Delhi District Court
Sanjiv Dhingra vs State on 3 February, 2024
IN THE COURT OF SH. NAVJEET BUDHIRAJA
ADDITIONAL SESSIONS JUDGE-02, SOUTH
DISTRICT, SAKET COURTS, NEW DELHI
REVISION PETITIONS NO. 178 OF 2023 & 442/2022
CNR NO. DLST01-004450-2023
CNR NO. DLST01-011065-2022
IN THE MATTER OF
Sanjiv Dhingra
S/o Late Sh. Virender Dhingra,
R/o House No. 11B/12B,
Sainik Farms, New Delhi ..... Revisionist
Versus
State ...... Respondent
DATE OF INSTITUTION : 10.05.2023
DATE OF RESERVING ORDER : 15.01.2024
DATE OF PRONOUNCEMENT : 03.02.2024
AND
Ashutosh Kumar
S/o Shri Ram Ekwal Thakur,
R/o HR 216, C Lane No. 4,
Pul Prahlad Pur, South,
New Delhi - 110044. ........ Revisionist
Versus
1. State
2. Sanjiv Dhingra
S/o Late Sh. Virender Dhingra,
R/o B-183, G.K.-1,
New Delhi - 110048. ........Respondents
DATE OF INSTITUTION : 20.12.2022
Page No. 1 of 24
DATE OF RESERVING ORDER : 15.01.2024
DATE OF PRONOUNCEMENT : 03.02.2024
JUDGMENT
Vide this common judgment, I shall dispose of two concatenated revision petitions under Section 397 of the Code of Criminal Procedure, 1973 (Cr.P.C.) against the impugned Orders dated 09.03.2022 and 28.03.2023 passed by Ld. Chief Metropolitan Magistrate (Ld. CMM), South, Saket Courts, in Cr. Case No. 1741/2019, FIR No. 192/2017 PS EOW (South) titled as State Vs. Sanjiv Dhingra Etc. whereby charge for the offence punishable under Section 420/120B of Indian Penal Code, 1860 (IPC, for short) was directed to be framed against the accused Sanjiv Dhingra (in this order, he shall be referred to as accused) and consequently framing the charge vide Order dated 28.03.2023 and discharge of the accused under section 409 IPC. For convenience, revisionist Ashutosh Kumar shall be referred to as complainant.
2. The nuts and bolts of the charge-sheet are that the complainant invested in a group housing project named 'California Country" at Sector - 8, Greater Faridabad (project, for short) which was launched by M/s Dhingra Jardine Infrastructure Pvt. Ltd. in which accused was the director and one of the major shareholders. Accused induced lot of people including the complainant to book flats in apartments of various sizes, thereby collecting huge funds and assured that the project shall be completed within 30 months of Page No. 2 of 24 the booking made by the complainant. The said assurances given by accused were completely and absolutely false from the beginning as construction of the said project has been stalled since last many years and no flat has been delivered to any of the investors including the complainant. Accused neither delivered the possession nor refunded the money invested by lot of people including the complainant despite the fact that complainant has already paid 95% of the unit value. Accused cheated the investors by charging money on the pretext of non-existent facilities. After getting cheated and duped of his hard-earned money by accused, the complainant filed a complaint against accused and many other people/investors also joined and, thereafter, an FIR dated 13.11.2017 was registered.
3. Post completion of investigation, charge-sheet was filed against the accused Sanjiv Dhingra and Virender Dhingra (since deceased) under Section 409/420/120B IPC, on which cognizance was taken. Thereafter, arguments on point of charge were heard on 28.02.2022 and vide Order dated 09.03.2022, accused was discharged for the offence under Section 409 IPC and Ld. CMM directed framing of charge under Section 420/120B IPC and, accordingly, formal charge was framed on 28.03.2023.
