Madhab Bhattacharjee vs The State of West Bengal and Another

R.K. Bag, J.—This criminal revision is preferred by the petitioner for quashing the proceedings being G.R. Case No. 959 of 2010 arising out of Barasat Police Station Case No. 509 of 2010 dated 10th March, 2010 under Sections 420/406/506/120B of the Indian Penal Code pending before the Court of learned Chief Judicial Magistrate, Barasat, North 24 Parganas.

The back ground of starting the instant criminal proceeding by the opposite party no. 2 is as follows:-

The opposite party no. 2 is an N.R.I. and U.S.A. National who visits India every year for about six months. The opposite party no. 2 decided to devote his retired life as social worker and chose the State of West Bengal for his working place and found two registered Non-Government Organisations viz. Kamakhya Balak Ashram and the Kamakhya Shikhayaniketan for the purpose of carrying out the social work. One Prafulla Kumar Bose since deceased was the President of the above two Non-Government Organisations during the financial years 2002-2003 to 2005 to 2006. The present petitioner was the General Secretary of the above two Non-Government Organisations during the said financial years 2002-2003 to 2005-2006. The opposite party no. 2 provided a sum of Rs. 31,24,147/- out of total amount of Rs. 33,90,000/- to the said Non-Government Organisations for the scheduled scheme of work with condition that true accounts of the funds with relevant documents and the actual development of the scheduled work will be shown to the opposite party no. 2 on demand. The scheduled work included construction of room for girls, one time payment of boarding cost of girls, the cost for school bus, renovation work of kitchen, purchase of Almirah and books for the library. The fund was provided by the opposite party no. 2 during a period of fifteen months from 21st December, 2003 to 2nd March, 2005, by issuing several account payee cheques for which the petitioner granted receipts showing the payment as donation u/s 80G of the Income Tax Act, 1961. The opposite party no. 2 found the progress of development work of the scheduled scheme to some extent till 2nd March, 2005, but found no development work of the scheduled scheme during Mid-September, 2005. The petitioner did not submit the true accounts of the fund provided by the opposite party no. 2 on demand. Subsequently, the petitioner provided two utilisation certificates and audit reports about the funds supplied by the opposite party no. 2 at the intervention of the Additional District Magistrate (Treasury), North 24 Parganas. The opposite party no. 2 doubted about the genuineness of the audit reports, but could not take proper steps to challenge those audit reports before the appropriate forum. According to the opposite party no. 2, the petitioner dishonestly induced the opposite party no. 2 to provide fund of Rs. 31,24,147/- for performance of the scheduled work, but the said scheduled work was not done in violation of the terms of providing the fund by the opposite party no. 2. Accordingly, the opposite party no. 2 filed one petition of complaint before the Court of learned Chief Judicial Magistrate at Barasat on 2nd March, 2010, praying for forwarding the same to the Officer-in-Charge of Barasat Police Station u/s 156(3) of the Code of Criminal Procedure for registration of FIR and causing investigation. It is relevant to point out that Prafulla Kumar Bose, President of both the Non-Government Organisations during the relevant period i.e. 2002-2003 to 2005-2006 died on 4th February, 2010. Accordingly, the said petition of complaint filed by the opposite party no. 2 was registered as FIR and Barasat Police Station Case No. 509 of 2010 was started against the petitioner on 10th March, 2010. The police investigated the case and submitted charge sheet against the petitioner on 22nd January, 2011 under Sections 420/406/506/120B of the Indian Penal Code. The petitioner has challenged the said criminal proceeding before this Court by filing this application u/s 482 of the Code of Criminal Procedure, 1973.

By referring to the averments made in the petition of complaint treated as FIR, Mr. Sekhar Kumar Basu, learned counsel appearing for the petitioner submits that there was no dishonest intention on the part of the petitioner to induce the opposite party no. 2 to provide the fund to the Non-Government Organisation of which the petitioner was the General Secretary at the relevant point of time. The fund was provided by the opposite party no. 2 for the purpose of scheduled work of the Non-Government Organisation. It is evident from the averments made by the opposite party no. 2 in paragraphs 6 and 7 of the petition of complaint that there was progress of development work of each scheduled scheme to some extent. According to Mr. Basu, the opposite party no. 2 himself has admitted in the petition of complaint that there was some progress of development works of each scheduled scheme, though the development may not be upto to the satisfaction of the opposite party no. 2 and as such, there was no dishonest intention on the part of the petitioner to induce the opposite party no. 2 to supply the fund to the Non-Government Organisation from the very inception of the transaction, and thus, the transaction cannot fall within the ambit of "cheating" defined in Section 415 of the Indian Penal Code. Mr. Basu contends that the petitioner has submitted utilisation certificates and the audit reports for utilisation of the fund provided by the petitioner as reflected in the petition of complaint treated as FIR. According to Mr. Basu, since the opposite party no. 2 has not taken any step to challenge the authenticity or genuineness of the audit reports, the audit reports prepared by the auditors of the Non-Government Organisation will be deemed to be final and accepted by the parties including the opposite party no. 2. Mr. Basu has urged this Court to consider that the contents of the petition of complaint treated as FIR do not disclose commission of offence punishable u/s 420 of the Indian Penal Code.

