Extra Territorial Jursidiction of IPC – S.4 IPC, S188 CrPC

Supreme Court of India

Ajay Agarwal vs Union Of India And Ors on 5 May, 1993
Equivalent citations: 1993 AIR 1637, 1993 SCR (3) 543
Author: H P Ramaswarmy
Bench: Ramaswamy, K.

PETITIONER:

AJAY AGARWAL

Vs.

RESPONDENT:

UNION OF INDIA AND ORS

DATE OF JUDGMENT05/05/1993

BENCH:

RAMASWAMY, K.

BENCH:

RAMASWAMY, K.

SAHAI, R.M. (J)

CITATION:

1993 AIR 1637 1993 SCR (3) 543

1993 SCC (3) 609 JT 1993 (3) 203

1993 SCALE (2)757

ACT:

Penal Code, 1860-Sections 120A, 12OB-‘Conspiracy’-‘Criminal Conspiracy’-Definition-Ingredients-Whether conspiracy- punishable as a substantive offence and whether continuing offence-Offences in pursuant to conspiracy whether separately, punishable.

Code of Criminal Procedure 1973-Section 188-When applicable- Conspiracy hatched at Chandigarh-Part of conspiracy at Dubai-Overt acts in furtherance of such conspiracy Sanction not necessary

Code of Criminal Procedure 1973-Section 188, Proviso- Construction-Requirements under.

Code of Criminal Procedure 1973-Section 188, read with Section, 4 IPC-Offence by Indian Citizen outside India- Effect of.

Penal Code, 1860-Section 120A, 120B, 468, 471-Charged under- Conspiracy at Chandigarh-Certain overt acts in furtherance of conspiracy done at Dubai-Sanction under Section 188, Cr. P.C. not necessary-Jurisdiction of Chandigarh Court-Scope of.

Penal Code, 1860-Section 120A, 120B, 468, 471-Charged under- Conspiracy at Chandigarh-Certain Overt acts in furtherance of conspiracy done at Dubai by a NRI-Effect of

HEADNOTE:

The prosecution case was that the appellant, a non-resident Indian at Dubai, hatched a conspiracy along with four others to cheat the Bank at Chandigarh. in furtherance of the conspiracy, the appellant got credit facility by way of Foreign Letters of Credit and issued proforma invoices of his concern and addressed to the Bank through the establishments of other accused. The Manager of the Bank, another accused, in confabulation with

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the appellant and other accused, being in-charge of foreign exchange department, issued Foreign letter of Credit in violation of import policy. The Bills of Lading were addressed to the Bank. The cable confirmation of the Bank was sent to appellant’s concern at Dubai for confirmation of discrepancy. The appellant confirmed correctness thereof. Placing reliance thereon, authority letter was issued by the Bank and cables were sent subsequent thereto to remit the amount-. to the Dubai Bank through one Irving Trust Company, At the instance of accused Anand, The Dubai Bank informed the Bankat Chandigarh that the discrepancy in the document adaptable to accused Anand and claimed to have inspected the goods on board in the vessel. On receipt of the information from the appellant’s concern at Dubai, full amount is US Dollars 4,39,200 was credited against all the three Letters of Credit on discount basis.

The investigation established that the vessel was a non- existent one and three Foreign Letters of Credit were fabricated on the basis of false and forged shipping documents submitted by the appellant to the Dubai Bank. Thus the Bank at Chandigarh was cheated of an amount of Rs. 40,30,329.

The accused were charge-sheeted under section read with sections 420, 468, and 471, IPC.

The Trial Court discharged all the accused of the offenses on the ground that conspiracy and the acts done in furtherance thereof had taken place outside India and as no sanction under section 188, Code of Criminal Procedure 1973 was produced, the prosecution was not maintainable. The High Court in revision held that the conspiracy took place at Chandigarh and the overt acts committed In pursuance of that conspiracy at Dubai constituted offences under sections 420,467 and 471 IPC., and they were triable at Chandigarh without previous sanction of the Central Govt. The High Court setting aside the order of discharge of the trial Court, directed to continue further proceedings in accordance with law. That order of the High Court was challenged under this appeal under Article 136 of the Constitution.

The appellant contended that he was not a privy to the conspiracy and the conspiracy did not take place at Chandigarh; and that even assuming that some of the offences were committed in India, by operation of section 188 read with the proviso thereto with a non-obstanti clause, absence of sanction by the

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Central Govt. barred the jurisdiction of the Courts in India to take cognisance of or to enquire into or try the accused. The respondents submitted that the conspiracy to cheat the Bank was hatched at Chandigarh; that all the accused committed over acts in furtherance of the conspiracy at Chandigarh and therefore, the sanction of the Central Govt. was not necessary.

Dismissing the appeal, this Court,

HELD: Per K. Ramaswarmy, J.

1.01. Judicial power of a State extends to the punishment of all offences against the municipal laws of the State by whomsoever committed within the territory. It also has the power to punish all such offences wherever committed by its citizen. The general principle of international law is that every person be it a citizen or foreigner who is found within a foreign State is subjected to, and is punishable by, its law. Otherwise the criminal law could not be administered according to any civilised system of jurisprudence. (553F)

1.02. Conspiracy may he considered to be a march under a banner and a person may join or drop out in the march without the necessity of the change in the text on the banner. In the comity of International Law, in these days, commiting offences on international scale is a common feature. The offence of conspiracy would be a useful weapon and there would exist no contact in municipal laws and the doctrine of autrefois convict or acquit would extend to such offences. The comity of nations are duty bound to apprehend the conspirators as soon as they set their feet on the country territorial limits and nip the offence in the bud. (564-F-G)

2.01. Section 120-A of the I.P.C. defines ‘conspiracy’ to mean that when two or more persons agree to do, or cause to be done an illegal act, or an act which is not illegal by illegal means such an agreement is designated as criminal conspiracy”. No agreement except an agreement to commit an offence shall amount to a criminal conspiracy, unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof. (557-C) 546

2.02. Section 120-B of the I.P.C. prescribes punishment for criminal conspiracy. It is not necessary that each conspirator must know all the details of the scheme nor be a participant at every state. It is necessary that they should agree for design or object of the conspiracy. Conspiracy is conceived as having three elements: (1) agreement (2) between two or more persons by whom the agreement is effected; and (3) a criminal object, which may be either the ultimate aim of the agreement, or may constitute the means, or one of the means by which that aim is to be accomplished. It is immaterial whether this is found in the ultimate objects. (554-E)

2.03. Conspiracy to commit a crime itself is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment, independent of the conspiracy. (556-D)

2.04. The agreement does not come to an end with it-. making, but would endure till it is accomplished or abandoned or proved abortive. Being a continuing offence, if any acts or omissions which constitute an offence are done in India or outside its territory the conspirators continuing to be parties to the conspiracy and since part of the acts were done in India, they would obviate the need to obtain sanction of the Central Govt. All of them need not he present in India nor continue to remain in India. (556-E) 2.05. An agreement between two or more persons to do an illegal act or legal acts by illegal means is criminal conspiracy. If the agreement is not an agreement to commit an offence, it does not amount to conspiracy unless it is followed up by an overt act done by one or more persons in furtherance of the agreement. The offence is complete as soon as there is meeting of minds and unity of purpose between the conspirators to de that illegal act or legal act by illegal means. Conspiracy itself is a substantive offence and is distinct from the offence to commit which the conspiracy is entered into. It is undoubted that the general conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy. Each act constitutes separate offence punishable, independent of the conspiracy. (563-F-G) “Jones’Case, 1832 B & A-D 345; Mulcahy v. Reg., (1868) L.R. 3 H.L. 306; Quinn v. Leathem, 1901 AC 495 at 528; B.G. Barsay. v. The State of Bombay, (1962) 2 SCR 229; Yashpal v. The State of Punjab, [1977] SCR 2433; Mohammed Usman, Mohamned Hussain Manivar & Anr.v. State of Maharashtra, [1981] 3SCR 68;Noor

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Mohammad Yasuf Monin v. State of Maharashtra, [1971] 1 SCR 119; R.K. Dalmia & Anr. v. The Delhi Administration, [1963] 1 SCR 253; Shivanarayan Laxminarayan & Ors. v. State of Maharashtra & Ors. [1980] 2 SCC 465 and Lennari Schussler & Anr. v. Director of Enforcement & Anr., 1197012SCR 760, referred to.

2.06. A conspiracy is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of facts. So long as it-; performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity A crime is complete as soon as the agreement is made, but it is not a thing of the moment It does not end with the making of the agreement. It will continue so long as there are two or more parties to it intending to carry into effect the design. Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so. The conspiracy designed or agreed abroad will have the same effect as in India,. when part of the acts, pursuant to the agreement are agreed to be finalised or done, attempted or even frustrated and vice versa. (564-H, 565-A) Abdul Kader v. State. AIR 1964 Bombay 133; U.S. v. Kissal, 218 US 601; Ford v. U.S., 273 US 593 at 620 to 622; Director of Public Prosecutions v. Doot and Ors., (1973) Appeal Cases 807 (H.L); Treacy v. Director of Public Prosecutions, (1971) Appeal Cases 537 at 563 (H.L.) and Board of Trade v. Owen. (1957) Appeal Cases 602, referred to.

Prof. Williams, Glanville: “Vanue and the Ambit of Criminal Law”, [1965] L.Q.R. 518 at 528; Halsbury’s Law of England, third edition Vol. 10. page 327, Para 6O2; Archobold:Criminal pleadings. Evidence and Practice 42nd edition, [1985] Chapter 23, In para 28-32 at page 2281; Writ: Conspiracies and Agreements, at pages 73-74; Smith: Crimes, at page 239 and Russel; Crime, 12th edition, page 613, referred to.

2.07. Sanction under section 188 is not a condition precedent to take cognizance of the offence. If need be it could he obtained before trial begins. Conspiracy was initially hatcher at Chandigarh and though its-elf is a completed offence, being continuing offence, even accepting appellant’s case that he was at Dubai and part of conspiracy and overt acts in furtherance

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thereof had taken place at Dubai and partly at Chandigar and in consequence thereof other offences had been ensued. Since the offences have been committed during the continuing course of transaction culminates in cheating P.N.B. at Chandigarh, the need to obtain sanction for various officer under proviso to s. 188 is obviated. Therefore, there is no need to obtain sanction from Central Govt. The case may he different if the offences were committed out side India and are completed in themselves without conspiracy. (566-D-E) K. Satwant Singh v. The State of Punjab, [1960] 2 SCR 89; In Re M. L Verghese, AIR 1947 Mad. 352; T. Fakhulla Khan and Ors. v. Emperor, AIR 1935 Mad. 326; Kailash Sharma v. State, 1973 Crl. law journal 1021, distinguished. Purshottamdas Dalmia v. State of Bengal, [1962] 2 SCR 101; L.N. Mukherjee v. The State of Madras, [1962] 2 SCR 116; R.K. Dalmia v. Delhi Administration [1963] 1 SCR 253 at 273; Banwari Lal Jhunjhunwala and Ors v. Union of India and Anr., [1963] Supp. 2 SCR 338, referred to.

Per R.M. Sahai, J. (Concurring)

1.1. Language of the section 188, Code of Criminal Procedure is plain and simple. It operates where an offence is committed by a citizen of India outside the country. Requirements are, therefore, one–commission of an offence; second-by an Indian citizen; and third-that it should have been committed outside the country. (567-D) 1.2. Substantive law of extra-territory in respect of criminal offences is provided for by Section 4 of the IPC and the procedure to inquire and try it is contained in Section 1 88 Cr. P.C. Effect of these sections is that an offence committed by an Indian citizen outside the country is deemed to have been committed in India. (567-E) 1.3. Since the proviso to Section 188, Cr.P.C. begin-. with a non obstinate clause its observance is mandatory. But it would come into play only if the principal clause is applicable, namely, it is established that an offence as defined in dause ‘n’of Section 2 of the Cr.P.C. has been committed and it has been committed outside the country. (567-G)

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1.4. What has to be examined at this stage is if the claim of the appellant that the offence under Section 120B read with Section 420 and Section 471 of the IPC were committed outside the country. An offence is deemed in the Cr.P.C. to mean an Act or omission made punishable by any law for the time being in force. None of the offences for which the appellant has been charged has residence as one of its ingredients. (567-H, 568-A)

1.5. The-jurisdiction to inquire or try vests under Section 177 in the Court in whose local jurisdiction the offence is committed. It is thus the commission of offence and not the residence of the accused which is decisive of jurisdiction. When two or more persons agree to do or cause to be done an illegal act or an act which is illegal by illegal means such agreement is designated a criminal conspiracy under Section 120A of the IPC. The ingredients of the offence is agreement and not the residence. Meeting of minds of more than two persons is the primary requirement Even if it is assumed that the appellant was at Dubai and he entered into an agreement with his counterpart sifting in India to do an illegal act in India the offence of conspiracy came into being when agreement was reached between the two. The two minds met when talks oral or in writing took place in India. Therefore, the offence of conspiracy cannot be said to have been committed outside the country. (568-B-C) 1.6. If a foreign national is amenable to jurisdiction under Section 179 of the Cr.P.C. a NRI cannot claim that the offence shall be deemed to have been committed outside the country merely because he was not physically present (568-F) Mobarik Ali Ahmed v. The State of Bombay, AIR 1957 SC 857, referred to.

1.7. An offence is committed when all the ingredients are satisfied. The section having used the word ‘offence’ it cannot be understood as part of the offence. Section 179 Cr.P.C. empowers a court to try an offence either at a place where the offence is committed or the consequences ensue. On the allegations in the complaint the act or omissions were committed in India. In any case the consequence of conspiracy, cheating and forging having taken place at Chandigarh the offence was not committed outside the country therefore the provisions of Sec. 188 Cr. P.C. were not attracted. (569-B)

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JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No’400 of 1993.

From the Judgment land order dated 3.6. 1992 of the Punjab and Haryana High Court in Criminal Revision No. 443 of 1990. P. Chadambaram, Mukul Rohtagi, Ms. Bina Gupta and Ms. Monika Mohil for the Appellants.

N.N. Goswamy, Y.D. Mahajan and N.D. Garg for the Respondent. The Judgments of the Court were delivered by K. RAMASWAMYJ: Special leave granted.

