Whether magistrate can direct investigation by CBI?

 As the present discussion is restricted to the question whether a magistrate can direct the CBI to conduct investigation in exercise of his powers under Section 156(3) of the Code it is unnecessary for us to travel beyond the scope of that issue. We, therefore, reiterate that the magisterial power cannot be stretched under the said sub-section beyond directing the officer in charge of a police station to conduct the investigation.

IN THE SUPREME COURT OF INDIA

Appeal (crl.) 1163-66 of 1998, 
Decided On: 19.01.2001

 Central Bureau of Investigation through S.P., Jaipur vs.  State of Rajasthan and Ors.

Hon'ble Judges/Coram: 
K.T. Thomas and Mr. R.P. Sethi
Citation: Citation : (2001 )3SCC 333

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Whether Special Judge can direct CBI to investigate criminal case under S 156 of CRPC??

After having considered the relevant provisions of the Code, we have no doubt in our mind that the Special Judge, Aurangabad exceeded his jurisdiction in directing investigation under Section 156(3) of the Code by CBI by the impugned order. The learned Special Judge failed in appreciating that CBI is an independent establishment created under the provisions of Delhi Special Police Establishment Act and in view of the provisions of Section and of the said Act, he was not empowered to direct investigation by it. The learned Special Judge further did not appreciate that CBI is not a local police station within his jurisdiction so as to invoke section 156(3) of the Code in directing investigation by it. 

IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

Criminal Writ Petition No. 1166 of 2010

The Superintendent of Police vs. Satish and Ors. 

Dated: 18.06.2015
Coram;
Borde and Bora JJ

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When offence under S 409 of IPC is not made out in case of govt contract?

 Some of the peculiar factors to be noted in this case are as under : (1) It took Cbi 8 years to file the chargesheet and that too without the requisite documents which would substantiate the said charges and without making K.D. Mitra, authorised representative of the contractor company a co-accused notwithstanding the fact that K.D. Mitra is the one who was taken delivery of the said goods from Delhi site and he had also got the indented material weighed at the site at Delhi. (2) This is not a case of vicarious liability and thirdly, it is not show as to how section 409, Indian Penal Code is attracted in a case on present nature because the petitioner is neither a public servant nor a banker nor a merchant, broker, Attorney nor agent. (3) It is also not shown as to how delivery of material which was taken by K.D. Mitra could be attributed to the present petitioner without any specific evidence of entrustment. In a case under Section 409 Ipc, the factum of entrustment and the factum of misappropriation of the entrusted articles is absolutely necessary. In the absence of these two essential ingredients, no charge can be framed underSection 409 Indian Penal Code (See Janeshwar Das Aggarwal v. State of Uttar Pradesh, ). In the absence of proof of entrustment, there can be no question of accused being found guilty of the offence (See Roshan Lal Raina v. State of Jammu & Kashmir, ). The petitioner, who is the Managing Partner of M/s B.K. Roy Choudhary & Company and is based at Calcutta, which is the Head Office of the said firm, had signed the aforesaid documents for the purposes of accounts irrespective of the fact that his Field Officer who was present at the site at Delhi, had taken the actual physical delivery after due weighment and he had also signed the necessary transfer entries in Mas register. Peculiarly, the Court has not summoned any of the other five co-accused. (4) There is no evidence shown of the petitioner being present on site for taking delivery of the material. (5) The documents which are signed by the contractor, could be to ascertain the civil liability in respect of each contract for costing and accounting purposes by transferring the value of the goods transferred from one site store to another site store. Under the terms of the contract/agreement awarding the contract, the Clauses-10 and 42(i) may be considered, which for the convenience are reproduced hereunder:- Clause-10 "If the specification or schedule of items provides for the use of any special description of materials to be supplied from Engineer-in-Charge's stores, or it is required that the contractor shall use certain stores to be provided by the Engineer-in-Charge as shown in the schedule of materials hereto annexed, the contractor shall be bound to procure and shall be supplied such materials and stores as are from time to time required to be used by him for the purposes of the contract only, and the value of the full quantity of materials and stores so supplied at the rates specified in the said schedule of materials may be set off or deducted from any sums then due, or thereafter to become due to the contractor under the contract, or otherwise or against or from the security deposit, or the proceeds of sale thereof if the same is held in government Securities, the same or a sufficient portion thereof being in this case sold for the purpose. All materials so supplied to the contractor shall remain the absolute property of government and shall not be removed on any account from the site of the work, and shall be at all times open to inspection by the Engineer-in-Charge. Any such materials remaining unused and in perfectly good condition at the time of the completion or determination of the contract shall be returned to the Engineer-in-Charge at a place directed by him, if by a notice in writing under his hand he shall so require, but the contractor shall not be entitled to return any such materials unless with such consent, and shall have no claim for compensation on account of any such materials so supplied to him as aforesaid not being used by him or for any wastage in or damage to any such materials. Provided that the contractor shall _____ no case be entitled to any compensation or damages on account of any delay in supply or non-supply thereof all or any such materials and stores." Clause-42(i) "The contractor shall see that only the required quantities of materials are got issued. Any such material remaining unused and in perfectly good condition at the time of completion and determination of the contract shall be returned to the Engineer-in-charge at a place where directed by him, if by a notice in writing under his hand, he shall so require. Credit for such material will be given at the prevailing market rate not exceeding the amount charged from him, excluding the storage charges levelled at the time of issue of materials to him. The contractor shall also not be entitled to cordage and incidental charges for returning the surplus materials from and to the stores wherefrom they were issued..."; Reading of the said clauses does not in any manner make out a case of entrustment. The delivery of the said materials and its transfer from one site to another and all the documentation primarily is a part of accounting procedure so that the cost of the material which is actually used at a different site, does not get added on to the first site wherefrom the material is shifted. The material which is supplied to the contractor is in the nature of sale from government to the contractor and the contractor unless and until the department required contractor by giving a notice in writing under the signatures of Engineer-in-Charge, cannot exercise his option to return the material. As and when the material is returned, the contractor is given credit for the value of the returned material. In the chargesheet, there is no allegation that at any point of time, the department had required the contractor to return unused material to the department because so far as Delhi contract is concerned, on the basis of Transfer Entries, Unstamped Receipt and Advice of Transfer of Debt, the account of the contractor appears to have been debited with the value of the materials transferred. There is no charge or allegation of misappropriation in respect of Tor Steel and cement indented by K.D. Mitra which was received at the transferee site. I am informed that arbitration is already pending in respect of the discrepancy in mild steel valued at Rs. 41,824.00 . As I have already noticed hereinabove in terms of Clauses-10 and 42(i) of the contract, there does not appear to be any case for entrustment. In the case of State of Gujarat v. Jaswantlal Nathalal, reported as 1968 Crl.L.J. 803, the Hon'ble Supreme Court had to deal with the question of entrustment and in para-8 observed as under:- "8.The term "entrusted" found inSection 405, Indian Penal Code governs not only the words "with the property" immediately following it but also the words "or with any dominion over the property" occurring thereafter - see Velji Raghavji Patel v. State of Maharashtra, . Before there can be any entrustment there must be a trust meaning thereby an obligation annexed to the ownership of property and a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another or of another and the owner. But that does not mean that such an entrustment need conform to all the technicalities of the law of trust - see Jaswantrai Manilal v. State of Bombay, 1966 Scr 483 at pp.498-500 = (AIR 1956 Sc 475 at pp.582-583). The expression "entrustment" carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Further the person handing over the property must have confidence in the person taking the property so as to create a judiciary relationship between them. A mere transaction of sale cannot amount to an entrustment. It is true that the government had sold the cement in question to Bss solely for the purpose of being used in connection with the construction work referred to earlier. But that circumstance does not make the transaction in question anything other than a sale. After delivery of the cement, the government had neither any right nor dominion over it. If the purchaser or his representative had failed to comply with the requirements of any law relating to cement control, he should have been prosecuted for the same. But we are unable to hold that there was any breach of trust."

