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Sunday, December 15, 2013

Sec.406 I.P.C.- Criminal breach of Trust - police reported the case as false - protest petition and it's appeal were dismissed by lower courts - High court in revision set aside the lower courts order and remanded the case finding prima faice offence for next step allowing protest petition - Apex court confirmed the High court order - Complainant clearly deposed that he had handed over gold while purchasing cloth in accused shop and were not returned - accused admitted the same - enough to hold prima faice case against the accused - accused admitted it - burden lies on him to prove non-guilty = Ghanshyam .... Appellant Vs. State of Rajasthan .... Respondent = Published in/Cited in / Reported in judis.nic.in/supremecourt/filename=41078

   Sec.406 I.P.C.- Criminal breach of Trust - police reported the case as false - protest petition  and it's appeal were dismissed by lower courts - High court in revision set aside the lower courts order and remanded the case finding prima faice offence for next step allowing protest petition  -  Apex court confirmed the High court order  - Complainant clearly deposed that he had handed over gold while purchasing cloth in accused shop  and were not returned - accused admitted the same - enough to hold prima faice case against the accused  - accused admitted it - burden lies on him to prove non-guilty = 

The High Court, vide  its  judgment  dated  4.2.2009, 
 held  that  the
statement recorded by the ACJM clearly reveals that the  complainant  handed over three gold chains to the accused-appellant at the time of  purchase  of cloth  by the appellant from the complainant’s shop but the  same  were  not returned. 
Therefore, according to the High Court,  a  prima  facie  case  of
criminal breach of trust was clearly  made  against  the  accused-appellant.
The trial Court erred in observing that no entry could  have  been  made  by
the complainant in his record book  simultaneously  when  the  clothes  were
purchased by the accused appellant from the  complainant’s  shop.  
The  High
Court further held that trial court erred in proceeding on  any  presumption
when the evidence  available  on  record  proved  otherwise  and  there  was
admission by the accused. In such cases, the burden was on  the  accused  to
have  rebutted  the  allegation  against  him.  Therefore,  the  High  Court
remanded the matter back to the trial court for fresh decision in the  light
of the statements of the witnesses and evidence on record.
in the case of Onkar Nath  Mishra  and  Ors. v. State
(NCT of Delhi) and  Anr.[1]  that  in  the  commission  of  the  offence  of
criminal breach of  trust,  two  distinct  parts  are  involved.  
The  first
consists of the creation of an obligation in relation to the  property  over
which dominion or control is acquired  by  the  accused.  
The  second  is  a
misappropriation or dealing with the property dishonestly  and  contrary  to
the terms of the obligation created.  
in  the  case  of  
Jaikrishnadas  Manohardas
Desai and Anr. v. State of Bombay[2] that:
        “To establish a charge of criminal breach of trust, 
the prosecution
        is  not  obliged  to  prove  the  precise   mode   of   conversion,
        misappropriation or misapplication by the accused of  the  property
        entrusted to him or over  which  he  has  dominion.  
The  principal
        ingredient of  the  offence  being  dishonest  misappropriation  or
        conversion which may not ordinarily be a matter  of  direct  proof,
        entrustment of property and failure, in breach of an obligation, to
        account for the property entrusted, if proved, may in the light  of
        other circumstances, justifiably lead to an inference of  dishonest
        misappropriation or conversion. 
Conviction  of  a  person  for  the
        offence of criminal breach of trust  may  not,  in  all  cases,  be
        founded merely on his failure to account for the property entrusted
        to him, or over which he has dominion, even when a duty to  account
        is imposed upon him but where he is  unable  to  account  which  is
        untrue, an inference of misappropriation with dishonest intent  may
        readily be made., the prosecution  is  not  obliged  to  prove  the
        precise mode of conversion, misappropriation or  misapplication  by
        the accused of the property entrusted to him or over which  he  has
        dominion. 
The principal ingredient of the offence  being  dishonest
        misappropriation or conversion which may not ordinarily be a matter
        of direct proof, entrustment of property and failure,  in breach of
        an obligation, to account for the property  entrusted,  if  proved,
        may in the light of other circumstances,  justifiably  lead  to  an
        inference of dishonest misappropriation or  conversion.  
Conviction
        of a person for the offence of criminal breach of trust may not, in
        all cases, be founded merely on his  failure  to  account  for  the
        property entrusted to him, or over which he has dominion, even when
        a duty to account is imposed upon him but where  he  is  unable  to
        account which is untrue,  an  inference  of  misappropriation  with
        dishonest intent may readily  be  made.,  the  prosecution  is  not
        obliged to prove the precise mode of  conversion,  misappropriation
        or misapplication by the accused of the property entrusted  to  him
        or over which he has dominion.  
The  principal  ingredient  of  the
        offence being dishonest misappropriation or  conversion  which  may
        not ordinarily be a matter of direct proof, entrustment of property
        and failure, in  breach  of  an  obligation,  to  account  for  the
        property  entrusted,  if  proved,  may  in  the  light   of   other
        circumstances,  justifiably  lead  to  an  inference  of  dishonest
        misappropriation or conversion. Conviction  of  a  person  for  the
        offence of criminal breach of trust  may  not,  in  all  cases,  be
        founded merely on his failure to account for the property entrusted
        to him, or over which he has dominion, even when a duty to  account
        is imposed upon him but where he is  unable  to  account  which  is
        untrue, an inference of misappropriation with dishonest intent  may
        readily be made.”
                     (emphasis laid by this Court)


