1 4judmtWP.527-07 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO.527 OF 2007 Mr.Jayraj Hiraji Bhoir, of Mumbai, Indian Inhabitant, aged 53, occupation Service, residing at A20, New Life Co-operative Housing Society Ltd., Shivsrushti, Kurla (East), Mumbai – 400 024. ..Petitioner. [Orig.Accused] Versus 1. State of Maharashtra, 2. Senior Inspector of Police, Chembur Police Station, Mumbai – 400 071. 3. Ramchandra Arjun Patil of Mumbai, Indian Inhabitant, residing at 103-B, Regal Complex, above Bajaj Show Room, Ulhasnagar 421 003, District – Thane. ..Respondents. [Resp. No.3-Orig.First Informant.] .......... Mr.D.G. Bagwe, Advocate for the Petitioner. Mr.Prashant Jadhav, Advocate for Respondent No.3. Mr.J.P. Yagnik, A.P.P. for the State. .......... PPD 2 4judmtWP.527-07 CORAM : A. M. KHANWILKAR AND P. D. KODE, JJ. DATED : 23rd AUGUST, 2011. ORAL JUDGMENT (PER A. M. KHANWILKAR, J.) : 1. This Petition, under Article 226 of the Constitution of India, is filed for quashing of FIR registered against the petitioner bearing FIR No.63 of 2007 dated 3.2.2007 in Chembur Police Station, Chembur, Mumbai for the offence punishable under Section 409 read with Section 34 of Indian Penal Code. 2. The petitioner is the General Manager of Chembur Nagarik Sahakari Bank Ltd.. In the FIR the complainant, who incidentally is the power of attorney holder of Shri Prakash Ahuja, Mrs.Neeta Prakash Ahuja, Dinesh Prakash Ahuja and Mahesh Prakash Ahuja, has alleged that on 25.1.2002 all four of them had invested an amount of Rs.2 lacs each in their personal names in the Fixed Deposit Scheme with the said Chembur Nagarik Sahakari Bank Ltd., for a period of three years. The aggregate sum of Rs.8 lacs invested in the Fixed Deposits was to mature on 25.1.2005. On the 3 4judmtWP.527-07 due date, instead of returning the amount so invested along with interest thereon, the Bank reinvested the amount receivable by the said four persons from the bank, in another Fixed Deposit scheme. It is alleged that the Bank did not return the amount to the said four persons for which they were required to issue legal notice through their Advocate on 23.6.2006. In spite of receiving the legal notice, the Bank did not refund the FDR proceeds to the said four persons. The allegation is that the Bank without the permission of the said four persons renewed the amount in fresh FDRs for a further period. On the basis of these allegations, FIR has been registered against the officials of the Bank for the offence punishable under Section 409 read with Section 34 of Indian Penal Code. 3. The petitioner who was incidentally the General Manager of the Bank during the relevant period, has approached this Court by way of Writ Petition praying for quashing of the FIR. According to the petitioner, no offence is disclosed from the FIR as registered. According to the petitioner, the investment was made by the said four persons against the tripartite arrangement of sale of vehicle. 4 4judmtWP.527-07 The terms and conditions on which the facility of hypothecation and loan was extended by the Bank is reflected in the communication dated 4th December, 2001 (at Exhibit-C). The petitioner also relies on the communication dated 18th June, 2002 (at Exhibit-F) which refers to the terms and conditions for the loan facility extended by the Bank. Condition Nos.13 & 14 of the said communication dated 18th June, 2002 read thus : “13) The disbursement of the loan is through credit of borrowers SB A/c and then payment will be made directly to you by debit of party's account, on receipt of original bills. 14) Under cross guarantee, NOC will be issued when liability of all the 3 borrowers are cleared.” 4. The case of the petitioner is that so long as the said four persons were not in a position to produce the NOC indicating that the three borrowers have discharged their liabilities in full, the question of releasing the amount invested in the FDRs in their name, would not arise. Besides, relying on other communications exchanged between the parties, in substance, the argument is that the transaction in question between the Bank and the said four persons was pure and simple transaction between the creditor and 5 4judmtWP.527-07 debtor. To buttress this contention, reliance is placed on the decision of the Apex Court in the case of Shanti Prasad Jain Vs. The Director of Enforcement, Foreign Exchange Regulation Act and another, reported in AIR 1962 SUPREME COURT 1764; and the latest decision in the case of M.N. OJHA and others Vs. Alok Kumar Srivastav and another, reported in (2009) 9 Supreme Court Cases 682. On this argument, it is submitted that by no stretch of imagination the ingredients of Section 409 of Indian Penal Code are attracted in the fact situation of the present case. Thus, it is argued that the FIR, as registered, even if each of the allegation contained therein is to be taken as it is, does not disclose offence punishable under Section 409 of Indian Penal Code. This is the core issue to be answered in the present Petition. 