SRINIVAS GUNDLURI & ORS.versusM/S. SEPCO ELECTRIC POWER CONSTRUCTION CORPORATION & ORS.

                       [2010] 9 S.C.R. 278


A                 SRINIVAS GUNDLURI & ORS.
                                 v.
       MIS. SEPCO ELECTRIC POWER CONSTRUCTION
                  CORPORATION & ORS.
               (Criminal Appeal No. 1377 of 2010)
B
                          JULY 30, 2010

           [P. SATHASIVAM AND ANIL R. DAVE, JJ.]

       Code of Criminal Procedure, 1973 - s. 156(3) - Police
C officer's power to investigate cognizable case - Criminal
  complaint against appellants u/ss. 405, 406, 418, 420, 427,
  503, 504, 506134 and 1208 of /PC before Magistrate -:-
  Magistrate uls. 156(3) directing police officer to register FIR,
  conduct investigation and submit charge sheet thereafter -
D Legality of- Held: To proceed u/s. 156 (3), a bare reading of
  complaint is required and if it discloses a cognizable offence,
  then Magistrate instead of applying his mind to the complaint
  for deciding whether or not there is sufficient ground for
  proceeding, may direct police for investigation - On facts,
E Magistrate only ordered investigati-0n uls. 156 (3) - He
  perused the complaint without examining the merits of the
  claim that there is sufficient ground for proceeding or not -
  Thus, the Magistrate did not commit any illegality in directing
  police investigation.
F      The respondent-SEPCO and SSVG entered into a
  works contract. It is alleged that SSGV misappropriated
  the advance money given by SEPCO. SEPCO filed a
  criminal complaint against SSVG u/ss. 405, 406, 418, 420,
  427, 503, 504, 506/34 and 1208 of IPC before the
G Magistrate, Korba. By the order dated 04.07.2009, the
  Magistrate allowed the application filed under section 156
  (3) of the Code of Criminal Procedure, 1973 and directed
  the Station House Officer to register FIR, after due

H                                278
  SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER            279
          CONSTRUCTION CORPORATION

enquiry, and to submit a chargesheet after investigation.     A
The appellant-Managing Director and Principal Officer of
SSVG filed a Writ Petition praying for quashing the order
passed by the Magistrate and to prohibit further
proceedings pending before the Magistrate. The Single
Judge of High Court dismissed the writ petition. The          s
Division Bench of the High Court upheld the order.
Thereafter, the police took the appellant into custody and
produced him for transit warrant before CMM, Hyderabad.
The appellant was granted transit bail. By order dated
22.04.2010, the CMM rejected the application for extension    c
of transit bail and issued non-bailable warrant against the
appellant for his arrest and production before the
Magistrate, Korba. The appellant challenged the order.
The High Court passed an interim order staying the said
order. Hence these appe~ls.
                                                              D
    Allowing the appeal of SEPCO and dismissing that
of SSVG, the Court

     HELD: 1.1 From the order of the Magistrate dated
04.07.2009 it is clear that the Magistrate only ordered       E
investigation under section 156 (3) of the Code of
Criminal Procedure, 1973. It also shows that the
Magistrate perused the complaint without examining the
merits of the claim that there is sufficient ground for
proceeding or not, directed the police officer concerned      F
for investigation under section 156 (3) of the Code. The
Single Judge of the High Court rightly observed that the
Magistrate did not bring into motion the machinery of
Chapter XV of the Code. He did not examine the
complainant or his witnesses under section 200 of the         G
Code which is the first step in the procedure prescribed
under the said Chapter. The question of taking next step
of the procedure envisaged in section 202 did not arise.
Instead of taking cognizance of the offence, the
Magistrate merely allowed the application filed by the        H
    280    SUPREME COURT REPORTS              [2010] 9 S.C.R.

A complainant/SEPCO under section 156(3) of the Code
  and sent the same along with its annexure for
  investigation by the police officer concerned under
  section 156 (3) of the Code. To proceed under section 156
  (3) of the Code, what is required is a bare reading of the
B complaint and if it discloses a cognizable offence, then
  the Magistrate instead of applying his mind to the
  complaint for deciding whether or not there is sufficient
  ground for proceeding, may direct the police for
  investigation. In the instant case, the Single Judge and
C Division Bench of the High Court rightly pointed out that
  the Magistrate did not apply his mind to the complaint for
  deciding whether or not there is sufficient ground for
  proceeding and, therefore, the Magistrate has not
  committed any illegality in directing the police to register
  FIR and conduct investigation. [Para 13] (298-G-H; 300-
0
  A-G]

      1.2 As a matter of fact, even after receipt of such
  report, the Magistrate under section 190 (1) (b) may or
  may not take cognizance of offence. In other words, he
E is not bound to take cognizance upon submission of the
  police report by the Investigating Officer, hence, by
  directing the police to file chargesheet or final report and
  to hold investigation with a particular result cannot be
  construed that the Magistrate has exceeded his power as
F provided in sub-section (3) of section 156. Neither the
  chargesheet nor the final report has been defined in the
  Code. The chargesheet or final report whatever may be
  the nomenclature, it only means a report under section
  173 of the Code which has to be fih>.d by the police officer
G on completion of his investigation. [Paras 13 and 14] [300-
  G-H; 301-8-C]
        1.3 The Magistrate in passing the impugned order
    has not committed any illegality leading to manifest
    injustice warranting interference by the High Court in
H
  SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER              281
          CONSTRUCTION CORPORATION

exercise of extraordinary jurisdiction conferred under          A
Article 226 of the Constitution of India. The Single Judge
as well as the Division Bench rightly refused to interfere
with the limited order passed by the Magistrate. The
challenge at this stage by the appellants is pre-mature
and the High Court rightly rejected their request. [Para 14]    B
[301-C-D]

