# STATE OF GUJARAT v. AFROZ MOHAMMED HASANFATTA

- **Citation:** [2019] 1 S.C.R. 1104
- **Court:** Supreme Court of India
- **Decided:** 2019-02-05
- **Case number:** Criminal Appeal No. 224 of 2019
- **Bench:** R. Banumathi, Indira Banerjee
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-gujarat-v-afroz-mohammed-hasanfatta-33744
- **Pages:** 33

## Headnote

Code of Criminal Procedure, 1973 - s.190(1)(b) - Allegation
of cheating/ siphoning of huge amounts of money through Hawala
- A complaint was filed by the ICICI Bank against a company
alleging that they hatched a conspiracy and as a part of this
conspiracy submitted false and bogus bill of entry in the Bank and
forwarded huge sum through Hawala to Dubai and Hong Kong to
different companies and thereby cheated Government of India -
FIR registered against the said company - Respondent's name did
not appear in the FIR - During course of investigation, statements
of various persons were recorded and as per the prosecution, these
statements, implicated the respondent and other accused persons -
Charge-sheet was filed wherein the respondent was referred to as a
suspect - In the first supplementary charge sheet, the respondent
was not added as an accused - Based on further investigation,
second supplementary charge sheet was filed and relying on it, the
Magistrate took cognizance of offence against accused including
respondent - Issuance of process - High Court granted bail to
respondent - Respondent filed revision challenging the order taking
cognizance of offence - High Court allowed the revision holding
that there was no material either direct or circumstantial to point
out any connection of respondent with alleged offences of forgery,
cheating, conspiracy etc. - State challenged the order of High Court
by filing instant appeal - Held: The offence alleged to have been
committed was a complex economic offence of sending foreign
exchange to Dubai and Hong Kong through Hawala by setting up
a web of companies and was not a simple case of forged Bills of
Entry - High Court erred in proceeding to examine the case as if it
was a simple case of submission of forged Bills of Entry by observing
that the case was not related to any import or export of diamonds -
When the satisfaction of the Magistrate was based on the charge
[2019] 1 S.C.R. 1104
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sheet and the materials placed before him, the satisfaction cannot
be said to be erroneous or perverse and the satisfaction ought not
to have been interfered with - While taking cognizance of an
offence based upon a police report, it is the satisfaction of the
Magistrate that there is sufficient ground to proceed against the
accused - Along with the second supplementary charge sheet,
number of materials like statement of witnesses, Bank statement of
the respondent-accused and his company and other Bank Statement,
Call Detail Records and other materials were placed and the
Magistrate satisfied himself that there was sufficient ground to
proceed against the respondent and issued summons - When the
prosecution relied upon the materials, strict standard of proof was
not to be applied at the stage of issuance of summons nor to examine
the probable defence which the accused may take - All that the
court was required to do is to satisfy itself as to whether there are
sufficient grounds for proceeding - High Court ought not to have
gone into the merits of the matter when the matter was at nascent
stage - Impugned order is liable to be set aside - The order of the
Magistrate taking cognizance of the second supplementary charge
sheet for the offences and issue of process to the respondent-accused
restored - Penal Code, 1860 - ss.420, 465, 467, 468, 471, 477A
and 120-B - Economic Offence.
Code of Criminal Procedure, 1973 - s.190(1)(b) - Cognizance
of offence and issue of summons based on police report - Whether
the Magistrate has to record reasons for its satisfaction of sufficient
grounds for issuance of summons - Held: In so far as taking
cognizance based on the police report, the Magistrate has the
advantage of the charge sheet, statement of witnesses and other
evidence collected by the police during the investigation - Evidence
and materials so collected are sifted at the level of the Investigating
Officer and thereafter, charge sheet is filed - In appropriate cases,
opinion of

## Text

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SUPREME COURT REPORTS
[2019] 1 S.C.R.
STATE OF GUJARAT
v.
AFROZ MOHAMMED HASANFATTA
(Criminal Appeal No. 224 of 2019)
FEBRUARY 05, 2019
[R. BANUMATHI AND INDIRA BANERJEE, JJ.]
