{"id":153343,"date":"2010-08-09T00:00:00","date_gmt":"2010-08-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/arun-kumar-sharma-vs-the-state-of-bihar-amp-anr-on-9-august-2010"},"modified":"2017-08-25T03:13:57","modified_gmt":"2017-08-24T21:43:57","slug":"arun-kumar-sharma-vs-the-state-of-bihar-amp-anr-on-9-august-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/arun-kumar-sharma-vs-the-state-of-bihar-amp-anr-on-9-august-2010","title":{"rendered":"Arun Kumar Sharma vs The State Of Bihar &Amp; Anr on 9 August, 2010"},"content":{"rendered":"
Patna High Court – Orders<\/div>\n
Arun Kumar Sharma vs The State Of Bihar &Amp; Anr on 9 August, 2010<\/div>\n
        IN THE HIGH COURT OF JUDICATURE AT PATNA\n\n                  Cr.Misc. No.15413 of 2010\n           ARUN KUMAR SHARMA @ ARUN SHARMA\n                           & ORS\n                            Versus\n                  STATE OF BIHAR & ANR\n                             With\n                  Cr.Misc. No.44542 of 2009\n\n                      ARUN KUMAR SHARMA\n                                  Versus\n                    THE STATE OF BIHAR & ANR\n                                 -----------\n      For the Petitioners : Sarvashri Birendra Kumar Sinha,\n                                        Senior Advocate\n                                        Alok Kumar Sinha,\n                                        Advocate.\n      For the State        : Shri Dashrath Mehta, APP\n      For the O.P. No.2 : Shri Baxi S.R.P. Sinha, Sr. Advocate\n                                   -------\n                                ORDER\n<\/pre>\n
      The two petitions have been heard together as facts of the two<\/p>\n
cases from which they arise, in most of their parts, are common and most<\/p>\n
of them are also admitted and the two are being disposed of by the<\/p>\n
present common order.\n<\/p>\n
      The petitions relate to complaint petitions filed by a single<\/p>\n
complainant, namely, Prakash Chandra Gupta who has claimed himself<\/p>\n
to be the sole owner and proprietor of a firm named and styled as M\/s<\/p>\n
Hanuman Ram Mahavir Ram Traders, its registered office being in<\/p>\n
Mirganj (Gopalganj). As regards the accused persons in the two<\/p>\n
petitions, petitioner Arun Kumar Sharma (Cr. Misc. No. 44542 of 2009)<\/p>\n
is an accused common in both the complaint petitions which were filed<\/p>\n
by the complainant Prakash Chandra Gupta vide Complaint Case no.<\/p>\n
1277 of 2009 and 2744 of 2009. In fact, all the petitioners in Cr. Misc.
\n                                    2<\/span><\/p>\n
No. 15413 of 2010 also figured as accused in the earlier petition of<\/p>\n
complaint bearing number 1277 of 2009, but none except petitioner<\/p>\n
Arun Kumar Sharma was summoned by order of summoning passed in<\/p>\n
the above noted complaint case on 8.9.2009. The remaining petitioners<\/p>\n
of Cr. Misc. No. 15413 of 2010 have been summoned in Complaint<\/p>\n
Petition no. 2744 of 2009 by order dated 19.9.2010.            The two<\/p>\n
summoning orders were also similar, as the accused persons of the two<\/p>\n
cases who are the petitioners before this Court, prima facie, appeared to<\/p>\n
the Magistrate who passed the two orders committing offence under<\/p>\n
section 406 of the IPC.\n<\/p>\n
      The admitted fact is that the petitioners were Director or Members<\/p>\n
of the Board of Directors of M\/s Shri Baidyanath Ayurved Bhawan<\/p>\n
Private Limited, Patna. The above noted firm was engaged in<\/p>\n
manufacture of Ayurvedic drugs and was marketing it at the relevant<\/p>\n
time in the undivided State of Bihar through the complainant\u201fs firm. It<\/p>\n
appears that after separation of the State of Jharkhand from Bihar, the<\/p>\n
manufacturer-company requested the complainant\u201fs firm to take up the<\/p>\n
sales of its products within the territory of Jharkhand and, accordingly,<\/p>\n
an agreement was reached (Annexure 2 to both the petitions) and that<\/p>\n
was signed by the representatives of the two sides. Some terms of<\/p>\n
business were settled down between the parties and those are stated in<\/p>\n
various paragraphs of the written agreement. The grievance of the<\/p>\n
complainant is confined to the terms which appeared in paragraph 19 of<\/p>\n
Annexure 2.\n<\/p>\n
                                     3<\/span><\/p>\n
