2012 (12) TMI 965 - SC - Indian Laws

Supreme Court Upholds Decision on Cheating Case, Emphasizes Section 202 Compliance

The Supreme Court upheld the High Court's decision to set aside the process issuance order against the accused for cheating. The Court emphasized the ... Obligation to enquire under Section 202 Cr.P.C. before summoning accused residing beyond magistrate's jurisdiction - distinction between enquiry under Section 202 Cr.P.C. and investigation under Section 156 Cr.P.C. - prima facie case for issuance of process - sanction by Central Government under the proviso to Section 188 Cr.P.C. - remand for fresh consideration to comply with statutory procedureObligation to enquire under Section 202 Cr.P.C. before summoning accused residing beyond magistrate's jurisdiction - prima facie case for issuance of process - Whether the Chief Judicial Magistrate, Ahmednagar erred in issuing process without carrying out or directing an enquiry under the amended Section 202 Cr.P.C. when the accused resided beyond the magistrate's jurisdiction, and whether the complaint made out a prima facie case for issuance of process under Sections 418 and 420 IPC. - HELD THAT: - The Court held that after the 2005 amendment to Section 202 Cr.P.C. it is obligatory for a Magistrate to enquire or direct an investigation before summoning an accused who resides beyond the Magistrate's territorial jurisdiction. The scope of enquiry under Section 202 is limited to determining the truth or otherwise of allegations on materials placed by the complainant for the limited purpose of deciding whether a prima facie case exists for issuing process; it is distinct from an investigation under Section 156 Cr.P.C. The C.J.M. did not carry out such enquiry or order investigation despite it being admitted that the accused resided outside the C.J.M.'s jurisdiction. The High Court correctly recorded that the C.J.M. failed to comply with the mandatory procedure; the High Court also observed that the bare allegations did not, on their face, make out a case for issuing process under Sections 418 or 420 IPC. The Supreme Court endorsed the requirement to follow the amended procedure and agreed with the High Court's conclusion that the C.J.M. had not followed Section 202, but did not endorse outright quashing of the complaint.The C.J.M. erred in issuing process without complying with the amended Section 202 Cr.P.C.; the High Court was right to set aside the process for that reason.Remand for fresh consideration to comply with statutory procedure - Whether the matter should be quashed by the High Court or remitted to the Magistrate for fresh consideration in accordance with Section 202 Cr.P.C. - HELD THAT: - Although the High Court set aside the order issuing process, the Supreme Court held that the proper course was not to quash the complaint but to remit the matter to the Magistrate to pass fresh orders after complying with the procedure under Section 202. The Magistrate must undertake the enquiry or direct an investigation unimpaired by the High Court's prima facie view and decide, on the materials placed by the complainant and for the limited purpose prescribed by Section 202, whether there are sufficient grounds to issue process. The Supreme Court directed that the C.J.M. should pass fresh orders within two months from receipt of the order.The complaint is remitted to the Magistrate for fresh consideration in accordance with Section 202 Cr.P.C.; the Magistrate to pass fresh orders within two months.Final Conclusion: The Special Leave Petition is disposed of by remitting the complaint to the Chief Judicial Magistrate, Ahmednagar to comply with the amended Section 202 Cr.P.C. and pass fresh orders within two months; the High Court's setting aside of the process was upheld insofar as the C.J.M. failed to follow the mandatory procedure, but the complaint was not quashed. Issues:1. Allegations of cheating against the accused2. Compliance with Section 202 of the Code of Criminal Procedure3. Jurisdiction of the Chief Judicial Magistrate, Ahmednagar4. Application of the amended Section 202 of the Cr.P.C.Detailed Analysis:1. The complainant, a bank, lodged a complaint against the respondent for cheating by swindling a significant amount of money. The accused had obtained financial facilities from the bank based on false representations about his business and financial stability. Despite a settlement agreement, the accused failed to repay the dues and absconded to India, leading to legal action. The Chief Judicial Magistrate, Ahmednagar, issued a process against the accused under Sections 418 and 420 of the Indian Penal Code (I.P.C.) after obtaining sanction from the Central Government.2. The respondent challenged the order before the High Court, arguing that the allegations did not constitute an offense and that the CJM did not follow the procedure under Section 202 of the Cr.P.C. The High Court agreed, emphasizing the need for an inquiry or investigation under Section 202, especially when the accused resided outside the CJM's jurisdiction. The High Court set aside the process issuance order due to non-compliance with Section 202.3. The Supreme Court upheld the High Court's decision, stating that the CJM had not conducted the necessary inquiry or investigation as required by Section 202 before issuing the process. The duty of the Magistrate under Section 202 is to ascertain the truth of the allegations to determine if there are sufficient grounds to proceed. The Court highlighted the importance of the 2005 amendment to Section 202, which mandates an inquiry when the accused resides beyond the Magistrate's jurisdiction.4. The Supreme Court found that the CJM had overlooked the amended Section 202 requirements and agreed with the High Court's decision. However, instead of quashing the complaint, the Court directed the Magistrate to pass fresh orders in compliance with Section 202 within two months. The matter was remitted to the Magistrate for proper consideration, emphasizing the need to follow the prescribed procedure under Section 202 of the Cr.P.C.