the accused in the custody of the police he should record in writing the ground on which he considers such detention necessary. The reasons put forward by the police why the accused should be returned to their custody are not always good and sufficient and require careful scrutiny. For example, detention for the purpose of enabling the accused to point out where the stolen property is concealed would be reasonable if the accused has voluntarily before the Magistrate offered to conduct the police to the spot; but it would be unreasonable if no such offer has been made and the object of the police is really to induce the accused to reveal the place of concealment. A general statement that the accused may be able to give further information should no circumstances be accepted as sufficient ground for such detention.

92. When an order for detention in the custody of the police is passed by a Magistrate other than the District or Sub-Divisional Magistrate he shall forward a copy of his order, with his reasons for making it, to the Magistrate to whom he is immediately subordinate. The Magistrate to whom the copy of the order is sent shall satisfy himself that the order has been made on good and sufficient grounds and that the period of detention allowed is not more than is reasonably sufficient for securing the object in view.

93. A prisoner may not, under Section 167 of the Code, be detained in the custody of the police for a longer period than fifteen days in the whole, i.e., the whole period of his detention by the police should not exceed twenty-four hours plus fifteen days; exclusive of the time occupied in the journey to the Magistrate’s Court after his arrest. When this period has expired an order of further remand should be passed under Section 344 of the Code after the case has been put up for trial before the Magistrate having jurisdiction.

94. An order of detention in police custody shall be written on the application for detention which shall be made in the form prescribed therefor. The Magistrate shall give the original order to the police and have a copy of it made in duplicate on the application to be filed with the magisterial record of the case. The copy shall first be sent to the Magistrate to whom the Magistrate making the order is immediately subordinate. The superior Magistrate shall after perusal return the copy to the Magistrate who is to enquire into or try the case to be filed with the record.

95. Whenever after a confession has been recorded a Magistrate is specially deputed to verify the confession locally with the aid of the accused, the accused shall remain in the charge of such Magistrate. The Magistrate shall make suitable arrangements for guarding the accused by peons, and the police shall not be allowed to take any part in guarding him.

5. Closing of the investigation and the Completed Investigation 
Report

96. An investigation is completed when-

(a) the police report that the charge which they have investigated is not established by the evidence, and the accused (if in custody) has been released on his executing a bond with or without sureties (Section 169 of the Code);

(b) the police report that the charge is established against the accused by the evidence collected, and send the case for trial (Section 170 of the Code); or

(c) the police report that the case is a true one, but that after doing all in their power they have been unable-

(i) to trace the offence to any particular person, or

(ii) to lay hands upon the person who is believed to be the guilty party (Section 173 of the Code).

In (b) the charge sheet, called the challan, will form the final report in the case and will go to the Magistrate having jurisdiction. In cases (a) and (c) a final report shall be submitted direct to the Magistrate who shall make such order for the discharge (or otherwise) of the accused’s bond as he thinks fit.

97. If the Magistrate having jurisdiction is at the headquarters of a district the charge sheet should in the first instance be taken to the office of the District Superintendent of Police so that immediate action may be taken to obtain copies for proving such previous convictions as may have been noted in the charge sheet or for tracing out such convictions if none have been so noted. The prosecuting inspector should inspect the charge sheet and see that it is properly drawn up and is presented in the proper Court with as little delay as possible. In no case should a charge sheet be delayed in the office either for the purpose of procuring fresh evidence or for any other object without an express order from the Court.

98. Except in extraordinary cases no alteration, correction or comment should be made on the original charge sheet. When any alteration, correction or comment is made, or when it is found necessary to substitute a fresh sheet for the original, the reason for any such alteration or change should be given to the Magistrate at the time of bringing the case before him.

99. When the trial is completed, and the result slip is filled in, the slip shall be signed by the Magistrate, or in cases committed to the Court of Session by the Sessions Judge, and despatched to the office of the District Superintendent of Police.

100. When the Magistrate or Judge considers that the property produced as stolen is not in fact all stolen, he shall enter in column 7 of the result slip of value of the part he thinks to be stolen.

101. When the final report, under Sections 169 and 173 of the Code, discloses facts which afford good prima facie grounds for believing a case to be false, or to have been instituted through mistake on the part of the complainant as to the criminal liability of the accused, the District Magistrate may order the case to be expunged from the Crime Register. Similar of the accused is sent up for trial under Section 170 and is acquitted or discharged on the ground that no offence was committed, the Court (subject in the case of a Court of a Magistrate to the orders of the District Magistrate) may direct the expunging of the offence.

102. In doubtful cases an offence should not be expunged. Mere failure to elicit confirmatory evidence will not justify the expunging of a complaint once registered. Some positive evidence inducing a reasonable certainty that the offence was not committed is needed. On the other hand a Court should not refuse to make such an order merely on the ground that there is no strictly legal evidence before it on which it can declare the charge to be false or erroneous.

6. Inquests

103. When there is any doubt as to the cause of death, or when death is said to have been suicidal, or it appears that homicide or any other offence has been committed or when for any other reason a police officer considers it expedient to do so, he should forward the dead body to the medical officer appointed to hold post mortem examinations in the particular area in which the police station concerned is situated. For very special reasons which must always be stated, the police may send a dead body to the Civil Surgeon from any area.

104. In cases in which the remains discovered consist mainly of bones or are so scanty as to require a highly skilled opinion to decide the cause of death, the identity of the remains and other similar matters, they should always be sent to the Civil Surgeon of the district for examination.

105. When a dead body is sent to headquarters from a place where a medical officer is stationed, the police may call on him to inspect the body and to describe in writing any wound or other unusual external condition that may be present.

106. When intimation is received by the officer in charge of a police station that a death has occurred by suicide, by homicide, by an accident by the attack of an animal or in suspicious circumstances, he shall give immediate information to the nearest Magistrate empowered to hold inquests and proceed to the spot where the body of the deceased person is.

107. When any person dies while in the custody of the police, the nearest Magistrate empowered to hold inquests shall hold an enquiry into the cause of death as required by Section 176 of the Code either instead of or in addition to the investigation held by a police officer. If the Magistrate considers it expedient to make an examination of the dead body of any person who has been already interred, in order to discover the cause of death, he may cause the body to be disinterred and examined.

Crime and Criminal Tracking Network & Systems (CCTNS)

Training Class-1

CCTNS is a Mission Mode Project under the National e-Governance Plan (NeGP) of Govt. of India. CCTNS aims at creating a comprehensive and integrated system for enhancing the efficiency and effectiveness of policing through adopting of principle of e-Governance and creation of a nationwide networking infrastructure for evolution of IT-enabled-state-of-the-art tracking system around ‘Investigation of crime and detection of criminals’.

Some centrally initiated programs such as the NCRB-led CCIS (Crime and Criminals Information System) and CIPA (Common Integrated Police Application), and State-led initiatives such as e-COPS (in Andhra Pradesh), Police IT (in Karnataka), Thana Tracking System (in West Bengal), CAARUS (in Tamil Nadu) and HD IITS (in Gujarat).

State of West Bengal and others Versus Swapan Kumar Guha and others[SC 1982 February]

Capture

Whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case. In considering whether an offence into which an investigation is made or to be made, is disclosed or not, the Court has mainly to take into consideration the complaint or the F.I.R. and the Court may in appropriate cases take into consideration the relevant facts and circumstances of the case. On a consideration of all the relevant materials, the Court has to come to the conclusion whether an offence is disclosed or not. If on a consideration of the relevant materials, the Court is satisfied that an offence is disclosed, the Court will normally not interfere with the investigation into the offence and will generally allow the investigation into the offence to be completed for collecting materials for proving the offence. If, on the other hand, the Court on a consideration of the relevant materials is satisfied that no offence is disclosed, it will be the duty of the Court to interfere with any investigation and to stop the same to prevent any kind of uncalled for and unnecessary harassment to an individual.

AIR 1982 SC 949 : (1982) 3 SCR 121 : (1982) 1 SCC 561 : (1982) 1 SCALE 38 : (1982) CriLJ SC 819

(SUPREME COURT OF INDIA)

State of WEST BENGAL and others Appellant
Versus
Swapan Kumar Guha and others Respondent

AND

State of WEST BENGAL and others Appellant
Versus
Sanchaita Investments and others Respondent

(Before : Y. V. Chandrachud, C.J.I., A. Varadarajan And Amarendra Nath Sen, JJ.)

Civil Appeals Nos. 1129 and 1130 of 1981 ,

Decided on : 02-02-1982.

Criminal Procedure Code, 1973—Section 154—FIR—Quashing of proceedings—No commission of cognizable offence disclosed in FIR—The Court would be justified in quashing the investigation as the power to investigate into cognizable offence must be exercised strictly in accordance with the provisions of the Code.

Judgement

Y. V. Chandrachud, C. J—My learned Brother A. N. Sen has dealt fully with the various points argued before us. I agree respectfully with his judgment, but desire to add a few words in view of the importance which this matter has acquired by reason of the immense circulation of ‘black money’ clearly and almost concededly involved in the affairs of the firm which is facing a prosecution.

2. These appeals by special leave arise out of the judgment dated March 5, 1981 of a learned single Judge of the Calcutta High. Court in Matters Nos. 2829 of 1980 and 37 of 1981. The appeals are, in substance, by the State of West Bengal while the contesting respondents are a firm called ‘Sanchaita Investments’ and its three partners, Swapan Kumar Guha, Sambhu Prasad Mukherjee and Beharilal Murarka. The two Matters in the Calcutta High Court were in the nature of writ petitions under Article 226 of the Constitution which were filed by the firm and its partners for quashing an investigation commenced against the firm. Allowing the writ petitions, the High Court issued a writ of Mandamus directing the State Government and its concerned officers to “forthwith recall, cancel and withdraw the First Information Report ………… and all proceedings taken on the basis thereof”, since the searches, seizures and arrests made in pursuance of the said F.I.R. are, according to the High Court, illegal and without jurisdiction. It has directed that the books, documents and moneys seized during the search be returned to the firm and its partners, including a sum of ` 52,11,930.

3. The short question for consideration in these appeals by special leave is whether the F.I.R. lodged by the Commercial Tax Officer, Bureau of Investigation, against the firm and its partners discloses an offence under S. 3 of “The Prize Chits and Money Circulation Schemes (Banning) Act”, 43 of 1978. The Act, which was passed by the Parliament, came into force on Dec. 13, 1978 and the two years’ period allowed by S. 12 for winding up every kind of business relating to Prize Chits and Money Circulation Schemes expired on Dec. 12, 1980. The F.I.R., which was lodged the next day on Dec. 13, reads thus:

“To

The Deputy Superintendent of Police,

Bureau of Investigation.

10, Madan Street,

calcutta-72.

Sir,

On a secret information that ‘Sanchaita Investments’ of 5-6, Fancy Lane, Calcutta, is carrying on business or promoting and/or conducting prize chit and/or money circulation ‘scheme enrolling members of such chit and/or scheme, participating in those, and/or receiving and remitting monies in pursuance of such chits and/or scheme in violation of the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, inquiry was held secretly to verify correctness or otherwise of the aforesaid secret information. Enquiry reveals that the said Sanchaita Investments’ is a partnership firm, partners being Shri Bihari Prasad Murarka, Shri Sambhu Mukherjee and Shri Swapan Kumar Guha and that it was floated in or around 1975. Enquiry further reveals that the said firm had been offering fabulous interest @ 48% per annum to its members, until very recently. The rate of interest has of late been reduced to 36% per annum. Such high rates of interest were and are being paid even-though the loan certificate receipts show the rate of interest to be 12% only. Thus, the amount in excess of 12% so paid clearly shows that the ‘Money Circulation Scheme’ is being promoted and conducted for the making of quick and/or easy money. Prizes and/or gifts in cash were and are also awarded to agents, promoters and members too.

In view of the above, Sarvashri Bihari Prasad Murarka. Sambhu Mukherjee and Swapan Kumar Guha appear to have been carrying on business in the trade name of ‘Sanchaita Investments’ in prize chits and money circulation scheme in violation of S. 3 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and are therefore, punishable under S. 4 of the said Act. Necessary action may therefore, be kindly taken against the aforesaid offenders along with other accomplices as provided in the law.

Yours faithfully,

Sd/-

Commercial Tax Officers,

Bureau of Investigation.

4. Section 4 of the Act provides that whoever contravenes the provisions of S. 3 shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees, or with both, provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees. Though the F.I.R., is riddled with the “and/or” clauses more appropriate in deeds of conveyancing, it is clear from its tenor and is common ground that the gravamen of the accusation against the accused is that they are conducting a ‘money circulation scheme’. The reference in the F.I.R. to ‘prize chits’ reflects but a common human failing to err on the safe side and the notorious effort of draftsmen to embrace as much as possible so that no argument may be shut out for want of pleading.

5. Since the sole question for consideration arising out of the F.I.R., as laid, is whether the accused are conducting a money circulation scheme, it is necessary to understand what is comprehended within the statutory meaning of that, expression. S. 2 (c) of the Act provides:

“ ‘Money circulation scheme’ means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions.”

Grammar, and punctuation are hapless victims of the pace of life and I prefer in this case not to go merely by the commas used in cl. (c) because, though they seem to me to have been placed both as a matter of convenience. and of meaningfulness, yet, a more thoughtful use of commas and other gadgets of punctuation would have helped make the meaning of the clause clear beyond controversy, Besides, how far a clause which follows upon a comma governs every clause that precedes the comma is a matter not free from doubt. I therefore consider it more safe and satisfactory to discover the true meaning of cl. (c) by having regard to, the substance of the matter as it, emerges from the object and purpose of the Act, the context in which the expression is used and the consequences necessarily following upon the acceptance of any particular interpretation of the provision, the contravention of which is visited by penal consequences.

6. Commas or no commas, and howsoever thoughtfully one may place them if they are to be there, I find it impossible to take cl. (c) to mean that any and every activity “for the making of quick or easy money” is comprehended within its scope. For the matter of that, I cannot believe any law to ban every kind of activity for making quick or easy money, without more, on pain of penal consequences. It is far too vague and arbitrary to prescribe that “whosoever makes quick or easy money shall be liable to be punished with fine or imprisonment”. For then, in the absence of any demarcation of legitimate money-making activities from those which fall within the ban, the question whether the penal provision is attracted in a given case will depend upon the will and temper, sweet or sour, of the magistracy. Besides, speaking of law and morals, it does not seem morally just or proper to say that no person shall make quick or easy money, especially quick. A person who makes quick money may do so legitimately by the use of his wits and wisdom and no moral turpitude may attach to it. One need not travel afar to find speaking examples of this. Indeed, there are honourable men (and now women) in all professions recognised traditionally as noble, who make quite quick money by the use of their talents, acumen and experience acquired over the years by dint of hard work and industry. A lawyer who charges a thousand rupees for a Special Leave Petition lasting five minutes (that is as far as a Judge’s imagination can go), a doctor who charges a couple of thousands for an operation of tonsilitis lasting ten minutes, an engineer, an architect, a chartered accountant and other professionals who charge likewise, cannot by any stretch of imagination be brought into. the drag-net of cl. (c). Similarly, there are many other vocations and business activities in which, of late, people have been notoriously making. quick money as, for example, the builders and real estate brokers. I cannot accept that the provisions of cl. (c) are directed against any of these categories of persons. I do not suggest that law is powerless to reach easy or quick money and if it wills to reach it. it can find a way to do it. But the point of the matter is that it will verge upon the ludicrous to say that the weapon devised by law to ban the making of quick or easy money is the provision contained in S. 2 (c) of ‘the “Prize Chits and Money Circulation Schemes (Banning) Act”.

7. In order to give meaning and content to the definition of the expression ‘money circulation scheme, which is contained in S. 2 (c) of the Act, one has, therefore, to look perforce to the adjectival clause which qualifies the words “for the making of quick or easy money”. What is within the mischief of the Act is not “any scheme, by whatever name called, for the making of quick or easy money” simpliciter, but a scheme for the making of quick or easy money, “on any event or contingency relative or applicable to the enrolment of members into the scheme”, (whether or not such money or thing is derived from the entrance money of the members of such scheme or their periodical subscriptions). Two conditions must, therefore, be satisfied before a person can be held guilty of an offence under S. 4 read with Ss. 3 and 2 (c) of the Act. In the first place, it must be proved that he is promoting or conducting a scheme for the making of quick or easy money and secondly, the chance or opportunity of making quick or easy money must he shown to depend upon an event or contingency relative or applicable to the enrolment of members into that scheme. The legislative draftsman could have thoughtfully foreseen and avoided all reasonable controversy over the meaning of the expression ‘money circulation scheme’ by shaping its definition in this form:

‘money circulation scheme’ means any scheme, by whatever name called,

(i) for the making of quick or easy money, or

(ii) for the receipt of any money or valuable thing as the consideration for a promise to pay money,

on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions;

I have reshaped the definition, in order to bring out its meaning clearly, without adding or deleting a single word or comma from the original text of S. 2 (c). The substance of the matter is really not in doubt:only the form of the definition is likely to create some doubt as to the meaning of the expression which is defined and, therefore, I have made a formal modification in the definition without doing violence to its language and indeed, without even so much as altering a comma.

8. There is another aspect of the matter which needs to be underscored, with a view to avoiding fruitless litigation in future. Besides the prize chits, what the Act aims at banning is money circulation schemes. It is manifestly necessary. and indeed, to say so is to state the obvious, that the activity charged as falling within the mischief of the Act must be shown to be a part of a scheme for making quick or easy money, dependent upon the happening or non-happening of any event or contingency relative or applicable to the enrolment of members into that scheme. A ‘scheme’, according to the dictionary meaning of that word, is ‘a carefully arranged and systematic programme of action’, a ‘systematic plan for attaining some object’, ‘a project’, ‘a system of correlated things’. (See Webster’s New World Dictionary, and Shorter Oxford English Dictionary, Vol. II). The systematic programme of action has to be a consensual arrangement between two or more persons under which, the subscriber agrees to advance or lend money on promise of being paid more money on the happening of any event or contingency relative or applicable to the enrolment of members into the programme. Reciprocally, the person who promotes or conducts the programme promises, on receipt of an advance or loan, to pay more money on the happening of such event or contingency. Therefore, a transaction under which, one party deposits with the other or lends to that other a sum of money on promise of being paid interest at a rate higher than the agreed rate of interest cannot, without more, be a ‘money circulation scheme, within the meaning of S. 2 (c) of the Act, howsoever, high the promised rate of interest may be in comparison with the agreed rate. What that section requires is that such reciprocal promises, express or implied, must depend for their performance on the happening of an event or contingency relative or applicable to the enrolment of members into the scheme. In other words, there has to be a community of interest in the happening of such event or contingency. That explains why S. 3 makes it an offence to “participate” in the scheme or to remit any money “in pursuance of such scheme.” He who conducts or promotes a money-spinning project may have manifold resources from which to pay fanciful interest by luring the unwary customer. But, unless the project envisages a mutual arrangement under which, the happening or non-happening of an event or contingency relative or applicable to the enrolment of members into the arrangement is of the essence, there can be no “money circulation scheme” within the meaning of S. 2 (c) of the Act.

