2019 (2) TMI 1936 - SC - Indian Laws

Supreme Court upholds Magistrate's order on issuing summons, emphasizes no detailed reasons needed

The Supreme Court set aside the High Court's decision and upheld the Magistrate's order issuing summons to the accused. The Court clarified that detailed ... Hawala Transactions - complex economic offence of sending foreign exchange abroad to foreign companies in Dubai and Hongkong through 'hawala' - Maintainability of revision petition against order of issue of process - necessity of recording reasons for its satisfaction of sufficient grounds for issuance of summons - cognizance of an offence Under Section 190(1) (b) Code of Criminal Procedure - HELD THAT:- It is well-settled that at the stage of issuing process, the Magistrate is mainly concerned with the allegations made in the complaint or the evidence led in support of the same and the Magistrate is only to be satisfied that there are sufficient grounds for proceeding against the Accused. It is fairly well-settled that when issuing summons, the Magistrate need not explicitly state the reasons for his satisfaction that there are sufficient grounds for proceeding against the Accused. Under Section 190 (1)(b) Code of Criminal Procedure, where the Magistrate has taken cognizance of an offence upon a police report and the Magistrate is satisfied that there is sufficient ground for proceeding, the Magistrate directs issuance of process. In case of taking cognizance of an offence based upon the police report, the Magistrate is not required to record reasons for issuing the process - In a case based upon the police report, at the stage of issuing the summons to the Accused, the Magistrate is not required to record any reason. In case, if the charge sheet is barred by law or where there is lack of jurisdiction or when the charge sheet is rejected or not taken on file, then the Magistrate is required to record his reasons for rejection of the charge sheet and for not taking on file. In the present case, cognizance of the offence has been taken by taking into consideration the charge sheet filed by the police for the offence Under Sections 420, 465, 467, 468, 471, 477A and 120B Indian Penal Code, the order for issuance of process without explicitly recording reasons for its satisfaction for issue of process does not suffer from any illegality. Whether revision Under Section 397(2) Code of Criminal Procedure against order of issue of process is maintainable? - HELD THAT:- While hearing revision Under Section 397 Code of Criminal Procedure, the High Court does not sit as an appellate court and will not reappreciate the evidence unless the judgment of the lower court suffers from perversity. Based on the charge sheet and the materials produced thereon when the Magistrate satisfied that there are sufficient grounds for proceeding, the learned Single Judge was not justified in examining the merits and demerits of the case and substitute its own view. When the satisfaction of the Magistrate was based on the charge sheet and the materials placed before him, the satisfaction cannot be said to be erroneous or perverse and the satisfaction ought not to have been interfered with - while taking cognizance of an offence based upon a police report, it is the satisfaction of the Magistrate that there is sufficient ground to proceed against the Accused. When the prosecution relies upon the materials, strict standard of proof is not to be applied at the stage of issuance of summons nor to examine the probable defence which the Accused may take. All that the court is required to do is to satisfy itself as to whether there are sufficient grounds for proceeding. The learned Single Judge committed a serious error in going into the merits and demerits of the case and the impugned order is liable to be set aside. Appeal allowed. 1. ISSUES PRESENTED AND CONSIDERED * Whether, when cognizance is taken under Section 190(1)(b) Cr.P.C. on the basis of a police report/charge-sheet, the Magistrate is required to record explicit reasons showing application of mind that 'there are sufficient grounds for proceeding' before issuing process under Section 204 Cr.P.C.? * Whether a High Court in exercise of revisional jurisdiction under Section 397 Cr.P.C. (or inherent jurisdiction) may set aside an order of the Magistrate issuing summons under Section 204 Cr.P.C., i.e., whether such an order is amenable to revision and the standard of review to be applied? * Ancillary/connected issue: the appropriate standard at the stage of issuance of process - whether the Magistrate may weigh evidentiary value, hearsay objections, res gestae or mens rea to decline to issue process, particularly in complex economic/hawala type offences. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Requirement of recording reasons when cognizance is taken on police report (Section 190(1)(b)) Legal framework: Sections 2(d), 190(1)(a)-(c), 203, 204, 239, 248 Cr.P.C.; distinction between complaints and police reports; Chapter XV (complaints) and Chapter XVI/XIX (commencement/trial) procedures. Precedent treatment: Earlier decisions (Pepsi Foods, Mehmood Ul Rehman and others) emphasise that taking cognizance on a private complaint requires application of mind and the summoning order should reflect reasons; Bhushan Kumar and related authorities explain cognizance and the limited role at the summons stage; decisions hold that Section 203 requires reasons when dismissing a complaint but Section 204 does not mandate recording reasons for issuance of process in cases instituted on police report. Interpretation and reasoning: The Court draws a clear statutory and doctrinal distinction between cognizance based on complaint (Section 190(1)(a)) and on police report (Section 190(1)(b)). For complaints, the Magistrate has only the complaint and Sections 200-203 require scrutiny and reasons when dismissing; hence the need for explicit reasoning