The next submission of Mr. Basu is that the fund of Rs. 31,24,147/- was provided by the opposite party no. 2 to the Non-Government Organisation as donation. It is clear from paragraph 5 of the petition of complaint that the petitioner granted receipts in favour of the opposite party no. 2, showing the payments made by him as "donation''" to get the exemption from income tax u/s 80G of the Income Tax Act, 1961. Mr. Basu has pointed out from Black''s Law Dictionary (9th edition) page 561 that "donation" means "a gift especially to a charity". By pointing out the definition of "gift" given in Section 122 of the Transfer of Property Act, 1882, Mr. Basu submits that gift is the transfer of existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. According to Mr. Basu, once fund is provided by the opposite party no. 2 as donation, the opposite party no. 2 cannot remain as the owner of the said money or he cannot have any dominion over the said property and as such, there is no question of entrustment of the property with the petitioner within the meaning of Section 405 of the Indian Penal Code. Thus, Mr. Basu emphatically points out that the contents of petition of complaint treated as FIR do not disclose the commission of offence punishable u/s 406 of the Indian Penal Code. The contents of the petition of complaint also do not disclose any offence u/s 506 of the Indian Penal Code or u/s 120B of the Indian Penal Code.

Mr. Anand Keshri, learned counsel representing the State has produced the case diary and submits that sufficient materials have not been collected by the investigating agency to make out prima facie case u/s 420 or u/s 406 of the Indian Penal Code.

Mr. Sandipan Ganguly, learned counsel for the opposite party no. 2 submits that the petitioner did some development work of each scheduled scheme during the period from 21st December, 2003 to 2nd March, 2005 in order to dishonestly induce the opposite party no. 2 to provide the entire amount of fund and the development work was completely stopped as noticed from Mid-September, 2005 when the opposite party no. 2 came back to India from the United States. Accordingly, there was intention on the part of the petitioner to induce the opposite party no. 2 from the very inception of the transaction to provide the fund to the Non-Government Organisation and as such, contents of the petition of complaint treated as FIR disclose offence punishable u/s 420 of the Indian Penal Code. By pointing out the averments made in paragraph 5 of the petition of complaint, Mr. Ganguly contends that the petitioner granted the receipts showing the payments as "donation" for the purpose of enjoying exemption from income tax u/s 80G of the Income Tax Act, 1961 and the opposite party no. 2 had nothing to do with the same. According to Mr. Ganguly, the fund was provided to the petitioner for performance of scheduled work i.e. for construction of room for orphan girls, the boarding cost of 15 girls for two financial years, the renovation work of the kitchen, purchase of books for the library and the cost for transport etc. The contention of Mr. Ganguly is that the fund was provided to the petitioner for the benefit of under privileged girls and the petitioner misappropriated the said fund by not using the same for the benefit of the under privileged girls, and as such, the same cannot be treated as donation but as entrustment of the property within the meaning of Section 405 of the Indian Penal Code. Mr. Ganguly emphatically submits that the contents of the petition of complaint very well disclose commission of offence punishable u/s 406 of the Indian Penal Code. Mr. Ganguly has not placed any submission whether the contents of the petition of complaint disclose any offence u/s 506 and 120B of the Indian Penal Code, though the charge sheet was also submitted u/s 120B and 506 of the Indian Penal Code.

The proposition of law laid down by the Hon''ble Supreme Court in Union of India (UOI) Vs. Prakash P. Hinduja and Another, , for quashing the criminal proceedings in exercise of inherent power u/s 482 of the Code of Criminal Procedure is as follows:-

(i) Where the allegations made in the FIR or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused, (ii) where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence against the accused and (iii) where there is an express legal bar engrafted in any of the provisions of the Code of Criminal Procedure or the Act concerned to the institution and continuance of the proceedings.

