Delhi District Court
Lalchand vs . State Of Haryana (Air 1984 Supreme ... on 30 August, 2012
IN THE COURT OF SHRI NARESH KUMAR LAKA
METROPOLITAN MAGISTRATE,
TIS HAZARI COURTS, DELHI
F.I.R. No. 562/97
Police Station: Rajouri Garden
under Section 409 IPC
(a) Case ID number : 02401R0030251998
(b) Date of commission of the : 27.06.1997
offence
(c) The name of the : Sh. Sunil Sayal, Proprietor
complainant of M/s. Uneca Freight
Movers Office at C2,
Goverdhan House, 5354,
Nehru Place, Delhi.
(d) The name of the accused, : Santosh Chandola S/o Sh.
his parentage and residence Dhan Prasad R/o H. No.
33/77, Om Apartment, Flat
No. B7, Punjabi Bagh West,
Delhi.
(e) The offence complained of : Under Section 409 IPC
or proved
(f) The plea of the accused : Pleaded not guilty
(g) The final order : Convicted
(h) The date of such order : 30.08.2012
FIR No. 562/1997 PS Rajouri Garden Page No.1 of 19
Challan was filed on: 04.08.1998
Final arguments were heard on: 21.08.2012
Judgment is announced on: 30.08.2012
JUDGMENT
Brief Facts: A complaint was filed by Shri Sunil Sayal, Partner of M/s. Unica Freight Movers against accused Santosh Chandola, Proprietor of M/s. Samarth Cargo Movers alleging therein that the complainant was running a business of air cargo and forwarding agents for international air transport and the accused was working as their subagent since October, 1990. It is also alleged that the accused used to book shipments from parties on behalf of complainant and also used to collect payment from them. After deducting his commission amount, the accused used to make payment of remaining amount to the complainant. In the year 1996, 14 shipments for client M/s. Creative Exports, Darya Ganj, New Delhi were booked by accused on behalf of complainant and 14 airways bills of total amount of Rs. 14,01,377/ were raised for the said work. It is alleged that the accused failed to make payment of Rs.11,21,949/ to complainant after deducting his commission from the total amount of Rs. 14,01,377/ despite repeated demands and visits and even a registered letter dated 13.01.1997 was also sent to him but no reply was received. Complainant company also sought clarification from the client company i.e. M/s. Creative Exports about making of payment and the said payment was confirmed having been made to the FIR No. 562/1997 PS Rajouri Garden Page No.2 of 19 accused. Accordingly, on this complaint, an FIR was registered for the offences under Section 420 and 406 IPC. After investigation of the case, final report under Section 173 Cr.P.C. was filed for the said offences.
2. Although the final report was filed for the offences under Section 420 and 406 IPC but on the basis of material on record, my Ld. Predecessor MM framed a charge for the offence under Section 409 IPC against accused to which he pleaded not guilty and claimed trial.
DEPOSITION OF PROSECUTION'S WITNESSES
3. In order to prove its case, prosecution examined total six witnesses. Their testimonies are described in brief as follows:
4. PW1 HC Khem Singh was the Duty Officer who proved FIR as Ex. PW1/A.
5. PW2 Shri Sunil Sayal is the complainant who deposed that he was the partner and proprietor of firm M/s. Unica Freight Movers and they were running the business of Air Cargo Cleaning and they used to book shipments of sub agents for export purpose. He further stated that on behalf of airline and freight, payment to FIR No. 562/1997 PS Rajouri Garden Page No.3 of 19 be made to airline and accused booked 14 shipments through their company for export purpose on different dates but he does not remember the exact dates. He further stated that he knew the accused prior to the incident as the accused was working in Kuwait Airline but after leaving the job he started his own business under the name and style of M/s. Samarth Cargo Movers and accused used to run business from his house. He further stated that accused has not made payment of freight of shipments booked through them and the total payment at that time was due around Rs. 11,30,000/ and whenever they demanded money from accused he used to avoid making payment on the ground that he has not yet got the payment from main exporter M/s. Creative Exports. He further stated that when they contacted owner of M/s. Creative Exporters, it has been revealed that they had already made the payment to the accused within the period of contract. The complainant also sent a letter to M/s. Creative Exports in this regard and the letter is Ex. PW2/A and they demanded their payment from accused through letter Ex. PW2/B. He further deposed that M/s. Creative Exports replied vide letter Ex. PW2/C in which they stated that they already made the payment in question to accused. They they made several requests to accused to pay the payment in question but he did not pay the money on one pretext or the other and accordingly he made written complaint to SHO (Ex. PW2/D). He further stated that he handed over some documents to the IO showing that the shipments were FIR No. 562/1997 PS Rajouri Garden Page No.4 of 19 booked and exported out of India and the documents and bills are Ex. PW2/E to Ex. PW2/S. PW2 Sunil Sayal correctly identified the accused in the court.
