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Reportable

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL  APPEAL  NO. 2165 OF 2014 (Arising out of S.L.P. (Crl.) No. 7521 of 2012)

George Bhaktan ...Appellant

Versus

Rabindra Lele & Ors.              ...Respondents

J U D G M E N T  

Delay condoned.

2. Leave granted.  

3. The present appeal, by special leave, calls in question  

the  legal  defensibility  of  the  order  dated  03.03.2012,  

passed by the High Court of Orissa at Cuttack in CrMC No.  

5808/2001 whereby the learned Single Judge has quashed  

the order of cognizance dated 18.10.2000 passed by the  

learned  SDJM,  Panposh,  Rourkela  in  ICC  Case  No.  92  of  

1998.

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4. The  broad  essential  facts  which  are  required  to  be  

adumbrated for the adjudication of the appeal are that the  

appellant-complainant filed a complaint under Section 200  

of  the  Code  of  Criminal  Procedure,  1973  (for  short  ‘the  

Code’)  against  the  accused-respondents  alleging  

commission of offences under Section 425, 468 and 471 of  

the Indian Penal Code, 1860 ( for short ‘the IPC’) on the  

foundation that the complainant, the Managing Director of  

Ores India (P) Ltd. had approached the accused persons for  

supply of machines and equipments for establishing an Iron  

Ore  Crusher  Unit  at  village  Regalveda  in  the  district  of  

Sundargarh with the financial assistance from Orissa State  

Financial Corporation (OSFC).  The accused persons being  

desirous  of  supplying  the  machinery  and  equipments  

persuaded the complainant to place the purchase order in  

their favour and on the basis of their past performance, the  

appellant  placed  the  purchase  order  on  23.10.1997.   As  

stipulated in the said purchase order, the accused persons,  

apart from other things, had agreed to provide designing  

and drawing for complete plant with 15 months guarantee  

from the date of dispatch.  On the basis of the purchase  

order, the complainant sent cheques for Rs.15 lakhs and, as  

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alleged,  after  receipt  of  the  said  money  the  accused  

persons  sent  their  written  confirmation  to  OSFC  

acknowledging  the  receipt  of  the  money.   The  OSFC,  in  

turn,  paid  Rs.25  lakhs  to  the  accused  persons  as  an  

advance  keeping  in  view  the  commitment  made  by  the  

complainant.

5. As  the  complaint  would  further  uncurtain,  in  spite  of  

substantial  amount  of  money  being  paid  by  way  of  

advance, no steps were taken by the accused persons to  

ensure  supply  of  machineries  and  equipments  with  an  

ulterior motive, as a consequence of which the complainant  

suffered huge loss.  It is asserted in the complaint petition  

that with the intention to cause wrongful loss and damage  

to the complainant, accused persons procured a letter pad  

of the complainant from a staff of the company and typed a  

letter with the signature of George Bakhtan on that letter  

so  that  they  would  get  an  extension  from  the  OSFC  

regarding the date of purchase.  It is further alleged that  

the  accused  persons  orchestrated  a  conspiracy  and  

contrived to manipulate the transaction but eventually the  

machineries  were  not  supplied.   In  this  backdrop,  the  

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complaint  was  lodged  for  the  offences  which  have  been  

mentioned hereinbefore.  

6. On the basis of the complaint, initial statement of the  

complainant was recorded under Section 200 of the Code  

and  thereafter  an  enquiry  was  conducted  under  Section  

202 of the Code and ultimately cognizance was taken.  Be it  

stated,  for some reason,  the order of cognizance initially  

taken was set aside by the High Court and the matter was  

remitted  to  the  trial  court  to  deal  with  the  aspect  of  

cognizance in accordance with law.  Thereafter, vide order  

dated 18.10.2000, the learned Magistrate took cognizance  

in respect of the offences.  

7. Being grieved by the aforesaid order, the respondents  

preferred  a  petition  under  Section  482 of  the  Code.   The  

primary  plank  of  proponement  before  the  High  Court  was  

that  the  order  of  cognizance  was  sensitively  susceptible  

inasmuch as the alleged forged document was produced in  

the  suit  brought  by  the  respondents  and,  therefore,  the  

prohibition  contained  in  Section  195(1)(b)(ii)  would  get  

attracted  on  all  fours.   To  bolster  the  said  submission,  

reliance  was  placed  on  a  two-Judge  Bench  decision  in  

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Gopalakrishna Menon and Anr. V D. Raja Reddy and  

Anr.1  The said submission was resisted by the counsel for  

the  complainant  placing  reliance  on  Smt.  Nagawwa  V.  

