Sikkim High Court
Sancha Bahadur Subba vs Ramesh Sharma And Another on 1 November, 2021
Author: Meenakshi Madan Rai
Bench: Meenakshi Madan Rai
THE HIGH COURT OF SIKKIM : GANGTOK
(Criminal Appellate Jurisdiction)
DATED : 1st November, 2021
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SINGLE BENCH: THE HON'BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
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Crl. A. No.38 of 2018
Appellant : Sancha Bahadur Subba
versus
Respondents : Ramesh Sharma & Another
Appeal under Section 372 of the
Code of Criminal Procedure, 1973
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Appearance
Mr. Raghvendra Kumar, Advocate for the Appellant.
Mr. S.S. Hamal, Mr. Leada Tshering Bhutia and Ms. Sabina
Chettri, Advocates for the Respondent No.1.
Mr. Yadev Sharma, Additional Public Prosecutor for the State-
Respondent No.2.
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JUDGMENT
Meenakshi Madan Rai, J.
1. Aggrieved by the acquittal of the Respondent No.1 herein, in Criminal Appeal No.01 of 2018, Ramesh Sharma vs. State of Sikkim under Section 406 and Section 420 of the Indian Penal Code, 1860 (for short, the "IPC"), by the Learned Sessions Judge, Special Division-II, Sikkim at Gangtok, vide Judgment dated 27.08.2018, having reversed the finding of Conviction of the Learned Judicial Magistrate, Chungthang, North Sikkim, in G.R. Case No.327 of 2015, State of Sikkim vs. Ramesh Sharma vide Judgment dated 28.12.2017, this Appeal has arisen.
2.(i) On 07.01.2015, the Appellant herein lodged Exhibit 16, the First Information Report (for short, the "FIR"), before the Sadar Police Station, which was registered as FIR No.08 of 2015, dated 07.01.2015 under Sections 420 and 406 of the IPC against the Respondent No.1. The Appellant reported that the Respondent Crl. A. No.38 of 2018 2 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
No.1, in the month of March, 2013, had informed him that Loan could be availed from the Syndicate Finance Pvt. Ltd., Mumbai, for the incomplete Hotel Project of his son with marginally lower rate of interest than the Nationalized Banks as also liberal moratorium period. The Respondent No.1 being known to the Appellant‟s close relative and having handled the Hotel Loan Project of his relative‟s wife, the Appellant agreed to the proposal. Pursuant thereto, for the said purpose the Respondent No.1 took a total sum of Rs.42,70,000/- (Rupees forty two lakhs and seventy thousand) only, in two tranches by executing two Money Receipts, the first comprising of Rs.12,70,000/- (Rupees twelve lakhs and seventy thousand) only, in March, 2013, and the second being a sum of Rs.30,00,000/- (Rupees thirty lakhs) only, in August, 2013 as "Promoter's Capital Contribution." That, the Appellant suspected that the Respondent No.1, instead of investing the money for the required purpose, invested it in "Nirmal Bang Broking House" of which he was a Franchisee, for his personal benefit. Despite repeated requests, the Respondent No.1 refused to return his money. On 04.11.2014, the Appellant warned the Respondent No.1 that should he fail to return his money, he would be compelled to take necessary legal action against him. Thereupon, on 07.11.2014, the Respondent No.1 executed Exhibit 1, an Agreement, wherein he promised to pay the Appellant, the aforestated amount in three installments towards which, he issued three post-dated Cheques, dated 30.12.2014, 15.02.2015 and 31.03.2015, drawn on IDBI Bank and AXIS Bank. The first Cheque was deposited by the Appellant in his Account in the Central Bank of India, Gangtok Branch, but the Cheque was dishonoured by the Crl. A. No.38 of 2018 3 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
said Bank on account of "insufficiency of funds" in the Respondent No.1‟s Account, hence the FIR. The matter was endorsed to the Investigating Officer (for short, the "I.O.") P.W.19 for investigation, on completion of which, Charge-Sheet was submitted against the Respondent No.1 under Section 420 and Section 406 of the IPC.
