Page 1 Reportable

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.781 OF 2012

Mrs. Priyanka Srivastava and Another Appellants

Versus

State of U.P. and Others Respondents

J U D G M E N T

Dipak Misra, J.

The present appeal projects and frescoes a

scenario which is not only disturbing but also has the

potentiality to create a stir compelling one to ponder in

a perturbed state how some unscrupulous, unprincipled

and deviant litigants can ingeniously and innovatively

design in a nonchalant manner to knock at the doors of

the Court, as if, it is a laboratory where multifarious

experiments can take place and such skillful persons

can adroitly abuse the process of the Court at their own

Page 2 CRL.A.781/12

will and desire by painting a canvas of agony by

assiduous assertions made in the application though the

real intention is to harass the statutory authorities,

without any remote remorse, with the inventive design

primarily to create a mental pressure on the said

officials as individuals, for they would not like to be

dragged to a court of law to face in criminal cases, and

further pressurize in such a fashion so that financial

institution which they represent would ultimately be

constrained to accept the request for “one-time

settlement” with the fond hope that the obstinate

defaulters who had borrowed money from it would

withdraw the cases instituted against them. The facts,

as we proceed to adumbrate, would graphically reveal

how such persons, pretentiously aggrieved but

potentially dangerous, adopt the self-convincing mastery

methods to achieve so. That is the sad and unfortunate

factual score forming the fulcrum of the case at hand,

and, we painfully recount.

2.The facts which need to be stated are that the

respondent No.3, namely, Prakash Kumar Bajaj, son of

2

Page 3 CRL.A.781/12

Pradeep Kumar Bajaj, had availed a housing loan from

the financial institution, namely, Punjab National Bank

Housing Finance Limited (PNBHFL) on 21

st

January, 2001,

vide housing loan account No.IHL-583. The loan was

taken in the name of the respondent No.3 and his wife,

namely, Jyotsana Bajaj. As there was default in

consecutive payment of the installments, the loan

account was treated as a Non-Performing Asset (NPA) in

accordance with the guidelines framed by the Reserve

Bank of India. The authorities of the financial institution

issued notice to the borrowers under Section 13(2) of

the Securitisation and Reconstruction of Financial Assets

and Enforcement of Security Interest Act, 2002, (for

short, 'the SARFAESI Act') and in pursuance of the

proceedings undertaken in the said Act, the PNBHFL, on

5

th

June, 2007, submitted an application before the

District Magistrate, Varanasi, U.P. for taking appropriate

action under Section 13(4) of the SARFAESI Act.

3.At this juncture, the respondent No.3 preferred W.P.

No.44482 of 2007, which was dismissed by the High

Court on 14

th

September, 2007, with the observation

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that it was open to the petitioner therein to file requisite

objection and, thereafter, to take appropriate action as

envisaged under Section 17 of the SARFAESI Act. After

the dismissal of the writ petition with the aforesaid

observation, the respondent No.3, possibly nurturing the

idea of self-centric Solomon’s wisdom, filed a Criminal

Complaint Case No.1058 of 2008, under Section 200

Cr.P.C. against V.N. Sahay, Sandesh Tiwari and V.K.

Khanna, the then Vice-President, Assistant President and

the Managing Director respectively for offences

punishable under Sections 163, 193 and 506 of the

Indian Penal Code (IPC). It was alleged in the application

that the said accused persons had intentionally taken

steps to cause injury to him. The learned Magistrate

vide order dated 4

th

October, 2008, dismissed the

criminal complaint and declined to take cognizance after

recording the statement of the complainant under

Section 200 Cr.P.C. and examining the witnesses under

Section 202 Cr.P.C.

4.Being grieved by the aforesaid order, the

respondent No.3 preferred a Revision Petition No.460 of

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2008, which was eventually heard by the learned

Additional Sessions Judge, Varanasi, U.P. The learned

Additional Sessions Judge after adumbrating the facts

and taking note of the submissions of the revisionist, set

aside the order dated 4

th

October, 2008 and remanded

the matter to the trial Court with the direction that he

shall hear the complaint again and pass a cognizance

order according to law on the basis of merits according

to the directions given in the said order. Be it noted, the

learned Additional Sessions Judge heard the counsel for

the respondent No.3 and the learned counsel for the

State but no notice was issued to the accused persons

therein. Ordinarily, we would not have adverted to the

same because that lis is the subject matter in the

appeal, but it has become imperative to do only to

highlight how these kind of litigations are being dealt

with and also to show the respondents had the

unwarranted enthusiasm to move the courts. The order

passed against the said accused persons at that time

was an adverse order inasmuch as the matter was

remitted. It was incumbent to hear the respondents

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though they had not become accused persons. A three-