  In the light of the above legal principle laid  down  by  this  Court,
the High Court was correct in holding that presumptions have  been  made  by
the trial court where it was not necessary in fact situation  at  hand.  The
decision reached by the trial court is not sustainable in law and is  liable
to be quashed. We concur with the decision of the High  Court  holding  that
it  was  correct  in  redirecting  the  matter  to  the  trial   court   for
adjudication on merit.

11.   For the reasons stated  supra,  the  appeal  is  dismissed.  The  stay
granted by this Court vide order dated 30th October, 2009 stands vacated.                       

 NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION


                       CRIMINAL APPEAL NO.2085 OF 2013
                 (Arising out of SLP(Crl.) No. 8101 of 2009)



Ghanshyam                               .... Appellant

                                     Vs.

State of Rajasthan                           .... Respondent






                               J U D G M E N T



     V.Gopala Gowda J.



      Leave granted.


2.     This  appeal  is  filed  by  the  appellant/accused  questioning  the
correctness of the judgment and final Order dated 04.02.2009 passed  by  the
High Court of  Judicature  at  Rajasthan,  Jaipur  in  S.B.  Criminal  Misc.
Petition No. 1067 of 2005 remanding the matter back to the trial  court  for
fresh decision in the light of the statements of the witnesses and also  the
material and evidence available on record, urging various  facts  and  legal
contentions in justification of his claim.

3.    Necessary relevant facts are stated hereunder to appreciate  the  case
of the appellant/accused and also to find out whether  he  is  entitled  for
the relief as prayed in this appeal.

      At the time of filing of this  appeal,  there  were  two  respondents,
respondent no.1 Ram Dayal – the complainant and respondent no.2 – the  State
of Rajasthan. Name of the complainant-Respondent no.1 has been deleted  vide
this Court’s order dated 13th September, 2010 as  the  appellant  could  not
take steps of service upon him.


