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2007 DIGILAW 885 (CAL)

Bank of Baroda v. Govind Ram Agarwal

2007-12-19

PARTHA SAKHA DATTA

body2007
ORDER :- By this application dated 22-6-2004 under S. 482 of the Cr. P.C. prayer has been made for quashing of the proceeding being C-Case No. 1240 of 2004 pending before the learned Magistrate, 6th Court, Calcutta under S. 120-B/409 of the I.P.C. The opposite party herein lodged a petition of complaint some time in the middle of 2004 against M/s. Bank of Baroda, accused No. 1 and other accused persons who are the officers of the said bank. The complainant deposited four fixed deposits of Rs. 7,15,000/-, 2,80,000/-, 2,40,000/- and 4,00,000/- with the said bank by way of trust and security and on 7-1-1992 and 15-1-1992 the bank deducted Rs. 1,777/- and Rs. 1,965/- by way of TDS on interest accrued on the aforesaid fixed deposits but did not issue any certificate of TDS in favour of the complainant in spite of the demand lastly made on 15-1-2004. Thus according to the complainant the accused persons committed the offence of criminal breach of trust by criminal conspiracy. Process was issued against the petitioners and during the pendency of the proceeding before the learned Magistrate this application has been filed praying for quashing of the proceeding on the ground that the learned Magistrate ought not to have taken cognizance of offence as no prima facie case was made out and that too without obtaining sanction from the appropriate authority. The further ground was that the bank did not receive the money in trust and as such, there cannot be any allegation of misappropriation of the property. 2. I have heard Mr. Milan Mukherjee, learned advocate appearing for the petitioner. None appears for the opposite party though service was effected as per affidavit of service. 3. During hearing only one point is raised to the effect that the bank cannot be said to be a trustee in respect of the money deposited by the O.P. because the relationship between the bank and the O.P. is a relationship of debtor and creditor. The further argument is that the deductions in respect of TDS was made by the bank in January, 1992 while the petition of complainant was filed after a lapse of twelve years on 26-2-2004 with no explanation convincing for such delay of more than one decade in lodging the petition of complainant and a Court of law cannot be utilised as a weapon of harassment. It has been argued that though it is the case of the O.P., that the amount deposited with the bank by way of a fixed deposit amounts to entrustment, it has been well settled by the decisions of the Hon'ble Supreme Court as also of this Court that the relationship between a bank and its customer is not that of a trustee and a beneficiary but of a creditor and a debtor because when the customer deposits money with the bank and expects interest therefrom the bank cannot keep such money aside and idle. The sum of money becomes a part of the corpus of the bank and the customer is only entitled to ask for return of the money after expiry of stipulated period. Thus in absence relationship of trustee and beneficiary the charge under S. 409 of the I.P.C. is inappropriate. Since it is the statutory demand of the bank to deduct the tax at source the tax so deducted becomes the property of the Government of India and the bank holds that property as a trustee on behalf of the Government. Thus the customer does not have any proprietary right over that property, even if the bank fails to deposit the same with the Government of India the customer cannot claim the said sum already deducted as TDS as his property and if any criminal breach of trust has been committed it can be so alleged by the Government of India who is the owner of the money after such deduction. The decisions which have been cited as follows :- 1. Shanti Prasad Jain v. Director of Enforcement, FERA, AIR 1962 SC 1764 . 2. Ram Ratan Gupta v. Director of Enforcement, FERA, AIR 1966 SC 495 . 3. Gopesh Chandra Pal v. Nirmal Kumar Dasgupta, AIR 1950 Cal 57 . 4. ANZ Grindlays Bank, PIC v. Shipping and Clearing (Agents) Pvt. Ltd., 1992 Cri LJ 77. 5. Kalpanth Rai v. State, 1998 Cri LJ 369. 6. Zandu Pharmaceutical Works Ltd. v. Mohammad Sharaful Haque, 2005 SCC (Cri) 283; (2005) 1 C Cr LR (SC) 23 : 2005 Cri LJ 92. 4. 4. ANZ Grindlays Bank, PIC v. Shipping and Clearing (Agents) Pvt. Ltd., 1992 Cri LJ 77. 5. Kalpanth Rai v. State, 1998 Cri LJ 369. 6. Zandu Pharmaceutical Works Ltd. v. Mohammad Sharaful Haque, 2005 SCC (Cri) 283; (2005) 1 C Cr LR (SC) 23 : 2005 Cri LJ 92. 4. It is further argued that the tax deducted at source from the interest accrued on the fixed deposits of the complainant was under S. 194-A of the Income-tax Act but such failure does not give rise to any cause of action to the complainant so as to initiate a case of criminal breach of trust. It was not the case of O.P./complainant that no deduction was at all made on account of T.D.S. from the interest accrued on the fixed deposits. 