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TMI Blog2019 (2) TMI 1936X X X X Extracts X X X X X X X X Extracts X X X X ..... e is sufficient ground for proceeding, the Magistrate directs issuance of process. In case of taking cognizance of an offence based upon the police report, the Magistrate is not required to record reasons for issuing the process - 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 charge sheet 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 on file. In the present case, cognizance of the offence has been taken by taking into consideration the charge sheet filed by the police for the offence Under Sections 420, 465, 467, 468, 471, 477A and 120B Indian Penal Code, the order for issuance of process without explicitly recording reasons for its satisfaction for issue of process does not suffer from any illegality. Whether revision Under Section 397(2) Code of Criminal Procedure against order of issue of process is maintainable? - HELD THAT:- While hearing revision Under Section 397 Code of Criminal Proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Case No. 62851/2014 and ordered issuance of process to the Respondent-Accused. 3. Brief factual matrix of the case is that a complaint was filed by the Manager of ICICI Bank against M/s. R.A. Distributors Pvt. Ltd. alleging that they hatched a conspiracy and as a part of this conspiracy, stated that their company is importing rough diamonds and polished diamonds from the foreign market and selling the same in the local market of Surat and Mumbai and by so stating, opened a current account on 13.12.2013 in ICICI Bank, Shyam Chambers, opposite to Sub-jail, Surat. On verification of Bills of Entry produced by M/s. RA Distributors, 17 Bills of Entries were found to be bogus. It was alleged that M/s. RA Distributors prepared false and bogus signature and stamp of Custom Officers and knowing fully well that those Bills of Entry are bogus, fraudulently submitted the same as if they are true and genuine and produced them in ICICI Bank, Shyam Chambers, Opp., Sub-jail, Surat between 13.12.2013 to 24.02.2014 and had forwarded ₹ 104,60,99,082/- to (01) MABOOK TRADING FZE, DUBAI (02) NIPPON INCORPORATION LTD. HONG KONG (03) CORNELL TRADING (HK) LTD. HONG KONG (04) AL ALMAS FZE LTD. HON ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added as an Accused as the statutory period for fling charge sheet in the case of Respondent-Accused had not expired. 7. During the course of further investigation, statement of witnesses C.A. Surendra Dhareva, Amratbhai Narottamdas Patel and elder brother of the Respondent-Accused Jafar Mohammed Hasanfatta, was recorded Under Section 161 Code of Criminal Procedure As per the prosecution, the said statement of Jafar Mohammed Hasanfatta, elder brother of Respondent-Accused shows that the Respondent has arranged to transfer ₹ 3,00,00,000/- into the account of his brother Jafar Mohammed Hasanfatta through RTGS from Natural Trading Company, owned by co-accused Madanlal Jain. The Respondent-Accused is the sole proprietor of the Nile Industries Pvt. Ltd. Statement of Samir Jiker Gohil, Manager of the said Nile Industries Pvt. Ltd. was recorded on 18.10.2014. According to the prosecution, bank statement of account of Respondent-Accused in the Union Bank of India, Nanpura Branch from 31.12.2013 to 25.03.2014 reflects crores of money having been transferred from Natural Trading Company account to Respondent's Company-Nile Trading Corporation. Further bank statement of Nile Trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, the Magistrate is to be satisfied that there is sufficient ground for proceeding and on the basis of the materials filed along with the second supplementary charge sheet, the Magistrate took cognizance of the offences and directed issuance of summons to the Respondent and Amit @ Bilal Haroon Gilani and the same ought not to have been inferred. The learned Counsel further submitted that issuance of summons, being an interlocutory order, the High Court in exercise of its revisional jurisdiction ought not to have set aside the order of issuance of summons. The learned Counsel further submitted that the learned Single Judge erred in proceeding under the footing as if it is a simple case of forgery of the Bills of Entry and did not keep in view that the present case is a complex economic offence of sending foreign exchange abroad to foreign companies in Dubai and Hongkong through hawala by setting up a web of companies. Placing reliance upon number of decisions, the learned Counsel for the Appellant-State submitted that at the stage of issuance of the summons, the Court is not to examine the merits and demerits of the case and the possible defence are not to be examined. