Holding

The Chief Metropolitan Magistrate, Kolkata possessed jurisdiction to order investigation under Section 156(3) CrPC because part of the cause of action – fraudulent representation and breach of trust – arose within its territorial jurisdiction, rendering the High Court's transfer order invalid.

Summary

The appellant, a food‑grain exporter, appointed the respondents as agents to arrange rail transport of wheat and rice. The respondents allegedly committed fraud, cheating, forgery, criminal breach of trust and misappropriation of funds, offences alleged to have been committed mainly in Uttar Pradesh but also involving fraudulent representations made in Kolkata. The appellant filed an application under Section 156(3) CrPC before the Chief Metropolitan Magistrate (CMM), Kolkata, which led to an FIR being registered there. The respondents filed a writ petition in the Allahabad High Court seeking quashing of the FIR, a stay on arrest and transfer of the investigation to Uttar Pradesh; the High Court partially allowed the petition and ordered the FIR to be transferred. The Supreme Court examined whether the CMM, Kolkata had jurisdiction to take cognizance and order investigation despite the majority of the alleged offences occurring outside its territorial area, and whether the High Court could direct transfer of investigation. It held that because fraudulent representations and breach of trust occurred within Kolkata, the CMM had jurisdiction under Section 178 read with Section 181(4) CrPC, and the High Court should not have interfered. Consequently, the Court directed that the investigation be carried out by the Uttar Pradesh CB‑CID and the report be sent to the CMM, Kolkata, which will finally determine its own jurisdiction.

Issues considered

The extent of territorial jurisdiction of a Chief Metropolitan Magistrate under Section 156(3) CrPC when the alleged offences are committed partly outside its area.
Whether Section 181(4) CrPC confers jurisdiction on the court where the accused is bound to render accounts.
Whether the Allahabad High Court could validly direct transfer of investigation and stay of arrest under its writ jurisdiction.
Whether the complaint petition filed under Section 156(3) CrPC was malafide, warranting quash of the FIR.

Legislation cited

Code of Criminal Procedure, 1973s. 156(3), s. 177, s. 178, s. 181(4)
Indian Penal Code, 1860s. 120B, s. 406, s. 420, s. 465, s. 468, s. 471, s. 478, s. 481
Negotiable Instruments Act, 1881s. 138

Subjects

jurisdictionChief Metropolitan MagistrateSection 156(3) CrPCSection 181(4) CrPCtransfer of investigationhigh court writ jurisdictionfraudcheatingmisappropriationArticle 226Article 142

Judgment

AS!T BHATIACHARJEE A
v.
MIS. HANUMAN PRASAD OJHA AND ORS.

MAY 15, 2007
B
(S.B. SINHA AND C.K. THAKKER, JJ.]

Code of Criminal Procedure, 1973-ss. 156(3), 177, 181and181 (4)-
i Jurisdiction of criminal courts in inquiries and trials-Complaint alleging
criminal offences-Application u!s. 156(3) before Metropolitan Magistrate, C
Ca/cul/a-Jurisdiction of. when major part of offences took place outside
Sate of West Bengal and principally in State of U.P.-Direction by Allahabad
High Court to transfer investigation to U.P. Police Station-Held: With regard
to offence alleged part of cause of action arose within the jurisdiction of
CMM, Calcutta, as such had jurisdiction in terms of s. 178 rlw s. 181(4)- D
Also no explicit prayer in the writ petition that the complaint filed at West
Bengal was malafide-Thus, Interference by High Court of Allahabad was
not called for-Direction of High Court regarding investigation by IO of U.P.
Police Station vague and indefinite-Thus, directed that the investigation to
be carried out by C.B.C.J.D. of U.P. which would be forwarded lo CMM,
Calcutta to determine his jurisdiction-Penal Code, 1860-ss.120B, 420, E
406, 465, 468 and 478.

Corporation of Chennai and Kolkata as also West Bengal Corporation
awarded contracts to the appellants for exporting wheat, rice etc. upon
purchasing the same from Food Corporation of India as also from open market F
Appellant appointed respondents as its agents to arrange and supply
foodgrains and send the same to different destinations in West Bengal on
commission basis. Respondents used to make arrangements of rail rakes at
different railway stations in U.P., Rajasthan, Uttranchal, M.P. and Haryana
for export of foodgrains. It is alleged that in course of rendition of such
services, respondents in collusion and connivance with each other committed G
various acts of breach of trust, cheating, forgery, misappropriation, criminal
misconduct and criminal conspiracy. It assaulted and criminally intimidated
one of their employees. Appellant filed an application under section 156(3) of
Cr.P.C. before the Chief Metropolitan Magistrate, Kolkata. FIR was registered
939 II
940 SUPREME COURT REPORTS [2007] 6 S.C.R.