9. Numerous persons lend their hardearned monies in the hope of earning high returns. It is notorious that, eventually, quite a few of them lose both the principal and the interest, for no project can succeed against the basic laws of economics. Sharp and wily promoters pay A’s money to B and B’s to C in order to finance interest at incredible rates, and eventually, when a high-risk investment made by them at the cost of the credulous lenders fails, the entire arrangement founders on the rock of foolish optimism. The promoters. of course, have easy recourse to gadgets of the law of insolvency. It is difficult to hold that the lender, himself a victim of the machinations of the crafty promoter, is intended by the Act to be arraigned as an accused. I do not think that any civilised law can intend to add insult to injury.

10. The question as to whether the First Information Report prima facie discloses an offence under S. 4 read with S. 3 of the Act has to be decided in the light of these requirements of S. 2 (c) of the Act. I have already reproduced in extenso the F.I.R. lodged by the Commercial Tax Officer, bureau of Investigation. Analysing it carefully and, even liberally, it makes the following allegations against the firm ‘Sanchaita Investments’ and its three partners:

(1) The firm had been offering fabulous interest @ 48% per annum to its members, which rate of interest was later reduced to 36% per annum;

(2) Such high rate of interest was being paid even though the loan certificate receipts show that interest was liable to be paid at the rate of 12% per annum only; and

(3) The fact that interest was paid in excess of 12% shows clearly that a ‘Money Circulation Scheme’ was being promoted and conducted for the making of quick or easy money.

It seems to me impossible to hold on the basis of these allegations that any offence can be said to be made, out prima facie under S. 3 of the Act. In the first ‘place, the F.I.R. does not allege, directly or indirectly, that the firm was promoting or conducting a scheme for the making of quick or easy money, dependent on any even or contingency relative or applicable to the enrolment of members into the scheme. Secondly, the F.I.R. does not contain any allegation whatsoever that persons who advanced or deposited their monies with the firm, were participants of a scheme for the making of quick or easy money, dependent upon any such event or contingency. The F.I.R. bears on its face the stamp of hurry and want of care. It seems to assume, what was argued before us by Shri Som Nath Chatterjee on behalf of the prosecution, that it is enough for the purposes of S. 2 (c) to show that the accused is promoting or conducting a scheme for the making of quick or easy money, an assumption which I have shown to be fallacious. An essential ingredient of S. 2 (c) is that the scheme for making quick or easy money must be dependent on any event or contingency relative or applicable to the enrolment of members into the scheme. A First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied, cannot form the foundation or constitute the starting point of a lawful investigation.

11. In answer to the writ petitions filed by the accused in the Calcutta High Court, affidavits were filed on behalf of the prosecuting. agency, which do not improve matters in any way. The affidavit filed by Arun Kanti Roy, Deputy Secretary, Finance Department, Government of West Bengal, alleges that:

(i) The actual payment of a very high rate of interest against the professed rate of 12% attracted huge amounts of idle money into circulation;

(ii) The investment of money as collected is not under the regulatory control of the Reserve Bank of India or any other agency of the State. dealing with credit control in relation to the country’s economy.

(iii) The pooling of the purchasing power and the financial resources and the unfettered deployment thereof have resulted in. the concentration of tremendous economic power in the hands of a few, posing a potential threat to the equilibrium of the country’s economy;

(iv) The entire process is speculative in nature and directed towards luring away the investing public to the speculative market for making quick and easy money;

(v) The very basis of the so-called contractual arrangement between the firm and its depositors is founded on the fraudulent device to assure to the people a high rate of the interest, the major portion of which is paid through unaccounted for money, thereby encouraging the growth of such unaccounted money in the hands of the investing public;

(vi) The professed rate of interests is a mere subterfuge to provide a cloak of bona fides and legality to the underhand transactions, through which unaccounted for money comes into play in the market, generating further unaccounted for money, a part whereof goes back to the depositors in the form of the balance of interest over 12% paid in cash, month by month;

(vii) The firm did not have enough income or resources so as to be able to pay interest at such high rates;

(viii) The irresistible conclusion, therefore, is that interest was being paid outof the capital itself-

(ix) “The depositor becomes a member of the investment scheme of the firm by subscribing, to it and the payment of the quick and easy money by way of high rate of interest is dependent upon the period of investment and/or efflux of time which are very much relative and/or applicable to the membership of the depositors of the scheme to which the depositor agrees to subscribe”; and

(x) In the process of its working, the scheme of the firm generates quick and easy money so as to render such scheme or arrangement a ‘money circulation scheme’ within the meaning of the Act.

12. The Assistant Commissioner of Police Shri Sunil Kumar Chakravarty has adopted these pleas and statements in his own affidavit.

13. It is clear from these averments that even at the stage when the State of West Bengal and its concerned officers submitted detailed affidavits to the High Court, there was no clear basis for alleging and no material was disclosed to show that, prima facie, the firm was promoting or conducting a scheme for making quick or easy money which was dependent upon an event or contingency relative or applicable to the enrolment of members into that scheme. The burden of the State’s song is that the scheme conducted by the accused generates black money and will paralyse the economy of the country. These are serious matters indeed and it is unquestionable that a private party cannot be permitted to issue bearer bonds by the back door. The fact that the accused are indulging in an economic activity which is highly detrimental to national interests is a matter which must engage the prompt and serious attention of the State and Central Governments. But the narrow question for our consideration is whether, on the basis of the allegations made against the accused, there is reason to suspect that they are guilty of an offence Under S. 4 read with Ss. 3 and 2 (c) of the Act. The allegation which we have reproduced in cl. (ix) above from the affidavit of Arun Kanti Roy is the nearest that can be considered relevant for the purposes of S. 2 (c) of the Act. But even that allegation does not meet the requirement of that section since, what it says is that “the payment of quick and easy money by way of high rate of interest is dependent upon the period of investment and/or efflux of time which are very much relative and/or applicable to the membership of the depositors of the scheme to which the depositor agrees to subscribe” This is too tenuous to show that the scheme is dependent upon an event or contingency of the description mentioned in S. 2 (c), apart from the fact that the only participation which is alleged as against the depositors is that, they become members of the “investment scheme” by subscribing to it. There is no allegation even in any of the affidavits filed on behalf of the State of West Bengal and its concerned officers that the depositors and the promoters are animated by a community of interest in the matter of the scheme being dependent upon any event or contingency relative or applicable to the enrolment of members into it. That being an essential ingredient of the offence charged, it cannot be said in the absence of. any allegation whatsoever in that behalf, that there is “reason to suspect” the commission of that offence within the meaning of S. 157 of the Criminal P. C., so as to justify the investigation undertaken by the State authorities.

14. My learned Brother, A. N. Sen, J., has considered exhaustively the various authorities cited at the Bar by both the sides on the question as to the power of the courts to quash an investigation. I fully concur with his careful analysis of those authorities and would content myself with a broad indication of the trend of law bearing on the subject.

15. Shri Ashok Sen and Shri Siddhartha Shankar Ray pressed upon us with considerable insistence the principle reiterated in W. H. King v. Republic of India, (1952) SCR 418 at page No. 424, that a statute which creates an offence and imposes a penalty of fine and imprisonment must be construed strictly in favour of the subject. The principle that no person can be put in peril of his life and liberty on an ambiguity is well-established. But, as observed in M. V. Joshi v. M. U. Shimpi, (1961) 3 SCR 986 at pages 993-994, when it is said that penal statutes must be construed strictly, what is meant is that the court must see that the thing charged is an offence within the plain meaning of the words used and it must not strain the words:

“To put it in other words, the rule of strict construction requires that the language of a statute should be so construed that no case shall be held to fall within it which does not come within the reasonable interpretation of the statute”, and that in case of doubt, the construction favourable to the subject should be preferred. But I do not think that this rule of strict interpretation of penal statutes in any way affects the fundamental principle of interpretation, that the primary test which can safely be applied is the language used in the Act and, therefore, when the words are clear and plain, the court must accept the expressed intention of the Legislature. It is unnecessary to pursue this matter any further in view of the fact that the language of S. 2 (c) is, in my opinion, clear and admits of no doubt or difficulty.

16. In R. P. Kapur v. State of Punjab, (1960) 3 SCR 388 at pages 392-393, the question which arose for consideration was whether a first information report can be quashed under S. 561-A of the Criminal P. C. The Court held on the facts before it that no case-for quashing the proceedings was made out but Gajendragadkar J., speaking for the Court observed that though ordinarily, criminal proceedings instituted against an accused must be tried under the provisions of the Code, there are some categories. of cases where the inherent jurisdiction of the Court can and should be exercised for quashing the proceedings. One such category, according to the Court, consists of cases where the allegations in the F.I.R. or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises and it is a matter merely of looking at the F.I.R. or the complaint in order to decide whether the offence alleged is disclosed or not. In such cases, said the Court, it would be legitimate for the High Court to hold that it would be manifestly unjust to allow the process of the criminal court to be issued against the accused.

17. In S. N. Sharma v. Bipen Kumar Tiwari, (1970) 3 SCR 946, a first information report was lodged naming an Additional District Magistrate (Judicial) as the principal accused. His application under S. 159 of the Criminal P, C. asking that the Judicial Magistrate should himself conduct a preliminary inquiry was dismissed, but the Court observed that though the Criminal P. C. gives to the police unfettered power to investigate all cases where they suspect that a cognizable offence has been committed, in appropriate cases, an aggrieved person can always seek a remedy by invoking the power of the High Court under Art. 226 of the Constitution and that the High Court could issue a writ of mandamus restraining the police from misusing their legal powers.

18. Shri Som Nath Chatterjee has placed great reliance on the decision of this Court in State of West Bengal v. S. N. Basak, (1963) 2 SCR 52, in which it was held that the statutory powers given to the police under Ss. 154 and 156 of the Criminal P. C. to investigate into the circumstances of an alleged cognizable offence without authority from a Magistrate cannot be interfered with by the exercise of powers under S. 439 or under the inherent powers conferred by S. 561A of the Code. It must be remembered that no question arose in that case as to whether, the allegations contained, in the F.I.R. disclosed any offence at all. The contention of the accused in that case was that the statutory power of investigation given to the police under Chapter XIV of the Code is not available in respect of an offence triable under the West Bengal Criminal Law Amendment (Special Courts) Act, 1949 and that being so, the investigation undertaken by the police was without jurisdiction. That contention was negatived and, therefore, the application filed by the accused under Ss. 439 and 561A ‘of the Code was dismissed.

19. In Jehan Singh v. Delhi Administration, (1974) 3 SCR 794, the application filed by the accused under S. 561-A of the Code for quashing the investigation was dismissed, as being premature and incompetent, but that was because the Court found (per Sarkaria J., page 797 that prima facie, the allegation in the F.I.R., if taken as correct, disclosed the commission of a cognizable offence by the accused.

20. The only other decision to which I need refer is that of the Privy Council in King-Emperor v. Khwaja Nazir Ahmad (1944) 71 Ind App 203, which constitutes, as it were, the charter of the prosecution all over, for saying that no investigation can ever be quashed. In a passage oft-quoted but much misunderstood, Lord Porter, delivering the opinion of the Judicial Committee observed:

“In their Lordship’s opinion, however, the more serious aspect of the case is to be found in the resultant interference by the court with the duties of the police. Just as it is essential that every one accused of a crime should have free access to a court of justice so that he may be duly acquitted if found not guilty of the offence with which he is charged, so it is of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes on them the duty of inquiry. In India, as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the court. The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a clue observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the court to intervene in an appropriate case when moved under S. 491 of the Criminal P. C. to give directions in the nature of habeas corpus. In such a case as the present, however, the court’s functions begin when a charge is preferred before it, and not until then,” (at pages 212-213 of Ind App).

I do not think that this decision supports the wide proposition canvassed before us by Shri Som Nath Chatterjee. In the case before the Privy Council, similar charges which were levelled against the accused in an earlier prosecution were dismissed. The High Court quashed the investigation into fresh charges after examining the previous record, on the basis of which it came to the conclusion that the evidence against the accused was unacceptable. The question before the Privy Council was not whether the fresh F.I.R. disclosed any offence at all. In fact, immediately after the passage which I have extracted above, the Privy Council qualified its statement by saying:

“No doubt, if no cognizable offence is disclosed, and still more, if no offence of any kind is disclosed, the police would have no authority to undertake an investigation.”

If anything, therefore, the judgment shows that an investigation can be quashed if no cognizable offence is disclosed by the F.I.R. It shall also have been noticed, which is sometimes overlooked, that the Privy Council took care to qualify, its statement of the law by saying that the judiciary should not interfere with the police in matters which are within their province.It is surely not within the province of the police to investigate into a Report which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases.

21. The position which emerges from these decisions and the other decisions which are discussed by Brother A. N. Sen is that the condition precedent to the commencement of investigation under S. 157 of the Code is that the F.I.R. must disclose, prima facie, that a cognizable offence has been committed, It is wrong to suppose that the police have an unfettered discretion to commence investigation under S. 157 of the Code. Their right of inquiry is conditioned by the existence of reason to suspect the commission, of a cognizable offence and they cannot, reasonably have reason so to suspect unless the F.I.R. prima facie discloses the commission of offence. If that condition is satisfied, the. investigation must go on and the rule in Khwaja Nazir Ahmed will apply. The Court has then no power to stop the investigation, for to do so would be to trench upon the lawful power of the police to investigate into cognizable offences. On the other hand, if the F.I.R. does not disclose the commission of a cognizable offence, the Court would be justified in quashing the investigation on the basis of the information as laid or received.

22. There is no such thing like unfettered discretion in the realm of powers defined by statutes and indeed, unlimited discretion in that sphere can become a ruthless destroyer of personal freedom. The power to investigate into cognizable offences must, therefore, be exercised strictly on the condition on which it is granted by the Code. I may, in this behalf, usefully draw attention to the warning uttered by Mathew J. in his majority judgment in Prabhu Dayal Deorah v. The District Magistrate, Kamrup, (1974) 2 SCR 12 at pages 22-23, to the following effect:

“We say, and we think it is necessary to repeat, that the gravity of the evil to the community resulting from anti-social activities can never furnish an adequate reason for invading the personal liberty of a citizen, except in accordance with the procedure established by the Constitution and the laws, The history of personal liberty is largely the history of insistence on observance of procedure. Observance of procedure has been the bastion against wanton on assaults personal liberty over the years. Under our Constitution, the only guarantee of personal liberty for a person is that he shall not be deprived of it except in accordance with the procedure established by law.”

23. For these reasons, which, frankly, are no different from those given by my learned Brother A. N. Sen, I am of the opinion that the investigation which has been commenced upon the First Information Report is without jurisdiction and must, therefore, be quashed. I do accordingly and direct-that no further investigation shall take place in pursuance or on the basis of the F.I.R. dated Dec. 13, 1980 lodged by the Commercial Tax Officer, Bureau of Investigation, with the Deputy Superintendent of Police, Bureau of Investigation Madan Street, Calcutta.

24. I am free to confess that it is with considerable regret that I have come to the conclusion that the investigation must be quashed. If the State authorities had applied their mind carefully to the requirements of S. 2 (c) of the Act, this appeal might have had a different story to tell, the bare outlines of which I must now proceed to narrate.

25. The firm ‘Sanchaita Investments’ commenced its business on July 1, 1975, its three partners contributing a total capital of ` 7000 (Rupees seven thousand). On Dec. 25, 1978 an advertisement appeared in the “Hindu” in the name of the firm, claiming falsely that its business was “approved by the Reserve Bank of India”. Since the representation was likely to mislead the public, the Reserve Bank advised the firm in May 1979 to issue a suitable corrigendum, which the firm did.

26. On July 6, 1979, Shri Rudolph L. Rodrigues, a Member of the Lok Sabha, wrote a confidential letter to Shri Charan Singh, the then Deputy Prime Minister, complaining that the business of the firm was “a cover-up for a parallel banking system for black money”. A copy of Shri Rodrigues’ letter was forwarded by the Director, Department of Economic Affairs, Ministry of Finance, to the Chief Officer, Department of Non-Banking Companies, Reserve Bank of India, Calcutta, for inquiry. By his letter dated Aug. 7, 1979 the Chief Officer pointed out the difficulty in directing investigation into the affairs of the firm since, its capital being less than ` one lakh, it did not come within the definition of a Non-Banking institution as provided in S. 54 (c) of the Reserve Bank of India Act, 1934. On Sept. 13, 1980 the Deputy Secretary, Finance Department, Government of West Bengal, wrote a letter to the Chief Officer requesting him to examine the question whether the business of the firm came within the purview of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and if not, under which Act the affairs of the firm could be regulated. On Oct. 1, 1980, Shri Ashok Mitra, Finance Minister for the State of West Bengal, wrote a letter to Shri Venkataraman, Finance Minister to the Government of India, complaining that the firm was involved in high-risk investments and that large amounts of public moneys were kept in deposit with the firm, which were not subjected to any regulatory control. The letter of Shri Ashok Mitra appears to have been handed over informally to Dr. K. S. Krishnaswamy, Deputy Governor of the Reserve Bank, who, by his, reply dated Oct. 22, 1980, informed Shri Mitra that the legal department of the Reserve Bank was of the opinion that the mere acceptance of loans by the firm would not ordinarily be covered by the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. There was further correspondence on the subject between the authorities of the Government of India and the State Government, but nothing came out of it.

27. The Act came into force on Dec. 13, 1978 and immediately on the expiry of the two years’ period of grace allowed by it. the F.I.R. was lodged against the firm on Dec. 13, 1980. On that day, the office of the firm at 5-6, Fancy, ‘Lane, Calcutta, was searched by the police, during the course of which a sum of Rupees 42,16,530 (Rupees forty two lacs. sixteen thousand, five hundred and thirty) was recovered. The amount was tied in separate bundles of “notes of different denominations. Several books of accounts were also seized during the search.

28. On the same date, a search was carried out at the residence of Shambu Prosad Mukherjee, a partner of the firm, when the following articles were seized;

(1) One pass-book of Syndicate Bank, Gariahat Branch, Calcutta, in the name of “Apcar Ave Toon”, 9, Royal Street, Calcutta-17. (The account was in a fictitious name and the pass-book shows that a sum of ` Twenty-eight crores was lying in credit in that account).

(2) A sum of ` 9,95,000 (Rs. nine lacs ninety-five thousand) tied in separate bundles of notes of the denomination of ` 100 and 50.

(3) A country-made 6 chamber revolver, with one bullet inside.

29. From the house of another partner, Biharilal Murarka. certain account books were seized,

30. During the course of investigation until Jan. 8, 1981 when it was stopped by an order of this Court, as many as eighty places were searched by the police and a large number of documents were seized. It is apparent from these documents that the firm was paying to its depositors interest at the rate of 48 per cent up to Sept. 1979 and 36 per cent thereafter for a short period. The interest was paid to each depositor every month by the agents who called on each depositor personally for that purpose. The interest in excess of 12 per cent was invariably paid in cash. The oncoming elections to legislative bodies in 1980 appear to have led to reduction in the rate of interest, since the firm’s circulating capital was needed by “political parties”. Which parties, I do not know, but this much is fairly certain from the facts which have emerged before us that the funds available to the firm were diverted frequently for the use of political parties.