The appellant, accused No. 2 in p.Ch. (CBI) No. 40/2, dated February 18, 1985, F.I.R. No. RC No. 2 to 4/1983 dated March 4,1983 and P.S. SPE/CBI/CTU (E) I/New Delhi, Dist. Delhi and four other namely, V.P. Anand, Baldev Raj Sharma, Bansi La] and Ranjit KumarMarwah are accused in the said case. It is the prosecution case that the accused hatched a conspiracy at Chandigarh to cheat Punjab National Bank for short’PNB ‘. In furtherance thereof V.P. Anand floated three New Link Enterprises and M/s. Moonlight Industries in the name of Baldev Raj Sharms, his employee and M/s. Guru Nanak Industries in the name of Bansi Lal, yet another employee. He opened current accounts in their respective names in the P.N.B. at Chandigarh. In furtherance of the conspiracy and in confabulation with V.P. Anand, the appellant, Ajay Aggarwal, a non-resident Indian at Dubai who is running M/s. Sales International, Dubai, agreed to and got credit facility by way of Foreign Letters of Credit Nos. 4069-p, 4070-p and 4084-p, issued proforma invoices of the said concern and addresses to PNB through Guru Nanak Industries and New Link Enterprises. Ranjit Marwah, the 5th accused, Manager of P.N.B., In-charge, of foreign exchange department confabulated with the accused, issued Foreign Letter of Credit in violation of import policy. The Bills of Lading were addressed to PNB at Chandigarh.The cable confirmation of P.N.B. was sent to M/ s Sales International by P.N.B., Chandigarh for confirmation of discrepancy. The appellant had confirmed correctness thereof in the name of V.P. Anand. Placing reliance thereon authority letter was issued by P.N.B., Chandigarh and cables were sent subsequent thereto to remit the amounts to Emirates National Bank Ltd. through Irving Trust Company. V.P. Anand was present on September 16, 1981 at Dubai and at his instance the Emirats National Bank, Dubai informed the

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P.N.B., Chandigarh that the discrepancy in the document adeptable to V.P. Anand and claimed to have inspected the goods on board in vessel, M.V. Atefeh. On receipt of the information from the Sales International, Dubai, full amount in US Dollars 4, 39,200 was credited against all the three Letters of Credit on discount basis. During investigation it was found that Vessel M.V. Atefeh was a nonexistent one and three Foreicn Letters of Credit were fabricated on the basis of false and forged shipping documents submitted by the appellant, Ajay Aggarwal to the Emirates National Bank, Dubai. Thus the P.N. B. was cheated of an amount of Rs. 40,30,329. Accordingly charge sheet was laid against the appellant. and others for offences punishable under sections 120B read with Sections 420 (Cheating), 468 (Forgery) and 471 using as genuine (Forged documents), I.P.C. The Chief Judicial Magistrate, Chandigarh by his order dated January 11, 1990 discharged all, the accused of the offences on the ground that conspiracy and the acts done in furtherance thereof had taken place outside India and, therefore the sanction under section 188 Criminal Procedure Code, 1973 for short the ‘Code’ is mandatory. Since no such sanction was produced the prosecution is not maintainable. On revision, the High Court of Punjab and Haryana in Criminal Revision No. 443 of 1990 by order dated June 3, 1992 held, that the conspiracy had taken place at Chandigarh. The overt acts committed in pursuance of that conspiracy at Dubai constituted offences under sections 420, 467 and 471, I.P.C., are all triable at Chandigarh without previous sanction of the central Govt. The order of discharge, therefore, was set aside and the appellant and other accused were directed to be present through their counsel in person in the Trial Court on July 17,1992 to enable the court to take further proceedings in accordance with law. This appeal has been filed by the appellant alone under Art. 136 of the constitution.

Sri Chidambaram, learned Senior counsel contended that the appellant was not a privy to the conspiracy. He was an N.I.R. businessman at Dubai. He never visited Chandigarh. Even assuming for the sake of argument that conspiracy had taken place and all act committed in furtherance thereof were also at Dubai. The transaction through, bank is only bank to bank transaction. Even assuming that some of the offences were committed in India since as per the prosecution case itself that part of the conspiracy and related offences were committed at Dubai, by operation of Section 188 read with the proviso thereto with a non- obstanti clause, absence of sanction by the Central Govt. knocks of the bottom of the jurisdiction of the courts in India to take cognisance of or to enquire into of try the accused. He placed strong reliance on 1. Fakhrulla khan and Ors. v. Emperor AIR 1935 Mad. 326, In re M.L. Verghese AIR 1947 MAD. 352, kailash Sharma v. State [1973] Crl. Law Journal 1021 and K. Satwant Singh v. State of Punjab [1960] 2 SCR 89. Sri Goswami, the learned senior counsel for the respondents contended that the conspiracy to cheat. PNB was hatched at Chandigarh. All the accused committed 552

overt acts in furtherance. All the accused committed overt acts in furtherance on the conspiracy at Chandigarh and, therefore, the sanction of the Central Govt. is not necessary. The High Court had rightly recorded those findings. There is no need to obtain sanction under s. 188 of the Code.

The diverse contentions give rise to the primary question whether the sanction of the Central Govt. as required under proviso to s. 188 of the Code is necessary. Section 188 of the Code reads thus

“Offence committed outside India-when an offence is committed outside India -

(a) by a citizen of India, whether on the high seas or elsewhere; or

(b) by a person, not being such citizen, on any ship or aircraft registered in India, he may be dealt with in respect of such offence asif it had been committed at any place within India at which he may be found:

Provided that, notwithstanding anything in any of the preceding sections of this Chapter, no such offence shall be inquired into or tried in India except. with the previous sanction of the Central Government”.

Section 3, IPC prescribes punishment of offences committed beyond, but which by law may be tried with, India, It provided that any person liable, by any Indian law, to be tried for an offence committed beyond India shall be dealt with according to the provisions of this Code for any act committed beyond India in the same manner as if such act had been committed within India. Section 4 extends its territorial operation postulating that IPC shall apply to any offence committed by-

(1) any citizen of India in any place without any beyond India;

(2) any person on any ship or aircraft registered in India wherever it may be.

Explanation-in this section the word offence’ includes every act committed outside India which, if committed in India, would be punishable under this Code.. 553

Illustration-A, who is a citizen of India, commits a Murder in Uganda. He can be tried and convicted of murder in any place in India in which he may be found.

The Code of Criminal Procedure extends to whole of India except the State of Jammu & Kashmir and except chapters 8, 10 and 11, the other provisions of the Code shall not apply to the State of Nagaland and to the tribal area. However, the State Govt. has been empowered, by a notification, to apply all other provisions of the Code or any of them to the whole or part of the State of Nagaland and such other tribal areas, with supplemental, incidental or consequential modifications, as may be specified in the notification. Therefore, the Code also has territorial operation. The Code is to consolidate and amend the law relating to criminal procedure. Section 188 was suitably amended pursuant to the recommendation made by the Law Commission. Chapter VIII deals with jurisdiction of the courts in inquiries and trials. Section 177 postulates that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed but exceptions have been engrafted in subsequent sections in the Chapter. Section 179 provides venue for trial or enquiry at the place where the act is done or consequences ensued. So inquiry or trial may be had by a Court within whose local jurisdiction such thing has been done or such consequence has ensued. Section 188 by fiction dealt offences conumitted by a citizen of India or a foreigner outside India or on high seas or elsewhere or on any ship or aircraft registered in India. Such person was directed to be dealt with, in respect of such offences, as if be had committed at any place within India at which he may be found. But the proviso thereto puts and embargo that notwithstanding anything in any of the preceding sections of this Chapter have been done such offences shall not be inquired into or tried in India except with the previous sanction of the Central Govt.

Judicial power of a State extends to the punishment of all offences against the municipal laws of the State by whomsoever committed within the territory. It also has the power to punish all such offences wherever committed by its citizen. The general principle of international law is that every person be it a citizen or foreigner who is found within a foreign State is subjected to, and is punishable by, its law. Otherwise the criminal law could not be administered according to any civilised system of jurisprudence. Sections 177 to 186 deal with the venue or the place of the enquiry or trial of crimes. Section 177 reiterates the well-established common law rule that the proper and ordinary situs for the trial of a crime is the area of jurisdiction in which the acts occurred and are alleged to constitute the crime. But this rule is subject to several well-recognised exceptions and some of those exceptions have been engrafted in subsequent sections in the chapter of the Code.

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Therefore, the provisions in Chapter VIII are elastic and not peremptory. In consequence there- with Sections 218 to 223 of the code would also deal with exceptions engrafted in the Code. Therefore, they do permit enquiry or trial of a particular offence along with other offences at a common trial in one court so that the court having jurisdiction to try an offence gets jurisdiction to try other offence committed or consequences thereof has ensued. The procedure is hand maid to substantive justice, namely, to bring the offenders to justice to meet out punishment under IPC or special law as the case may be, in accordance with the procedure prescribed under the Code or special procedure under that Act constituting the offence.

The question is whether prior sanction of the Central Govt. Is necessary for the offence of ‘conspiracy under proviso to s. 188 of the Code to take cognizance of an offence punishable under s. 120-B etc. I.P.C. or to proceed with trial. In Chapter VA, conspiracy was brought on statute by the Amendment Act, 1913 (8 of 1913). Section 120-A of the I.P.C. defines ‘conspiracy’ to mean that when two or more persons agree to do, or cause to be done an ilegal act, or an act which is not illegal by illegal means such an agreement is designated as “criminal conspiracy”. No agreement except an agreement to commit an offence shall amount to a criminal conspiracy, unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof. Section 120-B of the I.P.C. prescribes punishment for criminal conspiracy. It is not necessary that each conspirator must know all the details or the scheme nor be a participant at every stage. It is necessary that they should agree for design or object of the conspiracy. Conspiracy is conceived as having three elements: (1) agreement (2) between two or more persons by whom the agreement is effected-, and (3) a criminal object, which may be either the ultimate aim of the agreement, or may constitute the means, or one of the means by which that aim is to be accomplished. It is immaterial whether this is found in the ultimate objects. The common law definition of criminal conspiracy was stated first by Lord Denman in jones case (1832 B & A D 345) that an indictment for conspiracy must “charge a conspiracy to do an unlawful act by unlawful means” and was elaborated by Willies, J. on behalf of the judges while referring the question to the House of Lords in Mulcahy v. Reg [1868] L.R. 3 H.L. 306 and the House of Lords in unanimous decision reiterated in Quinn v. Leathem (1901 AC 495 at 528) as under:

A conspiracy consists not merely in the intention of two or more, but in the agreement. of two or more to do ,in unlawful act, or to do a lawful act by unlawful means. So long as such a design rests in intention only it is not indictable, When two agree to carry it into

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effect, the very plot is an act in itself, and the act of each of the parties, promise against promise, actus contra actum, capable of being enforced, if lawful, punishable of for a criminal object or for the use of criminal means”.

This Court in B. G. Barsay v. The State of Bombay [1962] 2 SCR at 229, held

“The (list of the offence is an agreement to break the law. The parties to such an agreement will be guilty of criminal conspiracy, though the illegal act agreed to be done has not been done. So too, it is an ingredient of the offence that all the parties should agree to do a single illegal act. It may comprise the commission of a number of acts. Under section 43 of the Indian Penal Code, an act would be illegal if fit is an offence or if it is prohibited by law”.

In Yashpal v. State of Punjab [1977] SCR 2433 the rule was laid as follows

“The very agreement, concert or league is the ingredient of the offence. It is not necessary that all the conspirators must know each and every detail of the conspiracy as long as they are co-participators in the main object of the conspiracy. There may be so many devices and techniques adopted to achieve the common goal of the conspiracy and there may be division of performances in the chain of actions with one object to achieve the real end of which every collaborator must be aware and in which each one of them must be interested. There must be unity of object or purpose but there may be plurality of means sometimes even unknown to one another, amongst the conspirators. In achieving the goal several offences may be committed by some of the conspirators even unknown to the others. The only relevant factor is that all means adopted and illegal acts done must be and purported to be in furtherance of the object of the conspiracy even though there may be sometimes misfire or over-shooting by some of the conspirators”.

In Mohammed Usman. Mohammad Hussain Manivar & Anr. v. State of Maharashtra [1981] 3 SCR 68, it was held that for an offence under section 120B IPC, the prosecution need not necessarily prove that the conspirators expressly 556

agreed to do or cause to be done the illegal act. the agreement may be proved by necessary implication. In Noor Mohammed Yusuf Momin v. State of Maharashtra [1971] 1 SCR 119, it was held that s. 120-B IPC makes the criminal conspiracy as a substantive offence which offence postulates an agreement between two or more persons to do or cause to be done an act by illegal means. If the offence itself is to commit an offence, no further steps are needed to be proved to carry the agreement into effect. In R. K. Dalmia & Anr. v. The Delhi Administration It 963] 1 SCR 253, it was further held that it is not necessary that each member of a conspiracy must know all the details of the conspiracy. In Shivanarayan Laxminarayan & Ors. State of Mahrashtra & Ors. [1980] 2 SCC 465, this court emphasized that a conspiracy is always hatched in secrecy and it is impossible to adduce direct evidence of the same. The offence can be only proved largely from the inferences drawn from acts or illegal omission committed by the conspirators in pursuance of a common design.

The question then is whether conspiracy is continuing offence. Conspiracy to commit crime it self is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment, independent of the conspiracy. Yet, in our considered view, the agreement does not come to an end with its making, but would endure till it is accomplished or abandoned or proved abortive. Being a continuing offence, if any acts or omissions which constitutes-an offence, are done in India or outside its territory the conspirators continuing to be parties to the conspiracy and since part of the acts were done in India, they would obviate the need to obtain sanction of the Central Govt. all of them need not be present in India nor continue to remain in India. In lennart Schussler- & Anr. v. Director of Enforcement & Anr. [1970] 2 SCR 760, a Constitution Bench of this Court was to consider the question of conspiracy in the setting of the facts, stated thus

“A. 2 was the Managing Director of the Rayala Corporation Ltd. Which manufactures Halda Typewriters. A. 1 was an Export Manager of ASSAB. A. 1 and A.2 conspired that A.2 would purchase material on behalf of his Company from ASSAB instead of M/s Atvidaberos, which provided raw material. A.2 was to over- invoice the value of the goods by 40 per cent of true value and that he should be paid the difference of 40 per cent on account of the aforesaid over-invoicing by crediting it to A.2’s personal account at Stockholm in a Swedish Bank and requested A. 1 to help him in opening the account in Swenska Handles Banken, Sweden and to have further

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deposits to his personal account from ASSAB. A. 1 agreed to act as requested by A.2 and A.2 made arrangements with ASSAB to intimate to A. 1 the various amounts credited to A.2’s account and asked A. 1 to keep a watch over the correctness of the account and’ to further intimate to him the account position from time to time through unofficial channels and whenever A. 1 come to India. A. 1 agreed to comply with this request. This agreement was entered into between the parties in the year 1963 at Stockholm and again in Madras in the year 1965. The question was whether Sec. 120- B of the Indian Penal Code was attracted to these facts”.

Per majority, Jaganmohan Reddy, J. held that the gist of the offence defined in s. 120-A IPC, which is itself punishable as a substantive offence is the very agreement between two or more persons to do or cause to be done an illegal act or legal act by illegal means, subject, however, to the proviso that where the agreement is not an agreement to commit an offence, the agreement does not amount to a conspiracy unless it is followed up by an overt act done by one or more persons in pursuance of such an agreement. There must be a meeting of minds in the doing of the illegal act or the doing of a legal act by illegal means. If. in furtherance of the conspiracy, certain persons are induced to do an unlawful act without the knowledge of the conspiracy or the plot they cannot be held to be conspirators, though they may be guilty of an offence pertaining to the specific unlawful act. The offence of conspiracy is complete when two or more conspirators have agreed to do or cause to be done an act which is itself an offence, in which case no overt act need be established. It was contended in that regard that several acts which constitute to make an offence under s. 120-B may be split up in parts and the criminal liability of A. 1 must only be judged with regard to the part played by him. He merely agreed to help A.2 to open an account in the Swedish Bank, having the amounts lying to the credit of A.2 with Atvidaberg to that account and to help A.2 by keeping a watch over the account. Therefore, it does not amount to a criminal conspiracy. While negating the argument, this court held thus:

“It appears to us that this is not a justifiable contention, because what has to be seen is whether the agreement between A. 1 and A.2 is a conspiracy to do or continue to do something which is illegal and, if it is, it is immaterial whether the agreement to do any of the acts in furtherance of the commission of the offence do not strictly amount to an offence. the entire agreement must be viewed as a whole and it has to be ascertained as to what in fact the conspirators intended to do or the object they wanted to achieve”.

