FIR in Economic Offences

AYUB S. PATHAN,
Legal Adviser,
State CID (Crime), Pune
Date – 14/08/2009
*
▪ F.I.R. and contents of F.I.R.,
▪ responsibility of SHO before drafting the FIR of
economic offences,
▪ Delay in F.I.R.,
▪ Panchnama,
▪ Case diary,
▪Various Supreme Court Rulings in these connections,
And
▪ → We can restate the subject for convenience as under.
" F.I.R. in economic offences, how it differs from
the F.I.R. of other offences and Initiation of
Investigation".
First of all we have to find ‘what economic offence’ means? Actually the term ‘economic offence’ so far is not defined in any law then we must try to define the same. Shall I ask somebody to define the same?
Define Economic offence –
Economic – Matter connected with the trade and industry, profitable, commercial, financial, monetary or the money making things.
Offence - Any illegal act, bridge crime or violation as per the dictionary meaning.
Though new terminology the concept is not new to law actually the frauds involving the monitory losses or gains which we took or registered it within the ambit of section 405,406,408,409,420,467,468,471, R/W. Read with 120 (B) of Indian Penal Code and also u/sec. 18, 24 and 35A of the Banking Regulation Act, are term as economic offences in the present time, considering growth of industrial, financial, co-operative and various Government schemes involving huge amounts.
Therefore factually the FIR which should be recorded for these offences will not defer legally. But some precautions and care should be taken to avoid the discrepancies while recording the same which I will deal the same in the letter part of this note.
As we all know what FIR means which actually is not defined anywhere in Cr.P.C.. But to understand the same we have to go to section 154 of Cr.P.C. which run as under-
Section 154 -
Information in cognizable cases – (1) Every information relating to the commission of a cognizable offence, if given to an officer in charge of a police station, shall be reduced to writing by him or under his direction, and be read over to the informant; and every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it, and the substance thereof shall be entered in a book to be kept by such officer in such form as the state Government may prescribe in this behalf.
(2) A copy of the information as recorded under sub-section (1) shall be given forthwith, free of cost, to the informant.
(3) Any person aggrieved by refusal on the part of an officer in charge of a police station to record the information referred to in sub-section (1) may send the substance of such information, in writing and by post, to the Superintendent of Police concerned who, if satisfied that such information discloses the commission of a cognizable offence, shall either investigate the case himself or direct an investigation to be made by any police officer subordinate to him, in the manner provided by this code, and such officer shall have all the powers of an officer in charge of the police station in relation to that offence.
Section 154 Cr.P.C. deals with information given to the police officer and reduced into writer or the statement given writing by signing the same and substance thereof shall be recorded in the book kept by such police officer in respect of commission of cognizable offence.
The principal object of FIR is to set the criminal law in motion. The requisite of FIR is that the information so received either orally or in writing must disclose a cognizable offence which must be entered in to the book kept by Station House Officer (SHO) popularly known as ‘Station Diary’.
Contents - FIR is not an encyclopedia and need not contain an exhaustive account (2003 Cr.L.J. 2322). But still must contain necessary ingredients of the offence on the basis of which the investigation can be started. It does not matter whether the person lodging the report had witnessed the offence or not, nor it is necessary that all detail should be mentioned in the report about the manner of occurrence, the participants in the crime and the time and place of occurrence.
Delay in FIR – It is settled law that, delay in filing FIR is not a ground to doubt the prosecution case. Unless there are indications of fabrication, the court can not reject the prosecution version which is substantiated by the evidence, merely on the ground of delay. In a recent case of Amar Singh V. Balwinder Singh (AIR 2003 SC 1164), their Lordships of the Supreme Court held thus :- " There is no hard and fast rule that any delay in lodging the FIR would automatically render the prosecution case doubtful. It necessarily depends upon facts and circumstances of each case whether there has been any such delay in lodging the FIR which may cast doubt about the veracity of the prosecution case and for this a host of circumstances like the condition of the first informant, the nature of injuries sustained, the number of victims, the efforts made to provide medical aid to them, the distance of the hospital and the police station etc. have to be taken into consideration. There is no mathematical formula by which an inference may be drawn either way merely on account of delay in lodging of the FIR".
