Research › Search › Judgment

Himachal Pradesh High Court · body

2016 DIGILAW 1438 (HP)

State of H. P. v. Bishan Singh

2016-07-20

SURESHWAR THAKUR

body2016
JUDGMENT : Sureshwar Thakur, J. The instant appeal stands directed by the State of Himachal Pradesh against the impugned judgment rendered on 13.03.2007 by the learned Additional Sessions Judge, Shimla, in Cr. Appeal No. 4-R/10 of 04/01, whereby the learned Additional Sessions Judge, Shimla, camp at Rohru, acquitted the respondent (for short ‘accused’) for the offences charged. 2. The brief facts of the case are that respondent accused applied to the ‘Corporation’ for loan to enable him to install a rope way. The loan was sanctioned to him. He executed some documents. So long as the loan was not repaid, as per the terms of the agreement, the appellant could not in any way misappropriate, sell or dispose off in any manner the machinery or accessories, etc. It is alleged against him that in violation of such terms of agreement, he disposed off the machinery, assets, etc. to one Kundan Lal and thereby committed breach of trust, as these assets etc. were in trust with him so long as the loan had not been repaid. At this complaint Ext.PW-1/A was made which resulted into the registration of the F.I.R. After registration of the F.I.R. the matter was investigated. After completing all codal formalities and on conclusion of the investigation into the offence, allegedly committed by the accused challan was prepared and filed in the Court. 3. The accused stood charged for his committing offence punishable under Section 406 of the Indian Penal Code to which he pleaded not guilty and claimed trial. 4. In order to prove its case, the prosecution examined 18 witnesses. On closure of prosecution evidence, the statement of the accused under Section 313 of the Code of Criminal Procedure, was recorded in which he pleaded innocence and claimed false implication. He did not choose to lead any evidence in defence. 5. On an appraisal of evidence on record, the learned Additional Sessions Judge, Shimla returned findings of acquittal in favour of the accused. 6. The learned Deputy Advocate General has concertedly and vigorously contended qua the findings of acquittal recorded by the learned Additional Sessions Judge standing not based on a proper appreciation of evidence on record, rather theirs standing sequelled by gross mis-appreciation of material on record. Hence, he contends qua the findings of acquittal being reversed by this Court in the exercise of its appellate jurisdiction and theirs being replaced by findings of conviction. Hence, he contends qua the findings of acquittal being reversed by this Court in the exercise of its appellate jurisdiction and theirs being replaced by findings of conviction. 7. The learned counsel appearing for the respondent has with considerable force and vigour contended qua the findings of acquittal recorded by the learned Additional Sessions Judge standing based on a mature and balanced appreciation of evidence on record and theirs not necessitating interference, rather theirs meriting vindication. 8. This Court with the able assistance of the learned counsel on either side has with studied care and incision, evaluated the entire evidence on record. 9. The order of acquittal recorded by the learned Additional Sessions Judge, Shimla, would suffer the ill-fate of its reversal by this Court only on invincible evidence existing on record connotative of the accused/respondent not holding absolute title as owner qua a ropeway which stood installed by him on financial assistance standing purveyed to him by H.P. State Financial Corporation (hereinafter referred to as the ‘Corporation’), whereupon hence he would not hold an absolute right of alienating it dehors his not repaying to the financial institution concerned the entire component of loan borrowed by him also would sequel a conclusion from this Court of with his not holding absolute dominion qua the property concerned whereupon the concomitant conclusion of its standing entrusted to him or his holding it in trust would stand engendered. However, with evidence standing evinced qua the factum of its standing not entrusted to him, the charge of his committing viz-a-viz it the offence of criminal breach of trust would founder. The learned First Appellate Court had acquitted the accused by applying the ratio of the judgment reported in State of Gujarat Vs. Jaswant Lal Nathalal, AIR 1968 Supreme Court 700. Thereupon it concluded with no inference of entrustment standing garnered from the evidence on record the charge against the accused qua his committing criminal breach of trust vis-a-vis it stood capsized. Hereat it is imperative to allude qua the prime factum qua the learned First Appellate Court while relying upon the afore referred verdict of the Hon’ble Apex Court its misapplying it vis-a-vis the factual matrix hereat. Hereat it is imperative to allude qua the prime factum qua the learned First Appellate Court while relying upon the afore referred verdict of the Hon’ble Apex Court its misapplying it vis-a-vis the factual matrix hereat. The apparent fact which imminently upsurges on a reading of the judgment of the Hon’ble Apex Court, as stood relied upon by