Judgment 1. This is an application for quashing the entire criminal proceeding including the order dated 9.5.2005 passed by Sri Premchand Anal, Judicial Magistrate, 1st Class, Patna in Complaint Case No. 212(C)/2004 by which he has taken cognizance against the petitioner under Sec. 406 of the Indian Penal Code. 2. The petitioner is a registered company situated in Patna dealing with all kinds of Tyre, Tubes and Batteries. The said Company appointed the complainant as a dealer of the Company. The Company agreed to pay interest at market value and interest @ 18% per annum over credit balance besides other attractive and beneficial schemes to the complainant. The Complainant wrote several letters to the Company for supply of goods and losses suffered due to non-supply of the goods and lastly request was made to return the security deposit as well as credit balance with interest which comes to Rs. 23,16,933/-as per agreement and promise. The accused persons being the petitioner in his criminal miscellaneous application narrated the entire details and procedure adopted for return of the money. There is no specific allegation against the petitioner. It is submitted that there is no prima facie case made out against the petitioner and there is no evidence against the petitioner for the offence under Sec. 406 of the I.P.C. 3. The Company has made a reference before the Board for Industrial and Financial Reconstruction (BIFR) under Sec. 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 which was registered as BIFR Case No. 14 of 1998. The Company was declared as a Sick Industrial Company by an order dated 22.6.1998 passed by the BIFR. It is further submitted that hearing took place before the BIFR and AAIFR (Appellate Authority Industrial and Financial Reconstruetion) and the Complainant/ Opposite Party No. 2 all along was aware of the hearing held before BIFR and AAIFR. The petitioner has informed the Complainant that Dunlop India Ltd. has been referred to Board for Industrial and Financial Reconstruction, any decision regarding interest/repayment on this amount will be taken after the approval of BIFR. The aforesaid information was given to the complainant vide letter dated 20.10.2000 which is said to be part of the complaint petition itself. It is submitted that in spite of the aforesaid circumstances the filing of the complaint petition is an abuse of the process of the Court. 4. The aforesaid information was given to the complainant vide letter dated 20.10.2000 which is said to be part of the complaint petition itself. It is submitted that in spite of the aforesaid circumstances the filing of the complaint petition is an abuse of the process of the Court. 4. It is further submitted that pursuant to the direction of the Hon ble Appellate Authority for Industrial and Financial Reconstruction, hereinafter referred to as "AAIFR", the petitioner-Company submitted a fresh Draft Rehabilitation Scheme in March, 2002 which also included the dues of the complainant. Vide order dated 17.5.2002 the Hon ble AAIFR circulated the Draft Rehabilitation Scheme being No. DRS-02 to all concerned. The Company of the petitioner had incorporated all dues in the Draft Rehabilitation Scheme to be paid by the Company irrespective of secured or unsecured creditors dues including the dues of the dealers like the complainant. The petitioner had neither denied nor avoided payment of the dues of the said complainant. The dues have already been incorporated in the Draft Rehabilitation Scheme which is now pending for final order of the AAIFR. It is also indicated that in accordance with the order passed in AAIFR Draft Rehabilitation Scheme was prepared which included payment of the creditors dues both secured and unsecured which also included the dues of the said dealers like the complainant/Opposite Party No. 2, the said Draft Rehabilitation Scheme was circulated. 5. It is submitted that at no point of time the complainant/Opposite Party No. 2 had raised any objection to the schemes within 31st July, 2002 or even thereafter as required by the Hon ble AAIFR that have been submitted either before the BIFR or AAIFR. It is further submitted that the complainant/Opposite Party No. 2 filed the complaint petition in order to procure an order for issuance of process in the name of the petitioner and others to humiliate the accused persons. It is also submitted that a bare reading of the allegations made in the complaint petition and considering such allegations in the context of the provisions of law, it can be said that criminal breach of trust does not stand on any scrutiny of this case both factually and legally as there is no element of mens rea or criminal intention in the allegation made. It is also submitted that the rehabilitation proceeding is pending before the Judicial Body and any order will frustrate the ongoing Rehabilitation process. 