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Saturday, July 25, 2015

Quash - Complaint - absence of entrustment does not attract sec.406/409 of I.P.C. - mere sales and resolutions which were not declared by any court as void - Can not attract the ingredients of Sec.415/420 of I.P.C. - a third party who has no locus standi cannot maintain a complaint when earlier the same was rejected by police on the ground of Civil litigation - No complaint to vendetta personal grievance be considered - liable to be quashed - Lower courts failed to observe the same and as such their orders are set aside. what is apparent in the present case is that the complainant is not the member of Mukka Welfare Society. It is also not disputed that the sale deeds in question were executed way back in the year 1996 and the complainant, who is not even member of the Society, raises the issue that the sale deeds were executed for the benefit of the Directors of the Society, after a long gap of more than twelve years. Sale deeds in question are registered, and not declared null and void by any court of law. It is also relevant to mention here that admittedly earlier a complaint was made by the complainant to the Deputy Commissioner in the year 2009, which was got investigated by the police and the result of the investigation was that no offence was found committed by the appellants on the ground that the dispute is of civil in nature. even if the allegations made in the complaint are taken to be true, the ingredients of the offence punishable under Section 409 IPC for which appellants are summoned, are also not made out. Needless to say that to constitute an offence punishable under Section 406 IPC, the essential ingredient is the “entrustment” of the property. The complaint filed by the complainant nowhere discloses that the land in question purchased in the year 1978 was entrusted to the Society for the benefit of others. It is only after entrustment is shown, it can be said that there was criminal breach of trust. To constitute an offence punishable under Section 409 IPC, apart from entrustment, it is also essential requirement that it should be shown that the accused has acted in the capacity of a public servant, banker, merchant, factor, broker, attorney or agent. It is nowhere shown in the complaint that the appellants have acted in any of the above capacities. As far as offence of cheating is concerned, the same is defined in Section 415 IPC, for which the punishment is provided under Section 420 IPC. Section 415 reads as under:- “415. Cheating. – Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”. Explanation. – A dishonest concealment of facts is a deception within the meaning of this section. Illustrations ……………” From the above language of the Section, one of the essential ingredients for the offence of cheating is deception, but in the present case, from the contents of the complaint it nowhere reflects that the complainant was deceived or he or anyone else was induced to deliver the property by deception. What was done, was so reflected in the resolutions, and sale deeds. The court must ensure that criminal prosecution is not used as an instrument of harassment or for seeking private vendetta or with an ulterior motive to pressurise the accused. On analysis of the aforementioned cases, we are of the opinion that it is neither possible nor desirable to lay down an inflexible rule that would govern the exercise of inherent jurisdiction. Inherent jurisdiction of the High Courts under Section 482 CrPC though wide has to be exercised sparingly, carefully and with caution and only when it is justified by the tests specifically laid down in the statute itself and in the aforementioned cases. In view of the settled legal position, the impugned judgment cannot be sustained.” In view of the above facts, apparent on the record, we are of the view that the High Court and the courts below have committed grave error of law in ignoring the same. . Therefore, we allow the appeal and set aside the orders passed by the High Court and that of the courts below. Accordingly, the order passed by the Magistrate summoning the appellants in the criminal complaint filed by respondent No. 1, in respect of offences punishable under Sections 406, 409 and 420 IPC, also stands quashed.

  Quash - Complaint - absence of entrustment does not attract sec.406/409 of I.P.C. - mere sales and resolutions which were not declared by any court as void - Can not attract the ingredients of Sec.415/420 of I.P.C. - a third party who has no locus standi cannot maintain a complaint when earlier the same was rejected by police on the ground of Civil litigation - No complaint to  vendetta personal grievance be considered - liable to be quashed - Lower courts failed to observe the same and as such their orders are set aside.

what is apparent in the present  case  is  that  the
complainant is not the member of Mukka Welfare  Society.
 It  is  also  not
disputed that the sale deeds in question were executed way back in the  year
1996 and the complainant, who is not even member of the Society, raises  the
issue that the sale deeds were executed for the benefit of the Directors  of
the Society, after a long gap of more  than  twelve  years.
 Sale  deeds  in
question are registered, and not declared null and  void  by  any  court  of
law.
It is  also  relevant  to  mention  here  that  admittedly  earlier  a
complaint was made by the complainant to  the  Deputy  Commissioner  in  the
year 2009, which was got investigated by the police and the  result  of  the
investigation was that no offence was found committed by the  appellants  on
the ground that the dispute is of civil in nature.

even if the allegations made in the complaint are  taken  to  be  true,  the
ingredients of the offence  punishable  under  Section  409  IPC  for  which
appellants are summoned, are also not made out.

