TaxTMI 
TaxTMI 
2022 (6) TMI 1546
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....stion an order dated 11-04-2022 by which the concerned Court takes cognizance of the offences against the petitioners and issues summons. In effect both these petitions arise out of common facts and grounds except a subsequent event dated 11-04-2022 being called in question in the latter petition. Therefore, both these petitions are taken together and considered by this common order. 3. Brief facts leading to the filing of the present petitions, as projected by the prosecution, are as follows:- 1st Petitioner is a public limited company registered under the provisions of the Companies Act, 1956 ('the Act' for short) and is in the business of manufacture of steel and has plant in several locations including the one at Vijayanagar in the name and style of JSW Steel Limited. The petitioner claims to be in the ordinary course of business having entered into a contract with M/s Obulapuram Mining Company Private Limited ('OMC' for short) owned by Mr. G. Janardhana Reddy who was one of the Directors and owners of the said Company. The said contract was entered into between the OMC and the petitioner for supply of 1.5 million tons of iron ore, fines and lumps to the plant of th....
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....owed the application for arbitration granting all the reliefs that had been sought by the petitioner. The petitioner has emphasized on the fact of arbitration to contend that it was a pure contract between the petitioner and the AMC or OMC, as the case would be, for supply of iron ore and this cannot be made into an offence by dragging the name of the petitioner in the aforesaid ECIR and the charge sheet filed. On 4-05-2016 an execution application was filed by the petitioner to enforce the award of the Arbitrator (supra) against the OMC in the Bombay High Court which is pending consideration before the said Court. OMC also had preferred an application challenging the very award in Commercial Arbitration Petition No. 454 of 2019, which came to be dismissed for its non-prosecution. Therefore, the contention of the petitioner is that it is a creditor and not a debtor of OMC and its group of companies or its sister concerns and, therefore, there can be no question of the petitioner/company in possession of any of the proceeds of crime under the PMLA and as such, the investigation or the charge sheet filed against the petitioner is totally misconceived. Several attachment orders came t....
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.... is filed by the Enforcement Directorate in which the name of the petitioner figures. It is, therefore, contended that when the foundation itself has gone, the superstructure cannot remain. It is on this premise that the present writ petition in W.P. No. 7499 of 2022 is filed by the petitioner. 9. The matter was heard on 19.04.2022 at which point in time, the respondent produced before the Court a charge sheet filed in the matter before the competent Court on 18-04-2022. The matter was then heard and reserved for orders. Challenging filing of the charge sheet and subsequent order of the concerned Court taking cognizance of the offence and issuing of summons, the companion petition in W.P. No. 11399 of 2022 is filed. 10. Heard the learned senior counsel Sri.Sidharth Luthra representing the petitioner in W. P. No. 7499 of 2022, learned senior counsel Sri C.V. Nagesh representing the petitioners in W.P. No. 11399 of 2022 and the learned counsel Sri Madhukar Deshpande representing the Enforcement Directorate in both the cases. 11. The learned senior counsel representing the petitioner in W.P. No. 7499 of 2022 would contend that the very initiation of proceedings against the pe....
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.... rendered by a Co-ordinate Bench in which the very petitioners were parties and all the submissions which are now being made were made and were rejected by the Co-ordinate Bench in Writ Petition No. 38642 of 2016 and connected cases decided on 11-12-2020 in which the present petitioners were also parties in the connected petitions viz., Writ Petition No. 17894 of 2015, Writ Petition No. 24444 of 2015 and Writ Petition No. 19313 of 2016. The said petitions were filed by the very petitioners herein urging the very same grounds that are now being urged in the present petitions and therefore, would seek dismissal of the petitions. 15. I have given my anxious consideration to the submissions made by the respective learned senior counsel and the learned counsel representing the Enforcement Directorate and perused the material on record. 16. The afore-narrated facts, dates and events are not in dispute and are, therefore, not reiterated. The contract between the petitioner and the OMC takes place in the years 2009 and an ECIR was registered against Mr. G. Janardhan Reddy and Smt. Lakshmi Aruna on 25-09-2012. The Division Bench by its order dated 13-03-2017 in Writ Petition No. 5962 ....
