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REPORTABLE IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL  NO.824 OF 2016 [ARISING OUT OF S.L.P. (CRL) NO. 1474 OF 2012]

BABITA LILA & ANOTHER    ....APPELLANTS

VERSUS

UNION OF INDIA   …..RESPONDENT

JUDGMENT

AMITAVA ROY, J.

Leave granted

2. Being aggrieved by the rejection of their challenge to the initiation

of their prosecution under Sections 109/191/193/196/200/420/120B/34 IPC

on the basis of a complaint made by the Deputy Director of Income Tax

(Investigation)-I, Bhopal (M.P.), both on the ground of lack of competence

of the complainant and of jurisdiction of  the Trial Court  at Bhopal,  the

appellants seek the remedial intervention of this Court under Article 136

of the Constitution of India.

3. The  appellants,  who  are  husband  and wife, are residents of

both Bhopal and Aurangabad.  A search operation was conducted by the

authorities under the Income Tax Act, 1961 (for short, hereinafter referred

to as “the Act”) on 28.10.2010 at both the residences of the appellants, in

course whereof their statements were recorded on oath under Section 131

of the Act.  On a query made by the authorities, it is alleged that they

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made false statements denying of having any locker either in individual

names or jointly in any bank.  It later transpired that they did have a safe

deposit  locker  with  the  Axis  Bank  (formerly  known  as  UTI  Bank)  at

Aurangabad which they had also operated on 30.10.2010.  The search at

Aurangabad was conducted by the Income Tax Officer, Nashik and Income

Tax  Officer,  Dhule  and  the  statements  of  the  appellants  were  also

recorded at Aurangabad.   

4. Based on the revelation that the appellants, on the date of the

search, did have one locker as aforementioned and that their statements

to  the  contrary  were  false  and  misleading,  a  complaint  was  filed  as

afore-stated under the above-mentioned sections of the Indian Penal Code

by the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) on

30.5.2011 in the court of the Chief Judicial Magistrate, Bhopal, (M.P.) and

the same was registered as R.T. No. 5171 of 2011.

5. The Trial Court on 9.6.2011, took note of the offences imputed

and issued process against the appellants.  In doing so, the Trial Court,

amongst others,  noted that  the search proceedings undertaken by the

authorities  under  Section  132  of  the  Act  were  deemed  to  be  judicial

proceedings in terms of Section 136 and  in course whereof, as alleged,

the appellants had made false statements with regard to their locker and

that on the basis of the documents and evidence produced on behalf of

the complainant, sufficient grounds had been made out against them to

proceed under Sections 191,193, 200 IPC.

6. The appellants impugned this order of the Trial Court before

the  High  Court  under  Section  482  Cr.P.C.  (for  short  hereinafter  to  be

referred to as “the Code”) and sought annulment thereof primarily on the

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ground that the search operations having been undertaken by the I.T.Os.

of Nashik and Dhule, the complaint could not have been lodged by the

Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) who was not

the appellate authority in terms of Section 195(4) of the Code and further

no part of the alleged offence having been committed within the territorial

limits  of  the  Court  of  the  Chief  Judicial  Magistrate,  Bhopal,  it  had  no

jurisdiction to either entertain the complaint or take cognizance of  the

accusations.  By the order impeached herein, the High Court has declined

to interfere on either of these contentions.

7. We have heard Ms. Sangeeta Kumar, learned counsel for the

appellants  and  Mr  Ranjit  Kumar,  learned  Solicitor  General  for  the

respondent.

8. Profusely referring to Section 195 of the Code as a whole, it

has been urged on behalf of the appellants that the Deputy Director of

Income Tax (Investigation)-I, Bhopal (M.P.), in the facts of the case was not

competent to lodge the complaint, he being not the authority to whom

appeals  would  ordinarily  lie  from  the  orders  or  actions  of  the  I.T.Os.,

Nashik and Dhule.  As the statements of the appellants were recorded in

the course of a search under Section 132 of the Act which was a judicial

proceeding and for that matter, the concerned I.T.Os., Dhule and Nashik

were deemed to be civil courts, it has been argued that in observance of

the  mandate  of  Section  195  (4)  of  the  Code,  the  complaint  could  be

lodged either by the authorities conducting the search or by the authority

to whom ordinarily  an appeal would lie from the orders/decisions and

actions of the income tax authorities undertaking the search.  It has been

asserted with reference to Sections 246 and 246A of the Act in particular,

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that the complainant, the Deputy Director of Income Tax (Investigation)-I,

Bhopal  (M.P.)  is  not  the authority/forum to  whom appeal  lies  from the

orders of the I.T.Os. involved and thus was not a Court as contemplated in

Section  195(1)(b)  or  the  appellate  forum under  Section  195(4)  of  the

Code.  

9. It  has  been  emphatically  maintained  on  behalf  of  the

appellants that having regard to the place of search, the recording of their

statements as well as of the location of the locker, no cause of action for

initiation of the criminal proceedings had arisen within the jurisdiction of

the court of the Chief Judicial Magistrate, Bhopal in terms of Sections 177

and 178 of the Code and thus the High Court had grossly erred in deciding

contrary thereto.  It has been argued  that the rejection of their plea by

the High Court  on the ground that the Deputy Director  of  Income Tax

(Investigation)-I, Bhopal (M.P.) was an officer superior in rank to the I.T.Os.

conducting the search  is patently flawed and unsustainable in law and on

facts, having regard to the peremptory perquisites of a valid complaint

under Section 195 of the Code.

10. Reliance on the decisions of this Court in Kuldip  Singh  vs.

The  State  of  Punjab and  Another 1956 SCR 125, Lalji  Haridas  vs.

State  of  Maharashtra  and  Another  1964  (6)  SCR  700, Rajesh

Kumar and Others vs.  Deputy C.I.T. and Others  (2007) 2 SCC 181,

Y.  Abraham  Ajith  and  Others  vs.  Inspector  of  Police,  Chennai

and Another (2004) 8 SCC 100 and Bhura Ram and others vs. State

of  Rajasthan  and  Another (2008)  11  SCC  103  has  been  made  in

buttressal of the above assertions.

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11. In  refutation  of  the  arguments  advanced  on  behalf  of  the

appellants,  the  learned  Solicitor  General  has  assertively  endorsed  the

impugned findings, contending that the decision assailed is based on a

detailed reference to the provisions of the Act enumerated in Chapters XIII

and XX and a correct analysis thereof.  He has maintained that having

regard to the scheme of these chapters in particular and the underlying

legislative intent ascertainable therefrom, the Deputy Director of Income

Tax (Investigation)-I, Bhopal (M.P.) had the competence and jurisdiction to

lodge the complaint at Bhopal.  This authority being admittedly and as

patent from the hierarchy enumerated by the Act, higher in rank than the

I.T.Os.  who had conducted the search and investigation,  did have the

authority  to  file  the  complaint  and  that  thereby  the  prescriptions  of

Sections 195(1)(b) and 195(g) of the Code  had not, in any way, been

contravened.   This is more so as the powers of any income tax authority

under  the  Act  and  his/her  jurisdiction  to  perform  any  function  is  not

limited or restricted but has been consciously   enlarged to deal with any

contingency so as to advance the objectives of the legislation, he urged.

