TaxTMI 
TaxTMI 
2021 (4) TMI 982
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....as follows: 3.1 The Appellant/Accused No. 1 was working as RegionalManager (South) at Chennai with the Rashtriya Ispat Nigam Ltd. On 4.01.2001 case was registered against the Appellant under Section 120B read with Sections 420, 467, 468 and 471 of the Indian Penal Code, 1860 ("IPC"); and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 ("PC Act"). Subsequently, the officers of the Respondent investigative agency conducted search at the Appellant's residence on 24.01.2001 on the basis of search warrant issued by the Special Judge, Tis Hazari Court, New Delhi. During the course of this search, an amount of Rs. 79,65,900/­ ("seized currency"), in addition to jewellery and property papers, was seized from the Appellant's residence. Since these assets were found to be disproportionate to the Appellant's known sources of income, on9.03.2001 a separate disproportionate assets case was registered against him under Section 13(2) read with 13(1)(e) of the PC Act. It is this case that forms the factual crux of the present appeal. 3.2 During the course of investigation, Accused No. 2 V.S. Krishnan (Appellant in the connected appeal arising out of S.L.P. ....
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.... for sale for the purpose of being shielded from legal action in the disproportionate assets case. Accordingly, the Learned Additional Special Judge for CBI Cases, Chennai ("Trial Court") framed charges against the Appellant and Accused Nos. 2­4 under Section 120B read with Section 193 of the IPC, in addition to charges under the PC Act already framed against the Appellant. Accused No. 4 died during the pendency of trial. No objection was raised by the accused at the stage of taking of cognizance. However, during the course of trial, the Accused argued that complaint under Section 195(1)(b) of the Code of Criminal Procedure, 1973 ("CrPC") was necessary for prosecuting the case under Section 193, IPC. The Trial Court rejected this argument by referring to the opinion of the Constitution Bench in Iqbal Singh Marwah and Another v. Meenakshi Marwah and Another, (2005) 4 SCC 370. Furthermore, based on the evidence on the record, the Trial Court found that it was not proved that Accused No. 2 had entrusted the seized currency to the Appellant for holding in escrow till completion of sale transaction by Accused No. 3. Hence, the Trial Court convicted the Appellant under Section 13(2....
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.... Basava Prabhu Patil, and learned counsel Mr. Amit Anand Tiwari and Mr. B. Karunakaran appearing for the Appellants/Accused, have forcefully argued that Section 195(1)(b)(i), CrPC cannot be construed as analogous to Section 195(1)(b)(ii). Therefore, the holding of the Constitution Bench in Iqbal Singh Marwah (supra) will not be applicable to the present case. They have relied upon Bandekar Brothers Pvt. Ltd. and Another v. Prasad Vassudev Keni and Others, AIR 2020 SC 4247 in support of their contentions. Thus, they have stressed that there is an absolute bar against taking of cognizance for the offences specified under Section 195(1)(b)(i), CrPC by any means except upon written complaint by the concerned Court. This is even if the offence of giving false evidence under Section 193, IPC was allegedly committed prior to proceedings before a Court of law. Therefore, the prosecution lodged by the Respondent agency against the Accused under Section 193, IPC is unsustainable. 4.1 Per contra, learned Additional Solicitor General appearing for the Respondent, Ms. Aishwarya Bhati, has contended that the holding in Iqbal Singh Marwah is applicable in respect of Section 195(1)(b)(i) of the C....
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.... making a complaint for such offences. However, there is a pertinent difference in the wording of Section 195(1)(b) (i) and Section 195(1)(b)(ii) inasmuch as Section 195(1)(b)(ii) is restricted to offences which are committed in respect of a document which is "produced or given in evidence in a proceeding in any court". Whereas Section 195(1)(b)(i) applies to offences against public justice which are committed not only in any proceeding in any court, but also "in relation to" such proceeding. Whether such semantical difference bars the analogous application of precedents relating to Section 195(1)(b)(ii) for interpreting Section 195(1)(b)(i) will be discussed by us later. 5.1 Section 340, CrPC prescribes the procedure to be followed for recording a complaint under Section 195(1)(b): "340. Procedure in cases mentioned in section 195.- (1) When upon an application made to it in this behalf or otherwise any Court is of opinion that it is expedient in the interest of justice that an inquiry should be made into any offence referred to in clause (b) of Sub­Section (1) of section 195, which appears to have been committed in or in relation to a proceeding in that Court or, as the ....
