Madras High Court
Alagiri And Another vs State, By Inspector Of Police, E. 1 ... on 23 February, 1996
Equivalent citations: 1996CRILJ2978, 1996(2)CTC37
ORDER
1. Petitioners Alagiri and Arunachalam, who are accused 1 and 2 before the learned Judicial Magistrate No. VI, Madurai, in C.C. 573 of 1992, facing the charges for the offence under Ss. 409 and 414 of the Indian Penal Code respectively have come forward with this revision challenging the legality and propriety of the order passed by the learned Judicial Magistrate in Crl.M.P. No. 1405 of 1993 on 1-6-1993 declining to discharge the accused for want of adequate materials and evidence for the trial.
2. The case of the prosecution is that the first petitioner's wife Lakshmi and witness Annamalai, who is the complainant, entered into a partnership agreement and commenced a partnership business under the name and style of Royal Video House during 1983 at S.S. Colony, Madurai and they carried on the business in Video Cassettes and V.C.R. for hire and sale and during 1988 the first petitioner also entered into the partnership business directly and was carrying on the said trade. It was also alleged that during 1990 the first petitioner herein, being a partner of the said business but however without the knowledge and consent of the witness Annamalai, who is also a partner had taken away 2016 Video casettes and four V.C.Rs. and thereby caused loss to the complainant Annamalai to the extent of Rs. 4,50,360/- and that the second petitioner, who was running a business under the name and style of Star Video near the by-pass road, Madurai, aided in secreting the National V.C.R. taken by the first petitioner in his business premises and thus the first petitioner and the second petitioner have committed the offences under S. 409 and 414, IPC respectively.
3. On taking the cognizance of the offences above referred on the basis of the report under S. 173, Cr.P.C. placed by the respondent herein, in Thirdeernagar P.S. Cr. No. 2448 of 1991, process has been issued to both the accused and on their appearance, copies of all the records were furnished to them and on a perusal it was found that there was no scope for framing the charges and continue the proceedings and therefore, a petition under S. 239, Cr.P.C. was filed by and on behalf of the petitioners herein praying for their total discharge. By hearing the respective parties, on perusal of the records, learned Judicial Magistrate has declined to accept their plea and consequently dismissed the petition by passing the impugned order. Aggrieved at this, petitioners have come forward with this revision as noted supra.
4. I have heard the Bar for the petitioners as well as the learned Government Advocate, against and for the impugned order with their contentions.
5. Section 239 of the Code of Criminal Procedure runs as follows :-
"When accused shall be discharged - If, upon considering the police report and the documents sent with it under S. 173 and making such examination, it any, of the accused as the Magistrate thinks necessary and after giving the prosecution and the accused an opportunity of being heard, the Magistrate considers the charge against the accused to be groundless, he shall discharge the accused, and record his reasons for so doing."
As per the above Section of law, the barest ingredients for a Court of law to discharge are that the report and document sent under S. 173 Cr.P.C. by the police have to be considered; and that if for any reason, after providing the opportunity to both the prosecution and the accused upon the grounds called out therefrom, the Magistrate thinks fit or finds that the charges are groundless, then by giving adequate reasoning, he shall be entitled to discharge the accused without any trial. This section is analogous to S. 245 of the Case. Since the purpose for which the above provision of law is to be adverted to is totally different, I will stop with this observation on this score.
6. Importing the above legal ratio to the facts of the instant case, it is worthwhile to note that the Judicial Magistrate has not adhered to the basic ingredients in-built in the above section of law. While adverting to the several contentions raised with regard to the settle position of law on behalf of the petitioners, I may straight away observe that the learned Judicial Magistrate has accepted the plea forwarded on behalf of the respondent only on the basis of conjecture and certainly not on the basis of any material or legal evidence. While considering the case law cited and referred to by the learned Judicial Magistrate, her further approach to accept the plea advanced on behalf of the respondent is totally erroneous and as such cannot at all be accepted as on par with the law. The conclusion of the learned Magistrate at the end of paragraph 10 of the impugned order whether the petitioners have really committed the offence and whether they are liable to be punished and whether the judicial Magistrate has got jurisdiction to try the accused for the offence, are all questions to be gone into only during the trial, by itself shows that the learned Juidicial Magistrate has not evaluated all the materials and case records placed before her under S. 173, Cr.P.C. Above all, while a partner alleges that another partner of the partnership business, who has equal right to participate in the partnership business has committed breach of trust or stealthily removed any property of the partnership business, the elementary aspect is that he has to prove the entrustment of the goods to that of the other partner and that the said removal without his consent or knowledge was only in pursuance of a special agreement entered into among themselves and the dealing with the said property any more by himself or third party must have been proved by materials or documentary evidence. The onus as laid down by the law is heavily upon the person who complains about it and that if the prosecution is to be sustained on the above basis, it requires the strict proof even to identify the prima facie case at that initial stage. When those elements are absent and silent, it is very difficult to sustain any prosecution for the alleged offences under the heading of criminal breach of trust or cheating or theft or receiving the stolen property.
