2014 (10) TMI 1043 - SC - Indian Laws

Retention of bill amount payable to Respondent No. 2 - criminal complaint for criminal breach of trust - charges Under Section 406 Indian Penal Code - HELD THAT - In proceedings instituted on criminal complaint exercise of the inherent powers to quash the proceedings is called for only in case where the complaint does not disclose any offence or is frivolous. It is well settled that the power Under Section 482 Code of Criminal Procedure should be sparingly invoked with circumspection it should be exercised to see that the process of law is not abused or misused. The settled principle of law is that at the stage of quashing the complaint/FIR the High Court is not to embark upon an enquiry as to the probability reliability or the genuineness of the allegations made therein. Section 420 Indian Penal Code deals with cheating. Essential ingredients of Section 420 Indian Penal Code are (i) cheating; (ii) dishonest inducement to deliver property or to make alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security and (iii) mens rea of the accused at the time of making the inducement. In the present case looking at the allegations in the complaint on the face of it there are no allegations are made attracting the ingredients of Section 405 Indian Penal Code. Likewise there are no allegations as to cheating or the dishonest intention of the Appellants in retaining the money in order to have wrongful gain to themselves or causing wrongful loss to the complainant - Excepting the bald allegations that the Appellants did not make payment to the second Respondent and that the Appellants utilized the amounts either by themselves or for some other work there is no iota of allegation as to the dishonest intention in misappropriating the property. Since no case of criminal breach of trust or dishonest intention of inducement is made out and the essential ingredients of Sections 405/420 Indian Penal Code are missing the prosecution of the Appellants Under Sections 406/120B Indian Penal Code is liable to be quashed - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Whether the charges under Section 406 IPC and the criminal complaint for criminal breach of trust for allegedly retaining the bill amount payable to Respondent No. 2 are liable to be quashed.

Issue-wise Detailed Analysis:

1. Background and History of the Dispute:
The dispute revolves around the non-payment of a bill amounting to Rs. 34,505/- related to a contract executed by the second Respondent for the construction of a building at K.S.S. College, Lakhisarai, a constituent unit of Tilka Manjhi Bhagalpur University. The second Respondent claimed that due to delays in receiving money and materials, the work was not completed on time. The University terminated the contract and promised to release all dues after consultation with the College Development Committee. However, only Rs. 14,000/- was paid, and the balance of Rs. 34,505/- was withheld. Aggrieved, the second Respondent filed a criminal complaint alleging criminal breach of trust.

2. Appellants' Defense:
The Appellants, who were officials of the college, filed an application under Section 227 CrPC seeking discharge from the criminal case, which was dismissed by the Sub Divisional Judicial Magistrate. They then filed a petition under Section 482 CrPC before the Patna High Court to quash the order, which was also dismissed. The Appellants contended that the withholding of payment was directed by the Vice-Chancellor and lacked any dishonest intention, thus not constituting misappropriation under Section 406 IPC.

3. Respondents' Argument:
The Respondents argued that the Magistrate had found a prima facie case against the Appellants based on witness examination and that the High Court rightly dismissed the petition for quashing the proceedings. They asserted that the Appellants, with malafide intent, withheld the dues, constituting criminal breach of trust.

4. Legal Principles on Quashing Proceedings:
The Supreme Court reiterated the principles for exercising inherent powers under Section 482 CrPC to quash proceedings, emphasizing that such powers should be used sparingly and only when the complaint does not disclose any offense or is frivolous. The Court referred to precedents, including Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi and Indian Oil Corporation v. NEPC India Ltd., outlining scenarios where quashing is justified, such as when allegations are absurd, inherently improbable, or when the complaint suffers from fundamental legal defects.

5. Examination of Allegations:
The Court examined whether the allegations in the complaint, taken at face value, constituted the offense of criminal breach of trust under Section 406 IPC. It noted the essential ingredients of the offense, including dishonest misappropriation of entrusted property. The Court found that the allegations lacked specifics on dishonest intention or misappropriation by the Appellants.

6. Civil vs. Criminal Remedies:
The Court observed that the dispute primarily involved non-payment of a bill, which had already been addressed through civil remedies. The parties had pursued civil suits for recovery of the amounts, indicating that the matter was essentially civil in nature. The Court emphasized that criminal proceedings should not be used as a shortcut for civil remedies.

7. Conclusion and Decision:
The Supreme Court concluded that the allegations did not make out a case of criminal breach of trust or cheating, as the essential ingredients of dishonest misappropriation and inducement were missing. It held that the prosecution under Sections 406/120B IPC was liable to be quashed. The impugned order of the High Court was set aside, and the appeal was allowed, with the parties being directed to pursue their remedies in the pending civil suits.

Final Judgment:
The Supreme Court allowed the appeal, quashing the criminal proceedings against the Appellants under Sections 406/120B IPC, and directed the parties to resolve their dispute through the ongoing civil litigation.

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