Veeranna  Shivalingappa  Konjalgi  and  others2.  The  

High Court, appreciating the legal submissions, came to hold  

as follows:-

“8. In the case at hand, the prosecution is  on the basis of a private complaint and in the  absence of a complaint from the appropriate  civil  court,  where  the  alleged  fraudulent  document has been produced, would not be  sustainable and such proposition is no longer  res  integra  what  has  been  settled  by  the  Hon'ble  supreme  Court  in  the  judgment  rendered in the case of Gopalakrishna Menon  & another (supra).

9. In view of the aforesaid conclusion,  I  am  of  the  considered  view  that  if  the  prosecution  is  allowed  to  continue,  serious  prejudice would be caused to the petitioners  and they would be called upon to face the  trial which would not be sustainable.  Hence,  the  order  of  cognizance  dated  18.10.2000  passed in I.C.C. case No. 92 of 1998 by the  learned  S.D.J.M.,  Panmposh,  Udit  Nagar,  Rourkela is set aside and it is left open for the  opposite  party-company,  if  so  advised,  to  make such complaint before the Civil Court,  Vadodara if aggrieved in any manner to the  alleged  forged  document  produced  before  the  said  court  who would  be  competent  to  deal with the same.”

1 (1983) 4 SCC 240 2 (1976) 3 SCC 736

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8. As is evincible, at the said juncture, the High Court did  

not think it appropriate to dwell upon the  justifiability of  

the order taking cognizance on facts,  for it  set aside the  

order  solely  on  the  basis  of  the  principle  stated  in  

Gopalakrishna menon (supra).  

9.   Attacking  the  aforesaid  order  Mr.  Tejaswi  Kumar  

Pradhan learned counsel for the appellant submitted that  

the order passed by the High Court suffers from incurable  

infirmity, for it has relied on a decision which has not been  

accepted  by  the  Constitution  Bench  in  Iqbal  Singh  

Marwah  and  Another  V.  Meenakshi  Marwah  and  

Another3.  It is also urged by him that it would have been  

advisable on the part of the High Court to deal with the lis  

on the bedrock of law as well as on the factual score and as  

the same has not been done, the impugned order is wholly  

unsustainable and deserves to be set aside.  

10.   Mr.  Mohan  Rao,  learned  counsel  appearing  for  the  

respondents, resisting the aforesaid submissions urged that  

though  the  principle  stated  in  Gopalakrishna  Menon's  

case (supra) may not be applicable in praesenti,  yet had  

3  (2005) 4 SCC 370

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the High Court perused the documents which have been  

alleged to have been forged by the complainant it would  

have come to a definite conclusion that no case has been  

made out in respect of the alleged offences. It is his further  

submission that present case is one which falls in one of  

the seven categories as enumerated in State of Haryana  

and others v. Bhajan Lal and others4.  That apart, Mr.  

Rao would also contend that the allegation in the complaint  

petition  as  regards  the  receipt  of  amount  by  way  of  

cheques sent by the complainant is a false one inasmuch  

as  the cheques for the said amount were dishonoured and  

proceedings  under  Section  138  of  the  Negotiable  

Instruments  Act,  1881  were  instituted  against  the  

respondents  and  hence,  the  instant  criminal  proceeding,  

being a malafide one, deserves to be quashed.  

11.  On a perusal of the order passed by the High Court, it  

is absolutely pellucid that it has not adverted to any aspect  

pertaining  to  the  allegations  in  the  complaint  or  the  

material  brought  on  record  to  arrive  at  a  conclusion  

whether a prima facie case has been made out or not.  It  

has  singularly  addressed  the  controversy  on  the  legal  4        1992 Supp (1) SCC 335

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backdrop  that  when  a  document  is  produced  in  a  civil  

proceeding, it attracts the bar under Section 195(1)(b)(ii) of  

the Code and,  therefore,  the complaint  is  not  tenable in  

law.    In  Gopalakrishna  Menon's case  the  two-Judge  

Bench  referred  to  various  provisions  of  the  Code  and  

eventually ruled thus:

“If S. 195 (1)(b)(ii) is attracted to the facts of  the  present  case,  in  the  absence  of  a  complaint in writing of the Civil  Court where  the alleged forged receipt has been produced,  taking of cognizance of the offence would be  bad  in  law  and  the  prosecution  being  not  maintainable,  there  would  be  absolutely  no  justification  to  harass  the  appellants  by  allowing  prosecution  to  have  a  full  dressed  trial.”   

