1 IN THE HIGH COURT OF JUDICATURE AT MUMBAI APPELLATE CRIMINAL JURISDICTION CRIMINAL WRIT PETITION NO.2506 OF 2008 M/s. Co-Nick Alloys (India) Ltd. ...Petitioner. v. The State of Maharashtra & Ors. ...Respondents. Mr.A.R.Pitale i/by P.M.Pradhan, advs. For the Petitioner. Ms. M.H.Mhatre, APP For the Respondent No.1/State. Shri Shirish Gupte i/by Ms. Usha Srivastav, h/for M/s. Consulta Juris, advs. for the Respondent Nos.2 to 4. CORAM : J.H. BHATIA, J. DATED : JULY 1, 2010 P.C. 1 Rule. Rule returnable forthwith. Heard the learned counsel for the parties. 2 To state in brief, the petitioner filed a complaint in the Court of J.M.F.C. at Murbad District: Thane for the offences punishable under Sections 420, 464, 465, 468, 471, 193, 196 read with Section 34 of the I.P.C. against the respondent nos.2 to 5. According to the petitioner, he had taken clean loan of Rs.3 crores from the respondent no.2 on the basis of his balance sheet . Respondent nos.2 to 4 attached the said property illegally and, therefore, petitioner had filed Special Civil Suit No.3/03 in the Court of Civil Judge Senior Division, Kalyan for declaration that the 2 take over notice issued by the Respondent No.2/SICOM was illegal and bad in law. Written statement was filed and nowhere the respondent no.2 had contended that valuation report of the factory premises, plant and machinery of the petitioner was obtained. On the contrary, it was contended that the valuation report was not necessary. Later on, SBI, who had first and second charge on the assets of the petitioner, filed an application before the Debts Recovery Tribunal at Mumbai in Original Application No.659/01 for recovery of loan amount from the petitioner. According to the petitioner, respondent no.2 had only third charge on the assets. During the proceedings before the D.R.T., respondent no.2 produced two valuation reports dated 17th August, 1999 and 26th May, 2003. According to the petitioner, said valuation reports were falsely prepared by the respondent no.5 at the instance of the respondent nos.2 to 4 and the property of the petitioner company was highly undervalued. According to him, value of the property was about 13 crores while the respondents/accused persons had shown the value only at Rs. 5,59,26,000/-. It is contended that the said reports were tendered before the D.R.T. and thus, the respondent nos.2 to 5 have committed several offences. 3 Complaint was filed on 19.1.2006. The learned J.M.F.C., 3 Murbad recorded verification statement of one Jagdish J. Doshi, who was former director and authorised representative of the petitioner company. After having recorded verification statement on oath, the learned Magistrate directed to call the report under Section 156(3) of the Cr.P.C. from the police. In view of this direction, police investigated the case and submitted B summary report. The learned Magistrate accepted the B summary report and dismissed the complaint. That order was challenged by the petitioner before the Sessions Court by filing Criminal Revision Application No.65 of 2007. Revision application was also rejected. Hence, this petition under Article 227 of the Constitution of India read with Section 482 of the Cr.P.C. 4 The learned counsel for the petitioner vehemently contended that once the learned J.M.F.C. had taken cognizance of the matter and recorded verification statement of the witness of the complainant, it could only hold enquiry or direct the police to investigate case and submit the report under Section 202 of the Cr.P.C. but it could not direct investigation under Section 156(3) of the Cr.P.C. According to him as the Magistrate after having taken cognizance of the matter directed the police to investigate the case under Section 156(3) of the Cr.P..C., that order is illegal and is liable to be set aside and as consequence of the 4 same, all the further proceedings by the virtue of section 156(3) including investigation by the police, B summary report and any order passed by the Magistrate based on B summary report are liable to be quashed and set aside. In support of his contention, the learned counsel placed reliance upon Ramesh Shamrao Sadar v. State of Maharashtra and Anr. 2007 ALL MR (Cri) 2435 wherein the learned Single Judge of this Court at Nagpur Bench had held that where the Magistrate had passed an order under Section 156(3) of the Cr.P.C. after recording of verification statement of the complaint, i.e., after taking cognizance of the complaint, the order was illegal. It was held that provisions of Section 156(3) can be resorted to before taking cognizance of the complaint and not after taking cognizance of the complaint. The learned counsel for the petitioner also placed reliance in support of contention on Suresh Chand Jain v. State of Madhya Pradesh & Anr. 2001(2) SCC 628. After having referred to the provisions of section 156(3) and Section 202 of the Cr.P.C., the Supreme Court observed as follows in Paragraph 10: “10. The position is thus clear. Any Judicial Magistrate, before taking cognizance of the offence, can order investigation under Section 156(3) of the Code. If he does so, he is not to examine the complainant on oath because he was not taking cognizance of any offence 5 therein. For the purpose of enabling the police to start investigation, it is open to the Magistrate to direct the police to register an FIR. There is nothing illegal in doing so. After all registration of an FIR involves only the process of entering the substance of the information relating to the commission of the cognizable offence in a book kept by the officer in charge of the police station as indicated in Section 154 of the Code. Even if a Magistrate does not say in so many words while directing investigation under Section 156(3) of the Code that an FIR should be registered, it is the duty of the officer in charge of the police station to register the FIR regarding the cognizable offence disclosed by the complaint because that police officer could take further steps contemplated in Chapter XII of the Code only thereafter.” From this it is clear that once the order is passed under Section 156(3), the police is required to register the F.I.R. regarding the cognizable offence disclosed by the complaint and police officer can take further steps as contemplated in Chapter XII of the Cr.P.C. It includes submission of report under Section 173, which is generally known as charge-sheet. Once the Magistrate has taken cognizance of the case, he can not give direction to the police to investigate the case under Section 156(3) because there may be then two different cases one, in which the Magistrate has already taken cognizance and another, which may be registered by the police as F.I.R. Similar view was taken in the earlier 6 judgments of the Supreme Court particularly Tula Ram and Others v. Kishor Singh AIR 1977 SC 2401 and D.Laxminarayana Reddy and Others v. V. Narayana Reddy & Ors. AIR 1976 SC 1672. On this legal proposition, there appears no dispute between the learned counsel for both the parties. 