Babulal Parasurampuria and Others vs State of Karnataka and Others

Rathnakala, J.—This petition is filed under Section 482 of Cr.P.C. to quash the complaint dated 17.04.2014 lodged by the second respondent in Crime No. 101/2014 registered by the police in respect of the offence punishable under Sections 171E, 188, 420, 489C read with Section 34 of IPC, under Section 4 of Prevention of Money Laundering Act, 2002, under Sections 5 and 39 of the Karnataka Money Lenders Act and Sections 3 and 4 of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004.

The facts succinctly stated, the incident occurred during April, 2014 in which period the Election Commission of India had declared general election; the date of election for Bellary district was scheduled to be held on 17.04.2014; the District Election Commissioner (District Executive Magistrate) on receipt of a Short Message Service (SMS) forwarded the information to the second respondent; the second respondent in his capacity of Sub-Divisional Magistrate issues search warrant on 14.04.2014 under Section 94 of Cr.P.C. to the Police Inspector, Gandhmagar Police Station, Bellary; the Police Inspector carries out search on 14.04.2014 to various premises belonging to the petitioners. The Sub-Divisional Magistrate lodges a complaint on 20.04.2014 alleging the above noted offence. In the meantime, the general elections were held in Bellary on 17.04.2014.

Learned Senior Counsel for the petitioner submits that as per the search warrant it was primarily issued on the suspicion that the petitioners had stashed counterfeit money and forged documents to the tune of many crores for the purpose of Lok Sabha General Elections. During the search, they neither traced out even a single fake currency note nor any forged document. Having failed in his attempt, to rope the petitioners in one or another criminal case, beyond the scope of the provisions of Section 94 of Cr.P.C., registered the case under various other offences. As such, there was not a single complaint against the petitioners from any private person about carrying out the business without license or charging exorbitant interest in violation of the statutory limits. No case can be registered by the police for the offence punishable under Section 79(B) of the Land Reforms Act, without there being any report by the concerned Tahasildar and this was not domain of the police investigation. Since the petitioners did not oblige to succumb to the attempts of the respondents, they registered the classical immured police case against the petitioners who are all members of the joint family. The petitioners have submitted the periodical reports to the Income Tax Department and paid the tax amount promptly on their income. Merely because there was cash money in the house and vehicles were parked in front of the house, the Investigating Officer has registered the case by presuming that the money was intended to be transported towards the election. The currency notes were subjected to forensic test and found to be genuine currency notes. Despite the thorough seizure made continuously for four days, they were unable to find out anything which can rope the petitioners for commission of any offence.

It is the further submission of Senior Counsel that after coming to know about the registration of this case, the Income Tax officials have moved the trial Court and filed an application under Section 132A(1) of Income Tax Act, 1961 to release the documents Kisan Vikas Patras, National Savings Certificate, blank cheques etc. seized by the Gandhmagar police shown under P.S. No. 34/2014 as item Nos. 2 to 18 dated 12.04.2014 were handed over to the Assistant Director of Income Tax (Investigation) to deal with the same in accordance with law. They have moved another similar application for release of the cash amount seized. Allowing the respondents to proceed with further investigation on such a false vindicating, concocted complaint is nothing but abuse of process of law which needs intervention of this Court under its extraordinary jurisdiction. There is enormous delay in lodging complaint from the date, the District Election Commissioner received an information by way of SMS and to the date the complaint was lodged. Whereas the SMS was received by the District Commissioner on 11.04.2014, the complaint was lodged on 20.04.2014. This is against the law laid down by the Apex Court in Lalithkuman''s case reported in 2015 para 2 SCC 15. In that view of the matter, the FIR and the complaint deserve to be quashed.