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....itted theft of 24,00,000 MT of iron ore by illegal mining, when his own quarry was not under operation. It is, also, alleged against this writ petitioner that he had sold the iron ore outside and thereby illegally acquired a sum of Rs. 480 crore [Rupees four hundred and eighty crore] only. 15. Mr Sudhir Nandrajog, learned senior advocate, appearing in support of the writ petitioners, has taken a short point, contending that the allegation of theft or illegal mining is not a scheduled offence under the PML Act. 16. As the offence of theft is not a scheduled offence under the PML Act, by applying the same principles as we have taken above, we find no merit in the initiation of proceedings against the petitioners in these writ petitions under the amended PML Act. Hence, the action taken against them under the said Act is, also, liable to be quashed. 17. In addition to the aforesaid submissions, Mr Nandrajog, learned senior advocate appearing for the writ petitioners in all these writ petitions, submits that till date, no proceeding was advanced against the writ petitioners far less to say about any conviction against the writ petitioners He submits that in t....
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.... RE. POINT Nos. (ii) & (iii): 65. It takes me to the next contention raised by the learned Advocates appearing for the petitioners namely, as to whether proceedings under the PML Act can be initiated by the authorities even though offence specified under the Schedule not being in existence or in other words, even though FIR is not registered for the offences specified in the schedule to the PML Act, against such person who is facing the proceedings under the PML Act? Point Nos. (ii) & (iii) are interlinked. Hence, they are taken up together for consideration, adjudication and being answered, since any opinion expressed on either of them is likely to overlap. ... ... ... 67. The main thrust of the arguments advanced by the learned Advocates appearing for the parties is that the provisions of The Prevention of Corruption Act, 1988 (for short 'PC Act') did not find a place in the Schedule to the PML Act or in other words, Section 13 of PC Act came to be added to the Schedule of the PML Act with effect from 01.06.2009 by Act 21 of 2009 and as such the offences which had occurred prior to 01.06.2009 cannot be brought under the sweep of the PML....
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.... obligation and not to be inconsistent with it. 70. The said order passed by the High Court of Andhra Pradesh is a subject matter of challenge before the Hon'ble Apex Court and that there is no interim order against the order passed by the Andhra Pradesh High Court. This Court is in full agreement with the views expressed by the High Court of Andhra Pradesh and do not find any good and valid ground to take any view contrary to the view expressed by High Court of Andhra Pradesh. 71. In fact, the High Court of Gujarat in the matter of ALIVE HOSPITALITY AND FOOD PRIVATE LIMITED VS. UNION OF INDIA AND OTHERS, 2013 SCC OnLine Guj 3909, has expressed its view that it is in agreement with the views expressed by the Andhra Pradesh High Court in B.RAMA RAJU's case including the conclusions drawn thereunder. It has been further held: "10. Upon threadbare analysis and consideration of contentions of law viz. jurisdiction and powers under Sections 5 and 8 of the PML Act, violation of rights of the petitioners under Articles 14, 19 and 21 of the Constitution of India, inapplicability of provisions of penal nature with retrospective effect in the facts and circumstance....
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....us, the definition of "proceeds of crime" as amended give a wider ambit to include value of specific property equivalent in value held outside the country as well. For instance, if a person in India is being labeled for having proceeds of crime in a country outside India, then, in such a scenario, his property situated in India shall be attached even though it may not have a relation to the proceeds of crime. The 2018 amendment has extended the ambit, wherein, the authorities can now proceed against such property equivalent to proceeds of crime held outside the country. 74. Thus, the expression "proceeds of crime" means any property derived or obtained directly or indirectly by any person, as a result of criminal activity, related to a scheduled offence or the value of such property. The expression 'property' is elucidated in Clause (v) of Section 2, as any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located. Section 2 (u), therefore, does not envisage either mens rea or knowledge that ....
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....tion prohibits conviction except for violation of a law in force at the time of commission of an offence. In other words, there cannot be prosecution under the PML Act for laundering of money acquired by committing the schedule offences prior to the introduction of the PML Act. Therefore, the time of commission of scheduled offences would not be relevant in the context of the prosecution under the PML Act. What would be relevant in the context of prosecution is the time of commission of the act of money laundering. The question would be, whether a person involved in money laundering as provided under Section 3 of the PML Act has indulged in the said act or not has to be decided by the competent authority. What is the date of laundering of money will have to be decided on facts of each case and there cannot be any prescribed straight jacket formula. This is an important fact which the authority will have to examine and it is a mixed question of law and fact. 78. A person acquiring assets through illegal means who comes before the society and claims that said money was acquired by proper means, then he would be guilty of the offence of money laundering. A person might have c....
