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Issues Involved:
1. Entrustment of share certificates. 2. Dismissal of the complaint by the Chief Presidency Magistrate and the High Court. 3. Applicability of Section 195(1)(c) of the Code of Criminal Procedure. 4. Prima facie evidence for issuing process. Detailed Analysis: 1. Entrustment of Share Certificates: The appellant alleged that 707 share certificates of Turner Morrison & Co. Ltd. were handed over to S. Varma by the company's directors and subsequently entrusted to D.M. Jaffray for safe custody. The receipt and indemnity bond were presented as evidence. The receipt indicated Varma received the shares, and Jaffray's endorsement stated "shares with me." The indemnity bond was signed by Varma and Hoon, indicating the shares were to be handed over to M/s Sanderson & Morgan. However, the evidence was contested. Jaffray claimed he only allowed Varma to inspect the shares and did not deliver them. The statement of N.K. Majumdar, who accompanied Varma, suggested that the shares were not delivered because Jaffray required Hoon's signature on the indemnity bond, which was not obtained at that time. 2. Dismissal of the Complaint: The Chief Presidency Magistrate dismissed the complaint, concluding no prima facie case of entrustment was made out, primarily due to the non-examination of Varma, who was a central figure. The High Court upheld this dismissal, emphasizing the failure to explain the initial possession of the shares by the company and the reasons for the indemnity bond. The Supreme Court observed that the Magistrate and the High Court did not consider the other evidence adequately, such as the receipt, the indemnity bond, and the testimonies of other witnesses. The Court noted that at the stage of Section 202 inquiry, the complainant need only show sufficient grounds for proceeding, not for conviction. 3. Applicability of Section 195(1)(c) of the Code of Criminal Procedure: In the counter-complaint filed by Jaffray against Hoon, the issue was whether Section 195(1)(c) barred the complaint. This section prohibits courts from taking cognizance of certain offences related to documents produced in court proceedings except on the complaint of the court. The Supreme Court held that the receipt was produced before the police during an investigation ordered by the Magistrate under Section 156(3), which was not a judicial proceeding. Thus, Section 195(1)(c) did not apply, and Jaffray's complaint was not barred. 4. Prima Facie Evidence for Issuing Process: The Supreme Court found that there was sufficient prima facie evidence to issue process. The receipt and indemnity bond, supported by the testimonies of Majumdar, Hoon, and Chaudhary, indicated a prima facie case of entrustment. The Court emphasized that the evidence at this stage need not establish guilt beyond a reasonable doubt but should show sufficient grounds for proceeding. Conclusion: The Supreme Court set aside the orders of the Chief Presidency Magistrate and the High Court, directing the Chief Presidency Magistrate to issue process and proceed with the case. The appeal in the counter-complaint was dismissed, affirming that Section 195(1)(c) did not bar Jaffray's complaint.
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