Needless  to  say  that  to  constitute  an   offence
punishable  under  Section  406  IPC,  the  essential  ingredient   is   the
“entrustment” of the property.
The  complaint  filed  by  the  complainant
nowhere discloses that the land in question purchased in the year  1978  was
entrusted to the Society for the  benefit  of  others.
 It  is  only  after
entrustment is shown, it can be said  that  there  was  criminal  breach  of
trust.  

 To  constitute  an  offence
punishable under Section  409  IPC,  apart  from  entrustment,  it  is  also
essential requirement that it should be shown that the accused has acted  in
the  capacity  of  a  public  servant,  banker,  merchant,  factor,  broker,
attorney  or  agent.   It  is  nowhere  shown  in  the  complaint  that  the
appellants have acted in any of the above capacities.

As far as offence of cheating is concerned, the same is defined  in  Section
415 IPC, for which  the  punishment  is  provided  under  Section  420  IPC.
Section 415 reads as under:-
“415. Cheating.  –  Whoever,   by  deceiving  any  person,  fraudulently  or
dishonestly induces the person so deceived to deliver any  property  to  any
person, or to  consent  that  any  person  shall  retain  any  property,  or
intentionally induces the person so deceived to do or omit  to  do  anything
which he would not do or omit if he were not so deceived, and which  act  or
omission causes or is likely to cause damage  or  harm  to  that  person  in
body, mind, reputation or property, is said to “cheat”.

      Explanation. – A dishonest concealment of facts is a deception  within
the meaning of this section.

Illustrations    ……………”

From the above language of the Section, one  of  the  essential  ingredients
for the offence of cheating is deception, but in the present case, from  the
contents of the complaint it  nowhere  reflects  that  the  complainant  was
deceived or he or anyone  else  was  induced  to  deliver  the  property  by
deception. What was done, was so reflected  in  the  resolutions,  and  sale
deeds.

 The court must ensure that  criminal  prosecution  is  not  used  as  an
instrument of  harassment  or  for  seeking  private  vendetta  or  with  an
ulterior  motive  to  pressurise   the   accused.  
On   analysis   of   the
aforementioned cases, we are of the opinion that it is neither possible  nor
desirable to lay down an inflexible rule that would govern the  exercise  of
inherent jurisdiction.
 Inherent  jurisdiction  of  the  High  Courts  under
Section 482 CrPC though wide has to be exercised  sparingly,  carefully  and
with caution and only when it is justified by the  tests  specifically  laid
down in the statute itself and in the aforementioned cases. In view  of  the
settled legal position, the impugned judgment cannot be sustained.”


In view of the above facts, apparent on the record, we are of the view  that
the High Court and the courts below have committed grave  error  of  law  in
ignoring  the  same.  

.
Therefore, we allow the appeal and set aside the orders passed by  the  High
Court and that of the courts below.  Accordingly, the order  passed  by  the
Magistrate summoning the appellants  in  the  criminal  complaint  filed  by
respondent No. 1, in respect of offences punishable under Sections 406,  409
and 420 IPC, also stands quashed.          



IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NO.953 OF 2015
              (@ Special Leave Petition (Crl.) No. 330 of 2015)


Mr. Robert John D’Souza and others                 … Appellants

                                   Versus

Mr. Stephen V. Gomes and another             … Respondents







                               J U D G M E N T


Prafulla C. Pant, J.


This appeal is directed against order dated 9.10.2014, passed  by  the  High
Court of Karnataka at  Bangalore  in  Criminal  Petition  No.  658  of  2014
whereby said court has dismissed the petition, and  declined  to  quash  the
Criminal Complaint case No. 357 of 2012, filed by respondent No. 1,  against
the appellants.

