# BABITA LILA & ANOTHER v. UNION OF INDIA

- **Citation:** [2016] 7 S.C.R. 604
- **Court:** Supreme Court of India
- **Decided:** 2016-08-31
- **Case number:** Criminal Appeal No. 824of2016
- **Bench:** Pinaki Chandra Ghose, Amitava Roy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/babita-lila-another-v-union-of-india-31637
- **Pages:** 35

## Headnote

Code of Criminal Procedure, 197 3:
s.195 - Complaint by Deputy Director of IT against
appellants-assessee for making false statements during search
operations - Maintainability of - Trial court held that sufficient
ground was made out against appellants to proceed under !PC -
Quashing of complaint sought on the ground that as search
operations were undertaken by the LT. Os of Nashik and Dhule, the
complaint could not have been lodged by the Deputy Director of IT,
Bhopal who was not the appellate authority in terms of s.195(4) -
High Court declined to quash complaint - Held: Under IT Act, the
Deputy Commissioner (Appeals) is designated to be the appellate
forum from the orders as enumerated u/s.246(1) of the Act - Neither,
by the hierarchy of the income tax authorities as listed in s.116 of
the Act nor in the notification issued u/s.118, the Deputy Director
of Income Tax is considered to be an appellate forum to which
appeals from the orders/decisions of the I. T. Os./assessing officers
would ordinarily lie within the meaning of s.195(4) of the Code -
The statute does not suffer from casus omissus so as to recognise
the Deputy Director of IT as an appellate forum - Deputy Director
of IT Bhopal, therefore, cannot be construed to be an authority to
whom appeal would ordinarily lie from the decisions/orders of the
I. T. Os involved in the search proceedings so as to empower him to
lodge the complaint in view of the restrictive preconditions imposed
by s.195 - Doctrines/Principles - Doctrine of casus omissus.
s.195 - Complaint by Deputy Director of IT, Bhopal against
appellant-assessee for making false statements during search
operations - Appellants husband and wife resident of Bhopal and
Aurangabad - Search operation conducted by authorities under
the IT Act at Bhopal and Aurangabad - Search at Aurangabad
604
BABITA LILA & ANOTHER v. UNION OF INDIA
conducted by ITO, Nashik and ITO, Dhule - Appellants allegedly
made false statements denying of having any locker in their names
-
Trial court held that sufficient ground was made out against .
appellants to proceed under !PC - Issuance of summons - Quashing
of complaint sought on the ground that since no part of the alleged
offence was committed within territorial limits of Bhopal Court, it
had no jurisdiction to entertain the complaint - High Court declined
to interfere - Held: Appellants as assessees, had residences both at
Bhopal and Aurangabad and had been submitting their income tax
returns at Bhopal - The search operations were conducted
simultaneously both at Bhopal and Aurangabad in course whereof
allegedly the appellants, in spite of queries made, did not disclose
that they in fact did hold a locker located at Aurangabad - They in
fact denied to hold any locker, either individually or jointly - The
search conducted simultaneously at Bhopal and Aurangabad has
to be construed as a single composite expedition with a common
mission - Having regard to the overall facts and the accusation of
false statement made about the existence of the locker in such a
ioint operation, it cannot be deduced that in the peculiar facts and
circumstances, no part of the offence alleged had been committed
within the jurisdictional limits of the Chief Judicial Magistrate,
Bhopal - Income Tax Act, 1961 - ss.116, 118, 177 to 179 - Penal
Code, 1860 - ss.191, 193, 200.
s.195(4) - 'ordinarily' - Connotation of
Words and phrases: 'ordinary' - Meaning of
Allowing the appeal, the Court
605
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HELD: 1. Section 195(l)(b) of the Code prohibits taking
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of cognizance by a court vis-a-vis the offences mentioned in the
three clauses (i), (ii) and (iii) except on a com plaint in writing of
the Court when the offence(s) is/are alleged to have been
committed in or in relation to any proceeding before it or in
respect of a document produced or given in evidence in such a
0
proceeding or by such officer of that court as it may authorise in .
writing or by some other court to which the court (in the
proceedings b

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[2016] 7 S.C.R. 604
BABITA LILA & ANOTHER
v.
UNION OF INDIA
(Criminal Appeal No. 824of2016)
AUGUST 31, 2016
[PINAKI CHANDRA GHOSE AND AMITAVA ROY, JJ.]
