IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MRS. JUSTICE M.C.HARI RANI WEDNESDAY, THE 18TH MARCH 2009 / 27TH PHALGUNA 1930 Crl.MC.No. 3329 of 2005 ------------------------- CC.511/2004 of JUDL. MAGISTRATE OF FIRST CLASS COURT-I, NEYYATTINKARA .................... PETITIONER: --------------- GAUTHAM CHAND SAMUDRIYA, PROPRIETOR, M/S. VIKASH FINANCE, RAMALAKHAN CHAMBERS, 1ST FLOOR, NO.19/20, GENERAL MUTHIAH MUDILI STREET, SOWCARPET, CHENNAI-600 079. BY ADV. SRI.BECHU KURIAN THOMAS RESPONDENTS: --------------- 1. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. 2. S.D. SURESH KUMAR, THENOOR KAMALAVILASAM, THOZHUKKAL, NAYYATTINKARA P.O., THIRUVANANTHAPURAM DISTRICT. ADV. SRI.K.P.SREEKUMAR FOR R2 SRI.P.M.SATHEESH FOR R2 R1 by PUBLIC PROSECUTOR MR. C.M. KAMMAPPU THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 19/02/2009, THE COURT ON 18/03/2009 PASSED THE FOLLOWING: ORDER ON CRL.M.A. N O. 12389/2005 IN CRL.M.C. NO. 3329/2005 DISMISED. 18-3-2009 SD/-M.C. HARI RANI, JUDGE TRUE COPY P.S. TO JUDGE M.C. HARI RANI, J. ====================== CRL.M.C.NO. 3329 of 2005 ======================= Dated this the 18th day of March 2009 ORDER This petition is filed by the petitioner who is the first accused in C.C.No.511/2004 on the file of the Judicial First Class Magistrate Court-I, Neyyattinkara with the prayer to quash Annexure-A1 complaint and all further proceedings against him by invoking the inherent jurisdiction of this Court under Section 482 of the Code of Criminal Procedure. 2. The facts of the case as narrated in this petition are as follows: The petitioner is a hire purchase company at Chennai. The above C.C.was registered against the petitioner on the basis of the complaint filed by the second respondent alleging offences punishable under Sections 403, 409 read with Section 34 of the Indian Penal Code. Copy of the complaint is produced as Annexure-A1 wherein the following allegations were made. The second respondent/complainant had entered into a hire purchase CRMC.3329/2005 -2- agreement with the petitioner on 24-6-2000 for an amount of Rs.1,75,000/- which was liable to be repaid with interest by 30 instalments of which 20 instalments at the rate of Rs.10,000/- each and the remaining instalments at the rate of Rs.9000/- each. The complainant while executing the hire purchase agreement had handed over three blank signed cheques and signed stamp papers also to the accused as returnable security. The complainant had paid full amount within 13 instalments through the 2nd accused who is the agent of the petitioner but the petitioner did not return the cheque leaves. On the other hand, the petitioner misappropriated the same by filling it up for an amount of Rs.2,75,000/- and presented the same for encashment which was dishonoured and initiated proceedings against the complainant under Section 138 of the Negotiable Instruments Act. The acts of the accused amount to criminal breach of trust misappropriation of the security and violation of the expressed terms and conditions of Hire purchase agreement which amount to offence punishable under Sections 403, 409 read with Section 34 of the Indian Penal Code. On the basis of the complaint filed by the second respondent, cognizance was CRMC.3329/2005 -3- taken by the learned Magistrate and issued process to the petitioner and another in the above case. It is alleged in this petition that no offence as alleged is made out against the petitioner and Annexure-A1 is liable to be quashed. 3. Heard Sri. Bechu Kurian Thomas, learned counsel appearing for the petitioner and Sri.K.P.Sreekumar, learned counsel appearing for the second respondent. Heard the learned Public Prosecutor also. 4.Sri.Bechu Kurian Thomas submitted that C.C.No.511/2004 is pending before the Court of J.F.C.M-I, Neyyattinkara which was taken cognizance by the learned Magistrate on the basis of Annexure-A1 complaint filed by the second respondent alleging offences under Sections 403,409 read with Section 34 of I.P.C. He argued that there are no sufficient ingredients to proceed against the petitioner for the abovesaid offences. It is argued that there has not been any entrustment in the sense in which the term has been used in Section 405 of the Code and even according to the complainant, the accused received the cheque under a hire purchase agreement whereby the accused was entitled to keep possession of the same and no entrustment of CRMC.3329/2005 -4- the property is there, to attract the provisions of the section. It is further argued that when a signed cheque has been handed over voluntarily as contended by the second respondent, the offence of Section 403 will not be attracted. Further, Section 20 of the Negotiable Instruments Act comes into play and even if a blank cheque is issued, signed by the maker, the person to whom it is handed over is by law entitled to fill up the same and no offence as alleged is made out against the petitioner in Annexure-A1 complaint. 