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....ode or any other penal laws. 26. The offence of money laundering under Section 3 of the Act is an independent offence. A reference to criminal activity relating to a schedule offence has wider connotation and it may extend to a person, who is connected with criminal activity relating to schedule offence, but may not be the offender of schedule offence. It is in this background, it has to be necessarily held that money laundering is a stand alone offence under the PML Act. In this background, when Section 44 of the PML Act is perused, it would clearly indicate that special court may take cognizance of the offence upon a complaint by authorized signatory, which means cognizance will be taken of an offence which is separate and independent. The object of issuance of summons is to trace or ascertain the proceeds of crime if any and to take steps in that regard like attaching the proceeds of crime if proved in a given case. 27. Even in case of a person who is not booked for a scheduled offence but is later booked and subsequently acquitted for the offences punishable under different enactments, prescribed under Part 'A' to Part 'C' of the Schedule, still such person ca....
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....ngs under the PML Act is not a condition precedent or in other words, the offence under Section 3 of the PML Act is a stand alone offence. Hence, the presence of a schedule offence as prescribed under the PML Act would not be condition precedent for proceeding against such person under the PML Act. 83. A plain reading of Section 5 of the PML Act would indicate where the Director or any other officer not below the rank of Deputy Director authorized by the Director for the purposes of said section has reason to believe, to be recorded in writing, on the basis of material in his possession would proceed to pass an order in writing provisionally attaching such property of any person who is in possession of any proceeds of crime and if such proceeds of crime are likely to be concealed, transferred or dealt with any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime. Every order of attachment made under sub-section (1) of Section 5 shall cease to have effect after the expiry of the period specified in that said sub-section (i.e., 180 days) or on the date of an order made under subsection (2) of Section 8, whichever is earlie....
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....attached or the non-attachment is likely to frustrate any proceedings that may be initiated under the PML Act. Second proviso to clause (b) of sub-section (1) of Section 5 would indicate that notwithstanding anything contained in Clause (b), "any property" of "any person" may be attached. This provision came into force by Act 21 of 2009 with effect from 06.03.2009. The second proviso to Section 5(1) enjoins that any property of any person may be attached if the specified authority therein has reason to believe on the basis of material in his possession that if such property is not attached, it is likely to frustrate any proceedings under the PML Act. Thus, nonobstante clause in second proviso clearly excludes clause (b) of Section 5(1). It is this clause (b) that incorporates or mandates the requirement that the proceeds of crime should be in possession of a person who is charged of having committed a schedule offence, for initiating proceedings for attachment and confiscation. Thus, reading of second proviso to clause (b) would clearly indicate that it excludes clause (b) of Section 5(1). In other words, the legislative intent to exclude clause (b) of Section 5(1) in the circumsta....
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....involved in money laundering, it would order release of such property to the person entitled to receive it as indicated under Section 8(6). In the event of trial not being proceeded for the reason of death of accused or the accused being declared a proclaimed offender or for any other reason or having commenced trial, it could not be concluded, the Special Court on an application filed by the Director or a person claiming to be entitled for possession of a property can pass appropriate orders regarding confiscation or release of such property involved in the money laundering after having regard to the material before it. Section 8(8) prescribes that where property has been confiscated to the Central Government under subsection (5) the Special Court can also direct the Central Government to restore such confiscated property or part thereof of a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of money laundering. 87. Yet another contention raised in W.P. No. 24444/2015 is that, amendment made to Section 8(3) to 8(6) has resulted in substantial rights accrued to the petitioner being extinguished. In other words, petit....
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....per and rational meaning to be attached to clause (a) in sub-section (3) of Section 8 is, that once the provisional attachment order passed under Section 5, is confirmed by the adjudicating authority under Section 8(3), the attachment would continue till the conclusion of proceedings relating to any offence under PML Act. It does not mean that confirmation of provisional attachment will not have any force if no proceedings relating to the offence of money laundering are pending before Special Court on the date of confirmation. 92. The Finance Minister while introducing Bill No. 133 of the Prevention of Money Laundering (Amendment) Bill, 2011 in his notes on clause relating to Section 8 has made the following explanation at clause (6): "This clause seeks to amend section 8 of the Act relating to adjudication to delink the attachment from of the property to the pendency of the proceedings relating to the Scheduled offence and link it to the money laundering offence. It further seeks to delink the attachment to conviction. It also seeks to broaden the scope of seizing by also enabling freezing of property and documents which cannot be seized. It also seeks to take aw....