Learned Government Pleader appearing for respondent No. 1 submits that of course the District Election Commissioner received a SMS message on 11.04.2014. After ascertaining about the message received, the Commissioner under the direction of the District Election Commissioner, the second respondent issued search warrant on 14.04.2014 to the jurisdictional police officer. Accordingly, the Investigating Officer proceeded along with election duty officials to the various premises of the petitioners from 14.04.2014 onwards and the search and seizure was concluded only by 17.04.2014. On that date, the complaint was filed and it took three more days for approval. Since the election at Bellary District was completed by 17.04.2014 and the officials were required to advert to the further consequential works of arrangements of bards for counting etc., complaint came to be filed on 20.04.2014. The delay by itself will not vitiate the registration of the case, if there is valid reasons. Even otherwise, there is no violation of law laid down by the Apex Court in Lalithkuman''s case. It is only after the search and seizure, the complainant was able to know about the alleged offence and has filed the complaint within seven days of the seizure. Because of want of currency machine, genuineness of the currency could not have been ascertained during search period. Unless the investigation is proceeded with, their genuineness cannot be ascertained. The investigation cannot be cleft or curtailed at the inception itself without giving free hand to the Investigating Officer to proceed with investigation from all inquest. As per the judgment of the Apex Court reported in 2008 part 8 SCC 781 head notes at G, H and I, even a mala fide complaint also deserves to be investigated, though the Income Tax Department has offered interest to investigate into the matter, it is only the police that can investigate in respect of the offence under the Indian Penal Code, 1860 and also Peoples Representation Act, 1950 as far as the election is concerned. Hence, the petition is liable to be dismissed.

Learned counsel for the second respondent while contributing to the submission made by the learned Government Pleader submits that due to exigency of work, the respondent being the important functionary in the election process that too in a sensitive Constituency had no time to file the FIR till after the accomplishment of pre-polling, polling and post polling exercises. After examining the seized materials and the documents, he has lodged complaint on 20.04.2014. The Enforcement Directorate of Government of India has addressed a letter to the District Supt. of Police seeking transfer of the seized cash property security for the purpose of further investigation. The petitioners have approached this Court by suppressing these vital materials. After receipt of a SMS and after due enquiry into the complaint, the second respondent/Sub Divisional Magistrate issued the search warrant as per the law and procedure established. During the search, huge sum of money amounting to Rs. 8,57,54,800/- was found and 39 blank but signed promissory notes were also found, National Savings Certificate, Kisan Vikasa Patras worth of Rs. 4,17,30,000/- and various blank cheques worth many lakh were recovered. It is only during the investigation they have to ascertain the authenticity of these notes and the purpose of these spurious documents. At the time of the check, the petitioners did not produce any proof of tax being paid on these sums. The Director of Income Tax subsequently issued a warrant of authorization under Section 132(A)(1) of Income Tax Act on 6/5/2014 and the some of the seized documents are handed over to the Assistant Director of Income Tax (Investigation) on 7/5/2014. The value of the documents handed over to Income Tax (Investigation) is Rs. 34,56,24,881/-. The various provisions of law quoted in the complaint, is on the basis of the documents seized and it is only after thorough investigation a final conclusion can be urged. Hence, the petition is liable to be dismissed.

On bare perusal of the complaint, it emanates that the complaint is drafted on an assumption and is imputed on the basis of the amount and items found and seized. While the petitioners who were very much present during the search submit that each and every currency notes were tested during the seizure and no fake currency could be identified, the complainant''s contention is genuineness of the currency notes are yet to be examined. He does not assign any reason as to why the genuineness of the currency notes could not be examined at the time of the search. They had ample time from 11/4/2014 itself till filing of the complaint filed to test the genuineness of the currency notes. The first raid is conducted from 9.00 a.m., on 11/4/2014, till 9.00 a.m. to 12/4/2014. The PF is submitted to the jurisdictional Magistrate only on 26/4/2014. That being so, the efforts of the respondents to offer explanation for the delay is not acceptable in view of the judgment of the Apex Court in the matter of Lalita Kuman''s case.

In view of the aforesaid discussion, we hold:

120.1. The registration of FIR is mandatory Section 154 of the Code, if the information discloses commission of a cognizable offence and no preliminary inquiry is permissible in such a situation.

120.2. If the information received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain whether cognizable offence is disclosed or not.

120.3. If the inquiry discloses the commission of a cognizable offence, the FIR must be registered. In cases preliminary inquiry ends in closing the complaint, a copy of the entry of such closure must be supplied to the first informant forthwith and not later than one week. It must disclose reasons in brief for closing the complaint and not proceeding further.

