Vedsons Steels & Wires Pvt.Ltd vs Union of India

Surinder Singh, J.

This petition under section 482, Code of Criminal Procedure, has been filed by Messrs Vedsons Steels & Wires Pvt Ltd with a prayer for quashing the First Information Report, dated January 21, 1984 (Copy Annexure P. 1), with the averments which are these. The Deputy Chief Controller of Imports & Exports, Amritsar, had lodged a complaint in respect of the petitionerCompany, on the basis of which the First Information Report, Annexure P1, had been registered. The petitioner Company obtained two Advanced Licences from the office of the Deputy Chief Controller of Imports & Exports, Amritsar, details whereof are mentioned in the First Information Report. The Licences were obtained after completing all the formalities required under the law. Subsequently, the said Officer on the basis of some anonymous complaint by persons immorally disposed to the Directors of the petitioner Company, suspended the Licences and simultaneously lodged the present First Information Report. It is alleged in the First Information Report that inquiries were made from the Foreign Buyers regarding placement of orders to the petitioner. Company but no reply was received from them in this behalf. Later on, a telex was sent to the Indian High Commission in U.K. who intimated that the order placed by one of the Firms in that country had been cancelled by the Firm in question in December, 1983. On May 4, 1983, the operation of one of the Licences issued to the PetitionerCompany was suspended. In regard to the other Advance Licence, the same had been utilised by the Firm for its full value excepting a balance amount of Rs. 49,843/ and this part of the Licence was also placed under abeyance for six months. The complaint which is the basis of the First Information Report goes on further to recite that the petitionerCompany had executed Bank Guarantees for certain amounts which on being referred to the Bank concerned were stated not to have been executed in favour of the petitioner. The Bank Guarantees were therefore, alleged to be bogus documents. An apprehension was also expressed in the complaint that it was unlikely that the petitioner would utilise the Licences for the purpose for which they were issued. On the basis of this complaint, a case under Section 120B read with Sections 420, 467, 471 Indian Penal Code, Section 5 of the Imports and Exports Control Act, 1947 and section 135 of the Customs Code was registered against the petitioner and Directors by means of the impugned First Information Report.

In the present petition, it was specifically asserted that even though all the allegations contained in the First Information Report are accepted at their face value, no offence is prima facie made out against the petitioner. On facts, it is contended that the Bank Guarantees issued by the Bank were genuine documents and were duly signed by the concerned Bank Officers. The grievance of the petitioner was in fact, that the said Bank Officers did not have the financial powers to issue the Guarantees in question. As such the Bank Guarantees could not be dubbed as bogus.

At the time of hearing of this matter, the learned counsel for the parties agreed that the arguments in the case may be heard at full of length and the matter disposed of at the Motion Stage itself. Accordingly, the learned counsel were heard at considerable length.

In so far as the legal position is concerned, the following observations made by Y.V. Chandrachud, Chief Justice and A. Varadarajan, J. (Concurring with. A.N. Sen, J.) in State of West Bengal and others v. Swapan Kumar Guha and others And State of West Bengal others v. Sanchaita Investments and others, AIR 1982 SC 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 requirement of the penal provisions are prima facie satisfied, cannot form the foundation to constitute the starting point of a lawful investigation.

An investigation can be quashed if no cognizable offence is disclosed by the FIR. It is surely not within the province of the police to investigate into a Report (FIR) 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 commencement of investigation under section 157 of the Code is that the FIR must disclose, prima facie, that a cognizable offence has been committed. It is wrong to suppose that the police have 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 FIR, prima facie, to 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 FIR does not disclose the commission of a cognizable offence, the Court would be justified in quashing the investigation on the basis of 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.

A perusal of the impugned First Information Report indicates that the gravamen of the charge levelled against the petitionerCompany is that they had obtained two Import Licences on the basis of forged Bank Guarantees. In fact, the allegation goes to the extent that the complainant made inquiries from Dena Bank, M 36, Connaught Circus, New Delhi, regarding the issue of the Bank Guarantees and the said Bank had intimated that they had not executed the Guarantee for Rs. 6,56,250/ in favour of the petitionerCompany. This allegation has been the subjectmatter of investigation since the time of the registration of the First Information Report, i.e. for a period of about one year and two months by now. Mr. K.K. Chaturvedi, Special Prosecutor for the CBI, who has appeared on behalf of the respondent has frankly conceded that the investigation in this matter has revealed that the above allegation that the Bank in question had not issued the Bank Guarantee was found to be wrong and, in fact, the Bank Guarantee though their contention is that the Officer of the Bank who had executed the Guarantee did not have the fiscal limit of issuing a Guarantee for the amount shown therein. It is, thus, obvious that there is no basis for the allegation that the Bank Guarantees furnished by the petitioner were bogus.

Another allegation mentioned in the complaint is out of the two Foreign Firms, who had placed the order with the petitioner firm, one of them which was located in Dubai had not sent any reply to the reference made by the Department and the other Firm in the United Kingdom had informed that the order placed with the petitioner had been cancelled. Both these allegations do not give rise to a prima facie charge that the petitioner had obtained the Import Licences without first obtaining orders from the Foreign Buyers. If due to certain reasons, the Foreign Buyer chose to cancel the order already placed with the petitioner firm, no presumption of mala fide can be attributed to the latter Firm, nor can it be said that their applications for the grant of Import Licences were not genuine. The last apprehension expressed in the complaint is that the petitioners are not likely to utilise the material imported by them on the basis of the two Licences, for the purpose for which these Licences had been issued. In this behalf, it may be observed that it is the complainant''s own case that the operation of the Licences of the petitioners has since been suspended or kept in abeyance. This being so, the petitioners cannot naturally utilise the Licences for any other purpose than the one mentioned in the Licences. Indeed, there is allegation in the complaint that the petitioners had misused the Licences by disposing of the material imported by them, either by selling the same in black market or by using it for any other purpose.

Another submission made by the learned counsel for the petitioners is that the First information Report in question was registered as far back as on January 21, 1984 and the sword of damocles in this behalf has been kept hanging on the head of the petitioners uptill now. The learned Special Public Prosecutor has very fairly and frankly admitted that the investigation in the matter relating to the First Information Report has been practically completed and no further material in this behalf is required to be collected. If in spite of this, no prosecution has been launched against the petitioners uptill now, the First Information Report indeed requires to be quashed and it is ordered accordingly.

JUDGMENT accordingly.