1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH, NAGPUR. Criminal Application (APL) No. 372/2011 Shriram Govinda Gajbhiye and another V/s. State of Maharashtra through P.S.O. P.S. Chamorshi, Distt. Gadchiroli ----------------------------------------------------------------------------------------------------------------------------------------- Office notes, Office Memoranda of Coram, appearances, Court's orders or directions and Registrar's orders. Court's or Judge's Orders. ----------------------------------------------------------------------------------------------------------------------------------------- Mr. R. M. Daga, Counsel for Applicants Mrs. K. R. Deshpande, APP for Respondent-State Coram: A.P. Bhangale, J Dated : 8th August 2011 1. Heard Mr. R. M. Daga, learned counsel for the applicants and Mrs. K. R. Deshpande, learned APP for Respondent-State. 2. By means of this application under Section 482 of Code of Criminal Procedure, the applicants prayed for to quash and call for record & proceedings of R.C.C. No. 4/2011, pending on the file of Chief Judicial Magistrate, Gadchiroli as against the applicants only. 3. It is the case of the applicants that they are sought to be prosecuted by Chamorshi Police Station on the ground that 2 they have committed an offence punishable under Section 409, 406 read with 34 of Indian Penal Code, arising as a result of Crime No. 151/2008, reported to Chamorshi Police Station, District Gadchirli. It is submitted that the State of Maharashtra had announced a scheme known as “Jal-Swaraj Prakalpa” for providing water to villages and in the said scheme village Waigaon, Dist. Gadchiroli was selected and a Grampanchayat of village Waigaon was authorized to look after the scheme. The accused no. 1 Kamlakar Deware and Accused No. 2 Sheela Undirwade were elected as President and Secretary of Grampanchayat respectively, to look after the scheme. The Grampanchayat, Waigoan had received Rs. 13,87,823/- from State Government on 21/06/2007 as first installment towards the fulfillment of the “Jal-Swaraj Prakalpa”at village Waigaon. The applicants have a society by name “Lok Kalyan Bahuddeshiya Shikshan Sanstha”, and an amount of Rs. 13,00,000/- was paid in various installment to the Sanstha of Applicant for execution of work in respect of water supply to various villages. The work was to be executed by 31/05/2008. On 19/09/2008, one Mr. Kishor Chillamwar, District Head of Jal-Swaraj Prakalpa, Zilla Parishad Gadchiroli had lodged report at Police Station, Chamorshi against accused Kamlakar and Sheela on the ground that out of Rs. 13,87,823/-, the accused has completed work of Rs. 5,88,326/- and had not given any account in respect of remaining amount of 3 Rs. 7,11,674/- and, therefore, the accused committed misappropriation of Government money. On the basis of report, Police Station registered the offence on 22/09/2008, under Section 409, 406 read with 34 of the Indian Penal Code, vide Crime No. 151/2008. The offence was registered against only Kamlakar Deware and Sheela Undirwade. It is the case of the applicants that their names were not mentioned in the FIR but, they were added as accused during the course of investigation and charge-sheets were filed. It is further grievance of the applicants that FIR was lodged after considerable delay of 15 months without naming applicants as accused nor any role was attributed to them in the FIR. According to the learned Advocate for the applicants for to establish the offence of criminal breach of trust there has to be some material to indicate that the applicants were entrusted with the property or dominion over the property and that they had dishonestly misappropriated or converted to their own use or that dishonestly used or disposed off that property or at least willfully suffered violation of law. Learned Advocate for the applicants submitted that it is at the most civil wrong on the part of the applicants and can never be construed as offence of criminal breach of trust. 4. Learned Advocate invited my attention to the ground mentioned in para 10 the of the application that an audit was 4 done by the official Auditor of Lok Kalyan Bahuuddeshiya Shikshan Prashikshan Sanstha, Waigaon, Dist. Gadchiroli in respect of amount of Rs. 13,87,823/- received by aforesaid Sanstha for execution of Jal-Swaraj Pakalpa and as per Audit Report signed by Chartered Accountants from Chandrapur on 11/04/2011, which was the statement in respect of receipts and payment of amounts for the Financial year ended on 31st March 2008. The receipts were shown in total sum of Rs. 15,05,139/-, which includes an amount of Rs. 13,00,000/- towards “Pani Puravatha & Swachhata Samiti” Z. P. Gadchiroli. The audit report indicates that total sum of Rs. 13,39,015/- was expenditure on various heads such as wages & labour charges, construction material, traveling expenses, transportation charges, etc. The account also