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..... xxx 193. Punishment for false evidence. Whoever intentionally gives false evidence in any stage of a judicial proceeding, or fabricates false evidence for the purpose of being used in any stage of a judicial proceeding, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine... Explanation 2: An investigation directed by law preliminary to a proceeding before a Court of Justice, is a stage of a judicial proceeding, though that investigation may not take place before a Court of Justice." In the present case, the allegation against Accused Nos. 2 and 3 is that they colluded with Appellant/Accused No. 1 to create a false sale deed, and gave false explanation of escrow arrangement amongst the three parties, to justify how the seized currency came to be in the Appellant's possession. This was done to exonerate the Appellant/Accused No. 1 and recover the seized currency at the stage of investigation itself, which is deemed to be "a stage of a judicial proceeding" under Explanation 2 of Section 193. Had the genuineness of the sale deed been accepted, the Respondent may have erroneously opined tha....
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....ction 190 of the Code empowers "any magistrate of the first class" to take cognizance of "any offence" upon receiving a complaint, or police report or information or upon his own knowledge. Section 195 restricts such general powers of the magistrate, and the general right of a person to move the court with a complaint is to that extent curtailed. It is a well­recognised canon of interpretation that provision curbing the general jurisdiction of the court must normally receive strict interpretation unless the statute or the context requires otherwise (Abdul Waheed Khan v. Bhawani [AIR 1966 SC 1718: (1966) 3 SCR 617]). 8. That apart it is difficult to interpret Section 195(1) (b)(ii) as containing a bar against initiation of prosecution proceedings merely because the document concerned was produced in a court albeit the act of forgery was perpetrated prior to its production in the Court. Any such construction is likely to ensue unsavoury consequences. For instance, if rank forgery of a valuable document is detected and the forgerer is sure that he would imminently be embroiled in prosecution proceedings he can simply get that document produced in any long­drawn litigation wh....
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....edings in that court so that it can without embarking upon a completely independent and fresh inquiry, satisfactorily consider by reference principally to its records the expediency of prosecuting the delinquent party. It, therefore, appears to be more appropriate to adopt the strict construction of confirming the prohibition contained in Section 195(1)(c) only to those cases in which the offences specified therein were committed by a party to the proceeding in the character as such party." 14. After stating so their Lordships proceeded to observe that the legislature could not have intended to extend the prohibition in the sub­section to offences committed by a party to the proceedings prior to his becoming such a party. According to their Lordships, any construction to the contrary would unreasonably restrict the right of a person which was recognized in Section 190 of the Code." (emphasis supplied) Aforementioned observations of this Court in Patel Laljibhai Somabhai (supra), as cited in Sachida Nand Singh (supra), make the import and purpose of Section 195(1)(b), CrPC clear. The provision is intended to bar the right to initiate prosecution only where the offence commit....
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....er Section 195(1)(b)(ii) would apply even if the offences stipulated therein were committed prior to production of the document before the Court, if such document was subsequently produced before the Court. The Constitution Bench clarified the position of law as follows: "10...This being the scheme of two provisions or clauses of Section 195 viz. that the offence should be such which has direct bearing or affects the functioning or discharge of lawful duties of a public servant or has a direct correlation with the proceedings in a court of justice, the expression "when such offence is alleged to have been committed in respect of a document produced or given in evidence in a proceeding in any court" occurring in clause (b)(ii) should normally mean commission of such an offence after the document has actually been produced or given in evidence in the court. The situation or contingency where an offence as enumerated in this clause has already been committed earlier and later on the document is produced or is given in evidence in court, does not appear to be in tune with clauses (a)(i) and (b)(i) and consequently with the scheme of Section 195 CrPC. This indicates that clause (b)(ii....