Code of Criminal Procedure, 197 3:
s.195 - Complaint by Deputy Director of IT against
appellants-assessee for making false statements during search
operations - Maintainability of - Trial court held that sufficient
ground was made out against appellants to proceed under !PC -
Quashing of complaint sought on the ground that as search
operations were undertaken by the LT. Os of Nashik and Dhule, the
complaint could not have been lodged by the Deputy Director of IT,
Bhopal who was not the appellate authority in terms of s.195(4) -
High Court declined to quash complaint - Held: Under IT Act, the
Deputy Commissioner (Appeals) is designated to be the appellate
forum from the orders as enumerated u/s.246(1) of the Act - Neither,
by the hierarchy of the income tax authorities as listed in s.116 of
the Act nor in the notification issued u/s.118, the Deputy Director
of Income Tax is considered to be an appellate forum to which
appeals from the orders/decisions of the I. T. Os./assessing officers
would ordinarily lie within the meaning of s.195(4) of the Code -
The statute does not suffer from casus omissus so as to recognise
the Deputy Director of IT as an appellate forum - Deputy Director
of IT Bhopal, therefore, cannot be construed to be an authority to
whom appeal would ordinarily lie from the decisions/orders of the
I. T. Os involved in the search proceedings so as to empower him to
lodge the complaint in view of the restrictive preconditions imposed
by s.195 - Doctrines/Principles - Doctrine of casus omissus.
s.195 - Complaint by Deputy Director of IT, Bhopal against
appellant-assessee for making false statements during search
operations - Appellants husband and wife resident of Bhopal and
Aurangabad - Search operation conducted by authorities under
the IT Act at Bhopal and Aurangabad - Search at Aurangabad
604
BABITA LILA & ANOTHER v. UNION OF INDIA
conducted by ITO, Nashik and ITO, Dhule - Appellants allegedly
made false statements denying of having any locker in their names
-
Trial court held that sufficient ground was made out against .
appellants to proceed under !PC - Issuance of summons - Quashing
of complaint sought on the ground that since no part of the alleged
offence was committed within territorial limits of Bhopal Court, it
had no jurisdiction to entertain the complaint - High Court declined
to interfere - Held: Appellants as assessees, had residences both at
Bhopal and Aurangabad and had been submitting their income tax
returns at Bhopal - The search operations were conducted
simultaneously both at Bhopal and Aurangabad in course whereof
allegedly the appellants, in spite of queries made, did not disclose
that they in fact did hold a locker located at Aurangabad - They in
fact denied to hold any locker, either individually or jointly - The
search conducted simultaneously at Bhopal and Aurangabad has
to be construed as a single composite expedition with a common
mission - Having regard to the overall facts and the accusation of
false statement made about the existence of the locker in such a
ioint operation, it cannot be deduced that in the peculiar facts and
circumstances, no part of the offence alleged had been committed
within the jurisdictional limits of the Chief Judicial Magistrate,
Bhopal - Income Tax Act, 1961 - ss.116, 118, 177 to 179 - Penal
Code, 1860 - ss.191, 193, 200.
s.195(4) - 'ordinarily' - Connotation of
Words and phrases: 'ordinary' - Meaning of
Allowing the appeal, the Court
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HELD: 1. Section 195(l)(b) of the Code prohibits taking
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of cognizance by a court vis-a-vis the offences mentioned in the
three clauses (i), (ii) and (iii) except on a com plaint in writing of
the Court when the offence(s) is/are alleged to have been
committed in or in relation to any proceeding before it or in
respect of a document produced or given in evidence in such a
0
proceeding or by such officer of that court as it may authorise in .
writing or by some other court to which the court (in the
proceedings before whi.ch the offence(s) has been committed) is
subordinate. Sub-section (3) of Section 195 clarifies that the term
"Court" would mean a Civil, Revenue or Criminal court and would
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[2016] 7 S.C.R.
include a tribunal constituted by or under a Central, Provincial
or State Act, if declared by that Act to be a Court for the purposes
of this section. In terms of sub-section (4), for the purposes of
sub-section (l)(b), a Court shall be deemed to be subordinate to
the Court to which appeals ordinarily lie from the appealable
decrees or sentences of such former Court, or in the case of a
Civil Court from whose decrees no appeal ordinarily lies, to the
principal Court having ordinary original civil jurisdiction within
whose local jurisdiction, such Civil Court is situated. [Paras 41,
42 and 43] (626-D-H]
2. The proviso to sub-section (4) explains that where
appeals lie to more than one Court, the Appellate Court of the
inferior jurisdiction shall be the Court to which such Court (in
the proceedings before which the offence has been committed)
shall be deemed to be subordinate and where appeals lie to a
Civil and also to a Revenue Court, the subordination would be
determined by the nature of the case or the proceeding, in
connection with which the offence is alleged to have been
committed. Noticeably Section 195 of the Code appears under
Chapter XIV enumerating the conditions requisite for initiation
of proceedings thereunder. Though Section 190 of the Code
outlines the categories of inputs on which a Magistrate of the
first class,. and any Magistrate of the second class specially
empowered, can take cognizance of the offence alleged, Section
195 dealing with the prosecution for contempt of lawful authority
of public servant and for offences against public justice or relating
to documents given in evidence, unmistakably marks a departure
from the usual modes of taking cognizance under Section 190 by
prescribing the restrictions. The provisions of Section 195 of the
Code are mandatory so much so that non-compliance thereof
would vitiate the prosecution and all consequential orders. There
is thus no escape from the proposition that for a valid complaint
under Section 195 of the Code, the mandate thereof has to be
essentially abided and as is easily perceivable, this is to prevent
frivolous, speculative and unscrupulous allegations relating to
judicial proceedings in any court, lest the process of law is abused
and public time is wasted in avoidable litigation. That the search
operations did constitute a proceeding under the Act before an
BABITA LILA & ANOTHER v. UNION OF INDIA
income tax authority and that therefore the same is deemed to
be a judicial proceeding within the meaning inter alia of Sections
193 and 196 IPC and that every income tax authority for the said
purpose would be deemed to be a civil court for the purposes of
Section 195, is not an issue between the parties. [Paras 44, 45,
46, 47, 48) [627-A-D, H; 628-A-B]
C. Muniappan and Others v. State of Tamil Nadu 2010
(10) SCR 262 : (2010) 9 SCC 567; Sachida Nand Singh
and Another v. State of Bihar and Another 1998 (1)
SCR 492 : (1998) 2 SCC 493 - relied on.