(4) The offence alleged can be constituted only if accused had failed or refused to return he material which was held by him is trust which is not the case here. The transaction being that of sale and that the department having never exercised its option for return of the goods, there was no question of any misappropriation on failure to return or refusal to return the said material return thereof having not been sought by the department. Failure to return such material could not, in any event, constitute an offence under Section 409 Indian Penal Code because an independent contractor cannot be described as an agent of the department. Even assuming that the contractor had any dominion over the material and there was an element of entrustment and some offence under Section 406 could be constituted. It is pointed out that the said offence underSection 406 is punishable with imprisonment of three years and, therefore, the limitation for prosecution under Section 406 is three years from the date of commission of the offence and in the present case, launching of prosecution would be hopelessly time barred. Apart from all the a foregoing facts and circumstances and keeping in view that this is not a case of vicarious liability, it is amazing to note how in the face of the facts that the petitioner had not indented the material nor did he get it weighed nor did he accept the actual physical delivery thereof and in the absence of evidence that the petitioner had disposed of any of the material in question or had refused to return the same, or acknowledged liability, could the offence under Section 409 Indian Penal Code be made out. No criminal liability can be created unless the involvement of the accused himself is substantiated by evidence, which in the present case, appears to be absent. Unless vicarious liability is created by a special statute, no such liability can give rise to criminal liability in respect of the petitioner, particularly in view of the allegations that all acts were being performed by the individual local representatives of the firm.

Delhi High Court

B.K. Roy Choudhary vs State (Central Bureau Of ... on 15 July, 1997

Equivalent citations: 1997 IVAD Delhi 490, 1997 CriLJ 4204, 1998 (1) Crimes 95, 68 (1997) DLT 484, 1997 (42) DRJ 615

Bench: J Mehra

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Whether accused should be heard prior to transferring investigation to CBI?

Criminal Trial

Generally - Natural justice - Opportunity of hearing to, and impleadment of accused - Writ petition by father seeking

impartial investigation into murder of his son, a social activist, as politically influential persons were allegedly involved -

High Court's directions for transfer of investigation from State Police to CBI - Grant of opportunity of hearing and

impleadment to a potential accused (appellant herein) not a party to writ petition before High Court, prior to issuance of

said direction - Whether necessary - Held, there is no obligation on High Court to either hear or to make potential

accused (appellant herein) a party to the proceedings before directing that the investigation be conducted by CBI - It is

not necessary to give an opportunity of hearing to proposed accused as a matter of course - If prior notice and an

opportunity of hearing have to be given in every criminal case before taking any action against the accused person, it

would frustrate the entire objective of an effective investigation - In the present case, the appellant was not even an

accused at the time when the impugned order was passed by High Court,

SUPREME COURT OF INDIA

Dinubhai Boghabhai Solanki v. State of Gujarat, (2014) 4 SCC 626

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