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....the offence and the proceeding. In case of offences specified in clause (c), they are required to be committed by a party to a proceeding in that court with respect to a document produced or given in evidence in that court. The court approved the view taken by the Allahabad High Court in Emperor v. Kushal Pal Singh and held as under in para 7 of the Report: (Patel Laljibhai Somabhai case [(1971) 2 SCC 376 : 1971 SCC (Cri) 548] , SCC pp. 376­77) "(i) The underlying purpose of enacting Sections 195(1)(b) and (c) and Section 476 seems to be to control the temptation on the part of the private parties to start criminal prosecution on frivolous vexations or insufficient grounds inspired by a revengeful desire to harass or spite their opponents. These offences have been selected for the court's control because of their direct impact on the judicial process. It is the judicial process or the administration of public justice which is the direct and immediate object or the victim of these offences. As the purity of the proceedings of the court is directly sullied by the crime, the court is considered to be the only party entitled to consider the desirability of complaining against....
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....er decisions would still hold good. 33. In view of the discussion made above, we are of the opinion that Sachida Nand Singh has been correctly decided and the view taken therein is the correct view. Section 195(1)(b)(ii) CrPC would be attracted only when the offences enumerated in the said provision have been committed with respect to a document after it has been produced or given in evidence in a proceeding in any court i.e. during the time when the document was in custodia legis." (emphasis supplied) Curiously, though the facts of Iqbal Singh Marwah also required a determination as to the applicability of Section 195(1) (b)(i), the Constitution Bench did not express any specific finding on this point. This was perhaps because the limited point for consideration before the Bench was the apparent conflict between Sachida Nand Singh and Surjit Singh (supra). However, it can nevertheless be seen that the Constitution Bench did not interpret Section 195(1)(b)(ii) in isolation, but linked its construction with the overall scheme under Sections 195(1)(b) and 340, CrPC. The Court reiterated the test laid down in Sachida Nand Singh, i.e., that the offence in respect of which only the ....
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....Section 340, CrPC before the relevant Judicial Magistrate. However, they later sought to convert this into private complaints, in reliance upon Iqbal Singh Marwah (supra). The respondents objected on the ground that the bar under Section 195(1)(b)(i) could not be circumvented. Subsequently, the appellants took the plea that offences under Section 195(1)(b)(ii) were also made out: "13. The point forcefully argued by the learned Counsel on behalf of the Appellants is that his clients, being victims of forgery, ought not to be rendered remediless in respect of the acts of forgery which are committed before they are used as evidence in a court proceeding, and that therefore, a private complaint would be maintainable in the fact circumstance mentioned in the two criminal complaints referred to hereinabove. The Court has thus to steer between two opposite poles of a spectrum the "yin" being the protection of a person from frivolous criminal complaints, and the "yang" being the right of a victim to ventilate his grievance and have the Court try the offence of forgery by means of a private complaint. In order to appreciate whether this case falls within the category of avoiding frivolous....
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....ndeed, it is this distinction that is vital in understanding the sheet anchor of the Appellant's case namely, this Court's judgment in Iqbal Singh Marwah (supra)." (emphasis supplied) 10.2 We fully agree with the aforementioned reasoning. The presence of "in relation to" under Section 195(1)(b)(i) means that Iqbal Singh Marwah would not have blanket application to every case where a complaint is lodged in respect of an offence specified under that Section. However, on the facts of Bandekar Brothers, this was not a situation in which the offence complained of did not have a "reasonably close nexus" with the court proceedings. The offence of giving false evidence was committed by the respondents, who were party to the court proceedings, for the purpose of leading the Court to form an erroneous opinion on a point material to the result of the proceedings. Hence it could be said that though the offence was not committed during the course of the court proceedings, it was certainly committed "in relation to" such proceedings. 11. Similar circumstances were present in Kailash Mangal v. Ramesh Chand (Dead) Through Legal Representative, (2015) 15 SCC 729 and Narendra Kumar Srivas....
