- Sections 406/420/323/34 of the IPC.
- Bhuban Mohan Das Vs. Surendra Mohan Das” reported in 0 AIR (Cal) 69/  55 CalWN 541/  0 CrLJ 723
- Gopala Chetty v. Vijayaraghavachariar, (1922-1 A. C. 488: AIR (9) 1922 P. C. 115)
- Mrs. Dhanalakshmi Vs. R. Prasanna Kumar & Ors. as reported in AIR 1990 SC 494.
- Piddock Vs. Burt (3) [1894 (1) Ch. 343]
- Velji Raghavji Patel Vs. The State of Maharashtra, as reported in AIR 1965 S.C. 1433
- Anil Saran Vs. State of Bihar & Another [(1995) 6 SCC 142]
- Debabrata Gupta Vs. S.K. Ghosh [1970(1) SCC 521]
Penal Code, 1860 – Ss. 406, 420, 323, 34 – Criminal Misappropriation or Breach of Trust – Partnership – the complaint was lodged fourteen (14) years after the original date of partnership without accounting for the delay and having failed to specify any recent dates on which the alleged offence of cheating/misappropriation were allegedly committed by petitioner no. 1, the motive behind the FIR becomes very questionable since it has not even been mentioned in the complaint that the complainant at any time in writing demanded production of the Partnership accounts or Books during the long period of 14 years. His allegation of having verbally made such demand only on 20.03.2012 without any explanation of the previous delay also hits his case badly, specially considering that he seeks to impute the allegations of criminal misappropriation/ breach of trust upon his admitted Partner in respect of the Partnership money, which, as has been observed earlier, is not legally sustainable. For the aforesaid reasons continuation of the criminal proceedings against the petitioners would be a clear abuse of the process of Court.
IN THE HIGH COURT AT CALCUTTA
(Criminal Revisional Jurisdiction) Appellate Side
Present: The Hon’ble Justice Sudip Ahluwalia
Judgment On : 20-05-2016
C.R.R. 3393 of 2014
Smt. Malabika Mondal & Anr. Vs. The State of West Bengal & Anr.
For the Petitioners : Mr. Shiladitya Sanyal, Mr. Abhijit Adhya; For the State : Mr. Ayan Bhattacharyya, For the O.P. No. 2 : Mr. Debashis Roy, Mr. Somopriya Chaudhury, Mr. Rajiv Lochan Chakraborty, Mr. Debapratim Guha, Mr. Arnab Sinha.
SUDIP AHLUWALIA, J. – In this Revisional application the petitioners have prayed for quashing the proceedings arising out of Thakurpukur P.S. Case No. 202 of 2012 dated 05.05.12, pending in the Court of the Ld. Additional Chief Judicial Magistrate at Alipore, South 24 Parganas.
2. The Opposite Party No. 2/De facto-complainant had filed the petition of complaint in the Ld. Court below under Section 156(3) of the Cr.P.C. The aforesaid FIR was thereafter drawn up under
# Sections 406/420/323/34 of the IPC.
In the complaint it had been alleged that the complaint and the petitioner no. 1 from their respective joint funds had started an Educational business under the name and style of ‘Sabuj Sathi’ in 1998. Thereafter the petitioner no. 1 took charge of as Principal of the school with consent of the complainant. She is then alleged to have deposited the School collections towards tuition fees, development fees, selling of books and uniforms to the students etc. in her own personal account and not in the joint School account opened with the Punjab National Bank, Ketopool Branch, Sakuntala Park, Kolkata- 700 061. She is also alleged to have instructed the parents of the students to make all payments to her in her personal name in order to cheat the complainant of his dues. In this manner she is alleged to have misappropriated money to the tune of Rs. 50,00,000/- (Fifty lacs) or more in connivance the petitioner no. 2 who is her own son. The complainant had further alleged that on 20.03.2012 he requested the petitioner no. 1 to produce the Books of Account relating to the profit and loss for the period between 2001 to 2012. But she refused to do so. On the contrary she and her son (petitioner no. 2) allegedly used filthy language against the complainant and forcibly ousted him from the premises by means of physical assault after which he was obliged to lodge a General Diary in Thakurpukur P.S., and subsequently filed the petition under Section 156(3).
