Calcutta High Court
S.R. Sharma vs The State Of West Bengal And Anr. on 4 September, 1992
Equivalent citations: 1993CRILJ831
ORDER Gitesh Ranjan Bhattacharjee, J.
1. This is an application under Section 482, Cr.P.C. for quashing the proceeding pending in the Court of Sub-Divisional Judicial Magistrate at Alipore in connection with the Ekbalpur police station Case No. 180 dated 28-6-90 under Section 408, IPC. The petitioner, Shri S. R. Sharma was appointed as Works Manager of Singh Hindustan Marine Pvt. Ltd. at its Bombay office in 1977. The said company has its registered office which is its head office at Calcutta within the territorial jurisdiction of the Ekbalpur Police Station. The said company also has different branch offices at Bombay and Madras. The petitioner is a Marine Engineer. In January 1988 he was promoted and appointed as Managing Director of the said company and in August 1989 he was appointed as Director-cum-Chief Executive of the said company. It may be mentioned here that in April, 1989 he was transferred from the Bombay office to the Calcutta office of the company and later he submitted resignation in September, 1989 and the resignation was accepted and he was relieved from the service with effect from 15th September, 1989. On 16th June, 1990 the opposite party No. 2 herein Shri T. K. Bhattacharyya who is the Manager of Singh Hindustan Marine Pvt. Ltd. filed a petition of complaint before the learned Sub-Divisional Judicial Magistrate, Alipore against the petitioner herein praying for a direction upon the Officer-in-Charge, Ekbalpur Police Station to take up investigation in the matter under Section 156(3), Cr.P.C. treating the said petition as FIR. The learned Sub-Divisional Judicial Magistrate accordingly directed police investigation in the matter under Section 156(3), Cr.P.C. It is inter alia alleged in the petition of complaint that the petitioner's company raised bills on their clients M/s. SNP Ship Management and Consultation Bureau (Colaba, Bombay-5) for repairs and supplies done by the company on the ships managed by the said M/s. SNP Ship Management and Consultation Bureau totalling Rs. 35,554,50 p. The said amount was covered by three bills, two of which were issued in January, 1987 and the third one in June, 1987. It is the further allegation that as the said bills were outstanding for a considerable period, the said Ship Management and Consultation Bureau was requested to arrange for payment of the outstanding bills but it was subsequently ascertained in 1990 that the accused S.R. Sharma had realised the said amount in two instalments in the break-up of Rs. 14,784.50 p. on 6-4-87 and Rs. 20,770 on 28-9-87 in settlement of the said bills and took the amounts in cash and granted receipts under his hand but without affixing any revenue stamp thereon. It is also the allegation that the accused misappropriated the said amount and never deposited the same with the petitioner's company and the matter was kept in complete darkness till it was ascertained when Advocate's notice was served on the said Ship Management and Consultation Bureau demanding payment of all dues. It is charged in the petition of complaint that the accused committed offence punishable under Section 408, IPC. In para 2 of the petition of complaint it is stated that the petitioner's company has different branch offices at Bombay and Madras but all the accounts are required to be accounted for at the Calcutta office at 12/ 5, Momimpur Road, P.S. Ekbalpur. The police in due course after completion of investigation submitted challan against the accused under Section 408, IPC and the learned Magistrate took cognizance on the said challan on 23-10-90.
