Criminal Breach of Trust; Shams Tabrez Vs. State of West Bengal [Calcutta High Court, 08-07-2016]

Indian Penal Code, 1860 – Sections 405, 406 & 120B – Criminal breach of trust – Calcutta Leather Complex Tanners Association – violation of the terms of agreement – quashing of the criminal proceeding – if any person being entrusted with the property or having dominion over the property, disposes of that property in violation of any legal contract, the said person commits criminal breach of trust. In the instant case the petitioners were entrusted with three Mobile Chrome Recovery Unit Components or they had dominion over the said property as office bearers of Managing Committee of CLC Tanners Association and they disposed of the said property in violation of terms of contract dated May 18, 2005 to which CLC Tanners Association is a party and thereby the action of the petitioners falls within the ambit of criminal breach of trust defined in Section 405 of the Indian Penal Code.

Calcutta Leather Complex Tanners Association


IN THE HIGH COURT AT CALCUTTA

CRIMINAL REVISIONAL JURISDICTION APPELLATE SIDE

Present: Hon’ble Justice R. K. Bag, J.

Judgment on : 08.07.2016

CRR 770 of 2014 With CRR 1578 of 2015 With CRAN 1589 of 2016 With CRAN 1980 of 2016

Shams Tabrez V. State of West Bengal & Anr. AND Iftekhar Najam V. State of West Bengal & Anr.

For the Petitioners : Mr. Shekhar Basu, Mr. Sandipan Ganguly, Mr. Kaushik Chatterjee, Mr. Prasun Ghosh, (In CRR 770/2014) For the Petitioners : Mr. Subhendu Roy, Mr. R. N. Dutta, Mr. Shirsendu Hazra, (In CRR 1578/2015) For the O. P. No.2 : Mr. Kazi Safiullah, Mr. Anand Keshri, Mr. Akbar Ali, For the State : Mr. Manjit Singh.

R. K. Bag, J.

The petitioner Shams Tabrez has prayed for quashing of the criminal proceeding of G.R. No.905 of 2014 arising out of Calcutta Leather Complex P.S. Case No.62 of 2014 under

Sections 409/120B of the Indian Penal Code

pending before the Court of Learned Additional Chief Judicial Magistrate, Baruipur, South 24-Parganas. Similarly, the petitioner Iftekhar Najam has also prayed for quashing of the criminal proceeding of G.R. No.905 of 2014 arising out of Calcutta Leather Complex P.S. Case No.62 of 2014 under Sections 409/120B of the Indian Penal Code pending before the Court of Learned Additional Chief Judicial Magistrate, Baruipur, South 24-Parganas. Both the revisional applications arise out of the same criminal proceeding and as such both the revisions are disposed of by this common judgement.

2. One Imran Ahmed Khan, Honorary General Secretary of CLC Tanners Association (in short the opposite party no.2) filed a written complaint before the police on the basis of which Calcutta Leather Complex Police Station Case No.62 of 2014 dated February 20, 2014 under Sections 409/120B of the Indian Penal Code was registered. The contents of the said written complaint disclose that in the month of October, 2013 the new Managing Committee took over charge of Calcutta Leather Complex Tanners Association. The averments made by the opposite party no.2 in the said written complaint indicate that the new Managing Committee came to learn that the petitioner Iftekhar Najam and the petitioner Shams Tabrez and others sold out three Mobile Chrome Recovery Unit Components including pumps, p.h. meters, gear motors, trolley tyres and tubes etc. valued at Rs.80 Lakh approximately as iron scrap while they were discharging the duty as office bearers of Calcutta Leather Complex Tanners Association on January 25, 2012, April 21, 2012, May 23, 2012 and November 9, 2012. The said Mobile Chrome Recovery Unit Components including pumps, p.h. meters, gear motors, trolley tyres and tubes were the assets of Government of West Bengal, but the same were sold out without seeking prior approval from the Government of West Bengal. The show cause notice was served on both the petitioners on February 13, 2014 calling upon them to explain why action will not be taken against them for abusing official position by selling out the property of Government of West Bengal and thereby committing criminal breach of trust. Without waiting for reply of the show cause notice from the petitioners, the opposite party no.2 filed the written complaint for initiating criminal proceeding against the petitioners and others. The police investigated the said criminal case and submitted chargesheet against both the petitioners before the Court of Learned Magistrate on March 11, 2015. Learned Magistrate issued warrant of arrest against both the petitioners on the basis of prayer of the Investigating Officer who claimed that the petitioners absconded and evaded the arrest. By filing supplementary affidavit the petitioners have challenged the order dated March 11, 2015 by which Learned Magistrate issued warrant of arrest against the petitioners. The petitioners have also prayed for quashing of the criminal proceeding on the ground that no offence is made out against the petitioners for facing the trial under Section 409/120B of the Indian Penal Code.