12. Vis-a-vis  the  competence  of  the  court  of  the  Chief  Judicial

Magistrate,  Bhopal,  the  learned  Solicitor  General  insisted  that  as  the

appellants were the residents, both of Bhopal and Aurangabad and search

operations were conducted simultaneously at both the places, and further

as they had been filing their income tax returns at Bhopal, the Trial Court

before  which  the  complaint  had  been  filed,  was  competent  to  take

cognizance of the offences alleged in  terms of Section 178 (b) and (d) of

the Code. To reinforce the above, the decision of the Constitution Bench of

this Court in  Lalji Haridas (supra)  has been pressed into service.

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13. Before adverting to the competing contentions, it would be apt

to note the conclusions of the High Court on these two counts.  In addition

to  the  admitted  factual  aspects  narrated  hereinabove,  the  High  Court

upheld the jurisdiction of the Chief Judicial Magistrate, Bhopal by taking

note  also  of  the  fact  that  the  income  tax  returns  relatable  to  the

undisclosed property i.e. the locker had been filed at Bhopal.  The facts, to

reiterate, that the appellants were residents of Bhopal and Aurangabad,

and that the search operations were conducted simultaneously at both

the places were noted as well.   

14. Qua  the  competence  of  the  Deputy  Director,  Income  Tax

(Investigations)-I  Bhopal,  the  High  Court  held  the  view  that  he  being

admittedly an officer superior in rank to the I.T.Os. conducting the search,

the institution of the complaint by him was not vitiated by any lack of

authority.   Reference  to  Section  136  of  the  Act,  whereunder  any

proceeding before an income tax authority would be a judicial proceeding

and that for that matter, every income tax authority is deemed to be a

civil court was recorded as well.  The High Court did refer to the Section

195 of the Code to enter a finding that the Deputy Director, Income Tax

(Investigations)-I  Bhopal  being  an  officer  superior  to  the  I.T.Os.

undertaking  the  search  and  to  whom  an  appeal  from  their

orders/decisions/actions ordinarily lay, was a civil court as contemplated

thereunder to lodge the complaint.

15. The  competing  contentions  have  received  our  due

consideration.  The rival submissions stir up two major issues pertaining

to the maintainability and adjudication of the complaint lodged before the

Chief Judicial Magistrate, Bhopal,  (M.P.)  by the Deputy Director, Income

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Tax  (Investigation)-I,  Bhopal,  (M.P)  in  the  face  of  the  prescription  of

Section 195(1)(b) of the Code, in particular read with the other cognate

sub-sections thereof as well as the limits of the territorial jurisdiction of

the  court  before  which  the  prosecution  of  the  appellants  has  been

initiated in the context of Section 177 of the Code.

16. Having regard to the decisive bearing of the adjudication on

the validity or otherwise of the complaint by the Deputy Director, Income

Tax (Investigation)-I, Bhopal, (M.P).  in the textual facts, expedient it would

be  to dwell  on this aspect at the threshold.

17. The admitted facts reveal that the appellants have residences

both at Bhopal and Aurangabad and file their returns of income tax at

Bhopal.  On 28.10.2010, search operations under Section 132 of the Act

were simultaneously conducted at both the places.  In the course of the

interrogation  of  the  appellants,  more  specifically  on  the  aspect  as  to

whether they or any of them either individually or jointly did hold any

locker, the answer was in the negative.  The accusation of the authorities

is that further investigation revealed that they did hold a locker in the Axis

Bank (formerly known as UTI Bank), Kranti Chowk, Aurangabad which had

been operated by appellant No. 1 on 30.10.2010.  In this factual backdrop,

the  complaint  had  been  filed  by  the  Deputy  Director,  Income  Tax

(Investigation)-I,  Bhopal,  (M.P)  in  the court  of  Chief  Judicial  Magistrate,

Bhopal, (M.P.) asserting that by making such false statement in the course

of search operations which were judicial proceedings in terms of Section

136 of  the  Act,  the  appellants  had  committed  offence  under  Sections

109/191/193/196/200/420/120B/34 IPC.  As referred to hereinabove, the

Chief Judicial Magistrate, Bhopal, after necessary hearing as contemplated

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in law and being prima facie satisfied that sufficient grounds had been

made out to proceed against the appellants under Sections 191,193 and

200 IPC, issued process against them.

18. As the documents appended to the appeal  would divulge that

the search operations at Aurangabad had been conducted on the strength

of the warrant of authorisation dated 26.10.2010 under Section 132 of the

Act, issued, signed and sealed by the Director of Income Tax (Inv.), M.P. &

C.G.,Bhopal/Deputy  Director  of  Income Tax  and  the  statements  of  the

appellant Nos. 1 and 2  were recorded by Mrs. Bharati Choudhary, I.T.O.

and Mr. A.T. Kapase, I.T.O. (Inv.), Nashik on 28.10.2010.  The materials on

record also disclose that search operations did continue on subsequent

dates as well, in course whereof seizures were made.   

19. Be that as it may, eventually the office of the Deputy Director

of Income Tax (Investigation)-I, Bhopal on 8.2.2011 issued a show cause

notice to the appellants under Section 277 of the Act alleging that they

had made false statement under Section 132(4) thereof, thereby seeking

a reply as to why prosecution would not follow by virtue thereof.  It is in

this factual premise, that the validity of the complaint filed by the Deputy

Director, Income Tax (Investigation)-I, Bhopal, (M.P).  has been questioned

by the appellants.  To reiterate, by the impugned order, the High Court

has  negated  both  the  demurrals  of  the  appellants  pertaining  to  the

complaint  and  territorial  jurisdiction  of  the  court  of  the  Chief  Judicial

Magistrate, Bhopal.  

20. The state of law as adumbrated  by the precedents cited  may

now be outlined before referring  to the relevant provisions involved.  

21. In  Kuldip  Singh (supra),  the  question  involved  before  a

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Constitution Bench of  this  Court  was about  the validity  of  a complaint

made  under  Section  476-A  read  with  Section  195(3)  of  the  Code  of

Criminal Procedure Code 1898 against the appellant for  perjury and for

using a forged document as genuine.  The contextual facts narrate that

the  2nd respondent  therein  had  filed  a  suit  against  the  appellant  for

recovery of money on the basis of a mortgage in the Court of one Mr. E.F.

Barlow,  Subordinate Judge of 1st  Class.  The appellant in the suit filed a

receipt which purported to show that Rs.35000/- had been paid towards

the satisfaction of the mortgage and in the witness box he swore that he

had paid the money for which the receipt was given.

22. Mr.  Barlow  held  that  the  receipt  did  not  appear  to  be  a

genuine document and that the evidence of the appellant to that effect

was not true.  A preliminary decree was accordingly passed against the

appellant for the entire amount  followed by a final decree.   The appeal

preferred  by the appellant was also dismissed by the High Court which

reiterated that the receipt was a very suspicious document and that the

appellant's evidence was not reliable as well.

23. The   plaintiff/respondent   thereafter   made  an       

application in the Court of  Mr. W. Augustine who had succeeded Mr.

