Dharmendra Bafna vs Kishan Lal and The Inspector of Police, Crime Branch CID

M. Jeyapaul, J.—The revision is directed against the order passed by the learned III Metropolitan Magistrate, George Town, Chennai in

M.P. No. 11979 of 2007 in C.C. No. 13970 of 2007 directing further investigation of the case based on the protest petition filed by the

respondent/de facto complainant.

The sum and substance of the complaint lodged by the respondent/de facto complainant reads as follows:

The first accused introduced the de facto complainant to the second accused. The first accused informed the de facto complainant that the second

accused was running a jewellery shop in the name and style of R.B. Jewellery at Sowcarpet, Chennai. He was an expert in the trade of buying and

selling gold and silver. The de facto complainant can do very well online business through the second accused and earn huge profits. The de facto

complainant thereupon paid a sum of Rs. 4.65 crores to the second accused during the period from 6.10.2005 to 2.12.2005 for the purpose of

doing online trading in gold and silver. The second accused is supposed to buy and sell the stock only with the instructions of the de facto

complainant. He enquired the second accused about the status of his account in his business. The second accused informed him that a sum of Rs.

4.95 crores is lying to his credit. There was some difference of opinion between the de facto complainant and the second accused over the claim of

the de facto complainant that a sum of Rs. 5.95 crores should have been lying to the credit of his account. The de facto complainant approached

the second accused on 8.12.2005 at about 5.00 pm and demanded the payment of the said amount. But, the second accused informed him that

the money was lying with Shanthilal Surana (A5), Gauthamraj Surana (A6) Vijayaraj Surana (A7) and Dinesh Surana (A8). The second accused

also assured the de facto complainant that he would get back the money from them. On 10.12.2005, the de facto complainant proceeded along

with the first and second accused to the aforesaid A5 to A8 and N.Maran (A9) and demanded the money from them. A5 to A9 having denied

possession of any money belonging to the de facto complainant threatened him with dire consequences.

The aforesaid complaint was registered originally by C2 Elephant Gate Police Station for offences punishable under Sections 406, 409, 420 and

506(ii) read with 120B of the Indian Penal Code. Thereafter, the case was transferred to the Central Crime Branch for further investigation. On the

basis of the representation made by the de facto complainant who was dissatisfied with the style of investigation done by the Central Crime Branch

Police, sought for transfer of investigation to the premier investigating agency in the State. Therefore, the investigation was transferred to CBCID

who is the present investigating agency.

During the course of investigation, one more accused was added. He was arrested and thereafter released on bail.

The second respondent, who is the present investigating officer, laid the final report only as against the first and second accused for offences

punishable under Sections 406, 420 and 120B of the Indian Penal Code deleting the other accused from the scope of the crime.

The learned III Metropolitan Magistrate, George Town, Chennai was pleased to take the case on file as against the first and second accused for

offences punishable under Sections 406, 420 and 120B of the Indian Penal Code.

Aggrieved by the deletion of A3 to A10, the de facto complainant filed a direction petition invoking Section 482 of the Code of Criminal

Procedure seeking to set aside the order dated 11.10.2007 taking cognizance of the case under the aforesaid penal provisions of law passed by

the learned III Metropolitan Magistrate.

This Court, disposed of the aforesaid petition filed by the de facto complainant giving liberty to him to file protest petition as against the charge

sheet laid by the second respondent.

