Page 1

REPORTABLE

ITEM NO.23               COURT NO.11             SECTION II

           S U P R E M E   C O U R T   O F   I N D I A                          RECORD OF PROCEEDINGS                      

Petition(s) for Special Leave to Appeal (Crl) No(s).9098/2012 (From the judgement and order  dated 03/10/2012 in CRLA  No.3146/2012 of The HIGH COURT OF BOMBAY AT AURANGABAD)

NATIONAL BANK OF OMAN                             Petitioner(s)

                VERSUS

BARAKARA ABDUL AZIZ & ANR.                        Respondent(s)

(With appln(s) for exemption from filing O.T.)

Date: 03/12/2012  This Petition was called on for hearing today.

CORAM :         HON'BLE MR. JUSTICE K.S. RADHAKRISHNAN         HON'BLE MR. JUSTICE DIPAK MISRA

For Petitioner(s) Mr. Devashish Bharuka,Adv.

For Respondent(s)

          UPON hearing counsel the Court made the following                                O R D E R  

The  complainant-National  Bank  of  Oman  lodged  a  

private  complaint  RTC  NO.No.260/2007  in  the  Court  of  

Chief  Judicial  Magistrate,  Ahmednagar  against  the  

respondent  alleging  that  he  had  cheated  the  bank  by  

swindling 43,15,000/- U.A.E. Dirhams (equivalent to 5.178  

Crores Indian Rupees).  The gist of the complaint reads  

as follows:

“In  the  year  1995,  the  applicant/accused  opened current account with the complainant  Bank on a representation that he was holding  

1

Page 2

Indian Passport.  The accused slowly gained  confidence  of  the  complainant  Bank.   In  February 1996, the accused produced trading  licence issued by Abu Dhabi Municipality and  Town Planning and represented that he owned  firm – M/s Bushra Textiles, situated at Abu  Dhabi  and  engaged  in  retail  and  wholesale  trading  and  sale  of  textiles  garments,  stationery  items,  electronics  etc.   The  accused  further  represented  that  he  was  established in business at Abu Dhabi and was  well supported by loyal clientele and was in  process  of  expanding  his  business,  which  required financial facilities from the Bank.  The accused also represented to the Bank that  he had more than enough financial stability  and  viability  to  honour  the  financial  commitments  and  pay  back  the  finances  made  available to him by the Bank.  Based on the  said  solemn  representation,  the  Company  in  good faith granted to the accused overdraft  facility of 2,50,000/- A.E.D.   This facility  was enhanced from time to time to the extent  of 51 lacs A.E.D. by overdraft loan against  trust receipts, local bill limit, credit card  etc.  till  October  2001.   The  accused,  however, committed breach of undertaking and  failed to repay the dues of the complainant  Bank.

The complainant Bank, therefore, contemplated  legal action against the accused in order to  obtain  detention  orders  from  the  competent  Court at U.A.E.

 The  accused  thereupon  approached  the  complainant Bank in November 2002 and entered  into  a  restructuring/settlement  agreement  with  the  accused  on  12.11.2002  for  A.E.D.  43,15,000/- by converting all the outstanding  liabilities into a term loan to be repaid in  48 installments.

The accused undertook to pay the said amount  as  per  terms  of  MOU  and  also  issued  post  dated cheques for 24 monthly installments and  gave  assurance  and  undertaking  that  said  cheques would be honoured and loan would be  repaid  as  per  the  restructuring  agreement  between the parties and thereby induced the  Bank not to take immediate action and obtain  detention order.  The complainant relied upon  the  said  representation  and  did  not  take  action against the accused in November 2002. The said cheques were dishonoured for want of  sufficient  funds  in  the  account  and  in  

2

Page 3

meanwhile  the  accused  surreptitiously  and  clandestinely  absconded  to  India  without  discharging his loan liability.”

The complainant-Bank is not having any branch or  

any activity in India or nor carrying on any business in  

India.  The Bank, therefore, decided to appoint Mr. N.B.  

Sapkal, as its power of attorney holder for the purpose  

of filing complaint and taking legal steps against the  

respondent, who is alleged to have duped the Bank and  

escaped to India.  The power of attorney holder is a  

resident of Ahmednagar and according to the Bank it was  

convenient  for  the  Bank  to  file  the  complaint  at  

Ahmednagar.   The  respondent  being  a  citizen  of  India,  

necessary sanction had to be obtained from the Central  

Government under the proviso to Section 188 of the Code  

of Criminal Procedure.  Sanction was accordingly sought  

for from the Government of India and the Government of  

India,  Ministry  of  Home  Affairs,  vide  letter  

No.F/83/2007.Jud.Cell  dated  26th March,  2010  accorded  

sanction  to  enquire  and  trial  of  the  respondent  by  a  

court of competent jurisdiction in India.

The  Chief  Judicial  Magistrate,  Ahmednagar  on  

25.2.2011 passed the following order on the complaint:

“Perused complaint and the documents attached  thereto.  The Central Government has accorded  sanction  to  prosecute  the  accused.   Heard  learned  counsel  appearing  for  the  complainant.  There are sufficient materials  against  the  accused.   The  complainant  has  made  out  prima  facie  case  against  the  accused.   Hence  process  be  issued  for  offences u/s 418 and 420 of I.P.C.