Code of Criminal Procedure, 1973 - s.190(1)(b) - Allegation
of cheating/ siphoning of huge amounts of money through Hawala
- A complaint was filed by the ICICI Bank against a company
alleging that they hatched a conspiracy and as a part of this
conspiracy submitted false and bogus bill of entry in the Bank and
forwarded huge sum through Hawala to Dubai and Hong Kong to
different companies and thereby cheated Government of India -
FIR registered against the said company - Respondent's name did
not appear in the FIR - During course of investigation, statements
of various persons were recorded and as per the prosecution, these
statements, implicated the respondent and other accused persons -
Charge-sheet was filed wherein the respondent was referred to as a
suspect - In the first supplementary charge sheet, the respondent
was not added as an accused - Based on further investigation,
second supplementary charge sheet was filed and relying on it, the
Magistrate took cognizance of offence against accused including
respondent - Issuance of process - High Court granted bail to
respondent - Respondent filed revision challenging the order taking
cognizance of offence - High Court allowed the revision holding
that there was no material either direct or circumstantial to point
out any connection of respondent with alleged offences of forgery,
cheating, conspiracy etc. - State challenged the order of High Court
by filing instant appeal - Held: The offence alleged to have been
committed was a complex economic offence of sending foreign
exchange to Dubai and Hong Kong through Hawala by setting up
a web of companies and was not a simple case of forged Bills of
Entry - High Court erred in proceeding to examine the case as if it
was a simple case of submission of forged Bills of Entry by observing
that the case was not related to any import or export of diamonds -
When the satisfaction of the Magistrate was based on the charge
[2019] 1 S.C.R. 1104
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sheet and the materials placed before him, the satisfaction cannot
be said to be erroneous or perverse and the satisfaction ought not
to have been interfered with - While taking cognizance of an
offence based upon a police report, it is the satisfaction of the
Magistrate that there is sufficient ground to proceed against the
accused - Along with the second supplementary charge sheet,
number of materials like statement of witnesses, Bank statement of
the respondent-accused and his company and other Bank Statement,
Call Detail Records and other materials were placed and the
Magistrate satisfied himself that there was sufficient ground to
proceed against the respondent and issued summons - When the
prosecution relied upon the materials, strict standard of proof was
not to be applied at the stage of issuance of summons nor to examine
the probable defence which the accused may take - All that the
court was required to do is to satisfy itself as to whether there are
sufficient grounds for proceeding - High Court ought not to have
gone into the merits of the matter when the matter was at nascent
stage - Impugned order is liable to be set aside - The order of the
Magistrate taking cognizance of the second supplementary charge
sheet for the offences and issue of process to the respondent-accused
restored - Penal Code, 1860 - ss.420, 465, 467, 468, 471, 477A
and 120-B - Economic Offence.
Code of Criminal Procedure, 1973 - s.190(1)(b) - Cognizance
of offence and issue of summons based on police report - Whether
the Magistrate has to record reasons for its satisfaction of sufficient
grounds for issuance of summons - Held: In so far as taking
cognizance based on the police report, the Magistrate has the
advantage of the charge sheet, statement of witnesses and other
evidence collected by the police during the investigation - Evidence
and materials so collected are sifted at the level of the Investigating
Officer and thereafter, charge sheet is filed - In appropriate cases,
opinion of the Public Prosecutor is also obtained before filing the
charge sheet - Thereafter, Magistrate is only required to pass an
order issuing summons to the accused - Such an order of issuing
summons to the accused is based upon subject to satisfaction of the
Magistrate considering the police report and other documents and
satisfying himself that there is sufficient ground for proceeding
against the accused and the Magistrate is not required to record
STATE OF GUJARAT v. AFROZ MOHAMMED HASANFATTA
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SUPREME COURT REPORTS
[2019] 1 S.C.R.
any reason - In the instant case, cognizance of the offence was
taken by taking into consideration the charge sheet filed by the
police for the offence under ss.420, 465, 467, 468, 471, 477A and
120B IPC - Order for issuance of process without explicitly recording
reasons for its satisfaction for issue of process did not suffer from
any illegality.
Code of Criminal Procedure, 1973 - s.190, 204 - Issuance
of process - Held: For issuance of process against the accused, it
has to be seen only whether there is sufficient ground for proceeding
against the accused - At the stage of issuance of process, the Court
is not required to weigh the evidentiary value of the materials on
record - The Court must apply its mind to the allegations in the
charge-sheet and the evidence produced and satisfy itself that there
is sufficient ground to proceed against the accused - The Court is
not to examine the merits and demerits of the case and not to
determine the adequacy of the evidence for holding the accused
guilty - The Court is also not required to embark upon the possible
defences - Likewise, 'possible defences' need not be taken into
consideration at the time of issuing process unless there is an exfacie defence such as a legal bar or if in law the accused is not
liable.
Code of Criminal Procedure, 1973 - s.397 - Revisional
jurisdiction - Scope of - While hearing revision under s.397, the
High Court does not sit as an appellate court and will not
reappreciate the evidence unless the judgment of the lower court
suffers from perversity - In the instant case, Magistrate was satisfied
that there were sufficient grounds for proceeding, based on the
charge sheet and the materials produced thereon - High Court was
not justified in examining the merits and demerits of the case and
substitute its own view - Penal Code, 1860 - ss.420, 465, 467, 468,
471, 477A and 120-B.
Allowing the appeal, the Court
HELD: 1.1 It is well-settled that at the stage of issuing
process, the Magistrate is mainly concerned with the allegations
made in the complaint or the evidence led in support of the same
and the Magistrate is only to be satisfied that there are sufficient
grounds for proceeding against the accused. When issuing
summons, the Magistrate need not explicitly state the reasons
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for his satisfaction that there are sufficient grounds for proceeding
against the accused. [Para 15][1117-G-H; 1118-A]
Pepsi Foods Ltd. and Another v. Special Judge
Magistrate and Others (1998) 5 SCC 749 : [1997] 5
Suppl. SCR 12; Bhushan Kumar and another v. State
(NCT of Delhi) and another (2012) 5 SCC 424 : [2012]
2 SCR 696; Mehmood Ul Rehman v. Khazir Mohammad
Tunda and others (2015) 12 SCC 420 : [2015] 4 SCR
841 - held inapplicable.