      Complaint Case no. 1277 of 2009<\/p>\n
      It was alleged by the complainant in the aforesaid complaint that<\/p>\n
as per the agreement reached between the parties, the complainant\u201fs firm<\/p>\n
carried on the marketing of the products of the manufacturers within the<\/p>\n
territory of the State of Jharkhand after its creation in the year 2000 and<\/p>\n
invested a huge sum of money in it. All on a sudden, on 1.4.2009, the<\/p>\n
manufacturing company closed down its business in the territory of<\/p>\n
Jharkhand and as per the balance sheet of accounts paid Rs.32,51,885\/-<\/p>\n
to one of the agents of the complainant D.N. Shrivastava. But, while<\/p>\n
settling the accounts in terms of the business, the firm of the accused<\/p>\n
persons misappropriated the money which was to be paid to the<\/p>\n
complainant for carrying out the business from his establishment at<\/p>\n
Mirganj and wrongly incorporated the same with dishonest intention in<\/p>\n
the balance sheet of accounts (Annexure 4 to the petitions) and thus,<\/p>\n
misappropriated the amount which was due to be paid to the<\/p>\n
complainant. It is stated by the complainant that the manufacturing<\/p>\n
company stopped dealing with the complainant\u201fs firm at Mirganj since<\/p>\n
1.4.2009 and the firm of the accused persons were obliged to pay him<\/p>\n
Rs.16,45,824, for the payment of which, a notice through the Advocate<\/p>\n
of the complainant was issued on 12.5.2009 and which was responded<\/p>\n
by the firm of the accused persons on 15.5.2009 and in that reply, the<\/p>\n
accused persons pointed out that the balance sheet of account by which<\/p>\n
Rs.32,51,885 was paid to the complainant through its agent D.N.<\/p>\n
Shrivastava, was the accumulated payment of all the dues to the
\n                                       4<\/span><\/p>\n
complainant and there was nothing due to be paid to him. Thus, in the<\/p>\n
facts of the above noted complaint case, the complainant claimed that<\/p>\n
the accused persons had misappropriated a sum of Rs.16,45,824 and did<\/p>\n
not pay it in spite of repeated correspondences and requests, as may<\/p>\n
appear from the statements made at page 6 of the complaint petition.<\/p>\n
      Complaint Petition No. 2744 of 2009<\/p>\n
      While making statements of facts and allegations against the<\/p>\n
accused persons, the complainant appears alleging that an amount of<\/p>\n
Rs.10,09,935\/- as charges         were required to be paid by the<\/p>\n
manufacturing firm of the accused persons on account of various charges<\/p>\n
which were required to be paid as per the terms of agreement (Annexure<\/p>\n
4) and in spite of request being personally made by the complainant on<\/p>\n
16.11.2009, the accused persons refused to pay stating that the same had<\/p>\n
already been paid by Annexure 4. The other facts regarding the<\/p>\n
appointment of firm of the complainant and its sales agent for the State<\/p>\n
of Jharkhand and for the State of Bihar through its office at Mirganj and<\/p>\n
Ranchi remained the same as has just been pointed out while stating the<\/p>\n
facts of the earlier complaint petition in the earlier paragraphs.<\/p>\n
      Shri Birendra Kumar Sinha, learned senior counsel appearing on<\/p>\n
behalf of the petitioners in the two petitions, has advanced a common<\/p>\n
argument for seeking the relief of quashing of the two orders summoning<\/p>\n
the two petitioners in the two petitions and thereby the quashing of the<\/p>\n
prosecution launched against them through the two petitions. It was<\/p>\n
contended, while drawing the attention of the court towards some of the
\n                                     5<\/span><\/p>\n
admitted facts, that the complainant\u201fs firm was appointed C & F Agent<\/p>\n
originally for the whole of the State of Bihar and on creation of the State<\/p>\n
of Jharkhand they were requested to carry on the business within the<\/p>\n
territory of Jharkhand through their offices at Ranchi and accordingly, an<\/p>\n
agreement in the form of Annexure 4, was entered into which, indeed,<\/p>\n
set down certain terms of business. However, in due course of time, the<\/p>\n
manufacturing company, M\/s Shri Baidyanath Ayurved Bhawan Private<\/p>\n
Limited, changed its policy of marketing of its products and started<\/p>\n
