- Bookmark
- Share
- CaseIQ
State Of Tamil Nadu v. S. Martin And Others
Factual and Procedural Background
On 12-3-2012, Crime No. 304 of 2012 was registered at Adambakkam Police Station, Chennai, on information received by Inspector M. Nataraj that large sums of unaccounted cash were secreted in the residence of Accused 1, Nagarajan. A raid led to the seizure of Rs 7.20 crores from Nagarajan and Rs 50 lakhs from Accused 3, Murthy. The First Information Report invoked Sections 294-A, 420 and 120-B of the Indian Penal Code, alleging that Accused 1, together with Accused 2 (Martin) and Accused 3 (Murthy), had illegally printed and sold lottery tickets of the States of Sikkim, Kerala and Maharashtra.
During investigation 3625 lottery tickets of various States were recovered. Seeking anticipatory bail, Accused 2 relied on an unregistered Agreement of Sale dated 2-3-2012 whereby his wife purportedly paid Rs 7.3 crores in cash to Accused 3 for a house in Anna Nagar. The police countered that the non-judicial stamp paper used for the agreement had been issued only on 9-3-2012 and sold on 13-3-2012, casting doubt on its genuineness.
While investigation was pending, Accused 2 and 3 filed Criminal Original Petitions Nos. 13106 and 14971 of 2013 under Section 482 CrPC in the Madras High Court to quash the FIR. On 15-10-2014 the High Court allowed the petitions, holding that the case fell within categories 2, 3, 5 and 7 of State of Haryana v. Bhajan Lal and that the prosecution materials disclosed no offence.
The State of Tamil Nadu filed the present appeals by special leave to the Supreme Court, challenging the High Court’s decision.
Legal Issues Presented
- Whether the Madras High Court was justified in quashing Crime No. 304 of 2012 under Section 482 CrPC while investigation was still in progress.
- Whether the facts alleged in the FIR and the materials collected satisfied any of the categories laid down in Bhajan Lal so as to warrant exercise of the High Court’s inherent powers.
Arguments of the Parties
State of Tamil Nadu (Appellant)
- Urged that the seizure of Rs 7.2 crores in cash from Accused 1’s premises and the respondents’ admission of possession constituted sufficient material to continue investigation.
- Contended that the Agreement of Sale relied on by the accused was prima facie dubious because the stamp paper used post-dated the alleged agreement.
- Maintained that the investigation was incomplete; therefore the High Court’s interference was premature and contrary to the principles in Bhajan Lal.
Respondent-Accused
- Relied on the unregistered Agreement of Sale dated 2-3-2012 to explain possession of the seized cash as advance payment for purchase of property.
- Argued that mere custody of unaccounted money is not an offence specified in the Penal Code and that the prosecution materials lacked ingredients of Sections 294-A, 420 and 120-B.
- Invoked categories 2, 3, 5 and 7 of Bhajan Lal to submit that continuation of the investigation would amount to abuse of process of law.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 | Enumerates seven categories wherein criminal proceedings may be quashed under Section 482 CrPC. | The High Court relied on categories 2, 3, 5 and 7 to quash the FIR. The Supreme Court held that the High Court misapplied these categories because material facts—including the recovery of huge unexplained cash and doubts about the sale agreement—warranted completion of investigation. |
Court's Reasoning and Analysis
The Supreme Court found the High Court’s interference “completely incorrect and uncalled for” at an interim stage. Two pivotal circumstances—the seizure of Rs 7.2 crores accepted by the accused and the questionable authenticity of the sale agreement—were sufficient, in the Court’s view, to justify continuation of investigation.
The Court noted that the stamp paper for the alleged agreement was issued after the date of execution claimed by the accused, casting doubt on their explanation. Whether the accused could legitimately account for possession of such large sums, and whether the lottery tickets were genuine or forged, were factual matters to be examined only after full investigation.
By extinguishing the investigation, the High Court had effectively short-circuited the criminal process without permitting the investigating agency to reach logical conclusions. Such premature quashing, the Supreme Court emphasized, is contrary to the narrow and exceptional scope of Section 482 CrPC as delineated in Bhajan Lal.
Holding and Implications
Appeals Allowed; High Court judgment set aside. Crime No. 304 of 2012 is restored and the State is at liberty to complete the investigation and proceed in accordance with law.
Implications: The decision reiterates that High Courts must exercise extreme caution before invoking Section 482 CrPC to quash proceedings at the investigation stage. Mere doubts raised by the accused, when significant incriminating material exists and the investigation is incomplete, do not place a case within the exceptional categories of Bhajan Lal. Although the ruling sets no new precedent, it underscores the principle that quashing should not thwart legitimate investigative avenues.
Uday U. Lalit, J.— Original Accused 2 and 3 approached the High Court of Judicature at Madras by filing petitions under Section 482 CrPC, namely, OPs Nos. 13106 and 14971 of 2013 respectively seeking quashing of Crime No. 304 of 2012 registered pursuant to FIR No. 304 of 2012 dated 12-3-2012 with Adambakkam Police Station, Chennai. Said petitions were allowed by the High Court vide its common judgment and order dated 15-10-2014 2014 SCC OnLine Mad 9127 which is presently under challenge at the instance of the State of Tamil Nadu in these appeals by special leave.
