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56 Patna High Court Cr. WJC No.931 of 2015 dt.05-10-2015

21. It would be evident from the definition of phrases „wrongful gain and wrongful loss‟ that when the owner is kept out of the property with the object of depriving him of the benefit arising from the possession even temporarily, the case will come within the definition of „wrongful gain and wrongful loss‟.

22. It would, thus, appear that for the offences punishable under section 406 IPC, the prosecution must prove :-

23. Having considered the definition of Sections 23, 24 and 405 IPC, it would be evident that the gist of the offence prescribed under section 406 IPC, is misappropriation done in a dishonest manner. There are two distinct parts of the said offence. The first involves the fact of entrustment, wherein an obligation arises in relation to the property over which dominion or control is acquired. The second part deals with misappropriation which should be contrary to the terms of the obligation which is created.

37. In the matter of Binod Kumar and ors. (Supra), a decision on which the petitioners have placed reliance, the question before the Supreme Court was whether the charges under Section 406 IPC for allegedly retaining the bill amount payable by the appellant to respondent no. 2 was liable to be set aside. In the aforementioned case, the dispute related to non-payment of bill amount of Rs.34,505/- pertaining to a contract executed by the respondent no. 2. The contract was entered into between respondent no. 2 and K.S.S. College on 04.09.1990 for the construction of building of K.S.S. College, Lakhisarai, a constituent unit of Tilka Manjhi Bhagalpur University. According to the second respondent, since money and material requisites were not given to him in time, the work was not completed within the stipulated period. The University vide letter dated 09.05.1995 informed respondent no. 2 that his contract is terminated and all his dues including final bill, earnest money and security deposit, etc. will be released after consultation with the College 65 Patna High Court Cr. WJC No.931 of 2015 dt.05-10-2015 Development Committee. The University Engineer vide letter dated 04.06.1996, addressed to the Principal of the College, informed that payment of Rs.48,505/- is payable to the contractor, but the respondent was paid Rs.14000/- vide cheque as per direction of the College Development Committee and balance amount of Rs.34,505/- was not paid to him. Aggrieved by the said non-payment of the entire amount, respondent no. 2 filed criminal complaint in the Court of Sub-Divisional Judicial Magistrate, Lakhisarai for criminal breach of trust. After the cognizance was taken and the matter reached the stage of framing of charge, an application for discharge was filed before the learned Sub-Divisional Judicial Magistrate, Lakhisarai. Learned Sub- Divisional Judicial Magistrate, Lakhisarai dismissed the said petition and directed the appellant to remain present in Court for framing charges under Sections 406 and 120-B IPC. The appellant filed a petition under Section 482 Cr.P.C. before the High Court for quashing of the said order. The High Court dismissed the petition. Aggrieved by the same, the appellant moved before the Supreme Court. After taking into consideration the facts and circumstances of the case, the Supreme Court held that the essential ingredients of dishonest misappropriation and cheating are missing and hence the prosecution of the appellant under Section 406 and 120-B IPC was quashed.

(Underlining mine for emphasis)

43. Further, in Bhaskar Lal Sharma & Anr. Vs. Monika & 68 Patna High Court Cr. WJC No.931 of 2015 dt.05-10-2015 Ors. [(2014) 3 SCC 383], a three-Judge Bench of the Supreme Court considered the question regarding making out of a case under Section 406 IPC. In the aforementioned case, in complaint petition, it was alleged that the appellants (Parents-in-law of respondent) were entrusted or had exercised dominion over the property belonging to the respondent and further that the appellants had unlawfully retained the same. After examining the aforesaid allegations while dismissing the appeal and directing the trial to be completed expeditiously, it observed in paragraph 12 as under:-