M/S. Varaha Infra Ltd & Ors. v. M/S. Greatful Infrastructures Pvt. Ltd.

#7. Mr. Krishnendu Bhattacharya, learned counsel for the petitioners has submitted that the petition of complaint vividly shows that all the accused persons including the company are situated outside the territorial jurisdiction of the learned Trial Court. But no enquiry in terms of Section 202 of the Code of Criminal Procedure was ever directed and process was issued defying the settled law of the land, which indeed is gross abuse of the process of law. 4

#8. The petitioners state that they have discharged their duty in strict sense pertaining to instant transaction and have paid the entire amount they were asked by the complainant/company and no amount is due. Hence, the statement of account relating to the instant transaction would evidently show that complainant has maliciously initiated this instant proceeding in order to extent unnecessary pressure upon the petitioners.

#9. The petitioners state and submit that firstly, complainant himself admitted that business was continuing and it was going on smoothly, hence deception and inducement from inception of the transaction does not find any place in the present case. Complainant did not avow any consequential made over of property or valuable goods and/or whether he deceived to deliver any property, thus there is no element of cheating and not a single ingredients constituting offence of cheating can be derived from petition of complaint. Secondly, both the petition of complaint and solemn affirmation at the most gives rise to a settlement of claim of Income Deduction at Source and counterclaim, and as such any culpability and/or mensrea is clearly absent. Thirdly, the statement of account glaringly proves that the complainant is trying to extort money from the petitioner/company by filing this false and baseless case. 5 Fourthly, the petition of complaint prima facie fails to make out any case in terms of Section 406 and Section 420 of the Indian Penal Code in any manner whatsoever. Fifthly, the correspondences and email referred hereinabove exchanged by and between the parties evidently shows claim and counter claim, which is purely civil in nature devoid of any culpability in any manner whatsoever thus the instant proceeding is an absolutely misnomer and gross abuse in the eye of law.

#10. The impugned proceeding is thus utterly bad in law and the same is liable to be quashed.

#11. Written notes of argument and Affidavit-in-reply have been filed reiterating the statements made in the revisional application.

#12. Ms. Manaswita Mukherjee, learned counsel for the opposite party has reiterated the case of the complainant as stated in the petition of complaint, by filing affidavit-in-opposition and written notes of argument.

#13. It is submitted that there is sufficient materials on record to prima facie make out a case against the petitioners in respect of the offenses alleged and as such the revision is liable to be dismissed.

#14. From the materials on record, it is evident that:- i) Admittedly there was a business relationship between the parties. 6 ii) The only dispute between the parties is that though TDS was deducted by the petitioners, they have not deposited the same with the income tax authority. iii) On the other hand the petitioners have claimed that the total agreed amount has been paid to the complainant. iv) It appears from the document at page 31 to the affidavit-in- opposition, that the work order issued by the petitioners in favour of the complainant, clearly notes that:- “...... 3. Taxes: TDS shall be recovered from all the i) payments that will be released you. ii) Service tax is nil as per notification no.25/2012-Service Tax dt.20.06.2012 under S. No.29(H)……………” v) Penalty for non-payment or belated payment of tax deducted at source, is provided under the Income Tax Act.

#15. It is submitted by the petitioners that the mandatory provision of section 202 Cr.P.C. has not been complied with by the learned Magistrate.

#16. The only address of the petitioners as given in the petition of complaint is:- “Umesh Smrati, 6, Jalem Vilas, Scheme Paota-’B’ Road, Jodhpur, Rajasthan-342 001..”

#17. The order issuing process is as follows:- 7 “CNS- 376 of 2019 Order dated:03.10.2019 Today is fixed for S/A. The authorised representative of the complainant Ranjit Gupta was examined on S.A. He also filed supportive xerox copy of documents. After perusal of the initial deposition and the document filed by the complainant, this Court is of the view that the complainant has been able to prove a prima facie case u/s 420/406 of IPC. Cognizance had already been taken. Issue summons upon all the accused u/s 420/406 of IPC. Issue summons at once. To for appearance and S/R. Requisite at once. Sd/- Metropolitan Magistrate, 12th Court, Calcutta”

#18. In Vijay Dhanuka and Ors. vs Najima Mamtaj and Ors., (2014) 14 SCC 638, on March 27, 2014, held:- in which he exercises his “11. Section 202 of the Code, inter alia, contemplates postponement of the issue of the process “in a case where the accused is residing at a place beyond the jurisdiction” and thereafter to either inquire into the case by himself or direct an investigation to be made by a police officer or by such other person as he thinks fit. In the face of it, what needs our determination is as to whether in a case where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, inquiry is mandatory or not.