3. After completion of investigations the Police submitted charge sheet against the petitioners under Sections 406/420/323/34 of the IPC. They have both challenged the same in this Revisional Application. The specific assertion of the petitioners is that the complaint/FIR lodged against them was false and motivated and that the complainant had suppressed the fact that he had voluntarily withdrawn himself from the partnership. To support this contention, the petitioners have mentioned various facts and incidents narrated in Para 5 the Revisional Application the relevant ones of which are noted below –
a) On July 28, 1998 the parties entered into a Deed of Partnership for the purpose of carrying on the business of running the educational institution namely “Sabuj Sathi”.
b) The initial capital of the institution “Sabuj Sathi” consisted of Rs. 40,000/- contributed jointly by both parties. The opposite party No. 2 had also invested Rs. 1,00,000/- in cash, at the time of setting up of the institution which was later refunded by the petitioner No. 1 on dissolution of the partnership.
c) The institution was set up in a rented house at 175, Biren Roy Road (West), Kolkata – 700061, P.S. Sarsuna, South 24 Parganas.
d) Under the Agreement (Annexure-P3), the petitioner No. 1 was authorized to run the institution and has been running the said institution by herself from its very inception.
e) The said deed of July, 1998 was however cancelled by way of the complainant’s declaration dated December 2, 1998 (Annexure -P4).
f) A fresh Agreement was thereafter made between them on September 27, 2002(Annexure-P5).
g) On March 10, 2003, the complainant finally executed a Deed of cancellation of Partnership (Annexure-P6).
h) He then wrote to the Municipal Authority seeking cancellation of his name from the institution’s Trade Licence due to ‘personal reason’ vide letter dated March 31, 2003 (Annexure – P7).
i) On June 26, 2003 the trade licence department of the Kolkata Municipal Corporation charged a cancellation fee of Rs. 100/- for deleting the complainant’s name and issued a fresh Trade Licence in the name of the petitioner No. 1 as the sole proprietor thereof (Annexure-P8).
j) After retiring from the partnership, the tenancy agreement was also renewed on March 12, 2003 in the name of the petitioner No. 1 by her landlady.
k) Thus the petitioner No. 1 since the beginning of the institution, particularly since 2003, has been managing the said institution on her own and after the dissolution of the partnership on March 10, 2003 has been the sole proprietor of the said institution as would, inter alia, appear from the record of the Kolkata Municipal Corporation.”
4. The petitioners have also stated that the complainant had separately filed an application under Section 11 of the Arbitration and Conciliation Act being A.P No. 1068 of 2014, in which they have already appeared and filed their written objections after which the matter is pending its final adjudication. It is also the case of the petitioner no. 1 that since the beginning of the Institution and particularly since 2003, she has been managing the same of her own after dissolution of the Partnership on March 10, 2003 and is now the sole proprietor of the said institution.
5. Both the petitioners therefore contend that the aforesaid criminal proceedings against them are liable to be quashed since the complainant has wrongly sought to give a criminal colour to what is essentially a civil cause of action, with an ulterior motive for “wrecking vengeance with a view to spite them due to private and personal grudge”. They have also placed certain Judgments before this Court to the effect that no case of criminal misappropriation or breach of trust lies against a person who is admittedly a partner of the complainant.
# Bhuban Mohan Das Vs. Surendra Mohan Das” reported in 0 AIR (Cal) 69/  55 CalWN 541/  0 CrLJ 723
in Criminal Revision no. 585 of 1950 a reference was made to a Full Bench of this Court on the question, “Can a charge under Section 406, Penal Code be framed against a person who according to the complainant is a partner with him and is accused of the offence in respect of property belonging to both of them as partners?”. The Full Bench in deciding this question made the following observations –
“(12) The point which had to be considered in that case was whether a partner who had retained certain of the partnership assets could be said to have acted in a fiduciary capacity. At p. 346 Chitty J. observed: “the case of a partner is quite different from these cases, because he receives money belonging to the firm on behalf of himself and his co- partners and it appears to me that I should be straining the law if were to hold that a partner receiving money on account of the partnership that is, on behalf of himself and his co-partners received it in a fiduciary capacity towards the other partners The law allows one partner one of several joint creditors– to receive the whole debt on account of the firm to whom it is due, and I am unable to recognise any such distinction, as was endeavoured to be made by Mr. Church, between the case of a partner receiving money of the firm and not accounting for it, and that of a partner overdrawing the partnership account ; because if this distinction were true, it would apply to every case where one partner wrongly overdraws the partnership account. “
(14) If a partner who receives money on behalf of the partnership does not receive it in a fiduciary capacity then it appears to me that he could not be charged with fraudulent breach of trust by reason of his failing to account for that money. Similarly, if a partner is holding property belonging to the partnership, he is holding it as one of the partners entitled to hold it and, therefore, I think it could not be said that he was holding it in a fiduciary capacity, that is, as a kind of trustee for himself and his other partners. If he could not be said to be holding the property in a fiduciary capacity then it is difficult, and indeed impossible, to hold that he could be said to have been entrusted with that property.
