Allowed

Santosh S/O Adinath Ghalage and Anr. v. the State of Maharashtra and Anr.

Bombay HC16 Aug 2017APPLN/478/2017

Case brief

AI extract

What is this about?

High Court allowed Criminal Application to quash FIR alleging criminal breach of trust for non-payment of bus hire rent. Court held allegations disclosed breach of contract, not dishonest misappropriation or conversion of property, rendering offence unsustainable.

What did the court decide?

Crime No.14 of 2017 registered with Ajintha Police Station for offence under Section 406 read with Section 34 IPC is quashed and set aside.

Santosh S/O Adinath Ghalage and Anr. Vs the… — Contract and Commercial Disputes | Bombay HC (2017)

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cria478.17

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD

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CRIMINAL APPLICATION NO. 478 OF 2017

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1.Santosh s/o. Adinath Ghalage ..Applicants
Age. 40 years, Occ. Service,
R/o. Plot No.22, Chhaya Nagar
Housing Society, CIDCO N-9,
Aurangabad.

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2.Vidya w/o. Santosh Ghalage
@ d/o. Sandu Gawali
Age. 34 years, Occ. Head Mistress,
R/o. Plot No.22, Chhaya Nagar
Housing society, CIDCO N-9,
Aurangabad.

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Versus

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1.The State of Maharashtra ..Respondents

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2. Bharat s/o. Laxman Kshirsagar Age. 42 years, Occ. Business, R/o. N-11, CIDCO, Aurangabad.

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Mr.Rupesh A. Jaiswal h/f. Mr. N.S. Ghanekar, Advocate for
the applicants.
Mr.S.B. Pulkundwar, A.P.P. for respondent No.1/State.
Mr.G.K. Kshirsagar, Advocate for respondent No.2.

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CORAM : S.S.SHINDE &
S.M.GAVHANE,JJ.
 RESERVED ON:28.07.2017
PRONOUNCED ON:16.08.2017

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J U D G M E N T [PER : S.M. GAVHANE, J.] :-

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1.The applicants, who are accused Nos.1 and 2 in
Crime No.14 of 2017, registered with Ajintha Police
Station, Aurangabad for the offence punishable under
section 406 read with section 34 of the Indian Penal Code
[for short “the IPC”], have filed this application under
section 482 of the Code of Criminal Procedure, to quash
and set aside the said crime.

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2.The facts giving rise to this application are
that the applicant No.1 is one of the members out of
seven members of an institution, namely, Ajintha Learning
Hub English School and applicant No.2 is the President
and Head Mistress of the said institution. The informant

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– Bharat Laxman Kshirsagar (respondent No.2) is in
transportation business and provides service of buses.

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In his report, on the basis of which aforesaid crime has
been registered, it is alleged that there was oral
agreement between him and the applicants in respect of
providing bus services for the students of Ajintha

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Learning Hub English School from the academic year 2013-
2015. It is alleged that respondent No.2 has provided
two buses bearing registration No.MH-20-W-9181 and MH-21-
9986. But even after providing transportation service for
the said academic years, the applicants did not pay
Rs.12,10,000/- as remuneration (rent) towards the
services.

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3.According to the applicants, the school had

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their own bus – Tata Magic having registration No.MH-20-
CT-7995 and Yogesh Jadhav was its driver. Respondent
No.2 had provided his bus bearing No. MH-20-W-9181 only
for short period from June, 2013 to February, 2014.
Since the said bus was not in working condition,
respondent No.2 took it back. The bus No.MH-21-9986 was
never provided for transportation service to the
applicants' school. The story of the respondent No.2 of
not receiving any amount from the school for his services
of bus and that said bus continued for a period of two
years is improbable. At no point of time, respondent No.2

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issued any notice to the applicants to pay his bill. In-
fact, for that year one SAB-Miller India, Waluj,
Aurangabad provided transportation service and there was
absolutely no question of providing bus services to the
applicants' school. The dispute appears to be purely of
civil nature.

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4.Respondent No.2 has filed an affidavit-in-reply
and in the affidavit it is stated that prima facie there
is involvement of the applicants in committing offence
under section 406 read with section 34 of the IPC. The

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crime registered against the applicants is under
investigation. Therefore, at this stage, it is not
possible to decide the case on merits. The applicants

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made oral agreement with respondent No.2. As per said
agreement the applicants had hired two buses owned by the
respondent No.2. Yogesh Jadhav and Gajanan Jadhav are

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the drivers on the said buses. The oral agreement was
before witness – Damu Digambar Rothe. This respondent

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had requested the applicants to have written agreement,

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but they deliberately avoided to make written agreement.
This conduct of the applicants shows their mala fide
intention and it amounts to criminal breach of trust. He
stated that the application be rejected with costs.