Barlow as  Subordinate Judge of 1st Class stating that a complaint be

filed  against  the  appellant  under  Sections  193  and  471  I.P.C.   Mr.

Augustine,  because of  his  transfer  could not  hear the application for

filing of the complaint.  In his place Mr. K.K. Gujral,  subordinate Judge of

the 4th Class was sent.  He, however,  declined to entertain the matter as

he was only a subordinate judge of the 4th Class and laid a report to the

District Judge pointing out his lack of jurisdiction in the matter as the

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offences had been allegedly committed in the Court of a subordinate

Judge of  the  1st Class.   The District  Judge thereupon  transferred  the

matter to the Senior Subordinate Judge, Mr. Pitam Singh who made the

complaint.  The impeachment of the validity of the complaint has arisen

in this backdrop.

24. As  the  sequence  of  events  unfold,  the  appellant  filed  an

appeal against the order of  Mr. Pitam Singh to the Additional  District

Judge Mr, J.N. Kapur who held that the Senior Subordinate Judge  Mr.

Pitam Singh had no jurisdiction to make complaint.  He also held that on

merits as well there was no prima facie case.  The High Court, however,

in revision held that the Senior Subordinate Judge had the jurisdiction

and further  the  materials  on  record  did  disclose  a  prima  facie  case.

Accordingly, the order of the Additional District Judge was set aside and

the order of the Senior Subordinate Judge was restored.

25. Three  questions  fell  before  this  Court  for  scrutiny. Firstly,

whether the Senior Subordinate Judge Mr. Pitam Singh had jurisdiction to

entertain the application and make a complaint.  Secondly, whether the

Additional District Judge had jurisdiction to entertain an appeal preferred

against the order of Mr. Pitam Singh and thirdly, whether the High Court

had the power to reverse the order of the Additional District Judge in

revision.

26. While dwelling upon the first issue, this Court adverted at the

threshold to Section 195(1)(b) and (c) of the  Code  which  prohibited

any Court from taking cognizance of either of the two offences alleged,

except on the complaint in writing of the Court concerned or of some

other Court to which such Court was subordinate.  Having regard to the

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fact  that  the  offences  were  committed  in  the  Court  of  E.F. Barlow,

Subordinate  Judge  of  the  1st Class,  their  Lordships  next  referred  to

Section  476-A of  the Code which  prescribed that  when the  Court  in

which  the  offence is  said  to  have been committed neither  makes  a

complaint nor rejects an application for the making of a complaint, the

Court to which such former Court is subordinate within the meaning of

Section 195 (3) may take action under Section 476.

27. Their  Lordships  noted  that  Section  476  authorised  the

appropriate Court,  after recording a finding to the effect  that  it  was

expedient to do so in the interest of  justice to make a complaint in

writing and forward it to a Magistrate of 1st Class having jurisdiction.

While examining in the scheme of prevalent hierarchy of posts as to

whether the court  of  Senior  Subordinate Judge presided over by  Mr.

Pitam  Singh  was  a  Court  to  which  the  Court  of  Mr.  Barlow  was

subordinate within the meaning of  Section 195(3)  of  the Code,  their

Lordships  marked  that  in  terms  of  Section  195(3),  a  Court  for  the

purposes thereof, would be deemed to be subordinate to the Court to

which appeals ordinarily lay from the appealable decrees or sentences

of such former Court, or in the case of a Civil Court from whose decrees

no appeal ordinarily lay, to the principal court having ordinary original

civil  jurisdiction within the local limits of whose jurisdiction such Civil

Court was situated.  The proviso to Section 195(3) was also noted which

ordained that where appeals lie to more than one court, the appellate

court of the inferior jurisdiction would be the court to which such court

would be deemed to be subordinate.  Further when appeals lay to a

Civil and also to a Revenue Court, such Courts would be deemed to be

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subordinate to the Civil or Revenue Court, according to the nature of

the case or the proceedings in connection with which the offence was

alleged to have been committed.

28. In this conspectus, this Court laid a decisive emphasis on the

word “ordinarily”  and to disinter  the legislative intent,  alluded to the

relevant provisions of the Punjab Courts Act, 1918 dealing in particular

with the classes and hierarchy of Civil Courts.  Apart from the Courts of

Small  Causes,  it  was noticed that under the said Act following three

classes of Civil Courts were provided:

(i)  The Court of District Judge

(ii)  The Court of Additional Judge

(iii) The Court of the Subordinate Judge

29. Vis-a-vis the provisions for appeal under Section 39 of the

Act,  it was noted that in the absence of any other enactment for the

time being in force,  appeals lay to the Court of the District Judge when

the value of the suit did not exceed Rs.5,000/- and in every other case

to the High Court.  Section 39(3), however, empowered the High Court

by notification to direct that appeals lying to the District Court from all

or any of the decrees or orders passed in its original jurisdiction by a

Subordinate Judge, would be preferred to such other Subordinate Judge

as mentioned in such notification.  The facts revealed that  as a matter

of fact such power had been invoked and appeals lying to the District

Courts from the decrees or orders passed by a Subordinate Judge in two

classes  of  cases  as  specified  could  be  preferred  before  the  Senior

Subordinate Judge of  the 1st Class  exercising jurisdiction within such

Civil District.

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30. In this factual setting their Lordships expounded that filing of

the appeal to the Senior  Subordinate Judge as notified qua the two

selected  categories  of  cases,  could  not  be  termed  as  “ordinary”

because the special  appellate jurisdiction had been conferred by the

notification, by way of an additional assignment so much so that the

power  pertaining  thereto  could  be  exercised  in  a  certain  limited

categories of cases.  It was not an ordinary appellate jurisdiction of the

Senior Subordinate Judge and for that matter for all Senior Subordinate

Judges generally, it could not be said that appeals from the Courts of

Subordinate Judges ordinarily lay to that of a  Senior Subordinate Judge.

31. Their Lordships thus concluded that in the paradigm of the

Civil  Courts  as  codified  by  the  Punjab  Court's  Act,  1918,  appeals

ordinarily lay either to the District Court or to the High Court and as the

District Court was of the lower tier of these two forums, it was to be

regarded as the appellate authority for the purposes of Section 476 B of

the Code.  With reference to Proviso (b) to Section 195(3) of the Code, it

was held that where in the facts of the case, appeals would lie to a Civil

as well as Revenue Court, the nature of the case or proceeding would

determine the court to which appeal would lie and that to that limited

extent the nature of the proceeding ought to be taken into account, but

once the genus  of the proceeding is determined namely,  Civil, Criminal

or Revenue, the hierarchy of the superior Courts would be determined

first by the rules that apply in their special cases, if any and next by the

rule in Section 195(3).

32. While dealing with the aspect as to whether the Court of the

senior   Subordinate  Judge  was  the  Court  to  which  the  Court  of

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Subordinate Judge of the 1st Class was Subordinate or both the courts

were at par, their Lordships confined the adjudication to the provisions

of the Punjab Court's Act, Section (18) whereof did authorise the State

Government to fix the number of subordinate judges to be appointed.

Section  27  which  vested  the  power  in  the  High  Court  to  post  a

subordinate judge and  also prescribe  the  limits of  his/her jurisdiction

was also referred to.  Their Lordships noted in terms of the Notification

dated  03.01.1923  that  four  classes  of   

Subordinate  Judges  had  been contemplated based  on  the  pecuniary

jurisdiction conferred.

