1. These eight Criminal Revision Applications are disposed of by this common judgment as the Point involved is the same and the accused in all the eight Revision Applications are also the same.
2. The two accused are alleged to be the Managing Director and Joint Managing Director respectively of Laxmichand Bhagaji Limited, a Company carrying on business as money-lenders. In four Revision Applications, viz., Criminal Revision Applications, viz., Criminal Revision Applications Nos. 790 of 1979, 792 of 1979, 793 of 1979 and 794 of 1979 the charge against the two accused is under Section 19(1) read with Section 34 of the Bombay Money-lenders Act 1946, in that they failed to deliver annual statement of accounts signed by the moneylender or his agent of any amount that may be outstanding against a debtor and failed to deliver statement containing particulars, specified in clauses (i) to (iv) of sub-section (1) of Section 19 to the Assistant Registrar. The charge in the remaining four Revision Applications, viz., Criminal revision Applications Nos. 791 of 1979, 795 of 1979, 796 of 1979 and 797 of 1979 is under Section 18(1), (2) and (3) read with Section 34 of the Bombay Money-lenders Act, 1946, for not maintaining Cash Book and Ledger in the prescribed form, for not delivering to the debtor statement of the amount the date of the loan and of its maturity, the nature of the security, if any, for the loan, to the debtor within the prescribed time and a statement containing the particulars referred to in clause (a)(i) to the Assistant Registrar and receiving payment from the debtor without passing receipt.
3. On 26-6-1978 Shri A. H. Shaikh, Co-operative Officer (ML), Bombay, filed eight complaints in the Court of the learned Additional Chief Metropolitan Magistrate, 4th Court, Girgaum, Bombay, for the alleged offences under Sections 18(1), (2) and (3) read with Section 34 and Section 19(1) read with Section 34 of the Bombay Money-lenders Act, 1946. On the same day, viz., on 26-2-1978, the learned Additional Chief Metropolitan Magistrate ordered issue of summonses, as to the two accused persons, viz., the Opponents. On 27th February 1979, the accused filed written applications raising preliminary objections. The two accused challenged the validity of the prosecution on three grounds; firstly, that the accused could not have been prosecuted for whatever acts of commission or omission committed by them in their capacity as Director and Joint Director of the said company; secondly, that the business which the Company in question carried on cannot be considered to be falling within the meaning of the expression 'money-lender' of Section 2(2) of the Bombay Money-lenders Act, 1946; and thirdly, that at the time the Court took cognizance of the offence, the sanction to prosecute as required by Section 35B of the said Act was not produced before the Court and since the sanction was not before the Court, the Courts had no jurisdiction to take cognizance of the offence and, therefore, the complaints should be dismissed. The first two grounds did not find favour with the learned Magistrate; but on the question of sanction, the trial Magistrate observed :-
'At the time the Court took cognizance of the offence, the complainant did not produce the sanction given by the Registrar to prosecute the accused'. It appears that at the time of the hearing of the preliminary objection the sanction, purported to have been given by the Registrar was produced before the learned Magistrate. On a perusal of the sanction produced the learned Magistrate has observed :'In the sanction 'Section 91' has been mentioned'.
And this error in the section was sought to be explained by the learned Additional Police Prosecutor by submitting before the learned Magistrate that Section 91 mentioned in the said sanction is a typographical error and that it should be read as Section 19 since there is no Section 91 in the said Act. On this submission, the learned Magistrate has observed :
'.......... We cannot at this stage assume that this is a typographical error. It is difficult to make out from the sanction itself whether the sanctioning authority had Section 19 also in mind when it gave the sanction.'
The learned Magistrate, therefore, found that the sanction was not proper, On the question of the competency of the Court to take cognizance of the offence without the production of the sanction before it, the trial Magistrate has stated :-
'...... it is obvious that the cognizance was taken without perusal of any sanction'.
The learned Magistrate construed the provisions of Section 35B of the said Act as casting a mandatory duty on the party launching th prosecution to produce sanction for the perusal of the Court before the Court takes cognizance. Since cognizance was taken without the production of he sanction, the complaints were dismissed by order dated 30-4-1979. Against the said orders of dismissal, the State has filed the eight Revision Applications.