A u/ss. 1208, 420, 406, 465, 468, 478 IPC at police station, Kolkata. The said
purported acts were committed outside the State of West Bengal and
principally in the State ofUttar Pradesh. The Officer-in-Charge of the Police
Station, Kolkata was directed to make investigation into the allegations.
Investigations were carried out. Warrants of arrest were issued against
B respondents for non-appearance. Respondents filed a criminal writ petition
before Allahabad High Court for quashing the case u/ss. 1208, 420, 406,
465, 468, 471 IPC at P.S. Kolkata; for direction not to arrest on the basis of
the FIR; and for direction to transfer the case to State of U.P. Division Bench
of the High Court partly allowed the writ petition. It refused to quash the First
Information Report but directed the case to be transferred to the appropriate
C police station of Uttar Pradesh where 1.0. would make an investigation and
the petitioners would not be arrested till the submission of charge sheet. Hence
the present appeal.

Disposing of the appeal with directions, the Court

D HELD: 1.1. The necessary ingredients for proving a criminal offence
must exist in a complaint petition. Such ingredients of offence must be
referable to the places where the cause of action in regard to commission of
offence has arisen. A cause of action as understood in its ordinary parlance
may be relevant for exercise of jurisdiction under Clause (2) of Article 226
of the Constitution but its definition stricto sensu may not be applicable for
E the purpose of bringing home a charge of criminal offence. The application
filed by the appellant u/s 156(3) of the Cr.P.C. disclosed commission of a large
number of offences. The fact that major part of the offences took place outside
the jurisdiction of the Chief Metropolitan Magistrate, Calcutta is not in
dfapute. But, even if a part of the offence committed by the respondents related
p to the appellant was committed within the jurisdiction of the said Court, the
High Court of Allahabad should not have interfered in the matter.
[Para 22] [949-F-H)

1.2. If there had been a fraudulent misrepresentation by some of the
respondents at Calcutta and a conspiracy was hatched to commit offences of
G cheating or misappropriation, indisputably a part of cause of action arose
within the jurisdiction of the Metropolitan Magistrate, Kolkata.
[Para 24) [950-H)

1.3. Fraudulent representation being one of the essential ingredients
in respect of commission of an offence u/s 420 IPC, a place where such
H fraudulent misrepresentation has been made would, thus, give rise to a cause
AS!T BHATTACHARJEE "· HA NUMAN PRASAD OJHA 941
~ of action for prosecuting the accused. Similarly, having regard to the A
ingredients of an offence u/s 406 where the entrustments were made as also
the situs where the offence was completed in the sense that the amount
entrusted had not been accounted for by the agent to the principal will also
have a nexus so as to enable to the Court concerned to exercise its jurisdiction
of taking cognizance. Furthermore, whether the offence of forgery of some
documents committed or some other criminal misconducts are said to have
B
been committed in furtherance of the commission of the principal offence of
cheating and misappropriation wherefor the respondents are said to have
-(' entered into a criminal conspiracy; and required to be investigations. Thus,
t
the Chief Metropolitan Magistrate, had jurisdiction in the matter in terms of
s.178 r/w s.181(4) ofCr.P.C. (Para 281 (951-D-FI c
1.4. No explkit prayer was made by the respondents in their writ petition
that complaint petition filed at West Bengal was malajide, although a prayer
for issuance of a writ in the nature of mandamus, directing the State of West
Bengal to transfer the case to the State of U.P., had been made. The question
of State of West Bengal's having a legal duty in that behalf did not arise. D
Only in the event an Investigating Officer, having regard to the provisions
contained in ss. 154, 162, 177 and 178 ofCr.P.C. had arrived at a finding that
r the alleged crime was not committed within his territorial jurisdiction, could
forward the First Information Report to the Police having jurisdiction in the
matter. Therefore, stricto sensu, the High Court should not have issued such
E
a direction. Assuming, however, that the High Court could mould the relief,
it was not a case where on the face of the allegations made in the complaint
petition, the same could be said to be malajide. A major part of the cause of
action might have arisen in the State of U.P., but the same by itself would not
mean that the Calcutta Court had no jurisdiction whatsoever.
(Paras 31and32] 1952-C-E] F
~
~ Navinchandra N. Majithia v. State of Maharashtra and Ors., 120001 7
SCC 640 and Mosaraf Hossain Khan v. Bhagheeratha Engg. Ltd. and Ors.,
(2006] 3 sec 658, referred to.