33. In  the above factual  as  well  as  legal  premise it  was thus

propounded that  the  Senior  Subordinate Judge  Pitam Singh had no

jurisdiction to lodge the complaint and instead it was the District Judge

who  was  competent  to  do  so,   being  the  Court  to  which  appeals

ordinarily lay from the court of the subordinate judge and was  lower in

rank to the High Court in the hierarchy.  It was held in this context, that

the Court of the Additional District Judge could not be construed to be a

District Judge and that the jurisdiction of the former was limited to the

discharge  of  such functions  as  were to  be  entrusted by  the  District

Judge.  It was thus concluded that neither the Senior Subordinate Judge

Mr. Pitam Singh nor the Additional Judge Mr. J.N. Kapur who construed

himself as an Additional District Judge, had the jurisdiction in the matter

and in view of the provisions of the Punjab Courts Act, it was the District

Judge who was competent to lodge the complaint in terms of Section

195(3) of the Code.  Having regard to the gravity of the allegations, this

Court remitted the matter to the District Court to do the needful in the

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exercise of his discretion in the facts and circumstances of the case.

34. In  Lalji  Haridas  (supra), a Constitution Bench of this Court

was seized with the question as to whether the proceeding before the

I.T.O. under Section 37 of the Indian  Income  Tax Act, 1922 (as it was

then)   could  be construed to be a  proceeding in  any court  within the

meaning  of  Section  195(1)(b)  of  the  Code.   The  factual  backdrop  as

outlined discloses that the appellant and the respondent No. 2 therein

were businessmen and used to carry on their business at two different

places and were known to each other for several years. In the income tax

assessment  proceedings  of  the  appellant  for  the  assessment  years

1949-50 and 1950-51, the respondent No. 2 adduced evidence on oath

before the I.T.O. of the concerned ward, wherein he denied that he had a

son named Nihal Chand and that he had done any business in the name

of M/s. Nihal Chand & Co. at Jamnagar.   The appellant alleged that the

said statement was false to the knowledge of the respondent No. 2 and

was made to mislead the enquiring  I.T.O.  and to avoid the incidence of

income tax on himself and consequently the appellant was heavily taxed.

35. The  appellant  thereafter  filed  a  criminal  complaint  against

respondent No. 2 under Section 193 IPC.  At the hearing of the complaint,

the  respondent  No.  2  raised  a  preliminary  objection  that  the  learned

Magistrate before whom the complaint  had been filed,  could not  have

taken  cognizance   thereof  as  the  allegation  was  making  of  a  false

statement by him on oath in a proceeding before the court  within the

meaning of Section 195(1)(b) of the Code  and in such an eventuality, the

complaint was to be filed by the court concerned as required under the

said provision of the Code and thus  the appellant was not competent to

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lodge the prosecution.

36. Though the learned Magistrate held that the I.T.O. was not a

court within the meaning of Section 195(1)(b) of the Code, the High Court,

on a revision being filed by the respondent No. 2, sustained his challenge

to the maintainability of the complaint.  The High Court held that the I.T.O.

was a court  within the meaning of  Section  195(1)(b)  of  the Code and

resultantly dismissed the complaint filed by the appellant, who eventually

approached this Court.

37. Adverting  to  Section  37  of  the  Income  Tax  Act,  1922  and

sub-section  (4)  thereof  in  particular,  it  was  held  that  as  apparent

therefrom,  any  proceeding  before  the  I.T.O.  in  which  powers  under

sub-sections  (1),  (2)  and  (3)  are  exercised  by  him,  would  be  judicial

proceeding for the purposes of the three sections of the Indian Penal Code

as  enumerated  in  sub-section  (4).   Consequently,  the  question  as  to

whether  the  false  statement  alleged  to  have  been  made  by  the

respondent  No.  2  was  rendered  in  a  judicial  proceeding  within  the

meaning of Section 193 IPC was answered in the affirmative.

38. This  Court  also  dwelt  upon  the  aspect  whether  “judicial

proceeding” as referred to in Section 193 IPC was synonymous with the

expression “any proceeding in any court” used in Section 195(1)(b) of the

Code.   This  issue  surfaced  primarily  in  view  of  the  two  classes  of

proceedings  contemplated  in  Section  193  IPC  attracting  two  varying

punishments.   This  provision,  it  was  noted,  envisaged  a  punishable

offence for giving false evidence in any stage of a judicial proceeding or

fabricating false evidence for the purpose of being used in any stage  of a

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‘judicial proceeding’ and also for giving or fabricating  false evidence in

‘any other’ case.  This Court in the ultimate analysis propounded on a

conjoint reading of Section 193 IPC and Section 195(1)(b) of the Code that

the proceedings which are judicial under the former ought to be taken to

be  proceedings in any court under the latter.  In this context, it was ruled

that having regard to the higher sentence for the offence under Section

193 IPC  qua  a  judicial  proceeding  compared  to  ‘any  other  case;   the

legislature  thus  had  intended  that  there  ought  to  be  a  safeguard  in

respect  of  complaints  pertaining  to  the  offence  relatable  to  judicial

proceedings  as  engrafted  in  Section  195(1)(b)  of  the  Code.   It  was

observed that an offence which was treated as more serious by the first

paragraph of Section 193 IPC, being one committed during the course of a

judicial  proceeding,  should  be  held  to  be  an  offence  committed  in  a

proceeding in any court for the propose of Section 195(1)(b) of the Code.

In terms of the majority decision that was rendered, the view taken by the

High Court was sustained and the complaint was dismissed as not filed in

compliance of the statutory prescriptions contained in Section 195(1)(b)

of the Code.  

39. Noticeably in course of the adjudication, it was marked that

Section 195 was an exception to an ordinary rule that any person could

make a complaint in respect of commission of an offence triable under the

Code.   The  restrictive  mandate  of  this  provision  of  the  Code  against

cognizance  of  any  offence  punishable  under  the  sections  mentioned

therein, when those pertain to any proceedings in any court, except on

the compliant in writing of such court or of some other court to which

such court is subordinate, was underlined in particular.  This Court, thus

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emphasised  that in the matter of invocation of Section 195(1)(b) of the

Code,  vis-a-vis  a  complaint  about  any  of  the  offences  as  mentioned

therein,  an exception to the ordinary rule of  making complaint by any

person has been carved out and by way of a safeguard, only the court in

the proceeding before which such offence had been committed or  such

officer of the Court as it may authorise in writing  or some other court to

which to this Court is subordinate, has been legislatively  identified as

competent to do so.  

