Asoke Basak Vs. State
of Maharashtra & Ors. [2010] INSC 832 (8 October 2010)
Judgment
IN THE SUPREME COURT
OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 1980 OF 2010
(Arising out of S.L.P. (Crl.) No. 7338 of 2007) ASOKE BASAK -- APPELLANT (S)
VERSUS
D.K. JAIN, J.:
1.
Leave
granted.
2.
This
appeal, by special leave, arises out of the judgment and order dated 9th
October 2007, delivered by the High Court of Bombay in Criminal Application No.
2854 of 2004 in a petition filed by the appellant and one Mr. Krishna Rao,
proforma respondent No.5 herein, under Section 482 of the Code of Criminal
Procedure, 1973 (in short "the Code"). The High Court has, by the
impugned judgment, declined to quash a criminal complaint filed by respondents
No.2 to 4 in this appeal against the appellant and 1 others for offences under
Sections 405 and 409 read with Section 34 of the Indian Penal Code, 1860 (for
short "the IPC").
3.
Briefly
stated, the facts, necessary for disposal of the present appeal, may be stated
thus:
The appellant was the
Chairman of the Maharashtra State Electricity Board (for short
"MSEB"). Respondent No.2 - M/s Datar Switchgear Ltd. is a company
which had entered into various contracts with MSEB for installation of Low
Tension Load Management System. Respondents No.3 and 4 are the senior officials
of respondent No.2; respondent No.1 is the State of Maharashtra and the
aforestated respondent No.5 is one of the co-accused.
4.
On
2nd March, 2001 respondent No.2 deposited an amount of `5 lakhs with MSEB as
security deposit in lieu of bank guarantee to be used for tenders to be filed
by respondent No.2 from time to time in the future. The conditions of tender
and supply provided that:
"This security
deposit in cash or in the form of bank guarantee or otherwise is for the due
performance of the material/contract and the same shall be liable to apportion
towards amount due or becoming due by the supplier on his failure to execute
this order or any other contract and in the event of non fulfilment of the
terms and conditions of the contract."
Certain disputes
arose between MSEB and respondent No. 2. On 16th September 2003, respondent No.
2 informed MSEB that they were no longer interested in participating in any
tenders which may be 2 floated by MSEB and sought immediate refund of the said
amount of `5 lakhs.
5.
The
Chief Engineer (Distribution), MSEB vide his letter dated 6th March 2004,
informed respondent No.2 that the deposit of `5 lakhs had been adjusted by MSEB
against the dues payable by respondent No.2 to MSEB.
6.
On
receipt of the said communication, on 29th June 2004, respondents No.2 to 4
filed Complaint No.1881 of 2004 before the Court of the Judicial Magistrate,
First Class, Pune against the appellant and other senior officials of the MSEB
under Sections 405 and 409 read with Section 34 of the IPC. The Judicial
Magistrate, First Class, Pune took cognizance and issued summons against all
the accused named in the complaint.
7.
Being
aggrieved by the order of the Magistrate taking cognizance of the complaint,
appellant preferred the afore-stated petition under Section 482 of the Code
before the High Court of Bombay for quashing of the complaint.
8.
As
stated above, the High Court, by the impugned judgment has dismissed the said
petition. The High Court has inter alia8 observed that a prima facie case has
been made out against the accused; the defence of the accused would be examined
on merits at the time of trial; the availability of a civil remedy does not 3
preclude a criminal law remedy and this alone cannot be a ground for quashing
the complaint and it was not incumbent on the complainant to plead the role of
each and every accused as due to the principle of vicarious liability under
Section 34 of the IPC, if two or more than two persons intentionally do a thing
jointly, it's the same if each of them had done it individually, since common
intention presupposes prior concert. Hence, the present appeal.
9.
Mr.
