Case Note & Summary
The Supreme Court considered two appeals arising from criminal complaints over 707 shares of a company. The appellant, a liquidator of H-company, filed a complaint against directors and secretary of T-company alleging criminal breach of trust, cheating and conspiracy. A counter-complaint was filed alleging forgery and perjury. The Chief Presidency Magistrate dismissed the appellant's complaint and issued process against the appellant on the counter-complaint. The High Court affirmed. The Supreme Court, by majority, allowed the appeal relating to the appellant's complaint and dismissed the appeal relating to the counter-complaint. Background: H-company owned 51% shares in T-company. Fifth respondent owned 49% and obtained a decree directing H-company to deliver shares on payment, with injunction. One liquidator V and another person M went to T-company's office, executed receipt and indemnity bond. Receipt indicated shares received from second respondent, with endorsements. Dispute arose whether shares were delivered to V and then entrusted back to second respondent, or only inspected. Appellant alleged entrustment and failure to return; second respondent alleged interpolation and false accusation. Legal issues: scope of inquiry under Section 202 CrPC, applicability of Section 195(1)(c) bar, and nature of police investigation under Section 156(3). The Court held that under Section 202 CrPC, a Magistrate must assess whether evidence makes out a prima facie case; process cannot be refused unless evidence is self-contradictory or intrinsically untrustworthy. The non-examination of V, though he was a principal witness, did not warrant dismissal when other evidence existed. On Section 195(1)(c), the bar applies only to specified offences committed by a party in respect of a document produced or given in evidence in a court proceeding. Investigation under Section 156(3) is by police in statutory right, not as a delegate of the Magistrate, and does not constitute a court proceeding; and only copies of documents were produced in the execution proceeding, not originals. Therefore the bar did not apply. The majority set aside the dismissal of the appellant's complaint and directed that the complaint be proceeded with according to law; the appeal against the counter-complaint was dismissed.
Headnote
A) Criminal Procedure - Inquiry under Section 202 - Prima facie case standard - Code of Criminal Procedure, 1898, Sections 202, 204 - Magistrate must ascertain whether complaint has evidence in support; process cannot be refused unless evidence self-contradictory or intrinsically untrustworthy; non-examination of principal witness V not fatal where other evidence prima facie existed; High Court erred in affirming dismissal. Held that the complaint should not have been dismissed. (Paras 79A-B, F-H; 81H; 82A-H) B) Criminal Procedure - Investigation under Section 156(3) - Not court proceeding; police not delegate - Code of Criminal Procedure, 1898, Section 156(3), 190(1)(a) - Investigation ordered by Magistrate is by police under statutory right, not as delegate; Magistrate taking action under Section 156(3) has not taken cognizance under Section 190(1)(a) as he only applied mind for directing investigation; such investigation not part of court proceeding. Held that documents produced before police during such investigation are not produced in court. (Paras 86B-F; 86F-H; 87A-B) C) Criminal Procedure - Bar under Section 195(1)(c) - Production of document in court - Code of Criminal Procedure, 1898, Section 195(1)(c); Indian Penal Code, 1860, Sections 463, 471, 475, 476 - Bar applies only to specified offences committed by party to proceeding in respect of document produced or given in evidence; document can be produced for any purpose, but in this case only copies were produced in execution proceeding, not originals; offence alleged was production before police, not court. Held that Section 195 bar did not apply. (Paras 85D-F; 87B-D; 86E-G; 87G-H; 88A-B) D) Evidence - Affidavit of absent witness - Non-admissibility under Section 510A - Code of Criminal Procedure, 1898, Section 510A - Affidavit of V, who was in UK, could not be received as his evidence was not of formal character; however non-examination of V not sufficient to discard other prima facie evidence. Held that complaint cannot be thrown out merely because key witness not examined. (Paras 82A-H; 92C; 93B-C)
Issue of Consideration
Whether the Magistrate correctly dismissed the appellant's complaint under Section 202 CrPC for absence of prima facie case; whether the counter-complaint was barred under Section 195(1)(c) CrPC for want of complaint by court; whether investigation under Section 156(3) CrPC formed part of court proceedings for purposes of Section 195; whether originals shown to counsel during execution proceedings constituted production in court.
Final Decision
By majority (Shelat and Dua JJ.), the Supreme Court allowed the appeal relating to the appellant's complaint, holding that the Magistrate erred in dismissing it without applying the prima facie standard under Section 202 CrPC. The appeal relating to the counter-complaint was dismissed, thereby upholding the issuance of process against the appellant. Khanna J. dissented on the first point.
Law Points
- Under Section 202 CrPC
- Magistrate must ascertain truth or falsehood of complaint and cannot refuse process if evidence makes out prima facie case unless evidence self-contradictory or intrinsically untrustworthy
- investigation under Section 156(3) is by police in statutory right
- not as delegate of Magistrate
- and does not constitute court proceeding
- Section 195(1)(c) bar applies only to specified offences committed by party to proceeding in respect of document produced or given in evidence in such proceeding
- document can be produced for any purpose
- not only tendering in evidence
- copies of document produced in court
- not originals shown to counsel
- satisfy production
- affidavit of absent witness not admissible for non-formal evidence under Section 510A
