Jharkhand High Court

Nirmal Kaur vs The State Of Jharkhand on 23 September, 2024

Author: Anil Kumar Choudhary

Bench: Anil Kumar Choudhary

IN THE HIGH COURT OF JHARKHAND AT RANCHI
                   Cr.M.P. No.956 of 2020
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Nirmal Kaur, aged about 44 years, Wife of Jagdish Singh, Resident of House No.271, New Sitaramdera, P.O. Sitaramdera, Jamshedpur, Town Jamshedpur, P.S. Adityapur, District-East Singhbhum (Jharkhand). ... Petitioner Versus

1. The State of Jharkhand, and

2. Universal Indus Trial Paints, (Prop. Globe Paints Pvt. Ltd.) Through Mahesh Kumar Lakhotia, S/o Not known of the petitioner, Director of the Firm of Gamharia, P.O & P.S.-Adityapur, District Seraikella Kharswan, (Jharkhand) ... Opposite Parties With

Cr.M.P. No.950 of 2020

Jagdish Singh, aged about 57 years, son of Hazara Singh, Resident of House No.271, New Sitaramdera, P.O. Sitaramdera, Jamshedpur, Town Jamshedpur, P.S. Adityapur, District-East Singhbhum (Jharkhand). ... Petitioner Versus

1. The State of Jharkhand, and

  For the Petitioners   : Mr. P.A.S. Pati, Advocate
                        : Ms. Vani Kumari, Advocate
  For the State         : Mrs. Nehala Sharmin, Spl.P.P.
                        : Mr. Sanjay Kr. Srivastava, Addl. P.P.
  For the O.P. No.2     : Mr. J.N. Upadhyay, Advocate
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1 Cr. M.P. No.956 of 2020 with Cr.M.P. No.950 of 2020 PRESENT HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY

By the Court:- Heard the parties.

2. Since, both these case have been filed with the same prayer arising out

the same case, hence, both these Criminal Miscellaneous Petitions are being

disposed of by this common judgment.

3. These Criminal Miscellaneous Petitions have been filed invoking the

jurisdiction of this Court under Section 482 of the Code of Criminal Procedure

with a prayer to quash and set aside the order dated 21.08.2018 in connection

with P.C. Case No.55 of 2017 passed by the learned Chief Judicial Magistrate,

Seraikella, whereby and where under the learned Chief Judicial Magistrate,

Seraikella has found prima facie case for the offences punishable under Sections

420/406 of the Indian Penal Code and ordered for issuance of summons to the

petitioners.

4. The allegation against the petitioners is that the petitioners purchased

paints, primer and thinner etc. manufactured by the complainant, who is the

proprietor of a firm and the petitioners purchased the same for their company

of which the petitioners were directors. It is the further case of the prosecution

that though articles worth Rs.6 lakhs were taken by the petitioners between the

year 2015-16 but they did not pay the same and on being demanded, they issue

a post dated cheque of Rs.3,87,670/- promising to pay the remaining amount of

Rs.1,34,302/- through bank transfer but only a cheque of Rs.16,929/- out of the

cheques of Rs.3,87,670/- was encashed. But, the remaining cheques were

dishonoured because of stop payment instructions issued by the petitioners to

their banker in respect of those cheques. The petitioners did not make the full 2 Cr. M.P. No.956 of 2020 with Cr.M.P. No.950 of 2020 payment as the quality of the material supplied by the complainant through his

proprietary firm was not of good quality. It is the admitted case of the

complainant that he was having commercial transactions with the petitioners

through their company for a long period of time but for the first time such

dispute has arisen.

5. On the basis of the complaint, statement on solemn affirmation of the

complainant and the statement of the inquiry witnesses, the learned Chief

Judicial Magistrate, Seraikella found prima facie case for the offences punishable

under Sections 420/406 of Indian Penal Code against the petitioners of these

two Criminal Miscellaneous Petitions and ordered for issuance of summons.

6. Learned counsel for the petitioners relies upon the judgment of Hon'ble

Supreme Court of India in the case of Binod Kumar & Others vs. State of

Bihar & Another reported in (2014) 10 SCC 663 paragraph-18 of which reads as

under:-

"18. In the present case, looking at the allegations in the complaint on the face of it, we find that no allegations are made attracting the ingredients of Section 405 IPC. Likewise, there are no allegations as to cheating or the dishonest intention of the appellants in retaining the money in order to have wrongful gain to themselves or causing wrongful loss to the complainant. Excepting the bald allegations that the appellants did not make payment to the second respondent and that the appellants utilised the amounts either by themselves or for some other work, there is no iota of allegation as to the dishonest intention in misappropriating the property. To make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the appellants. It must also be shown that the appellants dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact that the appellants did not pay the money to the complainant does not amount to criminal breach of trust." (Emphasis supplied)

and submits that to make out a case of criminal breach of trust, it is not

sufficient to show that money has been retained by the accused persons. It

3 Cr. M.P. No.956 of 2020 with Cr.M.P. No.950 of 2020 must also be shown that the accused persons dishonestly disposed of the same

in some way or dishonestly retained the same and the mere fact that the

accused persons did not pay the money to the complainant does not amount to

criminal breach of trust.

