Bombay High Court
Punkajj Manikrao Kumbhare vs The State Of Maharashtra And Another on 4 September, 2025
Author: Nitin B. Suryawanshi
Bench: Nitin B. Suryawanshi
2025:BHC-AUG:23613-DB
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IN THE HIGH COURT OF JUDICATURE OF BOMBAY
BENCH AT AURANGABAD
CRIMINAL APPLICATION NO. 2356 OF 2022
Laxminarayan S/o Jaynarayan Rathi
Age: 75 years, Occu. Business,
Shri Ramdeobaba Charitable Society
Residing at Near Shakil Garage,
Plot No. 104, B-Wing, Nisarg Park, Akola. ...APPLICANT
VERSUS
1. The State of Maharashtra
Through Incharge Police Inspector
Partur Police Station, Tal. Partur,
Dist. Jalna.
2. Ubed Bin Salam Chaus
Age: Major, Occu. Office Superintendent
In Municipal Council, Partur, Tal. Partur,
Dist. Jalna.
3. Municipal Council Partur,
Through Chief Executive Officer,
Partur. ...RESPONDENTS
Ms. A.S. Jadhav, Advocate for applicant
Mr. N.S. Tekale, APP for State
Mr. Pawan K. Lakhotiya, Advocate for respondent No. 3
WITH
CRIMINAL APPLICATION NO. 139 OF 2023
WITH
CRIMINAL APPLICATION NO. 4689 OF 2024
IN
CRIMINAL APPLICATION NO. 139 OF 2023
Punkaji s/o Manikrao Kumbhare,
Age: 50 years, Occu. Service as Head
Infrastructure of SGS India Private Limited,
R/o. C-702, Venkatesh Flora,
Phase-I, Kunveer Prabhu Nagar,
Bhagyawant Punde
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Near Hadapsar Mundhwa, Pune. ...APPLICANT
[Orig. Applicant]
VERSUS
1. The State of Maharashtra
Through Police Inspector
Partur Police Station, Tal. Partur,
Dist. Jalna.
2. Ubed Bin-Salam Chaus
Age: 53 years, Occu. Service,
R/o. Nagar Parishad, Partur,
Tq. Partur, Dist. Jalna.
3. Municipal Council Partur,
Through Chief Executive Officer,
Tal. Partur, Dist. Jalna. ...RESPONDENTS
Mr. A.S. Bajaj, Advocate for applicant
Mr. N.S. Tekale, APP for State
Mr. Pawan K. Lakhotiya, Advocate for respondent No. 3
.......
CORAM : NITIN B. SURYAWANSHI AND
SANDIPKUMAR C. MORE, JJ.
RESERVED ON : 04th AUGUST, 2025
PRONOUNCED ON: 04th SEPTEMBER, 2025
ORDER :
[PER NITIN B. SURYAWANSHI, J.]
1. These applications filed under Section 482 of Code of
Criminal Procedure seek quashing of proceedings of R.C.C. No.
298 of 2022, arising out of FIR No. 548 of 2020, registered with
Partur Police Station, Taluka- Partur, Dist. Jalna for offences
punishable under Sections 409, 420 read with 34 of Indian Penal
Code.
Bhagyawant Punde
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2. Authorized by Chief Officer, Office Superintendent of
Municipal Council Partur on 10.12.2020 lodged FIR alleging that
Partur Municipal Council floated tenders and invited bids in
respect of Integrated Housing and Slum Development Program
(IHSDP) for construction of tenements/Gharkuls. Shri.
Ramdeobaba Charitable Society and Gajanan Construction Infra
Ltd. were given contract for construction of 441
Gharkuls/tenements in Survey No. 297 and 299 for Rs.
18,30,52,000/-. Agreement to that effect was executed on
29.04.2010. The construction was to be supervised and
monitored by Project Management Consultancy (PMC) and Third
Party Inspection and Monitoring Agency Services (TPIMA) to be
appointed by MHADA. The construction work was done as per
the agreement. When joint inspection was done by the Chief
Officer and Vigilance and Quality Control Division, MHADA, they
found that construction was of sub standard quality. Gajanan
Construction and Infra Pvt. Ltd., Ramdeobaba Charitable Society,
Project Management Consultancy and Third Party Supervising
Agency appointed by MHADA in collusion have cheated the
Government and misappropriated the Government funds.