120.4. The police officer cannot avoid his duty of registering offence if cognizable offence is disclosed. Action must be taken against erring officers who do not register the FIR if information received by him discloses a cognizable offence.

120.5. The scope of preliminary inquiry is not to verify the veracity or otherwise of the information received but only to ascertain whether the information reveals any cognizable offence.

120.6. As to what type and in which cases preliminary inquiry is to be conducted will depend on the facts and circumstances of each case. The category of cases in which preliminary inquiry may be made are as under.

a) Matrimonial disputes/family disputes

b) Commercial offences

c) Medical negligence cases

d) Corruption cases

e) Cases where there is abnormal delay/laches in initiating criminal prosecution, for example, over 3 months'' delay in reporting the matter without satisfactorily explaining the reasons for delay.

The aforesaid are only illustrations and not exhaustive of all conditions which may warrant preliminary inquiry.

120.7. While ensuring and protecting the rights of the accused and the complainant, a preliminary inquiry should be made time bound and in any case it should not exceed 7 days. The fact of such delay and the causes of it must be reflected in the General Diary entry.

120.8. Since the General Diary/Station Diary/Daily Diary is the record of all information received in a police station, we direct that all information relating to cognizable offences, whether resulting in registration of FIR or leading to an inquiry, must be mandatorily and meticulously reflected in the said Diary and the decision to conduct a preliminary inquiry must also be reflected, as mentioned above."

In view of the above guidelines, it is permissible for the Investigating Officer investigating the corruption cases on receipt of an information which does not disclose a cognizable offence but indicates the necessity for an enquiry to conduct a preliminary enquiry to ascertain whether cognizable offence is disclosed or not and the relationship of such preliminary enquiry shall be not later than one week.

The offences quoted in the complaint are reiterated for the benefit of reference.

"1. 171E. Punishment for bribery:

171E. Whoever commits the offence of bribery shall be punished with imprisonment of either description for a term which may extend to one year, or with fine, or with both:

Provided that bribery by treating shall be punished with fine only.

Disobedience to order duly promulgated by public servant.

Whoever, knowing that, by an order promulgated by a public servant lawfully empowered to promulgate such order, he is directed to abstain from a certain act, or to take certain order with certain property in his possession or under his management, disobeys such direction, shall, if such disobedience causes to tender to cause obstruction, annoyance or injury, or risk of obstruction, annoyance or injury, to any person lawfully employed, be punished with simple imprisonment for a term which may extend to one month or with fine which may extend to two hundred rupees, or with both; and if such disobedience causes or trends to cause danger to human life, health or safety, or causes or tends to cause a not or affray, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

Cheating and dishonestly inducing delivery of property:

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 with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Tampering with property mark with intent to cause injury:

Whoever removes, destroys, defaces or adds to any property mark, intending or knowing it to be likely that he may thereby cause injury to any person, shall be punished with imprisonment of either description for a term which may extend to one year, or with fine, or with both.

Acts done by several persons in furtherance of common intention:

When a criminal act is done by several persons in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone.

vi. Sec. 4 of Prevention of Money Laundering Act -- shall not be less than 3 years which may extend to 7 years with fine of Rs. 5 lakhs.

vii. Sec. 5 of the Karnataka Money Lenders Act --Money lenders to obtain license.

viii. Section 39. Karnataka Money Lenders Act--General provision regarding penalties -- Whoever fails to comply with or acts in contravention of any revision of this Act, shall, if no specific penalty has been provided for in this Act, on conviction, be punished,

(a) for the first offence with simple imprisonment which may extend to three months or with fine which may extend to one thousand rupees or with both, and

(b) for the second or subsequent offence with imprisonment which may extend to six months or with fine which may extend to two thousand rupees or with both,

ix. 3. The Karnataka Prohibition of Charging Exorbitant Interest Act 2004 -- Prohibition of charging exorbitant interest -- No person shall charge exorbitant interest on any loan advanced by him.

x. 4. The Karnataka Prohibition of Charging Exorbitant Interest Act 2004 - Penalty -- Notwithstanding anything contained in the Karnataka Money -- Lenders Act, 1961, whoever contravenes the provision of section 3 or molests or abets the molestation of any debtor for recovery of any loan shall be punishable with imprisonment for a term which may extend to three years and also with fine which may extend to thirty thousand rupees".

