Rajeshkumar Ghisulal Munot vs The State Of Maharashtra
2021 Latest Caselaw 13784 Bom

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         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                 CRIMINAL APPELLATE JURISDICTION
                   BAIL APPLICATION NO.968 OF 2020


Rajeshkumar Ghisulal Munot                 ..   Petitioner
        Versus
The State of Maharashtra                   ..   Respondent
                                       ...

Mr.Aabad Ponda, Senior Advocate with Mr.Bhomesh R. Bellan
for the Applicant.
Mr.Swapnil S. Pednekar, APP for the State .
                             ...

                          CORAM: BHARATI DANGRE, J.

DATED : 24th SEPTEMBER, 2021

P.C:-

1. The Applicant is incarcerated in the wake of his arrest in

connection with C.R.No.281 of 2019 registered with L.T.Marg

Police Station, invoking Sections 409, 420, 465, 468, 471 read

with Section 34 of the Indian Penal Code (for short, "The IPC").

From the date of his arrest i.e. 01/11/2019, he continue to

languish in jail as his application for bail being rejected by the

Sessions Court.

2. Heard learned senior counsel Mr.Ponda for the Applicant

and learned APP Mr.Pednekar for the State.

The pivotal question which arises in this case is whether

M.M.Salgaonkar

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the Applicant, who is a partner in the frm alongwith the

Informant, can be made to stand the charge under Section 409

in light of the decision of the Hon'ble Apex Court in case of

Velji Raghavji Patel V. State of Maharashtra1 in the wake of the

allegations levelled by the Informant. In order to appreciate

the legal position, I have perused the charge-sheet with the

assistance of the respective counsel.

3. The Informant, Rajkumar Gupta allege in his complaint

that from 2013, he was into the business of sale and purchase

of gold and the business was carried out in the name of

'M/s.Dev Bullion' in which the present Applicant is a partner.

The partnership deed was entered into between the two on

18/11/2013 and the Informant was partner to the extent of

90% whereas the present Applicant is partner of 5% and the

Informant's brother was holding 5% stake in the partnership.

After stating the modus operandi of the partnership frm, it is

narrated by the Informant that he had full trust in the

Applicant and the day-to-day affairs of the frm were handled

by the present Applicant.

After four years into the business, on 29/11/2017, the

Informant was intimated by one of the Traders about the

1 AIR 1965 SC 1433

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Applicant having received money from him, but the gold being

not disbursed in return. This created suspicion in the mind of

the Informant and when he checked the books of account, it

came to his knowledge that for a long period, false calculations

were placed before him. As far as the Day Register of

21/11/2017 is concerned, four entries refected the names of

the Traders and some amount was scribed against their

names. The allegation in the complaint is to the effect that

though money was not received from the said Traders, wrong

entries were taken in Day Register and by showing that there

was purchase of gold and the gold was retained by the

Applicant. In the backdrop of these allegations, FIR came to be

registered.

4. The charge-sheet reveals that the statements of several

Traders came to be recorded during investigation and the

Applicant is charged with acting in breach of trust by

purchasing gold from six wholesale companies to the tune of

22.994 Kilo valued at Rs.6,89,82,330/-. However, instead of

disbursing this gold to the customers, it is alleged that it has

been misappropriated, causing fnancial loss to the Informant.

This constrained the investigation agency to invoke Section

409 of IPC. Another accusations which the Applicant is facing

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are under Sections 420, 465, 468, 471 where he is accused of

taking false entries in the Day Register as regards the balance

amount and the stock.

5. The submission advanced on behalf of the Applicant is to

the effect that before the offence of criminal breach of trust is

invoked, it would be necessary to establish that the person was

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. The submission

advanced is every partner has dominion over property by

reason of the fact that he is a partner, but this dominion

cannot satisfy the ingredients of Section 406 as in order to

establish 'entrustment of dominion' over property, mere

existence of that person's dominion over property is not

enough, but it must be shown that this dominion was the result

of entrustment and, therefore, the allegation of criminal

breach of trust can never survive against the Applicant. As

against Section 420 of IPC is concerned, the submission is that

there was no dishonest inducement of any kind by the

Applicant and it was during the course of the business that the

Traders had placed the orders.

M.M.Salgaonkar





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6. The Hon'ble Apex Court, as early as in 1965, dealt with

the said issue in Velji Raghavji Patel (supra) about a partner

being held guilty of an offence of criminal breach of trust and

the following observations are relevant :-

"Upon the plain reading of Section 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 satisfes the requirements of section 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 aspect 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 received money belonging to the partnership he cannot be said to have received it in a fduciary capacity or in other words cannot be held to have been "entrusted" with dominion over partnership properties."

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7. Learned APP has placed reliance upon the decision of

Gujarat High Court in case of State of Gujarat Vs. Vora

Jayantilal Chhotalal and Ors.2, but careful reading of the said

judgment would reveal that, it concede to the position that

decision of Velji Raghavji Patel (supra) still continue to be a

binding law and though the Division Bench of Gujarat High

Court made a reference to the earlier decision of the Hon'ble

Apex Court in case of R.K.Dalmia and Ors. V. The Delhi

Administration3, at the end, it is accepted that there is no

confict between the decisions of the Honble Apex Court in

Dalmia's case (supra) and in Velji's case (supra).

8. The position of law which has been well settled, can be

clearly stated to the effect that, in relation to the criminal

liability of a partner for breach of trust, entrustment to a

partner has to be proved. A person, in his capacity as a

partner alongwith other partners, has general dominion over

the property and the monies of the frm. For the purpose of

criminal breach of trust, entrustment must be proved and

such entrustment can only be by way of special agreement or

for that purpose, by conferment of authority to a partner to

collect the money, but such conferment can only be by special

2 (1975) 16GLR661 3 [1963] 1 SCR 253

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agreement. The principle of law which emerges from the

authoritative pronouncement is to the effect that the partner

cannot be held liable only because he is a partner and,

therefore, has dominion over the partnership property or

monies. The entrustment of the property has to be proved by

demonstrating that he was in-charge of the partnership

property or monies and it must exist in form of a special

agreement, which is conspicuously absent in the present case.

9. In light of the material compiled in the charge-sheet and

in the light of the decision in case of Velji Raghavji Patel

(supra) , the ingredients of Section 405 cannot be said to be

made out prima facie. The offence under Section 405 can be

said to be committed by a person in respect of the property,

which has been specifcally entrusted by another person and

which he owns in a fduciary capacity. The position of law

clearly emerging as above and since the investigation is

complete, the Applicant need not be incarcerated further and

deserves his release on bail.

It is made clear that the observations made above are

prima facie and limited to the extent of adjudication of the

present application and will have no bearing on trial.

M.M.Salgaonkar





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                                        : ORDER :

(a)Applicant - Rajeshkumar Ghisulal Munot shall be released on bail in C.R.No.281 of 2019 registered with L.T.Marg Police Station on furnishing P.R. bond to the extent of Rs.25,000/- with one or two sureties of the like amount.

(b) The Applicant shall not directly or indirectly make any inducement, threat or promise to any person acquainted with facts of case so as to dissuade him from disclosing the facts to Court or any Police Offcer and shall not tamper with the prosecution evidence.

(c) The Applicant shall report to the concerned Police Station on frst Thursday of every month between 10.00 a.m. and 2.00 p.m. till framing of the charge and thereafter he shall abide by the directions issued by the Trial Court.

10. The application is allowed in the aforestated terms.

( SMT. BHARATI DANGRE, J.)

M.M.Salgaonkar