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1969 DIGILAW 163 (PAT)

KANHAIYA LAL JAIN v. MAHESHWAR SINGH

1969-11-27

M.P.VERMA

body1969
JUDGMENT M. P. Verma, J. – This application has been filed under the provisions of Section 561A of the Code of Criminal Procedure to quash the order of the Sub-divisional Magistrate, Giridih, dated the 18th April, 1968, taking cognizance of offences under Sections 403, 406, 468, and 472 of the Indian Penal Code against the petitioners. 2. The short facts are these. The complainant Maheshwar Singh, Shrimati Phool Kumari Devi and petitioner no. 1 Kanhaiya Lal Jain entered into an agreement of partnership on the 25th July, 1966, and constituted a firm known and styled as "Kumkum Mica Works." Petitioner no. 1 maintained the Bahi Khata from the 12th November, 1966 to 1st November, 1967. But, for his illegal gains, he began to act against the specific terms and conditions of the partnership agreement and fraudulently and dishonestly issued wrong cheques, made wrong entries and misappropriated a total sum of Rs. 22,051.11 paise. The allegation against petitioner no. 2 was that he was a brother-in-law of petitioner no. 1 and maintained "Jama Bahi" partly till March, 1967, and be was in collusion with petitioner no. 1. The complainant was examined on solemn affirmation on the 18th April, 1968 and cognizance was taken, as stated earlier, and the case was transferred to a First Class Munsif-Magistrate for holding commitment enquiry under Chapter XVIII of the Code of Criminal Procedure. It is stated on behalf of the petitioners that all the disputes arising between the parties are to be referred to arbitration of three persons, as mentioned in Clause 21 of the deed of partnership agreement. 3. Mr. Brajkishore Prasad No.2, learned Counsel appearing for the petitioners, has argued that the criminal prosecution of the petitioners was unwarranted and against law. His main argument is that the liability of the petitioners, if any, would be a civil liability and they cannot be criminally prosecuted. He further pointed out that in the complaint petition no specific allegation was made concerning any overt act against petitioner no. 2 and be was unnecessarily dragged into the litigation on mere suspicion. In support of his argument, he relied on a decision of the Calcutta High Court in (I) Bhuban Mohan Das V. Surendra Mohan Das (A.I.R. 1951 Calcutta 69). That case was decided by a Bench of five Judges. 2 and be was unnecessarily dragged into the litigation on mere suspicion. In support of his argument, he relied on a decision of the Calcutta High Court in (I) Bhuban Mohan Das V. Surendra Mohan Das (A.I.R. 1951 Calcutta 69). That case was decided by a Bench of five Judges. It was observed in that case that a charge under Section 406 of the Indian Penal Code cannot be framed against a person, who according to the complainant, is a partner with him and is accused of the offence in respect of property belonging to both of them as partners. P. B. Mukharji, J., one of the Judges constituting the Bench, further observed that the reason for holding that a partner cannot be prosecuted by another partner for criminal breach of trust in respect of partnership property under Section 406 of the Penal Code is two-fold. The nature character and incident of partnership property are such that during the subsistence of the partnership there cannot be, except by special agreement, any entrustment or dominion and secondly partnership properly is not a specific and ascertainable property and is of so equivocal and problematic a nature, until dissolution and accounts, that it is not susceptible to be used in a manner which can bring into operation Section 405 of the Penal Code. Banerjee, J.; another Judge, further observed that, unless there is an agreement between the partners that a particular property would be the separate property of a partner, there cannot be an entrustment of it to the other partner or partners. In the absence of such an agreement, each partner is interested in the whole of the partnership assets and there cannot be an entrustment of a partner's property' which can be entrusted. This decision was approved of by their. Lordships of the Supreme Court in (2) Velji Raghavji Patel V. The State of Maharashtra (A.I.R. 1965 Supreme Court 1433) where it was observed that where, under an agreement between the partners, the working partner is authorised to recover the dues of the partnership and to spend the money for the business of the partnership, he cannot be said to have been guilty of criminal breach of trust even with respect to the dues realised by him from certain person by not depositing them in the bank as alleged by the prosecution. It was also observed that an owner of property, in whichever way he uses his property and with whatever intention, will not be liable for misappropriation and that would be so even if he is not the exclusive owner thereof. A partner has underfined ownership along with the other partners over all the assets of the partnership. If he chooses to use any of them for his own purpose he may be accountable to the other partners civilly. But he does not thereby commit any misappropriation. In the present case, the allegation is that the petitioners have given the partnership money to undeserving persons