marketing them through its own branches established in different cities<\/p>\n
including Ranchi and Mirganj and sent a notice of termination of<\/p>\n
agreement by Annexure 3 which is dated 31st December, 2008. It was<\/p>\n
signed by petitioner Arun Kumar Sharma and another office bearer of<\/p>\n
the manufacturer firm, namely, Bikram Sharma. It was indicated in the<\/p>\n
agreement that the management has decided not to continue further the<\/p>\n
agreement dated 25.7.2003 with effect from 1.4.2009 due to their own<\/p>\n
distribution policy and as such the statutory obligation, after assessment<\/p>\n
of sales tax, etc., be completed before the date of termination of<\/p>\n
agreement which was to take effect, as stated above, on 1.4.2009. It was,<\/p>\n
as such, submitted that on the 30th April, 2009 the letter, Annexure 4<\/p>\n
along with the attached account sheet which indicated a total balance of<\/p>\n
dues which was to be paid by the manufacturers to the agent, i.e., the<\/p>\n
notice was sent to the complainant which was accompanied by a cheque<\/p>\n
dated 28.4.2009 of the value of Rs.32,51,885 and accordingly, that<\/p>\n
cheque was received by the appointed agent of the complainant, namely,
\n                                      6<\/span><\/p>\n
Prakash Chandra Gupta namely Sri D.N. Shrivastava. The cheque was<\/p>\n
received on 30th April, 2009 and accordingly, a receipt was granted by<\/p>\n
Annexure 5. It was contended that the facts stated by the complainants in<\/p>\n
the two complaint petitions on the same head of non payment of other<\/p>\n
charges, as might have been admissible under the agreement between the<\/p>\n
parties, also appeared varying. In the earlier complaint case bearing<\/p>\n
number 1277 of 2009 the complainant claimed that the outstanding dues<\/p>\n
which was required to be paid to him, was Rs.16,45,824 but in the next<\/p>\n
complaint he was quantifying the amount at Rs.10,09,925 and was<\/p>\n
making a false, inadmissible claim in spite of having received the total<\/p>\n
settlement amount as per final accounts by Annexure 4, the balance<\/p>\n
sheet of settlement of account. It was submitted that the facts, if taken on<\/p>\n
their face value to be true, may not constitute an offence under section<\/p>\n
406 of the IPC, as firstly, the payments were due to be made by the<\/p>\n
manufacturers only when it could be covered by the terms of agreement<\/p>\n
and if the same were not paid as alleged, then it could be giving rise to a<\/p>\n
civil liability for which the complainant had already filed a suit before a<\/p>\n
competent Civil Court. Secondly, it was submitted, that the offence of<\/p>\n
section 406 IPC may not be constituted on the facts of the case as no<\/p>\n
dishonest intention could be shown part of the petitioners specially when<\/p>\n
the facts are to be tried by a competent Civil Court on account of the<\/p>\n
same being asserted and denied. Shri Sinha submitted that the allegations<\/p>\n
and statements of facts made in the two complaint petitions do not<\/p>\n
constitute the necessary ingredients constituting the offence of section
\n                                      7<\/span><\/p>\n
406 IPC as the facts do not indicate that there was any entrustment of<\/p>\n
any property and secondly, that the property was dishonestly<\/p>\n
misappropriated or brought into personal use of the petitioners by them<\/p>\n
after being entrusted by the petitioners.\n<\/p>\n
      As against the above, Shri Baxi S.R.P. Sinha, learned senior<\/p>\n
counsel appearing for the complainant took me to the two paragraphs of<\/p>\n
Annexure 4, the written agreement admittedly entered into by the two<\/p>\n
sides and, while admitting that for enforcing the terms of contract a suit<\/p>\n
has been filed by the complainant before the competent court of civil<\/p>\n
jurisdiction, submitted that the facts stated in the complaint petition do<\/p>\n
constitute an offence of criminal breach of trust and misappropriation as<\/p>\n
defined by section 405 of the IPC. He read out the contents of the<\/p>\n
complaint petition to me in the above context. It was submitted that the<\/p>\n
notice, Annexure 3, which was terminating the C & F agency of the<\/p>\n
complainant, was confined to Jharkhand and it never spoke about<\/p>\n
