1. This is a revision application by the State challenging the order of discharge passed by the learned Metropolitan Magistrate, 23rd Court, Esplanade, Bombay, dated 8th Oct. 1976.
2. It appears that the complainant Sawaldas Modi and the two accused entered into a partnership agreement on 28th December 1972. The agreement was to run a cloth business in the name of 'Shri Krishna Cloth Agencies.' It was also agreed that accounts should be opened in the Central Bank Head Office and Canara Bank, Kalbadevi branch. Everything went smoothly till the end of December 1973. It appears that goods were given on credit to several merchants and also disputes arose between the parties with regard to the account. That is why on 26th June 1974, the complainant sent in a telegram (Ex. B collectively) to his partners, the two accused. The telegram reads as under: 'It is for the period of past six months and more that I have been requesting you to furnish the detailed statement of accounts and the report of the business. You have been avoiding to do so for the reasons best known to you. Please note that I have retired from the business and any dealings with any person of any kind will solely be your responsibility as to the costs and consequences.'
3. It appears that thereafter the accused opened a bank account in their name and operated the same. The complainant thereafter filed a complaint dated 27th June 1975 in the police station stating inter alia, that the complaint was being filed by him as a partner of the firm of Shri Krishna Cloth Agencies and that moneys were due to that firm from 4 customers mentioned therein and that he had learnt, that monies due to the firm were taken by one G. R. Agarwal and they were deposited in a bank in Nana Chowk and a request was made to the po-1 lice to investigate into the matter. The police, it appears, thereafter investigated into the matter and they found that the account in the Bank of India, Nana Chowk was opened in the name of the second accused, the-first accused having introduced him. On these facts the police sent up a charge-sheet against the accused for an offence Under Section 409 of the I.P. Code.
4. When the ease was called or for hearing Under Section 239, Cr.PC it was submitted on behalf of the accused that there was no case made out for framing a charge and that the accused were entitled to a discharge. The matter was fully argued on both the sides and it appears that although in the F. I. R. filed on 27th June 1975, the complainant had not mentioned the fact that the accused were the partners of his firm and that he had retired from that partnership from 26th June 1974, that fact was admitted at the time of the hearing before the learned Magistrate. The copy of the telegram and the letter in confirmation of the same about the complainant having retired from the partnership produced by the accused was also admitted On these facts the learned Magistrate took the view that there was no case made out of any criminal breach of trust. Consistently with that view he passed an order of discharge.
5. It is the correctness of that order which is challenged by this revision application.
6. Mr. Kurdukar, the learned Public Prosecutor assailed the order of discharge by contending that after all it was a partnership business and according to the terms of the partnership the monies were required to be deposited either in the Central Bank Head Office or Canara Bank in the name of the firm and when the accused instead of doing so opened a bank account in the Bank of India, Nana Chowk, in the name of one Shri G. R. Agarwal and deposited the monies therein, that was a clear case of criminal breach of trust. As against that it is argued by Mr. Vyas, learned advocate for the accused-respondents that in the case of partnership there could not be any criminal breach of trust. In support of his submission he relied upon a decision of the Supreme Court reported in Velji Raghav.ii v. State of Maharashtra : 1965CriLJ431 .
7. I see no force in the submission of Mr. Kurdukar. Essentially the relationship between the parties viz. the complainant and the two accused was that of partners. They were dealing in partnership, If money due to a partnership was received and put in another account it could not be said that a partner has committed a criminal breads of trust. Actually in this case it appears that the complainant had retired from the partnership by sending in a telegram. Even otherwise as observed in Vein's case : 1965CriLJ431 on the facts of this case there could not be an offence of criminal breach of trust. Therein the Supreme Court has observed as under (at pp. 1435 afid 1436 of AIR):
In the case of a partnership, every partner has dominion over the partnership 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 satisfied the requirements of Section 405 of the Indian Penal Code. The prosecution must further 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.
Where, therefore, under an agreement between the partners the working partner is authorised to recover the dues of the partnership and to spend the money ' for the business of the partnership, he cannot be said to have been guilty of criminal breach of trust even with respect to the dues realised by him from certain person by not depositing them in the bank as alleged by the prosecution.
8. Again, the Supreme Court observed in para. 8 as under:-
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. Having regard to the above position of law, it would appear that no case is made for interfering with the order of discharge passed by the learned Magistrate.
10. The rule is, therefore, discharged.