     1.4 It is true that the counsel for the appellants,
highlighted that out of the claim of Rs. 21 crores, Rs. 10
crores have already been paid, the appellants have also
laid counter claim for Rs. 10 crores and in such a factual      C
scenario, there is no need to continue the criminal
proceedings and pray for deferment of the same till the
outcome of the civil proceedings. However, the counsel
for SljPCO, by taking through various allegations in the
complaint highlighted that SSVG by misappropriating the         D
advance money for the purpose other than for which it
was granted submitted that the Magistrate correctly
exercised his jurisdiction under Section 156 (3) and
referred the matter for investigation. He also submitted
that the complaint very much discloses cognizable               E
offence under sections 405, 406, 418, 420, 427, 503, 504,
506/34 and 120B of IPC. The Magistrate is justified in
asking to register FIR, conduct investigation on the facts
mentioned in the complaint and after completion of the
investigation submit a report in the Court. No illegality is    F
found either in the course adopted by the Magistrate or
in ultimate direction to the police. [Para 15) [301-E-H; 302-
A-B]
    1.5 The order passed by the Single Judge of the High
Court as well as the the Division Bench of the High Court       G
is upheld. As on date there is no impediment for the
police to investigate and submit report as directed by
Chief Judicial Magistrate. Interim orders in respect of all
the proceedings including the order dated 27.04.2010
passed by the High Court in Crl. Misc. Petition are             H
    282      SUPREME COURT REPORTS               [2010] 9 S.C.R.


A   vacated. [Para 17] [302-E-F]

         Devarapalli Lakshminarayana Reddy and Ors. vs. V.
    Narayana Reddy and Ors. (1976) 3 SCC 252; Tula Ram and
    Ors. vs. Kishore Singh (1977) 4 SCC 459 - relied on.

B        Madhavrao Jiwajirao Scindia and Ors. vs. Sambhajirao
    Chandrojirao Angre and Ors. (1988) 1 SCC 692 -
    distinguished.

                         Case Law Reference:
c         (1988) 1 sec 692         distinguished.      Para 9

          (1976) 3 sec 252         relied on.          Para 10

          (1977) 4 sec 459         relied on.          Para 10

D       CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
    No. 1377 of 2010.

        From the Judgment & Order dated 01.04.2010 of the High
    Court of Chhattisgarh at Bilaspur in W.A. No. 281 of 2009.

E                               WITH

    Crl. A. No. 1378 of 2010.

          Dr. A.M. Singhvi, C.A. Sundaram, Kuna! Verma, Sanjay
    Sen, Rana S. Biswas, Achintya Dwivedi, Mridul Chakravarty,
F   Hemant Singh, Sharmila Upadhyay, Atul Jha and D.K. Sinha
    for the appearing parties.

          The Judgment of the Court was delivered by

          P. SATHASIVAM, J. 1. Leave granted.
G
        2. The appeal arising out of S.L.P.(Srl.) No. 3267 of 2010
  is directed against the final judgment dated 01.04.2010 passed
  by the High Court of Chhattisgarh at Bilaspur in W.A. No. 281
  of 2009 whereby the High Court dismissed the appeal filed by
H the appellants herein and the appeal arising out of S.L.P.(Crl.)
  SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER                 283
 CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]
No. 5095 of 2010 is preferred against the interim order dated      A
27.04.2010 passed by the High Court of Judicature of Andhra
Pradesh at Hyderabad in Crl. R.C. M.P. No. 1307 of 2010 in
Crl. R.C. No. 893 of 2010 staying the order dated 22.04.2010
passed by the Chief Metropolitan Magistrate, Hyderabad
rejecting the application for extension of transit bail and also   B
recording of the fact that fraud has been played upon the Court
and resultantly, non-bailable warrant was issued against
respondent No.1 in this appeal for his arrest and production
before JMFC, Korba, Chhattisgrarh.

    3. The facts leading to the filing of these two appeals are:   C

    (a) M/s SEPCO Electric Power Construction Corporation
    (in short "SEPCO") was engaged in erection of power plant
    at village Nariyara in Akaltara District Janjgir-Champa.
    SEPCO awarded constructional work to M/s SSVG                  D
    Engineering Projects Private Limited (in short "SSVG") the
    appellants in appeal arising out of SLP (Crl.) No. 3267 of
    2010 as per the terms and conditions of the contract
    settled between SEPCO and SSVG. The contract value
    of the work was Rs. 42, 92, 19, 800/- and the work was to      E
    be completed within a period of two months. As per the
    terms, 50% of the value of the contract was to be paid in
    advance. SSVG was required to go ahead with the project
    work immediately. The work order was issued by SEPCO
    on 16.06.2009. A cheque for a sum of Rs. 20,97,46,840/         F
    -towards payment of 50% advance was issued to SSVG
    on 25.06.2009. SSVG wrote a letter on 28.06.2009 to the
    Dy. General Manager, SEPCO complaining that despite
    repeated requests, SEPCO has not handed over the site
    for commencing the work and requested to hand over the         G
    site so as to enable it to complete the work within two
    months. However, SEPCO vide letter dated 29.06.2009
    cancelled the work order dated 16.06.2009 on the ground
    that the company has failed to mobilize requisite
    manpower, machinery and equipment by that date but             H
    284      SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A         diverted the amount for some other purpose than the one
          as agreed, hence demanded refund of advance money.

