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Chiranjilal Sharma Vs. Raja Ramsingh - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtRajasthan High Court
Decided On
Case NumberCriminal Revn. No. 545 of 1963
Judge
Reported inAIR1964Raj267; 1964CriLJ730
ActsCode of Criminal Procedure (CrPC) , 1898 - Sections 561A; Indian Penal Code (IPC), 1860 - Sections 405 and 406;
AppellantChiranjilal Sharma
RespondentRaja Ramsingh
Appellant Advocate C.K. Garg, Adv.
Respondent Advocate S.R. Goyal, Adv.
DispositionRevision allowed
Cases Referred(See Main Mohan Das v. Mohendra Bhowal
Excerpt:
- - the learned magistrate on 8th july, 1963, having been satisfied on, the above materials registered a case under section 420 of the indian penal code against the accused and issued bailable warrants against them. it is not stated that the complainant ever called upon the petitioner to disclose the state of accounts and he failed to do so. but even if it be assumed that the petitioner has failed to render accounts and has concealed the partnership books, it would not bring the case within section 406 of the indian penal code. it is not alleged in the complaint that the complainant was not satisfied with this explanation and raised any further objection against the removal of the truck......the partnership books, it would not bring the case within section 406 of the indian penal code. the partners are joint owners of the patnership assets and each is only entitled to such part of the profits as on account would show is due to him. if he desires to claim what he alleges is due to him from the other partners he must be a partnership suit claim a dissolution of partnership and an account and payment to him of what is found due on taking the account. the only sum due from one partner to another is what is shown to be due to him after taking account of, all the partnership transactions. whether or not the partnership made a profit in a particular year can only be ascertained on taking an account and it is only after taking such an account that it can be said that any.....
Judgment:
ORDER

C.B. Bhargava, J.

1. This is an application by Chiranjilal one of the accused under Section 561-A read with Sections 435 and 439 of the Code of Criminal Procedure for quashing certain criminal proceedings which are being taken against him in this Court of Additional Munsif Magistrate Jaipur East.

2.On 8th June, 1963, the opposite party RajaRamsingh filed a complaint, against the petitioner nd others under Sections 420, 120B and 406 ofthe Indian Penal Code on the following facts, thatthe opposite party after his retirement, from themilitary started transport business. The petitionerpersuaded him to enter into a partnership and apartnership deed was executed between them on6th September, 1962. The partnership was to bein the name of Associated Transport Operators.In order to carry out the business of partnership,it was agreed to purchase a truck -- price of which,was to be equally paid by the partners. Accordingly truck No. RJL 5047 was purchased fromone Madhesingh for Rs. 19,500/-, The petitioner,did not pay his share of the capital but only paidRs. 2,000 /- and urged the complainant to makethe payment and promised to reimburse, him' lateron. Subsequently Rs. 6000/- more were takenfrom the opposite party for being paid to Madhe Singh. The petitioner took the entire managementof the business in his own hands on the pleathat the opposite party had, not sufficient experienceof the business. All the accounts were maintainedby the petitioner, and for some the account bookswere kept at 52 Sansar Chand Road, Jaipur whereopposite party was carrying on his old business,For sometime the partnership work continued butlater on the petitioner told him that the trackhad gone out of order and need repairs. So thetruck was left at the workshop of Fazul UddinMistry. In the third week of. February 1963 theopposite party came to know that the petitionerhad removed the 'truck from the workshop of Fazul Uddin without his permission. Although according to the agreement between the (parties thetruck was to run within Jaipur City only yet onenquiry the petitioner informed' him that, the truckwas being plied at Pali where he had been able tosecure some work of profit. It is further allegedin the complaint that after the purchasing of the'truck whatever profits accrued in the partnershipbusiness have all been kept by the petitioner andnothing had been paid to the opposite party, norhe had rendered accounts of the same. That thepetitioner in collusion with the other accused hadalso caused the disappearance of the accost-booksand when the opposite party lodged a protest he as beaten and a false report was made against him in the police. It is also alleged that thepetitioner was not disclosing the whereabouts ofthe truck and was not prepared to return the account books of the partnership; The sum andsubstance of the above allegations is that :

1. the opposite party was induced to pay for the purchase of the truck more than Ms agreed share of money.