Mirganj and, as per paragraph 19 of the agreement, the expenditures<\/p>\n
which were incurred by the complainant on those counts remained<\/p>\n
unsettled. It was contended that without terminating the agreement the<\/p>\n
balance sheet showing the settlement of account, Annexure 4, was<\/p>\n
created in such a way as to indicating the settlement of admissible dues<\/p>\n
of the complainant to the manufacturers and that showed the dishonest<\/p>\n
intent of the accused persons. Shri Sinha placed before me a bench<\/p>\n
decision of this Court reported in 2010(2) PLJR 1029 (Ram Sajjan Sah<\/p>\n
Vs. State of Bihar) to submit that the powers of the court under section
\n                                       8<\/span><\/p>\n
482 of the Code of Criminal Procedure are exceptional powers and those<\/p>\n
could be used very sparingly in rare cases and the present were not the<\/p>\n
petitions in which that special power was required to be used. Shri Sinha<\/p>\n
also placed before me in the above context a decision of the Supreme<\/p>\n
Court rendered in Zandu Pharmaceutical Works Limited Vs. Sharaful<\/p>\n
Haque reported in 2005(1) PLJR 95 (SC) in which it has been held that<\/p>\n
the inherent powers should not be exercised to stifle the legitimate<\/p>\n
prosecution and that the High Court should normally refrain from giving<\/p>\n
a prima facie decision in a case where the entire facts are incomplete and<\/p>\n
hazy. Shri Sinha cited the third decision of the Supreme Court in M\/s<\/p>\n
Indian Oil Corporation Vs. NEPC India Limited 2006 AIR SCW 3830<\/p>\n
where it has been held that where facts constituted both civil and<\/p>\n
criminal liabilities, criminal proceedings could not be terminated by<\/p>\n
virtue of section 482 of the Code of Criminal Procedure. Shri Sinha<\/p>\n
further submitted that the prospective defence has never to be considered<\/p>\n
and the documents which have been annexed as Annexures to the two<\/p>\n
petitions fall in that category of materials and, as such, the orders must<\/p>\n
not be quashed after perusing them.\n<\/p>\n
      There could not be any quarrel with the principle of law that the<\/p>\n
powers of the High Court under section 482 of the Code of Criminal<\/p>\n
Procedure were extraordinary, exceptional powers which have to be used<\/p>\n
very sparingly in rare cases and further that it has never to be used where<\/p>\n
the facts constitute an offence only because the accused might have<\/p>\n
some very strong defence and further because the case may be of such a
\n                                       9<\/span><\/p>\n
class as could be ending in acquittal. The decisions cited by the learned<\/p>\n
counsel for the opposite party take a view, as indicated above and this<\/p>\n
Court is very much aware, that the power is never to be utilized for<\/p>\n
stifling a legitimate prosecution. But, this has also to be kept in mind that<\/p>\n
if the facts admitted directly or obliquely or even the records which are<\/p>\n
produced which are bilateral between the parties to a proceeding<\/p>\n
containing admissions of parties, facts explained away the criminal<\/p>\n
liabilities of the prospective accused who could have been summoned,<\/p>\n
then it may not be a case of putting the accused on trial. In addition to<\/p>\n
the above, it is also a well known legal position that after considering the<\/p>\n
materials produced before it, the court may find it not expedient in the<\/p>\n
interest of justice to allow the continuance of the prosecution, if it comes<\/p>\n
to a conclusion that the very prospect of ultimate conviction of the<\/p>\n
accused could be bleak. The forum of courts are sacrosanct and<\/p>\n
established only for imparting justice. If such a sacrosanct forum is mis-<\/p>\n
utilized or is allowed to be utilized for any oblique purpose, without any<\/p>\n
real cause for setting the criminal law in motion, then it could simply<\/p>\n
breed hardship to a person as his personal liberties and properties may be<\/p>\n
put to jeopardy. This is the reason that the courts have to act, if it appears<\/p>\n
to it, that it was in the interest of justice as also to prevent the abuse of<\/p>\n
the process of the court that the prosecution should not be allowed to<\/p>\n
continue.\n<\/p>\n
      It was rightly contended by Shri Baxi S.R.P. Sinha, learned<\/p>\n
