Babita Lila & Anr vs Union Of India

2. Being aggrieved by the rejection of their challenge to the initiation of their prosecution under Sections 109/191/193/196/200/420/120B/34 IPC on the basis of a complaint made by the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.), both on the ground of lack of competence of the complainant and of jurisdiction of the Trial Court at Bhopal, the appellants seek the remedial intervention of this Court under Article 136 of the Constitution of India.

3. The appellants, who are husband and wife, are residents of both Bhopal and Aurangabad. A search operation was conducted by the authorities under the Income Tax Act, 1961 (for short, hereinafter referred to as “the Act”) on 28.10.2010 at both the residences of the appellants, in course whereof their statements were recorded on oath under Section 131 of the Act. On a query made by the authorities, it is alleged that they made false statements denying of having any locker either in individual names or jointly in any bank. It later transpired that they did have a safe deposit locker with the Axis Bank (formerly known as UTI Bank) at Aurangabad which they had also operated on 30.10.2010. The search at Aurangabad was conducted by the Income Tax Officer, Nashik and Income Tax Officer, Dhule and the statements of the appellants were also recorded at Aurangabad.

4. Based on the revelation that the appellants, on the date of the search, did have one locker as aforementioned and that their statements to the contrary were false and misleading, a complaint was filed as afore- stated under the above-mentioned sections of the Indian Penal Code by the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) on 30.5.2011 in the court of the Chief Judicial Magistrate, Bhopal, (M.P.) and the same was registered as R.T. No. 5171 of 2011.

5. The Trial Court on 9.6.2011, took note of the offences imputed and issued process against the appellants. In doing so, the Trial Court, amongst others, noted that the search proceedings undertaken by the authorities under Section 132 of the Act were deemed to be judicial proceedings in terms of Section 136 and in course whereof, as alleged, the appellants had made false statements with regard to their locker and that on the basis of the documents and evidence produced on behalf of the complainant, sufficient grounds had been made out against them to proceed under Sections 191,193, 200 IPC.

6. The appellants impugned this order of the Trial Court before the High Court under Section 482 Cr.P.C. (for short hereinafter to be referred to as “the Code”) and sought annulment thereof primarily on the ground that the search operations having been undertaken by the I.T.Os. of Nashik and Dhule, the complaint could not have been lodged by the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) who was not the appellate authority in terms of Section 195(4) of the Code and further no part of the alleged offence having been committed within the territorial limits of the Court of the Chief Judicial Magistrate, Bhopal, it had no jurisdiction to either entertain the complaint or take cognizance of the accusations. By the order impeached herein, the High Court has declined to interfere on either of these contentions.

17. The admitted facts reveal that the appellants have residences both at Bhopal and Aurangabad and file their returns of income tax at Bhopal. On 28.10.2010, search operations under Section 132 of the Act were simultaneously conducted at both the places. In the course of the interrogation of the appellants, more specifically on the aspect as to whether they or any of them either individually or jointly did hold any locker, the answer was in the negative. The accusation of the authorities is that further investigation revealed that they did hold a locker in the Axis Bank (formerly known as UTI Bank), Kranti Chowk, Aurangabad which had been operated by appellant No. 1 on 30.10.2010. In this factual backdrop, the complaint had been filed by the Deputy Director, Income Tax (Investigation)-I, Bhopal, (M.P) in the court of Chief Judicial Magistrate, Bhopal, (M.P.) asserting that by making such false statement in the course of search operations which were judicial proceedings in terms of Section 136 of the Act, the appellants had committed offence under Sections 109/191/193/196/200/420/120B/34 IPC. As referred to hereinabove, the Chief Judicial Magistrate, Bhopal, after necessary hearing as contemplated in law and being prima facie satisfied that sufficient grounds had been made out to proceed against the appellants under Sections 191,193 and 200 IPC, issued process against them.

19. Be that as it may, eventually the office of the Deputy Director of Income Tax (Investigation)-I, Bhopal on 8.2.2011 issued a show cause notice to the appellants under Section 277 of the Act alleging that they had made false statement under Section 132(4) thereof, thereby seeking a reply as to why prosecution would not follow by virtue thereof. It is in this factual premise, that the validity of the complaint filed by the Deputy Director, Income Tax (Investigation)-I, Bhopal, (M.P). has been questioned by the appellants. To reiterate, by the impugned order, the High Court has negated both the demurrals of the appellants pertaining to the complaint and territorial jurisdiction of the court of the Chief Judicial Magistrate, Bhopal.