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Thus, this court, though not in the context of jurisdictional issue, held that the agreement not illegal at its inception would become illegal by subsequent conduct and an agreement to do an illegal act or to do a legal act by illegal means, must be viewed as a whole and not in isolation. It was also implied that the agreement shall continuing- till the object is achieved. The agreement does not get terminated by merely entering into an agreement but it continues to subsist till the object is either achieved or terminated or abandoned.

In Abdul Kader v. State AIR 1964 Bombay 133, a conspiracy was formed in South Africa by appellants to cheat persons by dishonestly inducing them to deliver money in the Indian currency by using forced documents and the acts of cheating were committed in India. When the accused were charged with the offence of conspiracy, it was contended that the conspiracy was entered into and was completed in South Africa and, therefore, the Indian Courts had no jurisdiction to try the accused for the offence of conspiracy. The Division Bench held that though the conspiracy was entered in a foreign country and was completed as soon as the agreement was made, yet it was treated to be a continuous offence and the persons continued to be parties to the conspiracy when they committed acts in India. Accordingly, it was held that the Indian Courts had jurisdiction to try the offence of conspiracy. In U.S. v. Kissal 218 US 601, Holmes, J. held that conspiracy is a continuous offence and stated “is a perversion of natural thought and of natural language to call such continuous co-operation of a cinema to graphic series of distinct conspiracies rather than to call it a single one… a conspiracy is a partnership in criminal purposes. That as such it may have continuation in time. is shown by the rule that overt act by one partner may be the act of all without any new agreement specifically directed to that act”. In Ford v. U. S. 273 US 593 at 620 to 622, Tuft, C.J. held that conspiracy is a continuing offence. In Director of public Prosecutions v. Door and Ors. 1973 Appeal Cases 807 (H.L.), the five respondents hatched a plan abroad, i.e. Belgium and Morocco and worked out the details to import cannabis into the United States via England, In pursuance thereof two vans with cannabis concealed in them were shipped from Morocco to Southampton; the other van was traced at Liverspool, from where the vans were to have been shipped to America and the cannabis in it was found. They were charged among other offences with conspiracy to import dangerous drugs. At the trial, the respondents contended that the Courts in England had no jurisdiction to try them on the count of conspiracy since the conspiracy had been entered into abroad. While rejecting the contention, Lord Wilberforce held (at page 817)

“The present case involves international elements the accused are

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aliens and the conspiracy was initiated abroad but there can be no question here of any breach of any rules of international law if the) are prosecuted in this country. Under the objective territorial principle ( use the terminology of the Harward Research in Inter- national Law) or the principle of University (For the prevention of the trade in narcotics falls within this description)or both, the courts of this country have a clear right, if not a duty, to prosecute in accordance with our municipal law. The position as it is under the international law it not, however, determinative of the question whether, unde r

our municipal law, the acts committed amount to a crime. That has to be decided on different principles. If conspiracy to import drugs were a statutory offence, the question whether foreign conspiracies were included would be decided upon the terms of the statute. Since it is (if at all) a common law offence, this question must be decided upon principle and authority- In my opinion, the key to a decision for or against the offence charged can be found in an answer to the question why the common law treats certain actions as crimes. And one answer must certainly be because the actions in question are a threat to the Queen’s peace or as we would now perhaps say, to society. Judged by this test, there is every reason for, and none that I can see against, the prosecution. Con- spiracies are intended to be carried into effect, and one reason why, in addition to individual prosecution of each participant, conspiracy charges are brought is because criminal action organised and executed, in concert is more dangerous than an individual breach of law. Why, then, restrain from prosecution where the relevant concert was, initially, formed outside the United Kingoom?…The truth is that, in the normal case of a conspiracy carried out, or partly carried out, in this country, the location of the formation of the agreement is irrelevant; the attack upon the laws of this country is identical wherever the conspirators happened to commit; the “conspiracy” is a complex formed indeed, but not separately completed, at the first meeting of the plotters”.

Viscount Dilhorne at page 823 laid the rule that:

“a conspiracy does not end with the making of the agreement. It will continue so long as there are two or more parties to it intending to carry out the design. It would be highly unreal to say that the conspiracy to carry out the Gunpower plot was completed when the conspirators met and agreed to the plot at Catesby”.

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in my view, be considered contrary to the rules of international comity for the forces of law and order in England to protect the Queen’s peace by arresting them and putting them in trial for conspiracy whether they are British subjects or foreigners and whether or not conspiracy is a crime under the law of the country in which the conspiracy was born”. At page 835 it was held that the respondents conspired together in England notwithstanding the fact that they were abroad when they entered into the agreement which was the essence of the conspiracy. That agreement was and remained a continuing agreement and they continued to conspire until the offence they were conspiring to commit was in fact committed. Accordingly, it was held that the conspiracy, though entered into abroad, was committed in England and the courts in England and jurisdiction. The ratio emphasizes that acts done in furtherance of continuing conspiracy constitute part of the cause of action and performance of it gives jurisdiction for English Courts to try the accused. In Trecy v. Director of Public Prosecutions 1971 Appeal Cases 537 at 563 to ,(H. L.). the facts of the case were that the appellant therein posted in the Isle of Wright a letter written by him and addressed to Mrs. X in West Germany demanding money with menaces. The letter was received by Mrs. X in West Germany.The appellant was charged with black mail indictable s. 21 of the Theft Act, 1968. While denying the offence, it was contended that the courts in England were devoted of jurisdiction. Over-ruling the said objection, Lord Diplock at page 562 observed: “The State is under a correlative duty to those who owe obedience to its laws to protect their interests and one of the purposes of criminal law is to afford such protection by determining by threat of punishment conducted by other persons which is calculated to hand to those interests. Comity gives no right to a State to insist that any person may with immunity do physical acts in its own territory which have harmful consequences to persons within the territory of another state. It may be under no obligation in comity to punish those acts itself, but it has no ground from complaint in international law if the State in which the harmful consequences had their effect punishes, when they do enter its territories, persons who did such acts”.

Prof. Williams, Glanville in his article “Venue and the Ambit of Criminal Law [1965] L.Q.R. 518 at 528 stated thus: 562

“Sometimes the problem of determining the place of the crime is assisted by the doctrine of the continuing crime. Some crimes are regarded as being of a continuing nature, and they may accordingly be prosecuted in any jurisdiction in which they are partly committed the partial commission being, in the eye of the law, a total commission’.

In the context of conspiracy under the caption inchoate crimes” It was stated:

“The general principle seems to be that jurisdiction over an inchoate crime appertains to the State that would have had jurisdiction had the crime been consummated”.

Commenting upon the ratio laid down in Board of Trade v. Owen [1957] Appeal Cases 602, he stated at page 534 thus “The seems to follow owen as logical corollary that our courts will assume jurisdiction to punish a conspiracy entered into abroad to commit a crime here. Although the general principle is that crime committed abroad do not become punishable here merely because their evil effects occur here, there may be an exception for inchoate crimes aimed against persons in this country. Since conspiracy is the widest and vaguest of the inchoate crimes, it seems clearly that the rule for conspiracy must apply to more limited crimes of incitement and attempt also”.

At page 535 he further stated that “the rule of inchoate crimes is therefore an exception from the general principle of territorial jurisdiction. The crime is wholly committed in the State A, yet is justiciable also in State B”. At page 535 he elucidated that “certain exceptions are recognised or suggested”. Lord Tucker in own’s case (supra) illustrated that a conspiracy D 2 England to violate the laws of a foreign country might be justiciable here if the preferments the conspiracy charged would produce a public mischief within the State or injure a person here by causing him damage, abroad”. At page 536 be stated that “as another exception from the rule in Board of, Trade v. Owen (supra it seems from the earlier decision that a conspiracy entered into here will be punishable if the conspirators contem- plates that the illegality may be performed either within British jurisdiction or abroad even though, in the event, the illegality is performed abroad”. His statement of law now receives acceptance by House of Lords in Doot’s case. 563

In Halsbury’s Law of England, third edition, vol. 10, page 327, para 602, while dealing with continuing offence it was stated as under:

“A criminal enterprise may consist of continuing act which is done in more places than one or of a series of acts which are done in several places. In such cases, though there is one criminal enterprise, there may be several crimes, and a crime is committed in each place where a complete criminal act is performed although the act may be only a part of the enterprise”.

It was further elucidated in para 603 that: “What constitutes a complete criminal act is determined by the nature of the crime. Thus, as regards continuing acts, in the case of sending by post or otherwise a libellous or threatening letter, or a letter to provoke a breach of the peace, a crime is committed, both where the letter is posted or otherwise sent, and also where it is received, and the venue may be laid in either place.

Archbold in Criminal Pleadings, Evidence and Practice, 42nd edition (1985) Chapter 23, in para 28-32 at p. 2281, Wright on Conspiracies and Agreements at pages 73-74, Smith on Crimes at page 239 and Russel on Crime, 12th edition, page 613 stated that conspiracy is a continuing offence and liable to prosecution at the place of making the agreement and also in the country where the acts are committed. Thus, an agreement between two or more persons to do an illegal act or legal acts by illegal means is criminal conspiracy. If the agreement is not an agreement to commit an offence, it does not amount to conspiracy unless it is followed up by an overt act done by one or more persons in furtherance of the agreement. The offence is complete as soon as there is meeting of minds and unity of purpose between the conspirators to do that illegal act or legal act by illegal means. Conspiracy itself is a substantive offence and is distinct from the offence to commit which the conspiracy is entered into. It is undoubted that the general conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy. Each act constitutes separate offence punishable, independent of the conspiracy. The law had developed several or different models or technics to broach the scope of conspiracy. One such model is that of a chain, where each party performs even without knowledge of other a role that aids succeeding parties in accomplishing the criminal objectives of the conspiracy. An illustration, of a single conspiracy, its parts bound together as links in a chain, is

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the process of procuring and distributing narcotics or an illegal foreign drug for sale in different parts of the (,lobe. In such a case, smugglers, middlemen and retailers are privies to a single conspiracy to smuggle and distribute narcotics. The smugglers knew that the middlemen must sell to retailers-, and the retailers knew that the middlemen must buy of importers of someone or another. Thus the conspirators at one end of the chain knew that the unlawful business would not, and could not, stop with their buyers, and those at the other end knew that it had not begun with their settlers. The accused embarked upon a venture in all parts of which each was a participant and an abettor in the sense that, the success of the part with which he was immediately concerned, was dependent upon the success of the whole. It should also be considered as a spoke in the hub. There is a rim to bind all the spokes to gather in a single conspiracy. It is not material that a rim is found only when there is proof that each spoke was aware of one another’s existence but that all promoted in furtherance of some single illegal objective. The traditional concept of single agreement can also accommodate the situation where a well defined group conspires to commit multiple crimes so long as all these crimes are the objects of the same agreement or continuous conspiratorial relationship, and the conspiracy continues to subsist though it was entered in the first instance. Take for instance that three persons hatched a conspiracy in country ‘A’ to kill ‘D’ in country ‘B’ with explosive substance. As far as conspiracy is concerned, it is complete in country ‘A’ one of them pursuant thereto carried the explosive substance and hands it over to third one in the country ‘B’ who implants at a place where ‘D’ frequents and got exploded with remote control. ‘D’ may be killed or escape or may be diffused. The conspiracy continues-till it is executed in country ‘B’ or frustrated. Therefore, it is a continuing act and all are liable for conspiracy in country ‘B’ though first two are liable to murder with aid of s. 120-B and the last one is liable under s. 302 or 307 IPC, as the case may be. Conspiracy may be considered to be a march under a banner and a person may join or drop out in the march without the necessity of the change in the text on the banner. In the comity of International Law, in these days, committing offences on international scale is a common feature. The offence of conspiracy would be a useful weapon and there would exist no conflict in municipal laws and the doctrine of autrefoes convict or acquit would extend to such offences. The comity of nations are duty bound to apprehend the conspirators as soon as they set their feet on the country territorial limits and nip the offence in the bud. A conspiracy thus, is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of acts. So long aits performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity. A crime is complete as soon as the agreement is made, but it is not a thing of the moment. It does not end with the making of the 565

agreement. It will continue so long as there are two or more parties to it intending to carry into effect the design. Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so. The conspiracy designed or agreed abroad will have the same effect as in India, when part of the acts, pursuant to the agreement are agreed to be finalised or done, attempted or even frustrated and vice versa.

In K. Satwant Singh v. The State of Punjab [1960] 2 SCR 89, a Constitution Bench of this Court was to consider as to when s. 188 of the Code would be applicable to a case. The facts therein was that the appellant had cheated the Govt. of Burma whose office was at Shimla punishable under s. 420 IPC. The accused contended that the part of the act was done at Kohlapur where payment was to be made and on that basis the court at Shimla had no jurisdiction to try the offence without prior sanction of the political agent. Considering that question this court held that if the offence of cheating was committed outside British India, the sanction would be necessary but on facts it was held that: “It seems to us, on the facts established in this case, that no part of the offence of cheating was committed by the appellant outside British India. His false representation to the Govt. of Burma that money was due to him was at a place in British India which induced that govt. to order payment of his claims. In fact, he was paid at Lahore at his own request by means of cheques on the Branch of the Imperial Bank of India at Lahore. The delivery of the property of the Govt. of Burma, namely, the money, was made at Lahore, a place in Brithsh India, an d

we cannot regard, in the circumstances of the present case, the posting of the cheques at Kohlapur either as delivery of property to the appellant at Kohlapur or payment of his claims at Kohlapur. The entire argument founded on the provisions of S. 188 of the Code, therefore, fails.

Far from helping the appellant the ratio establishes that if an offence was committed in India the need to obtain sanction under section 188 is obviated. In Purshottamdas Dalmia v. Stale of West Bengal [1962] 2 SCR 101, this court, when the appellant was charged with offences punishable under ss. 120B, 466 and 477, the appellant contended that offence of conspiracy was entered into at Calcutta the offences of using the forged documents was committed at Madras. Therefore, the court at Calcutta had no jurisdiction to try the offence under s. 471 read with s. 466, EPC, even though committed in pursuance of the conspiracy and in course of the same transaction. This court held that the desirability of trying the offences of alit

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he overt acts committed in pursuance of a conspiracy together is obvious and ss. 177 and 239 of the Code leave no manner of doubt that the court which has the jurisdiction to try the offence of criminal conspiracy has also the jurisdiction to try all the overt acts committed in pursuance of it even though outside its territorial jurisdiction. In LN. Mukherjee v. The State of Madras [1962] 2 SCR 116, it was further held that the court having jurisdiction to try the offences committed in pursuance of the conspiracy, has also the jurisdiction to try the offence of criminal conspiracy, even though it was committed outside its territorial jurisdiction. This view was further reiterated in R.K. Dalmia v. Delhi Administration [1963] 1 SCR 253 at 273 and Banwari Lal Jhunjhunwala and Ors. v. Union of India and Anr. 1963] supp. 2 SCR 338. Therein it was held that the court trying an accused for offence of conspiracy is competent to try him for offences committed in pursuance of that conspiracy irrespective of the fact whether or not overt acts have been committed within its territorial jurisdiction. The charges framed therein under s. 409 read with ss. 120B, 420, IPC and s. 5(1) (D) read with s. 5(2) of the Prevention of Corruption Act were upheld.

