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        Money Laundering

        2021 (4) TMI 877 - HC - Money Laundering

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        Court-controlled prosecution for false evidence in pending proceedings prevails over police initiation when Section 195 applies. Section 195(1)(b)(i) of the Code of Criminal Procedure bars police initiation where the alleged conduct concerns false evidence or offences against public ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Court-controlled prosecution for false evidence in pending proceedings prevails over police initiation when Section 195 applies.

                            Section 195(1)(b)(i) of the Code of Criminal Procedure bars police initiation where the alleged conduct concerns false evidence or offences against public justice committed in relation to a pending court proceeding. Offences under Sections 167, 193 and 195A of the Indian Penal Code were treated as intertwined, so the Crime Branch could not validly register and continue the investigation on its own. The proper course was the court-controlled procedure under Section 340, under which the Special Court may examine the materials and decide whether a preliminary inquiry and complaint are warranted. The FIRs and further proceedings were quashed, and the records were directed to be placed before the Special Court.




                            Issues: (i) Whether the registration and police investigation of offences alleged to have been committed in relation to pending court proceedings were barred by Section 195(1)(b)(i) of the Code of Criminal Procedure, 1973, and whether the connected offences could also be proceeded against; (ii) Whether the materials collected by the Crime Branch ought to be placed before the Special Court to consider action under Section 340 of the Code of Criminal Procedure, 1973.

                            Issue (i): Whether the registration and police investigation of offences alleged to have been committed in relation to pending court proceedings were barred by Section 195(1)(b)(i) of the Code of Criminal Procedure, 1973, and whether the connected offences could also be proceeded against?

                            Analysis: Section 195(1)(b)(i) was held to cover offences of false evidence and offences against public justice when committed in, or in relation to, a proceeding in court. The alleged conduct concerned attempts to fabricate false evidence and to coerce statements in a matter already pending before the Special Court. The offences under Sections 167 and 195A of the Indian Penal Code, 1860 were treated as interwoven with, and inseparable from, the offence under Section 193 of the Indian Penal Code, 1860. Since the core offence fell within the statutory embargo and was treated as non-cognizable for the purpose of police initiation, the Crime Branch could not have registered and continued the investigation without following the procedure contemplated by the Code.

                            Conclusion: The bar under Section 195(1)(b)(i) applied, and the police registration and continuation of the crimes were not sustainable.

                            Issue (ii): Whether the materials collected by the Crime Branch ought to be placed before the Special Court to consider action under Section 340 of the Code of Criminal Procedure, 1973?

                            Analysis: Section 340 was treated as the proper statutory route for the Special Court to examine whether it was expedient in the interests of justice to inquire into the alleged offence relating to the pending proceeding. The Court held that the Special Judge could look into the records and materials collected by the Crime Branch as information for deciding whether a preliminary inquiry was warranted and whether a complaint should be made.

                            Conclusion: The Special Court was permitted to consider the Crime Branch materials for deciding whether to proceed under Section 340.

                            Final Conclusion: The FIRs and further proceedings were quashed, and the records were directed to be placed before the Special Court for consideration under the statutory procedure relating to offences affecting the administration of justice.

                            Ratio Decidendi: Where the substance of the allegation is fabrication of false evidence or coercion of statements in relation to a pending court proceeding, the bar in Section 195(1)(b)(i) of the Code of Criminal Procedure, 1973 applies to police initiation, and the matter must be left to the court-controlled procedure under Section 340.


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                            ActsIncome Tax
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