Cognizable offence should be investigated after registration of FIR, says Delhi HC

Read Judgment: HERO FINCORP LTD vs. STATE NCT OF DELHI

Pankaj Bajpai

New Delhi, January 13, 2022: While relying on the decision of the Apex Court Apex Court in Lalita Kumari vs. State of U.P., where it was held that Police is duty-bound to register FIR on receiving information on commission of cognizable offence and has to mandatorily investigate into allegations of FIR, the Delhi High Court has opined that a cognizable offence should be investigated after the registration of an FIR.  

The Bench of Justice Subramonium Prasad therefore directed the Economic Offences Wing to register FIR against Sunil Sharma, Director of M/s Benlon India Ltd (second Respondent) under appropriate sections. 

Going by the background of the case, HERO FINCORP LTD (Petitioner – NBFC) had filed application u/s 156(3) of CrPC before the Magistrate, calling upon her to direct Police to register FIR against second Respondent on charges of cheating, forgery, criminal breach of trust and misappropriation for a sum, which second Respondent and his parents had induced Petitioner to grant them as loan for buying machinery instrumental for their business. 

It was urged that the second Respondent had stopped paying interest installments and failed to adhere to repayment schedule as per their agreement and the Petitioner was not even allowed to inspect second Respondent’s factory site. The second Respondent and his parents in furtherance of criminal conspiracy had dishonestly misappropriated loan amount for their own gains in complete contravention of specified terms of loan agreement. 

The Chief Metropolitan Magistrate (CMM) however dismissed the application, holding that commission of cognizable offence required registration of FIR but every cognizable offence did not require investigation by police. The Petitioner thereupon filed revision before Principal District and Sessions Judge (PDJ), who upheld CMM’s order, holding that it suffered from no infirmity, impropriety or illegality. Hence present petition u/s 482 of CrPC. 

After considering the submissions, Justice Prasad noted that sec. 154 provided for registration of FIR w.r.t. cognizable offences and the police was mandated by law to register it in writing and thereafter, investigate into it. 

If they refused to file FIR, complaint could be filed with the Magistrate to direct them to probe into commission of cognizable offence, added the Single Judge. 

Justice Prasad went on to observe that remedy u/s 156(3) CrPC could only be exercised to report commission of cognizable offence not non-cognizable offences, and the police was duty-bound to register FIR on receiving information on commission of cognizable offence and had to mandatorily investigate into allegations of FIR.

In instant case, the High Court found that the second Respondent had taken loans for purchase of machineries but they were not been purchased, and that the second Respondent had misappropriated the money for its use. 

Facts on face of it, prima facie disclosed cognizable offence and the CMM and PDJ had erred in not directing registration of FIR, as Petitioner’s complaint had disclosed cognizable offence, i.e., criminal breach of trust w.r.t. terms of contract agreed upon, added the Court. 

Justice Prasad therefore highlighted that it was required to be investigated by police though borrowed amounts stood repaid to Petitioner and proceedings before an arbitral tribunal were ongoing. 

Thus, High Court opined that cognizable offence had been alleged against the second Respondent and the same had to be investigated after registration of FIR.