40. The  decision  in  Rajesh  Kumar (supra)   pertains  to  the

decision of the authorities under the Act to conduct a special audit of the

account of the petitioner - assessee in terms of Section 142(2-A) of the

Act.  This  was  subsequent  to  a  raid  conducted  in  the  premises  of  the

assessee  in  course  whereof  some  documents  including  its  books  of

accounts  had  been  seized.  The  assessee  questioned  this  decision  of

appointment  of  a  special  auditor  principally  on  the  ground of  want  of

fairness  in  action  as  no  opportunity  of  hearing  was  given  to  it,  prior

thereto.  The interpretation and application of Section 142(2-A) of the Act

in the textual facts thus fell for consideration in this case.  It is in this

context  that this Court  ruled that an assessment proceeding under the

Act, is in terms of Section 136 thereof,  a judicial proceeding  and that

when a statutory power is exercised by the assessing authority in exercise

of judicial function which is detrimental to the assessee, the same is not

and  cannot  be  administrative  in  nature.  In  the  extant  facts  and

circumstances the challenge of the assessee was upheld.  

41. As the genesis of the debate is rooted to Section 195 of the

Code, a detailed reference thereto is indispensable.  For  convenience,

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Section 195 as a whole is extracted hereinbelow:

“195.  Prosecution  for  contempt  of  lawful authority  of  public  servants,  for  offences against  public  justice  and  for  offences relating to documents given in evidence.

(1)   No Court shall take cognizance-

(a)  (i)  of  any  offence  punishable  under   sections  172  to  188  (both  inclusive)   of   the  Indian  Penal  Code  (45  of   1860), or

   (ii) of any abetment of,  or attempt to   commit, such offence, or

 (iii) of  any  criminal  conspiracy  to   commit  such  offence,  except  on  the   complaint  in  writing  of  the  public   servant  concerned  or  of  some  other   public  servant  to  whom  he  is   administratively subordinate;

(b)  (i)  of  any  offence  punishable  under   any  of  the  following  sections  of  the   Indian  Penal  Code  (45  of  1860),   namely,  sections  193  to  196  (both   inclusive), 199, 200, 205 to 211 (both   inclusive)  and  228,  when  such   offence  is  alleged  to  have  been   committed  in,  or  in  relation  to,  any   proceeding in any Court, or

(ii) of any offence described in section 463, or punishable under section 471,  section 475 or section 476, of the said Code, when such offence is alleged  to  have  been committed in respect  of  a  document produced or given  in  evidence  in  a proceeding in any Court, or

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43. In terms of sub-section (4), for the purposes of sub-section (1)

(b),  a Court shall be deemed to be subordinate to the Court to which

appeals ordinarily lie from  the appealable decrees or sentences of such

former  Court,  or  in  the  case  of  a  Civil  Court  from whose decrees  no

appeal ordinarily lies, to the principal Court having ordinary original civil

jurisdiction within whose local jurisdiction, such Civil Court is situated.

44. The proviso to sub-section (4) explains that where  appeals lie

to more than one Court, the Appellate Court of the inferior jurisdiction

shall be the Court to which such Court (in the proceedings before which

the offence has been committed) shall be deemed to be subordinate and

where  appeals  lie  to  a  Civil  and  also  to  a  Revenue  Court,  the

subordination  would  be  determined by the  nature of  the  case  or  the

proceeding, in connection with which the offence is alleged to have been

committed.

45. Noticeably Section 195 of the Code appears under Chapter

XIV  enumerating  the  conditions  requisite  for  initiation  of  proceedings

thereunder.  Though Section 190 of the Code outlines the categories of

inputs on which a Magistrate of the first class, and any Magistrate of the

second class specially empowered, can take cognizance of the offence

alleged, Section 195 dealing with the prosecution for contempt of lawful

authority  of  public  servant  and  for  offences  against  public  justice  or

relating  to  documents  given  in  evidence,  unmistakably  marks  a

departure from the usual modes of taking cognizance under Section 190

by prescribing the restrictions as adverted to hereinabove.

46. That the provisions of Section 195 of the Code are mandatory

so much so that non-compliance thereof would vitiate the prosecution

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and  all  consequential  orders,  has  been  ruled  by  this  Court,  amongst

others in C. Muniappan and Others vs. State of Tamil Nadu (2010)

9 SCC 567   wherein the following observations in Sachida Nand Singh

and Another vs. State of Bihar and Another  (1998) 2 SCC 493 were

recorded with approval.   

“7.....Section 190 of the Code empowers 'any Magistrate  of  the  First  Class'  to  take cognizance of 'any offence' upon receiving a complaint,  or police report  or information or upon  his  own  knowledge.   Section  195 restricts  such  general  powers  of  the Magistrate, and the general right of a person to move the court with a complaint is to that extent curtained.  It is a well-recognised canon of  interpretation  that    provision  curbing  the general jurisdiction of the court must normally receive strict interpretation   unless the statute or  the  context  requires  otherwise.....”. (emphasis supplied).

47. There is thus no escape from the proposition that for a valid

complaint under Section 195 of the Code, the mandate thereof has to be

essentially abided and as is easily perceivable this is to prevent frivolous,

speculative and unscrupulous allegations relating to judicial proceedings

in any court, lest the process of law is abused and public time is wasted

in avoidable litigation.

48. That the search operations did constitute a proceeding under

the Act before an income tax authority and that therefore the same is

deemed  to  be  a  judicial  proceeding  within  the  meaning  inter  alia  of

Sections 193 and 196  IPC and that every income tax authority for the

said purpose would be deemed to be a civil  court for the purposes of

Section 195 is not an issue between the parties.

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49. The essence of the discord is the competence of the Deputy

Director,  Income  Tax  (Investigation)-I,  Bhopal  (M.P.)   to  lodge  the

complaint. Whereas, according to the appellants, he is not the authority

or  the  forum  before  which  appeals  would  ordinarily  lie  from  the

actions/decisions of the I.T.Os.  who had recorded their statements, as

mandated by Section 194(4) of the Code, it  is  urged on behalf of the

respondent  that  having  regard  to  the  overall  scheme of  the  Act,  he

indeed  was  possessed  of  the  appellate  jurisdiction  to  maintain  the

complaint.   As nothing much turns on the ingredients of  the offences

under Sections 193,196,200 IPC  qua the issue to be addressed, detailed

reference thereto is considered inessential. The relevant provisions of the

Act next demand attention.

50. As enumerated under Section 116 of Chapter XIII of the Act,

Deputy  Director  of  Income  tax/Deputy  Commissioner  of  Income

Tax/Deputy Commissioner of Income Tax (Appeals) amongst others  are

the  designated  income  tax  authorities.   Section  118  authorises  the

Central  Board of  Direct  Taxes  constituted  under  the  Central  Board  of

Revenue Act, 1963 (hereinafter referred to as “the Board”) to direct by

notification  in  the  official  gazette  that  any  income  tax  authority  or

authorities specified therein would be subordinate to such other income

tax authority or authorities as may be specified in such notification.  In

course of the arguments, such a notification as contemplated has been

laid before this Court and attention has been drawn to clause (e) thereof

in the following terms:

“Income-tax Officers shall be subordinate to the Assistant Directors or Assistant Commissioners within  whose  jurisdiction  they  perform  their

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functions or other income-tax authority  under whom they are appointed to work and to any other  income  tax  authority  to  whom  the Assistant  Director  or  the  Assistant Commissioner,  as  the  case  may be,  or  other income tax authority is subordinate.”