 Brief facts of the case are that a Society named –  Mukka  Welfare  Society
was constituted  on  28.3.1970  for  charitable  work  and  social  service,
registered under Karnataka Societies Registration Act, 1970.  Appellant  No.
1, appellant No. 2  and  appellant  No.  3  were  President,  Secretary  and
Treasurer respectively, while appellant Nos. 4 to 7 were  Directors  of  the
Society.  Other appellants are their relatives.  A piece of land bearing  S.
No. 239/10 measuring 0.50 acres in Village Suratkal,  Taluk  Mangalore,  was
purchased by the Society vide registered sale deed dated 28.1.1978 from  one
Smt. Kaveri Hengsu.  It is alleged by the  complainant  (respondent  No.  1)
that appellant Nos. 1 to 7, being members of the Executive and Directors  of
Mukka Welfare  Society,  misusing  the  position,  held  Board  Meetings  on
22.9.1995 and 13.10.1995 facilitating the sale of the above  mentioned  land
in favour of their relatives (appellant Nos. 7 to 12).  The sale deeds  were
executed on 16.2.1996.  It is further stated that the purchasers  (appellant
Nos. 7 to 12), executed sale deeds  in  the  same  year  in  favour  of  the
Directors of the Society.  It is alleged by the complainant/respondent  No.1
that the appellants have fraudulently usurped the property through the  sale
deeds mentioned above, and thereby committed cheating.

The criminal complaint filed by respondent No. 1 was registered by  the  1st
Additional Senior Civil Judge and Chief Judicial Magistrate, Mangalore,  DK,
who, after recording the statement of the complainant under Section  200  of
the Code of Criminal  Procedure,  1973  (for  short  “CrPC”),  summoned  the
appellants vide order dated 13.4.2012  in  respect  of  offences  punishable
under Sections 406, 409, 420 read with  Section  34  of  Indian  Penal  Code
(IPC).  The appellants filed Criminal  Revision  Petition  No.  58  of  2012
before  the  Principal  Sessions  &  District  Judge  of  D.K.  District  at
Mangalore, which was dismissed vide order dated  6.2.2013.  Thereafter,  the
appellants filed a petition under Section 482 CrPC  before  the  High  Court
and the same was also dismissed.  Hence this appeal through special leave.

We have heard learned counsel for the parties  and  perused  the  papers  on
record.


The impugned orders passed by the  High  Court  and  the  other  authorities
below are challenged before us mainly on the following grounds: -
Respondent No. 1/complainant is not a member of the “Mukka Welfare  Society”
nor is he in any manner connected with the affairs of the Society,  as  such
he has no locus to file the criminal complaint.
The sale deeds in question were executed in the year 1996, and the  criminal
complaint is filed malafide by respondent No. 1 after a period  of  fourteen
years, in the year 2010, as such the courts below have erred in law  in  not
taking note of said fact.
The courts below have erred in law in not appreciating  that  the  complaint
in question was filed to get personal vendetta by respondent No.  1  against
the Directors of the Society.
The courts below  further  erred  in  not  considering  the  fact  that  the
complainant/respondent No. 1 had earlier filed a complaint,  with  same  set
of facts, before the Deputy Commissioner, Dakshin  Kannada,  Mangalore,  and
the same was sent to Police Station  Suratkal  for  investigation,  and  the
Circle Inspector, after investigation, did not  find  any  offence  to  have
been committed by the appellants, as the dispute  was  purely  of  civil  in
nature.
Ingredients of the offences punishable under Sections 406, 409 and  420  IPC
are not made out.
None of the transactions of sale in  question  is  against  any  bye-law  or
clause of Memorandum of Association of the Society.

In the counter affidavit filed on behalf of respondent  No.1,  it  has  been
stated that the complainant came to know of the transactions of  sale,  only
in the year 2009, whereafter he complained before the  Deputy  Commissioner,
D.K., as such the issue raised as  to  delay  in  filing  the  complaint  is
unfounded.  It is further stated that the  Mukka  Welfare  Society  receives
donations from various institutions and general public.  The  allegation  of
personal vendetta, pleaded in the appeal by the appellants, has been  denied
in the counter affidavit.   Lastly,  defending  the  orders  passed  by  the
courts below, it is stated that the courts below have committed no error  of
law.