          (b} On 03. 07. 2009, SSVG received a letter from the
          Union Bank of India whereby it was apprised that the
          Bank has received a letter on 02.07.2009 from the Police
8
          Station Ba/co Nagar requesting to freeze their current
          account with immediate effect on the complaint of
          SEPCO. Subsequently, SSVG came to know that on
          04. 07. 2009, SEPCO has filed a criminal complaint
          against them in the Court of Chief Judicial Magistrate,
c         Class I Korba. The Chief Judicial Magistrate, by his order
          dated 04.07.2009, allowed the application of SEPCO
          filed under Section 156 (3) of the Code of Criminal
          Procedure (hereinafter referred to as 'the Code) and
          forwarded the original complaint along with documents to
D         the concerned Station House Officer (SHO) directing him
          to register FIR, after due enquiry, and to submit a
          chargesheet after investigation. Mr. Srinivas Gundluri,
          Managing Director & Principal Officer, SSVG also
          received a memo from Police Station, Ba/co Nagar, for
E         recording his statement. In this background, the
          Managing Director and Principal Office1; Director and
          Promoter as well as the Company - SSVG Engineering
          Projects Pvt. Ltd. filed Writ Petition No. 3647 of 2009
          before the High Court of Chhattisgarh praying for
F         quashing and setting aside the order dated 04.07.2009
          passed by the Chief Judicial Magistrate, Class I, Korba
          and the proceedings drawn by the Magistrate on the
          complaint of SEPCO. They also prayed for issuance of
          writ of prohibition in order to prohibit further proceedings
G         pending in the Court of Magistrate, Class I, Korba in
          connection with the complaint lodged by SEPCO and
          quashing the communication dcted 03.07.2009 by the
          bank relating to freezing of the SSVG's account.

          (c) The learned single Judge, by order dated 03.09.2009,
H
SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER 285
CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]

  dismissed writ petition No. 3647 of 2009 and held that the        A
  Magistrate passed an order under Section 156 (3) of the
  Code after perusing the complaint which discloses
  commission of cognizable offence and has not committed
  any illegality by directing the police to register FIR. The
  learned single Judge further held that since the police           B
  authorities are investigating into the matter after registering
  FIR and final report is yet to be filed, therefore, challenge
  at this stage by SSVG is premature.

  (d) Questioning the order of the learned single Judge, C
  SSVG preferred W.A. No 281 of 2009 before the Division
  Bench of the same High Court. The Division Bench,
  entirely agreeing with the reasons assigned by the learned
  single Judge, by order dated 01.04.2010, dismissed their
  writ appeal and permitted the Magistrate to proceed in
  accordance with law. Against the decision of the Division D
  Bench, SSVG preferred appeal arising out of SLP (Crl.)
  3267 of 2010 before this Court.
  (e) On 09.04.2010, Chhatisgrarh Police had taken Srinivas
  Gundluri, Managing Director and Principal Officer of E
  SSVG into custody in Crime No. 272 of 2009 and
  produced him for transit warrant before CMM at
  Hyderabad and on the same day he applied for transit bail
  and the same was granted directing him to appear before
  Magistrate Class-I, Korba on or before 19.04.2010. On F
  19.04.2010, Srinivas Gundluri moved an application before
  the CMM, Hyderabad, for extension of the period of transit
  bail on the ground of his illness and of his wife and another
  application before the Judicial Magistrate 1st class, Korba,
  Chhattisgarh seeking extension of time on the ground that G
  the S.L.P. filed against the order of the writ appeal is listed
  before this Court on 20.04.2010 and as such, the time to
  surrender be extended by a week. On 22.04.2010, when
  the matter was taken up for hearing before CMM,
  Hyderabad, none appeared for Srinivas Gundluri, H
    286       SUPREME COURT REPORTS                 [2010] 9 S.C.R.


