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2019 DIGILAW 322 (MAD)

V. Srinivasan v. State Rep. by Inspector of Police, District Crime Branch, Tiruvarur

2019-01-31

N.ANAND VENKATESH

body2019
ORDER : Prayer: Criminal Original Petition filed under Section 482 of Cr.P.C. to call for the entire records pertaining to the case in Crime No. 11 of 2017 on the file of the Inspector of Police, District Crime Branch, Thiruvarur District and quash the same. 1. This petition has been filed seeking to quash the FIR in Cr. No. 11 of 2017 pending investigation before the first respondent police. 2. The FIR has been registered for an offence under Sections 406 and 420 IPC. The allegations that have been made in the complaint, is that the second respondent had inducted these petitioners as partners in the year 2017 for his jewel business. The entire business was conducted by these petitioners and in the course of doing business, it is alleged that they have committed mis-management as a result of which, there was a loss suffered in the business. Thereafter, the defacto complainant had instructed the petitioners not to proceed further with the administration of the business. But, however, the petitioners continued to take control of the business and there by the defacto complainant has lost his entire investments made in the business. 3. The learned counsel for the petitioners submitted that admittedly, the petitioners and the defacto complainant are the partners in the partnership firm. In order to constitute the offence of the criminal branch of trust under Section 409 IPC, there must be a special entrustment specifically alleged in the complaint, failing which the offence itself will not be made out. In order to substantiate his arguments, the learned counsel for the petitioner relied upon the judgment of the Hon'ble Supreme Court in Velji Raghavji Patel vs. State of Maharashtra, AIR 1965 SC 1433 . This judgment has subsequently been followed by this Court in the judgment reported in C.R. Rajesh vs. M/s. Jaibula Home Private Limited, 1998 Criminal Law Journal 2978. 4. Heard the learned counsel for the petitioner and the learned Additional Public Prosecutor on behalf of the first respondent. 5. The only issue that has to be considered by this Court, is as to whether on the basis of the allegations made in the complaint, offence have been made out in Sections 406 and 420 IPC. It will be relevant to rely upon the judgment of the Hon'ble Supreme Court in Velji Raghavji Patel vs. State of Maharashtra, AIR 1965 SC 1433 . It will be relevant to rely upon the judgment of the Hon'ble Supreme Court in Velji Raghavji Patel vs. State of Maharashtra, AIR 1965 SC 1433 . The relevant portion of the judgment is extracted hereunder:- “(5) On behalf of the appellant it is contended that even if the prosecution had succeeded in showing that the four items referred to above were realised by the appellant and that he has not accounted for them properly he will not be liable for accounted for them properly he will not be liable for criminal breach of trust under Section 409 IPC. But that his liability would be only a of a civil nature. In support of this contention reliance is placed upon Bhuban Mohan Rana vs. Surendra Mohan Das, ILR (1952) 2 Cal. 23 : AIR 1951 Cal. 69 (FB). There the following question was referred for decision by the Full Bench: Can a charge under Section 406 of the Indian Penal Code be framed against a person, who, according to the complainant, is a partner with him and is accused of the offence in respect of property belonging to both of them as partners? All the five Judges constituting the Full Bench answered the question in the negative. In the leading judgment which was delivered by Harris, C.J. he pointed out that before criminal breach of trust is established it must be shown that the person charged has been entrusted with property or with dominion over property and that a partner does not, in the ordinary course, hold property in fiduciary capacity. The learned Chief Justice further pointed out that there is really no distinct or defined share of a partner in any item belonging to the partnership. Upon the dissolution of the partnership and after an account is taken it may turn out that a partner who retains an asset is entitled to the whole of the asset and may be, much more. He referred to the English view that a partner does not hold money belonging to the partnership in a fiduciary capacity and said that this view appeared to him to be correct. He referred to the English view that a partner does not hold money belonging to the partnership in a fiduciary capacity and said that this view appeared to him to be correct. Referring to the decision in The Queen vs. Okhoy Coomar Shaw, 13 Beng LR 307, in which a Full Bench had held that a partner who dis-honestly misappropriates or converts to his own use any of the partnership property with which he is entrusted or over which he has dominion, is guildy of an offence under Section 405 IPC, Harris, C.J. observed: “The Full Bench never seems to have considered that there is really no partners share in the property until an account (sic) and it may well be that a partner, who retains an asset, is entitled not only to his share according to the partnership agreement in that asset, but, on taking an account, it may be found that he is entitled to the whole of the asset and considerably more. In such a case, how can it be said that he has been guilty of a breach of trust and has acted dishonestly towards the co-partners, if an account would show that he was entitled to everything which he had retained?” (8)........It is obvious that an owner of property in whichever way he uses his property and with whatever intention will not be liable for misappropriation and that would be so even this is not the exclusive owner thereof. As already stated, a partner has, undefined partnership along with the other partner over all the assets of the partnership. If he chooses to use any of them for his own purposes he may be accountable civilly to the other partners. But he does not thereby commit any misappropriation. Mr. Chatterjee's alternative contention must be rejected.” 6. It is clear from above Judgment that a partner has an undivided owner ship along with the other partners over all the assets of the partnership firm. If a partner chooses to use any of them for his own purposes, he may be accountable Civilly to the other partners and the same will not amount to misappropriation. 7. This judgment will squarely apply to the facts of the case. There is absolutely no material to show that there was any special entrustment made by the second respondent to the petitioners. 8. 7. This judgment will squarely apply to the facts of the case. There is absolutely no material to show that there was any special entrustment made by the second respondent to the petitioners. 8. Therefore, even if the allegations made in the complaint are taken as it is, it does not make out any offence under Sections 406 and 420 IPC. 9. In the result, the FIR in Cr. No. 11 of 2017 on the file of the Inspector of Police, District Crime Branch, Thiruvarur District is hereby quashed and the Criminal Original Petition is allowed.