5. In Kailash Kumar Sanwata v. State of Bihar (2003) 7 SCC 399 : 2003 Cri LJ 4313 their Lordships of the Supreme Court held that the basic requirement to bring home the accusations under S. 405 are that (i) entrustment (ii) whether the accused was actuated by dishonest intention and misappropriated it or not. Applying the test as expounded in the decision it is all the more clear that on the facts pleaded in the petition of complaint it cannot be said that the bank misappropriated the money which was deducted as T.D.S. inasmuch as the moment deduction was made which in the instant case has been made admittedly the money so deducted neither belongs to the bank nor to the complainant but to the Central Government which in the event of the failure of the bank to deposit the proceeds may initiate criminal action against the bank. Since the property did not belong to the complainant soon after deduction was complete it is of no avail to argue that the said had been entrusted with the bank. It cannot be said further that the bank was actuated by dishonest intention to misappropriate the money because of the fact that the money was not misappropriated as against the complainant and if the bank had committed any default in not returning the money to the Central Government then it is a matter of concern between the bank and the Central Government not between the bank and the complainant. In Ram Ratan Gupta v. Director of Enforcement (supra) it has been held that it is the settled law that the relationship between a banker and a customer qua the money deposits in the bank is that of a debtor and a creditor. If it is contended for the sake of argument that the TDS amount collected by the bank was not deposited with the Central Government it would amount to embezzlement of public money it has to be observed that if the bank after deducting the tax at source did not deposit the amount with the Income-tax authority alleged criminal breach of trust can at best be said to have been committed against the Central Government and the complainant is incompetent to invoke S. 409 of the I.P.C. as the element of entrustment was not there after deduction. Therefore, in the circumstance failure on the part of the bank to supply T.D.S. certificate in favour of the complainant can hardly attract the offence of criminal breach of trust. The decision in Gopesh Chandra Pal v. Nirmal Kumar Dasgupta, AIR 1950 Cal 57 and ANZ Grindlays Bank, P.I.C. v. Shipping and Clearing (Agents) Pvt. Ltd., 1992 Cri LJ 77 dispel the theory of trustee and beneficiary. In ANZ Grindlays Bank v. Shipping and Clearing (Agents) Pvt. Ltd. (supra) it was held by this Court the relationship between a bank and a customer in relation to the money deposited is ordinarily that of a debtor and a creditor and it is only by a special arrangement that the relationship of trustee and beneficiary may be created. In the instant case the petition of complaint does not reveal any special arrangement in favour of a different relationship other than the commercial relationship between the bank and the customer. It must not be lost sight of the fact that the amount of the T.D.S. by no means could be converted by the bank to its own use and the law enjoins upon the bank to deposit the money with the Central Government. It is not the case of the complainant that he has been charged by the Income-tax Authority for not deposit of the tax payable on account of interest accrued on his fixed deposits. It is not the case of the complainant that he has been charged by the Income-tax Authority for not deposit of the tax payable on account of interest accrued on his fixed deposits. This Court dealt with the situation exactly in the same line as in Bank of Baroda v. Govind Ram Agarwal (2007) 1 C Cr LR (Cal) 313 where this Court held that failure to issue the T.D.S. certificate does not constitute element of cheating on the ground principally that there was no entrustment by the depositor in respect of the money so deducted at source and secondly there could not be any relationship of trustee and beneficiary unless special arrangement to constitute such relationship was arrived at by any agreement or any instruction to that effect. My attention has further been drawn to an unreported judgment of this Court (CRR 421 of 2007, B. K. Sinha v. Govind Ram Agarwal) where another Hon'ble Judge of this Court held the same decision as the earlier decision of this Court and accordingly quashed the proceeding. In the decision in Shanti Prasad Jain v. Director of Enforcement, FERA, AIR 1962 C 1764 the Supreme Court held that the deposit made in a bank creates a relationship of a debtor and a creditor and not that of a trustee and a beneficiary. In the decision in Gopesh Chandra Pal v. Nirmal Kumar Dasgupta, AIR 1950 Cal 57 this Court held the same principle. Therefore the petition of complaint can hardly survive. Yet a point must not be missed to note that the complaint was lodged under S. 409 of the Cr. P.C. after a long lapse of 12 years and there was no explanation as to how there could be delay of more than one decade to lodge the complaint. The decision in Zandu Pharmaceutical Works Ltd. v. Mohammad Sharaful Haque, 2005 SCC (Cri) 283 : 2005 Cri LJ 92 is nonetheless relevant although it is not necessary for me to dwell on this point. 6. In the result, the revisional application succeeds. Continuation of the proceeding would be an abuse of the process of the Court. Accordingly, the criminal revision is allowed. The proceeding in Case No. C-1240 of 2004 pending before the learned Metropolitan Magistrate, 6th Court, Calcutta under Ss. 120-B/409 of the I.P.C. is quashed. The petitioner will stand discharged for bail bonds if they are on bail. Continuation of the proceeding would be an abuse of the process of the Court. Accordingly, the criminal revision is allowed. The proceeding in Case No. C-1240 of 2004 pending before the learned Metropolitan Magistrate, 6th Court, Calcutta under Ss. 120-B/409 of the I.P.C. is quashed. The petitioner will stand discharged for bail bonds if they are on bail. 7. Urgent xerox certified copies of this order, if applied for, be given to the parties as expeditiously as possible. Application allowed.