(33) WHETHER or not a partner can be said to have been entrusted with property must depend upon whether there is any special agreement between the parties. If there is no special agreement he does not receive property in a fiduciary capacity. It might be that if there was a special arrangement between the partners then it could be said that a partner was entrusted with property or with dominion over it. For example, if by the terms of the partnership agreement one partner was given the sole right to possession of the partnership assets or to receive moneys on behalf of the partnership then such a partner might, though it is unnecessary to hold it, be said to have entrusted another partner with money if he gave such other partner money for a specific purpose. It is unnecessary in this case to decide in what circumstances there can be entrustment. But all we need say is that by special agreement between the parties entrustment might be possible, and if entrustment was possible then a breach of conditions or arrangement might render the person accused guilty of fraudulent breach of trust. However I am satisfied that in ordinary cases where a partner receives moneys or an asset belonging to a partnership, or holds moneys or assets of a partnership, he does not hold that money in a fiduciary capacity. He cannot even be sued for a share in the moneys or assets by his co-partner
(34) The only remedy of a co-partner is an account and until such an account is taken it cannot be said whether the co-partner has any interest at all in the asset or money. As pointed out in the case of
# Gopala Chetty v. Vijayaraghavachariar, (1922-1 A. C. 488: AIR (9) 1922 P. C. 115)
decided by their Lordships of the P. C. , even after dissolution a co-patnr has no right to sue for his share of an asset. It appears to me that if a co-patnr has no right to sue to recover his share it cannot possibly be said that his co-patnr is holding that share in trust for him. If the patnr holds partnership property in a fiduciary capacity he would be holding it in trust for his co-partners and his co- partners could sue. But it has been laid down beyond all question that the co-partners cannot sue and that their only remedy is an account and to recover only what is ultimately found due on taking the account. It appears to me that in those circumstances it cannot be said that a patnr who receives or holds property of a partnership is entrusted with the property or dominion over it, and that being so it appears to me that the answer to question 1 must be in the negative.
(54) The reason, therefore, of holding that a patnr. cannot be prosecuted by another patnr for criminal breach of trust in respect of partnership property under Section 406, Penal Code, is two-fold. The nature, character and incident of partnership property are such that during the subsistence of the partnership there cannot be, except by special agreement with which we are not concerned here, any entrustment or dominion and secondly partnership property is net a specific and ascertainable property and is of so equivocal and problematic a nature until dissolution and accounts, that it is not susceptible to be used in a manner which can bring into operation Section 405, Penal Code. It is only when such ordinary character and nature of the partnership property are varied by special contract of partnership so as to create entrustment of any specific property in favour of one patnr as against the others or so as to give exclusive dominion of such property to one patnr as against the other that there can be any scope of application of Section 405, Penal Code.
(62) IT is quite clear, therefore, that unless there is an agreement between the partners that a particular property would be the separate property of a partner, there cannot be an entrustment of it to the other partner or partners. In the absence of such an agreement, each partner is interested in the whole of the partnership assets and there cannot be an entrustment of ‘a partner’s property’ as such by one partner to another, because there is no ‘property’ which can be entrusted.”
The Bench ultimately held that there could not have been a breach of trust in the given case as there was no evidence by which the partnership assets were converted into separate property of the partners.
7. In”Velji Raghavji Patel Vs. The State of Maharashtra” reported in  0 CrLJ 431 /  2 SCR 429 /  0 AIR (SC) 1433, in deciding a similar question, the Supreme Court observed –
“6. It seems to us that the view taken in Bhuban Mohan Rana’s case, ILR (1952) 2 Cal 23, by the later Full Bench of the Calcutta High Court is the right one. Upon the plain reading of S. 405, I.P.C. it is obvious that before a person can be said to have committed criminal breach of trust it must be established that he was either entrusted with or entrusted with dominion over property which he is said to have converted to his own use or disposed of in violation of any direction of law, etc. Every partner has dominion over property by reason of the fact that he is a partner. This is a kind of dominion which every owner of property has over his property. But it is not dominion of this kind which satisfies the requirements of S. 405. In order to establish “entrustment of dominion” over property to an accused person the mere existence of that person s dominion over property is not enough. It must be further shown that his dominion was the result of entrustment. Therefore, as rightly pointed out by Harris, C. J., the prosecution must establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties, entrusted to the accused person. If in the absence of such a special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or in other words cannot be held to have been “entrusted” with dominion over partnership properties.
