Allowed

The Savada Merchant Co-Op. Credit Society Ltd. and Others v. the State of Maharashtra and Another

Bombay HC14 Oct 2013APPLN/815/2013

Case brief

AI extract

What is this about?

High Court at Bombay Bench at Aurangabad quashed multiple criminal applications filed against office bearers of a cooperative credit society. The court held that depositing money in a credit society establishes a debtor-creditor relationship, not entrustment, meaning no offence under Section 409 IPC is prima facie disclosed; remedies are civil.

What did the court decide?

Applications allowed; impugned orders quashed; complaints dismissed; proceedings quashed.

The Savada Merchant Co-Op. Credit Society Ltd. and Others Vs the State of Maharashtra and Another — Bombay HC (2013) — LawSathi Research

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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BENCH AT AURANGABAD.

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CRIMINAL APPLICATION NO.798 OF 2013

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WITH CRIMINAL APPLICATION NO.799/2013 WITH CRIMINAL APPLICATION NO.815/2013 WITH CRIMINAL APPLICATION NO.817/2013 WITH CRIMINAL APPLICATION NO.818/2013

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THE SAVADA MERCHANT CO-OP CREDIT SOCIETY LTD. AND OTHERS.

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... APPLICANTS.

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VERSUS

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THE STATE OF MAHARASHTRA AND ANOHTER.

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... RESPONDENTS.

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Advocate for Applicants : Mr.Deshmukh Bhausaheb S APP for Respondent No.1: Mr.B.L. Dhas. Advocate for Respondent No.2 :Mr. Bhokarikar Madhav M

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WITH

CRIMINAL APPLICATION NO.799/2013

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THE SAVADA MERCHANT CO-OP CREDIT SOCIETY LTD. AND OTHERS. ... APPLICANTS.

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VERSUS

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THE STATE OF MAHARASHTRA AND ANOHTER. ... RESPONDENTS.

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Advocate for Applicants : Mr.Deshmukh Bhausaheb S APP for Respondent No.1: Mr.B.L. Dhas.

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WITH

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CRIMINAL APPLICATION NO.815/2013

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THE SAVADA MERCHANT CO-OP CREDIT SOCIETY LTD. AND OTHERS.

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... APPLICANTS.

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VERSUS

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THE STATE OF MAHARASHTRA AND ANOHTER.

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... RESPONDENTS.

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Advocate for Applicants : Mr.Deshmukh Bhausaheb S APP for Respondent No.1: Mr.B.L. Dhas. Advocate for Respondent No.2 :Mr. Bhokarikar Madhav M

WITH

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CRIMINAL APPLICATION NO.817/2013

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THE SAVADA MERCHANT CO-OP CREDIT SOCIETY LTD. AND OTHERS. ... APPLICANTS.

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VERSUS

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THE STATE OF MAHARASHTRA AND ANOHTER.

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... RESPONDENTS.

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Advocate for Applicants : Mr.Deshmukh Bhausaheb S APP for Respondent No.1: Mr.B.L. Dhas. Advocate for Respondent No.2 :Mr. Bhokarikar Madhav M

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WITH

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CRIMINAL APPLICATION NO.818/2013

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THE SAVADA MERCHANT CO-OP CREDIT SOCIETY LTD. AND OTHERS. ... APPLICANTS.

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VERSUS

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THE STATE OF MAHARASHTRA AND ANOHTER.

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... RESPONDENTS.

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Advocate for Applicants : Mr.Deshmukh Bhausaheb S APP for Respondent No.1: Mr.B.L. Dhas. Advocate for Respondent No.2 :Mr. Bhokarikar Madhav M

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CORAM : ABHAY M. THIPSAY, J.

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14th OCTOBER, 2013.

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ORAL ORDER:

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All these applications can be conveniently

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disposed of by this common order, as the applicants in all these applications are the same and though the respondent No.2 in these applications are different, the facts are identical and the questions, needing

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determination are also the same.

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The applicants, in all these applications, are the office bearers and officers of the Savada Merchant Cooperative Credit Society Ltd., Savada, Tq. Raver, Dist. Jalgaon (hereinafter referred to as the 'said society').

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On separate complaints against them, filed by different

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persons, alleging commission of offences punishable under Section 409 of I.P.C. r.w. section 34 of I.P.C., the

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J.M.F.C., Amalner, has issued process against the

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applicants, in all these cases, requiring them to answer

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to the charge of an offence punishable under Section

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409 of I.P.C. r.w. section 34 of I.P.C.

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The substance of all these complaints is as

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follows. That, the respective complaints were induced by the applicants to invest the monies in the said society on the assurance that they would be given good interest and other facilities. The complainants, in separate incidents, were assured that after the period would be over, the entire amount invested by them with

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the said society, would be repaid to the respective complainants, with interest. That, the respective complainants placed trust in the applicants and kept various amounts in fixed deposits for different periods

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with the said society. However, after the period of the

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fixed deposit was over, the society did not pay back the

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amounts, kept by the respective complainants, to them.