In view of the above proposition of law, I would like to accept the allegations made in the petition of complaint treated as FIR at their face value and consider the materials collected by the investigating agency which are available in case diary for formation of opinion whether the same, prima facie, constitute the offence under Sections 406/420/506/120B of the Indian Penal Code against the petitioner. Before doing so, I am inclined to discuss the decisions on which learned counsels relied on to make their respective submissions before this Court.

Mr. Ganguly has relied on the decision in the case of Vinod Raghuvanshi Vs. Ajay Arora and Others, wherein it is held in paragraph 30 that it is a settled legal proposition that while considering the case for quashing of the criminal proceedings the Court should not "kill a stillborn child", and appropriate prosecution should not be stifled unless there are compelling circumstances to do so. An investigation should not be shut out at the threshold if the allegations have some substance. When a prosecution at the initial stage is to be quashed, the test to be applied by the Court is whether the uncontroverted allegations as made, prima facie establish the offence. In view of this proposition of law, this Court will consider the contents of the petition of complaint treated as FIR and the materials collected by the investigating agency and take them at their face value to decide whether offences under Sections 406/420/506/120B of the Indian Penal Code are made out against the petitioner. Mr. Ganguly has also relied on the decision of K. Neelaveni Vs. State rep. by Insp. of Police and Others, to put forward the argument that this Court should not exercise the power u/s 482 of the Code of Criminal Procedure when learned Magistrate did not get the opportunity to consider the materials collected by the investigating agency u/s 190 of the Code of Criminal Procedure. This reported case relates to the allegation made by the wife against her husband who married another lady in presence of other accused persons and from the said wedlock a child was born and the wife was subjected to cruelty for refusing to consent to her abortion and was driven out from the matrimonial home and the charge sheet was submitted under Sections 406/494/498A of the Indian Penal Code. The facts of the reported case are clearly distinguishable from the facts of the present case where the fund is provided by an NRI for getting the benefit of income tax u/s 80G of the Income Tax Act, 1961. Since the facts of the instant case are clearly distinguishable from the facts of the reported case, the ratio of the decision reported in K. Neelaveni Vs. State rep. by Insp. of Police and Others, will not be applicable in the facts of the present case.

Mr. Basu has relied on the decision of Umesh Kumar Vs. State of Andhra Pradesh, where the Hon''ble Supreme Court has laid down in paragraph 20 as follows:

In exercise of powers u/s 482 of the Code of Criminal Procedure, it is not permissible for the High Court to appreciate the evidence as it can only evaluate material documents on record to the extent of its prima facie satisfaction about the existence of sufficient ground for proceedings against the accused and the Court cannot look into materials, the acceptability of which is essentially a matter for trial. Any document filed along with the petition labelled as evidence without being tested and proved, cannot be examined. The law does not prohibit entertaining the petition u/s 482 Cr.P.C. for quashing the charge-sheet even before the charges are framed or before the application of discharge is filed or even during the pendency of such application before the Court concerned. The High Court cannot reject the application merely on the ground that the accused can argue legal and factual issues at the time of the framing of the charge. However, the inherent power of the Court should not be exercised to stifle the legitimate prosecution but can be exercised to save the accused from undergoing the agony of a criminal trial.

In view of the above proposition of law laid down by the Apex Court, this Court can exercise the inherent power u/s 482 of the Code of Criminal Procedure for quashing the criminal proceeding even before the charges are considered by learned Court below or before consideration of any application for discharge of the accused person by the trial Court.

