Case: Rasiklal Dalpatram Thakkar Vs. State Of Gujarat

2. The Madhavpura MercantileCooperativeBank Ltd., which is governed by the provisions of the Multi StateCooperativeSocieties Act, 2002, has its Registered as well as Head Office at Madhavpura Market, Shastribaug, Ahmedabad, and carries on banking operations in the State of Gujarat, Maharashtra among other States in India. According to the Bank, all its activities relating to disbursement of loans are conducted from the Head Office at Ahmedabad3. In 1992, the appellants company took loan from the aforesaid Bank which for the reasons prevailing closed down its business operations in 2001. Thereafter, a Scheme of Reconstruction approved by the Reserve Bank of India was formulated and a new Board of Management (Administration) came to be appointed to implement the same. Several irregularities were discovered regarding the grant of loans to borrowers with the connivance of the then Chief Executive Officer, Managing Director and Chairman of the Bank. Several complaints came to be registered against the said officers and several borrowers. Five such complaints were filed against the appellant on 9th July, 2003, before the Chief Metropolitan Magistrate, Ahmedabad, who directed the Economic Offences Wing, State C.I.D. (Crime), Ahmedabad, under Section 156(3) Cr.P.C. to carry out an investigation. The Investigating Agency submitted a report stating that the allegations complained of had been committed within the territorial limits of the city of Mumbai, Maharashtra, and that the investigation should, therefore, be transferred to the Investigation Agency in Mumbai, Maharashtra4. The said report was rejected by the Chief Metropolitan Magistrate, Ahmedabad, on the ground that it was not for the Investigating Agency to decide not to investigate a complaint forwarded to it under Section 156(3) Cr.P.C. on the ground that the offence complained of was allegedly committed outside the territorial jurisdiction of the Investigating Agency. The learned Magistrate by his order dated 31.5.2006, directed the Investigating Agency to carry out a further investigation and report whether the alleged offence had been committed or not5. The said order of the learned Chief Judicial Magistrate, Ahmedabad, was challenged by the appellant herein before the City Civil and Sessions Court at Ahmedabad in revision which was dismissed on 22.9.2006 by the City Sessions Judge Court No.11, Ahmedabad. A writ petition was filed in the High Court by the appellant on 21.11.2006 being Writ Petition No.2366 of 2006, challenging the decision of the Sessions Court6. Before the High Court it was reiterated that the loan had been availed of by the appellants company from the Mandvi Branch of the Bank in Mumbai which had an independent identity as a registerede Society under the MaharashtraCooperativeSocieties Act. It was also reiterated that the loan amount had been disbursed from the said Branch in Mumbai. It was contended that since the cause of action for the alleged offence had arisen outside the territorial jurisdiction of the Chief Judicial Magistrate, Ahmedabad, he could not direct the Investigating Agency under his jurisdiction to conduct an investigation into the complaint made against the appellant in respect of such cause of action7. Accepting the views expressed by the Chief Metropolitan Magistrate that the Investigating Agency was only required to state the outcome of the investigation pursuant to an order under Section 156(3) Cr.P.C. and that it had no authority to state which Court had jurisdiction to inquire into the alleged offence, the High Court by its impugned judgment dated 15.3.2007 dismissed the writ petition filed by the appellant, inter alia, on the following grounds :(i) That the Investigating Agency had travelled beyond its jurisdiction in expressing its views regarding the territorial jurisdiction in regard to a criminal offence which was for the Courts to decide(ii) That the Station House Officer is vested with the authority to investigate any cognizable offence in respect of which an F.I.R. is lodged(iii) The powers reserved to the High Court under Section 482 Cr.P.C. could not be interfered with or curtailed on the ground that the Investigating Officer had no territorial jurisdiction over the investigation8. It appears that when the writ petitions were taken up for hearing a prayer was made for amendment of the prayers by incorporating paragraph 14(BBB)in each of the writ petitions. By virtue of the amended prayer, the appellant wanted the High Court to quash and set aside Enquiry Case No.21 of 2003 filed before the Chief Metropolitan Magistrate, Ahmedabad, and to also quash the order directing investigation under Section 156(3) Cr.P.C. and the proceedings arising therefrom. The said prayer was rejected by the High Court on the ground of delay and also on the ground that the order of the Magistrate dated 9.7.2003 had not been challenged for a period of four years.