3. By referring to various terms of agreement dated May 18, 2005 executed by and between Government of West Bengal, Calcutta Leather Complex Tanners Association (hereinafter referred to as CLC Tanners Association) and M. L. Dalmia & Co. Ltd. for establishment and maintenance of Calcutta Leather Complex, Mr. Sekhar Basu, Learned Senior Counsel for the petitioner Shams Tabrez contends that the said agreement is a contract within the ambit of Article 299 of the Constitution of India and the terms and conditions of the contract are binding on the parties. Mr. Basu submits that if the petitioners as office bearers of CLC Tanners Association have violated any term of the said contract, the remedy is available in the contract itself. He specifically submits that there is termination clause in the contract for violation of any term of contract by CLC Tanners Association. Mr. Basu argues that the State of West Bengal has no grievance against CLC Tanners Association or its previous office bearers for violation of any term of the contract and as such the State of West Bengal has not initiated the criminal proceeding against the petitioners. He further argues that the present criminal proceeding cannot be started by the police on the basis of complaint of the opposite party no.2 who happens to be the Honorary General Secretary of CLC Tanners Association, when the State of West Bengal has no grievance against CLC Tanners Association for violation of terms of the contract. By referring to the provisions of Section 204 and Section 87 of the Code of Criminal Procedure Mr. Basu submits that the order of issuance of warrant of arrest against the petitioners by showing them as absconders is not justified under the law. He has also relied on several decisions reported in AIR 2015 SC 2195, (2013) 4 SCC 506, (2008) 1 SCC (Cri) 259, (2014) 3 SCC 321 and 1960 Cri.L.J 1436 in support of his above contention.

4. Mr. S. S. Roy, Learned Counsel representing the petitioner Iftekhar Najam submits that the opposite party no.2 filed the written complaint before the police without waiting for the reply to show cause notice issued to the petitioners by the opposite party no.2, which indicates mala fide on the part of the opposite party no.2. He further submits that the properties alleged to have been sold out by the petitioners were not entrusted with the petitioners at any material point of time. Relying on the decision of the Supreme Court in 2009(1) AICLR 287 Mr. Roy submits that the offence under Section 409 of the Indian Penal Code is not made out against the petitioners.

5. Mr. Manjit Singh, Learned Public Prosecutor contends that the dispute resolution mechanism described in the deed of agreement cannot be resorted to as there is no violation of the terms of agreement by CLC Tanners Association. What has been alleged in the written complaint treated as FIR is that the petitioners have sold out the property of the State of West Bengal in an unauthorised manner without seeking approval from the State of West Bengal and thereby the petitioners being entrusted with the said property for maintenance of Calcutta Leather Complex have committed offence which is punishable under the penal law of the land. By referring to various pages of the case diary Mr. Singh specifically submits that the offence under Section 409/120B of the Indian Penal Code is made out against both the petitioners and as such the criminal proceeding should be allowed to come to its logical conclusion.

6. Learned Counsel for the opposite party no.2 submits that the ownership of three Mobile Chrome Recovery Unit Components belonged to the State of West Bengal and the said properties were handed over to CLC Tanners Association for use and maintenance and as such disposing of those assets by the petitioners without seeking approval from the State of West Bengal will amount to offence punishable under the law, irrespective of terms and conditions of the contract executed by and between the parties.

7. There is no dispute that on May 18, 2005 one deed of agreement was executed by and between Government of West Bengal and CLC Tanners Association and M.L. Dalmia and Co. Ltd. for establishment and maintenance of Calcutta Leather Complex in the district of South 24-Parganas. The Calcutta Leather Complex was established for relocating the tanneries which were closed down for protection of environment in compliance with the direction given by the Supreme Court of India. It appears from clause 11 of the said deed of agreement that all infrastructure assets mentioned in clause 4 and any replacement thereof or additions thereto will remain as the property of Government of West Bengal to be used solely for the benefit of all tanners and other production units in Calcutta Leather Complex till completion of payment of capital levies mentioned in clause 7.1 of the deed of agreement. It further appears from the said clause 11 of the deed of agreement that CLC Tanners Association shall have no right to transfer, mortgage, encumber or alienate the infrastructure assets without prior written consent of Government of West Bengal. The clause 4 of the deed of agreement indicates that Mobile Chrome Recovery Unit Components were included within the ambit of infrastructure assets provided by the Government of West Bengal to CLC Tanners Association. The clause 11 of the deed of agreement further indicates that CLC Tanners Association is obliged to use infrastructure assets and maintain the same solely for the benefit of the tanners and other production units located in Calcutta Leather Complex. It is not the case of either of the parties to the proceeding that the capital levies mentioned in clause 7 of the deed of agreement have been paid in full to the Government of West Bengal and as such the ownership of three Mobile Chrome Recovery Unit Components belong to the State of West Bengal and the State of West Bengal is the owner of the said property. It is, thus, established from the said clauses of deed of agreement that the said three Mobile Chrome Recovery Unit Components were entrusted to CLC Tanners Association for use and maintenance solely for the benefit of tanners and other production units located in Calcutta Leather Complex.