6. PW3 Shri D.P. Chandel is a public witness. He deposed that he received a letter from SHO, Rajouri Garden regarding the details of encashment of four cheques in favour of M/s. Smarth Cargo Movers and he issued a letter dated 18.10.1997 giving the details as found mentioned in Ex. PW3/A.
7. PW4 Chandan Dua was the District Manager In Lufthansa Cargo. He deposed that from 20.07.1996 to 21.08.1996, total 14 shipments were booked by Unica Freight Movers and the said goods belonged to M/s. Creative Exports. He further deposed that he sent the shipments in the name of Unica Freight Movers and received payment from Unica Freight Movers for the aforesaid shipments. He also stated that the aforesaid shipments were sent within the aforesaid period through Airway Bills issued by their cargo company.
8. PW5 Insp. Ajay Vedwal is the second I.O. of the case. He deposed that on 30.07.1997 he recorded the statement of witnesses and formally arrested the accused.
FIR No. 562/1997 PS Rajouri Garden Page No.5 of 19
9. PW6 Insp. Brij Pal is the initial Investigating Officer who deposed that on 27.06.1997 the present case was registered and investigation was handed over to him, however, after few days he was transferred from PS Rajouri Garden and deposited the case file with MHC(R), PS Rajouri Garden.
DEFENCE OF THE ACCUSED
10. In the statement recorded under Section 313 Cr.P.C. accused took the defence that he was not working as agent or sub agent of the complainant company nor he misappropriated the amount in question. He specifically took the defence that although he received the said amount of Rs. 14,01,377/ but he did not make payment of the said amount to the complainant as other previous amount was due from the complainant to him which was not paid to him. In this regard, accused also placed on record certain invoices/bills.
11. I have heard Ld. APP for the State and Shri K.D. Kaushal, learned counsel for the accused. Shri Lalit Trakru, learned counsel for the complainant also assisted Ld. APP for the state and argued the present case. Record perused.
APPRECIATION OF EVIDENCE AND REASONS FOR DECISION FIR No. 562/1997 PS Rajouri Garden Page No.6 of 19
12. In the present case, Section 409 IPC is alleged which is one of the graver forms of criminal breach of trust. As to what constitutes a criminal breach of trust is defined in Section 405 IPC and it reads as:
"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'."
13. Section 406 provides for punishment for criminal breach of trust. Section 407 provides for punishment for criminal breach of trust committed by a carrier, wharfinger or warehouse keeper, with respect to property entrusted to them as such and makes their offence more severe than the offence under S. 406. Similarly S. 408 makes the criminal breach of trust committed by a clerk or servant entrusted in any manner, in such capacity, with property or with any dominion over property, more severely punishable than the offence of criminal breach of trust under S.
406. Offences under Ss. 407 and 408 are similarly punishable. The last Section in the series is S.409 which provides for a still heavier FIR No. 562/1997 PS Rajouri Garden Page No.7 of 19 punishment when criminal breach of trust is committed by persons mentioned in that section. The Section 409 reads as under:
"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, merchant, 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."
AGENT OR NOT
14. At the very outset, the counsel for the accused vehemently argued that Section 409 IPC does not apply to accused as he was neither the agent or subagent of the complainant company. To support this contention, counsel for the accused further submitted that all the shipments were used to be booked by accused directly and payments were also received by accused directly and only bills were raised by the complainant company. It is also pointed out that the accused was doing his own independent business and he was not working under complainant company in any capacity.