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.... result of criminal activity relating to a scheduled offence or the value of any such property, for initial attachment and eventual confiscation. 26. Chapter III of the Act enables the specified authority, if he has reasons to believe (the reasons to be recorded in writing), on the basis of material in possession of the authority that any person charged of having committed a scheduled offence (Section 5(1)(b)) or even if not so charged (second proviso to Section 5(1)) is in possession of proceeds of crime and such proceeds are likely to be concealed, transferred etc., in a manner as may frustrate any proceedings relating to confiscation of such proceeds of crime under Chapter III, to provisionally attach (Section 5(1)); confirm an order of provisional attachment after a process of adjudication (Section 8(3)); and eventually pass an order confiscating such property (Section 8(6)). 27. On the afore-stated scheme the provisions of the Act, the prosecution under the Act; and attachment and eventual confiscation proceedings are distinct proceedings. These two sets of proceedings may be initiated against the same person if he is accused of the offence of money-launderin....
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....ed in moneylaundering, then for the purposes of adjudication or confiscation [under section 8 or for the trial or the moneylaundering offence, it shall unless otherwise proved to the satisfaction of the Adjudicating Authority or the Special Court], be presumed that the remaining transactions form part of such inter-connected transactions. 24. Burden of Proof.-In any proceeding relating to proceeds of crime under this Act,-- (a) in the case of a person charged with the offence of money-laundering under section 3, the authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money laundering; and (b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-laundering." 98. The Hon'ble Apex Court in the case of ATTORNEY GENERAL FOR INDIA vs AMRATHLAL PRAJIVANDAS reported in (1994)5 SCC 54 while considering the validity of provisions of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) has observed: "The relatives and associates are brought in only for the purpose of ensuring that the illeg....
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....9 has held that in a criminal action, the general conditions of penal liabilities are indicated in the word maxim "actus non facit reum, nisi mens sit rea" i.e., the act alone does not amount to guilt, it must be accompanied by a guilty mind. But there are exceptions to this Rule and the reason for this is that the legislature, under certain situations and circumstances, in its wisdom, may think it so important, in order to prevent a particular act from being committed to forbid or rule out the element of mens rea as a constituent part of a crime or of adequate proof of intention or actual knowledge. It has been further held that unless a statute either expressly or by necessary implication rules out mens rea in cases of this kind, the element of mens rea must be read into the provisions of the statute itself. 101. An argument is also canvassed on behalf of the respondents - revenue that the offence of money laundering is a continuing offence, since it also punishes possession of property acquired from crime and therefore, there is no question of retrospective criminalization. 102. In the case of STATE OF BIHAR vs. DEOKARAN NENSHI reported in (1972) 2 SCC 890 the ....
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....the country, it would definitely have delirious effect and impact on the economy and as such the offence which has been committed and continuing would not wipe-out the offence committed on the premise that act is prospective and cannot have retrospective effect. It would be that date when a person is found involved in any process or activity connected with the proceeds of crime and projecting as untainted property, which would be the relevant date for the purposes of prosecution under Section 3 of the PML Act and not the date when the scheduled offence was committed. What is being targeted by Section 3 is the "laundering" of money which would be relevant. The expression "laundering" as used in Section 3 comprises of involvement in any process of activity by which the illicit money is being projected as untainted. In that view of the matter, the relevant date is not the date of acquisition of illicit money but the dates on which such money is being processed and projected it as untainted. 106. The High Court of Mumbai, in the matter of RADHA MOHAN LAKHOTIA vs. DEPUTY DIRECTOR PMLA, reported in 2010 SCC OnLine Bom 1116, while examining the question as to whether Section 5 ca....
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....ection 3 read with section 4 of the Act of 2002 - in addition to suffering the action of attachment of the proceeds of crime in his possession. Attachment of proceeds of crime in possession of any person (other than the person charged of having committed a scheduled offence) will, therefore, be legitimate within the sweep of Section 5 of the Act of 2002. In our opinion, the thrust of section 5 is to attach every property involved in moneylaundering irrespective of whether it is in possession of the person charged of having committed a scheduled offence or any other person- provided however it must be shown to be proceeds of crime and further, that proceeds of crime are likely to be concealed, transferred or dealt with in any manner, which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under the Act. 12. Going by the definition of "person" occurring in Section 2(s) and on conjoint reading of section 2(u), which also refers to "any person" coupled with the purpose and intent for which the enactment has been brought into force, accepting the argument of the appellants would result in a pedantic approach and limiting the plenitude ....