4. Shri Kamat, the learned Public Prosecutor has argued that in the present case, the Registrar had granted sanction prior to the launching of the prosecution. But that sanction remained to be produced before the learned Magistrate. He has submitted that this is not a case of no sanction at all, but this is a case of non-production of sanction and that, therefore, it is a mere irregularity which can be cured under Section 465 of the Code of criminal Procedure, 1973. Shri Kamat has submitted that the intention of the Legislature in providing for sanction to prosecute is to protect offenders against frivolous and vexatious prosecution. The Legislature did not intend to provide the means of escape for persons against whom charge is levelled and in support of this proposition Shri Kamat has relied upon the decision of the Calcutta High Court in the case of Abdul Rahman v. Emperor : AIR1935Cal316 .
5. Shri Desai, learned Counsel appearing on behalf of the accused, has, on the other hand, contended that sanction is not an idle formality. The Court taking cognizance of an offence in respect of which sanction is required has to apply its mind to see vis-a-vis the complaint whether process should be issued. If so. whether process would be issued against all the persons mentioned in the sanction and in the complaint, whether process should be issued in respect of the offences mentioned in the sanction and the complaint and it is only then that the Magistrate can take cognizance of the offence. If the sanction is not produced, a condition precedent to the taking of cognizance is violated and it is the sanction which gives jurisdiction to the Magistrate to take cognizance. The absence of sanction would not confer jurisdiction upon the Court to take cognizance of the offence and cognizance, according to Shri Desai, being the first step in the application of the judicial mind to commence proceeding as provided in Chapter XVI, viz., issued of process, Section 204 etc., at the very initial stage of the proceedings it was incumbent upon the prosecution to produce the sanction since it is a condition precedent to taking cognizance of the offence and since congnizance has been taken without production of the sanction, the learned Magistrate was right in dismissing the complaints. Section 35B of the Bombay Money-lenders Act, 1946, provides :-
'No Court shall take cognizance of any offence punishable under Section 34 for contravening the provisions of Section 18 or Section 19, except with the previous sanction of the Registrar.'
The expression 'taking cognizance' is not defined in the Code of Criminal Procedure. Section 190(1) of the Code of Criminal Procedure, 1973, provides :-
'(1) Subject to the provisions of this Chapter, any Magistrate of the first class specially empowered in this behalf under sub-section (2), may take congnizance of any offence :-
(a) upon receiving a complaint of facts which constitute such offence;
(b) upon a police report of such facts;
(c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed'.
A Magistrate can be said to have taken cognizance of an offence when he applies his mind to the offence for the purpose of commencement of proceedings under Chapter XVI of the Code by issue of process under Section 204 of the Code It is only when the Magistrate takes notice of an offence and takes steps to see whether there is any basis for initiating judicial proceedings, that it can be said that the Magistrate has taken cognizance of the offence. It does not involve any formal action but occurs as soon as a Magistrate applies his judicial mind to the alleged commission of the offence. In the present case, the Magistrate has applied his judicial mind to the complaints that were lodged before him by the Co-operative officer and had initiated action under Chapter XVI of the Code of Criminal Procedure by issue of process under Section 204 of the said Code. It is, therefore, needless for me to consider the authority that has been cited before me on the question as to when is a Magistrate a said to have taken cognizance. The case cited is R. R. Chari v. State of U.P., : 1951CriLJ775 , where it is held that when a Magistrate applies his mind not for the purpose proceeding under the subsequent sections of the Chapter but for taking action of some other kind, he cannot be said to have taken cognizance of the offence. As already stated above, in the present case since cognizance has been taken, the question that arises is whether the learned Magistrate could have taken cognizance without the sanction.
6. Section 35B of the Bombay Money-lenders Act, 1946, is an exception to the general rule laid down in Section 190 of the Code of Criminal Procedure 1973, that any offence may be taken cognizance of by the Magistrate enumerated therein. Section 35B appears to be a safety measure against vexatious proceedings. As stated by the Privy Council in the case of Gokulchand Dwarkadas Morarka v. The King :-
The sanction to prosecute is an important matter, it constitute a condition precedent to the institution of the prosecution and the Government have an absolute discretion to grant or withhold their sanction. They are not, as the High Court seem to have thought, concerned merely to see that the evidence discloses a prima facie case against the person sought to be prosecuted. They can refuse sanction on any ground which commends itself to them, for example that on political or economic grounds they regard a prosecution as inexpedient.'
