O.K. Rajagopalan and Another vs State of C.G. and Another

T.P. Sharma, J.—By this revision, the applicant has challenged legality and propriety of the order dated 1-3-2001 passed by the Judicial Magistrate First Class, Durg in Criminal Case No. 144/2001, whereby the Court below has proceeded against the applicant and deceased Mr. P.S. Nair u/s 204 of the CrPC for the offence punishable under Sections 409, 420, 467 & 471 of the IPC. As per case of non-applicant No. 2/complainant, non-applicant No. 2 is a member of Indian Coffee Workers Co-operative Society Limited (ICWCS), Jabalpur (Registration No. 1485) with its Head Office at 592, Malviya Marg, Jabalpur, and he was posted as Senior General Manager, Indian Coffee House, Ispat Bhawan, Bhilai Nagar, Tahsil & Distt. Durg. Applicant No. 1 and deceased Mr. P.S. Nair were office bearers of the said Society. Applicant No. 1 was Honorary Secretary of the said Society who had submitted Annual Reports before the General Body Meetings of the Society which show that the Society was not having any branch at Nagpur and Durg in the name and style of Indian Coffee House at NTPC, Nagpur or Indian Coffee House at Padmanabhpur, Durg. Applicant No. 1 who was Honorary Secretary of the Society had entered into an illegal agreement with NTPC, Nagpur and Power Grid Corporation of India at Padmanabhpur, Durg, and has received huge amount of money from both the Coffee Houses which he had failed to show in the account of the Society and thus, has criminally misappropriated the same by committing cheating and forgery. Both the applicants were liable to account for the amounts and profits received from Indian Coffee House, Durg and Indian Coffee House. Nagpur in the account of ICWCS, Jabalpur. On the aforesaid basis, complaint was filed by non-applicant No. 2 before the Court of Judicial Magistrate First class, Durg and the Court below had sent the application u/s 156(3) of the (sic) the (sic). The Police of Durg had submitted its report against the applicants and thereafter, statements of the witnesses i.e. non-applicant No. 2 and M.A. Chandrabhanpur, were recorded under Chapter XV of the CrPC and the impugned order was passed.

I have heard learned counsel for the parties, perused copy of the order impugned, copies of statements of the witnesses, report of the list submitted u/s 156(3) of the CrPC, return of non-applicant No. 2 and order dated 30-4-2001 passed in W.P. No. 1771/2001 by the High Court of Madhya Pradesh at Jabalpur.

Learned Senior Advocate for the applicant submitted that initially, the order impugned was challenged before the High Court of Madhya Pradesh in W.P. No. 1771/2001 and vide order dated 30-4-2001, the High Court of Madhya Pradesh has held that part of cause of action has arisen within the territorial jurisdiction of the Court of Judicial Magistrate First Class situate at Durg and after creation of the State of Chhattisgarh, it is open to the petitioner (therein) to file appropriate proceeding before the competent Court in the State of Chhattisgarh challenging the order passed by the learned Magistrate. Learned Senior Advocate further submitted that definitely, the Court situate within the territorial jurisdiction of Durg is having jurisdiction to entertain the dispute and after creation of the State of Chhattisgarh, this Court is having jurisdiction to entertain the proceeding. Therefore, the applicants are not debarred from filing this revision before this Court. Learned Senior Advocate also submitted that the ICWCS, Jabalpur having its registered office at Jabalpur is a registered society and it is registered under the Madhya Pradesh Cooperative Societies Act. The said Society was not competent to establish its branch beyond the territorial jurisdiction of the then State of Madhya Pradesh. Therefore, the Society was not competent to extend, its business at Nagpur i.e. within the territorial jurisdiction of the State of Maharashtra. After creation of the State of Chhattisgarh, the Society was also not competent to extend/open its branch at Durg. The applicant and deceased Mr. P.S. Nair are office bearers of the said Society, but they were not debarred from opening any business in the name and style of Indian Coffee House at Maharashtra and Chhattisgarh. The complaint reveals that it was their illegal/private contract. Therefore, they were not responsible/liable to account for income and expenditure of the aforesaid two Coffee Houses in the account of the aforesaid Society. After enquiry, the police had submitted its report in negative. The Court below had examined two witnesses who had specifically deposed that the applicants have not shown the new business/branches in the business of the Society. Non-applicant No. 2 had failed to file any document to show that Indian Coffee House, Durg and Indian Coffee House, Nagpur were the branches or extension of the Jabalpur Society i.e. the ICWCS. However, taking cognizance of the offence and issuance of process against a person isliot a mere formality, it is a serious act and, therefore, it requires sufficient material before proceeding against the person, especially to save the innocent persons from unwarranted humiliation and groundless prosecution. In order to show prima facie case, non-applicant No. 2 was under obligation to produce material that Indian Coffee House, Padmanabhpur, Durg and Indian Coffee House, Nagpur were duly constituted branches of ICWCS, Jabalpur and that the applicants have committed cheating and forgery and criminal misappropriation of funds of ICWCS. Therefore, by issuing process against the applicants the Court below has committed illegality.