(ii) The Learned Trial Court framed Charge against the Respondent No.1 under Sections 406 and 420 of the IPC, to which he pleaded "not guilty." The Prosecution, in a bid to establish its case, examined nineteen Witnesses including the I.O. of the case. The Respondent No.1 was examined under Section 313 of the Cr.P.C., on closure of Prosecution evidence. He had no Witnesses to examine. On consideration of the evidence including the documentary evidence, the Learned Trial Court convicted the Respondent No.1 under Sections 406 and 420 of the IPC.
(iii) Pertinently, it may be observed that the reasoning of the Learned Trial Court begins at "Paragraph 13" of the Judgment and ends at "Paragraph 16." Reasons as to how the ingredients of each of the offences under which the Respondent No.1 was charged stood fulfilled by the evidence, has not been discussed. The only reason that appears to have weighed with the Learned Trial Court when arriving at the conclusion of Conviction, is that Exhibits 12 and 13 both dated 10.04.2014, were executed one year after the actual monetary transaction, pursuant to the Appellant warning the Respondent No.1 that he would take up the matter legally. Consequently, the Respondent No.1 issued the Money Receipts and the three Cheques. It was held that this corroborated the fact that the Respondent No.1 had committed "breach of trust to dishonestly cheat the Appellant." It was also recorded by the Crl. A. No.38 of 2018 4 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
Learned Trial Court that if the Respondent No.1 was upright with his contention, he would have called his Witness Tanmai Majumdar for examination which he did not. Thirdly, it was observed that if there was no fraud or cheating committed by the Respondent No.1, there was no requirement for him to comply with the phone call made by the Appellant to him on 04.11.2014 and issue the three Cheques, instead he would have approached the Police Station regarding the threat. Accordingly, it was concluded that the Prosecution had been able to establish the ingredients of the offence under Sections 406 and 420 of the IPC beyond a reasonable doubt.
(iv) Dissatisfied with the Judgment of Conviction and Order on Sentence, the Respondent No.1 was before the Learned First Appellate Court, which while reversing the Judgment of the Learned Trial Court, concluded in sum and substance that there was no material evidence on record to prove that the Respondent No.1 had dishonestly misappropriated the money or converted it to his own use or disposed it of in violation of such trust. That, there was no evidence to prove that the Respondent No.1 had dishonestly taken the sum of Rs.42,70,000/- (Rupees forty two lakhs and seventy thousand) only, from the Appellant. There was no evidence to prove that the Respondent No.1 had invested the amount in "Nirmal Bang Broking House" apart from which, the I.O. had admitted that such Broking House had closed since 2011. It was also concluded that in the absence of proof that the Respondent No.1 had misused the amount for his own use or disposed it of in violation of such trust, the Respondent No.1 could not be convicted for the offence under Section 406 of the IPC. For Crl. A. No.38 of 2018 5 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
the offence under Section 420 of the IPC, the Learned First Appellate Court concluded that the Prosecution had failed to prove that there was an intention to cheat, besides which it was incredulous that despite doubting the credibility of the Respondent No.1, the Appellant had parted with an additional sum of Rs.30,00,000/- (Rupees thirty lakhs) only, apart from Rs.12,70,000/- (Rupees twelve lakhs and seventy two thousand) only, paid to him earlier. The Learned Court disbelieved the entire money transaction, in the absence of evidence and in consideration of the fact that there was a delay of more than one year in lodging the FIR. He, thus, concluded that the matter was inherently Civil in nature and lacked the basic ingredients of Section 420 or Section 406 of the IPC. It is against this Judgment that the Appellant is before this Court.
3.(i) It is necessary to clarify at the outset that before the Learned Trial Court, the parties were State of Sikkim vs. Ramesh Sharma (the Respondent No.1 herein). In Appeal before the Learned First Appellate Court, the Respondent No.1 herein was the Appellant while the State (the Respondent No.2 herein) was the Respondent. Before this Court, it is the "Complainant" who is the "Appellant" and not the State. It goes without saying that the Complainant was represented by the State in G.R. Case No.327 of 2015, however, in the instant matter, in view of the State- Respondent No.2 not having preferred an Appeal, the Complainant has chosen to file this Appeal. In this context, reference is to be made to the provisions of Section 372 of the Code of Criminal Procedure, 1973 (for short, the "Cr.P.C.") which is extracted hereinbelow for easy reference;
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"372. No appeals to lie unless otherwise provided. --No appeal shall lie from any judgment or order of a Criminal Court except as provided for by this Code or by any other law for the time being in force:
Provided that the victim shall have a right to prefer an appeal against any order passed by the Court acquitting the accused or convicting for a lesser offence or imposing inadequate compensation, and such appeal shall lie to the Court to which an appeal ordinarily lies against the order of conviction of such Court."
