Revision of order of Presidency Magistrate by High Court.

Sinha, J.- The main question for determination in this appeal by Special Leave is whether the High Court has power, and if so, the extent of such power, to revise an order of discharge passed by a Presidency Magistrate. The order impugned in this case was passed by a Division Bench of the Bombay High Court (Bhagwati and Vyas, JJ.), dated June 22, 1951, setting aside the order, dated September 9, 1950, passed by a Presidency Magistrate of Bombay, directing the appellants who were accused 1 and 2 before the learned Magistrate, to take their trial in the Court of Session, on a charge under section 409 , Indian Penal Code, as against the first accused and under section 409 , read with section 109, Indian Penal Code, as against the second accused.

The facts leading up to this appeal, in bare outline, are as follows: On July 8, 1947, Raja Dhanraj Girji Narsingh Girji, Chairman of the Dhanraj Mills, Ltd., who will be referred to in the course of this judgment as the complainant, lodged a first information report before the Inspector of Police, General Branch, C.I.D., Bombay, in writing, to the effect that the Dhanraj Mills were formerly his private property which he converted into a limited concern in 1935. He is the Life-Chairman of the Board of Directors of the concern. Till 1937, he was the Managing Agent, but in that year, he transferred the managing agency to Ramgopal Ganpatrai, the first appellant who converted the managing agency into a private limited concern consisting of himself and members of his family. In 1943, the first appellant floated two private limited concerns under the name and style of (1) Ramgopal Ganpatrai & Sons as the Managing Agents and (2) Ramrikhdas Balkisan & Sons, Ltd., as the selling agents. Thus, the first appellant came to have control of the managing agency and the selling agency as also of the mills, all inter-connected. The complainant had six annas share in the managing agency and the remaining interest therein was owned by the first appellant and his family. Differences arose between the complainant and the first appellant in respect of the affairs of the Mills. The complainant's suspicions were aroused with respect to the accounts of the Mills, and as a result of his private enquiries, he claims to have discovered that “there were large defalcations committed in the management of this Mill”. It appeared to him that during September to December, 1945, the first appellant as the Managing Agent, in the course of his large purchases of cotton bales for consumption in the Mills, had “dove-tailed in these transactions about 20 bogus entries of so-called purchases of 3,719 cotton bales from fictitious merchants in the Bombay market. The cost of these purchases involved an approximate sum of Rs.8,27,000”. Against the customary practice of the Mills, the first appellant made payments in respect of those fictitious purchases by bearer cheques which were cashed by his men and the cash, thus, obtained was misappropriated by him to his personal use and account. In order to cover up those fictitious and bogus purchases, false entries had been made in the books and registers and the receipts, kept by the Mills. In order to balance the stock-in-hand of cotton bales, the first appellant and his associates in the crime like the second appellant, who is described as the office manager, showed bogus sales of an equal number of bales said to contain deteriorated cotton at reduced rates. The sale-price of such bogus sales amounted to Rs.4,19,000, thus, causing a loss of over four lacs of rupees to the shareholders. The sale-price is also said to have been received in cash by bearer cheques which have, likewise, been cashed by the employees of the Mills and similarly misappropriated to the appellant's account. A third series of bogus purchases are said to have been in respect of stores, dyes and chemicals, etc., approximately of the value of five lacs of rupees “by falsely debiting various sums of money to