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.... of crime. The interpretation given by the Appellants, if accepted would be destructive of the said legislative intent. Suffice it to observe that the term "person" appearing in clause (a) of Section 5(1) of the Act cannot be limited to the person who has been charged of having committed a scheduled offence. If that was the intent of the legislature, there was no reason to insert clause (a). In that case, the Legislature would have simply provided for any person who has been charged of having committed a scheduled offence and in possession of any proceed of crime, such proceeds of crime can be attached and confiscated, subject to fulfillment of the specified conditions." 107. Hence, this Court is of the considered view that contentions raised by the petitioners to quash the proceedings on the ground of the proceedings initiated against them is without jurisdiction for want of either there being no predicate offence or on the date of launch of proceedings under the PML Act, the predicate offence referred to in the schedule was not incorporated in the schedule and as such, there would be retrospective application of law cannot be accepted, inasmuch as, the offence of money l....
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....vanced by the petitioner have all been answered by the Co-ordinate Bench which finding this Court is bound to follow as it is rendered between the same parties. 18. Above all, the another factor that would stall the hands of this Court as per submissions made by the learned senior counsel and the pendency of the issue before the Apex Court as the primary ground on which the present petitions are preferred is that the offence so alleged against the petitioner was not a scheduled offence as on the date of its alleged commission. The matter pending before the Apex Court if considered by this Court at this juncture would be violative of judicial discipline. In the said context, it is germane to notice judgments rendered by the Apex Court from time to time wherein the Apex Court has clearly cautioned the High Courts for entertaining petitions delivering conflicting views. 19. The Apex Court in the case of D.K. TRIVEDI & SONS v. STATE OF GUJARAT [1986 Supp.SCC 20] holds as follows: "83. Civil Appeals Nos. 1525 and 1526 of 1982 are directed against the order of the Gujarat High Court dismissing the writ petitions filed by the appellants challenging the constitutionalit....
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....der Article 32. The petitioner was eonomine a party to the proceedings before this Court. It is an unhappy situation that the learned Judge of the High Court permitted himself to issue certain directions which, if implemented, would detract from the plenitude of the orders of this Court. The learned Single Judge's perception of justice of the matter might have been different and the abstinence that the observance of judicial propriety, counsels might be unsatisfactory; but judicial discipline would require that in a hierarchical system it is imperative that such conflicting exercise of jurisdiction should strictly be avoided. We restrain ourselves from saying anything more." (Emphasis supplied) In UNION OF INDIA v. JAISWAL COAL CO.LTD. [(1999) 5 SCC 733], the Apex Court holds as follows: "4. We are rather concerned to note that Writ Petition No. 823 of 1999 [Krishna Kumar Tiwari v. Civil Judge (S.D.) Mohanlalganj] has been entertained by the Lucknow Bench of the Allahabad High Court. That writ petition is directed against the auction-sale of House No. 546-547, Sector E, Hind Nagar, Kanpur Road, Lucknow and seeks an order to the effect that the auction-sale be not....
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....The principles of res judicata and such analogous principles although are not applicable in a criminal proceeding, still the courts are bound by the doctrine of judicial discipline having regard to the hierarchical system prevailing in our country. The findings of a higher court or a coordinate Bench must receive serious consideration at the hands of the court entertaining a bail application at a later stage when the same had been rejected earlier. In such an event, the courts must give due weight to the grounds which weighed with the former or higher court in rejecting the bail application. Ordinarily, the issues which had been canvassed earlier would not be permitted to be reagitated on the same grounds, as the same would lead to a speculation and uncertainty in the administration of justice and may lead to forum hunting." (Emphasis supplied) The Apex Court, in the aforesaid judgment, holds that though principle of res judicata and such analogous principles are not applicable to criminal proceedings, still the Courts are bound by the doctrine of judicial discipline having regard to hierarchical system prevailing in the country. 20. When the matter is seized by the higher....