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3. Applicant in Criminal Application No. 2356 of 2022 is
the President of Shri. Ramdeobaba Charitable Society (for short
"Applicant-Society"). Applicant-society was given contract to
construct to 359 Gharkuls at Indira Nagar slum area. Agreement
of construction of tenements was executed by the Chief Officer
and the applicant-society.
4. Learned advocate for applicant-society submitted
that work of construction of Gharkuls allotted to the applicant-
society was completed during the period between 2011 to 2014
and completion certificate was given to the applicant-society by
Municipal Council, Partur on 11.06.2014. The beneficiaries were
allotted said 359 houses constructed by the applicant-society
and there was no complaint from any of the beneficiaries. She
submitted that as per clause 10 of the agreement applicant-
society was under obligation to carry out repairs of the technical
defects in the construction. She submitted that there is no
complaint from any of the beneficiaries of the houses
constructed by the applicant-society. Municipal Council, Partur
did not settle the payment of houses constructed by the
applicant-society and therefore, Special Civil Suit No. 23/2016
was filed in the Court of Civil Judge, Senior Division, Jalna for
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recovery of amount of Rs. 32,97,768/-. According to her, FIR is
therefore lodged with a view to give counter blast to the civil suit
filed by the applicant-society. The allegation of incomplete work
of tenements is in respect of Survey Nos. 297 and 249. The work
of construction of tenements at those survey numbers was given
to Gajanan Construction and Infra Pvt. Ltd. and not to the
applicant-society. According to her no criminal offence is made
out against the applicant-society. By relying on the additional
affidavit filed by applicant-society she pointed out that five
members committee under the Chairmanship of Collector and
Engineers from MHADA has conducted re-inquiry into the
allegations and submitted a report dated 01.11.2021. It is stated
in the said report that applicant-society has completed work of
359 tenements and by the year 2014 all the tenements were
handed over to the beneficiaries. It is further mentioned that on
random inspection of 568 tenements, they were found complete
and beneficiaries were using the same.
She has strongly relied on the decision of co-ordinate
bench of this Court at Nagpur in Criminal Application (APL) No.
381 of 2014, wherein according to her in identical facts the
prosecution lodged against the applicant-society by Municipal
Council, Narkhed, Dist. Nagpur was quashed by this Court. Said
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decision is confirmed by the Apex Court on 13.12.2021 by
dismissing the Special Leave Petition filed by Municipal Council,
Narkhed. By relying on Delhi Race Club (1940) Limited and
Others vs. State of Uttar Pradesh and Another 1, N. Raghavender
vs. State of Andhra Pradesh, CBI 2 and State of Gujarat vs.
Jaswantlal Nathalal3 she submitted that FIR against the
applicant-society is liable to be quashed.
5. Applicant in Criminal Application No. 139 of 2023 is
the head of Infrastructure of SGS India Private Limited a Third
Party Inspection and Monitoring Agency Services (for short
"TPIMA") appointed by MHADA vide agreement dated
06.01.2010 for the project of construction of 441 houses which
were to be constructed by Accused No. 1 and 2.
6. Learned advocate for the applicant in Criminal
Application No. 139 of 2023 submitted that he had entered into
an agreement with MHADA for visiting and supervising the work
of construction of Gharkuls. Pursuant to the agreement, three
visits were conducted by the applicant and joint inspection
reports were submitted to MHADA pointing out the
1 (2024) 10 SCC 690
2 (2021) 18 SCC 70
3 1967 SCC OnLine SC 58
Bhagyawant Punde
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deficiencies/shortcoming in the construction work. Therefore, it
cannot be said that applicant is involved in the alleged offence as
there was no entrustment of property with the applicant.
Therefore, no offence is made out against the applicant.
Continuation of prosecution against the applicant is therefore an
abuse of process of law and Court and proceeding is therefore
liable to be quashed and set aside.
7. Learned APP strenuously opposed the applications by
submitting that award of contract is not in dispute. In the joint
inspection carried out by the Municipal Council and MHADA it
was revealed that sub standard material was used for
construction and the work was not satisfactorily done. According
to him, since the property i.e. Survey No. 297 and 299 and some
private lands of the beneficiaries were given to the applicant and
payment of construction was made to the applicant, there was
entrustment of property to the applicant-Construction Company
and by doing sub standard work, applicant has misappropriated
the property and has committed criminal breach of trust. Since,
TPIMA was having responsibility to supervise the construction
work they are also involved in the misappropriation of the
Government funds.