A         therefore, the Magistrate took cognizance of such fact and
          in view of the fraud played upon the court rejected the
          application for extension of time and issued non-bailable
          warrant against him for his arrest and production before
          the JMFC Korba, Chhattisgarh. Before this Court, on
B         26.04.2010, counsel for the appellant herein offered to pay
          a sum of Rs. 5 crores to SEPCO of which 2 crores to be
          paid within two days and sought four weeks' time to pay
          another Rs. 3 crores and this Court granted an order of
          interim protection of stay of arrest till 14.05.2010. On
          26.04.2010, Srinivas Gundluri filed a petition before the
c         High court of Andhra Pradesh, under Section 397 rear! with
          Section 401 read with Section 482 of the Code challenging
          the order dated 22.04.2010 passed by the CMM,
          Hyderabad. In the said petition, State of Andhra Pradesh
          and State of Chhattisgarh were arrayed as parties and
D
          represented through their Public Prosecutors. SEPCO was
          not made a party as required under Section 397 read with
          Section 401. The High Court of Andhra Pradesh, on
          27.04.2010, passed an interim order staying the order
          dated 22.04.2010 passed by the CMM Hyderabad.
E         Aggrieved by the said order, SEPCO filed appeal @
          S.L.P.(Crl.) 5095 of 2010 before this Court. On
          14.05.2010, this Court after issuing notice tagged this
          S.L.P. along with S.L.P.(Crl.)No. 3267 of 2010. For
          convenience, we refer the parties as described in SLP
F         (Crl.) 3267 of 2010.

      4. Heard Dr. A. M. Singhvi, learned senior counsel for the
  appellants, Mr. C.A. Sundaram, learned senior counsel for the
  contesting respondent-SEPCO and Mr. Atul Jha, learned
G counsel for the State of Chhattisgarh.

         5. Dr. Singhvi, learned senior counsel, at the outset,
    highlighted that in view of the facts and circumstances, more
    particularly, suit for recovery of money filed by SEPCO is
    pending in the civil court and counter claim of the appellants is
H
   SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER                   287
   CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]

   also pending in the same suit, proper course would be to A
   appoint an arbitrator to resolve the dispute. However, according
   to him, instead of pursuing the said legal and contractual
   remedy, the respondent-SEPCO rushed to the Magistrate and
   the Magistrate committed an error in invoking jurisd!ction under
   Section 156 (3) of the Code by directing the Investigation B
   Officer concerned to submit a charge sheet in the Court. He
   also submitted that inasmuch as the appellants, as on date,
   have repaid Rs. 10 crores as against the cla:m of Rs. 21 crores
   and made a counter claim for Rs.10 crores, the criminal
   proceedings could be deferred till appropriate decision being c
   taken in the civil proceedings. On the other hand, Mr. Sundaram,
   learned senior counsel for SEPCO, after taking us through the
   c;1lient features in the complaint, specific allegations with
 /·\ference to the criminality of the respondents, various terms
({:.}the contract and the conduct of the appellant in diverting the
                                                                    0
 ~ entire amount received for a different purpose and in view of
   the Sections 156 (3) and 190 of the Code, the Magistrate is
   well within his powers to pass the impugned order and the
   same l'l::is been rightly considered and approved by the learned
   single Judge and Division Bench of the High Court contended
   that there is no merit in the appeal filed by the appellants. He E
   also pleaded that the learned single Judge of the High Court
   of Andhra Pradesh committed an error in granting stay in
   respect of order dated 22.04.2010 passed by the CMM,
   Hyderabad in Crl. M.P. No. 690 of 2010 in Crime No. 272 of
   2009, P.O. Balco, Korba District, Chhattisgarh pending Crl. F
    R.C. No. 893 of 2010 on the file of the High Court.

      6. We have carefully perused the relevant materials and
  considered the rival contentions.
                                                                       G
       7. Inasmuch as, admittedly, for the recovery of amount, civil
  suit and counter claim are pending in the civil court, we may
  not be justified in expressing our views in respect of suit and
  counter claim of the respective parties. However, in order to
  answer the contentions raised by both parties, it is useful to       H
    288      SUPREME COURT REPORTS                    [2010] 9 S.C.R.


A refer certain relevant provisions of the Code which are as
  under:-

          "Section 156 - Police officer's power to investigate
          cognizable case:
8         (1) Any officer in charge of a police station may, without
          the order of a Magistrate, investigate any cognizable case
          which a Court having jurisdiction over the local area within
          the limits of such station would have power to inquire into
          or try under the provisions of Chapter XIII.
c
          (2) 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 this section to investigate.
D         (3) Any Magistrate empowered under section 190 may
          order such an investigation as above-mentioned.

          Section 173 - Report of police officer on completion of
          investigation
E
          (1) Every investigation under this Chapter shall be
          completed without unnecessary delay.

          (1A) The investigation in relation to rape of a child may be
          completed within three months from the date on which the
F         information was recorded by the officer in charge of the
          police station.

          (2) (i) As soon as it is completed, the officer in charge of
          the police station shall forward to a Magistrate empowered
G         to take cognizance of the offence on a police report, a
          report in the form prescribed by the State Government,
          stating-

                 (a) the names of the parties;
H                (b) the nature of the information;
SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER                 289
CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]

         (c) the names of the persons who appear to be           A
         acquainted with the circumstances of the case;

         (d) whether any offence appears to have been
         committed and, if so, by whom;
                                                                 B
         (e) whether the accused has been arrested;

         (f) whether he has been released on his bond and,
         if so, whether with or without sureties;

         (g) whether he has been forwarded in custody            c
         under section 170;

         (h) whether the report of medical examination of the
         woman has been attached where investigation
         relates to an offence under section 376, 376A,
         3768, 376C or 3760 of the Indian Penal Code(45          D
         of 1860).

  (ii) The officer shall also communicate, in such manner as
  :;.::.y be prescribed by the State Government, the action
  taken by him, to the person, if any, by whom the information   E
  relating to the commission of the offence was first given.

