K.P.S. Dagur vs Darshan Singh

Sanjiv Khanna, J.—The petitioner, Deputy General Manager, Domestic Resources Department (Customer Relation), Industrial Development Bank of India Ltd. has challenged the summoning order dated 18th September, 2006, passed on a private criminal complaint made by the respondent, Mr. Darshan Singh.

This private complaint was filed on 10th February, 2006, inter alia, stating that the respondent had purchased a bond with a face value of Rs. 5,000/- on 22nd February, 1992, which was to be redeemed on 31st March, 2002 at a premium of 5% of the face value. The respondent was entitled to interest @ 15% per annum payable half yearly with effect from 31st March, 1992 till redemption. It is stated in the complaint that legal notice was served on the petitioner on 10th March, 2004 and thereafter the maturity proceeds of Rs. 5,250/- were paid. Thus, there was delay of two years in payment of the maturity proceeds. The second allegation made in the complaint is that the respondent wrote a letter dated 24th December, 2005 asking for comprehensive details of interest, etc. paid to him since 15th June, 1992 onwards, but the petitioner herein had not replied to the said letter.

Learned Counsel for the petitioner submits that the surrender value of the bond was to be paid on deposit of the bond certificate by the registered bondholder. It is stated that there was delay in the deposit of the bond certificate and, therefore, maturity proceeds could not be paid. Learned Counsel for the petitioner relies upon the terms on which allotments were made. The relevant term of allotment, reads as under:

The holders of Regular Return Bonds must get their name(s) registered with IDBI at the end of 10 years from the date of allotment, on the basis of a record date to be specified by IDBI at that time. Redemption of Bonds will be made in accordance with the Register of Bondholders at the end of 10 years. The Bonds will be redeemed only on the surrender of the Bond Certificates by the registered Bondholder(s).

With regard to non-payment of interest, it is submitted that IDBI had obtained details from Investor Services of India Ltd. for dispatch and payment of interest warrants as per the prescribed schedule. Investor Services of India Ltd. has given details of interest warrants dispatched to the respondent with dates. It is further stated by the petitioner that they have verified from Andhra Bank, Karol Bagh, New Delhi with regard to the encashment of the interest warrants. The said bank has been able to give details of four warrants and certified that payments were duly deposited in the account of the respondent. With regard to other warrants, the bank has stated that these details are very old and they cannot confirm the same.

Learned Counsel for the respondent has submitted that there was delay in payment and interest payments have not been made. It is submitted that interest of justice and equity requires that the petitioner should face prosecution.

I have examined the contents of the complaint. The relevant portion reads:

That the accused served a legal notice on 10.3.2004 and the accused has paid Rs. 5,250/- only after lapse of 12 years. Copy of the notice alongwith postal receipt is attached herewith and marked C/2 (colly).

That the complaint wrote another letter dt. 24.12.2005 asking for comprehensive details of the dividends/bonus etc. granted to RR00000124 since 15.6.1992 till date, and the accused has not replied to the letter. A copy of the letter dt. 24.12.2005 is attached herewith and marked C/3 along with copy of the latest return of the complainant and proforma No. ISIL/SR-I/RR/305 dated 25/5/98 is also attached herewith for your kind perusal.

That it is further submitted that the accused has played fraud with the complainant by misappropriating the aforesaid amount and also cheated by adopting malpractice with the complainant. The accused has not even bothered to acknowledge the letter/correspondence sent by the complainant which implies that the accused has concealed the real position of payment and has denied the liabilities of payment to the complainant so far.

That the accused has malafide intention to grab the interest incurred on the capital amount of Rs. 5,000/- for which the complainant is entitled to recover by legal means by filing complaint in the appropriate court of law.

Contents of the complaint do not disclose any criminal offence. With regard to non-payment of half yearly interest, no details are given in the complaint. The complaint in fact only refers to a letter dated 24th December, 2005 by which the respondent had made a complaint and has asked for details of interest warrants. It is alleged that the petitioner did not reply to this letter. Failure to reply cannot and does not constitute any offence. Even with regard to non-payment of the maturity proceeds of the bonds on redemption, the clause relating to return of the original bond as per the terms of allotment is clear. The bonds were to be redeemed on surrender of the bond certificate by the registered bondholder. Bonds were transferable and, therefore, surrender of the bond certificate was required.

Even otherwise the facts as averred in the complaint do not establish a case u/s 406 of the Indian Penal Code. Section 406 of the Indian Penal Code reads as under:

Section 406. Punishment for criminal breach of trust-Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

The essential ingredient of Section 406 are (i) Entrusting any person with property or with any dominion over property, (ii) the person entrusted (a) dishonestly misappropriating or converting to his own use that property; or (b) dishonestly using or disposing of that property or willfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, or (ii) of any legal contract made touching the discharge of such trust.

Mere delay in payment without requisite intention of dishonesty or willfulness does not make out a case u/s 406 of the Indian Penal Code. The said ingredient is missing and not established. The petition is allowed and the summoning order dated 18th September, 2006 is quashed.

At this stage, learned Counsel for the petitioner submits that the respondent can visit office of the petitioner with full details and in case any interest warrant has not been encashed for whatever reason, they shall ensure that payment is made. In this connection, learned Counsel for the petitioner states that respondent has to produce his bank pass book for the relevant period or certificate from his bank to show that the interest warrant has not been encashed. The said statement is taken on record. The question of civil liability has not been examined or considered.