JUDGMENT

NATARAJAN, J :— Special Leave granted.

2. This appeal by special leave is directed against an order of the High Court of Karnataka under Sec. 482 Criminal Procedure Code (for short the Code) setting aside the order of the Second Additional Chief Metropolitan Magistrate, Bangalore directing the registration of a calendar case against the second respondent under Sections 408 and 420 of the Indian Penal Code and the issue of summons to him under Section 204 of the Code.

3. So far as the facts are concerned, they are as follows. The appellant gave a report to the Commissioner of Police, Bangalore on 20-2-1980 against the second respondent alleging that he had committed the offences of cheating and criminal breach of trust. It was averred that the second respondent, was its Divisional Manager (Export-Import) and had negotiated on its behalf with an Italian firm in July 1979 for supply of quality granite stones and had obtained a letter of credit. Availing the credit facility, he had drawn a sum of Rs. 13,69,750/- but failed to supply granite stones to the Italian firm and instead had misappropriated the amount.

4. On the foot of the report, a case was registered against the second respondent in Ulsoor Police Station as Crime No. 145/1980 under Sections 408 and 420 of the Indian Penal Code and the case was investigated by Shri Bayar, Inspector of Police. When Shri Bayar went away on promotion, his successor took over the investigation but subsequently he sent a B report to the Court stating that further investigation was not required as the case was of a civil nature.

5. Aggrieved by the report sent by the police, the appellant approached the Second Additional Chief Metropolitan Magistrate, Bangalore for the report being quashed and permission granted to him to prove the commission of offences by the second respondent. The learned Magistrate, after perusing the investigation records came to the view that a prima facie case was made out against the second respondent and consequently he passed an order for a calendar case being registered against him for offences punishable under Sections 408 and 420 of the Indian Penal Code and for summons being issued to him under Sec. 204 of the Code.

6. Thereupon, the second respondent filed a petition under Sec. 482 of the Code before the High Court and sought the quashing of the order of the Magistrate. The High Court allowed the petition and set aside the order of the Magistrate on the ground the Magistrate had not followed the procedure laid down by the Code for taking cognizance of the case and issuing process to the accused after the police had sent a B report in the case. The High Court has held that on receipt of the B report, the Magistrate should have issued notice to the appellant to find out whether he was disputing the correctness of the B report and, if so, to comply with the requirements of Sec. 200 of the Code. The High Court has further stated that only after examing the appellant on oath and his witnesses, the Magistrate should have decided whether a case should be registered and process issued to the accused. The High Court has referred to the ratio laid down in an earlier case K. Sham Rao v. A. R. Diwakar, (1979) 2 Kant U 441 and followed it. Aggrieved by the order of the High Court, the appellant has come forward with this appeal.

7. Mr. B. R. G. K. Achar, learned counsel for the appellant contended that the second respondent had no locus to question the order of the Second Additional Chief Metropolitan Magistrate and therefore, the High Court was in error in entertaining the petition filed by him under Section 482 of the Code and setting aside the order of the learned Magistrate. In support of this contention he placed reliance on the decision in Nagawwa v. S. Konjalgi, (1976) 3 SCC 736. He further submitted that the Second Additional Chief Metropolitan Magistrate was entitled to take cognizance of the offences alleged to have been committed by the second respondent and or