6. It is also pointed out that one complaint petition No. 1649(d)/2004 was filed by one Paresh Nath Mukherjee against M/s Dunlop India Ltd. under Sections 406/ 34/120(B) of the I.P.C. before Chief Metropolitan Magistrate, Calcutta. The Company challenged the cognizance taken by the Chief Metropolitan Magistrate, Calcutta before the Hon ble High Court, Calcutta. The Hon ble High Court, Calcutta after hearing the parties quashed the criminal proceeding. It is further submitted that the case of the petitioner stands on similar footing. The nature of dispute raised by the Opposite Party No.2 is purely of civil nature and do not attract any provisions of the I.P.C. or Cr.PC. and therefore, this application for quashing has been filed. It is also submitted that no proceeding lies against a sick company under Sec. 22(1) of Sick Industrial Companies (Special Provisions) Act, 1985 and hence there is no breach of trust. It has been submitted that the impugned order is fit to be set aside and the proceeding be quashed. 7. It has been submitted on behalf of the complainant/Opposite Party No. 2 that the offence against the petitioners is squarely covered under Sections 406, 420, 120B I.P.C. as the outstanding amount of being the security amount and other dues of Rs. 23,16,933/- were neither paid by the petitioners company on the legal notice nor replied and the accused persons in conspiracy with each other misappropriated the amount aforesaid. It is also submitted that the accused persons in conspiracy with each other fraudulently obtained money in the name of security for business transaction, making assurance and promise to return the same with interest but did not return the same and thereby cheated the complainant/Opposite Party No. 2 by criminally breaching the trust which caused wrongful gain to the accused persons and wrongful loss to the complainant. 8. In the complaint the short fact is that the petitioner/accused is the manufacturer of tyres and tubes. The Chairman, Vice-Chairman and Executive Director of the Company were also made as accused. The complainant is the stockist of all types of tyre, tubes with other allied items. 8. In the complaint the short fact is that the petitioner/accused is the manufacturer of tyres and tubes. The Chairman, Vice-Chairman and Executive Director of the Company were also made as accused. The complainant is the stockist of all types of tyre, tubes with other allied items. On the basis of terms and conditions of the dealership of the accused manufacturer Company, the complainant, accepted the offer and made the security deposit which was confirmed by the accused persons through letter dated 20.10.2000 by which they had admitted the amount of security deposit with interest upto 30.9.1998 being Rs. 6,96,000/- and credit balance of Rs. 98,178/- inclusive of interest. The accused persons suddenly stopped supply of the goods without assigning any reason to the complainant. Several letters had been written to the accused persons for supply of goods and in lieu thereof return the security deposit as well as credit balance alongwith the interest upto 31.1.2003 @ 18% per annum including the business loss @ 3% per month, total amounting to Rs. 23,16,933.00 as per agreement and promises. 9. When the accused persons had not returned the security deposit nor credit balance with interest, a legal notice was given asking for payment of aforesaid amount but the amount was not paid. It is submitted on behalf of the complainant that the offence of cheating has been made out as stated above. The correspondences were entered into between the complainant and the accused persons being the petitioner in this case. It appears that belatedly the aforesaid amount had not been paid. 10. On behalf of the petitioner it was argued that even from bare reading of the complaint petition no breach of trust or criminal breach of trust has been made out. There was an agreement and negotiation between the parties. 11. It appears that belatedly the aforesaid amount had not been paid. 10. On behalf of the petitioner it was argued that even from bare reading of the complaint petition no breach of trust or criminal breach of trust has been made out. There was an agreement and negotiation between the parties. 