1.2 Section 190(1)(b) Cr.P.C. deals with taking cognizance
of any offence on the basis of police report under Section 173(2)
Cr.P.C. A complaint filed before the Magistrate may be dismissed
under Section 203 Cr.P.C. if the Magistrate is of the opinion that
there is no sufficient ground for proceeding and in every such
case, he shall briefly record his reasons for so doing. If a complaint
is not dismissed under Section 203 Cr.P.C., the Magistrate issues
process under Section 204 Cr.P.C. A combined reading of Section
203 and Section 204 Cr.P.C. shows that for dismissal of a
complaint, reasons should be recorded. In the present case,
cognizance has been taken on the basis of police report. In a
case instituted on a police report, in warrant cases, under Section
239 Cr.P.C., upon considering the police report and the
documents filed along with it under Section 173 Cr.P.C., the
Magistrate after affording opportunity of hearing to both the
accused and the prosecution, shall discharge the accused, if the
Magistrate considers the charge against the accused to be
groundless and record his reasons for so doing. [Paras 18,
19][1120-D, F-G; 1121-A]
Raj Kumar Agarwal v. State of U.P. and another 1999
Cr.LJ 4101 - approved.
1.3 In summoning the accused, it is not necessary for the
Magistrate to examine the merits and demerits of the case and
whether the materials collected is adequate for supporting the
conviction. The court is not required to evaluate the evidence
and its merits. The standard to be adopted for summoning the
accused under Section 204 Cr.P.C. is not the same at the time of
framing the charge. For issuance of summons under Section 204
STATE OF GUJARAT v. AFROZ MOHAMMED HASANFATTA
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Cr.P.C., the expression used is "there is sufficient ground for
proceeding....."; whereas for framing the charges, the expression
used in Sections 240 and 246 IPC is "there is ground for presuming
that the accused has committed an offence.....". At the stage of
taking cognizance of the offence based upon a police report and
for issuance of summons under Section 204 Cr.P.C., detailed
enquiry regarding the merits and demerits of the case is not
required. The fact that after investigation of the case, the police
has filed charge sheet along with the materials thereon may be
considered as sufficient ground for proceeding for issuance of
summons under Section 204 Cr.P.C. [Para 21][1122-E-H]
1.4 In so far as taking cognizance based on the police report,
the Magistrate has the advantage of the charge sheet, statement
of witnesses and other evidence collected by the police during
the investigation. Investigating Officer/SHO collects the
necessary evidence during the investigation conducted in
compliance with the provisions of the Criminal Procedure Code
and in accordance with the rules of investigation. Evidence and
materials so collected are sifted at the level of the Investigating
Officer and thereafter, charge sheet was filed. In appropriate
cases, opinion of the Public Prosecutor is also obtained before
filing the charge sheet. The court thus has the advantage of the
police report along with the materials placed before it by the police.
Under Section 190(1)(b) Cr.P.C., where the Magistrate has taken
cognizance of an offence upon a police report and the Magistrate
is satisfied that there is sufficient ground for proceeding, the
Magistrate directs issuance of process. In such case, the
Magistrate is not required to record reasons for issuing the
process. In the instant case, cognizance of the offence was taken
by taking into consideration the charge sheet filed by the police
under Sections 420, 465, 467, 468, 471, 477A and 120B IPC, the
order for issuance of process without explicitly recording reasons
for its satisfaction for issue of process did not suffer from any
illegality. [Para 22][1123-A-F]
2. Whether revision under Section 397(2) Cr.P.C. against
order of issue of process is maintainable:-
2.1 The Single Judge was not right in proceeding under
the footing as if the case was a simple case of presenting forged
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Bills of Entry. The case of prosecution was a complex economic
offence of sending foreign exchange to companies based in Dubai
and Hong Kong through Hawala by setting up a web of companies.
These companies approached the ICICI Bank and other banks
and opened Letters of Credit and by presenting fake Bills of Entry
on the fraudulent misrepresentation that these Bills of Entry were
genuine and that there had been genuine import of diamonds.