#12. The words “and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction” were inserted by Section 19 of 8 (Amendment) Act the Code of Criminal Procedure (Central Act 25 of 2005) w.e.f. 23-6-2006. The aforesaid amendment, in the opinion of the legislature, was essential as false complaints are filed against persons residing at far off places in order to harass them. The note for the amendment reads as follows: “False complaints are filed against persons residing at far off places simply to harass them. In order to see that innocent persons are not harassed by unscrupulous persons, this clause seeks to amend sub-section (1) of Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction he shall enquire into the case himself or direct investigation to be made by a police officer or by such other person as he thinks fit, for finding out whether or not proceeding against the accused.” there was sufficient ground The use of the expression “shall” prima facie makes the inquiry or the investigation, as the case may be, by the Magistrate mandatory. The word “shall” is ordinarily mandatory but sometimes, taking into account the context or the intention, it can be held to be directory. The use of the word “shall” in all circumstances is not decisive. Bearing in mind the aforesaid principle, when we look to the intention of the legislature, we find that it is aimed to prevent innocent persons from harassment by unscrupulous persons from false complaints. Hence, in our opinion, the use of the expression “shall” and the background and the purpose for which the amendment has been brought, we have no doubt in our mind that inquiry or the investigation, as the case may be, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate.

#13. In view of the decision of this Court in Udai Shankar Awasthi v. State of U.P. [(2013) 2 SCC 435 : (2013) 1 SCC (Civ) 1121 : (2013) 2 SCC (Cri) 708] , this point need not detain us any further as in the said case, this Court has clearly held that the provision aforesaid is mandatory. It is apt to reproduce the following passage from the said judgment: (SCC p. 449, para 40) 9 “40. The Magistrate had issued summons without meeting the mandatory requirement of Section 202 CrPC, though the appellants were outside his territorial jurisdiction. The provisions of Section 202 CrPC were amended vide the Amendment Act, 2005, making it [Ed.: The matter between the two asterisks has been emphasised in original as well.] mandatory to postpone the issue of process [Ed.: The matter between the two asterisks has been emphasised in original as well.] where the accused resides in an area beyond the territorial jurisdiction of the Magistrate concerned. The same was found necessary in order to protect innocent persons from being harassed by unscrupulous persons and making it obligatory upon the Magistrate to enquire into the case himself, or to direct investigation to be made by a police officer, or by such other person as he thinks fit for the purpose of finding out whether or not, there was sufficient ground for proceeding against the accused before issuing summons in such cases.” (emphasis supplied)

#14. In view of our answer to the aforesaid question, the next question which falls for our determination is whether the learned Magistrate before issuing summons has held the inquiry as mandated under Section 202 of the Code. The word “inquiry” has been defined under Section 2(g) of the Code, the same reads as follows: “2. (g) „inquiry‟ means every inquiry, other than a trial, conducted under this Code by a Magistrate or court;” It is evident from the aforesaid provision, every inquiry other than a trial conducted by the Magistrate or the court is an inquiry. No specific mode or manner of inquiry is provided under Section 202 of the Code. In the inquiry envisaged under Section 202 of the Code, the witnesses are examined whereas under Section 200 of the Code, examination of the complainant only is necessary with the option of examining the witnesses present, if any. This exercise by the Magistrate, for the purpose of deciding whether or not there is sufficient ground for proceeding against the accused, is nothing but an inquiry envisaged under Section 202 of the Code.” 10

#19. In 2018(3) AICLR 625(Cal.), S.S. Binu vs. State of West Bengal (Cal.), the court held:- “100. To sum up, the reference made by the Learned Single Judge on the five issues are answered as follows:- of Section 19 of I. According to the settled principles of law, the amendment of sub-section (1) of Section 202 Cr.P.C. by virtue the Criminal Procedure (Amendment) Act, 2005, is aimed to prevent innocent territorial persons, who are residing outside jurisdiction of the Learned Magistrate concerned, from harassment by unscrupulous persons complaints. The use of expression "shall", looking to the intention of the legislature to the context, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate. II. Keeping in mind the object sought to be achieved by way of amendment of sub-section (1) of Section 202 Cr.P.C., the nature of enquiry as indicated in Section 19 of the Criminal Procedure (Amendment) Act, 2005, the Magistrate concerned is to ward of false complaints against such persons who reside at far of places with a view to save them from unnecessary harassment and the Learned Magistrate concerned is under obligation to find out if there is any matter which calls for investigation by Criminal Court in the light of the settled principles of law holding an enquiry by way of examining the witnesses produced by the complainant or direct an investigation made by a police officer as discussed hereinabove. III. When an order of issuing summon is issued by a learned Magistrate against an accused who is residing at a place beyond the area in which he exercises his jurisdiction without conducting an enquiry under Section 202 Cr.P.C., the matter is required to be remitted to the learned Magistrate concerned orders uninfluenced by the prima facie conclusion reached by the Appellate Court. for passing 11 in mind the object underlined IV. Keeping in Section 465 Cr.P.C. that if on any technical ground any party to the criminal proceedings is aggrieved he must raise the objection thereof at the earliest stage. In the event of failure on the part of an aggrieved party to raise objection at the earliest stage, he cannot be heard on that aspect after the whole trial is over or even at a later stage after his participation in the trial. In cases V. falling under Section 138 read with Section 141 of the N.I.Act, the Magistrate is not mandatorily required to comply with the provisions of Section 202 (1) before issuing summons to an accused residing outside the territorial jurisdiction of the learned Magistrate concerned.”