4. Ld. Counsel for complainant argued with vehemence that this is the case between the builder and buyers and there is a clear, unambiguous and categorical allegations of cheating and siphoning of funds of the innocent buyers against the accused and Page No. 3 of 24 there are valid and legal grounds to charge the accused for offence under section 420 and 409 IPC. It is further urged that Ld. CMM has fallen in error in discharging the accused under section 409 IPC as the monies paid to the accused for the project was in the nature of being an 'entrustment' and since there is material on record which indicate that some part of those monies had been misappropriated rather than utilizing the same for the project, the accused being acting in the capacity of agent is liable to be indicted for offence under section 409 IPC. To buttress this view, Ld. Counsel for complainant has alluded to the judgment of the High Court of Delhi in Vijay Dixit Vs. State, 2017 SCC Online DEL 7580. Ld. Counsel further took the court through various extracts of the charge-sheet to pin-point the allegations and material against the accused and argued that the accused took home a salary of Rs. 90 lacs per year despite his company being facing the rough weather and was unable to complete the construction of the project. There is also an allegation that the accused was a partner in a firm namely M/s Rajni Construction in which substantial amount of monies were transferred out of the funds received from the buyers for the purpose of the project.
5. On the contrary, on behalf of the accused, Ld. Counsel stoutly countered the arguments made on behalf of the complainant by asserting that first and foremost the company in which the accused was shown to be the director has not been made accused in this case and company being a separate entity then can be made Page No. 4 of 24 liable at the most but accused cannot be imputed with any vicarious liability for the alleged wrongs done by the company and prosecution has not proffered any explanation for this omission. Ld Counsel further urged that the allegations levelled against the accused merely indicate the non-deliverance of a promise or non- fulfillment of the promise without any angle of criminality and at best the case of the prosecution falls under section 418 IPC and not under section 420 IPC as the overt act of cheating is clearly missing. Ld. Counsel further emphasized that 406/409 IPC is also not made out as the transaction was a flat buyer agreement and there cannot be any entrustment in the case of sale. Ld. Counsel also took umbrage on the invocation of Section 409 IPC on the premise of the accused not being the agent of the complainants. Ld. Counsel further canvassed that the income of Rs. 90 lacs per annum for the promoter cannot be categorized as a huge income so as to hold him liable for offence in question. Ld. Counsel also sought to distinguish between the principle of obiter dicta and ration decidendi in the context of the judgment relied upon by Ld. Counsel for complainant in Vijay Dixit Vs. State and argued that observations made therein are not binding on the court.
6. Ld. Counsel for accused placed reliance on the observations of the Supreme Court in Carrier Institute Education Society Vs. Om Shri Thakur Ji Educational Society, decided on 24.04.2023.
Page No. 5 of 247. Before returning any finding on the present revision petitions, it is deemed imperative to reproduce the relevant extract of the impugned order dated 09.03.2022 vide which the accused was directed to be charged under section 420/120B IPC and was discharged under section 409 IPC.
"....It is a matter of record that the accused Sanjiv Dhingra and co-accused Virender Dhingra (since deceased) were directors of the company at the time when the alleged project was launched. There is a prima facie material available on record to show that accused Sanjiv Dhingra was signing authority in all the accounts of the accused company. There is also material to show that M/s Dhingra Jardine Infrastructure Pvt. Ltd. had filed a representation as to its inability in completing construction on account of financial constraints. There are categorical allegations that the victims had visited the accused and were personally assured by accused Sanjiv Dhingra and co- accused Virender Dhingra (since deceased) regarding all necessary approvals and permissions available to them in respect of the said project and induced them to enter into buyer builder agreement. It is seen that the project has not been delayed by mere 36 months as assured in the agreement but is still left incomplete. There is no accounting of the utilization of money received from the victims. There is prima facie material to show that accused company did not have any licence or approval of building plan to carry out the project. Thus, a prima facie charge u/s 420/120B IPC is made out against accused Sanjiv Dhingra, however, as regards offence u/s 409 IPC, there is nothing to suggest that the accused was acting as an agent or broker or attorney to the victims and thus, does not fall within the purview Page No. 6 of 24 of section 409 IPC. Hence, accused is discharged for offence u/s 409 IPC"