Thus we hold that sanction under section 188 is not a condition precedent to take cognizance of the offence. If need be it could be obtained before trial begins. Conspiracy was initially hatched at Chandigarh and though itself is a completed offence, being continuing offence, even accepting appellant’s case that he was at Dubai and part of conspiracy and overt acts in furtherance thereof had taken place at Dubai and partly at Chandigarh; and in consequence thereof other offences had been ensued. Since the. offences have been committed during the continuing course of transaction culminated in cheating P.N.B. at Chandigarh, the need to obtain sanction for various offences under proviso to s. 188 is obviated.Therefore, there is no need to obtain sanction from Central Govt. The case may be different if the offences were committed out side India and are completed in themselves without conspiracy. Perhaps that question may be different for which we express no opinion on the facts of this case. The ratio in Fakhruila Khan has no application to the facts in this case. Therein the accused were charged for offences under s. 420, 419, 467 and 468 and the offences were committed in native State, Mysore. As a result the courts in British India i.e. Madras province had no jurisdiction to try the offence without prior sanction. Equally in Verghese’s case the offences charged under s. 409, IPC had also, been taken place outside British India. Therefore, it was held that the sanction under s, 188 was necessary. The ratio in Kailash Sharma’s case is not good at law. The appeal is accordingly dismissed.

R.M. SAHAI J. While agreeing with Brother Ramaswamy, J., I propose to add a few words. Prosecution of the appellant under Section 120B read with Section 420 and 471 of the Indian Penal Code (in brief ‘IPC’) was assailed for 567

absence of sanction under Section 188 of the Criminal Procedure Code (in brief ‘Cr. P. C.’). Two submissions were advanced, one that even though criminal conspiracy was itself an offence but if another offence was committed in pursuance of it outside India then sanction was necessary; second-an offence is constituted of a number of ingredients and even if one of them was committed outside the country Section 188 of the Cr. P.C. was attracted. Language of the section is plain and simple. It operates where an offence is committed by a citizen of India outside the country. Requirements are, therefore, one-commission of an offence; second by an Indian citizen; and third-that it should have been committed outside the country. Out of the three there is no dispute that the appellant is an Indian citizen. But so far the other two are concerned the allegations in the complaint are that the conspiracy to forge and cheat the bank was hatched by the appellant and others in India. Whether it was so or not, cannot be gone into at this stage.

What is the claim then? Two fold one the appellant was in Dubai at the relevant time when the offence is alleged to have been committed. Second, since the bills of lading and exchange were prepared and were submitted to the Emirates National Bank at Dubai and the Payment too was received at Emirates National Bank in Dubai, the alleged offence of forgery and cheating were committed outside India. Is that so? Can the offence of conspiracy or cheating or forgery on these allegations be said to have been committed outside the country? Substantive law of extra-territory in respect of criminal offences is provided for by Section 4 of the IPC and the procedure to inquire and try it is contained the Section 188 Cr.P.C. Effect of these sections is that an offence committed by an Indian citizen, outside the country is deemed to have been committed in India. Proviso to Section 188 Cr. P.C. however provides the safeguard for the NRI to guard against any unwarranted harassment by directing, “that, notwithstanding anything in any of the preceding sections of this Chapter, no such offence shall be inquired into or tried in India except with the previous sanction of the Central Government.”

Since the proviso begins with a non obstinate clause its observance is mandatory. But is would come into play only if the principal clause is applicable, namely, it is established that an offence as defined in clause ‘n’ of Section 2 of the Cr.P.C. has been committed and it has been committed outside the country.

What has to be examined at this stage is if the claim of the appellant that the offence under Section 120B read with Section 420 and Section 471 of the IPC were committed outside the country. An offence is defined in the Cr. P.C. to mean an

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act or omission made punishable by any law for the time being in force. None of the offences for which the appellant has been charged has residence as one of its ingredients. The jurisdiction to inquire or try vests under Section 177 in the Court in whose local jurisdiction the offence is committed. It is thus the commission of offence and not the residence of the accused which is decisive of jurisdiction. When two or more persons agree to do or cause to be done an illegal act or an act which is illegal by illegal means such agreement is designated a criminal conspiracy under Section 120A of the IPC. The ingredients of the offence is agreement and not the residence. meeting of minds of more than two persons is the primary requirement. Even if it is assumed that the appellant was at Dubai and he entered into an agreement with his counterpart sitting in India to do an illegal act in India the offence of conspiracy came into being when agreement was reached between the two. The two minds met when talks oral or in writing took place in India. Therefore, the offence of conspiracy cannot be said to have been committed outside the country. In Mobarik Ali Ahmed v. The State of Bombay. AIR 1957 SC 857 this court while dealing with the question of jurisdiction of the Courts to try an offence of cheating committed by a foreign national held that the offence of cheating took place only when representation was made by the accused sitting in Karachi to the complaints sitting in Bombay. The argument founded on corporeal presence was rejected and it was observed:

“What is, therefore, to be seen is whether there is any reason to think that a foreigner not corporeally present at the time of the commission of the commission of the offence does not fall within the range of persons punishable therefor under the Code. It appears to us that the answer must be in the negative unless there is any recognised legal principle on which such exclusion can be founded or the language of the Code compels such a construction”.

If a foreign national is amenable to jurisdiction under Section 179 of the Cr. P.C. a NRI cannot claim that the offence shall be deemed to have been committed outside the country merely because he was not physically present. Preparation of bill of lading at Dubai or payment at Dubai were not isolated acts. They were part of chain activities between the appellant and his associates with whom he entered into agreement to cheat the bank at Chandigarh. Any isolated act or omission committed at Dubai was insufficient to constitute an offence. The illegal act of dishonestly inducing the bank at Chandigarh was committed not by preparation of bill at Dubai but its presentation in pursuance of agreement to cheat. The submission thus founded was on residence or on preparation of bills of lading or encashment at Dubai are of no consequence. 569

Nor is there any merit in the submission that even part of the offence would attract Section 189 as the section operates when offence is committed outside India. An offence is committed when all the ingredients are satisfied. The section having used the word offence it cannot be understood as part of the offence. Section 179 Cr.P.C. empowers a court to try an offence either at a place where the offence is committed or the consequences ensue. On the allegations in the complaint the act or omissions were committed in India. In any case the consequence of conspiracy, cheating and forging having taken place at Chandigarh the offence was not committed outside the country therefore the provisions of Sec. 188 Cr. P.C. were not attracted.

ORDER

For reasons given by us in our concurring but separate orders the appeal fails and is dismissed.

Parties shall bear their own costs.

VPR. Appeal dismissed.

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On Re-investigation 173(8) CrPC

Comment : A landmark decision on powers of further investigation and how in the fitness of things – the police should inform the magistrate and seek permission to maintain harmony between judiciary and executive if new facts – warrant a re-investigation or a further investigation u/s 173(8) 

Supreme Court of India

Ram Lal Narang Etc. Etc vs State Of Delhi (Admn.) on 10 January, 1979
Equivalent citations: 1979 AIR 1791, 1979 SCC (2) 322
Bench: Reddy, O Chinnappa

PETITIONER:

RAM LAL NARANG ETC. ETC.

Vs.

RESPONDENT:

STATE OF DELHI (ADMN.)

DATE OF JUDGMENT10/01/1979

BENCH:

REDDY, O. CHINNAPPA (J)

BENCH:

REDDY, O. CHINNAPPA (J)

UNTWALIA, N.L.

CITATION:

1979 AIR 1791 1979 SCC (2) 322

ACT:

Criminal Procedure Code, 1973, Section 173-Whether the Police have powers to further investigate, after the magistrate has taken cognizance of the offence-Scope and ambit of Section 173 Cr. P.C.

HEADNOTE:

A criminal case, arising out of F.I.R. 72 of 1967 against one Sri Bali Ram Sharma and two others for the offence of the theft of two sandstone pillars of great antiquity, beauty and value from the Suraj Kund Temple, in village Amin, Dist. Karnal, ended in the acquittal of the accused. During the pendency of this case, on an application made by him one Narinder Nath Malik (N. N. Malik) an alleged research scholar and a friend of H. L. Mehta, the then Chief Judicial Magistrate was given the custody of these two sandstone pillars which had been recovered from the accused. The pillars remained in the custody of N. N. Malik from 1-3- 1968 to 27-5-1968 and on the acquittal of the accused on 16- 7-1968, they were handed over to the Lambardar of Village Amin. Later, it came to light that the pillars returned by Malik were not the original pillars but fakes. Thereupon, F.I.R. RC 2-71-CIA/SPE/CBI was registered at Delhi against Malik and H. L. Mehta under Section 120 B read with Sections 406 and 420 I.P.C. After completing the investigation a charge sheet No. RC 2 of 1971 was filed on 30-12-1972, in the Court of Special Magistrate, Ambala against Malik and H. L. Mehra for the aforesaid offences noted in the F.I.R. Though an order was passed on 17-5-1976 directing the framing of charges, no charges were actually framed. However, on 16-5-77, on an application dated 17-4-77 filed by the Public Prosecutor under Section 494 of the Criminal Procedure Code, 1973, the Special Magistrate permitted the withdrawal of the case and discharged the accused. During the pendency of the case, the two genuine pillars were traced and found in London in the ware house of Spink & Co. It was suspected that Manohar Lal Narang and Ramlal Narang had engaged Balkishan Rawal and Nathubai Rawal of Delhi to make three sets of fakes and had exported the genuine pillars to London. This resulted in the registering of F.I.R. RC 4/76-CIU(A)/SPE by the Superintendent of Police, CIV (Antiquities SPE/CBI, New Delhi) against Manohar Lal Narang and others for alleged offences under Section 120B, read with Section 411 I.P.C. and Section 25 (1) of the Antiquities and Art Treasures Act, 1972. An application under s. 306 Cr.P.C. filed by N. N. Malik on 26-6-1976 before the Chief Metropolitan Magistrate, New Delhi with reference to this F.I.R. RC 4/76, was accepted on 3-7-1976 and Malik was granted pardon, after confessional statement was recorded. On 19-7-1976 a charge sheet was filed (RC 4 of 1976) before the same Court for offences under Sections 120B, I.P.C. read with Section 420, 411 and 406 I.P.C. and Section 25 of the Antiquities and Art Treasures Act 1972. The case was transferred to the Court of Additional Chief Metropolitan Magistrate. On 20-7-1976 the Magistrate issued process for the appearance of the accused including the three Narang brothers out of whom the appellant in Crl. Appeal 373 of 1978 was already under detention under MISA and COFEPOSA. The other two who were in London were extradited and brought

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to India on 27-7-1977. An application filed by Ramlal Narang in March 1977 immediately after his release from detention, to drop the proceedings against him, to cancel the extradition warrants against his two brothers and to discharge all the accused on the ground of illegality of the Delhi case in view of the fact that a case on the same facts was already pending in the Ambala Court failed. Thereafter two applications filed by the three Narang brothers on 21-6- 1977 in the Delhi High Court under Section 482 Crl. P.C. once again challenging the legality of the proceedings arising out of charge sheet RC4 of 1974 were admitted on 22- 6-1977, but dismissed on 10-1-1978. During the pendency of these two appeals Malik died sometime during May 1977 and Mehra was made a co-accused in the Delhi case on 1-8-1977 in view of the withdrawal of the Ambala case on 16-5-1977. Dismissing the appeals by special leave, the Court, ^

HELD: 1. The police have the statutory right and duty to ‘register’ every information relating to the commission of a cognizable offence. The police also have the statutory right and duty to investigate the facts and circmstances of the case where the commission of a cognizable offence was suspected and to submit the report of such investigation to the Magistrate having jurisdiction to take cognizance of the offence upon a police report. These statutory rights and duties of the police were not circumscribed by any power of superintendence or interference in the Magistrate; nor was any sanction required from a Magistrate to empower the police to investigate into a cognizable offence. [937 F-H] (a) The scheme of the 1898 Code of Criminal Procedure was that the First Information Report was followed by investigation, the investigation led to the submission of a report to the Magistrate, the Magistrate took cognizance of the offence on receipt of the police report and finally, the Magistrate taking cognizance issued process to the accused. As such ordinarily the right and duty of the police would end with the submission of a report under Section 173(1) Criminal Procedure Code upon receipt of which it was up to the Magistrate to take or not to take cognizance of the offence. [937 E-F, 938 F]

(b) There was no provision in the 1898 Code prescribing the procedure to be followed by the police, where after the submission of a report under Section 173(1) Criminal Procedure Code and after the Magistrate had taken cognizance of the offence, fresh facts came to light which required further investigation. Similarly, there was no express provision prohibiting the police from launching upon an investigation into the fresh facts coming to light after the submission of the report under Section 173(1) or after the Magistrate had taken cognizance of the offence. Therefore further investigation was permissible and was not altogether ruled out merely because cognizance of the case has been taken by the Court; defective investigation coming to light during the course of a trial could also be cured by a further investigation, if circumstances permitted it. [938 F-H, 941 C-D]

King Emperor v. Khwaja Wazir Ahmed, 71 Indian Appeals, PC 203: followed.

Diwakar Singh v. A. Ramamurthy Naidu, AIR 1919 Madras 751. In re. Palaniswami Goundan, AIR 1946 Madras 502; Mohd. Niwaj v. The Crown, 48 Crl. L.J. 744 Lahore; Prosecuting Inspector v. Minaketan

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Monato, AIR 1952 Orissa 350; Ramashankar v. State of U.P., AIR 1956 All. 525; In re. State of Kerala v. State Prosecutor, 79 Crl. L.J. 1973 p. 1288 (Kerala) D.B.; approved.

H. N. Rishbud v. State of Delhi, [1955] 1 SCR 1150; Tara Singh v. State [1951] SCR 72; referred to.

2. (a) Neither Section 173 nor section 190 lead to the conclusion that the power of the police to further investigate was exhausted by the Magistrate taking cognizance of the offence. Practice, convenience and preponderance of authority, permitted repeated investigations and discovery of fresh facts. Notwithstanding that a Magistrate had taken cognizance of the offence upon a police report submitted under Section 173 of the 1898 Code, the right of the police to further investigate was not exhausted and the police could exercise such right as often as necessary when fresh information came to light. Where the police desired to make a further investigation, the police could express their regard and respect for the Court by seeking its formal permission to make further investigation. [943 G-H, 944 A]

(b) When it comes to the notice of the investigating agency that a person already an accused of an offence has a good alibi or where the involvement of persons who are not already accused comes to the notice of the investigating agency, the investigating agency cannot keep quiet and refuse to investigate the fresh information. It is their duty to investigate and submit a report to the Magistrate upon the innocence or involvement of the persons concerned. In either case, it is for the Magistrate to decide upon his future course of action depending upon the stage at which the case is before him. If he has already taken cognizance of the offence, but has not proceeded with the enquiry or trial, he may direct the issue of process to persons freshly discovered to be involved and deal with all the accused in a single enquiry or trial. If the case of which he has previously taken cognizance has already proceeded to some extent, he may take fresh cognizance of the offence disclosed against the newly involved accused and proceed with the case as a separate case. What action a Magistrate is to take in accordance with the provisions of the Code of Criminal Procedure in such situations is a matter best left to the discretion of the Magistrate. A further investigation by the police cannot be considered as trenching upon the proceedings before the Court because whatever the police may do, the final discretion in regard to further action is with the Magistrate. That the final word is with the Magistrate is sufficient safeguard against any excessive use or abuse of the power of the police to make further investigation. [942 F-H, 943 A-D]

Ram Gopal Neotia v. State of West Bengal, AIR 1969 Cal. 316 Hanuman and Anr. v. Raj. AIR 1951 Rajasthan 131; State v. Mehr Singh and Ors., ILR 1973 (3) P & H 561-[1974] 2 Cal. LJ 970; over-ruled.