the learned First Appellate Court to record findings of acquittal qua the accused, is of thereat the Government selling cement to the Contractor concerned. The Apex Court had hence held of with the Contractor thereat holding absolute dominion over it negated any inference of the property thereat standing entrusted to the accused therein hence rendering his dealing with it even in infraction of the relevant regulations to be not rendering him to be amenable for conviction qua his committing an offence punishable under Section 409 IPC. Preponderantly when the charge for commission of an offence constituted under the afore referred penal provision would succeed on adduction of clinching proof qua the accused not holding any absolute dominion qua it whereat with the contractor thereat holding absolute dominion qua the property thereat reiteratedly the charge framed against him under Section 409 IPC warranted its standing not countenanced. Contrarily hereat the accused/respondent had borrowed a loan from the ‘Corporation’. He despite his not defraying to it the entire component of loan, proceeded to alienate it. The trite conundrum which is to be put at rest is whether the loanee from the ‘Corporation’ during the currency of the loan holds absolute dominion qua the property which stands installed by him on finance standing purveyed to him by the ‘Corporation’. Unfoldments occur in Ext.P-1 of the respondent/accused acquiescing to till his defraying to it the entire component of loan borrowed for the relevant purpose by him from it, his holding the relevant property as a trustee vis-a-vis the ‘Corporation’. The learned counsel appearing for the respondent/accused has contended, of dehors the relevant unfoldments occurring in Ext.P-1 unveiling of the respondent/accused holding the relevant property as a trustee vis-a-vis. the ‘Corporation’ nonetheless given the verdict of the Hon’ble Apex Court reported in Indian Oil Corporation vs. NEPC India Ltd. and others (2006) 6 SCC 736 , relevant paragraphs whereof stand extracted hereinafter:- “26. The question directly arose for consideration in Central Bureau of Investigation v. Duncans Agro Industries Ltd., Calcutta. the ‘Corporation’ nonetheless given the verdict of the Hon’ble Apex Court reported in Indian Oil Corporation vs. NEPC India Ltd. and others (2006) 6 SCC 736 , relevant paragraphs whereof stand extracted hereinafter:- “26. The question directly arose for consideration in Central Bureau of Investigation v. Duncans Agro Industries Ltd., Calcutta. It related to a complaint against the accused for offences of criminal breach of trust. It was alleged that a floating charge was created by the accused debtor on the goods by way of security under a deed of hypothecation, in favour of a bank to cover credit facility and that the said goods were disposed of by the debtor. It was contended that the disposal of the goods amounted to criminal breach of trust. Negativing the said contention, this Court after stating the principle as to when a complaint can be quashed at the threshold, held thus :- "...a serious dispute has been raised by the learned counsel as to whether on the face of the allegations, an offence of criminal breach of trust is constituted or not. In our view, the expression 'entrusted dominion over property' has been used in a wide sense in Section 405, I.P.C. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of in violation of law or in violation of contract. The expression 'entrusted' appearing in Section 405, IPC is not necessarily a term of law. It has wide and different implications in different contexts. It is, however, necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. The expression 'trust' in Section 405, IPC is a comprehensive expression and has been used to denote various kinds of relationship like the relationship of trustee and beneficiary, bailor and bailee, master and servant, pledger and pledgee. When some goods are hypothecated by a person to another person, the ownership of the goods still remains with the person who has hypothecated such goods. When some goods are hypothecated by a person to another person, the ownership of the goods still remains with the person who has hypothecated such goods. The property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in other person and the offender must hold such property in trust for such other person or for his benefit. In a case of pledge, the pledged article belongs to some other person but the same is kept in trust by the pledge. In the instant case, a floating charge was made on the goods by way of security to cover up credit facility. In our view, in such case for disposing of the goods covering the security against credit facility, the offence of criminal breach of trust is not committed." (Emphasis supplied.) 