  (3) Where a superior officer of police has been appointed
  under section 158, the report, shall, in any case in which
  the State Government by general or special order so
  directs, be submitted through that officer, and he may,        F
  pending the orders of the Magistrate, direct the officer in
  charge of the police station to make further investigation.

  (4) Whenever it appears from a report forwarded under this
  section that the accused has been released on his bond,        G
  the Magistrate shall make such order for the discharge of
  such bond or otherwise as he thinks fit.

  (5) When such report is in respect of a case to which
                                                                 H
    290       SUPREME COURT REPORTS                     [2010) 9 S.C.R.


A         section 170 applies, the police officer shall forward to the
          Magistrate along with the report-

                 (a) all documents or relevant extracts thereof on
                 which the prosecution proposes to rely other than
8                those already sent to the Magistrate during
                 investigation;

                 (b) the statements recorded under section 161 of
                 all the persons whom the prosecution proposes to
                 examine as its witnesses.
c
          (6) If the police officer is of opinion that any part of any such
          statement is not relevant to the subject-matter of the
          proceeding or that its disclosure to the accused is not
          essential in the interests of justice and is inexpedient in
D         the public interest, he shall indicate that part of the
          statement and append a note requesting the Magistrate
          to exclude that part from the copies to be granted to the
          accused and stating his reasons for making such request.

          (7) Where the police officer investigating the case finds it
E         convenient so to do, he may furnish to the accused copies
          of all or any of the documents referred to in sub-section
          (5).

          (8) Nothing in this section shall be deemed to preclude
F         further investigation in respect of an offence after a report
          under sub-section (2) has been forwarded to the
          Magistrate and, where upon such investigation, the officer
          in charge of the police station obtains further evidence,
          oral or documentary, he shall forward to the Magistrate a
G         further report or reports regarding such evidence in the
          form prescribed; and the provisions of sub-sections (2) to
          (6) shall, as far as may be, apply in relation to such report
          or reports as they apply in relation to a report forwarded
          under sub-section (2).
H
SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER 291
CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]
  Section 200 - Examination of complainant                        A

  A Magistrate taking cognizance of an offence on complaint
  shall examine upon oath the complainant and the witnesses
  present, if any, and the substance of such examination
  shall be reduced to writing and shall be signed by the
                                                                  8
  complainant and the witnesses, and also by the
  Magistrate:

  Provided that, when the complaint is made in writing, the
  Magistrate need not examine the complainant and the
  witnesses-                                                      C

         (a) if a public servant acting or purporting to act in
         the discharge of his official duties or a Court has
         made the complaint; or

         (b) if the Magistrate makes over the case for inquiry    D
         or trial to another Magistrate under section 192:

  Provided further that if the Magistrate makes over the case
  to another Magistrate under section 192 after examining
  the complainant and the witnesses, the latter Magistrate        E
  need not re-examine them.

  Section 201 - Procedure by Magistrate not competent to
  take cognizance of the cas,e-

  lf the complaint is made to a Magistrate who is not             F
  competent to take cognizance of the offence, he shall,-

         ( a) if the complaint is in writing, return it for
         presentation to the proper Court with an
         endorsement to that effect;                              G

         (b) if the complaint is not in writing, direct the
         complainant to the proper Court.

  Section 202 - Postponement of issue of process
                                                                  H
    292      SUPREME COURT REPORTS                   [201 O] 9 S.C.R.


A         (1) Any Magistrate, on receipt of a complaint of an offence
          of which he is authorised to take cognizance or which has
          been made over to him under section 192 , may, if he
          thinks fit and shall in a case where the accused is residing
          at a place beyond the area in which he exercises his
B         jurisdiction postpone the issue of process against the
          accused, and either inquire into the case himself or direct
          an investigation to be made by a police officer or by such
          other person as he thinks fit, for the purpose of deciding
          whether or not there is sufficient ground for proceeding:
c         Provided that no such direction for investigation shall be
          made-

                 (a) where it appears to the Magistrate that the
                 offence complained of is triable exclusively by the
D                Court of Sessions; or

                 (b) where the complaint has not been made by a
                 Court, unless the complainant and the witnesses
                 present (if any) have been examined on oath under
                 section 200 .
E
          (2) In an inquiry under sub-section (1 ), the Magistrate may,
          if he thinks fit, take evidence of witness on oath:

                 Provided that if it appears to the Magistrate that the
F                offence complained of is triable exclusively by the
                 Court of Session, he shall call upon the complainant
                 to produce all his witnesses and examine them on
                 oath.

          (3) If an investigation under sub-section (1) is made by a
G         person not being a police officer, he shall have for that
          investigation all the powers conferred by this Code on an
          officer in charge of a police station except the power to
          arrest without warrant."

H         8. A perusal of the above provisions, particularly, Section
 SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER                     293
 CONSTRUCTION CORPORATION [P. SATHASIVAM, J.)

