1. In this case, the petitioner is the sole proprietor of the firm of Messrs. Chandra Nath Ananda Mohan Akshoy Kumar Saha and the rule is directed against an order made by Mr. H.K. De, Fourth Presidency Magistrate, Calcutta, on 29th November 1939, under which the learned Magistrate directed that certain currency notes should be returned to the complainant Naba Kumar Singh Dudhuria. It appears that the complainant represented the firm of Budh Singh Dudhuria with which firm the petitioner had transacted money lending business for some years. Certain employees of the complainant's firm were prosecuted under Section 408, I.P.C., in respect of a sum of Rs. 21,000 which sum had been withdrawn by a person named Kekab Chand Bucha, the manager of the complainant's firm, from the Eastern Bank and had been misappropriated by him. The other two employees of the complainant's firm, who were prosecuted in respect of this transaction, were discharged but Rekab Chand Bucha pleaded guilty and was convicted. It will appear that, after withdrawing the sum of Rs. 21,000 from the Eastern Bank, Bakab Chand Bucha proceeded to redeem certain bills of exchange, which he had pledged on his own account with the petitioner's firm, by depositing cash with that firm to the amount of Rs. 20,000. The notes which he handed over to the petitioner have been identified by their numbers and most of these notes were seized by the police and were produced in the Court of the learned Magistrate. It is urged on behalf of the petitioner that he was not guilty of any offence in connection with this matter nor had any allegation of bad faith been made against him. It is therefore contended that the currency notes should have been allowed to remain with him and that the order of the learned Magistrate dated 29th November 1939 is misconceived.
2. In this connection some reliance is placed upon the decision of Batchelor J. in the case in In re Pandharinath Pundlik (1915) 2 A.I.R. Bom 265 in which it was pointed out that the general rule with regard to currency notes is that they pass by mere delivery. In a case in which currenoy notes had passed to a person in the ordinary course of business in circumstances such as those to which Batchelor J. refers in his judgment, I would certainly have been prepared to apply the principle which the learned Judge lays down in the above cited case. But, in the matter which we are now considering, I do not think it can be said that the notes in respect of which the order of the learned Magistrate was made passed to the petitioner's firm in the ordinary course of business. There can be no doubt that an offence had been committed with reference to these notes within the meaning of Section 517, Criminal P.C., and the circumstances in which this offence was committed seem prima facie to indicate that the petitioner had allowed himself to be duped by the manager of the complainant's firm. In a case such as this I do not think it can be said that the learned Magistrate improperly exercised the discretion vested in him under Section 517, Criminal P.C. This being the case, the currency notes in respect of which the order has been made should be retained by the complainant and it will be for the petitioner, if so advised, to seek his remedy in the Civil Court. In these circumstances this rule must be discharged.