3. As enumerated under Section 116 of Chapter XIII of the
Act, Deputy Director of Income tax/Deputy Commissioner of
Income Tax/Deputy Commissioner of Income Tax (Appeals)
amongst others are the designated income tax authorities.
Section 120 provides that im.ome tax authorities would exercise
all or any of the powers and perform all or any of the functions
conferred on or as the case may be assigned to such authorities
under the Act in accordance with such directions as the Board
may issue in this regard. As a necessary corollary, the Board can
also by general or special order and subject to such conditions,
restrictions or limitations as may be specified therein, authorise
such authorities as enumerated in sub-section (4) thereof to
perform such functions, as may be assigned. The powers of an
assessing officer vested with the jurisdiction as permitted by
Section 120 of the Act, extend as is clarified by Section 124, to
any person carrying on business or profession, if the place at
which he carries on his business or profession is situated within
the limits of the area over which such officer had been vested
with the jurisdiction or ifthe person concerned carries on business
in more places than one, if the principal place of his business or
profession is situated within the area over which the assessing
officer has jurisdiction. In addition, such officer would have also
jurisdiction in respect of any other person residing within the
area.
[Paras 50, 53, 54) (628-F; 629-F-H; 630-A-B]
4. The bone of contention lies in the interpretation of
Section 246 of the Act in particular which is contained in Chapter
XX dealing with Appeals and Revision. Whereas Section 246
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catalogues the orders of an assessing officer other than those of
the Deputy Commissioner from which appeal would lie to the
Deputy Commissioner (Appeals), Section 246A lists the orders
from which appeal would lie to the Commissioner (Appeals).
Admittedly, the categories of orders specified under Section
246(1) of the Act do not include one stemming from any
proceeding before an assessing officer under Section 132 of the
Act pertaining to search or seizure. Though under clause (d) of
Section 116, Deputy Director of Income Tax, Deputy
Commissioner of Income Tax and Deputy Commissioner of
Income Tax (Appeals) have been bracketed together, it is only
the Deputy Commissioner (Appeals), as is apparent from Section
246(1), who has been conferred with the appellate jurisdiction to
entertain appeals, albeit from specified orders passed by an
assessing officer as mentioned in that sub-section. The Deputy
Director of Income Tax in particular, has not been designated to
be the appellate authority or forum from such orders or any other
order of the assessing officer. LT.Os. are included in the classes
of income tax authorities as per Section 116 of the Act and having
regard to the hierarchy designed, they are subordinate in rank to
the Deputy Director of Income Tax, Deputy Commissioner of
Income Tax and the Deputy Commissioner of Income Tax
(Appeals). [Paras 56, 57) [630-E-H; 631-A-B]
5. The word "ordinarily" denote developments which are
likely to occur, exist or ensue in the regular or normal course of
events as logically and rationally anticipated even though not
set out or expressed in categorical terms. This is a compendious
expression to encompass all events reasonably expected to
occur in the usual and common course of occurrences and are
expected to so happen unless prohibited, prevented or directed
by some express and unexpected interventions to the contrary.
Section 195 of the Code read as a whole unambiguously impose
restrictions in the matter of lodgement of complaint qua the
offences as mentioned in sub-section (l)(b) thereof in particular
and therefore as a corollary, any interpretation for identifying the
court/authority/forum contemplated thereby to be competent has
to be in furtherance of the restraint and not in casual relaxation
thereof. Consequently, therefore, the exposition of the provisions
of the corresponding substantive law which designs the forums
BABITA LILA & ANOTHER v. UNION OF INDIA
or authorities and confers original and appellate jurisdiction has
also to be in aid of the underlying objectives of the restrictions
stipulated. Any postulation incompatible with the restrictive
connotations would be of mutilative bearing thereon and thus
frustrate the purpose thereof, a consequence not approvable in
law. Section 195 of the Code clearly carves out an exception to
the otherwise conferred jurisdiction on a court under Section 190
to take cognizance of an offence on the basis of the complaints/
information from the sources as enumerated therein. (Paras 60,
61] [631-F-H; 632-A-C]
Blacks Law Dictionary, to•h Edition - referred to.