21. In Kuldip Singh (supra), the question involved before a Constitution Bench of this Court was about the validity of a complaint made under Section 476-A read with Section 195(3) of the Code of Criminal Procedure Code 1898 against the appellant for perjury and for using a forged document as genuine. The contextual facts narrate that the 2nd respondent therein had filed a suit against the appellant for recovery of money on the basis of a mortgage in the Court of one Mr. E.F. Barlow, Subordinate Judge of 1st Class. The appellant in the suit filed a receipt which purported to show that Rs.35000/- had been paid towards the satisfaction of the mortgage and in the witness box he swore that he had paid the money for which the receipt was given.

23. The plaintiff/respondent thereafter made an application in the Court of Mr. W. Augustine who had succeeded Mr. Barlow as Subordinate Judge of 1st Class stating that a complaint be filed against the appellant under Sections 193 and 471 I.P.C. Mr. Augustine, because of his transfer could not hear the application for filing of the complaint. In his place Mr. K.K. Gujral, subordinate Judge of the 4th Class was sent. He, however, declined to entertain the matter as he was only a subordinate judge of the 4th Class and laid a report to the District Judge pointing out his lack of jurisdiction in the matter as the offences had been allegedly committed in the Court of a subordinate Judge of the 1st Class. The District Judge thereupon transferred the matter to the Senior Subordinate Judge, Mr. Pitam Singh who made the complaint. The impeachment of the validity of the complaint has arisen in this backdrop.

34. In Lalji Haridas (supra), a Constitution Bench of this Court was seized with the question as to whether the proceeding before the I.T.O. under Section 37 of the Indian Income Tax Act, 1922 (as it was then) could be construed to be a proceeding in any court within the meaning of Section 195(1)(b) of the Code. The factual backdrop as outlined discloses that the appellant and the respondent No. 2 therein were businessmen and used to carry on their business at two different places and were known to each other for several years. In the income tax assessment proceedings of the appellant for the assessment years 1949-50 and 1950-51, the respondent No. 2 adduced evidence on oath before the I.T.O. of the concerned ward, wherein he denied that he had a son named Nihal Chand and that he had done any business in the name of M/s. Nihal Chand & Co. at Jamnagar. The appellant alleged that the said statement was false to the knowledge of the respondent No. 2 and was made to mislead the enquiring I.T.O. and to avoid the incidence of income tax on himself and consequently the appellant was heavily taxed.

35. The appellant thereafter filed a criminal complaint against respondent No. 2 under Section 193 IPC. At the hearing of the complaint, the respondent No. 2 raised a preliminary objection that the learned Magistrate before whom the complaint had been filed, could not have taken cognizance thereof as the allegation was making of a false statement by him on oath in a proceeding before the court within the meaning of Section 195(1)(b) of the Code and in such an eventuality, the complaint was to be filed by the court concerned as required under the said provision of the Code and thus the appellant was not competent to lodge the prosecution.

71. Both these decisions on territorial jurisdiction, to start with having regard to the facts involved herein are distinguishable and are of no avail to the appellants. As hereinbefore stated, the appellants as assesses, had residences both at Bhopal and Aurangabad and had been submitting their income tax returns at Bhopal. The search operations were conducted simultaneously both at Bhopal and Aurangabad in course whereof allegedly the appellants, in spite of queries made, did not disclose that they in fact did hold a locker located at Aurangabad. They in fact denied to hold any locker, either individually or jointly. The locker, eventually located, though at Aurangabad, has a perceptible co-relation or nexus with the subject matter of assessment and thus the returns filed by the appellants at Bhopal which in turn were within the purview of the search operations. The search conducted simultaneously at Bhopal and Aurangabad has to be construed as a single composite expedition with a common mission. Having regard to the overall facts and the accusation of false statement made about the existence of the locker in such a joint drill, it cannot be deduced that in the singular facts and circumstances, no part of the offence alleged had been committed within the jurisdictional limits of the Chief Judicial Magistrate, Bhopal.

“177: Ordinary place of inquiry and trial – Every offence shall ordinarily be inquired into and tried by a court within whose local jurisdiction it was committed.

178: Place of inquiry or trial – (a) When it is uncertain in which of several local areas an offence was committed, or

(b) where an offence is committed partly in one local area and partly in another, or

(c) where an offence is continuing one, and continues to be committed in more local areas than one, or

76. The inevitable consequence of the determination in its entirety however is that the complaint is unsustainable in law having been filed by an authority, incompetent in terms of Section 195 of the Code.

77. In the result, the appeal succeeds and the impugned proceeding and the order assailed are set-aside. The respondent is however left at liberty to take appropriate steps in the matter, as available in law, if so advised.

AUGUST 31, 2016.