FIR No. 562/1997 PS Rajouri Garden Page No.8 of 19
15. From the evidence produced on record, it is clear that there is nothing in writing (any contract or covenant) about the contractual relationship of the accused and the complainant company which prescribes/defines the manner of transactions held between them. However, the complainant placed on record 14 air way bills which were issued by Lufthansa Cargo through which the goods were consigned/sent overseas. The parties have also somehow disclosed the manner of conducting transactions in their oral testimonies. From the above said evidence on record and the afore said bills, I hold that the carrier agency was M/s. Unica Freight Movers (Complainant's company) and the client company was M/s Creative Exports and the accused was the agent on behalf of M/s Unica Fright Movers. The position becomes more clear from the endorsements made on the bottom of said airways bills. In the said bills, in front of nomenclature 'Shipper or Agent's name', a rubber stamp of the accused company i.e. M/s. Sammarth Cargo Movers found appended in all the bills. Even some of the bills bear signature of the accused. The said bills are not disputed by the accused at any stage of trial. Thus, it is clear that accused and complainant were doing the job of sending consignment/shipments to abroad in coordination with each other. As the accused was not the approved IATA agent and he used the status of complainant's company being the IATA agent, in that capacity, the accused can be said to be the facilitator/agent FIR No. 562/1997 PS Rajouri Garden Page No.9 of 19 of the complainant's company. For all practical purposes, the accused might be doing all the transactions directly with the customers/clients but when he was using the service of complainant company on papers/documents and signing himself as an agent, then he cannot be said to be acting independently without having any concern with the complainant company. The accused also admitted that he received payment of Rs. 14,01,377/ for consignment work from client company i.e. M/s. Creative Exports and his share was towards some amount of commission. Keeping in view the above said evidence, I hold that accused was acting as an agent or subagent of complainant's company.
16. It is seen from the definition of Section 409 IPC that the said Section does not apply exclusively to the term 'agent' or 'sub agent' but it also applies to many other categories of professions. Even if it is assumed for the sake of arguments that the accused was not the agent of complainant's company, then also the case of the accused is covered in the capacity of 'merchant' or 'factor' or 'broker'. The connotation of said terms can be understood from the following definition:
16.1 In the Jacob's Law Dictionary (1736), Vol. II, Edn of 1809, the word 'merchant' is defined as the person who deals in purchase and sale of goods but every one that buys and sells is not FIR No. 562/1997 PS Rajouri Garden Page No.10 of 19 at this day under the denomination of a merchant, only those who traffic, in the way of commerce, by importation or exportation, or carry on business by way of emption, vendition, barter, permutation or exchange, and who make it their living to buy and sell, by a continued assiduity, or frequent negotiation, in the mystery of merchandising are esteemed merchants.
16.2 The word 'factor' is defined in the Whartor Law Lexicon, 14th Edition, p.400, as a substitute in merchantile affairs, an agent employed to sell goods or merchandise consigned or delivered to him by or for his principal, for a compensation commonly called factorage or commission.
16.3 The term 'broker' is defined in the Whartor Law Lexicon, 14th Edition, p.148 as an agent employed to make bargains and contracts between other persons in matters of trade, commerce and navigation, by explaining the intentions of both parties and negotiating in such a manner as to put those who employ him in a condition to treat together personally. More particularly he is an agent employed by one party only to make a binding contract with another.
17. It is the admitted case of the parties that the accused has to deduct the commission amount from the total amount FIR No. 562/1997 PS Rajouri Garden Page No.11 of 19 received from the client company and return the rest of the amount to the complainant. The evidence came on record and the above admitted facts clearly prove that the status of accused comes not only within the profession of agent but also in the categories of 'merchant', 'broker' or 'factor'.
ENTRUSTMENT OR DOMINION
18. The counsel for the accused further strenuously argued that the offence under Section 409 IPC presupposes 'entrustment' and there is no entrustment of property in the present case. He further stated that the withholding of payment by the accused does not amount entrustment of fund.