6. It is a trite law that there is no presumption that a casus
omissus exists and a court should avoid creating a casus omissus
where there is none. It is a fundamental rule of interpretation
that courts would not fill the gaps in statute, their functions being
ius discre nonfacere i.e. to declare or decide the law. The judicial
formulations on the theme is so consistent and absolute in terms
that no further dilation is essential. The scheme of the Act and
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the legislative design being unreservedly patent in the instant
case, that it is plainly impermissible to acknowledge the Deputy
Director of Income Tax to be the forum to which an appeal would
ordinarily lie from an order/decision of an assessing officer/I.T.O.
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The present is thus not a case where this Court can premise
that the statute suffers from C(ISUs omissus so as to recognise
the Deputy Director of Income Tax as such an appellate forum.
(Paras 63, 65] [632-H; 633-A, H; 634-A-B]
Petroleum and Natural Gas Regulatory Board vs.
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Indraprastha Gas Limited and Others 2015 (7) SCR
215 : (2015) 9 SCC 209; Sree Balaji Nagar Residential
Association vs. State of Tamil Nadu and Others 2014
(7) SCR 799 : (2015) 3 SCC 353 - relied on.
7. The Parliament has unmistakably designated the Deputy
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Commissioner (Appeals) to be the appellate forum from the
orders as enumerated under Section 246(1) of the Act. This
however, does not detract from the recognition of this authority
to be the appellate forum before whom appeals from the decisions
of an assessing officer or of an officer of the same rank thereto
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would generally and ordinarily lie even in the contingencies not
referred to in particular in sub section 1 of Section 246. This is
more so, in absence of any provision under the Act envisaging
the Deputy Director of Income Tax to be an appellate forum in
any eventuality beyond those contemplated in Section 246(1) of
the Act. Neither the hierarchy of the income tax authorities as
listed in Section 116 of the Act nor in the notification issued under
Section 118 thereof, nor their duties, functions, jurisdictions as
prescribed by the cognate provisions alluded heretobefore, permit
a deduction that in the scheme of the legislation, the Deputy
Director of Income Tax has been conceived also to be an appellate
forum to which appeals from the orders/decisions of the I.T.Os./
assessing officers would ordinarily lie within the meaning of
Section 195(4) of the Code. [Paras 67) (634-G-H; 635-A-C]
Y. Abraham Ajith and Others vs. Inspector of Police,
Chennai and Another 2004 (3) Suppl. SCR 604 :
(2004) 8 SCC 100; Bhura Ram and others vs. State of
Rajasthan and Another (2008) 11 SCC 103 -
distinguished.
8.1 The appellants as assessees, had residences both at
Bhopal and Aurangabad and had been submitting their income
tax returns at Bhopal. The search operations were conducted
simultaneously both at Bhopal and Aurangabad in course whereof
allegedly the appellants, in spite of queries made, did not disclose
that they in fact did hold a locker located at Aurangabad. They in
fact denied to hold any locker, either individually or jointly. The
locker, eventually located, though at Aurangabad, has· a
perceptible co-relation or nexus with the subject matter of
ass.essment and thus the returns filed by the appellants at Bhopal
which in turn were within the purview of the search operations.
The search conducted simultaneously at Bhopal and Aurangabad
has to be construed as a single composite expedition with a
common mission. Having regard to the overall facts and the
accusation of false statement made about the existence of the
locker in such a joint drill, it cannot be deduced that in the singular
facts and circumstances, no part of the offence alleged had been
committed within the jurisdictional limits of the Chief Judicial
Magistrate, Bhopal. [Para 71] [636-D-F)
BABITA LILA & ANOTHER v. UNION OF INDIA
8.2 Ordinarily every offence ought to be inquired into and
tried by a court within whose local jurisdiction it had been
committed as is manda~ed by Section 177 of the Code. Section
178, however marks a departure contingent on the eventualities
as listed in clauses (a),(b), (c) and (d) of Section 178 to identify
the court that would have the jurisdiction to try the offences as
contemplated therein. A cumulative reading of Sections 177, 178
and 179 of the Code in particular and the inbuilt flexibility
discernible in the latter two provisions shows that in the attendant
facts and circumstances of the case where a single and combined
search operation had been undertaken simultaneously both at
Bhopal and Aurangabad for the same purpose, the alleged offence
can be tried by courts otherwise competent at both the places.
To confine the jurisdiction within the territorial limits of the court
at Aurangabad would amount to impermissible and illogical
truncation · of the am bit of Sections 178 and 179 of the Code.
The objection with regard to the competence of the Court of the
Chief Judicial Magistrate, Bhopal is hereby rejected. The
inevitable consequence of the determination in its entirety
however is that the complaint is unsustainable in law having been
filed by an authority, incompetent in terms of Section 195 of the
Code. [Paras 73, 75] [637-D, G-H; 638-A-B]
Dashrath Rupsingh Rathod v. State of Maharashtra and
Another 2014 (11) SCR 921 : (2014) 9 SCC 129- relied
on.