The ICICI Bank and other banks were fraudulently induced to
remit this amount in foreign exchange to foreign companies in
Dubai and Hong Kong. [Para 26][1126-C-F]
2.2 A reading of the statement of Prafulbhai Patel prima
facie shows that the respondent-accused was collecting cash and
sending it to Prafulbhai Patel through couriers and thereby acted
as a conduit for the illegal transfer of cash abroad. The Single
Judge observed that the statement of Prafulbhai Patel with
reference to the respondent's business and accounts is only
hearsay and he never stated that he had directly or indirectly
dealt with the respondent. Whether the statement of Prafulbhai
Patel is in the nature of hearsay and whether it is supported by
'contemporaneous exposition' and whether it would fall under
'res gestae' and whether it is admissible or not is to be seen only
at the time of trial. The merits of the contention of either party
cannot be gone into now as the same is to be raised and answered
only at the time of trial. The Angadias are yet to be examined in
the court. During the time of trial, at the time of examining of
Angadiyas, it is open to the prosecution to confront them with
the relevant materials linking the respondent with the alleged
transactions. For issuance of process against the accused, it has
to be seen only whether there is sufficient ground for proceeding
against the accused. At the stage of issuance of process, the Court
is not required to weigh the evidentiary value of the materials on
record. The Court is not to examine the merits and demerits of
the case and not to determine the adequacy of the evidence for
holding the accused guilty. [Paras 31, 32, 35, 36 and 37][1130-EG; 1131-D, H; 1132-A-B]
Nupur Talwar v. Central Bureau of Investigation and
another (2012) 11 SCC 465 : [2012] 6 SCR 723 -
relied on.
STATE OF GUJARAT v. AFROZ MOHAMMED HASANFATTA
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Amar Nath and Others v. State of Haryana and Another
(1977) 4 SCC 137 : [1978]1 SCR 222; K.K. Patel and
Another v. State of Gujarat and Another (2000) 6 SCC
195 : [2000] 1 Suppl. SCR 312; Urmila Devi v. Yudhvir
Singh (2013) 15 SCC 624 : [2013] 16 SCR 542; Balram
Prasad Agrawal v. State of Bihar and others (1997) 9
SCC 338 : [1996] 9 Suppl. SCR 752; Bholu Ram v.
State of Punjab and Another (2008) 9 SCC 140 : [2008]
12 SCR 959 - referred to.
3.1 The Single Judge was not right in saying that there
was no material that the respondent has played any role in the
conspiracy in making the black money in cash into white and
fraudulently inducing the banks based on fake bills of entry and
remitting the amount in foreign exchange to foreign banks based
in Hong Kong and Dubai. The Single Judge erred in brushing
aside the materials produced by the prosecution which primafacie indicated the role of the respondent that he used to collect
the money from the remitters and sending it through Angadiya
Firms to Prafulbhai Patel who in turn deposited the same through
RTGS in the accounts of the companies operated by MJ which
money was transferred abroad by foreign exchange. The brother
of the respondent admitted that Rs.3,00,00,000/- were deposited
in his account on the instructions of the respondent-accused from
the company controlled by accused-MJ. The question whether
the brother of respondent-accused received money as a genuine
loan transaction or whether it was a part of the commission, could
be examined only at the stage of trial when the parties adduced
oral or documentary evidence. Further, a perusal of bank
statement of the respondent showed four transactions for a total
amount of Rs.6,30,00,000/- in the account of respondent from M/
s Natural Trading Company. Further, by perusal of the bank
statement of M/s Nile Trading Corporation, the proprietorship
concern of respondent, showed transactions to the tune of
approximately Rs.7,00,00,000/- in the account of the firm from a
business concern of accused-MJ. [Paras 38, 39 and 41][1132-EH; 1133-B, F]
3.2 The contention that the two companies who had remitted
an amount of Rs.16,00,00,000/- in the accounts of the respondent
and his brother which amount is stated to be as 'commission',
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have not been arraigned as accused nor its Director/partner has
been shown as accused does not merit acceptance. Only during
the time of trial, trail of money from the above two companies to
the account of the respondent could be established. Having
received a huge amount of Rs.16,00,00,000/-, it is for the accused
to establish his defence plea at the time of trial that the money is
by way of receipt in the normal course of his business dealings.
The bank statement produced by the prosecution showing the
deposit of amount in the account of respondent-accused and his
company and receipt of the amount by the respondent's brother
are the prima facie materials showing that there are sufficient
grounds for proceeding against the accused. The evidence and
materials so produced by the prosecution cannot be brushed aside
on the possible defence which the respondent is taking that such
credits are in the regular course of his business dealings. [Paras
42,44][1133-G-H; 1134-A, D-E]
4. While hearing revision under Section 397 Cr.P.C., the
High Court does not sit as an appellate court and will not
reappreciate the evidence unless the judgment of the lower court
suffers from perversity. Based on the charge sheet and the
materials produced thereon when the Magistrate satisfied that
there are sufficient grounds for proceeding, the Single Judge was
not justified in examining the merits and demerits of the case
and substitute own view. [Para 49][1135-G-H; 1136-A]
Case Law Reference
[1997] 5 Suppl. SCR 12
held inapplicable
Para 11
[2012] 2 SCR 696
held inapplicable
Para 15
[2015] 4 SCR 841
held inapplicable
Para 16
1999 Cr.LJ 4101
approved
Para 19
[1978] 1 SCR 222
referred to
Para 23
[2000] 1 Suppl. SCR 312
referred to
Para 23
[2013] 16 SCR 542
referred to
Para 24
[1996] 9 Suppl. SCR 752
referred to
Para 33
[2012] 6 SCR 723
referred to
Para 37
[2008] 12 SCR 959
referred to
Para 43
STATE OF GUJARAT v. AFROZ MOHAMMED HASANFATTA
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CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
224 of 2019.
