Patna High Court
Branch Manager, Bihar State Financial ... vs State Of Bihar And Anr. on 18 December, 2000
Equivalent citations: 2001(1)BLJR764
JUDGMENT Indu Prabha Singh, J.
1. This is an application filed under Sections 397 and 401 of the Code of Criminal Procedure, 1973 (in short 'the Code'). It is directed against the judgment and order dated 16.5.1998 passed by Shri Shahid Raus, 1st Class, Judicial Magistrate, Gaya in G.R. Case No. 1311 of 1995/T.R. No. 350 of 1998, by which the learned Magistrate acquitted opposite Party No. 2 of the charge under Section 406 of the Indian Penal Code and set him at liberty.
2. It appears that on the basis of a written report given by the Branch Manager of Gaya Branch of Bihar State Financial Corporation (in short 'the Corporation') an FIR was drawn up vide M.U. Police Case No. 22/95 under Section 406 of the Indian Penal Code against opposite party No. 2 Md. Khalil the proprietor of M/s Magadh Plastic Industries, Pariya, Bodh Gaya. The allegation against-him was that even when he had mortgaged the plant and machinery of his factory in favour of the Corporation, he removed the same and thereby he committed the offence of criminal breach of trust. The further case of the prosecution is that a sum of Rs. 5,85,000/- by way of loan, was advanced by the Corporation to opposite party No. 2' to set up the above-named industry for which necessary legal documents were executed. The plant and machinery were set' up at the mortgaged site by opposite party No. 2. However, on account of default of payment of the instalments of loan as per the agreement, a proceedings against opposite party No. 2 was started for its realisation. On inspection of the unit by the Officers of the Corporation, it was found that the plant and machinery worth Rs. 4,61,000/- were missing. Accordingly, the Officer Incharge of Bodh Gaya Police Station was informed on the basis of which the FIR was drawn up. The police after completing the investigation submitted charge-sheet. The cognizance of the offence was taken and opposite party No. 2 was put on trial before the learned Magistrate named above, who, however, acquitted him of this charge for the grounds stated in his judgment.
3. On behalf of the petitioner it has been contended that as many as 6 P.Ws. were examined on his behalf who have fully supported the case of the prosecution. However, the learned Magistrate without property appreciating their evidence and the facts and circumstances of this case acquitted opposite party No. 2. As a matter of fact, all the P.Ws. examined in this case have clearly stated about the offence committed by the opposite party No. 2 and at present, the liability of opposite party No. 2 exceeds Rs. 22,00,000/-. The learned Court did not take into consideration the fact about the dishonest removal of the plant and machinery by-opposite, party No. 2. It did not properly appreciate the evidence on record. It wrongly held that the Corporation had taken over the possession of the factory which was put on auction sale: The entire judgment of the learned Court below is perverse. The offence under Section 406 of the Indian Penal Code was clearly made out. On these grounds, it has been contended that the judgment of acquittal of the learned Court below be set aside and opposite party No. 2 be. convicted for the offence under Section 406 of the Indian Penal Code.
4. A show cause has been filed on behalf of the Opposite party No. 2 in which he had accepted that a loan of Rs. 5,85,000/- was given to him for setting up an industry, namely, "Magadh Plastic Industries". The plant and machinery for this factory were installed on the mortgaged site by opposite party No. 2. The factory started production and on behalf of the Corporation an inspection of the factory was made by the Officers of the Corporation. On 28.2.1991, a theft of the generator of this factory and one hand-pipe was committed for which a case under Sections 461/380 of the Indian Penal Code was registered on 1.3.1991. Thereafter, another theft of valuable machine etc. was committed in the said factory for which another FIR on 20.11.1994 was lodged. In both these cases the police submitted final form.