2. The aforesaid FIR was registered pursuant to reporting by M. Nataraj, Inspector of Police, Crime, Adambakkam Police Station, Chennai. The FIR, inter alia, stated that the informant had received information that several crores of unaccounted money was stashed in the house of Accused 1, Nagarajan pursuant to which a raid was conducted and cash amounting to Rs 7,20,05,000 stored in three bags was found. The FIR further noted that said Accused 1 Nagarajan had admitted that he and his associates, namely, Accused 2, Martin and Accused 3, Murthy had illegally printed lottery tickets of the States of Sikkim, Kerala and Maharashtra and sold the same without obtaining any permission and in the process had amassed enormous profit and the cash in question represented the same. Rs 50 lakhs in cash were also seized from the house of Accused 3 Murthy. A-1 Nagaraj was immediately arrested and Crime No. 304 of 2012 was registered under Sections 294-A, 420 and 120-B of the Penal Code, 1860 and the case was forwarded for investigation.
3. During the course of investigation 3625 numbers of lottery tickets of various States were recovered. In his application for anticipatory bail, Accused 2 Martin relied upon a document i.e. Agreement of Sale dated 2-3-2012. According to this unregistered agreement, the wife of Accused 2 Martin named Mrs Leema Rose had agreed to purchase House No. 4, Old No. 56, 3rd Main Road, Anna Nagar, Chennai-40 from said Accused 3 Murthy and had paid Rs 7.3 crores by way of advance in cash. It was submitted that the seized cash in question represented such amount received in cash.
4. While the matter was still under investigation, Crl. OP Nos. 13106 and 14971 of 2013 were filed on 21-5-2013 and 11-6-2013 respectively, praying, inter alia, quashing of aforesaid Crime No. 304 of 2012. A common counter-affidavit dated 25-6-2013 refuting all material allegations was filed by Assistant Commissioner of Police on behalf of the State of Tamil Nadu. It was submitted, inter alia, that the unregistered agreement dated 2-3-2012 was on a stamp paper which was issued by the State Government to the stamp vendor on 9-3-2012 and the same was sold to one Vimla on 13-3-2012. It was further submitted that the lottery tickets recovered during investigation were sent to the respective State Governments to check whether they were genuine and the report was still awaited. The counter-affidavit further submitted that the investigation was still incomplete.
5. The High Court by its judgment and order dated 15-10-2014 2014 SCC OnLine Mad 9127 allowed said Crl. OP Nos. 13106 and 14971 of 2013 and quashed Crime No. 304 of 2012 in its entirety. The High Court was of the view that the present case came within categories 2, 3, 5 and 7 as laid down by this Court in State of Haryana v. Bhajan Lal 1992 Supp (1) SCC 335. It further observed: (S. Martin case 2014 SCC OnLine Mad 9127, SCC OnLine Mad paras 18 & 19)“18
. In this case, there is no element of impersonation or falsely claiming to be authorised to make a false document. …
19. As far as the present case is concerned, the custody of unaccounted money is not specified as to be an offence and the act of creating ante-dated document by allegedly using forged non-judicial stamp papers is also not specified as offence under the Code.”
The High Court finally summed up: (SCC OnLine Mad para 21)
“21. Thus, for the reasons stated above, this Court is of the view that neither the case of the prosecution discloses any of the ingredients of the offences charged against the accused nor the accused can be subjected to face the ordeal of trial by reason of improbable nature of prosecution case, as such, the FIR in Criminal No. 304 of 2012 pending on the file of the respondent police is liable to be quashed in entirety against the petitioners herein as well as non-petitioners.”
6. This Court issued notice on 10-7-2015. The counsel on behalf of respondents appeared and produced on record certain documents along with their affidavit-in-reply. The matter was thereafter taken up for hearing. We heard M. Yogesh Kanna, learned Advocate-on-Record for the State and Mr Amarendra Sharan, Mr Mukul Rohatgi and Dr A.M. Singhvi, learned Senior Advocates for the respondent-accused.
7. In our view the assessment made by the High Court at a stage when the investigation was yet to be completed, is completely incorrect and uncalled for. Presence of two crucial facts was enough to let the investigation go on, namely, recovery of huge amount of cash of Rs 7.2 crores from the house of one of the accused and that such recovery was accepted by the accused. The explanation given by them about the alleged transaction of agreement of sale and receipt of cash in pursuance thereof does not prima facie appear to be correct. The agreement is stated to have been entered on 2-3-2012 while the stamp paper in question was issued by the relevant department on 9-3-2012 to the vendor which was later sold to lady named Vimla on 13-3-2012. Whether the possession of huge cash amounting to Rs 7.2 crores can be explained by the accused and whether such explanation be accepted or not, are all matters which will be gone into at the relevant stage in the proceedings. The investigation in any case ought not to have been set at naught but it ought to have been permitted to be taken to its logical conclusion.
8. We are not expressing any opinion on merits or demerits of either the case of the prosecution or the defence of the accused but we are of the firm opinion that while the investigation was still incomplete, the High Court ought not to have interfered in the present case. Leaving all questions open to be agitated at appropriate stages in the proceeding, we set aside the view taken by the High Court and allow these appeals. Consequently Crime No. 304 of 2012 stands restored to its file and the appellant is free to conduct investigation and take the matter to its logical conclusion.
Alert