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Judgment
Surinder Singh, J.—This petition has been filed by Messrs Ganesh Steel & Allied Industries, under section 482 of the Code of Criminal Procedure, with a prayer for quashing of the First information Report, D.D. No. 22/24, dated July 6, 1982 of the Police Station Sadar, District Hoshiarpur, (Copy Annexure P/1 to the petition).
The averments made in the petition may be, briefly, noticed. The petitioner Firm had been carrying on their business at Rail Majra, District Hoshiarpur, being engaged in the manufacture of agricultural implements, for which purpose they obtained raw material from the open market as well as from the Steel Authority of India. In the year 1981, the registration of the petitioner. Firm and the other Firms mentioned in the impugned First Information Report was cancelled by the Director of Industries, Punjab. All these Units approached this Court by means of Writ Petitions against the order of registration. During the pendency of these Writ Petitions, this Court granted an interim relief to the effect that the Steel Authority of India was directed to release the iron and steel quota of the Firms on their furnishing Bank Guarantees. The order of this Court which is reproduced in the First Information Report itself is to the following effect :
"The iron and steel quota, shall be released to the petitioner only after he furnishes bank guarantee to the tune to the value of iron & steel required to be released to the satisfaction of the Deputy Regional Iron & Steel Controller. The petitioner shall not alienate the released material to anybody in whatsoever manner. If he does so in violation of this condition, he shall pay a penalty to the tune of the value of released iron and steel, the realization whereof stands secured from the bank guarantee, which the petitioner is required to furnish before the release of the material. In case the imported material, or the material released by Deputy Regional Iron and Steel Controller issued for manufacturing the articles, then the articles so manufactured shall be sold only to the Govt, and semiGovt. authorities and to none else till further order".
The basic allegation levelled in the First Information Report against the petitioner and the other Units is that they furnished bogus Bank Guarantees inasmuch as the Bank who had issued these Guarantees, on inquiry, revealed that they had not issued the Guarantees. In view of this allegation, it was stated that the petitioner and the other Firms had committed the offence of cheating under section 420, Indian Penal Code. Some other offences i.e. sections 465, 467, 468, 471 and 120B Indian Penal Code, were also mentioned but they are all ancillary to the offence under section 420, Indian Penal Code.
The petitioners averred that the various Bank Guarantees furnished by them to the Steel Authority of India were all genuine documents. It was further stated that the Bank Guarantees in question had never been utilised by the petitioner for the release of a single pie by the Steel Authority of India in their favour. The following averments as made in para 9 of the petition may be noticed in extenso :
"That an analytical perusal of the F.I.R. would make it clear that this is not the case of the Steel Authority of India either that the petitioner or any other industrial unit availed of any bank guarantee, and that the bank guarantee was ever utilised and, therefore, the Steel Authority of India has been cheated on the basis of the bank guarantees furnished by the industrial units at the time of lifting the material payment was made to the Steel Authority of India, not on the basis of any bank guarantee, but by bank drafts by the petitioner and other industrial units. As has been submitted above there being no allegation that the bank guarantee has been utilised, or that the Steel Authority of India has been made to part with any property on the basis of the bank guarantee, no case under any of the sections is made out and, in view thereof, the first information report is liable to be quashed on the short ground that even if the allegations made in the F.I.R. are to be taken on their face value, or they are taken to be correct, no case of cheating is made out".
It was further mentioned in Para 10 of the petition that the First Information Report in question had been registered as far back as in the year 1982 and since then hardly any action had been taken by the Police at Hoshiarpur. In these circumstances, it was stated that the lodging of the First Information Report was an abuse of the process of law and hence the same should be quashed under the inherent jurisdiction vested in this Court under section 482, Code of Criminal Procedure.