and they have issued cheques concerning the partnership business to some others to whom they should not have issued. Another allegation is that they received money on behalf of the partnership business, entered them in the Bahis of the business, but misappropriated the same. So all the allegations are concerning the partnership business. In view of the decisions quoted above, it must be held that the petitioners cannot be proceeded against under Section 403 or Section 406 of the Indian Penal Code. As regards the forging of the accounts the same argument would apply. The writing of the accounts or making entries in the account books is as much a part of the business of the firm as it is to pay or receive money on behalf of the partnership business. It rather shows the bonafides of the petitioners. If they have received any money, they have made a note of the same in the partnership book. If they issued cheque or gave money to any person, they have made entries regarding the same in the books of account. So this part of the business, that is; the writing of the Bahis, is surely a part of the business of the partnership firm and the two alleged offences cannot be separated. If eventually, a dissolution takes place and accounts are adjusted, it would be found out whether, on account of these entries and transactions, the petitioners are liable to the partnership firm or not. If they are liable, the same will be recovered from their assets. In that view of the matter, I think; there should be criminal proceeding against the petitioners for the allegations made in the complaint petition. 4. Mr. If they are liable, the same will be recovered from their assets. In that view of the matter, I think; there should be criminal proceeding against the petitioners for the allegations made in the complaint petition. 4. Mr. Umesh Chandra Prasad Sinha, learned Counsel for the opposite party, raised a point before me to the effect that the learned Magistrate had taken cognizance on the 18th April, 1968, and this petition for quashing that order has been filed in this Court on the 1st September, 1969. In the intervening period the petitioners had tried other courts also, and so this petition should be taken as barred by limitation. Giving some details be said that when the cognizance was taken, the petitioners moved the Sessions Judge of Hazaribagh on the 4th July, 1968 for quashing the order taking cognizance. That petition was dismissed on the 14th August, 1968. The petitioners then went to the trial court on the 23rd November, 1968, but their petition was withdrawn on the 27th February, 1969. Then they filed Criminal Miscellaneous Case No. 1039 in this Court for the production of the accounts of the partnership business. That petition was disposed of on the 21st July, 1969. So, his main argument is that this petition is barred by limitation. Appreciating the nature of the case, I think, this argument cannot be accepted. For quashing the proceeding, the petitioners had to come directly to the High Court, because it is not the function of the Sessions Court to make a recommendation for quashing a proceeding. This petition has been filed under the provisions of Section 561A of the Code of Criminal Procedure. Under this section, any petitioner cannot claim any right to move the High Court to pass any particular order. This section has been enacted for saving the inherent powers of the High Court. This petition has been filed under the provisions of Section 561A of the Code of Criminal Procedure. Under this section, any petitioner cannot claim any right to move the High Court to pass any particular order. This section has been enacted for saving the inherent powers of the High Court. The section reads as follows:- "Nothing in this Code shall be deemed to limit or affect the inherent power of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice." But the power to be exercised under this section is in its nature extraordinary and ought not to be exercised capriciously or arbitrarily, but is to be exercised ex debito justitiae to do the real and substantial justice for the administration of which alone Courts exist. The High Court must, therefore, be careful to see that its decision is based on sound general principles of criminal jurisprudence and is not in conflict with them or with the intentions of the Legislature as indicated in statutory provisions. The High Court may exercise its power suo motu or on a petition of a party. So there is no limitation put upon the High Court for the purpose of entertaining such an application. When a proceeding is going on, a party may come at any stage to the High Court direct to get the proceeding quashed, because the proceeding is still continuing. A criminal proceeding started on a complaint which does not contain any definite accusation amounts to an abuse of the process of the Criminal Court and in such a situation the High Court can certainly intervene. As discussed above, a plain reading of the complaint petition does not disclose any offence against the accused persons. In that view of the matter, I think, for the furtherance of the ends of justice, this Court should interfere with the impugned order. 5. In the result, this application is allowed and the proceeding against the accused persons is quashed. Application allowed.