Judge Bench in Manharibhai Muljibhai Kakadia and

Anr. v. Shaileshbhai Mohanbhai Patel and others

1

has opined that in a case arising out of a complaint

petition, when travels to the superior Court and an

adverse order is passed, an opportunity of hearing has

to be given. The relevant passages are reproduced

hereunder:

46. .......If the Magistrate finds that there is no

sufficient ground for proceeding with the

complaint and dismisses the complaint under

Section 203 of the Code, the question is

whether a person accused of crime in the

complaint can claim right of hearing in a

revision application preferred by the

complainant against the order of the

dismissal of the complaint. Parliament being

alive to the legal position that the

accused/suspects are not entitled to be heard

at any stage of the proceedings until

issuance of process under Section 204, yet in

Section 401(2) of the Code provided that no

order in exercise of the power of the revision

shall be made by the Sessions Judge or the

High Court, as the case may be, to the

prejudice of the accused or the other person

unless he had an opportunity of being heard

either personally or by pleader in his own

defence.

xxxxx xxxxx xxxxx

1

(2012) 10 SCC 517

6

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48. In a case where the complaint has been

dismissed by the Magistrate under Section

203 of the Code either at the stage of Section

200 itself or on completion of inquiry by the

Magistrate under Section 202 or on receipt of

the report from the police or from any person

to whom the direction was issued by the

Magistrate to investigate into the allegations

in the complaint, the effect of such dismissal

is termination of complaint proceedings. On a

plain reading of sub-section (2) of Section

401, it cannot be said that the person against

whom the allegations of having committed

the offence have been made in the complaint

and the complaint has been dismissed by the

Magistrate under Section 203, has no right to

be heard because no process has been

issued. The dismissal of complaint by the

Magistrate under Section 203—although it is

at preliminary stage—nevertheless results in

termination of proceedings in a complaint

against the persons who are alleged to have

committed the crime. Once a challenge is laid

to such order at the instance of the

complainant in a revision petition before the

High Court or the Sessions Judge, by virtue of

Section 401(2) of the Code, the suspects get

the right of hearing before the Revisional

Court although such order was passed

without their participation. The right given to

“accused” or “the other person” under

Section 401(2) of being heard before the

Revisional Court to defend an order which

operates in his favour should not be confused

with the proceedings before a Magistrate

under Sections 200, 202, 203 and 204. In the

revision petition before the High Court or the

Sessions Judge at the instance of the

complainant challenging the order of

dismissal of complaint, one of the things that

could happen is reversal of the order of the

7

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Magistrate and revival of the complaint. It is

in this view of the matter that the accused or

other person cannot be deprived of hearing

on the face of the express provision

contained in Section 401(2) of the Code. The

stage is not important whether it is pre-

process stage or post process stage.

xxxxx xxxxx xxxxx

53. We are in complete agreement with the

view expressed by this Court in P.

Sundarrajan2, Raghu Raj Singh Rousha3 and

A.N. Santhanam4. We hold, as it must be,

that in a revision petition preferred by the

complainant before the High Court or the

Sessions Judge challenging an order of the

Magistrate dismissing the complaint under

Section 203 of the Code at the stage under

Section 200 or after following the process

contemplated under Section 202 of the Code,

the accused or a person who is suspected to

have committed the crime is entitled to

hearing by the Revisional Court. In other

words, where the complaint has been

dismissed by the Magistrate under Section

203 of the Code, upon challenge to the

legality of the said order being laid by the

complainant in a revision petition before the

High Court or the Sessions Judge, the persons

who are arraigned as accused in the

complaint have a right to be heard in such

revision petition. This is a plain requirement

of Section 401(2) of the Code. If the

Revisional Court overturns the order of the

Magistrate dismissing the complaint and the

complaint is restored to the file of the

Magistrate and it is sent back for fresh

consideration, the persons who are alleged in

the complaint to have committed the crime

have, however, no right to participate in the

proceedings nor are they entitled to any

8

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hearing of any sort whatsoever by the

Magistrate until the consideration of the

matter by the Magistrate for issuance of

process.”

Though the present controversy is different, we

have dealt with the said facet as we intend to emphasize

how the Courts have dealt with and addressed to such a

matter so that a borrower with vengeance could

ultimately exhibit his high-handedness.