[Emphasis supplied]
(ii) In Mallikarjun Kodagali (Dead) Represented through Legal Representatives vs. State of Karnataka and Others 1, a three Judge Bench of the Hon‟ble Supreme Court, was considering the following;
"8. The rights of victims, and indeed victimology, is an evolving jurisprudence and it is more than appropriate to move forward in a positive direction, rather than stand still or worse, take a step backward. A voice has been given to victims of crime by Parliament and the judiciary and that voice needs to be heard, and if not already heard, it needs to be raised to a higher decibel so that it is clearly heard.
9. With this background, we need to consider the questions that arise before us consequent to the introduction of the proviso to Section 372 CrPC with effect from 31-12-2009. The questions are somewhat limited : Whether a "victim" as defined in CrPC has a right of appeal in view of the proviso to Section 372 CrPC against an order of acquittal in a case where the alleged offence took place prior to 31-12-2009 but the order of acquittal was passed by the trial court after 31-12-2009? Our answer to this question is in the affirmative. The next question is : Whether the "victim" must apply for leave to appeal against the order of acquittal? Our answer to this question is in the negative."
[Emphasis supplied] The observation supra of the Hon‟ble Supreme Court clears the air with regard to the right to Appeal of a Victim, "Victim" having been defined under Section 2(wa) of the Cr.P.C. Hence, the Complainant being the Victim, is before this Court.
4. Learned Counsel for the Appellant, relying on Exhibit 12 and Exhibit 14 Money Receipts, dated 10.04.2014, advanced the argument that admittedly, a total sum of Rs.42,70,000/- (Rupees forty two lakhs and seventy thousand) only, was taken by the Respondent No.1 from the Appellant in March, 2013 and August, 2013 in instalments and the Receipts prepared in 10.04.2014, as reflected in Exhibits 12, 13 and 14. The Respondent No.1 is in 1 (2019) 2 SCC 752 Crl. A. No.38 of 2018 7 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
agreement that all the three transactions revealed that the money changed hands and the documents were scribed by the Respondent No.1 himself. This is fortified by the findings of the RFSL Expert P.W.17. The Cheques which bounced were also issued in the handwriting of the Respondent No.1. That, resultant entrustment has been proved by Exhibits 12, 13 and 14 and P.W.14, the Assistant Director, Indian Chamber of Commerce, has established that the money was not handed over to the Indian Chamber of Commerce by the Respondent No.1. This evidence establishes his dishonest intention. To fortify this submission, reliance was placed on Shri Krishan Kumar vs. Union of India2. That, the initial burden on the Prosecution is to prove entrustment of the property on the accused, the actual manner of misappropriation by the accused need not be proved. Once the initial burden is discharged by the Prosecution, the onus would shift to the accused to prove how the property entrusted to him was dealt by him. Towards this submission, reliance was placed on State of H.P. vs. Karanvir3. That, the Respondent No.1 had induced the Appellant to deliver the money to him with dishonest intention with the promise that the Loan for the purpose mentioned would be obtained by him. Having practiced deceipt, the provisions of Section 420 of the IPC are also fulfilled. Hence, the Judgment of the Learned First Appellate Court, being misdirected be set aside and that of the Learned Trial Court restored. To further fortify his contentions, succour was drawn from the ratiocination of State of Punjab vs. Pritam Chand and Others4 and Sangeetaben Mahendrabhai Patel vs. State of Gujarat and Another 5. 2 AIR 1959 SC 1390 3 (2006) 5 SCC 381 4 (2009) 16 SCC 769 5 (2012) 7 SCC 621 Crl. A. No.38 of 2018 8 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