counsel for the opposite party that the prospective defence of the accused
\n                                      10<\/span><\/p>\n
has never to be considered for quashing a proceeding in exercise of<\/p>\n
court\u201fs power under section 482 of the Code of Criminal Procedure. But,<\/p>\n
this has firstly to be found out as to whether the facts which are placed<\/p>\n
on record by the accused, who has been summoned, were really his<\/p>\n
prospective defence or were facts placed so as to explaining away the<\/p>\n
allegations and making out a case as if there was no commission of any<\/p>\n
offence. Such a situation may be available to a court if the accused<\/p>\n
produced before the court the documents which could contain<\/p>\n
admissions of the complainant or which could indicate as to what was<\/p>\n
the real state of affairs as regards the allegations of commission of<\/p>\n
offence. Such admitted facts, if give rise to an inference that the facts<\/p>\n
alleged in the complaint petition in tandem with the facts brought on<\/p>\n
record by the accused through some admitted statements or documents<\/p>\n
specially in a case of commercial transaction, did not constitute an<\/p>\n
offence and merely gave raise to a liability which could be adjudicated<\/p>\n
upon by the Civil Court, then in that case, it could be utterly an abuse of<\/p>\n
the process of the court if such a proceeding is allowed to continue. If<\/p>\n
the facts appear like, what I have just pointed out, then the case<\/p>\n
presented before the court through some admitted documents, ceases to<\/p>\n
be the defence of an accused and becomes the bilateral statements of the<\/p>\n
parties to the proceedings and that document must not be ignored as,<\/p>\n
ultimately, the purpose of vesting the High Court with the inherent<\/p>\n
powers under section 482 of the Code is to prevent the abuse of the<\/p>\n
process of the court and also to ensure the delivery of justice.
\n                                     11<\/span><\/p>\n
      In the present set of petitions, there is a written agreement and that<\/p>\n
agreement is admitted by the complainant also when he was making<\/p>\n
such a statement in the complaint petition of Complaint Case no. 1277 of<\/p>\n
2009 as also that of 2744 of 2009. The reference to agreement dated<\/p>\n
25.7.2003 appears made in both the complaint petition at their respective<\/p>\n
pages no. 3. Thus, it has always to be assumed that transactions between<\/p>\n
the parties and the creation of fiduciary relationship on that account was<\/p>\n
through mutually agreed terms which had been reduced into writing in<\/p>\n
the form of agreement noted above. It is not denied that there was a<\/p>\n
statement in the agreement indicating that the agreement was to<\/p>\n
terminate automatically on 31st March, 2006 and it is also not denied that<\/p>\n
the agreement was terminated by notice dated 31st December, 2008 on<\/p>\n
account of the reason that the manufacturers had decided not to continue<\/p>\n
with the agreement further with effect from 1.4.2009 due to the<\/p>\n
formulation of their own distribution policy. The same notice which is<\/p>\n
annexed to both the petitions as Annexures 3, indicates that the<\/p>\n
complainant was \u201eadvised\u201f to complete all statutory obligations and<\/p>\n
assessment of sales tax before the above mentioned date of termination<\/p>\n
of agreement. There is no denial of the fact that this notice dated<\/p>\n
31.12.2008 was received by the complainant rather, it appears from<\/p>\n
Annexure 4 which is a letter dated 30th April, 2009 addressed to the<\/p>\n
complainant that he was requested by sending a statement of account<\/p>\n
with the above letter to receive cheque bearing no. 344050 dated
\n                                    12<\/span><\/p>\n
28.4.2009 drawn on HDFC Bank, Patna in favour of the firm of the<\/p>\n
complainant and to return the unsold stock.\n<\/p>\n
      It appears that the above letter (Annexure 4) which was containing<\/p>\n
the complete balance sheet of the accounts, which was to the tune of<\/p>\n
Rs.31,51,885, was responded to by the complainant by Annexure 5<\/p>\n
which is an authorisation dated 30th April, 2009 by which he had<\/p>\n
authorised Shri D.N. Shrivastava, to hand over all the unsold goods lying<\/p>\n