#20. Section 202 Cr.P.C. lays down:- “202. Postponement of issue of process. - is authorised (1) Any Magistrate, on receipt of a complaint of an offence of which he cognizance or which has been made over to him under section 192, may, if he thinks fit, [and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction] postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: Provided that no such direction for investigation shall be made,-- (a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or (b) where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200. 12 (2) In an inquiry under sub- section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath: Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainant to produce all his witnesses and examine them on oath. (3) If an investigation under sub- section (1) is made by a person not being a police officer, he shall have for that investigation all the powers conferred by this Code on an officer- in- charge of a police station except the power to arrest without warrant.”

#21. This court also relies upon the case of Birla Corporation Ltd. vs. Adventz Investments and Holdings (Criminal appeal No. 875, 876, 877 of 2019). The Supreme Court on 9th May, 2019 observed and held in respect of Section 202 Cr.P.C. as follows (The relevant paragraph are reproduced herein):-

#26. Complaint filed under Section 200 Cr.P.C. and enquiry contemplated under Section 202 Cr.P.C. and issuance of process:- Under Section 200 of the Criminal Procedure Code, on presentation of the complaint by an individual, the Magistrate is required to examine the complainant and the witnesses present, if any. Thereafter, on perusal of the allegations made in the complaint, the statement of complainant on solemn affirmation and the witnesses examined, the Magistrate has to get himself satisfied that there are sufficient grounds for proceeding against the accused and on such satisfaction, the Magistrate issuance of process as may direct contemplated under Section 204 Cr.P.C. The purpose of the enquiry under Section 202 Cr.P.C. is to determine whether a prima facie case is made out and whether there is sufficient ground for proceeding against the accused. 13

#27. The scope of enquiry under this section is extremely restricted only to finding out the truth or otherwise of the allegations made in the complaint in order to determine whether process should be issued or not under Section 204 Cr.P.C. or whether the complaint should be dismissed by resorting to Section 203 Cr.P.C. on the footing that there is no sufficient ground for proceeding on the basis of the statements of the complainant and of his witnesses, if any. At the stage of enquiry under Section 202 Cr.P.C., the Magistrate is only in the concerned with the allegations made complaint or the evidence in support of the averments in the complaint to satisfy himself that there is sufficient ground for proceeding against the accused.

#28. In National Bank of Oman v. Barakara Abdul Aziz and Another (2013) 2 SCC 488, the Supreme Court explained the scope of enquiry and held as under:- “9. The duty of a Magistrate receiving a complaint is set out in Section 202 CrPC and there is an obligation on the Magistrate to find out if there is any matter which calls for investigation by a criminal court. The scope of enquiry under this section is restricted only to find out the truth or otherwise of the allegations made in the complaint in order to determine whether process has to be Investigation under Section issued 202 CrPC investigation contemplated in Section 156 as it is only for holding the Magistrate to decide whether or not there is sufficient ground for him to proceed further. The scope of enquiry under Section 202 CrPC ascertainment of allegations made in the complaint: limited falsehood of therefore, truth or is different or not. is, (i) on the materials placed by the complainant before the court; (ii) for the limited purpose of finding out whether a prima facie case for issue of process has been made out; and 14 (iii) for deciding the question purely from the point of view of the complainant without at all adverting to any defence that the accused may have.”