5. Per contra, Learned Counsel for the Respondent No.1 submitted that the Learned First Appellate Court has rightly set aside the Magisterial Judgment which was bereft of reasons for the conviction of the Respondent No.1. That, the FIR, Exhibit 16, gives a false narrative, as only one Cheque had bounced at the time the FIR was lodged. The G.R. Case is also confined to the bouncing of one Cheque only but there are no supporting documents to show that the Cheque was returned. Although the Prosecution has tried to make out a case of three Cheques being returned, the other two Cheques have not been exhibited. Besides, the matter has already been decided by this Court under Section 138 of the Negotiable Instruments Act, 1881, in Criminal Appeal No.33 of 2018, Criminal Appeal No.34 of 2018 and Criminal Appeal No.35 of 2018. That, the ingredient of Sections 406 and 415 of the IPC have remained unproved. Although Exhibits 12, 13 and 14 may indicate entrustment but dishonest intention and mens rea have not been established. There is no evidence whatsoever to suggest that after entrustment, the Respondent No.1 had diverted the money for his own use or for any other purpose. In fact, the steps required to be taken by the Appellant was to file a Suit for recovery of money and not lodge an FIR for the offences under Sections 406 and 420 of the IPC. Besides, Clauses 4 and 5 of the Agreement, Exhibit 1, clearly indicates that should the Cheques be dishonoured, Civil remedy would be opted by the Appellant towards which reliance was placed on Vir Prakash Sharma vs. Anil Kumar Agarwal and Another6. That, the Prosecution is to discharge its burden and prove its case beyond a reasonable doubt, which burden has not been 6 (2007) 3 SCC (Cri) 370 Crl. A. No.38 of 2018 9 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
discharged, as there is no proof of misappropriation or Witnesses furnished to testify about such alleged misappropriation. On this count strength was garnered from the decisions of the Hon‟ble Supreme Court in Dalip Kaur and Others vs. Jagnar Singh and Another7 and Satishchandra Ratanlal Shah vs. State of Gujarat and Another 8 and the decision of the Hon‟ble High Court of Delhi in J.R.D. Tata vs. Payal Kumar and Others9. That, the impugned Judgment requires no interference and the Appeal be dismissed.
6. The State-Respondent No.2 had no arguments to advance.
7. The rival submissions put forth by Learned Counsel were heard in extenso and afforded due consideration. The records of the case including the evidence have been meticulously perused, as also the impugned Judgment and the citations made at the Bar.
8. The questions that fall for consideration before this Court are;
(i) Whether the ingredients of Sections 406 and 420 of the IPC were fulfilled to enable the Learned Trial Court to accordingly convict the Respondent No.1 under the above Sections of law?; and
(ii) Whether the Learned First Appellate Court was in error in reversing the order of Conviction?
9.(i) To address the first Question formulated hereinabove, I briefly delve into the provision of the Sections. Section 405 of the IPC defines the offence of criminal breach of trust and Section 406 of the IPC is the penal provision for the offence. Section 405 IPC reads as follows;
"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 7 AIR 2009 SC 3191 8 AIR 2019 SC 1538 9 1986 (2) Crimes 449 Crl. A. No.38 of 2018 10 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
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 of the provision are not being extracted herein for the reason that it is not necessary for the facts of the instant case. The essential ingredients for an offence under Section 405 of the IPC are as under;
„1. A person should have been entrusted with property or entrusted with dominion over property;
2. He should have dishonestly misappropriated or converted to his own use that property, or dishonestly used or disposed off that property or willfully suffered any other person to do so; and
3. Such misappropriation, conversion, use or disposal should be in violation of any direction of laws 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.‟ Section 405 of the IPC thus envisages entrustment of property or dominion over property by the accused and dishonest misappropriation of it by him in violation of any direction of law prescribing the manner of discharge.