Law has not fixed any time for filing FIR, as such a delayed FIR is not illegal. A mere delay in lodging the FIR cannot be a ground by itself for throwing the entire prosecution case abroad. The Court has to seek an explanation for delay and test the truthfulness and plausibility of the reason assigned. If the delay is explained to the satisfaction of the Court, it cannot be counted against the prosecution. Where eye-witness are reliable and trustworthy, mere delay in filing FIR would be no ground to discard the entire prosecution case.
Any delay in FIR must be explained upon the fact in circumstances of each case. Normally the delay is to be avoided to clear the doubts and suspicion in the mind of the Court regarding the FIR being fabricated or concocted.
In case of reasonable delay the court has to see whether plausible explanation was offered and if offered whether it was satisfactory. (AIR 2006 SC 2002)
How it Differs from other offences - Actually though the contents of the FIR in economic offences does not differs from the FIR of other offences in terms of its contents. But the investigation machinery is directed towards a particular direction in connection with the offence alleged, incase of economic offences. The basis of the FIR in economic offences is the documentary evidence. The evidence as we all know is either oral or documentary. In case of other offences we me not have chance to collect documentary evidence, which is always a direct evidence but we have to carry out the investigation based upon circumstantial. In case in economic offences we have direct evidence of fraud, forgery, cheating and even the conspiracy at some point of time.
We can state some of the instances as under regarding the economic offence if committed in relation to –
i) In cases of financial institutions like co-operative societies, credit co-operative societies, Banks etc. – The statement of account in respect of act alleged, deposit and withdrawal receipts, submission of audit report and inspection of books of accounts, and as such directions-circulars, regulations issued by Reserve Bank of India under Banking Regulation Act, 1949 etc.
ii) In cases of Government Offices, offices of the local bodies and semi Govt. authorities – The official orders issued involving financial stakes, Government resolutions, subsidies (if any ) declared by the Government, bills submitted, orders of approval and release of payments, treasury remarks and passing orders, policy decisions of the Government, project report in respect of the schemes of the Government, project cost, completion report, amount appropriated for the same and registered maintained for the same etc.
iii) In cases of co-operative societies, credit co-operative societies, trusts, organizations, companies (public and private Ltd) – certificate of incorporation, memorandum of association and articles of association, books of account, muster rolls, trust deeds, IT returns, audit reports, challans and invoices, orders, statement profit and losses. Etc.
These are some of the instances wherein we can have documentary evidence in economic offences, at the time of registration of offences or immediately after the FIR.
Precautions while recording FIR and investigation, Panchnama and case diary. While recording the FIR we have to gather the above said documentary evidence and the substance there of can be stated in the FIR along with the contents and essential ingredients of the offence alleged. The concise statement of allegation should be stated in the words of informant and the contents of the document or the directions as the case may be, must be clearly stated and ambiguous statements should be avoided. The substance of the offence must be stated in brief.
Now in respect of the investigation the documents as earlier stated must be seized by drawing the panchanama and the search and seizure can be carried out under section 94 and section 102 of Cr.P.C.
At the same time in case of absconding offenders the procedure under section 82 and 83 of Cr.P.C. can be followed.
In case of banking and financial companies the procedure as laid down by the Reserve Bank of India under The Banking Regulation Act 1949 is to be followed. The guidelines as laid down in section 18(cash reserves), sec.24(maintenance of percentage of assets), sec.30(audits) and sec.35(inspection By RBI) are to be followed and the failure to comply the same liable for the penalties as laid down in section 46 of the said act.
At the same time deeds and misdeeds of the culprits is to be recorded in respect of the mismanagement of the financial institutions or banks. (AIR 2006 SC 915)
To sum up we have to note that the documentary evidence made available or seized after the recording of FIR is to be linked with the rights, duties and liabilities of the accused persons so as to bring home the ingredients of the offences registered against the accused and the same should be corroborated by the oral evidence of the witnesses from the concerned departments, so as to secure conviction. The SHO if conducts the investigation on cardinal principles of the criminal law, not to look over single piece of evidence which may be helpful in the interests of the investigating agency as well as the State.
Thank You.
Adv. Ayub S Pathan,
Legal Adviser,
StateCID(Crime), Pune