31. Certain lists of Agents were seized during the investigation which show that Code numbers were assigned to at least 84 of them. The agents have acquired large properties at various places, consisting of lands, apartments, cars etc, Some of the agents have started new business activities.

32. A staggering revelation which came to light as a result of the searches at the office of the firm is that, as of September 1, 1980, the firm was holding deposits to the tune of ` 73,51,23,500 (Rupees seventy-three crores, fifty-one lacs. twenty-three thousand and five hundred). These deposits were received by the firm from persons drawn from all parts of the country, the pride of place belonging to Calcutta, Bombay, Delhi, Madras and Hyderabad. Remittances. also appear to have been received by the firm from overseas clients. A compilation prepared by the State authorities in pursuance of an interim order passed by this Court shows that the total amount of deposits made by persons who had deposited a sum of ` 10,000 or less each comes to ` 11, 49,40,950/- (Rupees eleven crores forty-nine lacs, forty-thousand, nine hundred and fifty).

33. The documents relating to the account in the fictitious name of “Apcar Ave Toon” show that a person alleged to bear that name was introduced to the Syndicate Bank, Gariahat Branch, Calcutta, by the firm’s partner Sambhu Prosad Mukherjee. The pass-book relating to the account (Current Account No 210) shows that the account was opened with a cash deposit of ` 28 lacs. A total sum of Rupees twenty-seven crores, ninety-seven lacs eighty-six thousand and odd was deposited in that account until December 6, 1980, all deposits being in cash. Such cash deposits varied often between 50 to 80 lacs at a time. The amount of nearly ` 28 crores was withdrawn from the account steadily from Nov. 11, 1980. The account was closed on Dec. 6, 1980 that is, a week before the F.I.R. was lodged on Dec. 13, 1980, Some of the entries in the pass-book do not tally with the Bank’s Ledger.

34. A study of Current Account No. S-502 in the name of the firm with the United Bank of India, High Court Branch. Calcutta, shows that the firm had invested several lacs of rupees in various concerns numbering about forty. Lacs of rupees have been transferred by the firm to various concerns.

35. Documents seized from the office premises of the firm show that the partners and their family members are insured with the L.I.C. in heavy amounts. They have acquired large properties, particularly in Bombay.

36. Several offices and concerns in Bombay were searched by the police and interesting discoveries were made. Their magnitude and variety are too large for the scope of this judgment. I will close this narrative by saying that the income-tax returns of Shambhu Prosad Mukherjee reveal that he had shown a sum of ` 8,00,000 as prizes received from Delhi Lotteries in 1979 and that the firm has not filed any income-tax return after the financial year ending June 30, 1977. It had asked for an extension of time on the ground that its accounts were not finalised but the Department rejected that prayer on Dec. 9, 1980. What further indulgence they have managed cleverly to secure is not yet known.

37. These facts disclose a bizarre state of affairs. A token capital of ` 7,000 has begotten a wealth of crores of rupees within a span of five years. A Bank account opened by the firm in a fictitious name had a sum of ` twenty-eight crores in it, which was withdrawn within a week before” the lodging of the F.I.R. Interest was being paid to depositors at the incredible rate of 48 p.c. p.a. The firm had no ostensible source of’ income from which much exorbitant amounts could be paid and its account books, such as were seized from its head-office. give no clue to its income or its assets. The partners of the firm have become millionaires overnight. Clerks and Chemists that they and some of their agents were in 1975, today they own properties which will put a prince to shame. “Rags to riches” is how one may justly describe this story of quick and easy enrichment. There is no question that this vast wealth has been acquired by the firm by generating and circulating black money. Indeed, rightly did Shri Ashok Sen appearing for the firm, ask us to be free to proceed on the assumption that the exorbitant amount of interest was being paid from out of unaccounted money.

38. In these circumstances, though I see no alternative save to stop all further investigation on the basis of the F.I.R. as laid no offence being disclosed by it under S. 4 of the Act, I am unable to accept the contention of Shri Ashok Sen that all documents, books, papers and cash seized so far during the investigation should be returned to the firm and its partners forthwith. The firm appears to be on the brink of an economic crisis. as any scheme of this nature is eventually bound to be. Considering the manner in, which the firm has manipulated its accounts and its affairs, I have no doubt that it will secret the large funds and destroy the incriminating documents if they are returned to it. The State Government, the Central Government and the Reserve Bank of India must be given a reasonable opportunity to see if it is possible, under the law, to institute an. inquiry into the affairs of the firm and, in the meanwhile, to regulate its affairs. I consider such a step essential in the interests of countless small depositors who, otherwise, will be ruined by being deprived of their life’s savings. The big blackmoney bosses will take any loss within their stride but the small man must receive the protection of the State, which must see to it that the small depositors are paid back their deposits with the agreed interest as quickly as possible. I therefore direct that the documents, books, papers, cash and other articles seized during the investigation shall be retained by the police in their custody for a period of two months from today and will be returned, on the expiry of that period, to persons from whom they were seized, subject to any lawful directions which may be given or obtained in the meanwhile regarding their custody and return.

39. With this modification, I agree respectfully with Brother A. N. Sen that the appeals be dismissed.

40. A. Varadarajan, J—I agree with the judgment and the final order proposed by the learned Chief Justice.

41. Amarendra Nath Sen, J—This appeal by special leave has been filed by the State of West Bengal and three officers of the State against an order passed by a learned single Judge of the Calcutta High Court. The facts material for the purpose of this appeal have been fully set out in the judgment of the learned single Judge of the Calcutta High Court. The facts material for the purpose of this appeal may, however, be briefly indicated:

Sanchaita Investments is a partnership firm duly registered under the Partnership Act. Sanchaita Investments (hereinafter referred to as the Firm) has its principal place of business at Nos. 5 and 6 Fancy Lane, Calcutta. Shambhu Prasad Mukherjee, Bihari Lal Murarka and Swapan Kumar Guha are the three partners of the Firm. The capital of the partnership firm is ` 7,000. The firm carries on the business as financiers and investors and in its business the firm accepts loans or deposits from the general public, for different periods repayable with interest @ 12 % per annum. Under the terms of deposits, the depositors have a right to withdraw their deposits with the firm at any time before the expiry of the fixed period of the deposit. In case of premature withdrawal. the depositors however loses interest of 1% and is paid interest @ 11% per annum. Under the terms and conditions of the deposits, the firm has also the liberty to repay the amount with interest to any depositor at any time before the expiry of the stipulated period of the deposit and in the event of such repayment by the firm, the firm is not required under the terms and conditions of the deposit or loan, to give any reason. It appears that the firm has been carrying on its business on a very extensive scale.

42. In the year 1978, the Parliament passed an Act called the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (hereinafter referred to as the Act).

43. On the 13th Dec., 1980, the Commercial Tax Officer, Bureau of Investigation lodged a complaint of violation of the Act by the firm with the Police. The F.I.R. has been set out in full in the judgment of the learned Trial Judge and the same reads as follows

“                                                                                            13-12-1980

The Deputy Superintendent of Police.

Bureau of Investigation,

10, Madan Street,

Calcutta-72.

Sir,

On a secret information that ‘Sanchaita Investments’ of 5 and 6 Fancy Lane, Calcutta, is carrying on business of promoting and/or conducting prize chit and/or money circulation scheme enrolling members of such chit and/or scheme, participating in these, and/or receiving and remitting monies in pursuance of such chits and/or scheme in violation of the provisions of the Prize Chits and Money Circulation Scheme (Banning) Act, 1976, Inquiry was held secretly to verify correctness of otherwise of the aforesaid secret information. Enquiry reveals that the ‘said’ ‘Sanchaita Investments’ is a Partnership firm, partners being Shri Behari Prasad Murarka, Sri Sambhu Mukherjee and Swapan Kumar Guha and that it was floated in or around 1975. Enquiry further reveals that the said firm had been offering fabulous interest @ 48% per annum to its members until very recently. The rate of interest has of late been reduced to 36% per annum. Such high rates of interest were and are being paid even though the loan certificate receipts show the rate of interest to be 12% only. Thus, the amount in excess of 12 % so paid clearly shows that the ‘Money Circulation Scheme, is being promoted and conducted for the making of quick and/or easy money. prizes and/or gifts in cash were and are also awarded to agents, promoters and members too.

In view of the above, Sarvashri Bihari Prasad Murarka, Sambhu Prasad Mukherjee and Swapan Kumar Guha appear to have been carrying on business in the trade name of ‘Sanchaita Invesments’ in prize chits and money circulation scheme in violation of S. 3 of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978 are therefore, punishable under S. 4 of the said Act. Necessary action may, therefore, be kindly taken against the aforesaid offenders along with other accomplice as provided in the law.

Yours faithfully,

Sd/- Illegible

13-12-1980

Commercial Tax Officer. Bureau

of Investigation.”

44. On the 13th of Dec., two of the partners of the firm were arrested. The office of the firm and also the houses of the partners were searched. Various documents and papers were seized And a large amount of cash was also seized from the office and also from the residence of one of the partners. Two partners who were arrested were, however, thereafter enlarged on bail.

45. The firm and its two partners, namely, Shambhu Prasad Mukherjee and Bihari Lal Murarka filed this writ petition in the High Court challenging the validity of the F.I.R. and the proceedings arising out of the same including the validity of the searches and seizures of documents, papers and cash. The respondents in the writ petition were six. The first respondent was the State of West Bengal, respondent No. 2 was the Officer who had lodged the F.I.R., respondent No. 3 was the Assistant Commissioner of Police and Superintendent of Police. Bureau of Investigation, and respondent No. 4 was the Investigating Officer in the cases pending before the Chief Metropolitan Magistrate, Calcutta. Respondent No. 5 was the Reserve Bank of India and respondent No. 6 was the Union of India.

46. In brief the case made by the firm and its partners in the writ petition is that the firm is a non-banking financial institution which carries on business of accepting deposits or loans from the general public on terms and conditions mentioned in the agreement of loan or deposit, pays interest to persons who invest or advance money to the firm in terms of the agreement between the parties and repays all amounts received from the parties with interest in terms of the agreement between the parties. The further case made by the writ petitioners in the writ petition is that the amounts which they receive from parties are reinvested by them and out of the investments made by the firm, the firm pays the interest to the depositors and also the principal amount deposited by them in terms of the agreement between the parties. In the writ petition, there is a denial of the allegations made in the F.I.R. and the case is further made that even if the allegations made in the F.I.R. are assumed to be correct, there cannot be any question of any violation of the Act and no offence under the Act is disclosed. It is the positive case of the writ petitioners in the writ petition that the Act has no application to the firm. In the writ petition, the validity of the F.I.R. and the proceeding arising therefrom is challenged mainly on the ground that the F.I.R. does not disclose any offence under the Act which does not apply to the firm and there can be no question of any violation of any provisions of the Act which has no application to the firm at all.

47. In answer to the averments made in the writ petition, an affidavit affirmed by Shri Arun Kanti Roy, was filed on behalf of respondents Nos. 1 and 2, an affidavit affirmed by Shri Sunil Kumar Chakravorty on behalf of respondents Nos. 3 and 4 was filed and an affidavit affirmed by Shri Rani Armaji Rao on behalf of the Reserve Bank of India was also filed. In the affidavit affirmed by Arun Kanti Roy, Deputy Secretary, finance Department and Ex-officio Director of Small Savings, Government of West Bengal, on behalf of respondents Nos. 1 and 2, that, is, the State of West Bengal and Shri B. K. Kundu, there is an assertion that the respondents come within the mischief of the Act and they have violated S. 3 of the Act. The relevant averments are contained in paragraphs 6, 7, 8, and 9 of the said affidavit and it is necessary to set out the same in their entirety:

“6. With reference to paragraphs 3 and 4 of the petition, I say that the petitioner firm accepts loans and/or deposits from all and sundry for varying periods without any authority of law. Although the professed rate of interest of such deposit is at the rate of 12% per annum, the petitioner firm was actually paying interest at the rate of 48% per annum, which was recently reduced to 36% per annum. The actual payment of such high rate of interest against the professed rate of 12% attracts huge amount of idle money into circulation and the investment of money as collected is not under the regulatory control of the Reserve Bank of India or any other agency of the State dealing with credit control in relation to the country’s economy. The receipt of such money from the members of public at such high rate of interest is without any letters as against the case of ‘the receipt of money by banking companies as also non-banking companies which are regulated under different provisions of law, to which I will crave reference at the time of hearing, if necessary. The pooling of the purchasing power and/or the financial resources and the deployment thereof being unfettered has resulted in the concentration of tremendous economic power in the hands of a few posing a potential threat to the equilibrium of the country’s economy. The term of the deposit are unilaterally determined without any scrutiny by the Reserve Bank of India or with reference to the norms as to the credit control which the said Bank lays down and follows from time to time. The acceptances of such deposits from the members of public with unrestricted use of the moneys so collected are completely repugnant to the accepted modes of public savings and investment thereof for generation of goods and services contributing to the economic growth of the country. The entire process is speculative in nature and directed towards luring away the investing public to the speculative market for making quick and easy money. These are some of the activities which are sought to be banned by the banning provisions of the said Act, which has replaced similar regulatory measures contained in the several directions issued by the Reserve Bank of India under the Reserve Bank of India Act, 1934 to the various financial institutions and non-banking companies. The present Act is applicable not only to such companies but also to individuals and firms. All allegations contrary to and save as aforesaid are denied.

7. With reference to paragraph 5 of the petition I call upon the petitioner to disclose full particulars of their deposit scheme, which if disclosed will go to show that the terms and conditions are wholly arbitrary and contrary to the economic norms. The very basis of the so-called contractual arrangement between the petitioner firm and its depositors is founded on the fraudulent device to assure the people with a high rate of interest, the major portion of which is paid through unaccounted for money, thereby encouraging growth of such unaccounted for money in the hands of the investing public. The professed rate of interest is a mere subterfuge to provide a cloak of bona fide and legality over the underhand transactions through which unaccounted for money comes into play in the market generating further unaccounted for money, a part thereof goes back to the depositors in the form of the balance of interest over 12% paid in cash month by month. All allegations contrary to and save as aforesaid are denied.

8. With reference to paragraph 9 of the petition I say that the petitioners have been very much working on the above scheme to which the depositers have subscribed. Whether such deposits are one time deposits and whether such deposits actually earn income in excess of the interest actually paid to the depositors or (sic) a matter of detailed investigation, which were in progress until the same was stopped by the order of the learned Court of Appeal passed on 8th Jan., 1981. From whatever particulars are so far available to the answering respondents it can be stated that the firm did not have so much income as the quantum of interest that was being paid by it and the irresistible conclusion from such state of affairs is that payment of interest was being made out of capital itself. All allegations contrary to and save as aforesaid are denied.

9. With reference to paragraph 7 of the petition I reiterate the statements made hereinbefore and deny all allegations contrary thereto. I specifically deny that no quick or easy money is accepted or received by the depositors or lenders or that payment of any such money is not contemplated or made by the firm as purported to be alleged. The depositor becomes a member of the investment scheme of the company by subscribing to it and the payment of the quick and easy money by way of high rate of interest is dependent upon the period of investment and/or efflux of time which are very much relative and/or applicable to the membership of the depositors of the scheme, to which the depositor agrees to subscribe. In the process of its working the scheme of the firm generates quick and easy money so as to render such scheme or arrangement as a money circulation scheme within the meaning of the said Act. All allegations contrary to and save as aforesaid are denied.”

48. The following further averments contained in paragraph 22 and in paragraph 30 of the said affidavit may also be noted:

“22**********

I further say that payment of interest at the clandestine rate of 36% or 46% as against the aforesaid rate of 12% is in the context of the scheme promoted and conducted by the petitioners tantamount to activity which is banned under the banking provisions of the said Act.

30. **********

No question of the depositors being ruined should arise if the petitioners bad been running their business on sound economic line and had invested the fund collected from the depositors in-safe and sound investment. The very fact that the petitioners are apprehensive of innumerable depositors being ruined goes to show that they engaged themselves and also the depositors in the speculative market and have rendered the investment insecure by reasons of the very nature of the business i. e. money circulation scheme, transacted by them.”

In the affidavit affirmed by Shri Sunil Kumar Chakravorty, Assistant Commissioner of Police and Deputy Superintendent of Police, Bureau of Investigation, Government of West Bengal, Finance, Taxation Department and filed on behalf of respondents Nos. 3 and 4, the deponent adopts the statements made in the affidavit of Arun Kanti (Roy) and the deponent denies that the searches and seizures were unlawful and illegal. The deponent further stated that as a result of the searches effected a mass of documents and a large amount of cash had been seized and the documents were being scrutinised.

49. In the affidavit affirmed by Sri Rani Annaji Rao, filed on behalf of Reserve Bank of India, the deponent has stated that the Reserve Bank of India which has no regulatory control over the firm has been unnecessarily made a party to the proceeding. It has been further stated in the said affidavit that as desired by the parties and the Court, the Reserve Bank of India was placing the materials which had come to the knowledge of the Reserve Bank. In this affidavit reference has been made to certain correspondence between the State Finance Minister, Union Finance Minister and the Deputy Governor of the Reserve Bank of India and also to various queries made and the enquiries made by the Reserve Bank of India. It has been further stated that the view of the legal department of the Reserve Bank on the basis of the enquiries made had been indicated to the Finance Minister of the State of West Bengal. In this connection it will be relevant to set out two letters which have been annexed to the said affidavit filed an behalf of the Reserve Bank of India and are annexures D and E thereto. Annexure D is the copy of a letter addressed by Shri Ashok Mitra, State Finance Minister to the Union Minister for Finance and the said letter reads as follows:-

“Informally handed over to

DG (K) at Calcutta,

Ashok Mitra

D. O. No. IM. 28-2-80

Calcutta, October 1, 1980

Dear Shri Venkataraman,

In the context of the action being taken by the Government of West Bengal under the Prize Chits and ‘Money Circulation Schemes (Banning) Act, 1978, a question has arisen whether an organisation called “Sanchaita Investments” with the address at 5 and 6, Fancy Lane, Calcutta-1 come within the purview of the above Act. A reference in the matter has been made by our authorised officer under the above act to the Chief Officer, Department of Non-Banking Companies, Reserve Bank of India, Calcutta today. I am enclosing a copy of an advertisement published by the above organisation in the local newspapers as also a copy of a loan certificate receipt issued by the said organisation. I may mention that the authorised officer has issued notice under the above Act to a “Sanchaita Savings Scheme (P.) Ltd.” which is to be distinguished from ‘Sanchaita Investments”. It appears that the organisation called “Sanchaita Investments” is receiving large amount of monies from the public ostensibly as loans, and in lieu they are issuing loan certificates receipts. While we have no documentary evidence, the news is strongly circulating in the market that the organisation is in fact offering rates of interest as high as 30 to 40 per cent even though the loan certificate receipts indicate a rate of interest of 12 per cent only. There seems reasonable grounds for suspicion that this organisation is involved in extremely high-risk investments which only can enable them to pay such rates of interest. Since the security of monies deposited by the public is involved, we would suggest that a thorough enquiry be conducted by the Government of India into the activities of this organisation particularly for finding out whether they are infringing provisions of any relevant statute. It is felt necessary to conduct such an investigation on an urgent basis-since large amounts of public monies are reported to be kept with this organisation, which. does not seem as yet to have subjected to any regulatory control. We are meanwhile awaiting a reply to our reference (copy enclosed) to the Reserve Bank of India regarding the applicability of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 to this organisation.