8. As per the charge-sheet, the gravamen of the complainant is that there was a project 'California Country' in Sector-8, Greater Faridabad which was launched almost 10 years ago when the complaint was proffered on 15.03.2017 which contained various types of apartments and flats under various mid- rise, duplex, high rise towers spread over 10.38 acres by a group of builders and developers named M/s BVM Projects Private Limited and M/s Dhingra Jardine Infrastructure Pvt. Ltd. under a License No. 178 of 2007 from DTCP, Haryana. The said group of builders and developers through a network of real estate brokers, dealers and underwriters created a false impression of being a reputed builders and FDI backed project and induced the residents of Faridabad, Delhi and NCR to book flats and apartments of various sizes and specifications and collected a huge amount from the date of its launch. Till the filing of complaint, not a single flat was delivered in the project which was lying incomplete, unfinished and abandoned. It was promised that the project would be completed within 30 months of booking but despite the passing of almost 10 years, the project was lying incomplete in violation of Builder Buyer Agreement. It is alleged that millions of rupees were collected in the name of VAT, EDC, IDC, Extra EDC & IDC for Government authorities which have also not been deposited in full. Various charges were also collected without providing any charge for parking, power back-up, club charges, swimming pool, etc. Despite Page No. 7 of 24 the buyers buying 95% value of the flat, neither the flats/apartments were delivered nor any compensation for the delayed possession was paid.
9. The charge-sheet further reveals that 52 more complaints of similar nature were received and the total deposited amount of all the victims was found to be approximately Rs. 26 crores. During the course of investigation, it was revealed that the license for the said project was issued on 13.04.2007 and building plan was approved on 27.01.2010 in favour of M/s BVM Projects Pvt. Ltd (land-owning company) but M/s Dhingra Jardine Infrastructure Pvt. Ltd. (developer company) started the collection of money from various investors since 2006 without issuance of license as well as without approval of the building plan. As per the DTCP, Chandigarh, Haryana, any company/developer can collect booking amount against residential flats only after sanction of building plans.
10. It is further revealed from the charge-sheet that the scrutiny of the developer company unraveled that the accused Virender Dhingra (since deceased) and accused Sanjiv Dhingra had formed a company in the name of M/s Echo Estate Pvt. Ltd. on 13.03.2006 and both were 50% shareholders in the company. In the said company, which was later on converted in the name of M/s Dhingra Jardine Infrastructure Pvt. Ltd. and both the accused were 50% shareholders in this company also. Both the accused were Page No. 8 of 24 found to be the signing authority in all the accounts of the developer company and on scrutiny of the accounts, major amounts were found to be transferred in M/s Rajni Construction, which was a partnership firm of the accused Director Sanjiv Dhingra and Late Sh. Virender Dhingra. On further scrutiny, withdrawal in the form of cash was also found from the account of the developer company.
11. It was also found during investigation that one M/s H.S. Oberoi-VSPL group gave a public notice in the leading newspaper dated 23.06.2018 mentioning that on account of financial difficulty, M/s Dhingra Jardine Infrastructure Pvt. Ltd. could not complete the project within the given time and in order to complete the said project, the company entered into an agreement dated 20.02.2018 with M/s H.S. Oberoi-VSPL and buyers were asked to approach their office within 30 days of the publication.
12. Perusal of charge-sheet further reveals that the incriminating evidence against the accused Sanjiv Dhingra has been summarized as under :-
• He has been found director in the developer company since registration of the company i.e. 13.03.2006 to 01.06.2015 and further since 01.10.2016 to 12.01.2017. • He has been found signing authority in approx all the accounts of the developer company M/s Dhingra Jardine Infrastructure Pvt. Ltd. alongwith his father Late Sh. Virender Dhingra.Page No. 9 of 24
• He has always been found a share-holder in the developer company M/s Dhingra Jardine Infrastructure Pvt. Ltd. and holding 50% share in the company. • Accused Sanjiv Dhingra has been found promoter of the developer company M/s Dhingra Jardine Infrastructure Pvt. Ltd.