Arguments were advanced by learned counsel for  the  parties  on  the  above
lines pleaded before us. Having considered the submissions  of  the  learned
counsel for the parties what is apparent in the present  case  is  that  the
complainant is not the member of Mukka Welfare  Society.   It  is  also  not
disputed that the sale deeds in question were executed way back in the  year
1996 and the complainant, who is not even member of the Society, raises  the
issue that the sale deeds were executed for the benefit of the Directors  of
the Society, after a long gap of more  than  twelve  years.  Sale  deeds  in
question are registered, and not declared null and  void  by  any  court  of
law.  It is  also  relevant  to  mention  here  that  admittedly  earlier  a
complaint was made by the complainant to  the  Deputy  Commissioner  in  the
year 2009, which was got investigated by the police and the  result  of  the
investigation was that no offence was found committed by the  appellants  on
the ground that the dispute is of civil in nature.


In view of the above facts, apparent on the record, we are of the view  that
the High Court and the courts below have committed grave  error  of  law  in
ignoring  the  same.   Needless  to  say  that  to  constitute  an   offence
punishable  under  Section  406  IPC,  the  essential  ingredient   is   the
“entrustment” of the property.   The  complaint  filed  by  the  complainant
nowhere discloses that the land in question purchased in the year  1978  was
entrusted to the Society for the  benefit  of  others.   It  is  only  after
entrustment is shown, it can be said  that  there  was  criminal  breach  of
trust.
In Ram Narayan Popli v. Central Bureau of Investigation[1], this Court,  per
majority, has explained “entrustment” in paragraph 363 as under: -
“The term “entrustment” is not necessarily a  term  of  law.   It  may  have
different  implications  in  different  contexts.   In  its   most   general
signification all it  imports  is  the  handing  over  possession  for  some
purpose which may not imply the  conferring  of  any  proprietary  right  at
all.”


In State of Gujarat v. Jaswantlal Nathalal[2], this  Court  in  paragraph  8
has  observed  that  a  mere  transaction  of  sale  cannot  amount  to   an
entrustment.

At this stage we also think it proper to observe that in the  present  case,
even if the allegations made in the complaint are  taken  to  be  true,  the
ingredients of the offence  punishable  under  Section  409  IPC  for  which
appellants are summoned, are also not made out.  To  constitute  an  offence
punishable under Section  409  IPC,  apart  from  entrustment,  it  is  also
essential requirement that it should be shown that the accused has acted  in
the  capacity  of  a  public  servant,  banker,  merchant,  factor,  broker,
attorney  or  agent.   It  is  nowhere  shown  in  the  complaint  that  the
appellants have acted in any of the above capacities.


As far as offence of cheating is concerned, the same is defined  in  Section
415 IPC, for which  the  punishment  is  provided  under  Section  420  IPC.
Section 415 reads as under:-
“415. Cheating.  –  Whoever,   by  deceiving  any  person,  fraudulently  or
dishonestly induces the person so deceived to deliver any  property  to  any
person, or to  consent  that  any  person  shall  retain  any  property,  or
intentionally induces the person so deceived to do or omit  to  do  anything
which he would not do or omit if he were not so deceived, and which  act  or
omission causes or is likely to cause damage  or  harm  to  that  person  in
body, mind, reputation or property, is said to “cheat”.

      Explanation. – A dishonest concealment of facts is a deception  within
the meaning of this section.

Illustrations    ……………”

From the above language of the Section, one  of  the  essential  ingredients
for the offence of cheating is deception, but in the present case, from  the
contents of the complaint it  nowhere  reflects  that  the  complainant  was
deceived or he or anyone  else  was  induced  to  deliver  the  property  by
deception. What was done, was so reflected  in  the  resolutions,  and  sale
deeds.