With regards.

Yours sincerely,

Sd/- Ashok Mitra

Shri R. V. Vankataraman,

Union Minister for Finance,

North Block,

New Delhi-110001”.

Annexure E is a letter by Sri K. S. Krishnaswamy, Deputy Governor of Reserve Bank to Dr. Ashok Mitra, State Finance Minister. The said letter is also hereunder set out:

“D.O. DNBC No. 2020/102 (Gen) LO-80/81 22nd Oct., 1980

My dear Ashok,                                           Sanchaita Investments.

You might recall that during my recent visit to Calcutta, you had sent me a copy of your D. O. Letter dated October 1, 1980 to Shri Venkataraman, Union Minister for Finance as also of a letter dated Sept. 30, 1980 addressed to our Chief Officer, DNBC, Calcutta, in connection with the above firm. I have had the position examined by our Legal Department. According to them (vide extract of the note dated 17th Oct., 1980, enclosed for your confidential information) the acceptance of loans simpliciter by the firm by issue of receipts (as per the specimen received by us from our Calcutta Office) without floating any scheme or arrangement would not ordinarily be covered by the definition of “Prize Chit” and hit by the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. However, you may also like to consult your Legal Adviser on the subject.

2. As you may know, there are a few writ petitions pending in the Calcutta High Court where the interpretation of S. 2 (e) of the Banning Act is involved. In that context I have thought it advisable to write to you on a confidential basis, rather than send a separate official reply. I shall therefore be grateful if you could leave instructions with your staff to keep this matter and the views of our legal department strictly confidential.

With warm regards,

Sd/- K. S. Krishnaswamy

Dr. Ashok Mitra, Minister of Finance.”

50. Further supplementary affidavits had also been filed. On consideration of the facts and circumstances of this case and the materials which were placed before the learned Judge, the learned Judge came to the conclusion that the Act did not apply to the firm and the learned Judge further held that the searches and seizures were also wrongful, illegal and improper; and in view of his finding the learned Judge quashed the proceedings and directed the return of all documents and the refund of cash monies seized, to the writ petitioners. It appears from the judgment of the learned Judge that the matter had been very fully argued before him and the learned Judge in an elaborate judgment had considered the arguments advanced before him and thereupon recorded his findings and passed the order allowing the said writ petition.

51. Against the judgment and order passed by the learned Judge, the State of West Bengal and its three officers have preferred this appeal with special leave granted by this Court. The writ petitioners, the Reserve Bank of India and Union of India have been made respondents in this appeal. It does not appear that Union of India has participated in the proceedings before the learned Judge and no affidavit on behalf of the Union of India appears to have been filed before the learned Judge.

52. Mr. Som Nath Chatterjee, learned counsel appearing on behalf of the appellant has attacked the judgment under appeal on the main ground that the learned Judge in this extraordinary jurisdiction should not have held that the Act has no application to the respondent-Firm and should not have on the basis of the said finding interfered with the investigation into the affairs of the firm. Mr. Chatterjee contends that the question of applicability of the Act will only come for consideration after the investigation has been completed and all relevant materials have been gathered on such investigation. It is the contention of Mr. Chatterjee that at the investigation stage, the Court does not interfere and does not quash any proceedings before the investigation has been completed. In support of this contention, Mr. Chatterjee has referred to a number of decisions of this Court. I shall consider the relevant decisions referred to by Mr. Chatterjee at the appropriate time. Mr. Chatterjee has submitted that after the investigation has been completed and all relevant materials have been gathered a charge under the Act may or may not be framed against the appellant firm for violation of the provisions of the Act. It is his submission that if the materials collected do not indicate any infringement of the Act, no charge against the firm will be preferred, and all the accused persons will be discharged; if, on the other hand, materials gathered disclose an offence under the Act, proper charge against the accused persons will be framed and it will be open to the accused persons to raise the plea in the course of the prosecution that no offence under the Act has been committed by them and the Act has no application to the transactions of the firm and to the firm.

53. In the case of State of West Bengal v. S. N. Basak, (1963) 2 SCR 52), this Court held at pages 55-56 as follows:-

“The powers of investigation into cognizable offences are contained in Chapter XIV of the Code of Criminal Procedure. Section 154 which is in that Chapter deals with information in cognizable offences and S. 156 with investigation into such offences and under these sections the police has the statutory right to investigate into the circumstances of any alleged cognizable offence without authority from a Magistrate and this statutory power of the Police to investigate cannot be interfered with by the exercise of power under S. 561-A of Criminal P. C. As to the powers of the judiciary in regard to statutory right of the police to investigate, the Privy Council in King Emperor v. Khwaja Nazir Ahmed (1944) 71 Ind App 203, 212 observed as follows:-

‘The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the Court to intervene in an appropriate case when moved under S. 491 of the Criminal P. C. to give directions in the nature of habeas corpus. In such a case as the present, however, the court’s functions begin when a charge is preferred before it, and not until then. It has sometimes been thought that S. 561A has given increased powers to the Court which it did not possess before that section was enacted. But this is not so, the section give no new powers, it only provides that those which the Court already inherently possesses shall be preserved and is inserted as their Lordships think, lest it should be considered that the only powers possessed by the Court are those expressly conferred by the Criminal P. C. and that no inherent powers had survived the passing of that Act.

With the interpretation which has been put on the statutory, duties and powers of the police and of the powers of the Court, we are in accord. The High Court was in error therefore in interfering with the powers of the police in investigating into the offence which was alleged in the information sent to the officer-in-charge of the police station.”

54. In the case of State of Bihar v. J. A. C. Saldhana, (1980) 2 SCR 16), this Court at pages 39-40 observed:

“The next contention is that the High Court was in error in exercising jurisdiction under Art. 226 at a stage when the Addl. Chief Judicial Magistrate who has jurisdiction to entertain and try the case has not passed upon the issues before him, by taking upon itself the appreciation of evidence involving facts about which there is an acrimonious dispute between the parties and giving a clean bill to the suspects against who the first information report was filed. By so directing the learned Addl. Chief Judicial Magistrate the judgment of the High Court virtually disposed of the case finally. As we are setting aside the judgment of the High Court with the result that the case would go back to the learned Additional Chief Judicial Magistrate, it would be imprudent for us to make any observation on facts involved in the case.

There is a clear-cut and well demarcated sphere of activity in the field of crime detection and crime punishment Investigation of an offence is the field exclusively reserved for the executive through the police department, the superintendence over which vests in the State Government. The executive which is charged with a duty to keep vigilance over law and order situation is obliged to prevent crime and if an offence is alleged to have been committed it is its bounden duty to investigate into the offence and bring the offender to book. Once it investigates and finds an offence having been committed it is its duty to collect evidence for the purpose of proving the offence. Once that is completed and the investigating officer submits report to the Court requesting the Court to take cognizance of the offence under S. 190 of the Code its duty comes to an end. On a cognizance of the affence being taken by the Court the police function of investigation comes to an end subject to the provision contained in Section 173 (8), there commences the adjudicatory function of the judiciary to determine whether an offence has been committed and if so, whether by the person or persons charged with the crime by the police in its report to the Court, and to award adequate punishment according to law for the offence proved to the satisfaction of the Court. There is thus a well defined and well demarcated function in the field of crime detection and its subsequent adjudication between the police and the Magistrate”.

Same views have been reiterated by this Court in the other decisions which were cited by Mr. Chatterjee. In the case of S. N. Sharma v. Bipen Kumar Tiwari, (1970) 3 SCR 946), this Court at page No. 951, referred to the observations of the Privy Council in the case of King Emperor v. Khwaja Nazir Ahmed, (1944) 71 Ind App 203, which have been quoted in the judgment of this Court in the earlier decision and then proceed to hold at pages 951-952:

“Counsel appearing on behalf of the appellant urged that such an interpretation is likely to be very prejudicial particularly to Officers of the Judiciary who have to deal with cases brought up by the police and frequently give decisions which the police dislike. In such cases, the police may engineer a false report of a cognizable offence against the Judicial officer and may then harass him by carrying on a prolonged investigation of the offence made out by the report. It appears to us that, though the Code of Criminal Procedure gives to the police unfettered power to investigate all cases where they suspect that a cognizable person can always seek a remedy by invoking the power of the High Court under Art. 226 of the Constitution under which, if the High Court could be convinced that the power of investigation has been exercised by a police officer mala fide, the High Court can always issue a writ of mandamus restraining the police officer from misusing his legal powers”.

55. Relying on these decisions and the principles enunciated therein, Mr. Chatterjee has argued that the learned Judge clearly erred in interfering with the investigation and quashing the proceedings at the stage of investigation before framing of charges against the accused persons. Mr. Chatterjee argues that there is no allegation of mala fide in the instant case and the learned Judge has also come to a conclusion that there is no case of any mala fide on the part of the appellants. Mr. Chatterjee has submitted that the materials which have been gathered as a result of the investigation which could be carried on only for a short while go to indicate that the transactions of the firm are not above board and they are not what they pretend or purport to be. It is his submission that materials gathered clearly indicate that though the loan certificates stipulate interest to be paid @ 12% a much larger sum by way of interest ranging between 36% to 48% is actually paid to the depositors, and the amount which is paid in excess of the rate stipulated in the loan certificates is paid in cash in a clandestine manner. depriving and defrauding revenue of its legitimate dues. Mr. Chatterjee comments that the payment of Interest in this clandestine manner at a very high rate which Is not shown or otherwise accounted for results not only in generation of black-money, but paralyses the economy of the State. Mr. Chatterjee has further commented that in view of this allurement to the, depositors of payment of large sums of money in a clandestine manner, the firm which has a share-capital of only ` 7,000 has succeeded in alluring depositors and the deposits received by the firm with the capital of ` 7,000 now exceed crores of rupees. Mr. Chatterjee submits that a firm which carries on clandestine business of this nature is not entitled to invoke the extraordinary jurisdiction conferred on the Court under Art. 226 of the Constitution.

56. Mr. Chatterjee has contended that the violation of S. 3 of the Act has been alleged and it is his contention that the nature of business carried on by the Arm indicates that the firm is conducting a ‘Money Circulation Scheme’. According to Mr. Chatterjee, ‘Money Circulation Scheme’ by virtue of its definition in Section 2 (c) of the Act means any scheme, by whatever name called, for the making of quick or easy money. It is his argument that the transactions disclose that the firm and the depositors are both trying to make quick or easy money, the scheme being that the depositors will deposit money against certificate stipulating interest to be paid @ 12% but they will in fact be paid interest at a much higher rate and thereby make quick or easy money and the firm invests the money received from the depositors in such transactions as to enable them to earn easy or quick money. Mr. Chatterjee has further argued that money circulation scheme has to be interpreted to mean any scheme for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription. Further investigation according to Mr. Chatterjee, can only show whether the scheme of making quick or easy money depends on any contingency relative in the enrolment of members into the scheme. Mr. Chatterjee submits that the question of proper interpretation of the provisions of the Act and also of what money circulation scheme means, should come up only after investigation has been completed and all relevant materials have been collected. It is Mr. Chatterjee’s submission that the interpretation of the provisions of the Act and particularly what ‘Money Circulation Scheme’ means, is not to be made in a hypothetical way in the absence of relevant materials being gathered on completion of investigation. Mr. Chatterjee has argued that after all the materials have been collected on completion of the investigation, it may be that materials may show that the firm is not conducting a Money Circulation Scheme and no charge against the firm may at all be preferred; if, however, on the other band, the materials, indicate that the firm is conducting a money circulation scheme and a charge is preferred, it will be open to the accused persons to take the defence that the business conducted by them is not one which will be considered to be a money circulation scheme within the meaning of the Act. As I have earlier observed, the main grievance of Mr. Chatterjee is that the Court should (not) have interfered at the stage of investigation and quashed the proceedings.

57. Mr. Chatterjee has next contended that S. 7 of the Act, clearly empowers a police officer not below the rank of an officer in charge of a police station to enter, search and seize in the manner provided in the said section. It is Mt. Chatterjee’s contention that the searches have been carried out duly in terms of the provisions contained in the said section and cash money and other books and documents have been lawfully seized in terms of the provisions contained in the said section. Mr. Chatterjee has further submitted that even if there had been any irregularity in the matter of searches and seizure, the searches and seizure are not rendered illegal and void as a result thereof. Various decisions were also referred to by Mr. Chatterjee in support of his submissions.

58. Mr. A. K. Sen, learned counsel appearing on behalf of the firm has submitted that the learned Judge on a proper consideration of all the relevant materials and the provisions of the Act has correctly come to the conclusion that no offence under the Act is disclosed and the Act has no application to the firm and in that view of the matter the learned Judge was perfectly justified in quashing the proceedings against the firm, and in directing the return of the documents and cash money seized by the police to the firm. Mr. Sen has argued that investigation has to be done when an offence is disclosed for collecting materials for establishing an offence. It is the argument of Mr. Sen that if no offence is disclosed there cannot be any investigation and any investigation when no offence is disclosed by the F.I.R. and the other materials, means unnecessary harassment for the firm and its partners and illegal and improper deprivation of their liberty and property. Mr. Sen submits that it is no doubt true that when an offence is disclosed, the Court normally does not interfere with the investigation into an offence. He, however, contends that when no offence is disclosed, it, indeed, becomes the duty of the Court to interfere with any investigation which is improperly and illegally carried on to the serious prejudice of the persons. In support of this contention Mr. Sen has referred to the decision of the Judicial Committee in the case of King Emperor v. Khwaja Nazir Ahmed (supra) and has relied on the following observations at page No. 213 (of Ind App):-

“No doubt, it no cognizable offence to disclosed and still more, if no offence of any kind is disclosed, the Police would have no authority to undertake investigation.”

In this connection, Mr. Sen also referred to the decision of this Court in the case of R. P. Kapur v. State of Punjab, (1960) 3 SCR 388 and has placed very strong reliance on the following observations at page No. 393:-

“Cases may also arise where the allegations in the first information Report or the complaint” even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to decide whether the offence alleged is disclosed or not. In such cases it would be legitimate for the High Court to hold that it would be manifestly unjust to allow the process of the criminal court to be issued against the accused person.”

Mr. Sen has also referred to the decision of this Court in Jehan Singh v. Delhi Administration, (1974) 3 SCR 794; in which the aforesaid observations made by Gajendragadkar, J. in the case of R. P. Kapur v. State of Punjab (supra) have been reproduced and reiterated. Mr. Sen further points out that in the case of S. N. Sharma v. Bipen Kumar Tiwari (supra), this Court at page No. 951 recognises that “in appropriate cases the aggrieved person can always seek remedy by invoking powers of the High Court under Art. 226 of the Constitution under which, if the High Court could be convinced that the power of investigation has been exercised by a police officer mala fide, the High Court can always issue a writ of mandamus restraining the police officer from misusing his legal powers”.

59. Mr. Sen has argued that the learned Judge having properly appreciated the legal position has made the correct approach to the consideration of the present case. It is his argument that the teamed Judge has carefully considered the materials which have been placed before him including the F.I.R. and he has properly analysed the provisions of the Act and on a proper interpretation of the Act and on a proper appreciation of the materials which were there before the learned Judge, the learned Judge has come to the conclusion that no offence under the Act is disclosed and the Act has no application to the firm. Mr. Sen argues that for a proper appreciation of the question whether the materials disclose any offence under the Act, it is imperative to interpret the Act. He contends that it will not be a proper approach to leave the question of interpretation to the stage after the investigation is complete, as according to Mr. Sen, there can be no investigation unless an offence has been disclosed. Mr. Sen argues that if the materials do not disclose any offence, no investigation can be permitted to find out whether as a result of the investigation an offence may be disclosed or not. Mr. Sen submits that investigation can legitimately go on, once an offence is disclosed for collecting materials for establishing and proving the offence. It is the contention of Mr. Sen that the case of the appellants is that the firm is conducting money circulation scheme which is banned by the Act. Mr. Sen argues that to find out whether the firm is conducting a money circulation scheme, it is necessary to consider what a money circulation scheme is within the meaning of the Act and to find out whether on the materials alleged in the F.I.R. and also in the affidavits, it can be said that the business carried on by the firm is one in the nature of conducting a money circulation scheme. Mr. Sen has argued that the learned Judge in his judgment has correctly interpreted what constitutes ‘money circulation scheme, within the meaning of the Act, and it is the argument of Mr. Sen that such interpretation is absolutely essential to find out whether the allegations made in the F.I.R. make out a case that the firm is conducting a money circulation scheme. Mr. Sen submits that the materials on record including the allegations made in the even if they are all assumed to be correct, do not go to show that. the firm is conducting a money circulation scheme; and, in that view of the matter there can be no investigation, if no offence under the Act is disclosed. Analysing the F.I.R. and the other materials which have been placed before the Court, Mr. Sen submits that the materials go to indicate- (1) that the firm is accepting deposits or loans from the public for a term against loan certificates which stipulate payment of interest @ 12 %, (2) though interest is stipulated to be paid @ 12%, the firm, in fact, is paying interest at a much higher rate. It used to pay interest @ 48% previously and is now paying interest @ 36%. The amount of interest paid in excess of the stipulated rate of 12% is paid in cash in a clandestine manner to the depositors. The excess amount of interest paid is not accounted for and results in accumulation of black-money; (3) the firm invest the money received from the depositors in high risk investment made by the firm and the earnings from the investment made, also result in generation of black-money; (4) because of the allurement of high rate of interest offered to the depositors, a major part of which is given in unaccounted black-money, the firm which has a share-capital of about ` 7,000 only has received deposits over crores of rupees.

60. It is the contention of Mr. Sen that even if all these allegations which are there in the F.I.R. and also in the other materials which have been placed before the Court are accepted to be correct, the said allegation do-not go to show that the firm, is conducting a money circulation scheme and do not disclose any offence under the Act. Mr. Sen in this connection hag commented that though in the F.I.R. it has been alleged that the firm is carrying on business of promoting Prize Chits, no such case was sought to be made out before the learned Judge or before this Court and there are no allegations or materials to show that the firm is carrying on business of promoting prize chits:and the only case that has been sought to be made before the trial Court and also this Court is that the firm is carrying on business of conducting or promoting money circulation scheme. Mr. Sen has argued that the money circulation scheme has been defined in Section 2 (c) of the Act to mean “any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription”. According to Mr. Sen, the essential requirements of a money circulation scheme are– (1) There must be a scheme for the making of quick or easy money on any event of contingency relative or applicable to the enrolment of members into the scheme whether or not such money is derived from the entrance money of the members of such scheme or periodical subscription; or (2) there must be a scheme for the receipt of any money or valuable thing as the consideration for promise to pay money on any event or contingency relative or applicable to the enrolment of members into a scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or from periodical subscription. Mr. Sen submits that neither F.I.R. nor any of the other materials go to show that the business carried on by the firm is, in any way, in the nature of conducting or promoting a money circulation scheme. In this connection Mr. Sen has drawn our attention to the statement of objects for the passing of this enactment. Mr. Sen has further submitted that this enactment which is in the nature of penal one has to be construed in the event of doubt or ambiguity in a manner beneficial to the party against whom any accusation is made.

