ANIL SARAN versus THE STATE OF BIHAR AND ANR.

Citation: [1995] SUPP. 3 S.C.R. 58 · Decided: 24-08-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.L. HANSARIA · Disposal: Dismissed

Judgment (excerpt)

A 
ANIL SARAN 
v. 
THE STATE OF BIHAR AND ANR. 
AUGUST 24, 1995 
B 
[K. RAMASWAMY AND B.L. HANSARIA, JJ.) 
Code of Oiminal Procedure, 1973: Sections 190 and 192. 
Offence-Cognizance of-When takes place-Held cognizance takes 
place as soon as the Magistrate applies his judicial mind to the offence stated 
C in the complaint. 
Chief Judicial Magistrate-Complaint before-Transfer of case to Judi-
cial Magistrate without taking cognizance-Magistrate examining witnesses 
and issuing proces~Held Magistrate committed no error of jurisdiction in 
D taking cognizance of offence. 
E 
Indian Penal Code, 1860: Section 406. 
Partnership property-Climinal breach of tntst by partner-Held it must 
be shown that property was entntsted under a special contract and he held 
the property in a fiduciary capacity. 
A partnership firm, consisting of three partners viz. the appellant, 
the second respondent and one A, entered into an agreement with the first 
accused (before the Trial Court) for exhibition of a film owned by the firm. 
Under the terms of the agreement, the film along with the sale proceeds 
F 
was to be returned after exhibition. On failure of the first accused to do 
so, the second respondent filed a complaint before the Chief Judicial 
Magistrate, Patna that the first accused in collusion with the appellant 
and the other partner of the firm steathily and illegally misappropriated 
the collections and dishonestly made wrongful gain for themselves and 
caused wrongful loss to the complainant and the partnership firm. The 
G Chief Judicial Magistrate examined the complainant and transferred the 
case to Judicial Magistrate-II who examined witnesses and issued process 
under sections 406 and 420 of the Indian Penal Code. The appellant's 
application under section 482 of the Code of Criminal Procedure, 1973 was 
dismissed by the High Court on the ground that the complaint prim a f acie 
H 
disclosed commission of the alleged offences. 
58 
... 
c 
ANILSARAN v. STATE 
59 
In appeal to this Court it was contended for the appellant that (i) 
without taking cognizance of the case the Chief Judicial magistrate com-
mitted manifest jurisdictional error in transferring the complaint to the 
Magistrate who took further action therein; (ii) the appellant, being a 
partner in the complainant finn, cannot be said to have committed 
criminal breach of trust of his own funds and therefore, it is a case of civil 
liability only. 
Dismissing the appeal, this Court 
HELD : 1. The word 'cognizance' has not been defined in the Code 
A 
B 
of Criminal procedure. But it is now settled law that the court takes C 
cognizance of the offence and not the offender. As soon as the Magistrate 
applies his Judicial mind to the offence stated fo the complaint or the 
police report etc. cognizance is said to be taken. Cognizance of the offence 
takes place when the Magistrate takes Judicial notice of the. offence. 
Whether the Magistrate has taken cognizance of offence on a complaint or 
on a police report or upon information of a person other than the police D 
officer, depends upon further steps taken pursuant thereto and the attend-
ing circumstances of the particular case including the mode in which case 
is sought to be dealt with or the nature of the action taken by the 
Magistrate. [61-H; 62-A-B] 
2. The power to take cognizance has been conferred on a Magistrate 
by section 190(1) of the Code, and he would not be denuded of this power 
because the case has come to his filed pursuant to some illegal order of 
the Chief Judicial Magistrate. The former would be exercising his power 
of taking cognizance even in such a case, because of his having received a 
complaint constituting the offence. It would not be material, for this 
purpose, as to how he came to receive the complaint - directly or on 
transfer from the Chief Judicial Magistrate. Therefore, no error of juris-
diction was committed by the Judicial Magistrate in taking cognizance of 
the offence. [62-E-G] 
E 
F 
3. Partnership firm is not a legal entity but a legal mode of doing G 
business by all the partners. Until the firm is dissolved as per law and the 
accounts settled, all the partners have dominion in common over the 
property and funds of the firm. Only after the settlement of accounts and 
allotment of respective share, the partner becomes owner of his share. 
However, criminal breach of trust under section 406 of Indian Penal Code H 
60 
SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R. 

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