5.As the narration further proceeds, after the

remand, the learned Magistrate vide order dated 13

th

July, 2009, took cognizance and issued summons to V.N.

Sahay, Sandesh Tripathi and V.K. Khanna. The said

accused persons knocked at the doors of the High Court

under Section 482 Cr.P.C. and the High Court in Crl. Misc.

No.13628 of 2010, by order dated 27th May, 2013, ruled

thus:

“A perusal of the complaint filed by the

respondent no.2 also indicates that the issues

were with regard to the action of the bank

officers against respondent no.2 on the

ground of alleged malafide and as such an

offence under sections 166/500 I.P.C. was

made out. Both the sections are non

cognizable and bailable and triable by

Magistrate of First Class. For the foregoing

reasons the 482 Petition deserves to be

allowed and the criminal complaint filed by

9

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the respondent no.2 being Complaint Case

No.1058 of 2009 is liable to be quashed.

Accordingly the application under section 482

Cr.P.C. is allowed and the Criminal Complaint

Case No.1058 of 2009, Prakash Kumar Bajaj

versus P.N.B. Housing Finance Ltd. And

others, pending in the Court of Additional

Chief Judicial Magistrate, Court No.2 Varanasi

is quashed.”

6.Presently, we are required to sit in the time

machine for a while. In the interregnum period the

borrowers filed an objection under Section 13(3A) of the

SARFAESI Act. Be it noted, as the objection was not

dealt with, the respondent No.3 preferred W.P. No.22254

of 2009, which was disposed of on 5

th

May, 2009 by the

High Court, directing disposal of the same. Eventually,

the objection was rejected by the competent authority

vide order dated June 1, 2009. Being grieved by the

aforesaid order of rejection, the respondent No.3 filed

Securitisation Appeal No.5 of 2010, before the Debt

Recovery Tribunal (DRT), Allahabad, U.P., which was

rejected vide order dated 23

rd

November, 2012. The

non-success before the DRT impelled the borrowers to

prefer an appeal before the Debts Recovery Appellate

Tribunal (DRAT), Allahabad, U.P.

1

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7.At this stage, it is apposite to state that the third

respondent, if we allow ourselves to say so, have

possibly mastered how to create a sense of fear in the

mind of the officials who are compelled to face criminal

cases. After the High Court had quashed the earlier

proceeding, the third respondent, in October, 2011, filed

another application under Section 156(3) CrPC against

V.N. Sahay, Sandesh Tripathi and V.K. Khanna alleging

criminal conspiracy and forging of documents referring

to three post-dated cheques and eventually it was

numbered as Complaint Case No. 344/2011, which gave

rise to FIR No. 262 of 2011 under Sections 465, 467,

468, 471, 386, 506, 34 and 120B IPC. Being not

satisfied with the same, on 30.10.2011, he filed another

application under Section 156(3) against the present

appellants alleging that there has been under-valuation

of the property. It was numbered as Complaint Case No.

396/2011 wherein the Trial Magistrate directed the SHO

to register FIR against the present appellants. Pursuant

to the said order, FIR No. 298/2011 was registered.

8.At this juncture, it is imperative to state that the

11

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third respondent made the officials agree to enter into

one time settlement. The said agreement was arrived at

with the stipulation that he shall withdraw various cases

filed by him on acceptance of the one time settlement.

As the factual matrix would reveal, the third respondent

did not disclose about the initiation of the complaint

cases no. 344/2011 and 396/2011. On 28.11.2011, the

one time settlement was acted upon and the third

respondent deposited Rs.15 lakhs.

9.At this stage, it is apt to mention that V.N. Sahay

and two others approached the High Court of Allahabad

in Writ (C) No. 17611/2013 wherein the learned Single

Judge heard the matter along with application under

Section 482 CrPC in Crl. Misc. No. 13628/2010. We have

already reproduced the relevant part of the order passed

therein. Be it noted, the writ petition has also been

disposed of by the High Court by stating thus:

“Heard Mr. Manish Trivedi, learned counsel for

the petitioner, Mr. Vivek Kumar Srivastava,

learned counsel appearing on behalf of

respondent no.3 and learned AGA.

It is submitted by learned AGA that in the

present case investigation has been

completed and final report has been

1

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submitted, considering the same, this petition

has become infructuous.

The interim order dated 2.12.2011 is hereby

vacated.

Accordingly, this petition is disposed of.”