Bhagyawant Punde
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8. Learned advocate for Respondent No. 3-Municipal
Council submits that genesis of the FIR is sub standard quality
work done while constructing the tenements/Gharkuls. According
to him, since all the accused were involved in the said process
either as contractor or supervising agency, prima facie their
involvement in the misappropriation is clear. There is sufficient
material on record against the applicants for their prosecution.
Filing of civil suit would not absolve applicant-Construction
Company from criminal liability.
9. Heard learned advocates for the applicants, learned
APP for State and learned advocate for Municipal Council at
length. With their assistance, we have perused the criminal
applications, documents filed on record, charge sheet, affidavits
filed by the respective parties and the citations relied upon by
the parties.
10. It is a matter of record that Crime No. 61/2014 dated
14th June, 2014 was registered with Narkhed Police Station, Dist.
Nagpur for offences punishable under Sections 409, 420, 468,
471 r/w 34 of IPC against applicant-society and others wherein
similar allegations were levelled against the applicant-society. It
was alleged that applicant-society has not constructed the
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tenements as per the specifications in the agreement and the
material which was used by the applicant-society was of sub-
standard quality. This Court at Nagpur has allowed the
application filed by the applicant-society and quashed the FIR.
Relevant observations are as follows:
"5. We have carefully considered the contents of the
First Information Report and the other material
produced on record by the applicants. The First
Information Report accuses the applicant in Criminal
Application No.381 of 2014 for having committed the
offences punishable under Sections 420, 468 and 471 of
the Indian Penal Code. Section 420 of the Indian Penal
Code for ready reference, reads as under :
" 420. Cheating and dishonestly inducing
delivery of property- Whoever cheats and
thereby dishonestly induces the person deceived
to deliver any property to any person, or to
make, alter or destroy the whole or any part of a
valuable security, or anything which is signed or
sealed, and which is capable of being converted
into a valuable security, shall be punished with
imprisonment of either description for a term
which may extend to seven years, and shall also
be liable to fine."
After carefully considering the definition of the
cheating as provided under Section 415 and Section
420 of the Indian Penal Code, the dishonest intention
at the inception of entering into the contract between
the parties is the essential ingredient. From reading of
the First Information Report, the allegations against
the said applicants is to the effect that the applicant
had constructed 611 tenements not as per the
agreement entered into between the applicant and the
non-applicant No.2 which is on page No.27 of the said
application and has received an amount of
Bhagyawant Punde
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Rs.4,04,99,196/-. The applicant has placed on record
the correspondence between the applicant and the
non-applicant No.2. From the said correspondence, it
appears that there was notice issued by the applicant
to the non-applicant No.2 invoking arbitration clause
and the application was also filed under Section 11 of
the Arbitration and Conciliation Act, 1996 in the year
2012. From the correspondence it appears that the
applicant was demanding remaining dues of his work
which was completed as per the agreement. The
impugned First Information Report came to be
registered on 8th June 2014 which is after almost
seven years from the date of execution of the
agreement and after six years of the occupation of the
tenements holders. During the course of hearing, we
called upon the Advocates for the non- applicant Nos.
1 and 2 to ascertain whether there was any complaint
made by the tenement holders about the quality of the
construction or the material used by the applicant
being of sub-standard nature.
We have perused the agreement at page 27 and
in particular clause 11 of the said agreement. Clause
11 of the said agreement requires that the applicant
should carry out repairs of the construction in case of
the defects in the construction. The non-applicant Nos.
1 and 2 have not pointed out that such complaint was
made with the applicant within period of six months
from the date of completion of the construction.
6. Having considered the contents of the First
Information Report against the applicants in Criminal
Application No. 602 of 2014 and Criminal Application
No. 598 of 2014 wherein there are accusations against
the applicants that the applicants being Junior Engineer
and Chief Officer, respectively have abetted the crime
of the applicant in Criminal Application No. 381 of
2014. Having considered the said allegations in the
First Information Report, we are satisfied that the
Bhagyawant Punde
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ingredients of the offences of Section 409 read with
Sections 420, 468 and 471 of the Indian Penal Code are
not made out against the said applicants. It is also
pertinent to note that there is neither any departmental
enquiry initiated against both the applicants nor there
is any show cause notice issued to them.
7. We have also gone through the contents of the
First Information Report in the context of the
allegations as regards the commission of the offences
under Sections 468 and 471 of the Indian Penal Code.
After having carefully considered the clauses in the
First Information Report, we do not find any averments
in the First Information Report against all three
applicants which prima-facie make out case of
fulfillment of the offences under Sections 468 and 471
of the Indian Penal Code.