• License for the said project was issued on 13.04.2007 and building plan was approved on 27.04.2010 but developer company M/s Dhingra Jardine Infrastructure Pvt. Ltd., wherein he was promoter as well as director, have started the collection of money from various investors since 2006 without issuance of license as well as without approval of building plan from the competent authority. • On the scrutiny of the accounts of developer company, it revealed that maximum amounts have been found to be transferred in the accounts of M/s Rajni Construction, which is a partnership firm and Sanjiv Dhingra is a partner in the said company with his father Late Sh. Virender Dhingra. • On the scrutiny of the collaboration agreement dated 11.09.2006 between land owning company and developer company for the development of alleged project, it revealed that Sanjiv Dhingra has signed the said agreement on behalf of the developer company M/s Dhingra Jardine Infrastructure Pvt. Ltd.
• He has also been found director as well as shareholder in land-owning company i.e. M/s BVM Project Pvt. Ltd. after Page No. 10 of 24 purchase of 95% share of this company.
• Scrutiny of the ITR of accused Sanjiv Dhingra revealed that he was getting Rs. 90,00,000/- as a salary from developer company M/s Dhingra Jardine Infrastructure Pvt. Ltd. for a financial year.
• Balance sheets of the developer company M/s Dhingra Jardine Infrastructure Pvt. Ltd. are under the signature of accused Sanjiv Dhingra.
• In their examination, buyers have alleged that accused Sanjiv Dhingra personally assured them that all necessary approvals and permissions in respect of the said project are in place and have already been obtained from the concerned authority and further induced them to buy the flat.
13. In the above backdrop, I advert to the contention of Ld. Counsel for accused that the transaction in question merely pertains to non-fulfillment of the promise to complete the project which got completed 85% and there is no element of criminality. Given the nature of allegations and material on record, I do not concur with the said argument as the accused Sanjiv Dhingra who was stated to be the director w.e.f. 13.03.2006 till 01.06.2015 and further from 01.10.2016 till 12.01.2017 who was also the promoter of the developer company holding 50% share. The license for the said project was issued on 13.04.2007 and building plan was approved on 27.10.2010 but the monies were started getting collected from the investors in the year 2006 which prima facie indicates towards the Page No. 11 of 24 dishonest inducement to the buyers as without obtaining the necessary approvals and sanctions, the collection of monies in the anticipation of getting the approvals and sanctions was not justified. Further, the act of the accused having involved a third party for completion of the project due to financial constraints also point towards the deception at the end of the accused as the buyers were made to believe that the project would be ready in 30 months but despite the passage of 10 years, the project could not be completed and rather a third entity was roped in to take over the project. Buyers have also alleged that accused personally assured them that all the necessary approvals and permissions in respect of the project are in place thereby further inducing them to invest money and buy the flats.
14. Also, there is ample material to suggest that the amounts collected from the buyers were transferred in the accounts of M/s Rajni Construction, which is a partnership firm of which accused is one of the partners along with his late father Sh. Virender Dhingra (co-accused). Accused was contractually bound to utilize the funds received from the buyers in the completion of the project and, thus, the transfer of the funds to its partnership firm also amounts to causing wrongful loss to the buyers as the fate of the project hanged in limbo.
15. In so far as the contention on behalf of the accused that the developer company is not made an accused and no vicarious Page No. 12 of 24 liability can be imputed upon the accused, it is observed that it is a settled legal proposition that in case Directors of a company are found indulging in embezzlement or siphoning off of funds, principle of lifting of corporate veil can be brought into unearth the real culprit, therefore, even if the developer company is not indicted, the arraignment of the accused in this case cannot be called into question.
16. Further, the argument of Ld. Counsel for the accused that section 418 IPC at the most is attracted and not section 420 IPC, here also Ld. Counsel for the accused has erred as section 418 IPC does not encompass delivery of property after the cheating and dishonest inducement which is an important ingredient of section 420 IPC and which has been rightly invoked herein as the buyers have invested different amounts towards the purchase of the flats which tantamount to delivering the property as enunciated in section 420 IPC.
