01Facts
The Petitioners, former employees of Ratnakar Bank Limited (RBL), were accused of embezzling approximately ₹12.02 crores by receiving kickbacks from Direct Selling Agents
pp. 4-5Initially, the Economic Offence Wing (EOW) closed a 2022 complaint by RBL, stating no offence was made out
p. 6RBL subsequently filed an application under Section 156(3) of the Cr.PC before the Metropolitan Magistrate. After a series of procedural steps—including a revision before the Sessions Court—the Magistrate passed an order on 15.04.2024 directing the registration of an FIR
pp. 8-9The Petitioners sought to quash the resulting FIR (No. 0275/2024) primarily on procedural grounds, alleging non-compliance with statutory pre-requisites
pp. 9-1102Issues
i.1. Whether the Magistrate's order was without jurisdiction for lack of prior recourse to Section 154(3) of the Cr.PC
¶ 15(a)ii.2. Whether the Affidavit filed in support of the Section 156(3) application failed to comply with mandatory judicial guidelines
¶ 15(b)iii.3. Whether the impugned order was erroneously based on a "fresh" complaint dated 15.09.2023 that was never received by the police
¶ 15(c)03Law Applied
The court primarily applied Section 156(3) of the Cr.PC regarding the Magistrate's power to order an investigation and Section 154 regarding the registration of cognizable offences
p. 9, 21Priyanka Srivastava v. State of U.P. mandated that Section 156(3) applications must be supported by an affidavit and preceded by applications under Sections 154(1) and 154(3) to prevent harassment
¶ 20Anurag Bhatnagar v. State (NCT of Delhi) clarified that while a Magistrate should ordinarily insist on exhausting Section 154(3) remedies, entertaining a direct application is a "mere procedural irregularity" and not a jurisdictional defect if a cognizable offence is disclosed
¶ 21-22Criminal Manual (Chapter VII) regarding the substantial compliance of affidavits
¶ 28Provisions in the judgment · 4 · Linked ones open on LawLens
Code of Criminal Procedure, 1973 Section 154Section 156Section 190Section 482
04Reasoning
The court reasoned that although the Respondent-Bank did not strictly exhaust Section 154(3) remedies following the closure report, the Magistrate's decision to entertain the application was a permissible exercise of jurisdiction since the allegations clearly disclosed a cognizable financial fraud exceeding ₹11 crores
¶ 22, 24The court found no conflict between Priyanka Srivastava and Anurag Bhatnagar, choosing to follow the latter's view that such procedural lapses do not vitiate the order if no prejudice is shown by the accused
¶ 23, 25Regarding the affidavit, the court observed that the Verification Clause and the independent Affidavit filed by the Bank’s Assistant Vice President constituted "substantial compliance" as they demonstrated the affiant’s accountability and knowledge of records
¶ 29-30The court dismissed the claim that the order was based on a non-existent second complaint, clarifying that the Magistrate stayed within the bounds of the original 2022 allegations as sanctioned by the Sessions Court
¶ 31-3305Holding
The High Court held that procedural irregularities in invoking Section 156(3) do not warrant quashing an FIR when a prima facie cognizable offence is made out
¶ 25The High Court dismissed the Writ Petitions and discharged the Rule, holding that the Magistrate’s order was neither illegal nor without jurisdiction
¶ 35The interim order staying the filing of the chargesheet was extended for fifteen days to allow for further legal recourse, after which it would stand vacated
¶ 36Original Court PDF
Rudhir SareenvsThe State Of Maharashtra And Anr
Click to open original judgment
Original judgment, available to read, download and summarize on LawLens.in