7. Learned counsel for the petitioners next relies upon the judgment of the

Hon'ble Supreme Court of India in the case of Yogesh Beriwal vs. State of

Jharkhand and Another reported in 2023 SCC OnLine Jhar 1939 and submits

that in that case, this court reiterated the settled principle of law that every

breach of contract would not give rise to an offence of cheating and only in

those cases breach of contract will amount to cheating where there was any

deception played at the very inception and if the intention to cheat has

developed later on, the same cannot amount to cheating as has been held by

the Hon'ble Supreme Court of India in the case of Uma Shankar Gopalika vs.

State of Bihar & Another reported in (2005) 10 SCC 336 paragraph-6 of which

reads as under:-

6. "Xxxx xxxx xxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC." (Emphasis supplied)

8. Learned counsel for the petitioners next submits that as admittedly the

commercial transactions was going on between the parties for quite a long time

and there is no allegation against the petitioners of playing deception in the

beginning of the transactions between the parties, hence, it is submitted that

4 Cr. M.P. No.956 of 2020 with Cr.M.P. No.950 of 2020 the offence punishable under Section 420 of Indian Penal Code is not made out

against the petitioners.

9. Learned counsel for the petitioners further submits that as there is no

allegation of dishonest misappropriation of any property on the part of the

petitioners, hence, it is submitted that even if the entire allegations made

against the petitioners are considered to be true in their entirety still the offence

punishable under Section 406 of the Indian Penal Code is not made out against

them. It is lastly submitted that that the prayer, as prayed for in the instant

Cr.M.P, be allowed.

10. Learned Addl.P.P. appearing for the State and the learned counsel for the

opposite party No.2 on the other hand vehemently oppose the prayer of the

petitioners made in the instant Cr.M.P and submit that there is direct and

specific allegation against the petitioners of misappropriating the article

entrusted to them and they were not returning the poor quality articles

supplied, hence, the same amounts to both the offences punishable under

Sections 420/406 of Indian Penal Code. It is lastly submitted that both these

Criminal Miscellaneous Petitions, being without any merit, be dismissed.

11. Having heard the rival submissions made at the Bar and after carefully

going through the materials available in the record, it is pertinent to mention

here that it is a settled principle of law that in case of sale of goods, the

property passes to the purchaser from the seller when the goods delivered.

Once, the property in the shape of goods passes to the purchaser, it cannot be

said that the purchaser was entrusted with the property of the seller and

without entrustment of property there cannot be any criminal breach of trust as

has been held by the Hon'ble Supreme Court of India in the case of Delhi Race 5 Cr. M.P. No.956 of 2020 with Cr.M.P. No.950 of 2020 Club (1940) Ltd. and Others v. State of Uttar Pradesh and Another reported in

2024 SCC OnLine SC 2248 paragraph-36 of which reads as under:-

"36. From the aforesaid, there is no manner of any doubt whatsoever that in case of sale of goods, the property passes to the purchaser from the seller when the goods are delivered. Once the property in the goods passes to the purchaser, it cannot be said that the purchaser was entrusted with the property of the seller. Without entrustment of property, there cannot be any criminal breach of trust. Thus, prosecution of cases on charge of criminal breach of trust, for failure to pay the consideration amount in case of sale of goods is flawed to the core. There can be civil remedy for the non-payment of the consideration amount, but no criminal case will be maintainable for it. [See : Lalit Chaturvedi v. State of Uttar Pradesh, 2024 SCC OnLine SC 171 & Mideast Integrated Steels Ltd. (MESCO Steel Ltd.) v. State of Jharkhand, 2023 SCC OnLine Jhar 301]" (emphasis supplied)

12. Now, coming to the facts of the case, it is the admitted case of the

complainant that there was long standing business relationship between the

petitioners and the opposite party no.2 and for the first time, after such a long

period of commercial transactions, such a dispute has arisen between the

parties.

13. Under such circumstances, this Court has no hesitation in holding that in

the absence of any specific allegation against the petitioners of playing

deceptions in the beginning of the transactions between the parties rather the

facts of the case indicates that the facts are to the contrary, hence, this court is of

the considered view that even if the allegations against the petitioners are

considered to be true in their entirety still the offence punishable under Section

420 of Indian Penal Code is not made out.

14. So far as the offence punishable under Section 406 of the Indian Penal

Code is concerned, as the opposite party no.2 has allegedly sold the articles to

the petitioners, it cannot be stated to be a case of entrustment. Further, there is

6 Cr. M.P. No.956 of 2020 with Cr.M.P. No.950 of 2020 no allegation of dishonest misappropriation of the property against the

petitioners. Under such circumstances, this Court is of the considered view that

even if the entire allegations against the petitioners are considered to be true in

their entirety, still the offence punishable under Section 406 of Indian Penal

Code is not made out.

15. In view of the discussions made above as neither the offence punishable

under Section 420 of the Indian Penal Code nor the offence punishable under

Section 406 of the Indian Penal Code is made out against the petitioners, hence,

this Court is of the considered view that the continuation of this Cr.M.P. will

amount to abuse of process of law and this is a fit case where the order dated

21.08.2018 passed by the learned Chief Judicial Magistrate, Seraikella, be

quashed and set aside.