Court's reasoning:
20. From the aforesaid provisions it is quite clear that a police officer in charge of a police station can, without the order of a Magistrate, investigate any cognizable offence which a Court having jurisdiction over such police station can inquire into or try under Chapter III of the Code.n (2) of Section 156 ensures that once an investigation is commenced undern (1), the same is not interrupted on the ground that the police officer was not empowered under the Section to investigate. It is in the nature of a "savings clause" in respect of investigations undertaken in respect of cognizable offences. In addition to the powers vested in a Magistrate empowered under Section 190 Cr.P.C. to order an investigation undern (1) of section 202 Cr.P.C.,n (3) of Section 156 also empowers such Magistrate to order an investigation on a complaint filed before him22. In the instant case, the stage contemplated under Section 181(4) Cr.P.C. has not yet been reached. Prior to taking cognizance on the complaint filed by the Bank, the learned Chief Judicial Metropolitan Magistrate, Ahmedabad, had directed an inquiry under Section 156(3) Cr.P.C. and as it appears, a final report was submitted by the Investigating Agency entrusted with the investigation stating that since the alleged transactions had taken place within the territorial limits of the city of Mumbai, no cause of action had arisen in the State of Gujarat and, therefore, the investigation should be transferred to the police agency in Mumbai. There seems to be little doubt that the Economic Offences Wing, State CID (Crime), which had been entrusted with the investigation, had upon initial inquiries recommended that the investigation be transferred to the police agency of Mumbai. In our view, both the trial Court as well as the Bombay High Court had correctly interpreted the provisions of Section 156 Cr.P.C. to hold that it was not within the jurisdiction of the Investigating Agency to refrain itself from holding a proper and complete investigation merely upon arriving at a conclusion that the offences had been committed beyond its territorial jurisdiction. A glance at the material before the Magistrate would indicate that the major part of the loan transaction had, in fact, taken place in the State of Gujarat and that having regard to the provisions ofn (2) of Section 156 Cr.P.C., the proceedings of the investigation could not be questioned on the ground of jurisdiction of the officer to conduct such investigation. It was open to the learned Magistrate to direct an investigation under Section 156(3) Cr.P.C. without taking cognizance on the complaint and where an investigation is undertaken at the instance of the Magistrate a Police Officer empowered undern (1) of Section 156 is bound, except in specific and specially exceptional cases, to conduct such an investigation even if he was of the view that he did not have jurisdiction to investigate the matter23. Having regard to the law in existence today, we are unable to accept Mr. Syeds submissions that the High Court had erred in upholding the order of the learned Trial Judge when the entire cause of action in respect of the offence had allegedly arisen outside the State of Gujarat. We are also unable to accept the submission that it was for the Investigating Officer in the course of investigation to decide whether a particular Court had jurisdiction to entertain a complaint or not. It is the settled law that the complaint made in a criminal case follows the place where the cause arises, but the distinguishing feature in the instant case is that the stage of taking cognizance was yet to arrive. The Investigating Agency was required to place the facts elicited during the investigation before the Court in order to enable the Court to come to a conclusion as to whether it had jurisdiction to entertain the complaint or not. Without conducting such an investigation, it was improper on the part of the Investigating Agency to forward its report with the observation that since the entire cause of action for the alleged offence had purportedly arisen in the city of Mumbai within the State of Maharashtra, the investigation should be transferred to the concerned Police Station in Mumbai. Section 156(3) Cr.P.C. contemplates a stage where the learned Magistrate is not convinced as to whether process should issue on the facts disclosed in the complaint. Once the facts are received, it is for the Magistrate to decide his next course of action. In this case, there are materials to show that the appellant had filed his application for loan with the Head Office of the Bank at Ahmedabad and that the processing and the sanction of the loan was also done in Ahmedabad which clearly indicates that the major part of the cause of action for the complaints arose within the jurisdiction of the Chief Metropolitan Magistrate, Ahmedabad. It was not, therefore, desirable on the part of the Investigating Agency to make an observation that it did not have territorial jurisdiction to proceed with the investigation, which was required to be transferred to the Police Station having jurisdiction to do so24. On the materials before him the learned Magistrate was fully justified in rejecting the Final Report submitted by the Economic Offences Wing, State CID (Crime) and to order a fresh investigation into the allegations made on behalf of the Bank. The High Court, therefore, did not commit any error in upholding the views expressed by the Trial Court. As mentioned hereinbefore, Section 181(4) Cr.P.C. deals with the Courts powers to inquire or try an offence of criminal misappropriation or of a criminal breach of trust if the same has been committed or any part of the property, which is the subject of the offence, is received or retained within the local jurisdiction of the said Court25. The various decisions cited by Mr. Syed, and in particular the decision in Satvinder Kaurs case (supra) provide an insight into the views held by the Supreme Court on the accepted position that the Investigating Officer was entitled to transfer an investigation to a Police Station having jurisdiction to conduct the same. The said question is not in issue before us and as indicated hereinbefore, we are only required to consider whether the Investigating Officer in respect of an investigation undertaken under Section 156(3) Cr.P.C. can file a report stating that he had no jurisdiction to investigate into the complaint as the entire cause of action had arisen outside his jurisdiction despite there being material available to the contrary. The answer, in our view, is in the negative and we are of the firm view that the powers vested in the Investigating Authorities, under Sections 156(1) Cr.P.C., did not restrict the jurisdiction of the Investigating Agency to investigate into a complaint even if it did not have territorial jurisdiction to do so. Unlike as in other cases, it was for the Court to decide whether it had jurisdiction to entertain the complaint as and when the entire facts were placed before it.