2. The proceeding started in the Court of the learned Sub-Divisional Judicial Magistrate, Alipore on the basis of the challan has been challenged before this Court by this revisional application mainly on the ground that the Sub-Divisional Judicial Magistrate at Alipore has no territorial jurisdiction to try the case. The contention of the accused who is the petitioner herein is that the amount of Rs. 35,554.50 p. which was collected by the petitioner in cash from the said SNP Ship Management and Consultation Bureau was handed-over by the Petitioner in October, 1987 at Bombay to Shri C.J. Singh who was the Managing Director of the company in presence of one Smt. Girija Nair, an employee of the company. It is of course an admitted fact that the petitioner realised the amount stated to have been misappropriated, but there is a factual controversy as to whether the said amount was paid in cash by him in October, 1987 to the Managing Director, Shri C. J. Singh at Bombay or (not?) at all. There is also a controversy as to whether the said Smt. Girija Nair was present at the time of the alleged payment, It is needless to mention that there is no scope for entering into the merit of the factual controversy between the parties in this revisional application. The question whether the amount has been misappropriated by the petitioner or has been paid by him to the then Managing Director are all questions of facts which will have to be decided at the time of trial on the basis of evidence,
3. The question which however has to be decided by this Court now is whether the Sub-Divisional Judicial Magistrate, Alipore has jurisdiction to try the case. As regards the territorial jurisdiction it has been submitted on behalf of the opposite party that in para 2 of the petition of complaint it has been specifically stated that the company has different branch offices at Bombay and Madras but all the accounts are required to be accounted for at the head office of the company at Calcutta. In the affidavit-in-opposition also it has been stated in para 10 that at all material times accounts of the company including its branches at Bombay and Madras used to be, and are, audited in Calcutta by Mr. M. R. Biswanathan and Co., Chartered Accountant of Calcutta and that employees/officers/directors of the said branch offices were-obliged to and have been regularly despatching the accounts papers to the registered office of the company at its Calcutta address for the purpose of audit and every person at Bombay and Madras branch offices was and is accountable only .to the registered office of the company at Calcutta. In para 11 of the affidavit-in-opposition it is stated that in view of what has been stated in the preceding paragraphs money received in Bombay on behalf of the company and misappropriated can be tried also by the Court of the Sub-Divisional Judicial Magistrate at Alipore. Therefore even according to the complainant/opposite party the money was received and misappropriated at Bombay. It is therefore evident that the alleged offence of the criminal breach of trust was committed at Bombay. Section 177, Cr. P.C. provides that every offence shall ordinary be inquired into and tried by a Court within whose local jurisdiction it was committed. Evidently, therefore, the Bombay Court has jurisdiction to try the present case. The contention of the complainant opposite party however is that in view of Section 181(4) Cr.P.C. the case is triable by Calcutta Court inasmuch as the money received by the accused and misappropriated by him at Bombay was required to be accounted for by him at the head office of the company at Calcutta within the jurisdiction of the Calcutta Court and as such the Calcutta Court has jurisdiction to try the offence although the offence was committed at Bombay. Section 181(4), Cr. P.C. runs thus :
"181(4). Any offence of criminal misappropriation or of criminal breach of trust may be inquired into or tried by a Court within whose local jurisdiction the offence was committed or any part of the property which is the subject of the offence was received or retained, or was required to be returned or accounted for, by the accused person".
4. So far as the allegation goes the offence was committed at Bombay and the money was received, retained and misappropriated at Bombay. The only ground on which the jurisdiction is ascribed to the Calcutta Court is that the accused was required to account for the money to the head office of the company at Calcutta. On the other hand, the learned Advocate for the petitioner has attracted my attention to several provisions of the Companies Act, 1956 in support of his contention that the petitioner had no liability to account for the money received by him at Bombay to the head office at Calcutta. Section 2(9) of the Companies Act defines 'branch office'. It is however an admitted fact that the Bombay office of the company is a branch office and the head office is at Calcutta Section 209 of the Act provides for keeping of books of account of the company. Sub-section (1) of Section 209 inter alia provides that every company shall keep at its registered office proper books of account with respect to all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure take place, etc. etc. Sub-section (2) of Section 209 provides that where a company has a branch office, the company shall be deemed to have complied with the provisions of Sub-section (1), if proper books of account relating to the transactions effected at the branch office are kept at that office and proper summarised returns, made up to dates at intervals of not more than three months are sent by the branch office to the company at its registered office or the other place referred to in Sub-section (1). Sub-section (3) of Section 209 provides that for the purposes of Sub-sections (1) and (2) proper books of account