If they had ascertained about the possible commission of the offence on 12.04.2014 itself (on which day SMS was received by the Deputy Commissioner), there was no reason why they did not lodge the complaint on that very day itself. Nothing prevented the Investigating Officer to continue his search in the premises of the petitioners after registering the case. The search and seizure initiated from 14.04.2014 not preceded by registering of the FIR which is against the provisions of Section 154(1) of Cr.P.C. which reads thus:

"154. Information in cognizable cases.

(1) Every information relating to the commission of a cognizable offence, if given orally to an officer in charge of a police station, shall be reduced to writing by him or under his direction, and be read over to the informant; and every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it, and the substance thereof shall be entered in a book to be kept by such officer in such form as the State Government may prescribe in this behalf."

(2) xxx

(3) xxx

This Court in number of cases has held that search and seizure not preceded by registration of FIR is illegal.

(Crl. P. No. 10616/2013 D.D. 23.08.2013 K. Yernswamy vs. State of Karnataka, Lokayuktha, Bellary; Crl. P. No. 15941/2012 c/w. Crl. P. No. 15852/2012 D.D. 05.02.2013 Sri Girishchandra and Another vs. The State by Lokayuktha Police, Yadgir; Crl. P. No. 1001/2013 D.D. 09.04.2013 Sri K. Ashwath Reddy and Another vs. Karnataka Lokayuktha Police, Police Wing, City Division, Bangalore; Crl. P. No. 3213/2012 and connected cases D.D. 03.09.2012 -- L. Shankaramurthy and Others vs. State by Lokayuktha Police, City Division, Bangalore Urban Division, Bangalore; Crl. P. No. 10442/2013 D.D. 18.03.2013 Somashekhrappa vs. The Karnataka Lokayukta, Belgaum; Crl. P. No. 11477/2011 D.D. 26.03.2013 Shri C. Hemanth Kumar vs. Karnataka Lokayuktha, Hospet, Bellary District)

When the Lokayuktha took the matter in Special Leave to Appeal (Crl.) No. 3508/13 in the case of State of Karnataka vs. N.A. Kamesh, which came to be rejected along with connected matters.

Coming to back to the offences quoted in the FIR, to attract punishment under Section 171E, there shall be an offence of bribery but the complaint allegation lacks the material particulars as to whom petitioners were attempting to bribe likewise to attract the Section 188 of IPC, there must be some material indicating the violation of any order duly promulgated by the public servants. The complaint averments fail to make out a case of cheating, attracting the offence punishable under Section 420 of IPC or tampering of the property mark to attract the offence punishable under Section 489 of IPC. There was no complaint from any quarter to invoke the provisions of Karnataka Money Lenders Act. The further allegation that the petitioners had mortgaged borrower''s land and had taken the land as penalty on forfeiture etc. is also not preceded by a complaint of any aggrieved person. If the petitioners have committed any offence in violation of the Karnataka Land Reforms Act, 1961, there is specific procedure prescribed under the Karnataka Land Reforms Act to initiate action.

For more than one reasons the complaint is liable to be quashed. Firstly, there is enormous delay in registering the complaint beyond the time stipulated by the Apex Court in Lalita Kuman''s case supra thereby vitiating not only the FIR but also the search and seizure conducted prior to registration of the case. Secondly, even on entire reading of the complaint, it fails to disclose commission of any cognizable offence. It is evident from the language employed in the complaint that the complaint is drafted on speculation, assumption and presumption. Allowing the investigation on such imaginary grounds is a waste exercise and pure abuse of process of law, which needs to be quashed under Section 482 of Cr.P.C.

Accordingly, the petition is allowed. The FIR registered by the first respondent police in Crime No. 101/2014 in respect offences punishable under Sections 171(E), 188, 420, 489(C), r/w. 34 of IPC is quashed. Further, it is clarified that the Income Tax Department who is said to have been already in the process of investigation can continue with their investigation and enquiry.