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds for proceeding against the Accused? In exercise of revisional jurisdiction Under Section 397 Code of Criminal Procedure, whether the learned Single Judge was right in setting aside the order of the Magistrate issuing summons to the Respondent-Accused? While taking cognizance of an offence Under Section 190(1) (b) Code of Criminal Procedure, whether the court has to record reasons for its satisfaction of sufficient grounds for issuance of summons: 13. The charge sheet was filed in Criminal Case No. 47715/2014 on 18.08.2014 against the Accused persons namely Sunil Agrawal and Ratan Agrawal. In the first charge sheet, the Respondent-Afroz Mohammad Hasanfatta (Afroz Hasanfatta) was referred to as a suspect. In the second supplementary charge sheet filed on 15.11.2014 in Criminal Case No. 62851/2014, the Respondent-Afroz is arraigned as Accused No. 1 and Amit @ Bilal Haroon Gilani as Accused No. 2. In the second supplementary charge sheet, prosecution relies upon the statement of witnesses as well as on certain bank transactions as to flow of money into the account of the Respondent-Afroz Hasanfatta and his Company-Nile Trading Corporation. The order of taking cognizan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the initiation of proceedings by the Magistrate or the Judge. Cognizance is taken of cases and not of persons. Under Section 190 of the Code, it is the application of judicial mind to the averments in the complaint that constitutes cognizance. At this stage, the Magistrate has to be satisfied whether there is sufficient ground for proceeding and not whether there is sufficient ground for conviction. Whether the evidence is adequate for supporting the conviction can be determined only at the trial and not at the stage of enquiry. If there is sufficient ground for proceeding then the Magistrate is empowered for issuance of process Under Section 204 of the Code. 12. A summons is a process issued by a court calling upon a person to appear before a Magistrate. It is used for the purpose of notifying an individual of his legal obligation to appear before the Magistrate as a response to violation of law. In other words, the summons will announce to the person to whom it is directed that a legal proceeding has been started against that person and the date and time on which the person must appear in court. A person who is summoned is legally bound to appear before the court on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izance, the Court has to record reasons that prima facie case is made out and that there are sufficient grounds for proceeding against the Accused for that offence. On the facts and circumstances of those cases, this Court held that the order of the Magistrate summoning the Accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. However, what needs to be understood is that those cases relate to issuance of process taking cognizance of offences based on the complaint. Be it noted that as per the definition Under Section 2(d) Code of Criminal Procedure, 'complaint' does not include a police report. Those cases do not relate to taking of cognizance upon a police report Under Section 190(1)(b) Code of Criminal Procedure Those cases relate to taking cognizance of offences based on the complaint. In fact, it was also observed in the case of Mehmood Ul Rehman that Under Section 190(1)(b) Code of Criminal Procedure, the Magistrate has the advantage of a police report; but Under Section 190(1)(a) Code of Criminal Procedure, he has only a complaint before him. Hence, the code specifies that a complaint of facts which constitutes an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ode of Criminal Procedure considering the various provisions and pointing out three stages of the case. Observing that there is no requirement of recording reasons for issuance of process Under Section 204 Code of Criminal Procedure, in Raj Kumar Agarwal v. State of U.P. and Anr. 1999 Cr. LJ 4101, Justice B.K. Rathi, the learned Single Judge of the Allahabad High Court held as under: ...As such there are three stages of a case. The first is Under Section 204 Code of Criminal Procedure at the time of issue of process, the second is Under Section 239 Code of Criminal Procedure before framing of the charge and the third is after recording the entire evidence of the prosecution and the defence. The question is whether the Magistrate is required to scrutinise the evidence at all the three stages and record reasons of his satisfaction. If this view is taken, it will make speedy disposal a dream. In my opinion the consideration of merits and evidence at all the three stages is different. At the stage of issue of process Under Section 204 Code of Criminal Procedure detailed enquiry regarding the merit and demerit of the cases is not required. The fact that after investigation of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not required to evaluate the evidence and its merits. The standard to be adopted for summoning the Accused Under Section 204 Code of Criminal Procedure is not the same at the time of framing the charge. For issuance of summons Under Section 204 Code of Criminal Procedure, the expression used is there is sufficient ground for proceeding..... ; whereas for framing the charges, the expression used in Sections 240 and 246 Indian Penal Code is there is ground for presuming that the Accused has committed an offence..... . At the stage of taking cognizance of the offence based upon a police report and for issuance of summons Under Section 204 Code of Criminal Procedure, detailed enquiry regarding the merits and demerits of the case is not required. The fact that after investigation of the case, the police has filed charge sheet along with the materials thereon may be considered as sufficient ground for proceeding for issuance of summons Under Section 204 Code of Criminal Procedure. 