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2000 DIGILAW 1179 (PNJ)

Ashok Kumar Singhal v. State Of Punjab

2000-09-29

V.M.JAIN

body2000
Judgment 1. This is a petition under Section 482, Cr. P.C., filed by the petitioner, seeking quashment of FIR 286 dated 13-12-1999 under Sections 406/420, IPC, registered at Police Station, Focal Point, Ludhiana. 2. In the petition, it was alleged that the Firm known as M/s. Ludhiana Industrial Corporation, of which the petitioner was one of the partners, had taken loan facility from Punjab Financial Corporation for the construction of factory and purchase of machinery. Subsequently, the Firm entered into an agreement of hypothecation with the Punjab Financial Corporation. It was alleged that the petitioner had withdrawn from the partnership of the said Firm in the year 1994 and that due intimation was also sent to the said Corporation in this regard. It was further alleged that the said Corporation had lodged an FIR against all the partners of the said Firm, including the petitioner. It was alleged that as per the FIR the partnership Firm was advanced a loan of Rs. 23.43 lakhs by the said Corporation for the construction of the factory premises and purchase of machinery, on the terms and conditions duly mentioned in the mortgage deed, duly executed by all the partners on 6-10-1998. It was alleged that the entire machinery purchased out of the loan amount was installed at the factory premises and was charged and assigned to the said Corporation under the said mortgage deed. It was further alleged in the FIR that one of the terms and conditions of the said mortgage deed was that the borrower shall not sell, transfer or otherwise part with or remove from the said factory premises, the said plant and machinery, without the prior permission, in writing, of the said Corporation. It was alleged that when the representative of the said Corporation visited the factory premises on 23-8-1999, it was found that all the machinery was without motors and approximately 50 electric motors had been removed from thefactory premises. It was alleged that the accused had dishonestly misappropriated and disposed of the said items, in violation of the terms and conditions of the said mortgage deed and had committed the offence punishable under Section 406, IPC. In the petition filed by the petitioner, Ashok Kumar, one of the accused, it was alleged that no offence under Section 406, IPC, was made out and as such the FIR was liable to be quashed. 3. In the petition filed by the petitioner, Ashok Kumar, one of the accused, it was alleged that no offence under Section 406, IPC, was made out and as such the FIR was liable to be quashed. 3. I have heard learned counsel for the petitioner and gone through the record carefully. 4. Learned counsel for the petitioner submitted before me that the plant and machinery, including the electric motors, had been hypothecated with the Punjab Financial Corporation and that the removal of the said electric motors did not amount to an offence punishable under Section 406, IPC. Reliance was placed on the law laid down by their Lordships of the Supreme Court in the case reported as CBI, New Delhi V/s. Duncan Agro Industries, Calcutta, 1996 0 CrLJ 3501 and the law laid down by this Court, in the cases reported as Pardeep Kumar V/s. State of Haryana, 1999 2 Rec Cri R 791, Sunita Bajaj V/s. Punjab and Sind Bank, 1998 1 RCriR 129 and Dilbagh Rai V/s. State of Haryana, 1999 2 RCriR 596. 5. After hearing learned counsel for the petitioner and perusing the record, I find no merit in the present petition. 6. As per the allegations made in the FIR, lodged on behalf of the Punjab Financial Corporation, the Firm, of which the petitioner was a partner, had obtained a loan of Rs. 23.43 lakhs for the construction of the factory premises and purchase of machinery, on the terms and conditions duly mentioned in the mortgage deed, duly executed by all the partners including the petitioner, on 6-10-1998 and that the entire machinery, which was purchased out of the loan amount, was installed at the factory premises and was charged and assigned to the said Corporation under the said deed of mortgage. It was also alleged in the FIR that one of the terms and conditions of the said mortgage deed was that the borrowers shall not sell, transfer or otherwise part with or remove, from the factory premises, the said plant and machinery along with its ancillaries and accessories, without the previous permission, in writing, of the said Corporation. It was also alleged in the FIR that one of the terms and conditions of the said mortgage deed was that the borrowers shall not sell, transfer or otherwise part with or remove, from the factory premises, the said plant and machinery along with its ancillaries and accessories, without the previous permission, in writing, of the said Corporation. In the present case, as per the allegations made in the FIR, when the representative of the said Corporation had visited the factory premises, on 23-8-1999, he found that the entire machinery was without motors and that approximately 50 electric motors had been removed from the site. In this