10.At this juncture, we are impelled to look at the past

again. The respondent had preferred, as has been

stated before, an appeal before the DRAT. The said

appeal was numbered as Appeal No. 5 of 2013. In the

said appeal, the following order came to be passed:

“During the pendency of the said application,

a proposal was submitted by the borrower to

settle the claim for an amount of Rs.15.00

lacs. The said proposal was accepted by the

Bank by its letter dated 15.11.2011 and the

appellant also deposited the full amount, for

which the settlement was arrived at i.e.

Rs.15.00 lacs. Thereafter, the grievance of

the appellant was that since the full amount

of the settlement has been paid by the

appellant, therefore, the bank should be

directed to return the title deed, as the title

deed was not returned.

The Tribunal was of the view that since the

matter has been settled, therefore, the

securitization application was dismissed as

infructuous and the Tribunal did not pass any

order for return of the title deed. Therefore,

the appellant being aggrieved of the

judgment dated 23.11.2011 passed by the

Tribunal has filed the present appeal.

Learned counsel for the appellant submitted

1

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that after when the full amount under the

settlement has been paid, the respondent-

Bank was duty bound to return the title deed,

which has not been returned to the appellant.

It is contended on behalf of the respondent-

Bank that the settlement was accepted by

letter dated 14.11.2011, wherein the

condition was mentioned that the appellant

shall withdraw the complaint case which he

has filed before the Criminal Court.

Learned counsel for the appellant submitted

that he has no objection to withdraw the

complaint case but the title deed must be

returned to the appellant.

The title deed shall be returned by the

respondent-Bank to the appellant within

seven days from today and thereafter, the

appellant shall move an application to

withdraw the Criminal Case No.1058/09

which is pending before the Chief Judicial

Magistrate, Varanasi.”

11.The labyrinth maladroitly created by the

respondent No.3 does not end here. It appears that he

had the indefatigable spirit to indulge himself in the

abuse of the process of the Court. The respondent No.3

had filed an application under Section 156(3) Cr.P.C.

before the learned Additional Chief Judicial Magistrate on

30

th

October, 2011, against the present appellants, who

are the Vice-President and the valuer respectively. In

the body of the petition, as we find in the paragraphs 19

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and 20, it has been stated thus:

“That the aforesaid case was referred to the

Deputy Inspector General of Police, Varanasi

through speed post but no proceeding had

been initiated till today in that regard.

That the aforesaid act done by the aforesaid

accused prima-facie comes in the ambit of

section 465, 467, 471, 386, 504, 34 & 120B

IPC and in this way cognizable offence is

made out and proved well.”

12.On the basis of the aforesaid application the

learned Additional Chief Judicial Magistrate, Varanasi,

U.P., called for a report from the concerned police station

and received the information that no FIR had been

lodged and hence, no case was registered at the local

police station. Thereafter, the learned Additional Chief

Judicial Magistrate observed as follows:

“It has been stated clearly in the application

by the applicant that it is the statement of

applicant that he had already given 3

postdated cheques to the financial bank for

payment and despite the availability of the

postdated cheques in the financial society,

even a single share in the loan account has

not been got paid. The opposite parties

deliberately due to conspiracy and prejudice

against applicant have not deposited

previously mentioned postdated cheques for

payment and these people are doing a

conspiracy to grab the valuable property of

the applicant. Under a criminal conspiracy,

illegally and on false and fabricated grounds

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a petition has been filed before District

Collector (Finance & Revenue) Varanasi,

which comes under the ambit of cognizable

offence. Keeping in view the facts of the

case, commission of cognizable offence

appears to be made out and it shall be

justifiable to get done the investigation of the

same by the police.”

After so stating it directed as follows:

“In the light of the application, SHO Bhelpur,

Varanasi is hereby directed to register the

case and investigate the same.”

13.On the basis of the aforesaid order, F.I.R. No.298 of

2011 was registered, which gave rise to case Crime

No.415 of 2011 for the offences punishable under

Sections 465, 467, and 471 I.P.C. Being dissatisfied with

the aforesaid order, the appellants moved the High

Court in Crl. Misc. No.24561 of 2011. The High Court in

a cryptic order opined that on a perusal of the F.I.R. it

cannot be said that no cognizable offence is made out.

Being of this view, it has declined to interfere with the

order. Hence, this appeal by special leave.

14.In course of hearing, learned counsel for the State

of U.P. has submitted that the investigating agency has

already submitted the final report on 21

st

November,

1

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2012. The said report reads as follows:

“Complainant in the present case has not

appeared before any of the investigators,

even after repeated summoning. And that

the action of Smt. Priyanka Srivastava has

been done as per her legal rights in 'good

faith', which is protected under Section 32 of

the SARFAESI Act, 2002. With the

abovestated investigations, the present

report is concluded.”