Nagendra Rai, learned senior counsel appearing for the appellant assailed the
decision of the High Court in not exercising its jurisdiction under Section 482
of the Code as fallacious on the ground that the complaint, assuming to be
correct in its entirety, does not disclose the commission of an offence under
Section 409 IPC by the appellant. According to the learned counsel, the subject
matter of the complaint is purely civil in nature and the complaint amounts to
an abuse of the process of court. In support of his assertion that in this type
of cases the courts should be loathe to take cognizance, in the brief written
submissions filed on behalf of the appellant, reliance is placed on the
decisions of this Court in Inder Mohan 1 (2007) 12 SCC 1 2 (2008) 4 SCC 541 3
(2008) 8 SCC 77 4 of `5 lakhs by MSEB could not amount to criminal breach of
trust as under the terms of the contract, the MSEB could adjust the said amount
against their claims, which were under various stages of adjudication. State of
Uttar Pradesh & Ors.6, learned counsel contended that the summoning order
issued by the Magistrate is ex-facie illegal and vexatious in as much as even
as per the allegations in the complaint, the said amount was entrusted/bailed
out to MSEB, which has not been made an accused and no role in this behalf has
been assigned to the appellant.
10.
It
was asserted that in the entire complaint there is not even a whisper that the
adjustment in question was in furtherance of a pre-planned action by MSEB and
its functionaries, including the appellant, so as to attract Section 34 IPC. It
was thus, pleaded that the Magistrate in taking cognizance of the complaint had
failed to take into consideration all these relevant factors and, therefore,
the summoning order is liable to be set aside.
11.
Per
contra, Mr. Ranjit Kumar, learned senior counsel appearing for respondents No.2
to 4 urged that since the deposit was in the 4 (2008) 11 SCC 670 5 (2000) 2 SCC
636 6 (2008) 5 SCC 662 5 nature of an interest free security, solely for the
purpose of ensuring that contracts would be duly entered into if the tenders
were awarded by MSEB to the respondents, it was in the nature of an entrust. In
support, reliance was placed on the decision of Tankha & Anr.7, wherein it
was held that the fact that the security deposit did not attract interest,
would lead to the inference that the deposit was an entrustment. It was further
contended that the entrustment with MSEB enjoins the role of a trustee on the
natural persons who controlled the MSEB at the material time, and therefore in
light of the decision of this fallacious to contend that the accused did not
have dominion over the subject deposit. It was also contended that the remedies
under the criminal law and civil law are not mutually exclusive but
co-extensive; they differ in their content, scope and consequence and,
therefore, even when a civil remedy is available, a criminal prosecution is not
barred.
12.
Relying
heavily on a three-Judge bench decision of this Court in overt act is needed on
the part of the accused to attract Section 34 IPC, if he shares the common
intention with others in respect 7 AIR 1967 SC 1162 8 AIR 1956 SC 575 9 (2001)
3 SCC 673 6 of the ultimate criminal act, learned counsel contended that in the
instant case, the complaint clearly spells out the role of the appellant and,
therefore, Section 34 IPC, which recognizes the principle of vicarious
liability, is clearly attracted. Commending us to the decision of this Court in
Shiva Nath Prasad case under Section 409, the question of entrustment has to be
examined on the strength of the evidence led by the complainant and, therefore,
at this stage, it is pre-mature to return a finding on the applicability of the
said provision or to hold that the case is of a civil nature.
13.
Learned
counsel also argued that while taking cognizance of a criminal offence and
issuing process against the accused, the court is not required to pass a
reasoned order, as pleaded by learned counsel for the appellant. In support,
reliance was placed on the decisions of this Court in Kanti Bhadra Shah &
Anr. Meakins Ltd. & Ors.12 and Dy. Chief Controller of Imports & 10
(2006) 2 SCC 757 11 (2000) 1 SCC 722 12 (2000) 3 SCC 745 13 (2003) 4 SCC 139 14
(1978) 4 SCC 58 15 (1973) 3 SCC 753 7 counsel for the respondents strenuously
urged that at the stage of issuance of summons the Magistrate has to satisfy
himself that there was sufficient material to merely proceed, and not to
sustain a conviction. According to the learned counsel, there was sufficient
material before the Magistrate on the basis whereof he took cognizance of the
complaint. Learned counsel also invited our attention to the notice dated 22nd
March 2004, issued by respondent No.2 to the functionaries of MSEB, including
the appellant, repudiating their stand that the adjustment of `5 lacks was in
terms of the chamber summons dated 29th October 2002, in support of his
submission that the conduct of the officials of MSEB was contumacious. It was
thus, contended that the High Court was justified in not exercising its
jurisdiction under Section 482 of the Code, particularly when only summons had
been issued to the appellant to appear in court.