27. The allegations in the complaints are that aircrafts and the engines fitted therein belong to NEPC India, and that a charge was created thereon by NEPC India, in favour of IOC, by way of hypothecation to secure repayment of the amounts due to IOC. The terms of hypothecation extracted in the complaint show that the ownership and possession of the aircrafts continued with NEPC India. Possession of the aircraft, neither actual nor symbolic, was delivered to IOC. NEPC India was entitled to use the aircraft and maintain it in good state of repairs. IOC was given the right to take possession of the hypothecated aircrafts only in the event of any default as mentioned in the Hypothecation Deed. It is not the case of the IOC that it took possession of the aircraft in exercise of the right vested in it under the Deed of Hypothecation. Thus, as the possession of the aircraft remained all alongwith NEPC India in its capacity as the owner and the Deed of Hypothecation merely created a charge over the aircrafts with a right to take possession in the event of default, it cannot be said that there was either entrustment of the aircrafts or entrustment of the dominion over the aircrafts by IOC to NEPC India. The very first requirement of Section 405, that is the person accused of criminal breach of trust must have been "entrusted with the property" or "entrusted with any dominion over property" is, therefore, absent.” of the accused/respondent in tandem with the apposite manifestations occurring therein holding as unfolded in Ext.P-1, it, as a hypothecatee vis-a-vis. the Corporation, capacity whereof of his holding it, stands mandated therein, to exclude its holding by the accused from the ambit of its standing entrusted to him concomitantly also renders him unamenable to face an order of conviction. However, the reliance placed by the learned counsel for the respondent upon the afore referred verdict of the Hon’ble Apex Court is misplaced. The reason for distinguishing the judgment relied upon by the learned counsel for the respondent vis-a-vis the factual matrix hereat is of (a) in Clause 5 of exhibit thereof which stands extracted hereinafter, “I also agree that nothing contained in this agreement cum undertaking shall effect or prejudice the rights or power available to the Corporation under the provisions of the State Financial Corporation Act, 1951 or in terms of the loan documents executed by me or under the H.P. Public Moneys Recovery of Dues Act, 1973 ( as amended from time to time) for the recovery of its outstanding dues or invoke Section 29 of the said SFCs Act, 1951and take possession of the unit alongwith all the machineries and accessories thereof. the accused/respondent reserving besides vesting in the ‘Corporation’ rights in tandem also in concurrence with the statutory rights embodied in it by Section 29 of the State Financial Corporations Act, 1951 provisions whereof also stand extracted hereinafter: “29. Right of Financial Corporation incase of default :- (1) Where any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof 1[or in meeting its obligations in relation to any guarantee given by the corporation] or otherwise fails to comply with the terms of its agreement with the Financial Corporation the Financial Corporation shall have the 2[right to take over the management or possession or both] of the industrial concern], as well as the fright to transfer by way of lease or sale] and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation. (2) Any transfer of property made by the Financial Corporation, in exercise of its powers under sub-section (1), shall vest in the transferee all rights in or to the property transferred [as if the transfer] had been made by the owner of the property. (3) The Financial Corporation shall have the same rights and powers with respect to goods manufactured or produced wholly or partly from goods forming part of the security held by it as it had with respect to the original goods. (4) Where any action has been taken against and industrial concern] under the provisions of sub-section (1), all costs, [charges and expenses which in the [as incidental thereto,] shall be recoverable from the industrial concern and the money which is received by it shall in the absence of any contract to the contrary, be held by it in trust to be applied firstly, in payment of such costs, charges and expenses and, secondly in discharge of the debt due to the Financial Corporation and the residue of the money so received shall be paid to the person entitled thereto.] (5) [Where the Financial Corporation has taken any action against and industrial concern] under the provisions of sub-section (1), the Financial Corporation shall be deemed to be the owner of such concern for the purposes of suits by or against the concern, and shall sue and sued in the name of the concern]”. A perusal whereof display qua a scenario unravelling of its loanee omitting to defraying to it the entire component of loan borrowed by him from it, its thereupon holding the right to take over the management and possession of the relevant property installed by the accused/respondent on finance standing purveyed to him by it besides its standing vested with a statutory rights to transfer it by lease or sale besides its holding a statutory leverage to realize the property pledged, mortgaged, hypothecated or assigned to the ‘Corporation’. With the aforesaid statutory rights or dominion standing preserved in the ‘Corporation’ qua property installed by the respondent on finance standing purveyed to him by it, galvanizes an unflinching inference of no right of dominion much less absolute title subsisting in the accused/respondent during the