15.On a query being made, learned counsel for the

State would contend that the learned Magistrate has not

passed any order on the final report. Mr. Ajay Kumar,

learned counsel appearing for the appellants would

submit that the learned Magistrate has the option to

accept the report by rejecting the final form/final report

under Section 190 Cr.P.C. and may proceed against the

appellants or may issue notice to the complainant, who

is entitled to file a protest petition and, thereafter, may

proceed with the matter and, therefore, this Court

should address the controversy on merits and quash the

proceedings.

16.We have narrated the facts in detail as the present

case, as we find, exemplifies in enormous magnitude to

take recourse to Section 156(3) Cr.P.C., as if, it is a

1

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routine procedure. That apart, the proceedings initiated

and the action taken by the authorities under the

SARFAESI Act are assailable under the said Act before

the higher forum and if, a borrower is allowed to take

recourse to criminal law in the manner it has been taken

it, needs no special emphasis to state, has the inherent

potentiality to affect the marrows of economic health of

the nation. It is clearly noticeable that the statutory

remedies have cleverly been bypassed and prosecution

route has been undertaken for instilling fear amongst

the individual authorities compelling them to concede to

the request for one time settlement which the financial

institution possibly might not have acceded. That apart,

despite agreeing for withdrawal of the complaint, no

steps were taken in that regard at least to show the

bonafide. On the contrary, there is a contest with a

perverse sadistic attitude. Whether the complainant

could have withdrawn the prosecution or not, is another

matter. Fact remains, no efforts were made.

17.The learned Magistrate, as we find, while exercising

the power under Section 156(3) Cr.P.C. has narrated the

1

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allegations and, thereafter, without any application of

mind, has passed an order to register an FIR for the

offences mentioned in the application. The duty cast on

the learned Magistrate, while exercising power under

Section 156(3) Cr.P.C., cannot be marginalized. To

understand the real purport of the same, we think it apt

to reproduce the said provision:

“156. Police officer’s power to investigate

congnizable case. –(1) Any officer in charge of

a police station may, without the order of a

Magistrate, investigate any cognizable case

which a Court having jurisdiction over the

local area within the limits of such station

would have power to inquire into or try under

the provisions of Chapter XIII.

(2) No proceeding of a police officer in any

such case shall at any stage be called in

question on the ground that the case was one

which such officer was no empowered under

this section to investigate.

(3) Any Magistrate empowered under section

190 may order such an investigation as

above-mentioned.”

18.Dealing with the nature of power exercised by the

Magistrate under Section 156(3) of the CrPC, a three-

Judge Bench in Devarapalli Lakshminarayana Reddy

and others v. V. Narayana Reddy and others

2

, had

2

(1976) 3 SCC 252

1

Page 20 CRL.A.781/12

to express thus:

“It may be noted further that an order made

under sub-section (3) of Section 156, is in the

nature of a peremptory reminder or

intimation to the police to exercise their

plenary powers of investigation under Section

156(1). Such an investigation embraces the

entire continuous process which begins with

the collection of evidence under Section 156

and ends with a report or chargesheet under

Section 173.”

19.In Anil Kumar v. M.K. Aiyappa

3

, the two-Judge

Bench had to say this:

“The scope of Section 156(3) CrPC came up

for consideration before this Court in several

cases. This Court in Maksud Saiyed [(2008) 5

SCC 668] examined the requirement of the

application of mind by the Magistrate before

exercising jurisdiction under Section 156(3)

and held that where jurisdiction is exercised

on a complaint filed in terms of Section

156(3) or Section 200 CrPC, the Magistrate is

required to apply his mind, in such a case,

the Special Judge/Magistrate cannot refer the

matter under Section 156(3) against a public

servant without a valid sanction order. The

application of mind by the Magistrate should

be reflected in the order. The mere statement

that he has gone through the complaint,

documents and heard the complainant, as

such, as reflected in the order, will not be

sufficient. After going through the complaint,

documents and hearing the complainant,

what weighed with the Magistrate to order

investigation under Section 156(3) CrPC,

should be reflected in the order, though a

detailed expression of his views is neither

3

(2013) 10 SCC 705

2

Page 21 CRL.A.781/12

required nor warranted. We have already

extracted the order passed by the learned

Special Judge which, in our view, has stated

no reasons for ordering investigation.”