17. Thus, in the light of the aforesaid, I do not find any ground to interfere with the impugned order whereby the charges has been directed to be framed against the accused Sanjiv Dhingra u/s 420/120B IPC.
18. I now come to grips with the legal argument whether the impugned order discharging the accused from offence under section 409 IPC suffers from the vice of infirmity or not. It is also to Page No. 13 of 24 be examined whether the offence of cheating as provided in section 415/420 IPC can co-exist with the offence of criminal breach of trust as provided in section 405/406 IPC and in aggravated form in section 409 IPC.
19. Let us analyze the concept of the offence of criminal breach of trust and cheating.
Criminal Breach of Trust 19.1 The offence is defined under Section 405 IPC as under:-
"405. Criminal breach of trust.-- Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust".
19.2 The basic ingredients to constitute an offence of Criminal Breach of Trust are three-fold:
Page No. 14 of 241. A person should have been entrusted with property, or entrusted with dominion over property.
2. That person should dishonestly misappropriate or convert to their own use that property, or dishonestly use or dispose of that property or willfully suffer any other person to do so.
3. That such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which the person has made, touching the discharge of such trust.
19.3 The most essential ingredient, however, is that the accused person shall be voluntarily entrusted with some property by the victim.
19.4 An illustration (b) of Section 405 IPC to demonstrate an offence constituted under it is as under:-
(b) A is a warehouse-keeper. Z going on a journey entrusts his furniture to A, under a contract that it shall be returned on payment of a stipulated sum for warehouse room. A dishonestly sells the goods. A has committed criminal breach of trust.
19.5 This illustration shows that A never asked Z or exercised any dishonest inducement for the entrustment of the furniture of Z. Z himself entrusted the furniture to A. Cheating
20. Cheating is defined under Section 415 IPC as under:-
"415. Cheating.--Whoever, by deceiving any person, fraudulently Page No. 15 of 24 or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".
20.1 The basic ingredients to constitute an offence of cheating are also three- fold:
1. There should be a fraudulent or dishonest inducement of a person by deceiving him.
2. (a) the person so induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or
(b) the person so induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived.
3. In cases covered by (2)(b) above, the act or omission should be one which caused or is likely to cause damage or harm to the person induced in body, mind, reputation or property.
20.2 The most essential ingredient here is that there must be a fraudulent or dishonest inducement to the victim.
An illustration (c) of Section 415 IPC to demonstrate an offence constituted under it is as under:-
Page No. 16 of 24(c) A, by exhibiting to Z a false sample of an article, intentionally deceives Z into believing that the article corresponds with the sample, and thereby, dishonestly induces Z to buy and pay for the article. A cheats.
20.3 This illustration shows that A dishonestly induced Z and made him to buy and pay for the article.
21. Reading of the aforesaid would demonstrate that in the first scenario i.e in an offence of Criminal Breach of Trust, the accused person comes into possession and has dominion over the property with complete bonafides. He subsequently develops dishonest intention to convert it into his own use in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract made with the victim.
22. Whereas to constitute an offence of Cheating, the dishonest intention to induce the victim to part with his property must exist from the very inception. The crime is committed not when the victim parts with his property or does or omits to do anything, but when the accused person fraudulently induces the victim with dishonest intention to cheat the victim before he could part with such property or do or omit to do anything. It is pertinent to note that the property so parted with is on a pretext of such deception by the accused and is not made voluntarily and with free consent.
23. In the case of Wolfgang Reim & Ors v. State & Anr, decided on 02.07.2012, the Delhi High Court categorically held that Page No. 17 of 24 "a person must not be charged with the offence of cheating and criminal breach of trust simultaneously for the same transaction because for the offence of cheating, it is a prerequisite that dishonest intention must exist at the inception of any transaction whereas in case of criminal breach of trust, there must exist a relationship between the parties whereby one party entrusts another with property as per law, therefore, for commission of criminal breach of trust, the dishonest intention comes later, i.e, after obtaining dominion over the property by the accused person whereas for commission of cheating, dishonest intention of the accused has to be present at the inception of the transaction."