19. From the close reading of Section 409 IPC, it is clear that the said Section not only speaks about the factum of entrustment but also, in the alternative, about the state of dominion over the property in the capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent. In my opinion, the facts of the present case squarely apply to the latter category. There is no material placed on record by the prosecution to suggest that the accused had made payment of this amount to the complainant at any point of time nor it is the defence of the accused. In other words, the FIR No. 562/1997 PS Rajouri Garden Page No.12 of 19 amount in question came to the credit of accused through the transaction done by using the status of complainant as IATA agent and, as such, the accused can be said to be the trustee of the said amount.
20. Accordingly, I hold that requirement of entrustment or dominance over the property in terms of Section 409 IPC is fulfilled in the present case.
MISAPPROPRIATION OR CONVERSION TO ONE'S OWN USE
21. Now, the question arises whether the accused dishonestly misappropriated or converted to his own use the said amount received from the client company. As already said, the accused admitted receiving of amount from the client company but he took the defence that he did not pay the agreed amount to the complainant company (after deducting his commission) from the total amount of Rs. 14,01,377/ because some other amount was due to him from the complainant company. In this regard, accused has placed on record the following documents:
(i) Statement of account issued by Unica Freight Movers in favour of M/s Smarth Cargo Movers (Ex.
PW2/D1) FIR No. 562/1997 PS Rajouri Garden Page No.13 of 19
(ii) Seven Letter written by accused to Unica Freight Movers during the period from October 1990 to August, 1996 (Mark D1 to D7).
22. The accused did not examine himself or any witness in his defence. The abovesaid documents were filed at the time of recording evidence of the prosecution's witnesses. The Ld. APP and the counsel for the complainant raised objection about proving of documents Mark D1 to D7. As such, before analyzing the content of the said documents, it is important to see whether they can be read in evidence or not. The document mark D1 to D7 are the letters purported to be written by the accused to the complainant company. The PW2 Sunit Syal categorically denied receiving of such letters. On the other hand, the accused stated that the said letters were received by the complainant's company as they bear official stamp of complainant's company. It is seen that none of these letters bear any specific signature or name of the staff/employee of the complainant's company, nor they bear any date of receiving. In my opinion mere affixing of seal of one company does not amount receiving of such letters. Moreover, the PW2 also specifically stated in his crossexamination that whenever any document is received in their office, the same is signed and sealed with the name of the employee. When the receiving of abovesaid letters were specifically denied/disputed, FIR No. 562/1997 PS Rajouri Garden Page No.14 of 19 the onus shifted on the accused to prove such letters but the accused did not lead any evidence in this regard. The counsel for the accused argued that the accused did not call any official/staff of the complainant's company as they may not depose in favour of accused or would not produce any such records as the matter is very old. It is seen that in the abovesaid letters details of certain transactions are mentioned and the accused could have proved such letters or previous transactions by leading evidence. But no such evidence is led by accused. Accordingly I hold that the said documents cannot be read in evidence.
23 Regardless of the procedural provisions of Evidence Act, if it is assumed that the documents mark D1 to D7 are proved by the accused, in that case also the document Ex. PW2/D7 (filed by the accused himself) shows due amount of Rs.14,17,350/ payable by accused to complainant's company and under such circumstances, the onus was on the accused to bring on record the clear evidence that no amount was due against him or that he adjusted the amount of transaction in question towards other outstanding amount. But no such evidence is led.
24. Further, as regards the document Ex. PW2/D1, the accused explained in his statement that he did not make payment of the due amount as he was given the bill (Ex. PW2/D1) for the amount of Rs.14,17,350/ and the complainant company withheld FIR No. 562/1997 PS Rajouri Garden Page No.15 of 19 commission of previous transaction. The accused did not lead any evidence to prove as to what were those transactions, what were their amount, what was their time period, etc.
25. It is also the defence of the accused that approximately Rs.14 lacs were due towards complainant payable to the accused during the period from 1992 to 1996. In those days, the amount of Rs.14 lacs was very huge and, as such, nonsending of legal notice or nonfiling of civil suit by the accused against the complainant raise serious doubt about the stand of accused regarding existence of previous outstanding amount payable from the side of complainant's company.
