Calcutta High Court
Ravi Bafna And Anr. vs State Of West Bengal And Anr. on 21 July, 2006
Equivalent citations: 2006(4)CHN881
JUDGMENT Arun Kumar Bhattacharya, J.
1. The hearing arises from an application under Section 397/401 read with Section 482 Cr. PC filed by the petitioners praying for quashing the criminal proceeding being Case No. C-259/2004 pending before the Court of learned Judicial Magistrate, 9th Court, Alipore and for setting aside the order dated 20.09.2004 rejecting the prayer for exemption from their personal appearance under Section 205 Cr. PC.
2. The circumstances leading to the above application are that O.P. No. 2 firm purchased poultry feed supplement, worth of Rs. 2,25,134/- from the petitioners' company M/s. Harshavardhan Laboratory Pvt. Ltd. and in part discharge of liability issued a cheque dated 10.02.2003 for Rs. 1,72,974.34/-drawn on State Bank of Mysore, Rashbehari Avenue Branch, Kolkata, dihonoured with the remark "payment stopped by the drawer". The company issued a notice dated 14.03.2003 requesting for payment of the amount, but no amount was paid by O.P. No. 2 firm, for which the company filed a complaint before the Court of learned Chief Judicial Magistrate, Indore under Section 420 IPC and Section 138 N.I. Act against the said firm and its partners, whereupon cognizance was taken under Section 138 N.I. Act and process was issued against O.P. No. 2 firm and one Dwijen Banerjee. As a retaliatory measure the said firm lodged a complaint being Case No. C-259/2004 under Section 409/420/120B/34 IPC before the Court of learned Chief Judicial Magistrate, South 24-Parganas at Alipore inter alia alleging that the firm paid a total sum Rs. 1, 25,000/- as security deposit for super distributorship of institutional products of the company in the Eastern Region. It was arranged between the firm and the accused persons that farmer's products of the company would be sold to the firm but in reality the same would be a transaction between the company and accused No. 3 M/s. Rare Remedies. The company raised a bill for the transaction amounting to Rs. 2,00,474.34, out of which accused No. 3 was liable to pay Rs. 94,500/-. The firm being induced by misrepresentation of petitioner No. 2 Dr. Prativa and the said accused No. 3 accepted the bill and on simple belief of realizing the said amount of Rs. 94,500/- from accused No. 3 issued two cheques for Rs. 1,72,974.34 and Rs. 27,500/- in favour of the company. As the cheque given by accused No. 3 to the firm returned unpaid by banker and accused No. 3 failed to hand over the amount of Rs. 94,500/-, the firm instructed its banker to stop payment of Rs. 1,72,974.34, for which the company instituted the said proceeding under Section 138 N.I. Act against the firm. The company paid interest till December, 2002 but subsequently stopped payment of interest as also stopped business with the firm without refunding the security deposit of Rs. 1,25,000/- along with accrued interest thereon to the tune of Rs. 16,250/-. The facts disclosed in the complaint do not constitute any offence under Section 406/120B IPC.
3. The learned Chief Judicial Magistrate, South 24-Parganas at Alipore after taking congnizance transferred the case to the Court of learned Judicial Magistrate, 9th Court, Alipore who upon examining witnesses and finding a prima facie case under Section 406/120B IPC issued summons against the petitioners on 18.02.2004. The petitioners entered appearance through their learned Advocate and prayed for exemption from their appearance under Section 205 Cr. PC which was rejected vide order dated 20.09.2004.
4. Being aggrieved by, and dissatisfied with, the continuance of the proceeding and the said order of rejection the petitioners have come up before this Court.