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5.We have heard learned Counsel appearing for the
applicants, learned APP appearing for respondent
No.1/State and learned Counsel appearing for respondent
No.2. Learned Counsel appearing for the applicants
submits that the allegations in the FIR do not disclose
ingredients of offence punishable under section 406 of
the IPC. The dispute between the applicants and
respondent No.2 is of civil nature. Therefore, when the
offence under section 406 of the IPC does not attract, on

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the basis of material collected by the Investigating
Officer during investigation of crime registered against
the applicants, the said crime is required to be quashed
and set aside.

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6.On the other hand, learned Counsel appearing for

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the informant (respondent No.2) made submissions in the
light of contentions in the affidavit-in-reply of the
said respondent. He submits that merely because the
dispute is of civil nature, is no ground to quash the
crime registered against the applicants and though civil
remedy is available, criminal Court cannot be prevented
from taking cognizance of offence under section 406 of

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the IPC. In support of his submissions, learned Counsel
appearing for respondent No.2 has relied upon the ratio
laid down by this Court in the case of Madhosingh and
others Vs. Smt. Kamla Devi and others, 1992 Cri.L.J.1858,

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wherein in para 8, it is observed as under:-

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“8.The object of the criminal law is to
protect the innocent and punish the guilty. It
is not the function of the criminal Court to do
anything with the dispute relating to the
property. It is the function of the civil
courts to decide the disputes relating to the
property. Where the dispute is of civil nature,
a Magistrate ought not to deal with it. But,
there is nothing in the law to prevent the
criminal Court from taking cognizance of the
offence provided the ingredients of the offence
are made out on the face of the complaint.
Merely because the person concerned is subject
to civil liability, the criminal complaint is
not to be dismissed even if the civil remedy is

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tenable. In a case of Jaswantrao V. State of
Bombay, AIR 1956 SC 575 : Their Lordships
observed that

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“The same set of facts may give rise both to
civil liability and a criminal prosecution.”

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7.Learned APP appearing for the State supported
the arguments advanced on behalf of respondent No.2.

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8.We have carefully considered the submissions
made on behalf of the parties and perused the affidavit-
in-reply filed by respondent No.2 and the annexures to
the petition including the FIR and statements of the

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witnesses. The FIR shows that respondent No.2-informant

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is doing transport business since last 15 years. He is

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having the vehicles for transporting the workers in the

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companies. At the time of lodging FIR, four vehicles
were engaged by Pals Company and Fosters SAB-Miller Beer
Company in MIDC, Aurnagabad for transporting the workers.

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In the year 2013, applicant No.1 started Ajintha Learning

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Hub English School, at Ajintha. He is president of the

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said school. His wife – applicant No.2 is Head Mistress
of the said school. For the academic years 2013-2015,

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he had given two vehicles i.e MH-20-W-9181 (Swaraj Mazda)

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and MH-21-9986 Bajaj Tempo Travellers 4S on hire for to-

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and-fro journey of the students in the villages in the
limits of Ajintha. One Gajanan Maruti Jadhav, Yogesh
Maruti Jadhav and Banwarilal Mahut were drivers of the
said vehicles. The FIR further shows that in the year
2013-14 both the vehicles were engaged by Ajintha
Learning Hub School and total rent of the said vehicles
for the said year was Rs.7,70,000/-. In the year 2015,
there was mechanical defect in one of the vehicles. It
is alleged that total rent of the vehicles of the above
said two years due to be paid to the informant was

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Rs.12,10,000/-, but no single rupee has been paid by the
applicants to the respondent No.2, despite demand of the
said rent by him and as such they have committed breach
of trust. The FIR further depicts that respondent No.2
requested for legal action against the applicants to pay
him above said amount of rent of the buses.

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9.Here it is necessary to know meaning of criminal

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breach of trust, given under section 405 of the IPC and

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it is reproduced thus :-

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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, or dishonestly uses or disposes of
that property in violation of any direction of
law prescribing the mode in which such trust is
to be discharged, or any legal contract, express
or implied, which he has made touching the
discharge of such trust, or wilfully suffers any
other person so to do, commits “criminal breach
of trust”.

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10.Thus it is clear from the above provision that

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to attract the offence of criminal breach of trust,
punishable under section 406 of the IPC, following
ingredients are required to be proved;

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(1)entrusting any person with property or with
any dominion over property,

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(2) that person entrusted

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(a)dishonestlymisappropriatingor
converting to his own use that property; or
(b)Dishonestly using or disposing of that
property or wilfully suffering any other
person so to do in violation

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(i) of any direction of law
prescribing the mode in which such
trust is to be discharged, or

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( 10 ) cria478.17

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(ii)of any legal contract made
touching the discharge of such trust.

