Supreme Court Allows Counter FIR in Fraud Case: P. Sreekumar vs. State of Kerala (2018)

Date of the Judgment: March 19, 2018

Citation: [Not Available in Source]

Judges: R.K. Agrawal, J. and Abhay Manohar Sapre, J.

Can an individual file a second FIR if it is a counter-complaint related to the same incident for which the first FIR was filed? The Supreme Court of India addressed this question in a case involving allegations of fraud within a charitable trust. The court examined whether a counter-complaint, even if related to the same incident, can be considered valid and tried on its merits. This judgment clarifies the circumstances under which a second FIR is permissible, especially when it presents a different version of events. The bench comprised Justices R.K. Agrawal and Abhay Manohar Sapre, with the judgment authored by Justice Abhay Manohar Sapre.

Case Background

The case revolves around the Vidyodaya Trust, a public charitable trust involved in educational activities in Kerala. The appellant, P. Sreekumar, was a Chief Executive Trustee, while respondent No. 3 was a Treasurer. On October 17, 2001, a Trustee (respondent No. 2) filed a private complaint alleging that the appellant, respondent No. 3, and three bank officials had conspired to defraud the Trust of approximately Rs. 42 lakhs. This led to the registration of an FIR (Crime Case No. 817 of 2001) against them. Subsequently, the appellant filed another FIR (FIR No. 5 of 2002) against respondent No. 3, accusing him of fraud and forgery. The police then submitted a charge-sheet against respondent No. 3 in the second FIR. The High Court quashed the second FIR, leading to the present appeal before the Supreme Court.

Timeline

Course of Proceedings

The initial complaint by respondent No. 2 led to the registration of Crime Case No. 817 of 2001 against the appellant, respondent No. 3, and three bank officials. The police, after investigation, filed a final report stating no case against the appellant and the bank officials. Respondent No. 2 then filed a protest petition, and the Chief Judicial Magistrate issued summons to the appellant and respondent No. 3. Meanwhile, the appellant filed FIR No. 5 of 2002 against respondent No. 3, leading to a charge-sheet against him. Respondent No. 3 then filed a Criminal M.C. No. 2641 of 2007 in the High Court seeking to quash the second FIR. The High Court allowed respondent No. 3’s petition and quashed the FIR against him, while dismissing the appellant’s petition to quash the proceedings against him.

Legal Framework

The case involves the interpretation of the Code of Criminal Procedure, 1973, specifically concerning the registration of multiple FIRs for the same incident. The relevant provisions of the Indian Penal Code, 1860 cited in the FIRs include:

• Section 406 of the Indian Penal Code, 1860: “Punishment for criminal breach of trust”
• Section 408 of the Indian Penal Code, 1860: “Criminal breach of trust by clerk or servant”
• Section 409 of the Indian Penal Code, 1860: “Criminal breach of trust by public servant, or by banker, merchant or agent”
• Section 420 of the Indian Penal Code, 1860: “Cheating and dishonestly inducing delivery of property”
• Section 465 of the Indian Penal Code, 1860: “Punishment for forgery”
• Section 467 of the Indian Penal Code, 1860: “Forgery of valuable security, will, etc.”
• Section 468 of the Indian Penal Code, 1860: “Forgery for purpose of cheating”
• Section 471 of the Indian Penal Code, 1860: “Using as genuine a forged document or electronic record”
• Section 473 of the Indian Penal Code, 1860: “Making or possessing counterfeit seal, etc., with intent to commit forgery punishable otherwise”
• Section 477 of the Indian Penal Code, 1860: “Fraudulent cancellation, destruction, etc., of will, authority to adopt, or valuable security”
• Section 34 of the Indian Penal Code, 1860: “Acts done by several persons in furtherance of common intention”

The Court also considered Section 482 of the Code of Criminal Procedure, 1973, which deals with the inherent powers of the High Court to prevent abuse of the process of law.

Arguments

Appellant’s Arguments:

• The appellant argued that the second FIR filed by him was a counter-complaint against respondent No. 3, and thus, was legally maintainable.
• He contended that the High Court erred in quashing the second FIR without considering the law on the subject, particularly the principle that a counter-complaint is permissible.
• The appellant submitted that the first FIR was against five persons based on one set of allegations, while the second FIR was based on different allegations against respondent No. 3.