1.5. The order passed by the High Court of Judicature at Allahabad has G
been complied with. It was necessary, with a view to arrive at the bottom of the
matter to conduct investigation into the allegations contained in the complaint
-( petition by a competent investigating officer of the State of Uttar Pradesh.
Some offences at various places situated within the State of Uttar Pradesh
had been committed. The High Court had not issued any direction as to which
H
942 SUPREME COURT REPORTS [2007) 6 S.C.R.

A Investigating Officer attached to which Police Station of Uttar Pradesh will \L
have jurisdiction in the matter. The direction of the High Court is vague and
indefinite. IO attached to one Police Station may feel handicapped in carrying
out the investigation within the entire State. In this case, it may be necessary
for the IO to make investigation even in other States including Rajasthan,
Madhya Pradesh, West Bengal etc. for the aforementioned purpose.
B [Paras 35 and 361 (953-G-H; 954-AI

1.6. In the interest of justice, it is directed that the investigation shall
be carried out by C.B.C.I.D. of the State of Uttar Pradesh and the report on
(
completion of the investigation shall be forwarded to the Chief Metropolitan
c Magistrate, Calcutta who shall determine the question of his own jurisdiction
at an appropriate stage. (Para 371 [954-B-FJ

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 738 of
2007.

From the Final Judgment and Order dated 09.03.2006 of the High Court
D
of Judicature at Allahabad in Cr!. Misc. Writ Petition No. 2317 of 2005.

SunH Kumar, Sr. Adv., Braj Kishore Mishra, Aparna Jha, Asbhishek ...,
Singh, Abhishek Yadav, Vikram and Uijwal Jha for the Appellant.

Rakesh Dwivedi, Ratnakar Dash, Sr. Adv., Abhis!1ek Chaudhary, Avijit
E
Bhattarcharjee, Saumya Kundu, Vikrant Yadav, Javed Mahmud Rao, Shahid
Ali Rao and Musharraf Chawdhary for the Respondents,

The Judgment of the Court was delivered by

S.B. SINHA, J. Leave granted.
F
.,..
I. Appellant herein was awarded contracts for exporting wheat, rice etc.
<
upon purchasing the same from Food Corporation of India as also from open
market by the State Trading Corporation of India, Chennai and Kolkata as also
West Bengal Essential Commodities Supply Corporation Limited. Respondent
G Nos. I and 2 herein allegedly approached him for appointment as its agent
to arrange and supply foodgrains i.e. wheat and rice of the Food Corporation
of India and send the same to different destinations in West Bengal on
commission basis. Pursuant to or in furtherance of the said agreement, ---..
Respondent No. I under the direction of Respondent No. 2 used to make
arrangement of railway rakes at different railway stations in the State of Uttar
H Pradesh, Rajasthan, Uttaranchal. Madhya Pradesh and Haryana for export of
ASIT BHATT ACHARJEE v. HA NUMAN PRASAD OJHA [S.B. SINHA, J.) 943
,
'1, rice and wheat from Food Corporation of India to Bangladesh for and on A
behalf of the appellant. Allegedly, in course of rendition such services,
respondents committed various acts of breach of trust, cheating, forgery and
criminal conspiracy. One of their employees was also assaulted. A complaint
petition was filed by the Appellant Company before the Chief Metropolitan
Magistrate, Kolkata purported to be under Section 156(3) of the Code of
Criminal Procedure, 1973 on or about 15. t 0.2004 inter alia alleging that a
B
criminal conspiracy was entered into by and between accused No. 2 with
accused Nos. 3 to 12 with a view to cheat the complainant Company and/or
dishonestly misappropriate a huge amount of Rs. 1,62,32,837.00 by making
forged and false documents, fraudulently preparing its letter heads and seals
and using the same, committed breach of trust and withdrew the refund c
amount of Rs. 1,55,07,928.00

2. It is not in dispute that the said purported acts were committed
outside the State of West Bengal and principally in the State ofUttar Pradesh.

3. The bankers of the appellant company issued a draft of Rs. 1,63,536.00 D
in favour of District Manager, Food Corporation of India, Sitapur which was
also allegedly misappropriated by the concerned respondents.
)-"

' 4. One of the indent receipts out of the 30 indents amounting to Rs.
4,50,000.00 was lost by an employee of the appellant while travelling and the
accused No. 6 representing accused Nos. 1 and 2 withdrew the amount in E
question by using forged indemnity bond and letter head of the Company
and, thus, a sum of Rs. 4,50,000.00 was misappropriated by the accused
persons. The said offence was also allegedly committed at Iradatgunj in the
State of U.P. On behalf of the appellant, accused No. 2 allegedly deposited
indent money in respect of 40 indents at Hardoi, out of which also some
F
amount was misappropriated by the accused persons. Hardoi is also in the
~
State of Uttar Pradesh. Demand draft issued by the bankers of the appellant
~
viz. Union Bank of India and Punjab National Bank in favour of the District
Manager, Food Corporation of India had also allegedly been misappropriated.