(c) Where the report of the second investigation is submitted to a Magistrate other than the Magistrate who has already taken cognizance of the first case, it is up to the prosecuting agency or the accused concerned to take necessary action by moving the appropriate superior Court to have the two cases tried together. The Magistrate themselves may take action suo motu. [944 B]

926

In the instant case; the prosecution did not act with any oblique motive or out of any malice by submitting a charge sheet to the Delhi Court and by withdrawing the case in the Ambala Court. In the charge sheet filed in the Delhi Court, it was expressly mentioned that a case had been filed in the Delhi Court against Mehra and others and, therefore, it was not necessary to prosecute Mehra in the Ambala Court. The Court granted its permission for the withdrawal of the case. [944 C-E]

3. Where the conspiracy discovered later is found to cover a much larger canvas with broader ramifications, it cannot be equated with the earlier conspiracy which covered a smaller field of narrower dimentions. [936 B-C] In the present case, (a) the conspiracies which are the subject matter of the two cases cannot be said to be identical though the conspiracy which is the subject matter of the first case, may perhaps be said to have turned out to be part of the conspiracy which is the subject matter of the second case. When investigation commenced in First Information Report No. RC4 of 1976, apart from the circumstance that the property involved was the same, the link between the conspiracy to cheat and to misappropriate and the conspiracy to dispose of the stolen property was not known. [936 C-D]

(b) A comparison of the two First Information Report coupled with the several facts and circumstances show that the conspiracy which was the subject matter of the second case could not be said to be identical with the conspiracy which was the subject matter of the first case. The conspirators were different. Malik and Mehra alone were stated to be the conspirators in the first case, while the three Narang brothers were alleged to be the principal conspirators in the second case. The objects of the two conspiracies were different. The alleged object of the first conspiracy was to obtain possession of the pillars from the Court by cheating and to misappropriate them. The alleged object of the second conspiracy was the disposal of the stolen property by exporting the pillars to London. The offences alleged in the first case were Section 120B read with Section 420 and 406 Indian Penal Code while the offences alleged in the second case were S. 120B read with S. 411 IPC and Section 25 of the Antiquities and Art Treasures Act, 1972. [935 D-F]

(c) No fault could be found with the police for registering a first information Report against the Narang brothers for the offence of conspiracy to commit an offence under section 411 Indian Penal Code. In the course of the investigation into this offence, it transpired that the Narang brothers were also parties to the original conspiracy to obtain possession of the pillars from the Court by cheating Facts came to light which indicated that the conspiracy which was the subject matter of the case pending in the Ambala Court was but part of a larger conspiracy. The fresh facts which came to light resulted in the filing of the second charge sheet. [935 C-D]

(d) Neither at the time when the First Information Report pertaining to the Ambala Case was registered nor at the time when the Charge sheet was filed in the Ambala Court, were the Narang brothers known to be in the picture. The investigating agency was not also aware of what Malik and Mehra had done with the pillars after they had obtained possession of the pillars from the Court and substituted and returned fake pillars to the Court. The First Information Report and the charge-sheet were concerned primarily with the

927

offences of conspiracy to cheat and to misappropriate committed by Malik and Mehra. At that stage, the investigating agency was not aware of any conspiracy to send the pillars out of the country. It was not known that Narang brothers were also parties to the conspiracy to obtain possession of the pillars from the Court. It was much later, that the pillars surfaced in London were discovered to be in the constructive possession of Narang brothers. Even then, the precise connection between Malik and Mehra on the one side and Narang brothers on the other was not known. All that was known was that the pillars which were stolen property within the definition of the expression in Section 410 Indian Penal Code were found to be in the possession of Narang brothers in London. On the discovery of the genuine pillars in the possession of Narang brothers, without anything further to connect Narang brothers with Malik and Mehra, the police had no option but to register a case under Section 411 Indian Penal Code against Narang brothers. That was what was done. [934 F-H, 935 A-B]

Observation:

In the interests of the independence of the magistracy and the judiciary, in the interests of the purity of the administration of criminal justice and in the interests of the comity of the various agencies and institutions entrusted with different stages of such administration, it would ordinarily be desirable that the police should inform the Court and seek formal permission to make further investigation when fresh facts come to light. [943 E]

JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos. 373-374 of 1978.

Appeals by Special Leave from the Judgment and Orders dated 10-1-1978 and 14-9-1978 of the Delhi High Court in Criminal Misc. (M) No. 323 and 322/77 and Criminal Misc. Nos. 1083, 1149 of 1978 in Special Misc. (M) No. 322/77. Ram Jethmalani (In Crl. A.373), A. K. Sen (In Crl. A.374) and Harjinder Singh for the Appellants. U. R. Lalit and R. N. Sachthey for the Respondent. The Judgment of the Court was delivered by

CHINNAPPA REDDY, J.-On the intervening night of 31st March 1967 and Ist April 1967, two sandstone pillars of great antiquity, beauty and value were stolen from Suraj Kund temple, in Village Amin (District Karnal, Haryana). They were of the Sunga period (2nd Century B.C.) and their present estimated value in the International Art Treasures’ Market is said to be around five hundred thousand American dollars. A first information report (F.I.R. No. 72 of 1967) was registered by the Police of Butana, District Karnal. The pillars were recovered on 2nd May 1967. On completion of investigation a charge-sheet was filed on 3rd October 1967 in the Court of the Ilaqa Magistrate at Karnal, against one Bali Ram Sharma and two others. 3-119 SCI/79 928

The case ended in their acquittal on 16th July 1968. During the pendency of the case one Narinder Nath Malik (N. N. Malik) filed an application before the Magistrate alleging that he was a research scholar and requesting that he might be given custody of the two pillars to enable him to make a detailed study. At the instance of H. L. Mehra, the then Chief Judicial Magistrate, Karnal and a friend of N. N. Malik, the learned Ilaqa Magistrate gave custody of the two pillars to N. N. Malik on his executing a personal bond in a sum of Rs. 20,000/-. The order was written by H. L. Mehra himself and signed by the Ilaqa Magistrate. The pillars remained in the custody of N. N. Malik from Ist March 1968 to 27th May 1968, when N. N. Malik purported to return them to the Court of the Ilaqa Magistrate, Karnal. After the acquittal of Bali Ram Sharma and others, the pillars were handed over to the Lambardar of village Amin. Later, it came to light that the pillars returned by N. N. Malik were not the original pillars but fakes. Thereupon, First Information Report No. RC.2/71-CIA/SPE/CBI was registered at Delhi against N. N. Malik and H. L. Mehra under Section 120-B read with Sections 406 and 420 Indian Penal Code. After completing the investigation the C.B.I. filed a charge-sheet No. R.C. 2 of 1971 in the Court of Special Magistrate, Ambala, against N. N. Malik and H. L. Mehra for alleged offences under Section 120-B read with Sections 406 and 420 Indian Penal Code. The charge-sheet was filed on 30th December, 1972. On 17th May, 1976, the learned Special Magistrate, Ambala, passed an order directing the framing of charges against N. N. Malik and H. L. Mehra. But, no charges were actually framed as the accused were not present in the Court. On 17th April, 1977, the Public Prosecutor filed an application under Section 494 Criminal Procedure Code for permission to withdraw the case against Malik and Mehra. The learned Special Magistrate, Ambala, by his order dated 16th May 1977, permitted the withdrawal of the case and discharged the accused.

Between May 1976 and May 1977 several other things happened and the Narang brothers, the appellants in the two appeals, made their appearance on the scene. It may be mentioned here, that of the three Narang brothers, Om Prakash alias Omi Narang had been living in London since 1970, Manohar Lal alias Manu Narang had been similarly living in London since July 1974 and Ram Lal Narang alone had been living in India. Ram Lal Narang was detained first under the MISA from September 1974 till he was released under orders of the High Court, and later, under the COFEPOSA from 1st July 1975 till after the revocation of the internal Emergency in March 1977.

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The two genuine pillars which had been removed from Suraj Kund temple were traced and found in London in the warehouse of Messrs Spink & Co. It was suspected that Manoharlal Narang and Ramlal Narang had engaged Balkishan Rawal and Nathubhai Rawal of Delhi to make three sets of fakes and had exported the genuine pillars to London. A First Information Report (R.C. 4/76-CIU(A)/SPE) was registered by the Superintendent of Police, CIU (Antiquities, SPE/CBI, New Delhi) against Manohar Lal Narang and others, for alleged offences under Section 120-B Indian Penal Code read with Section 411 Indian Penal Code and Section 25(1) of the Antiquities and Art Treasures Act, 1972, On 26th June, 1976, N. N. Malik made and application before the Chief Metropolitan Magistrate, Delhi, in case R.C. No. 4/76- CIU(A)/SPE, New Delhi, purporting to be under Section 306 of the Code of Criminal Procedure, 1973, praying that he might be granted pardon. The application mentioned Sections 411, 406 and 420 Indian Penal Code read with Section 120-B and Section 25(1) of the Antiquities and Art Treasures Act, 1972, as the offences involved. The application was supported by the reply filed by the Superintendent of Police, C.B.I. On 3rd July 1976, the Chief Metropolitan Magistrate, Delhi, granted pardon to N. N. Malik. Before the grant of pardon the confessional statement of N. N. Malik was got recorded by the Metropolitan Magistrate, Delhi. Thereafter, on 19th July 1976, a charge-sheet (R.C. 4/1976) was filed in the Court of Chief Judicial Magistrate, Delhi, for offences under Section 120-B Indian Penal Code read with Sections 420, 411 and 406 Indian Penal Code and Section 25 of the Antiquities and Art Treasures Act, 1972. The case was transferred to the Court of the Additional Chief Metropolitan Magistrate. On 20th July 1976, the Additional Metropolitan Magistrate issued process for the appearance of the three Narang brothers. The learned Magistrate also issued warrants for the extradition of Omi Narang and Manu Narang who were in London. Extradition proceedings were initiated in Britain at the instance of the Government of India. The Metropolitan Magistrate, Bow Street, London ordered the detention of Omi Narang and Manu Narang pending the issue of warrants by the Secretary of State under Section 5 of the Fugitive Offenders Act. A petition for the issue of Writ of Habeas Corpus Ad Subjiciendum was filed in the High Court of Justice, Queen’s Bench Division, London. The Divisional Court directed the release of Omi Narang and Manu Narang. The Government of India filed an appeal to the House of Lords and on 24th March, 1977, the appeal was allowed. Omi Narang and Manu Narang were finally extradited and brought to India on 27th July, 1977.

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Meanwhile internal emergency was lifted in India in March 1977 and Ram Lal Narang was released. Almost immediately he filed a petition before the Additional Metropolitan Magistrate to drop the proceedings against him, to cancel the extradition warrants and to discharge the accused. The contention was that the entire investigation in First Information Report No. R.C. 4/76 was illegal as a case on the same facts was already pending before the Ambala Court and that the Delhi Court acted without jurisdiction in taking cognizance of the case pursuant to a report of police based upon such illegal investigation. The learned Magistrate held that he was not competent to sit in judgment, as it were, over the order of his predecessor taking cognizance of the case. He, however, found that the conspiracy which was the subject matter of the case before the Court at Ambala and the conspiracy which was the subject matter of the case before himself were one and the same, but, he held that the question as to which Court should proceed with the case, was not for him to decide; it was a matter for the High Court to decide under Section 186 Criminal Procedure Code. The learned Magistrate also noticed an application filed before him, after the conclusion of arguments, informing him that the case in the Court at Ambala against Malik and Mehra had since been withdrawn on 16th May 1977.

On 21st June 1977, two applications were filed in the Delhi High Court under Section 482 Criminal Procedure Code, one by Ramlal Narang and the other on behalf of Omi Narang and Manu Narang who were still in England awaiting extradition. The applicants sought quashing of the orders of the learned Metropolitan Magistrate issuing process to them and warrants for the extradition of Omi Narang and Manu Narang. It was also sought to be declared that the entire investigation in R.C. 4 of 1976 was illegal and the orders of the Chief Metropolitan Magistrate and the Additional Metropolitan Magistrate taking cognizance of R.C. 4 of 1976 were illegal. The grant of pardon to N. N. Malik was questioned. It was also prayed that the proceedings before the Metropolitan Magistrate might be quashed. The petitions were admitted by the Delhi High Court on 22nd June, 1977, but ultimately dismissed on 10th January 1978, by a common judgment. Ramlal Narang having obtained special leave from this Court has filed Criminal Appeal No. 373 of 1978 and Omi and Manu Narang have preferred Criminal Appeal No. 374 of 1978. We may mention here that on 1st August, 1977, a supplemental charge-sheet was filed making Mehra an accused in the Delhi case, the case in the Ambala Court having been withdrawn on 16th May, 1977, as mentioned earlier. Malik, we may add, died sometime during August, 1977.

931

We are given to understand that Mehra also was subsequently granted pardon.

Shri Harjinder Singh, learned Counsel for the appellant in Criminal Appeal No. 373 of 1978 and Shri Ashok Sen, learned Counsel for the appellants in Criminal Appeal No. 374 of 1978 argued that the conspiracy and the overt acts which were the subject matter of the two First Information Reports and the two charge-sheets were the same and, therefore, there was an implied bar to the power of the Police to investigate into First Information Report No. R.C. 4 of 1976 and the power of the Court at Delhi to take cognizance of the case upon the report of such information. It was submitted that the mere circumstance that some more persons were mentioned as involved or the mere circumstance that the property was said to have been recovered later would not affect the legal position. It was submitted that gist of the conspiracy in both the cases was to obtain possession of the pillars. The offence of conspiracy relating to the obtaining of the pillars having been investigated and a charge-sheet having been filed in the Ambala Court, the Police had no authority in law to start a fresh investigation under the Criminal Procedure Code by registering another First Information Report and to submit a charge-sheet in the Delhi Court for the very same offence. That was an unwarranted interference by the Police with the proceedings pending in the Court. The whole of the investigation subsequent to the filing of the charge-sheet in the Ambala Court was without jurisdiction and no material or fact gathered during the course of such illegal investigation could be used to found further proceedings. The Delhi Court was, therefore, in error in taking cognizance of offences which had already been investigated and which were the subject matter of proceedings in another Court. It was also argued that the subsequent withdrawal of the case from the Ambala Court did not and could not confer jurisdiction on the Delhi Court. The withdrawal itself was an abuse of the process of the Court.

Shri Lalit, learned Counsel for the respondents urged that the conspiracy which was the subject matter of the charge-sheet filed in the Delhi Court was not the same as the conspiracy which was the subject matter of the charge- sheet filed in the Ambala Court. The circumstance that some of the conspirators were common and part of the case was the same did not make the two conspiracies identical with each other. There was, therefore, no question of any bar against the Delhi Court from taking cognizance of the case based upon the wider conspiracy merely because the Ambala Court had taken cognizance of the case based upon the narrower conspiracy. Shri Lalit also urged that the statutory right of the Police to investigate into cognizable 932

offences was not fettered and did not end with the submission of a charge-sheet to the Court. He submitted that the Police had the right and indeed, the duty, to investigate into fresh facts coming to light and to appraise the Court of the same.