61. Mr. Sen has further argued that the rules framed under the Act can also be taken into consideration for proper interpretation of the Act and the learned Judge in the instant case was justified in referring to the rules in construing the provisions of the Act. In this connection Mr. Sen has referred to the decision in Ex parte Wier in re Wier, (1871) 6 Ch App 875 and has relied upon the following observations at page No. 879:

“We do not think that any other section of the Act throws any material light upon the proper construction of this section, and if the question had depended upon the Act alone we should have had great doubt what the proper construction was; but we are of opinion that, where the construction of the Act is ambiguous and doubtful on any point, recourse may, be had to the rules which have been made by the Lord Chancellor under the authority of the Act, and If we find that in the rules any particular construction has been put on the Act, that it is our duty to adopt and follow that construction.”

Mr. Sen in this connection has drawn our attention to the relevant rules and he has argued that the rules leave no room for doubt that the Act has no application to the firm and no offence under the Act has been disclosed by the firm. Mr. Sen has submitted that the construction of the Act by the learned Judge is correct and it is his submission that in view of the provisions of the Act properly interpreted, there cannot be any doubt that the Act has no application to the instant case and there can be no question of any violation of the said Act by the firm. It is the submission of Mr. Sen that the approach and the reasoning of the learned Judge are both sound. Mr. Sen has next contended that the search and seizure carried on in the instant case are also illegal and unjustified. It is the argument of Mr. Sen that if no offence under the Act is disclosed and the Act has no application, there cannot be any question of any search or seizure under the Act. Mr. Sen has argued that the search and seizure done in the instant case have also not been done in conformity with the provisions of law. Mr. Sen has submitted that learned judge has correctly come to the conclusion that the search and seizure in the instant case were also illegal. In this connection Mr. Sen referred to a number of decisions.

62. Mr. Ray and Mr. Sibal who followed Mr. Sen mainly adopted the submissions made by Mr. Sen. Mr. Ray, further contended that to be a chit fund or to be a money circulation scheme; an element of uncertainty or luck is essential. It is the argument of Mr. Ray that in so far as the transactions carried on by the firm in the instant case are concerned the said element is nowhere there. Mr. Ray, in this connection referred to the definition of conventional chit and has argued that the conventional chits have not been brought within the purview of this Act. Mr. Ray has drawn our attention to the decision of this Court in the case of Srinivasa Enterprises v. Union of India (1980) 4 SCC 507 in which the validity of the Act came to be challenged in this Court and was upheld by this Court.

63. The appeal before us has been argued at great length. A number of decisions have also been cited from the Bar. I have already referred to some of the decisions which were cited before us. I do not propose to consider all the cases which were referred to in the course of argument by the learned counsel appearing on behalf of the parties as I do not consider the same to be necessary. I have already stated that the matter appears to have been elaborately argued before the learned trial Judge who in his judgment has fully set out the relevant facts and circumstances of the case, has noted the arguments which were advanced before him and the learned Judge has also referred to a number of decisions. I may, however, note that Mr. Chatterjee, appearing on behalf of the appellants, has made a grievance before us that some of the decisions cited by him have not been considered by the learned Judge. Though the matter has been argued at great length, yet, to my mind, the case appears to rest in a fairly short compass.

64. In my opinion, the legal position is well-settled. The legal position appears to be that if an offence is disclosed, the Court will not normally interfere with an investigation into the case and will permit investigation into the offence alleged to be completed; if, however, the materials do not disclose an offence, no investigation should normally be permitted. The observations of the Judicial Committee and the observations of this Court in the various decisions which I have earlier quoted, make this position abundantly clear. The propositions enunciated by the Judicial Committee and this Court in the various decisions which I have earlier noted, are based on sound principles of justice. Once an offence is disclosed, an investigation into the offence must necessarily follow in the interests of justice. If, however, no offence is disclosed, an investigation cannot be permitted, as any investigation, in the absence of any offence being disclosed, will result in unnecessary harassment to a party, whose liberty and property may be put to jeopardy for nothing. The liberty and property of any individual are sacred and sacrosanct and the Court zealously guards them and protects them. An investigation is carried on for the purpose of gathering necessary materials for establishing and proving an offence which is disclosed. When an offence is disclosed, a proper investigation in the interest of justice becomes necessary to collect materials for establishing the offence, and for bringing the offender to book. In the absence of a proper investigation in a case where an offence is disclosed, the offender may succeed in escaping from the consequences and the offender may go unpunished to the detriment of the cause of justice and the society at large. Justice requires that a person who commits an offence has to be brought to book and must be punished for the same. If the Court interferes with the proper investigation in a case where an offence has been disclosed, the offence will go unpunished to the serious detriment of the welfare of the society and the cause of the justice suffers. It is on the basis of this principle that the Court normally does not interfere with the investigation of a case where an offence has been disclosed. The decisions on which Mr. Chatterjee has relied are based on this sound principle, and in all these cases, an offence had been disclosed. Relying on the well-settled and sound principle that the Court should not interfere with an investigation into an offence at the stage of investigation and should allow the investigation to be completed, this Court had made the observations in the said decisions which I have earlier quoted reiterating and reaffirming the sound principles of justice. The decisions relied on by Mr. Chatterjee, do not lay down, as it cannot possibly be laid down as a broad proposition of law that an investigation must necessarily be permitted to continue and will not be prevented by the Court at the stage of investigation, even if no offence is disclosed. While adverting to this specific question as to whether an investigation can go on even if no offence is disclosed, the Judicial Committee in the case of King Emperor v. Khwaja Nizam Ahmed (supra) and this Court in R. P. Kapur v. State of Punjab (supra), Jehan Singh v. Delhi Administration (supra) S. N. Sharma v. Bipen Kumar Tiwari (supra) have clearly laid down that no investigation can be permitted and have made the observations which I have earlier quoted and which were relied on by Mr. Sen. As I have earlier observed this proposition is not only based on sound logic but is also based on fundamental principles of justice, as a person against whom no offence is disclosed, cannot be put to any harassment by the process of investigation which is likely to put his personal liberty and also property which are considered sacred and sacrosanct into peril and jeopardy.

65. Whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case. In considering whether an offence into which an investigation is made or to be made, is disclosed or not, the Court has mainly to take into consideration the complaint or the F.I.R. and the Court may in appropriate cases take into consideration the relevant facts and circumstances of the case. On a consideration of all the relevant materials, the Court has to come to the conclusion whether an offence is disclosed or not. If on a consideration of the relevant materials, the Court is satisfied that an offence is disclosed, the Court will normally not interfere with the investigation into the offence and will generally allow the investigation into the offence to be completed for collecting materials for proving the offence. If, on the other hand, the Court on a consideration of the relevant materials is satisfied that no offence is disclosed, it will be the duty of the Court to interfere with any investigation and to stop the same to prevent any kind of uncalled for and unnecessary harassment to an individual.

66. In the instant case, the offence complained of is violation of the Act. For a proper adjudication of the case and for a proper appreciation of the question, it, therefore, becomes necessary to consider the relevant materials and also the provisions of the Act for being satisfied as to whether the relevant materials go to indicate any violation of the Act and disclose any offence under the Act. The materials are mainly contained in the F.I.R. which has been earlier set out in its entirety. An analysis of the F.I.R. mentions the following allegations on the basis of which the said F.I.R. has been lodged:

1. Sanchaita Investments is a partnership Firm. Its partners are Behari Prasad Murarka, Sri Sambhu Mukherjee and Sri Swapan Kumar Guha. The firm was started in and around 1975;

2. The Firm had been offering fabulous interest @ 48% to its members until very recently. The rate of interest has of late been reduced to 36% per annum.

3. Such high rate of interest were and are being paid even though the loan certificate receipts show rate of interest to be 12% only.

4. Thus, the amount in excess of 12% so paid clearly shows that ‘Money Circulation Scheme’ is being promoted and conducted for the making of quick and /or easy money, prizes and/or gifts.

5. Prizes or gifts in cash are also being awarded to agents, promotors and members too.

6. In view of the above, Sarv/Shri Behari Prasad Murarka, Sambhu Mukherjee and Swapan Kumar Guha appears to have been carrying on the business in the trade name of ‘Sanchaita Investments’ in prize chits and money circulation scheme in violation of Section 3 of the Prize Chits and Money Circulation Scheme (Banning) Act. 1978.

67. The other materials are contained in paragraphs 6, 7, 8, 9, 22, 27 and 30 of the affidavit and the two documents, namely, the article published in the Newspaper ‘Business Standard’ dated 16-11-1980 and the documents seized in the course of searches. I have earlier set out in extenso the statement made in the said paragraphs of the affidavit filed on behalf of the State. A copy of the article has been enclosed to the affidavit filed on behalf of the State. The document seized in the course of starches and handed over to Court in the course of the arguments was a letter addressed by an officer of the Air Force to the firm in which the officer makes a grievance that the Firm which was paying interest @ 48% has now reduced the same to 36% in view of advances made to political parties. The letter further records the fact that the firm hopes to pay the enhanced rate of interest of 48% in the near future. An analysis of these materials suggests that the firm is carrying on activities of accepting deposits from the members promising to pay them interest on such deposits at an agreed rate of 12% as stipulated in the loan certificate, but in fact, it has been paying interest to them at much higher rate of interest. The materials further indicate that the firm is making high risk investments of the monies received from the depositors and has also been advancing monies to political parties.

68. The crux of question is whether these allegations disclose an offence under the Act namely, violation of S. 3 of the Act even if all these allegations are deemed to be correct.

69. The question Whether these allegations disclose an offence under the Act and can be the basis for any suspicion that an offence under S. 3 of the Act has been committed or not, must necessarily depend on the provisions of the Act and its proper interpretation.

70. The Act has been enacted for implementing the recommendations of a Study Group of the Reserve Bank of India under the Chairmanship of Shri James S. Raj the then Chairman of the Unit Trust of India, constituted for examining the depth the provisions of Chapter IIIB of the Reserve Bank of India Act, 1934 and the directions issued thereunder to Non-Banking Companies in order to-assess their adequacy in the context of ensuring the efficacy of the monetary and credit policies of the country and affording a degree of protection to the interests of the depositors who place their savings with such companies. Paragraph 2 of the Statement of Objects and Reasons of the Act states:

“Prize chits would cover any kind of arrangement under which moneys are collected by way of subscriptions, contributions, etc. and prizes, gifts, are awarded. The prize chit is really a form of lottery. Its basic feature is that the foreman or promoter who ostensibly charges no commission collects regular subscriptions from the members. Once a member gets the prize. He is very often not required to pay further instalments and his name is dropped from further lots. The institutions conducting prize chits are private limited companies with a very low. capital base contributed by the promoters, directors, or their close relatives. Such schemes confer monetary benefit only on a few members and on the promoter companies. The Group had, therefore, recommended that prize chits or money circulation schemes, by whatever name called, should be totally banned in the, larger interests of the public and suitable legislative measures should be undertaken for purpose.”

71. The relevant portion of paragraph 3 of the Statement of Objects and Reasons reads as follows:-

“The Bill proposes to implement the above recommendation of the Group by, providing for the banning of the promotion or conduct of any prize chit or money circulation scheme, by whatever name called, and of the participation of any person in such chit or scheme. The Bill provides for a period of two years within which the existing units carrying on the business of prize chits or money circulation schemes may be wound up and provides for penalties and other incidental matters.”

It is, therefore, clear that the main object of the Act is to ban promotion or conduct of any Prize Chit or Money Circulation Scheme, by whatever name called, and of the participation of any person in such chit or scheme. S. 2 of the Act deals with definitions. Money Circulation Scheme is defined in S. 2 (e) in the following words:

“ ‘Money Circulation Scheme’ means any scheme, by whatever name called, for the, making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions”.

Prize Chit is defined in S. 2 (e) in the following terms:-

“‘prize chit’ includes any transaction or arrangement by whatever name called under which a person collects whether as a promoter, foreman, agent or in any other capacity, monies in one lump sum or in instalments by way of contributions or subscriptions or by sale of units, certificates or other instruments or in any other manner or as membership fees or admission fees or service charges to or in respect of any savings, mutual benefit, thrift or any other scheme or arrangement by whatever name called and utilises the monies so collected or any part .thereof or the income accruing from investment or other use of such monies for all or any of the following purposes, namely:-

(i) giving or awarding periodically or otherwise to a specified number of subscribjers as determined by lot, draw or in any other manner, prizes or gifts in cash or in kind whether or not the recipient of the prize or gift is under a liability to make any further payment in respect of such scheme or arrangement;

(ii) refunding to the subscribers or such of them as have not won any prize or gift, the whole or part of the subscriptions, contributions or other monies collected with or without any bonus, premium, interest or other, advantage by whatever name called, on the termination of the scheme or arrangement, or on or after the expiry of the period stipulated therein, but does not include a conventional chit.”

A Conventional Chit which is specifically excluded in the definition of prize chits in. S. 2 (c) (ii) is defined in S. 2 (a) as follows:-

“Conventional Chit” means a transaction whether called chit, chit fund, kuri or by any other name by or under which a person responsible for the conduct of the chit enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or certain quantity of grain instead) by way of periodical instalments for a definite period and that each subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be provided for in the chit agreement, be entitled to a prize amount.”

Section 3 of the Act the violation of which alleged reads:-

“No person shall promote or conduct any prize chit or money circulation scheme or enrol as a member to any such chit or scheme, or participate in it otherwise or receive or remit any money in pursuance of such chit or scheme”.

Section 7 of the Act provides:

“(1) It shall be lawful for any police officer not below the rank of an officer in charge of a police station:

(a) to enter, if necessary by force, whether by day or night with such assistance as he considers necessary any premises which he has reason to suspect, are being used for purposes connected with the promotion or conduct of any prize chit or money circulation scheme in contravention of the provisions of this Act;

(b) to search the said premises and the persons whom he may find therein;

(c) to take into custody and produce before any Judicial Magistrate all such persons as are concerned or against whom a complaint has been made or credible information has been received or a reasonable suspicion exists of their having been concerned with the use of the said premises for purposes connected with, or with the promotion or conduct of, any such prize chit or money circulation scheme as aforesaid;

(d) to seize all things found in the said premises which are intended to be used, or reasonably suspected to have been used, in connection with any such prize or money circulation scheme as aforesaid.

(2) Any officer authorised by the State Government may

(a) at all reasonable times, enter into and search any premises which he has reason to suspect, are being used for the purposes connected with, or conduct of, any prize chit, or money circulation scheme in contravention of the provisions of this Act;

(b) examine any person having the control of, or employed in connection with, any such prize chit or money circulation scheme;

(c) order the production of any documents, books or records in the possession or power of any person having the control of, or employed in connection with, any such prize chit or money circulation scheme; and

(3) All searches under this section shall be made in accordance with the provisions of the Code of Criminal Procedure, 1973.”

S. 13 confers necessary powers to make rules and reads as under:

“(1) The State Government may, by notification in the Official Gazette and in consultation with the Reserve Bank, make rules for the purpose of carrying out the provisions of the Act.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for

(a) the office of the Reserve Bank to whom full information regarding any prize chit or money circulation scheme. may be furnished under the first proviso to sub-section (1) of Section 12, and the form in which and the period within which such information may be furnished;

(b) the particulars relating to the winding up plan of the business relating to prize chits or money circulation. schemes.”

72. The complaint alleges violation of S. 3 of the Act, In other words, the complaint is that the firm is promoting or conducting a prize chit or a money circulation scheme. The definition of prize chit has been earlier set out. I have also earlier analysed the F.I.R. and the other materials on the basis of which the complaint is made and the materials which have been placed before the Court. The materials do not indicate anything to disclose that the firm is promoting or conducting any prize chit. I may also here note that no arguments have been advanced on behalf of the appellants that the firm is promoting or conducting any prize chit; and in my opinion, rightly, as the allegations do not give any indication whatsoever of any case of a prize chit being promoted or conducted by the firm. The argument on behalf of the appellants has been that the firm is promoting or conducting a money circulation scheme. Though the Statement of Objects and Reasons of the Act may suggest that the prize chit and a money circulation scheme are more or less of like nature, yet, in view of the separate definitions of these two being given in cl. 2 of the Act and in view of the further fact that S. 3 speaks of prize chit or money circulation scheme, each of the aforesaid must be considered to be separate and distant for the purposes of the Act; and promoting or conducting either prize chit or any money circulation scheme or both must be held to be an offence under the Act.

73. I shall now proceed to consider whether the materials disclose that the firm is promoting or conducting a money circulation scheme. I have already set out the definition of money circulation scheme as given in S. 2 (c) of the Act. On a plain reading of the said definition, the requirements of A money circulation scheme are-

(i) there must be a scheme;

(ii) there must be members of the scheme;

(iii) the scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrolment of members into the scheme or there must be a scheme for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or contingency relative or applicable to the enrolment of members into the scheme;

(iv) the event of contingency relative or applicable to the enrolment of members into the scheme will however not be in any way affected by the fact whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription.

74. On a proper interpretation of this definition, it clearly appears that the condition in the said definition ‘on any event or contingency relative or applicable to the enrolment of members into the scheme whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription’ qualifies both the provisions contained therein, namely, (i) money circulation scheme means a scheme by whatever name called, for the making of quick or easy money, (ii) or money circulation scheme means any scheme for the receipt of any money or-valuable thing as the consideration for the promise to pay money. Taking into consideration the language used in the section and particularly the two commas,, one after the words “easy money” and the other after the words “pay money”, it becomes clear that this stipulation, is intended to cover both; and the interpretation contended for by Mr. Chatterjee that the further provision in the definition, namely, “on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from entrance money of such scheme or periodical subscription” applies only to the second part, namely, money circulation scheme ‘means any scheme, by whatever name called, for the receipt of any money or valuable thing as the consideration for a promise to pay money, is not sound’. On this interpretation, of Mr. Chatterjee, the provision in the definition, namely ‘money circulation scheme’ means any scheme by whatever name called for the making of quick or easy money’ will indeed become vague and meaningless.

75. For properly appreciating whether the offence of promoting or conducting a money circulation scheme is disclosed or not, it becomes necessary to consider whether the materials, even if they are all accepted to be correct, indicate that the business carried on by the firm satisfies the requirements of money circulation scheme And disclose an offence under the Act.