20.In Dilawar Singh v. State of Delhi

4

, this Court

ruled thus:

“18. ...11. The clear position therefore is that

any Judicial Magistrate, before taking

cognizance of the offence, can order

investigation under Section 156(3) of the

Code. If he does so, he is not to examine the

complainant on oath because he was not

taking cognizance of any offence therein. For

the purpose of enabling the police to start

investigation it is open to the Magistrate to

direct the police to register an FIR. There is

nothing illegal in doing so. After all

registration of an FIR involves only the

process of entering the substance of the

information relating to the commission of the

cognizable offence in a book kept by the

officer in charge of the police station as

indicated in Section 154 of the Code. Even if

a Magistrate does not say in so many words

while directing investigation under Section

156(3) of the Code that an FIR should be

registered, it is the duty of the officer in

charge of the police station to register the FIR

regarding the cognizable offence disclosed by

the complainant because that police officer

could take further steps contemplated in

Chapter XII of the Code only thereafter.”

21.In CREF Finance Ltd. v. Shree Shanthi

Homes (P) Ltd.

5

, the Court while dealing with the

4

(2007) 12 SCC 496

5

(2005) 7 SCC 467

2

Page 22 CRL.A.781/12

power of Magistrate taking cognizance of the

offences, has opined that having considered the

complaint, the Magistrate may consider it appropriate

to send the complaint to the police for investigation

under Section 156(3) of the Code of Criminal

Procedure.

And again:

“When a Magistrate receives a complaint he

is not bound to take cognizance if the facts

alleged in the complaint disclose the

commission of an offence. The Magistrate has

discretion in the matter. If on a reading of the

complaint, he finds that the allegations

therein disclose a cognizable offence and the

forwarding of the complaint to the police for

investigation under Section 156(3) will be

conducive to justice and save the valuable

time of the Magistrate from being wasted in

enquiring into a matter which was primarily

the duty of the police to investigate, he will

be justified in adopting that course as an

alternative to taking cognizance of the

offence itself. As said earlier, in the case of a

complaint regarding the commission of

cognizable offence, the power under Section

156(3) can be invoked by the Magistrate

before he takes cognizance of the offence

under Section 190(1)(a). However, if he once

takes such cognizance and embarks upon the

procedure embodied in Chapter XV, he is not

competent to revert back to the pre-

cognizance stage and avail of Section

156(3).”

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22.Recently, in Ramdev Food Products Private

Limited v. State of Gujarat

6

, while dealing with the

exercise of power under Section 156(3) CrPC by the

learned Magistrate, a three-Judge Bench has held that:

“.... the direction under Section 156(3) is to

be issued, only after application of mind by

the Magistrate. When the Magistrate does

not take cognizance and does not find it

necessary to postpone instance of process

and finds a case made out to proceed

forthwith, direction under the said provision is

issued. In other words, where on account of

credibility of information available, or

weighing the interest of justice it is

considered appropriate to straightaway direct

investigation, such a direction is issued.

Cases where Magistrate takes cognizance and

postpones issuance of process are cases

where the Magistrate has yet to determine

“existence of sufficient ground to proceed.”

23.At this stage, we may usefully refer to what the

Constitution Bench has to say in Lalita Kumari v.

Govt. of U.P.

7

in this regard. The larger Bench had

posed the following two questions:-

“(i) Whether the immediate non-registration

of FIR leads to scope for manipulation by the

police which affects the right of the

victim/complainant to have a complaint

immediately investigated upon allegations

being made; and

(ii) Whether in cases where the

6

Criminal Appeal No. 600 of 2007 decided on 16.03.2015

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(2014) 2 SCC 1

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complaint/information does not clearly

disclose the commission of a cognizable

offence but the FIR is compulsorily registered

then does it infringe the rights of an

accused.”

Answering the questions posed, the larger Bench

opined thus:

“49. Consequently, the condition that is

sine qua non for recording an FIR under

Section 154 of the Code is that there must

be information and that information must

disclose a cognizable offence. If any

information disclosing a cognizable offence

is led before an officer in charge of the

police station satisfying the requirement of

Section 154(1), the said police officer has

no other option except to enter the

substance thereof in the prescribed form,

that is to say, to register a case on the

basis of such information. The provision of

Section 154 of the Code is mandatory and

the officer concerned is duty-bound to

register the case on the basis of

information disclosing a cognizable offence.

Thus, the plain words of Section 154(1) of

the Code have to be given their literal

meaning.

