Sinha, J. - (1.)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 22-6-1951, setting aside the order dated 9-9-1950, 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 S. 409, Indian Penal Code as against the first accused and under S. 409, read with S. 109, Indian Penal Code, as against the second accused.
(2.)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 Limited, who will be referred to in the course of this judgment as to 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 and Sons as the Managing Agents and (2) Ramrikhdas Balkisan and Sons Limited, 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 larged 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 socalled 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 be 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 share-holders. 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 a number of non-existent parties." In order to conceal the fraud, thus, perpetrated on the Mills, other false entries in the books of account and other documents relating to those bogus transactions were alleged to have been made by the first appellant and his underlings. It was, further, alleged that the complainant's suspicious were further strengthened by the false statement made at a Directors' meeting that there was a strike and that the strikers had burnt some records of the Mills. Three persons, namely, the first appellant, Harprasad Gupta, the second appellant and A. R. Mulla Feroz who was subsequently discharged by the magistrate, were named as three accused persons concerned in the crime of embezzlement in respect of the funds of the Mills. During their investigation, the Police had taken possession of the relevant books of account from the precincts of the Mills. On July 19, 1948, a charge-sheet under Section 409 and Section 409/109, Indian Penal Code, was submitted by the Police, against the aforesaid three persons, for defalcation of Rs. 8,97,735 and odd between August 1, 1945 to July 31, 1956. The names of 40 witnesses appear in the charge-sheet.
(3.)The learned Presidency Magistrate, Shri C. B. Velkar, passed a 'preliminary order in which he considered the question whether the enquiry against the accused persons should take the form of the procedure for summons trial or for a warrant trial or commitment proceedings preliminary to their being placed on trial before a Court of Session. After a consideration of the police charge-sheet and his own powers adequately to punish the offenders if their offence were made out, and the relevant provisions of the Criminal Procedure Code, he recorded the following order"
"........I hold that this case is governed by S. 207 Criminal Procedure Code and as such I order that this case should be proceeded with on Sessions Form."
Thereafter, the learned magistrate examined as many as 42 witnesses for the prosecution between November, 1948 and October, 1949. He also considered the written statements of the accused persons, filed in October and December that year and a very large volume of documentary evidence, which was exhibited in the case, numbering many hundreds of exhibits and running into thousands of pages, as will presently appear. On December 17, 1949 after hearing counsel for the parties and considering their respective versions as contained in the oral and documentary evidence, the learned magistrate recorded the following order:
".......I agree with this view and order that accused No. 3 should be discharged.
As regards accused Nos. 1 and 2 I hold that there is a prima facie case to charge them and for reasons already mentioned I restrict the charges to the following courts:" Then, he framed seven separate charges in respect of much smaller sums against the two accused persons under S. 409, read with S. 109, Indian Penal Code.