The sanction to be given must be in respect of the facts constituting the offence charged and the facts should be referred to on the face of the sanction. If this is not done, there is no valid sanction and the Court has no jurisdiction to take cognizance of the offence. A sanction given without reference to the fact constituting an offence is not compliance situating an offence is no compliance with the actual terms of Section 35B. However, the charge need not follow the exact terms of a sanction though that to an offence essentially different from that to which the sanction relates. The defect in the sanction is not curable under Section 465 of the Code of Criminal Procedure, 1973. In Gokulchand Morarka's case the accused was charged for contravening the provisions of clause 18(2) of the Cotton Cloth and Yarn (Control) Order, 1943, and Section 23 of the order provided :-
'No prosecution for the contravention of any of the provisions of this order shall be instituted without the previous sanction of the provincial Government .........'
The sanction in that case specified the appellant as the person to be prosecuted and the clause of the Order which he was alleged to have contravened, but did not specify the acts of the appellant alleged to have constituted such contravention. The question which arose for determination before the Privy Council was whether the sanction constituted due compliance with the provisions of Clause 23 of the said Order Their Lordships of the Privy Council observed :-
'The sanction to prosecute is an important matter, it constitutes a condition precedent to the institution of the prosecution and the Government have an absolute discretion to grant or withhold their sanction.'
It was further observed :-
'The giving of sanction confers jurisdiction on the Court to try the case and the Judge or Magistrate having jurisdiction must try the case in the ordinary way under the Code of Criminal Procedure'.
The contention that the failure of the Crown to prove the facts on which the sanction was granted amounted to no more than an irregularity did not find favour with Their Lordships for the reason that a defect in the jurisdiction of the Court can never be cured under Section 537 (Section 465 of the Code of Criminal Procedure, 1973). The decision was referred to by the Saurashtra High Court in the case of Gadhia Bhanuchandra Vallabhadas v. State, AIR 1954 Sau 132 : 1954 Cri LJ 1559In that case, before the Saurashtra High Court sanction to prosecute the accused in respect of illegal gratification of Rs. 5,700/- was given but no sanction to prosecute the accused in respect of attempt to receive Rs. 1,150/- as illegal gratification nor in respect of the offence under Section 5(1)(a) of the Prevention of Corruption Act, 1947, habitually receiving illegal gratification. was given. The Saurashtra High Court after considering the Privy Council decision in Gokulchand Morarka's case 1948 Cri LJ 261 quashed the proceedings. As stated by the Privy Council, it is only the sanction that gives jurisdiction to the Court.
7. In the present case, the sanction given by the Registrar was not produced before the learned Magistrate along with the complaint. The learned Magistrate took cognizance of the offence on 26-6-78, without the sanction having been produced before him. It was for the first time on 30-4-1979 when the learned Magistrate heard heard the preliminary objection raised on behalf of the accused that the sanction was produced before the learned Magistrate. As stated by the Privy Council in Gokulchand Morarka's case 1948 Cri LJ 261 the sanction to prosecute constitutes a condition precedent to the institution of the prosecution. The giving of sanction confers jurisdiction on the Court to try the case. Since the sanction was not produced before the learned Magistrate at the time the learned Magistrate took cognizance of the offence, the belated production of sanction cannot confer jurisdiction upon the learned Magistrate to take cognizance of the offence. If a sanction is given but it is not produced at the time the learned Magistrate takes cognizance of the offence, the result would be the same as if there was no sanction. In fact, in the present case, there is not even a mention in the complaint that a sanction as required by the said Section 35B was given by the Registrar. As observed by the learned Additional Chief Metropolitan Magistrate, had the sanction been produced before him, the learned Magistrate may perhaps have refused to take cognizance of the offence as the sanction according to the learned Magistrate was not a proper sanction there being no Section 91 in the Bombay Money-lenders Act, 1946. In this view of the matter, the learned. Magistrate was right in holding that there was no sanction and the sanction was not proper and the order passed by the learned Magistrate must, therefore, be sustained.
8. In the result, the Revision Applications fail and are dismissed. Rules discharged.
9. Application dismissed.