8. We are satisfied that prima-facie the allegations
in the First Information Report do not constitute
averments alleged against all the three applicants. We,
therefore, are satisfied that continuation of the
proceedings against the applicants would amount to
abuse of process of the Court. The present case is
squarely covered by clause (1) of paragraph No.102
given in the judgment in the case of State of Haryana
Vs. Bhajan Lal, reported in 1992 Supp(1) SCC 335."
11. Admittedly, in the FIR in question similar allegations
are levelled against the applicant-society and therefore case of
applicant-society is squarely covered by the above observations.
12. The Municipal Council, Narkhed has challenged the
said decision by filing Special Leave Petition, which was
Bhagyawant Punde
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dismissed by the Apex Court on 13.12.2021.
13. Record indicates that applicant-society has
completed construction of 359 tenements and has handed over
the same to the Municipal Council, Partur. The beneficiaries are
occupying the said tenements. There is no material on record to
indicate that the beneficiaries have made any complaints about
the quality of construction. It appears that agreement at page 20
and in particular clause 10 of the said agreement casts a duty on
the applicant-society to carry out repairs/remove defects in the
construction within six months. There is no material on record to
show that complaints were made against the applicant-society
during the period of six months from the date of handing over
the tenements. Though, the tenements were handed over in the
year 2014, the FIR is belatedly lodged after a period of six years.
In absence of any material on record to show dishonest intention
on the part of applicant-society at the initial stage and
entrustment of an amount or valuable property to the applicant-
society and misappropriation of it by the applicant-society in
violation of legal contract which was made for construction of
tenements and/or the applicant-society has dishonestly
converted the entrusted property to its own use or disposed it of
Bhagyawant Punde
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in violation of any direction of law or contract, no offence can be
said to be made out against the applicant-society.
14. In N. Raghavender (supra) it is held:
"45. Section 409 IPC pertains to criminal breach of
trust by a public servant or a banker, in respect of the
property entrusted to him. The onus is on the
prosecution to prove that the accused, a public servant
or a banker was entrusted with the property which he
is duly bound to account for an that he has committed
criminal breach of trust. (See Sadhupati Nageswara
Rao v. State of A.P., (2012) 8 SCC 547).
46. The entrustment of public property and
dishonest misappropriation or use thereof in the
manner illustrated under Section 405 are sine qua non
for making an offence punishable under Section 409
IPC. The expression "criminal breach of trust" is
defined under Section 405 IPC which provides, inter
alia, that whoever being in any manner entrusted with
property or with any dominion over a property,
dishonestly misappropriates or converts to his own use
that property, or dishonestly uses or dispose of that
property contrary to law, or in violation of any law
prescribing the mode in which such trust is to be
discharged, or contravenes any legal contract, express
or implied etc. shall be held to have committed
criminal breach of trust. Hence, to attract Section 405
IPC, the following ingredients must be satisfied.
46.1. Entrusting any person with property or with
any dominion over property.
46.2. That person has dishonestly misappropriated or
converted that property to his own use.
46.3. Or that person is dishonestly using or disposing
of that property or willfully suffering any other person
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so to do in violation of any direction of law or a legal
contract.
47. It ought to be noted that the crucial word used
in Section 405 IPC is "dishonestly" and therefore, it
pre-supposes the existence of mens rea. In other
words, mere rentention of property entrusted to a
person without any misappropriation cannot fall
within the ambit of criminal breach of trust. Unless
there is some actual use by the accused in violation of
law or contract, coupled with dishonest intention,
there is no criminal breach of trust. The second
significant expression is "misappropriates" which
means improperly setting apart for ones uses and to
the exclusion of the owner."
15. In Jaswantlal Nathalal (supra) it is held:
"8. The term "entrusted" found in Section 405 IPC
governs not only the words "with the property"
immediately following it but also the words "or with
any dominion over the property" occurring thereafter-
see Velji Raghvaji Patel v. State of Maharashtra [1965]
2 S.C.R. 429. Before there can be any entrustment
there must be a trust meaning thereby an obligation
annexed to the ownership of property and a confidence
reposed in and accepted by the owner or declared and
accepted by him for the benefit of another or of another
and the owner. But that does not mean that such an
entrustment need conform to all the technicalities of
the law of trust-see Jaswantrai Manilal Akhaney v. State
of Bombay [1956] SCR 483, 498-500. The expression
'entrustment' carries with it the implication that the
person handing over any property or on whose behalf
that properly is handed over to another, continues to be
its owner. Further the person handing over the property
must have confidence in the person taking the property
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so as to create a fiduciary relationship between them. A
mere transaction of sale cannot amount to an
entrustment. It is true that the government had sold the
cement in question to BSS solely for the purpose of
being used in connection with the construction work
referred to earlier. But that circumstance does not make
the transaction in question anything other than a sale.
