Judgment :- These revision petitions arise out of a common order passed by the Chief Judicial Magistrate, Ernakulam discharging accused Nos.2, 3 and 5 under Section 239 of the Code of Criminal Procedure, 1908 from proceedings arising out of C.C.No.972 of 1994. Accused, five in number, have been charge sheeted by the Detective Inspector, Crime Branch C.I.D., Special Squad, Trivandrum for offence under Section 406, 409 and 420 of the Indian Penal Code read with Section 34 I.P.C. 2. Accused Nos.1 and 3 are respectively the Managing Partner and partner of Cheenakkadan Company Investors and Financiers having registration number 460/83 which was functioning in a shop room bearing door No.37/1664/B in Flower Junction, T.D. Road, Ernakulam. Accused Nos.2 and 4 are brothers and 5th accused is the wife of the first accused. Accused Nos. 1 and 4 are absconding. 3. C.C.No.971 of 1994 was filed on the basis of the criminal complaint lodged by C.W.1 based on which crime No.303/87 was registered by the Central Police Station, Ernakulam. C.C.No.972 of 1994 was filed on the basis of the written complaint lodged by C.W.1 a depositor. Several complaints were received from the general public stating that Chennakkadan Company had duped large number of depositors promising that deposits made by them would carry 36% interest and the amount would be returned at any time with interest on demand. Sixteen witnesses C.Ws1 to 16 were cited by the prosecution in support of its case that the above mentioned firm, had received large amounts from the general public making such false representations through newspapers which had attracted several depositors. C.P.W.1 had deposited Rs.12,000/- on 23.7.1986 as per receipt No.797 and on 20.8.1986 Rs.10,000/- as per receipt No.857 and C.W.2 deposited Rs.25,000/- on 3.11.1986 as per receipt No.1714 with the aforesaid firm and accordingly altogether an amount of Rs.47,000/- was entrusted by C.Ws1 and 2 to the firm of which first accused is the Managing Partner and third accused is the partner. Similar deposits were received from several others on public advertisement. In violation of the stipulations, on 6.6.1987 the accused closed down the firm without returning the deposits with interest to depositors including C.Ws1 and 2. Similar deposits were received from several others on public advertisement. In violation of the stipulations, on 6.6.1987 the accused closed down the firm without returning the deposits with interest to depositors including C.Ws1 and 2. The accused had therefore committed offence punishable under section 406, 409 and 420 read with Section 34 I.P.C. case was registered as Crime No.303/87 of the Central Police Station on the basis of petition filed by C.W.1 before the City Police Commissioner. C.W.12, the Sub Inspector of Police, of the Central Police Station had conducted preliminary investigation. Later investigation was taken over by Crime Branch C.I.D., Special Squad. On completion of investigation C.W.16 Detective Inspector laid charge against the accused before court. 4. Accused 2, 3 and 5 appeared before court and were enlarged on bail Case against accused 1 and 4, who were absconding, was split up. When the case came up for hearing, on the question of framing charges accused 2, 3 and 5 filed separate petitions under section 239 of the Code of Criminal Procedure for their discharge. They had contended that the report of the police under Section 173 Cr.P.C and the documents filed in support of the same do not disclose any offence against them and no witnesses have stated that they had entrusted the amounts to them and caused them to part with money and even if the first accused had received amounts from persons and failed to return the amounts, they are not liable to be prosecuted for the same. They have also stated that when deposits were made third accused was not there. C.P.Ws.3 to 5 are the employees of the firm Chennakkadan Company, investors and Financiers and as per their statement recorded by the Investigating Officer under Section 161 Cr.P.C it was the first accused who had received deposits from the public and accused 1 and 4 used to put their signature on the receipts given to the depositors and all the records were kept and maintained by accused 1 and 4. Court below holding that the report of the police and the documents went along with it under Section 173 of the Code of Criminal Procedure did not disclose any offence against the accused 2, 3 and 5 discharged them under Section 239 Cr.P.C. Aggrieved by the same these revision petitions have been preferred, by the State. 5. Court below holding that the report of the police and the documents went along with it under Section 173 of the Code of Criminal Procedure did not disclose any offence against the accused 2, 3 and 5 discharged them under Section 239 Cr.P.C. Aggrieved by the same these revision petitions have been preferred, by the State. 5. Learned Public Prosecutor submitted that the court below has committed a grave error while exercising its powers under section 239 of the Code of Criminal Procedure. Counsel submitted that the accused being a partner in the firm is also equally liable for the functioning of the firm. Further it was contended that the court below has committed a grave error in stating that third accused is a sleeping partner. Further it was argued that the accused persons duped several depositors including C.Ws1 and 2 promising exorbitant rate of interest and have closed down the business and have thus committed the offence punishable under Sections 406, 409 and I.P.C read with Section 34 I.P.C. Counsel placed reliance on the decisions of the apex court in State of Maharashtra v. Som Nath Tapa (AIR 1996 S.C. 1744) and Devender Kumar Singla v. Baldev Krishnan Singla (2005 SCC Crl 1185) and contended that there is no justification in discharging the accused in exercise of the powers conferred under Section 239 Cr.P.C. when all ingredients for offence under section 420 I.P.C. Could be inferred from the facts and circumstances of the case. 6. Counsel