14.
Before
examining the merits of the rival submissions, it would be appropriate to
briefly notice the scope and ambit of the jurisdiction of the High Court under
Section 482 of the Code. It needs little emphasis that although the
jurisdiction of the High Court under the said provision is very wide but it is
not unbridled. The High Court is required to exercise its inherent powers under
Section 482 of the Code sparingly, carefully and cautiously, ex debito
justitiae to do real and substantial justice and to prevent abuse of the process
of court. One of the 8 situations' when the High Court would be justified in
invoking its powers is where the allegations in the first information report or
the complaint, as the case may be, taken at their face value and accepted in
their entirety do not constitute the offence alleged.
15.
In
G. Sagar Suri `s case (supra), this Court had observed thus:
"Jurisdiction
under Section 482 of the Code has to be exercised with great care. In exercise
of its jurisdiction the High Court is not to examine the matter superficially.
It is to be seen if a matter, which is essentially of a civil nature, has been
given a cloak of criminal offence. Criminal proceedings are not a short cut of
other remedies available in law. Before issuing process a criminal court has to
exercise a great deal of caution. For the accused it is a serious matter. This
Court has laid certain principles on the basis of which the High Court is to
exercise its jurisdiction under Section 482 of the Code. Jurisdiction under
this section has to be exercised to prevent abuse of the process of any court
or otherwise to secure the ends of justice."
16.
Bearing
in mind the aforestated legal position in regard to the width of power of the
High Court under Section 482 of the Code, we shall now advert to the facts at
hand. For the sake of ready reference, we may extract the relevant portions of
the complaint containing allegations against the appellant. These are: 16 AIR
1960 SC 866 17 (1995) 6 SCC 194 9 "7. On or about March 2001 an amount of
`5 Lacs was caused to be deposited by the Company as Security Deposit in view
of Bank Guarantee to be used for tenders to be filed by the Company with the
MSEB from time to time in the future. The payment was made on behalf of the
Complainant No. 1 by the Bank of Maharashtra having its registered office at
Lokmangal, Shivaji Nagar, Pune. The said amount of `5 Lacs was therefore in the
dominion of the Accused. The amount was entrusted/bailed to the MSEB by the
Complainant and came under the dominion of the Accused and was to be used as
security for future contracts only, if any, and was to be refunded if the
Complainant Company so desired, at any time. The amount was not to be used for
any other purpose whatsoever. Vide letter dated 9.7.2002, the MSEB acknowledged
receipt of `5 Lacs from the Complainant Company.
8. Vide letter dated
16.9.2003 the Company informed the MSEB that it no longer desired (sic) to
participate in any tenders floated by the MSEB and sought immediate refund of
the amount of `5 Lacs. On 16.9.2003, the Complainant informed the MSEB that it
had not participated in any tenders under the said Security Deposit of `5 Lacs.
It was expected and legally necessary that the MSEB forthwith refund the said
amount to the Complainant as there were no tenders pending filed by the
Complainant Company on the date of seeking refund.
9. The Complainants
were shocked and surprised that the Accused (who had dominion over the amount
of `5 Lacs) started giving false excuses and pretences to avoid refund of the
entrusted/bailed amount. The whole approach of the accused was to stifle the
refund of the amount dishonestly and deprive the Complainant Company the use of
its own money. The response of the Accused and/or on their behalf is of bogus
and dodging with an intention to drive away the Complainant and avoid refund
anyhow.... .... .... .... .... .... .... .... .... .... .... .... .... ....
