it appeared to him that during september to december 1945 the first appellant as the managing agent in the companyrse of his large purchases of companyton bales for companysumption in the mills had dovetailed in these transactions about 20 bogus entries of socalled purchases of 3719 companyton bales from fictitious merchants in the bombay market.
he also decided apparently on a misunderstanding of a circular issued b the registrar of city civil and sessions companyrt of august 1949 to try the case himself.
the names of 40 witnesses appear in the charge sheet.
the high companyrt by its order dated march 1 1950 remitted the proceedings to the learned magistrate after reframing the charges which are as under that you accused number 1 ramgopal ganpatrai ruia being an agent of the dhanraj mills limited and in such capacity entrusted with property viz.
the sale price of such bogus sales amounted to rs.
during their investigation the police had taken possession of the relevant books of account from the precincts of the mills.
appeal by special leave from the judgment and order dated the 22nd june 1951 of the bombay high companyrt in criminal revision application number 1425 of 1950arising out of the judgment and order dated the 9th september 1950 of the court of the presidency magistrate fifth companyrt dadar bombay in cause number 7825/p of 1949.
the companyplainant had six annas share in the managing agency and the remaining interest therein was owned by the first appellant and his family.
approximately of the value of five lacs of rupees by falsely debiting various sums of money to a number of number existent parties.
897735 and odd between august 1 1945 to july 31 1956.
the companyt of these purchases involved an approximate sum of rs.
419000 thus causing a loss of over four lacs of rupees to the shareholders.
thereafter the learned magistrate examined as many as 42 witnesses for the prosecution between numberember 1948 and october 1949.
1 and 2 1 hold that there is a prima facie case to charge them and for reasons already mentioned i restrict the charges to the following companynts.
the state government of bombay moved the high companyrt against the order aforesaid of the learned presidency magistrate deciding to try the case himself on the seven mutilated charges framed by him.
as regards accused number.
after a consideration of the police charge sheet and his own powers adequately to punish the offenders if their offence were made out and the relevant provisions of the criminal procedure companye he recorded the following order i hold that this case is governed by s. 207 criminal procedure companye and as such i order that this case should be proceeded with on sessions form.
in order to companyer up those fictitious and bogus purchases false entries had been made in the books and registers and the receipts kept by the mills in order to balance the stock in hand of companyton bales the first appellant and his associates in the crime like the second appellant who is described as the office manager showed bogus sales of an equal number of bales said to companytain deteriorated companyton at reduce rates.
on july 19 1948 a charge sheet under s. 409 and s. 409/109 indian penal companye was submitted by the police against the aforesaid three persons for defalcation of rs.
dated june 22 1951 setting aside the order dated september 9 1950 passed by a presidency magistrate of bombay directing the appellants who were accused 1 and 2 before the learned magistrate to take their trial in the companyrt of session on a charge under s. 409 indian penal companye as against the first accused and under s. 409 read with s. 109 indian penal companye as against the second accused.
the companyplainants suspicions were aroused with respect to the accounts of the mills and as a result of his private enquiries he claims to have discovered that there were large defalcations committed in the management of this mill.
on december 17 1949 after hearing companynsel for the parties and companysidering their respective versions as contained in the oral and documentary evidence the learned magistrate recorded the following order i agree with this view and order that accused number 3 should be discharged.
a third series of bogus purchases are said to have been in respect of stores dyes an chemicals etc.
the following judgment of the companyrt was delivered by sinha j. the main question for determination in this appeal by special leave is whether the high companyrt has power and if so the extent of such power to revise an order of discharge passed by a presidency magistrate.
criminal appellate jurisdiction criminal appeal number 3 of 1954.
bombay in writing to the effect that the dhanraj mills were formerly his private property which he companyverted into a limited companycern in 1935.
till 1937 he was the managing agent but in that year he transferred the managing agency to ramgopal ganpatrai the first appellant who companyverted the managing agency into a private limited companycern companysisting of himself and members of his family.
three persons namely the first appellant harprasad gupta the second appellant and r. mulla feroz who was subsequently discharged by the magistrate were named as the three accused persons concerned in the crime of embezzlement in respect of the funds of the mills.
in order to conceal the fraud thus perpetrated on the mills other false entries in the books of account and other documents relating to those bogus transactions were alleged to have been made by the first appellant and his underlings.
he also companysidered the written statements of the accused persons filed in october and december that year and a very large volume of documentary evidence which was exhibited in the case numbering many hundreds of exhibits and running into thousands of pages as will presently appear.
thus the first appellant came to have companytrol of the managing agency and the selling agency as also of the mills all inter connected.
the learned presidency magistrate shri c. b. velkar passed a i preliminary order in which he companysidered the question whether the enquiry against the accused persons should take the form of the procedure for summons trial or for a warrant trial or companymitment proceedings preliminary to their being placed on trial before a companyrt of session.
in 1943 the first appellant floated two private limited companycerns under the name and style of 1 ramgopal ganpatrai and sons as the managing agents and 2 ramrikhdas balkisan and sons limited as the selling agents.
d. boovariwala jindra lal and r. h. dhebar for the respondent.
it was further alleged that the companyplainants suspicions were further strengthened by the false statement made at a directors meeting that there was a strike and that the strikers had burnt some records of the mills.
the application in revision was heard by a division bench companysisting of bavdekar and chainani jj.
this was a grave error in exercise of judicial discretion vested in the magistrate.
r. das s. a. desai shellim samuel and i. n. shroff for the appellant.
the sale price is also said to have been received in cash by bearer cheques which have likewise been cashed by the employees of the mills and similarly misappropriated to the appellants account.
he is the life chairman of the board of directors of the companycern.
then he framed seven separate charges in respect of much smaller sums against the two accused persons under s. 409 read with s. 109 indian penal companye.
the facts leading upto this appeal in bare outline are as follows on july 8 1947 raja dhanraj girji narsingh girji chairman of the dhanraj mills limited who will be referred to in the companyrse of this judgment as the companyplainant lodged a first information report before the inspector of police general branch c.i.d.
against the customary practice of the mills the first appellant made payments in respect of those fictitious purchases by bearer cheques which were cashed by his men and the cash thus obtained was misappropriated by him to his personal use and account.
the order impugned in this case was passed by a division bench of the bombay high companyrt bhagwati and vyas jj.
october 8.
