TaxTMI 
TaxTMI 
2021 (4) TMI 982
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.... 3. The brief facts leading to this appeal are 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 (Appel....
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....cused Nos. 2­4 to fabricate false deed of agreement 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,....
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....gned judgment of the High Court. 4. Learned senior counsel Mr. 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 Sin....
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....re with the effective dispensation of justice by the Court. Hence, it for the Court to exercise its discretion and consider the suitability of 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 ref....
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....may cause any person who in such proceeding is to form an opinion upon the evidence, to entertain an erroneous opinion touching any point material to the result of such proceeding, is said "to fabricate false evidence". 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 seiz....
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.... to the appellants, the decisive event for attracting the bar is the production of the document in the Court. xxx 7. Even if the clause is capable of two interpretations we are inclined to choose the narrower interpretation for obvious reasons. Section 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 construct....
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....ecision therein is the following: (SCC Headnote) "The offences about which the court alone is clothed with the right to complain may, therefore, be appropriately considered to be only those offences committed by a party to a proceeding in that court, the commission of which has a reasonably close nexus with the proceedings 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 recog....
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....(ii) would not apply where forgery of a document was committed before producing the said document in court. However, it was noticed that Sachida Nand Singh appeared to conflict with an earlier three­Judge Bench decision in Surjit Singh and Others v. Balbir Singh, (1996) 3 SCC 533. Surjit Singh had held that the bar against taking cognizance under 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....
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....n for the charge and there is a reasonable likelihood of conviction. The requirement of a finding as to the expediency is understandable in case of an offence alleged to have been committed either in or in relation to a proceeding in that court in case of offences specified in clause (b) [of the old Code corresponding to clause (b)(i) CrPC] because of the close nexus between 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 contr....
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....ourt, the view taken by the High Court that the Magistrate could proceed with the trial of the criminal case was upheld and the appeal was dismissed. 20. Since the object of deletion of the words "by a party to any proceeding in any court" occurring in Section 195(1)(c) of the old Code is to afford protection to witnesses also, the interpretation placed on the said provision in the earlier 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 B....
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....Singh Marwah by way of analogy to Section 195(1)(b)(i) in every case. 10. For further elucidation on this point, we may turn to therecent decision of this Court in Bandekar Brothers (supra). The appellants in that case claimed that the respondents/accused had given false evidence and forged debit notes and books of accounts in civil court proceedings between the parties. They had initially filed application under 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 cri....
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....r given in evidence in a proceeding in any Court. What is conspicuous by its absence in Section 195(1)(b)(ii) are the words "or in relation to", making it clear that if the provisions of Section 195(1)(b)(ii) are attracted, then the offence alleged to have been committed must be committed in respect of a document that is custodia legis, and not an offence that may have occurred prior to the document being introduced in court proceedings. Indeed, 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....
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....vate complaint. However, on the facts of that case, this was again a situation wherein at the first instance, the Court was allegedly persuaded to form an opinion based on certain false evidence which was produced by persons who were already party to the proceedings. This is a completely different factual matrix from the present case. 12. Indeed, at this juncture it must be noted that evenSachida Nand Singh (supra) and Iqbal Singh Marwah (supra) were rendered 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 pe....
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....ed to conduct a fresh investigation. Hence, though the offence is one which affects the administration of justice, it is the investigating agency, and not the Court, which is the aggrieved party in such circumstance. 17. In this regard, we consider it beneficial to refer to the portion of the opinion expressed by the Constitution Bench in Iqbal Singh Marwah (supra) as to why a narrow interpretation of Section 195(1)(b)(ii), CrPC was necessary to avoid impracticality or injustice in its implementation: "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 valuab....
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....ts are normally reluctant to direct filing of a criminal complaint and such a course is rarely adopted. It will not be fair and proper to give an interpretation which leads to a situation where a person alleged to have committed an offence of the type enumerated in clause (b)(ii) is either not placed for trial on account of non­filing of a complaint or if a complaint is filed, the same does not come to its logical end. Judging from such an angle will be in consonance with the principle that an unworkable or impracticable 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 Constitut....
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....take a chance and wait for the trial court to form its opinion in each and every case. This may give the offender under Section 193, IPC sufficient time to fabricate more falsehoods to hide the original crime. Further, irrespective of the potential impact that such false evidence may have on the opinion formed by the trial court, the investigating agency has a separate right to proceed against the accused for attempting to obstruct fair and transparent probe into a criminal offence. Thus, we are of the view that it would be impracticable 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 cours....
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....n Iqbal Singh Marwah (supra), the three­Judge Bench did not have the benefit of referring to the observations made in that case. Hence the decision in Arvindervir Singh will not have any application to the case at hand as it involved a completely different set of factual and legal issues. III. Whether " stage of a judicial proceeding " under Explanation 2 to Section 193, IPC is synonymous with " proceeding in any court " under Section 195(1)(b)(i), CrPC? 20. The last point that remains to be considered is the effect of Explanation 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 ensur....
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....roceedings before an Income Tax Officer under the Indian Income Tax Act, 1922 would be proceedings in any court under Section 195(1)(b) of the 1898 Code, which was the corresponding section in that Code to Section 195(1)(b)(i), CrPC. Section 37(4) of the 1922 Act provided that proceedings before the Income Tax authority shall be deemed to be "judicial proceedings" (and not merely a stage of such proceedings) under Section 193, IPC. It was in this context that the majority of the Constitution Bench (K.C. Dasgupta J., dissenting) held that the 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 ....
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....roceedings", the same would be considered as "proceedings in any court" under Section 195(1)(b)(i), CrPC. Therefore, if the offence under Section 193, IPC is committed before such an authority, the written complaint of that authority is mandatorily required for trial of the offence. However, the facts of the decisions in Lalji Haridas (supra), Babita Lila (supra) and Chandrapal Singh (supra), are clearly distinguishable from the present appeal as they all involve 1) False statements made on oath or in affidavits, 2) in a judicial proceeding and 3) 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 p....
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....Thus, it can be concluded that the investigation conducted by the Respondent under the PC Act cannot be equated with a proceeding in a court of law under Section 195(1) (b)(i), CrPC, though it is deemed to be a stage of a judicial proceeding under Section 193, IPC. 22.3 Had this been a case wherein the Respondent had not developed any suspicion against Accused Nos. 2 and 3, and the Trial Court had subsequently discovered the subterfuge caused by them, we may have taken a different view. As we have noted in paragraph 18 (supra), where the fabrication 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, t....