5. Sri. K.P.Sreekumar, learned counsel for the complainant submitted that the case of the complainant is that the cheque was handed over for use by the accused in terms of the contract on specific understanding that on the expiry of the period it would be returned to the complainant. Thus there is an element of trust implied in the transaction. Therefore, the contention of the counsel for the petitioner that no question of trust or entrustment in the sense in which that term is used in Section 405 of I.P.C. arises in the present case does not appear to be correct. It is also pointed out that the accused not only retained possession, but dishonestly misappropriated the cheque CRMC.3329/2005 -5- by filling it up which was entrusted to him by the complainant, by way of security and the dishonest intention of the accused can be inferred. 6. It is revealed from Annexure-A1 complaint filed on 3-2-2004 that the allegation against the petitioner as first accused and against the second accused as the agent of the first accused are for the offences punishable under Sections 403,409 read with Section 34 of I.P.C. The learned Magistrate took cognizance of the same as C.C.No.511/2004 after conducting enquiry under Section 202 of Cr.P.C. The sworn statement of the complainant was recorded and two witnesses were already examined. The Magistrate has also recorded that he was satisfied that prima facie case is made out to proceed against the petitioner and the second accused for the offences under Sections 403 and 406 read with Section 34 of I.P.C. Hence, the complaint was taken on file as C.C.No.511/2004 and issued summons to accused 1 and 2 to appear on 3-11-2004. 7. The petitioner/first accused in the above case is a hire purchase company and the second respondent is the complainant in the above case. It is the admitted case that the second CRMC.3329/2005 -6- respondent had entered into a hire purchase agreement with the petitioner on 24-6-2000, a copy of which is produced as Annexure-A2. It is the specific case of the complainant/2nd respondent that he had entered into a hire purchase agreement with the accused for an amount of Rs.1,75,000/- which was liable to be repaid with interest in 30 instalments, a total amount of Rs.2,90,000/- and at the time of executing the hire purchase agreement, the complainant had handed over three blank cheques and signed stamp papers to the accused/petitioner herein. It is further alleged in Annexure-A1 complaint that the complainant had paid the full amount within 13 instalments through the second accused, who is the agent of the petitioner and despite payment the petitioner failed to return the cheque leaves. On the other hand, one of the blank cheque given by the second respondent has been misused and with a dishonest intention to misappropriate amounts converted the blank cheque by filling up the amount and date and presented for encashment. Thus the blank signed cheque given by the second respondent at the time of hire purchase agreement was misappropriated by the petitioner for an amount of Rs.2,75,000/- and presented the CRMC.3329/2005 -7- same for encashment which was dishonoured and initiated proceedings under Section 138 of the Negotiable Instrument Act by the petitioner. Annexure-A3 is produced as true copy of the letter dated 24-6-2000 wherein it was stated that all payments must be made to Chennai office. According to the petitioner, the second respondent continued to pay the instalments amount for 12 months till 2-7-2001 and thereafter failed to pay the remaining instalments. Subsequently, on 11-12-2003 cheque No.3661 for an amount of Rs.2,75,000/- was issued by the second respondent to the petitioner which was dishonoured when presented for encashment. Before presenting the cheque, the petitioner intimated the second respondent to pay the amount due under the hire purchase agreement. Thereafter, a lawyer notice dated 31-12-2003 was issued by the petitioner to the second respondent, which is produced as Annexure-A4. At that juncture, Annexure-A1 complaint was filed by the second respondent alleging offence under Sections 403 and 409 of I.P.C. and the learned magistrate took cognizance of the same against the petitioner as first accused and against the second accused for the offences under Sections 403 and 406 r ead with CRMC.3329/2005 -8- Section 34 of I.P.C. 8. The petitioner/1st accused had received the cheque is a fact which admits no doubt. However, the second respondent has a case that the entrustment of the cheque was not in the manner as alleged by the petitioner. According to the second respondent, the cheque was to be returned to him after payment of the entire amount, but in violation of the condition of entrustment, the petitioner did not return the cheque which was given as security for the due performance of the agreement on 24-6-2000, even after the repayment of the entire amount due under the hire purchase agreement and misappropriated the same dishonestly and committed criminal breach of trust. Thus the case of the second respondent in Annexure-A1 complaint is that the petitioner retained possession of the cheque with dishonest intention to make illegal gain for him, and to cause illegal loss to the complainant who entrusted the cheque to the accused and the accused thereby committed the criminal offence. 