IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.37087 of 2008 1. AMAL KUMAR CHOUDHARY, SON OF LATE CHANDRA BHUSAN CHOUDHARY, MANAGING DIRECTOR M/S PRACHI EXIM INDIA LIMITED. 2. SANJEEV KUMAR, SON OF MAHENDRA NARAYAN KUMAR, DIRECTOR, M/S PRACHI EXIM INDIA LIMITED. REGISTERED OFFICE AT GOURIPUR, P.O. GOURIPUR, P.D. BIHPUR, DISTRICT BHAGALPUR (BIHAR). ----- PETITIONERS Versus 1. THE STATE OF BIHAR 2. RAKESH KUMAR, SON OF SRI RAMAUTAR PRASAD GUPTA, PROPRIETOR OF MAA AMBAY ENTERPRISES, RESIDENT OF COURT AREA HORILGANJ, P.O.,P.S. & DISTRICT JEHANABAD. ----- OPPOSITE PARTIES ----------- 4 29.10.2009 Heard learned Counsel for the petitioners and the counsel appearing on behalf of the State. This quashing application has been filed for quashing the order dated 20.11.2007 by which the Court has refused to discharge the petitioners under Sections 406 and 420 of the Indian Penal Code and Section 138 of the Negotiable Instrument Act. Learned counsel for the petitioners does not challenge the charge framed against them under Section 138 of the Negotiable Instrument Act. However, he challenges the order of the Court as far as it rejects the stand of the petitioners that they should be discharged for offences under Sections 420 and 406 of the Indian Penal Code. The main argument advanced in this case is that no offences is made out under Section 420 and 406 of the Indian Penal Code. It is said that the petitioners and the opposite party no. 2 entered into a contract by signing an agreement under which the petitioners’ company had taken 1,50,000/- as security money in lieu of supplying the goods to the petitioner. It is also agreed that the petitioners’ company would pay the rental amount to the opposite party no. 2. For this purpose the petitioner’s company issued two cheques of Rs. 3,500/- and Rs. 5,000/- however, these cheques bounced as there was no money in the account of the petitioners. Thereafter the opposite party no. 2 noticed that the petitioners’ company was not acting fairly in accordance with the terms and conditions and decided not to continue with the deal. The opposite party no. 2 demanded that the security money paid by him should be returned to the opposite party. Accordingly the petitioners’ company issued cheque nos. 236827 & 236828 dated 9.8.2004 for Rs. 75,000/- each which bounced. The opposite party no. 2 sent him a legal notice which the petitioners’ company did not reply and thereafter he has filed this case alleging that the petitioners have committed criminal breach of trust, and have cheated the opposite party and are liable to punished under Section 138 of the Negotiable Instrument Act and Sections 420 and 406 of the Indian Penal Code. Learned counsel for the petitioners relies on certain decisions to show that Sections 420 and 406 would not be attracted in a case of this nature. Learned counsel for the petitioners has relied on certain documents to substantiate his claim that no offences are made out under Sections 420 and 406 of the Indian Penal Code. It has been submitted that annexures-2, 2/1 and 2/2 show that petitioners’ company had supplied certain goods to the opposite party which were not returned to him. These documents were produced at the time of filing the bail application in the Court below. Learned counsel for the opposite party submits that these documents are forged and fabricated and points out that annexure-2/1 bears the original signature of the petitioners which can be compared with the Vakalatnama. It is submitted that the signature seal of the opposite party does not tally with annexure-2 and 2/2 and as such it is submitted that these documents are forged and have been wrongly produced for the purposes of grant of bail to the opposite party. The comment on this aspect of the matter is that the Court below in sessin of the matter can always conduct the enquiry and pass appropriate orders in the case if it finds that the signatures are forged. The petitioners next relies on a letter dated 9.8.2004 contained in annexure-4. This letter was addressed to the Assistant General Manager, State Bank of India, Bhagalpur Branch. It has been submitted in the letter that the bank is advised not to make payment to the opposite party. It is further stated in the letter “He promised that he will send us settlement letter and stock statement by 15th of July, 2004, but till date he has not submitted the captioned letter & stock statement. Under the circumstances we have no optioned other than to stop the payment of cheques.” In the complaint petition it has been stated categorically that the cheques