24. The Guwahati High Court and the Punjab and Haryana High Court have taken similar views in the cases of Mahindra and Mahindra Financial Services Ltd. and Ors v. Delta Classic Pvt. Ltd, 2009 (4) GLT 741 and Jalpa Parahad Aggarwal vs. State of Haryana and Ors, (1987) 2 Recent CR 427 respectively.
25. The Madras High Court also in Jaya Prakash vs. The State, dated 15.10.2014 had observed in paragraph 9 that section 406 IPC and section 420 IPC cannot go together because section 406 IPC essentially requires mutual trust, whereas section 420 IPC requires an element of deception.
26. Further, the Gujarat High Court also in the judgment titled as Ranjit Kumar Chakravarti vs. Cooperative Bank of Baroda Limited, 1998 Cri.LJ 216, had spoken about the framing Page No. 18 of 24 of alternate charge u/s 420 IPC and 406 to 409 IPC and observed in paragraph 6 as under:-
"6. The third contention raised on behalf of the revision applicant is that the learned Chief Judicial Magistrate has ordered to frame a charge under Sections 406, 408 and 409 as well as under Section 420 read with Section 114 of I.P.C. It is vehemently urged before me that the offences punishable under Sections 406 to 409 and offence under Section 420 cannot go together. The applicant has come before this Court before the actual framing of the charge against him and only after the order of framing the charge is passed. It must be mentioned that it is always open for a criminal Court to frame charges alternatively. A person can alternatively be charged under Sections 406 to 409 or under Section 420, I.P.C. It is true that the ingredients of Sections 406 to 409 and the ingredients of Section 420 are required to be considered. The offence under Sections 406, 408 or 409 and the offence under Section 420 could not go together. But if the alternative charge is framed, it could not be said that an alternative charge is illegal or invalid. In the case of Sunil Kumar Paul v. State of West Bengal AIR 1965 SC 706 : 1965 (1) Cri LJ 630 the charge-sheet was framed against the accused only under Section 409, but the Appellate Court had found the accused guilty of the offence punishable under Section 420 instead of Section 409 and had convicted the accused Page No. 19 of 24 under that Section and the said decision has been approved by the Apex Court by observing as under :-
Where a public servant was charged and tried by the Special Court for an offence under Section 409, I.P.C, but a charge under Section 420, I.P.C. could have been framed by the Special Court under Section 236, Cr. P.C. on the basis of the allegations in the charge-
sheet, the trial Court or the appellate Court can, in law, convict the accused of that offence instead of an offence under Section 409, I.P.C. if it be of the view that the offence of cheating had been established. This would be in accordance with the provisions of Section 237, Cr.P.C. Therefore, the learned Judicial Magistrate will have to bear in mind the ingredients of 406 to 409 as well as the ingredients Section 420 and then to consider as to whether the present revision applicant would be alternatively charged under Sections 406 to 409 and Section 420, IPC. Therefore, in the circumstances, I do not find any illegality of irregularity in the order passed by the learned Chief Judicial Magistrate.
I, therefore, hold that there are no grounds to interfere with the order while exercising the power under Section 482, Cr.P.C. The application is, therefore, dismissed. Rule is discharged. Interim orders stand vacated"Page No. 20 of 24
27. It can be deduced from above that if the intention of the accused was bonafide while he was being entrusted with the property and he thereafter developed a dishonest intention to convert the property into his own use, it would constitute an offence of breach of trust and not cheating. Thus, it is imperative to establish the intention of the accused, and moreover, the timing of such intention.
28. Hence, if in the facts of a particular case, there is an offence of breach of trust, one must not charge the person with an offence of cheating for the same set of facts or vice versa. When a property is so entrusted, the victim does it voluntarily and with free consent and the offence is committed only subsequently when the accused develops a dishonest intention to convert the entrusted property to his own use.