12.    In  Sachida Nand Singh and another v. State of   

Bihar and another5 a three-Judge Bench was dealing with  

the question whether a prosecution can be maintained in  

respect of a forged document produced in a court unless  

complaint  has  been filed  by the court  concerned in  that  

behalf.   Elaborating the posed question the Court stated  

that the question involved is whether prohibition contained  

in  Section  195(1)(b)(ii)  of  the  Code would apply  to  such  

prosecution.   Proceeding  further  the  three-judge  Bench  

5  (1998) 2 SCC 493

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observed that though the question was ticklish, yet it had  

almost received a quietus with the pronouncement in Patel  

Laljibhai  Somabhai  v.  State  of  Gujarat6,  however,  a  

subsequent  decision  in  Gopalakrishna  Menon's  case  

struck a different note and thereby revived the issue that  

had  been  put  to  rest.   After  referring  to  the  language  

employed in  Sections 340 and 195 of  the Code and the  

decisions in Raghunath v. State of U.P.7, Mohan Lal v.  

State  of  Rajasthan8 and  Legal  Remembrancer  of  

Govt.  of  W.B.  v.  Haridas  Mundra9,  the  Court  finally  

opined thus:-

“Of course in the end of that decision it was  mentioned that prosecution on the basis of a  private  complaint,  in  the  absence  of  a  complaint from appropriate civil court, is not  sustainable.  Learned Judges made reference  to the decisions in  Patel Laljibhai Somabhai   and S.L. Goswami (Dr) v. High Court of M.P.10,  and observed that the ratio in those decisions  support the view taken by them.  The forgery  alleged in  Goswami  case took  place during  the  period  when  the  document  in  question  was in the custody of the Court and in such a  case  the  bar  under  Section  195(1)(b)(ii)  would  certainly  apply.   But,  with  great  respect, we are unable to agree that the ratio  in  Laljibhai  Somabhai would  support  the  

6       (1971) 2 SCC 376 7       (1973) 1 SCC 564 8       (1974) 3 SCC 628 9       (1976) 1 SCC 555 10       (1979) 1 SCC 373

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conclusion reached in  Gopalakrishna Menon  case.  

13.   From the aforesaid it is limpid that the principle stated  

in  Gopalkrishna  Menon  (supra)  has  specifically  been  

overruled  in  Sachida  Nand  Singh’s  case. Despite  the  

three-Judge  Bench  decision  in  Sachida  Nand  Singh  

(supra) the controversy was not allowed to rest.  Thereafter  

the  conflict  was  seen  in  the  principle  stated  in  Surjit  

Singh v. Balbir Singh11, a decision rendered by a three-

Judge Bench and Sachida Nand Singh  (supra) and both  

pertained to interpretation of Section 195 (1)(b)(ii) of the  

Code  and,  therefore,  the  controversy  travelled   to  the  

Constitution Bench in Iqbal Singh Marawah's case.   

14.   The Constitution Bench after analyzing in detail  the  

contours of provisions contained in Section 340, 195(1)(b)  

and  after  referring  to  the  decisions  in  Patel  Laljibhai  

(supra),  Raghunath (supra) and taking note of deletion of  

certain words occurring in Section 195(1) of the old Code,  

and the 41st report of the Law Commission, came to hold as  

follows:

“  In  view of  language  used in  Section  340  CrPC  the  Court  is  not  bound  to  make  a  

11  (1996) 3 SCC 533  

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complaint  regarding  commission  of  an  offence referred to  in  Section  195(1)(b),  as  the section is conditioned by the words “court  is  of  opinion  that  it  is  expedient  in  the  interests of justice”.  This shows that such a  course will be adopted only if the interest of  justice requires and not in every case.  Before  filing of the complaint, the court may hold a  preliminary enquiry and record a finding to  the effect that it is expedient in the interest  of justice that enquiry should be made into  any  of  the  offences  referred  to  in  Section  195(1) (b).  This expediency will normally be  judged  by  the  court  by  weighing  not  the  magnitude of  injury  suffered by the  person  affected by such forgery or forged document,  but  having  regard  to  the  effect  or  impact,  such  commission  of  offence  has  upon  administration of justice.  It  is possible that  such forged document or forgery may cause  a  very  serious  or  substantial  injury  to  a  person in the sense that it may deprive him  of a very valuable property or status or the  like, but such document may be just a piece  of evidence produced or given in evidence in  court, where voluminous evidence may have  been adduced and the effect of such piece of  evidence  on  the  broad  concept  of  administration of justice may be minimal.  In  such  circumstances,  the  court  may  not  consider it expedient in the interest of justice  to  make  a  complaint.   The  broad  view  of  clause  (b)  (ii),  as  canvassed  by  learned  counsel for the appellants, would render the  victim  of  such  forgery  or  forged  document  remediless.  Any interpretation which leads to  a  situation  where  a  victim  of  a  crime  is  rendered remediless, has to be discouraged.”