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....ed in the context of balancing the right of private parties to initiate complaints in respect of forged documents, with protecting parties to civil suits from frivolous or vexatious prosecutions. In neither of the abovementioned decisions has this Court authoritatively considered the specific issue of preserving the right of an investigative agency, such as the Respondent in the present case, to initiate complaints against persons who have fabricated false evidence during the course of criminal proceedings. 13. The moot point therefore, as mentioned in Para Nos. 6 & 6.1, is whether offence committed under Section 193, IPC during the stage of investigation, prior to commencement of proceedings before the Trial Court, by a person who is not yet party to proceedings before the Trial Court, is an offence committed "in relation to" such proceedings for the purpose of the bar under Section 195(1)(b)(i), CrPC? 14. The construction of the words "in relation to" must be controlled by the overarching principle applicable to Section 195(1)(b), CrPC as stated in Patel Laljibhai Somabhai (supra) and Sachida Nand Singh (supra), which was affirmed by the Constitution Bench in Iqbal Singh Marwah....
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....mplementation: "23...Before filing of the complaint, the court may hold a preliminary enquiry and record a finding to the effect that it is expedient in the interests of justice that enquiry should be made into any of the offences referred to in Section 195(1)(b). This expediency will normally be judged by the court by weighing not the magnitude of injury suffered by the person affected by such forgery or forged document, but having regard to the effect or impact, such commission of offence has upon administration of justice. It is possible that such forged document or forgery may cause a very serious or substantial injury to a person in the sense that it may deprive him of a very valuable property or status or the like, but such document may be just a piece of evidence produced or given in evidence in court, where voluminous evidence may have been adduced and the effect of such piece of evidence on the broad concept of administration of justice may be minimal. In such circumstances, the court may not consider it expedient in the interest of justice to make a complaint. The broad view of clause (b)(ii), as canvassed by learned counsel for the appellants, would render the victim o....
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....ticable result should be avoided..." (emphasis supplied) It is possible that Courts may be more pro­active in making complaints under Section 195(1)(b)(i), CrPC upon application made by the concerned investigative agencies, than in those preferred by private parties. The former being public authorities would enjoy more credence in seeking inquiry into their claims. Therefore, the aforementioned reasons assigned by the Constitution Bench in Iqbal Singh Marwah for adopting a narrow construction of Section 195(1)(b)(ii), CrPC may not be strictly applicable in the present case. However, the general principles of statutory interpretation laid down by the Constitution Bench should not be disregarded. This is especially given that the Court did not consider Section 195(1)(b)(ii) separately but provided a holistic view of the scheme under Section 195(1)(b). 17.1 Just like a private party who has been a victim of forgery committed outside the precincts of the Court, the investigative agency should not be left remediless against persons who have producing false evidence for the purpose of interfering with the investigation process. Moreover, the present case concerns offences alleged ....
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....racticable to insist upon lodging of written complaint by the Court under Section 195(1)(b)(i), CrPC in such a situation. 18. It must be clarified that the aforementioned opinionexpressed by us is limited to factual situations such as the present case wherein the fabricated evidence has been detected prior to commencement of the trial, or without such trial having been initiated in the first place. The same may not apply for example, where the investigation agency on the basis of false evidence given by a third party happens to wrongfully implicate a person, other than the real perpetrator, for a particular offence. Subsequently, the Court during the course of trial proceedings may take judicial notice of such defect in the investigation process and make a complaint under Section 195(1)(b)(i), CrPC. Since by this stage, the evidence has been produced before the Court, and contains potential for directly impacting the formation of the Court's opinion on the innocence or guilt of the accused person, invoking the bar under Section 195(1)(b)(i) may not give rise to much difficulty. However, at this juncture, we decline to make any conclusive finding on this aspect, as the facts of the....
