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2008 DIGILAW 925 (ALL)

S. K. SHARMA v. STATE OF UTTAR PRADESH

2008-04-24

AMAR SARAN

body2008
JUDGMENT Hon’ble Amar Saran, J.—Heard Gopal Chaturvedi alongwith Sri R.C. Upadhyaya and Sri Satish Trivedi appearing for the applicants, and Sri Pankaj Shukla, holding brief of Sri P.K. Gupta for opposite party No. 2 and learned A.G.A. 2. This application has been filed for quashing an order dated 9.3.2004 summoning the applicants under Section 406, IPC, passed on a complaint under Sections 406, 419, 420, 504, 506 and 120B, IPC dated 22.4.2003. 3. The allegations in this case were that opposite party No. 2 was proprietor of M/s. Priya Distributors (in short, the firm). He became an agent for the applicant’s firm M/s. Godrej Pilsbury Ltd. in Gorakhpur. For getting the said agency, he gave a draft of Rs. 11,000/- on 12.10.1998. After that he was appointed as distributor for the food products of the firm. The applicant No. 1, was the area manager of the firm at Gorakhpur and applicant No. 2 was the Chairman of the firm. 4. It was mentioned in the complaint that the complainant gave a draft No. 035011 of Rs. 70,000/- drawn on the Oriental Bank at Gorakhpur but the products were not supplied against the said draft. However, it is mentioned that even thereafter the applicants kept on sending drafts and products were supplied but the supplies were irregular. It was further mentioned in the complaint that the complainant resigned from being the agent for the firm on 6.9.2000. He, however, sent a claim for Rs. 1,67,786.20 to the firm through a registered letter to the applicants’ regional offices in Kanpur and Delhi, but the said claim was not met and in this view of the matter the applicants are said to have committed the offences mentioned in the complaint. 5. In the summoning order, the learned Judicial Magistrate has observed that there are no allegations of any inducement to part with any money for the purpose of cheating the complainant, hence the offence under Sections 419 and 420, IPC was not at all disclosed. Even so far as the allegation of hurling some abuses etc. at Delhi are concerned, the same were disbelieved and the applicants were not summoned under Sections 504 and 506, IPC. The applicants have, however, been summoned under Section 406, IPC. 6. Even so far as the allegation of hurling some abuses etc. at Delhi are concerned, the same were disbelieved and the applicants were not summoned under Sections 504 and 506, IPC. The applicants have, however, been summoned under Section 406, IPC. 6. Learned Counsel for the applicants has contended that it is a pure civil dispute, if at all, over incomplete payment of price of products and there is no question of entrustment and, therefore, the ingredients of Section 405, IPC are not present in the complaint. The dispute in fact is essentially of civil nature and the criminal proceedings ought not to have been launched against the applicants. 7. Learned Counsel for the complainant, on the other hand, contends that the money in question was entrusted to the applicants for supply of goods and neither the goods had been supplied nor the money returned, therefore, a clear case of criminal breach of trust was made out. 8. In my view for constituting an offence of criminal breach of trust, the property must have been entrusted for being used in a particular manner and in that manner alone. 9. It is regrettable that after the Court had dictated the facts of the case and contentions by the parties raised in the Court, learned Counsel for the complainant and the applicants were given time to submit their rulings in the chambers of the Court. But, whilst the applicants have submitted some case-laws, none have been furnished on behalf of the complainant. 10. One decision cited by the learned Counsel for the applicants is Inder Mohan Goswami and another v. State of Uttaranchal and others, 2008 (60) ACC 1. In this case it has been held that when a civil suit relating to the same dispute was pending in a competent civil Court initiation of criminal proceedings by the respondents against the applicants amounted to an abuse of the process of the Court. As in the present case no civil suit is said to be pending in any Court, this case is not very relevant on the facts. However, insofar as the case of Inder Mohan Goswami (supra), refers to certain other case viz. As in the present case no civil suit is said to be pending in any Court, this case is not very relevant on the facts. However, insofar as the case of Inder Mohan Goswami (supra), refers to certain other case viz. Madhavrao Jiwajirao Scindia and others v. Sambhajirao Chandrojirao Angre and others, (1988) 2 SCC 692, for the proposition that the prosecution cannot be permitted to be used for an oblique purpose and where a Court is of the view that chances of ultimate conviction are bLeak, it could quash the criminal proceedings at the initial stage itself and in another case in Indian Oil Corporation v. NEPC India Ltd. and others, (2006) 6 SCC 736 , the Apex Court cautioned against the growing tendency in business circles to convert purely civil disputes into criminal cases. The Court further noticed that the prevalent impression that civil law remedy are time consuming and do not adequately protect the interests of the lenders/creditors and deprecated the efforts to settle civil disputes and claims which do not involve any criminal offence by applying pressure through criminal prosecution. In another case cited by the learned Counsel for the applicants, viz. Veer Prakash Sharma v. Anil Kumar Agarwal and another, 2007 (3) JIC 378 (SC), where certain articles had been purchased and two cheques were given which later on were dishonoured, the Court observed that the dispute was essentially of a civil nature are non-payment or underpayment of price of the articles purchased and would not amount to commission of offence of cheating or criminal breach of trust. In another case cited by learned Counsel for the applicants, viz. S.W. Palanitkar and others v. State of Bihar and another, 2002 SCC (Cri) 129, it was observed that mens rea is a necessary ingredient without which breach of trust would not result in criminal breach of trust. It was observed in paragraph 8 of this decision as follows : “8... Every breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a civil Court but a breach of trust with mens rea gives rise to a criminal prosecution as well.” 11. An act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a civil Court but a breach of trust with mens rea gives rise to a criminal prosecution as well.” 11. It was further observed in the said case that there must be a fraudulent or dishonest intention to cheat at the inception and subsequently a mere failure to keep the promise cannot lead to the inference of cheating. Notably in the present case the applicants have not been summoned for offence of cheating but only for criminal breach of trust. In a more pertinent decision in case of State of Gujarat v. Jaswantlal Nathalal, AIR 1968 SC 700 , where cement had been released by the Government to the contractor for the purpose of its being used in connection with the construction works but that was not utilised for the said purpose, it was observed that when the cement was handed over to the contractor, it was a mere transaction of sale to him and did not amount to any entrustment and there was no fiduciary relationship between the Government and the contractor and there was no requirement that the cement was to be used purely for the purpose of construction works. After delivery of the cement the Government had neither any right nor dominion over it. If the purchaser or his representative failed to comply with the requirements of any law relating to cement, he could be prosecuted for the same under the relevant control order but the questionable act could not amount to an offence of criminal breach of trust. 12. On the facts also of the present case, I find that the substantial portion of the goods were supplied often as per the complaint, although the supplies were alleged to be irregular and even after certain supplies was not made against a particular draft, the applicants continued to supply products and drafts were issued by the complainant even on later dates and that it appears that only after the complainant resigned as the agent of the company on 6.9.2000 that he sent a claim of Rs. 1,67,786.20 to the firm through registered letter to the applicants’ regional offices in Kanpur and Delhi and that when the said claims were not met, in a mala fide manner he has lodged the present criminal complaint against the applicants in which they were summoned as above. 13. In this view of the matter, I find that the criminal proceedings to proceed against the applicants would amount to an abuse of the process of the Court. Therefore, this application is allowed and the criminal proceedings taken and non-bailable warrants issued against the applicants in the aforesaid case are hereby quashed. ————