The learned counsel for the parties agreed that the matter may be disposed of at the Motion Stage itself. They were accordingly heard at considerable length. In so far as the legal position is concerned, the following observations made by K.V. Chandrachud, Chief Justice and A. Varadarajan, J. Concurring with A.N. Sen, Jin State of West Bengal and others v. Swapan Kumar Guha and others and State of West Bengal and others v. V. Sanchaita Investments and others, A.I.R. 1982 S.C. 949, would indicate the nature and scope of interference with the Investigation of the case in consequence of a First Information Report :
"First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied cannot form the foundation or constitute the starting point of a lawful investigation.
An investigation can be quashed if no cognizable offence is disclosed by the F.I.R. It is surely not within the province of the police to investigate into a Report (F.I R.) which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases.
The condition precedent to the commencement of investigation under section 157 of the Code is that the F.I.R. must disclose, prima facie that a cognizable offence has been committed. It is wrong to suppose that the police have an unfettered discretion to commence investigation under section 157 of the Code. Their right of inquiry is conditioned by the existence of reason to suspect the commission of a cognizable offence and they cannot reasonably have reason so to suspect unless the F.I.R. prima facie, discloses the commission of such offence. If that condition is satisfied, the Investigation must go on. The Court has then no power to stop the investigation, for to do so would be to trench upon the lawful power of the police to investigate into cognizable offences. On the other hand, if the F.I.R. does not disclose the commission of a cognizable offence, the Court would be justified in quashing the investigation on the basis of the information as laid or received. The power to investigate into cognizable offences must therefore, be exercised strictly on the condition on which it is granted by the Code."
It is in the light of the above observations that the facts and circumstances of the present case are to be scrutinized. The foremost contention on behalf of the petitioner is that the question of the offence of cheating would arise only if the Bank Guarantees (whether they ate genuine or bogus) were utilised by the petitioner for depriving the Steel Authority of India of any property or for obtaining an advantage on the basis of the Bank Guarantees. It is submitted that there is not a whisper in the First Information Report that the Bank Guarantees in question had been utilised by the petitioner for any such purpose. On the other hand, as specifically alleged in Para 9 of the petition at the time of the lifting of the material, the payment was made to the Steel Authority of India not on the basis of any Bank on Guarantee but by means of Bank Drafts. It may be observed here that the respondent had chosen to file a reply to the petition in the shape of an affidavit of the Investigating officer. In reply to Para 9 of the petition the aforesaid allegations were not controverted and all that was stated in that the Bank Guarantees were forged. Another averment made in Para 9 of the reply is that on interrogation of the Proprietor of Guru Nanak Industries. He disclosed that the Firms whose names were mentioned in the First Information Report were in existence only on paper and were not functioning as such. In this behalf, the learned counsel for the petitioner made a reference to the record of Civil Writ Petition No. 1450 of 1991 (Messrs Ganesh Steel and Allied Industries v. Union of India and others) wherein a Local Commissioner was appointed for visiting the premises of the petitionerfirm and some other Firms, and to report in regard to various matters including the fact as to whether the Industrial Units were functioning at the given sites and also in regard to their assets including machinery etc. The Local Commissioner while submitting his report in regard to the petitioner firm, stated that the same was functioning at the place indicated and the machinery was being run through Diesel Engine, while the workers were finishing end products with hand tools. The Local Commissioner gave the details about the premises of the petitionerFirm. He valued the machinery found in the Workshop at Rs. 1,65,400/. In view of this report of the Local Commissioner the learned counsel submitted that the ipse dixit of the complaint that the petitioner''s Unit was a bogus one, was only an abuse of the process of law. Irrespective of this aspect of the matter, as already observed, the First Information Report is absolutely silent regarding any allegation of the complainant Steel Authority of India, having been cheated by the use of the Bank Guarantees.
The learned counsel for the petitioner is also on sound footing to contend that the First Information Report was registered as far back as in the year 1982 and if no material is forthcoming for a period of two years and eight months, there was no justification for keeping the sword of damocles hanging on the petitioner''s head indefinitely.
In view of the circumstances noticed above, the impugned First Information Report (Copy Annexure P/1) is quashed in so far as the petitioner is concerned.
JUDGMENT accordingly.