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Judgment
D.N. Baruah, J.—The Petitioners have approached this Court for quashing a criminal proceeding (Criminal Case No. 389 of 1992) registered under Sections 403/406/34/I.P.C pending before the Chief Judicial Magistrate, Guwahati.
The opposite party No. 1 and 2 have filed the above criminal complaint Case No. 389/92 in the Court of Chief Judicial Magistrate against the Petitioner and 3 others contending inter alia that the opposite party No. 1 was appointed by the Government of Assam as centralised handling agent for handling, carriage and salts of State quota of levy cement (public sale category). In pursuance of the said appointment, the opposite party No. 1 was handling levy cement till the 1st of March, 1989 when the Government of India decontrolled cement.
The Assistant Regional Development Commissioner for Cement Industries, Guwahati used to issue allotment of quota of cement for the State Government on periodic basis on various cement factories for lifting by the Petitioner No. 1 on behalf of the Government of Assam. On the basis of such allotment made by the assistant Regional Development Commissioner for Cement Industries, Guwahati, the opposite party No. 1 used to remit money towards advance payment to the cement manufacturers from time to time. Such authorisation of levy cement was also made to the Petitioner No. 1 for the period beginning from 1987. The payments used to be made from time to time. During the period from 23.5.87 to 17.2.89 the opposite party No. 1 paid a total sum of Rs. 1,32,74,752.32 P (Rupees one wore thirty two lakhs seventy four thousand seven hundred fifty two and paise thirty two only) for supply of levy cement and the said amount was duly received and acknowledged by the Petitioner No. 1.
Against the said payment of Rs. 1,32,74,752,32P, the Petitioner No. 1 despatched from time to time cement worth Rs. 77,15,191,47P. (Rupees seventy seven lakhs fifteen thousand one hundred ninety one and paise forty seven only) and raised necessary invoices on the opposite party No, 1. However, owing to the abolition of the control on cement by the Government of India with effect from 1.3.89 a sum of Rs. 55,59,260.85p, (Rupees fifty five lakhs fifty nine thousand two hundred sixty and paise eighty five only) remained with the Petitioners towards the value of the levy cement. The Government of India through the Joint Development Commissioner for Cement Industry, New Delhi by letter dated 31.12.89, directed the Petitioner No. 1 to refund all amount lying with the Petitioner No. 1. A telegram was also sent on 15.5.89 by the opposite party No. 1 to the Petitioner requesting him to refund the entire amount lying with him. The opposite party No. 1 to also by yet another letter dated 10.7.89 addressed to the Petitioner No. 1 again requested for refund of the aforesaid amount. A detail statement of the account was also enclosed with the said letter. The Development Commissioner Cement Industries, Government of India, New Delhi by a Circular dated 3.4.89 directed the Petitioner No. 1 to return the entire balance amount by 15.4.89. In spite of repeated request by the opposite party No. 1 and the directions given by the officials of the Government of India the Petitioners failed to refund the amount. According to the opposite party, the Petitioner No. 1 retained the said amount dishonestly and fraudulently am) misappropriated it and converted to its own use in its business.
Having failed to receive the amount the opposite party No. 1 also filed and application u/s 12-A of the Monopoly and Restrictive Trade Practice act against the Petitioner No. 1 before Commissioner of Monopoly and Restrictive Trade Practice, New Delhi. The second Petitioner filed an affidavit on 9.4.90 on behalf of the first Petitioner before the Commissioner totally denying any liability to pay any amount to the complainant. The Petitioners were fully aware that the statements made in the affidavit were false. According to the opposite party this itself was sufficient to indicate that the Petitioners had no intention to return the money.
Situated thus, the Petitioner filed the above complaint before the Chief Judicial Magistrate. The Chief Judicial Magistrate registered the case took cognizance of offence and issued process. Therefore, the Petitioners accused in the said case have approached this Court for quashing the criminal proceeding. According to the Petitioners, the allegation made in the complaint even if in face value accepted to be true would not disclose any offence under Sections 403/406 I.P.C. or under any provision of law. The Petitioners have further stated mat the Petitioner No. 1 had been supplying cement to the opposite party No. 1 from time to time. They further stated that on taking into proper account it would appear that no amount was due to the opposite party. Besides, they stated that the dispute was purely of civil nature and the Petitioners were willing to pay any amount if due by them after taking into proper account. Hence, this petition.
I heard both side Mr. J.M. Choudhury, learned Counsel for the Petitioners strenuously argued that the complaint petition Annexure-1 does not disclose any offence against the Petitioner. There was no case u/s 403/406 I.P.C. inasmuch as there was no entrustment. Mr. Choudhury further submitted that there was no entrustment of the money inasmuch as it was not intended by the parties that the money handed over to the Petitioners by the opposite party No. 1 could not be utilised by the Petitioners for any other purpose. Only obligation of the Petitioners was to hand over levy cement as and when it would be made available to the Petitioners. Thus, one of the essential ingrethents of Section 405 I.P.C. that the ownership of the money continued to remain with the opposite party even after handing it over to the Petitioners was absent. Mr. Choudhury also submitted that mere transactions of sale would not amount to entrustment. In the instant case, essential requirement of "entrustment" being wholly absent, the institution of criminal proceeding is nothing but an abuse of the process of Court. The opposite party had filed this case just to compel the Petitioners to yield to the unreasonable demand. The criminal proceeding was instituted with the sole object to harass. The Court, therefore, in exercise of inherent power should quash the proceeding.