The basic submission on behalf of the appellants was that the two conspiracies alleged in the two cases were but one. The sequitur was that the investigation into and the taking of cognizance of the second case were without jurisdiction.

We will first examine the question whether the conspiracy which was investigated by the Police and which investigation led to the filing of the charge-sheet in the Ambala case can be said to be the same as the conspiracy which was later investigated and which led to the filing of the charge-sheet in the Delhi Court. For this purpose, it is necessary to compare the First Information Report and the charge-sheet in the two cases.

The First Information Report relating to the case in the Ambala Court was registered against “N. N. Malik and others” for alleged offences under “Section 120-B Indian Penal Code read with Section 420 and Section 406 Indian Penal Code.” It was stated therein that N. N. Malik applied to the Court of the Judicial Magistrate 1st Class, Karnal and obtained possession of the two stone pillars and dishonestly substituted two fake pillars in their place and returned them to the Court. The charge-sheet which was filed on 30th December, 1972 mentioned N. N. Malik and H. L. Mehra as the two accused in the case and recited that N. N. Malik was introduced by Mehra to the Magistrate as an eminent archaeologist and that he obtained possession of the pillars on the pretext that he wanted to make some research. The actual order granting custody of the pillars to Malik was written by Mehra but signed by the Magistrate R. K. Sen. It was further recited that sometime after the pillars were returned by Malik to the Court it was discovered that the pillars so returned were fakes and that N. N. Malik was not an archaeologist. It was finally said that Malik and Mehra had “thus dishonestly made misrepresentation of fact and got the delivery of the two statues which were subsequently substituted by them” and they had “thus committed the offence under Section 120-B read with Section 420 Indian Penal Code and Section 406 Indian Penal Code.” It is, therefore, seen from the allegations in the charge-sheet filed in the Ambala Court that the conspirators involved in the conspiracy which was its subject matter were two, namely, Malik and Mehra, that the object of the conspiracy was to dishonestly obtain possession of the pillars by making false representation to the Magistrate and to substitute the pillars by fakes after

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obtaining possession of the same and that the offences committed were under Section 120-B read with Section 420 and 406 Indian Penal Code.

The First Information Report in the Delhi case was registered on 13th May, 1976, and the offences mentioned were Section 120-B Indian Penal Code read with Section 411 Indian Penal Code and Section 25(1) of the Antiquities and Art Treasures Act, 1972. The accused mentioned in the report were Manu Narang and Ramlal Narang. After reciting that the pillars had been taken from the Court by N. N. Malik and had been substituted by fake pillars, the First Information Report went on to recite that the genuine pillars, which were stolen from Suraj Kund temple as mentioned above were found to be in the possession and control of Manohar Lal alias Manu Narang in London. It was further recited that Manu Narang was negotiating the sale of the pillars through some London brokers and the price expected to be fetched was approximately five hundred American dollars. It was recited further that Manu Narang and his brother Ramlal Narang had commissioned two well known sculptors of Delhi to make three sets of fake pillars. The two brothers and others, acting in conspiracy, had dishonestly received and exported the two stone pillars. The charge-sheet which followed the investigation was filed on 19th July 1976 in the Delhi Court. The charge-sheet mentioned the three Narang brothers, Ramlal Narang, Manoharlal Narang and Om Parkash Narang, as the three accused persons sent up for trial and H. L. Mehra as a person not sent up for trial as he was already facing trial before the Special Magistrate, Ambala. The charge- sheet recited, among other facts, that the Narang brothers had come to know in or about the month of February 1978 about the invaluable nature of the pillars and devised a stratagem to get the custody of the pillars. They discussed their stratagem with their family friend N. N. Malik, informing him that the pillars were worth a fortune. Ramlal Narang and Malik met Mehra and it was decided that Malik should file an application for temporary custody of the pillars and that Mehra should wield his influence over the Magistrate to help N. N. Malik to get such temporary custody. That was done. Temporary custody of the pillars was obtained and they were removed to Delhi in a truck at the instance of the Narang brothers to a place in Defence Colony, New Delhi. Replicas of the pillars were made by Balkrishan Rawal and Natwarlal, two eminent sculptors of Delhi under the supervision of Ramlal Narang and Omi Narang. Manu Narang also used to visit Delhi and check the progress made. The original pillars were transported to Bombay by Manu Narang and smuggled out of the country. 934

Fake pillars were substituted and returned by N. N. Malik to the Court. Later on, suspicion was created by the discovery of two fake pillars which were also attempted to be smuggled out of the country. The two pillars returned by N. N. Malik were then got examined by experts and were found to be fakes. Malik was presented by the Narang brothers with a Fiat car, a revolving brass bed and a sum of Rs. 70,000/-. They also paid for two pleasure trips made by Malik and his wife to Bombay. It was recited in the charge-sheet that the facts disclosed “the commission of offences under Section 406 (criminal breach of trust), Section 411 (receiving and retaining stolen property), Section 420 (cheating) Indian Penal Code and Section 25(1) of the Antiquities and Art Treasures Act, 1972, all read with Section 120-B Indian Penal Code, in pursuance of criminal conspiracy to which Manoharlal Narang, Ramlal Narang and Om Prakash Narang, H. L. Mehra and N. N. Malik (already granted pardon) were parties.” It was further recited “Manoharlal Narang, Ramlal Narang and Omi Narang also abetted the commission of offences under Section 420 and Section 406 Indian Penal Code by N. N. Malik approver and these three accused were, therefore, liable for prosecution under Section 406 and Section 420 Indian Penal Code read with Section 109 Indian Penal Code and they had also committed other offences under Section 411 Indian Penal Code.” It was further mentioned in the charge-sheet that Manoharlal Narang and Omi Narang were in London and that proceedings for their extradition were under way. It was also mentioned that H. L. Mehra was facing trial before the Special Magistrate, Ambala, for the offences committed by him and, therefore, he was nor being sent up for trial in this case.

It is obvious that neither at the time when the First Information Report pertaining to the Ambala case was registered nor at the time when the charge-sheet was filed in the Ambala Court, were the Narang brothers known to be in the picture. The investigating agency was not also aware of what Malik and Mehra had done with the pillars after they had obtained possession of the pillars from the Court and substituted and returned fake pillars to the Court. The First Information Report and the charge-sheet were concerned primarily with the offences of conspiracy to cheat and to misappropriate committed by Malik and Mehra. At that stage, the investigating agency was not aware of any conspiracy to send the pillars out of the country. It was not known that the Narang brothers were also parties to the conspiracy to obtain possession of the pillars from the Court. It was much later that the pillars surfaced in London and were discovered to be in the constructive possession of Narang brothers. Even then, the precise connection between Malik and Mehra on the one side and

935

Narang brothers on the other was not known. All that was known was that the pillars which were stolen property within the definition of the expression in Section 410 Indian Penal Code were found to be in the possession of Narang brothers in London. On the discovery of the genuine pillars in the possession of Narang brothers, without anything further to connect Narang brothers with Malik and Mehra, the police had no option but to register a case under Section 411 Indian Penal Code against Narang brothers. That was what was done. No fault could, therefore, be found with the police for registering a First Information Report against the Narang brothers for the offence of conspiracy to commit an offence under Section 411 Indian Penal Code. In the course of the investigation into this offence, it transpired that the Narang brothers were also parties to the original conspiracy to obtain possession of the pillars from the Court by cheating. Facts came to light which indicated that the conspiracy, which was the subject matter of the case pending in the Ambala Court was but part of a larger conspiracy. The fresh facts which came to light resulted in the filing of the second charge-sheet. The several facts and circumstances mentioned by us earlier and a comparison of the two First Information Reports and the two charge-sheets show that the conspiracy which was the subject matter of the second case could not be said to be identical with the conspiracy which was the subject matter of the first case. The conspirators were different. Malik and Mehra alone were stated to be the conspirators in the first case, while the three Narang brothers were alleged to be the principal conspirators in the second case. The objects of the two conspiracies were different. The alleged object of the first conspiracy was to obtain possession of the pillars from the Court by cheating and to misappropriate them. The alleged object of the second conspiracy was the disposal of the stolen property by exporting the pillars to London. The offences alleged in the first case was Section 120-B read with Section 420 and Section 406 Indian Penal Code, while the offences alleged in the second case were Section 120-B read with Section 411 Indian Penal Code and Section 25 of the Antiquities and Art Treasures Act, 1972. It is true that the Antiquities and Art Treasures Act had not yet come into force on the date when the First Information Report was registered. It is also true that Omi Narang and Manu Narang were not extradited for the offence under the Antiquities and Art Treasures Act and, therefore, they could not be tried for that offence in India. But the question whether any of the accused may be tried for a contravention of the Antiquities and Art Treasures Act or under the corresponding provision of the earlier Act is really irrelevant in deciding whether the two 936

conspiracies are one and the same. The trite argument that a Court takes cognizance of offences and not offenders was also advanced. This argument is again of no relevance in determining the question whether the two conspiracies which were taken cognizance of by the Ambala and the Delhi Courts were the same in substance. The question is not whether the nature and character of the conspiracy has changed by the mere inclusion of a few more conspirators as accused or by the addition of one more among the objects of the conspiracy. The question is whether the two conspiracies are in substance and truth the same. Where the conspiracy discovered later is found to cover a much larger canvas with broader ramifications, it cannot be equated with the earlier conspiracy which covered a smaller field of narrower dimensions. We are clear, in the present case, that the conspiracies which are the subject matter of the two cases cannot be said to be identical though the conspiracy which is the subject matter of the first case may, perhaps, be said to have turned out to be part of the conspiracy which is the subject matter of the second case. As we mentioned earlier, when investigation commenced in First Information Report No. R.C. 4 of 1976, apart from the circumstance that the property involved was the same; the link between the conspiracy to cheat and to misappropriate and the conspiracy to dispose of the stolen property was not known. The further connected questions arising for consideration are, what was the duty of the police on discovering that the conspiracy, which was the subject matter of the earlier case, was part of a larger conspiracy, whether the police acted without jurisdiction in investigating or in continuing to investigate into the case and whether the Delhi Court acted illegally in taking cognizance of the case ?

In order to answer these questions, it is necessary to refer to the relevant provisions of the Criminal Procedure Code. Counsel on both sides argued the questions on the basis that the Old Criminal Procedure Code governed the situation. We proceed on that assumption without deciding whether the trial in the Delhi Court will be governed by the old Code or the new one.

Under the Criminal Procedure Code, 1898, whenever an officer in charge of the Police Station received information relating to the commission of a cognizable offence, he was required to enter the substance thereof in a book kept by him, for that purpose, in the prescribed form (Section 154 Criminal Procdure Code). Section 156 Criminal Procedure Code invested the Police with the power to investigate into 937

cognizable offences without the order of a Court. If, from the information received or otherwise, the officer in charge of a Police Station suspected the commission of a cognizable offence, he was required to send forthwith a report of the same to a Magistrate empowered to take cognizance of such offence upon a police report and than to proceed in person or depute one of his subordinate officers to proceed to the spot, to investigate the facts and circumstances of the case and to take measures for the discovery and arrest of the offender (Section 157 Criminal Procedure Code). He was required to complete the investigation without unnecessary delay, and, as soon as it was completed, to forward to a Magistrate empowered to take cognizance of the offence upon a police report, a report in the prescribed form, setting forth the names of the parties, the nature of the information and the names of the persons who appeared to be acquainted with the circumstances of the case (Section 173(1) Criminal Procedure Code). He was also required to state whether the accused had been forwarded in custody or had been released on bail. Upon receipt of the report submitted under Section 173(1) Criminal Procedure Code by the officer incharge of the Police Station, the Magistrate empowered to take cognizance of an offence upon a police report might take cognizance of the offence (Section 190(1) (b) Criminal Procedure Code). Thereafter, if, in the opinion of the Magistrate taking cognizance of the offence, there was sufficient ground for proceeding, the Magistrate was required to issue the necessary process to secure the attendance of the accused (Section 204 Criminal Procedure Code). The scheme of the Code thus was that the First Information Report was followed by investigation, the investigation led to the submission of a report to the Magistrate, the Magistrate took cognizance of the offence on receipt of the police report and, finally, the Magistrate taking cognizance issued process to the accused. The police thus had the statutory right and duty to ‘register’ every information relating to the commission of a cognizable offence. The police also had the statutory right and duty to investigate the facts and circumstances of the case where the commission of a cognizable offence was suspected and to submit the report of such investigation to the Magistrate having jurisdiction to take cognizance of the offence upon a police report. These statutory rights and duties of the police were not circumscribed by any power of superintendence or interference in the Magistrate; nor was any sanction required from a Magistrate to empower the Police to investigate into a cognizable offence. This position in law was well established. In King Emperor 938

v. Khwaja Nazir Ahmed(1), the Privy Council observed as follows:

“Just as it is essential that every one accused of a crime should have free access to a Court of justice, so that he may be duly acquitted if found not guilty of the offence with which he is charged, so it is of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes on them the duty of inquiry. In India, as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rules by an exercise of the inherent jurisdiction of the Court. The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the Courts, to intervene in an appropriate case when moved under Section 491 of the Criminal Procedure Code to give directions in the nature of Habeas Corpus. In such a case as the present, however, the Court’s function begin when a charge is preferred before it and not until then……. In the present case, the police have under Sections 154 and 156 of the Criminal Procedure Code, a statutory right to investigate a cognizable offence without requiring the sanction of the Court……….

Ordinarily, the right and duty of the police would end with the submission of a report under Section 173(1) Criminal Procedure Code upon receipt of which it was up to the Magistrate to take or not to take cognizance of the offence. There was no provision in the 1898 Code prescribing the procedure to be followed by the police, where, after the submission of a report under Section 173(1) Criminal Procedure Code and after the Magistrate had taken cognizance of the offence, fresh facts came to light which required further investigation. There was, of course, no express provision prohibiting the police from launching upon an investigation into the fresh facts coming to light after the submission of the report under Section 173(1) or after the Magistrate had taken cognizance of the offence. As we shall presently point out, it was generally, thought by many High 939

Courts, though doubted by a few, that the police were not barred from further investigation by the circumstance that a report under Section 173(1) had already been submitted and a Magistrate had already taken cognizance of the offence. The Law Commission in its 41st report recognized the position and recommended that the right of the police to make further investigation should be statutorily affirmed. The Law Commission said :

“14.23. A report under Section 173 is normally the end of the investigation. Sometimes, however, the police officer after submitting, the report under Section 173 comes upon evidence bearing on the guilt or innocence of the accused. We should have thought that the police officer can collect that evidence and send it to the Magistrate concerned. It appears, however, that Courts have sometimes taken the narrow view that once a final report under Section 173 has been sent, the police cannot touch the case again and cannot re- open the investigation. This view places a hindrance in the way of the investigating agency, which can be very unfair to the prosecution and, for that matter, even to the accused. It should be made clear in Section 173 that the competent police officer can examine such evidence and send a report to the Magistrate. Copies concerning the fresh material must of course be furnished to the accused”.

