IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 7TH JANUARY, 2008 / 17TH POUSHA, 1929 Crl.MC.No. 1622 of 2006 --------------------------- (Order dtd.5.6.2006 in CMP No.1276/2006 in ST No.4577/2004) PETITIONER/COMPLAINANT: ------------------------------- T.R.AJAYAN, S/O. O.RAMAN, JOSHILA, WEST YAKKARA, PALAKKAD. BY ADV. SRI.A.KUMAR RESPONDENTS/ACCUSED 1 & 2: ------------------------------------ 1. M.RAVINDRAN, VICE CHAIRMAN, INFOGENIE INFORMATION TECH AND SERV PVT. LTD. 2. MRS. NIRMALA DINESH, W/O. DINESH, MANAGING DIRECTOR, INFORENIE INFORMATION TECH AND SERV PVT. LTD. BY ADV. SMT.M.K.PUSHPALATHA SMT.P.K.RADHIKA THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 14/11/2007, ALONG WITH CRMC Nos. 1627 & 1628 OF 2006 , THE COURT ON 07/01/2008 PASSED THE FOLLOWING: 'C.R.' V.K.MOHANAN, J. --------------------------------------------- Crl.M.C.Nos. 1622, 1627 & 1628 of 2006 --------------------------------------------- Dated this the 7th day of January, 2008 O R D E R These three Crl.M.Cs. are filed challenging three separate orders in S.T.No.4577 of 2004 on the file of the Judicial First Class Magistrate's Court, Palakkad. Since in all these Crl.M.Cs., the parties are the same and the matter arose out of S.T.No.4577 of 2004, these matters are heard together and are being disposed of by this common judgment. 2. The petitioner herein is the complainant in S.T.No.4577 of 2004 on the file of the Judicial First Class Magistrate Court-II, Palakkad arising out of a private complaint filed under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881 (hereinafter referred for short as 'N.I.Act' only). The petitioner, on the closure of evidence filed three petitions,(1) C.M.P.No.1276 of 2006, filed for a direction to reopen the prosecution evidence, (2) C.M.P.No.1277 of 2006, filed for a direction Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-2-: to the first accused to produce the minutes book of Infogenie Information Tech and Serv Pvt. Ltd. and (3) C.M.P.No.1275 of 2006, filed for a direction to the Assistant Commissioner of Income Tax (Assessment), Circle No.I, Palakkad to produce the income tax returns, balance sheet etc. of M/s.Infogenie Information Tech and Serv Pvt.Ltd. All these petitions were dismissed by the court below by three separate orders and the petitioner is challenging the above three orders separately by preferring these Crl.M.Cs. 3. Crl.M.C.No.1622 of 2006 is filed challenging Annexure-F order dated 5.6.2006 in CMP No.1276 of 2006 in S.T.No.4577/2004. Annexure-C is the copy of the petition (C.M.P.No.1276 of 2006) where the prayer is for re-opening the complainant's evidence. Crl.M.C.No.1627 of 2006 is filed challenging Annexure- E order in Annexure-B petition, namely C.M.P.No.1275 of 2006, in which the prayer is for a direction to produce the income tax records from the Assistant Commissioner of Income Tax (Assessment), Circle No.I, Palakkad. Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-3-: Crl.M.C.No.1628 of 2006 wherein the challenge is against Annexure-G order of the court below in C.M.P.No.1277 of 2006, a copy of which is produced as Annexure-D wherein the prayer is to direct the first accused to produce the minutes book of the company, namely M/s.Infogenie Information Tech and Serv Pvt.Ltd. The above three orders are impugned in the above three criminal miscellaneous cases. 4. In order to appreciate the contentions of the petitioner, a brief description of facts of the case is absolutely necessary which is as follows:- S.T.No.4577 of 2004 was filed by the petitioner herein under Section 138 read with Section 142 of the N.I.Act with the allegation that the cheque in question was issued by the first and second accused in their capacity as Vice Chairman and Managing Director respectively of the company M/s.Inforgenie Information Tech and Serv Pvt.Ltd. for repayment of loan advanced to the company to the tune of Rs.10,75,000/- on various occasions in his individual capacity. The petitioner- Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-4-: complainant was earlier the Chairman and the Managing Director of the said company till his resignation in October, 2003. According to the petitioner/complainant, an amount of Rs.10,75,000/- was due to the complainant and the accused, acting on behalf of the company in discharge of the liability towards the complainant, gave cheques for Rs.5,00,000/- and 5,75,000/- respectively. The cheque for Rs.5,75,000/- was encashed. But the cheque for Rs.5,00,000/- was not encashed. According to the petitioner/complainant, on contacting the accused, they took back the cheque for Rs.5,00,000/- and issued two other cheques; one for Rs.3,00,000/- and another cheque for Rs.2,00,000/- bearing No.170842 dated 15.9.2004 drawn on H.D.F.C.Bank, Palakkad Branch. The cheque for Rs.3 lakhs was encashed. The further