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....old that the initial action under the PML Act is contrary to law. Several judgments relied on to buttress the very submission made reiterating them would only increase the length of the judgment as the principles laid down by the Apex Court in every one of those cases would not be applicable to the case at hand as inter-parties there is determination by a Co-ordinate Bench of this Court which considered the purport of the order of the Division Bench and the matter is now pending before the Apex Court. Therefore, while finding no qualm with the principles enunciated by the Apex Court, I decline to consider those judgments owing to peculiarity of the facts of the case at hand as is narrated hereinabove. It is not for this Court to now pronounce with regard to whether on the date of the transaction the offence alleged against the petitioner was a scheduled offence or otherwise as judicial discipline guides this Court to hold its hands to answer any such plea reiterated. Therefore, Writ Petition No7499 of 2022 is to be rejected. 23. Writ Petition No. 11399 of 2022 is filed on verbatim similar grounds with an added feather in the very same cup. The added feather is filing of the fina....
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....fore in terms of Section 200(a) of the Cr.P.C. recording of sworn statement is dispensed with and considers the complaint averments and the documents produced in two volumes and holds that there is sufficient prima facie material evidence against accused No. 5 for offences punishable under Section 4 of the Act and accordingly takes cognizance of the offence under Section 4 of the Act and issues summons to accused Nos. 1 to 5 to be returnable by 13-06-2022. Before embarking upon consideration of the impugned order, it is germane to notice the judgments of the Apex Court holding application of mind to be imperative and to what extent in several judgments rendered from time to time. Section 204 of the Cr.P.C. mandates existence of sufficient ground to be the reason for issuance of process by a competent Court. The judgment, that the learned senior counsel would place reliance upon to buttress the submission that the order does not bear application of mind, is in the case of SUNIL BHARTI MITTAL v. CBI - (2015) 4 SCC 609 and several other judgments rendered by the Apex Court concerning application of mind with regard to sanction. SUNIL BHARATI MITTAL is a judgment rendered by a Ben....
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....een committed to for trial by the Magistrate, can without recording evidence, summon a person not named in the police report by exercise of its power under Section 319 CrPC. The two judge Bench held that when a case is committed to the Court of Sessions by the Magistrate under Section 209 on the ground that it is exclusively triable by it, the Sessions Court would have the power to take cognizance of the offence. It was thus held that since cognizance is taken of the offence and not the accused, if any material suggests the complicity of other persons in the offence, the Court of Sessions can summon such other persons. The court, by drawing a comparison between Section 193 of the Code of 1973 and the Code of 1898, and on a reading of Section 209 CrPC held that both the committal and cognizance is of the offence and not the accused/offender. Justice AM Ahmadi (as the learned Chief Justice then was) summarized the position in law in the following observations: "7. [...] Section 190 of the Code sets out the different ways in which a Magistrate can take cognizance of an offence, that is to say, take notice of an allegation disclosing commission of a crime with a view to settin....
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....on 209 to the Court of Session the bar of Section 193 is lifted thereby investing the Court of Session complete and unfettered jurisdiction of the court of original jurisdiction to take cognizance of the offence which would include the summoning of the person or persons whose complicity in the commission of the crime can prima facie be gathered from the material available on record." 52. In other words, upon the committal by the Magistrate, the Court of Sessions is empowered to take cognizance of the whole of the incident constituting the offence. The Court of Sessions is thus invested with the complete jurisdiction to summon any individual accused of the crime. The above principles were reiterated in a two judge Bench decision in State of W.B. v. Mohd. Khalid Justice S Mohan speaking for the Court observed: "43.[...] Section 190 of the Code talks of cognizance of offences by Magistrates. This expression has not been defined in the Code. In its broad and literal sense, it means taking notice of an offence. This would include the intention of initiating judicial proceedings against the offender in respect of that offence or taking steps to see whether there is any ....
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....t which was triable by the Court of Session, he may commit the case to the Court of Session to proceed further in the matter." 54. In RN Agarwal v. RC Bansal, a Special Judge took cognizance of the offences punishable under Sections 120-B, 420, 468 and 471 IPC as well as Section 13(1)(d) of the Prevention of Corruption Act. The Special Judge however, summoned the prosecution witnesses. The prosecution witnesses approached the High Court under Section 482 CrPC seeking to quash the summons issued against them. The High Court quashed the summons order passed by the Special Judge. This Court allowed the appeal holding that the Special Judge in view of Sections 193 and 209, took cognizance of the offence and therefore had the power to arraign other accused in the case based on the material available before it at that stage. 55. It is evident from the discussion in Kishun Singh (supra) and Dharam Pal (supra) that in view of the provisions of Section 193 CrPC, cognizance is taken of the offence and not the offender. Thus, the Magistrate or the Special Judge does not have the power to take cognizance of the accused. The purpose of taking cognizance of the offence instead ....