.... .... .... ....
11. The Accused have
therefore dishonestly and wilfully with common criminal intent suffered the
MSEB to refuse refund of `5 Lacs contrary to the provisions of law and deprived
wilfully and dishonestly the Complainant Company the use of its money and
committed the offence of criminal breach of 1 Trust in terms (sic) of Sec. 405
r/w Sec. 409 r/w Sec. 34 of the Indian Penal Code......"
17.
It
is manifest from a bare reading of the afore-extracted paragraphs that the
gravamen of the complaint against the appellant is that the said amount of `5
lakhs was in the dominion of the accused, which was entrusted to MSEB for a
specific purpose and, therefore, by adjusting the said amount for some other
purpose, the accused dishonestly and wilfully, with common intention, deprived
the complainant the use of the money and committed offence of breach of trust
in terms of Section 405 read with Section 409 IPC.
18.
Section
405, IPC defines "criminal breach of trust" to mean:
"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 of 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".
Explanation 1.--A
person, being an employer of an establishment whether exempted under section 17
of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of
1952), or not who deducts the employee's contribution from the wages payable to
the employee for credit to a Provident Fund or Family Pension Fund established
by any law for the time being in force, shall be deemed to have been entrusted
with the amount of the contribution so deducted by him and if he makes default
in the payment of such contribution to the said Fund in 1 violation of the
said law, shall be deemed to have dishonestly used the amount of the said
contribution in violation of a direction of law as aforesaid.
Explanation 2.--A
person, being an employer, who deducts the employees' contribution from the
wages payable to the employee for credit to the Employees' State Insurance Fund
held and administered by the Employees' State Insurance Corporation established
under the Employees' State Insurance Act, 1948 (34 of 1948), shall be deemed to
have been entrusted with the amount of the contribution so deducted by him and
if he makes default in the payment of such contribution to the said Fund in
violation of the said Act, shall be deemed to have dishonestly used the amount
of the said contribution in violation of a direction of law as aforesaid."
19.
It
is plain that for constituting an offence of criminal breach of trust, the
following ingredients must be satisfied:
"(a) a person
should have been entrusted with property, or entrusted with dominion over
property; (b) that person 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; (c) 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 person has made, touching the discharge of such
Investigation22.) 18 (2006) 6 SCC 736 19 (2008) 2 SCC 561 20 (1985) 2 SCC 370
21 (1997) 2 SCC 397 22 (2009) 11 SCC 737 1
20.
In
the instant case, we are unable to gather from the complaint any averment which
may suggest that `5 lakhs was entrusted to the appellant, either in his
personal capacity or as the Chairman of MSEB and that he misappropriated it for
his own use. The basis of the allegation is that the appellant had caused the
MSEB to refuse return of the money to the complainant in order to wilfully and
dishonestly deprive the complainant of its use. In this regard, it would be
useful to refer to the following observations in S.K. Alagh's case (supra):
"As, admittedly,
drafts were drawn in the name of the Company, even if the appellant was its
Managing Director, he cannot be said to have committed an offence under Section
406 of the Penal Code. If and when a statute contemplates creation of such a
legal fiction, it provides specifically therefor. In absence of any provision
laid down under the statute, a Director of a Company or an employee cannot be
held to be vicariously liable for any offence committed by the Company
itself."
21.
Admittedly,
in the present case, the said amount was deposited by the complainant company
with MSEB and there is nothing in the complaint which may even remotely suggest
that the complainant had entrusted any property to the appellant or that the
appellant had dominion over the said money of the complainant, which was dishonestly
converted by him to his own use, so as to satisfy the ingredients of Section
405 of the 1 IPC. In the absence of any such specific averment demonstrating
the role of the accused in the commission of the offence, we find it difficult
to hold that the complaint, even ex-facie, discloses the commission of an
offence by the appellant under Section 409 IPC, punishable under Section 406
IPC.
22.