22. In so far as taking cognizance based on the police report, the Magistrate has the advantage of the charge sheet, statement of witnesses and other evidence collected by the police during the invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Criminal Procedure denotes orders of purely interim or temporary nature which do not decide or touch the important rights or liabilities of the parties and any order which substantially affects the right of the parties cannot be said to be an 'interlocutory order'. In K.K. Patel and Anr. v. State of Gujarat and Anr. (2000) 6 SCC 195, this Court held as under: 11. ...It is now well-nigh settled that in deciding whether an order challenged is interlocutory or not as for Section 397(2) of the Code, the sole test is not whether such order was passed during the interim stage (vide Amar Nath and Ors. v. State of Haryana and Anr. (1977) 4 SCC 137, Madhu Limaye v. State of Maharashtra (1977) 4 SCC 551, V.C. Shukla v. State through CBI 1980 Supp. SCC 92 and Rajendra Kumar Sitaram Pande and Ors. v. Uttam and Anr. (1999) 3 SCC 134). The feasible test is whether by upholding the objections raised by a party, it would result in culminating the proceedings, if so any order passed on such objections would not be merely interlocutory in nature as envisaged in Section 397(2) of the Code.... 24. The question whether against the order of issuance of summons Under Section 204 Code of Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .K. Patel and Anr. v. State of Gujarat and Anr. (2000) 6 SCC 195, it will be in order to state and declare the legal position as under: 21.1. The order issued by the Magistrate deciding to summon an Accused in exercise of his power Under Sections 200 to 204 Code of Criminal Procedure would be an order of intermediatory or quasi-final in nature and not interlocutory in nature. 21.2. Since the said position viz. such an order is intermediatory order or quasi-final order, the revisionary jurisdiction provided Under Section 397, either with the District Court or with the High Court can be worked out by the aggrieved party. 21.3. Such an order of a Magistrate deciding to issue process or summons to an Accused in exercise of his power Under Sections 200 to 204 Code of Criminal Procedure, can always be subject-matter of challenge under the inherent jurisdiction of the High Court Under Section 482 Code of Criminal Procedure. ........... 23. Therefore, the position has now come to rest to the effect that the revisional jurisdiction Under Section 397 Code of Criminal Procedure is available to the aggrieved party in challenging the order of the Magistrate, directing issuan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and fraudulently inducing the ICICI Bank to remit the foreign exchange to foreign companies for import of diamonds. Though, presenting forged and fake Bills of Entry would be an important last leg of the transaction, the Respondent-Accused is allegedly involved in the earlier part of collection of money i.e. by collecting money from remitters and the Respondent-Accused and his person Amit @ Bilal Haroon Gilani sending it to Prafulbhai Patel through Angadias who in turn transferred the money by RTGS to chain of companies operated by Madanlal Jain in ICICI Bank. Case of prosecution is that the persons who played any role in this conspiracy to fraud and cheat the government and banks is equally liable for the offence and not merely the persons who actually forged the signature or stamp of the Custom Officers in preparing the fake Bills of Entry. 28. The learned senior Counsel for the Respondent-Accused Mr. Mukul Rohatgi submitted that Angadias as well as Prafulbhai Patel would form a vital link in this flow of money and therefore, they should have been charged. It was submitted that the very fact that the Angadias and Prafulbhai Patel are not shown as Accused in any of the charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 2013 to February, 2014 through RTGS/NEFT. Whatever the cash amount comes to me, I deducted 0.10 paise as commission and thereafter deposited that cash amount through RTGS/NEFT by that financier and I paid them commission 0.5 paise, 0.8 paise and 0.10 paise and whatever the difference remains is my commission. Accordingly, in the above business, I got commission of ₹ 9 lakhs. Whatever the cash amount, I have transferred through RTGS/NEFT by financier in the bank account of Madanlal Jain of Axis and ICICI Bank, out of which some amount was sent by Narendra Jain, person of Madanlal Jain; Amit @ Bilal Gilani person of Afroz Fatta; though P. Umesh Firm and through S Babulal Firm. Sometimes, Johan, person of Amit also used to come with cash at my office situated at U-7, Abhinandan Complex, Magob Patiya and this cash was given by me to my known persons Dipak Suchak and Harshadbhai Modi, financiers who are doing business of commission and RTGS. And that cash amount will be deposited by me through RTGS/NEFT in the following bank accounts of Madanlal Jain and Afroz Fatta of Axis Bank. Sl. No. Name of Firm Account No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the statement of Prafulbhai Patel which is in the nature of hearsay is inadmissible qua the Respondent. It was submitted that there was no contemporaneous exposition which corroborates the statement of Prafulbhai Patel to make it fall Under Section 6 of Evidence Act so as to make it admissible as 'res gestae'. It was submitted that the statement of Prafulbhai Patel being in the nature of hearsay and in the absence of any material to bring it Under Section 6 of the Indian Evidence Act, there is no basis for the allegation against the Respondent-Accused and the learned Single Judge rightly held that there is no ground for proceeding against the Accused. 