Full Judgment Text
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PETITIONER:
LEGAL REMEMBRANCER OF GOVT. OF WEST BENGAL
Vs.
RESPONDENT:
HARIDAS MUNDRA
DATE OF JUDGMENT09/12/1975
BENCH:
BHAGWATI, P.N.
BENCH:
BHAGWATI, P.N.
GOSWAMI, P.K.
UNTWALIA, N.L.
CITATION:
1976 AIR 2225 1976 SCR (2) 933
1976 SCC (1) 555
CITATOR INFO :
R 1979 SC 437 (8)
ACT:
Code of Criminal Procedure, 1898-Sec. 195(1)(C)-Scope
of.
HEADNOTE:
The respondent, a director of a company was charged
with offences under ss. 418 and 471 read with ss. 468 and
477A, I.P.C. on the ground that he defrauded the company. At
the trial, a single Judge of the High Court discharged the
respondent on the view that he had no jurisdiction to
proceed with the trial by reason of s.195(1)(c) of the Cr.
P.C., 1898. The full Bench of the High Court affirmed the
view of the single Judge.
Allowing the appeals to this Court,
^
HELD: The High Court was entitled to proceed with the
trial of the respondent in respect of offences under s. 471
without any complaint in writing from the company Judge whom
the proceeding was pending. [938A]
(1) Section 195(1)(c) of the Code of Criminal Procedure
provides that no court shall take cognizance of an offence
described in s. 463 or punishable under ss. 471, 475 and
476, Indian Penal Code where such offence is alleged to have
been committed by a party to any proceeding in any court in
respect of any document produced or given in evidence in
such proceeding, except on the complaint in writing of such
court or of some other court to which such court is
subordinate. The High Court had clearly and indubitably
jurisdiction to proceed with the trial against the
respondent in respect of offences under ss. 418 and 477A. On
its plain language the inhibition in s. 195(1)(c) applies
only where a person is being tried for an offence under s.
463 or punishable under ss. 471, 475 or 476. Offences under
418 and s. 477A are plainly not covered by s. 195(1)(c) Cr.
P.C. [936-D-G]
(2) In regard to offences under s. 471, I.P.C. it could
not be said that the respondent could invoke the
applicability of s. 195(1)(c). The offence under s. 471 was
committed by the respondent long before the proceeding in
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the Company matter commenced and he became a party to that
proceeding, and it was not committed by him in his capacity
as such party, i.e. after having become a party to the
proceeding. In Patel Laljibhai Somabhai v. The State of
Gujarat this Court restricted the scope and ambit of s. 195
(1)(c) to cases where the offence was alleged to have been
committed by a party to a proceeding after he became such
party and not before. [936H, 937A-D]
Raghunath v. State of U.P., AIR 1973 S.C. 1100 and
Mohan Lal v. The State of Rajasthan, AIR 1974 S.C. 299,
referred to.
In the instant case since the offence charged against
the respondent was one alleged to have been committed by him
before he became a party to the proceeding in the company
matter, s. 195(1)(c) had no application. Secondly, the
forged bills had not been produced in evidence before the
Company Judge in the proceeding before him. The requirement
of s. 195(1)(c) that the document in question should be
produced or given in evidence in the proceeding was,
therefore, clearly not satisfied and on this ground also s.
195(1)(c) was not attracted in the present case. [937G,
938A]
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
115 of 1971.
From the judgment and order dated 16th June 1970 of the
Calcutta High Court in Criminal Revision Case No. 650 of
1967 and
934
Criminal Appeals Nos. 256 and 257 of 1971
Appeals by special leave from the judgments and order
dated the 27-4-67 and 28-1-71 of the Calcutta High Court in
Cases Nos. 2-4/67 and 2/67 Second Criminal Sessions 1967
respectively.
D. Mookherjee and M. N. Shroff for the appellants (in
all the appeals).
V. S. Desai, A. G. Menseses, J. B. Dadchanji & Co. for
respondents in Crl. 256-57/71.