#29. In Mehmood Ul Rehman v. Khazir Mohammad Tunda and Others (2015) 12 SCC 420, the scope of enquiry under Section 202 Cr.P.C. and the satisfaction of the Magistrate for issuance of process has been considered and held as under:- 200 Cr.P.C, examine upon oath for dealing with “Complaints “2. Chapter XV Cr.P.C. deals with the further procedure Magistrate”. Under Section Magistrate, taking cognizance of an offence on a complaint, shall complainant and the witnesses, if any, present and the substance of such examination should be reduced to writing and the same shall be signed by the complainant, the witnesses and the Magistrate. Under Section Magistrate, if required, is empowered to either inquire the case himself or direct an investigation to be made by a competent person “for the purpose of deciding whether or not there is sufficient ground for proceeding”. If, after considering recorded under Section 200 Cr.P.C and the result of the inquiry or investigation under Section 202 Cr.P.C, Magistrate is of the opinion that there is no for proceeding, he should sufficient ground dismiss the complaint, after briefly recording the reasons for doing so. the statements 202 Cr.P.C,

#3. Chapter XVI Cr.P.C deals with “Commencement of Proceedings before Magistrate”. If, in the opinion of the Magistrate taking cognizance of an offence, there is sufficient ground for proceeding, the Magistrate has to issue process under Section 204(1) Cr.P.C for attendance of the accused.”

#30. Reiterating the mandatory requirement of application of mind in the process of taking cognizance, in Bhushan Kumar and Another v. State (NCT of Delhi) and Another (2012) 5 SCC 424, it was held as under:- 15 “11. In Chief Enforcement Officer v. Videocon International Ltd. (2008) 2 SCC 492 (SCC p. 499, para 19) the expression “cognizance” was explained by this Court as “it merely means „become aware of‟ and when used with reference to a court or a Judge, it connotes „to take notice of judicially‟. It indicates the point when a court or a Magistrate takes judicial notice of an offence with a view to initiating proceedings in respect of such offence said to have been committed by someone.” It is entirely a different thing from initiation of proceedings; rather it is the condition precedent to the initiation of proceedings by the Magistrate or the Judge. Cognizance is taken of cases and not of persons. Under Section 190 of the Code, it is the application of judicial mind to the averments in the complaint that constitutes cognizance. At this stage, the Magistrate has to be satisfied whether there is sufficient ground for proceeding and not whether there is sufficient ground for conviction. Whether evidence is adequate for supporting the conviction can be determined only at the trial and not at the stage of enquiry. If there is sufficient ground for proceeding then the Magistrate is empowered for issuance of process under Section 204 of the Code.”

#31. Under the amended sub-section (1) to Section 202 Cr.P.C., it is obligatory upon the Magistrate that before summoning the accused residing beyond its jurisdiction, he shall enquire into the case himself or direct the investigation to be made by a police officer or by such other person as he thinks fit for finding out whether or not there is sufficient ground for proceeding against accused.

#32. By Cr.P.C. (Amendment) Act, 2005, in Section 202 Cr.P.C. of the Principal Act with effect from 23.06.2006, in sub-section (1), the words “…and shall, in a case where accused is residing at a place beyond the area in which he exercises jurisdiction…” were inserted by Section 19 of the Criminal Procedure Code (Amendment) Act, 2005. In the opinion of the legislature, such amendment was necessary as false complaints are filed against persons residing at far off places in order to harass them. The object of the amendment is to ensure that persons residing at far off places are not harassed by filing false complaints making it 16 obligatory for the Magistrate to enquire. Notes on Clause 19 reads as under:- filed against persons “False complaints are residing at far off places simply to harass them. In order to see that the innocent persons are not harassed by unscrupulous persons, this clause seeks to amend sub-section (1) of Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction he shall enquire into the case himself or direct investigation to be made by a police officer or by such other person as he thinks fit, for finding out whether or not there was sufficient ground for proceeding against the accused.”

#33. Considering the scope of amendment to Section 202 Cr.P.C., in Vijay Dhanuka and Others v. Najima Mamtaj and Others (2014) 14 SCC 638, it was held as under:- “shall” “12. ….The use of the expression “shall” prima facie makes the inquiry or the investigation, as the case may be, by the Magistrate mandatory. The is ordinarily mandatory but sometimes, taking into account the context or the intention, it can be held to be directory. The use of the word “shall” in all circumstances is not decisive. Bearing in mind the aforesaid principle, when we look to the intention of the legislature, we find that it is aimed to prevent innocent persons from harassment by unscrupulous persons from false complaints. Hence, in our opinion, the use of the expression “shall” and the background and the purpose for which the amendment has been brought, we have no doubt in our mind that inquiry or the investigation, as the case may be, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate.” Since the amendment is aimed to prevent persons residing outside the jurisdiction of the court from being harassed, it was reiterated that holding of enquiry is mandatory. The purpose or objective behind the 17