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PETITIONER: ANIL SARAN

       Vs.

RESPONDENT: THE STATE OF BIHAR AND ANOTHER

DATE OF JUDGMENT24/08/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. HANSARIA B.L. (J)

CITATION:  1996 AIR  204            1995 SCC  (6) 142  JT 1995 (6)   428        1995 SCALE  (5)216

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.      The appellant  was a  partner in  M/s. Agjevinath Films along with  the second respondent, Shiv Prakash, and another person,  Ajit   Jai  Tilak.  The  firm  was  constituted  to distribute, exhibit and exploit the cinematograph films. The firm had  entered into  an agreement with producer, Bhojpuri film for  distribution of  ‘Hamari Dulhaniya’  and  had  two prints of  the films  obtained from the laboratory at Bombay and were arranged for exhibition in Roopak Cinema, Patna. It is the  case of  Shiv Prakash,  the complainant on behalf of M/s. Ajgevinath  Films, that the first accused, namely, M/s. Sapna Enterprises,  had contracted  on June 22, 1988 to take the film,  exhibit the  same and account for the proceeds in terms  of   the  contract.   Pursuant  thereto,  M/s.  Sapna Enterprises was  entrusted with  the second copy of the film for exhibition  and they  exhibited the  film from  July  1, 1988. But  the first  accused had  not returned the print to the  complainant-second   respondent   with   ulterior   and dishonest intention  to make  wrongful  gain  and  to  cause wrongful loss  to the  second respondent.  Subsequently,  it came to the knowledge of Shiv Prakash that the first accused colluded and  conspired with  the appellant and Ajit with an intention to  defraud the  second respondent;  and the  firm exploited the second copy of the film in the said cinema and "they stealthily  and illegally  misappropriated collections and dishonestly made wrongful gain for themselves and caused wrongful loss  to the  complainant and the said concern." It was also  alleged that  the appellant  and Ajit  induced the first accused  by conspiracy  to illegally  obtain the films prepared for  themselves and  fabricated the  documents  and thereby Ajit,  the first  accused firm and the appellant, in collusion  and   conspiracy  with  common  intention  to  do mischief,  committed   the  offence   referred  to  earlier. Admittedly,  the   complaint  was  filed  before  the  Chief

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Judicial  Magistrate,   Patna  who,   after  examining   the complainant, transferred the case to Judicial Magistrate-II, Patna whose  Presiding Officer then was Mr. A.K. Srivastava. The  learned   Magistrate  examined   three  witnesses   and thereafter  issued   process  to  the  appellant  and  third respondent  under   ss.405  and   420  IPC.   The  appellant thereafter filed  an application  under s.482 of the Code of Criminal Procedure, 1973 [for short, ‘the Court’] before the High Court, Patna to quash the complaint.      The High  Court in  the impugned  order  dismissed  the application holding that the complaint prima facie discloses the  offence   punishable  under   the  sections  for  which cognizance was taken and process was issued to the appellant and  another.   The  question,   therefore  is  whether  the complainant-second respondent  made a  prima facie  case  to take cognizance  of the  offence and  issue process  to  the appellant and others.      It is  contended  for  the  appellant  that  the  Chief Judicial Magistrate,  having entertained  the complaint, was required to  examine other  witnesses, take  cognizance  and then could have transferred the case, if he so desired, to a competent Magistrate  subordinate to  him  as  envisaged  by s/92(1) of  the Code.  But,  in  this  case  without  taking cognizance, the Chief Judicial Magistrate committed manifest jurisdictional error  in transferring  the complaint  to the Magistrate who took further action therein.      We find  no force  in the  contention. Though  the Code defines "cognizable  offence" and  "non-cognizable offence", the word  ‘cognizance’ has not been defined in the Code. But it is now settled law that the court takes cognisance of the offence and  not the  offender. As  soon as  the  Magistrate applies his  judicial mind  to the  offence  stated  in  the complaint or the police report etc, cognisance is said to to be taken.  Cognizance of  the offence  takes place  when the Magistrate takes judicial notice of the offence. Whether the Magistrate has taken cognizance of offence on a complaint or on a  police report  or upon  information of  a person other than the police officer, depends upon further taken pursuant thereto and  the attending  circumstances of  the particular case including  the mode in which case is sought to be dealt with or  the nature  of the  action taken by the Magistrate. Under sub-section  (1) of  section  190  of  the  code,  any Magistrate may  take  cognizance  of  an  offence  (a)  upon receiving  a   complaint  of  facts  which  constitute  such offence, (b)  upon a  police report  of such  facts, and (c) upon information  received from  any  person  other  than  a police officer, or upon his own knowledge, that such offence has been committed.      Sub-section (1)  of Section 192 has conferred a special power on  the Chief  Judicial Magistrate,  as, normally, the Magistrate taking  cognizance of  an offence, has himself to proceed further  as enjoined  by the Code. But, an exception has been  made in the case of Chief Judicial Magistrate, may be because  he has  some administrative  functions  also  to perform. A  Magistrate who receives the case on transfer and takes cognizance  would not  become  incompetent  to  do  so merely because  the sanction  of transfer of the case to his file is  not in  accordance with  law.  The  power  to  take cognizance has been conferred on a Magistrate by s.190(1) of the Code,  and he would not be denuded of this power because the case has come to his file pursuant to some illegal order of the  Chief  Judicial  Magistrate.  The  former  would  be excercising his  power of  taking cognizance  even in such a case,  because   of  his   having   received   a   complaint constituting the offence. It would not be material, for this