34. The learned Counsel appearing for the State of Gujarat has submitted that at the stage of issuance of summons, the court is not required to examine merits and demerits of the evidence relied upon by the prosecution and its evidentiary value. It was further submitted that the statement of Prafulbhai Patel was made in the presence of Madanlal Jain, Respondent-Afroz Hasanfatta and his person Amit @ Bilal Haroon Gilani and therefore, the statement of Prafulbhai Patel would definitely fall under Explanation II o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf that there is sufficient ground to proceed against the Accused. The Court is not to examine the merits and demerits of the case and not to determine the adequacy of the evidence for holding the Accused guilty. The Court is also not required to embark upon the possible defences. Likewise, 'possible defences' need not be taken into consideration at the time of issuing process unless there is an ex-facie defence such as a legal bar or if in law the Accused is not liable. [Vide Nupur Talwar v. Central Bureau of Investigation and Anr. (2012) 11 SCC 465] 38. The learned Single Judge observed that there is nothing in the supplementary charge sheets to even remotely suggest any role of the Petitioner in setting up of any of the foreign companies who were recipient of the amounts fraudulently sent abroad or any Indian Entity which fraudulently remitted the amounts out of India .......... or of having received the remitted amount out of India directly or indirectly. The learned Single Judge was not right in saying that there was no material that the Respondent has played any role in the conspiracy in making the black money in cash into white and fraudulently inducing the banks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of M/s. Nile Trading Corporation. He stated that out of the said amount, he repaid ₹ 91,00,000/- by depositing the same in the bank account of two persons as per say of Respondent from the aforementioned bank account of his wife through RTGS. He stated that he does not know in whose account the said amount was deposited. 41. Further, a perusal of bank statement of the Respondent for the period 01.03.2014 to 31.03.2014 shows four transactions dated 06.03.2014 and 07.03.2014 for a total amount of ₹ 6,30,00,000/- in the account of Respondent from M/s. Natural Trading Company. Further, by perusal of the bank statement of M/s. Nile Trading Corporation, the proprietorship concern of Respondent, for the period 01.10.2013 to 30.11.2014 shows transactions to the tune of approximately ₹ 7,00,00,000/- in the account of the firm from one M/s. Gangeshwar Mercantile Private Limited which is a business concern of Accused Madanlal Jain. 42. Mr. Mukul Rohatgi, learned senior Counsel appearing for the Respondent submitted that the two companies namely M/s. Natural Trading Corporation and Gangeshwar Mercantile Pvt. Ltd. who had remitted an amount of ₹ 16,00,00,000/- i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent in the bank account of M/s. Nile Trading Corporation (proprietorship of Respondent-Accused) and by his brother-Jafar Mohammad is to show that the said amount has been received in the regular course of business transaction. The Respondent would also have to show that he has declared this receipt as business income in his income tax return for the relevant year. 46. Additionally, the prosecution also relies upon Call Detail Records to show that the Respondent was in contact with the Accused Madanlal Jain, witness Praful Patel and Accused Amit @ Bilal Haroon Gilani during the period when these alleged instances of hawala took place. 47. The learned Single Judge in the impugned order extensively extracted statement of the witnesses viz. Jafar Mohammed, brother of Respondent, Samir Jiker Gohil, Manager of Nile Industries and other witnesses of Angadias Firms, concluded that none of the statements allege anything incriminating against the Respondent. The learned Single Judge further observed that neither the angadiyas nor the cheque discounters who admittedly were recipients of huge cash payments for further transfer to other companies, alleged any dealing or transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the charge sheet and the materials placed before him, the satisfaction cannot be said to be erroneous or perverse and the satisfaction ought not to have been interfered with. 50. As discussed earlier, while taking cognizance of an offence based upon a police report, it is the satisfaction of the Magistrate that there is sufficient ground to proceed against the Accused. As discussed earlier, along with the second supplementary charge sheet, number of materials like statement of witnesses, Bank statement of the Respondent-Accused and his company Nile Trading Corporation and other Bank Statement, Call Detail Records and other materials were placed. Upon consideration of the second supplementary charge sheet and the materials placed thereon, the Magistrate satisfied himself that there is sufficient ground to proceed against the Respondent and issued summons. The learned Single Judge, in our considered view, erred in interfering with the order of the Magistrate in exercise of revisional jurisdiction. 51. In our view, the learned Single Judge ought not to have gone into the merits of the matter when the matter is in nascent stage. When the prosecution relies upon the materials, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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