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Sugesan Finance Investment by Its Partner Vs. State of Karnataka by Its State Public Prosecutor and 2 ors. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtKarnataka High Court
Decided On
Case NumberCriminal Revision Petition No. 729 of 1983
Judge
Reported inILR1984KAR78
ActsCode of Criminal Procedure (CrPC) , 1973 - Sections 200; Indian Penal Code (IPC), 1860 - Sections 405 and 406
AppellantSugesan Finance Investment by Its Partner
RespondentState of Karnataka by Its State Public Prosecutor and 2 ors.
Appellant AdvocateUrval N. Ramannad, Adv.
Respondent AdvocateT.J. Chouta, Adv.
DispositionPetition dismissed
Excerpt:
.....disclosed a a prima facie case of an offence.;it is true that a magistrate taking cognizance of an offence on complaint shall have to proceed in accordance with the provisions contained in chapter 15 of the code. 'taken cognizance of offences' means that the magistrate concerned had made up his mind to probe into facts placed before him. at the first look he decides that the averments made in the complaint deserve his attention. but, there may be cases where at that stage itself he feels that the facts placed before him were not worthy of any further probe. in such a case it is open to him to dismiss the complaint without taking cognizance of the alleged offence.;(b) indian penal code, 1860 (central act no. 45 of 1860) - section 405 - entrustment of property or dominion over property..........and there-fore the court below ought to have taken cognizance of the same and proceeded further.4. facts: - complainant is a financingfirm. the second accused, rule 3 herein, is a private company limited dealing in export of granites. the first accused (rule 2) is the managing director of the second accused firm-company. the accused entered into an agreement with the complainant and another sister concern of the complainant called 'm/s. sugesan and co., pvt. ltd.,' on 22-4-1977 and obtained some loan from the complainant subject to the terms and conditions of the agreement. it may be noted that the accused had secured an export order for the supply and shipment of 3,000 cubic meters of black and red granite blocks. to extract the said granite he had obtained the necessary licence with.....
Judgment:
ORDER

N. D. Venkatesh, J.

1.This Revision is directed against the order dated 29-9-1983 of the Metropolitan Magistrate, II Court, Bangalore, in hisproceeding No. P.C.R. 27/83. That proceeding was on a private complaint filed by the petitioner u/s 200 of the Cr.P.C, against the accused (respondents 2 and 3 herein) for an offence under Sec, 406 of the I.P.C.

2. After the complaint was presented by the complainant, the complaint was posted to hear re : the jurisdiction. Two days later he heard the counsel appearing for the complainant, perused the complaint and the documents produced along with the petition and ordered as under:

'Taking into the entire facts of the case, it is clear that dispute between the parties is of civil nature. Hence, it is held that it is of civil nature. Hence, complaint stands dismissed'.

3. Challenging this order two submissions were made by the counsel for the complainant (petitioner herein). His firstsubmission is that without recording the sworn statements of the complainant and his witnesses, if any, the court below could not have dismissed his complaint on the ground that the dispute between the parties was of a civil nature. And his second submission is that the averments made in the complaint prima facie spell out a case of an offence punishable under the Indian Penal Code and there-fore the court below ought to have taken cognizance of the same and proceeded further.

4. FACTS: - Complainant is a financingfirm. The second accused, Rule 3 herein, is a private company limited dealing in export of granites. The first accused (Rule 2) is the Managing Director of the second accused firm-Company. The accused entered into an agreement with the complainant and another sister concern of the complainant called 'M/s. Sugesan and Co., Pvt. Ltd.,' on 22-4-1977 and obtained some loan from the complainant subject to the terms and conditions of the agreement. It may be noted that the accused had secured an export order for the supply and shipment of 3,000 cubic meters of black and red granite blocks. To extract the said granite he had obtained the necessary licence with the M.M.T.C. of India.

5. As per the terms of the agreement, after quarrying the granite and making it ready for export, the accused had to appoint Sugesan and Co., Pvt. Ltd., the complainant's sister concern as their shipping agents for exporting the same and until so exported out of the country, the same had to be stocked in the yard of that concern and as further mutually agreed, the granite stocked will be subject a lien in favour of the financiers.

6. The complainant's case, as set out in the complaint, is that the accused, who had quarried the granite dressed it and made it ready for export, had, in violation of the aforesaid conditions, diverted the said granite to some other concerns for export and is about to export the same and thus violating these specific conditions of the agreement had committed criminal breach of trust.

