K.A. Joy v. State of Kerala

# `IN THE HIGH COURT OF KERALA AT ERNAKULAM` ## `PRESENT` ``` THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A. ``` ``` WEDNESDAY, THE 16[TH] DAY OF MARCH 2022 / 25TH PHALGUNA, 1943 CRL.MC NO. 3934 OF 2019 ``` ``` [C.C NO.1172/2018 ON THE FILE OF THE JUDICIAL MAGISTRATE OF FIRST ``` ``` CLASS, CHALAKUDY] ``` ## `PETITIONER/ACCUSED NO.8:` ``` K.A.JOY, AGED 55 YEARS S/O.ANTONY, KALLINGAL VEEDU, WEST CHALAKUDY, THRISSUR. BY ADVS. S.RAJEEV SRI.K.K.DHEERENDRAKRISHNAN SRI.V.VINAY SRI.D.FEROZE SRI.K.ANAND (A-1921) ``` ## `RESPONDENT/STATE AND COMPLAINANT:` ``` 1STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM- 682031.(CRIME NO.527/2016 OF CHALAKUDY POLICE STATION, THRISSUR DISTRICT). 2K.J.URUMEES, S/O.JOSEPH, KALLELI HOUSE, PARIYARAM DESOM, PARIYARAM, THRISSUR-680721. R1 BY SHRI. SUDHEER GOPALAKRISHNAN, PP R2 BY SHRI. ADV. T.N.MANOJ ``` ``` THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 16.03.2022, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ``` CRL.MC No.3934 of 2019 2 ## `O R D E R` ``` The petitioner is the 8[th] accused in Crime ``` ``` No.527/2016 of Chalakudy Police Station which is now pending as C.C.No.1172/2018 on the file of the Judicial First Class Magistrate Court, Chalakudy. The petitioner and seven other persons were arrayed as accused persons in the said case which was registered for the offences punishable under Sections 406,420,468,471 r/w. Section 34 of the IPC. ``` ``` 2.The prosecution case is as follows: ``` ``` The 1[st] accused is a Company engaged in the business of conducting kuries and accused Nos.2 to 8 are the Managing Director and Directors of the said Company. The petitioner who is the 8[th] accused was implicated as the accused being one of the Directors of the said Company. The Crime was registered on the basis of a complaint ``` CRL.MC No.3934 of 2019 3 ``` submitted by the 2[nd] respondent herein. The ``` ``` allegation is that, the 2[nd] respondent/defacto complainant and his relatives subscribed the kuries that was being conducted by the accused persons and on 2.3.2016 even though kuri amount ``` ``` became due to the defacto complainant, they did ``` ``` not pay the said amount which comes to Rs.10,33,988/-. It is also alleged that, the accused persons created forged documents and ``` ``` received amounts on the basis of such documents by releasing the joined suspense account maintained in the name of 2[nd] and 4[th] accused and ``` ``` they also allegedly created documents showing that some new subscribers are inducted in some of the kuries without the knowledge and consent of the said persons. ``` ``` 3.Initially Annexure-VI FIR was registered by the Police and after conducting the investigation, Annexure-VII final report was submitted by the Police referring the case as ``` CRL.MC No.3934 of 2019 4 ``` civil in nature. The said report was numbered ``` ``` as RC No.1/2017 and when the said report came ``` ``` up for consideration before the Judicial First ``` ``` ClassMagistrateCourt,Chalakudyon ``` ``` 27.03.2017,afterhearingthedefacto ``` ``` complainant, it was ordered that if the defacto ``` ``` complainant is aggrieved by the report of the Investigating Officer, he can either file a fresh complaint or can request the court to ``` ``` take cognizance on the original complaint filed by him. With the above observation, R.C. was closed for the time being by granting liberty to the complainant as above. ``` ``` 4.It appears that, subsequently, a further investigation was conducted by the Police under Section 173(8) of Cr.PC and Annexure-I final report was submitted. It is to be noted that, in the initial complaint submitted by the 2[nd] ``` ``` respondent/defacto complainant and also in the ``` CRL.MC No.3934 of 2019 5 ``` F.I.R registered by the Police pursuant to the ``` ``` same, the petitioner was not arrayed as an accused. However, when a supplementary final ``` ``` report was submitted after conducting further ``` ``` investigation under Section 173(8) of Cr.PC, the petitioner was implicated as 8[th] accused. The learned Magistrate as per order dated 17.10.2018 had taken cognizance of the offences ``` ``` on the basis of supplementary final report. The ``` ``` order passed on the said police report reads as follows: ``` ``` “17.10.2018 : Taken and filed as CC 1172/2018 u/s. 406, 420, 468, 471 r/w. 34 IPC. Issue summons to accused and posted to 16.11.2018.” ``` ``` This Crl.M.C. is filed by the petitioner for ``` ``` quashing Annexure-I supplementary report and ``` ``` all further proceedings pursuant to the same. ``` ``` 5.Heard Sri.S. Rajeev, the learned counsel for the petitioner, Sri.Sudheer Gopalakrishnan, ``` CRL.MC No.3934 of 2019 6 ``` the learned Public Prosecutor for the State and ``` ``` Sri. T.N. Manoj, the learned counsel for the 2[nd] respondent. ``` ``` 6. The contention put forward by the learned ``` ``` counsel for the petitioner is that, there are ``` ``` noadequatematerialsjustifyingthe ``` ``` implication of the petitioner as one of the accused. It is contended that, the petitioner ``` ``` was made an accused only on the allegation that he was one of the Directors of the Company and without even conducting any investigation as to whether he was the Director of the Company at the relevant time. It is also contended that, ``` ``` even if it is assumed that the petitioner was one of the Directors of the Company, absolutely nothing is mentioned about the role played by him in the day to day affairs of the 1[st] accused ``` ``` Company and also the acts alleged by the prosecution which attracts the offences alleged against accused persons. Yet another contention ``` CRL.MC No.3934 of 2019 7 ``` raised by the learned counsel for the ``` ``` petitioner is that, the cognizance taken by the learned Magistrate was erroneous as the same was without application of mind. This contention was raised mainly because of the reason that, even though it was obligatory on the part of the learned Magistrate to consider the initial final report submitted by the Police and the supplementary final report ``` ``` submittedafterconductingfurther investigation conjointly to take a decision as to whether the proceedings are to be continued against the accused or not. In this case, the contents of the refer report submitted by the ``` ``` Police was not taken note of and cognizance was ``` ``` taken on the supplementary final report completely ignoring the said refer report. The learned counsel for the petitioner relies upon the judgments rendered by the Hon’ble Supreme Court in Vinay Tyagi v. Irshad Ali @ Deepak and ``` CRL.MC No.3934 of 2019 8 ``` Others [(2013)5 SCC 762], Vinubhai Haribhai Malaviya v. State of Gujarat [(2019)17 SCC 1], Lukose Zachariah and Ors. v. Joseph Joseph and Ors.[2022(2)KLT 144]and also the judgment rendered by this Court in Parameswaran Nair v. Surendran [2009(1)KLT 794] to substantiate the contention that both the reports submitted by the police were to be considered by learned Magistrate while taking cognizance. To substantiate the contention that, without the role of the Director being specifically mentioned, no prosecution can be launched against the Director of a Company. The learned counsel for the petitioner also places relies on the decision in Maksud Saiyed v. State of Gujarat and Others [(2008)5 SCC 668] and M/s.Pepsi Food Ltd. and Another v. Special Judicial Magistrate and Others [(1998) 5 SCC 749] and Thermax Ltd.(M/s) and Others v. K.M.Johny and Others[(2011)13 SCC 412]. ``` CRL.MC No.3934 of 2019 9 ``` 7.On the other hand, the learned Public ``` ``` Prosecutor and the learned counsel for the 2[nd] respondent would oppose the prayer sought for ``` ``` by the petitioner. It was contended by them ``` ``` that the question whether the petitioner has committed the offence or not is a matter of evidence which cannot be considered in a ``` ``` proceeding under Section 482 Cr.PC. ``` ``` 8.I have gone through the records and heard the contentions on either side. One of the crucial contentions raised by the learned ``` ``` counsel for the petitioner is that, even though ``` ``` two reports were submitted by the Police, ``` ``` namely, final report submitted under Section 173(2) of Cr.PC stating that no offences are made out and a supplementary final report filed under