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CALCUTTA HIGH COURT
Rai Chattopadhyay, J.
N.P. Mathi Lingan – Petitioner
versus
State of West Bengal and Anr. – Opp. Party
CRR 2292 of 2016
Decided on 3.9.2025
For the Petitioner:Mr. Sourav Chatterjee, Ld. Sr. Advocate, Mr. Sumanta Ganguly, Mr. Shiv Ratan Kakrania, Mr. Karanjeet Sharma, Mr. N. Das, Advocates
For the Opp. Party No.2:Mr. Satadru Lahiri, Mr. Soumyajyoti Nandy, Mr. Gyan Prakash, Mr. Jyotirmoy Talukder, Advocates
IMPORTANT POINTS
Enquiry by Magistrate is not merely procedural but a mandatory safeguard to ensure genuineness of complaint before issuing process.
Headnote:
(A) Payment and Settlement Systems Act, 2007 – Section 7 – Criminal Procedure Code, 1973 – Section 482 – Hypothecation Loan Agreement – Dishonour of electronic transfer of fund in favour of complainant company – Cognizance of offence – For only reason of order of Magistrate being typed out, would not be a clear implication of fact of him not having applied mind before taking cognizance of offence – That it is not a sustainable proposition – Magistrate having endorsed that order has been dictated by him, has taken cognizance of offence in accordance with settled legal principles – Allegation of non-application of mind by Magistrate while taking cognizance of offence is thus not sustainable – Magistrate has done appropriately by conducting enquiry as to existence of prima facie case against petitioners, on the basis of materials available before him, at a pre-summon stage and by issuance of process therefor – Excepting name of petitioner having been mentioned as one of accused persons in complaint, his involvement or any role in commission of alleged offence or regarding his day to day involvement in affairs of accused company has not been expressed therein, except that accused company is being managed and controlled by other accused persons – Criminal case against petitioner quashed. (Paras 12, 18, 28 to 32)
(B) Criminal Procedure Code, 1973 – Section 202 – Enquiry by Magistrate – Enquiry is not merely procedural but a mandatory safeguard to ensure genuineness of complaint before issuing process – Enquiry by Magistrate under this provision of law involves examining materials on record and application of his mind to allegations and evidence, ensuring that there is prima facie case – Failure of Magistrate to conduct mandatory enquiry, especially when accused resides outside jurisdiction, renders process illegal and liable to be quashed. (Para 16)
Result: Criminal Revision Petition allowed.
JUDGMENT
Rai Chattopadhyay, J.—The petitioner is the accused person in criminal proceeding No. CS 0025782 of 2015, filed before the Chief Metropolitan Magistrate, Kolkata which is now pending before the Metropolitan Magistrate 14th Court at Kolkata. The petitioner by filing the instant case under Section 482 of the Code of Criminal Procedure, 1973, has sought for quashing of the said criminal proceeding being No. CS 0025782 of 2015 and all orders of the Magistrate passed in connection with the said case.
2. The authorized representative of the opposite party no. 2/complaint company has filed the complaint before the Magistrate on May 21, 2015. The petitioner is the accused person No. 7 and Company Secretary of the complainant company and said to have been looking after the day to day business affairs of the company. He is said to have been in control and management thereof. After careful perusal of the written complaint lodged by the opposite party No. 2 before the Magistrate it appears that a hypothecation loan agreement was entered into between the complainant company and the accused No. 1 company, of which the accused No. 7 that is the present petitioner has been employed as a Company Secretary. At the time of entering into the said hypothecation loan agreement, the accused persons had opted for ECS Mandate and accordingly issued standing instructions to its banker being MICR No. 600072002 to debit sums of Rs.48,33,630/- and Rs.44,09,000/- respectively from its bank account No. 11/06020100005067, towards payment of the Equated Monthly Installment (EMI), in respect of repayment of loan pursuant to the hypothecation loan agreement as mentioned above. Such EMIs through ECS Mandate were to be deposited/credited in the bank account of the complainant company. Therefore, after procuring the loan amount pursuant to the hypothecation loan agreement and to discharge the burden of legally enforceable liability to repay the same, the accused persons had initiated payment of EMI in favour of the complainant company through the ECS mode.
3. Allegedly, the electronic transfer of fund in favour of the complainant company was dishonored. The Complainant says to have received information regarding dishonor of electronic fund transfer, vide debit memo dated March 5, 2015. [Being Transaction Nos. 102 319 6413 and 103 292 5358]. The alleged dishonor with regard to transfer and credit of fund in favour of the complainant company happened on January 22, 2015 and February 23, 2015 respectively due to “Insufficient Fund”, as remarked. Such alleged dishonor of fund transfer in favour of the complainant company was followed by a demand notice dated March 26, 2015, which has been admittedly posted on April 6, 2015.
4. Allegedly also, in spite of service of the demand notice and receipt thereof by the accused persons, they have failed to make the payment of the amount of EMIs which were earlier dishonoured. Hence, the complaint was lodged under Section 25 of the Payment And Settlement Systems Act, 2007.
5. The Chief Metropolitan Magistrate, Kolkata has taken cognizance of offence and transfer the record for trial and disposal to the Metropolitan Magistrate, 14th Court at Kolkata. Hence, being aggrieved, the petitioner has come up with the instant case to seek relief that the entire criminal proceeding against him may be quashed.
6. The petitioner accused person No. 7 has been represented by Mr. Sourav Chatterjee, learned Senior Counsel. Mr. Satadru Lahiri has appeared for the opposite party No. 2/complainant company.
7. Respective arguments on behalf of the petitioner as well as the opposite party No. 2 may be summarized in the following manner:-
8. The petitioner’s case:
8.1. Illegal taking of cognizance:
• The order taking cognizance by the Chief Metropolitan Magistrate is alleged to be a “pre-typed cyclostyle order-sheet” with handwritten blanks, indicating a lack of application of judicial mind.
• This is argued to be a violation of the princip