5. On account of these thefts, the factory remained closed for which informant in writing was given to the Corporation to take over the possession. Subsequently, the Corporation took over the possession of the aforesaid factory and put it on auction sale. The case filed against opposite party No. 2 is false. The P.Ws. examined in this case have made wrong statements. Their evidence is not reliable and the learned Court below has rightly discarded the same. On these grounds amongst others it has been contended that the judgment of acquittal of the learned Court below is correct and this revision application may be dismissed.
6. The only point for decision before me is whether this revision application is fit to be allowed or not.
7. The parties have been-heard in detail on various questions connected with this case. From the impugned judgment, it appears that the learned Court below was of the view that no offence under Section 406 of the Indian Peal Code has been made out against opposite party No. 2. If at all there is any allegation against him, it will simply amount to civil liability for which the Corporation was free to take steps for the realisation of the loan and also for which there is a provision under the relevant law. This takes us to the consideration of the question whether any offence under Section 406 of the Indian Penal Code has been made out against opposite party No. 2 or not. Before taking up for consideration this question, I will firstly like to refer the FIR (Annexure-1) lodged in this case. According to the FIR, the required machines were installed on the mortgaged site with the financial assistance of the Corporation. However, there was default in payment of the dues of the Corporation for which legal notice was served on opposite party No. 2. The factory was inspected by Officers of the Corporation who found that the plant and machinery installed at the site were missing. Accordingly, it was alleged that opposite party No. 2 had committed an offence in contravention of the terms of the agreement executed by him with the Corporation which has caused damage and loss to the Corporation. Hence, it was contended that opposite party No. 2 had made himself liable for the offence of criminal breach of trust/contract and mis-appropriation of public fund. The FIR was lodged accordingly.
8. This takes us to the consideration of the offence under Section 406 of the Indian Penal Code. The offence of breach of trust has been defined in Section 405 of the Indian Penal Code. It runs as follows:
405-Chminal 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 the 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". "(Explanations 1 and 2 omitted).
9. From this, it would appear that the expression entrustment carries with it the implication that the person handed over any property or on whose behalf that property is handed over to another, continues to be its owner and the fiduciary relationship is established between them. To establish the offence of criminal breach of trust the ownership or beneficial entrust of property in respect of which criminal breach of {rust is alleged who has been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. In the case of criminal breach of trust, the property in question continues in the prosecution and is put in trust to the accused as a bailor to be restored to the prosecutor or to be applied in accordance with his instruction. The person who transfers the possession of the property to the second party still remains the legal owner of the property. Mere breach of contract is not synonymous with criminal breach of trust.
10. In this connection, a reference may be made to a decision by Hon'ble Supreme Court in the case of Central Bureau of Investigation, SPE, SIU (X), New Delhi v. Duncans Agro Industries Ltd, Calcutta , in which the following observation has been made:
The explanation "entrusted with property" or "with any dominion over property" has been used in a wide sense in Section 405, IPC. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed for a specific purpose and dishonestly disposed of in violation of law or in violation of contract. The expression "entrusted" appearing in Section 405, IPC, is not necessarily a term of Law. It has wide and different implications in different contexts.
xx xx xx It is, however, necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit.
It was further observed in the said case as follows:
When some goods are hypothecated by a person to another person, the ownership of the goods still remains with the person who has hypothecated such goods. The property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in the other person and the offender must hold such property in trust for such other person or for his benefit. In a case of pledge, the pledged article belongs to some other person but the same is kept in trust by the pledged. In the instant case, a floating charge was made on the goods by way of security to cover up credit facility. In such case for disposing of the goods covering the security against credit facility, the offence of criminal breach of trust is not committed.