76. The materials show that the firm accepts loans or deposits from general public for a term against loan certificates which stipulate payment of interest @ 12%. Materials also indicate that the firm pays stipulated amount of interest and further pays a much larger amount of interest in a clandestine manner to the persons who invest their monies in the firm against loan certificates. The materials further indicate that the persons who have invested their monies with the firm against loan certificates used to receive, in fact, the stipulated amount of interest @ 12% and also used to receive an additional sum as further Interest @ 36% in a clandestine manner. The materials also indicate that this further rate of interest @ 36% paid clandestinely in addition to the stipulated rate of 12 % has been reduced now to 24 %, because of investments by the firm with political parties. In other words, the materials go to show that though the rate of interest stipulated in the loan certificate was 12 %, the firm used to pay altogether interest @ 48% previously and is now paying interest @ 36% inclusive of payment of interest stipulated in the loan certificate. The materials also indicate that the firm invests the deposits or loans received from the general public in high risk investments. The materials, however, do not show that the payment of interest at the stipulated rate of 12% or at any enhanced rate in excess of the stipulated rate depends on any event or contingency relative or applicable to the enrolment of any new depositors. The materials also do not indicate that the firm makes any discrimination in the matter of payment of interest to its depositors. The materials also do not indicate that the payment of interest to the depositors whether at the stipulated rate or at the enhanced rate is dependent on any element of chance and the materials do not indicate that any kind of gifts is made by the firm to the depositors in addition to the payment of interest.

77. The first question that requires to be considered is whether these materials go to indicate that there is my scheme. The word ‘scheme’ has not been defined in the Act. The word ‘scheme’, however, has been defined in the Rules, in Cl. 2 (g) thereof. Cl. 2 (g) of the Rules state that a “scheme means a money circulation scheme or as the case may be a prize chit as, defined in cls. (c) and (e) respectively of S. 2”. The word ‘scheme’ as contemplated in S. 2 (c) of the Act is therefore, to be money circulation scheme within the meaning of the Act. To be a money circulation scheme, a scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrolment of the members into the scheme. The scheme has necessarily to be judged as a whole, both from the viewpoint of the promotors and also of the members. Even if it be assumed that the firm may be considered to be the promoter and the persons who invest their monies in the firm are members, the question has still to be considered whether investments of the monies with the firm in expectation of getting interest @ 48 % and a big part of it in black in a clandestine manner, can be said from the viewpoint of the depositors that the investment is for the making of quick or easy money. If any individual invests his money in expectation of getting a high return, say 50% or more and there is nothing clandestine in the transaction which is above board, can it be said that the investment is for making easy money or quick money? Various individuals may invest their monies in their business which may yield very high profits. Many individuals also may indulge in speculative business in expectation of high return of their money and may succeed or may not succeed in speculative transactions. If such transactions are made openly and not in violation of any law, I have no doubt in my mind that it can never be said that such investment has been made for making quick or easy money, and such transactions can never come within the scheme for making easy or quick money, as enumerated in the Act. The further question that, however, arises for consideration is whether the position will be any different if a part of the transaction is not above, board and is secretive in nature. In my mind, that will not make any difference and the transaction cannot be considered to be a scheme for the making of quick or easy money, though the transaction may offend against revenue laws or any other law. Transactions in black money do not come within the mischief of this Act. Judged from the point of view of the depositors, it cannot, therefore, be said that their investment in the firm for high return by way of interest, part of which is above board and a part of which is clandestine, will form any part of a scheme for making easy or quick money. It is further to be noted that this return on investment by way of interest is not dependent on any event or contingency whatsoever and has nothing to do with any event or contingency relative or applicable to the enrolment of any new members, even if the depositors be assumed to be members.

78. Judged from the point of view of the firm, there is nothing to indicate that the firm makes any investment in consultation with its depositors. The materials only indicate that the firm indulges in high risk investments and also advances monies to political parties. Neither of these acts appears to be illegal and they do not go to show that the firm makes easy or quick money. It is no doubt true that the materials go to show that the firm pays a larger amount by way of interest than payable on the basis of the rates stipulated in the loan certificate and the firm pays the excess amount of interest to the depositors in a clandestine manner. The clandestine manner of payment of interest in excess of the stipulated rate does not, in any way, indicate the existence of any scheme for making quick or easy money. It is again to be pointed out that in any event the materials do not indicate that the payment of interest by the firm in excess of the stipulated rate is in any way dependent on any event or contingency. There is nothing to indicate any scheme for the receipt of the money by the firm from its depositors as a consideration for promise to pay the interest in excess of the stipulated rate and also to pay back principal amount on the expiry of the term dependent in any way on any event or contingency relative or applicable to the enrolment of new depositors, considering the depositors to be members. I am, therefore, of the opinion, that not any of the requirements of a money circulation scheme is satisfied in the instant case. As there is no money circulation scheme, there can be no scheme as contemplated in the Act in view of the definition of scheme in the Rules. The materials, appear to disclose violation of revenue laws. They” however, do not disclose any violation of the Act. The materials do not disclose that the firm is promoting or conducting money circulation scheme and the question, therefore, of any violation of S. 3 of the Act does not arise in the instant case. As the firm is not conducting or promoting a money circulation scheme, and as no case is made that the firm is conducting or promoting a chit fund, the Act cannot be said to be applicable to the firm. In my opinion, it does not become necessary to refer to the rules for coming to the conclusion. I may, however, add that a consideration of the rules also clearly lends support to the conclusion to which I have come. I find that the learned Judge has very carefully and elaborately considered all the aspects in his judgment and in the course of elaborate discussion, he has noted all the contentions raised by the parties and has carefully considered them. The learned Judge on a careful consideration of all aspects and on a proper interpretation of the Act, has expressed the view that no offence under the Act is disclosed against the firm which does not conduct or promote money circulation scheme or a chit fund and the Act has no application to the firm. It may also be noted that the learned Judge has also in his judgment referred to the report of the Reserve Bank and the opinion of the learned Advocate General of the State which lent support to the view taken by the learned judge. The view expressed by the learned Judge that the materials do not disclose that the firm is promoting or conducting a money circulation scheme and the Act has, therefore, no application to the firm meets with my approval and I agree with the same.

79. Before concluding it will be proper to refer to the decision of this Court in the case of Srinivas Enterprises v. Union of India, (1980) 4 SCC 507, which were relied on before the learned Judge and has been considered by me. In this case, the validity of the Act was challenged before this Court while upholding, the validity of the Act for reasons stated in the judgment, Krishna Iyer, J. who spoke for the Bench observed at page No. 514 of SCC.), as follows:- “In many situations, the poor and unwary have to be saved from the seducing processes resorted by unscrupulous racketeers who glamourize and prey upon the gambling instinct to get rich quick through prizes. So long as there is the resistless spell of a chance, though small of securing a prize, though on paper, people chase chance the prospect by subscribing to the speculative scheme only to lose what they had. Can you save moths from the fire except by putting out the fatal glow? Once this prize facet of the chit scheme is given up, it becomes substantially a ‘conventional chit’ and the ban of the law ceases to operate. We are unable to persuade ourselves that the State is wrong in its assertion, based upon expert opinions that a complete ban of prize chits is an overall or excessive blow. Therefore, we decline to strike down the legislation on the score of Article 19 (1) (f) and (9) of the Constitution.”

80. As I have earlier noticed the materials in the instant case do not disclose any element of chance in the matter of business carried on by the firm. It may, however, be said that these observations which were made while dealing with a case of chit fund are not of very great assistance while considering what may be a money circulation scheme within the meaning of the Act.

81. As no offence under the Act is at all disclosed, it will be manifestly unjust to allow the process of criminal code to be issued or continued against the firm and to allow any investigation which will be clearly without any authority.

82. In the view that I have taken, I do not consider it necessary to deal with other aspects, namely, as to whether the searches and seizures were lawfully and properly done.

83. I, therefore, hold that the proceedings against the firm and its partners arising out of the F.I.R. must be quashed as the F.I.R. and the other materials do not disclose any offence under the Act and as such no investigation into the affairs of the firm under the Act can be permitted or allowed to be continued. I, accordingly, quash the proceedings against that firm and its partners and order that no investigation under the Act into affairs of the firm is to be carried on or continued.

84. I agree with the final order proposed by the learned Chief Justice In regard to the return of the documents, books and cash

85. The appeal, therefore, fails and is dismissed. I, however, make no order as to costs.

Whether police, on its own, conduct further investigation after filing final report

CODE OF CRIMINAL PROCEDURE

143. The decision, in STATE OF RAJASTHAN VS. ARUNA DEVI AND OTHERS[Supreme Court Of India, 08 Nov 1994] , has, thus, two important aspects, namely, even after acceptance of the ‘final report’, ‘further investigation’, at the instance of the police, is permissible even if no permission has been formally obtained from the Magistrate and, if on completion of such an investigation too, a ‘police report’ is filed disclosing commission of offence, there is no bar, in law, in the Magistrate taking ‘cognizance’ of the offence, which such a police report may disclose. It needs to be carefully noted that Aruna Devi (supra) was a case, wherein ‘cognizance’ had not been taken and ‘further investigation’ had been carried out without any formal order from the Magistrate and when the Magistrate took ‘cognizance’ on the basis of such a police report, the Supreme Court upheld the Magistrate’s decision. The case of Aruna Devi (supra) has also no application to the issue at hand inasmuch as even Aruna Devi (supra) does not relate to court’s power to direct further investigation after cognizance has already been taken and accused has entered appearance.

144. The case of Kishan Lal (supra), makes it dear that ‘further investigation’ can be directed at various stages of a trial, i.e., even after congizance has been taken. Kishan Lal (supra) also takes note of its earlier decision, in Mithabhai Pashabhai Patel and Ors. v. State of Gujarat,MANU/SC/0858/2009 , wherein, drawing the distinction between ‘further investigation’ and ‘re-investigation’, the court took the view that ‘re-investigation’ being forbidden, no superior court should, ordinarily, direct ‘re-investigation’. The relevant observations, appearing in para 15 and 16, are as under:

“15. An order of further investigation can be made at various stages including the stage of the trial, that is, after taking cognizance of the offence. Although some decisions have been referred to us, we need not dilate thereupon as the matter has recently been considered by a Division Bench of this court in Mithabhai Pashabhai Patel v. State of Gujarat in the following terms: (SCC pp. 336-37, paras 12-13)

‘12. This court while passing the order in exercise of its jurisdiction under article 32 of the constitution of india did not direct reinvestigation. This court exercised its jurisdiction which was within the realm of the Code. Indisputably the investigating agency in terms of sub-section (8) of section 173 of the code can pray before the court and may be granted permission to investigate into the matter further. There are, however, certain situations, where such a formal request may not be insisted upon.

13. It is, however, beyond any cavil that ‘further investigation’ and ‘reinvestigation’ stand on different footing. It may be that in a given situation a superior court in exercise of its constitutional power, namely, under articles 226 and 32 of the constitution of indiacould direct a ‘‘State’ to get an offence investigated and/or further investigated by a different agency. Direction of a reinvestigation, however, being forbidden in law, no superior court would ordinarily issue such a direction. Pasayat, J in Ramachandran v. R. Udhayakumar, opined as under: (SCC p. 415, para 7)

‘7. At this juncture it would be necessary to take note of section 173 of the code. From a plain reading of the above section it is evident that even after completion of investigation under sub-section (2) of section 173 of the code, the police has right to further investigate under sub-section (8), but not fresh investigation or reinvestigation.”

We have referred to the aforementioned decision only because Mr. Tulsi contends that in effect and substance the prayer of the appellant before the learned Magistrate was for reinvestigation but the learned Magistrate had directed further investigation by the Investigating Officer inadvertently.

16. “The Investigating Officer may exercise his statutory power of further investigation in several situations as, for example, when new facts come to his notice; when certain aspects of the matter had not been considered by him and he found that further investigation is necessary to be carried out from a different angle(s) keeping in view the fact that new or further materials came to his notice. Apart from the aforementioned grounds, the learned Magistrate or the superior courts can direct further investigation, if the investigation is found to be tainted and/or otherwise unfair or is otherwise necessary in the ends of justice.” The question, however, is as to whether in a case of this nature a direction for further investigation would be necessary.” [Emphasis is added]

145. Kishan Lal (supra) is also not a case, wherein the question arose as to whether ‘further investigation’ can be directed by Magistrate at the instance of the informant or de facto complainant after cognizance had been taken. What Kishan Lal (supra), indeed, decides is that the police can seek permission for further investigation at any stage and, in certain situations, formal request from the police may not be insisted upon meaning thereby that it is permissible, in tune with what had happened in Aruna Devi (supra), for the police to conduct ‘further investigation’ without formal permission from the Magistrate and such a further investigation would not be interfered with if, otherwise, justified and was warranted by the fact situation of a given case.

146. In the case of Ramachandran (supra), the Supreme Court has, in no uncertain words, laid down that even after completion of investigation and submission of ‘police report’ under sub-section (2) of section 173, police has the ‘right’ to further investigate the case under sub-section (8) of section 173, though not ‘fresh investigation’ or ‘re-investigation’ can be conducted by the police. The relevant observations, appearing at para 6 and 7, read as under:

“6. Learned counsel for respondent 1 supported the order of the High Court.

7. At this juncture it would be necessary to take note of section 173 of the code. From a plain reading of the above section it is evident that even after completion of investigation under sub-section. (2) of section 173 of the code, the police has right to further investigate under sub-section (8), but not fresh investigation or reinvestigation. This was highlighted by this court in K. Chandrasekhar v. State of Kerala. It was, inter alia, observed as follows: (SCC p. 237, para 24)

“24. The dictionary meaning of ‘further’ (when used as an adjective) is ‘additional; more; supplemental’. ‘Further’ investigation, therefore, is the continuation of the earlier investigation and not afresh investigation or reinvestigation to be started ab initio wiping out the earlier investigation altogether. In drawing this conclusion we have also drawn inspiration from the fact that sub-section (8) clearly envisages that on completion of ‘further investigation’ the investigating agency has to forward to the Magistrate a ‘further’ report or reports and not fresh report or reports regarding the ‘further’ evidence obtained during such investigation.”

(emphasis added)

147. In Ramachandran (supra), though the High Court had directed for ‘further investigation’, the Supreme Court held the said direction to be indefensible and directed, instead of a ‘fresh investigation’, ‘further investigation’, if required.

148. Before proceeding further and in order to resolve the controversy, which this writ appeal has raised, namely, as to whether the law laid down, in Randhir Singh Rana (supra), is, in the light of the decision, in Reeta Nag (supra), still holds good or not, appropriate it is that we pause here and point out as to what was the question, which Randhir Singh Rana (supra), was required to answer, because, without clearly understanding the question, which had been raised in Randhir Singh Rana’s case (supra), it would not be proper, on our part, to, finally, decide the issues of law raised in this appeal.

149. The question, raised in Randhir Singh Rana’s case (supra), was described by Hansaria, J, speaking for the court, at paragraph 6, in the following words,

“Question posed by us was if for further investigation, the police should ordinarily take formal permission of the court, can the court on its own not ask for further investigation, if the same be thought necessary to arrive at a just decision of the case.”

(emphasis added)

150. In the backdrop of the question, posed above, namely, whether a court can, on its own, ask the police to conduct ‘further investigation’ if the same was found necessary by the court to arrive at a ‘just decision of the case’, the court observed, in Randhir Singh Rana (supra), that the contention, that the courts are meant to advance the cause of justice, cannot be doubted and it is this principle, namely, that the courts are meant to advance the cause of justice, that led a Full Bench of the Punjab and Haryana High Court, in State v. Mehar Singh1974 Crl. LJ 970 , to take the view that even after cognizance has been taken, court can order ‘further investigation’ in exercise of inherent power. What was held, in Mehar Singh (supra), is really what is contended, even now, in this appeal, by the learned amicus curiae to be the reason for existence of courts.

Distinction between further investigation and re-investigation

CODE OF CRIMINAL PROCEDURE

‘Investigation’, it may be noted, has been defined in section 2 (h) of the code. The Supreme Court, in H.N. Rishbud v. State of Delhi, AIR 1955 SC 196, dealt with the definition of ‘investigation’ under the Code of Criminal Procedure, 1898, which is same as under section 2 (h) of the new code, and, upon analyzing the provisions of Chapter IV of the that Code (which corresponds to Chapter XII of the new Code) described ‘investigation’, thus:

“……………under the Code ‘investigation’ consists generally of the following steps: (1) Proceeding to the spot, (2) Ascertainment of the facts and circumstances of the case, (3) Discovery and arrest of the suspected offender, (4) Collection of evidence relating to the commission of the offence which may consist of (a) the examination of various persons (including the accused) and the reduction of their statements into writing, if the officer thinks fit, (b) the search of places or seizure of things considered necessary for the ‘investigation’ and to be produced at the trial, and (5) Information of the opinion as to whether on the material collected there is a case to place the accused before a Magistrate for trial and if so taking the necessary steps for the same by the filing of charge sheet under section 173.”

Before proceeding further, what needs to be noted is that on completion of ‘investigation’, when police submits report, in terms of section 173(2)(i), informing the Magistrate that no incriminating material has been found against the person named as an accused in the FIR or that the materials, unearthed during ‘investigation’, are inadequate to warrant prosecution of the person named as accused in the FIR, such a report is popularly known as ‘final report’; whereas a report, which the police submits, in terms of the provisions of section 173(2)(i), stating to the effect that materials, warranting prosecution of all or of some of the persons, named in the FIR, have been unearthed on ‘investigation’, such a report, suggesting prosecution of any person, as an accused, is commonly known as ‘charge sheet’.

On completion of ‘investigation’, conducted by police or any other agency, when either no incriminating material is found against a person or the ‘investigation’, so conducted, is unsatisfactory or improper and, in such a case, when an ‘investigation’ is directed or commenced by an agency, which is not only distinct and different from the agency, which had conducted the earlier ‘investigation’, but is also an agency, which is under the control of an authority, other than the one, which had control over the agency, which had conducted the earlier ‘investigation’, it becomes a case of ‘re-investigation’. Say, for instance, when an ‘investigation’, conducted by the local police, has resulted into submission of final report or charge sheet and some allegations are made that the ‘investigation’ conducted was not proper or mala fide and when, in such a situation, the State Government entrusts the case for ‘investigation’ to its any other or superior agency, such as. Criminal Investigation Department (‘the CID’), such an ‘investigation’ can be regarded as ‘further investigation’ and not ‘re-investigation’, for, the police and the CID come under one and the same Government. However, on completion of ‘investigation’ by the local police or the CID or without completion thereof, an ‘investigation’ is commenced by an agency, say for instance by the Central Bureau of Investigation (i.e., CBI), which comes under an authority, which is distinct and different from the State Government, it becomes a case of ‘re-investigation’ [See State of Andhra Pradesh v. A.S. Peter, (2008) 2 SCC 383].