5. Various other alleged criminal misconducts on the part of the accused G
persons were said to have been committed in the State of Uttar Pradesh.

..,. 6. We may at this juncture notice some of the allegations made in the
said complaint petition.

"8. According to Railway procedure, for allotment of railway rake, the H
944 SUPREME COURT REPORTS [2007] 6 S.C.R.

A party concerned shall have to pay Rs. 15,000.00 as indent money for
registration of rake, for which Railway issue Money Receipt. Allotment
of rake is made accordingly after the announcement of quota ,from the
Railway Headquarters. The indentor is free to withdraw the indent
money any time after ten days from the date of indenting, without any
liability. Accordingly, Accused No. 2 collected total Rs. 4,91,39,748.00
B out of which Rs. 1,55,07,928.00 was paid by Demand Draft favoring the
concerned Railway authority and balance amount of Rs. 3,36,31,820.00
paid to Accused No. Hanuman Prasad Ojha. All the Demand Draft in
favour of the Railway Authorities were issued for your petitioner's
Company."
...
")

c 7. Paragraph 16 of the complaint petition deals with assault and criminal
intimidation of an employee of the appellant viz. Subodh Singh, at Kanpur.

8. Paragraph 17 of the complaint petition reads as under:-

"17. It appears that under the leadership of Accused No. 2 all the
D Accused Persons committed serious crimes viz. preparing forged
documents by printing Letter Pad and forging the Seal of your
petitioner's company and forged authorization letters and collected
refund amount from the Railway to the tune of Rs. 1,55,07,928.00 from
the Railway Authorities of different Railway Station and fraudulently
E and dishonestly misappropriated Rs. 1,63,536.00 for which Demand
Draft was handed over to Accused No. 2 to deposit to the District
Manager, Food Corporation of India, Sitapur for cost of the materials
exported by your petitioner's company on behalf of the State Trading
Corporation Ltd., Chennai. But the Accused No. 2 dishonestly deposited
the said draft in the account ofNafed India Ltd. with Food Corporation
F of India and also the Accused Persons fraudulently and dishonestly
utilized indent money of your petitioner's company amounting to Rs.
<
3,57 ,810.00 for the payment of the railway freight of AK Industries and
Lavi Industries. Accused persons fraudulently and dishonestly
misappropriated the amount of Rs. 22,03,563.00 of your petitioner's
G Company by depositing demand draft to District Manager, Food
Corporation of India, Jhansi in the account ofWBECSC Limited instead
of depositing in the account of The State Trading Corporation of India
Ltd., Chennai towards cost of material. As such all the .Accused
Persons have misappropriated and/or cheated the complainant
company for a sum of Rs. 1,62,32,837.00."
H
ASIT BHATTACHARJEE v. HANUMAN PRASAD OJHA [S.B. SINHA, J.] 945

~ 9. Appellant in the said complaint petition further stated; A
"18. Thus the Accused Persons in collusion and connivance with
each other, committed forgery, cheating, criminal breach of trust,
dishonest misappropriation etc. etc. and are liable to be prosecuted
under section 1208/420/406/465/467/ 468/471 of the Indian Penal Code.
B
19. That this Ld. Court has got jurisdiction to try this case as the
representation of accused No. 2 was made within the jurisdiction of
this Ld. Court and the accused persons were to account for at this
-(
, office of the complainant's company which is also within the
jurisdiction of this Ld. Court."
c
I 0. The learned Chief Metropolitan Magistrate upon consideration of
the said complaint directed the Officer-in-Charge of Shakespeare Sarani Police
Station, Kolkata to make an investigation into the allegations contained therein.
Pursuant to or in furtherance of the said direction, investigations had been
carried out. As the respondents did not appear before the Court, warrants of
arrest had also been issued by the Chief Metropolitan Magistrate, Kolkata. D

I 1. Respondents herein filed a criminal writ petition before the High
r Court of Judicature at Allahabad on or about 1.3.2005 praying inter alia for
)
the following reliefs:-