5. Mr. Ganguly, learned Counsel for the petitioners, contended that the that expression "security deposit" indicates in case of failure of payment the amount in security deposit will be applied for adjustment and so when the liability of O.P. No. 2 to pay the petitioners an amount of Rs. 1,05,974/- is undisputed in the complaint, the petitioners justifiably adjusted the said amount of security deposit which the firm can no longer claim to belong to it. Relying upon the cases of ANZ Grindlays Bank, PIC v. Shipping & Clearing (Agents) Pvt. Ltd.1992 Cr. LJ 77 (Cal) and Shanti Prasad Jain v. Director of Enforcement , Mr. Ganguly further contended that applying the principle that when money is deposited in a bank, the relationship that is constituted is one of debtor and creditor and not trustee, as there was no entrustment the question of invoking the provision of Section 406 IPC does not srise. Mr. Ganguly further contended that as the company was to pay interest, it had utilized the deposited amount for profitable purpose for which the amount was mixed with the corpus and as such there being no entrustment of the said amount, Section 406 does not lie. The next limb of argument of Mr. Ganguly is that as there was no demand for the amount on the part of O.P. No. 2 nor any refusal on the part of the petitioners and mere retention of the amount is not an offence, Section 406 IPC is not attracted. Regarding prayer under Section 205 Cr. PC, Mr. Ganguly on referring the cases of Bhaskar Industries Ltd. v. Bhiwani Denim & Apparels Ltd. 2001 C Cr. LR (SC) 481 and in Re : Sukla Mukherjee, reported in 1995 C Cr. LR (Cal) 180 submitted that when the petitioners stated that they would not object to the evidence being recorded in their absence and they would not challenge their identity and their physical appearance on every date of hearing from their residence at Indore, Madhya Pradesh would casue a great harassment, the impugned order should be set aside.
6. Mr. Bagchi, learned Counsel for O.P. No. 2, the other hand, contended that when the on petitioners stopped business with the but firm and also stopped payment of interest did not refund the security deposit and interest accrued thereon to the tune of Rs. 16,250/-, it speaks of conversion of the said amount for personal gain and misappropriation, and as such the offence under Section 406 IPC was committed. Whether there was any dues payable to the petitioners and if so, to what extent are disputed questions of fact which, Mr. Bagchi submitted, may be taken by the petitioners in defence and is a matter for trial. Mr. Bagchi further contended that the petitioners cannot take the plea of standing on the same footing like that of banker and creditor, and when a prima facie case has been made out, and the prayer of the petitioners should be dismissed. As regards prayer under Section 205 Cr. PC Mr. Bagchi submitted that there was no illegality with the order such as the learned Magistrate observed that order would be considered only after physical appearance of the petitioners.
7. Quashing of proceeding to prevent abuse of the process of the Court or otherwise to secure the ends of justice may be done where: (1) it appears that there is a legal bar against the institution or continuance of criminal proceeding in respect of the offence alleged e.g. absence of requisite sanction, or (2) the allegations in the F.I.R. or the complaint even if they are taken at their face value and accepted in their entirety do not constitute the offence alleged, or (3) the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or the evidence adduced clearly or manifestly fails to prove the charge. In this connection, reference may be made to the case of R.P. Kapur v. State of Panjab and State of Haryana v. Bhajan Lal in . It is to be borne in ind that the power to quash an FIR by this Court can be exercised very sparingly and with circumspection and that too in the rarest of the rare cases. At this stage the Court cannot inquire about reliability or genuineness or otherwise of the allegations made in the F.I.R. nor it can inquire whether the allegations are likely to be established or not, as was held in the case of M. Narayandas v. State of Karnataka 2004 SCC (Cri) 118 at 123. In the case of State of M.P. v. A.K. Gupta 2004 SCC (Cri) 353 at 361, it was observed : 'The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest Court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so, when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material... It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises, arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the meterial before it and conclude that the complaint cannot be proceeded with. ..." The legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the Court is as to whether the uncontroverted allegations as made prima facie establish the offence, as was held in the case of M.J. Scindia v. S.C. Angre 1988 SCC (Cri) 234.