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....planation 2 to Section 193, IPC which deems an investigation preliminary to a proceeding before a Court of Justice to be a "stage of a judicial proceeding" for the purposes of the Section. Such deeming provision applies even though that investigation may not take place before a Court of Justice. This gives rise to the question of whether an offence committed during the investigation, which is a "stage of a judicial proceeding" under Explanation 2, Section 193, IPC, would be an offence committed "in relation to any proceeding in any Court" under Section 195(1)(b)(i), CrPC. 20.1 The purpose of Explanation 2 to Section 193, IPC is evidently to ensure that a person who fabricates false evidence before an investigating or inquiring authority prior to the trial of the case does not escape penalty. This encompasses all nature of proceedings, whether civil or criminal. However, whether the commission of such offence would require the complaint of a Court under Section 195(1)(b)(i) would depend upon the authority before whom such false evidence is given. For example, if a person gives false evidence in an inquiry before the Magistrate under Section 200, CrPC, that would undoubtedly be an o....
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.... expressions "judicial proceeding" under the 1922 Act and "proceeding in any court" under Section 195(1) (b), 1898 Code are synonymous. Therefore, a private complaint would not be maintainable in respect of a false statement given on oath before the Income Tax Officer. 21.1 In Babita Lila and Another v. Union of India, (2016) 9 SCC 647, a Division Bench of this Court similarly considered the jurisdiction of the Deputy Director of Income Tax to make a complaint under Section 195(1)(b), CrPC in respect of false statements given on oath during a search operation conducted under the Income Tax Act, 1961. The discussion in this case was primarily concerned with whether the Deputy Director would be the competent appellate authority authorized to make a complaint under Section 195(4), CrPC. However, the Division Bench, referring to Lalji Haridas, made an ancillary observation that such search operation is deemed to be a "judicial proceeding" under Section 193, CrPC, and that the relevant Income Tax authority would be deemed to be a civil court for the purpose of Section 195, CrPC. This is as per the express provision made to the effect under Section 196 of the 1961 Act. 21.2 In Chandrapa....
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.... before an authority which is expressly deemed under law to be a "court". None of the aforequoted cases were concerned with fabrication of evidence before an investigating authority under a penal statute. 22. In the present case, pursuant to recovering the seized currency from the Appellant's house on 24.01.2001, the Respondent initiated investigation under Section 13(2) read with Section 13(1)(e), PC Act against him. Accused Nos. 2 and 3, at the behest of the Appellant, wrote letter dated 4.02.2002 to the Superintendent of Police, CBI stating that the seized currency was held by the Appellant as part of an escrow arrangement amongst the parties. Hence, they sought that the money should be paid back to Accused No. 2. They additionally produced a false sale deed dated 24.01.2001 and certain books of account in support of their claim. There was no involvement of the Trial Court at this stage in as much as the letter dated 4.02.2002 and the sale deed were obviously intended to convince the investigation agency that the Appellant had not accumulated disproportionate financial assets. Had the Respondent accepted the veracity of the contents of this letter, they would not only have dropp....
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....of evidence has escaped the scrutiny of the investigating agency, and the case is subsequently brought to trial, such evidence would have direct bearing on the trial court's opinion and hence the bar under Section 195(1)(b)(i), CrPC may be applicable. However, in the present case, the investigating agency has been sagacious enough to detect the commission of offence under Section 193, IPC at the preliminary stage. Therefore, as stated by us in paragraph 17.3 (supra), it would be unjust and impracticable to insist upon the requirement of an independent inquiry and written complaint by the Trial Court in such a scenario. 23. Thus, the questions of law stated in paragraph 6 (supra)stand answered against the Appellants/accused. Even on merits, we do not find any valid reason to interfere with the concurrent findings of the Trial Court and the High Court. The High Court has rightly observed that the Appellant/Accused No. 1 had not raised the defence of holding the money in escrow for Accused Nos. 2 and 3 at the time of search conducted at his house on 24.01.2001. The supposed agreement of sale was also not produced. This defence was raised by Accused Nos. 2 and 3 at a highly belated st....