“Shall”

xxx xxx xxx xxx

72. It is thus unequivocally clear that

registration of FIR is mandatory and also

that it is to be recorded in the FIR book by

giving a unique annual number to each FIR

to enable strict tracking of each and every

registered FIR by the superior police

officers as well as by the competent court

to which copies of each FIR are required to

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be sent.

“Information”

xxx xxx xxx xxx

111. The Code gives power to the police to

close a matter both before and after

investigation. A police officer can foreclose

an FIR before an investigation under

Section 157 of the Code, if it appears to

him that there is no sufficient ground to

investigate the same. The section itself

states that a police officer can start

investigation when he has “reason to

suspect the commission of an offence”.

Therefore, the requirements of launching

an investigation under Section 157 of the

Code are higher than the requirement

under Section 154 of the Code. The police

officer can also, in a given case, investigate

the matter and then file a final report under

Section 173 of the Code seeking closure of

the matter. Therefore, the police is not

liable to launch an investigation in every

FIR which is mandatorily registered on

receiving information relating to

commission of a cognizable offence.

xxx xxx xxx xxx

115. Although, we, in unequivocal terms,

hold that Section 154 of the Code

postulates the mandatory registration of

FIRs on receipt of all cognizable offences,

yet, there may be instances where

preliminary inquiry may be required owing

to the change in genesis and novelty of

crimes with the passage of time. One such

instance is in the case of allegations

relating to medical negligence on the part

of doctors. It will be unfair and inequitable

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to prosecute a medical professional only on

the basis of the allegations in the

complaint.”

After so stating the constitution Bench proceeded to

state that where a preliminary enquiry is necessary, it is

not for the purpose for verification or otherwise of the

information received but only to ascertain whether the

information reveals any cognizable offence. After laying

down so, the larger Bench proceeded to state:-

“120.6. As to what type and in which cases

preliminary inquiry is to be conducted will depend

on the facts and circumstances of each case. The

category of cases in which preliminary inquiry may

be made are as under:

(a) Matrimonial disputes/family disputes

(b) Commercial offences

(c) Medical negligence cases

(d) Corruption cases

(e) Cases where there is abnormal delay/laches

in initiating criminal prosecution, for example, over

3 months’ delay in reporting the matter without

satisfactorily explaining the reasons for delay.

The aforesaid are only illustrations and not

exhaustive of all conditions which may warrant

preliminary inquiry.

120.7. While ensuring and protecting the rights

of the accused and the complainant, a preliminary

inquiry should be made time-bound and in any

case it should not exceed 7 days. The fact of such

delay and the causes of it must be reflected in the

General Diary entry.”

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We have referred to the aforesaid pronouncement for

the purpose that on certain circumstances the police is

also required to hold a preliminary enquiry whether any

cognizable offence is made out or not.

24.Regard being had to the aforesaid enunciation of

law, it needs to be reiterated that the learned Magistrate

has to remain vigilant with regard to the allegations

made and the nature of allegations and not to issue

directions without proper application of mind. He has

also to bear in mind that sending the matter would be

conducive to justice and then he may pass the requisite

order. The present is a case where the accused persons

are serving in high positions in the bank. We are

absolutely conscious that the position does not matter,

for nobody is above law. But, the learned Magistrate

should take note of the allegations in entirety, the date

of incident and whether any cognizable case is remotely

made out. It is also to be noted that when a borrower of

the financial institution covered under the SARFAESI Act,

invokes the jurisdiction under Section 156(3) Cr.P.C. and

also there is a separate procedure under the Recovery of

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Debts due to Banks and Financial Institutions Act, 1993,

an attitude of more care, caution and circumspection

has to be adhered to.

25.Issuing a direction stating “as per the application”

to lodge an FIR creates a very unhealthy situation in the

society and also reflects the erroneous approach of the

learned Magistrate. It also encourages the unscrupulous

and unprincipled litigants, like the respondent no.3,

namely, Prakash Kumar Bajaj, to take adventurous steps

with courts to bring the financial institutions on their

knees. As the factual exposition would reveal, he had

prosecuted the earlier authorities and after the matter is

dealt with by the High Court in a writ petition recording

a settlement, he does not withdraw the criminal case

and waits for some kind of situation where he can take

vengeance as if he is the emperor of all he surveys. It is

interesting to note that during the tenure of the

appellant No.1, who is presently occupying the position

of Vice-President, neither the loan was taken, nor the

default was made, nor any action under the SARFAESI

Act was taken. However, the action under the SARFAESI

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Act was taken on the second time at the instance of the

present appellant No.1. We are only stating about the

devilish design of the respondent No.3 to harass the

appellants with the sole intent to avoid the payment of

loan. When a citizen avails a loan from a financial

institution, it is his obligation to pay back and not play

truant or for that matter play possum. As we have

noticed, he has been able to do such adventurous acts

as he has the embedded conviction that he will not be

taken to task because an application under Section

156(3) Cr.P.C. is a simple application to the court for

issue of a direction to the investigating agency. We

have been apprised that a carbon copy of a document is

filed to show the compliance of Section 154(3),

indicating it has been sent to the Superintendent of

police concerned.