26. It is next argued by the counsel for the accused that the prosecution did not prove the exact rate of commission and there is huge difference of amount calculated at the rate of 4% and the amount of Rs.3 lacs plus (i.e. Rs. 14,01,377/minus Rs.11,21,949/). The accused also stated in his statement under Section 313 Cr.P.C. that he did not make payment of the due amount to the complainant as the complainant company raised a bill in the name of accused for net amount of Rs.14,17,350/ which was not the due amount from the side of accused payable to the complainant. I have carefully considered the said arguments and do not find any substance in them because had there been any kind of different or dispute on the point of exact calculation of FIR No. 562/1997 PS Rajouri Garden Page No.16 of 19 amount or interest or commission, the accused must agitate such issues with the complainant. No such steps seemed to have been taken. Moreover, the accused admitted receiving of registered letter dt. 13.01.1997 (Ex.PW2/B) whereby the complainant demanded the due amount from the accused and despite service of this letter, the accused did not send any reply to the said notice nor take any other steps to show his protest. The accused simply explained that the present complaint was filed by the complainant without his knowledge. But it is seen that the letter Ex. PW2/B was sent on 13.01.1997 and the first complaint was filed to SHO on 07.06.1997 and it shows that the complainant waited for more than five months to lodge the complaint and the accused did not take any steps during such period. The abovesaid facts and circumstances weaken the defence of the accused and strengthen the case of the prosecution. It is also settled proposition of law that wrongful withholding or retaining of fund amounts to conversion to one's own use.
27. Counsel for the accused also relied upon the cases of Lalchand Vs. State of Haryana (AIR 1984 Supreme Court 226); U. Dhar Vs. State of Jharkand (AIR 2003 SC 974) and N. Nagarajan Vs. State (1996 (3) CRIMES 446 Madras High Court and argued that the case of the prosecution does not stand anywhere as the complainant has not filed any civil suit for recovery of alleged due FIR No. 562/1997 PS Rajouri Garden Page No.17 of 19 amount. I have carefully gone through the said cases and I am of the opinion that the facts of cited cases are entirely distinguishable to the facts of the instant case. In my opinion, the filing or non filing of civil suit is not relevant for the purpose of fastening criminal liability if the act of the satisfies the essential ingredients of criminal offence. Reliance can be placed on the case of Collector of Customs and Central Excise, Bhubneshwar, District Puri Vs. Paradip Port Trust and Another (1990 (4) SCC 205) wherein it was held that "A particular act may constitute both civil wrong as well as criminal wrong but merely because civil action is also pursued, such course of action does not render criminal action impermissible. Since the very definition of offence of criminal breach of trust is founded on legal contract touching upon the discharge of trust, almost every case of criminal breach of trust is bound to have an element of civil liability. Policy of the legislature in enacting the offence under Section 405 IPC, therefore, is to treat the breach of contract in the matter of property which is entrusted as an aggravated civil wrong and thereby constituting a criminal offence."
28. The counsel for the accused also contended that the case of the prosecution is not proved as the prosecution did not file on record the entire documents of the transaction in question and thus withheld the best evidence available with them. He also FIR No. 562/1997 PS Rajouri Garden Page No.18 of 19 stressed that the I.O. also admitted in his examination that he did not file the entire documents of transaction (except the documents placed on record). In this regard, I am of the opinion that the said argument is without any force as the prosecution filed on record all the material documents, i.e. 14 airways bills, registered letter dt. dt. 13.01.1997, complaint made to SHO, confirmation letter from M/s Creative Exports (Ex. PW2/C) and the confirmation letter from Lufthansa Cargo (Ex. PW2/E) and even otherwise accused admitted the taking place of transaction in question and as such, there was no need of filing any further documents.
29. Keeping in view the aforesaid facts & circumstances of the present case and evidence brought on record, I hold that the prosecution succeeded in proving all the ingredients of offence under Section 409 IPC against the accused beyond reasonable doubt. Accordingly, accused is convicted for the said offence.
Announced in the open court on 30.08.2012 (Naresh Kumar Laka) Metropolitan Magistrate, Tis Hazari Courts, Delhi FIR No. 562/1997 PS Rajouri Garden Page No.19 of 19