Delhi District Court
Fir No. 564/02 1 State vs . Ghanshyam Paliwal on 28 April, 2011
FIR no. 564/02 1 State Vs. Ghanshyam Paliwal
IN THE COURT OF SH. SAMAR VISHAL, METROPOLITAN MAGISTRATE05,
SOUTHEAST DISTRICT, NEW DELHI
STATE VS. Ghanshyam Paliwal
FIR NO: 564/02
P. S. Ambedkar Nagar
U/s 406/420/120B IPC
JUDGMENT
Sl. No. of the case and : 443/2 (14.10.2010)
Date of its institution : 21.8.2004
Name of the complainant : Chief Manager Punjab National
Bank
Date of Commission of offence : 1.9.95
Name of the accused : Ghanshyam Paliwal
Offence complained of : Section 406/420/120B IPC
Plea of accused : Not Guilty
Case reserved for orders : 15.4.2011
Date of Judgment : 28.04.2011
Final Order : AQUITTED
FIR no. 564/02 2 State Vs. Ghanshyam Paliwal
BRIEF STATEMENT OF FACTS FOR THE DECISION:
This is the prosecution of the accused Ghanshaym Paliwal upon a charge sheet filed by the police station Ambedkar Nagar u/s 406/420/120B IPC.
The prosecution case is that a complaint was lodged by the complainant Chief Manager, Punjab National Bank alleging that for the Economic Development of Educated Urban Poor, Central Government introduced a 'Prime Minister Rozgar Yojna' to provide financial assistance for self employment without creating any charge on existing assets for the security of sanctioned loan amount. Accused Ghanshyam Paliwal applied for financial assistance for running a business of Auto Spare Parts under the said scheme on 18.4.95 to the tune of Rs.1,00,000/ but the bank sanctioned Rs.95,000/ on 1.9.95. Accused executed all the relevant documents and promised to repay the said amount in installments but he failed to make even single installment to the Bank, hence the officers of the bank visited at the known place of the borrower and found that the stock which were hypothecated has been misappropriated and sold without the prior permission of the Bank, thus he has violated the terms and condition of the contract of Term Loan Amount. As per the balance sheet of the Bank a sum of Rs.1,72,586/ as on 31.3.2000 was due and the accused has not paid even a single instalment. Hence the present FIR has been lodged.
After completing the formalities, the investigation was carried out by PS Ambedkar Nagar and a charge sheet was filed by the investigating officer indicting the accused u/s 406/420/120B IPC. The charge was framed against the accused u/ s 406/420 IPC to which he pleaded not guilty and claimed trial.
The trial started on framing of charge and to prove its case, prosecution examined as many as five witnesses.
PW 1 is Ct. Satender Kumar who deposed that on 26.8.2003 he was posted at PS FIR no. 564/02 3 State Vs. Ghanshyam Paliwal Ambedkar Nagar. On that day he joined the investigation of this case with the IO/SI Jeet Singh. They reached at H.No. 20/203, DDA Flats, Dakshin Puri where accused was arrested vide memo Ex.PW1/A which bears his signature at point A and was released on the bail. (Accused has been correctly identified by the witness).
PW 2 is HC Dharam Pal who deposed that on 30.12.2002 investigation was marked to him after registration of FIR. He collected documents from Chief Manager, PNB (Agreement to Sell etc) which are Mark A colly and same were seized vide memo Ex.PW2/A (Witness has been shown letter dated 2.4.03 and same is Ex.PW2/B). He prepared site plan at the instance of Chief Manager (Sanction not on record). On 4.3.2003 a letter was received from Bank that payment has been received and application was moved to prosecution for opinion. Thereafter he was transferred and file was marked to SI Jeet Singh.
PW 3 is Sh. Tej Singh who deposed that in the year 2003, he was posted at PNB, Branch Office, Khanpur, as Agriculture Manager. He got the matter settled for the bank one side and Ghanshayn Paliwal present in Court (correctly identified) on the other side for Rs. 80,000/ which he deposited. The proof of settlement is lying with the Bank in his loan file. He do not recollect whether the police met him in this case nor he recollect whether he had handed over documents to the police. At that stage, witness was shown the seizure memo fo documents. The witness correctly identified his signatures at point A, same is already Ex.PW2/A. He handed over the copy of documents mentioned in the said seizure memo. He cannot tell whether the original papers of bank loan were lying with the bank or not. Certain documents were also proved as Ex.PW3/A and Ex.PW3/B. The statement of account of the accused from 1.9.95 to 12.3.03 is also on record. It is in original and certified by the witness at point A, same is Ex.PW3/C. PW 4 is Sh. B.S. Wahi who deposed that in the year 2002, he was posted at Khanpur FIR no. 564/02 4 State Vs. Ghanshyam Paliwal Branch of PNB as Chief Manager. The accused present in the Court (correctly identified) who had availed loan of Rs.80,000/. He cannot recollect the amount which fall in arrear. Thereafter, he lodged a complaint Ex.PW4/A. The reason of filing complaint was that accused had fallen arrear and he had not made the payment. He had not brought the file of the accused. The application form of the accused Ex.PW3/A is on record and agreement of the bank Ex.PW3/B and statement of account is Ex.PW3/C. (Accused was cross examined by Ld. APP for State).