2. the petitioner who was maintaining the accounts and running the truck had not rendered the accounts and had not paid the complainant's share' of profits.

3. the petitioner had unlawfully taken away the books of account of the partnership and was not returning them.

4. the petitioner had removed the truck fromJaipur without the complainant's permissions- and was not prepared to disclose itswhereabouts.

3. The learned Munsif Magistrate racorded the statements of the complainant and of the witness Shri Pribhu Dayal. No additional facts were brought out in the statements of these two persons. The complainant however, admitted that the truck was at Pilani and requested the Court to' issue a warrant fur its seizure. The learned Magistrate on 8th July, 1963, having been satisfied on, the above materials registered a case under Section 420 of the Indian Penal Code against the accused and issued bailable warrants against them. Against that order the petitioner filed a revision application in the Court of the Additional Sessions Judge. Jaipur city on the grounds that the facts mentioned in the complaint did not constitute any offence. The learned Additional Sessions Judge did not agree with the contention and rejected the revision application.

On an application under Section 561-A of the Code of Criminal Procedure at this interlocutory stage generally this Court would- be very reluctant to interfere with the proceedings which are being taken against the accused in the Court below. But as pointed out by their Lordships of the Supreme Court in R. P, Kapur v. State of Punjab, (AIR 1960 SC 866),

''there are some cases where the inherent jurisdiction to quash proceedings can, and should be exercised, one of such cases being where the allegations in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to' decide whether the offence alleged is disclosed or not.'

Now it is to be seen in the light of these observations whether the allegations made in the complaint constitute any offence or not. As' already stated the learned Magistrate has registered the case against the accused only under Section 420 of the Indian Penal Code. It is not the complainant's case that he was deceived to pay Rs. 14,000/-for the price of the truck or that he was fraudulently or dishonestly induced to pay that amount but it was in performance of their mutual agreement. Paragraph 7 of the partnership agreement which was produced by the complainant in the Court below recites that:

'The Capital of the partnership shall be contributed by the parties by, mutual agreement. And the shares of the parties in the profits and losses of the partnership shall be as under: First party 50 %Second party 50 %'

4. It is admitted by the complainant that a truck was purchased by them for Rs. 19,500/- from one Madhosingh and hence no question of deception arises. Learned counsel for the complainant has frankly conceded that on the above facts offence under Section 420 of the Indian Penal Code will not be made out. He however, urges that the fact mentioned in the complaint do disclose an offence of criminal breach of trust punishable under Section 406 of the Indian Penal Code. Both the learned counsel addressed lengthy arguments on the question whether a partner can be guilty of a charge of criminal breach of trust in respect of the partnership assets.. It is unnecessary to discuss all the cases relied upon by the parties in this connection in view of the observations Of the Supreme Court in R.K. Dalmia v. Delhi Administration AIR 1962 SC 1821 where their Lordships quoted with approval the following observations from a Full Bench case of the Calcutta High Court in Queen v. Okhoy Coomar Shaw 21 Suth WR Cr 59 at p. 6i (FB).

'We think the words of Section 405 of the Penal Code are large enough to include the case of a partner, if it be proved that he was in fact entrusted with the partnership property, or with a dominion over it, and had dishonestly misappropriated it or converted it to his own use.'

And further the following observations by Beaumont C. J. in the case of Jagannath Raghunath Das v. Emperor, AIR 1932 Born 57:

'In my opinion, the words of the section (Section 405) are quite wide enough to cover the case of a partner. Where one partner is given authority by the other partners to collect moneys or property of the firm I think that he is entrusted with dominion over that property, and if he dishonestly misappropriates it, then I think he comes within the section,'

Thus from the above it follows that even a partner can be guilty of a charge under Section 405 of the Indian Penal Code in case where he is found to have been entrusted with property or dominion over that property and is further shown to have dishonestly misappropriated it.