51. As  would  be  evident  from  the  above  extract,  it  deals

exclusively with the inter se subordination of the authorities mentioned

therein  so  much  so  that  Income  Tax  Officers  have  been  made

subordinate  to   Assistant  Directors  or  Assistant  Commissioners  within

whose  jurisdiction  they  perform  their  functions  or  other  income  tax

authorities under whom they are appointed to work and to any other

income tax authority  to  whom the Assistant  Director  or  the  Assistant

Commissioner  as  the  case  may  be  or  other  income  tax  authority  is

subordinate.   Noticeably  this  clause  does  not  spell  out  any territorial

barriers  but  logically  warrant  some  order/notification  to  activate  the

functional mechanism in order to address the institutional exigencies.   

52. Our attention has not been drawn to any document to this

effect.   Additionally as well, the decisive and peremptory  prescription of

Section 195(4) of the Code is not merely the levels of the rank inter se

but  the  recognised  appellate  jurisdiction  ordinarily  exercised  by  the

authority or the forum concerned for a complaint to be validly lodged by

it, if in a given fact situation, the initiation of prosecution is sought to be

occasioned  not  by  the  court  in  the  proceedings  before  which  the

contemplated offence(s) had been  committed, but  by a court to which

ordinarily appeals therefrom would lie.

53. Considerable  emphasis  has  been  laid  on  behalf  of  the

respondent on the provisions of the Act outlining  the jurisdiction of the

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income tax authorities as encompassed in Sections 120 and 124 of the

Act in particular.  Section 120 provides that income tax authorities would

exercise all or any of the powers and perform all or any of the functions

conferred on or as the case may be assigned to such authorities under

the Act in accordance with such directions as the Board may issue in this

regard. The factors to be taken note of by the Board or any other income

tax  authority  authorised  by  it  for  such  purposes  have  also  been

prescribed.  As a necessary corollary, the Board can also by general or

special order and subject to such conditions, restrictions or limitations as

may be specified therein, authorise such authorities as enumerated in

sub-section (4) thereof to perform such functions, as may be assigned.

54. The powers of an assessing officer vested with the jurisdiction

as permitted by Section 120 of the Act, extends as is clarified by Section

124, to any person carrying on business or profession, if  the place at

which he carries on his  business or  profession  is  situated within the

limits  of  the  area  over  which  such  officer  had  been  vested  with  the

jurisdiction or if the person concerned carries on business in more places

than one, if the principal place of his business or profession is situated

within the area over which  the assessing officer  has jurisdiction.  In

addition, such officer would have also jurisdiction in respect of any other

person residing within the area.  Sub-section 3 of Section 124 debars a

person to call in question the jurisdiction of an assessing officer in the

eventualities as mentioned in sub-clauses (a) and (b) thereof.     

55. The power with regard to discovery, production of evidence

etc. and the officer empowered to exercise the same has been dealt with

in details in Section 131 of the Act. The procedure to be complied with in

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conducting search and seizure has been delineated in Section 132 of the

Act.  Seemingly, to this extent, the parties are one and ad idem.

56. The bone of contention lies in the interpretation of Section

246 of the Act in particular which is contained in Chapter XX dealing with

Appeals and Revision. Whereas Section 246 catalogues the orders of an

assessing  officer  other  than  those  of  the  Deputy  Commissioner  from

which appeal would lie to the Deputy Commissioner (Appeals), Section

246A lists the orders from which appeal would lie to the Commissioner

(Appeals).  Admittedly, the categories of orders specified under Section

246(1)  of  the  Act  do not  include one stemming from any proceeding

before an assessing officer under Section 132 of the Act pertaining to

search or seizure.  Noticeably though under Section 116 of the Act, as

referred  to  hereinabove,  under  clause  (d)  thereof,  Deputy  Director  of

Income  Tax,  Deputy  Commissioner  of  Income  Tax  and  Deputy

Commissioner of Income Tax (Appeals) have been bracketed together, it

is only the Deputy Commissioner (Appeals), as is apparent from Section

246(1),  who  has  been  conferred  with  the  appellate  jurisdiction  to

entertain appeals, albeit from  specified orders passed by an assessing

officer  as  mentioned  in  that sub-section. The  Deputy  Director  of

Income Tax in particular, has not been designated to be the appellate

authority or forum from such orders or any other order of the assessing

officer.  Having regard to  the issue to  be  addressed,  it  is  considered

inessential to dilate on Section 246A which deals with the appeals to the

Commissioner (Appeals).

57. Our attention has not been drawn to any provision of the Act

whereunder the Deputy Director of  Income Tax has been designated  to

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be an authority or forum before whom  an appeal would lie from any

order of any subordinate officer including the  I.T.O..  To reiterate, I.T.Os.

are included in the classes of income tax authorities as per Section 116

of  the  Act   and  having  regard  to  the  hierarchy  designed,  they  are

subordinate  in  rank  to  the  Deputy  Director  of  Income  Tax,  Deputy

Commissioner of Income Tax and the Deputy Commissioner of Income

Tax (Appeals).

58. On a conjoint reading of the above provisions of the Act, it is

thus  patent  that  the  statute  has  not  only  identified  the  income  tax

authorities but also has specified their duties and jurisdiction, territorial

and  otherwise.   It  has  stipulated  as  well  the  eventualities  and  the

pre-requisites, for the exercise of such jurisdiction or performance of the

duties assigned to ensure effective and purposeful implementation of the

provisions thereof.   These functional  framework indubitably has been

made for the desired conduct of the organisational affairs as legislatively

intended.

59. The word “ordinary” as defined in Blacks  Law Dictionary,

10 th Edition, reads thus:

“Ordinary: occurring in regular course of events; normal; usual.

The word “ordinarily” is a derivative of this word (adverb) carrying the

same meaning.

60. The word “ordinarily” therefore would denote  developments

which are likely to occur, exist or ensue   in the regular or normal  course

of events as logically and rationally  anticipated  even though not set out

or expressed in categorical terms. This is a compendious expression  to

encompass  all  events   reasonably expected to occur  in the usual and

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common  course  of occurrences  and are expected to so happen unless

prohibited,  prevented  or  directed   by  some  express  and  unexpected

interventions to the contrary.

61. As adverted to hereinabove, Section 195 of the Code read as

a whole unambiguously impose restrictions in the matter of lodgement of

complaint qua the offences as mentioned  in sub-section (1)(b) thereof in

particular and therefore  as a corollary, any interpretation for identifying

the court/authority/forum contemplated thereby to be competent has to

be in furtherance  of the   restraint  and not in casual relaxation thereof.

Consequently,  therefore  the    exposition  of  the  provisions  of  the

corresponding substantive law which designs the forums or   authorities

and confers  original and  appellant jurisdiction has also to be in aid of

the underlying objectives of the restrictions stipulated. Any postulation

incompatible  with the restrictive connotations would be of   mutilative

bearing thereon and thus frustrate the purpose thereof, a consequence

not  approvable in law.  To reiterate,  Section 195 of the Code  clearly

carves out an exception to the otherwise conferred jurisdiction on a court

under Section 190 to take cognizance of an offence on the basis of the

complaints/information from the sources as enumerated therein.