Respondent No. 3’s Arguments:

• Respondent No. 3 argued that he should not be subjected to two trials on the same set of facts and for the same offences in two different courts.
• He contended that the second FIR and the charge-sheet filed against him should be quashed.

Respondent No. 2’s Arguments:

• Respondent No. 2 supported the appellant’s arguments.
• Respondent No. 2, the original complainant, argued that the second FIR was a valid counter-complaint and should be allowed to proceed.

Issues Framed by the Supreme Court

The main issue framed by the Supreme Court was:

1. Whether the High Court was justified in quashing the FIR/charge-sheet filed against respondent No. 3 and all consequential proceedings arising out of the FIR/charge-sheet pending as C.C. No. 2682 of 2002 on the file of JMFC-II, Ernakulum.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The High Court placed reliance on State of Haryana & Ors. vs. Bhajanlal, (1992) Supp(1) SCC 335, Madhu Limaye vs. State of Maharashtra, 1977 (4) SCC 551 and R.P. Kapur vs. State of Punjab, AIR 1960 SC 866. The Supreme Court noted that these cases laid down general principles of law relating to the exercise of inherent powers under Section 482 of the Code of Criminal Procedure, 1973, but did not address the specific issue of counter-complaints.
• The Supreme Court relied on Upkar Singh vs. Ved Prakash & Ors., (2004) 13 SCC 292, where it was held that a second complaint in regard to the same incident filed as a counter-complaint is permissible under the Code. The Court quoted from the judgment: “if in regard to a crime committed by the real accused he takes the first opportunity to lodge a false complaint and the same is registered by the jurisdictional police then the aggrieved victim of such crime will be precluded from lodging a complaint giving his version of the incident in question, consequently he will be deprived of his legitimated right to bring the real accused to book. This cannot be the purport of the Code.”
• The Supreme Court also relied on Surender Kaushik & Ors. vs. State of U.P. & Ors., (2013) 5 SCC 148, which reiterated the principle that while two FIRs for the same incident are not permissible, a counter-FIR is an exception. The Court quoted from the judgment: “What is prohibited is any further complaint by the same complainant and others against the same accused subsequent to the registration of the case under the Code, for an investigation in that regard would have already commenced and allowing registration of further complaint would amount to an improvement of the facts mentioned in the original complaint.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure that all parties have an opportunity to present their version of events, especially in cases where there are conflicting accounts of the same incident. The Court emphasized that preventing a counter-complaint would allow an accused to lodge a false complaint first and prevent the real victim from seeking justice. The Court also considered the fact that the second FIR was filed by a different person, the appellant, and contained different allegations than the first FIR.

Fact:Law Ratio

Logical Reasoning:

Key Takeaways

• A second FIR is maintainable if it is a counter-complaint arising from the same incident but filed by a different person with different allegations.
• The concept of “sameness” in the context of FIRs does not encompass counter-complaints.
• The High Court’s inherent powers under Section 482 of the Code of Criminal Procedure, 1973, should be exercised cautiously and should not be used to quash valid counter-complaints.
• The Magistrate should examine all issues arising in the case from all angles and proceed against any person involved in the alleged offences.

Directions

The Supreme Court directed the Magistrate to try and decide the case on merits within a year, examining all issues arising in the case and proceeding against any person(s) found involved in the alleged offenses.

Development of Law

The ratio decidendi of this case is that a counter-complaint, even if related to the same incident, is permissible and should be tried on its merits. This judgment clarifies the exception to the general rule against multiple FIRs for the same incident. It reinforces the principle that all parties should have an opportunity to present their version of events, especially when there are conflicting accounts. This decision also highlights that the High Court’s inherent powers should not be used to quash valid counter-complaints.

Conclusion

The Supreme Court allowed the appeal, setting aside the High Court’s order that had quashed the second FIR filed by the appellant. The Court held that the second FIR was a valid counter-complaint and should be tried on its merits. This decision clarifies that a counter-complaint is permissible, even if related to the same incident, especially when it presents a different version of events. The case was restored to the Magistrate for trial on merits.