Referring to a catena of case laws, Division bench of SC said the following:
From Para 5,
It is well settled that Section 195(1)(b) creates a bar against taking cognizance of offences against the administration of justice for the purpose of guarding against baseless or vindictive prosecutions by private parties. The provisions of this Section imply that the Court is the only appropriate authority which is entitled to raise grievance in relation to perjury, forgery of documents produced before the Court, and other offences which interfere with the effective dispensation of justice by the Court. Hence, it for the Court to exercise its discretion and consider the suitability of making a complaint for such offences. However, there is a pertinent difference in the wording of Section 195(1)(b) (i) and Section 195(1)(b)(ii) inasmuch as Section 195(1)(b)(ii) is restricted to offences which are committed in respect of a document which is “produced or given in evidence in a proceeding in any court”. Whereas Section 195(1)(b)(i) applies to offences against public justice which are committed not only in any proceeding in any court, but also “in relation to” such proceeding. Whether such semantical difference bars the analogous application of precedents relating to Section 195(1)(b)(ii) for interpreting Section 195(1)(b)(i) will be discussed by us later.
From Para 8,
Curiously, though the facts of Iqbal Singh Marwah also required a determination as to the applicability of Section 195(1)(b)(i), the Constitution Bench did not express any specific finding on this point. This was perhaps because the limited point for consideration before the Bench was the apparent conflict between Sachida Nand Singh and Surjit Singh (supra). However, it can nevertheless be seen that the Constitution Bench did not interpret Section 195(1)(b)(ii) in isolation, but linked its construction with the overall scheme under Sections 195(1)(b) and 340, CrPC. The Court reiterated the test laid down in Sachida Nand Singh, i.e., that the offence in respect of which only the Court can make a complaint must be one which has a direct correlation to, or a direct impact on, proceedings before a court of justice. It is for this reason that only the relevant Court is vested with the right to consider the desirability of complaining against the guilty party.
From Para 17 (Very important)
Bhima Razu Prasad Vs State of Tamil Nadu on 12 Mar 2021
17. It is possible that Courts may be more proactive in making complaints under Section 195(1)(b)(i), CrPC upon application made by the concerned investigative agencies, than in those preferred by private parties. The former being public authorities would enjoy more credence in seeking inquiry into their claims.Therefore, the aforementioned reasons assigned by the Constitution Bench in Iqbal Singh Marwah for adopting a narrow construction of Section 195(1)(b)(ii), CrPC may not be strictly applicable in the present case. However, the general principles of statutory interpretation laid down by the Constitution Bench should not be disregarded. This is especially given that the Court did not consider Section 195(1)(b)(ii) separately but provided a holistic view of the scheme under Section 195(1)(b).
17.1 Just like a private party who has been a victim of forgery committed outside the precincts of the Court, the investigative agency should not be left remediless against persons who have producing false evidence for the purpose of interfering with the investigation process. Moreover, the present case concerns offences alleged to have been committed under the PC Act. Public interest and the reputation of the State will suffer significant harm if corrupt public servants are facilitated by third parties in hiding their assets from scrutiny. Hence any interpretation which negates against the speedy and effective trial of such persons must be avoided.
17.2 The application of the bar under Section 195(1)(b)(i), CrPC to situations such as the present case can lead to two scenarios. The first is one in which the investigative agency, on the basis of false/fabricated material drops the case. Subsequently, it is brought to their notice that the evidence was falsified. Second, the investigative agency at that very stage suspects that the material produced before them is bogus or forged in nature. In both scenarios, the Court has not had an opportunity to consider the allegedly fabricated evidence, as trial has not yet commenced in respect of the offence. Hence it would not be possible for the Court to independently ascertain the need for lodging a complaint under Section 195(1)(b)(i) read with Section 340, CrPC when the evidence alleged to have been falsified is not even present on its records. Rather, it is the investigating agency which is best placed to verify and prove whether such falsification has taken place, through what means and for what purpose.
17.3 In case the bar under Section 195(1)(b)(i) is applied to offences committed during the course of investigation, the Court may think it fit to wait till the completion of trial to evaluate whether a complaint should be made or not. Subsequently, the Court may be of the opinion that in the larger scheme of things the alleged fabrication of evidence during investigation has not had any material impact on the trial, and decline to initiate prosecution for the same. The investigation agency cannot be compelled to take a chance and wait for the trial court to form its opinion in each and every case. This may give the offender under Section 193, IPC sufficient time to fabricate more falsehoods to hide the original crime. Further, irrespective of the potential impact that such false evidence may have on the opinion formed by the trial court, the investigating agency has a separate right to proceed against the accused for attempting to obstruct fair and transparent probe into a criminal offence. Thus, we are of the view that it would be impracticable to insist upon lodging of written complaint by the Court under Section 195(1)(b)(i), CrPC in such a situation.