Multiple FIRs Allowed in Co-operative Society Fraud: Supreme Court Judgment (2017)

Date of the Judgment: November 15, 2017
Citation: (2017) INSC 976
Judges: R.K. Agrawal, J., Abhay Manohar Sapre, J.
Can multiple FIRs be filed for similar offenses involving different entities but the same accused? The Supreme Court of India recently addressed this question in a case involving alleged fraud in multiple co-operative housing societies. The Court overturned a High Court decision that had quashed multiple FIRs, ruling that each society’s case warranted separate investigation due to differing facts and circumstances.

Case Background

The case involves six FIRs registered against members of five different Co-operative Housing Societies in Gujarat. These FIRs alleged offenses under Sections 406, 409, 420, 465, 467, 468, 471, 120-B, and 477-A of the Indian Penal Code, 1860. The accused, who were office bearers of these societies, were alleged to have committed fraud and misappropriation of funds. The first FIR was registered on May 21, 2012, and the subsequent five FIRs were registered on February 19, 2013. The accused then sought to quash the five FIRs, arguing they were repetitive of the first one.

Timeline

Course of Proceedings

The accused persons filed Criminal Applications under Section 482 of the Code of Criminal Procedure, 1973 in the High Court of Gujarat seeking to quash the five FIRs registered on February 19, 2013. The High Court allowed the applications, quashing the five FIRs, and directed that the investigation in those FIRs be merged with the investigation of the first FIR. Aggrieved by this decision, the members of the societies appealed to the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of the powers of the High Court under Section 482 of the Code of Criminal Procedure, 1973, which allows the High Court to exercise its inherent powers to prevent abuse of the process of any court or to secure the ends of justice. The offenses alleged in the FIRs were under Sections 406, 409, 420, 465, 467, 468, 471, 120-B, and 477-A of the Indian Penal Code, 1860, which deal with criminal breach of trust, cheating, forgery, and falsification of accounts.

Arguments

The accused argued that the five FIRs were repetitive of the first FIR, as they were based on the same allegations and involved the same parties. They contended that once the investigation in the first FIR was completed, it would cover all the offenses alleged in the subsequent FIRs. The State, on the other hand, argued that each FIR related to a different co-operative society, with different members, areas of operation, and transactions, and therefore, each FIR should be investigated independently.

Issues Framed by the Supreme Court

The main issue before the Supreme Court was:

1. Whether the High Court was justified in quashing the five FIRs.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authority:

Judgment

What weighed in the mind of the Court?

The Supreme Court emphasized the distinct nature of each co-operative society and the need for a thorough investigation into each case. The Court highlighted that the societies had different members, areas of operation, and transactions, and therefore, the allegations of fraud needed to be investigated separately. The Court also noted that the High Court had acted as an appellate court by examining the facts in detail, which was not within its powers under Section 482 of the Code of Criminal Procedure, 1973.

Logical Reasoning

The Court stated, “We find that all the five Co-Operative Societies against whom the afore-mentioned FIRs were registered are different, their members are different, their area of operation is different, the lands which were sold/transferred are also situated in different areas…”. The Court further observed, “In our considered opinion, it is only when on reading the FIR, a sheer absurdity in the allegations is noticed and when no prima facie cognizable case is made out on its mere reading due to absurdity in the allegations… then the Court may, in appropriate case, consider it proper to quash the second FIR.” Finally, the Court concluded, “The appeals thus succeed and are allowed. The impugned judgment is set aside.”

Key Takeaways

• Multiple FIRs can be registered for similar offenses if they involve different entities, even if the accused are the same.
• Each case must be investigated independently based on its unique facts and circumstances.
• High Courts should not act as appellate courts when exercising their inherent powers under Section 482 of the Code of Criminal Procedure, 1973.

Directions

The Supreme Court directed that all six FIRs be investigated separately. It also directed that once the charge sheets are filed, the cases should be clubbed together and tried by one competent court. The parties were given liberty to approach the High Court for clubbing and transfer of cases to one court.

Development of Law

The ratio decidendi of this case is that multiple FIRs can be registered for similar offenses if they involve different entities with distinct facts and circumstances. This decision clarifies the scope of investigation in cases involving multiple entities and reinforces the principle that each case should be examined on its own merits.

Conclusion

The Supreme Court’s decision in this case emphasizes the importance of thorough and independent investigations in cases involving multiple entities. It clarifies that the High Court cannot quash FIRs based on a detailed factual examination at the investigation stage. The judgment ensures that all allegations of fraud are properly investigated, and the accused are brought to trial under the law.