156 (3) and Sections 200 and 202 of the Code would reveal              A
that Chapter XII of the Code contains provisions relating to
information to the police and their powers to investigate
whereas Chapter XV, which contains Section 202, deals with
provisions relating to the steps which a Magistrate has to adopt
while and after taking cognizance of any offence on a complaint.       B
As rightly observed by the learned single Judge of the High
Court, the provisions of the above two Chapters deal with two
different facets altogether. ·

      9. Dr. Singhvi, learned senior counsel, relying on a
judgment of this Court in Madhavrao Jiwajirao Scindia & Ors.           C
vs. Sambhajirao Chandrojirao Angre & Ors. (1988) 1 SCC
692 contented that the learned Magistrate is not justified in
issuing direction to the Investigation Officer and the same is
liable to be interfered with and the High Court ought to have
interfered with and quashed the same. We have perused the              D
facts of this case. The High Court, in the said decision, quashed
the prosecution against two of the four accused. We have also
gone through the factual details as stated in paragraphs 2, 3
and 4 as well as the submissions made by the counsel. After
narrating all the events in paragraph 7, Their Lordships have          E
 held that:

    "7. The legal position is well settled that when a
    prosecution at the initial stage is asked to be quashed, the
    test to be applied by the court is as to whether the               F
    uncontroverted allegations as made prima facie establish
    the offence. It is also for the court to take into consideration
    any special features which appear in a particular case to
    consider whether it is expedient and in the interest of
    justice to permit a prosecution to continue. This is so on         G
    the basis that the court cannot be utilised for any oblique
    purpose and where in the opinion of the court chances of
    an ultimate conviction are bleak and, therefore, no useful
    purpose is likely to be served by allowing a criminal
    prosecution to continue, the court may while taking into
                                                                       H
    294      SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A         consideration the special facts of a case also quash the
          proceeding even though it may be at a preliminary stage.

         On perusal of the factual details, while agreeing with the
    legal principles, we are of the view that since in the said case
    summons were ordered to be issued by the learned Magistrate,
8
    the said decision is distinguishable and no1 applicable to the
    case on hand.

         10) Mr. Sundaram, learned senior counsel for SEPCO
    pressed into service the decisions rendered in Devarapalli
C   Lakshminarayana Reddy & Ors. vs. V. Narayana Reddy &
    Ors. (1976) 3 SCC 252 and Tula Ram & Ors. vs. Kishore Singh
    (1977) 4 sec 459.

        11. In Oevarapalli Lakshminarayana Reddy (supra), a
0   bench of three Hon'ble Judges have explained the power of the
    Magistrate under Section 156 (3) and Sections 200 and 202.
    The following discussion and ultimate conclusion are relevant
    which reads as under:-

          "13. It is well settled that when a Magistrate receives a
E         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
F         "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
G         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.
H
SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER                295
CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]
  14. This raises the incidental question: What is meant by      A
  "taking cognizance of an offence" by a 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        B
  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       c
  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
                                                                 0
  Magistrate applies his mind for the purposes of
  proceeding under Section 200 and the succeeding
  sections in Chapter XV to the Code of 1973, he is said to
   have taken cognizance of the offence within the meaning
  of Section 190(1)(a). If, instead of proceeding under          E
  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(3), he cannot be said to have taken cognizance of any
  offence.                                                       F

  15. This position of law has been explained in several
  cases by this Court, the latest being Nirmaljit Singh Hoon
  v. State of West Bengal.
                                                                 G
  16. The position under the Code of 1898 with regard to
  the powers of a Magistrate having jurisdiction, to send a
  complaint disclosing a cognizable offence - whether or
  not triable exclusively by the Court of Session - to the
  police for investigation under Section 156(3), remains
                                                                 H
    296      SUPREME COURT REPORTS                   [2010] 9 S.C.R.


A         unchanged under the Code of 1973. The distinction
          between a police investigation ordered under Section
          156(3) and the one directed under Section 202, has also
          been maintained under the new Code; but a rider has
          been clamped by the first proviso to Section 202(1) that if
B         it appears to the Magistrate that an offence triable
          exclusively by the Court of Session has been committed,
          he shall not make any direction for investigation.

          17. Section 156(3) occurs in Chapter XII, under the caption
          : "Information to the Police and their powers to investigate";
c         while Section 202 is in Chapter XV which bears the
          heading: "Of complaints to Magistrates". The power to
          order police investigation under Section 156(3) is different
          from the power to direct investigation conferred by Section
          202(1 ). The two operate in distinct spheres at different
D         stages. The first is exercisable at the pre-cognizance
          stage, the second at the post-cognizance stage when the
          Magistrate is in seisin of the case. That is to say in the
          case of a complaint regarding the commission of a
          cognizable offence, the power under Section 156(3) can
E         be invoked by the Magistrate before he takes cognizance
          of the offence under Section 190(1)(a). But if he once takes
          such cognizance and embarks upon the procedure
          embodied in Chapter XV, he is not competent to switch
          back to the pre-cognizance stage and avail of Section
F         156(3). It may be noted further that an order made under
          sub-section (3) of Section 156, is in the nature of a
          peremptory reminder or intimation to the police to exercise
          their plenary powers of investigation under Section 156(1).
          Such an investigation embraces the entire continuous
G         process which begins with the collection of evidence under
          Section 156 and ends with a report or charge-sheet under
           Section 173. On the other hand, Section 202 comes in at
           a stage when some evidence has been collected by the
           Magistrate in proceedings under Chapter XV, but the
H          same is deemed insufficient to take a decision as to the
 SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER 297
 CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]

    next step in the prescribed procedure. In such a situation,     A
    the Magistrate is empowered under Section 202 to direct,
    within the limits circumscribed by that section an
    investigation "for the purpose of deciding whether or not
    there is sufficient ground for proceeding". Thus the object
    of an investigation under Section 202 is not to initiate a      B
    fresh case on police report but to assist the Magistrate in
    completing proceedings already instituted upon a
    complaint before him.