From the Judgment and Order dated 03.05.2017 of the High
Court of Gujarat at Ahmedabad in Criminal Revision Application No.
264 of 2017.
Pritesh Kapur, Ms. Hemantika Wahi, Ms. Jesal Wahi, Ms. Puja
Singh, Ms. Vishakha, Advs. for the Appellant.
Mukul Rohatgi, Sr. Adv., Neeraj Kishan Kaul, Sameer Rohatgi,
Ms. Diksha Rai, Ashish Batra, Sarthak Sachdev, Wattan Sharma, Akshit
Pradhan, Ishan Bisht, Palak Mahajan, Amit K. Nain, Varun Mathur, Viren
Sibal, Vivekananda Bommineni, Divyanshu Srivastava, Nikhil Rohtagi,
Ashish Batra, Advs. for the Respondent.
The Judgment of the Court was delivered by
R. BANUMATHI, J. 1. Leave granted.
2. This appeal arises out of the order of the High Court of Gujarat
dated 03.05.2017 allowing the Criminal Revision No.264 of 2017 in and
by which the High Court has set aside the order dated 15.11.2014 passed
by the Chief Judicial Magistrate at Surat by which the Magistrate had
taken cognizance of the offences punishable under Sections 420, 465,
467, 468, 471, 477A and 120-B IPC on the basis of the second
supplementary charge sheet filed by the police in Criminal Case No.62851/
2014 and ordered issuance of process to the respondent-accused.
3. Brief factual matrix of the case is that a complaint was filed by
the Manager of ICICI Bank against M/s R.A. Distributors Pvt. Ltd.
alleging that they hatched a conspiracy and as a part of this conspiracy,
stated that their company is importing rough diamonds and polished
diamonds from the foreign market and selling the same in the local market
of Surat and Mumbai and by so stating, opened a current account on
13.12.2013 in ICICI Bank, Shyam Chambers, opposite to Sub-jail, Surat.
On verification of Bills of Entry produced by M/s RA Distributors, 17
Bills of Entries were found to be bogus. It was alleged that M/s RA
Distributors prepared false and bogus signature and stamp of Custom
Officers and knowing fully well that those Bills of Entry are bogus,
fraudulently submitted the same as if they are true and genuine and
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produced them in ICICI Bank, Shyam Chambers, Opp., Sub-jail, Surat
between 13.12.2013 to 24.02.2014 and had forwarded Rs.104,60,99,082/-
to (01) MABOOK TRADING FZE, DUBAI (02) NIPPON
INCORPORATION LTD HONG KONG (03) CORNELL TRADING
(HK) LTD HONG KONG (04) AL ALMAS FZE LTD. HONG KONG,
(05) S. AL SABA GENERAL TRADING FZE, DUBAI, (06) DAIMUR
GEMS JEWELLRY (LLC) LTD HONG KONG and thereby committed
the offence of cheating the Government of India.
4. Based on the aforesaid complaint, FIR No.16/2014 dated
11.04.2014 was registered against M/s R.A. Distributors Pvt. Ltd & its
Directors, namely Shailesh Rameshbhai Patel and Aniket Ashok Ambekar
under Sections 420, 465, 467, 468, 471, 477A and 120B IPC. The
complainant, in his complaint had stated that the accused mentioned in
the complaint, had hatched a criminal conspiracy and in all, deposited 17
bogus and fabricated Bill of Entries and had presented the said forged
Bills of Entries before the ICICI Bank, Surat and thus illegally transferred
Rs.104,60,99,082/- through Hawala to Dubai and Hong Kong to different
companies and had cheated with Government of India. The said FIR
did not contain the name of the respondent herein.
5. During the course of investigation, statement of one Prafulbhai
Mohanbhai Patel was recorded under Section 161 Cr.P.C. on 01.08.2014
and as per the prosecution, the said statement of Prafulbhai Patel
implicates respondent-accused Afroz Mohammed Hasanfatta and the
other accused persons namely Madanlal Manikchand Jain and Amit @
Bilal Haroon Gilani. Case of the prosecution is that the aforesaid accused
along with others hatched a criminal conspiracy to cheat the Government
of India by siphoning off huge amounts of money through Hawala.
6. Statement of other witnesses viz. Babubhai Kanjibhai Patel,
partner of S. Babulal Angadiya and Pravinbhai Jethabhai Patel, Manager
of Babulal Angadiya was recorded on 11.08.2014. Charge sheet was
filed under Section 173 Cr.P.C. in Criminal Case No.47715/2014 on
18.08.2014 against two persons namely Sunil Agarwal and Ratan
Agarwal. In the said charge sheet, the respondent-accused was referred
to as a 'suspect'. The respondent-accused Afroz Hasanfatta was
arrested by the police officers of DCB Police Station, Surat on 20.08.2014
for investigation in connection with FIR No.16/2014. The first
supplementary charge sheet was filed under Section 173(8) Cr.P.C. in
Criminal Case No.55259/2014 against Madanlal Manikchand Jain on
STATE OF GUJARAT v. AFROZ MOHAMMED HASANFATTA
[R. BANUMATHI, J.]