(ii) On the bedrock of the essential ingredients, it is pertinent to examine whether the evidence on record fulfills the said requisites. P.W.1 was an Employee in the same Office of the Appellant and P.W.2, who was known to the Appellant, had gone to the Chamber of the concerned Advocate for his own legal work but was made to sign on Exhibit 1 as a Witness to its execution. Their evidence reveals that they were aware of the contents of Exhibit 1 which had been read over to them, thereby indicating that the Respondent No.1 had taken a sum of Rs.42,70,000/- (Rupees forty two lakhs and seventy thousand) only, from the Appellant to obtain Loan for the incomplete Hotel Project of his son. As per Exhibit 1, Crl. A. No.38 of 2018 11 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
the Loan was to be obtained from Syndicate Finance Pvt. Ltd. or with the Indian Chamber of Commerce from where the Respondent No.1 had previously processed a Hotel Project Loan for one Naina Kumari Subba, wife of P.B. Subba, the relative of the Appellant. Exhibit 1 also proves that as the Loan amount was not forthcoming, the Appellant requested the Respondent No.1 to repay the money taken by him, on his failure to do so, the Respondent No.1 agreed to issue three post dated Cheques. It was agreed between the parties that if the three Cheques got dishonoured, the Respondent No.1 would be liable to be prosecuted under Section 138 of the Negotiable Instruments Act, 1881 and the Appellant could also take recourse to any other legal steps for recovery of the amount. Exhibit 12, Money Receipt dated 10.04.2014 fortifies the fact that Rs.10,00,000/- (Rupees ten lakhs) only, was handed over by the Appellant to the Respondent No.1. Exhibit 13, Money Receipt dated 10.04.2014 indicates that a sum of Rs.2,70,000/- (Rupees two lakhs and seventy thousand) only, was handed over to the Respondent No.1 by the Appellant and vide Exhibit 14, another Money Receipt of the same date, a sum of Rs.30,00,000/- (Rupees thirty lakhs) only, was handed over by the Appellant to the Respondent No.1. The execution of Exhibits 12, 13 and 14 dated 14.04.2014, were witnessed by P.Ws. 8 and 9. Admittedly, money did not change hands on that date, but had been made over in the months of March, 2013 and August, 2013, however, Exhibit 1 the Agreement, clarifies this aspect, inasmuch as it reads inter alia as follows;
"And whereas, the actual payment of
Rs.10,00,000/- (Rupees Ten Lakhs) only and
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Rs.2,70,000/- (Rupees Two Lakhs Seventy Thousand) only was made to the Second party in the month of March, 2013 for the purpose of processing of Rs.50,000,000/- (Rupees Five Crore) only for said Project Loan. ......"
It is further stated that;
"The Second Party thereafter demanded Rs.30,00,000/- (Rupees Thirty Lakhs) only from the First party as Promoter‟s Capital contribution. Since, the proposal brought in was from a reputed institution, the First Party managed Rs.30,00,000/- (Rupees Thirty Lakhs) only paid the said amount to the Second Party as Promoters Capital Contribution for the Hotel Project loan from ICCI, Kolkata in the name of Shri Tanam Subba, son of Shri Sancha Bdr. Subba (First Party), resident of Middle Burtuk, East Sikkim in the month of August, 2013. ......"
These documents thereby establish "Entrustment." The decision in State of Punjab vs. Pritam Chand and Others supra relied on by Learned Counsel for the Appellant is of no assistance to his case, since in the said matter, the Punjab and Haryana High Court had endorsed the view of the Trial Court which had acquitted the Accused on the ground that the matter arose out of a breach of Contract and was of Civil nature. The Hon‟ble Supreme Court while remitting the matter back to the High Court for fresh consideration observed that the High Court should not have in a summary manner dismissed the Appeal after having recorded that a Criminal case may arise even when breach of Contract is also there and there is no bar for prosecution under the Criminal law.
(iii) In State of H.P. vs. Karanvir supra relied on by Learned Counsel for the Appellant, the Hon‟ble Supreme Court while considering a matter where the Respondent, a Postmaster, had been entrusted a certain amount of money by the Complainant for purchasing National Savings Certificates, had misappropriated it, opined inter alia as follows;
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"11. The actual manner of misappropriation, it is well settled, is not required to be proved by the prosecution. Once entrustment is proved, it was for the accused to prove as to how the property entrusted to him was dealt with in view of Section 405 IPC. If the respondent had failed to produce any material for this purpose, the prosecution should not suffer therefor."