Section 173(8) of Cr.PC wherein the ``` ``` allegation constituting the offences are made against the accused persons, before the learned Magistrate, the cognizance was taken ``` ## CRL.MC No.3934 of 2019 10 |`on the supplementary final report without`| |---| |`taking into account the contents of the refer`| |`report submitted by the Police. As rightly`| |`pointed out by the learned counsel for the`| |`petitioner, the manner in which the learned`| |`Magistrate has to exercise jurisdiction in a`| |`case where there are two reports, are clearly`| |`considered by the Hon’ble Supreme Court in`| |`Vinay Tyagi’s case (supra). After elaborately`| |`considering various provisions in the Cr.PC and`| |`the judicial precedents in this regard, it was`| |`held that both these reports have to be read`| |`conjointly and it is the cumulative effect of`| |`the reports and the documents annexed thereto`| |`to which the Court would be expected to apply`| |`its mind to determine whether there`| |`exist grounds to presume that the accused`| |`has committed the offence. If the answer`| |`is in the negative, on the basis`| |`of`<br>`these`<br>`reports,`<br>`the`<br>`Court`<br>`shall`| CRL.MC No.3934 of 2019 11 ``` discharge an accused in compliance with the provisions of S.227 of the Code. It is very clearly observed by the Hon’ble Supreme Court that merely because of the reason that, after submitting a negative report under Section 173(2) Cr.PC, if a further report implicating the accused is submitted by the Police under Section 173(8), under no circumstances, the supplementary report would deface the first ``` ``` report. The aforesaid report would continue as part of the record unless the same was directed to be ignored or to be detached from the file by a specific order by a superior court in exercise of powers conferred under Article 226 of the Constitution of India or under Section ``` ``` 482 of Cr.PC. So long as no such order ignoring ``` ``` the final report submitted under Section 173(2) is passed, the learned Magistrate is bound to consider the contents of both the reports and the materials produced along with the same ``` CRL.MC No.3934 of 2019 12 ``` together and after weighing both the said ``` ``` reports, a decision has to be taken to proceed against the accused or not. The aforesaid view ``` ``` was reiterated by the Hon’ble Supreme Court in Vinubhai Haribhai Malaviya’scase(supra). In paragraphs 31 and 32 of the said decision, the ``` ``` Hon’ble Supreme Court has observed as follows: ``` ``` “31. Having discussed the scope of power of the Magistrate under S.173 of the Code, now we have to examine the kind of reports that are contemplated under the provisions of the Code and/or as per the judgments of this Court. The first and the foremost document that reaches the jurisdiction of the Magistrate is the First Information Report. Then, upon completion of the investigation, the police are required to file a report in terms of S.173(2) of the Code. It will be appropriate to term this report as a primary report, as it is the very foundation of the case of the prosecution before the Court. It is the record of the case and the documents annexed thereto, which are considered by the Court and then ``` ## CRL.MC No.3934 of 2019 13 ``` the Court of the Magistrate is expected to exercise any of the three options afore-noticed. Out of the stated optionswiththeCourt,the jurisdiction it would exercise has to be in strict consonance with the settled principles of law. The power of the magistrate to direct ‘further investigation’ is a significant power which has to be exercised sparingly, in exceptional cases and to achieve the ends of justice. To provide fair, proper and unquestionable investigation is the obligation of the investigating agency and the Court in its supervisory capacity is required to ensure the same. Further investigation conducted under the orders of the Court, including that of the Magistrate or by the police of its own accord and, for valid reasons, would lead to the filing of a supplementary report. Such supplementary report shall be dealt with as part of the primary report. This is clear from