7. Mr. Chatterjee who appears for the respondent sought to show that there was special agreement in this case. According to him, by virtue of certain decisions taken at a meeting of the partners held on January 7, 1959 the appellant had been entrusted with the duty of making recoveries of monies from the debtors of the firm and, therefore, this was a case of specific entrustment. All that he could point out was item No. 15 in the minutes of that meeting which runs thus: Shri Veljibhai agrees to recover the monies due by Shri Kablasingh immediately and shall deposit the same with the Bankers of the firm.”
He has, however, not been able to explain the next item in the minutes, the irrelevant portion of which runs thus:-
“(16) If in future any further motleys are required to be spent the same shall be spent out of the recoveries of the firm and no partner shall be bound or responsible to bring in any further money. Reading the two together the meaning seems to be only this that as working partner the appellant should carry on the work of recovery of the dues of the partnership and that in respect of the dues from one Kablasingh it was decided that they should be deposited in the bank. It does not follow from this that any of the other partners was precluded from making the recoveries. Further, even if this is said to be a mandate to the appellant item 16 authorises him to spend the money for the business of the partnership. That is to say, if the money was required for the business of the partnership it was not obligatory upon the appellant to deposit it in the bank. In our opinion, therefore, the appellant cannot be said to have been guilty of criminal breach of trust even with respect to the dues realised by him from Kablasingh and in not depositing them in the bank as alleged by the prosecution.
8. Mr. Chatterjee finally contends that the act of the appellant will at least amount to dishonest misappropriation of property even though it may not amount to criminal breach of trust and, therefore, his conviction could be altered from one under S. 109 under S. 403, Section 403 runs thus:-
“Whoever dishonestly misappropriates or converts to his own use any movable property, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.”
It is obvious that an owner of property in whichever way he uses his property and with whatever intention will not be liable for misappropriation and that would be so even this is not the exclusive owner thereof. As already stated, a partner has, undefined ownership along with the other partner over all the assets of the partnership. If he chooses to use any of them for his own purposes he may be accountable civilly to the other partners. But he does not thereby commit any misappropriation. Mr. Chatterjee’s alternative contention must be rejected.
9. In the result we allow the appeal and set aside the conviction and sentence passed against him.”
8. In “Smt. Shyamarani Garg & Anr. Vs. The State of West Bengal & Anr.” (CRR No.3391 of 2005), a Single Judge of this Court in his Judgment dated 31.03.2008 relying upon the ratio in “Velji Raghavji Patel” (supra) and certain other decisions quoted therein, had directed quashing of the criminal proceedings against the petitioners in that case, who were admittedly partners in a business from which subsequently the complainant’s husband had retired, with the following observations –
“Whether charge under Section 406 of the Indian Penal Code can be framed against a person who, according to the complainant, is a partner with him and is accused of the ‘offence in respect of property belonging to both of them as partners fell for consideration before the Apex Court. (Ref:-
# Mrs. Dhanalakshmi Vs. R. Prasanna Kumar & Ors. as reported in AIR 1990 SC 494.
In the said case, it was held, deriving inspiration from various other judgments, that if a. partner is to be charged under Section 406 of I.P.C., it must be held that property belonging to somebody else was entrusted to him. A partnership firm has no existence apart from the partners and is not an entity like a limited company which can own property. If a partner holds partnership property it cannot be said that he has been entrusted with his own share in the property if he had any share in it. It is worth mentioning that whether or not a partner can be said to have been entrusted with property must depend upon whether there is any special agreement between the parties. If there is no special agreement, he does not receive property in a fiduciary capacity. In the case of
# Piddock Vs. Burt (3) [1894 (1) Ch. 343]
it was held that a partner who receives money belonging to the partnership on account of himself and his co-partner does not do so in a fiduciary capacity. At common law in England no criminal prosecution can be maintained by one partner against another for stealing or embezzling by false pretexts or misappropriating property of the firm. Partners are regarded in law as joint owners or co- owners of the partnership property. The relationship is virtually like that of ‘comrades in arms’. In the case of
# Velji Raghavji Patel Vs. The State of Maharashtra, as reported in AIR 1965 S.C. 1433
it was held that an owner of property, in whichever way he uses his property and with whatever intention, will not be liable for misappropriation and that would be so even if he is not the exclusive owner thereof. A partner has undefined ownership along with the other partners over all the assets of the partnership. If he chooses to use any of them for his own purposes he may be accountable civilly to the other partners. But he does not thereby commit any misappropriation.”