The observation of the Hon‟ble Supreme Court in this matter also lends no succour to the Appellant‟s case as the Hon‟ble Court found that the Respondent had admitted to the entire Prosecution case for all intents and purposes.
(iv) Reliance had been placed by Learned Counsel for the Respondent No.1 on Satishchandra Ratanlal Shah supra. The Appellant therein was trapped in an economic crisis and therefore he had approached the Respondent 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, the Respondent 2 had instituted a summary Civil Suit seeking recovery of the Loan amount which was still pending adjudication. The Hon‟ble Court held that the mere inability of the Appellant to return the Loan amount could not give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention was shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the Complaint and material were to be taken on their face value, no such dishonest representation or inducement could be found or inferred. In the matter at hand before this Court, it was not, in fact, a Loan taken by the Respondent No.1 but he had assured the Appellant by placing a proposal before him that he would help him avail Loan for which 2% Processing Fee advance payment for the Loan of Rupee Five Crores was required and thereafter taken a sum of Rs.42,70,000/- (Rupees forty two lakhs and seventy thousand) Crl. A. No.38 of 2018 14 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
only, from the Appellant. No mens rea has been proved on such act of the Respondent No.1.
(v) Admittedly, "entrustment" has been established in the matter at hand, yet it is trite to state that mere "entrustment" cannot constitute the offence under Section 405 of the IPC. To establish an offence under this Section, the fact of entrustment of the property as well as any or more of the ingredients detailed above have to be established by the Prosecution, the gist being a dishonest intention on the part of the Accused. The burden of proving such dishonest intention is on the Prosecution, which can justifiably be inferred from the attending circumstances, the conduct of the Accused and steps taken by him. In the first instance, it is to be noticed that Exhibit 1 reflects that the first Proposal of Respondent No.1 made to the Appellant was to obtain Loan from Syndicate Finance Pvt. Ltd. When the Loan failed to come through, the Respondent No.1 came up with another Proposal of availing Loan from the Indian Chamber of Commerce. Towards achieving this end, the Appellant handed over a sum of Rs.30,00,000/- (Rupees thirty lakhs) only, as "Promoter's Capital Contribution" to the Respondent No.1 in addition to Rs.12,70,000/- (Rupees twelve lakhs and seventy thousand) only, handed over earlier. The Appellant knew the Respondent No.1 and the attendant circumstances before handing over the amount. The Prosecution evidence nowhere indicates that efforts were made by the I.O. P.W.19 to trace out any deposits made by the Respondent No.1 before the Syndicate Finance Pvt. Ltd. to obtain Loan. All that the I.O. has stated is that he issued a Section 91 Cr.P.C. Notice to the Senior Executive Officer, Indian Crl. A. No.38 of 2018 15 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
Chamber of Commerce, Kolkata for supplying requisite documents regarding monetary transactions made for the purpose of Loan before their Office by the Appellant and the Respondent No.1. According to him, the documents received from the concerned Banks also revealed that the Respondent No.1 had never approached them for availing Loan. These documents referred to by the I.O. were not placed before the Learned Trial Court for its consideration. P.W.14, an Employee of the Indian Chamber of Commerce was the Witness examined by the Prosecution. He identified himself as an Assistant Director of the Indian Chamber of Commerce, Head Office, Kolkata. His evidence failed to shed any light on the facts involved in the case, as no documents were furnished before the Court in this context. Exhibit 23 is said to be the Letter prepared by him to the I.O. in response to Exhibit 22, the Section 91 Cr.P.C. Notice, in which he merely states that he does not possess any document regarding any monetary transaction that might have taken place between "Sancha Bahadur Subba, Son of Late A.B. Subba and Ramesh Sharma, son of Muktinath Sharma." It is not established by any documentary evidence from the Indian Chamber of Commerce that he was their Employee. Assuming he was, no proof has been furnished to establish that he dealt with the Loan Section of the Bank. It was also not proved by the Prosecution that the Draft Indenture dated 02.12.2013 referred to by the Witness, was prepared by the Respondent No.1. In fact, the Witness has not been able to establish who the parties between whom the Draft Indenture dated 02.12.2013 was executed. According to him, "I thereafter, stated to the investigation officer through a letter Crl. A. No.38 of 2018 16 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
