ORDER. A complaint was filed before the Judicial Second Class Magistrate, Vijayawada town, on the allegation that the complainant and the accused petitioner herein, entered into a partnership for the purpose of carrying on business in electrical and fancy goods. They executed a partnership deed and according to the terms the firm was to carry on business under the name and style of Sri Seetharama Electrical and Fancy Stores, 1962. The complainant was to be the managing partner of the firm and they had their respective shares of 45 per cent, and 55 per cent, in the profits and losses of the firm. It appears that they carried on business; some time until some disputes arose. It is alleged that on the day of the offence when the complainant was busy with some other work, the accused-petitioner took advantage of his absence and at about 10-45 A.M. broke open the lock put on the partnership premises and that he fraudulently and dishonestly removed all the stocks. When the complainant came to know this, he gave a report to the police and as no action was taken, he filed this complaint under section 424, Indian Penal Code. The Magistrate took it on file and added sections 380 and 454, Indian Penal Code, also. The petitioner has come up in revision before this Court challenging the competency of the complaint. It may here be stated that it is an admitted fact that the complainant and the accused are partners in business and it has been represented to me by the learned Counsel for the petitioner that a civil suit has also been filed. Being a partnership business, no partner can claim exclusive interest in the property. They will have only an interest to the extent of their share in the business. Mr. Adavi Rama Rao takes his stand in a case reported in Man Mohan Das v. Mohendra Bhowali1, in which it has been held that a partner cannot be prosecuted under section 424, Indian Penal. Code, for dishonestly and fraudulently concealing or removing the books of the partnership. The complainant-partner has a remedy by way of acivil suit.
Mr. Adavi Rama Rao takes his stand in a case reported in Man Mohan Das v. Mohendra Bhowali1, in which it has been held that a partner cannot be prosecuted under section 424, Indian Penal. Code, for dishonestly and fraudulently concealing or removing the books of the partnership. The complainant-partner has a remedy by way of acivil suit. In another case reported in Jaikrishna v. Crown2, it was observed that a partner cannot be guilty of criminal breach of trust or misappropriation and a partner who receives money belonging to the partnership on account of himself and his copartners does not do so in a fiduciary capacity and therefore the complaint is untenable. In Nand Kishore v. Emperor, Mulla, J. has observed that: “the removal referred to in section 424 , Indian Penal Code, is ejusdem generis with concealment which precedes it. section 424, Indian Penal Code is designed to meet a special class of cases and has no application to a case where property is openly seized by a person in the exercise of an alleged right.” section 424 , Indian Penal Code, is the last of the four sections from sections 421 to 424, intended to punish fraudulent debtors and their accomplices and in my view do not intend to punish persons who claim under a right and in the circumstances of this case when a civil suit is pending, which is the subject matter of the disputes between the partners, a party should not be encouraged to take resort to criminal Courts when it is seen that the dispute can be more appropriately decided by a civil Court. I am entirely in agreement with the observations made by the learned Judges in the cases cited above that section 424, Indian Penal Code, cannot be invoked to punish a person who has a claim of right in the property. There is no dispute about the relationship existing between the complainant and the accused at the time when the offence was said to have been committed.
There is no dispute about the relationship existing between the complainant and the accused at the time when the offence was said to have been committed. Smt. Seetha Mahalakshmi in support of her argument relics on a decision reported in Gour Benode Dutt in which it has been held that the offence which section 424, Indian Penal Code, contemplates is such a concealment or removal of property from the place where the property is deposited as can be considered fraudulent, whether the fraud is intended to be practised on creditors or partners. The basis on which this decision proceeds is that, the words of the section are general and there is no reason why a man. should not be criminally punished for defrauding his partner just as he would be criminally punished for defrauding his creditors nor is there any reason why a man should not fraudulently remove the property of a partnership just as he may fraudulently remove the property which belongs to himself. I do not agree with this proposition. This is directly in conflict with a case of the Madras High Court in In re. Karri Mangadu where it is held that this section 424, Indian Penal Code, is intended to punish fraudulent debtors. In my view if a person has any claim of right he will not come within the ambit of this section. Therefore, I quash the proceedings in C.C. No. 2484 of 1963 on the file of the Judicial Second Class Magistrate, Vijayawada town. This petition is accordingly allowed. K.N.R.-----Petition allowed; Proceedings quashed.