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That, the matter was taken by the respective complainants to the Consumer Forum where also the complainants have succeeded; but, still the applicants have not given their amounts back.

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In my opinion, no offence is, prima facie, disclosed

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from any of the complaints.

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The whole basis of the complaints is that trusting

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the office bearers of the said society, the respective complainants invested their monies with the society, by keeping them in fixed deposits for certain terms. That, after the term was over, monies were not repaid to the complainants. It is on the basis of that specific averment, the applicants, who are said to be responsible for the act of the said credit society, are alleged to have committed criminal breach of trust.

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It is well settled, that money deposited by the

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customer in a Bank or Credit Society does not amount to 'entrustment' of the money with the Bank/Credit Society. It is well settled that the relationship between such person and the Banker would be of debtor and creditor. The money so deposited, even if it is termed as a 'fixed deposit', does not remain property of the person who deposits the money; but, it becomes part of the funds of the Bank/Credit Society. The Bank/Credit Society is supposed to and, in fact, authorized to, use it for their own business. Thus, the concept of 'entrustment' cannot be introduced at all, when such money is kept in the Bank/Credit Society with the understanding that the same would be repaid after certain term with a certain rate of interest.

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As a matter of fact, the person depositing such

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such amounts with a Bank/Credit Society and hoping to get interest, is always well aware that the Bank/Credit Society would be investing the money for their business i.e. for disbursing loans to others or any other business, which such Bank/Credit Society would be interested in carrying on. Otherwise, such person would never expect to get interest from the Bank over the amounts invested by him. It is, therefore, more than clear that the concept of 'entrustment' of money cannot be brought into, with reference to the monies deposited with the Bank/Credit Society which are, as per the contract between such person and the Bank/Credit Society, required to be repaid after a certain period along with a certain rate of interest.

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The learned Counsel for the complainants submitted before this Court that there is an allegation of the applicants of having deceived the complainants

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also. He drew my attention to some assertions in the

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complaints wherein, some vague suggestions of the applicants having cheated the complainant, have been given. In this context, it may be observed that there is no allegation of the applicants having committed an offence under Section 420 of I.P.C. Moreover, process has also not been issued with reference to that offence. There is a categorical assertion of the applicants having committed criminal breach of trust, which is not consistent with the allegation of cheating, as is suggested to have been made, at this stage. The only reference to the applicants having 'deceived' the respective complainants, is in the context of 'not returning of the amounts' and that the 'deceiving' is said to be only by 'committing criminal breach of trust' in respect of these amounts. As a matter of fact, the complaints themselves indicate that, on behalf of the society, the complainants were being told that 'their

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monies would be paid when the monies advanced by the

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society to various persons, as loans would be recovered'.

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Thus, apart from whatever has been said above, the complaints also fail to make out an element of dishonesty with sufficient clarity. Therefore, the feeble

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attempt to suggest that 'if not criminal breach of trust,

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the applicants have committed cheating', does not succeed.

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The learned Counsel for the respective

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complainants then made certain submissions, seeking sympathy of this Court towards the complainants. Some of the complainants are old and apparently, they are in difficulty because of the inability to get the amounts back. Indeed, though one may feel

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sympathetic about such complainants, it would not be

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proper to permit the machinery of criminal law to be used for helping such complainants to recover their

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amounts. Such complainants can take recourse to a civil remedy.

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It also appears that a committee, termed as District Level Action Committee, has been constituted

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to ensure equitable distribution of the amounts to various creditors of the said credit society, who are

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similarly not paid the amounts.

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Since the Committee is already taking steps to

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ensure redressal of the grievances of different creditors, including the present complainants, there would be no question of passing any further orders, in the present applications, as suggested by the learned Counsel for

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the complainants. The complainants can very well approach the said Committee and it is expected that

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such committee will consider their cases, sympathetically.

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The fact however, remains that no case of an

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offence punishable under Section 409 of I.P.C. is disclosed against any of the applicants. To permit continuance of such proceedings would be abuse of the

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process of criminal law. The proceedings, in all these applications, therefore, are required to be quashed.

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The applications are allowed. The impugned

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orders are quashed.

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The complaints shall stand dismissed.

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The applications are disposed of in the above

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terms.

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(ABHAY M. THIPSAY, J.)

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PLK/*

The Savada Merchant Co-Op. Credit Society Ltd. and Others v. the State of Maharashtra and Another

Case brief

What is this about?

What did the court decide?

The Savada Merchant Co-Op. Credit Society Ltd. and Others v. the State of Maharashtra and Another

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

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