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30.09.2014. According to the appellant, in the said first supplementary
charge-sheet, the respondent-accused was not added as an accused as
the statutory period for filing charge sheet in the case of respondentaccused had not expired.
7. During the course of further investigation, statement of witnesses
C.A. Surendra Dhareva, Amratbhai Narottamdas Patel and elder brother
of the respondent-accused Jafar Mohammed Hasanfatta, was recorded
under Section 161 Cr.P.C. As per the prosecution, the said statement of
Jafar Mohammed Hasanfatta, elder brother of respondent-accused
shows that the respondent has arranged to transfer Rs.3,00,00,000/- into
the account of his brother Jafar Mohammed Hasanfatta through RTGS
from Natural Trading Company, owned by co-accused Madanlal Jain.
The respondent-accused is the sole proprietor of the Nile Industries Pvt.
Ltd. Statement of Samir Jiker Gohil, Manager of the said Nile Industries
Pvt. Ltd. was recorded on 18.10.2014. According to the prosecution,
bank statement of account of respondent-accused in the Union Bank of
India, Nanpura Branch from 31.12.2013 to 25.03.2014 reflects crores
of money having been transferred from Natural Trading Company
account to respondent's Company-Nile Trading Corporation. Further
bank statement of Nile Trading Corporation also reflects credit of huge
amount into its account from Gangeshwar Merchantile Pvt. Ltd. owned
by Madanlal Jain. Based on further investigation, namely statement of
witnesses, bank transactions and copy of Call Details Record between
respondent and Madanlal Jain and other accused, second supplementary
charge sheet was filed arraigning the respondent as accused No.1 and
Amit @ Bilal Haroon Gilani as accused No.2. Based on the second
supplementary charge sheet, cognizance was taken of the offences under
Sections 420, 465, 467, 468, 471, 477A and 120B IPC in Criminal Case
No.62851/2014 on 15.11.2014 and the Magistrate ordered issuance of
summons against the accused arraigned thereon including the respondentAfroz Hasanfatta.
8. The High Court granted bail to the respondent accused in FIR
No.16/2014 vide order dated 05.03.2015. The respondent-accused filed
Criminal Revision Application No.264 of 2017 before the High Court of
Gujarat assailing the order dated 15.11.2014 passed by the Chief Judicial
Magistrate, Surat. The High Court vide order dated 24.03.2017 condoned
the delay of 766 days in filing the revision. By the impugned order dated
03.05.2017, the learned Single Judge allowed the criminal revision and
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set aside the order of the Chief Judicial Magistrate, Surat taking
cognizance of the offences based on the second supplementary charge
sheet No.62851/2014 dated 15.11.2014 and directing issuance of
summons to the respondent-accused under Sections 420, 465, 467, 468,
471, 477A and 120B IPC. The High Court held that there is no material
either direct or circumstantial to point out any connection of the
respondent-accused with alleged offences of forgery, cheating, conspiracy
etc. The High Court further held that there was no material to show
that the respondent was fraudulently sending his undisclosed cash income
abroad through Hawala nor any material to show that he was receiving
cash from any person fraudulently and sending the same in foreign
exchange to foreign companies through Hawala to earn any commission.
The High Court held that roping in of the accused with the aid of Section
120B IPC is also not substantiated by any material.
Contentions:-
9. Mr. Pritesh Kapur, learned counsel for the appellant-State
submitted that time and again, it has been laid down that while issuing
summons, the Magistrate is to be satisfied that "there is sufficient
ground for proceeding" and on the basis of the materials filed along
with the second supplementary charge sheet, the Magistrate took
cognizance of the offences and directed issuance of summons to the
respondent and Amit @ Bilal Haroon Gilani and the same ought not to
have been inferred. The learned counsel further submitted that issuance
of summons, being an interlocutory order, the High Court in exercise of
its revisional jurisdiction ought not to have set aside the order of issuance
of summons. The learned counsel further submitted that the learned
Single Judge erred in proceeding under the footing as if it is a simple
case of forgery of the Bills of Entry and did not keep in view that the
present case is a complex economic offence of sending foreign exchange
abroad to foreign companies in Dubai and Hongkong through "hawala"
by setting up a web of companies. Placing reliance upon number of
decisions, the learned counsel for the appellant-State submitted that at
the stage of issuance of the summons, the Court is not to examine the
merits and demerits of the case and the possible defence are not to be
examined.
10. Per contra, Mr. Mukul Rohatgi, learned senior counsel for the
respondent submitted that summoning an accused is a very serious step
and there should be strict examination of the materials on record and the
STATE OF GUJARAT v. AFROZ MOHAMMED HASANFATTA
[R. BANUMATHI, J.]