Mr. P.G Baruah learned Counsel appearing for the opposite party on the other hand, stated that the facts and circumstances of the complaint petition if read together, the ingrethence of "entrustment" is patent and the complaint petition clearly discloses that there was an arrangement to supply levy cement and for that purpose an amount of Rs. 1,32,74,752.32 P. was entrusted to the opposite party out of which only cement worth Rs. 77,15,191.47 P. was supplied leaving a balance of Rs 55,59,260.85 P. and this amount was retained without any reasonable ground. Therefore, the intention of the Petitioner is very clear.
On the basis of the rival contention of the Petitioners it is to be seen whether it is a fit case to quash the criminal proceeding. The inherent power of the High Court has been recognised u/s 482 Code of Criminal Procedure.
Section 482 Code of Criminal Procedure provides thus:
Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise, to secure the ends of justice.
This is a wholesome power. In exercise of this power, High Court may quash a proceeding if High Court comes to the conclusion that allowing a proceeding to continue would be an abuse of the process of the Court or that the ends or justice require that the proceeding ought to be quashed. The saving of the High Court''s inherent power is designed to achieve a salutory public purpose i.e. a Court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of prosecution rests and the like would justify the High Court in quashing proceedings in the interest of justice. The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the legislature See State of Karnataka Vs. L. Muniswamy and Others, Therefore, if it appears to the Court that a criminal prosecution has been initiated by a party just to harass the accused or to get some relief which may not be possible without taking recourse to the criminal Court the High Court should not hesitate to quash a proceeding. However, the inherent powers of the Court does not confer unrestricted arbitrary jurisdiction of the high Court. This power has to be exercised sparingly with circumspection and in the rarest of the rare case as held by the Supreme Court in Kurukshetra University and Another Vs. State of Haryana and Another,
Keeping in mind of the above position of law as laid down by the Apex Court, it is to be considered whether the inherent power of this Court should be exercised for quashing the criminal proceeding as claimed by the counsel for the Petitioner, The opposite party-complainants have filed the criminal case on the ground of breach of trust. Section 405 deals with the criminal breach of trust. It is a specis of criminal misappropriation as envisaged u/s 403 namely dishonest misappropriation by a person entrusted with property or with domain of over the property. The essential requirements of this Section are that the accused must have been entrusted with property or domain over the property and that he must have misappropriated or converted mat property to his own use or dispose of that property in violation of a legal contract "expressed or implied" which he made touching the discharge of such trust or wilfully suffered another person so to do. The misappropriation or user or disposer must be with a dishonest intention. There may be civil or criminal liability in respect of breach of trust. Every breach of trust is not criminal. Such breach may be intentional without being dishonest or it may appear to be dishonest without really being so. The word "trust" used in the section has got comprehensive meaning. This expression has been used in this section covering not only the relationship of trustee o� beneficiary but also that of bailor or bailee, master and servant, pledgor or pledgee, guardian and ward and all other ''relations where a feduciary relationship has been created between the complainant and the accused. The word "entrustment" embraces all cases in which goods are entrusted for a specific purpose. In Som Nath Puri Vs. The State of Rajasthan, the Supreme Court observed thus:
The expression entrusted in Section 409 is used in a wide sense and includes all cases in which property is voluntarily handed over for a specific purpose and is dishonestly disposed of contrary to the terms on which possession has been handed over.
It may be that a person to whom the property is handed over may be an agent of the person to whom it is entrusted or to whom it may belong, in which case if the agent who comes into possession of it on behalf his principal, fraudulently misappropriates the property, he is none the less guilty of criminal breach of trust because as an agent he is entrusted with it. A person authorised to collect moneys on behalf on another is entrusted with the money when the amounts are paid to him and though the person paying may no longer have any proprietary interest none the less the person on whose behalf it was collected becomes the owner as soon as the amount is handed over to the person so authorised to collect on his behalf.
In The State of Gujarat Vs. Jaswantlal Nathalal, the Supreme Court observed that the term "trusted and entrusted" found in Section 405 I.P.C. governs not only the words "with the property" immediately following it but also the words "or with any domain over the property" occuring thereafter. Before there can be any entrustment there must be a trust meaning thereby an obligation annexed to the ownership of the property and a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit o� another or of another and the owner. But that does not mean that such entrustment need conform to all the technicalities of the trust. The expression "entrustment" carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner, Further the person handing over the property must have confidence in the confidence in the taking the property so as to create a fiduciary relationship between them. The word "property" used in the section has got a much wider sense as held in R.K. Dalmia Vs. Delhi Administration, In view of the above a money handed over by a person to another person to carry out a specific work also be an entrustment of money. A cheque choose in action and actionable claim are all properties within the meaning of the said section.
In the instant case, the averments made in the complaint petition show that money was handed over by the opposite party to the Petitioners to supply levy cement. With the abolition of the control on cement the system of supply of levy cement was abolished. Therefore the money given by the opposite party No. 1 to the Petitioner No. 1 for the purpose cannot be fulfilled. It was the duty of the Petitioners to refund the money as requested by the opposite party as well as the Government of India. In spite of that the money was not refunded. In view of the above, it cannot be said that the averments made in the complaint petition even if it is taken to be true, do not make out a case of criminal breach of trust or misappropriation or simple misappropriation. This is dependant upon the intention of the parties. The Petitioner that mere was outstanding balances as per the account and if the accounts are taken into consideration the Petitioners would not be liable to pay.
All these matters require full dress trial. It can be ascertained only after recording evidence of the witnesses for the complainant and the Petitioners.
In view of the above, I do not find any ground to, quash the petition. Accordingly, the petition is dismissed with costs of Rs. 1,000/- to be paid of the opposite party.
The Magistrate shall take up the matter for hearing and after giving due notice. The Magistrate shall make endeavour to complete the trial as early as possible at any rate within one year from the date of receipt of this order. The Petitioners shall pay cost of Rs. 1,000/- to the opposite party on the first date of appearance before the trial Court.