9. The Opposite Party/Complainant from his side has however contended that the facts of the cases cited on behalf of the petitioners are distinguishable in the present case since in the cited cases the allegations pertained to misappropriation from partnership property while in the present case such partnership property has been converted to individual property and then siphoned off, where it is clear that the same was under the control of the “specially entrusted” accused. Therefore a prima facie case of criminal breach of trust would be made out. The complainant has also cited two decisions of the Supreme Court.
# Anil Saran Vs. State of Bihar & Another [(1995) 6 SCC 142]
the facts and outcome were as follows –
“2. The appellant was a partner in M/s. Agjevinath Films along with the second respondent, Shiv Prakash, and another person, Ajit Jai Tilak. The firm was constituted to distribute, exhibit and exploit the cinematograph films. The firm had entered into an agreement with producer, Bhojpuri film for distribution of ‘Hamari Dulhaniya’ and had two prints of the films obtained from the laboratory at Bombay and were arranged for exhibition in Roopak Cinema. Patna. It is the case of Shiv Prakash, the complainant on behalf of M/s. Agjevinath Films, that the first accused, namely, M/s. Sapna Enterprises, had contracted on 22.06.1988 to take the film, exhibit the same and account for the proceeds in terms of the contract. Pursuant thereto, M/s. Sapna Enterprises was entrusted with the second copy of the film for exhibition and they exhibited the film from 01.07.1988. But the first accused had not returned the print to the complainant-second respondent with ulterior and dishonest intention to make wrongful gain and to cause wrongful loss to the second respondent. Subsequently, it came to the knowledge of Shiv Prakash that the first accused colluded and conspired with the appellant and Ajit with an intention to defraud the second respondent, and the firm exploited the second copy of the film in the said cinema and “they stealthy and illegally misappropriated collections and dishonestly made wrongful gain for themselves and caused wrongful loss to the complainant and the said concern”. It was also alleged that the appellant and Ajit induced the first accused by conspiracy to illegally obtain the films prepared for themselves and fabricated the documents and thereby Ajit, the first accused firm and the appellant, in collusion and conspiracy with common intention to do mischief, committed the offence referred to earlier…
8. It is next contended that the appellant, being a partner in the complainant firm, cannot be said to have committed criminal breach of trust of his own funds and that, therefore, it is a case of civil liability only. The contention that one partner cannot commit criminal breach of trust against other partners, though prima facie alluring, on facts of this case, it does not appear to be tenable, Partnership firm is not a legal entity but a legal mode of doing business by all the partners. Until the firm is dissolved as per law and the accounts settled, all the partners have dominion in common over the property and funds of the firm. Only af ter the settlement of accounts and allotment of respective share, the partner becomes owner of his share. However, criminal breach of trust under Section 406 is not in respect of the property belonging to the partnership firm, but is an offence committed by a person in respect of the property which has been specially entrusted to such a person under a special contract and he holds that property in fiduciary capacity under special contract. If he misappropriates the same, it is an offence.
9. At this stage, we have only to see whether the allegations made in the complaint make out the offence prima f acie. It is not the case of the complainant that the appellant and the other accused Ajit were entrusted with the dominion of the property of the firm in their capacity as partners of the complainant firm. On the other hand, the complainant him entered into a contract with the first accused firm, M/s. Sapna Enterprises, entrusted the second film for exhibition and for accounting the sale proceeds in terms of the contract and to return the film. They had neither accounted for not returned the film. The first accused, the appellant and Ajit therefore, were alleged to have committed the offences in question.
10. Under these circumstances, we do not think that the imputations alleged against the appellant have been done in his capacity as a partner of the firm. Whether the offence has been made out, whether he is liable and what are the defences open to him are not matters at this stage for consideration. It is for the learned Magistrate to proceed with the trial and to deal with according to law.”