After delivery of the cement, the government had
neither any right nor dominion over it. If the purchaser
or his representative had failed to comply with the
requirements of any law relating to cement control, he
should have been prosecuted for the same. But we are
unable to hold that there was any breach of trust."
16. In Delhi Race Club (supra) the Apex Court has held:
"47. Similarly, in CBI v. Duncans Agro Industries Ltd.,
Calcutta reported in (1996) 5 SCC 591 this Court held
that the expression "entrusted with property" used in
Section 405 of the IPC connotes that the property in
respect of which criminal breach of trust can be
committed must necessarily be the property of some
person other than the accused or that the beneficial
interest in or ownership thereof must be in the other
person and the offender must hold such property in trust
for such other person or for his benefit. The relevant
observations read as under: -
"27. In the instant case, a serious dispute has been
raised by the learned counsel appearing for the
respective parties as to whether on the face of the
allegations, an offence of criminal breach of trust is
constituted or not. In our view, the expression
"entrusted with property" or "with any dominion
over property" has been used in a wide sense in
Section 405 IPC. Such expression includes all cases in
which goods are entrusted, that is, voluntarily
handed over for a specific purpose and dishonestly
disposed of in violation of law or in violation of
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contract. The expression 'entrusted' appearing in
Section 405 IPC is not necessarily a term of law. It
has wide and different implications in different
contexts. It is, however, necessary that the ownership
or beneficial interest in the ownership of the property
entrusted in respect of which offence is alleged to
have been committed must be in some person other
than the accused and the latter must hold it on
account of some person or in some way for his
benefit. The expression 'trust' in Section 405 IPC is a
comprehensive expression and has been used to
denote various kinds of relationships like the
relationship of trustee and beneficiary, bailor and
bailee, master and servant, pledger and pledgee.
When some goods are hypothecated by a person to
another person, the ownership of the goods still
remains with the person who has hypothecated such
goods. The property in respect of which criminal
breach of trust can be committed must necessarily be
the property of some person other than the accused
or the beneficial interest in or ownership of it must
be in the other person and the offender must hold
such property in trust for such other person or for his
benefit. In a case of pledge, the pledged article
belongs to some other person but the same is kept in
trust by the pledgee."
(Emphasis supplied)"
17. The case of the applicant-society is squarely covered
by the aforesaid rulings.
18. There appears substance in the contention of the
applicant-society that it is implicated in the present crime with a
view to give counter blast to the civil suit filed by it.
Bhagyawant Punde
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19. So far as case of applicant in Criminal Application No.
139 of 2023 is concerned, being TPIMA it was not party to the
contract of construction of tenements with Municipal Council. It
was appointed by MHADA for supervising the construction work.
Record indicates that on the instructions of MHADA three visits
were made by the TPIMA and reports were submitted to MHADA
pointing out deficiencies in the construction work. Therefore,
there is absolutely no involvement of TPIMA in the alleged crime.
In the FIR or in the charge sheet no ingredients of Section 409
and 420 of IPC are made out against the TPIMA. The applicant's
case is also covered by the N. Raghavender (supra), Jaswantlal
Nathalal (supra) and Delhi Race Club (supra).
20. For the aforesaid reasons since no ingredients of
Section 409 and 420 of IPC are made out against the applicants,
continuation of the prosecution against the applicants is an
abuse of process of law and Court. Hence, the following order:
ORDER
(i) Criminal Applications are allowed.
(ii) Charge Sheet No. 153 of 2022 and proceedings of
R.C.C. No. 298 of 2022 pending before learned Judicial
Magistrate First Class, Partur, arising out of FIR No. 548
of 2020, registered with Partur Police Station, Taluka-
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Partur, Dist. Jalna for offences punishable under
Sections 409, 420 read with 34 of Indian Penal Code
are quashed and set aside against applicants-
Laxminarayan Jaynarayan Rathi and Punkaji Manikrao
Kumbhare.
(iii) In view of disposal of criminal applications, Criminal
Application No. 4689 of 2024 stands disposed of.
(SANDIPKUMAR C. MORE, J.) (NITIN B. SURYAWANSHI, J.)
Bhagyawant Punde