    18. In the instant case the Magistrate did not apply his mind   C
    to the complaint for deciding whether or not there is
    sufficient ground for proceeding; but only for ordering an
    investigation under Section 156(3). He did not bring into
    motion the machinery of Chapter XV. He did not examine
    the complainant or his witnesses under Section 200 CrPC,
    which is the first step in the procedure prescribed under       D
    that chapter. The questiori of taking the next step of that
    procedure envisaged in Section 202 did not arise. Instead
    of taking cognizance of the offence, he has, in the exercise
    of his discretion, sent the complaint for investigation by
    police under Section 156."                                      E

     12. In Tula Ram & Ors. vs. Kishore Singh (supra) again
this Court considered order for investigation under Section 156
(3) on a complaint. After considering various earlier decisions,
the Court on a caretul consideration of the facts and               F
circumstances of the case propounded the following legal
propositions:-

    " .... 1. That a Magistrate can order investigation under S.
    156 (3) only at the pre-cognizance stage, that is to say,
    before taking cognizance under Sections 190, 200 and            G
    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 in
    cases not falling within the proviso to Section 202 he can
    order an investigation by the police which would be in the      H
    298      SUPREME COURT REPORTS                  (2010] 9 S.C.R


A         nature of an enquiry as contemplated by Sec. 202 of the
          Code.

          2. Where a Magistrate chooses to take cognisance he can
          adopt any of the following alternatives:
B         (a) He can peruse the complaint and if satisfied that there
          are sufficient grounds for proceeding he can straightaway
          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.
c
          (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
D
          by the police.

          3. In case the Magistrate after considering the statement
          of the complainant and the witnesses or as a result of the
          investigation and the enquiry ordered is not satisfied that
E         there are sufficient grounds for proceeding he can dismiss
          the complaint.

          4. Where a Magistrate orders investigation by the police
          before taking cognizance under S. 156 (3) of the Code and
          receives the report thereupon he can act on the report and
F
          discharge the accused or straightaway issue process
          against the accused or apply his mind to the complaint
          filed before him and take action under Section 190 as
          described above."

G        13. With these legal principles, we also verified the
    allegations in the complaint made by SEPCO as well as the
    order of the Magistrate dated 04.07.2009. The order of the
    Magistrate reads as under:-
          "IN THE COURT OF CHIEF JUDICIAL MAGISTRATE,
H
    SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER                299
    CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]

      KORBA (CHHATISGARH)                                            A
      COMPLAINT CASE NO. OF 2009
      M/s Sepco Electric Power Construction Corporation
      Vs.
                                                                     B
      Mr. Srinivas Gundluri and Ors.
      04.07.2009
•     Present case was produced before me because Smt.
      Saroj Nand Das, Judicial Magistrate 1st Class, Korba, is
      on leave. Complainant present along with his counsel Shri      C
      B.K. Shukla, Advocate. Complaint under Section 200
      Cr.P.C. has been filed against Respondents-accused
      praying for taking cognizance against them under Sections
      405, 406, 418, 420, 427, 503, 504, 506/34 and 1208 of
      Indian Penal Code. It has been further prayed that case        D
      be sent to the concerned Police Officer under Section 156
      (3) Cr.P.C.
      Heard on the application. Perused Complaint under
      Section 200 Cr.P.C. According to this complaint, a prayer      E
      has been made to take cognizance against Accused-Mr.
      Srinivas Gundluri and Smt. Bharati Devi, Director and
      others under Sections 405, 406, 418, 420, 427, 503, 504,
      506/34 and 1208 of Indian Penal Code. All these are
      cognizable offences.
                                                                     F
      Therefore, application filed on behalf of the Complainant
      under Section 156 (3) Cr.P.C. is allowed and original
      complaint and other documents are sent to concerned
      Station House Officer and he is directed to register a first
      information report and conduct investigation in the matter     G
      on the basis of facts mentioned in the and after completion
      of investigation, to submit a charge sheet in the Court.
                                                    Sd/- Illegible
                                       Chief Judicial Magistrate
                                          Korba (Chhatisgarh)"       H
    300     SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A From the above, it is clear that the Magistrate only ordered
  investigation under Section 156 (3) of the Code. It also shows
  that the Magistrate perused the complaint without examining the
  merits of the claim that there is sufficient ground for proceeding
  or not, directed the police officer concerned for investigation
B under Section 156 (3) of the Code. As rightly observed by the
  learned single Judge of the High Court, the Magistrate did not
  bring into motion the machinery of Chapter XV of the Code.
  He did not examine the complainant or his witnesses under             •
  Section 200 of the Code which is the first step in the procedure
c prescribed under the said Chapter. The question of taking next
  step of the procedure envisaged in Section 202 did not arise.
  As rightly pointed out by Mr. Sundaram, instead of taking
  cognizance of the offence, the learned Magistrate has merely
  allowed the application filed by the complainanUSEPCO under
  Section 156(3) of the Code and sent the same along with its
0
  annexure for investigation by the police officer concerned under
  Section 156 (3) of the Code. To make it clear and in respect
  of doubt raised by Mr. Singhvi to proceed under Section 156
  (3) of the Code, what is required is a bare reading of the
  complaint and if it discloses a cognizable offence, then the
E Magistrate instead of applying his mind to the complaint for
  deciding whether or not there is sufficient ground for
  proceeding, may direct the police for investigation. In the case
  on hand, the learned single Judge and Division Bench of the
  High Court rightly pointed out that the Magistrate did not apply
F his mind to the complaint for deciding whether or not there is
  sufficient ground for proceeding and, therefore, we are of the
  view that the Magistrate has not committed any illegality in
  directing the police for investigation. In the facts and
  circumstances, it cannot be said that while directing the police
G to register FIR, the Magistrate has committed any illegality. As
  a matter of fact, even after receipt of such report, the Magistrate
  under Section 190 (1) (b) may or may not take cognizance of
  offence. In other words, he is not bound to take cognizance upon
   submission of the police report by the Investigating Officer,
H hence, by directing the police to file chargesheet or final report
       SRINIVAS GUNDLURI v. SEPCO ELECTRIC POWER 301
      CONSTRUCTION CORPORATION [P. SATHASIVAM, J.]