With the above legal back ground and factual matrix, I would like to consider whether any prima facie case is made out under Sections 420/406/506/120B of the Indian Penal Code from the petition of complaint treated as FIR and also from the evidence collected by the investigating agency during investigation after taking the same at their face value. On consideration of the contents of the petition of complaint and also the materials available in the case diary, I do not find that any offence is made out under Sections 506 or 120B of the Indian Penal Code, though the charge sheet has been submitted amongst other penal provisions under Sections 506 and 120B of the Indian Penal Code. It appears from paragraph 5 of the petition of complaint that the opposite party no. 2 provided fund of Rs. 31,24,147/- by several account payee cheques during a period of 15 months from 21st December, 2003 to 2nd March, 2005. It also appears from paragraphs 6 and 7 of the petition of complaint that there was progress of development work of each scheduled scheme to some extent till 2nd March, 2005, though no development of the progress of work was noticed in the middle of September, 2005. It also appears from the petition of complaint that the fund was provided by the opposite party no. 2 in favour of the Non-Government Organisation of which the petitioner was the General Secretary at the relevant point of time on condition that the petitioner will furnish true and actual accounts of the fund on demand. It appears from paragraphs 10 to 13 of the petition of complaint that the petitioner supplied utilisation certificates and also audit reports of the fund provided by the opposite party no. 2 at the intervention of the Additional District Magistrate (Treasury), North 24 Parganas. It is held by the Hon''ble Supreme Court in the case of "Anil Mahajan V. Bhor Industries Limited" reported in (2006) 1 SCC (Cri) 746 that a distinction has to be kept in mind between mere breach of contract and the offence of cheating. A culpable intention right from the beginning when the promise was made cannot be presumed from mere failure of a person to keep up promise subsequently. It depends upon the intention of the accused at the time of inducement. The subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating, unless fraudulent, dishonest intention is shown at the beginning of the transaction. The Court must decide on the basis of the substance of the complaint and not on the basis of mere use of the expression cheating in the complaint. In view of the above proposition of law, the contents of the petition of complaint treated as FIR must show that the petitioner had fraudulent or dishonest intention at the time of making the promise or entering into the transaction. From the mere failure of the petitioner to keep up promise subsequently, such a culpable intention right at the beginning i.e. when he made the promise cannot be presumed. It appears from the petition of complaint that there was some progress of development work of each scheduled item for which fund was provided by the opposite party no. 2 to the petitioner and the utilisation certificate and the audit reports of the said fund were also supplied to the opposite party no. 2 by the petitioner at the intervention of the Additional District Magistrate (Treasury), North 24 Parganas. The statements of two witnesses who were members of the Non-Government Organisation of which the petitioner was the General Secretary, were recorded by the investigating officer u/s 161 of the Code of Criminal Procedure. Nothing transpires from the statements of those two witnesses available in the case diary to indicate that there was fraudulent or dishonest intention of the petitioner from the very inception of the transaction. The argument advanced by Mr. Ganguly to the effect that the development work of each scheduled item was done by the petitioner during the period from 21st December, 2003 to 2nd March, 2005, intentionally for the purpose of inducing the opposite party no. 2 to part with the balance amount of fund, cannot be accepted, because the opposite party no. 2 has not disclosed in the petition of complaint about the break up of providing the fund and the dates of issuing various cheques in favour of the Non-Government Organisation of which the petitioner was the General Secretary. In view of my above findings, I can safely hold that the contents of the petition of complaint and the materials available in the case diary do not prima facie disclose any offence punishable u/s 420 of the Indian Penal Code.