The Judgment of the Court was delivered by
BHAGWATI, J. These three appeals arise out of the same
facts and it would, therefore, be convenient to dispose of
them by a common judgment. The respondent in all the three
appeals is one Haridas Mundra. He was at all material times
the managing director of S. B. Industrial Development Co.
(Pvt.) Ltd., who were the managing agents of a company
called Richardson & Cruddas Ltd. He and his brother Tulsidas
Mundra were also directors of Richardson & Cruddas Ltd. The
Life Insurance Corporation of India, which was the largest
shareholder, filed a petition in the High Court of Calcutta
being Matter No. 357 of 1957 seeking relief against
mismanagement of Richardson & Cruddas Ltd. under ss. 397 and
398 of the Companies Act, 1956. The respondent and other
directors were impleaded as party-respondents to the
petition. The High Court, on the application of the Life
Insurance Corporation, made an interim order sometime in
December 1957 appointing Sir Dhirendra Mitra as Special
Officer to manage the affairs of Richardson & Cruddas Ltd.
There was an audit report made by M/s Gutgutia & Co.,
Chartered Accountants, in regard to the accounts of
Richardson & Cruddas Ltd., but the Special Officer was not
satisfied with this report and he, therefore, after
obtaining directions from the Company Judge, appointed M/s
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Ferguson & Co., a reputed firm of Chartered Accountants, to
examine the accounts of the Company and submit their report.
Ferguson & Co. found, as a result of their investigation,
that there were two bills in the records of the Company, one
for Rs. 4,12,000 dated 20th June, 1955 and the other for Rs.
6,48,900 dated 27th June, 1955 purporting to be issued by a
firm called Indian Machine Tools Co. having its address at
7, Mission Row, Calcutta, showing purchase of certain
machinery by Richardson & Cruddas Ltd. from Indian Machine
Tools Co. and on the strength of these two bills, entries
were made in the books of account of Richardson & Cruddas
Ltd. on 24th June, 1955 in respect of the first bill and on
29th June, 1955 in respect of the second bill, crediting the
amounts of the bills to S. B. Industrial Development Co.
(Pvt.) Ltd. and debiting to the machinery account. On making
inquiries, Ferguson & Co. discovered that there was no firm
of Indian Machine Tools Co. in existence at 7, Mission Row,
Calcutta and no machinery was in fact purchased or received
by Richardson & Cruddas Ltd. as shown in the two bills
supposed to have been made out by Indian Machine Tools Co.
The conclusion reached by Ferguson & Co. as a result of this
probe was that Richard-
935
son & Cruddas Ltd. has been defrauded of an aggregate sum of
Rs. 10,60,900 representing the amounts of the two bills and
that amount had been siphoned off to S. B. Industrial
Development Co. (Pvt.) Ltd. by using these two bills, which
were forged, as genuine and they made a report to this
effect to the Special officer. The Special Officer, on
receipt of the report, made an application to the Company
Judge for a direction that he might be authorised to lodge a
complaint with the police for further investigation into
these facts set out in the report. The Company Judge gave
the necessary direction and the Special officer thereupon
moved the police for making further investigation in the
matter. The Special Police Establishment started the
investigation and ultimately submitted a chargesheet against
the respondent and Tulsidas Mundra in the Court of the Chief
Presidency Magistrate. The respondent and Tulsidas Mundra
were committed by the Chief President Magistrate to stand
their trial before the High Court on charges under ss. 120B,
409, 471 read with s. 468 and s. 477A against the respondent
and ss. 120B and 409 of the Indian Penal Code against
Tulsidas Mundra. When the trial commenced before the High
Court, the Public Prosecutor made two applications on 17th
April, 1967, one for amending the charges against the
respondent by dropping ss. 120B and 409 adding s. 418 and
the other for withdrawing the prosecution against Tulsidas
Mundra. Both these applications were allowed by the High
Court, with the result that the trial proceeded only against
the respondent on charges under ss. 418, 471 read with s.