8. To constitute an offence of criminal breach of trust, there must be an entrustment, there must be misappropriation or conversion to one's own use or use in violation of any legal direction or of any legal contract, and thirdly, the misappropriation or conversion or disposal must be with a dishonest intention. In cases of criminal breach of trust failure to account for the money proved to have been received by the accused is generally considered to be a strong circumstance against the accused. It is not necessary, in order to establish dishonestly, that the prosecution should establish an intention to retain permanently the property misappropriated. An intention wrongfully to deprive the owner of the use of the property for a time and to secure the use of the property for his own benefit for a time, may be sufficient.
9. Security deposited by a purchaser is a sum which the seller is entitled to retain as long as it is necessary to secure him against losses which may be occasioned by the purchaser's default. This would usually be until accounts between the seller and the purchaser have been adjusted. The actual manner of misappropriation, it is well-settled, is not required to be proved by the prosecution. Once entrustment is proved, it is for the accused to prove as to how the property entrusted to him was dealt with within view of Section 405 IPC. if the accused fails to produce any material for this purpose, the prosecution should not suffer, as was held in the case of State of H.P. v. Karanvir 2006 AIR SCW 2853. The relationship between a banker and customer is in no way applicable to the case of purchaser and vendor and so, the cases of Shanti Prasad Jain (supra) and ANZ Grindlays Bank, P.I.C. (supra), so referred to by the learned Counsel for the petitioners, have no application here.
10. What is exact amount due to the petitioners, whether the said amount should include Rs. 94,500/- payable by accused No. 3, as Mr. Bagchi rightly submitted, are matters which the petitioners at best may take in defence and such disputed question of facts are matters for trial and cannot be expected to be decided by this Court by converting itself into a Trial Court. In this connection, the case of State of Bihar v. P.P. Sharma AIR 1991 SC 126 may well be referred to where it was held that by treating "the annexures" which were neither part of the police-report nor were relied upon by the Investigating Officer but produced by the accused before the High Court, and affidavits as avidence and by converting itself into a Trial Court, the High Court cannot declare the accused to be innocent and quash the proceeding. Another vital question involved is how far and whether the company which pursued the dishonour of cheques and initiated the proceeding under Section 138, N.I. Act against O.P. No. 2 can unilaterally convert the security deposit oand simultaneously take the above plea which is a matter for decision of the Trial Court. Accordingly, when there are prima facie materials bearing out the offence under Section 406 IPC, the question of quashing the criminal proceeding is out of the way.
11. As regards exemption from personal appearance, Section 205 Cr. P.C. which deals with exemption from initial appearance and not during trial, confers power on the Magistrate to dispense with personal attendance of the accused whenever a summons is issued and permit him to appear by pleader. The very observation of the Apex Court in para 19 of the case of Bhaskar Industries Ltd. (supra) -- The position, therefore, boils down to this : "it is within the power of a Magistrate and in his judicial discretion to dispense with the personal appearance of an accused either throughout or at any particular stage of such proceedings in a summons case, if the Magistrate finds that insistence on his personal presence would itself inflict enormous suffering or tribulations on him, and the comparative advantage would be less" ' leads to suggest that the provision is applicable in a summons case. Accordingly, the present case being a warrant procedure case under Section 406 IPC, there is no scope to invoke the above provision. Moreover, the learned Magistrate rejected the prayer with the observation that the petitioners should have sought for bail before seeking exemption from personal appearance. Once the discretion to grant exemption from personal appearnace has been judicially exercised by the Magistrate, it cannot be interfered with in revision. In this connection, reference may be made to the case of Damodar Mishra v. State of Orissa 2001 Cr. LJ 796 (Ori).
12. In the premises, in the light of the above discussion, there being no merit in the present revisional application, it be dismissed.
13. Interim order, passed on 23.12.2004 and subsequently extended, stands vacated.
14. The application being CRAN No. 209/2005 stands disposed of accordingly.
15. Let a copy of this order be sent down at once to the learned Court below.
16. Urgent xerox certified copy of this order, if applied for, be supplied to the parties as expeditiously as possible.