appearing for the respondents on the other hand contended that the court below has rightly exercised; the powers under section 239 Cr.P.C and discharged the accused persons and there was no evidence to hold them liable for the offence alleged. Referring to the various mahazars as well as the depositions counsel contended that the entire transaction was effected by the first accused who is the Managing Partner of the firm of which third accused was only a partner and has nothing to do with the offence alleged. Counsel submitted that the reports of the police under section 173 Cr.P.C and the documents filed in court in support of the same did not disclose any case against accused 2, 3 and 5 No witness had stated that they had entrusted amount to accused 2, 3 and 5. Reference was made to the deposition of C.P.Ws.1 and 2. Counsel submitted that the reports of the police under section 173 Cr.P.C and the documents filed in court in support of the same did not disclose any case against accused 2, 3 and 5 No witness had stated that they had entrusted amount to accused 2, 3 and 5. Reference was made to the deposition of C.P.Ws.1 and 2. Reference was made to the statement of C.P.Ws.4 and 5 which would indicate that accused 1 and 4 had received money from the depositors as proprietors and therefore accused 2, 3 and 5 have no connection whatsoever with the offence alleged. 7. I have gone through the mahazars produced before court as well as the reports submitted by the police and the statements recorded from the witnesses. Court below, in my view, has completely misunderstood the scope and ambit of Section 239 Cr.P.C. There was total non application of mind by the court below while exercising the powers under that Section. 8. Before examining the rival contentions, reference may be made to Sections 239 and 173 Cr.P.C, which are extracted below for easy reference. 239. When the accused shall be discharged – If, upon considering the police report and the documents sent with it under Section 173 and making such examination, if any, of the accused as the Magistrate thinks necessary and after giving the prosecution and the accused an opportunity of being heard, the Magistrate considers the charge against the accused to be groundless, he shall discharge the accused, and record his reasons for so doing. 173. Report of police officer on completion of investigation – (1) Every investigation under this Chapter shall be completed without unnecessary delay. 173. Report of police officer on completion of investigation – (1) Every investigation under this Chapter shall be completed without unnecessary delay. (2) (i) As soon as it is completed, the officer in charge of the police station shall forward to a Magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government, stating – (a) the names of the parties; (b) the nature of the information; (c) the names of the persons who appear to the acquainted with the circumstances of the case; (d) xx xx xx xx (d) whether any offence appears to have been committed and, if so, by whom; (e) whether the accused has been arrested; (f) whether he has been released on his bond and, if whether with or without sureties; (g) whether he has been forwarded in custody under Section 170. (ii) The officer shall also communicate, in such manner as may be prescribed by the State Government, the action taken by him, to the person, if any, by whom the information relating to the commission of the offence was first given (3) Where a superior officer of police has been appointed under Section 158, the report shall, in any case in which the State Government by general or special order so directs, be submitted through that officer, and he may, pending the orders of the Magistrate, direct the officer in charge of the police station to make further investigation. (4) Whenever it appears from a report forwarded under this section that the accused has been released on his bond, the Magistrate shall make such order for the discharge of such bond or otherwise as he thinks fit. (5) When such report is in respect of a case to which section 170 applies, the police officer shall forward to the Magistrate along with the report- (a) all documents or relevant extracts thereof on which the prosecution proposes to rely other than those already sent to the Magistrate during investigation. (b) the statements recorded under section 161 of all the persons whom the prosecution proposes to examine as its witnesses. (b) the statements recorded under section 161 of all the persons whom the prosecution proposes to examine as its witnesses. (6) if the police officer is of opinion that any part of any such statement is nor relevant to the subject-matter of the proceedings or that its disclosure to the accused is not essential in the interests of justice and is inexpedient in the public interest, he shall indicate that part of the statement and append a note requesting the Magistrate to exclude that part from the copies to be granted to the accused and stating his reasons for making such request. (7) Where the police officer investigating the case finds it convenient so to do, he may furnish to the accused copies of all or any of the documents referred to in sub-section (5) (8) Nothing in this section shall be deemed to preclude further investigation in respect of an offence after a report under sub-section (2) has been forwarded to the Magistrate and, where upon such investigation, the officer in charge of the police station obtains further evidence, oral or documentary, he shall forward to the Magistrate a further report or reports regarding such evidence in the form prescribed, and the provisions of sub-sections (2) to (6) shall, as far as may be, apply in relation to such report or reports as they apply in relation to a report forwarded under sub-section (2). It is trite law that before an order of discharge is passed by the Magistrate, Magistrate is required to consider all the documents referred to in Section 173. The Magistrate is expected to see whether there is any reasonable basis