Read judgment: M/s Supreme Bhiwandi Wada vs. State of Maharashtra & Anr

Pankaj Bajpai

New Delhi, July 29, 2021: While setting aside the anticipatory bail granted u/s 438 of CrPC to the respondent-accused, the Supreme Court has said that the High Court in granting the bail has evidently lost sight of the nature and gravity of the alleged offence, as well as the scope of Section 156(3) CrPC

The primary basis on which the High Court has allowed the applications u/s 438 is that the complaint filed by the first informant was supported by an affidavit. 

A Division Bench of Justice Dr. D Y Chandrachud and Justice M R Shah observed that there are serious allegations against the respondent of a fraudulent misappropriation of amounts intended to be paid by the company to the farmers affected by the work of road widening being undertaken by the complainant. 

The substance of the allegation is that the accused did not hand over the cheques due to the farmers for their lands taken over for the project and got the cheques released in the names of other persons, thereby defrauding the company and misappropriating its fund. 

It was alleged that in 2015, the appellant company had handed over the work of disbursing the land acquisition amounts due to the affected farmers to five employees, including the respondent-accused, who were engaged in the job of the road construction project between Wada and Wadape Junction. 

It was also alleged that the respondent had made 66 fake and bogus tenants, without attaching necessary papers of land acquisition with an intention to obtain personal gain. Resultantly, they misappropriated an amount of Rs 68 lakh for the purpose of giving compensation to the farmers. 

Thus, it was complained that the accused were involved in a fraud of around Rs 5.28 crores by fabricating documents pertaining to the occupants of lands and making nominal payments to villagers.

After perusing the complaint, the Metropolitan Magistrate passed an order u/s 156(3) of the CrPC directing the police to investigate into the complaint. This led to lodging of FIR against accused for offences u/s 418, 419, 420, 405, 467, 468, 471, 474, 120B r/w/s 34 of the Indian Penal Code.

Accordingly, two of the accused named in the FIR moved the Sessions Court seeking anticipatory bail, which was granted. The High Court also granted interim protection against arrest to the accused.

The Division Bench of the Supreme Court found that the High Court has held that the mandate of Section 200 of the CrPC of examining the complainant on oath has not been fulfilled by the Magistrate. 

Reiterating that Magistrate’s order u/s 156(3) of CrPC was not under challenge before the High Court and has attained finality, the Apex Court opined that the High Court has erred in raising a doubt about the correctness of the order passed by the Metropolitan Magistrate in the course of considering the complaint. 

“The position in law as set out in the order of the High Court does not accord with the principles which have been consistently enunciated in the decisions of this Court specifically in the context of Chapter XV of the CrPC,” said the SC Bench. 

Dealing specifically with the provisions of Chapter XV, the Apex Court observed that once the Magistrate takes cognizance of an offence, the procedure which is enunciated in Chapter XV has to be followed. 

“The investigation which the Magistrate can direct u/s 202(1) either by a Police officer or by any other person is for a limited purpose of enabling the Magistrate to decide whether or not there is sufficient ground to proceed further,” observed the Bench. 

In case of Tilak Nagar Industries Limited vs. State of Andhra Pradesh , a two judge Bench of the Apex Court held that power u/s 156(3) can be exercised by the Magistrate even before he takes cognizance, provided the complaint discloses the commission of cognizable offence. 

Therefore, while reiterating that an appellate court or a superior court can set aside the order granting bail if the court granting bail did not consider relevant factors, the Top Court held that the power of the Magistrate u/s 156(3) is not affected by the provisions of Section 202.

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