Sri Nagaraj Rao Vs State & Anr (2021): It Is Important For Magistrates To Apply Their Minds And Record Reasons While Rejecting The B Report Of Police

Key Takeaways

• The Second Respondent had established a company after securing a loan from the Karnataka State Finance Corporation. However, it failed to repay it.
• The concerned property was, thus, auctioned off to the petitioner. Thereafter, the Second Respondent filed a complaint against him.
• The Magistrate, without careful analysis, rejected the investigation report submitted by the Police and ordered for registration of the case.
• The Karnataka High Court set aside the order observing that it is essential for the Magistrate to apply his mind before deciding a case. The Bench also held the petitioner to be innocent and quashed the entire proceedings against him.

Facts of the Case

• The Second Respondent’s wife had received a loan from the Karnataka State Finance Corporation and had established Sri Durga Printers and Sri Durga Printers Conventional Hall in Brahmavar city.
• On failure to repay the loan, the Corporation sold the Second Respondent and his wife’s property to the petitioner by way of public auction on 11th November 2010.
• On 13th November 2010, the Second Respondent filed a complaint against the petitioner as well as the State Corporation, under Section 506 of the Indian Penal Code, 1860.
• The Police conducted the investigation and submitted a ‘B’ report stating the absence of any evidence supporting the commission of an offense by the petitioner that would attract punishment under Section 506.
• However, the Magistrate rejected the ‘B’ report and, on the basis of the Second Respondent’s statement, ordered for the registration of a case, under Section 506, against the petitioner.
• Aggrieved by the order, the petitioner approached the Karnataka High Court.

Submissions by the Parties

• The Counsel for the petitioner submitted that there is no material in the complainant’s allegations under Section 506 since the petitioner is an innocent purchaser and that the case was made out on purpose to harm him.
• It was further stated that the Magistrate had failed to apply his mind while rejecting the ‘B’ report, and had mechanically ordered the registration of the case.
• The Counsel for the Respondents’, however, argued that there was no need for the Magistrate to apply his mind since the matter was in the trial stage.

Court Order

• The Karnataka High Court allowed the petition and set aside the Magistrate’s order as well as the entire proceedings against the petitioner.
• The Single-Judge Bench opined that it was mandatory for the Magistrate to apply his mind while deciding on the rejection of the ‘B’ report and the acceptance of the complainant’s statement.
• Reason and application of mind are impregnable for a Judicial order to sustain the scrutiny of law, the Bench stated.
• Further, the Court concluded that the case does not link even to the remotest sense to the offense alleged, and deemed it inappropriate to remit the matter back to the Magistrate.

Do you think that the Magistrate ought to have applied his mind and recorded reasons for his order? Share your views in the comment section below.