Finance Ltd. Vs. Shree Shanthi Homes Pvt. Ltd. & Anr  Insc 435 (23
Singh & S.H. Kapadia
J U D
G M E N T (Arising out of SLP(Crl.) No.320/2005)
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.
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 ...........
& 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.
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 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.
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.
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.
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.
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.
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
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.
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.
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.
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.
appeal is allowed.