case of the complainant is that at the request of the accused, the complainant had presented the said cheque for collecting through the H.D.F.C.Bank, Palakkad, but, the same was returned to the complainant without Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-5-: encashment. Hence, after compliance of the statutory formalities, a complaint was filed on which the court took cognizance and the case was proceeded with. On the side of the complainant, the complainant himself was examined as PW-1 and another witness PW-2, the Branch Manager of H.D.F.C. Branch, Palakkad was also examined. Thereafter, the prosecution evidence was closed and the accused were questioned under Section 313 of the Criminal Procedure Code. During the trial, the defence took a contention that no amount is due to the complainant and no consideration was passed. It is also the defence of the accused that the blank cheque kept in the company was misused by the complainant, as such they have denied the entire transaction. It was, in these circumstances, the complainant filed petitions as aforesaid for reopening the complainant's evidence and with a prayer for direction to the Income Tax Authorities as well as the first accused to produce the documents mentioned in those petitions. Annexure-C in Crl.M.C.No.1622 of 2006 was filed under Section 311 of Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-6-: the Cr.P.C. whereas Annexure-B in Crl.M.C.No.1627 of 2006 and Annexure-D in Crl.M.C.No.1628 of 2006 were filed under Section 91 of the Criminal Procedure Code for production of documents. Suffice to say in those petitions for production of documents, nobody was cited as witnesses, but simply prayed for a direction to the concerned parties therein to produce the documents which are mentioned therein. But, the court below dismissed all the above three petitions and according to the petitioner/complainant, the said orders of the court below are arbitrary and illegal. 5. I have heard elaborately Mr.A.Kumar, learned counsel for the petitioner and also Advocate Smt.P.K.Radhika, counsel for the respondents. 6. The learned counsel for the petitioner submits that the order of the Magistrate dismissing the petition of the complainant for reopening the evidence is against the settled law and by disallowing the above petition, the court below had denied opportunity to the complainant to substantiate his case. It is further Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-7-: submitted that by Annexure-E order in Crl.M.C.No.1627 of 2006, the learned Magistrate had denied the prayer of the complainant to adduce better evidence to advance the case of the complainant. In the said petition, the prayer was only for a direction to the Assistant Commissioner of Income Tax (Assessment), Circle No.1, Palakkad to produce the income tax returns, balance sheet etc. of M/s.Infogenie Information Tech and Serv Pvt.Ltd. According to counsel, the said prayer was rejected by the court below on a mis-conception of law. According to the counsel, as on the date of the impugned order, there was no restriction in producing the document which sought to be produced. According to counsel for the petitioner, after the amendment to Section 137 of the 1961 Act, there is no ban for producing such documents. 7. It is also argued by counsel for the petitioner that though directions are sought for directing the first accused to produce the minutes book of the company, as per Annexure-D in C.M.P.No.1277 of 2006 in Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-8-: S.T.No.4577 of 2004, there was no prayer to examine the first accused as a witness and therefore, the finding of the court below that if the first accused is directed to produce the documents of the company which are based upon the personal knowledge of the accused, it will be used as incriminating evidence against him which will against Article 20(3) of the Constitution of India, is absolutely baseless and perverse. 8. Per contra, Adv.Smt.P.K.Radhika, counsel for the respondents argued that the orders of the court below are absolutely correct and the court can issue direction to produce the income tax documents only if it is satisfied that the same was for the purpose of public interest. It is also argued that even though the first accused was not cited as a witness, the order directing him to produce the documents of the company in a criminal case against him will amount to compelling him to adduce evidence against himself and therefore, the directions sought for by the complainant are hit by Article 20(3) of the Constitution of India. It is also Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-9-: argued that the complainant's evidence was closed much earlier and the accused were questioned under section 313 of the Criminal Procedure Code and the