11. On behalf of the complainant/ Opposite Party No. 2 while relying upon the established rules of law it has been contended that at this stage the defence of the petitioner regarding any absence of criminal intention and also invocation of the provision of Sick Industrial Companies (Special Provisions) Act, 1985 , the further existence of BIFR Case No. 14 of 1998 and the declaration of the Company being Sick Industrial Company by order passed by BIFR and also the decision reached in respect of the Company, the Appellate Authority for Industrial and Financial Reconstruction, herein referred to as "AAIFR", with regard to private rehabilitation scheme cannot be looked into nor the contention on behalf of the petitioner that the company of the petitioner had incorporated all the dues of the Opposite Party/ complainant in the draft rehabilitation scheme to be paid by the company can be looked into. The established principle of law in this respect has been laid down in various decisions of the Hon ble Supreme Court and such decisions had followed the decision of the Apex Court State of Haryana and Others V/s. Choudhary Bhajan Lal and Others, AIR 1992 SC 604 in which the categories of cases have been enumerated whereby and whereunder there can be exercise of power under Sec. 482 Cr.P.C. which, inter alia, included the following factor: "Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make a case against the accused." 12. With reference to the established principle of law it has been submitted on behalf of the Opposite Party/complainant that the case has to be looked into purely on the complainants points of view without adverting in any way to the defence case or embarking upon an enquiry whether the offence has been constituted under Sec. 406 I.P.C. 13. With reference to the established principle of law it has been submitted on behalf of the Opposite Party/complainant that the case has to be looked into purely on the complainants points of view without adverting in any way to the defence case or embarking upon an enquiry whether the offence has been constituted under Sec. 406 I.P.C. 13. On behalf of the petitioner it has been submitted that even if the allegations made in the complaint are taken on its face value and accepted in its entirety, such allegations do not prima facie constitute an offence under Sec. 406 I.P.C. In this connection on behalf of the petitioner 2003(3) PCCR 224 has been cited wherein and whereunder while dealing with Criminal Appeal No. 904 of 1996 Kailash Kumar Sanwatia vs. The State of Bihar & Anr. the Hon ble Apex Court held as follows: "The basic requirement to bring home the accusations under Sec. 405 are the requirements to prove conjointly (1) entrustment, and (2) whether the accused was actuated by the dishonest intention or misappropriated it or converted it to his own use to the detriment of the persons who entrusted it. As the question of intention is not a matter of direct proof, certain broad tests are envisaged in deciding whether in a particular case the accused had mens rea for the crime." 14. On the aforesaid premises so far as the dishonest intention is concerned it is well settled that the question of intention has to be looked into in the perspective of facts narrated in the case. Reliance has also been placed in which arose out of the Criminal Appeal No. 1552 of 2002, Hotline Telebutes and Components Ltd. and Others V/s. The State of Bihar, 2005 3 PCCR 76. Reliance has also been placed in which arose out of the Criminal Appeal No. 1552 of 2002, Hotline Telebutes and Components Ltd. and Others V/s. The State of Bihar, 2005 3 PCCR 76. In that case since there is no whisper in the complaint that at the very inception of the contract between the parties, there was any intention to cheat, the Hon ble Apex Court on bare perusal of the complaint found the case to be a case of pure civil liability and no criminal offence was disclosed much less offences either under Sec. 406 or 420 I.P.C. The aforesaid case decided by the Hon ble Apex Court related to the supply of goods to the accused by the complainant but non-payment of price thereof by the petitioners in that case, the Hon ble Apex Court found it to be an abuse of the process of the Court and found it expedient to quash the proceeding. As regards the broad test in the aforesaid cited decision 2003(3) PCCR page 224, by way of an example it was observed as follows: "If due to a fortuitous or intervening situation, a person to whom money is entrusted is incapacitated from carrying out the job, that will not bring in application of Sec. 405 IPC, or Sec. 409 IPC, unless misappropriation, or conversion to personal use or disposal of property is established." 15. In this case even if the complaint petition is put to the broad test, as stated above, from the bare facts of the complaint it appears that the security amount with interest had not been refunded to the complainant/Opposite Party No. 2. So far as the petitioner is concerned, from the bare facts of the complaint it could not be shown as to whether there was dishonest intention on the part of the petitioner from the very inception of the contract or the agreement. 16. Under such circumstances the inevitable conclusion is that allowing such prosecution to continue under Sec. 406 I.P.C. would amount to an abuse of the process of the court and it would be just and expedient to quash the prosecution. This however will not stand in the way of the complainant/opposite party getting such relief as available in law otherwise by pursuing a suitable remedy. 17. Criminal miscellaneous application is accordingly allowed.