468 and s. 477A. Mr. Justice Bagchi, before whom the trial
proceeded, felt that he had no jurisdiction to proceed with
the trial in view of s. 195(1)(c) of the Code of Criminal
Procedure, 1898 and he, therefore, requested the Public
Prosecutor as well as the counsel for the respondent to
argue the point as to the applicability of that section. The
learned Judge, after hearing the arguments advanced before
him on both sides, delivered an elaborate judgment holding
that by reason of s. 195(1) (c) of the Code of Criminal
Procedure, 1898, which applied in the present case, he had
no jurisdiction to proceed further with the trial of the
respondent and he accordingly discharged the respondent by
an order dated 27th April 1967.
The State being aggrieved by this judgment and order
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passed by Mr. Justice Bagchi in the exercise of original
criminal jurisdiction, preferred a revision application
against the same on the appellate side of the High Court.
The respondent raised a preliminary objection against the
maintainability of the revision application on the ground
that it was not competent to the High Court to exercise
revisional jurisdiction against an order made by a judge of
the High Court in a Sessions trial. Since this preliminary
objection raised a question of some importance it was
referred to a full Bench and by a judgment dated 16th June,
1970, the Full Bench upheld the preliminary objection and
held that the High Court had no jurisdiction in revision of
some importance, it was referred to a Full Bench and by a
judge of the High Court in the exercise of its original
criminal jurisdiction and accordingly rejected the revision
application.
936
It appears that the State had in the meantime filed an
application in the High Court for leave to appeal to this
Court against the judgment and order of Mr. Justice Bagchi.
This application was rejected by the learned Judge by an
order dated 28th January, 1971 on the ground that it was not
a judgment or a final order or a sentence falling within
Art. 134(1)(c) of the Constitution. The State thereupon
preferred two petitions in this Court for special leave to
appeal, one against the judgment and order of Mr. Justice
Bagchi discharging the respondent and the other against the
judgment and order of the same learned Judge rejecting the
application of the State for leave to appeal to this Court.
This Court allowed both the petitions and granted special
leave and hence we have Criminal Appeal No. 256 of 1971
directed against the judgment and order of Mr. Justice
Bagchi discharging the respondent and Criminal Appeal No.
257 of 1971 against the judgment and order of that learned
Judge refusing leave to appeal to the State. The State also
preferred an application in the High Court for leave to
appeal to this Court against the judgment and order of the
Full Bench rejecting the revision application of the State
and on this application, leave was granted by the High Court
under Art. 134(1) (c) of the Constitution and that is how
Criminal Appeal No. 115 of 1971 is before us.
We will first deal with Criminal Appeal No. 256 of
1971. If that criminal appeal is allowed and it is held that
s. 195(1) (c) has no applicability in the present case, it
would become unnecessary to consider the other two criminal
appeals. Now, s. 195(1)(c) provides that no court shall take
cognisance of an offence described in s. 463 or punishable
under ss. 471, 475 and 476 of the Indian Penal Code where
such offence is alleged to have been committed by a party to
any proceeding in any court in respect of any document
produced or given in evidence in such proceeding, except on
the complaint in writing of such court or of some other
court to which such court is subordinate. Obviously, on its
plain language, the inhabitation in s. 195(1) (c) applies
only where a person is being tried for an offence described
in s. 463 or punishable under ss. 471, 475 or s. 476. Here,
the respondent was being tried for three distinct offences
under ss. 418, 471 and 477A. So far as the offences under
ss. 418 and 477A are concerned, they were plainly not
covered by s. 195(1)(c) and even if s. 195(1)(c) were
otherwise applicable, it is difficult to see how the trial
of the respondent for these two offences could be said to be
vitiated on the ground that no complaint in writing was made
by the Company Judge. The High Court had, therefore clearly
and indubitably jurisdiction to proceed with the trial
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against the respondent in respect of the offences under ss.
