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TMI Blog1986 (3) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No. 2 in all the above mentioned revision petitions) comprising Suresh Kumar, Mukesh Kumar and Yogesh Kumar, sons of Rajender Kumar, was carrying on business of re-rolling as conversion agents for the Company. The precise nature of the business was that the company used to send tested steel billets from time to time to respondent No. 2 for conversion into Tiscon Bars. During the course of stock checking of respondent No. 2 by the officials of the Company in February 1979, certain shortages of the stock of Tiscon ban were detected. The same were estimated to be worth ₹ 10,22,458.00 Suresh Kumar, husband of respondent No. 1 was the managing partner of respondent No. 2 at that time. The Company sought to fasten criminal liability on respondent No. 2 for alleged misappropriation of the Tiscon bars found short at the time of checking. Eventually a settlement was arrived at between the parties which culminated in agreement of pledge of movables, viz. diamond jewellery etc., dated 23rd February, 1979. The said agreement was executed between respondent No. 2 on the one hand and the Company on the other, the latter being represented through P.S. Prasad. Under the said agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery valuable diamond jewellery (as detailed in annexure 'A' to the complaint) with the Company although it was her Istridhan and its value was estimated at a very low figure of ₹ 3.72 lakhs. The main reason for the shortage found in the stock of Tiscon bars was said to be supply of raw material of different specifications due to mis-management at the end of the Company which resulted in higher wastage. It was further averred that the parties had agreed that the final amounts due to the Company would be ascertained after going into the accounts of both the partial because the Company had yet to make payment on account of bundling, bending and conversion charges etc. to respondent No. 2 on the basis of the bills submitted to the Company. Further, an assurance was given by P.S. Prasad, accused No. I, to the husband of respondent No. I that the pledged jewellery would not be old and it was being delivered to the Company only by way of collateral security. However ,the respondents were shocked to learn on receipt of letter dated 8th December, 1979 of the Company, accused No. 2, that the pledged jewellery had since been disposed of by auction on 29th November, 1979. The pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x months of the agreement failing which it was permissible to the petitioners to dispose of the pledged jewellery by sale/auction. Therefore, on failure of respondent No. 2 to pay the balance amount despite service of notice of demand dated 28th August, 1979 as stipulated in the agreement the jewellery pledged with them was liable to be sold on 12th September, 1979, annexure 'D' of Cr R. No. 178/82 being copy of the said notice. Even then the petitioner did not dispose of the pledged jewellery by auction but waited until 29th November, 1979 when the same was sold by auction to M/s. Shri Ram Hari Ram, Jewellers, for a sum of ₹ 4.40 lakhi which was much more than its estimated value which was got done by Suresh Kumar through M/s. Nathu Mal Sons, approved valuers and jewellers. It is also pointed out that respondent No. 1 was neither a privy to the agreement of pledge nor was she a party to the handing over of the jewellery which was admittedly done by her husband, Suresh Kumar as Managing Partner of respondent No. 2. Unfortunately, however, the learned Magistrate without taking notice of all these salient features of the case hastened to issue process against the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther words, every offence of criminal breach of trust involves a civil wrong in respect of which the complainant may seek redress in a civil court but every breach of trust in the absence of requisite means read is not criminal. As observed by the Supreme Court in Jaswantrai Manilal Akhaney v. The State of Bombay. 1956 CriLJ 1116: THE same set of facts may give rise both to a civil liability and a criminal prosecution. But if there is no means rea, or if the other essential ingredients of an offence are lacking, the same facts may not sustain a criminal prosecution, though a civil action may lie . (8) So, dealing with cases of criminal breach of trust the difference between civil and criminal liability must be borne in mind. (9) On a plain reading of Section 405 which defines criminal breach of trust, it is manifest that the following ingredients must be satisfied before the offence can amount to criminal breach of trust : (I) the accused must have been entrusted with property or with dominion over property; (ii) the accused must have misappropriated or converted to his own use that property or used or disposed of that property in violation of any direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the pledger were to be kept by the pledgee Bank charged with the payment of an amount up to a certain limit as may from time to time have been advanced or be advanced to the pledger Bank under the overdraft arrangement. However, the pledgee Bank had no right to deal with the securities by way of pledge, sub-pledge or assignment until certain contingencies contemplated in the contract had arisen. The Supreme Court held that the contract did create a trust in favor of the pledger Bank in respect of pledged securities. Their Lordships observed that : When Section 405 which defines criminal breach, of trust speaks of a person being in any manner entrusted with property, it does not contemplate the creation of a trust with all the technicalities of the law of trust. It contemplates the creation of a relationship whereby the owner of property makes it over to another person to be retained by him until a certain cogency arises or to be disposed of by him on the happening of a certain event. The person who transfers possession of the property to the second party still remains the legal owner of the property and the person in whose favor possession is so transferred has only the custody ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter to be gone into at the stage of enquiry/trial and not by this Court while hearing this petitioner under Section 482 of the Code of Criminal Procedure (hereinafter referred to as 'the Code'). It may be, however, pertinent to notice here that the alleged notices were issued to Suresh Kumar and not to respondent No. 2 who was the pawner, while Suresh Kumar was only acting as managing partner on its behalf. The learned counsel for the respondents has also drawn my attention to the facts that both the notices did not conform to the specific stipulation in the agreement of pledge that pawnee would give a notice of 15 clear days of the sale to the pawner. Thus, according to the respondents, there was no compliance with the terms and conditions of the contract. (17) Still worse, it would appear that letter dated 23rd November, 1979 of respondent No. 2 (Ex. Public Witness 2/C) was only received by the petitioners. The said letter has been acknowledged by the petitioners in their letter dated 8th December, 1979, annexure 'E' to the complaint. If that be so, it is not intelligible as to what was the hurry in disposing of a valuable security like diamond jewellery. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers under Section 482 of the Code to quash a First Information Report or a complaint is very limited. It is well settled by long catena of decisions of the Supreme Court that it has no jurisdiction to examine the correctness or otherwise of the allegations. The High Court would be justified in quashing the complaint and the proceedings only if no offence is made out on the allegations made in the complaint or documents accompanying it per se. In Smt. Nagawwa (supra) the Supreme Court considered the scope of Sections 202 and 204 of the Code and while laying down the guidelines and the grounds on which the proceedings could be quashed by the High Court, it observed as follows :- THUS it may be safely held that in the following cases an order of the Magistrate issuing process against the accused can be quashed or set aside: (1) Where the allegations made in the complaint or the statement of the witnesses recorded in support of the same taken at their face value make out absolutely no case-against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused ; (2) Where the allegations made in the complaint are pat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is thit taking the allegations and the complaint as they are, without adding or subtracting anything, if no offence is made out then the High Court would be justified in quashing the proceedings in the exercise of its powers under Section 482 of the Code. Unfortunately for the petitioners the allegations made in the complaint in the present case and the documents accompanying the same are quite clear and specific. They prima facie constitute an offence under Section 406, Indian Penal Code. at least against the petitioner Rusi Mody, who was the Managing Director of the Company at the relevant time and as such was in overall charge and control of all the affairs of the Company, P.S. Prasad and Sujit Gupta, who were actually handling affairs of the Company and dealing with the case of the respondent No. 2. It is, however, highly doubtful that the petitioner J.R.D Tata, who was the Chairman of the Company, would have the knowledge of this episode although there is an allegation to that effect in the complaint and in the testimony of Public Witness 2 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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