Accordingly, in the Criminal Procedure Code, 1973, a new provision, Section 173(8), was introduced and it says: “Nothing in this section shall be deemed to preclude further investigation in respect of an offence after a report under sub-section (2) has been forwarded to the Magistrate and, where upon such investigation, the officer in charge of the police Station obtains further evidence, oral or documentary, he shall forward to the Magistrate a further report or reports regarding such evidence in the form prescribed, and the provisions of sub-sections (2) to (6) shall, as far as may be, apply in relation to such report or reports as they apply in relation to a report forwarded under sub section (2)”.

The right of the police to make repeated investigations under the old Code was recognised by the Madras High Court as early as in 1919 in Divakar Singh v. A. Ramamurthi Naidu (1), where Phillips and Krishnan, JJ., observed as follows: 940

“Another contention is put forward that when a report of investigation has been sent in under Section 173, Criminal P.C., the police has no further powers of investigation, but this argument may be briefly met by the remark that the number of investigations into a crime is not limited by law and that when one has been completed another may be begun on further information received”.

In re. Palaniswami Goundan(1) the Madras High Court held that notwithstanding the filing of a final charge- sheet, a police officer could still investigate and lay further charge-sheets if he got information and that there was no finality either to the investigation or to the laying of charge-sheets. In Md. Niwaz v. The Crown(2) a Bench of the Lahore High Court consisting of Din Mohammad and Cornelius JJ., cited with approval the decision of the Division Bench of the Madras High Court in Divakar Singh v. A. Ramamurthi Naidu(3) already referred to by us. In Prosecuting Inspector v. Minaketan Mahato(4), the High Court of Orissa held that the police had the right to reopen investigation even after the submission of the charge-sheet under Section 173 Criminal Procedure Code if fresh facts came to light. In Rama Shanker v. State of U.P.(5) a Division Bench of Allahabad High Court took the view that the submission of a charge-sheet not being a judicial act, the submission of a fresh charge-sheet after submission of a report under Section 173 Criminal Procedure Code was not illegal. In re. State of Kerala v. State Prosecutor(6) a Division Bench of the Kerala High Court thought it was well settled law that the police had the right to reopen the investigation even after the submission of a charge-sheet under Section 173 Criminal Procedure Code and that there was no bar for further investigation or for filing of supplementary report.

In H. N. Rishbud v. The State of Delhi(7),this Court contemplated the possibility of further investigation even after a Court had taken cognizance of the case. While noticing that a police report resulting from an investigation was provided in Section 190 Criminal Procedure Code as the material on which cognizance was taken, it was pointed out that it could not be maintained that a valid and legal police report was the foundation of the jurisdiction of the Court to take cognizance.

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It was held that where cognizance of the case had, in fact, been taken and the case had proceeded to termination, the invalidity of the precedent investigation did not vitiate the result unless miscarriage of justice had been caused thereby. It was said that a defect or illegality in investigation, however serious, had no direct bearing on the competence of the procedure relating to cognizance or trial. However, it was observed:

“It does not follow that the invalidity of the investigation is to be completely ignored by a Court during trial. When the breach of such a mandatory provision is brought to the knowledge of the Court at a sufficiently early stage, the Court, while not declining cognizance, will have to take the necessary steps to get the illegality cured and the defect rectified, by ordering such re-investigation as the circumstances of an individual case may call for”. This decision is a clear authority for the view that further investigation is not altogether ruled out merely because cognizance of the case has been taken by the Court; defective investigation coming to light during the course of a trial may be cured by a further investigation, if circumstances permit it.

In Tara Singh v. State(1) the police first submitted a report styled as “an incomplete challan”, which, however, contained all the particulars prescribed by Section 173(1). Later, two supplemental challans were submitted containing the names of certain formal witnesses. The Magistrate had taken cognizance of the case when the incomplete challan was submitted. It was urged that the Magistrate had taken cognizance of the case illegally and the statements of witneses examined before submission of the supplemental challans should be excluded from the record. This Court held that the so called incomplete challan was in fact a complete report of the kind contemplated by Section 173(1) (a), and, therefore, the Magistrate had properly taken cognizance of the case. The Court declined to express any opinion on the question whether the police could be permitted to send incomplete reports under Section 173(1) Criminal Procedure Code. This case while neither approving nor disapproving the practice of submitting incomplete challans in the first instance, certainly notices the existence of such practice. Some High Courts took the view that with the submission of a charge-sheet under Section 173 the power of the police to investigate came to an end and the Magistrate’s cognizance of the offence started.

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It was said that any further investigation by the police would trench upon the magisterial cognizance. Vide-Ram Gopal Neotia v. State of West Bengal(1). In Hanuman & Anr. v. Raj.(2) it was held that when a case was pending before a Magistrate, the action of the police in resuming investigation and putting up a new challan against a person not originally an accused as a result of the further investigation was unauthorised and unlawful. In State v. Mehar Singh & Ors.(3), a Full Bench of the High Court of Punjab and Haryana held that the police became functus officio once the Court took cognizance of an offence on the filing of a charge-sheet by the police and thereafter further investigation by the police was not permissible. The police, it was said, could not ‘tinker’ with the proceedings pending in the Court. It was, however, observed that it would be open to the Magistrate to ‘suspend cognizance’ and direct the police to make further investigation into the case and submit a report. The High Court of Punjab and Haryana acknowledged the existence of the practice of submitting supplemental charge-sheets, but was of the view that such practice was not sanctioned by the Code. Faced with the impracticality of banning all further investigation once cognizance of an offence was taken by the Court, the High Court tried to find a solution to the problem by suggesting the procedure of the Magistrate suspending cognizance and ordering further investigation. The procedure of ‘suspending cognizance’ suggested by the High Court of Punjab and Haryana does not appear to us to be warranted by the provisions of the Criminal Procedure Code. Anyone acquainted with the day today working of the criminal courts will be alive to the practical necessity of the police possessing the power to make further investigation and submit a supplemental report. It is in the interests of both the prosecution and the defence that the police should have such power. It is easy to visualise a case where fresh material may come to light which would implicate persons not previously accused or absolve persons already accused. When it comes to the notice of the investigating agency that a person already accused of an offence has a good alibi, is it not the duty of that agency to investigate the genuineness of the plea of alibi and submit a report to the Magistrate ? After all the investigating agency has greater resources at its command than a private individual. Similarly, where the involvement of persons who are not already accused comes to the notice of the investigating agency, the investigating agency cannot keep quiet and refuse to investigate the fresh information. It is their duty

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to investigate and submit a report to the Magistrate upon the involvement of the other persons. In either case, it is for the Magistrate to decide upon his future course of action depending upon the stage at which the case is before him. If he has already taken cognizance of the offence, but has not proceeded with the enquiry or trial, he may direct the issue of process to persons freshly discovered to be involved and deal with all the accused, in a single enquiry or trial. If the case of which he has previously taken cognizance has already proceeded to some extent, he may take fresh cognizance of the offence disclosed against the newly involved accused and proceed with the case as a separate case. What action a Magistrate is to take in accordance with the provisions of the Code of Criminal Procedure in such situations is a matter best left to the discretion of the Magistrate. The criticism that a further investigation by the police would trench upon the proceedings before the Court is really not of very great substance, since whatever the police may do, the final discretion in regard to further action is with the Magistrate. That the final word is with the Magistrate is sufficient safeguard against any excessive use or abuse of the power of the police to make further investigation. We should not, however, be understood to say that the police should ignore the pendency of a proceeding before a Court and investigate every fresh fact that comes to light as if no cognizance had been taken by the Court of any offence. We think that in the interests of the independence of the magistracy and the judiciary, in the interests of the purity of the administration of criminal justice and in the interests of the comity of the various agencies and institutions entrusted with different stages of such administration, it would ordinarily be desirable that the police should inform the Court and seek formal permission to make further investigation when fresh facts come to light.

As observed by us earlier, there was no provision in the Code of Criminal Procedure, 1898 which, expressly or by necessary implication, barred the right of the police to further investigate after cognizance of the case had been taken by the Magistrate. Neither Section 173 nor Section 190 lead us to hold that the power of the police to further investigate was exhausted by the Magistrate taking cognizance of the offence. Practice, convenience and preponderance of authority, permitted repeated investigations on discovery of fresh facts. In our view, notwithstanding that a Magistrate had taken cognizance of the offence upon a police report submitted under Section 173 of the 1898 Code, the right of the police to further investigate was not exhausted and the police could exercise such right as often as necessary when fresh information came to light. Where the police desi

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ed to make a further investigation, the police could express their regard and respect for the Court by seeking its formal permission to make further investigation.

As in the present case, occasions may arise when a second investigation started independently of the first may disclose a wide range of offences including those covered by the first investigation. Where the report of the second investigation is submitted to a Magistrate other than the Magistrate who has already taken cognizance of the first case, it is up to the prosecuting agency or the accused concerned to take necessary action by moving the appropriate superior Court to have the two cases tried together. The Magistrates themselves may take action suo motu. In the present case, there is no problem since the earlier case has since been withdrawn by the prosecuting agency. It was submitted to us that the submission of a charge-sheet to the Delhi Court and the withdrawal of the case in the Ambala Court amounted to an abuse of the process of the Court. We do not think that the prosecution acted with any oblique motive. In the charge-sheet filed in the Delhi Court, it was expressly mentioned that Mehra was already facing trial in the Ambala Court and he was, therefore, not being sent for trial. In the application made to the Ambala Court under Section 494 Criminal Procedure Code, it was expressly mentioned that a case had been filed in the Delhi Court against Mehra and others and, therefore, it was not necessary to prosecute Mehra in the Ambala Court. The Court granted its permission for the withdrawal of the case. Though the investigating agency would have done better if it had informed the Ambala Magistrate and sought his formal permission for the second investigation, we are satisfied that the investigating agency did not act out of any malice. We are also satisfied that there has been no illegality. Both the appeals are, therefore, dismissed.

M.R. Appeals dismissed

Intention to defraud/cheat at time of making of contract essential to make out cheating.

Comment : In this case the Court was faced with a situation where a complainant prosecuted the vendors in an agreement to sell that he entered, for Cheating (420/415/418), 423 etc. The basis of his case being that the vendors with a fraudulent intention, deceptively, induced the complainant to purchase the property, knowing perfectly well that with regard to the whole property they did not have the right to sell, and there was a litigation pending vis-a-vis the property. This was claimed to have been done with a dishonest intention – to cause wrongful loss to the complainant and wrongful gain to them. The Court however was not impresed by this particular prosecution and SC quashed the same on the ground that every failed contract is not cheating, intention to cheat/defraud should be proved at the time of making of contract in order to sustain a proseuction for cheating. 

 Supreme Court of India
Hridaya Ranjan Pd. Verma & Ors. vs State Of Bihar And Another on 31 March, 2000
Equivalent citations: 2000 (1) ALD Cri 848, 2000 (1) ALT Cri 349
Author: D Mohapatra
Bench: K Thomas, D Mohapatra

JUDGMENT

D.P. Mohapatra, J.

1. Leave granted.

2. The three appellants, Hridaya Ranjan Prasad Verma, Manoranjan Prasad Verma and Rajiv Ranjan Prasad Verma are sons of Late Shri Kashi Nath Prasad Verma. They have three other brothers who are not directly involved in the present proceedings. Late Kashi Nath Prasad Verma was the owner of Khasra No. 213, Plot No. 1172, in Village Srinagar, within Siwan Police Station. On his death his six sons succeeded to the property. Appellant No. 1 is a neurosurgeon at Patna; appellant No. 2 is the Manager of Pathar Jliora Tea Gardens in Jalpaiguri and appellant No. 3 is a retired marketing manager of Jay Shree Tea and Industries Ltd., Delhi. Respondent No. 2, Manish Prasad Singh, an advocate, is the secretary of Kanishka Sahkari Grih Nirman Samiti Limited, Sewan, (hereinafter referred to as the Society) a cooperative society engaged in purchasing land from different persons and after developing and dividing it into small pieces selling the plots to different customers. The appellants agreed to sell the land in village Srinagar to respondent No. 2 for a consideration of Rs. 16,00,000. The respondent paid a sum of Rs. 11,00,000 to the appellants by way of drafts drawn in their favour on 7.12.92. The appellants executed a registered sale deed in respect of the land in favour of the Society. It is the case of the appellants that on insistence of respondent No. 2 two other brothers of the appellants signed the sale deed as witnesses. By way of a further safeguard the appellants executed a separate indemnity deed on the same day in which they undertook to indemnify any loss caused to the society on account of any objection which may be raised by any co-sharer against transfer of the land in future. The appellants assert that they have delivered possession of the land to the society on the same day. Another brother of the appellants Priya Ranjan Prasad Verma also executed a sale deed in favour of the society alienating his portion of the land.

3. On registration of the sale deed respondent No. 2 handed over three cheques to the appellants for the sum of Rs. 5,50,000. When the appellants presented the said cheques in the bank, the same were dishonoured on account of insufficiency of amount in the account of the drawer. The respondent No. 2 had issued a separate cheque in favour of Priya Ranjan Prasad Verma which was also dishonoured for the same reason.

4. Prior to the execution of the sale deed Akhil Ranjan Prasad Verma brother of the appellants had filed a suit, Title Suit No. 118 of 1990 for partition alleging inter alia that though the properties left by their father had been partitioned amongst the brothers in 1971 no division by metes and bounds had taken place. On 5.12.1992 on the application filed under Order 39 Civil Procedure Code the learned subordinate judge, Siwan passed an interim order restraining the appellants from disturbing the status quo or transferring the land of Schedule I to the plaint but no injunction was passed in respect of the land described in Schedule-VI of the plaint in which the property in dispute in the present proceeding is included. According to the appellants the plaintiff Akhil Ranjan Prasad Verma did not press his prayer for injunction in respect of the Schedule IV properties. It is the further case of the appellants that between 9.12.92 to 18.12.92 the respondent No. 2 sold portions of the land sold by them to several other persons.

5. When the cheques issued by the respondent No. 2 in their favour bounced the appellants made several requests to the said respondent for payment of the amount. On each such occasion the said respondent avoided to pay the amount promising to do so within a short time. Finally on 21.10.1995 the appellants through their advocate sent a notice to respondent No. 2 reminding him that the cheques issued by him in favour of the appellants had bounced due to insufficiency of funds. Finding that respondent No. 2 had no intention to pay the amount, the appellants lodged a first information report under Sections 406, 420 and 120B IPC with the Siwan Police Station on 11.11.1995 which was registered as Siwan Misfile Case No. 191/95. In the said FIR the respondent No. 2 and Avdesh Narayan Rai who was the Vice President of the cooperative society were named as the accused. The police after investigating into the allegations made in the FIR filed a charge-sheet against respondent No. 2 and Avdesh Narayan Rai. The appellants also filed three suits for realisation of the amount due to them.

6. Shortly thereafter on 14.12.1995 the respondent No. 2 filed complaint No. 1282/95 in the Court of the Chief Judicial Magistrate, Siwan against the appellants alleging commission of offences under Section 418 (Cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect), Section 420 (Cheating and dishonestly inducing delivery of property), Section 423 (Dishonest or fraudulent execution of deed of transfer containing false statement of consideration), Section 469 (Forgery for purpose of harming reputation), Section 504 (intentional insult with intent to provoke breach of the peace) and Section 120B IPC (criminal conspiracy). It is the case of the appellants that the FIR was filed as a counter blast to the criminal case and the civil suits filed by them against the respondent No. 2.