In Mathavrao Jiwajirao Scindia and others v. Sambhajirao Chandrojirao  Angre
and others[3], a three-Judge Bench of this Court has laid down  the  law  as
to quashment of proceedings under Section 482 CrPC as follows:-
“7.   The legal position is well settled that  when  a  prosecution  at  the
initial stage is asked to be quashed, the test to be applied  by  the  court
is as  to  whether  the  uncontroverted  allegations  as  made  prima  facie
establish the offence. It is also for the court to take  into  consideration
any special features which appear in a particular case to  consider  whether
it is expedient and in the interest of justice to permit  a  prosecution  to
continue. This is so on the basis that the court cannot be utilised for  any
oblique purpose and where  in  the  opinion  of  the  court  chances  of  an
ultimate conviction is bleak and, therefore, no useful purpose is likely  to
be served by allowing a criminal prosecution  to  continue,  the  court  may
while taking into consideration the special facts of a case also  quash  the
proceeding even though it may be at a preliminary stage.”

In  Suresh  v.  Mahadevappa  Shivappa  Danannava  and  another[4],  criminal
prosecution was  quashed  by  the  Court  in  respect  offence  of  cheating
noticing that the complaint was filed after a lapse of ten years.

    In  Inder  Mohan  Goswami  and  another  v.  State  of  Uttaranchal  and
others[5], this Court in paragraphs 25 and 46 has observed as under: -



“25. Reference to the following cases would  reveal  that  the  courts  have
consistently taken the view that they must use this extraordinary  power  to
prevent injustice and secure the ends of justice. The  English  courts  have
also used inherent power to achieve the  same  objective.  It  is  generally
agreed that the Crown Court has inherent power to protect its  process  from
abuse. In Connelly  v. DPP (1964 AC 1254)  Lord  Devlin  stated  that  where
particular criminal proceedings constitute an abuse of  process,  the  court
is empowered to refuse to allow the indictment to  proceed  to  trial.  Lord
Salmon in DPP v. Humphrys  (1977  AC  1)  stressed  the  importance  of  the
inherent power when he observed that it is only if the  prosecution  amounts
to an abuse of the process of the court  and  is  oppressive  and  vexatious
that the judge has the power to intervene. He  further  mentioned  that  the
court’s power to prevent such abuse is of  great  constitutional  importance
and should be jealously preserved.

            xxx              xxx             xxx

46. The court must ensure that  criminal  prosecution  is  not  used  as  an
instrument of  harassment  or  for  seeking  private  vendetta  or  with  an
ulterior  motive  to  pressurise   the   accused.   On   analysis   of   the
aforementioned cases, we are of the opinion that it is neither possible  nor
desirable to lay down an inflexible rule that would govern the  exercise  of
inherent jurisdiction.  Inherent  jurisdiction  of  the  High  Courts  under
Section 482 CrPC though wide has to be exercised  sparingly,  carefully  and
with caution and only when it is justified by the  tests  specifically  laid
down in the statute itself and in the aforementioned cases. In view  of  the
settled legal position, the impugned judgment cannot be sustained.”

In view of the above discussion and facts and circumstances of the case,  we
are of the view that none of the  offences  for  which  the  appellants  are
summoned, is made out  from  the  complaint  and  material  on  record.   We
further find that it is nothing but abuse of process of law on the  part  of
the complainant to implicate the appellants  in  a  criminal  case  after  a
period of twelve years of execution of registered sale  deeds  in  question,
who is neither party to  the  sale  deeds  nor  a  member  of  the  Society.
Therefore, we allow the appeal and set aside the orders passed by  the  High
Court and that of the courts below.  Accordingly, the order  passed  by  the
Magistrate summoning the appellants  in  the  criminal  complaint  filed  by
respondent No. 1, in respect of offences punishable under Sections 406,  409
and 420 IPC, also stands quashed.


                                                           ……………….....…………J.
                                                               [Dipak Misra]



                                                             .……………….……………J.
                                        [Prafulla C. Pant]
New Delhi;
July 21, 2015.
-----------------------
[1]    (2003) 3 SCC 641
[2]    AIR 1968 SC 700
[3]    (1988) 1 SCC 692
[4]    (2005) 3 SCC 670
[5]    (2007) 12 SCC 1


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