Ku/dip Singh v. The State of Punjab and Another 1956
SCR 125; Lalji Haridas v. State of Maharashtra and
Another 1964 (6) SCR 700; Rajesh Kumar and Others
v. Deputy C.I. T. and Others 2006 (8) Suppl. SCR 284
: (2007) 2 SCC 181; Union of India and others v.
Dharmendar Textile Processors and others (2008) 306
ITR 277 (SC) - referred to.
Stock v. Frank Johns (Tipton) Limited (1978) 1 All ER
948 (HL) - referred to.
1956 SCR 125
19(14 (6) SCR 700
Case Law Reference
referred to
referred to
Para 10
Para 10
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2006 (8) Suppl. SCR 284
referred to
Para 10
2004 (3) Suppl. SCR 604
distinguished
Para 10
(2008) 11 sec 103
distinguished
Para 10
2010 (10) SCR 262
relied on
Para 46
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1998 (1) SCR 492
relied on
Para 46
(2008) 306 ITR 277 (SC)
referred to
Para 63
2015 (7) SCR 215
relied on
Para 64
2014 (7) SCR 799
relied on
Para64
c
2014 (11) SCR 921
relied on
Para 74
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
824 of2016.
From the Judgment and Order dated 20.12.2011 of the High Court
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of Madhya Pradesh, Principal Seat at Jabalpur, in Misc. Criminal Case
No. 8819 of201 I.
Ms. Sangeeta Kumar, Ms. Vithika Garg, Ms. Vidushi Garg, Advs.,
for the Appellants.
Ranjit Kumar, SG, Mrs. Anil Katiyar, Ms. Binu Tamta, Manish
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Pushkarna, Advs. for the Respondent.
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The Judgment of the Court was delivered by
AMITAVA ROY, J. I. Leave granted.
2. Being aggrieved by the rejection of their cha! lenge to the initiation
of their prosecution under Sections 109/191/193/196/200/420/120B/34
!PC on the basis of a complaint made by the Deputy Director oflncome
Tax (Investigation)-!, Bhopal (M.P.), both on the ground of lack of
competence of the complainant and of jurisdiction of the Trial Court at
Bhopal, the appellants seek the remedial intervention of this Court under
Article 136 of the Constitution oflndia.
3. The appellants, who are husband and wife, are residents of
both Bhopal and Aurangabad. A search operation was conducted by
the authorities under the Income Tax Act, 1961 (for short, hereinafter
referred to as "the Act") on 28.10.2010 at both the residences of the
appellants, in course whereof their statements were recorded on oath
BABITA LILA & ANOTHER v. UNION OF INDIA
[AMITAVA ROY, J.]
under Section 131 of the Act. On a query made by the authorities, it is
alleged that they made false statements denying of having any locker
either in individual names or jointly in any bank. It later transpired that
they did have a safe deposit locker with the Axis Bank (formerly known
as UTI Bank) at Aurangabad which they had also operated on
30.10.20 I 0. The search at Aurangabad was conducted by the Income
Tax Officer, Nashik and Income Tax Officer, Dhule and the statements
of the appellants were also recorded at Aurangabad.
4. Based on the revelation that the appellants, on the date of the
search, did have one locker as aforementioned and that their statements
to the contrary were false and misleading, a complaint was filed as aforestated under the above-mentioned sections of the Indian Penal Code by
the Deputy Director oflncome Tax (lnvestigation)-I, Bhopal (M.P.) on
30.5.2011 in the court of the Chief Judicial Magistrate, Bhopal, (M.P.)
and the same was registered as R.T. No. 5171 of 2011.
5. The Trial Court on 9.6.2011, took note of the offences imputed
and issued process against the appellants. In doing so, the Trial Court,
amongst others, noted that the search proceedings undertaken by the
authorities under Section 132 of the Act were deemed to be judicial
proceedings in terms of Section 136 and in course whereof, as alleged,
the appellants had made false statements with regard to their locker and
that on the basis of the documents and evidence produced on behalf of
the complainant, sufficient grounds had been made out against them to
proceed under Sections 191, 193, 200 IPC.
6. The appellants impugned this order of the Trial Court before
the High Court under Section 482 Cr.P.C. (for short hereinafter to be
referred to as "the Code") and sought annulment thereof primarily on
the ground that the search operations having been undertaken by the
I. T.Os. ofNashik and Dhule, the complaint could not have been lodged
by the Deputy Director oflncome Tax (Investigation)-!, Bhopal (M.P.)
who was not the appellate authority in terms of Section 195(4) of the
Code and further no part of the alleged offence having been committed
within the territorial limits of the Court of the Chief Judicial Magistrate,
Bhopal, it had no jurisdiction to either entertain the complaint or take
cognizance of the accusations. By the order impeached herein, the
High Court has declined to interfere on either of these contentions.
7. We have heard Ms. Sangeeta Kumar, learned counsel for the
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[2016] 7 S.C.R.
appellants and Mr Ranjit Kumar, learned Solicitor General for the
respondent.