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....ecisions in Pepsi Foods Ltd. v. Special Judicial Magistrate, Fakhruddin Ahmad v. State of Uttaranchal Mehmood Ul Rehman v. Khazir Mohammad Tunda, Sunil Bharti Mittal v. CBI and RavindranathaBajpe v. Bangalore Special Economic Zone Ltd. The respondent argued that this Court has made a distinction on application of mind by the judge for the purpose of taking cognizance based on a police report on the one hand and a private complaint under Section 200 CrPC on the other, and that the requirement of a demonstrable application of mind in the latter case is higher. For this purpose, the counsel relied on this Court's decisions in Bhushan Kumar v. State (NCT of Delhi) and State of Gujarat v. Afroz Mohammed Hasanafatta. 77. The decision of this Court in Pepsi Foods Ltd. (supra), arose out of the institution of a complaint filed against the appellants under Section 7 read with Section 16 of the Prevention of Food Adulteration Act 1964. The allegation in the complaint was that the appellants sold a bottle of beverage which was adulterated. After recording primary evidence, the Magistrate passed orders summoning the appellants. The appellants instituted proceedings before the High....
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....de to the Magistrate upon which steps had been initiated pursuant to the provision of Section 200 of the CrPC. 80. In Sunil Bharti Mittal (supra), the case before this Court arose out of alleged irregularities in the grant of an additional Spectrum in 2002. The case was being monitored by this Court. The CBI registered a case and after completion of the investigation filed a charge-sheet in the court of the Special Judge. The CBI, among others, mentioned three telecom companies as accused persons in respect of offences under Section 13(2) read with 13(1)(d) of the PC Act and allied offences. When the matter was taken up for the issuance of summons to the accused persons, the Special Judge while recording satisfaction that there was enough incriminating material to proceed against the accused named in the charge-sheet also found that three individuals, namely, the CMD, MD and Director of the three telecom companies were an alter ego of the respective companies. While taking cognizance of the cases, summons were issued not only to the accused in the charge-sheet but to the aforesaid three persons as well. Two of them moved this Court. Justice A K Sikri, while speaking for th....
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....tiated by the Magistrate. The High Court rejected the petition. Before this Court, a contention was raised that the Magistrate had not applied his mind to the complaint to form an opinion on whether the allegations would constitute an offence. Relying on Pepsi Foods Ltd. (supra), it was observed that the Magistrate ought to have applied his mind to the allegations and must be satisfied that the facts alleged would constitute an offence. The order of the Magistrate was set aside by this Court on the ground that the order did not indicate an application of mind by the Magistrate. The facts in this case fall squarely within Section 190(1)(a) CrPC since the Magistrate was only guided by the complaint before him. Moreover, Justice Kurian Joseph, writing for the two-judge Bench has clearly taken note of the difference between Section 190(1)(a) and 190(1)(b): "21. Under Section 190(1)(b) CrPC, the Magistrate has the advantage of a police report and under Section 190(1)(c) CrPC, he has the information or knowledge of commission of an offence. But under Section 190(1)(a) CrPC, he has only a complaint before him. The Code hence specifies that "a complaint of facts which constitute s....
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.... to apply his mind to the materials placed before him before taking cognizance, they have been differentiated on facts from the present case as unlike the present case where cognizance was taken based on the SIT report, in those cases cognizance was taken based on a complaint. The difference in the standard of proof for application of mind with reference to cognizance based on a complaint and police report has been briefly discussed in Mehmood Ul Rehman (supra) and Fakruddin Ahmed (supra). A two-judge Bench of this Court in Afroz Mohammed Hasanfatta (supra) laid down the law on the difference of the standard of review of the application of mind by the Judge while taking cognizance based on a police report and a private complaint. 86. In Afroz Mohammed Hasanfatta (supra), a complaint was filed by the Manager of a Bank against a Private Limited Company alleging that in pursuance of a conspiracy, the Company was importing rough and polished diamonds from the foreign market and selling them in the local market. On verification, the bills of entry were found to be bogus. Based on the complaint, an FIR was registered for offences under Sections 420, 465, 467, 468, 471, 477A and ....
