Calcutta High Court: In an application under Section 340 of the Criminal Procedure Code, 1973 (CrPC) seeking a preliminary inquiry into the alleged fraudulent and illegal acts of the respondents with regards to appointment of arbitrator, a single-judge bench comprising of Moushumi Bhattacharya,* J., held that the respondents/proposed accused do not have a right to be heard at the stage of inquiry under Section 340(1) of the CrPC. The Court granted liberty to the petitioner to mention the matter for an early hearing on merits, indicating that the respondents have no right to be heard in the present application.
Brief Facts
In the instant matter, the petitioner filed an application under Section 340 of the CrPC seeking a preliminary inquiry into alleged fraudulent and illegal acts by the respondents in connection with petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the Act), seeking the appointment of an arbitrator.
Parties’ Contentions
The petitioner while citing various precedents, including Pritish v. State of Maharashtra, (2002) 1 SCC 253, contended that there is no obligation to provide an opportunity for hearing to the proposed accused at the pre-referral stage. The petitioner argued that Section 340(1) focuses on the court forming an opinion on the expediency of an inquiry, without determining guilt or innocence.
The respondents vehemently argued that proceedings under Section 340 of the CrPC necessitate an opportunity for the proposed accused to be heard. The respondents emphasised on the wording of the provision, asserting that the term “inquiry” implies court intervention, requiring the proposed accused to be heard before initiating an inquiry into the offense.
Moot Point
Whether respondents have right to be heard during the proceedings under Section 340 of the CrPC?
Relevant Legal Provision
Section 340(1) of the CrPC — outlines the court’s powers to order a preliminary inquiry into an offense referred to in Section 195(1)(b) in connection with a proceeding or document produced in court.
Court’s Observation
The Court examined Pritish (Supra) where the Supreme Court emphasised that Section 340(1) does not mandate a hearing for the proposed accused at the pre-referral stage. The Court clarified that the preliminary inquiry’s purpose is not to decide guilt or innocence but to determine the need for an inquiry in the interest of justice. The Court highlighted key points from Pritish (Supra), including the discretionary nature of a preliminary inquiry, the absence of a mandatory requirement for a complaint, and the preservation of the accused’s right to be heard during subsequent proceedings before the Magistrate. Reference is made to State of Punjab v. Jasbir Singh, 2022 SCC OnLine SC 1240, where a larger bench affirmed Pritish (Supra), holding that the proposed accused has no right to be heard before the court directs a preliminary inquiry under Section 340(1) of the CrPC.
Bound by the legal principles established in Pritish (Supra) and later affirmed in subsequent judgments, the Court held that the respondents do not have the right to be heard at the inquiry stage under Section 340(1) of the CrPC.
Court’s Decision
The Court concluded that the petitioner should be heard in the present proceeding, and the respondents do not have a right to be heard in this application. The petitioner is granted liberty to mention the matter at an early date for a hearing on merits.
[Al Amin Garments Haat (P) Ltd. v. Jitendra Jain, 2024 SCC OnLine Cal 110, order dated 05-01-2023]
*Judgment by Justice Moushumi Bhattacharya
Advocates who appeared in this case :
Mr. Rajeev Kumar Jain, Mr. Sounak Sengupta, Ms. Sreyasi Chatterjee, Ms. Reitambhara P., Counsel for the Petitioner
Mr. S. N. Mitra, Sr. Adv., Mr. Rajarshi Dutta, Mr. Deepak Kr. Jain, Counsel for the Respondent
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