"i. Issue a writ, order or direction in the nature of certiorari quashing E
the WR in Case No. 381 dated 18.10.2004 G.R. No. 2711/04 under
Section 1208, 420, 406, 465, 468, 471 I.P.C. P.S. Shakespeare Sarani,
Kolkata & Orders dated 15.10.2004 and 11.2.2005 passed by respondent
no. 5.

ii. issue a writ, order or direction in the nature of mandamus F
..,.... commanding the respondents not to arrest the petitioners on the basis
'r of the FIR dated 18.10.2004.

iii. Issue a writ, order or direction in the nature of mandamus
commanding the respondent no. 1 to transfer the Case No." 381 under
Section 1208, 420, 406, 465, 468, 471 IPC to State ofU.P. G

iv. issue any other writ, order or direction which the Hon'ble Court
may deem fit and proper in the circumstances of the present case.

v. Award costs to the petitioners from the contesting respondents."
I H
946 SUPREME COURT REPORTS (2007) 6 S.C.R.

A 12. By reason of the impugned Judgment, a Division Bench of the 'L-
Allahabad High Court allowed the said Writ Petition in part. While declining
to quash the First Information Report, the High Court opined:-

"Therefore, in totality of the matter, we are of the view and accordingly
direct that F.I.R. in case No. 381 dated 18th October, 2004 G.R. No.
B 2711/04 under Section 120B, 420, 406, 465, 468, 471 I.P.S., P.S.
Shakespeare Sarani, Kolkata be transmitted to the appropriate Police
Station of Uttar Pradesh through the Secretary Home, State of West
Bengal and the Secretary, Home, State of Uttar Pradesh within a period
of fortnight from the date of communication of this order. The
concerned Investigating Officer will make all efforts to conclude the
c investigation preferably within a period of three months from the date
of receipts of transmitted F.I.R. The petitioners will not be arrested in
respect of the said crime number till the submission of chargesheet/
final report, if any. The petitioners are directed to co-operate with the
Investigating Officer in all possible manner. However, no order is
D passed in respect of quashing of the first information report."

13. Appellant is, thus, before us.

14. Mr. Sunil Kumar, learned senior counsel appearing on behalf of the
appellant in support of this appeal urged:-
E
(Q The High Court committed a manifest error in passing the
impugned judgment insofar as it failed to take into consideration
the effect and purport of sub-section (4) of Section 181 of the
Code of Criminal Procedure which categorically provides that a
Court within whose local jurisdiction the property was to be
F accounted for by the accused persons will also have jurisdiction
to try the case which was introduced pursuant to the
recommendations of the Law Commission in its 41st Report, but
despite the same, the High Court wrongly relied upon on a
decision of the Bombay High Court in Re Jivandas Savchand
[A.LR. 1930 Born. 490], which was rendered prior thereto.
G
(ii) The Chief Metropolitan Magistrate having exercised its judicial
power not only by issuing a direction in terms of sub-section (3)
of Section 156 of the Code of Criminal Procedure but also issuing
a non-bailable warrant of arrest, the Allahabad High Court had
no territorial jurisdiction to interfere therewith, as the said Court
H
ASIT BHATTACHARJEE v. HANUMAN PRASAD OJHA (S.B. SINHA, J.] 947

-.,_j was not under its supervisory jurisdiction. Strong reliance in this A
behalf has been placed on Surya Dev Rai v Ram Chander Rai
and Ors., (2003] 6 SCC 675 and Mosaraf Hossain Khan v
Bhagheeratha Engg. Ltd. and Ors., [2006] 3 SCC 618.

(iii) Only because a part of cause of action has arisen within the State
of Uttar Pradesh, the same by itself would not entitle the B
respondents to pray for transfer of investigation from one State
to the other.

(iv) The High Court had no jurisdiction to transfer the investigation
-{ of a criminal case from one statutory authority to another in
exercise of its jurisdiction under Article 226 of the Constitution c
of India or otherwise.

(v) Respondents having made false representations at Calcutta, a
part of the offence must be held to have been committed within
the jurisdiction of the learned Metropolitan Magistrate. As the
respondents were to account for of the amount received by them D
in Calcutta, the Chief Metropolitan Magistrate had jurisdiction in
the matter to entertain a complaint petition under Section 156(3)
of the Code of Criminal Procedure.
r 15. Mr. Rakesh Dwivedi, learned counsel appearing on behalf of the
a:cused/respondents, on the other hand, submitted: E
(i) Representations made by the accused person, if any, for the
purpose of entering into an arrangement do not indicate that the
same were fraudulent one or were made from the very beginning
so as to attract the provisions of Section 420 of the Indian Penal
Code. F
(li) The complaint petition does not disclose as to which part of the
cause of action arose within the jurisdiction of the Court of Chief
Metropolitan Magistrate and taking into consideration the totality
of circumstances, the said Court had no jurisdiction to direct
investigation by the Police in terms of Section 156(3) of the Code G
of Criminal Procedure.