In the protest petition, the de facto complainant sought for further investigation of the case u/s 173(8) of the Code of Criminal Procedure on the

ground that a specific charge as against A5 to A9 was not properly investigated. The second accused was the agent of M/s. Surana Corporation

Limited. He had collected money on behalf of the said Surana Corporation from the de facto complainant and others. The money was remitted by

the second accused for trading by the said Surana Corporation. Inspite of the fact that all the relevant materials were placed before the second

respondent, the second respondent, in order to screen the real offenders, has either wilfully suppressed or destroyed the records seized during the

course of investigation. The second respondent failed to investigate the case based on the materials produced in the manner known to law. The

investigating officer failed to note that the conduct of A5 to A8 by itself is incriminating against them. The version of A5 to A8 is that the second

accused placed orders with Surana Corporation (A5 to A8) on behalf of the de facto complainant and the de facto complainant was assigned with

the account No. MEGHA G.G. A/c. There was no investigation pertaining to the fact that M/s. Surana Corporation did billion trade with Multi

Commodities Exchange (MCX). The contradictory version that the money belonging to the de facto complainant was lost in trade with M/s. ICICI

during the online trading was not properly investigated by the second respondent. Fabrication of a tripartite Memorandum of Understanding dated

14.10.2005 in active collusion and connivance of the second accused by A5 to A8 was not investigated. As the principal offenders have been

screened with ulterior motive, further investigation is warranted, it is submitted in the protest petition filed by the de facto complainant seeking

further investigation.

The prosecution has filed a counter stating that there was no transaction between the second accused and Surana Corporation till 17.11.2005.

No evidence also was available to show that the second accused deposited money with anybody for the purpose of online trading till 16.11.2005.

The voluminous materials collected by the de facto complainant would show that it was only the second accused who had handled the money

received from the de facto complainant. Further, all the documents referred to by the petitioner were perused and examined by the investigating

officer. A case has been prima facie made out as against A1 and A2 and not against others, it has been contended by the prosecution.

The second accused has filed counter stating that the court has no power to order further investigation in this matter after it has taken

cognizance of the case on the basis of the police report. The de facto complainant also has not made out a case for further investigation. No fresh

material was brought out by the de facto complainant. Therefore, the second accused has sought for dismissal of the petition seeking further

investigation.

The learned III Metropolitan Magistrate, George Town, Chennai has observed that the truth surrounding the amount entrusted by the de facto

complainant to the second accused was not unraveled by the investigating agency. There was no investigation as to how there was a loss in the

online trading done by the second accused on behalf of the de facto complainant. The hidden facts surrounding the allegation of cheating will have

to be unearthed by the investigating agency by further investigation. The III Metropolitan Magistrate, George, Town, Chennai, having thus

observed, directed further investigation.

Learned Senior Counsel appearing for the petitioner would contend that the learned III Metropolitan Magistrate, George Town, Chennai

should not have permitted further investigation after taking cognizance of the case based on the police report filed by the second respondent as

against the first and second accused. The prosecution has completely scanned the entire materials available on record and has come to a fair

conclusion that no case was made out as against A3 to A10. No investigating agency can satisfy the de facto complainant who had, for reasons

best known to him, expressed loss of faith in the premier investigating agency in the State. Therefore, the learned Senior Counsel would contend

that the III Metropolitan Magistrate, George Town, Chennai erred in directing further investigation in this case as against A3 to A10 who have

been rightly relieved of the charges.

Learned Government Advocate (Criminal Side) would submit that the second respondent is the third investigating agency who had embarked

upon investigation in this matter. The investigation was directed against all the accused. But, the materials collected would show prima facie the role

of the first and second accused in the case of cheating lodged by the de facto complainant. Even the stand taken by the second accused in the

anticipatory bail application was also investigated by the second respondent police. The further investigation of this case will not advance the case

of the prosecution, he would contend.

Learned Counsel appearing for the de facto complainant would vehemently submit that for reasons best known, the second respondent police

has not recovered certain vital documents which would clinchingly establish the incriminating role of A3 to A10. Even the stand taken by the

second accused and the Surana Corporation were not taken into serious consideration by the investigating agency. It is still a mystery as to what

happened to the whopping amount of Rs. 4.95 crores entrusted to the second accused by the de facto complainant. Unless the role of A3 and A5

are fixed by further investigation, justice cannot be rendered to the de facto complainant who has come out with a serious allegation of cheating to

the tune of a sum of Rs. 4.95 crores entrusted to the second accused.