7. In the complaint respondent No. 2 alleged inter alia that by conspiring together all the accused have defaulted and cheated the society and the complainant by giving false, concocted and wrongful information and assurances saying to have a Sada “Kora” and thus they induced the complainant to enter into negotiations and also to advance them a heavy amount with their ulterior design to acquire wrongful gain to themselves and for wrongful loss to the society and the complainant – both monitory and reputational. Some averments in the complaint relevant for the purpose of this proceeding are extracted hereunder:

That at the time of giving proposal to the complainant for buying the said land, accused No. 1 asserted that the said land has fallen exclusively to the share and possession of three brothers (all accused) after the partition of the estate left by late Kashi Nath Prasad Verma among all his six sons and a “Kora” to this effect has also been prepared and signed by all the brothers. Accused No. 1 also said that the said Kora was not available at that time and he would show as and when need be.

That all accused hail from a very sound and respectable family and accused No. 1 specially being a renowned doctor, appeared to be more trustworthy to the complainant. The complainant showing due respect to accused No. 1 believed him and entered into negotiation with him for purchase of said land.

That ultimately all the accused appeared at Siwan for executing the sale deeds in favour of the Society on a date fixed earlier by them. Just before the execution of the sale deed the complainant asked the accused to show the “Kora” prepared and signed by them (all the six brothers). The accused did not show the “Kora” and assured that all the brothers will join the deed. The accused will execute the sale deeds and rest three brothers will join the sale deeds as attesting witnesses.

That the sale deeds in question were scribed at the direction and dictation of the accused in favour of the Society in respect of entire land but only two brothers out of rest three came to join the deeds as attesting witnesses and one of them i.e. sixth brother namely Praful Ranjan Prasad Verma did not appear to do the same as assured by accused No. 1 to the complainant.

That in order to avoid future complications the complainant proposed the accused either to retain 1/6th share of land for themselves and to execute sale deeds in respect of only five shares of land or to refund the money to the complainant given to them as advance consideration money. But the accused did not agree to the proposals of the complainant saying that they will execute an agreement to the effect that in case of any future trouble to the Society, the executant i.e. the accused will be liable to compensate the Society. Thus the complainant, seeing no alternative, agreed to the proposal of the accused to execute sale deeds in respect of entire lands and sale deeds were executed accordingly.

That in the meantime, some days after the execution of the said sale deed, the complainant came to know that Title Suit No. 118/90 tiled by Akhil Ranjan Prasad Verma, one of the six brothers of the accused as plaintiff against Priya Ranjan Prasad Verma & five others as defendants was subjudice in the court of Sub-Judge-III, Siwan, long before the starting of the negotiation for the sale and purchase of said land. Besides, another suit bearing no 68/83, Nagendra Nath Sinha and Ors.-plaintiffs v. Singhashani Devi and Ors., defendants has also been pending in the Court of Munsif-1 Siwan from long before the starting of the negotiation of sale and purchase of the said land. The accused had concealed these facts from the complainant at the time of negotiation and execution of the aforesaid sale deeds.

That from the facts detailed above, it is quite clear that accused have deliberately and intentionally defrauded and cheated the Society and the complainant by suppressing some facts and giving false and concocted information and assurances to the complainant so as to make him believe that the deal is a fair one and free of troubles. The accused did so with an intention to acquire wrongful gain for themselves and to cause wrongful loss to the society and the complainant. The accused have always kept the complainant in wrong box and thus they have induced the complainant to enter into negotiation and advance consideration money to them.

That by suppressing facts relating to two pending cases from before and filing criminal case against the complainant and civil cases against the Society the accused have lowered down the prestige and reputation of the Society and the complainant in the eyes of the members, customers and the public at large, although the complainant has committed no fault since the amount due to the accused has already been entered into the Cash Book of the Society and it has come in the audit Report done for the year 1994-95.

8. In the case of State of Haryana and Ors. v. Bhajan Lal and Ors. [1992] Supp. 1 SCC 335, this Court in the back drop of interpretation of various relevant provisions of the CrPC under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Cr.P.C. gave the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse, of the process of the Court or otherwise to secure the ends of justice, making it clear that it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list to myriad kinds of cases wherein such power should be exercise:

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.

9. In the decision this Court added a note of caution to the effect that the power of quashing a criminal proceeding should be exercised ‘very sparingly and with circumspection and that too in the rarest of rare cases’.

10. The principles laid down in this decision have been followed in several decisions of this Court like [1995] 5 SCC 194 Rupan Deol Bajaj (Mrs.) and Anr. v. Kanwar Pal Singh Gill and Anr. ; Rajesh Bajaj v. State NCT of Delhi and Ors. [1992] 2 SCC 651;State of Kerala and Ors. v. O.C. Kuttan and Ors. [1996] 9 SCC 1 and P.S. Rajya v. State of Bihar State of Orissa v. Bansidhar Singh.

11. The question is whether the case of the appellants comes under any of the categories enumerated in State of Haryana and Ors. v. Bhajan Lal and Ors. (supra) ? Is it a case where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in entirety do not make out a case against the accused? For determination of the question it becomes relevant to note the nature of the offences alleged against the appellants, the ingredients of the offences and the averments made in the complaint.

12. On a reading of the complaint portions of which have been extracted earlier it is clear that the main offence alleged to have been committed by the appellants is ‘cheating’ punishable under Section 420 IPC.

13. Cheating is defined in Section 415 of the Code as, “Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”.

Explanation – A dishonest concealment of facts is a deception within the meaning of this section.

The section requires – (1) Deception of any person.

(2) (a) Fraudulently or dishonestly inducing that person

(i) to deliver any property to any person; or

(ii) to consent that any person shall retain any property; or

(b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body mind, reputation or property.

14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest.

15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise.

16. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed.

17. Judged on the touchstone of the principles noted above, the present case, in our considered view warrants interference inasmuch as the ingredients of the offence of cheating punishable under Section 420 IPC and its allied offences under Sections 418 and 423 has not been made out. So far as the offences under Sections 469, 504 and 120B are concerned even the basic allegations making out a case thereunder are not contained in the complaint. That being the position the case comes within the first category of cases enumerated in State of Haryana and Ors. v. Bhajan Lal and Ors. (Supra) and as such warrants interference by the Court. Reading the averments in the complaint in entirety and accepting the allegations to be true, the ingredients of intentional deception on the part of the accused right at the beginning of the negotiations for the transaction has neither been expressly stated nor indirectly suggested in complaint. All that the respondent No. 2 has alleged against the appellants is that they did not disclose to him that one of their brothers had filed a partition suit which was pending. The requirement that the information was not disclosed by the appellants intentionally in order to make the respondent No. 2 part with property is not alleged expressly or even impliedly in the complaint. Therefore the core postulate of dishonest intention in order to deceive the complainant-respondent No. 2 is not made out even accepting all the averments in the complaint on their face value. In such a situation continuing the criminal proceeding against the accused will be, in our considered view, an abuse of process of the court. The High Court was not right in declining to quash the complaint and the proceeding initiated on the basis of the same.

18. Accordingly the appeals are allowed. The Judgment/Order dated 13-4-1999 of the Patna High Court in Criminal Misc. No. 22880/1998 and Criminal Misc. No. 24068 of 1998 is set aside and the proceeding in Criminal Case No. 22/96 pending in the Court of Chief Judicial Magistrate, Siwan is quashed.

For 420 in cheque bounce cases – dishonest intention at time of giving cheque necessary

This decision basically states that merely because cheque gets dishonoured – won’t automatically give rise to liability u/s 420 for cheating – the prosecution/complainant has to prove that at the time of giving of cheque the intention of drawer was dishonest/fraudulent, and he did not intend to pay, but dishonestly induced the complainant to delivery valuable security/property. 
Gauhati High Court
Manoranjan Haldar vs Mechfab Engineering Industries on 15 March, 1983
Equivalent citations: 1984 CriLJ 1265
Author: S Ali
Bench: S Ali

ORDER

S.M. Ali, J.

1. This application under Section 401 and/or 482 Cr.P.C. is directed against the order dated 15.10.81 passed by Judicial Magistrate, Gauhati in Case No. 1666/81 and for quashing the proceeding pending in the court of the judicial Magistrate vide the aforesaid case.

2. The opposite party filed a complaint petition in the Court of the Chief Judicial Magistrate, Kamrup at Gauhati on 28.8.82, against the accused-petitioner alleging that the complainant is a partner of M/s. Mechfab Engg, Industries having its head office and place of business at Zoo Road, Gauhati and being a firm manufacturing steel articles. On 3.7.81 the accused-petitioner placed an order with the firm for supply of 27 Nos. of G.I. Tank valued at Rs. 64,500/-. In pursuance of which the accused-petitioner paid an advance amouts of Rs. 30,000/- to the firm by a Bank cheque D/-3.7.81 which was duly encased by the firm Against the order of supply the complainant firm issued 27 Nos. of M. Section Moulds for P.S.C. Poles and one G.I. Tank by the bill D/-5.9.81. 14 Nos. of P.S.C. Poles and G. I. Tank were accepted by the accused-petitioner from the firm on 14.8.81. Then 13 Nos. of M.S. Moulds, P.S.C. Poles were supplied to the accused-petitioner on 5.9.81 by the firing which the accused-petitioner accepted. It is further alleged that a sum of Rs. 10,000/- was subsequently paid by the accused-petitioner to the complainant through a Bank Cheque which was also duly encased. For the balance amount of the dues the accused-petitioner issued a Bank Cheque DA 7.9.81 against his account at the Central Bank of India, Fancy Bazar Branch, Gauhati. The complainant presented the cheque to the Bank on 7.9.81 but it was dishonoured by the Bank. This fact was brought to the notice of the accused-petitioner who however apologized for the firm having not received the payment of the cheque money. The accused-petitioner assured the complainant that the cheque would be honoured if presented to the Bank after a couple of days. The complainant again presented the cheque on 24.9.81 to the Bank but’ the Bank informed that the accused petitioner by his letter D/- 24.9.81 directed the Bank to stop payment to the complainant. On enquiry from Bank the complainant came to know that the accused-petitioner bad only sum of Rs. 700/- at his credit at the Bank. Thereafter the complainant demanded the sum of Rs. 24,500/- from the accused-petitioner on several occasions but the accused ultimately refused to make payment of the dues on 14.10.81. The allegation is therefore that the accused-petitioner with full knowledge that he had no money in the Bank to satisfy the dues of the complainant issued the cheque and thus had the intention to deceive the complainant. Thus the accused-petitioner dishonestly induced the complainant to, deliver the articles with the intention to cheat the complainant.

3. The learned Chief Judicial Magistrate transferred the petition of complaint to the I learned Judicial Magistrate who examined the complainant on oath and finding that a I prima facie case Under Section 420 IPC was made out against the accused, issued, warrant of arrest against the accused with a bail of Rs. 5000/-.

4. On 17.11.81 the accused-petitioner I appeared before the court and was enlarged on a bail of Rs. 3000/- with one surety.

5. The case remains pending in the court of the learned Judicial Magistrate, who has not yet started trial.

6. It is to be seen whether any offence of cheating has been made out as per the complaint. In his examination under Section 200 Cr.P.C. the complainant (the partner representing the firm) disclosed that he met the accused-petitioner 2/4 days after the Bank had issued him a memo. Showing the reason of not honouring the bank cheque and that ultimately on 14.10.81 the accused informed him that he would not make any payment. Learned counsel for the petitioner pointed out that the facts of the complaint do not constitute the ingredients necessary for the offence of cheating, in any form. Section 415 IPC defines cheating as follows:

Whoever by deceiving any person fraudulently or dishonestly induces the person so deceived to deliver any property to any person or to consent that any person shall retain any property or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were so deceived and which act or omission causes or is likely to cause the damage or harm to that person in body, mind, reputation or property is said to cheat.

Explanation – The dishonest concealment of facts is a deception within the meaning of this section.

Section 420 IPC says:

Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person or to make, alter or destroy the whole or any part of a valuable security or anything which is signed or sealed and which is capable of being converted into a valuable security, shall be punished….

It is therefore clear that the intention to cheat must have been there with the accused at the time of the initial transaction. Where the accused had an intention to pay against delivery of goods, I the fact that he did riot pay would not convert the transaction into one of cheating. On the other hand, if he had no intention to pay but merely expressed his intention to pay in order to induce the complainant to part with the goods, then in that case cheating would be established. Then again, if there be no intention to, cheat at the time when promise of payment is made, subsequent inability to pay or perform the promise will not amount to any offence. It is of course settled principle that intention of an accused may be judged by his subsequent act or conduct. But still such conduct or act cannot be the sole criterion to judge his intention at the time of initial representation. There are two main Elements of offence of cheating, namely, deception and dishonest inducement to do or omit to do anything. At the same time, there deception is not a criminal offence nor is mere dishonesty so. In between the two conceptions there is yet a line though very thin giving rise to breach of contract for which remedy lies in a civil action.

7. In the light of the aforesaid principles of law we have to examine whether any criminal offence has been made out by the facts of the complaint. Here admittedly the accused made a payment of Rs. 40,000/- only to the complainant against the articles received by him from the firm. For the balance of the dues he issued a cheque D/-7.9.81 which though post dated was accepted by the complainant for encashment. When the Bank first dishonoured the cheque and as the matter came to the knowledge of the accused-petitioner he apologized and assured that in future the cheque would be honoured. That means he would be making necessary deposit in the Bank for encashment of the cheque. The accused-petitioner had only a sum of Rs. 700/- on his account in the Bank. It is stated in the complaint that on some subsequent occasions also the accused-petitioner assured the complainant that the payment would be made. Ultimately on 14.10.81 he refused to make any payment. These are the circumstances of the case and on the basis of these circumstances, it cannot be said that at the time when order for supply of the articles was placed by the accused-petitioner, he had any dishonest intention to deceive the complainant. There is scope to think that due to some subsequent developments, taking place between the parties, the accused-petitioner might have changed his mind for which he refused the payment. As said before, it is the established principle of law that the dishonest intention at the time of the initial transaction must appear to be clear. The subsequent conduct of the accused cannot make the transaction amount to cheating. The submission of the learned Counsel for the opposite parties that the facts of the case indicate that the accused-petitioner in order to cover up his dishonest intention made partial payment and that it was in his mind that after receiving the entire lot of the articles he would not make the balance payment thereby having some wrongful gain and that such dishonest intention to deceive the complainant was there with the accused from the very start of the deal, cannot be accepted in view of the facts of the case. The knowledge of the accused-petitioner that he had only a sum of Rs. 700/- in the Bank, whereas the Bank Cheque issued by him on 7.9.81 was for a sum of Rs. 24,500/- also by itself does not lead to the inference that he had the dishonest intention of cheating the complainant at the time when he placed the order for supply of the goods or at the time when he accepted the goods. As said before, there should be circumstances showing in a clear way that the accused had such a dishonest intention at the initial stage. As said before subsequent refusal to pay the balance amount cannot convert the transaction into cheating. It is found that the matter is purely of civil nature. It is a case of breach of contract. The complainant may take recourse to civil action if he so likes. But the criminal proceeding as it is in the present form would be merely a futile exercise.

8. The result is that the petition is allowed. The impugned order and the proceeding are hereby quashed. No order as to costs.