8. Profusely referring to Section 195 of the Code as a whole, it
has been urged on behalf of the appellants that the Deputy Director of
Income Tax (lnvestigation)-1, Bhopal (M.P.), in the facts of the case
was not competent to lodge the complaint, he being not the authority to
whom appeals would ordinarily lie from the orders or actions of the
I.T.Os., Nashik and Dhule. As the statements of the appellants were
recorded in the course of a search under Section 132 of the Act which
was a judicial proceeding and for that matter, the concerned LT.Os.,
Dhule and Nashik were deemed to be civil courts, it has been argued
that in observance of the mandate of Section 195 ( 4) of the Code, the
complaint could be lodged either by the authorities conducting the search
or by the authority to whom ordinarily an appeal would lie from the
orders/decisions and actions of the income tax authorities undertaking
the search. It has been asserted with reference to Sections 246 and
246A of the Act in particular, that the complainant, the Deputy Director
oflncome Tax (Investigation)-!, Bhopal (M.P.) is not the authority/forum
to whom appeal lies from the orders of the LT.Os. involved and thus
was not a Court as contemplated in Section 195( I )(b) or the appellate
forum under Section 195(4) of the Code.
9. It has been emphatically maintained on behalf of the appellants
that having regard to the place of search, the recording of their statements
as well as of the location of the locker, no cause of action for initiation of
the criminal proceedings had arisen within the jurisdiction of the court of
the Chief Judicial Magistrate, Bhopal in terms of Sections 177 and 178
of the Code and thus the High Court had grossly erred in deciding contrary
thereto. It has been argued that the rejection of their plea by the High
Court on the ground that the Deputy Director of Income Tax
(Investigation)-1, Bhopal (M.P.) was an officer superior in rank to the
LT.Os. conducting the search is patently flawed and unsustainable in
law and on facts, having regard to the peremptory perquisites of a valid
complaint under Section 195 of the Code.
10. Reliance on the decisions of this Court in Ku/dip Singh vs.
The State of Punjab and Another 1956 SCR 125, Lalji Hark/as vs.
State of Mallaras/ltra am/ Another 1964 (6) SCR 700, Rajesh Kumar
and Others vs. Deputy C.I. T. and Others (2007) 2 SCC 181, Y.
Abraham Ajith and Others vs. Inspector of Police, C/le1111ai and
BABITA LILA & ANOTHER v. UNION OF INDIA
[AMITAVA ROY, J.]
Anotlter (2004) 8 SCC 100 and Bltura Ram and others vs. State of
Rajastltan and Another (2008) 11 SCC 103 has been made in buttressal
of the above assertions.
11. In refutation of the arguments advanced on behalf of the
appellants, the learned Solicitor General has assertively endorsed the
impugned findings, contending that the decision assailed is based on a
detailed reference to the provisions of the Act enumerated in Chapters
XIII and XX and a correct analysis thereof. He has maintained that
having regard to the scheme of these chapters in particular and the
underlying legislative intent ascertainable therefrom, the Deputy Director
oflncome Tax (Investigation)-!, Bhopal (M.P.) had the competence and
jurisdiction to lodge the complaint at Bhopal. This authority being
admittedly and as patent from the hierarchy enumerated by the Act,
higher in rank than the LT.Os. who had conducted the search and
investigation, did have the authority to file the complaint and that thereby
the prescriptions of Sections 195(1 )(b) and l 95(g) of the Code had not,
in any way, been contravened. This is more so as the powers of any
income tax authority under the Act and his/her jurisdiction to perform
any function is not limited or restricted but has been consciously enlarged
to deal with any contingency so as to advance the objectives of the
legislation, he urged.
12. Vis-a-vis the competence of the court of the Chief Judicial
Magistrate, Bhopal, the learned Solicitor General insisted that as the
appellants were the residents, both of Bhopal andAurangabad and search
operations were conducted simultaneously at both the places, and further
as they had been filing their income tax returns at Bhopal, the Trial
Court before which the complaint had been filed, was competent to take
cognizance of the offences alleged in terms of Section 178 (b) and (d)
of the Code. To reinforce the above, the decision of the Constitution
Bench of this Court in Lalji Haridas (supra) has been pressed into
service.
13. Before adverting to the competing contentions, it would be
apt to note the conclusions of the High Court on these two counts. In
addition to the admitted factual aspects narrated hereinabove, the High
Court upheld the ju_risdiction of the Chief Judicial Magistrate, Bhopal by
taking note also of the fact that the income tax returns relatable to the
undisclosed property i.e. the locker had been filed at Bhopal. The facts,
to reiterate, that the appellants were residents of Bhopal and Aurangabad,
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and that the search operations were conducted simultaneously at both
the places were noted as well .
. 14. Qua the competence of the Deputy Director, Income Tax
(Investigations)-! Bhopal, the High Court held the view that he being
admittedly an officer superior in rank to the LT.Os. conducting the search,
the institution of the complaint by him was not vitiated by any lack of
authority. Reference to Section 136 of the Act, whereunder any
proceeding before an income tax authority would be a judicial proceeding
and that for that matter, every income tax authority is deemed to be a
civil court was recorded as well. The High Court did refer to the Section
195 of the Code to enter a finding that the Deputy Director, Income Tax
(Investigations)-! Bhopal being an officer superior to the LT.Os.
undertaking the search and to whom an appeal from their orders/
decisions/actions ordinarily lay, was a civil court as contemplated
thereunder to lodge the complaint.