11. As I have already pointed out above, the FIR does not show any hypothecation nor pledge. As will appear from Annexure-1 (FIR), the only allegation made against him in it is that a sum of Rs. 5,85,000/- was disbursed to opposite party No. 2 for completion of project. With the help of this, many assets were acquired and machines were installed on the mortgaged site and the scheme was implemented. Subsequently, there was default in payment of dues of the Corporation and, therefore, the case was instituted. From the aforesaid allegations, it becomes clear that what was mortgaged was only the site over which the plant and machinery were to be installed. It is obvious that the plant and machinery were not hypothecated as there is no such statement in the FIR. Though the plant and machinery were purchased by the loan advanced to opposite party No. 2 the ownership over the same was of opposite party No. 2 and not of the Corporation. These facts become clear from Annexure 1 which is the FIR in the case. The allegations against opposite party No. 2 is that he had clandestinely removed the material from the premises.
12. The question that may arise in this connection would be whether the offence of criminal breach of trust with respect to the plant and machinery of the factory was made out against opposite party No. 2 or not. As is clear from the settlement made in the FIR, there was no entrustment of plant and machinery by the Corporation to opposition party No. 2. There is also no mention of the fact in the FIR that any beneficial interest in the plant and machinery was held by the Corporation. It appears to be pure and simple a case of granting of loan for a specified purpose to opposite party No. 2 who was only responsible for returning back the loan with' interest. As a matter of the fact, the' FIR shows that since opposite party No. 2 had defaulted in the payment of the instalment of this loan, therefore, the FIR was lodged. Thus, the basic requirement to constitute the offence of offence of criminal breach of trust as noticed above was completely lacking under the facts and circumstances of this case and it is clear that there has been no entrustment of plant and machinery to opposite party No. 2 by the Corporation which are alleged to have been removed by him. Thus, even if accepting the allegation that the plant and machinery of the factory purchased by the money received as loan from the Corporation were removed by Opposite Party No. 2 no offence of criminal breach of trust appears to have been made out inasmuch as the element-of entrustment of the plant and machinery is completely lacking in this case. As noticed above in the case of CBI (supra), no offence of criminal breach of trust under the facts and circumstances of this case could be made against opposite party No. 2, I have carefully gone through the judgment of the learned Court below, he was discussed this point and has come to the correct conclusion that no criminal offence under Section 406 of the Indian Penal Code is made out against opposite party No. 2 though it was open to, the Corporation to take steps in the Civil Court for the realisation of the amount given as loan to him through civil action.
13. From the impugned judgment, it becomes clear that the learned Court below has properly discussed the evidence on record and has come to the correct conclusion. In this connection, reference may be made to the evidence of P.W. 2 who had stated in his evidence that opposite Party No. 2 had installed the factory; was running the same and production was going on. This shows that the loan was utilised for the purpose of which it was taken. However, it appears that there were two thefts in the premises in which some plant and machinery were removed. Even P.W. 4 has stated that the accused (opposite party No. 2) has installed Plastic Factory at the site, and machines and tools were put set up and the production was going on. However, during the inspection on 8.9.1994, he found part of the machine removed for which there were provisions in Bihar State Financial Corporation Act, 1951 under Sections 29, 30 and 31 for the realisation of the amount of loan in case of removal of the article by invoking civil Court jurisdiction. From this also, it would appear that the learned Court below has come to the correct conclusion.
14. On behalf of the opposite party, it has been contended that this criminal revision application, is not maintainable inasmuch as no criminal revision will lie against the judgment of acquittal passed by the competent Court. Since this question has been raised, it has become necessary for me to discuss it in brief to find out what is the correct law on the subject.
15. This takes us to the consideration of Section 401 of the Code. This Section deals with the High Court's power of revision. Sub-section (1) of Section 401 of the Code lays down that in case of a revision, the High Court may, in its discretion, exercise any of the powers conferred on a Court of appeal by Sections 386, 390 and 391 of the Code. Section 386 provides for the power of the appellate Court. In Section 386(a), there is a provision that in an appeal from an order of acquittal the appellate Court can reverse the same. Coming to Section 401(3), it provides that nothing in this Section shall be deemed to authorize a High Court to convert the finding of acquittal into one of conviction. In view of this provision, it has to be considered whether the plea of the petitioner in the present case for convicting the opposite party No. 2 after setting aside the judgment of acquittal can be allowed or not. As per Sub-section (3), it is clear that this can not be done.