7. The admitted facts of the instant case seems to be that pursuant to the partnership agreement, the complainant and the first petitioner were found carrying on the partnership business under the name and style of Royal Video House. The record shows that there was no specific term pertaining to the dealing of the partnership property in any of the individual partner's capacity. There was no material to infer nor any averments even to indicate that there was a special agreement either explictly or impliedly among the first petitioner and witness Annamalai, the complainant, namely, the partners of the business. The partnership agreement has not even been produced nor any copy of the same has been shown to the Investigating Officer. It is not known under the circumstances, what are the specific terms and conditions agreed upon between the partners herein. If that being so, in as much as any specific agreement with reference to its terms is absent, law presumes under the partnership Act, every partner is having an equal right over the assets and properties of the partnership business. Such being the case, the allegation that during 1990 the first petitioner took away 2016 video casettes and four V.C.Rs. and the 2nd petitioner aid in secreting one V.C.R. inviting the offences under Ss. 409 and 414, IPC cannot be sustained for the simple reasoning that the very complaint in this case itself does not contain any material facts and averments. In fact, it is noted that several months after the alleged removal, the complaint was lodged and the respondent was entrusted with the investigation and then finally the final report under S. 173, Cr.P.C. was filed. The defence of the petitioners accused was one of total denial and that they never removed any goods or articles of the partnership business at any point of time nor used or concealed anything as alleged. Therefore, there was no material or evidence or records to show the identity of any criminal offences committed by both the accused. Practically, there was no iota of material to prove the entrustment to invite the definition even as defined under S. 405, IPC. It was stated by the Bar that due to the misunderstanding, bickering that existed between the partners, namely, the first petitioner and the witness Annamalai, the business was closed long back and not even in existence. It was also admitted that no legal action in civil Courts were taken by any of the parties to get their appropriate reliefs over the partnership business and its properties. This being so, in the absence of any material, as revealed from the perusal of the entire case records, I am firm in saying that there was no ground or scope made available to frame a charge against the revision petitioners for the offences under Ss. 409 and 414, IPC.
8. Before a person can be said to have committed criminal breach of trust within the meaning of S. 405, IPC it must be established that he was either entrusted with or entrusted with dominion over property which he is said to have converted to his own use. In order to establish "entrustment of dominion" over property to an accused person the mere existence of that person's dominion over property is not enough. It must be further shown that his dominion was the result of entrustment.
9. In the case of a partnership, every partner has dominion over the partnership property by reason of the fact that he is a partner. This is a kind of dominion which every owner of property has over his property. But it is not dominion of this kind which satisfies the requirements of S. 405. The prosecution must further establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties, entrusted to the accused person. If in the absence of such a special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or, in other words cannot be held to have been 'entrusted' with dominion over partnership properties.
10. In Velji Raghavji v. State of Maharashtra, , the Supreme Court while dealing with the scope of S. 403, IPC - Dishonest misappropriation of property, has observed as follows :-
"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 if he is not the exclusive owner thereof. A partner has undefined ownership along with the other partners over all the assets of the other partners 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."
11. In S.A.Q. Hasmi v. State (1980 Cri LJ 1030), a learned single Judge of the Calcutta High Court, while dealing with the scope of Section 405, IPC on identical facts of the case has observed as follows :-
"Ordinarily a partner cannot institute a criminal proceeding for criminal breach of trust of partnership property against another partner unless it can be shown that by a special contract the accused was entrusted with the dominion over the property and in breach of such entrustment he has misappropriated the money."
12. A Full Bench of the Calcutta High Court in Bhuban Mohan v. Surendra Mohan , has held as follows :
"A charge under S. 406, Penal Code, cannot be framed against a person who, according to the complainant, is a partner within him and is accused of the offence in respect of property belonging to both of them as partners.
The reason for holding that a partner cannot be prosecuted by another partner for criminal breach of trust in respect of partnership property under S. 406, Penal Code, is two fold. The nature, character and incidents of partnership property are such that during the subsistance of the partnership there cannot be, except by special agreement any entrustment or dominion and secondly partnership property is not a specific and ascertainable property and is of so equivocal and proclamatic a nature until dissolution and accounts, that it is not susceptible to be used in a manner which can bring into operation S. 405, Penal Code. It is only when such ordinary character and the nature of the partnership property are varied by special contract of partnership so as to create entrustment of any specific property in favour of one partner as against the others or so as to give exclusive dominion of such property to one partner as against the other that there can be any scope of application of S. 405, Penal Code.
Unless there is an agreement between the partners that a particular property would be the seperate property of a partner, there cannot be an entrustment of it to the other partner or partners. In the absence of such an agreement, each partner is interested in the whole of the partnership assets and there cannot be an entrustment of 'a partner's property' as such by one partner to another, because there is no 'property' which can be entrusted."
13. Even with regard to the alleged recovery of one V.C.R. from the second petitioner, the very element of property and the entrustment as that of the property of the partnership business is totally lacking and as such, the observation and conclusion of the learned Judicial Magistrate that there could be implied agreement between the partners and that therefore further proceedings could be taken up is not correct and highly erroneous. The very observation above referred to, in the absence of any special agreement or entrustment as laid down in the above cited case laws, is also against the same and that therefore it is based on mere conjecture and surmise and even if so, it is mere inference. Having considered the whole gamut of the case and the records with the impugned order. I am of the firm view that if there is any dispute among the parties herein, namely, the petitioners and the witness Annamalai, the complainant, it will be civil dispute and that for which no criminal proceedings can be entertained. The basic ingredients for the offences under Ss. 409 and 414, IPC are not at all available in the materials placed before the Court in the instant case. Therefore, the impugned order is liable to be set aside as it lacks every legality and propriety.
14. In the result, the revision succeeds and accordingly it is allowed. Consequently, the impugned order passed by the learned Judicial Magistrate No. VI, Madurai, in Cr.M.P. No. 1405 of 1993 in C.C. No. 573 of 1992 dated 1-6-1993 is set aside and both the revision petitioner/accused are hereby discharged of the charges against then under S. 239 of the Code of Criminal Procedure.
15. Revision petition allowed.