(iii) Assuming that sub-section (4) of Section 181 of the Code of
Criminal Procedure is attracted in the instant case, the principal
ingredient therefor being "required to be" which would mean that
such requirement must arise either by law or contract and in H
948 SUPREME COURT REPORTS [2007] 6 S.C.R.

A absence of any avennent made in the complaint petition in that ~.

,;..J
behalf, the same cannot be taken recourse to.
(iv) In any event as the major part of the cause of action arose within
the territorial jurisdiction of the Allahabad High Court, it could
direct transfer of investigation from one investigating agency to
B another.
(v) Direction to lodge a First Information Report being not a judicial
order as the said power has been exercised at the pre-investigation
stage and having regard to the provisions contained in sub-
section (I} of Section 156 of the Code of Criminal Procedure, r
c detennination of the jurisdiction of the two courts must be held
to be referable to Section 177 and I 81 of the Code of Criminal
Procedure.
(vi) In any event as the complaint petition was filed only to harass
the respondents, this Court should not exercise its discretionary
jurisdiction under Article 136 of the Constitution of India and/or
.... D issue requisite direction itself even if be held that the High Court
of Allahabad had no jurisdiction in this behalf.

16. Mr. Ratnakar Dash, learned senior counsel appearing on behalf of
the State of Uttar Pradesh supported Mr. Dwivedi. Mr. Avijit Bhattach!!rjee,
E learned counsel appearing on behalf of the State of West Bengal supported
"" 1

Mr. Sunil Kumar.

17. Appellant herein did not file any complaint petition within the
meaning of Section 200 of the Code of Criminal Procedure. It filed an application
in tenns of sub-section (3) of Section 156 thereof.
F
18. Sub-section (I) of Section 156 empowers the in-charge of a Police
Station to investigate any cognizabie offence which Court having jurisdiction y
over the local area within its limit or to try under the provisions of Chapter '(

XIII, the power of the Magistrate to order such an investigation is vested in
him who can take cognizance of the offence under Section 190 of the Code
G of Criminal Procedure.

19. Chapter XIII provides for jurisdiction of the Criminal Courts in
inqlliries and trials. Section 177 provides that every offence shall ordinarily
be inquired into and tried by a Court within whose local jurisdiction it was r
committed. Section 178 provides for place of inquiry or trial. It provides:
H
ASIT BHATT ACHARJEE v. HANUMAN PRASAD OJHA [S.B. SINHA, J. ] 949

(a) when it is uncertain in which of several local areas an offence A
was committed; or
(b) where an offence is committed partly in one local area and partly
in another; or
(c) when an offence is a continuing one and continues to be
committed in more local areas than one; or B
(d) where it consists of several acts done in different local areas, that
it may be inquired into or tried by a Court having jurisdiction
over any of such local areas.
{
20. Section 181 provides for place of trial in case of certain offences. C
Sub-section (4) of Section 181 was introduced in the Code of Criminal Procedure
in 1973 as there existed conflict in the decisions of various High Courts as
regards commission of offence of criminal misappropriation and criminal breach
of trust and with that end in view, it wa : provided that such an offence may
be inquired into or tried by the Court within whose jurisdiction the accused
' was bound by law or by contract to render accounts or return the entrusted D
property, but failed to discharge that obligation.

21. The provisions referred to hereinbefore clearly suggest that even if
a part of cause of action has arisen, the police station concerned situate
within the jurisdiction of the Magistrate empowered to take cognizance under E
Section 190(1) of the Code of Criminal Procedure will h~ve the jurisdiction to
make investigation.

22. The necessary ingredients for proving a criminal offence must exist
in a complaint petition. Such ingredients of offence must be referable to the
places where the cause of action in regard to commission of offence has F
arisen. A cause of action as understood in its ordinary parlance may be
relevant for exercise of jurisdiction under Clause (2) of Article 226 of the
Constitution of India but its definition stricto sensu may not be applicable for
the purpose of bringing home a charge of criminal offence. The application
filed by the appellant under Section 156(3) of the Code of Criminal Procedure
disclosed commission of a large number of offences. The fact that major part G
of the offences took place outside the jurisdiction of the Chief Metropolitan
Magistrate, Calcutta is not in dispute. But, even if a part of the offence
committed by the respondents related to the appellant-Company was
committed within the jurisdiction of the said Court, the High Court of Allahabad
should not have interfered in the matter. Respondents themselves have referred H
950 SUPREME COURT REPORTS [2007) 6 S.C.R.

