Karnataka High Court issues guidance for Magistrates handling police ‘B’ reports and protest petitions

The complainant alleged that Pearson had obtained access to its Kaleido educational software for trial and licensing discussions, then copied and marketed it as MyPedia.

After police investigated the complaint and filed a ‘B’ report, the complainant filed a protest petition.

The Magistrate rejected the ‘B’ report, recorded sworn statements, took cognizance of offences under Sections 380, 406, 468, 471, 420 and 120B IPC, and issued process.

Amit Bansal, arrayed as accused No. 4, challenged those orders under Section 482 CrPC, arguing, among other things, that Pearson had not been made an accused and that no specific role was attributed to him.

1. Whether criminal proceedings could be maintained against the petitioner, alleged to be the company’s Managing Director, without arraigning the company as an accused.

2. Whether the Magistrate erred in rejecting the ‘B’ report without considering the protest petition and the investigation materials.

3. Whether the Magistrate erred in issuing process without considering the protest petition, sworn statements and supporting documents.

Under Aneeta Hada v. Godfather Travels and Tours (P) Ltd., where liability is sought to be imposed vicariously for an offence by a company, arraigning the company is a prerequisite; Pepsi Foods Ltd. v. Special Judicial Magistrate requires a summoning order to show application of mind because setting criminal law in motion is a serious matter.

Under Sections 200, 203 and 204 CrPC, the Magistrate must assess whether the complaint materials disclose sufficient grounds to proceed; a protest petition may be treated as a complaint and considered with the sworn statements and documents.

A ‘B’ report does not bind the Magistrate, who may independently assess it and the complainant’s material before dismissing the complaint or issuing process (H.S. Bains; G. Krishna Prakash; Rakesh).

The Court also stated that recording the complainant’s sworn statement amounts to taking cognizance, whether or not the order expressly says so.

The complaint’s allegations concerned Pearson’s alleged copying and marketing of the software, but the company was not arraigned as an accused. Applying Aneeta Hada, the Court held that the petitioner could not be prosecuted on the pleaded basis of the company’s conduct in the company’s absence; it also found no particular accusation against him.

Separately, the Magistrate’s orders did not meaningfully examine the reasons for the ‘B’ report, the protest petition, or the sworn statements and documents. The Magistrate therefore failed to undertake the required assessment of the materials before rejecting the report and issuing process.

Although the Court identified procedural errors in the Magistrate’s approach, it found remand unnecessary because the company’s absence independently barred proceedings against this petitioner.

The Magistrate’s orders were quashed insofar as they concerned Amit Bansal/accused No. 4.

The Registrar General was directed to circulate the order to Magistrates and Judges dealing with private complaints and to the Karnataka Judicial Academy for judicial guidance on the procedure following receipt of a ‘B’ report.