5. Learned counsel for the petitioner has not been able to cite any decision to show that in no case a charge under Section 405 can be made out against a partner. The full Bench case of the Calcutta High Court in Bhuban Mohan Das v. Surendra Mohan Das, AIR 1951 Cal 69 on which reliance has been placed on behalf of the petitioner also does not lay down that extreme proposition of law. Judged in this light the question is whether the facts alleged in the complaint Constitute an offence under Section 405 of the Indian Penal Code. As regards the allegation that the petitioner had not paid his share of profits to the complainant and had not rendered the accounts and had further concealed the partnership books it may be pointed out that the allegations in that behalf are in the first instance quite vague. It is not stated in the complaint that any profits have, as a matter of fact, accrued in the partnership business. If so what is their extent. It is not stated that the complainant ever called upon the petitioner to disclose the state of accounts and he failed to do so. It is also not stated that the petitioner was to render accounts at any particular time. In the absence of the above particulars it is difficult to say whether there have been any profits in the partnership business at all and the petitioner had wrongly withheld the share of the complainant out of it. But even if it be assumed that the petitioner has failed to render accounts and has concealed the partnership books, it would not bring the case within Section 406 of the Indian Penal Code. The partners are joint owners of the patnership assets and each is only entitled to such part of the profits as on account would show is due to him. If he desires to claim what he alleges is due to him from the other partners he must be a partnership suit claim a dissolution of partnership and an account and payment to him of what is found due on taking the account. The only Sum due from one partner to another is what is shown to be due to him after taking account of, all the partnership transactions. Whether or not the partnership made a profit in a particular year can only be ascertained on taking an account and it is only after taking such an account that it can be said that any sum whatsoever was due to the opposite party. It cannot possibly be a criminal offence to withhold payment in the circumstances' (See Main Mohan Das v. Mohendra Bhowal, AIR 1948 Cal 292).

It was further observed in the above case that:

'A partner cannot be prosecuted under Section 424 for dishonestly and fraudulently concealing or removing the books of the partnership. Partners who are joint owners of books are entitled to retain them' and the complaining partner has no more right to the books than the partner who has them in his possession. All that the former is entitled to is inspection of these books. There is nothing dishonest or fraudulent in the partner retaining these books. The proper remedy is a partnership suit claiming dissolution and account and thus obtaining an order for production and inspection of these books. '

6. The above case is a clear authority for the proposition that a partner cannot be held liable for a charge under Section 406 of the Indian Penal Code for not rendering accounts to any partner and for, withholding the share of profits of the other partner when the accounts have not been gone into and it has not been ascertained whether there have been any profits in the partnership business at all and what sum is due to the complainant in these profits. With respect I agree with the view taken in the above mentioned case. It is not the function of a criminal Court to be into the accounts of partnership and determine the specific amount due to one partner from the other for his share of profits. This can only be done by a civil Court in a suit for accounts. In such circumstances the case of the petitioner so far as the above allegations are concerned, would not come under Section 406 of the Indian Penal Code. The proper remedy for the complainant is to file a suit for dissolution of the partnership and rendition of accounts, against the petitioner. At this stage the amount of his share of profits cannot be predicted.

7. The next allegation against the petitioner is that he had removed the truck from Jaipur city without the permission of the complainant and was not disclosing its whereabouts. It would appear from the statement of facts given above that the truck was alleged to have been taken away from the workshop of Fazal Uddin in the third week of February, 1963. Thereafter the complainant was informed by the petitioner that it was plying at Pali because he had been able to secure some profitable work there. It is not alleged in the complaint that the complainant was not satisfied with this explanation and raised any further objection against the removal of the truck. For an offence of criminal breach of trust besides showing that the property was entrusted to the accused it is further necessary to show that he had dishonestly misappropriated or converted it to his own use. The complaint does not contain any allegation that the accused had misappropriated or converted the truck to his own use. It is true that direct evidence of misappropriation or conversion may sometimes not be available and may be inferred from the circumstances but even the complainant's allegation that its whereabouts were not known, is falsified by his own statement and the affidavit wherein he admits that the truck is in the possession of the accused at Pilani. In the absence of any allegation of misappropriation or conversion of the truck by the petitioner offence under Section 406, I. P. C. will not be constituted. It seems that the complainant has chosen a wrong forum for the redress of his grievance. In these circumstances when the complaint does not disclose any offence, the proceedings pending against the accused cannot be allowed to continue and are therefore, quashed.

8. This application is therefore, accepted and the proceedings pending in the Court of the Additional Munsif Magistrate, Jaipur East against the petitioner are quashed.


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