Dt.25.02.2011

Sd/- (G.O. Agrawal) C.J.M. Ahmednagar

3

Page 4

The  respondent  challenged  that  order  by  filing  

Criminal Application No.3146/2012 before the High Court  

of  Judicature,  Bombay  Bench  at  Aurangabad.   It  was  

contended that the allegations in the complaint do not  

prima facie constitute any offence or make out a case for  

issuance of process under Sections 418 and 420 of the  

I.P.C.   Further,  it  was  stated  that  the  respondent-

accused was a resident of Dakshin Kannada in the State of  

Karnataka and the C.J.M. Ahmednagar issued the process  

without  complying  with  the  mandatory  requirement  of  

making an enquiry or directing an investigation for the  

purpose of deciding whether or not there was sufficient  

ground for initiating proceedings against the accused as  

contemplated under Section 202 of the Code of Criminal  

Procedure.  The High Court took the view that prima facie  

the bare allegation of cheating did not make out a case  

against the accused for issuance or process under Section  

418 of 420 of the I.P.C.  Further, it was held that the  

C.J.M.  did  not  follow  the  procedure  laid  down  under  

Section 202 of the Cr.P.C.  The High Court held that the  

Magistrate was obliged to postpone the process against  

the accused and either enquire the case himself or direct  

an investigation to be made by a police officer or by  

such other officer as he thinks fit for the purpose of  

deciding whether or not there is sufficient grounds for  

proceeding in a case where the accused is residing beyond  

the  area  in  which  the  Magistrate  exercises  his  

jurisdiction.  The High Court noticed that the accused is  

a  resident  of  District  Dakshin  Kannada,  Karnataka  and  

hence, the CJM should have followed the procedure laid  

down in Section 202 Cr.P.C.   The High Court, therefore,  

set aside the order dated 25.2.2011 issuing the process  

under Sections 418 and 420 of the I.P.C. by the C.J.M.  

Ahmednagar.  Aggrieved by the said order the Bank has  

come up with this special leave petition.

We find no error in the view taken by the High  

4

Page 5

Court that the C.J.M. Ahmednagar had not carried out any  

enquiry  or  ordered  investigation  as  contemplated  under  

Section 202 of the Cr.P.C. before issuing the process,  

considering the fact that the respondent is a resident of  

District Dakshin Kannada, which does not fall within the  

jurisdiction  of  the  C.J.M.  Ahmednagar.    It  was,  

therefore, incumbent upon him to carry out an enquiry or  

order investigation as contemplated under Section 202 of  

the Cr.P.C. before issuing the process.

The duty of a Magistrate receiving a complaint is  

set out in Section 202 of the Cr.P.C. and there is an  

obligation on the Magistrate to find out if there is any  

matter which calls for investigation by a criminal court.  

The scope of enquiry under this  Section is restricted  

only  to  find  out  the  truth  or  otherwise  of  the  

allegations made in the complaint in order to determine  

whether process has to be issued or not.  Investigation  

under Section 202 of the Cr.P.C. is different from the  

investigation contemplated in Section 156 as it is only  

for holding the Magistrate to decide whether or not there  

is sufficient grounds for him to proceed further.  The  

scope of enquiry under Section 202 of the Cr.P.C. is,  

therefore,  limited  to  the  ascertainment  of  truth  or  

falsehood of the allegations made in the complaint – (i)  

on  the  materials  placed  by  the  complainant  before  the  

Court (ii) for the limited purpose of finding out whether  

a prima facie case for issue of process has been made  

our; and (iii) for deciding the question purely from the  

point of view of the complainant without at all adverting  

to any defence that the accused may have.

Section  202  of  the  Cr.P.C.  was  amended  by  the  

Cr.P.C. (Amendment Act 2005) and the following words were  

inserted:

“and shall, in a case where the accused is  

5

Page 6

residing at a place beyond the area in which  he exercises jurisdiction”

The  notes  on  clauses  for  the  above-mentioned  

amendment read as follow:

“False complaints are filed against persons  residing at far off places simply to harass  them.   In  order  to  see  that  the  innocent  persons  are  not  harassed  by  unscrupulous  persons,  this  clause  seeks  to  amend  sub- section  (1)  of  Section  202  to  make  it  obligatory  upon  the  Magistrate  that  before  summoning  the  accused  residing  beyond  his  jurisdiction he shall enquire into the case  himself or direct investigation to be made by  a police officer or by such other person as  he thinks fit, for finding out whether or not  there  was  sufficient  ground  for  proceeding  against the accused.”

The amendment has come into force w.e.f. 23.6.2006  

vide notification No.S.O.923(E) dt. 21.6.2006.

We  are  of  the  view  that  the  High  Court  has  

correctly held that the above-mentioned amendment was not  

noticed by the C.J.M. Ahmednagar.  The C.J.M. had failed  

to  carry  out  any  enquiry  or  ordered  investigation  as  

contemplated under the amended Section 202 of the Cr.P.C.  

Since it is an admitted fact that the accused is residing  

outside  the  jurisdiction  of  the  C.J.M.  Ahmednagar,  we  

find no error in the view taken by the High Court.  All  

the  same,  the  High  Court  instead  of  quashing  the  

complaint, should have directed the Magistrate to pass  

fresh orders following the provisions of Section 202 of  

the Cr.P.C.  Hence, we remit the matter to the Magistrate  

for passing fresh orders uninfluenced by the prima facie  

conclusion  reached  by  the  High  Court  that  the  bare  

allegations of cheating do not make out a case against  

the accused for issuance of process under Section 418 or  

420 of the I.P.C.  The C.J.M. will pass fresh orders  

6

Page 7

after complying with the procedure laid down in Section  

202 Cr.P.C., within two months from the date of receipt  

of this order.

The  special  leave  petition  is,  accordingly,  

disposed of.

(NARENDRA PRASAD) COURT MASTER

(RENUKA SADANA) COURT MASTER

7