# Debabrata Gupta Vs. S.K. Ghosh [1970(1) SCC 521]
it was observed –
“10. Counsel for the appellant relied on the decision of this Court in Velji Raghabji Patel v. State of Maharashtra, where one of the partners was convicted of an offence of criminal breach of trust under Section 409 of the Indian Penal Code and this Court held that where a partner realized the sum in his capacity as partner and utilized them for the business of the partnership he was only liable to render accounts to his partners and his failure to do so would not amount to criminal breach of trust. Counsel for the appellant invoked the application of the same doctrine to the present case.
11. In order to accede to the contention it has to be established first that the dispute is only between the partners and secondly it does not relate to any special entrustment of property which constitutes one of the basic ingredients of an offence under Section 406 of the Indian Penal Code. This Court in Patel’s case (supra) approved the decision of the Calcutta High Court in Bhuban Mohan Rana v. Surendra Mohan Das and said that before criminal breach of trust is established it must be shown that the person charged has been entrusted with property or with dominion over the property. In other words, the offence of criminal breach of trust under Section 406 of the Indian Penal Code is not in respect of property belonging to the partnership but is an offence committed by the person in respect of property which has been specially entrusted to such a person and which be holds in a fiduciary capacity.
12. In the present case, the appellant denies that there was any special entrustment of any property or that he was holding any property in a fiduciary capacity. It is neither possible nor desirable to express any opinion on the merits of such a plea. It is not possible to do so because the facts are not in possession of the court and furthermore the facts cannot be before the court without proper investigation and enquiry. It is not desirable to do so because if any such opinion be expressed it may prejudice or embarrass either party.”
12. Additional support has been sought by the complainant’s side from an unreported decision of this Court in “Barun Kumar Biswas Vs. State of West Bengal” [C.R.R. No. 2641 of 2012] in which the Court refused to quash the proceedings on the ground that “any special purpose of a particular document or material cannot be appreciated at a pre-trial stage especially if it pertains to partnership…….”
13. The decisions relied upon by the complainant/ respondents are however, distinguishable from the facts of the present case. In each of those decisions it was held and accepted that criminal proceedings against a partner in respect of the partnership property are not maintainable in the absence of a specific contract regarding and entrustment of such property.
14. In “Anil Saran” (supra) the proceedings were allowed to continue as the Court was of the view “we do not think that the imputations alleged against the appellant have been done in his capacity as a partner of the firm.”
But in the present case admittedly the petitioner No. 1 has been implicated squarely in her capacity as a partner.
15. In Barun Kumar Biswas (supra) there was a further contention that a particular disputed cheque had been given to the petitioner/accused for a specific purposes of making payment to the painter, but that he misappropriated the same to himself after allegedly having committed forgery by way of inserting the amount and particulars in the same himself and thereby had also rendered himself punishable under Sections 420/406 of the IPC. In this manner there was clearly a case of a specific ‘entrustment’ to the accused in that matter.
16. In “Debabrata Gupta” (supra) the Court in rejecting the application had observed in relation to the Petitioner’s denial of the existence of any “special entrustment” that “it is neither possible nor desirable to express any opinion on the merits of such a plea … without proper investigation and enquiry.”
17. From the ratio of the decisions cited it is unquestionable that there is no scope for any ‘entrustment’ of the partnership property to any person who admittedly is partner, until and unless there is a case of any ‘specific agreement’ of such entrustment, or that the property in question does not belong to the partnership. In the present case however there is absolutely no averment in the petition of complaint regarding any ‘Special entrustment’ of the partnership property to the petitioner no. 1, nor has any material to this effect been produced although investigation is complete.
18. In a recent decision in “Rajiv Thapar Vs. Madan Lal” the Supreme Court while dealing with the proposition of law pertaining to quashing of criminal proceedings initiated against an accused by a High Court u/s 482 Cr. P.C., inter alia, held as under –
“29. The issue being examined in the instant case is the jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure, if it chooses to quash the initiation of the prosecution against an accused, at the stage of issuing process, or at the stage of committal, or even at the stage of framing of charges. These are all stages before the commencement of the actual trial. The same parameters would naturally be available for later stages as well. The power vested in the High Court under Section 482 of the Code of Criminal Procedure, at the stages referred to hereinabove, would have far reaching consequences, inasmuch as, it would negate the prosecution’s/complainant’s case without allowing the prosecution/complainant to lead evidence. Such a determination must always be rendered with caution, care and circumspection. To invoke its inherent jurisdiction under Section 482 of the Code of Criminal Procedure the High Court has to be fully satisfied, that the material produced by the accused is such, that would lead to the conclusion, that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such, as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such, as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/complainant. It should be sufficient to rule out, reject and discard the accusations levelled by the prosecution/complainant, without the necessity of recording any evidence. For this the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such, as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under Section 482 of the Code of Criminal Procedure to quash such criminal proceedings, for that would prevent abuse of process of the court, and secure the ends of justice.
30. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashing, raised by an accused by invoking the power vested in the High Court under Section 482 of the Code of Criminal Procedure:-
30.1 Step one, whether the material relied upon by the accused is sound, reasonable, and indubitable, i.e., the material is of sterling and impeccable quality?
30.2 Step two, whether the material relied upon by the accused, would rule out the assertions contained in the charges levelled against the accused, i.e., the material is sufficient to reject and overrule the factual assertions contained in the complaint, i.e., the material is such, as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false.
30.3 Step three, whether the material relied upon by the accused, has not been refuted by the prosecution/complainant; and/or the material is such, that it cannot be justifiably refuted by the prosecution/complainant?
30.4 Step four, whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice?
30.5 If the answer to all the steps is in the affirmative, judicial conscience of the High Court should persuade it to quash such criminal-proceedings, in exercise of power vested in it under Section 482 of the Code of Criminal Procedure. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as, proceedings arising therefrom) specially when, it is clear that the same would not conclude in the conviction of the accused.”
19. The complainant has asserted that the aforesaid decisions are not applicable in the present case since they pertain to “misappropriation from partnership property”, but in the present case according to him such “partnership property has been converted to individual property”. In the opinion of this Court however, such assertion is merely a jugglery of words, since the alleged act of “conversion of partnership property to individual property” if done wrongfully would be nothing different from ‘misappropriation’ from partnership property. In any case there is no material on record to indicate any specific ‘entrustment’ of property in favour of the petitioner no. 1. The relevant clause in Para No. 9 of the original partnership agreement dated 28.07.1998 reads as follows –
“9. It is hereby agreed by and between the partners that the first partner Smt. Malabika Mondal is authorized is run who institution property as per rules and regulations of the Board of West Bengal, situated at 175, Biren Roy Road (West) Calcutta – 700 061, P.S Thakurpukur, on behalf of the educational institution ‘Sabuj Sathi’.”
20. It was mentioned in Clause 7 of the agreement that
“all moneys, cheques and other securities belonging to the institution except those required for current expenses shall be paid into or deposited with the schedule bank of the institution and that The account shall be operated by both the partners jointly.”
But according to Clause 10 it was also agreed that the ‘Partners shall keep and maintain paper books of accounts”.
In this manner clearly the complainant was at no stage precluded from involving himself with the financial affairs of the institution, exactly as in the case of “Velji Raghavji Patel” (supra), in which it had been mentioned –
“Reading the two together the meaning seems to be only this that as working partner the appellant should carry on the work of recovery of the dues of the partnership and that in respect of the dues from one Kablasingh it was decided that they should be deposited in the bank. It does not follow from this that any of the other partners was precluded from making the recoveries.”
21. In this backdrop of the matter, the fact that the complaint was lodged fourteen (14) years after the original date of partnership without accounting for the delay and having failed to specify any recent dates on which the alleged offence of cheating/misappropriation were allegedly committed by petitioner no. 1, the motive behind the FIR becomes very questionable since it has not even been mentioned in the complaint that the complainant at any time in writing demanded production of the Partnership accounts or Books during the long period of 14 years. His allegation of having verbally made such demand only on 20.03.2012 without any explanation of the previous delay also hits his case badly, specially considering that he seeks to impute the allegations of criminal misappropriation/ breach of trust upon his admitted Partner in respect of the Partnership money, which, as has been observed earlier, is not legally sustainable. For the aforesaid reasons, in the opinion of this Court, continuation of the criminal proceedings against the petitioners would be a clear abuse of the process of Court.
22. The Revisional Application is therefore allowed and further proceedings of ACGR Case No. 5632 of 2012 arising out of Thakurpukur, P.S. Case No. 202 dated 05.05.12 accordingly stand quashed.