Criminal Procedure Code

Priyanka Srivastava v. State of Uttar Pradesh

(2015) 6 SCC 287

Facts

The dispute arose from loan transactions and proceedings initiated by a financial institution for recovery of its dues.
After measures were taken under the special recovery law, applications were filed under Section 156(3) CrPC accusing officers of the financial institution of criminal misconduct.
Magistrates directed registration of FIRs without sufficiently examining:
the civil and recovery background;
whether the complainants had first approached the police;
and whether the allegations were supported by sworn responsibility.
The Supreme Court noticed growing misuse of Section 156(3) applications to pressure public officials, banks and private opponents in civil disputes. ( )

What safeguards must be followed before a Magistrate orders investigation under Section 156(3)?
Whether such applications must be supported by an affidavit.
Whether a Magistrate may pass the order mechanically.

An order under Section 156(3) is a judicial order and requires application of mind.
Before approaching the Magistrate, the applicant should ordinarily show compliance with:
Section 154(1), by first approaching the police station; and
Section 154(3), by approaching the Superintendent of Police if necessary.
The application under Section 156(3) must be supported by an affidavit.
The affidavit serves to:
make the applicant personally responsible;
discourage false allegations;
and permit action for perjury where deliberate falsehood is established.
The Magistrate must examine:
the nature of the allegations;
the documents relied upon;
the existence of prior civil or statutory proceedings;
and whether police investigation is genuinely necessary.
The Magistrate need not conduct a trial, but cannot act as a mere forwarding office.
The judgment does not permit rejection merely because a civil dispute exists; conduct may produce both civil and criminal consequences.
BNSS Section 175(3) now expressly requires the Magistrate to consider an application supported by an affidavit under Section 173(4) and to make such inquiry as considered necessary. ()

The allegations against the financial institution’s officers arose after lawful recovery action had been taken.
This chronology required careful examination because the criminal complaint could have been intended to obstruct or retaliate against those proceedings.
The Magistrate did not adequately determine:
whether a cognizable offence was genuinely disclosed;
whether the complainants had exhausted the police remedies;
whether the accusations were supported by reliable documents;
or whether the criminal process was being used for collateral pressure.
A Section 156(3) order immediately exposes the proposed accused to:
an FIR;
police investigation;
possible search;
questioning;
arrest;
and reputational damage.
Therefore, the power cannot be exercised through a brief mechanical endorsement.
The Court stressed that an affidavit would not prevent a truthful complainant from seeking justice.
It would only require the person making serious allegations to formally stand behind them.
The Magistrate could also conduct a limited verification where circumstances required caution.
The Court’s purpose was not to weaken access to criminal justice.
It was to ensure that the judicial direction for investigation was used for genuine offences rather than as a tactical weapon in commercial or civil disputes.

The Supreme Court set aside the mechanically issued investigative directions.
It made supporting affidavits mandatory for Section 156(3) applications and required disclosure of prior steps under Section 154.
The case is the leading safeguard against casual or abusive applications seeking court-directed FIRs. ( )