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summoning order must reflect the application of mind by the Magistrate.
It was further submitted that the alleged statement of Praful Patel dated
01.08.2014 relied upon by the prosecution was rightly held to be in the
nature of hearsay and inadmissible qua the respondent. The learned
senior counsel further submitted that Angadiyas as well as Praful Patel
who is alleged to have transferred the cash by RTGS to the companies
in ICICI Bank would form a vital link in the alleged flow of money and
they have not been shown as accused and the contention of the State
with regard to the statement of Praful Patel is bereft of any merits. The
learned senior counsel further submitted that absolutely there is no
evidence to connect the respondent with the companies in ICICI Bank
and other foreign companies based in Hong Kong and Dubai to whom
the foreign exchange is alleged to have been sent and in the absence of
any material, learned Single Judge rightly held that there was no sufficient
ground in proceeding against the respondent and the impugned order of
the High Court warrants no interference.
11. Mr. Neeraj Kishan Kaul, learned senior counsel appearing for
the respondent has placed reliance upon number of judgments and
submitted that the Magistrate to take cognizance of an offence,
irrespective of the fact that the cognizance is based upon a police report
or on a complaint. Placing reliance upon Pepsi Foods Ltd. and Another
v. Special Judge Magistrate and Others (1998) 5 SCC 749, the learned
senior counsel submitted that summoning of an accused in a criminal
case is a serious offence and the order of the Magistrate is bereft of
reasons indicating the application of mind and the impugned order was
rightly quashed by the High Court.
12. We have carefully considered the contentions and perused
the impugned judgment and materials on record, the following points
arise for consideration:-
• While directing issuance of process to the accused in case of
taking cognizance of an offence based upon a police report
under Section 190(1)(b) Cr.P.C., whether it is mandatory for
the court to record reasons for its satisfaction that there are
sufficient grounds for proceeding against the accused?
• In exercise of revisional jurisdiction under Section 397 Cr.P.C.,
whether the learned Single Judge was right in setting aside the
order of the Magistrate issuing summons to the respondentaccused?
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While taking cognizance of an offence under Section
190(1)(b) Cr.P.C., whether the court has to record reasons for its
satisfaction of sufficient grounds for issuance of summons:-
13. The charge sheet was filed in Criminal Case No.47715/2014
on 18.08.2014 against the accused persons namely Sunil Agrawal and
Ratan Agrawal. In the first charge sheet, the respondent-Afroz
Mohammad Hasanfatta (Afroz Hasanfatta) was referred to as a suspect.
In the second supplementary charge sheet filed on 15.11.2014 in Criminal
Case No.62851/2014, the respondent-Afroz is arraigned as accused No.1
and Amit @ Bilal Haroon Gilani as accused No.2. In the second
supplementary charge sheet, prosecution relies upon the statement of
witnesses as well as on certain bank transactions as to flow of money
into the account of the respondent-Afroz Hasanfatta and his CompanyNile Trading Corporation. The order of taking cognizance of the second
supplementary charge sheet and issuance of summons to the respondentAfroz Hasanfatta reads as under:-
"I take in consideration charge sheet/complaint for the offence of
Section 420, 465, 467, 468 IPC etc. Summons to be issued against
the accused."
14. The first and foremost contention of the respondent-accused
is that summoning an accused is a serious matter and the summoning
order must reflect that the Magistrate has applied his mind to the facts
of the case and the law applicable thereto and in the present case, the
order for issue of process without recording reasons was rightly set
aside by the High Court. In support of their contention that the summoning
order must record reasons showing application of mind, reliance was
placed upon Pepsi Foods Ltd. The second limb of submission of the
learned senior counsel appearing for the respondent-accused is that there
has to be an order indicating the application of mind by the Magistrate as
to the satisfaction that there are sufficient grounds to proceed against
the accused irrespective of the fact that whether it is a charge sheet by
the police or a private complaint.
15. It is well-settled that at the stage of issuing process, the
Magistrate is mainly concerned with the allegations made in the complaint
or the evidence led in support of the same and the Magistrate is only to
be satisfied that there are sufficient grounds for proceeding against the
accused. It is fairly well-settled that when issuing summons, the
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[R. BANUMATHI, J.]
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Magistrate need not explicitly state the reasons for his satisfaction that
there are sufficient grounds for proceeding against the accused. Reliance
was placed upon Bhushan Kumar and another v. State (NCT of Delhi)
and another (2012) 5 SCC 424 wherein it was held as under:-
"11. In Chief Enforcement Officer v. Videocon International
Ltd. (2008) 2 SCC 492 (SCC p. 499, para 19) the expression
"cognizance" was explained by this Court as "it merely means
'become aware of' and when used with reference to a court or a
Judge, it connotes 'to take notice of judicially'. It indicates the
point when a court or a Magistrate takes judicial notice of an
offence with a view to initiating proceedings in respect of such
offence said to have been committed by someone." It is entirely a
different thing from initiation of proceedings; rather it is the
condition precedent to the initiation of proceedings by the
Magistrate or the Judge. Cognizance is taken of cases and not of
persons. Under Section 190 of the Code, it is the application of
judicial mind to the averments in the complaint that constitutes
cognizance. At this stage, the Magistrate has to be satisfied whether
there is sufficient ground for proceeding and not whether there is
sufficient ground for conviction. Whether the evidence is adequate
for supporting the conviction can be determined only at the trial
and not at the stage of enquiry. If there is sufficient ground for
proceeding then the Magistrate is empowered for issuance of
process under Section 204 of the Code.
