Different Transactions Of Cheating The Investors Cannot Be Clubbed In the Single FIR: Delhi HC [Read Judgment]

Delhi High Court has held that in a case of inducement, allurement and cheating of large number of investors/ depositors in pursuance to a criminal conspiracy, each deposit by an investor constitutes a separate and individual transaction. All such transactions cannot be amalgamated and clubbed into a single FIR by showing one investor as the complainant, and others as witnesses.

The following questionsof law were put by the ASJ before the consideration of the High Court:

1. 1. Whether in a case of inducement, allurement and cheating of large number of investors/ depositors in pursuance to a criminal conspiracy, each deposit by an investor constitutes a separate and individual transaction or all such transactions can be amalgamated and clubbed into a single FIR by showing one investor as complainant and others as witnesses?
2. 2. If in case the Hon'ble Court concludes that each deposit has to be treated as separate transaction, then how many such transactions can be amalgamated into one charge- sheet?
3. 3. Whether under the given circumstances the concept of maximum punishment of seven years for a single offence can be pressed into service by the accused by clubbing and amalgamating all the transactions into one FIR with maximum punishment of seven years?

In the present case the accused was allegedly one of the promoters of an investment scheme floated in and around Delhi. It is alleged that around 1,852 different victims were allured; induced and; cheated to invest different amounts of money, at different points of time, and at different places under the scheme, on the pretext that their money would be tripled within three days.

During the hearing of regular bail application of the accused, the ASJ was, prima facie, of the view that the aforesaid acts constituted separate and distinct offences, thereby necessitating the registration of separate FIRs. She had relied upon the judgement of the apex court in Narinderjit Singh Sahni&Anr. Vs. Union of India &Ors. (2002) 2 SCC 210. She had also held that the registration of a single FIR and filing of a single charge sheet appeared to be contrary to the statutory provisions and scheme contained in Section 218, 219, 220, 221 and 222 Cr.P.C., and appeared to be illogical and opposed to the concept of proportionality of punishment enshrined in the Cr.P.C.

Mr. Hariharan, ld. Amicus Curiae, also relied upon Narinderjit Singh Sahniand submitted that each case of inducement, allurement and cheating of an investor constitutes a separate transaction, mandating registration of a separate FIR for each such transaction.He further submitted that that amalgamation and clubbing of all transactions into one would vitiate the trial. However, the counsel appearing for Delhi Police argued that every case of cheating and inducement of an investor constitutes the "same transaction", when such transactions are asub-specie of a single specie of transaction – i.e. of a single conspiracy.

In order to understand the term 'same transaction', the court relied on the Bombay High Court's judgment in ShapurjiSorabjiwhich held that for a series of acts to be regarded as forming the "same transaction", they must be connected together in some way, and there should be continuity of action. The court also considered this issue in light of the apex court's decision in Narinderjit Singh Sahni where it was held that stated each offence is a distinct one, and cannot be regarded as constituting a single series of acts/transaction.

The court, therefore, agreed with the submission of Mr Hariharan and held that the practice followed by the Delhi Police/ State of registering a single FIR on the basis of the complaint of one of the complainants/ victims, and of treating the other complainants/ victims merely as witnesses, even otherwise, raises very serious issues with regard to deprivation of rights of such complainants/ victims to pursue their complaints.

"Mere citing a large number of complainants/ victims only as witnesses would also deny them the right to file their protest petitions in the eventuality of a closure report being field by the police in respect of the complaint on the basis of which FIR was registered, or the Magistrate not accepting the final report/ charge-sheet and discharging the accused. It was also noted that their right to oppose, or to seek cancellation of bail that the accused may seek in relation to their particular transaction would also be denied also if the accused enters into a settlement/ compromise with the complainant on whose complaint the FIR stands registered, the complaints of other victims may go unaddressed".

The Division Bench of Justice Sanghi and Justice Mehta also went on to hold that in respect of each FIR,a separate final report (and wherever necessary supplementary/ further charge sheet(s)) have to be filed, and there is no question of amalgamation of the final reports that may be filed in respect of different FIR.

Finally, on the issue of punishment, the court directed the trial court to consider section 31 of Cr.P.C which states the when a person is convicted at one trial of two or more offences, the Court, may subject to the provisions of Section 71 IPC, sentence him for such offences to the several punishments prescribed therefor which such Court is competent to inflict. 

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