S.M. Daud, J.
1. By this petition under section 482 of the Criminal Procedure Code (Cri.P.C.) and Article 227 of the Constitution, the petitioner wants the quashing of a Magisterial direction under section 156(3) of the Cri.P.C.
2. Petitioner and respondent 1 are brothers having four more brothers, named Manmohandas, Navinchandra, Jaindas and Rasiklal. The business of the family was to trade in cloth. They were doing business under different names in which they and/or their sons and daughters were and are partners. The offices of all the firms were at 34, Navi Galli, Mulji, Jehta Market and 439/3, Kalbadevi Road, Bombay. In the latter half of 1986 disputes arose between the brothers and in September 1986, the brothers came to a settlement. This was that the Bank accounts of the six firms would be operated for the purpose of control of funds only by cheques drawn jointly by the petitioner-hereinafter referred to as 'the accused' and a family friend Natwarlal M. Shah. The sales and collections of all the firms were to be looked after only by the accused.
3. On 10 June, 1987, respondent 1 submitted a petition to a Metropolitan Magistrate seeking therein a direction to the General Crime Branch C.I.D. Bombay under section 156(3) of the Cri.P.C. The genesis of this sought for direction was explained thus :---
At the end of September 1986 a total sum of Rs. 46,43,000/- representing the collections and dues from different customers of the six firms had been effected. Most of the payments had comes vide drafts and cheques. They were collected by the accused. Enquiries with the Dena Bank revealed that a little prior to the institution of the petition, the credits in the accounts of the firms had gone down considerably. The Enquiries made by the complainant and Rasiklal showed that the customers of the firms had been making payments in due course. This was however, not reflected in the credits with the Bank. For this reason the complainant believed that---'The accused being entrusted with the collection of dues has been dishonestly converting the same to his own use in violation of the terms of entrustment viz., to deposit the same in the respective Bank accounts. For that purpose the accused may be encashing the cheques and drafts by opening fictitious bank accounts or illegal discounting. If, therefore, charge the accused for the offence of Criminal Breach of Trust. Though the accused is a partner he was specifically entrusted with the work of collection and deposit in bank and would be liable under section 406 I.P.C.'
The order passed by the Magistrate reads as follows :---
'Perused the complaint. Heard the advocate. The facts of the case disclose a cognizable offence under section 406 I.P.C. It should therefore be thoroughly investigated by police. The complaint is therefore referred to General Branch CID, Bombay, for investigation under section 156(3) Cri.P.C. 1973.'
The communication sent to the Police went a little further in that it direct them to submit a report on or before a certain date.
4. The contention of the accused in the quashing petition is that the petition moved by the complainant before the Magistrate is an abuse of the process of law. The petition did not disclose any offence whatsoever. The disputes between the parties was essentially of a civil nature involving partners. In such a case there was no question of criminal breach of trust and the matter was concluded by the decision of the Supreme Court in Velji Raghavji Patel's case, reported in : 1965CriLJ431 . The order passed by the Magistrate was erroneous and deserved to be quashed.
5. Learned Counsel representing the accused and the complainant have been heard. The short point for determination is whether the order passed by the Magistrate deserves to be quashed and the petition moved by the complainant dismissed.
6. The first point which requires an answer is whether the petition moved by the complainant discloses a matter requiring a direction under section 156(3) of the Cri.P.C. Mr. Vakil for the accused submits that the petition itself shows the disputes between the parties to be of a civil nature. The terms under which the brothers had came together to do business included the reference of disputes between them to arbitration. If at all any judicial forum had jurisdiction to resolve the disputes between the partners, it would be a Civil Court. The petition hardly contained anything which could be said to constitute an allegation in precise terms. The extent of collections made, the total sum withdrawn, and all other matters of substance were vaguely set out in the petition. On this scantiest of material, the complainant wanted an investigation. The Magistrate without even a verification statements acceded to the request for investigation by the police, and this, after opining that the petition discloses a cognizable offence requiring thorough investigation. Learned Counsel for the complainant on the other hand contends that the material which has come in after the filling of the petition, whether in the course of the investigation being carried out or in the shape of affidavits tendered by the parties, fortify the allegations made in his client's petition to the Magistrate. Reference is made to the affidavit of the accused in which he admits being entrusted with the task of collecting amounts from the customers of six firms and being empowered to make withdrawals from the accounts by means of cheques drawn jointly by himself and the family friend Natwarlal Shah. At this stage it is not necessary to go into the details. A close scrutiny of the petition presented to the Magistrate is necessary. That shows that the brothers including the parties entered into an arrangement whereunder the accused was entrusted with the task of collecting dues and sums payable to the firms by the customers. These collections were to go into specified accounts that the firms had with the Dena Bank. Withdrawals from the accounts were to be made through cheques drawn jointly by the accused and Natwarlal Shah. Para 5 of the petition speaks of sums received in the accounts of the six different firms. Para 6 refers to the mode by which the firms were paid by their customers. Para 7 shows the basis on which the complainant ascribes the commission of an offence of criminal breach of trust to the accused. To be brief, a decrease in the deposits vis-a-vis the expectation led him to infer that the receipts were being diverted to other channels so as to enable their conversion to purposes other than that stipulated in the settlement between the brothers. The arguments is that even assuming the entire petition to be true, no offence had been made out. In support of this contention, reliance is placed upon the following passage from Velji Raghavji Patel's case (supra) :---