16. Coming to the case law on the subject, I will firstly refer to the case of K. Chinnaswamy Reddy v. State of Andhra Pradesh and Anr. , wherein in paragraph 7, it was held as follows:
It is true that it is open to High Court in revision to set aside an order of acquittal even at the instance of private parties, though the State may not have thought fit to appeal; but this jurisdiction should, in our opinion, be exercised by the High Court only in exceptional cases, when there is some glaring defect in the procedure or there is a manifest error on a point of law and consequently, there has been a flagrant miscarriage of justice. Sub-section (4) of Section 439 for bids a High Court from converting a finding of acquittal into one of conviction and that makes it all the more incumbent on the High Court to see that it does not convey the finding of acquittal into one of conviction by the indirect method of ordering retrial, when it cannot itself directly covert a finding of acquittal into a finding of conviction. This places limitations on the power of the High Court to set aside a finding of acquittal in revision and it is only in exceptional cases that this power should be exercised.
17. The ratio of this decision has been upheld by the Hon'ble Supreme Court in the case of Ayodhya Dube and Ors. v. Ram Sumer Singh . This is a three-Judge Bench decision of the Hon'ble Supreme Court which affirmed the ratio of the decision in a case of K. Chinnaswamy (supra) two-Judge Bench decision with an observation that the cases were only illustrative and not exhaustive. In a recent decision in the case of Kishan Swaroop v. Government of N.C.T. of Delhi , the Hon'ble Supreme Court relying on the decision of the K. Chinnaswamy (supra) set aside the order of the High Court in which it was also held that the appellant was required to obtain permission from the Public Prosecutor to file a revision petition against the acquittal. In the case of Vimal Singh v. Khuman Singh and Ors. also reliance was placed on the case of K. Chinnaswamy (supra). It was observed in the case of Vimal Singh (supra) that the High Court will not interfere with the judgment of the acquittal if the trial Courts order is not suffering from glaring illegality or it does not cause miscarriage of justice or it does not suffer from want of jurisdiction or the trial Court has not illegally shut out a legal evidence. It was further observed in the case that the High Court cannot convert a judgment of acquittal into that of conviction. At best, it can order for re-trial. While considering the scope of Section 401 of the Code, it was further observed in this decision in paragraph 7 as follows:
Thus, the High Court would not be justified in substituting an order of acquittal into one of conviction even if it is convinced that the accused deserves conviction. No doubt, the High Court in exercise of its revisional power can set aside an order of acquittal if it comes within the ambit of exceptional cases enumerated above, but it cannot convert an order of acquittal into an order of conviction. The only course left to the High Court in such exceptional case is to order retrial.
The exceptional cases mentioned are those exceptional cases which have been referred to in the decision in the case of K. Chinnaswamy (supra).
18. This question came up for consideration before a Bench of this Court of which I was also a member along with N. Rai, J. in the case of Ram Bilash Prasad v. Binda Tanti and Ors. 2000(1) PLJR 879. In this decision also, the reliance was placed on the case of K. Chinnaswamy (supra) and it was held that a revision against the order of acquittal at the instance of the informant or a witness or any other interested person in the litigation is maintainable provided its come within the exceptional cases mentioned in the case of K. Chinnaswamy (supra).
19. From the detailed discussions made above, it appears that there is no merit in this revision application. The judgment of acquittal passed by the learned trial Court does not warrant interference in exercises of the revisional powers by this Court. It is obvious that the State could have filed an appeal against the impugned judgment. This has not been done and any revision petition filed on behalf of the informant has to be put to the strict test of law relating to the revisional powers of this Court. It is, however, made clear that it will not debar the petitioner from moving the Civil Court for realisation of loan amount with interest from opposite party No. 2.
20. In the result, this revision petition is dismissed for the reasons stated above.