manner, as per the FIR, the accused had committed the offence under Section 406, IPC. In my opinion, if the Firm and its partners had executed the mortgage deed, while obtaining the loan and had purchased the plant and machinery out of the said loan amount and one of the terms and conditions of the said mortgage deed was that they would not remove the said plant and machinery or any part thereof, without the written consent of the said Corporation, and if about 50 electric motors, which were part of the said machinery, were missing from the spot, prima facie, at this stage, it could not be said that no offence under Section 406, IPC, had been committed by the executants of the said mortgage deed, being the partners of the said Firm. If the petitioner was one of the partners of the Firm and had executed the mortgage deed on 6-10-1998, prima facie, it could not be said that the petitioner was not liable merely because in the year 1994, there was some change in the partnership deed, as alleged. In any case, there is nothing on the record to show that the said Corporation had accepted the said change in the constitution of the Firm. 7. Various authorities relied upon by learned counsel for the petitioner, in my opinion, would have no application to the facts of the present case. All these authorities pertain to the hypothecation of goods and do not pertain to the mortgage of the plant and machinery under a mortgage deed. 7. Various authorities relied upon by learned counsel for the petitioner, in my opinion, would have no application to the facts of the present case. All these authorities pertain to the hypothecation of goods and do not pertain to the mortgage of the plant and machinery under a mortgage deed. In (1996) 3 Rec Cri R 60 : (1996 Cri LJ 3501) (supra), it was noticed by their Lordships of Supreme Court that M/s. Duncan Agro Industries Limited had cash credit facilities on hypothecation of stocks, etc. with the Bank. It was also noticed by their Lordships that as per the allegations made in the FIR, the stock worth about Rs. 12 crore was either fraudulently or dishonestly removed or disposed of without any payment to the Bank although the same was hypothecated with the Bank. It was under those circumstances that it was held by their Lordships of Supreme Court that for disposing of the goods covering security against credit facility, theoffence of breach of trust was not committed. The law laid down by their Lordships of Supreme Court, in this authority, in my opinion, would have no application to the facts of the present case. As referred to above, in the present case, the plant and machinery was mortgaged with the Punjab Financial Corporation and one of the terms and conditions was that the borrowers would not remove any part of the plant and machinery from the said premises without the written permission of the said Corporation. Similarly, in (1996) 2 Rec Cri R 791 (supra), the accused got the loan from Punjab National Bank and the stock in the shop was hypothecated as security for repayment of the said loan along with interest. It was under those circumstances that it was held by this Court that no offence under Sections 406/420, IPC, was made out if the stock was disposed of by the accused. Similarly, in (1998) 1 Rec Cri R 129 (supra), the accused had taken a loan from the Punjab and Sind Bank as cash credit hypothecation limit and term loan against hypothecation of stock of rice, bardana and machinery and one of the conditions of the said loan was that the hypothecated goods shall not be disposed of without the prior permission of the Bank and without depositing the sale proceeds of the same. In the reported case, the allegations against the accused were that the hypothecated stock had been disposed of by the accused without depositing the sale proceeds with the Bank. It was under those circumstances that it was held by this Court that the sale of hypothecated stock did not amount to an offence under Sections 406/420, IPC. Similarly, in (1999) 2 Rec Cri R 596 (supra), the accused had raised crop loan from the Bank and had mortgaged their agricultural land with the Bank and a valid charge was created in favour of the Bank showing the lien of the Bank. Without repayment of the loan amount, the accused sold a part of the said land knowing fully well that the said land was mortgaged with the Bank. Thereupon, the Bank filed an FIR under Sections 406/409/120-B, IPC, against the accused. In the reported case, the sale of the mortgaged land had taken place during pendency of the suit filed by the Bank for recovery of the loan amount. During pendency of the said suit, the entire amount was paid by the defendants to the plaintiff-Bank and thereupon, counsel for the plaintiff Bank had made a statement before the Court that the suit might be dismissed as withdrawn. It was under those circumstances that it was held by this Court that the continuation of the FIR would be a sheer abuse of the process of Court. In my opinion, the law laid down in this authority would have no application to the facts of the present case. 8. In view of the above finding (sic) no merit in this petition, I hereby dismiss the same.