the fact that the provisions of S.173(3) to 173(6) would be applicable to such reports in terms of S.173(8) of the Code. ``` ``` 32. Both these reports have to be read conjointly and it is the cumulative effect of the reports and the documents annexed thereto to which the Court ``` CRL.MC No.3934 of 2019 14 ## `would be expected to apply its mind to` ``` determine whether there exist grounds to presume that the accused has committed the offence. If the answer is in the negative, on the basis of these reports, the Court shall discharge an accused in compliance with the ” provisions of S.227 of the Code. ``` ``` In Lukose Zachariah’scase (supra) also which is a very recent decision the Hon’ble Supreme Court reiterated the above question. ``` ``` 9.When the aforesaid principles are made applicable to the facts of this case, it could be seen that the order passed by the learned Magistrate on 17.10.2018 taking cognizance of the offences on the basis of supplementary final report submitted (Annexure-I) does not contain any indication as to the consideration of the final report submitted by the Police under Section 173(2) of Cr.PC. It is a non ``` ``` speaking order without any reference to the contents of any of the reports. Therefore, the ``` CRL.MC No.3934 of 2019 15 ``` cognizance taken by the learned Magistrate without following the principles laid down by the Hon’ble Supreme Court in this regard, is liable to be interfered with. ``` ``` 10.As regards the question of involvement of the petitioner in the commission of the crime, I am of the view that, since I have already found that, the cognizance taken by the learned Magistrate was not proper, I am not intending to consider the same at this juncture. First of all, the learned Magistrate has to take a decision by taking into account the contents of the materials in Annexure-VII ``` ``` finalreportsubmittedunderSection ``` ``` 173(2)Cr.PC and Annexure-I supplementary report submitted under Section 173(8) of Cr.PC. ``` ``` In the result, this Crl.M.C. is disposed of setting aside the order of taking cognizance passed by the learned Magistrate on 17.10.2018 ``` CRL.MC No.3934 of 2019 16 ``` and directing the learned Magistrate to ``` ``` consider the matter afresh and pass appropriate orders with specific reference to the contents of the final report submitted under Section 173(2)Cr.PC and the supplementary report submitted under Section 173(8) of Cr.PC. All the other contentions raised by the petitioner are left open. It is further directed that, a decision on the above shall be taken by the learned Magistrate, after hearing the Public Prosecutor concerned and also the 2[nd] respondent. It is clarified that, as the said consideration is being done at the pre-cognizance stage, the petitioner does not ``` ``` have any right to be heard. ``` ``` Sd/- ``` ## `ZIYAD RAHMAN A.A. JUDGE` ``` pkk ``` CRL.MC No.3934 of 2019 17 ## `APPENDIX OF CRL.MC 3934/2019` |`PETITIONER’S ANNEXURES`|`PETITIONER’S ANNEXURES`| |---|---| |`ANNEXURE I`|`CERTIFIED COPY OF THE FINAL REPORT IN`| ||`CRIME NO.527/2016 OF CHALAKUDY POLICE`| ||`STATION, WHICH IS NOW PENDING AS`| ||`C.C.NO.1172/2018 ON THE FILE JUDICIAL`| ||`MAGISTRATE OF FIRST CLASS, CHALAKUDY.`| |`ANNEXURE II`|`TRUE COPY OF THE JUDGMENT AND DECREE DATED`| ||`11.08.2016 PASSED BY THE MUNSIFF COURT,`| ||`CHALAKUDY, IN O.S.NO.263/2016.`| |`ANNEXURE III`|`TRUE COPY OF THE JUDGMENT AND DECREE DATED`| ||`11.08.2016 IN O.S.NO.264/2016 OF MUNSIFF`| ||`COURT, CHALAKUDY.`| |`ANNEXURE IV`|`TRUE COPY OF THE JUDGMENT AND DECREE DATED`| ||`11.08.2016 IN O.S.NO.266/2016 OF MUNSIFF`| ||`COURT, CHALAKUDY.`| |`ANNEXURE V`|`TRUE COPY OF THE JUDGMENT AND DECREE DATED`| ||`11.08.2016 IN O.S.NO.262/2016 OF MUNSIFF`| ||`COURT, CHALAKUDY.`| |`ANNEXURE VI`|`TRUE COPY OF THE FIR IN CRIME NO.527/2016`| ||`REGISTERED BY CHALAKUDY POLICE ALONG WITH`| ||`A COMPLAINT FILED BY THE DEFACTO`| ||`COMPLAINANT.`| |`ANNEXURE VII`|`TRUE COPY OF THE REFER REPORT IN CRIME`| ||`NO.527/16 OF CHALAKUDY POLICE STATION,`| ||`THRISSUR.`| |`ANNEXURE VIII`|`TRUE COPY OF THE ORDER PASSED BY THE`| ||`JUDICIAL MAGISTRATE OF FIRST CLASS,`| ||`CHALAKDY, IN RC.NO.1/2017.`|