5. Going by the FIR, we are in agreement with the submission of the petitioner that even if each of the allegation contained therein is to be taken as it is, it merely discloses that the transaction between the Bank on the one hand and the four investors on the other hand, was only one of investing the amount aggregating to Rs.8 lacs in Fixed Deposit scheme as a consequence 6 4judmtWP.527-07 of tripartite arrangement for offering loan facility and the Fixed Deposit amounts were to remain as security. Indeed the amount so invested in FDRs on 25.1.2002 were to mature on 25.1.2005, but, that does not mean that four persons became entitled to receive the said amount unless their obligation under the tripartite agreement was fulfilled by them by producing NOC to indicate that all the liabilities by the three borrowers have been cleared. 6. In any case, we have no hesitation in accepting the argument of the petitioner that the true relationship between the Bank and the four persons on account of the transaction in connection with the tripartite agreement was that of a debtor and creditors. If it is a case of relationship of debtor and creditors, the question of applying Section 409 of Indian Penal Code does not arise. The requirement under Section 409 is of misappropriation of the property which has been entrusted to the other party or with any dominion over the said property. In the present case, neither the allegation of dishonestly misappropriating the amount invested in FDRs has been made out nor the allegations in the FIR makes out case of converting the fixed deposit amount by the Bank 7 4judmtWP.527-07 or its officials for its own use. 7. Ingredients of Section 409 of Indian Penal Code have been culled out by the Apex Court in the case of Kailash Kumar Sanwatia Vs. State of Bihar and another, reported in (2003) 7 Supreme Court Cases 399. In paragraphs 7, 8 & 9, the Apex Court observed thus : “7. Section 409 IPC deals with criminal breach of trust by a public servant, or by banker, merchant or agent. In order to bring in application of said provision, entrustment has to be proved. In order to sustain conviction under Section 409, two ingredients are to be proved. They are: (1) the accused, a public servant, or banker or agent was entrusted with property of which he is duty-bond to account for; and (2) the accused has committed criminal breach of trust. 8. What amounts to criminal breach of trust is provided in Section 405 IPC. Section 409 is in essence criminal breach of trust by a category of persons. The ingredients of the offence of criminal breach of trust are:- (1) Entrusting any person with property, or with any dominion over property. (2) The person entrusted (a) dishonestly misappropriating or converting to his own use that property; or (b) dishonestly using or disposing of that property or willfully suffering any other person so as to do in violation - (i) of any direction of law prescribing the mode in which such trust is to be discharged; or 8 4judmtWP.527-07 (ii) of any legal contract made touching the discharge of trust. 9. The basic requirement to bring home the accusations under Section 405 are the requirements to prove conjointly (1) entrustment, and (2) whether the accused was actuated by the dishonest intention or not; misappropriated it or converted it to his own use to the detriment of the persons who entrusted it. ........” 8. As aforesaid, none of the ingredients of Section 409 of Indian Penal Code are attracted to the fact situation of the present case. Hence, even if the allegations made in the FIR were to be accepted as it is, no offence under Section 409 of Indian Penal Code is disclosed. 9. Accordingly, the FIR so registered cannot be allowed to proceed. Hence, this Petition ought to succeed in terms of prayer clauses (a) & (b), which read thus : “(a) This Honourable Court be pleased to issue a writ, direction or order directing the Respondent No.2 to produce before the said F.I.R. Exhibit `R' hereto, and after examining the legality thereof quash and set aside the same in exercise of its powers under Article 226 of the Constitution of India and its inherent powers under Section 482 of the Code of Criminal Procedure, 1973; 9 4judmtWP.527-07 (b) this Honourable Court be pleased to issue a writ, direction or order, prohibiting the Police Authorities of the Chembur Police Station, Chembur, Mumbai from continuing with the investigation into the said FIR, Exhibit `R' hereto; 10. Order accordingly. 11. Needless to observe that quashing of FIR would not preclude the respondents/orig.complainants from pursuing their remedy for refund of the amount invested by them which claim, however, will have to be considered on the basis of the obligations flowing from the tripartite agreement and other obligations of the complainants arising therefrom on its own merits in accordance with law. (P. D. KODE, J.) (A. M. KHANWILKAR, J.)