What is also important to bear in mind is that a ‘further investigation’ is neither ‘fresh investigation’ nor it is ‘re-investigation’. A ‘further investigation’ really means an additional ‘investigation’, for, it is a continuation of the earlier ‘investigation’ and not a ‘fresh’ or ‘re-investigation’, which starts ab initio, though the materials, which may have surfaced and unearthed during earlier ‘investigation’ may be taken into account by the officer or the investigating agency conducting ‘re-investigation’. Distinction between ‘fresh investigation’ and ‘re-investigation’, on the one hand, and ‘further investigation’, on the other, has been dealt with, and succinctly described, in K. Chandrasekhar (supra), wherein an ‘investigation’ was conducted by the CBI, but the State withdrew its consent given earlier for ‘investigation’ of the case by the CBI. The question arose as to whether withdrawal of consent by the State is permissible? This question was answered in the negative. While holding that the ‘investigation’ must be directed to be completed by the CBI, the Supreme Court drew the distinction between ‘re-investigation’ and fresh ‘investigation’ in the following words:

“24. From a plain reading of the above section it is evident that even after submission of police report under sub-section (2) on completion of ‘investigation’, the police has a right of “further” ‘investigation’ under sub-section (8) but not “fresh ‘investigation'” or “‘re-investigation'”. That the Government of Kerala was also conscious of this position is evident from the fact that though initially it stated in the Explanatory Note of their notification dated 27-6-1996 (quoted earlier) that the consent was being withdrawn in public interest to order a “‘re-investigation'” of the case by a special team of State police officers, in the amendatory notification (quoted earlier) it made it clear that they wanted a “‘further investigation’ of the case” instead of “‘re-investigation’ of the case”. The dictionary meaning of “further” (when used as an adjective) is “additional; more; supplemental”. “Further” ‘investigation’, therefore, is the continuation of the earlier ‘investigation’ and not a fresh ‘investigation’ or ‘re-investigation’ to be started ab initio wiping out the earlier ‘investigation’ altogether. In drawing this conclusion we have also drawn inspiration from the fact that sub-section (8) clearly envisages that on completion of ‘further investigation’ the investigating agency has to forward to the Magistrate a “further” report or reports and not fresh report or reports regarding the “further” evidence obtained during such ‘investigation’. Once it is accepted and it has got to be accepted in view of the judgment in Kazi Lhendup Dorji that an ‘investigation’ undertaken by CBI pursuant to a consent granted under section 6 of the Act is to be completed, notwithstanding withdrawal of the consent, and that ‘further ‘investigation’ is a continuation of such ‘investigation’ which culminates in a further police report under sub-section (8) of section 173, it necessarily means that withdrawal of consent in the instant, case would not entitle the Slate Police, to further investigate into the case. To put it differently, if any ‘further investigation’ is to be made it is the CBI alone which can do so, for it was entrusted to investigate into the case by the State Government. Resultantly, the notification issued withdrawing the consent to enable the State Police to further investigate into the case is patently invalid and unsustainable in law. In view of this finding of ours we need not go into the questions, whether section 21 of the general clauses act applies to the consent given under section 6 of the Act and whether consent given for investigating into Crime No. 246 of 1994 was redundant in view of the general consent earlier given by the State of Kerala.” (emphasis added).

 In State of Andhra Pradesh v. A.S. Peter, (2008) 2 SCC 383 , it was pointed out that it was not correct to contend that ‘investigation’, when handed over to the CID, was an ‘investigation’ by a different agency, for, points out the Supreme Court, in A.S. Peter (supra), the CID is a part of the investigating authorities of the same State and it was, therefore, permissible for the higher authority of the State to direct ‘further investigation’ by the CID. Reliance, in this regard, has been placed by the Supreme Court, in A.S. Peter (supra) at para 13, on the case of State of Bihar v. J.A.C. Saldanha, (1980) 1 SCC 554. The relevant observations, at para 13, in A.S. Peter (supra), read:

“13. This aspect of the matter is covered by a decision of this court in State of Bihar v. J.A.C. Saldanha wherein it was held:

‘19…….This provision does not in any way effect the power of the Investigating Officer to further investigate the case even after submission of the report as provided in section 173(8). Therefore, the High Court was in error in holding that the State Government in exercise of the power of superintendence under section 3 of the Act lacked the power to direct ‘further investigation’ into the case. In reaching this conclusion we have kept out of consideration the provision contained in section 156 (2) that an ‘investigation’ by an Officer-in-Charge of a police station, which expression includes police officer superior in rank to each officer, cannot be questioned on the ground that such Investigating Officer had no jurisdiction to carry on the ‘investigation’; otherwise that provision would have been a short answer to the contention raised on behalf of the respondent No. 1.”

What emerges from the above discussion is that a ‘further investigation’ is nothing but continuation of the earlier investigation; whereas, a ‘re-investigation’ or a ‘fresh investigation’ would be an investigation, which would be ab initio in nature wiping out the earlier investigation altogether. In other words, a ‘further investigation’ is the continuation of the earlier investigation, which commences by virtue of the provisions of section 173(8), cr.p.c. and culminates into such further ‘police report(s)’as the police or the investigating agency may submit. In short while ‘further investigation’ results into filing of further or additional ‘police report’ under section 173(8), ‘re-investigation’ or ‘fresh investigation’ results into ‘police report(s)’as envisaged by section 173(2), Cr.P.C.

Considering the fact that this present writ appeal arises out of the present appellant’s application, made in the learned trial court, seeking a direction for ‘further investigation’ to be issued to the police, it is necessary to trace out, in brief, how the law on the concept of ‘further investigation’ has developed in India. This is, to our mind, necessary for the purpose of determining as to how far the judicial pronouncements, rendered on this aspect of law, has developed and taken shape.

The distinction between investigation directed under section 156(3) vis-a-vis section 202.

CODE OF CRIMINAL PROCEDURE

Magistrate’s power to direct ‘investigation’ under section 156(3) vis-a-vis his power to direct ‘investigation’ under section 202.

This, in turn, brings us to the question as to what taking of ‘cognizance’, within the scheme of the Code, means, when a Magistrate can take ‘cognizance’ of an offence, or, when can a Magistrate be said to have taken ‘cognizance’ of an offence? While considering these aspects of law, it is necessary to bear in mind that ‘cognizance’ has not been defined under the Code. The word ‘cognizance’ really indicates the point, when a Magistrate or a Judge first takes judicial notice of an offence. It also deserves to be borne in mind that ‘cognizance’ is taken of offence(s) and not of person(s) accused of such offences.

A patient reading of sub-section (1) of section 190 of the code clearly shows, as already indicated above, that a Magistrate can take ‘cognizance’ of an offence in three different modes, namely, (a) upon receipt of a ‘complaint’ of facts, which constitute such offence, (b) upon a ‘police report’ of such facts and (c) upon ‘information’ received from any person other than a police officer or, upon his own ‘knowledge’ that such offence has been committed.

A careful reading of section 200 of the code makes it clear that a Magistrate, taking ‘cognizance’ of an offence on a complaint, shall examine, upon oath, the complainant and the witnesses present, if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses and also by the Magistrate. Such examination can be dispensed with under two contingencies, namely, (a) if a public servant, acting or purporting to act in the discharge of his official duties, or a court has made the complaint, or (b) if the Magistrate makes over the case for inquiry or trial to another Magistrate under section 192.

A careful analysis of the provisions of section 190 of the code read with section 200 thereof clearly reveals that what section 200 of the code really lays down is the procedure as to what a Magistrate shall do, when he takes ‘cognizance’ of an offence on receiving a complaint of the facts, which constitute such offence. This, in turn, clearly reveals that taking of ‘cognizance’ must precede examination of the complainant under section 200 of the code [See Pradyut Kr. Das v. Ajit Borah, 2006 (2) GLT 574].

Broadly speaking, when, on receiving a complaint, the Magistrate applies his mind for the purpose of proceeding under section 200 and the succeeding sections in Chapter XV of the Code, he is said to have taken ‘cognizance’ of the offence within the meaning of section 190(1)(a). If, instead of proceeding under Chapter XV, he has, in the judicial exercise of his discretion, taken action of some other kind, such as, issued a search warrant for the purpose of ‘investigation’, or ordered ‘investigation’ by the police under section 156 3), he cannot be said to have taken ‘cognizance’ of any offence (See Devarapalli Lakshminarayana Reddy and Others v. Narayana Reddy and Others, AIR 1976 SC 1672].

Thus, whether the Magistrate has or has not taken ‘cognizance’ of an offence will depend on the circumstances of the particular case including the mode in which the case is sought to be instituted and the nature of the preliminary action, if any, taken by the Magistrate.

 In short, in the light of the decision in Superintendentand Remembrancer of Legal Affairs, West Bengal v. Abani Kumar Banerji, AIR 1950Cal. 437 approved in R.R. R.R Chari v. State Of Uttar Pradesh., (1951) SCR 312. and in view of what Devarapalli Lakshminarayana Reddy (supra) lays down, it is abundantly clear that when a Magistrate applies his mind to the contents of a complaint for the purpose of proceeding in accordance with the subsequent provisions of the code, particularly. section 200 thereof, he can be said to have taken ‘cognizance’. When, however, the Magistrate applies his mind not for the purpose of proceeding under Chapter XV of the Code, but for taking action of some other kind, such as, ordering ‘investigation’ under section 156 (3) or directing issuance of search warrant, he cannot be said to have taken ‘cognizance’ of the offence.

What surfaces from the discussions held above is that the scheme of the Code is that when a complaint is presented before a Magistrate, he can either direct an ‘investigation’, in terms of sub-section (3) of section 156 of the code, or he may decide to proceed with the complaint. If he decides to proceed with the complaint by taking ‘cognizance’ of the offence(s), which the complaint discloses, he shall, for this purpose, take steps in terms of section 200 of the code by examining the complainant. If the Magistrate, on receipt of the complaint, takes no steps to indicate that the Magistrate wanted to proceed in terms of section 200 of the code and sends the complaint to the police for ‘investigation’, it will be indicative of the fact that the Magistrate has not taken ‘cognizance’. Thus, in the later case, there will be no impediment, on the part of the Magistrate, to take ‘cognizance’ of the offence if and when the police, on ‘investigation’ carried out, submit a report, in this regard, in terms of section 190(b). The act of sending of the ‘complaint’ to police for ‘investigation’ is really at a ‘pre-cognizance’ stage.

 When, however, a Magistrate, instead of sending the ‘complaint’ for ‘investigation’ to the police, decides to proceed or proceeds under section 200 of the code, the Magistrate shall be deemed to have, unless shown otherwise, taken ‘cognizance’ of the offence, for, the Magistrate cannot proceed to record the complainant’s statement under section 200 without taking ‘cognizance’. The act of proceeding with the examination of the complainant under section 200 will, thus, be indicative of the fact that the Magistrate has taken ‘cognizance’ of the offence and has decided to proceed accordingly. It is for this reason that when the Magistrate, after recording statement of the complainant and his witnesses, if any, present, decides to hold inquiry under section 202 of the code, he cannot, thereafter, send, for ‘investigation’, a complaint, which discloses commission of offence, which is exclusively triable by court of Session. The act of sending the complaint for ‘investigation’ after recording of statement of the complainant and/or the witness and/or after holding inquiry under section 202 of the code is a stage, which may be called the ‘post-cognizance’ stage. If the distinction between ‘pre-cognizance’ stage and ‘post-cognizance’ stage is borne in mind, there will be no difficulty in appreciating that when a Magistrate, instead of sending the complaint for ‘investigation’, decides to proceed under section 200 and records the statement of the complainant and his witnesses, the Magistrate shall be treated to have taken ‘cognizance’ of the offence disclosed by the complaint, for, as already indicated above, he cannot proceed to record the statement of the complainant under section 200 without taking ‘cognizance’.

What may, thus, be summarized is that when a Magistrate applies his mind to the contents of the complaint and decides to proceed in the manner as indicated in the subsequent provisions of the Code, namely, Chapter XV and, particularly, section 200 of the code, he can be said to have taken ‘cognizance’. In other words, it is only upon taking of ‘cognizance’ of an offence that it is open to Magistrate to examine the complainant on oath under sub-section (1) of section 200 and also complainant’s witnesses present, it any. The proviso to section 200 makes it abundantly clear that the examination of the complainant and his witnesses is not necessary, when the complaint is made, in writing, by a public servant or the Magistrate makes over the case for inquiry and trial by another Magistrate under section 192 of the code. If a Magistrate takes ‘cognizance’ of an offence, he must (i) examine, on oath, the complainant, though the complaint may be in writing, and the witnesses present, if any, and (ii) reduce the substance of such examination to writing. By examining the complainant and the witnesses present, if any, what the Magistrate essentially does is to determine as to whether there are sufficient grounds for proceeding against the accused. If the Magistrate is of the opinion, on examining the complainant and his witnesses under section 200, that there are sufficient grounds for proceeding against the accused, he can issue process in terms of section 204 of the code. If, on examining the complainant and his witnesses under section 200, the Magistrate is of the view that the allegations made against the accused need to be inquired into or investigated, he may, in terms of section 202, either inquire into the case himself or direct an ‘investigation’ to be made by a police officer or by such other persons as he thinks fit.

What is, now, important to note is that the ‘inquiry’ or ‘investigation’, which a Magistrate directs, in exercise of power under section 200, is really for the purpose of determining as to whether there is sufficient grounds for proceeding or not. If the Magistrate chooses to hold the inquiry himself under section 202 of the code, this inquiry may result either, as already mentioned above, issuance of processes against the accused under section 204 or dismissal thereof under section 203, for, section 203 makes it clear that if, upon considering the statements on oath, if any, of the complainant and his witnesses and the result of the inquiry or ‘investigation’, if any, under section 202, the Magistrate is of the opinion that sufficient grounds do not exist for proceeding further, it is obligatory on him to dismiss the complaint, though while dismissing the complaint, the Magistrate is duty bound to record reasons for so doing.

One may reiterate that when, after examining the complainant and the witnesses, if present, in terms of section 200, the Magistrate finds that there exists some materials against the accused, but the same are insufficient for issuance of process, the appropriate statutory mechanism is engrafted under section 202, which empowers the Magistrate to either direct ‘investigation’ or inquire into the case himself to decide if the process deserves to be issued against the accused.

Imperative it is to point out that the power conferred on a Magistrate to direct ‘investigation’ under section 156 (3) is quite different from the power given to him to direct ‘investigation’ under section 202 (1). The power, so conferred, is resorted to in two distinct and different spheres at two different stages envisaged under the Code. The Code, it is pertinent to reiterate, has mode distinction between ‘pre-cognizance’ and ‘post-cognizance’ stage. While section 156 (3) deals with Magistrate’s powers to direct ‘investigation’ at ‘pre-cognizance’ stage. Section 202 empowers the Magistrate to direct ‘investigation’ by police at ‘post-cognizance’ stage.

What is, now, necessary to note is that an ‘investigation’, which is directed, under section 202(1), is really aimed at helping a Magistrate, determine if process needs to be issued or not. The ‘investigation’, which section 202(1) conceives, is, therefore, materially different from the ‘investigation’, which is ordered under section 156(3). Thus, it is clear that when an order is passed under section 156(3), a police officer has all the powers of ‘investigation’, which he, otherwise, has in a cognizable case and the report, which he submits on completion of such an ‘investigation’, is a ‘police report’ within the meaning of the provisions of section 173(2)(i) if read with section 2(r); but when an ‘investigation’ is directed under section 202(1), the report of the ‘investigation’, which the police officer may submit, is merely to enable the Magistrate to make up his mind whether the complaint needs to be dismissed or process needs to be issued. If the Magistrate dismisses the complaint, it is in exercise of his powers under section 203. If he issues process, it is in exercise of his powers under section 204.

The proviso to sub-section (1) of section 202 contemplates, again, two situations, where a Magistrate cannot direct ‘investigation’, even for the limited purpose of enabling him to make up his mind if the complaint needs to be dismissed or process needs to be issued. These two exceptions are: (i) when the Magistrate, on taking ‘cognizance’ of an offence and having examined the complainant and the witnesses, if any, present, finds that the offence, complained of, is in respect of an offence, which is triable exclusively by a court of Session or (ii) where the complainant and the witnesses, if any, have not been examined unless the complaint is one, which has been made by a court. I may also point out that by virtue of the Act of 25 of 2005, which has introduced some amendments to section 202, an inquiry, under section 202 (1), is, with effect from 23-6-2006, necessary if the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction. This amendment has been made in order to enable the Magistrate determine if the complaint against a person, who resides outside the territorial jurisdiction of the Magistrate, is not one, which is frivolous.

Having clarified the nature of ‘investigation’, which a Magistrate may direct, in exercise of his power under section 156 (3) vis-a-vis section 202 (1), it is also imperative to point out that the report, which a police officer, on completion of ‘investigation’, submits in terms of the provisions of section 173(2) and which is defined by section 2(r) as the police report, the Magistrate may, in terms of clause (b) of section 190(1) of the code, take ‘cognizance’ if the police report discloses commission of an offence. The Magistrate, in such a case, may also, instead of taking ‘cognizance’, direct, in the light of what has been held in Bhagwant Singh (supra), ‘further investigation’. To put it a little differently, it is within the powers of the Magistrate not to accept a police report furnished to him in terms of section 173(2) and it is open to him to direct the police to carry out ‘further investigation’ in the matter. ‘Further investigation’ can, therefore, be directed not necessarily after the police report has been accepted and ‘cognizance’ taken, but even before ‘cognizance’ is taken, it is permissible in law for the Magistrate to direct ‘further investigation’ if he, for reasons to be recorded, in writing, does not accept the police report, which, on completion of ‘investigation’, is submitted by the police to the Magistrate.

Notwithstanding the fact that we have already indicated above that it is possible for a Magistrate to accept a police report submitted to him on completion of ‘investigation’ by police in terms of the provisions of section 173(2) and direct, in the light of the decision in Bhagwant Singh (supra), further ‘investigation’, we may, now, turn to examine the other situations or circumstances, when the Code recognizes the Magistrate’s power to direct further ‘investigation’. In other words, apart from having power to direct ‘further investigation’ under section 156 (3), i.e., at pre-cognizance stage, we are, now, required to determine as to whether a Magistrate has the power to direct ‘further investigation’ after he has accepted the police report given to him under section 173(2) and if it is so, what may be the circumstances, whereunder such ‘further investigation’ may be directed.

