In a landmark judgment, the Supreme Court of India held that the mere registration of a First Information Report (FIR) cannot be interpreted as the initiation of proceedings. The decision came in the case of Baccarose Perfumes and Beauty Products Pvt. Ltd. v. Central Bureau of Investigation & Anr. (Criminal Appeal No. 3216 of 2024), where the Court quashed the proceedings against the appellant, Baccarose Perfumes and Beauty Products Pvt. Ltd., highlighting important legal principles concerning the registration of FIRs and the initiation of prosecution.
Background of the Case
Baccarose Perfumes and Beauty Products Pvt. Ltd. (the “Appellant-Company”), a private limited company involved in manufacturing and exporting cosmetics and toiletries, found itself embroiled in legal trouble after the Central Bureau of Investigation (CBI), Respondent No. 1, alleged that it had conspired with two government officials — Shri Yogendra Garg, Joint Development Commissioner, and Shri V.N. Jahagirdar, Deputy Commissioner of Customs, at Kandla Special Economic Zone (KASEZ) — to evade payment of Countervailing Duty (CVD) from March 2001 to August 2004. The alleged evasion amounted to INR 8 crores, causing a corresponding loss to the government exchequer.
Legal Issues Involved
The case involved several key legal issues:
1. Interpretation of FIR Registration: The primary issue was whether the registration of an FIR constituted the initiation of criminal proceedings.
2. Immunity from Prosecution: The Appellant-Company argued that it had already been granted immunity from prosecution by the Settlement Commission under various statutes, including the Customs Act, 1962, Central Excise Act, 1944, and Indian Penal Code, 1860.
3. Assessment and Refund of Duties: The company contested the assessment orders concerning the payment of duties on goods cleared into the Domestic Tariff Area (DTA) and claimed a refund.
4. Role of the Public Servants in the Alleged Conspiracy: The case also raised questions regarding the culpability of public servants allegedly involved in the conspiracy, where the prosecution sanction against them had been declined.
The Decision of the Supreme Court
The Supreme Court bench, comprising Justice Abhay S. Oka and Justice Augustine George Masih, ruled in favor of the appellant, setting aside the orders passed by the High Court of Gujarat and the Special Judge, CBI.
Justice Augustine George Masih, delivering the judgment, observed, “A perusal of the scheme of the Code of Criminal Procedure, 1973, allows us to infer that mere registration of FIR cannot be interpreted to mean that it constitutes the initiation of such proceedings.” He further elaborated that the registration of an FIR necessitates a thorough investigation by a competent officer, and only after the submission of a final report (chargesheet) under Section 173(2) of the CrPC does cognizance of the offence get taken by the court.
Key Observations of the Court
The Court relied on precedents, including H.N. Rishbud v. State (Delhi Administration), Abhinandan Jha v. Dinesh Mishra, and State of Orissa v. Habibullah Khan, to emphasize that the processes of investigation and the taking of cognizance operate in parallel channels without intermingling. The Court also referred to the decision in Hira Lal Hari Lal Bhagwati v. CBI, New Delhi, where it was held that the continuation of prosecution despite a settlement would be inconsistent with the law.
The judgment stated:
“The very basis of the allegation of offence against the Appellant-Company was found to be non-existent, and it would have amounted to misuse rather abuse of the process of law. The prosecution sanction sought against the officials of KASEZ, who were said to have committed offences under the Prevention of Corruption Act, 1988, stood declined.”
Parties and Representation
– Appellant: Baccarose Perfumes and Beauty Products Pvt. Ltd.
– Respondents: Central Bureau of Investigation & Anr.
– Bench: Justice Abhay S. Oka and Justice Augustine George Masih