15.   Thereafter,  the larger Bench proceeded to observe  

thus:

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“An enlarged interpretation to Section 195(1) (b)(ii),  whereby the bar created by the said  provision  would  also  operate  where  after  commission  of  an  act  of  forgery  the  document is subsequently produced in court,  is capable of great misuse.  As pointed out in  Sachida Nand Singh after preparing a forged  document or committing an act of forgery, a  person  may  manage  to  get  a  proceeding  instituted  in  any  civil,  criminal  or  revenue  court, either by himself or through someone  set up by him and simply file the document in  the  said  proceeding.   He  would  thus  be  protected  from  prosecution,  either  at  the  instance of a private party or the police until  the  court,  where  the  document  has  been  filed, itself chooses to file a complaint.  The  litigation  may  be  a  prolonged  one  due  to  which the actual trial of such a person may  be  delayed  indefinitely.   Such  an  interpretation would be highly detrimental to  the interest of the society at large.”

16. On the base of aforesaid ratiocination, the Constitution  

Bench approved the principle laid down in  Sachidanand  

Singh (supra) by stating thus:

“In view of  the discussion made above,  we  are of the opinion that  Sachida Nand Singh  has  been  correctly  decided  and  the  view  taken  therein  is  the  correct  view.   Section  19591)(b)(ii)  CrPC  would  be  attracted  only  when  the  offences  enumerated  in  the  said  provision have been committed with respect  to a document after it has been produced or  given  in  evidence  in  a  proceeding  in  any  court i.e. during the time when the document  was in custodia legis ”  

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In  view  of  the  aforesaid  the  law  laid  down  in  

Gopalkrishna Menon (supra) is no more good law.  

17.   Be  it  stated,  the  Constitution  Bench  repelled  the  

argument of strict construction and distinguishing many a  

decision,  came  to  hold  that  Section  195  is  not  a  penal  

provision  but  is  a  part  of  procedural  law,  namely,  CrPC,  

which  elaborately  gives  a  procedure  for  trial  of  criminal  

cases.   Proceeding  further,  their  Lordships  held  that  the  

provision only creates a bar against taking cognizance of an  

offence  in  certain  specified  situations  except  upon  

complaint by Court and a penal statute is one upon which  

an action for penalties can be brought by a public officer or  

by a person aggrieved and a penal act in its wider sense  

includes  every  statute  creating  an  offence  against  the  

State,  whatever  is  the  character  of  the  penalty  for  the  

offence.  

18.   Dealing with the argument that there should be no  

conflict in the findings recorded by the civil  and criminal  

court,  the  Constitution  Bench  referred  to  earlier  

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Constitution Bench decision in  M.S. Sheriff V. State of  

Madras12 and declined to accept the said submission.   

19.  Eventually, taking note of the facts in that case, the  

Court held the Will in question had been produced in the  

Court subsequently and there was no allegation that the  

offence  as  enumerated  in  Section  195(1)(b)(ii)  was  

committed  in  respect  of  the  said  Will  after  it  had  been  

produced or filed in the Court, the bar created by the said  

provision would not come into play and hence, there was  

no embargo on the power of the court to take cognizance  

of the offence on the basis of the complaint filed by the  

complainants therein.  

20.   In the case at hand, as we find, the allegation in the  

complaint is that the respondents had forged the signature  

of  the  complainant  and  submitted  to  the  Corporation  

seeking  extension  of  the  period  of  supply.   Thereafter,  

seeking certain relief a suit was filed and in the suit the  

document  was  filed.   There  is  no  allegation  that  this  

document  was  forged  when  the  matter  was  subjudice  

before the Civil Court.  Thus, the dicta of the Constitution  

12 1954 SCR 1144

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Bench is squarely applicable.  The High Court has clearly  

erred in relying on the principle stated in  Gopalakrishna  

Menon's case (supra) which makes the impugned order  

wholly indefensible.  

21.   We have already taken note of the submission of Mr.  

Rao that  the High Court has not adverted to the factual  

score  whether a case has been made out on the basis of  

the  material  brought  on  record.   In  the  absence  of  any  

findings in that regard by the High Court, we do not intend  

to  take  up  the  burden  on  ourselves.   That  makes  it  

obligatory on our part to set aside the order passed by the  

High  Court  and  remand  the  matter  to  it  for  fresh  

consideration whether in the obtaining factual matrix the  

order of cognizance deserves to be lancinated.    We would  

request the High Court to dispose of the petition within a  

period of three months as the matter has been continuing  

for  long.   We  may  hasten  to  clarify  that  we  have  not  

expressed any opinion on the merits of the case.  

22.   Consequently, the appeal is allowed, the order passed  

by the High Court is set aside and the matter is remanded  

to the High Court for fresh disposal in accordance with law.  

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...................................J.                      [Dipak Misra]

...................................J.                                                [Vikramajit Sen]

New Delhi; September 24, 2014

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