The next question for consideration of this court is whether the contents of the petition of complaint and the materials available in the Case Diary disclose commission of any offence punishable u/s 406 of the Indian Penal Code. To establish an offence u/s 406 of the Indian Penal Code the following ingredients must be furnished by the opposite party no. 2: (i) that the petitioner should have been entrusted with property or entrusted with dominion over property, (ii) that the petitioner should dishonestly misappropriate or convert to his own use that property, or dishonestly use or dispose of that property or wilfully suffer any other person to do so, (iii) that such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which the petitioner has made, touching the discharge of such trust. It appears from paragraph 5 of the petition of complaint that the opposite party no. 2 provided the fund to the petitioner who granted receipts showing the said payment as "donation" to get the exemption from income tax u/s 80G of the Income Tax Act, 1961. The meaning of "donation" given in page 561 of Black''s Law Dictionary (9th Edition) is "a gift especially to a charity" and the word "donated" means "to give (property or money) without receiving consideration for the transfer". "Gift" is also defined in Section 122 of the Transfer of Property Act, 1882 as "transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee and accepted by or on behalf of the donee". According to the above definition of "donation" and "gift", it is crystal clear that the donor cannot retain the ownership of the property after donation and thereby the donor cannot have any right or interest over the said property. In this connection it is relevant to mention the decision cited by Mr. Ganguly reported in Central Bureau of Investigation, SPE, SIU (X), New Delhi Vs. Duncans Agro Industries Ltd., Calcutta, . In the case of Central Bureau of Investigation, SPE, SIU (X), New Delhi Vs. Duncans Agro Industries Ltd., Calcutta, it is held by the Apex Court that it is necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. According to Mr. Ganguly, the fund was entrusted with the petitioner by the opposite party no. 2 for performance of scheduled work and for the benefit of under privileged girls and the said fund was not used for the purpose for which the same was given and as such the petitioner is liable to be prosecuted for the offence punishable u/s 406 of the Indian Penal Code. The contention of Mr. Basu in this regard is that the fund is donated by the opposite party no. 2 in favour of the Non-Government Organization of which the petitioner was the Secretary for the purpose of getting the benefit of income tax u/s 80G of the Income Tax Act, 1961 and the opposite party no. 2 cannot have any ownership or dominion over the said fund after donation and as such the question of entrustment of the fund with the petitioner by the opposite party no. 2 does not arise. I have already observed that the opposite party no. 2 provided the fund to the petitioner as his donation, because the opposite party no. 2 accepted the receipts showing the payment as his donation to get the exemption from income tax u/s 80G of the Income Tax Act, 1961. Once the fund is donated by the opposite party no. 2 in favour of the petitioner or in favour of the Non-Government Organization of which the petitioner was the Secretary, the opposite party no. 2 cannot remain as the owner of the said fund or cannot have any dominion over the said fund. The contention on behalf of the opposite party no. 2 that the fund was entrusted with the petitioner for the purpose of carrying out the scheduled work for the benefit of under privileged girls, cannot be accepted on the ground that the opposite party no. 2 has accepted the receipts provided by the petitioner showing the said fund as his donation for getting benefit u/s 80G of the Income Tax Act, 1961. Since the opposite party no. 2 has donated the fund and got the benefit u/s 80G of the Income Tax Act, he cannot be allowed to blow hot and cold and claim that the fund was entrusted with the petitioner for carrying out the scheduled work for the benefit of under privileged girls. In this connection I accept the contention of Mr. Basu that the opposite party no. 2 cannot have the ownership or the beneficial interest in the fund after making donation of the same to get the benefit u/s 80G of the Income Tax Act, 1961. Accordingly, the ownership of the fund or the beneficial interest in the ownership of the fund in respect of which the offence is alleged to have been committed was in the petitioner and not in the opposite party no. 2 and as such it cannot be said that the offence of criminal breach of trust is committed. Moreover, there is nothing in the petition of complaint or in the case diary to show that the fund was misappropriated or used by the petitioner for his own benefit. What transpires from the petition of complaint is that the progress or development of work of each scheduled scheme was not up to the satisfaction of the opposite party no. 2, but the utilization certificates and the audit reports were supplied to the opposite party no. 2 by the petitioner at the intervention of the Additional District Magistrate (Treasury), North 24 Parganas. It is not possible for this court to decide at this stage about the genuineness of the audit reports. Nor has the opposite party no. 2 taken any effective step to challenge the genuineness or authenticity of the audit reports before any forum.

On consideration of the statements recorded u/s 161 of the Code of Criminal Procedure, I find that the opposite party no. 2 was also a member of the Non-Government Organization of which the petitioner was the Secretary at the relevant point of time. What transpires from the statements of the witnesses recorded u/s 161 of the Code of Criminal Procedure is that the opposite party no. 2 wanted to take back the fund provided by him on the ground that the fund was not spent for the purpose for which it was given. Since this fund was donated by the opposite party no. 2 for the purpose of taking the benefit of the income tax u/s 80G of the Income Tax Act, 1961, the question of refund of the said fund does not arise. In view of the above statements of the witnesses recorded u/s 161 of the Code of Criminal Procedure and other materials available in the Case Diary and in view of the averments made by the opposite party no. 2 in the petition of complaint treated as FIR, I cannot persuade myself to hold that a prima facie case u/s 406 of the Indian Penal Code is made out against the petitioner.

The upshot of my entire above observation is that the contents of the petition of complaint treated as FIR and the materials collected by the investigating agency for the purpose of submitting charge sheet u/s 173 of the Code of Criminal Procedure do not, prima facie, disclose any offence against the petitioner u/s 420/406/506/120B of the Indian Penal Code. In view of the proposition of law laid down by the Apex Court in Union of India (UOI) Vs. Prakash P. Hinduja and Another, cited hereinabove, I am of the opinion that this is a fit case where the criminal proceeding should be quashed by invoking the inherent power u/s 482 of the Code of Criminal Procedure to prevent abuse of the process of the court and for ends of justice. The logical inference is that the instant criminal proceeding being G.R. Case No. 959 of 2010 arising out of Barasat P.S. Case No. 509 of 2010 under Sections 420/406/506/120B of the Indian Penal Code pending before the Court of Learned Chief Judicial Magistrate, Barasat, North 24 Parganas is quashed.

The criminal revision and the application being CRAN No. 308 of 2014 are, thus, disposed of.

The department is directed to send down the copy of this judgment and order to learned court below for favour of information and necessary action.

Criminal Section is directed to supply urgent Photostat certified copies of this order to the parties, if applied for, after compliance with all necessary formalities.