shall not be deemed to be kept with respect to the matters specified therein (a) if there are not kept such books as are necessary to give a true and fair view of the state of affairs of the company or branch office, as the case may be, and to explain its transactions, and (b) if such books are not kept on accrual basis arid according to the double entry system of accounting. Section 227 contains provisions relating to the powers and duties of auditors. The auditor's report is required under Sub-Sections (3)(bb) to state whether the report on the accounts of any branch office audited under Section 228 by a person other than the company's auditor has been forwarded to him as required by clause (c) of Sub-Section (3) of that Section and how he has dealt with the same in preparing the auditor's report. Section 228 makes provisions for audit of accounts of branch office of company and provides that where a company has a branch office the accounts of that office shall be audited by the company's auditor appointed under Section 224 or by a person qualified for appointment as auditor of the company under Section 226. Sub-Section (2) of Section 228 provides that where the accounts of any branch office are audited by a person other than the company's auditor, the company's auditor shall be entitled to visit the branch office if he deems it necessary to do so for the performance of his duties as auditor and shall have a right of access at all times to the books and accounts and vouchers of the company maintained at the branch office. Sub-Section (4) of Section 228 empowers the Central Government to make rules providing for the exemption of any branch office from the provisions of Section 228 to the extent specified in the rules. It further provides that in making such rules the Central Government shall have regard to all or any of the matters specified therein including the arrangement made by the company for the audit of accounts of the branch office by a person otherwise qualified for appointment as Branch Auditor even though such person may be an officer or employee of the company. Section 232 provides that if default is made by a company in complying with any of the provisions contained in Sections 225 to 231, the company and every officer of the company who is in default shall be punishable with fine which may extend to five hundred rupees. The provisions of the Companies Act referred to above when read together leave no doubt that a company has to maintain at the branch office its accounts for the branch office and such accounts of the branch office, unless exempted by the Central Government by rules, are also required to be audited either by the auditor of the company or by any separate auditor appointed for the purpose. Proper summarised returns of the accounts of the branch office are also required to be sent at specified intervals to the registered office of the company and the auditor's report also must cover not only the accounts of the head office but also the accounts of the branch office and where the accounts of the branch office is audited by a person other than the company's auditor the report of the auditor of the company must state whether the report on the accounts of the branch office audited by a person other than the company's auditor has been forwarded to the company's auditor and how he has dealt with the same in preparing the auditor's report. It is, therefore, evident that when account of the branch office have to be maintained at the branch office showing inter alia all sums of money received, any employee or officer of the company who receives any sum of money on behalf of the company as a part of the transactions and activities performed by the branch office such employee or officer has to account for the same at the branch office. Here in the present case the allegation is that the petitioner collected the money at Bombay on the basis of the bills raised by the branch office at Bombay and that being so this is a transaction which is required to find place in the accounts required to be maintained at the branch office at Bombay and therefore it must be held that the petitioner who collected the money as a part of the transaction falling within the domain of accounts required to be maintained at Bombay has to account for the same at the branch office at Bombay. The fact that from the branch office periodical statements of account or even regular statement of account are sent to the registered office at Calcutta or that all accounts are centrally audited at the head office at Calcutta does not make the accused liable to account for at the head office any sum received by him as part of the activities and transactions carried on at the branch office. That being so, I must hold that it will not be correct to say that the petitioner/ accused was required to account for at Calcutta in respect of the money he had received at Bombay as a part of the transactions and activities carried on by the branch office at Bombay which he was responsible to account for at the branch office. As I find that the petitioner was required to account for not at Calcutta but at Bombay, I must hold that the Calcutta Court has no jurisdiction to try the case and the jurisdiction lies with the Bombay Court. My attention has been drawn to the audit report of the company and the statement of summary of sundry debtors as on 31-12-87 showing inter alia the outstanding debt of Rs. 35,554.50 p. against the said SNP Ship Management and Consultation Bureau which also bears the signature of the present petitioner. This is, of course, a matter relating to the question whether as a matter of fact the petitioner paid the amount collected by him or misappropriated the same which will be decided at the time of trial but this has, at the present moment, no connection with the question of jurisdiction of the Court.