or foundation for framing charge. Magistrate should address himself and decide as to whether the statements and the circumstances if accepted make out a prima facie case of which a charge could be framed against the accused and if the answer is in the affirmative, he would proceed with the trial for the offence. The procedure prescribed under sections 239 and 240 is a complete Code by itself. Magistrate has to consider the police report and other documents produced under sec. 173 and give an opportunity to the prosecution to submit their case. Magistrate at that stage must have the report of the police officer and the result of the investigation conducted by the police officers. Magistrate has to consider the police report and other documents produced under sec. 173 and give an opportunity to the prosecution to submit their case. Magistrate at that stage must have the report of the police officer and the result of the investigation conducted by the police officers. Prosecution merely submits report to court and at this stage persons whose statements have been recorded during investigation are expected to depose the facts recorded. It is unfortunate to note that though prosecution has submitted statements of 16 witnesses, C.P.Ws.1 to 16, Magistrate has reliance only on the statements of C.P.Ws 1 and 2 and found that their statements would not implicate accused 2, 3 and 5. Materials made available before court would indicate that accused 1 and 3 Managing Partner and partner of Chennakkadan Company, Investors and Financiers respectively having its registration No.460/83 functioning in the shop room bearing door No.37/1664/B at Flower Junction, T.D. Road, Ernakulam. First accused had 60% share and the third accused had 40% share in the registered firm. Facts would indicate that the above mentioned firm had received large amounts by way of deposit. 9. I have perused the receipts issued by the firm which would indicate that large amounts of money have been received by Chennakkadan Company and certain receipts were signed by the Manager of the firm and also by the first accused. Facts would clearly show that third accused was a partner of the firm Chennakkadan Company, Investors and Financiers with the registered number 460/83 which was spoken to by the Head Clerk of the office of the Registrar of Firms, Trivandrum. Further it has also come out in evidence that third accused was having a telephone bearing number 368749 in his personal name. He had submitted an application before the Commercial Officer Telephones for transfer of that telephone to room number 37/1664/B in T.D. Road and got it transferred to the place where the Financing Company was functioning. He had also submitted an attested copy of the partnership deed of the firm by name Chennakkadan Company, Investors and Financiers and it is that firm which was functioning in door No 37/1664/B, a vital fact which the court below has failed to take note of. Further the court below has totally ignored the statements of various other depositors made available to the court. Further the court below has totally ignored the statements of various other depositors made available to the court. A depositor by name Mathew, son of Isaac stated before police, which is also part of the record, that he had entrusted the money to third accused. He stated that first and third accused were partners of the firm. When he went to the firm the third accused was present and he accepted the money. Receipt was given by the first accused. Another depositor by name K.V. Varghese son of Paily Varghese has stated that third accused was also partner of the firm and he was present when he had deposited the amount. Another depositor by name Thomas son of Ittan Varkey has specifically stated that third respondent was a partner of the firm and that he has entrusted the amount to third accused. Another depositor by name Rajasekharan Kartha, Lecturer of St. Alberts College has also stated that third accused was a partner of the firm and that he had entrusted the amount to the third accused. Similar is the statement made by another depositor by name Paulose son of Ouseph. He has stated that the firm was conducted by first and third accused and that he has deposited an amount of Rs.83,000/-. Chartered Accountant who had prepared the partnership deed. Has also given statement which would indicate that first accused was having a share of 60% and third accused was having a share of 40%. 10. I have also gone through the various mahazars and statements made available to the court. On going through the above mentioned materials, I am of the view that the charges leveled alleged against the accused persons 2 and 5 are groundless. The court below has completely ignored the various statements made available which would categorically reveal the involvement of the third accused though the matter has to be finally adjudicated by the trial court on evidence. The court below has committed a grave error in discharging the third accused disregarding the statements made by various depositors which were made available to the Magistrate. So far as accused 2 and 5 are concerned there is nothing to show that they were partners of the firm or that they had any direct involvement in the offences alleged. The court below has committed a grave error in discharging the third accused disregarding the statements made by various depositors which were made available to the Magistrate. So far as accused 2 and 5 are concerned there is nothing to show that they were partners of the firm or that they had any direct involvement in the offences alleged. I therefore sustain the order impugned as far as accused 2 and 5 concerned and set aside the order as far as third accused is concerned. The court below is directed to take further steps to apprehend accused 1 and 4 and proceed with the accused persons. All the Criminal R.Ps are disposed of as above. Send back the files to the court below to proceed with the cases and for speedy disposal of the cases against accused persons 1, 3 and 4.