On the other hand, learned Panel Lawyer appearing on behalf of the State/non-applicant No. 1 opposed the revision and submitted that the applicants are required to file appropriate application before the Court-below.

Learned counsel for the complainant/non-applicant No. 2 vehemently opposed the revision and submitted that after due enquiry under Chapter XV of the CrPC, the Court below has issued process against the applicants on the basis of material produced on behalf of the complainant. Material produced on behalf of the complainant, if not rebutted, would be sufficient for conviction of the applicants. At the stage of issuance of process, the Court is required to examine the material filed on behalf of the complainant in its face value, no meticulous scrutiny of evidence/material is required, even grave/strong suspicion that the applicants/accused have committed the offence is sufficient for proceeding against the applicants. The applicants are having opportunity to raise the grounds before the trial Court. The applicants were under obligation to account for income and expenditure of Indian Coffee House, Durg and Indian Coffee House, Nagpur in the account of ICWCS, Jabalpur, however, they have not only failed to account for but have suppressed the fact that they have opened two branches of the Society at Nagpur & Durg. The applicants have suppressed previous litigation between the parties in W.P. No. 1771/2001. Non-applicant No. 2 has succeeded in showing prima facie case against the applicants and the Court below has rightly proceeded against the applicants.

Learned counsel for non-applicant No. 2 placed reliance in the matter of A.V. Murthy Vs. B.S. Nagabasavanna, in which the Supreme Court has held that the plea of defence i.e. non-existence of debt or liability in case of Section 138 of the Negotiable Instruments Act, 1881, could be agitated as a defence before the trial Court, therefore, proceeding cannot be quashed in exercise of revisional jurisdiction. Learned counsel further placed reliance in the matter of Rajmata Vijaya Raje Scindia v. State of MP. and others [(2003) 12 SCC 429] in which the Supreme Court has held that quashment of criminal complaint in exercise of revisional jurisdiction without giving reason as to why the Special Judge erred in taking cognizance of the offence against the accused is not justified. Learned counsel also placed reliance in the matter of Subramanium Sethuraman Vs. State of Maharashtra and Another, in which the Supreme Court has held that issuance of process u/s 204 of the CrPC is not open to the accused to recall after recording of the plea of the accused and the Magistrate is not competent to review or reconsider his decision to issue process in absence of any specific provision to recall such order. Learned counsel relied upon the matter of Adalat Prasad Vs. Rooplal Jindal and Others, ] in which the Supreme Court has held that the Magistrate is not competent to recall the order of issuance of process u/s 204 of the CrPC and remedy to the accused is to invoke jurisdiction u/s 482 of the CrPC. Learned counsel further relied upon the matters of Mohanlal Choudhari Vs. State of Maharashtra, ] and Natwar Lal and Others Vs. State and Others, ] in which the Bombay High Court and the Rajasthan High Court, respectively, have held that although the High Court and the Sessions Court are having concurrent jurisdiction to exercise revisional power, but it is prudent for the applicant to approach Sessions Court and then the High Court. The High Court should entertain application directly, only if exceptional circumstances are made out by the applicant. Learned counsel also relied upon the matter of Prof. Manjunatha B.P. Vs. Prof. V.J. Pyati and State of Karnataka, in which the Karnataka High Court has held that issuance of process u/s 204 of the CrPC cannot be termed as an order which substantially touches rights of accused and no revision petition is maintainable against such order. Learned counsel placed reliance in the matter of Rakesh Singh and Another Vs. State of Bihar and Others in which the Patna High Court has held that while taking cognizance of offence the Magistrate is not required to weigh the evidence in detail.

One K. Ravindran Nair had filed W.P. No. 1771/2001 before the High Court of Madhya Pradesh at Jabalpur and vide order dated 30-4-2001 the High Court of Madhya Pradesh has held that part of cause of action has arisen within the territorial jurisdiction of the Judicial Magistrate First Class, Durg, therefore, it cannot be said that the said Court has no jurisdiction. The High Court of Madhya Pradesh had also observed that in the light of creation of the State of Chhattisgarh it is open to the petitioner (therein) to file appropriate proceeding before the competent Court in the State of Chhattisgarh. Part of para 20, paras 21 & 22 read as follows:-

It is alleged that the profits of the said branch is not accounted for. In view of this factual scenario, I am of the considered opinion that a part of cause of action has arisen within the territorial jurisdiction of the learned Magistrate at Durg and it cannot be said that the said Court has no jurisdiction whatsoever.

