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CASE NO.: Appeal (crl.)  1063 of 2005

PETITIONER: CREF FINANCE LTD.        

RESPONDENT: SHREE SHANTHI HOMES PVT. LTD.&ANR.                                

DATE OF JUDGMENT: 23/08/2005

BENCH: B.P. SINGH & S.H. KAPADIA  

JUDGMENT: J  U  D  G  M  E  N  T (Arising out of SLP(Crl.) No.320/2005)                            Special Leave granted.         This appeal is directed against the judgment and order dt.21st  September, 2004 of the High Court of Karnataka at Bangalore  in Criminal  Petition No.4469/2002.  The appellant is the complainant, and he is aggrieved  by the order passed by the High Court whereby the High Court remitted the  matter to the Magistrate on a finding that the Magistrate had issued process  against the respondents without taking cognizance of the offence, and since  taking of cognizance was a condition precedent, the issuance of process was  bad.  The correctness of this order is challenged before us.           It is not in dispute that four cheques were issued by respondent No.2,  the Managing Director of the respondent No.1 Company for the total amount  of rupees five crores.  The payments were made by respondent No.2 on behalf  of the respondent No.1 company of which he was a Director.  The cheques  were dishonoured since the respondent No.2 stopped payment of those  cheques.  The appellant filed a complaint before the 14th Additional Chief  Metropolitan Magistrate, Bangalore who on 19.4.2000, the date of filing of  the complaint itself, directed the matter to be put up on 01.06.2000.  The  rubber seal order put on the complaint itself reads as follows :-                 " Presented on 19/4/2000                    Cognizance taken ...........                    Register & put up on 1/6/2000                                 Sd.........."

       This has been signed by the 14th Additional Chief Judicial  Magistrate.  The order-sheet of the court of that date records that cognizance  was taken against the accused persons in the presence of the complainant  whose statement was to be recorded on 1.6.2000.  It appears that the order  sheet is not signed by the Magistrate himself, though the rubber seal order is  signed by him.  On 29.7.2000, the Magistrate proceeded to record the  statement of the complainant and thereafter by order dated July 31, 2000,  issued process against the respondents finding that there was ground to  proceed against the accused for the offence under Section 138 of the  Negotiable Instruments Act, 1881.           After about four years, the respondents moved an application before  the High Court under Section 482 of the Code of Criminal Procedure for  quashing the proceeding.  The said petition has been disposed of by a brief  order, the relevant portion of which reads as follows :-         "On  presentation of the complaint before the Magistrate, the  Magistrate neither endorsed on the complaint by applying his mind  to proceed with the complaint by taking cognizance nor in the order  sheet produced.  It is mandatory that the word taking cognizance  necessarily requires application of mind by perusing the complaint  and taking of cognizance precedes recording of sworn statement in  respect of P.C.R. like this.  The Magistrate did not take cognizance  before proceeding to sworn statement and after recording the sworn  statement going through the documents he has formed an opinion  that it is a case to proceed against the petitioners and accordingly