We
shall now examine whether the appellant is vicariously liable for the
afore-mentioned offence with the aid of Section 34 of the IPC. The essence of
liability under Section 34 IPC is the existence of a common intention. A common
intention implies pre-arranged plan and acting in concert pursuant to the
pre-arranged plan. In Ramaswami observed that the essence of Section 34 IPC is
simultaneous consensus of the minds of persons participating in the criminal
action to bring about a particular result. It is true that to attract Section
34, no overt act is needed on the part of the accused if he shares the common intention
with others in respect of the ultimate criminal act, which may be done by any
one of the accused sharing such intention. Nonetheless, Section 34 IPC clearly
envisages pre-concert or pre-planning, which may even develop at the spur of
the moment but such plan must precede the act constituting the offence. It is
equally true that it may not be possible in every case to have direct evidence
of a common intention and it may have to be inferred from the facts and
circumstances of each case.
observed thus:
"Common
intention" implies prearranged plan and acting in concert pursuant to the
prearranged plan. Under this section a preconcert in the sense of a distinct
previous plan is not necessary to be proved. The common intention to bring
about a particular result may well develop on the spot as between a number of
persons, with reference to the facts of the case and circumstances of the
situation. Though common intention may develop on the spot, it must, however,
be anterior in point of time to the commission of offence showing a prearranged
plan and prior concert."
23.
(1976)
3 SCC 779 24 (2004) 13 SCC 203 1
24.
Thus,
in order to attract Section 34 of the IPC, the complaint in question must,
prima facie, reflect a common prior concert or planning amongst the appellant
and other accused. Having carefully gone through the complaint, we are of the
view that it does not reveal any pre-concert or pre-planning whereby all the
accused had decided to misappropriate the said amount. It is pertinent to note
that MSEB, in whose coffers the said amount was credited, has not been
arraigned as an accused in the complaint. Be that as it may, having come to the
conclusion that the ingredients of Section 409 IPC are not satisfied against
the appellant, the question of his acting in concert with others does not
arise. We are, therefore, convinced that Section 34 IPC is not attracted
against the appellant.
25.
In
light of the above-noted conclusions, we are of the opinion that no prima facie
case has been made out against the appellant in respect of offence under
Section 409 read with Section 405, even with the aid of Section 34 of the IPC.
Therefore, it was a fit case where the High Court should have exercised its
powers under Section 482 of the Code by quashing the complaint against the
appellant.
26.
Resultantly,
the appeal is allowed; the impugned order in relation to Criminal Application
No.2854 of 2004 is set aside 1 and the order of the Magistrate taking
cognizance against the appellant in Complaint No.1881 of 2004 is quashed.
...........................................J.
(D.K. JAIN)
............................................J.
(H.L. DATTU)
NEW
DELHI;
OCTOBER
8, 2010
ITEM NO. 1-C COURT
No. 5 SECTION IIA ( For Judgment ) 1 S U P R E M E C O U R T O F I N D I A RECORD
OF PROCEEDINGS CRIMINAL APPEAL NO. 1980 OF 2010 @ SLP(Crl.) NO. 7338 OF 2007
Asoke Basak .. Appellant(s) Versus State of Maharasthra & Ors. ..
Respondent(s) DATE : 08/10/2010 This matter was called on for pronouncement of
judgment today. For Appellant(s) Mr. Abhishek Mitra, Adv. Mr. chandra Prakash,
Adv. Mr. vikrant, Adv. Mr. Ravi Prakash, Adv.' Mr. Varun Agarwal, Adv. Mr.Lakshmi
Raman singh, Adv. For Respondent(s) Dr. Jatin Zaveri, Adv. --- Hon'ble Mr.
Justice D.K. Jain pronounced the judgment of the Bench comprising His Lordship
and Hon'ble Mr. Justice H.L. Dattu.
Leave granted, The
appeal is allowed; the impugned order in relation to Criminal application No.
2854 of 2004 is set aside and the order of the Magistrate taking cognizance
against the appellant in Complaint No. 1881 of 2004 is quashed.
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