when taking cognizance on complaint. By contrast, where cognizance is taken on the police report/charge-sheet, the Magistrate has the advantage of an investigation, statements and documentary material filed under Section 173 Cr.P.C. Section 204 requires the Magistrate to be satisfied that 'there are sufficient grounds for proceeding' but does not mandate explicit narration of reasons; hence recording detailed reasons for issuing summons in a police-report case is not a statutory requirement. The Court reasons that the standard at the summons stage is limited: the Magistrate must be satisfied there are sufficient grounds to proceed, but need not evaluate merits or weigh evidence for conviction. Ratio vs. Obiter: Ratio - It is not mandatory for a Magistrate to record explicit reasons for satisfaction when issuing process under Section 204 Cr.P.C. upon a police report (Section 190(1)(b)). Obiter - Elaboration on comparative procedural stages and reference to practical consequences of requiring reasons at this stage. Conclusion: No requirement to record explicit reasons when taking cognizance based on police report/charge-sheet; issuance of process without detailed reasons does not ipso facto suffer illegality provided the Magistrate applied judicial mind to the police report and material placed before him. Issue 2 - Maintainability and scope of revisional jurisdiction under Section 397 Cr.P.C. against order issuing process Legal framework: Section 397 Cr.P.C. (revision), Section 482 Cr.P.C. (inherent jurisdiction), jurisprudence distinguishing interlocutory, intermediate and quasi-final orders (Amar Nath, Rajendra Kumar Sitaram Pande, K.K. Patel, Urmila Devi). Precedent treatment: The Court summarises settled law that orders directing issuance of process under Sections 200-204 Cr.P.C. are intermediate or quasi-final and not purely interlocutory; accordingly, revisional jurisdiction under Section 397 is available. Urmila Devi and related cases confirm the High Court's competence to exercise revision in such matters. Interpretation and reasoning: The Court reiterates the established test: whether upholding objections would culminate or substantially affect rights - issuance of process affects substantial rights and can be the subject of revision. However, an exercise of revisional power does not empower reappreciation of evidence unless the lower court's view is perverse. The High Court must not substitute its view by weighing merits at the summons stage; it must interfere only if the Magistrate's satisfaction was legally erroneous or perverse. Ratio vs. Obiter: Ratio - Revisional jurisdiction under Section 397 Cr.P.C. is available against an order issuing summons; however, the revisional court must not re-appreciate evidence or substitute its view on the sufficiency of material unless there is perversity or illegality. Obiter - Discussion of limits of inherent jurisdiction under Section 482 as alternative forum. Conclusion: Revision against issuance of process is maintainable, but the revisional court must respect the limited scope of inquiry at the summons stage and refrain from delving into merits absent perversity or error of law. Issue 3 - Proper standard at the stage of issuance of process in complex economic/hawala cases; admissibility/weight of hearsay and related materials Legal framework: Section 204 Cr.P.C. standard ('sufficient ground for proceeding'); Evidence Act provisions (res gestae, hearsay exceptions) to be considered at trial; principle that mens rea and detailed evidentiary sufficiency are trial matters. Precedent treatment: Authorities establish that the Magistrate need not test mens rea or convictibility at summons stage (Bholu Ram, Bhaskar Lal Sharma, Nupur Talwar). Cases addressing admissibility of statements and res gestae are matters of trial appreciation. Interpretation and reasoning: The Court emphasises that in complex economic offences involving chain transactions (collection of cash, couriers/angadias, RTGS transfers, interlinked companies, call detail records), the police report and accompanying material (witness statements, bank statements, CDRs) may prima facie furnish sufficient ground to proceed. The summoning stage requires accepting allegations and materials on their face for the narrow purpose of deciding whether proceedings should be initiated; evaluation of hearsay, res gestae, or detailed corroboration is ordinarily for trial. The Court rejects the High Court's approach of treating the matter as a simple forged bills case and of weighing evidence to quash issuance of summons. Ratio vs. Obiter: Ratio - At the stage of issuing process, courts must not weigh evidentiary value or probable defences (including mens rea); prima facie materials in a charge-sheet, even if involving hearsay or complex chains, may suffice to show 'sufficient ground for proceeding' and are to be examined and tested at trial. Obiter - Observations on how particular statements (e.g., alleged res gestae) might be treated at trial are illustrative, not determinative here. Conclusion: Where a police report and accompanying materials prima facie indicate participation in a complex economic conspiracy (flow of cash, RTGS, nexus with recipients abroad), the Magistrate may validly issue process without detailed reasons or full evaluation of hearsay; the revisional court should not set aside such an order merely by reassessing merits. Final disposition (as to issues collectively) The order of the Magistrate taking cognizance on the police report and issuing summons, though brief, did not suffer from illegality for lack of recorded reasons; the High Court in revision erred by reappreciating evidence and substituting its view at the summons stage. Revision under Section 397 Cr.P.C. was maintainable, but interference was unwarranted absent perversity. The Magistrate's order issuing process is restored and trial to proceed in accordance with law.