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issued summons.  The same has been assailed in this petition on  various grounds.  Since taking of cognizance is a condition  precedent as noted above, without entering into the merits of the  case on various grounds raised by the petitioners in this petition, it  would be appropriate to quash the order of issuance of summons  and to remit back the matter to the Magistrate to proceed from the  stage of taking cognizance in accordance with law and it is left open  to the parties to raise all the contentions before the Magistrate at the  appropriate stage."         Learned counsel for the appellant submitted before us that the order  passed by the High Court is clearly unsustainable both on law as also in the  facts of this case.  He brought to our notice the photocopy of the original  complaint filed in the Court which bears the rubber stamp order to the effect  that the complaint was presented on 19.4.2000, cognizance was taken, the  case was ordered to be registered  and to be put up on 01.06.2000.  It is not  disputed before us that this order is signed by the learned Magistrate on  19.4.2000 itself.  He, therefore, submitted that the High Court was clearly in  error in coming to the conclusion that the Magistrate had not taken cognizance  before proceeding further in the matter.         Secondly, he submits that in any event, once the Magistrate peruses  the complaint and proceeds to take further steps which he is required to take  in law, he should be deemed to have taken cognizance even if not so expressly  recorded because that is not necessary.  The fact that he did not reject the  application on any of the grounds on which such an application could be  rejected, and chose to proceed further in the matter, itself amounts to taking  cognizance of the offence.  The High Court was clearly wrong in holding that  the Magistrate had proceeded in the matter without taking cognizance.         Learned counsel appearing on behalf of the respondents submitted  that it may be that the Magistrate need not in express words record the fact  that he has taken cognizance, but the record must show that he had applied his  mind to the contents of the complaint before proceeding further in the matter.   He supported the view of the High Court and submitted that even if it be held  that cognizance was taken, this Court must hold that cognizance was taken  improperly, without application of mind.                 In Ajit Kumar Palit vs. State of  West Bengal,  (1963) Supp. 1 SCR  953, this Court observed :-         "The  word "cognizance" has no esoteric or mystic  significance in criminal law or procedure.  It merely means - -- become aware of and when used with reference to a Court  or Judge, to take notice of judicially.  It was stated in Gopal  Marwari v. Emperor (AIR 1943 Pat.245) by the learned  Judges of the Patna High Court in a passage quoted with  approval by this Court in R.R.Chari v. State of Uttar  Pradesh (1951 SCR 312, 320) that the word, ‘cognizance’  was used in the Code to indicate the point when the  Magistrate or Judge takes judicial notice of an offence and  that it was a word of indefinite import, and is not perhaps  always used in exactly the same sense.  As observed in  Emperor v. Sourindra Mohan Chuckerbutty (1910 ILR 37  Cal.412, 416), "taking cognizance does not involve any  formal action ; or indeed action of any kind, but occurs as  soon as a Magistrate, as such, applies his mind to the  suspected commission of an offence."  Where the statute  prescribes the materials on which alone the judicial mind  shall operate before any step is taken, obviously the  statutory requirement must be fulfilled."         In the instant case, the appellant had filed a detailed complaint before  the Magistrate.  The record shows that the Magistrate took cognizance and  fixed the matter for recording of statement of the complainant on 01.06.2000.   Even if we assume, though that is not the case, that the words "cognizance  taken" were not to be found in the order recorded by him on that date, in our  view that would make no difference.  The cognizance is taken of the offence  and not of the offender and, therefore, once the Court on perusal of the  complaint is satisfied that the complaint discloses the commission of an  offence and there is no reason to reject the complaint at that stage, and

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proceeds further in the matter, it must be held to have taken cognizance of the  offence.  One should not confuse taking of cognizance with issuance of  process.  Cognizance is taken at the initial stage when the Magistrate peruses  the complaint with a view to ascertain whether the commission of any offence  is disclosed.  The issuance of process is at a later stage when after considering  the material placed before it, the Court decides to proceed against the  offenders against whom  a prima facie case is made out.  It is possible that a  complaint may be filed against several persons, but the Magistrate may choose  to issue process only against some of the accused.  It may also be that after  taking cognizance and examining the complainant on oath, the Court may  come to the conclusion that no case is made out for issuance of process and it  may  reject the complaint. It may also be that   having considered the  complaint, the Court may consider it appropriate to send the complaint to  police for investigation under Section 156(3) of the  Code of Criminal  Procedure.  We can conceive of many other situations in which a Magistrate  may not take cognizance at all, for instance, a case where he finds that the  complaint is not made by the person who in law can lodge the complaint, or  that the complaint is not entertainable by that  Court, or that cognizance of the  offence alleged to have been committed cannot be taken without the sanction  of the competent authority etc. etc.  These are cases where the Magistrate will  refuse to take cognizance and return the complaint to the complainant.  But if  he does not do so and proceeds to examine the complainant and such other  evidence as the complainant may produce before him then,  it should be held  to have taken cognizance of the offence and proceeded with the inquiry. We  are, therefore, of the opinion that in the facts and circumstances of this case,  the High Court erred in holding that the Magistrate had not taken cognizance,  and that being a condition precedent, issuance of process was illegal.           Counsel for the respondents submitted that the cognizance even if  taken was improperly taken because the Magistrate had not applied his mind  to the facts of the case.  According to him, there was no case made out for  issuance of process.  He submitted that the debtor was the company itself and  the respondent No.2 had issued the cheques on behalf of the Company. He had  subsequently stopped payment of those cheques.  He, therefore, submitted that  the liability not being the personal liability of respondent No.2, he could not  be prosecuted, and the Magistrate had erroneously issued process against him.   We find no merit in the submission.  At this stage, we  do not wish to express  any considered opinion on the argument advanced by him, but we are satisfied  that so far as taking of cognizance is concerned, in the facts and circumstances  of this case, it has been taken properly after application of mind.  The  Magistrate issued process only after considering the material placed before  him.  We, therefore, find that the  judgment and order of the High Court is  unsustainable and must be set aside.  This appeal is accordingly allowed and  the impugned judgment and order of the High Court is set aside.  The trial  court will now proceed with the complaint in accordance with law from the  stage at which the respondents took the matter to the High Court.         Since the matter is already considerably delayed, it must be disposed  of with promptitude.  Counsel for the parties are present in Court and in their  presence, we direct the parties to appear before the trial court  on 19.9.2005 on  which date the Court will give further directions.         This appeal is allowed.