in the godown at Ranchi to one of the employees of the manufacturers<\/p>\n
and, accordingly, he had attested the signatures of Shri D.N. Shrivastava.<\/p>\n
It further appears that the said D.N. Shrivastava received full and final<\/p>\n
payment of Rs.32,51,885 as per statement of accounts dated 30.3.2009<\/p>\n
by the above cheque no. 344050 dated 28.4.2009. Annexure 6 is the<\/p>\n
receipt under the signature of appointed agent of the complainant, Shri<\/p>\n
D.N. Shrivastava, showing the receipt of the above account and thus, the<\/p>\n
settlement of account between the parties.\n<\/p>\n
      The complainant does not deny that he did not receive the amount<\/p>\n
of Rs.32,51,885 through the cheque noted above, rather he admits<\/p>\n
receiving the cheque and the amount conveyed through it to him, when<\/p>\n
he alleged that the petitioners dishonestly and fraudulently showed<\/p>\n
through that cheque the payment of the dues for providing services to<\/p>\n
them by the complainant from his Mirganj Establishment. Thus, what he<\/p>\n
denies is that the balance sheet of account which was presented by the<\/p>\n
manufacturer to the complainant was fabricated so as to containing the<\/p>\n
accounts also of the transaction between parties from Mirganj office of
\n                                     13<\/span><\/p>\n
the complainant. In the first complaint, i.e., Complaint Petition no. 1277<\/p>\n
of 2009, the complainant stated that he was not paid an amount of<\/p>\n
Rs.16,45,824.80 paise only which was due to be paid to him on account<\/p>\n
of the activities which was carried out by his firm from Mirganj<\/p>\n
establishment. It is admitted that agreement for carrying on the activities<\/p>\n
as C & F Agent of the manufacturers had also been terminated from<\/p>\n
1.4.2009. In the subsequent complaint, i.e. Complaint petition no. 2744<\/p>\n
of 2009, the complainant did not make any such statement that the<\/p>\n
amount of Rs.16,45,824.80 was due to be paid to him by the<\/p>\n
complainant and instead alleged that the charges on different heads as<\/p>\n
per paragraph 19 of the terms of contract amounting to Rs.10,09,935 had<\/p>\n
not been paid to him. Thus, the complainant alleged that it was an act of<\/p>\n
misappropriation by the accused persons.\n<\/p>\n
      What appears from the above facts is that the balance of amount<\/p>\n
was transmitted and received by the complainant by Annexure 3 which<\/p>\n
is a letter dated 30th April, 2009 which was accompanied by balance<\/p>\n
sheet of accounting and that was in respect of full and final statement of<\/p>\n
account of trades, both at Mirganj and Ranchi firms of the complainant.<\/p>\n
On receipt of such balance of account, the complainant had appointed<\/p>\n
out one of his agents to receive the cheque which was to be paid towards<\/p>\n
all his dues and accordingly, the agent Shri D.N. Shrivastava, after<\/p>\n
receipt of the cheque, granted receipt in the form of Annexure 6. This<\/p>\n
receipt in the form of Annexure 6 is on the letter head of the<\/p>\n
complainant\u201fs firm. As such, it could be very difficult for the court to
\n                                     14<\/span><\/p>\n
accept that the final settlement of accounts which was of the value of<\/p>\n
Rs.32,51,885 did not include the whole of the settlement of accounts on<\/p>\n
all heads which was due to be paid by the manufacturers to the<\/p>\n
complainant. This is in the above background that this court has to<\/p>\n
consider whether an offence under section 406 of the IPC could be made<\/p>\n
out.\n<\/p>\n
       Section 406 of the Indian Penal Code punishes the offence of<\/p>\n
criminal breach of trust which has been defined by section 405 of the<\/p>\n
IPC which reads as under:\n<\/p>\n
       “405. Criminal breach of trust.— Whoever, being in any manner
\n       entrusted with property, or with any dominion over property,
\n       dishonestly misappropriates or converts to his own use that
\n       property, or dishonestly uses or disposes of that property in
\n       violation of any direction of law prescribing the mode in which
\n       such trust is to be discharged, or of any legal contract, express or
\n       implied, which he has made touching the discharge of such trust,
\n       or willfully suffers any other person so to do, commits “criminal