9. The criminal breach of trust has been defined in Section 405 of the I.P.C. as follows: “Whoever, being in any manner entrusted with CRMC.3329/2005 -9- 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”. The ingredients of the offence are:- (1)There should be an entrustment by one person to another of the property, or with any dominion over property; (2)such entrustment must be in trust;(3) there must have been a misappropriation or conversion to his own use by the person who received the property in trust; and (4)such conversion or retention of the property must be against or in violation of any direction, or law prescribing the mode in which such trust is to be discharged, or of any legal contract made touching the discharge of such trust. CRMC.3329/2005 -10- Entrustment is an essential element of the offence defined in Section 405 of I.P.C. Entrustment need not be express, it may be implied. 'Entrusted' is not necessarily a term of law. It may have different implications in different contexts. In its most general significance all it imports is a handing over the possession for some purpose which may not imply the conferring any proprietary right at all. The word entrusted used in this section is not a legal term which has a definite precise meaning attached to it. It is an ordinary word, a word, in common use. 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 and there cannot be any breach of trust. The purpose for which the cheque was handed over to the petitioner, whether he has committed any offence as alleged in Annexure-A1 complaint and whether any amount has been paid by the second respondent to the 2nd accused in the instant case as the agent of the petitioner/1st accused so as to discharge the entire liability under the hire purchase agreement etc. are to be decided by the trial court after considering the prosecution evidence and CRMC.3329/2005 -11- also the evidence on the side of the defence if any. 10. In a catena of decisions,the Supreme Court has deprecated the interference by this Court in exercise of its inherent powers under S.482 of the Code in a routine manner, it has been consistently held that the power under S.482 must be exercised sparingly, with circumspection and in rarest of rare cases. Exercise of inherent power under S.482 of the Code of Criminal Procedure is not the rule but it is an exception. The exception is applied only when it brought to the notice of the court that grave miscarriage of justice would be committed if the trial is allowed to proceed where the accused would be harassed unnecessarily if the trial is allowed to linger. In a proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegation set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to this Court to quash the same in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous CRMC.3329/2005 -12- analysis of the case before the trial to find out whether the case would be end in conviction or acquittal. If it appears that on consideration of the allegation in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by this Court. It is the material collected during the investigation and evidence led in court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the proceedings. 11. Of course, no hard and fast rule can be laid down in regard to cases in which this Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. Any way it would not be proper for this Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material CRMC.3329/2005 -13- before it and conclude that the complaint cannot be proceeded. 12. The inherent jurisdiction envisaged under Section 482 of Cr.P.C.can be invoked only where the allegations made in the complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient grounds for proceeding against the accused. In the instant case, there are sufficient materials to proceed against the petitioner, who is the first accused in C.C.No.511/2004, and the learned Magistrate also satisfied that prima facie case is made out to proceed against the petitioner and took cognizance of the same. There are no sufficient grounds to quash Annexure-A1 complaint and further proceedings in C.C.No.511/2004 on the file of the Judicial First Class Magistrate Court-I, Neyyattinkara as prayed for in this petition. In the circumstances, I find that this petition is devoid of merits and is liable to be dismissed. In the result, the Crl.M.C.is dismissed. M.C. HARI RANI JUDGE ks. CRMC.3329/2005 -14-