Sushil Kumar Uppal vs Shankar P. Jethani And Anr.
2006 Latest Caselaw 2101 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. This revision petition is directed against the order dated 31.5.2006 passed by the learned Additional Sessions Judge. The impugned order was, in turn, passed in a revision petition filed by the complainant against the order of the trial court dated 22.11.2005 whereby the trial court dismissed the complaint of the petitioner and did not issue summons to the accused. By virtue of the impugned order, the trial court order dated 22.11.2005 was set aside. The revision petition was allowed and the trial court was directed to summon the petitioner as an accused under Section 406 IPC and to proceed in accordance with law.

2. Reading the impugned order as well as the order passed by the trial court, it appears that both the courts have proceeded on the basis that there was a subsisting partnership between the petitioner and the respondent. It is now stated before this Court by the Learned Counsel for the petitioner that the petitioner himself was not the partner in the firm [Motor Products India], but his mother (Shanta Rani Uppal) was the partner and she has since passed away. The partnership was allegedly between the respondent and the said late Smt Shanta Rani Uppal who was arrayed as accused No. 2 in the criminal complaint filed by the respondent, the petitioner being the accused No. 1.

3. The trial court proceeded on the basis that both the accused, i.e., the petitioner and his mother, had authority over the funds and properties of the partnership concern and that they utilised the same under that authority. According to the trial court, the alleged mis-utilisation of the funds was a subject matter of civil disputes, but would certainly not fall within the provisions of the offence under Section 406 IPC. The trial court dismissed the complaint by its order dated 22.11.2005.

4. Being aggrieved by this order, the complainant filed the aforementioned revision petition which was allowed by the learned Additional Sessions Judge. A reading of the impugned judgment from paragraph 9 onwards indicates that the learned Additional Sessions Judge has proceeded on the basis that there existed a partnership between the petitioner and the respondent and proceeding on such basis, the following conclusion has been noted by the learned Additional Sessions Judge in paragraphs 14 and 15 of the impugned order:

14. On a careful consideration of the complaint and the statement of the complainant recorded on oath as CW1, I am of the considered view that the respondent prima facie appears to have committed the offence punishable Under Section 406 IPC as one partner of a firm is a trustee of other partner in respect of the property of the firm and property of firm cannot be appropriated by one partner in violation of the terms of the partnership contract and issue of summons can not be refused merely because the allegations in the complaint give a right to the petitioner to initiate civil proceedings against the respondent which he has already initiated. In my considered view the order of the learned Trial Court cannot be sustained. The same is hereby set aside and the Trial Court is directed to summon the respondent as an accused Under Section 406 IPC and to proceed in accordance with law. However, nothing stated herein shall tantamount to an expression of opinion on merits of the case.

15. For the foregoing reasons the Trial Court order dated 22.11.2005 is hereby set aside and the petition is accepted. The trial court record be sent back with a certified copy of the judgment. The petitioner is directed to appear before the Trial Court on 06.07.2006.

5. The Learned Counsel for the petitioner straightway referred to the decision of the Supreme Court in the case of Velji Raghavji Patel v. The State of Maharashtra which clearly indicates that unless a case of special entrustment and agreement is made out as between the partners, the utilisation of the partnership property by one of the partners to the detriment of the other partners would not fall within the definition of criminal breach of trust under Section 405 IPC. The Supreme Court observed as under:

6. It seems to us that the view taken in Bhuban Mohan Rana's case , by the later Full Bench of the Calcutta High Court is the right one. 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 satisfies 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 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.

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8. ...It is obvious that 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. As already stated, 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.

6. In the context of the present case, I find that the observations contained in the impugned order in paragraphs 14 and 15 are clearly contrary to what the Supreme Court has observed in the said decision of the Velji Raghavji Patel(supra). Therefore, the impugned order cannot be sustained and the same requires to be set aside.

7. However, the Learned Counsel for the respondent submits that even the learned Metropolitan Magistrate, while passing the order dated 22.11.2005 had proceeded on the same footing that there existed a partnership firm, whereas, according to him, the partnership firm had already stood dissolved and the petitioner herein being the accused No. 1 in the complaint was not a partner at all. On the other hand, the Learned Counsel for the petitioner submits that while it is true that the petitioner was not a partner in the firm, but his mother was a partner in the firm and the complaint pertains to the period when the partnership firm existed and the petitioner's mother, namely, accused No. 2 was alive.

8. In these circumstances, I feel that it would be appropriate that if, while setting aside the impugned order as well as the Magistrate's order dated 22.11.2005, the matter is remanded to the stage prior to summoning to enable the respondent to place the true and correct facts before the Magistrate who shall then consider the material on record as well as the order passed by this Court in the light of the observations of the Supreme Court judgment referred to above.

With these directions, this revision petition is disposed of.

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