5 The learned Additional Sessions Judge while rejecting the revision application observed that even though the Magistrate had referred to Section 156(3) of the Cr.P.C. but infact he only wanted to call the report, which means the Magistrate wanted to invoke the power under Section 202 and not under section 156(3) of the Cr.P.C. He held that under Section 202, Magistrate could call the report from the police and, therefore, the order is valid. I am unable to accept this reason particularly because Magistrate had specifically mentioned Section 156(3) of the Cr.P.C. If the Magistrate would have called only a report under section 202, police could not submit either a report or charge-sheet under Section 173 of the Cr.P.C. nor could submit B Summary report in the matter. Police could only collect the material and place before the Court, with its own opinion. It would be the report to be considered by the Magistrate to come to conclusion as to whether process should or should not be issued. But in this case, police registered the F.I.R and 7 submitted B summary, which clearly indicate that police acted under Section 156(3), in view of the order calling the report under Section 156(3) and not under Section 202 of the Cr.P.C. In view of the legal position settled in several cases by the Supreme Court and followed by this Court in Ramesh Shamrao Sadar (Supra), the Magistrate could not have directed investigation under Section 156(3) after having taken cognizance in the matter. In view of this position, everything which was done by the police, including registration of the F.I.R., investigation and submission of B summary, will be against the law and without jurisdiction and, therefore, the order under Section 156(3), registration of the F.I.R. investigation as well as submission and acceptance of B summary and consequential order of dismissal of the complaint accepting B Summary will have to be quashed. 6 In view of the above, normally the petition should have been allowed and the learned Magistrate could be directed to proceed under Section 202 of the Cr.P.C., ignoring the earlier order under Section 156 till the final order passed by him on the basis of B summary. However, in view of the facts disclosed in the complaint, it appears that basic contention of the complainant is that offence under Section 193 I.P.C. was committed by the accused persons by preparing and producing a 8 forged and false document in the form of two valuation reports about the property of the complainant. Section 195(1)(b)(i) Cr.P.C. provides that no Court shall take cognizance of any offence punishable under Sections 193 to 196 of the I.P.C. when such offence is alleged to have been committed in, or in relation to, any proceeding in any Court, except on the complaint in writing of that Court or by such officer of the Court as that Court may authorise in writing in this behalf, or of some other Court to which that Court is subordinate. Section 340 of the Cr.P.C. provides for procedure to be followed in cases which fall under Section 195 of the Cr.P.C. As per Section 340, either upon an application made to it in this behalf or otherwise is of the opinion that it is expedient in the interest of justice that enquiry should be made into any offence referred to in clause (b) to sub-section 1 of Section 195 which appears to have been committed in or in relation to a proceeding in that Court or, as the case may be, in respect of a document produced or given in evidence in a proceeding in that Court, such Court may, after such preliminary enquiry, if any, as it thinks necessary record a finding to that effect, make a complaint in writing thereof and send it to a Magistrate of the First Class having jurisdiction and only on such complaint, cognizance can be taken by the Court under Section 195 of the Cr.P.C. In view of 9 this, the petitioner/complainant should have first approached D.R.T. with an application to make inquiry into the matter and to lodge a complaint for the offences including section 193 of the I.P.C. If D.R.T. would be satisfied that such offence was committed , it could file a complaint and then the concerned Magistrate could take cognizance of that offence. That procedure was not followed in this case and the complainant directly filed the complaint under Section 193 and other sections of the I.P.C. against the respondent nos.2 to 5 in the Court of J.M.F.C. It appears that the learned J.M.F.C. did not notice the provisions of Section 195 and 340 of the Cr.P.C. and proceeded to take cognizance and to record verification statement of the witness of the complainant, which he could not do in view of the specific bar under Section 195(1) of the Cr.P.C. In view of these circumstances, no purpose will be served by giving direction to the Magistrate to proceed further from the stage where it had recorded verification statement. All that exercise will be futile in view of the provisions of section 195 read with Section 340 of the Cr.P.C. 7 For the aforesaid reasons, while the impugned order passed by the Magistrate to call the report under Section 156(3) and consequential registration of the F.I.R., investigation by the police, 10 submission of B summary and dismissal of the complaint on the basis of B summary stand quashed. However, in view of the fact that Magistrate could not take cognizance under Section 195 for the offences punishable under Section 193 in view of the specific bar under Section 195(1) Cr.P.C., complaint shall stand dismissed with liberty to the complainant to approach D.R.T. for an appropriate action. Order passed by the revisional Court also stands quashed. Rule discharged accordingly. (J.H. BHATIA,J.)