8. Now, the question for consideration of the Court is whether three Mobile Chrome Recovery Unit Components were entrusted with the present two petitioners as office bearers of CLC Tanners Association. CLC Tanners Association is a company incorporated under Section 25 of the Companies Act, 1956. It appears from memorandum of association of CLC Tanners Association that the administration of the affairs of the said company is vested in the Managing Committee which will be duly elected by the members of the company at the annual general meeting. It further appears from the said memorandum of association that the Managing Committee comprises President, two Vice-Presidents, Honorary General Secretary, two Honorary Joint Secretaries, Honorary Treasurer and eight committee members. So the Managing Committee of CLC Tanners Association is responsible for use and maintenance of three Mobile Chrome Recovery Unit Components of the Government of West Bengal for the benefit of tanners of Calcutta Leather Complex. Since the Managing Committee of CLC Tanners Association is entrusted with the responsibilities of use and maintenance of three Mobile Chrome Recovery Unit Components belonging to Government of West Bengal, the petitioners being the office bearers of the Managing Committee of CLC Tanners Association cannot take the plea that they are not entrusted with the property, viz, three Mobile Chrome Recovery Unit Components belonging to Government of West Bengal. In my view the petitioners being the office bearers of the Managing Committee of CLC Tanners Association were entrusted with the property, viz, three Mobile Chrome Recovery Unit Components belonging to Government of West Bengal.

9. On perusal of the deed of agreement dated May 18, 2005, I find that the said agreement is not executed on behalf of the Governor of State of West Bengal. In the said agreement Government of West Bengal is represented by the Principal Secretary, Commerce and Industries Department, Writers’ Buildings, Calcutta-700 001. Accordingly, the question whether the said deed of agreement falls within the ambit of Article 299 of the Constitution of India remains open for decision by any competent court of law if the terms of the said deed of agreement are challenged by any of the parties to the said agreement before the court of law. The contention of Mr. Basu is that by selling out three Mobile Chrome Recovery Unit Components as iron scrap, the CLC Tanners Association has violated the terms of deed of agreement dated May 18, 2005 for which remedy is available in the said deed of agreement. It appears from clause 14 of the said deed of agreement that there is dispute resolution mechanism for default of any party in executing terms of the said deed of agreement. The act of disposing of three Mobile Chrome Recovery Unit Components as iron scrap by the petitioners as office bearers of CLC Tanners Association cannot be construed as default in executing the terms of deed of agreement dated May 18, 2005. The opposite party no.2 has made specific allegation in the written complaint treated as FIR that on January 25, 2012, April 21, 2012, May 23, 2012 and November 9, 2012 both the petitioners as office bearers of CLC Tanners Association sold out three Mobile Chrome Recovery Unit Components as iron scrap. Had the said sell of the property been authorised by any resolution of the Managing Committee of CLC Tanners Association, the CLC Tanners Association would have been responsible for making default in executing terms of agreement for which dispute resolution mechanism incorporated in clause 14 of the said deed of agreement would have been attracted. It appears from the statement of Imanul Haque, Manirul Haque, Ramesh Kumar Juneja, Javed Akhtar, Tamir Ahmed recorded under Section 161 of the Code of Criminal Procedure that the said three Mobile Chrome Recovery Unit Components have been sold out as iron scrap by the present petitioners as office bearers of CLC Tanners Association. In view of my above findings, I fully agree with the submission made by Mr. Singh, Learned Public Prosecutor that the dispute resolution mechanism of the deed of agreement dated May 18, 2005 will not be attracted when the petitioners have disposed of the property of the Government of West Bengal as office bearers of CLC Tanners Association without any authorisation from the Managing Committee of CLC Tanners Association or approval of the Government of West Bengal.

10. The criteria laid down by the Supreme Court for quashing of the criminal proceeding in paragraph 102 of