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14. A Constitution Bench of the Apex Court in Vadilal Panchal v. Dattatraya Dulaji Ghadigaonkar (AIR 1960 SC 1113) elaborately considered the scope of an inquiry under section 200,202 and 203 of the Code. The position is settled in paragraph 9. It reads:-

"The general scheme of the aforesaid sections is quite clear. Section 200 says inter alia what a Magistrate taking cognizance of an offence on complaint shall do on receipt of such a complaint. Section 202 says that the Magistrate may, if he thinks fit, for reasons to be recorded in writing, postpone the issue of process for compelling the attendance of the person complained against and direct an inquiry for the purpose of ascertaining the truth or falsehood of the complaint; in other words, the scope of an inquiry under the section is limited to finding out the truth or falsehood of the complaint in order to determine the question of the issue of process. The inquiry is for the purpose of ascertaining the truth or falsehood of the complaint; that is, for ascertaining whether there is evidence in support of the complaint so as to justify the issue of process and commencement of proceedings against the person concerned. The section does not say that a regular trial for adjudging the guilt or otherwise of the person complained against should take place at that stage; for the person complained against can be legally called upon to answer the accusation made against him only when a process has issued and he is put on trial. Section 203, be it noted, consists of two parts: the first part indicates what are the materials which the Magistrate must consider, and the second part says that if after considering those materials there is in his judgment no sufficient ground for proceeding, he may dismiss the complaint. Section 204 says that if in the opinion of the Magistrate there is sufficient ground for proceeding, he shall take steps for the issue of necessary process."

20. The inquiry provided under section 200 and 202 is limited to the ascertainment of the truth or falsehood of the allegations made in the complaint. The decision of the Magistrate can only be based on the materials placed by the complainant. The inquiry is limited for the purpose of finding out whether a prima facie case for issue of process has been made out. For deciding the question only the complaint, sworn statements of the complainant and witnesses if any and investigation if any can be considered. Accused has absolutely no locus standi at that stage and he is not entitled to be heard on the question whether process should be issued against him or not. Though Magistrate has been given an unfettered discretion in the matter, to decide whether the complaint is to be proceeded or is to be dismissed under section 203, the discretion has to be exercised judicially. The Apex Court in Debendra Nath v. State of West Bengal (AIR 1972 SC 1607) held:-