IMPORTANT POINT
Magistrate has no power to direct withdrawal of an investigation.

JUDGMENT

S.B. Sinha, J.—

1. Leave granted.

2. These appeals arising out of a common judgment were taken up for hearing together.

Appellants herein are depositors in City Cooperative Bank Ltd. (the Bank), a bank incorporated and registered under the Gujarat Co-operative Societies Act, 1962.

3. Some of the borrowers had mortgaged their properties with the bank. Alleging commission of offences under Sections 406, 420, 423, 465, 477, 468, 471, 120(B), 124 and 34 of the Indian penal Code and investigation against the accused persons - respondents herein, the bank filed a complaint petition before the Second Court of Judicial Magistrate First Class, Surat praying for a direction upon the Rander Police Station to register a complaint.

By an order dated 11.6.2004, the learned Magistrate upon consideration of the said allegations directed as under :

“The complaint is hereby ordered to be registered as the Inquiry Case and is ordered to be sent to Rander Police Station under Section 156(3) for the Police Investigation. On being investigating the offence the Investigating Officer has to submit the report of Investigation on or before 12.7.2004 before this Court.”

4. However, the complainant filed an application before the learned Magistrate on or about 6.7.2004 informing the learned Court that a compromise had been entered into by and between the accused and the bank pursuant whereto and in furtherance whereof, an order was passed, directing:

“As the compromise has been taken place between the complainant and the accused which is being proclaimed by Ex.4, the complainant don’t want to proceed further with the complaint, the order is being passed to withdraw the inquiry. It is to be informed to the concerned Police Station.”

5. Questioning the legality and validity thereof, the appellants filed Writ Petitions before the High Court.

The main judgment was passed in the case of Writ Petition No.3771 of 2005. Before the High Court, a contention was raised that once a complaint is sent for registration of the first information report and investigation on the allegations contained therein, the learned Magistrate had no jurisdiction to recall the order. Reliance in this behalf, inter alia, was placed on the decision of this Court in Subramanium Sethuraman v. State of Maharashtra & Anr.1 [2004 (7) SCALE 733].

The High Court, however, upon taking note of the fact that at the relevant point of time, an administrator had been functioning under the direct control and supervision of the District Registrar, Co-operative Societies, in absence of any allegation that he had exercised his power mala fide, declined to interfere with the said order dated 6.7.2004, stating :

“It appears that the petitioners were not in the picture, either at the time when the complaint was filed and/or at the time when the learned Magistrate passed the order for investigation under Section 156(3) of Cr.P.C. or at the time when the settlement purshis was filed and the learned Magistrate passed the offer of recalling the inquiry in the month of July 2004. As such in normal circumstances, the petitioners who are depositors of the bank can be said as third party to the programmes of the complaint and subsequent there to in case of S.M.S. Jayaraj (Supra), the case before the Apex Court was pertaining to the grant of licence for liquor and, therefore, while considering the question of locus standi it was observed that the appellant before the Apex Court was the person, who was having the business in the area can have locus. In any case, it was not matter for considering the question of locus standi in criminal prosecution and, therefore, the said decision is of no help to the petitioners.”

6. Mr. U.U. Lalit, learned senior counsel appearing on behalf of the appellant, would submit that the High Court committed a serious error in passing the impugned order insofar as it failed to take into consideration that the learned Magistrate could not have recalled his earlier order passed i