dated 26.06.2015 that our office had received a draft indenture dated 02.12.2013 executed between the Indian Chamber of Commerce where the address of the office has been mentioned as "Cock Burn Lane, Church Road, Kolkotta". I took the same draft and referred/verified it with the business finance leader and Mr. Tanam Subba, proprietor of hotel Basera for authentication." The Witness further stated, "...........While going through the draft indenture I had also noticed that the same had been executed between the "Chairman" of the chamber and Mr. Tanam Subba, Proprietor of hotel Basera. However, there is no "Chairman" of the chamber as mentioned in the said draft nor has the chamber ever authorized any person to negotiate or execute any such deals with any party under any circumstances whatsoever." The evidence of P.W.14 is incomprehensible and defies understanding. It was the duty of the Prosecution to have investigated as to whether there was a Chairman of the Indian Chamber of Commerce and not taken the Statement of P.W.14 as gospel truth, based on Exhibit 23, the response of P.W.14. Further, no Witness was ever produced from the Syndicate Finance Pvt. Ltd. to prove that the Respondent No.1 had ever deposited or not deposited any amount by way of Promoter's Capital Contribution and no investigation appears to have been conducted on this aspect. As per the FIR Exhibit 16, the Appellant suspected that the Respondent No.1 had misused the money by investing it in one Share Company named "Nirmal Bang Broking House." In this context, the I.O. P.W.19 has categorically deposed that such a Broking House was defunct in the year 2011 itself whereas the Complaint was lodged in January, 2015, thereby defeating the Crl. A. No.38 of 2018 17 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
Prosecution case. It thus concludes that the Prosecution made no investigation whatsoever with regard to any deposit made by Respondent No.1 before the Syndicate Finance Pvt. Ltd. or the Indian Chamber of Commerce while the Broking House was closed down in 2011 itself. Suffice it to conclude here that besides "entrustment" there is no proof of dishonest misappropriation. Contrary to the submissions of Learned Counsel for the Appellant, in my considered opinion, the onus would shift on the Respondent No.1 only if the Prosecution had conducted investigation as to whether the money taken by the Respondent No.1 had been deposited and on concluding that no amount was deposited by the Respondent No.1 in any of the Financial Institutions mentioned above, the onus would fall on the Respondent No.1 to prove how he had misappropriated the amount. The Prosecution cannot shirk its burden of proving its case beyond a reasonable doubt nor foist such responsibility on the Accused. Hence, the ingredients of Section 405 of the IPC, as detailed hereinabove, have clearly not been established.
10.(i) So far as the offence under Section 420 of the IPC is concerned, the Section provides for an aggravated case of cheating and dishonestly inducing delivery of property, the offence for which is defined under Section 415 of the IPC as follows;
"415. Cheating.--Whoever, by deceiving any person, fraudulently 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."
Explanation.-A dishonest concealment of facts is a deception within the meaning of this section." Section 420 of the IPC reads as under;
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"420. Cheating and dishonestly inducing delivery of property.--Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
The sine qua non for the offence under Section 420 of the IPC is the dishonest intention of the person concerned at the time the money was handed over to him on the inducement made by the Accused. Hence, the essential requisites for an offence under Section 420 of the IPC are as follows;
„(1) the accused cheated another person;
(2) that he thereby induced--
(a) delivery of property to another person; the property not belonging to him; or
(b) to make, alter or destroy the whole or any part of a valuable security, or
(c) anything which is signed or sealed and capable of being converted into a valuable security;
(3) that he did so dishonestly.‟
(ii) In this context, we may revert back to Exhibit 1. The details of how the Loan was to be obtained are not being repeated herein to prevent prolixity. Suffice it to point out here that the condition of the Loan was that 2% Processing Fee was to be paid for the Capital Project Loan applied for.
