2015 (3) TMI 1387 - SC - Indian Laws

Discretion of the Magistrate to call for a report Under Section 202 instead of directing investigation 156(3) - controlled by any defined parameters or not - power of Police Officer to arrest an accused - correctness of seeking report Under Section 202 instead of directing investigation Under Section 156(3) - HELD THAT - The direction Under Section 156(3) is to be issued only after application of mind by the Magistrate. When the Magistrate does not take cognizance and does not find it necessary to postpone instance of process and finds a case made out to proceed forthwith direction under the said provision is issued. In other words where on account of credibility of information available or weighing the interest of justice it is considered appropriate to straightaway direct investigation such a direction is issued. Cases where Magistrate takes cognizance and postpones issuance of process are cases where the Magistrate has yet to determine existence of sufficient ground to proceed - Subject to these broad guidelines available from the scheme of the Code exercise of discretion by the Magistrate is guided by interest of justice from case to case. Power of police to arrest in the course of investigation Under Section 202 with a view to give its report to the Magistrate to enable him to decide whether a case to proceed further existed - HELD THAT - Careful examination of scheme of the Code reveals that in such situation power of arrest is not available with the police. Contention based on language of Section 202(3) cannot be accepted - Nature of cases dealt with Under Section 202 are cases where material available is not clear to proceed further. The Magistrate is in seisin of the matter having taken the cognizance. He has to decide whether there is ground to proceed further. If at such premature stage power of arrest is exercised by police it will be contradiction in terms. As regards denial of opportunity to record confession Under Section 27 of the Evidence Act it has to be kept in mind that admissibility of such confession cannot guide exercise of power of arrest. Source of power of arrest is governed by other provisions and not by Section 27. Whether in the present case the Magistrate ought to have proceeded Under Section 156(3) instead of Section 202? - HELD THAT - The answer is in negative - The Magistrate has given reasons which have been upheld by the High Court. The case has been held to be primarily of civil nature. The accused is alleged to have forged partnership. Whether such forgery actually took place whether it caused any loss to the complainant and whether there is the requisite mens rea are the questions which are yet to be determined. The Magistrate has not found clear material to proceed against the accused. Even a case for summoning has not yet been found. While a transaction giving rise to cause of action for a civil action may also involve a crime in which case resort to criminal proceedings may be justified there is judicially acknowledged tendency in the commercial world to give colour of a criminal case to a purely commercial transaction - the Magistrate and the High Court rightly held that in the present case report Under Section 202 was the right course instead of direction Under Section 156(3). The question is answered accordingly. Thus there are no error in the view taken by the Magistrate and the High Court that direction Under Section 156(3) was not warranted in the present case and the police may not be justified in exercising power of arrest in the course of submitting report Under Section 202 - appeal dismissed.

Issues Involved:
1. Discretion of the Magistrate to call for a report under Section 202 instead of directing investigation under Section 156(3).
2. Power of the police to arrest an accused during an investigation under Section 202.
3. Appropriateness of the Magistrate's decision to seek a report under Section 202 instead of directing an investigation under Section 156(3).

Detailed Analysis:

1. Discretion of the Magistrate to Call for a Report under Section 202 Instead of Directing Investigation under Section 156(3):
The Supreme Court examined whether the Magistrate's discretion to call for a report under Section 202 instead of directing an investigation under Section 156(3) is controlled by any defined parameters. It was held that the Magistrate's discretion is not mechanical and must be exercised with application of mind. The direction under Section 156(3) is issued when the Magistrate does not take cognizance and finds it necessary to proceed forthwith based on credible information. Conversely, Section 202 is used when the Magistrate takes cognizance but postpones the issuance of process to decide whether there is sufficient ground to proceed. The court emphasized that the exercise of discretion by the Magistrate is guided by the interest of justice from case to case.

2. Power of the Police to Arrest an Accused During an Investigation under Section 202:
The court addressed whether the police have the power to arrest an accused during an investigation under Section 202. It was concluded that the police do not have the power to arrest during such an investigation. The court reasoned that the purpose of the investigation under Section 202 is limited to deciding whether there is sufficient ground for proceeding, and not to conduct a full investigation or arrest. The court referred to the maxim "expressio unius est exclusio alterius" and held that the power of arrest is not implied under Section 202(3). The court approved the views of the Bombay, Gujarat, and Delhi High Courts which held that the police cannot exercise the power of arrest under Section 202.

3. Appropriateness of the Magistrate's Decision to Seek a Report under Section 202 Instead of Directing Investigation under Section 156(3):
The court examined whether the Magistrate erred in seeking a report under Section 202 instead of directing an investigation under Section 156(3). It was held that the Magistrate was justified in proceeding under Section 202. The Magistrate and the High Court found the case to be primarily of a civil nature, involving allegations of forgery of partnership documents. The court noted that the Magistrate had not found clear material to proceed against the accused and that the allegations could be addressed in civil proceedings. The court emphasized that criminal proceedings should not be used as a shortcut for civil remedies and that the Magistrate had rightly chosen the limited inquiry under Section 202.

Additional Observations:
The court also referred to various precedents and legal principles to support its conclusions. It cited cases such as *Lalita Kumari v. Govt. of U.P.*, which emphasized the mandatory nature of FIR registration and the need for checks and balances on police powers. The court also discussed the scope of Sections 156(3) and 202, noting that Section 156(3) is used before taking cognizance, while Section 202 applies post-cognizance to determine whether there is sufficient ground to proceed. The court reiterated that the power of arrest is not to be exercised mechanically and must be based on reasonable satisfaction.

Conclusion:
The Supreme Court concluded that the Magistrate and the High Court correctly held that a report under Section 202 was appropriate in this case, and the police did not have the power to arrest during such an investigation. The appeal was dismissed.

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