      The complainant alleged that on 1.10.1994, he gave three  gold  chains
weighing 6.5 tola to the accused-appellant for making  a  new  design  chain
after melting the old chains. 
But according to the complainant, neither  the
three old chains nor a new gold chain were returned to  him.
On  2.11.1994,
the complainant sent a telegram asking the accused appellant to  return  the
gold chains. 
He further sent a legal notice  through  his  advocate  to  the
appellant on 6.5.1995 making allegation of taking the gold  chains  and  not
returning the same. 
All the allegations were denied by  the  appellant.
The
complainant then filed a complaint under  Section  156(3)  of  the  Criminal
Procedure Code (in short ‘CrPC’) for an offence under  Section  406  of  the
Indian Penal Code.
Statements of witnesses were  taken  under  Section  161,
CrPC by  the  Additional  Chief  Judicial  Magistrate,  Gangapur  City.
The
complainant further filed an application under Section 190  of  CrPC  before
the  Additional  Metropolitan  Magistrate  bringing  to   his   notice   the
commission of the alleged offence.
Investigation was conducted by  the  SHO,
PS Gangapur City, District Sawai Madhopur and report was  submitted  by  him
who concluded that the FIR was false and the case  was  without  merit.
The
complainant  filed  a  protest  petition  against  the  said   report.   The
Additional  Chief  Judicial  Magistrate,  while  considering   the   protest
petition, confirmed the negative  report.
The  complainant  challenged  the
said  Order  of  the  Additional  Chief  Judicial  Magistrate   before   the
Additional Sessions Judge  by  filing  a  protest  petition.  
The  Court  of
Additional Sessions Judge set  aside  the  Order  of  the  Additional  Chief
Judicial Magistrate and sent the matter back to the Additional  Metropolitan
Magistrate to rehear the matter after considering the documents  on  record.
The Additional Metropolitan Magistrate considered  the  entire  evidence  on
record and came to the conclusion that no case was made out and the  protest
petition filed by the complainant deserved to be dismissed.

4.    The complainant  being  aggrieved  by  the  Order  of  the  Additional
Metropolitan Magistrate preferred a criminal revision before  the  Court  of
learned Additional Sessions Judge which  upheld  the  Order  passed  by  the
Additional Metropolitan Magistrate. 
The complainant, therefore, preferred  a
petition under Section 482 of CrPC challenging  the  Order  of  the  learned
Additional Sessions Judge. 
The Hon’ble High  Court  exercised  its  inherent
jurisdiction to set aside the findings of the courts below and  allowed  the
petition of the complainant.

5.    The High Court, vide  its  judgment  dated  4.2.2009, 
 held  that  the
statement recorded by the ACJM clearly reveals that the  complainant  handed over three gold chains to the accused-appellant at the time of  purchase  of cloth  by the appellant from the complainant’s shop but the  same  were  not
returned. 
Therefore, according to the High Court,  a  prima  facie  case  of
criminal breach of trust was clearly  made  against  the  accused-appellant.
The trial Court erred in observing that no entry could  have  been  made  by
the complainant in his record book  simultaneously  when  the  clothes  were
purchased by the accused appellant from the  complainant’s  shop.  
The  High
Court further held that trial court erred in proceeding on  any  presumption
when the evidence  available  on  record  proved  otherwise  and  there  was
admission by the accused. In such cases, the burden was on  the  accused  to
have  rebutted  the  allegation  against  him.  Therefore,  the  High  Court
remanded the matter back to the trial court for fresh decision in the  light
of the statements of the witnesses and evidence on record.

6.    In the light of the facts and circumstances  presented  before  us  on
the basis of evidence on record, and also based on  the  contentions  raised
by the learned senior  counsel  on  behalf  of  both  the  parties,  we  are
inclined to frame the following issue to be answered by us:
        1. Whether the High Court was justified  in  remanding  the  matter
           back to trial court  for  consideration  on  merit  against  the
           concurrent findings of the courts below?

7.    It is to be noted here that the case made against the accused in  this
case is that of criminal breach  of  trust.  Criminal  breach  of  trust  is
provided under Section 405 of Indian Penal Code which reads as:
          “405. Criminal Breach of  Trust:
Whoever,  being  in  any  manner
          entrusted with property,  or  with  any  dominion  over  property,
          dishonestly misappropriates  or  converts  to  his  own  use  that
          property in violation of any direction of law prescribing the mode
          in which such trust is to be discharged, or of any legal contract,
          express or implied, which he has made touching  the  discharge  of
          such trust or willfully suffers any other person so to do, commits
          “Criminal Breach of Trust”.


The punishment for Criminal breach of trust is provided under Sections  406-
409 of IPC.