complainant/petitioner approached the court below at the fag end of the trial and therefore, the court is not bound to allow the petitions of the complainant and the court below has rightly dismissed all the petitions and no interference of this Court is warranted at this stage. Since the subject matter of these Crl.M.Cs. is different, for the sake of convenience, it can be considered separately. Crl.M.C.No.1622 of 2006: This Crl.M.C. is filed challenging Annexure-F order of the court below by which Annexure-C petition filed under Section 311 of the Code of Criminal Procedure for re-opening the evidence of the complainant was dismissed. The reason stated by the Magistrate for rejecting the petition is that he had already dismissed the other two petitions filed by the complainant for production of certain documents. It Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-10-: appears to me that the above approach of the court below, though practically correct, procedurally and legally is incorrect. Chapter XVIII of the Code of Criminal Procedure deals with the trial before a Court of Session. Chapter XIX deals with trial of warrant- cases by Magistrates and this Chapter is divided into three parts. Chapter XX deals with trial of summons—cases by Magistrates and Chapter XXI deals with summary trials. From the above provisions of the Code of Criminal Procedure, it can be seen that according to the nature of trials, separate provisions are incorporated in each chapter. Chapter XXIV under the caption 'General Provisions as to Inquiries and Trials' by which several provisions are incorporated by which the parties to the proceedings as well as the court are authorised to invoke appropriate provisions contained in the above chapter so as to meet the contingencies that may arise during the trial of the case. Thus Section 311 of Code of Criminal Procedure is included as one of the provisions in Chapter Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-11-: XXIV dealing with general provisions as to inquiries and trials. Coming to Section 311, it can be seen that the same is incorporated as an exception to the provisions enumerated in the aforesaid chapters of the Criminal Procedure Code. Section 311 of the Criminal Procedure Code is a provision incorporated with a view to enable either the prosecution or the defence or even the court itself to take evidence at any stage even if the evidences are closed as the case may be. In Section 311, it is stated that any Court may, at any stage of any inquiry, trial or other proceeding under this Code, summon any person as a witness, or examine any person in attendance, though not summoned as a witness, or recall and re- examine any person already examined; and the court shall summon and examine or recall and re-examine any such person if his evidence appears to it to be essential to the just decision of the case. As per the various provisions contained in the above chapters, the code has fixed a strict procedure for the trial of the cases. But, Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-12-: for the ends of justice and for the just decision of the case, either party to the proceedings or the court itself can invoke Section 311 even though separate provisions are made for the trial of the cases, according to its nature/class. In such a situation, unless and until sufficient reasons are made out, the court cannot invoke Section 311 of the Code of Criminal Procedure and therefore, it is incumbent upon the court below to come into a conclusion as to whether in the given facts and circumstances of the case, for invoking Section 311, sufficient grounds are made out or not. If the court is of the opinion that no case is made out to invoke Section 311, there is no need to reopen the evidence either for the prosecution or for the defence. 2. Section 311 of the Criminal Procedure Code consists of two parts. The first part is discretionary in nature whereas the second part is mandatory. But in Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-13-: both the cases, the test is whether the exercise of such power is imperative to do justice to the case. But, in the present case, nothing is discernible from the impugned order as to whether the court has come into any conclusion as required under Section 311 of the Code of Criminal Procedure. The order simply says that since the court has dismissed two petitions (Crl.M.P.1275 & 1277 of 2006) for production of documents, the prayer for re-opening evidence is also rejected. There is no error in simultaneously considering the request for re-opening the evidence as well as production of the documents. But, even then, the above test has to be applied and court has come into its own conclusion. Then only, it can be ensured that the justice should not be only done but manifestly seen to be done. It is discernible from the available materials that the accused has denied the passing of consideration and if so, it is the burden of the complainant to establish the passing of consideration and to discharge his burden, it Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-14-: is absolutely necessary, just and proper to re-open the evidence and the documents sought to be produced assume importance. 