\n       breach of trust”.”<\/p><\/blockquote>\n
       From a perusal of the above provision, it may appear that for<\/p>\n
constituting the offence of criminal breach of trust, the necessary<\/p>\n
ingredients are that any property should either be entrusted to a person or<\/p>\n
the person be put in dominion over that property. The person so being<\/p>\n
entrusted with the property or having the dominion over it, must be<\/p>\n
shown to have misappropriated it or to have converted that property to<\/p>\n
his own used or has dishonestly used or disposed of that property in<\/p>\n
violation of any direction of law prescribing the mode in which such<\/p>\n
trust is to be discharged, or of any legal contract, express or implied,
\n                                      15<\/span><\/p>\n
which he has made touching the discharge of such trust, or willfully<\/p>\n
suffers any other person so to do.\n<\/p>\n
      There is a large course of judgments of the Supreme Court itself<\/p>\n
which have been reported in AIR 1953 SC 478, AIR 1956 SC 575, AIR<\/p>\n
1968 SC 700 and AIR 1972 SC 1490, which indicate that in order to<\/p>\n
creating the offence which has been defined by section 405 of the IPC, it<\/p>\n
was necessary that the property should be entrusted to the person. What<\/p>\n
is implied by entrustment was that the property should have been<\/p>\n
transferred from its real owner to the accused so that he could have it in<\/p>\n
his possession. The other alternative mode of putting the property in<\/p>\n
possession of the accused might be that he had dominion over that<\/p>\n
property. Here, in the present case, there was no entrustment of any<\/p>\n
property as there was no transfer of any property from the complainant<\/p>\n
to the accused persons or their firms in any form. In fact, the<\/p>\n
complainant had not parted with a single paisa and thereby had not put<\/p>\n
anything in trust for him in custody of the accused persons. But, still, if<\/p>\n
the complainant could show that the accused persons had the dominion<\/p>\n
over any property which could ultimately be belonging to him even by<\/p>\n
virtue of the result of a trade agreement, then its non-payment might be<\/p>\n
giving rise to one of the ingredients of the offence that the accused<\/p>\n
persons could be having the dominion over the property which could be<\/p>\n
ultimately belonging to the complainant. But then, for deciding this<\/p>\n
ingredient of the offence, the court has to consider the terms of<\/p>\n
agreement and the liability of paying any amount as a result thereof. At
\n                                    16<\/span><\/p>\n
the same time, the court has also to remind itself that while considering<\/p>\n
the dominion of the accused over any property whether in fact any<\/p>\n
property had merely accrued to the accused persons as a result of non<\/p>\n
payment, etc. to the complainant of any amount which might have been<\/p>\n
due on account of some performance of the part of contract arising out of<\/p>\n
the written terms of agreement. To illustrate, the very agreement in<\/p>\n
question, vide paragraph 19, required the manufacturers, i.e., the<\/p>\n
employers of the accused persons to pay certain charges on account of<\/p>\n
some services being provided or being performed by the complainant<\/p>\n
under different heads, as indicated by that paragraph 19 of the<\/p>\n
agreement. The relevant part of the agreement i.e., paragraph 19,<\/p>\n
required the manufactures to pay to the firms of the complainant<\/p>\n
remuneration equivalent to 4% commission on sales value of the<\/p>\n
produce in the financial year which was to be paid annually at the end of<\/p>\n
the financial year and that payment was to be admissible after excluding<\/p>\n
taxes which have been indicated in paragraph 19 (a) of the terms of<\/p>\n
agreement. The manufacturers were also to pay certain service charges,<\/p>\n
like, the reimbursement of actual cost incurred by the complainant\u201fs<\/p>\n
firm on courier and postage, telephone and STD, cartage charges from<\/p>\n
Hanuman Ram Mahavir Ram Trader\u201fs godown to transporter\u201fs godown<\/p>\n
as also the cost of repacking. But, the above charges were to be<\/p>\n
reimbursed to the complainant\u201fs firm by the manufacturers only when<\/p>\n
the actual vouchers were to be produced for payment.
