NATIONAL BANK OF OMANversusBARAKARA ABDUL AZIZ & ANR.

                         [2012] 11 S.C.R. 500


A                    NATIONAL BANK OF OMAN
                                    v.
                  BARAKARA ABDUL AZIZ & ANR.
                    (SLP (Crl.) No. 9098/2012)

                         DECEMBER 3, 2012
B
       [K.S. RADHAKRISHNAN AND DIPAK MISRA, JJ.]

         Code of Criminal Procedure, 1973:

c       s. 202 (as amended by Amendment Act, 2005) - Duty
  of Magistrate - To direct inquiry and investigation - Complaint
  before CJM Ahmednagar - Against the accused who was
  resident of an area, not falling within the territorial jurisdiction
  of the CJM- CJM issuing process for offences u/ss. 418 and
D 420 /PC - High Court quashed the complaint on the ground
  that CJM passed the order without following the procedure laid
  down u/s.202 - On appeal, held: It was incumbent upon the
  CJM to carry out an enquiry or order investigation as
  contemplated u/s. 202, before issuing process which the CJM
E had failed - Therefore, order of High Court was correct -
  However, High Court, instead of quashing the complaint,
  should have directed the CJM to pass fresh orders following
  the procedure u/s. 202 - Hence, matter remitted to the
  Magistrate for passing fresh orders - Penal Code, 1860 - ss.
  418 and 420.
F
        s. 202 (as amended by Amendment Act, 2005) - Enquiry
  under - Scope of - Held: The scope of enquiry under this
  Section is restricted only to find out the truth or otherwise of
  the a/legations made in the complaint for the purpose of
G issuing process.

        s. 202 (as amended by Amended Act, 2005) -
    Investigation under - Nature and scope of - Held:
    Investigation under this provision is different from the
H                                 500
 NATIONAL BANK OF OMAN v. BARAKARA ABDUL 501
                AZIZ &ANR.
investigation contemplated u/s. 156 Cr.P.C. - It is limited to       A
the ascertainment of truth or falsehood of the allegations
made in the complaint.

    CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 9098 of 2012.                                                    B
    From the Judgment & Order dated 03.10.2012 of the High
Court of Judicature at Bombay, Bench at Aurangabad in
Criminal Application No. 3146 of 2012.

    Devashish Bharuka for the Petitioner.
                 •
                                                                     c
    The following Order of the Court was delivered

                          ORDER

     1. The complainant-National Bank of Oman lodged a D
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:                    E

    "In the year 1995, the applicanVaccused opened current
    account with the complainant Bank on a representation that
    he was holding Indian Passport. The accused slowly
    gained confidence of the complainant Bank. In February
    1996, the accused produced trading licence issued by             F
    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         G
    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   H
      502       SUPREME COURT REPORTS                  [2012) 11 S.C.R.


  A         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 lime to the
 B          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
 c          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/
  D         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
  E
            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
. F         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 meanwhile the accused
 G          surreptitiously and clandestinely absconded to India without
            discharging his loan liability."

        2. The complainant-Bank is not having any branch or any
   activity in India or nor carrying on any business in India. The
 H Bank, therefore, decided to appoint Mr. N.B. Sapkal, as its
 NATIONAL BANK OF OMAN v. BARAKARA ABDUL                   503
                AZIZ & ANR.
power of attorney holder for the purpose of filing complaint and   A
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,               B
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      C
March, 2010 accorded sanction to enquire and trial of the
respondent by a court of competent jurisdiction in India.

     3. The Chief Judicial Magistrate, Ahmednagar on
25.2.2011 passed the following order on the complaint:
                                                                   D
    "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          E
    case against the accused. Hence process be issued for
    offences u/s 418 and 420 of l.P.C.

     Dt.25.02.2011
                                                          Sd/-     F
                                                (G.O. Agrawal)
                                           C.J.M. Ahmednagar
     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              G
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 l.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         H
    504     SUPREME COURT REPORTS                  [2012] 11 S.C.R.


A 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
8 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 l.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
C 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
  ciiher 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
D 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
E Sections 418 and 420 of the 1.P.C. by the C.J.M. Ahmednagar.
  Aggrieved by the said order the Bank has come up with this
  special leave petition.

       5. We find no error in the view taken by the High Court that
F 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.
G 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.

         6. 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
H
 NATIONAL BANK OF OMAN v. BARAKARA ABDUL                     505
                AZIZ &ANR.
the Magistrate to find out if there is any matter which calls for    A
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       B
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)    c
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
                                                                     0
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 residing at a        E
     place beyond the area in which he exercises jurisdiction"

   7. The notes on clauses for the above-mentioned
amendment read as follow:

            "False complaints are filed against persons residing     F
     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                G
     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."                                                       H
    506      SUPREME COURT REPORTS               [2012) 11 S.C.R.

A        8. The amendment has come into force w.e.f. 23.6.2006
    vide notification No.S.0.923(E) di. 21.6.2006.

       9. We are of t~e view that the High Court has correctly held
  that the above-mentioned amendment was not noticed by the
8 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
C 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
D out a case against the accused for issuance of process under
  Section 418 or 420 of the l.P.C. The C.J.M. will pass fresh
  orders after complying with the procedure laid down in Section
  202 Cr.P.C., within two months from the date of receipt of this
  order.
E
        10. The special leave petition is, accordingly, disposed of.

    K.K.T.                                       SLP disposed of.