418 and 477A. The question of lack of jurisdiction in the
High Court to proceed with the trial could arise only in
regard to the offence under s. 471 which is one of the
offences specified in s. 195(1) (c). But in regard to this
offence also, we do not see how, on the facts of the present
case, the applicability of s. 195 (1) (c) could be invoked
on behalf of the respondent. The offence under s. 471 which
was charged against the respondent was that he had used the
two forged bills of Indian Machine Tools Co. as
937
genuine on 24th and 29th June, 1955 by making, on the
strength of these two bills, false entries in the books of
account of Richardson & Cruddas Ltd. crediting the aggregate
sum of Rs. 10,60,900/- in the account of S. B. Industrial
Development Co. (Pvt.) Ltd. and debiting it in the machinery
account. This offence was alleged to have been committed by
the respondent on 24th and 29th June, 1955 long before the
proceeding in Matter No. 357 of 1957 commenced and he became
a party to that proceeding and it was not committed by him
in his capacity as such party, that is, after having become
a party to the proceeding. Now, at one time there was sharp
cleavage of opinion amongst various High Courts in regard to
the true interpretation of s. 195(1) (c). Some High Courts
held that to attract the prohibition contained in s.
195(1)(c), the offence should be alleged to have been
committed by the party to the proceeding in his character as
such party, which means, after having become a party to the
proceeding, while some others took the view that it was
sufficient to attract the applicability of s. 195(1) (c)
even if the alleged offence was committed by the party to
the proceeding prior to his becoming such party, provided
that the document in question was produced or given in
evidence in such proceeding. This divergence of opinion
amongst different High Courts was set at rest by this Court
by its decision in Patel Lal Gbhai Somabhai v. The State of
Gujarat(1) where this Court accepted the former view in
preference to the latter. This Court pointed out that the
words of s. 195(1) (c) clearly meant that the offence should
be alleged to have been committed by the party to the
proceeding in his character as such party, that is, after
having become a party to the proceeding. Sections 195(1)(c),
476 and 476A read together indicated beyond doubt that the
legislature could not have intended to extend the
prohibition contained in s. 195(1) (c) to the offences
mentioned therein when committed by a party to a proceeding
prior to his becoming such party. The scope and ambit of s.
195(1) (c) was thus restricted by this Court to cases where
the offence was alleged to have been committed by a party to
a proceeding after he became such party and not before. This
view as to the interpretation of s. 195(1) (c) was
reaffirmed by this Court in Raghunath v. State of U.P.(2)
and Mohan Lal v. The State of Rajasthan(3). It must
inevitably follow, on this view, that since the offence
charged against the respondent was one alleged to have been
committed by him before he became a party to the proceeding
in Matter No. 357 of 1957, s. 195(1)(c) had no application.
It may also be noted that neither of the two forged bills of
Indian Machine Tools Co. was produced or given in evidence
in the proceeding in Matter No. 357 of 1957. Both these
forged bills formed part of the record of Richardson &
Cruddas Ltd. and they were taken possession of by the
Special Officer along with the other record of the Company
and nobody produced them or tendered them in evidence before
the Company Judge in the proceeding in Matter No. 357 of
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1957. The requirement of s. 195(1) (c) that the document in
question should be
938
produced or given in evidence in the proceeding was,
therefore, clearly not satisfied and on this ground also, s.
195(1) (c) was not attracted in the present case. We must,
therefore, hold that the High Court was entitled to proceed
with the trial of the respondent in respect of the offence
under s. 471 without any complaint in writing from the
Company Judge before whom the proceeding in Matter No. 357
of 1957 was pending.
We accordingly allow Criminal Appeal No.256 of 1971,
set aside the judgment of Mr. Justice Bagchi discharging the
respondent and remand the case to the City Sessions Court,
to which the original criminal jurisdiction in Sessions
cases has now been transferred, for disposal according to
law. Since the case is a very old one, we would direct the
City Sessions Court to take it up for hearing at an early
date. In the view taken by us in Criminal Appeal No. 256 of
1971, Criminal Appeals Nos. 115 and 257 of 1971 do not
survive for consideration and we accordingly dismiss them.
P.B.R. Cr. A. 256 of 1971 allowed.
Cr.As. 115 & 257 of 1971 dismissed.
939