Cognizance after transfer and prima facie cheating allegations can survive where the complaint discloses an offence.

An irregularity in transferring a complaint to a Judicial Magistrate did not deprive the transferee Magistrate of jurisdiction to take cognizance under the Code of Criminal Procedure, because cognizance is of the offence and not the offender, and the receiving court may act once the complaint discloses an offence. At the cognizance and process stage, the Court needed only to determine whether the allegations made out a prima facie case. Allegations that partnership property or film prints were specially entrusted for exhibition and return, followed by dishonest misappropriation or failure to account, were sufficient to attract criminal breach of trust and cheating. The proceedings were therefore allowed to continue.

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Issues: (i) whether the Judicial Magistrate lacked jurisdiction to take cognizance after the case was transferred by the Chief Judicial Magistrate; and (ii) whether the complaint disclosed a prima facie case of criminal breach of trust and cheating against a partner of the firm.

Issue (i): whether the Judicial Magistrate lacked jurisdiction to take cognizance after the case was transferred by the Chief Judicial Magistrate;

Analysis: Cognizance is taken of the offence and not of the offender, and it is taken when the Magistrate applies judicial mind to the facts constituting the offence. Under Section 190(1) of the Code of Criminal Procedure, 1973, a Magistrate may take cognizance upon a complaint, police report, or other permissible information. The power under Section 192(1) of the Code of Criminal Procedure, 1973 enables transfer of cases, and an irregularity in the transfer order does not denude the receiving Magistrate of the statutory power to take cognizance if the complaint otherwise discloses an offence.

Conclusion: The Judicial Magistrate did not commit any jurisdictional error in taking cognizance.

Issue (ii): whether the complaint disclosed a prima facie case of criminal breach of trust and cheating against a partner of the firm.

Analysis: At the stage of cognizance and process, the Court was only required to see whether the allegations made out a prima facie offence. A partner is not automatically immune from criminal liability merely because the dispute arises out of a partnership. Where property or film prints are specially entrusted under a contract for exhibition and return, and the allegations suggest dishonest misappropriation or failure to account for the proceeds, the ingredients of criminal breach of trust and cheating may be attracted. The question whether the accused was actually liable, or what defences may be available, was held to be a matter for trial.

Conclusion: The complaint disclosed a prima facie case and the proceedings were not liable to be quashed.

Final Conclusion: The order under challenge was upheld and the criminal proceedings were permitted to continue before the Magistrate.

Ratio Decidendi: An irregular or unauthorized transfer of a complaint does not prevent the transferee Magistrate from taking cognizance under Section 190(1) of the Code of Criminal Procedure, 1973, and at the stage of cognizance the Court need only see whether the complaint discloses a prima facie offence, not whether the accused will ultimately be convicted.

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