26. At this stage it is seemly to state that power under

Section 156(3) warrants application of judicial mind. A

court of law is involved. It is not the police taking steps

at the stage of Section 154 of the code. A litigant at his

own whim cannot invoke the authority of the Magistrate.

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A principled and really grieved citizen with clean hands

must have free access to invoke the said power. It

protects the citizens but when pervert litigations takes

this route to harass their fellows citizens, efforts are to

be made to scuttle and curb the same.

27.In our considered opinion, a stage has come in this

country where Section 156(3) Cr.P.C. applications are to

be supported by an affidavit duly sworn by the applicant

who seeks the invocation of the jurisdiction of the

Magistrate. That apart, in an appropriate case, the

learned Magistrate would be well advised to verify the

truth and also can verify the veracity of the allegations.

This affidavit can make the applicant more responsible.

We are compelled to say so as such kind of applications

are being filed in a routine manner without taking any

responsibility whatsoever only to harass certain persons.

That apart, it becomes more disturbing and alarming

when one tries to pick up people who are passing orders

under a statutory provision which can be challenged

under the framework of said Act or under Article 226 of

the Constitution of India. But it cannot be done to take

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undue advantage in a criminal court as if somebody is

determined to settle the scores. We have already

indicated that there has to be prior applications under

Section 154(1) and 154(3) while filing a petition under

Section 156(3). Both the aspects should be clearly spelt

out in the application and necessary documents to that

effect shall be filed. The warrant for giving a direction

that an the application under Section 156(3) be

supported by an affidavit so that the person making the

application should be conscious and also endeavour to

see that no false affidavit is made. It is because once an

affidavit is found to be false, he will be liable for

prosecution in accordance with law. This will deter him

to casually invoke the authority of the Magistrate under

Section 156(3). That apart, we have already stated that

the veracity of the same can also be verified by the

learned Magistrate, regard being had to the nature of

allegations of the case. We are compelled to say so as a

number of cases pertaining to fiscal sphere, matrimonial

dispute/family disputes, commercial offences, medical

negligence cases, corruption cases and the cases where

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there is abnormal delay/laches in initiating criminal

prosecution, as are illustrated in Lalita Kumari are

being filed. That apart, the learned Magistrate would

also be aware of the delay in lodging of the FIR.

28.The present lis can be perceived from another

angle. We are slightly surprised that the financial

institution has been compelled to settle the dispute and

we are also disposed to think that it has so happened

because the complaint cases were filed. Such a

situation should not happen.

29.At this juncture, we may fruitfully refer to Section

32 of the SARFAESI Act, which reads as follows :

“32. Protection of action taken in good faith.-

No suit, prosecution or other legal proceedings

shall lie against any secured creditor or any of

his officers or manager exercising any of the

rights of the secured creditor or borrower for

anything done or omitted to be done in good

faith under this Act.”

30.In the present case, we are obligated to say that

learned Magistrate should have kept himself alive to the

aforesaid provision before venturing into directing

registration of the FIR under Section 156(3) Cr.P.C. It is

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because the Parliament in its wisdom has made such a

provision to protect the secured creditors or any of its

officers, and needles to emphasize, the legislative

mandate, has to be kept in mind.

31.In view of the aforesaid analysis, we allow the

appeal, set aside the order passed by the High Court

and quash the registration of the FIR in case Crime

No.298 of 2011, registered with Police Station, Bhelupur,

District Varanasi, U.P.

32.A copy of the order passed by us be sent to the

learned Chief Justices of all the High Courts by the

Registry of this Court so that the High Courts would

circulate the same amongst the learned Sessions Judges

who, in turn, shall circulate it among the learned

Magistrates so that they can remain more vigilant and

diligent while exercising the power under Section 156(3)

Cr.P.C.

.......................J.

[Dipak Misra]

.......................J.

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[Prafulla C. Pant]

New Delhi

March 19, 2015.

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