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purpose, as  to how  he came  to  receive  the  complaint  - directly or on transfer from the Chief Judicial Magistrate.      We are,  therefore, of  the opinion  that no  error  of jurisdiction was  committed by  the Judicial  Magistrate  in taking cognizance of the offence.      It is  next  contended  that  the  appellant,  being  a partner in  the complainant  firm, cannot  be said  to  have committed criminal  breach of  trust of  his own  funds  and that, therefore,  it is  a case of civil liability only. The contention that one partner cannot commit criminal breach of trust against  other partners,  though prima facie alluring, on facts  of this  case, it  does not  appear to be tenable. Partnership firm  is not  a legal entity but a legal mode of doing business  by all  the  partners.  Until  the  firm  is dissolved as  per law  and the  accounts  settled,  all  the partners have dominion in common over the property and funds of the  firm. Only  after the  settlement  of  accounts  and allotment of  respective share, the partner becomes owner of his share.  However, criminal breach of trust under s.406 is not in  respect of the property belonging to the partnership firm, but  is an offence committed by a person in respect of the property  which has  been specially  entrusted to such a person under  a special  contract and he holds that property in  fiduciary   capacity  under   special  contract.  If  he misappropriates the same, it is an offence.      At  this  stage,  we  have  only  to  see  whether  the allegations made in the complaint make out the offence prima facie. It  is not  the case  of  the  complainant  that  the appellant and the other accused Ajit were entrusted with the dominion of  the property  of the  firm in their capacity as partners of  the complainant  firm. On  the other  hand, the complainant firm  entered into  a contract  with  the  first accused firm-M/s.  Sapna Enterprises,  entrusted the  second film for  exhibition and for accounting the sale proceeds in terms of  the contract  and to  return the  film.  They  had neither accounted  for, not  returned the  film.  The  first accused, the  appellant and Ajit, therefore, were alleged to have committed the offences in question.      Under these  circumstances, we  do not  think that  the imputations alleged  against the appellant have been done in his capacity  as a  partner of the firm. Whether the offence has been  made out,  whether he  is liable  and what are the defences open  to him  are not  matters at  this  stage  for consideration. It  is for  the learned Magistrate to proceed with the trial and to deal with according to law.      The appeal is accordingly dismissed.