A to the Minutes of Meeting held on J8.05.2000 between the representatives of ' ). !'
the appellant and Mr. Hanuman Prasad Ojha at the registered office of the
appellant wherein inter alia it was agreed:
ASIT BHATT ACHARJEE v HANUMAN PRASAD OJHA (S.B. SlNHA, J.] 95 I

-_J.' 25. The complainant has alleged that the respondents have committed A
offences under Section 1208, 420, 406, 465, 468, 471, 478 and 481 of the Indian
Penal Code.

26. Although referred to in the complaint petition, but as no investigation
was sought to be prayed for in respect of the assault on Subodh Singh at
Kanpur Railway Station, it may not be necessary for us to address thereupon. B
27. Respondents were appointed as their agents by the appellants.
There, thus, existed a relationship of principal and agent. What were the terms
1 and conditions of the contract of agency and how criminal misconducts have
been committed while purporting to perform their part of the terms of the said
contract of agency, would be a matter of detailed investigation. c
28. Fraudulent representation being one of the essential ingredients in
respect of commission of an offence under Section 420 of the Indian Penal
Code, a place where such fraudulent misrepresentation has been made would,
thus, give rise to a cause of action for prosecuting the accused. Similarly,
D
having regard to the ingredients of an offence under Section 406 where the
entrustments were made as also the situs where the offence was completed
,,.. in the sense that the amount entn;sted had not been accounted for by the
I agent to the principal will also have a nexus so as to enable to the Court
concerned to exercise its jurisdiction of taking cognizance. Furthermore,
whether the offence forgery of some documents committed or some other E
criminal misconducts are said to have been committed in furtherance of the
commission of the principal offence of cheating and misappropriation wherefor
the respondents are said to have entered into a criminal conspiracy; are
required to be investigated. The Chief Metropolitan Magistrate, thus, had
jurisdiction in the matter in terms of Section 178 read with Section 181(4) of
the Code of Criminal Procedure.
F
y
..., 29. The High Court has placed strong reliance upon a decision of this
Court in Navinchandra N. Majithia v State of Maharashtra and Ors., [2000]
7 SCC 640, wherein this Court held, while considering a contention that the
High Court of Bombay was not correct in not entertaining the application for G
quashing of a complaint petition filed by the complainant in Shillong, went
into the merit of the matter and instead of remitting the matter back to the
High Court directed:

"29. Considering the peculiar fact-situation of the case we are of the
view that setting aside the impugned judgment and remitting the case H
952 SUPREME COURT REPORTS [2007] 6 S.C.R.

A to the High Court for fresh disposal will cause further delay in
investigation of the matter and may create other complications. Instead, .
it will be apt and proper to direct that further investigation relating to
complaint filed by J.B. Holdings Ltd. should be made by the Mumbai
Police."

B 30. This Court arrived at the finding that the High Court should have
issued a Writ of Mandamus directing the State of Meghalaya to transfer the
investigation to the Mumbai Police taking note of the averments made in the
writ petition that the complaint petition flied at Shillong was malafide.

31. No such explicit prayer was made by the respondents in their writ
C petition, although a prayer for issuance of a writ in the nature of mandamus,
directing the State of West Bengal to transfer Case No. 381 to the State of
U.P., had been made. The question of State of West Bengal's having a legal
duty in that behalf did not arise. Only in the event an Investigating Officer,
having regard to the provisions contained in Section 154, 162, 177 and 178
D of the Code of Criminal Procedure had arrived at a finding that the alleged
crime was not cgmmitted within his territorial jurisdiction, could forward the
First Information Report to the Police having jurisdiction in the matter.

32. Stricto sensu therefore, the High Court should not have issued such
a direction. Assuming, however, that the High Court could mould the relief,
E in our opinion, it was not a case where on the face of the allegations made
in the complaint petition, the same could be said to be malafide. A major part
of the cause of action might have arisen in the State of U.P., but the same
by itself would not mean that the Calcutta Court had no jurisdiction whatsoever.

