Rule 24.7 of Police Rules, 1934 Vol.III, Chapter XXIV prescribes the procedure for submitting a report for cancellation of FIR to a Magistrate, empowered to take cognizance of the offence on a police report and to try the accused or send him for trial.
 Bare  reading  of  the  above  mentioned  provision,  clearly depicts  that  the  situations,  where  a  move  for  cancellation of  a  registered  case can  be  made  are:-
 a. Information  is  maliciously  false, 
b. false  owing  to  mistake  of  law,
c.  false  owing  to  mistake  of  fact   
d. offence  reported  is  found  to  be  non-cognizable   
e. matter  fit for  a  civil  suit 
While  exercising  power  under  section  173(3),  Cr.P.C,  the Magistrate  is  not  to  act  as  pawns,  in  the  hands  of  the  police  and pass  mechanical  orders,  without  application  of  his  conscious mind  to  the  facts  and  the  material,  placed  before  him.  The Magistrate  must  realize  that  the  power  to  cancel  a  police  case  is of  wide  amplitude,  which  has  the  effect  of  bringing  to  halt  a criminal  prosecution,  which  otherwise  would  entail  a  detailed process.  Such  a  power,  therefore,  by  its  very  nature,  cannot  be designed  to  be  exercised  on  mere  “ipsi  dixit”  of  the  police. Otherwise,  the  very  purpose  for  conferring  this  power  to  the Magistrate  on  responsible  level,  in  supervisory  capacity  would stand  defeated.  The  Magistrate  while  acting  fairly,  justly, honestly  and  applying  his  mind  to  the  material  before  him  and duly  considering  all  the  aspects  of  the  matter  should  pass  a speaking  and  well-reasoned  order,  rather  putting  his  signatures in  an  unjustified  manners,  whichever  is  placed  before  him  by  the police.  His  order  should  indicate  as  how  and  on  the  basis  of which  material,  he  finds  himself  in  agreement  with  the cancellation  report.  Any  order  passed  in  a  mechanical  manner, without  indicating  independent  application  of  mind,  is deprecated. 
Furthermore, the Punjab Police Rules, 1934 as highlighted above, prescribe a criteria for making a cancellation report by the police and dealing with it, by a Magistrate. Therefore, the learned Magistrate should have also seen whether strict compliance of the said rules has been made by the police or otherwise. 





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