 

When can a police officer investigate and when can he decline to investigate

CODE OF CRIMINAL PROCEDURE

  1. sub-section (1) of section 154 provides that every information, relating to the commission of a cognizable offence, if given orally to an Officer-in-Charge of a police station, shall be reduced to writing by him or under his direction and be read over to the informant and every such information, whether given in writing or reduced to writing, shall be signed by the person giving it and sub-section (2) of section 154 requires that a copy of such information shall be given, forthwith, free of cost, to the informant. sub-section (1) of section 156 vests, in the Officer-in-Charge of every police station, the power to investigate any cognizable case without the order of a magistrate and sub-section (3) of that section authorizes the magistrate, empowered under section 190, to order an ‘investigation’ as mentioned in sub-section (1) of that section.
  2. Before proceeding further, we may also hasten to add that we would, a little later, deal with the occasion(s), when a Magistrate cannot, in exercise of his powers under section 156 (3), direct an ‘investigation’ by the police.
  3.  Leaving, aside, momentarily, the question as to when a Magistrate cannot direct, in exercise of his powers under section 156 (3), on ‘investigation’, it is apposite to point out that sub-section (1) of section 156 makes it clear that a police officer’s power to investigate, without the order of a Magistrate, in a cognizable case, is co-extensive with the territorial jurisdiction of the court, which has the jurisdiction over the local area within the limits of such police station. Thus, sub-section (1) of section 156 shows that a police officer cannot investigate even a cognizable case beyond the territory of the court, which has the jurisdiction over the local area within which the police station falls. In other words, an 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 local limits of such a police station, would have power to inquire into or try under the provisions of Chapter XII. The fall out of these provisions is that the Officer-in-Charge of a police station, which comes within the territorial jurisdiction of a Magistrate, ‘X’, cannot investigate a cognizable case, which falls within the territorial jurisdiction of another Magistrate, say ‘Y’.
  4. Coming to the information, given to an Officer-in-Charge of a police station, about the commission of a non-cognizable offence, it is to be noted that it is the duty of such an officer to enter, or cause to be entered, the substance of the information in a book to be kept by such an officer, in such form as the State Government may prescribe in this behalf, and refer the informant to the Magistrate, but he cannot, in the light of section 155(2), investigate into such a case without the order of a Magistrate, who has the power to try such a case or commit the case for trial. When, however, a police officer receives an order from a Magistrate to investigate a non- cognizable case, his powers, according to section 155(3), to carry out ‘investigation’ will be the same as in the case of a cognizable case.
  5.  Coupled with what is indicated above, one should also bear in mind that sub-section (1) of section 157 lays down that if, from the information received or otherwise, an Officer-in-Charge of a police station has reason to suspect the commission of an offence, which he is empowered, under section 156, to investigate, he shall, forthwith, send a report of the same to a Magistrate empowered to take ‘cognizance’ of such an offence upon a police report and shall proceed to the spot to investigate the facts and circumstances of the case and, if necessary, to take measures for the discovery and arrest of the offender. But there are two provisos to this sub-section. Proviso (b) states that if it appears to the Officer-in-Charge of a police station that there is no sufficient ground for entering on an ‘investigation’, he shall not investigate the case. However, in such a case, sub-section (2) of section 157 requires that the officer shall, forthwith, notify to the informant the fact that he will not investigate the case or cause it to be investigated.
  6.  Thus, in a given case, in the light of the proviso to sub-section (1) of section 157,the police officer has the option of not investigating a case if an information, as to the commission of any offence, is given against any person by name provided that the case is not of a serious nature or if it appears to the Officer-in-Charge of the police station that there is no sufficient ground for entering on an ‘investigation’ into the case. Section 158 contemplates sending to the Magistrate a report, as envisaged in section 157, through such superior police officer as the State Government may, by general or special order, appoint in that behalf, and such superior police officer has the power to give such instruction as he thinks fit and such instruction shall also be transmitted to the Magistrate along with the report.
  7. Notwithstanding, however, the fact that section 157 empowers the police not to investigate a case, the Magistrate, on receiving the report, as contemplated in section 157 read with section 158, has the power to direct ‘investigation’ or, if he thinks fit, at once, proceed or depute any Magistrate, subordinate to him, to hold preliminary inquiry or, otherwise, to dispose of the case in the manner as provided in the Code.
  8.  What the Officer-in-Charge of a police station is required to do, on completion of the ‘investigation’, is set out in section 173. sub-section (2)(i) of section 173 provides that as soon as an ‘investigation’ is completed, the Officer-in-Charge of the police station shall forward to the Magistrate, empowered to take ‘cognizable’ of the offence on a police report, a report, in the form prescribed by the State Government, setting out various particulars including whether, in the opinion of the officer, any offence appears to have been committed and, if so, by whom.
  9. What is, now, of utmost importance to note is that sub-section (2)(ii) of section 173states that the officer shall also communicate, in such manner as may be prescribed by the State Government, to the person, if any, by whom the information, relating to the commission of the offence was first given, as to what action had been taken by him. sub-section (1) of section 190, then, proceeds to enact that any Magistrate of the First Class and any Magistrate of the Second Class, specially empowered in this behalf under sub-section (2) of section 190, may take ‘cognizance’ of any offence: (a) upon receiving a ‘complaint’ of facts, which constitute such offence, or (b) upon a ‘police report’ of such facts, or (c) upon ‘information’ received from any person, other than a police officer, or upon his ‘own knowledge’, that such offence has been committed. We are concerned, in this case, only with clause (b), because the question, which we are required to examine and determine, before we proceed further, is: whether a Magistrate is bound to issue notice to the first informant or to the injured or to any relative of the deceased or de facto complainant, when the Magistrate is considering the police report submitted under section 173(2).
  10. Is a Magistrate bound to issue notice to the first informant or to the injured or to any relative of the deceased or de facto complainant. When the Magistrate is considering the police report submitted under section 173(2).
  11. While considering the above aspect of the case, it needs to be recalled that the Supreme Court in, Bhagwant Singh (supra), has pointed out that when an informant lodges first information report with the Officer-in-Charge of a police station, he does not fade away with the lodging of the first information report; rather, he is very much concerned with what action is initiated by the Officer-in-Charge of the police station on the basis of the first information report lodged by him. No sooner he lodges the first information report, a copy thereof has to be supplied to him, free of cost, under sub-section (2) of section 154. If, notwithstanding the first information report, the Officer-in-Charge of a police station decides not to investigate the case on the ground that there is no sufficient ground for entering on an ‘investigation’, he is required, under sub-section (2) of section 157, to notify to the informant the fact that he is not going to investigate the case or cause it to be investigated. This apart, the officer-in-change of a police station is obligated, under sub-section (2)(ii) of section 173, to communicate to the informant as to what the ‘investigation’, conducted by the police, has revealed. Furthermore, the Officer-in-Charge of the police station is also required to supply to the informant a copy of the report, which he has forwarded to the Magistrate under section 173(2)(i).
  12. The question, therefore, is as to why action taken by the Officer-in-Charge of a police station, on the first information report, is required to be communicated to the informant along with the report, which is forwarded to the Magistrate under sub-section (2)(i) of section 173. The reason is obvious and the reason, as pointed out in Bhagwant Singh (supra), is that the informant, who sets the machinery of ‘investigation’ into motion by filing the first information report, must know what is the result of the ‘investigation’ initiated on the basis of the first information report, which he had lodged. The informant having taken the initiative of lodging the first information report with a view to initiating ‘investigation’ by the police for the purpose of ascertaining whether any offence has been committed and, if so, by whom, he becomes vitally interested in the result of the ‘investigation’ and, hence, the law requires that the action, taken by the Officer-in-Charge of a police station, on the first information report should be communicated to the informant. More importantly, even the report, forwarded by such an officer to the Magistrate under clause (i) of sub-section (2) of section 173, is required to be supplied, under the provisions of clause (ii) of sub-section (2) of section 173, to the informant by the officer concerned [see Bhagwant Singh (supra) at page 542 of 2 SCC].
  13. Now, when the report, forwarded, under clause (i) of sub-section (2) of section 173, by the Officer-in-Charge of a police station to the Magistrate, comes up for consideration by the Magistrate, one of two different situations may, as pointed out in Bhagwant Singh (supra), arise. The report may conclude that an offence appears to have been committed by a particular person or persons and, in such a case, the Magistrate may do one of three things: (i) he may accept the report and take ‘cognizance’ of the offence or offences, as the case may be, and issue process or (ii) he may disagree with the report and drop the proceeding or (iii) he may direct ‘further investigation’ under sub-section (3) of section 156 and require the police to submit a further report. The report, submitted under section 173(2)(i), may, on the other hand, state that, in the opinion of the police, no offence appears to have been committed and when such a report is made, the Magistrate, according to the Supreme Court, in Bhagwant Singh (supra), has, once again, the option to adopt one of three courses: (i) he may accept the report and drop the proceeding, or (ii) he may disagree with the report and, taking the view that there is sufficient ground for proceeding further, take ‘cognizance’ of the offence or offences, as the case may be, and issue process, or (iii) he may direct ‘further investigation’ to be made by the police under sub-section (3) of section 156.
  14. Where, in either of the two situations, as described above, the Magistrate decides to take ‘cognizance’ of offence(s) and to issue process(es), the informant is not, ordinarily, prejudicially affected nor can the injured or, in case of death, any relative of the deceased, may really feel aggrieved, because cognizance of the offence is taken by the Magistrate and it is decided by the Magistrate that the case shall proceed. If, however, the Magistrate decides that there is no sufficient ground for proceeding further and drops the proceeding or takes the view that though is sufficient ground for proceeding against some, but there is no sufficient ground for proceeding against others named and mentioned in the first information report, the informant, as noted in Bhagwant Singh (supra), would certainly be prejudiced, because the first information report, lodged by him, would have failed in its purpose, wholly or in part. Moreover, when the interest of the informant, in prompt and effective action being taken on the first information report lodged by him, is clearly recognized by the provisions contained in sub-section (2) of section 154sub-section (2) of section 157 and sub-section (2)(ii) of section 173,it must be presumed that the informant would equally be interested in seeing that the Magistrate takes ‘cognizance’ of the offence(s) and issues process(es) against all those, who may have been named by him in the first information report, because that would be culmination of the first information report lodged by him. The case of Rosendra Chandra Das (supra), which Mr. Bhowmik has relied upon, throws some light on this aspect of law inasmuch as it was a case, wherein the informant had named, in the FIR, as many as four persons as accused involved in the commission of offences under sections 120(b)/304(b)/436/34, ipc and when the police, upon investigation, submitted report (that is, charge sheet), under section 173(2)(i), against one of the persons named as accused in the FIR, the High Court held that the learned Sub-Divisional Judicial Magistrate ought not to have accepted such a charge sheet without giving the informant a notice to have his say as to why the report, so submitted by police, be not accepted.
  15. There can, therefore, be no doubt, as held in Bhagwant Singh (supra), that when, on a consideration of the report made by the Officer-in-Charge of a police station under sub-section (2)(i) of section 173, the Magistrate is not inclined to take ‘cognizance’ of the offence and issue process, the informant must be given an opportunity of being heard so that he can make his submissions to persuade the Magistrate to take ‘cognizance’ of the offence or the offences, as the case may be, and issue process or processes.
  16. It has been further clarified and authoritatively held, in Bhagwant Singh (supra), that in a case, where the Magistrate, to whom a report is forwarded under sub-section (2)(i) of section 173, decides not to take ‘cognizance’ of the offence and to drop the proceeding or takes the view that there is no sufficient ground for proceeding against some of the persons mentioned in the first information report, the Magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of the report as to why the Magistrate shall take cognizance of offence and proceed against only some of the persons, but not against all those, who may have been named as offenders in the first information report.
  17. What logically follows from the above discussion is that if there is a first information report, which does not disclose the name of the offender, even then the informant must be informed by the police of the result of the ‘investigation’ and it is the duty of the Magistrate to ensure that a copy of the report, which a police officer submits to the Magistrate, on completion of ‘investigation’, is given to the informant so that he may have his say in the matter.

Investigation Into Cases Under The Prevention of Corruption Act 1988

Note

The Prevention Of Corruption Act, 1988

 S 17. Persons authorised to investigate.

Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no police officer below the rank,

(a) in the case of the Delhi Special Police Establishment, of an Inspector of Police;

(b) in the metropolitan areas of Bombay, Calcutta, Madras and Ahmedabad and in any other metropolitan area notified as such under sub-section (1) of section 8 of the Code of Criminal Procedure, 1973 (2 of 1974), of an Assistant Commissioner of Police;

(c) elsewhere, of a Deputy Superintendent of Police or a police officer of equivalent rank, shall investigate any offence punishable under this Act without the order of a Metropolitan Magistrate or a Magistrate of the first class, as the case may be, or make any arrest therefor without a warrant:

Provided that if a police officer not below the rank of an Inspector of Police is authorised by the State Government in this behalf by general or special order, he may also investigate any such offence without the order of a Metropolitan Magistrate or a Magistrate of the first class, as the case may be, or makes arrest therefor without a warrant:

Provided further that an offence referred to in clause (e) of sub-section (1) of section 13 shall not be investigated without the order of a police officer not below the rank of a Superintendent of Police.

18. Power to inspect bankers books .

If from information received or otherwise, a police officer has reason to suspect the commission of an offence which he is empowered to investigate under section 17 and considers that for the purpose of investigation or inquiry into such offence, it is necessary to inspect any bankers books, then notwithstanding anything contained in any law for the time being in force, he may inspect any bankers books insofar as they relate to the accounts of the persons suspected to have committed that offence or of any other person suspected to be holding money on behalf of such person, and take or cause to be taken certified copies of the relevant entries therefrom, and the bank concerned shall be bound to assist the police officer in the exercise of his powers under this section:

Provided that no power under this section in relation to the accounts of any person shall be exercised by a police officer below the rank of a Superintendent of Police, unless he is specially authorised in this behalf by a police officer of or above the rank of a Superintendent of Police.

Explanation. In this section, the expressions banks and bankers books shall have the meanings respectively assigned to them in the Bankers Books Evidence Act, 1891.

Further investigation by police under [Sec 173(8)

173 (8) Nothing in this section shall be deemed to preclude further investigation in respect of an offence after a report under sub-section (2) has been forwarded to the Magistrate and, where upon such investigation, the officer in charge of the police station obtains further evidence, oral or documentary, he shall forward to the Magistrate a further report or reports regarding, such evidence in the form prescribed; and the provisions of sub-sections (2) to (6) shall, as far as may be, apply in relation to such report or reports as they apply in relation to a report forwarded under sub-section (2).

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SUPREME COURT DECISIONS
  1. Amrutbhai Shambhubhai Patel Vs. Sumanbhai Kantibhai Patel & Ors.

 

 

Criminal Investigation by Bengal Police- PRB Guidelines

bengalmap

Police Regulation for criminal Investigation[ extract from PRB]

1. Recording of information in General Diary: Officer–in-charge of a police station can record any information in G.D  U/S 44 Police Act.

2. Non-cognizable information: O/C of a Police station has no power to investigate a non– Cognizable information, he can record it in G.D U/S 155 CrPC or 44 Police Act and ask the informant to seek for an order from a competent court for investigation/enquiry of such information (245 PRB).

3. FIR (Cognizable Information): should be recorded by O/C himself (243 PRB) and investigation should be carried out by himself or any other officer as per his direction (244 PRB).

4. Report to magistrate about cognizable offence at once: 245 PRB.

5. Despatch of FIR to other Superior Officer: 246PRB.

6. List of property stolen/misappropriated to be obtained from the informant: 247 PRB.

7. Information of heinous crime occurring outside jurisdiction: 248 PRB.

8. Searches and seizure list u/s 100, 102,165,166 of CrPC: 280 PRB.

9. Medical examination of wounded person: 312 PRB.

10. Dying declaration: 266 PRB.

11. Sketch Map and Plan: 273 PRB.

12. Post mortem examination and report: 305, 306PRB.

13. Presence of police officer at the P.M. Examination: 307 PRB.

14. Photographing of unidentified dead body: 314 PRB.

15. Finger print of unidentified dead body: 313 PRB.

16. Arrest without warrant: 316 PRB.

17. Unnecessary arrest to be avoided and bail to be allowed: 317 PRB.

18. Register of person arrested: 323 PRB.

19. Medical examination of the arrested person: 328 PRB.

20. Illness of the person arrested: 321 PRB.

21. Accommodation and segregation of male, female and juvenile prisoners: 327 PRB.

22. Guards for lock-up: 329 PRB.

23. Use of handcuff: Prisoners shall not be subjected to more restraint than necessary to prevent their escape, in bailable offence prisoners should not be hand cuff unless reason to believe that he can be violent: 330 PRB.

24. Guarding and escorting prisoner arrested: 331, 332 PRB.

25. Death of prisoner in Police custody: 302 (b) PRB.

26. Accused to be forwarded to Magistrate and application for detention in Police custody: 324 PRB.

27. Memorandum of evidence: 274 PRB.

28. Charge sheet: 272 PRB.

29. Final report and discharge of accused person from the case: 275 PRB.

COUNTER-TERRORISM MEASURES (DOMESTIC)

 National Investigation Agency, Government of India

The Agency was created by NIA Act 2008

An Act to constitute an investigation agency at the National level to investigate and prosecute offences affecting the Sovereignty, Security and Integrity of India, security of State, friendly relations with foreign States and offences under Acts enacted to implement international treaties, agreements, conventions and resolutions of the United Nations, its agencies and other international organisations and for matters connected therewith or incidental thereto.

The National Investigation Agency Act, 2008

Key Ideas

The superintendence of the Agency shall vest in the Central Government.

Investigation of Scheduled Offences.—(1) On receipt of information and recording thereof under section 154 of the Code( CR.P.C) relating to any Scheduled Offence the officer-in-charge of the police station shall forward the report to the State Government forthwith.
(2) On receipt of the report under sub-section (1), the State Government shall forward the report to the Central Government as expeditiously as possible.
(3) On receipt of report from the State Government, the Central Government shall determine on the basis of information made available by the State Government or received from other sources, within fifteen days from the date of receipt of the report, whether the offence is a Scheduled Offence or not and also whether, having regard to the gravity of the offence and other relevant factors, it is a fit case to be investigated by the Agency.
(4) Where the Central Government is of the opinion that the offence is a Scheduled Offence and it is a fit case to be investigated by the Agency, it shall direct the Agency to investigate the said offence.
(5) Notwithstanding anything contained in this section, if the Central Government is of the opinion that a Scheduled Offence has been committed which is required to be investigated under this Act, it may, suo motu, direct the Agency to investigate the said offence.
(6) Where any direction has been given under sub-section (4) or sub-section (5), the State
Government and any police officer of the State Government investigating the offence shall not proceed
with the investigation and shall forthwith transmit the relevant documents and records to the Agency.
(7) For the removal of doubts, it is hereby declared that till the Agency takes up the investigation of the case, it shall be the duty of the officer-in-charge of the police station to continue the investigation.

Power of Central Government to constitute Special Courts.—(1) The Central Government shall, by notification in the Official Gazette, for the trial of Scheduled Offences, constitute one or more Special Courts for such area or areas, or for such case or class or group of cases, as may be specified in the notification.

  • A Special Court may, on its own motion, or on an application made by the Public Prosecutor and if it considers it expedient or desirable so to do, sit for any of its proceedings at any place other than its ordinary place of sitting.
  • Procedure and powers of Special Courts. A Special Court may take cognizance of any offence, without the accused being committed to it for trial, upon receiving a complaint of facts that constitute such offence or upon a police report of such facts.
  • Appeals—(1) Notwithstanding anything contained in the Code, an appeal shall lie from any judgment, sentence or order, not being an interlocutory order, of a Special Court to the High Court both on facts and on law.
    (2) Every appeal under sub-section (1) shall be heard by a bench of two Judges of the High Court and shall, as far as possible, be disposed of within a period of three months from the date of admission of the appeal.

Offences branded as Schedule Offence if committed under the Following Acts

1. The Atomic Energy Act, 1962 (33 of 1962);
2. The Unlawful Activities (Prevention) Act, 1967 (37 of 1967);
3. The Anti-Hijacking Act, 1982 (65 of 1982);
4. The Suppression of Unlawful Acts against Safety of Civil Aviation Act, 1982 (66 of 1982);
5. The SAARC Convention (Suppression of Terrorism) Act, 1993 (36 of 1993);
6. The Suppression of Unlawful Acts Against Safety of Maritime Navigation and Fixed Platforms on
Continental Shelf Act, 2002 (69 of 2002);
7. The Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 (21 of 2005);
8. Offences under—
(a) Chapter VI of the Indian Penal Code (45 of 1860) [sections 121 to 130 (both inclusive)];
(b) Sections 489-A to 489-E (both inclusive) of the Indian Penal Code (45 of 1860)