33. We may notice that this Court in Mosaraf Hossain Khan v.
F Bhagheeratha Engg. Ltd. and Ors., (2006] 3 sec 658, distinguished
Navinchandra N. Majithia (supra), in the following terms:-

"33. In this case, the averments made in the writ petition filed by the .
respondent herein even if given face value and taken to be correct in
their entirety would not confer any jurisdiction upon the Kerala High
G Court. The agreement was entered into within the jurisdiction of the
Calcutta High Court. The project for which the supply of stone chips
and transportation was being carried out was also within the State of
West Bengal. Payments were obviously required to be made within
the jurisdiction of the said Court where either the contract had been
H entered into or where payment was to be made.
•

ASIT BHATTACHARJEE v. HANUMAN PRASAD OJHA [S.B. SINHA, J. J 953

34. The appellant did not deny or dispute any of the avennents made A
in the complaint petition. In the writ petition it merely wanted some
time to make the payment. It is now well known that the object of the
provision of Section 138 of the Act is that for proper and smooth
functioning of business transaction in particular, use of cheques as
negotiable instruments would primarily depend upon the integrity and
honesty of the parties. It was noticed that cheques used to be issued B
as a device inter alia for defrauding tile creditors and stalling the
payments. It was also noticed in a number of decisions of this Court
that dishonour of a cheque by the bank causes incalculable loss,
injury and inconvenience to the payee and the entire credibility of the
business transactions within and outside the country suffers a serious C
setback. It was also found that the remedy available in a civil court
is a long-drawn process and an unscrupulous drawer nonnally takes
various pleas to defeat the genuine claim of the payee.

[See Goa Plast (P) Ltd v. Chico Ursula D'Souza and Monaben
Ketanbhai Shah v. State of Gujarat.] D
36. For the purpose of providing the aforementioned ingredients of
the offence under Section I 38 of the Act, the complainant appellant
was required to prove the facts constituting the cause of action
r therefor none of which arose within the jurisdiction of the Kerala High
Court. It is apt to mention that in Prem Chand Vijay Kumar this Court · E
held that cause of action within the meaning of Section 142(b) of the
Act can arise only once."

34. It was furthennore held that ordinarily the High Court should not
interfere with an order taking cognizance passed by a competent court except
in appropriate cases. F
35. However, the order passed by the High Court of Judicature at
Allahabad has been complied with, as would appear from the counter affidavit
filed on behalf of the State of West Bengal. It was necessary, with a view to
arrive at the bottom of the matter to conduct investigation into the allegations
contained in the complaint petition by a competent investigating officer of the G
State of Uttar Pradesh. Some offences at various places situated within the
State of Uttar Pradesh had been committed. The High Court had not issued
any direction as to which Investigating Officer attached to which Police
Station of Uttar Pradesh will have jurisdiction in the matter.

36. The direction of the High Court, in that way is vague and indefinite. H
954 SUPREME COURT REPORTS (2007] 6 S.C.R.

A Investigating Officer attached to one Police Station may feel handicapped in _.__,..
carrying out the investigation within the entin: State. In this case, it may be
necessary for the Investigating Officer to make investigation even in other
States including Rajasthan, Madhya Pradesh, West Bengal etc. for the
aforementioned purpose.

B 37. We, therefore, are of the opinion that interest of justice would be
subserved if this appeal is disposed of with the following directions.

(i) Further investigation shall be carried out by C.B.C.I.D. of the
State of Uttar Pradesh.
(ii) Accused/respondents shall surrender before the Chief Judicial
c Magistrate, Allahabad and their applications for grant of bail, if
any, may be considered by the said court on its own merits.
(in) The accused/respondent shall render all cooperation with the
Investigating Officer. They shall appear before the Investigating
Officer as and when directed, if released on bail.
D (iv) Investigation shall be carried out inter alia on the premise that the
jurisdiction to make investigation shall be subject to the ultimate
decision of the Court of the Chief Metropolitan Magistrate,
Calcutta as if investigations are being carried out by the C.B.C.I.D,
~
of the State of Uttar Pradesh in continuation of the investigation
made by the Officer-in-charge of the Shakespeare Sarani Police
•
E Station. The Chief Metropolitan Magistrate, Allahabad shall be
entitled to pass appropriate orders from time to time in this
behalf.
(v) The Report on completion of the investigation shall be forwarded
to the Chief Metropolitan Magistrate, Calcutta who shall determine
F the question of his own jurisdiction at an appropriate stage.
(vi) This order, it is made clear, is being passed in exercise of our y
extra-ordinary jurisdiction under Article 142 of the Constitution ,-·
of India. All concerned authorities are directed to carry out these
directions.
G 38. For the views we have taken, it is not necessary for us to embark
upon the question as to whether directions issued by the Judicial Magistrate
by an Order passed under sub-section (3) of Section 156 is a judicial order
or an administrative order.

39. This appeal is disposed of with the aforementioned directions.
H
N.J. Appeal disposed of.