have been dishonored and this letter dated 9.8.2004 has been produced at the belated stage. This Court will also like to refer to another letter issued on behalf of the petitioners’ company which is contained in annexure-7. It is a legal notice issued to the opposite party dated 14.10.2004. The legal notice has been issued after the institution of the case, it is mentioned “that the petitioners will lodge a case against the opposite party no. 2 committing forgery and cheat if he does not return the goods and materials sent to him by the petitioners company.” It has been argued that there was no occasion for the petitioners’ company to issue cheques on 9.8.2004 and at the same time issue a letter on the same date i.e. on 9.8.2004 to the Bank in question ‘stopping payment’ to the opposite party no. 2. This act of the petitioner shows their intention was not to pay to the dues to the opposite party no. 2. It has also been argued that the complaint case prima facie shows that from the very beginning the company did not have the intention to make payments to the petitioners as even the cheques which were of small amounts for payment of the rent amount bounced, although it is admitted that no separate case has been instituted for bouncing of those cheques. This fact has only been highlighted in the complaint petition to show that the intention of the petitioners, who was not interested in fulfilling their part of the agreement and as such had an intention to cheat the opposite party. Learned counsel for the petitioners further submits that no offence under Section 405 is made out against the petitioners’ company as the complaint petition does not disclose that any property was entrusted to the petitioners’ company and that the petitioners’ company dishonestly misappropriated the money or converted to his own in order to cause loss to the opposite party. As far as the charge under Section 405 is concerned this Court finds that in fact the complaint petition does not disclose any offence that would indicate that the petitioners had committed a criminal breach of trust considering that the ingredients which constitute the offence of criminal breach of trust. 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 willfully suffers any other person so to do, commits “criminal breach of trust”. I, therefore, find that the petitioners are not liable to be tried under Section 406 of the Indian Penal Code. As far as Section 420 of the Indian Penal Code is concerned, the documents, the conduct and the contents of the complaint petition show that a prima facie offences are made out under Section 415 of the Indian Penal Code i.e. cheating. By the documents annexed by the petitioners, it is apparent that the petitioners had no intention to make such payment and that there was no occasion for the petitioner to issue a cheque and at the same time stop payment. Learned counsel has referred to certain judgments to substantiate his case. I find that the facts in the judgments referred to do not tally with the facts of this case. In any event, I am referring to the judgments cited before this Court which are Raghunath Prasad Srivastava & Ors. Vs. The State of Bihar & Anr. reported in 2004 (3) PLJR 144, Ashok Kumar Lakhaiyar & Anr. Vs. The State of Bihar & Anr. reported in 2005 (2) PLJR 607 and Vir Prakash Sharma Vs. Anil Kumar Agarwal & Anr., reported in (2007) 7 SCC 373. In the former two cases the High Court at Patna has held that where there is a contractual relationship between the parties and the complaint petition did not disclose any offence under Sections 471 or 419, 420 or 406 cognizance could not be taken in this case even though in the aforesaid transaction the cheques had been dishonoured. Similarly the Apex Court has also held that where the ingredients of Sections 406 and 420 are not made out then it cannot be said in a contractual relationship that offences under Sections 420 and 406 are made out in a case of this nature. In the present case as discussed above however, prima facie it appears that the conduct of the petitioners’ company from the very beginning i.e. from 11.2.2004 and onwards was not to make payment to the opposite party no. 2 as per the contract and as such it cannot be said that no offence is made out under Section 420 of the Indian Penal Code. In the result this application is partly allowed to the extent mentioned aforesaid. It is open for the petitioners to substantiate their case during the trial that no offence under Section 420 of the Indian Penal Code is made out in this case. Sanjay/A.F.R. ( Sheema Ali Khan, j.)