8.    It has been held in the case of Onkar Nath  Mishra  and  Ors. v. State
(NCT of Delhi) and  Anr.[1]  that  in  the  commission  of  the  offence  of
criminal breach of  trust,  two  distinct  parts  are  involved.  
The  first
consists of the creation of an obligation in relation to the  property  over
which dominion or control is acquired  by  the  accused.  
The  second  is  a
misappropriation or dealing with the property dishonestly  and  contrary  to
the terms of the obligation created.

9.    Further, it has been held in  the  case  of  
Jaikrishnadas  Manohardas
Desai and Anr. v. State of Bombay[2] that:
        “To establish a charge of criminal breach of trust, 
the prosecution
        is  not  obliged  to  prove  the  precise   mode   of   conversion,
        misappropriation or misapplication by the accused of  the  property
        entrusted to him or over  which  he  has  dominion.  
The  principal
        ingredient of  the  offence  being  dishonest  misappropriation  or
        conversion which may not ordinarily be a matter  of  direct  proof,
        entrustment of property and failure, in breach of an obligation, to
        account for the property entrusted, if proved, may in the light  of
        other circumstances, justifiably lead to an inference of  dishonest
        misappropriation or conversion. 
Conviction  of  a  person  for  the
        offence of criminal breach of trust  may  not,  in  all  cases,  be
        founded merely on his failure to account for the property entrusted
        to him, or over which he has dominion, even when a duty to  account
        is imposed upon him but where he is  unable  to  account  which  is
        untrue, an inference of misappropriation with dishonest intent  may
        readily be made., the prosecution  is  not  obliged  to  prove  the
        precise mode of conversion, misappropriation or  misapplication  by
        the accused of the property entrusted to him or over which  he  has
        dominion. 
The principal ingredient of the offence  being  dishonest
        misappropriation or conversion which may not ordinarily be a matter
        of direct proof, entrustment of property and failure,  in breach of
        an obligation, to account for the property  entrusted,  if  proved,
        may in the light of other circumstances,  justifiably  lead  to  an
        inference of dishonest misappropriation or  conversion.  
Conviction
        of a person for the offence of criminal breach of trust may not, in
        all cases, be founded merely on his  failure  to  account  for  the
        property entrusted to him, or over which he has dominion, even when
        a duty to account is imposed upon him but where  he  is  unable  to
        account which is untrue,  an  inference  of  misappropriation  with
        dishonest intent may readily  be  made.,  the  prosecution  is  not
        obliged to prove the precise mode of  conversion,  misappropriation
        or misapplication by the accused of the property entrusted  to  him
        or over which he has dominion.  
The  principal  ingredient  of  the
        offence being dishonest misappropriation or  conversion  which  may
        not ordinarily be a matter of direct proof, entrustment of property
        and failure, in  breach  of  an  obligation,  to  account  for  the
        property  entrusted,  if  proved,  may  in  the  light   of   other
        circumstances,  justifiably  lead  to  an  inference  of  dishonest
        misappropriation or conversion. Conviction  of  a  person  for  the
        offence of criminal breach of trust  may  not,  in  all  cases,  be
        founded merely on his failure to account for the property entrusted
        to him, or over which he has dominion, even when a duty to  account
        is imposed upon him but where he is  unable  to  account  which  is
        untrue, an inference of misappropriation with dishonest intent  may
        readily be made.
                     (emphasis laid by this Court)


10.   In the light of the above legal principle laid  down  by  this  Court,
the High Court was correct in holding that presumptions have  been  made  by
the trial court where it was not necessary in fact situation  at  hand.  The
decision reached by the trial court is not sustainable in law and is  liable
to be quashed. We concur with the decision of the High  Court  holding  that
it  was  correct  in  redirecting  the  matter  to  the  trial   court   for
adjudication on merit.

11.   For the reasons stated  supra,  the  appeal  is  dismissed.  The  stay
granted by this Court vide order dated 30th October, 2009 stands vacated.





                            ……………………………………………………………………J.
                     [SUDHANSU JYOTI MUKHOPADHAYA]








                            ……………………………………………………………………J.        [V. GOPALA
                            GOWDA]




New Delhi,
December 12, 2013
-----------------------
[1]    (2008) 2 SCC 561
[2]    AIR 1960 SC 889

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                                     12


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