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11.In the present case as referred earlier, the FIR

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discloses that there was oral agreement between the
applicants and respondent No.2. By the said agreement,
applicant hired two buses of respondent No.2 for
transporting the students from their village in the
limits of Ajintha to their school for the period from
2013-2015 on rent and total amount of Rs.12,10,000/-

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towards rent was due to respondent No.2 and payable by
the applicants and the applicants have not paid single
rupee out of the said rent amount to respondent No.2.
These allegations show that the applicants have committed
breach of contract between them and respondent No.2.
However, the above said allegations do not, prima facie,
suggest that the respondent No.2 had entrusted the
property i.e. his two buses to the applicants within the

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meaning of section 405 and 406 of the IPC. Similarly,

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the said allegations do not suggest that the applicants

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have dishonestly misappropriated or converted the said

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property/vehicles to their own use or dishonestly used
the said vehicles or disposed the said vehicles in
violation of any direction of law prescribing the law in
which such trust is to be discharged.

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12.It is not the case of respondent No.2 that the
applicants have sub-let his vehicles or transferred the
same to anybody else so as to say that they have
dishonestly used the said vehicles or disposed the said
vehicles in violation of any direction of law prescribing
the law in which such trust is to be discharged. Thus,
the elements of dishonest intention which is necessary to
constitute the offence of criminal breach of trust is
prima facie not attracted on the basis of allegations in
the FIR and statements of witnesses. Therefore, prima
facie ingredients of offence punishable under section 406
of the IPC are not disclosed on the basis of FIR and
material collected during the investigation. Therefore,
the FIR against the applicants for the said offence is

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not sustainable and the same is liable to be quashed.

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13.It appears from the allegations in the FIR and

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the statements of witnesses that there was breach of
contract, which gives rise to Civil remedy to respondent
No.2 for recovery of rent as well as damages. But
instead, having recourse to Civil remedy, the respondent
No.2 is trying to recover the rent of vehicles due from

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the applicants by filing prosecution against the
applicant, which is not permissible.

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14.As referred earlier in support of his submission

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that the Criminal Court is not prevented from taking
congnizance of offence punishable under section 406 of
the IPC against the applicant though civil remedy is
available to the respondent No.2, learned Counsel
appearing for respondent No.2 has relied upon ratio laid
down in the case of Madhosingh & Ors. (Supra).The facts

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of the said case are that in the year 1976, a society

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acquired a piece of land and prepared layout. The
complainant’s husband was alloted plot in the above said

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society admeasuring 60 x 60 sq.mtr. bearing plot No.13 in
the lay out of the society vide letter dated 10.08.1976.
According to the husband of the complainant, as said plot
was not lucky number, he made request to the society for

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change of number and accordingly his request was
considered and the said plot was re-numbered as plot
No.12 and original plot number 12 was renumbered as plot
No.13. The value of the plot was fixed at Rs.12,200/-.
The husband of the complainant paid Rs.13,627=20. The
complainant made allegation of foul play on the part of
the accused. The complainant made a request to accused
No.1, after death of her husband to execute the sale deed

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of plot No.12. When the accused No.1 failed to execute
sale deed on one pretext or another, the complainant
issued notice on 05.10.1988 to execute sale deed, but

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accused No.1 did not take any action. Again in the month
of April, 1989, the complainant approached the accused
No.1 for execution of sale deed. Accused No.1 handed over
particulars of sale-deed, but the area of said plot has

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been shown as 1800 sq.ft. i.e. 18.28 x 9 sq.mtrs. in

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place of 3600 sq.ft. And the value of the said plot was

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also shown as Rs.6200/- only, though complainant had paid

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Rs.13,627.50. The complainant was compelled to issue
notice to the accused to execute sale-deed of plot No.12
admesuring 3600 sq.ft. The accused replied the said
notice. As the complainant smelled foul play on the part
of the accused, she lodged report to the Police Station

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Sadar Nagpur for the offence punishable under section 406
of the IPC. Thus, the facts of the above decision are
different from the facts of the present case. Therefore,
the ratio laid down in the said decision cannot be made
applicable to this case to state that there can be
criminal action against the applicants though Civil
remedy is available to respondent No.2.

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15.For the reasons discussed herein above, we hold

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that Crime No.14 of 2017 registered with Ajintha Police
Station against the applicants for the offence punishable

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under section 406 read with section 34 of the IPC is not
sustainable and the same is liable to be quashed.

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Accordingly, the same is quashed and set aside. The
Criminal Application is thus allowed.

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16.Above observations are confined to adjudication
of this application and in any manner they will not come
in the way of the respondent No.2 in any other pending
proceedings or the proceedings that may be filed by him

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in connection with the transaction in this matter.

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snk/2017/AUG17/ cria478.17

Santosh S/O Adinath Ghalage and Anr. v. the State of Maharashtra and Anr.

Case brief

What is this about?

What did the court decide?

Santosh S/O Adinath Ghalage and Anr. v. the State of Maharashtra and Anr.

Case brief

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What the court decided

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