It is found that the case in FIR was originally lodged by the de facto complainant with C2 Elephant Gate Police Station. Thereafter, the case

was transferred to the file of Central Crime Branch, Chennai for further investigation of the case. On the specific representation of the de facto

complainant, the case of the de facto complainant was again transferred to the second respondent CBCID. The second respondent has examined

as many as 22 witnesses and recovered 15 documents to lay final report as against the first and second accused for the offences punishable under

Sections 406 and 420 read with 120B of the Indian Penal Code.

The complaint would read that a sum of Rs. 4.95 crore was entrusted to the second accused as per the advice of the first accused. The second

accused, on enquiry by the de facto complainant, had allegedly informed that the money entrusted to him was lying with A5 to A8. It is his

emphatic version in the FIR that they having denied possession of money belonging to the de facto complainant, threatened them with dire

consequences. Therefore, it is not the version of the de facto complainant that A3 to A10 were associated by the second accused in the online

trading business.

The second respondent, investigating agency has thoroughly investigated the case and found that the second accused has no connection with

A3 to A10 as regards the amount of Rs. 4.95 crores entrusted to the second accused by the de facto complainant. They have critically analysed

the online trading done by Surana Corporation on behalf of the second accused and has come to the conclusion that there is no material to show

that the amount entrusted to the second accused was rotated in the online trading business the second accused had with A3 to A10. On

scrutinising the entire documents recovered by the second respondent, the second respondent has come to the conclusion that there had been

independent online business transaction the second accused had with Surana Corporation, since the respondent police is not in a position to detect

any material to establish the role of A3 to A10 in the loss of the amount entrusted to the second accused.

Neither the additional ground raised in the anticipatory bail petition by the second accused with the fond hope of getting anticipatory bail from

the court nor the plaint pleadings in the civil suit seeking recovery of the amount filed by the second accused nor the plea taken by Surana

Corporation in the complaint to the Chief Minister''s Cell could be a basis for further investigation of this case as sought for by the de facto

complainant. Further, the second respondent, investigating agency had found that there was no material substance in the aforesaid stand taken by

the second accused and Surana Corporation in the aforesaid documents.

The second respondent has come to a definite conclusion based on the thorough investigation that the second accused had engaged in online

trading with the authority of the de facto complainant as per their understanding independently without involving any person in the aforesaid trading.

When the investigation would reveal that no third party was involved in the online speculative gold and silver trading transaction of the second

accused, the court finds that no purpose will be served by ordering further investigation in this case. It is not as if the relevant books of accounts

were not perused by the investigating agency. LW14 has produced the relevant books of accounts and the same were subjected to scrutiny by the

second respondent. It has also been found by the investigating agency that the transaction with Multi Commodity Exchange had been concluded

prior to the alleged occurrence. The second accused had effected independent transactions till 16.11.2006. No record is available to show that the

petitioner was assigned an account number M/s. MEGHA GG Account. The second respondent also has found that the new version of the de

facto complainant far from the allegation found in the FIR was not borne out by records.

Coming to the online trading of A3 to A10, it is found that the investigating agency backed by materials has come to the conclusion that there

was no transaction between the second accused and Surana Corporation till 17.11.2005. No evidence was available to show that A2 deposited

money with a third party for the purpose of online trading till 16.11.2005. The loss, if any, has occasioned only in the hands of the second accused,

who had involved in online trading on the instruction of the de facto complainant. No material also was found out to show that A2 transferred the

amount of the de facto complainant to Surana Corporation for the purpose of online trading business. To top it all, the second respondent had also

analysed the additional ground raised in the anticipatory bail application by the second accused, the plaint filed by the second accused in the civil

suit and the letter written by Mahaveer Surana on behalf of Surana Corporation to the Chief Minister''s Cell and come to the conclusion that there

was no substance in those materials.

The further point that arises for consideration is whether the learned Judicial Magistrate is empowered u/s 173(8) of the Code of Criminal

Procedure to direct further investigation in this matter after he has taken cognizance of the case.