\n                                     17<\/span><\/p>\n
      As may appear from the above, the payments could be due only<\/p>\n
when the vouchers were really produced before the manufacturers, i.e.,<\/p>\n
before the accused persons. This goes to indicate that the entitlement of<\/p>\n
the complainant to a property could accrue only when the real vouchers<\/p>\n
had been presented by him or his firm to the manufacturers or the<\/p>\n
officials who were responsible for handling such vouchers and further<\/p>\n
responsible for making payment. If there was no production of any<\/p>\n
vouchers, then there could not be any question of generating any<\/p>\n
property and, as such, there could not be any further question of the<\/p>\n
property being within the dominion of the accused. As I have just<\/p>\n
pointed out, these facts have to be discerned after reading carefully the<\/p>\n
admitted terms of agreement as is available in the present case.<\/p>\n
      The complainant stated that he was entitled to Rs.16,45,824.80<\/p>\n
and Rs.10,09,935 only because the settlement of account which was<\/p>\n
received by him and the payment accordingly in that behalf did not<\/p>\n
contain payment for carrying out the activities of C & F agent from his<\/p>\n
Mirganj office as also on account of non payment of admissible<\/p>\n
authorised charges in the light of paragraph 19 of the written agreement.<\/p>\n
He has not denied, as I have pointed out earlier also, that the balance of<\/p>\n
account and the payment of Rs.32,51,885 was received by him. Thus,<\/p>\n
the complainant admits the validity of the document which is Annexure<\/p>\n
4 to the present petition and the receipt of the payment. What is alleged<\/p>\n
by him does not appear supported by any material facts inasmuch as the<\/p>\n
complainant, in his complaint, has not alleged that he presented the
\n                                     18<\/span><\/p>\n
vouchers which were required under the agreement to be presented and<\/p>\n
in spite of that he was not paid money which was to be paid to him. The<\/p>\n
balance sheet settling the account indicates that payment of Rs.32,51,885<\/p>\n
was in terms of payments on all heads and nothing was due to be paid.<\/p>\n
      Thus, from the admitted facts of the case, it could not be said that<\/p>\n
the accused persons had any dominion over any property which could be<\/p>\n
belonging to the complainant. Besides, there is a complete lack of<\/p>\n
dishonest intention. Dishonest intention pre-supposes the intent to cause<\/p>\n
wrongful loss to a person by wrongful gain by the accused. The terms of<\/p>\n
contract are written. If there was any violation, it could be creating a<\/p>\n
civil liability only because the complainant does not appear coming out<\/p>\n
with any clean and clear statement as regards putting the accused<\/p>\n
persons in dominion over any of the properties or part thereof, which<\/p>\n
could be said belonging to him. It remains a matter which could be in the<\/p>\n
realm of accounting and settlement of account. In commercial<\/p>\n
transactions, there could not be any end of accounting unless the parties<\/p>\n
are fully satisfied after settling the same. If there are admitted written<\/p>\n
terms of contract, then the terms of contract may not be constituting any<\/p>\n
criminal offence under the facts, as have been presented before this<\/p>\n
Court. Besides, the complainant appears filing a civil suit for recovery of<\/p>\n
whatever was due to him from the manufacturers who were responsible<\/p>\n
as per the agreement existing between the parties.\n<\/p>\n
      In my considered view, the breach of contract in the present case,<\/p>\n
even if it could be available – though there does not appear any element
\n                                    19<\/span><\/p>\n
of such breach, – shall never give rise to an offence under section 405 of<\/p>\n
the Code which could be punishable under section 406 of the IPC.<\/p>\n
      Thus, on discussion of the facts and the materials available on the<\/p>\n
record what is found is that the facts alleged did not constitute any<\/p>\n
offence for which the petitioners should have been summoned. The<\/p>\n
continuance of the summoning orders passed in the two complaint<\/p>\n
petitions and the continuance of the prosecution on that account, to me,<\/p>\n
appears complete abuse of the process of the court and it appears<\/p>\n
expedient in the interest of justice that the two petitions be allowed and<\/p>\n
the two proceedings be quashed.\n<\/p>\n
      In the result, these petitions are allowed and the proceedings are<\/p>\n
quashed.\n<\/p>\n<\/p>\n
                              (Dharnidhar Jha, J.)<\/p>\n
Patna High Court
\nThe 9th August, 2010,
\nA.F.R.\/Anil\/\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Patna High Court – Orders Arun Kumar Sharma vs The State Of Bihar &Amp; Anr on 9 August, 2010 IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.15413 of 2010 ARUN KUMAR SHARMA @ ARUN SHARMA & ORS Versus STATE OF BIHAR & ANR With Cr.Misc. No.44542 of 2009 ARUN KUMAR SHARMA Versus THE […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,27],"tags":[],"class_list":["post-153343","post","type-post","status-publish","format-standard","hentry","category-high-court","category-patna-high-court-orders"],"yoast_head":"\nArun Kumar Sharma vs The State Of Bihar &Amp; Anr on 9 August, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/arun-kumar-sharma-vs-the-state-of-bihar-amp-anr-on-9-august-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arun Kumar Sharma vs The State Of Bihar &Amp; 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