'Upon the plain reading of section 405 I.P.C. it is obvious that before a person can be said to have committed criminal breach of trust it must be established that he was either entrusted with or entrusted with dominion over property which he is said to have converted to his own use or disposed of in violation of any direction of law, etc. Every partner has dominion over property by reason of the fact that he is a partner. This is a kind of dominion which every owner of property has over his property. But it is not dominion of this kind which satisfied the requirements of section 405. In order to establish 'entrustment of dominion' over property to an accused person the mere existence of that person's dominion over property is not enough. It must be further shown that his dominion was the result of entrustment. Therefore, as rightly pointed out by Harris, C.J., the prosecution must establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties, entrusted to the accused person. If in the absence of such a special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or in other words cannot be held to have been 'entrusted' with dominion over partnerships properties.'
But it is not correct to say that the petition presented to the Magistrate does not make out a case of special entrustment of property with the accused. This inference I draw not from the mere use of the words 'special entrustment' appearing in the petition. Admittedly collections of dues and advances from the customers of the firms were to be the exclusive preserve of the accused. Next, the collections were to be funnelled into six specified accounts with the Dena Bank. Withdrawals therefrom were to be made through cheques drawn jointly by the accused and Natwarlal Shah. This arrangement is not disputed by the accused. The ingredients of a special entrustment are therefore clearly established. Under the arrangement the collection could not be made by the other brothers. Next, the arrangement stipulated the passing of the collections made into specified accounts. Accused after collecting the amounts could not deposit the amounts where he willed. Withdrawals could not be made from the accounts by the accused as and for the purpose, he liked. Therefore, dominion over the property was conferred only upon the accused. A case of special entrustment having been made out, the next question will be whether the petition made out the commission of an offence requiring investigation under section 156(3) Cri.P.C.
7. In regard to the second question, I have been referred to a number of authorities as to what are the conditions precedent for the making of an order under section 156(3) Cri.P.C. The one which concludes the question is Devarpalli L Reddy v. Narayan Reddy, : 1976CriLJ1361 . Mr. Vakil for the accused submits that the law laid down in that case has to be read as restricted to the power of a Magistrate giving a direction under section 156(3) Cri.P.C. upon receipt of a complaint disclosing an offence exclusively triable by the Court of Sessions. Mr. Desai for the complainant replies, and, I agree, that the ratio is not to be read or thus restricted. Sarkaria, J., speaking for the Bench has this to say and these observations take into their sweep the powers of the Magistrate under a different sections mentioned therein :---
'It is well settled that when a Magistrate receives a complaint, he is not bound to take cognizance if the facts alleged in the complaint, disclose the commission of an offence. This is clear from the use of the words 'may take cognizance' which in the context in which they occur cannot be equated with 'must take cognizance'. The word 'may' gives a discretion to the Magistrate in the matter. If on a reading of the complaint he finds that the allegations therein disclose a cognizable offence and the forwarding of the complaint to the police for investigation under section 156(3) will be conducive to justice and save the valuable time of the Magistrate from being wasted in enquiring into a matter which was primarily the duty of the Police to investigate, he will be justified in adopting that course as an alternative to taking cognizance of the offence, himself.
This raises the incidental question : what is meant by 'taking cognizance of an offence' by the Magistrate within the contemplation of section 190 This expression has not been defined in the Code. But from the scheme of the Code, the content and marginal heading of section 190 and the caption of Chapter XIV under which sections 190 to 199 occur, it is clear that a case can be said to be instituted in a Court only when the Court takes cognizance of the offence alleged therein. The ways in which such cognizance can be taken are set out in clauses (a), (b) and (c) of section 190(1). Whether the Magistrate has or has not taken cognizance of the offence will depend on the circumstances of the particular case including the mode in which the case is sought to be instituted , and the nature of the preliminary action, if any, taken by the Magistrate. Broadly speaking, when on receiving a complaint the Magistrate applies his mind for the purposes of proceeding under section 200 and the succeeding sections in Chapter XV of the Code of 1973, he is said to have taken cognizance of the offence within the meaning of section 190(a). If, instead of proceeding under Chapter XV , he has in the judicial exercise of his discretion, taken action of some other kind, such as issuing a search warrant for the purpose of investigation, or ordering investigation by the police under section 156(a), he cannot be said to have taken cognizance of any offence.'
