2017 (12) TMI 1445 - HC - Indian Laws

Hawala transactions - Offence alleged under Sections 420, 465, 467, 468, 471, 477A, 120B of Indian Penal Code 1860 - maintainability of appeal - alternative remedy of appeal - Held that - the preliminary objection of the respondent has no merits and the petitioner has rightly invoked statutory remedy under Section 397 read with 401 of Cr.P.C., rather than invoking inherent jurisdiction - there is no hesitation in holding that it is not only within the jurisdiction, but is an obligation of this Court to look into as to whether the taking of cognizance and issuance of process was mechanical without there being any prima facie case for bringing home the charge of the offences alleged against the petitioner. The allegations in the case concern hawala, total amount of which as alleged now is likely to be more than ₹ 5000 crores. Bogus bill of entry is the genus of the scam. Total 861 Bills of Entry were under scrutiny by Custom Department, out of which at least 454 bill of entries have been found to be bogus amounting to ₹ 2846 crores - The petitioner is neither director nor any authorized person for any of these seven companies, and there is neither any allegation that any of these companies were formed and controlled by the petitioner, nor that the bank accounts of any of these companies were managed by the petitioner. Neither there is any allegation or material to show that the petitioner was fraudulently sending abroad his undisclosed income by the alleged modus operandi, nor is there any iota of allegation or material to show that he was receiving cash from any person whatsoever to fraudulently send the same abroad i.e. for hawala to earn any commission. In absence of any such tangible material, there is no strong and reasonable basis for such degree of suspicion, that the petitioner may have received commission towards the hawala scam, which can be considered sufficient for proceeding against the petitioner and subjecting him to rigours of trial. I am satisfied that there is no prima facie material against him. The trial Court has committed manifest error in taking cognizance and issuing process against the petitioner for proceedings against him for the alleged offence vide the impugned order, when there is no prima facie material sufficient to proceed against him - petition allowed.

Issues Involved:
1. Maintainability of the Revision Application.
2. Validity of the order taking cognizance and issuing process.
3. Applicability of hearsay evidence and the rule of res gestae.
4. Existence of prima facie material against the petitioner.

Detailed Analysis:

1. Maintainability of the Revision Application:
The respondent raised a preliminary objection regarding the maintainability of the Revision Application under Section 397 read with 401 of CrPC, suggesting that the petitioner should have invoked Section 482 of CrPC. The court referenced the Supreme Court's decision in Urmila Devi v. Yudhvir Singh, (2013) 15 SCC 624, which clarified that an order issuing summons under Sections 200 to 204 CrPC is intermediatory or quasi-final, and thus, revisional jurisdiction under Section 397 CrPC is available. The court concluded that the preliminary objection lacked merit and the petitioner rightly invoked Section 397 read with 401 of CrPC.

2. Validity of the Order Taking Cognizance and Issuing Process:
The petitioner challenged the order dated 15-11-2014 by the Chief Judicial Magistrate, Surat, for taking cognizance and issuing process under various sections of the IPC. The petitioner argued that the order was cryptic and mechanical, lacking prima facie evidence. The court examined whether the Magistrate applied judicial mind to the facts and materials before issuing the process. The court referenced judgments like Pepsi Foods Ltd. v. Special Judicial Magistrate, (1998) 5 SCC 749, emphasizing that summoning an accused is a serious matter requiring careful scrutiny of evidence. The court found that the Magistrate's order did not reflect due application of mind and was issued mechanically.

3. Applicability of Hearsay Evidence and the Rule of Res Gestae:
The court evaluated the admissibility of hearsay evidence, particularly the statement dated 1-8-2014 of Shri Prafulbhai Mohanbhai Patel. The court referenced the Supreme Court's decision in Bhairon Singh v. State of M.P., (2009) 13 SCC 80, which elaborated on the rule of res gestae under Section 6 of the Evidence Act. The court found that the statement of Shri Prafulbhai Patel did not meet the criteria for admissibility under the rule of res gestae, as it was neither contemporaneous nor directly connected to the alleged offences. The court concluded that the statement was inadmissible hearsay evidence.

4. Existence of Prima Facie Material Against the Petitioner:
The court scrutinized the charge sheets and supplementary charge sheets to determine if there was prima facie evidence against the petitioner. The court noted that the petitioner was initially shown only as a "suspect" and was later added as an accused without any new incriminating evidence. The court found no direct or circumstantial evidence linking the petitioner to the alleged offences of forgery, cheating, conspiracy, or hawala transactions. The court emphasized that mere receipt of amounts through banking channels did not constitute sufficient grounds for trial. The court concluded that there was no prima facie material against the petitioner to justify the issuance of process.

Conclusion:
The court allowed the Revision Petition, setting aside the impugned order dated 15-11-2014 in Case No. 62851 of 2014 qua the petitioner. The court held that the order was issued mechanically without sufficient prima facie evidence, and the hearsay evidence relied upon was inadmissible. The court emphasized the importance of preventing miscarriage of justice and ensuring that criminal proceedings are based on tangible and admissible evidence. The bail bond of the petitioner was ordered to stand cancelled. The request for a stay of the judgment was rejected.

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