(iii) It emerges that the amount of Rs.42,70,000/- (Rupees forty two lakhs and seventy thousand) only, handed over by the Appellant to the Respondent No.1 were of his own volition in order to obtain Loan for the purpose as stated in Exhibit 1. Therefore, the question of any offence under Section 420 of the IPC having been committed does not arise, as there is no dishonest inducement of the Appellant by the Respondent No.1, the Appellant being aware and willing to hand over a sum of Rs.42,70,000/- (Rupees forty two lakhs and seventy thousand) only, to the Respondent No.1 for Crl. A. No.38 of 2018 19 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
the stated purpose. There is no dishonest representation to the Appellant as Exhibit 1 reveals that the Respondent No.1 along with one P.B. Subba and Naina Kumari Subba went to Mumbai to finalize the Loan Project in the month of May, 2013, and although the Loan of the said Naina Kumari Subba had also not seen the light of day, yet the Appellant willingly handed over a sum of Rs.30,00,000/- (Rupees thirty lakhs) only, to the Respondent No.1, hence, the question of cheating by inducement of the Appellant as envisaged in the Section, does not arise. The Appellant appears to have discovered that the Respondent No.1 was the Agent for the Company Nirmal Bang Securities Pvt. Ltd. and he suspected that his money had been misused by the Respondent No.1 by investing in the said Company, however, Exhibit 10 relied on by the Prosecution, which is the File containing the Account transactions of one Naina Kumari Subba, does not indicate any such act by the Respondent No.1. The investments made in the said Securities are only in the name of P.B. Subba and Naina Kumari Subba evidently in the year 2011 and do not bear the name of the Respondent No.1. He has admitted that he did not have any proof that the Respondent No.1 had deposited the money in Nirmal Bang Securities Pvt. Ltd. for his personal benefit. On pain of repetition, it may be stated here that this would have been an impossibility considering that "Nirmal Bang Broking House" closed down in 2011 while the Appellant had handed over money to the Respondent No.1 in 2013. The entire matter of the Appellant appears to pivot around the dishonouring of the Cheque Exhibit 15, for a sum of Rs.10,00,000/- (Rupees ten lakhs) only, issued by the Respondent No.1 to the Appellant on 30.12.2014, on the ground of insufficiency Crl. A. No.38 of 2018 20 Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
of funds in the Account of the Respondent No.1 pursuant to which, he lodged the FIR Exhibit 16. It is worth noting that Exhibit 1 was executed between the parties and mere breach of the terms of Exhibit 1 ipso facto does not constitute the offence either of Criminal breach of trust as provided under Section 405 of the IPC or of cheating under Section 420 of the IPC nor is mens rea deducible.
(iv) The Evidence-in-Chief of the Appellant nowhere reveals that he was misled or induced by the Respondent No.1 at any point of time to make an investment. In fact, he has clearly stated inter alia as under;
"I know the accused present before the Court. I was introduced to him by my brother in law Prem Bdr. Subba in his house in the year 2012. In the month of March 2013, the accused approached me for availing loan from Syndicate Finance Pvt. Ltd. Mumbai for my son's stagnant hotel project as the interest rate as stated to me was marginally lower than national banks and its liberal moratorium period which seemed a very promising proposal. Since he was well known to Mr. P.B. Subba who was holding a high official post, I instantly agreed for the proposal of processing of the hotel project loan with Syndicate Finance Pvt. Ltd. Mumbai for my son. Further, I also agreed to the said proposal offered to me by the accused as I was well aware that the wife of P.B. Subba, Mrs. Naina Kumari Subba had also availed of a similar loan and which was under
process by the accused. ......."
11. Consequently, in light of all the discussions that have emanated supra, it is clear that the Prosecution has failed to establish the ingredients of Sections 405 and 420 of the IPC and inevitably, in the absence of any such evidence, the Learned Trial Court could not have convicted the Respondent No.1 under the above Sections of law.
12. The response to the second Question formulated hereinabove would therefore be that no error arises in the findings of the Learned First Appellate Court, which has correctly reversed the order of Conviction of the Learned Trial Court. Crl. A. No.38 of 2018 21
Sancha Bahadur Subba vs. Ramesh Sharma & Anr.
13. Appeal fails and is accordingly dismissed.
14. No order as to costs.
15. Copy each of this Judgment be sent forthwith to the Learned First Appellate Court and the Learned Trial Court, for information.
( Meenakshi Madan Rai ) Judge 01.11.2021 ml Approved for reporting : Yes