62. Viewed in this context, in our estimate, the notification issued

under Section 118 of the Act cannot be conceded   an overriding effect

over the scheme of the statute  designating the appellate forums more

particularly in absence of  any order, circular, notification of any authority

thereunder to that effect.    The Deputy Director of Income Tax for that

matter,   as  the  framework  of  the  Act  would  reveal,  has  not  been

acknowledged to be the appellate forum  from any order or the decision

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of the assessing officer/I.T.O.,  notwithstanding several  other provisions

with regard to conferment of various powers and assignments of duties

on the said office.  In the teeth of such mindful  and unequivocal module

of the Act, recognition of the Deputy Director of Income Tax to be a forum

to whom  an appeal would ordinarily lie from any decision or action  of

the assessing officer/income tax officer would not only be inferential but

would  also  amount  to  unwarranted  judicial  legislation  by  extrinsic

additions  and doing violence  to the language of the law framed.   On

the contrary, acceptance of the Deputy Commissioner (Appeals) as the

forum to which an appeal would ordinarily lie from an order/decision of

the  assessing  officer/I.T.O.,  would  neither  be  inconsistent  with  nor

repugnant  to  any  other  provision  of  the  Act  and  certainly  not

incompatible   with  the  legislative  scheme  thereof.   Mere  silence  in

Section  246 of  the Act  about  any decision  or  order  other  than those

enumerated  in  sub-section  (1)  thereof  as  appealable  /decision  to  the

Deputy  Commissioner  (Appeals),  does  not  ipso  fact  spell  legislative

prohibition in that regard and in our comprehension instead signifies an

affirmative dispensation.

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63. It  is  a trite law that there is  no presumption that  a  casus

omissus exists and a court should avoid creating a casus omissus where

there is  none.   It  is  a fundamental  rule  of  interpretation   that  courts

would not feel the gaps in statute, their functions being  jus discre non

facere i.e. to declare or decide the law.  In reiteration of this well-settled

exposition, this Court in (2008) 306 ITR 277 (SC)  Union  of  India  and

others  vs.  Dharmendar   Textile  Processors   and  others    had

ruled  that it is a well settled principle in law that a court cannot read

anything in  the statutory provision or a stipulated provision which  is

plain and unambiguous.  It was held  that a statute being in edict of the

Legislature,  the  language  employed  therein  is  determinative  of  the

legislative intent.  It recorded with approval the observation in Stock v.

Frank  Johns  (Tipton)  Limited (1978)  1  All  ER 948 (HL)   that  it  is

contrary to all rules of construction to read words into an Act unless it is

absolutely  necessary  to  do  so.  The  observation  therein  that,  rules  of

interpretation do not permit the courts to do so unless the provision as it

stands meaningless or doubtful and that the courts are not entitled to

read words into an Act of Parliament unless clear reason for it is to be

found within  the  four  corners  of  the  statute,  was  underlined.   It  was

proclaimed that    a  casus  omissus   cannot  be supplied  by the court

except in the case of clear necessity and that reason for is found in the

four corners  of the statute itself but at the same time a casus omissus

should not be readily inferred and for that purpose, all  the parts of a

statute or  section  must  be construed together and every clause of  a

section  should  be  construed  with  reference  to  the  context  and  other

clauses  thereof  so  that  the  construction  to  be  put  on  a  particular

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provision makes a consistent enactment of the whole statute.

64. More recently this Court  amongst others in Petroleum     and

Natural Gas Regulatory Board vs. Indraprastha Gas Limited and

Others (2015) 9 SCC 209 had propounded  that  when the legislative

intention  is  absolutely  clear  and  simple  and  any  omission  inter  alia

either  in  conferment  of  power  or  in  the  ambit  or  expanse  of  any

expression used is deliberate and not accidental, filling up  of the lacuna

as perceived   by a judicial interpretative process is impermissible. This

was  in  reiteration  of  the   proposition    in  Sree  Balaji  Nagar

Residential  Association  vs.  State  of  Tamil  Nadu  and  Others

(2015) 3 SCC 353 to the effect  that casus omissus  cannot be supplied

by  the  court  in  situations  where   omissions  otherwise  noticed   in  a

statute  or  in  a  provision  thereof   had  been  a  conscious  legislative

intendment.

65. The judicial formulations on the theme is so consistent  and

absolute in terms that no further dilation  is essential.  The scheme of the

Act and  the legislative design being  unreservedly  patent in the instant

case, that it is plainly impermissible to acknowledge the Deputy Director

of Income Tax  to be the forum to which an appeal would ordinarily lie

from an order/decision of an assessing officer/I.T.O.  The  present  is thus

not a case where this Court can premise that  the statute suffers from

casus omissus  so as to  recognise the Deputy Director of Income Tax  as

such an appellate forum.

66. In  this  persuasive  backdrop,  the  conferment  of  appellate

jurisdiction  on  the  Deputy  Commissioner  of  Appeals  from  the

orders/decisions of the assessing officers as is apparent from Section 246

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of the Act, has to be construed as a conscious statutory mandate.  This is

more  so  as  noticed  hereinabove,  the  Deputy  Director  of  Income Tax,

Deputy Commissioner of Income Tax and the Deputy Commissioner of

Income Tax (Appeals) have been otherwise placed at par in the list of

income tax authorities provided by Section 116 of the Act.  The omission

to  either  vest  the  Deputy  Director  of  Income  Tax  with  the  appellate

powers or to contemplate the said post to be an appellate forum from the

orders/decisions of the assessing officers cannot thus be accidental  or

unintended.  The relevant provisions of the Act pertaining to the powers,

duties and jurisdiction of the various income tax authorities do not leave

any room for doubt, in our estimate, to conclude otherwise.  True it is,

that the Deputy Commissioner of Appeals has been construed in terms of

Section  246 of  the  Act  to  be  an appellate  forum from the  orders  as

enumerated in sub-section (1) thereof, but in absence of any  provision in

the  statute  nominating  the  Deputy  Director  of  Income  Tax  to  be  an

appellate forum for any order/decision of the assessing officer/I.T.O., the

inevitable  conclusion is  that  the said authority  i.e.  Deputy Director  of

Income Tax cannot be construed to be one before whom an appeal from

any  order/decision  of  any  income  tax  authority,  lower  in  rank  would

ordinarily lie.

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67. The  Parliament   has  unmistakably  designated  the  Deputy

Commissioner (Appeals) to be the appellate forum from the orders as

enumerated under Section 246(1) of the Act.  This however, in our view,

as observed hereinabove does not detract from the recognition of this

authority  to  be  the  appellate  forum  before  whom  appeals  from  the

decisions  of   an  assessing  officer  or  of  an  officer  of  the  same  rank

thereto would generally and ordinarily lie even in the contingencies not

referred to in particular in sub section 1 of Section 246.  This is more so,

to reiterate, in absence of any provision under the Act envisaging the

Deputy  Director  of  Income  Tax  to  be  an  appellate  forum  in  any

eventuality  beyond  those  contemplated  in  Section  246(1)  of  the  Act.

