LexTRISUNS CHEMICAL INDUSTRY versus RAJESH AGARWAL AND ORS.
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A TRISUNS CHEMICAL INDUSTRY v. RAJESH AGARWAL AND ORS. SEPTEMBER 17, 1999 B [K.T. THOMAS AND M.B. SHAH, JJ.] Code of Criminal Procedure, 1973. Ss.156, 190, 482-Quashing of complaint-Grounds for-Complaint to C Magistrate First Class for offence of Cheating and other offences alleged to have been committed under Penal Code-Magistrate forwarliing it for investigation-High Court quashing complaint on grounds that the dispute was of a civil nature and covered under arbitration clause and that the Magistrate did not have territorial jurisdiction to try the case-Held, High Court erred in quashing the complaint-Merely because an act has a civil D profile is not sufficient to denude it of its criminal outfit-Power of a Magistrate of the First Class to take cognizance of an offence is not impaired by territorial restrictions-As to which Court has jurisdiction to enquire into or try the offence is to be decided during post-Cognizance stage and not earlier. E F A complaint was filed by the Chairman of the appellant-company against the respondents and their company located at Indore, Madhya Pradesh, before the Judicial Magistrate I Class Gandhidham, Gujarat alleging that the respondents committed offences including the offence of cheating the appellants. It was alleged that the respondents approached the appellant and offered to supply "Toasted Soyabean Extracts". The appellants were induced to pay the price on the representation that the best quality commodity would be supplied, but the respondents supplied the most inferior quality, and thus the appellants suffered a huge loss. The Magistrate forwarded the complaint to the police for investigation. The respondents filed a petition under S.482 of the Code of Criminal Procedure 1973, before the Gujarat High Court for G quashing the complaint on the grounds, that the dispute was of civil nature and, therefore, no prosecution should have been permitted, and that the Judicial Magistrate, Gandhidham had no jurisdiction to entertain the complaint. The High Court quashed the complaint and the order passed by the Judicial Magistrate. Aggrieved, the complainants filed the present appeal. H Allowing the appeal, the Omrt 686 ' - TRISUNS CHEMICAL INDUSTRY v. RAJESH AGARWAL 687 HELD: 1. The High court was not right in holding that the provisions A incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution, when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albiet the same act may be connected with the 1 / B discharge of any function under the ai;reement. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would bejustified only in very extreme cases. (689-H; 690-A-B] State of Haryana v. Bhajan Lal, (1992) suppl. 1 SCC 335 and Rajesh C Bajaj v. State NCT of Delhi, (1993) 3 SCC 259, relied on. 2. The High Court also erred in holding that the Judicial Magistrate had no power to take cognizance of the offences alleged. It is an erroneous view that the Magistrate taking cognizance of an offence must necessarily have territorial jurisdiction to try the case as well. In view of s.190 of the D Code of Criminal Procedure, 1973, "any" Magistrate of the First Class has the power to take cognizance of any offence, no matter that the offence was committed within his jurisdiction or not. Only in certain special enactments special provisions are incorporated for restricting the power of taking cognizance of offences falling under such Acts. The jurisdiction aspect E becomes relevant only when the question of inquiry or trial arises. After taking cognizance, the Magistrate may have to decide as to the Court which has jurisdiction to enquire into· or try the offence and that situation would reach only during the post cognizance stage and not earlier. Even otherwise, without being apprised of the fuller conspectus a decision on the question of jurisdiction should not have been taken by the High Court at a grossly F premature stage as this. (691-H; 692-A-C] 3. If any of the respondents is arrested in connection with the complaint, he will be released on bail by the arresting officer on executio
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