3. In a decision reported in Iddar v. Aabida reported in 2007(4) KLT 652 (S.C.), the Apex Court has reiterated the legal position by saying that the object underlining Section 311 of the Code is that there may not be failure of justice on account of mistake of either party in bringing the valuable evidence or record or leaving ambiguity in the statements of witnesses examined from either side. The determinative factor is whether it is essential to the just decision of the case. Therefore, I am of the view that the court below ought to have allowed Annexure-C petition namely, C.M.P.No.1276 of 2006 filed by the complainant, thereby further opportunity ought to have been given to the complainant to substantiate his case and to uphold the policy of court allowing to adduce evidence and not to shut out the evidence. Going by Annexure-F order, it can be seen that the same was issued without proper Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-15-: application of judicial mind. In the decision cited supra, the Apex Court has held that “it is, however, to be borne in mind that whereas the section confers a very wide power on the Court on summoning witnesses, the discretion conferred is to be exercised judiciously, as the wider the power the greater is the necessity for application of judicial mind.” In the light of the above decision and considering the factual situation involved in the case, I am of the view that the court below ought to have allowed the application of the complainant to reopen the complainant's evidence. Therefore, Annexure-F order is not sustainable and the same is set aside and C.M.P.No.1276 of 2006 (Annexure-C) is allowed. Crl.M.C.No.1627 of 2006: This Crl.M.C. is filed challenging Annexure-E order by which the learned Magistrate had rejected the prayer of the complainant for a direction to the Assistant Commissioner, Income Tax Circle-I, Palakkad to produce Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-16-: the income tax returns, balance sheet etc. of M/s.Infogenie Information Tech and Serv Pvt.Ltd. Annexure-E order is issued in Annexure-B petition filed under Section 91 of the Code of Criminal Procedure. The reason given in the impugned order is that there is a ban under Section 138(1)(b) of the Income Tax Act for summoning the particulars relating to an assessee. However, the Commissioner or the Chief Commissioner, as the case may be, shall furnish such particulars only if he is satisfied that the particulars sought to be produced are in the public interest. According to the learned Magistrate, the request for production of documents by the complainant is only for protecting the interest of the complainant and not for any public interest and hence the request was rejected. The learned counsel for the petitioner submits that the above decision of the learned Magistrate is illegal as the same is against the statute. The counsel very much placed reliance on the decision of the Supreme Court reported in M/s.Dagi Ram Pindi Lall v. Trilok Chand Jain (AIR 1992 SC 990). In Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-17-: paragraphs 14 and 15 of the above judgment, the Apex Court had held as follows:- “14. The finality which has been attached to the order of the Commissioner under Section 138(1) (b) of the Act is applicable only in cases where application is made to the Commissioner by a party or any other person for receiving documents or information. It has nothing to do with the powers of the Courts to summon the production of assessment record of an assessee, filed after 1-4-1964. The privilege as to secrecy, which the assessee had acquired under Section 54 of the 1922 Act remained unimpaired by the repeal of that Act or even by the omission of Section 137 of the 1961 Act in respect of record filed prior to 1-4-1964 and relating to the assessments prior to that date. That privilege did not extend, after April 1, 1964, to record filed before the income-tax authorities, for the assessment years 1964-65 onwards. Section 6 of the General Clauses Act as well as Section 138(1)(b) of the 1961 Act cannot extend the ban on the exercise of the jurisdiction by the Courts to summon the production of documents from the income-tax authorities after April 1, 1964 relating to assessment year 1964-65 in respect of the record filed after April 1, 1964. 