currency of the loan borrowed by him from it. With the aforesaid statutory rights or dominion standing preserved in the ‘Corporation’ qua property installed by the respondent on finance standing purveyed to him by it, galvanizes an unflinching inference of no right of dominion much less absolute title subsisting in the accused/respondent during the currency of the loan borrowed by him from it. Consequently, with the respondent/accused herein also accepting the recitals occurring in Ext.P-1 wherein their occurs a display of his accepting the play of Section 29 of the Act, as a corollary, when the provisions of Section 29 of the Act disentitle the accused/respondent to espouse qua his holding any dominion qua the relevant property till he liquidates the entire component of loan borrowed by him from the ‘Corporation’ wherefrom a firm conclusion stands aroused of his holding it as a trustee vis-a-vis. the ‘Corporation’ dehors any employment in Ext.P-1 of his hypothecating it in favour of the ‘Corporation’ especially when sub section 1 of Section 29 of the Act preserves in the ‘Corporation’ a right to yet realize it even when its stand hypothecated, implication whereof is of till the entire component of loan stands liquidated by the respondent to it, the borrower standing statutorily barred to stake any absolute dominion vis-a-vis it. Predominantly with statutory trammels fettering the user of the relevant property by the respondent/accused at par with or in compatibility with rights of a person or an entity holding absolute dominion vis-a-vis it, constrains this Court to conclude of reverence standing enjoined to be imputed to the statutory fetter fastened upon rights exercisable thereupon by its loanee. Predominantly with statutory trammels fettering the user of the relevant property by the respondent/accused at par with or in compatibility with rights of a person or an entity holding absolute dominion vis-a-vis it, constrains this Court to conclude of reverence standing enjoined to be imputed to the statutory fetter fastened upon rights exercisable thereupon by its loanee. Unless the aforesaid parlance stands imputed to the provisions of sub section 1 of Section 29 of the Act whereupon hence the accused respondent stands de-facilitated to canvass of his holding absolute domain qua the relevant property which stood installed by him on finance standing purveyed to him by the ‘Corporation’ also he stands disabled to canvass of his act of alienating it even during the currency of the loan borrowed by him from it, not standing imbued with any penal vice, it would encourage alike defaulters of loans vis-a-vis the ‘Corporation’, to in the garb of theirs preparing a hypothecation deed vis-a-vis the relevant property to proceed to alienate it on the anvil of the judgment of the Apex Court relied upon by the learned counsel for the respondent/accused, hence causing immense financial loss to the ‘Corporation’ besides would also denude the play of sub section 1 of Section 29 of the Act, provisions whereof fetter the loanee to during currency of the loan alienate it. Contrarily when a reading thereof purveys a meaning of till the liquidation of the apposite loan by the borrower occurs, his holding it not as an absolute owner rather as a trustee vis-a-vis the ‘Corporation’. Consequently, with the aforesaid parlance standing imputed to sub section 1 of Section 29 of the Act parlance whereof erodes the effect hereat of the rendition of the Hon’ble Apex Court besides renders it distinguishable hereat. In aftermath, with the accused/respondent holding the relevant property as a trustee vis-à-vis the ‘Corporation’ his proceeding to alienate it dehors his not liquidating his financial liability vis-à-vis the ‘Corporation’ renders him amenable to face conviction for a charge under Section 406 IPC. 10. For reasons which stands recorded hereinabove, this Court holds that the learned Additional Sessions Judge has not appraised the entire evidence on record in a wholesome and harmonious manner apart therefrom the analysis of the material on record by the learned Judge suffers from perversity or absurdity of mis-appreciation and non appreciation of evidence on record. 10. For reasons which stands recorded hereinabove, this Court holds that the learned Additional Sessions Judge has not appraised the entire evidence on record in a wholesome and harmonious manner apart therefrom the analysis of the material on record by the learned Judge suffers from perversity or absurdity of mis-appreciation and non appreciation of evidence on record. In aftermath this Court deems it fit and appropriate that the findings of acquittal recorded by the learned Additional Sessions Judge, Shimla camp at Rohru, merit interference. 11. In view of the above discussion, I find merit in this appeal, which is accordingly allowed and the judgment of acquittal rendered by Additional Sessions Judge, Shimla camp at Rohru, is set-aside and the judgment of conviction and sentence recorded against the accused by the learned trial Court is maintained and affirmed. Bail bonds, if any, furnished by the accused stand cancelled. He be taken into custody forthwith to suffer the sentence. Necessary follow up action be taken by the Registry forthwith.