5. Since I have found that the Calcutta Court has no jurisdiction to try the case we are now required to consider the question as to what order is warranted. We have seen that in this case the FIR was lodged at Calcutta and the police of the Ekbalpur P.S., Calcutta made the investigation and submitted charge-sheet after completion of such investigation. The case rather could have been investigated by Bombay police within whose jurisdiction the offence was committed. However the fact that the Calcutta police has investigated the case has no fatal consequence. In view of Section 156(1), Cr.P.C. any officer-in-charge of a police station may investigate any cognizable case which a Court having jurisdiction over the local area of such police station would have power to inquire into or try under the provisions of Chapter-XIII. Sub-Section (2) of Section 156 however clearly provides that no proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under Section 156 to investigate. Therefore investigation in the case by the Calcutta police cannot be called in question on the ground that the Calcutta police was not empowered under Section 156, Cr. P.C. to investigate the same. As a matter of fact that legality or validity of the investigation in this case has not been questioned before me. What has been questioned is the territorial jurisdiction of the Court at Alipore to try the case started on the basis of a cognizance taken by the learned Magistrate upon a police report submitted before him.
6. In this connection, I may refer to Section 462, Cr.P.C. which contains provisions regarding proceedings in wrong place and provides that no finding, sentence or order of any criminal court shall be set aside merely on the ground that the inquiry, trial or other proceedings in the course of which it was arrived at or passed, took place in a wrong sessions division, district, sub-division or other local area unless it appears that such error has in fact occasioned a failure of justice. In the present case however the question of territorial jurisdiction has been raised at a fairly early stage of the proceeding. It will therefore be proper for the Court to consider whether in a facts and circumstances any corrective measure can be taken now so that the accused may not have to face the trial at a wrong place, particularly when he has taken the objection at a fairly early stage. In this connection I may mention that in certain circumstances a Magistrate having no territorial jurisdiction to inquire into or try any case may under Section 187, Cr.P.C. refer the accused to a Magistrate having jurisdiction to inquire into or try the offence. There is no reason why the High Court also in a fit case should not direct for referring a case to a competent Magistrate by way of a corrective measure where it appears to the High Court that the proceeding pending in the Court of a Judicial Magistrate subordinate to it has no territorial jurisdiction to try the same, particularly where such course of action seems to be necessary for securing the ends of justice. The jurisdiction of the High Court in the matter being exercisable under Section 482 will not obviously be confined to circumstances mentioned in Section 187. In the present case the police made necessary investigation and found a prima facie case against the petitioner/accused and accordingly submitted charge-sheet on which the Magistrate at Calcutta has taken cognizance although he has no territorial jurisdiction to try the case. There is also nothing to show that there was any mala fides on the part of the opposite party herein in starting the proceeding at Calcutta under the belief that the Calcutta police has jurisdiction to investigate the case.
7. In the circumstances, when as a matter of fact the Calcutta police has made and completed the investigation and has found a prima facie case and therefore submitted charge-sheet it is felt that the proceeding pending before the learned Sub-Divisional Judicial Magistrate at Alipore should, for securing the ends of justice, be referred to the Chief Metropolitan Magistrate, Bombay for trial instead of allowing the Alipore Court to proceed with the trial of the case and instead of quashing the proceeding. It is accordingly directed that the learned Sub-Divisional Judicial Magistrate, Alipore shall not proceed with the trial of the case pending in his court in connection with the Ekbalpur police station case No. 180 dated 28-6-90 under Section 408, IPC. (CGR 1942-90) and shall refer the case to the Chief Metropolitan Magistrate. Bombay for trial and shall forward the case records to the Chief Metropolitan Magistrate, Bombay The petitioner is also directed to report before the Chief Metropolitan Magistrate Bombay in connection with the said proceeding and obtain necessary direction and act accordingly. The lower Court records along with a copy of this order be immediately sent down to the Sub-Divisional Judicial Magistrate, Alipore for information and compliance. The revisional application stands disposed of accordingly. Prayer for stay as now verbally made is rejected.