15. Section 6(c) of the General Clauses Act 1897 on which reliance was placed by the High Court reads as under:-- “6. Where this Act, or any Central Act or regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-18-: different intention appears, the repeal shall not .......................................................................... (c) affect any right, privilege, obligation or liability acquired or incurred under any enactment so repealed. A plain reading of the Section shows that the repeal of any enactment, unless a different intention appears, shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactment. In respect of the documents filed after the repeal of Section 137 of the 1961 Act, with effect from April 1, 1964 relating to assessments for the period 1964-65 onwards, no right, privilege, obligation or liability can be said to have been acquired, accrued or incurred prior to the omission of Section 137 of the Act. Therefore, the ban contained in Section 137 of the 1961 Act on the exercise of the powers of a civil court to call for production of documents etc., could not be said to have continued to exist, in matters arising subsequent to the omission of that Section with effect from April 1, 1964 and that ban came to an end in respect of the period after April 1, 1964. The general principle is that an enactment which is repealed, is to be treated, except as to transactions past and closed, as if it had never existed. The assessee had acquired no right or privilege under the repealed act, since the provision is only a procedural restriction and did not create any substantive right in the assessee, in respect of assessments for the period after the omission of Section 137 of the 1961 Act. Thus, reliance placed on the provisions of Section 6 of the General Clauses Act to hold the continuation of the ban on Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-19-: the exercise of jurisdiction by the Courts was misplaced.” Thus, after the detailed examination regarding the scope of Section 138(1)(b) of the Income Tax Act, in para 18 of the above decision, the Apex Court had held as follows:- “18. As a result of the above discussion, we, therefore, find that the answer given by the Full Bench of the High Court in the impugned judgment, to situation (d) of the second question (supra) as formulated by it, is erroneous and we set it aside. Consequently, we hold that after the repeal of Section 137 of the Act, there is no longer any impediment left in the way of a Court to summon the production of documents filed by an assessee before the income-tax authorities after April 1, 1964 relating to assessment proceedings for 1964- 65 onwards and that the finality attached to an order of the Commissioner under Section 138(1)(b) has no relevance to the exercise of powers by a Court to summon the production of documents in a case pending before the Court. Since, the challenge before us had been confined to the answer given by the High Court to situation (d) of the second question as formulated by it and no other finding of the High Court was called in question, we have refrained from expressing any opinion on the other findings recorded by the Full Bench of the High Court. The appeal consequently succeeds to the extent indicated above and is allowed. We, however, make no order as to costs.” Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-20-: From the above, it can be seen that the settled position of law is that there is no ban in directing the concerned authority to produce income tax returns and balance sheet as required by the complainant in the present case and the court is entitled to issue such direction for the proper disposal of the matter pending before it. 2. In the light of the above discussion, it is to be held that after the repeal of Section 137 of the Income Tax Act and in the light of Section 138(1)(b) of the same Act, there is no bar for the court to the exercise of its powers to summon the production of documents relating to income tax assessment in a case pending before the court. The embargo contained in Section 138(1)(b) of the Act has nothing to do with the powers of the court under Section 91 of the Code of Criminal Procedure, even if no public interest involved. Thus, on a reading of Section 138(1)(b) of the Income Tax Act, it is conspicuous that there is no impediment against the exercise of powers of the court to summon the production of a document filed by an assessee before the Crl.M.C.Nos.1622, 1627 & 1628 of 2006 :-21-: income tax authorities after April 1, 1964 relating to assessment proceedings for 1964-65 onwards. Therefore, in the light of the above position of law, Annexure-E order of the learned Magistrate is unsustainable and the same is liable to be quashed and accordingly, Annexure-E order of the court below is quashed and Annexure-B petition, i.e., C.M.P.No.1275 of 2006 is allowed. Crl.M.C.No.1628 of 2006 The above M.C.is