    and to hoid investigation with a particular result cannot be            A
    construed that the Magistrate has exceeded his power as
    provided in sub-section 3 of Section 156.

          14. Neither the chargesheet nor the final report has been
     defined in the Code. The chargesheet or final report whatever
                                                                            8
     may be the nomenclature, it only means a report under Section
     173 of the Code which has to be filed by the police officer on
     completion of his investigation. In view of our discussion, in the
•    case on hand, we are satisfied that the Magistrate in passing
     the impugned order has not committed any illegality leading to
     manifest injustice warranting interference by the High Court in        C
     exercise of extraordinary jurisdiction conferred under Article 226
    ·of the Constitution of India. We are also satisfied that learned
     single Judge as well as the Division Bench rightly refused to
     interfere with the limited order passed by the Magistrate. We
     also hold that challenge at this stage by the appellants is pre-       D
     mature and the High Court rightly rejected their request.

          15. It is true that Dr. Singhvi, learned senior counsel for the
    appellants, highlighted that out of the claim of Rs. 21 crores,
    Rs. 10 crores have already been paid, the appellants have also          E
    laid counter claim for Rs. 10 crores and in such a factual
    scenario, there is no need to continue the criminal proceedings
    and prayed for deferment of the same till the outcome of the
    civil proceedings. However, Mr. Sundaram for SEPCO, by
    taking us through various allegations in the complaint                  F
    highlighted that SSVG by misappropriating the advance money
    for the purpose other than for which it was granted submitted
    that the Magistrate correctly exercised his jurisdiction under
    Section 156 (3) and referred the matter for investigation. He
    also submitted that the complaint very much discloses                   G
    cognizable offence under Sections 405, 406, 418, 420, 427,
    503, 504, 506/34 and 1208 of IPC. Whatever may be, we are
    not here to find out the truth or otherwise of those allegations
    but the Magistrate is justified in asking to register FIR, conduct
    investigation on the facts mentioned in the complaint and after
                                                                            H
    302     SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A   completion of the investigation submit a report in the Court. We
    do not find any illegality either in the course adopted by the
    Magistrate or in ultimate direction to the police.

         16. Dr. Singhvi has also brought to our notice that the
8   respondent - SEPCO has made another complaint in respect
    of the same issue before the Chief Metropolitan Magistrate,
    Hyderabad. According to him, the same is not permissible and
    the stay granted by the High Court in Crl. M.P. 1307 of 2010 in
    Crl. R.C. No. 893 of 2010 is justifiable. However, we are not
C   expressing anything on the said complaint and it is for the
    appropriate Court to consider about the merits of the claim
    made by both the parties.

        17. In the light of what has been stated above, we are in
    agreement with the order dated 20.07.2009 passed by the
D   learned single Judge of the High Court of Chhattisgarh in W.P.
    No. 3647 of 2009 as well as the order dated 01.04.2010
    passed by the Division Bench of the High Court of Chhattisgarh
    in WA No. 281 of 2009. As on date there is no impediment for
    the police to investigate and submit report as directed in the
E   order dated 04.07.2009 by Chief Judicial Magistrate, Korba
    District, Chhattisgarh. Interim orders in respect of all the
    proceedings including the order dated 27.04.2010 passed by
    the High Court of Andhra Pradesh in Crl. M.P. No. 1307 of
    2010 in Crl. R.C. No. 893 of 2010 are vacated and both parties
F   are at liberty to pursue their remedy in the pending proceedings
    in accordance with law.

         18. In the result, the appeal arising out of SLP (Crl.) 3267
    of 2010 of Srinivas Gundluri and others (SSVG) is dismissed
    and the appeal arising out of SLP (Crl.) No. 5095 of 2010 filed
G   by SEPCO is allowed to the extent indicated above.

    N.J.                                     Appeals disposed of.