15. The competing contentions have received our due
consideration. The rival submissions stir up two major issues pertaining
to the maintainability and adjudication of the complaint lodged before the
Chief Judicial Magistrate, Bhopal, (M.P.) by the Deputy Director, Income
Tax (Investigation)-!, Bhopal, (M.P) in the face of the prescription of
Section 195( I )(b) of the Code, in particular read with the other cognate
sub-sections thereof as well as the limits of the territorial jurisdiction of
the court before which the prosecution of the appellants has been initiated
in the context of Section 177 of the Code.
16. Having regard to the decisive bearing of the adjudication on
the validity or otherwise of the complaint by the Deputy Director, Income
Tax (Investigation)-!, Bhopal, (M.P). in the textual facts, expedient it
would be to dwell on this aspect at the threshold.
17. The admitted facts reveal that the appellants have residences
both at Bhopal and Aurangabad and file their returns of income tax at
Bhopal. On 28.10.20 I 0, search operations under Section 132 of the Act
were simultaneously conducted at both the places. In the course of the
interrogation of the appellants, more specifically on the aspect as to
whether they or any of them either individually or jointly did hold any
locker, the answer was in the negative. The accusation of the authorities
is that further investigation revealed that they did hold a locker in the
Axis Bank (formerly known as UT! Bank), Kranti Chowk, Aurangabad
BABITA LILA & ANOTHER v. UNION OF INDIA
[AMITAVA ROY, J.]
which had been operated by appellant No. 1 on 30.10.2010. In this
factual backdrop, the complaint had been filed by the Deputy Director,
Income Tax (lnvestigation)-I, Bhopal, (M.P) in the court of Chief Judicial
Magistrate, Bhopal, (M.P.) asserting that by making such false statement
in the course of search operations which were judicial proceedings in
terms of Sectior> 136 of the Act, the appellants· had committed offence
under Sections 109/J 91/193/J 96/200/420/ I 20B/34 IPC. As referred to
hereinabove, the Chief Judicial Magistrate, Bhopal, after necessary
hearing as contemplated in law and being prima facie satisfied that
sufficient grounds had been made out to proceed against the appellants
under Sections 191, 193 and 200 !PC, issued process against them.
18. As the documents appended to the appeal would divulge that
the search operations at Aurangabad had been conducted on the strength
of the warrant of authorisation dated 26. I 0.20 I 0 under Section 132 of
the Act, issued, signed and sealed by the Director oflncome Tax (Inv.),
M.P. & C.G,Bhopal/Deputy Director ofincome Tax and the statements
of the appellant Nos. 1 and 2 were recorded by Mrs. Bharati Choudhary,
I.T.O. and Mr. A.T. Kapase, l.T.0. (Inv.), Nashik on 28.10.2010. The
materials on record also disclose that search operations did continue on
subsequent dates as well, in course whereof seizures were made.
19. Be that as it may, eventually the office of the Deputy Director
oflncome Tax (Investigation)-!, Bhopal on 8.2.2011 issued a show cause
notice to the appellants under Section 277 of the Act alleging that they
had made false statement under Section 132(4) thereof, thereby seeking
a reply as to why prosecution would not follow by virtue thereof. It is in
this factual premise, that the validity of the complaint filed by the Deputy
Director, Income Tax (Investigation)-!, Bhopal, (M.P). has been
questioned by the appellants. To reiterate, by the impugned order, the
High Court has negated both the demurrals of the appellants pertaining
to the complaint and territorial jurisdiction of the court of the Chief Judicial
Magistrate, Bhopal.
20. The state of law as adumbrated by the precedents cited may
now be outlined before referring to the relevant provisions involved.
21. In il;;!dip Singh (supra), the question involved before a
Constitution Bench of this Court was about the validity ofa complaint
made under Section 476-A read with Section 195(3) of the Code of
Criminal Procedure Code 1898 against the appellant for perjury and for
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using a forged document as genuine. The contextual facts narrate that
the 2"d respondent therein had filed a suit against the appellant for recovery
of money on the basis of a mortgage in the Court of one Mr. E.F. Barlow,
Subordinate Judge of I st Class. The appellant in the suit filed a receipt
which purported to show that Rs.35000/- had been paid towards the
satisfaction of the mortgage and in the witness box he swore that he had
paid the money for which the receipt was given.
22. Mr. Barlow held that the receipt did not appear to be a genuine
document and that the evidence of the appellant to that effect was not
true. A preliminary decree was accordingly passed against the appellant
for the entire amount followed by a final decree. The appeal preferred
by the appellant was also dismissed by the High Court which reiterated
that the receipt was a very suspicious document and that the appellant's
evidence was not reliable as well.