PW 5 is SI Jeet Singh who deposed that on 9.7.03 he was posted at PS Ambedkar Nagar. The investigation of the case was handed over to him. Accused present in the Court that day was formally arrested on 26.8.03 and released on bail as he had secured anticipatory bail from the Sessions Court. Next day he received document in photocopies from PNB vide seizure memo Ex.PW2/A. The photocopy of document is Ex.PW3/A, Ex.PW3/B and Ex.PW3/C and challan was filed after investigation.
After the prosecution evidence was recorded, the accused was examined u/s 313 Cr.PC and all the incriminating evidences were put to them as required by the provisions of that section to which he replied that he took the loan without any dishonest intention and with the bonafide belief to repay the loan. He never had any intention to misappropriate the loan amount and due to some financial reasons, he could not pay the loan.
On one hand Ld. APP has argued that the case of the prosecution has been proved beyond reasonable doubt and the accused deserves conviction.
On the other hand, it has been argued by the counsel for defence that the matter was settled even during the time of investigation and accused has paid the settlement amount to the complainant bank.
I have heard counsel for both the parties and perused the records of the case.
FIR no. 564/02 5 State Vs. Ghanshyam Paliwal Now I will appreciate the evidence lead in this case.
The present case appears to me a case of more of a civil nature and I take a note of caution in the judgment of Mohd. Ibrahim Vs. State of Bihar 2009 (4) JCC 2754, the Supreme Court of India has observed that " this court has time and against draw attention to the growing tendency of complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused or out of enmity towards the accused, or to subject the accused to harassment. Criminal Courts should ensure that proceedings before it are not used for settling scores or to pressurize parties to settle their disputes. But at the same time, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes".
Now in the present case the charge against the accused is that in the year 1995 he took a loan from the Punjab National Bank of Rs.95,000/ and had disposed off the stocks hypotheticated with the bank in order to cheat the complainant. The charge was framed under two sections i.e u/s 420 IPC and 406 IPC. I will deal with both of them one by one. Sh. B.S. Wahi deposed that in the year 2002 he was posted at Khanpur Branch of PNB as Chief Manager and the accused availed a loan of Rs.80,000/ but he cannot recollect the amount which falls in arrear. He lodged a complaint Ex.PW4/A. The application form of the accused is proved as Ex.PW3/A and Ex.PW3/B, statement of account is Ex.PW3/C. This witness has not supported much of the prosecution story and for this Ld. APP for State has to cross examine him. Similarly there is no other witness regarding the offence of cheating.
Section 420 IPC deals with cheating. As I have already discussed earlier, it appears to be more of a civil nature i.e of taking and obtaining loan. There is no evidence on record that which stocks were hypothecated with the complainant bank. There is no details or list of FIR no. 564/02 6 State Vs. Ghanshyam Paliwal those hypothecated items. I have gone through the application form Ex.PW3/A and no such list is provided in that form also. Since it remained unproved that the accused has disposed off the hypothecated assets, it remained completely a case of giving and taking loan and there is no allegation that loan was obtained by fraudulent documents or the accused has any dishonest intention not to repay the loan or that he has changed the address and has not appeared or has done anything which may constitute cheating in this case. A simple case of giving and not repaying the loan does not amount to criminal offence unless and until the inducement to obtain loan and dishonest intention is proved. There is nothing of such kind in the present case. Further the case of prosecution is shattered with the testimony of PW 4 Sh. B.S. Wahi who deposed that the reason of filing complaint was that accused had fallen in arrear and he had not made the payment. I dont think that falling in arrear amounts to criminal offence . The only remedy was to recover the arrears from the civil court.