shows grant refunded to Z.P. Gadchiroli is Rs. 1,49,210/- while loan was refunded i.e. Rs. 16,000/-. If this is so, then according to learned Advocate, there was no question of any dishonest intention of misappropriation of the Government money received from the State Government which may amount to commission of offence of criminal breach of trust in respect thereof. When amount of Rs. 13,00,000/- was received by the Sanstha, while expenditure incurred by the Sanstha is shown to be Rs. 13,39,015/- and the amount of Rs. 1,49,210/- was in fact refunded to the Z.P. Gadchiroli. This specific contention in para 10 of the application is not replied on behalf of the respondent- 5 State. It is contended that the present applicants are the contractors who were assigned the work to complete the work of well and pipeline and the water connection for potable water under the “Jal-Swaraj Prakalpa, Yojna”. But the present applicants performed the work to the extent of Rs. 5,88,326/- and not completed the work of the remaining amount and misappropriated the amount which was received by way of cheque by the committee consisting of President and Secretary. It is alleged by the respondent that the present respondent in collusion with accused President and Secretary with ulterior motive and intention to misappropriate had duped the Government of fund and committed the offence. It is alleged that there was neither refund of the amount to the Government nor they performed the balance work till now and misappropriated the Government fund. This contention by the respondent-State is not sufficient to answer the specific contention of the applicants with reference to annexures P-3 and P-4 statement of accounts issued by the Chartered Accountants which also bears signature of the President and the Secretary of Lok Kalyan Bahuddeshiya Shikshan Sanstha, Waigaon. 5. Learned Advocate for the applicants made reference to the ruling in M/s. Astec Life Sciences Ltd. & Ors Vs. State of Maharashtra & Ors. reported in 2008 ALL MR (Cri) 1054 6 in paragraph 13 of the ruling, Division Bench of this Court considered various ingredients of the offence of criminal breach of trust and observed that such alleged misappropriation, conversion or use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged or in violation of any legal contract which a person has made, touching discharge of such trust. The offence consists of one of four positive acts, to wit, misappropriation, conversion, user or disposal of property. Neither failure to account nor breach of contract, however dishonest, can amount to an offence of criminal breach of trust. These observations are helpful to the applicants since the Division Bench in M/s. Astec’s case following observations in paragraph 13 had allowed the petition for quashing the FIR on the ground that the FIR do not disclose commission of cognizable offence, even if it is assumed to be true. 6. In the present case, considering the ingredients of criminal breach of trust as mentioned in Section 405 of the Indian Penal Code, does indicate that the ingredient of entrustment is very important. Thus, unless there is prima facie case of entrustment, there can be no offence of criminal breach of trust although it may be a civil dispute, which can be solved by 7 approaching a Competent Civil Court in the present case also. Considering the facts stated as also annexures along with application, prima facie it appears that the applicants were not named in the FIR. The statement issued by the CA’s was signed by present applicants i.e. President and Secretary apart from the Chartered Accountants. It may be a case of breach of trust or non performance of the contract in its entirety for which remedy for compensation and damages is available in the competent Civil Court for alleged breach of contract, since is is alleged that the actual work done by the contractor is to the extent of Rs. 5,88,326/- and the non performance of work was to the extent of Rs. 7,11,674/-. If that is the case, remedy was available for civil wrong in a Competent Civil Court, criminal prosecution in such case need not continue due to want of essential ingredients to constitute an offence punishable under Section 409 or for criminal misappropriation as alleged in the facts and circumstances of the present case. That being so, following the ruling in the case of M/s. Astec Life Sciences Ltd. & Ors (cited supra), the application has to be allowed as prayed for as against the present applicants. Regular Criminal Case No. 4/2011, pending on the file of Chief Judicial Magistrate, Gadchiroli is quashed and set aside as against the present applicants only. Needless to state that the trial Court may if it finds evidence against present applicants can take steps 8 under Section 319 of the Criminal Procedure Code if it is felt necessary or essential for just decision of the case. 7. Application is allowed. JUDGE Punde