The Honourable Supreme Court in Randhir Singh Rana Vs. The State Being the Delhi Administration, has observed that the learned Judicial

Magistrate has no authority to order further investigation invoking the provision u/s 173(8) of the Code of Criminal Procedure after he had taken

cognizance of the case based on the police report. But, in this case, it appears that the learned Judicial Magistrate has acted not suo motu, but on

the basis of the protest petition filed by the de facto complainant. Therefore, the aforesaid authority is not applicable to the facts and circumstances

of the case.

I quote with approval the observation made by the High Court of Gujarat in the decision in Miteshkumar Rameshbhai Patel and Another Vs.

State of Gujarat and Another, which reads as follows:

It is noticed while going through the provision of Section 173(8) that such powers are not conferred upon the Courts. By virtue of Section 156 of

the Code of Criminal Procedure and the provisions thereafter before taking cognizance upon the police report, the Court is empowered to direct

further investigation. However, once cognizance is taken and the trial is proceeded with, the Court is not empowered to alter the prosecution case

by directing the further investigation. Therefore, by scheme of the Code, powers are vested in the Court, by virtue of Sections 319 and 311 of the

Code of Criminal Procedure to the extent to call for any person to answer the prosecution case. The powers of the police to investigate further u/s

173(8) and power of the Court to direct further investigation at pre-cognizance stage must not be intermingling. The powers of the police u/s

173(8) to investigate further even when charge sheet is filed and Court has taken cognizance are unfettered, but the Court, after taking cognizance

cannot direct the police on its own to investigate further u/s 173(8) except such powers can be exercised at pre-cognizance stage by Courts. In the

present case, it appears that the order passed by the trial Court is without jurisdiction as aforesaid discussed by the Apex Court in the matter of

Randhir Singh Rana Vs. The State Being the Delhi Administration, . Therefore, it becomes clear that the powers of the police to further investigate

u/s 173(8), are unfettered and when trial is proceeding, police may inform concerned Court about further investigation u/s 173(8), after taking

cognizance upon the police report.

The Magistrate, on his own, can direct further investigation u/s 173(8) of the Code of Criminal Procedure only at a pre-cognizance stage. But,

the powers of the investigating agency to further investigate the case u/s 173(8) of the Code of Criminal Procedure is not fettered by the

cognizance of the case taken by the court concerned. Even after taking cognizance, if the de facto complainant comes straight by way of protest

petition, the court concerned will have to exercise the power of ordering further investigation u/s 173(8) of the Code of Criminal Procedure.

In this case, the learned Judicial Magistrate had not acted suo motu directing further investigation of the case. Only on the protest petition filed

by the de facto complainant as per the directions of this Court, the learned III Metropolitan Magistrate, George Town, Chennai has ordered

further investigation. Therefore, it is held that the court concerned has power to order further investigation even after taking cognizance of the case

at the instance of the de facto complainant or at the instance of the investigating agency.

On facts, the court finds that the petitioner has not made out a case for further investigation. The loss has occasioned in the online trading solely

transacted by the second accused as per the findings of the investigating agency. The investigating agency has ruled out the association of A3 to

A10 in the online trading of the second accused. Therefore, the learned III Metropolitan Magistrate, George Town, Chennai has erred in ordering

further investigation in this case.

The mala fides alleged as against the investigating officer is found to be totally unsubstantiated. There is no revelation in the case after the

investigation was terminated. No new material also has come to light after the charge sheet was laid. Therefore, the Trial Court should not have

permitted further investigation.

In view of the above, the impugned order dated dated 13.2.2008 passed by the learned III Metropolitan Magistrate, George Town, Chennai

in M.P. No. 11979 of 2007 in C.C. No. 13970 of 2007 directing further investigation stands set aside and consequently, the criminal revision case

stands allowed. The connected Miscellaneous Petition stands closed.