12. A "summons" is a process issued by a court calling upon a
person to appear before a Magistrate. It is used for the purpose
of notifying an individual of his legal obligation to appear before
the Magistrate as a response to violation of law. In other words,
the summons will announce to the person to whom it is directed
that a legal proceeding has been started against that person and
the date and time on which the person must appear in court. A
person who is summoned is legally bound to appear before the
court on the given date and time. Wilful disobedience is liable to
be punished under Section 174 IPC. It is a ground for contempt of
court.
13.Section 204 of the Code does not mandate the Magistrate to
explicitly state the reasons for issuance of summons. It clearly
states that if in the opinion of a Magistrate taking cognizance of
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an offence, there is sufficient ground for proceeding, then the
summons may be issued. This section mandates the Magistrate
to form an opinion as to whether there exists a sufficient ground
for summons to be issued but it is nowhere mentioned in the section
that the explicit narration of the same is mandatory, meaning
thereby that it is not a prerequisite for deciding the validity of the
summons issued." [underlining added]
16. After referring to Bhushan Kumar, Videocon International
Limited and other decisions, in Mehmood Ul Rehman v. Khazir
Mohammad Tunda and others (2015) 12 SCC 420, it was held as
under:-
"20. The extensive reference to the case law would clearly show
that cognizance of an offence on complaint is taken for the purpose
of issuing process to the accused. Since it is a process of taking
judicial notice of certain facts which constitute an offence, there
has to be application of mind as to whether the allegations in the
complaint, when considered along with the statements recorded
or the inquiry conducted thereon, would constitute violation of
law so as to call a person to appear before the criminal court. It is
not a mechanical process or matter of course. As held by this
Court in Pepsi Foods Ltd. and another v. Special Judicial
Magistrate and others (1998) 5 SCC 749 to set in motion the
process of criminal law against a person is a serious matter."
The above observations made in para (20) is in the context of
taking cognizance of a complaint. As per definition under Section 2(d)
Cr.P.C., complaint does not include a police report.
17. The learned senior counsel appearing for the respondentaccused relied upon various judgments to contend that while taking
cognizance, the court has to record the reasons that prima facie case is
made out and that there are sufficient grounds for proceeding against
the accused for that offence. The learned senior counsel appearing on
behalf of the respondent-accused relied upon judgments in the case of
Pepsi Foods Ltd. and Mehmood Ul Rehman to contend that while
taking cognizance, the Court has to record reasons that prima facie
case is made out and that there are sufficient grounds for proceeding
against the accused for that offence. On the facts and circumstances of
those cases, this Court held that the order of the Magistrate summoning
STATE OF GUJARAT v. AFROZ MOHAMMED HASANFATTA
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the accused must reflect that he has applied his mind to the facts of the
case and the law applicable thereto. However, what needs to be
understood is that those cases relate to issuance of process taking
cognizance of offences based on the complaint. Be it noted that as per
the definition under Section 2(d) Cr.P.C, 'complaint' does not include a
police report. Those cases do not relate to taking of cognizance upon a
police report under Section 190(1)(b) Cr.P.C. Those cases relate to
taking cognizance of offences based on the complaint. In fact, it was
also observed in the case of Mehmood UlRehman that "under Section
190(1)(b) Cr.P.C., the Magistrate has the advantage of a police report;
but under Section 190(1)(a) Cr.P.C., he has only a complaint before him.
Hence, the code specifies that "a complaint of facts which constitutes
an offence".
18. Section 190(1)(a) Cr.P.C. provides for cognizance of complaint.
Section 190(1)(b) Cr.P.C. deals with taking cognizance of any offence
on the basis of police report under Section 173(2) Cr.P.C. Complaint is
defined in Section 2(d) Cr.P.C. which reads as under:-
"2. Definitions.
.......
(d) "complaint" means any allegation made orally or in writing to
a Magistrate, with a view to his taking action under this Code,
that some person, whether known or unknown, has committed
an offence, but does not include a police report."
The procedure for taking cognizance upon complaint has been
provided under Chapter XV - Complaints to Magistratesunder Sections
200 to 203 Cr.P.C. A complaint filed before the Magistrate may be
dismissed under Section 203 Cr.P.C. if the Magistrate is of the opinion
that there is no sufficient ground for proceeding and in every such case,
he shall briefly record his reasons for so doing. If a complaint is not
dismissed under Section 203 Cr.P.C., the Magistrate issues process under
Section 204 Cr.P.C. Section 204 Cr.P.C.