Neither the hierarchy of the income tax authorities as listed in Section

116 of the Act nor in the notification issued under Section 118 thereof,

nor  their  duties,  functions,  jurisdictions  as  prescribed  by  the  cognate

provisions alluded heretobefore, permit a deduction that in the scheme of

the legislation, the Deputy Director of Income Tax has been conceived

also to be an appellate forum to which appeals from the orders/decisions

of the I.T.Os./assessing officers would ordinarily lie within the meaning of

Section  195(4)  of  the  Code.   The  Deputy  Director  of  Income  Tax

(Investigation)-I  Bhopal,  (M.P.),  in  our  unhesitant  opinion,  therefore

cannot be construed to be an authority to whom appeal would ordinarily

lie  from  the  decisions/orders  of  the  I.T.Os.  involved  in  the  search

proceedings in the case in hand so as to empower  him to lodge the

complaint in view of the restrictive preconditions imposed by Section 195

of the Code. The complaint filed by the Deputy Director of Income Tax,

(Investigation)-I, Bhopal (M.P.), thus  on an overall analysis  of the facts of

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the case and the law involved has to be held as incompetent.

68. The cavil on the competence of the Court of the Chief Judicial

Magistrate, Bhopal to entertain the complaint and take cognizance of the

offences alleged, though reduced to an academic exercise, in view of the

above determination needs to be dealt with in the passing.

69. In  Y.  Abraham  Ajith (supra),  the  issue  of  territorial

jurisdiction of the Trial Court in which a complaint had been filed by the

respondent  No.  2   under  Sections  498A  and  406  IPC,  in  the  face  of

Sections 177 and 178 of  the Code surfaced for  scrutiny. The defence

raised the plea that as no part of the cause of action constituting the

alleged  offence  had  arisen  within  the  jurisdiction  of  the  court  before

which the complaint had been filed, it lacked competence to entertain

the  same  and  conduct  the  trial  following  the  submission  of  the

charge-sheet.  The complaint had disclosed that the allegations levelled

therein related to the incident that had happened at her previous place

of stay beyond the territorial limits of the court in which it had been filed.

This Court after dilating on the scope and purport of Sections 177 and

178 of the Code as well as the judicially expounded connotation of the

expression  “cause  of  action”  sustained  the  objection  to  the

maintainability of the complaint. It was noticed that there was no whisper

of any allegation relatable to the offences imputed at the place of stay of

the complainant where the complaint had been filed. It  was thus held

that no part of cause of action did arise within the jurisdiction of the Trial

Court before which the complaint had been filed and the proceedings

resultantly were quashed.

70. A similar fact situation obtained in Bhura  Ram  (supra) also

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involving offences under Sections 498A/406/147 IPC.  In the attendant

facts, it being apparent that no part of the cause of action for the alleged

offence had arisen or no part of the offence had been committed within

the jurisdiction of the court before which the complaint had been filed,

the proceedings were quashed.

71.  Both these decisions on territorial jurisdiction, to start with having

regard to the facts involved herein are distinguishable and  are of no

avail  to  the  appellants.  As  hereinbefore  stated,  the  appellants  as

assesses, had residences both at Bhopal and Aurangabad and had been

submitting their  income tax  returns  at  Bhopal.  The search operations

were  conducted  simultaneously  both  at  Bhopal  and  Aurangabad  in

course whereof allegedly the appellants, in spite of queries made, did not

disclose that they in fact did hold a locker  located at Aurangabad. They

in fact denied to hold any locker, either individually or jointly.  The locker,

eventually located, though at Aurangabad, has a perceptible co-relation

or nexus with the subject matter of assessment and thus the returns filed

by the appellants at Bhopal which in turn were  within the purview of the

search operations.  The search conducted simultaneously at Bhopal and

Aurangabad has to be construed as a single composite expedition with a

common mission.  Having regard to the overall facts and the accusation

of false statement made about the existence of the locker in such a joint

drill, it cannot be  deduced that in the singular facts and circumstances,

no  part  of  the  offence  alleged  had  been  committed  within  the

jurisdictional limits of the Chief Judicial Magistrate, Bhopal.

72. Chapter  XIII  of  the  Code  sanctions  the  jurisdiction  of  the

criminal courts in inquries and trials. Whereas Section 177 of the Code

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stipulates the ordinary place of inquiry and trial, Section 178 enumerates

the places of inquiry or trial.  In terms of Section 179, when an act is an

offence  by  reason  of  anything  which  has  been  done  and  of  a

consequence which has  ensued, the offence may be inquired into or

tried  by a court within whose local jurisdiction such thing has been done

or such consequence has ensued.  For immediate reference, Sections 177

and 178 are extracted hereinbelow.

“177: Ordinary place of inquiry and trial – Every offence  shall ordinarily be inquired into and tried by a court within whose local jurisdiction it was committed.

178:  Place  of  inquiry  or  trial  –  (a)  When  it  is uncertain  in  which   of  several  local  areas  an offence was committed, or  

(b)  where an offence is committed partly in one local area and partly in another, or    (c)    where an  offence  is  continuing  one,  and continues to be committed  in more local areas than one, or

(d)    where it  consists of  several  acts  done in different local areas, it may be inquired into or tried by a court having jurisdiction over any of such local areas.

73. As  would  be  evident  from  hereinabove,  ordinarily  every

offence ought to be  inquired into and tried by a court within whose local

jurisdiction it had been  committed as is mandated by Section 177 of the

Code.  Section 178, however  marks a departure  contingent  on the

eventualities as listed in clauses (a),(b),  (c) and (d) of  Section 178 to

identify the court  that would have the jurisdiction  to try  the offences as

contemplated therein.   

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74. Though the concept of  “cause of action“  identifiable with a

civil  action   is  not  routinely   relevant   for  the  determination  of

territoriality  of  criminal  courts   as  had  been  ruled  by  this  Court  in

Dashrath  Rupsingh  Rathod  vs.  State  of  Maharashtra  and

Another, (2014) 9 SCC 129,  their Lordships however were cognizant of

the word “ordinarily” used in Section 177 of the Code to acknowledge the

exceptions  contained  in Section 178 thereof.  Section 179 also did not

elude notice .

75. Be that as it may,  on a cumulative reading of Sections 177,

178  and  179  of  the  Code  in  particular   and  the  inbuilt  flexibility

discernible in the latter two provisions, we are of the comprehension that

in the attendant facts and circumstances of the case where  to repeat, a

single  and  combine  search  operation  had  been  undertaken

simultaneously both at Bhopal and Aurangabad for the same purpose,

the alleged offence can be tried by courts otherwise competent at both

the  aforementioned   places.   To confine  the  jurisdiction  within  the

territorial limits  to the court at Aurangabad would amount, in our view,

to  impermissible   and illogical truncation  of  the ambit of Sections 178

and 179 of the Code. The objection with regard to the competence of the

Court of the Chief Judicial Magistrate, Bhopal is hereby rejected.

76. The  inevitable  consequence  of  the  determination  in  its

entirety however is that the complaint is unsustainable in law  having

been filed by an authority, incompetent in terms of Section 195 of the

Code.

77. In  the  result,  the  appeal  succeeds  and  the  impugned

proceeding  and  the  order  assailed  are  set-aside. The  respondent  is

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however  left  at  liberty  to  take  appropriate  steps  in  the  matter,  as

available in law, if so advised.

             ….....…....................................J.          (PINAKI CHANDRA GHOSE)

       .............................................J.

         (AMITAVA ROY) NEW DELHI; AUGUST 31,  2016.

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