29. Whereas, when an offence of cheating is committed, the intention to cheat exists since the beginning and parting of the property by the victim takes place only as a result of such dishonest or fraudulent inducement thereof. Therefore, the offences of Cheating and Breach of Trust must not co-exist in the same set of facts and are antithetical to each other.
30. However, in a given set of facts, like in the instant case, though there are categorical allegations of dishonest inducement by the accused and misappropriation of monies of the buyers by futher transfer of funds to another partnership firm of the accused i.e. M/s Rajni Construction, at the juncture of framing of charge, charge in Page No. 21 of 24 alternative can be legally framed against the accused for the offence of cheating or in alternative for the offence of criminal breach of trust.
31. At this juncture, I also feel duty bound to discuss the judgment relied upon by Ld. Counsel for the complainant in the case of Vijay Dixit vs. State. Ld. Counsel attracted the attention of the Court to the relevant paragraphs i.e. paragraph 5, 8, 9 and 12. No doubt, in the said judgment, an argument was raised that section 420 IPC cannot co-exist with section 409 IPC, which was repelled, however, in paragraph 13 and 14 of the said judgment, and the judgment of Hon'ble Supreme Court in Superintendent & Remembrancer of Legal Affairs, West Bengal vs. S.K. Roy and Jaswant Lal Natha Lal vs. State of Gujarat were discussed but those judgments were strictly not on the aspect of whether section 420 IPC and 409 IPC could co-exist together but were on the aspect of 'entrustment'. Therefore, rather than taking cue from the said judgment, in the light of the afore-discussed judgments of various High Courts including High Court of Delhi, I am of the opinion that the reliance placed by Ld. Counsel for complainant on this judgment would not advance his cause. But yes, the judgment in Jaswant Lal Natha Lal (supra) does negate the plea of Ld. counsel for accused that this builder-buyer agreement for purchase of flat would not amount to sale.
32. The issue has narrowed down to whether the alternative charge is to be framed under section 409 IPC as invoked by the Page No. 22 of 24 investigating agency while presenting the chargesheet. For reference, the said section is being reproduced herein under:
Section 409 IPC "Criminal breach of trust by public servant, or by banker, merchant or agent.--
Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, mer-chant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine."
33. During the course of arguments, Ld. Counsel for the complainant sought to justify the invocation of section 409 IPC on the premise that the monies were being entrusted to the accused in the capacity of him being a director of the developer company and being acting as an agent thereof and since prima facie misappropriation of those monies has been alleged against him, he is liable to be enquired into and tried for offence under section 409 IPC.
34. In this regard, it is noted that section 409 IPC talks about the entrustment to any person in his capacity as a public Page No. 23 of 24 servant as a banker, merchant, factor, broker, attorney or agent.
Here, we are concerned with the term 'agent'. The term 'agent' cannot be divorced with the term 'principal'. The agent derives his authority from the principal and for his acts, the principal is liable. This section is meant to cater to those cases where there is a fiduciary relationship between the parties like principal-agent, attorney-client and the entrustment of the property is made by that principal in respect of which criminal breach of trust may have been committed. In the instant case, it is observed that the developer company would be the principal and the accused being a Director would be its agent, but the complainant herein is one of the buyer and the other buyers/ witnesses and not the principal so as to hold the accused/ Director liable for offence under section 409 IPC. Therefore, section 409 IPC is not made applicable herein but section 406 IPC can be brought in.
35. In the face of the aforesaid elucidation, the revision petition on behalf of the accused Sanjiv Dhingra is dismissed and the revision petition on behalf of complainant Ashutosh Kumar is allowed to the limited extent as above, and as a sequitur, alternate charge under section 406 IPC be framed against the accused along side the charge already framed under section 420/120B IPC.
PRONOUNCED IN OPEN COURT ON 03.02.2024 (NAVJEET BUDHIRAJA) ASJ-02/SOUTH/SAKET COURTS NEW DELHI/03.02.2024 Page No. 24 of 24