It was argued that the Magistrate in the instant case has taken cognizance inasmuch as he has observed that the facts of the case disclose a cognizable offence under section 406 I.P.C. requiring thorough investigation by the police. As I will show later these observations of the Magistrate were unwarranted and should never have been made. However, the mere use of mistake would not change the substance of the order. In law, there is a distinction between as investigation under section 156(3) and that under section 202 of the Cri.P.C. This difference is best explained in Tula Ram's case reported at : 1978CriLJ8 . In that case, the Court analysed sections 156(3), 190, 200, 202, and 204 of the Cri.P.C. The propositions emerging from this analysis were summarised thus at para 14 :
'1. That a Magistrate can order investigation under section 156(3) only at the pre-cognizance stage, that is to say, before taking cognizance under section 190, 200 and 204 and where a Magistrate decides to take cognizance under the provisions of Chapter 14 he is not entitled in law to order any investigation under section 156(3) though cases not falling within the proviso to section 202 he can order an investigation by the police which would be in the nature of an enquiry as contemplated by section 202 of the Code.
2. Where a Magistrate chooses to take cognisance he can adopt any of the following alternatives :---
(a) He can pursue the complaint and if satisfied that there are sufficient grounds for proceeding he can straight-way issue process to the accused but before he does so he must comply with the requirements of section 200 and record the evidence of the complainant or his witnesses.
(b) The Magistrate can postpone the issue of process and direct an enquiry by himself.
(c) The Magistrate can postpone the issue of process and direct an enquiry by any other person or an investigation by the police.'
Here after the presentation of the petition, the Magistrate perused the contents thereof. After the perusal was over, he heard learned advocate representing the complainant. He then took cognisance in a sense by holding that a prima facie case disclosing the commission of an offence by the accused had been made out. But this he could do only after recording the statement of the complainant on oath. Such a statement not having been recorded, it follows that the Magistrate had not acted under section 202 of the Cri.P.C. The objectionable words found in the order mean no more than an expression that the petition presented to the Magistrate, disclosed a matter requiring investigation by the Police. That there was material to that effect in the petition is undeniable. First the petition averred that there was the arrangement between the brothers for the collection and withdrawal. Next, it averred that there was the so-called shortfall in the expected credits in the Bank accounts. A case requiring a direction to the police to investigate was made out and that sufficed to justify the impugned order. The entire order cannot be justified and certainly not the observations about disclosure of a cognisable offence under section 406 I.P.C. requiring a thorough investigation by the Police. Mr. Vakil submits that in the face of these observations no Police Officer would dare to conduct an independent investigation for he would always be haunted by the very decisive words used by the Magistrate in expressing himself. There was no material to warrant the use of the words taken exception to. It was hardly necessary for the Magistrate to direct the carrying out of a 'thorough' investigation. Every investigation to be conducted by the police is expected to be proper and words like 'thorough' can give rise to an inference of pressure which should not be brought to bear upon the investigating agency. The investigating agency shall therefore disregard the Magistrate's opinion that a cognisable offence under section 406 I.P.C. had been made out. Neither should any heed be paid to the arbitrary admonition that the investigation be thorough. All that it should be taken to mean, is that the investigation be honest and proper. Mr. Desai very fairly offered that the police be directed not to effect an arrest of the accused except with the previous permission of the Magistrate. According to Mr. Vakil such a condition cannot be imposed upon the Police. Normally, the Police cannot be placed under any restraint, but the inherent powers of this Court can be used for furtherance of justice where required. Having regard to the foregoing discussion, the application is partly allowed by ordering thus :
The Police shall disregard the Magistrate's opinion that the facts of the case disclosed a cognisable offence under section 406 I.P.C requiring a thorough investigation by them. They shall investigate in the manner expected of the Police by the law and without any pre-conceived notions. In the event of their wanting to arrest the petitioner accused, they shall obtain the prior permission of the Magistrate, and the Magistrate, before issuing such permission, shall hear both the parties. Subject to the above variation, the Magistrate's order is confirmed.
On a request made by Mr. Vakil, I direct the investigating agency to complete the investigation within two months as from today. Accused is also directed to make himself available for compliance with all such lawful directions as may be given unto him by the police.
Rule in these terms made absolute.