I am further fortified in this view by the judgment in "C.B.I. v. Duncans Agro Industries Ltd., Calcutta" 1996 AIR SCW 3019, AIR 1996 SUPREME COURT 2452 wherein it was observed
23. Coming to the offence under S.420, I.P.C. as alleged in the FIR, Mr. Shanti Bhushan has submitted that the offence of 'cheating' has been defined in S.415, I.P.C. and consists of fraudulently and dishonestly inducing a person by deceiving him to deliver any property or to do or omit to do anything which he would not do or omit if he were not so deceived. Two essential ingredients of offence would be i) To make a false statement so as to deceive any person, and ii) fraudulently and dishonestly inducing the person to deliver any property or to do or omit to do something. It is submitted that neither in the FIR FIR no. 564/02 7 State Vs. Ghanshyam Paliwal nor in the extracts from the FIR which have been referred to in the CBI's submission, there is any reference to any false representation about the existence of stocks of Rs.17.50 crores on any particular day. That the credit facility limit sanction to M/s. DAIL on 1211984 was to the tune of Rs.17.50 crores. It is also wrongly stated in the written submission of the CBI that the grant of credit facility amounts to delivery of property. The grant of credit facility only means that the Bank is prepared to give loans up to the limit sanctioned. Hence, no case of cheating has been made out even prima facie.
Section 406 IPC provides as under;
Punishment for criminal breach of trust Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
The criminal breach of trust is defined in section 405 IPC which reads as under; 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 wilfully suffers any other person so to do, commits "criminal breach of trust".
There is no evidence that the stocks does not belong to the accused. It is a case of the complainant itself that the stocks were of the accused and were hypothecated with the complainant bank. Therefore, it means that the stocks belonged to accused himself and no FIR no. 564/02 8 State Vs. Ghanshyam Paliwal person can be punished for dishonest misappropriation of his own property therefore, there is no question of any criminal misappropriation of property. I am further fortified in this view by the judgment in "C.B.I. v. Duncans Agro Industries Ltd., Calcutta" 1996 AIR SCW 3019, AIR 1996 SUPREME COURT 2452 wherein it was observed ''26. After giving our careful consideration to the facts and circumstances of the case and the submissions made by the respective counsel for the parties, it appears to us that for the purpose of quashing the complaint, it is necessary to consider whether the allegations in the complaint prima facie make out an offence or not. It is not necessary to scrutinise the allegations for the purpose of deciding whether such allegations are likely to be upheld in the trial. Any action by way of quashing the complaint is an action to be taken at the threshold before evidences are led in support of the complaint. For quashing the complaint by way of action at the threshold, it is, therefore, necessary to consider whether on the face of the allegations, a criminal offence is constituted or not. In recent decisions of this Court, in the case of Bhajan Lal (1992 AIR SCW 237) (supra), P.P. Sharma (1991 AIR SCW 1034) (supra), and Janata Dal (1993 AIR SCW 248) (supra), since relied on by Mr. Tulsi, the guiding principles in quashing a criminal case have been indicated.
27. In the instant case, a serious dispute has been raised by the learned counsel appearing for the respective party as to whether on the face of the allegations, an offence of criminal breach of trust is constituted or not. In our view, the expression 'entrusted with property' or 'with any dominion over property' has been used in a wide sense in Section 405, I.P.C. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of FIR no. 564/02 9 State Vs. Ghanshyam Paliwal in violation of law or in violation of contract. The expression 'entrusted' appearing in Section 405, I.P.C. is not necessarily a term of law. It has wide and different implications in different contexts. 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. The expression 'trust' in Section 405, I.P.C. is a comprehensive expression and has been used to denote various kinds of relationship like the relationship of trustee and beneficiary, bailor and bailee, master and servant, pledger and pledgee. 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 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 pledgee. In the instant case, a floating charge was made on the goods by way of security to cover up credit facility. In our view, in such case for disposing of the goods covering the security against credit facility the offence of criminal breach of trust is not committed. In the facts and circumstances of the case, it, however, appears to us that the respondents moved the High Court only in 1991 although the first FIR was filed in 1987 and the second was filed in 1989. The CBI, therefore, got sufficient time to complete the investigation for the purpose of framing the charge.
FIR no. 564/02 10 State Vs. Ghanshyam Paliwal Not only this, it is very clear from the prosecution evidence that the matter was settled with the complainant bank and to this effect, PW 3 Tej Singh, has deposed who is the employee of the complainant bank that the matter was settled with the bank on one side and Ghanshayn Paliwal present in Court (correctly identified) on the other side for Rs.80,000/ which he deposited. This fact also suggests that there was no dishonest intention of taking the loan without intention to repay.
On the overall evidence, the present case appears to be a simple case of civil nature and even the registration of FIR was not proper in this case.
In view of the aforesaid discussions, the accused stands acquitted of the charges u/s 420/406 IPC.
Announced in the open court (Samar Vishal)
on 28th April, 2011 Metropolitan Magistrate05,
South East, New Delhi