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.... is only required to pass an order issuing summons to the accused. Such an order of issuing summons to the accused is based upon satisfaction of the Magistrate considering the police report and other documents and satisfying himself that there is sufficient ground for proceeding against the accused. 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 chargesheet 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 it on file." (emphasis supplied) 87. The Special Judge, it must be noted, took cognizance on the basis of a report submitted under Section 173 CrPC and not on the basis of a private complaint. Therefore, the case is squarely covered by the decision in Afroz Mohammed Hasanfatta (supra). The Special Judge took note of the FIR, the witness statements, and connected documents before taking cognizance of the offence. In this backdrop, it would be far-fetched to fault the order of the Special ....
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....as taken. No reason was given to explain the inordinate delay. Moreover, in view of the diminished role of the committal court under Section 209 of the Code of 1973 as compared to the role of the committal court under the erstwhile Code of 1898, the gradation of irregularity in a cognizance order made in Sections 460 and 461 and the seriousness of the offence, no failure of justice has been demonstrated; (v) It is a settled principle of law that cognizance is taken of the offence and not the offender. However, the cognizance order indicates that the Special Judge has perused all the relevant material relating to the case before cognizance was taken. The change in the form of the order would not alter its effect. Therefore, no 'failure of justice' under Section 465 CrPC is proved. This irregularity would thus not vitiate the proceedings in view of Section 465 CrPC; (vi) The Special Court has the power to take cognizance of offences under MMDR Act and conduct a joint trial with other offences if permissible under Section 220 CrPC. There is no express provision in the MMDR Act which indicates that Section 220 CrPC does not apply to proceedings under the MMDR Act; ....
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....20 SCC OnLine Kar 3416]. The Co-ordinate Bench recorded the order of the Special Judge taking cognizance. The Co-ordinate Bench had held as follows: "13. As per the said clause, the first party namely accused No. 3 was responsible to obtain the mineral dispatch permit. But, the allegations in the charge sheet proceed on the basis that accused No. 2 herein transported the alleged minerals without obtaining the permit which presupposes that accused No. 2 transported the said minerals without insisting accused No. 3 from obtaining the prior permit. Therefore, even this contention does not come to the aid of the petitioner/accused No. 2 to come clear of the charges leveled against him. 14. In so far as the validity of the order of cognizance and the summons issued to the petitioners is concerned, on perusal of the order sheet it is noticed that a brief order is made by the learned Special Judge, which is extracted here below: "Perused the final report Cognizance is taken against accused No. 1 to 5, Register the case against the accused No. 1 to 5, Register the case and issue summons to accused No. 1 to 5 returnable by 16-01-2016." 15. As rightly subm....
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.... 17. The reading of the cognizance order passed by the learned Special Judge clearly indicates that on perusal of the charge sheet submitted by the SIT, learned Special Judge has taken cognizance of the alleged offences purportedly under Section 190(1)(a) of the Code and has proceeded to issue summons to the petitioners/accused, as such, there cannot be any difficulty in holding that by considering the facts of the case as borne on the final report, the learned Special Judge has taken cognizance of IPC offences as well as the offences under the provisions of Forest Rules and MMDR Act. 18. It is trite law that while taking cognizance and issuing summons in respect of IPC offences, based on the report under Section 173 of the Code, law does not require the Magistrate to pass elaborate order recording reasons for issuance of summons; though the order must reflect that he has considered the final report and satisfied himself that there is sufficient ground for proceeding against the accused named in the final report. 19. In BHUSHAN KUMAR v. STATE OF (NCT OF DELHI), (2012) 5 SCC 424, the Hon'ble Supreme Court has reiterated the requirement of application of mind ....
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....against the petitioners. For the reasons discussed above, impugned order shall be construed as the orders passed by the learned Special Judge on the complaint filed by the authorized officer insofar as the allegations constituting the offences falling under the provisions of the MMDR Act are concerned." (Emphasis supplied) It is the afore-quoted judgment of the Co-ordinate Bench that is affirmed by the Apex Court in the case of PRADEEP S.WODEYAR. Therefore, if the order taking cognizance which is extracted supra is affirmed by the Apex Court in PRADEEP S.WODEYAR, the present impugned order taking cognizance as quoted hereinabove would definitely demonstrates application of mind on the part of the learned Special Judge. 25. Therefore, the contention that there is no application of mind in the case at hand as is urged by the learned senior counsel is repelled. This Court has come across plethora of orders taking cognizance which demonstrate non-application of mind as sometimes there are one line orders of taking cognizance not noticing even the offence or recording minimum necessary reason of application of mind. Even jurisdictional facts while taking cognizance are ignored ....