At this juncture I may hasten to add here that when the matter was listed on second occasion for hearing, learned senior counsel for the petitioner had endeavoured to argue before this Court that if eventually this Court comes to hold that it has the jurisdiction to entertain the writ petition it should quash the order passed by the learned Magistrate. Later on, when a query being made that if this Court ultimately comes to hold that learned Magistrate has also the jurisdiction to entertain the complaint would the counsel like the submissions of merits to be dealt with. At this stage the learned senior counsel for the petitioner fairly submitted that in that event writ petition may be disposed of by observing that it would be open to the petitioner to file appropriate proceeding before the competent Court in the State of Chhattisgarh challenging the order passed by the learned Magistrate.

In view of the aforesaid submission while holding that this Court has the jurisdiction to entertain the writ petition I refrain myself from addressing in regard to defensibility of the order and leave it to the petitioner to assail the same, if so advised, before the appropriate Court in the State of Chhattisgarh.

As per the allegations made in the complaint and the statements of non-applicant No. 2 herein & one witness M.A. Chandrabhanpur recorded under Chapter XV of the CrPC, the applicant & deceased Mr. P.S. Nair were office bearers of the Society (ICWCS) registered at Jabalpur, they have opened branches of the Society at Nagpur & Durg and have entered into illegal agreement for opening such branches. They have failed to account for income & expenditure of the aforesaid two branches in the account of ICWCS, Jabalpur.

Statements, complaint and the order impugned do not reflect whether the applicant & deceased Mr. P.S. Nair had entered into any agreement with the aforesaid two establishments as office bearers of ICWCS, Jabalpur or have entered into any agreement on behalf of the said Society. Non-applicant No. 2 has also not produced any material to show that it was not possible for the applicants to open any branches of Indian Coffee House independently.

Definitely, issuance of process and taking cognizance of the offence is a serious matter and not a mere formality, it effects the substantive rights of the parties. Therefore, at the time of taking cognizance and issuance of process, the Court is required to see whether the prosecution/complainant has collected sufficient material for proceeding against the accused.

As held by the Patna High Court in the matter of Rakesh Singh (supra), at the time of taking cognizance, the Magistrate is not required to take evidence in detail, but the Magistrate is required to see whether prima facie case for proceeding against the accused persons is made out or not.

As held by the Supreme Court in the matter of A.V. Murthy (supra), defence of accused cannot be considered in exercising revisional jurisdiction, but the prosecution is required to show prima facie commission of the offence.

As held by the Supreme Court in the matter of Rajmata Vijaya (supra), the High Court is required to give reason as to why the Special Judge erred in taking cognizance of the offence against the accused, in exercise of revisional jurisdiction. The Supreme Court has further held that the High Court can quash criminal complaint in exercise of revisional jurisdiction after giving reasons that what illegality has been committed by the Court at the time of taking cognizance of the offence.

While dealing with the question of recalling of the order of the Magistrate, the Supreme Court in the matter of Subramanium Sethuraman (supra) has held that in absence of any provision, the Magistrate is not competent to recall the order of issuance of process and remedy u/s 482 of the CrPC is available to the accused.

In the matter of Adalat Prasad (supra), the Supreme Court has held that the Magistrate is not competent to recall the order of issuing process. Although the High Court and the Sessions Court are having concurrent jurisdiction to entertain revision, but definitely, the applicant is required to show exceptional circumstances before the High Court in revision directly.

Non-applicant No. 2 herein was having full opportunity or having opportunity to produce such agreement or the material relating to the fact that the applicants are not competent to open any branch other than in exercise of their official capacity and that the alleged branches were the branches of ICWCS, Jabalpur. However, non-applicant No. 2 has failed to produce such material before the Court at the time of taking cognizance.

Taking cognizance of the offence and issuing process against the accused is not a mere formality, it is a serious matter. No detailed and meticulous scrutiny of evidence is required while taking cognizance of the offence. However, the complainant is required to show prima facie material on its face value.

Statements of two witnesses and the complaint by itself are not sufficient for issuance of process and taking cognizance of the serious offences against the applicant and deceased Mr. P.S. Nair. Therefore, by taking cognizance and issuing process of the offence punishable under Sections 409, 420, 467 & 471 of the IPC against the applicant and deceased Mr. P.S. Nair on the basis of insufficient material, the Court below has committed illegality which requires interference in exercise of revisional jurisdiction. Consequently, the revision deserves to be allowed and is allowed. Order taking cognizance dated 1-3-2001 passed by the Judicial Magistrate First Class, Durg in Criminal Case No. 144/2001 is hereby quashed. The case is remitted back to the Court of Judicial Magistrate First Class, Durg, for providing opportunity to non-applicant No. 2 to produce prima facie sufficient material and to pass order afresh. Non-applicant No. 2 shall remain present before the Court of Judicial Magistrate First Class, Durg on 30-7-2012.