23. The plaintiff/respondent thereafter made an application in the
Court of Mr. W. Augustine who had succeeded Mr. Barlow as
Subordinate Judge of 1" Class stating that a complaint be filed against
the appellant under Sections 193 and 471 l.P.C. Mr. Augustine, because
of his transfer could not hear the application for filing of the complaint.
In his place Mr. K.K. Gujral, subordinate Judge of the 4'h Class was
sent. He, however, declined to entertain the matter as he was only a
subordinate judge of the 4'h Class and laid a report to the District Judge
pointing out his lack of jurisdiction in the matter as the offences had
been allegedly committed in the Court of a subordinate Judge of the I"
Class. The District Judge thereupon transferred the matter to the Senior
Subordinate Judge, Mr. Pitam Singh who made the complaint. The
impeachment of the validity of the complaint has arisen in this backdrop.
24. As the sequence of events unfold, the appellant filed an appeal
against the orderofMr. Pitam Singh to the Additional District Judge Mr,
J .N. Kapur who held thatthe Senior Subordinate Judge Mr. Pitam Singh
had no jurisdiction to make complaint. He also held that on merits as
well there was no prima facie case. The High Court, however, in revision
held that the Senior Subordinate Judge had the jurisdiction and further
the materials on record did disclose a prima facie case. Accordingly, the
order of the Additional District Judge was set aside and the order of the
Senior Subordinate Judge was restored.
25. Three questions fell before this Court for scrutiny. Firstly,
BABITA LILA & ANOTHER v. UNION OF INDIA
[AMITAVA ROY, J.]
whether the Senior Subordinate Judge Mr. Pitam Singh had jurisdiction
to entertain the application and make a complaint Secondly, whether
the Additional District Judge had jurisdiction to entertain an appeal
preferred against the order of Mr. Pitam Singh and thirdly, whether the
High Court had the power to reverse the order of the Additional District
Judge in revision.
··'
26. While dwelling upon the firsfissue, this Court adverted at the
threshold to Section 195(1)(b) and (c) of the Code which prohibited
any Court from taking cognizance of either of the two offences alleged,
except on the complaint in writing of the Court concerned or of some
other Court to which such Court was subordinate: Having regard to the
fact that the offences were committed in the Court of E.F. Barlow,
Subordinat-: Judge of the I st Class, their Lordships next referred to
Section 476-A of the Code which prescribed that when the Court in
which the offence is said to have been committed neither makes a
complaint nor rejects an application for the making of a complaint, the
Court to which such former Court is subordinate within the meaning of
Section 195 (3) may take action under Section 476.
27. Their Lordships noted that Section 4 76 authorised the
appropriate Court, after recording a finding to the effect that it was
expedient to do so in the interest of justice to make a complaint in writing
and forward it to a Magistrate of I st Class having jurisdiction. While
examining in the scheme of prevalent hierarchy of posts as to whether
the comt of Senior Subordinate Judge presided over by Mr. Pitam Singh
was a Court to which tht: Court of Mr. Barlow was subordinate within
the meaning of Section 195(3) of the Code, their Lordships marked that
in terms of Section 195(3), a Court for the purposes thereof, would be
deemed to be subordinate to the Court to which appeals ordinarily lay
from the appealable decrees or sentences of such former Court, or in
the case of a Civil Court from whose decrees no appeal ordinarily lay, to
the principal court having ordinary original civil jurisdiction within the
local limits of whose jurisdiction such Civil Court was situated. The
proviso to Section 195(3) was also noted which ordained that where
appeals lie tu "lore than one court, the appellate court of the inferior
jurisdiction would be the court to which such court would be deemed to
be subordinate. Further when appeals lay to a Civil and also to a Revenue
Court, such Courts would be deemed to be subordinate to the Civil or
Revenue Court, according to the nature of the case or the proceedings
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in connection with which the offence was alleged to have been committed.
28. In this conspectus, this Court laid a decisive emphasis on the
word "ordinarily" and to disinter the legislative intent, alluded to the
relevant provisions of the Punjab Courts Act, 1918 dealing in particular
with the classes and hierarchy of Civil Courts. Apart from the Courts of
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Small Causes, it was noticed that under the said Act following three
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classes of Civil Courts were provided:
(i) The Court of District Judge
(ii) The Court of Additional Judge
(iii) The Court of the Subordinate Judge
29. Vis-a-vis the provisions for appeal under Section 39 of the
Act, it was noted that in the absence of any other enactment for the
time being in force, appeals lay to the Court of the District Judge when
the value of the suit did not exceed Rs.5,000/- and in every other case to
the High Court. Section 39(3 ), however, empowered the High Court by
notification to direct that appeals lying to the District Court from all or
any of the decrees or orders passed in its original jurisdiction by a
Subordinate Judge, would be preferred to such other Subordinate Judge
as mentioned in such notification. The facts revealed that as a matter
of fact such power had been invoked and appeals lying to the District
Courts from the decrees or orders passed by a Subordinate Judge in two
classes of cases as specified could be preferred before the Senior
Subordinate Judge of the 1 ~ Class exercising jurisdiction within such
Civil District.
30.