7. It is evident from the order of the court below, extracted above, that not taking cognizance of the complaint he has dismissed it.

8. I have referred to the submissions of the counsel for the petitioner at para-3 above. Could he (the learned Magistrate) not have dismissed the complaint without recording the sworn statements of the complainant and his witnesses, if any, as argued by the counsel for the petitioner is the first question.

9. It is true that a Magistrate taking cognizance of an offence on complaint shall have to proceed in accordance with the provisions contained in Chapter 15 of the Code. 'Taken cognizance of offences' means that the Magistrate concerned had made up his mind to probe into the facts placed before him. At the first look he decides that the averments made in the complaint deserve his attention. But, there may be cases where at that stage itself he feels that the facts placed before him were not worthy of any further probe. In such a case it is open to him to dismiss the complaint without taking cognizance of the alleged offence.

10. Is this a case in which the court below could have dismissed the complaint, without taking cognizance of the same is the next question?

11. It all depends upon the facts of each case. Now, what are the allegations in the instant case? Could those allegations have been supplemented in any manner by the sworn statement of the complainant and his witnesses ?

12. I have narrated the contents of the complaint - facts found therein - at para-4 above. I need not repeat them over again. According to the complainant, the facts placed by him constitute an offence punishable under Section 406 I.P.C.

13. Section 406 I.P.C, provides punishment for the offence of criminal breach of trust. Criminal Breach of Trust is defined in Section 405 I.P.C. The ingredients of that offence are as under :

1. 'Entrusting any person with property or with any dominion over property.

2.The person entrusted (a) dishonestly misappropriating or converting to his own use that property ; or

(b) dishonestly using or disposing of that property or willfully suffering any other person so to do in violation -

(i) of any direction of law prescribing the mode in which such trust is to be discharged, or

(ii) of any legal contract made touching the discharge of such trust'.

The most essential ingredient of the offence is entrustment of property or entrustment of dominion over the property. This means that the ownership or beneficial interest in the property in respect of which criminal breach of trust is alleged to have been committed must be of some person other than the accused.

14. In the instant case the accused had not been entrusted with any property nor any dominion thereof. On the other hand, the agreement was that he, the accused, after quarrying granite and making it ready for export, in the process of exporting the same, had to follow a particular course as agreed upon and that course of action contained the doing of two things. The first was that he should expert it through Sugesan and Co., Pvt. Ltd., the sister concern of the complainant, and the second was, that he should stock the same with them Sugesan and Co., - and in their yard. And the moment it is stocked there a lien for the money advanced by the complainant would come into being in their (complainant's) favour. It is thus clear that thecomplainant had not entrusted anything to the accused nor had he (complainant) created any dominion in favour of the accused over any property of his (complainant). It may be, that the accused has committed breach of the terms of the agreement said to have been entered into with the complainant. But that would not amount to the committing of any breach of trust, as alleged.

15. Before disposing of this matter I would like to refer to a few decisions cited by the learned counsel for the petitioner. He referred to (1) GOVINDA PILLAI v.. STATE (1972 Vol. 16 Madras Law Journal (Criminal), 100), (2) CHANDRA DEO SINGH v.. CHANDRA BOSE ALIAS CHABI BOSE & ANOTHER (1963 (2) Criminal Law Journal, page 397). and (3) KALU RAM & OTHERS v.. BHAGAT RAM (1975 (2) Criminal Law Journal, page 1627).

These decisions deal with the question as to how the Magistrates will have to proceed on a private complaint of which they take cognizance. The ratio enunciated in these decisions is not applicable to the facts of this case which, I have already stated, has been disposed of without taking cognizance.

16. About the scope of Section 405 I.P.C., the learned counsel drew my attention to MOHAMMED SULAIMAN v.. MD. AYUB AND ANOTHER (A.I.R. 1975 S.C. 1319). In particular he drew my attention to para-4 of this case. The decision cannot help him for the reason that, as already stated, in the instant case there was no entrustment by the complainant of any of his property to the accused nor had he (the complainant) created any dominion of entrustment in favour of the accused in respect of his (the complainant's) property. If having been entrusted with some property under an agreement the accused had violated the terms of that agreement in dealing with the property entrusted to him, perhaps the observations made in SULAIMAN's case would have had a bearing.

17. In the circumstances of the case, the order of the court below dismissing the complaint, not taking cognizance of the offence alleged, has to be sustained

Accordingly, for the reasons stated above, the petition is dismissed.


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