-1- Criminal Revision No.1713 of 2001. IN THE HIGH COURT FOR THE STATES OF PUNJAB & HARYANA AT CHANDIGARH ... Criminal Revision No.1713 of 2001. Date of Decision: March 19 , 2010. District Manager, Markfed, Ferozepur ...Petitioner VERSUS Manohar Lal (since deceased) and another ...Respondents 1. Whether the Reporters of Local Newspapers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ? CORAM : HON'BLE MR. JUSTICE MOHINDER PAL. Present: Mr. H.S.Bakshi, Advocate, for the petitioner. Mr. C.M. Munjal, Advocate, for accused-respondent Sunil Kumar. -.- MOHINDER PAL, J. This revision petition, filed by the District Manager, Markfed, Ferozepur (hereinafter referred to as `the Federation') against the acquittal of Sunil Kumar ( accused-respondent) of the charge under Section 406 of the Indian Penal Code (for short -2- Criminal Revision No.1713 of 2001. `the Code') by the trial Court, was admitted for hearing on 18.3.2004. Manohar Lal, co-accused of accused-respondent Sunil Kumar, had died during trial and criminal proceedings against him, accordingly, stood abated. Accused-respondent Sunil Kumar and Manohar Lal (since deceased), being partners/owners of the firm known as M/s. Laxmi Rice Mill, Guru Har Sahai, were entrusted paddy by the Federation for custom milling and delivery of resultant rice to Food Corporation of India in the account of the Federation. The accused misappropriated the paddy for their own interest/benefit. Due to this act of the accused, the Federation had suffered loss of Rs.70,53,253/-. On these allegations, the instant case was registered against the accused. The trial Court, after framing charge, recording evidence and hearing the learned counsel for the parties, vide judgment dated 11.8.2000, acquitted the accused-respondent of the charge framed against him, as afore-mentioned. For acquitting the accused-respondent, the trial Court was, inter alia, influenced by the fact that the matter between the accused and the Federation had been referred to the Arbitrator as per the agreement between the parties and the matter was purely of civil nature. I have heard Mr. H.S.Bakshi, Advocate, appearing for the petitioner and Mr. C.M. Munjal, Advocate, appearing for the -3- Criminal Revision No.1713 of 2001. accused- respondents and have gone through the records of the case. It has been argued by the learned counsel for the petitioner that the learned trial Judge, while passing the impugned judgment failed to appreciate the facts of the case, evidence on record and law on the subject. The prosecution evidence was sufficient to warrant conviction of the accused- respondent and the trial Court erred in not believing the same. On the other hand learned counsel for the accused- respondent has contended that the view taken by the trial Court is probable and cannot be substituted by another view even though possible to be drawn from the circumstances of the case. He submitted that the order of acquittal can be set aside only for compelling reasons and wherever two views are possible to be drawn, the one favourable to the accused person should be preferred It has further been argued by the learned counsel for the accused that as per the agreement between the parties, arbitration proceedings had been initiated in the matter and the matter had been referred to the Arbitrator. The allegations against the accused were only to the extent of violation of the terms of agreement inasmuch as the accused failed to deliver the full quantity of rice as per the agreement. According to the learned counsel, the matter being purely of a civil nature, the accused has rightly been acquitted by the trial Court. Reliance has been placed by the learned -4- Criminal Revision No.1713 of 2001. counsel for the accused on the authorities reported as Bal Kishan Das v. P.C. Nayar, 1991 Supp (2) Supreme Court Cases 412 and Kailash Verma v. Punjab State Civil Supplies Corporation and another, 2005 (1) R.C.R (Criminal) 727. No doubt, it is well settled that the High Court will ordinarily not interfere with an order of acquittal except in exceptional cases where the interest of public justice requires interference for the correction of a manifest illegality or the prevention of gross miscarriage of justice and that High Court should not re-appreciate the evidence to reach a finding different from the Court acquitting the accused except to prevent miscarriage of justice, but each case has its own facts. In this case, the facts and circumstances of the case, to be discussed hereinafter, disclose that the trial Court, while acquitting the accused, did not consider material evidence on record and the law on the subject and for that reason the impugned judgment is consisted of faulty reasoning. The trial Court, while passing the impugned judgment, did not rightly consider all aspects of the case. In the afore-mentioned judgments, relied upon by the learned counsel for the accused-respondent, the Hon'ble Supreme Court has not laid down any absolute proposition of law that the existence of an arbitration clause or the pendency of arbitration proceedings would entail an automatic failure of the -5- Criminal Revision No.1713 of 2001. criminal case. In Bal Kishan Das's case (supra), the Hon'ble Supreme Court, after examining the facts of the case and specifically taking note of the facts that after registration of the case under Section 409 of the Indian Penal Code, the Vigilance Department had dropped the case and the arbitration proceedings were pending for more than seventeen years, quashed the criminal proceedings. This judgment of the Apex Court, in the facts and circumstances of that case, cannot be construed as a precedent for the proposition that the existence of an arbitration clause bars the filing of a complaint or an F.I.R for the offence under Section 406 of the Indian Penal Code. In Kailash Verma's case (supra), the appellant was discharged by the Chief Judicial Magistrate. The Chief Judicial Magistrate was of the view that the allegation contained in the complaint was of civil nature and no criminal case was made out. The Chief Judicial Magistrate also observed that there was no prima facie case to show that the paddy was supplied to the accused and that there was shortage of rice supplied to the Civil Supplies Corporation. The order of the Chief Judicial Magistrate was challenged by the Corporation in a Revision filed before the Court of Sessions Judge, Sangrur. The Sessions Judge, after considering the question raised, upheld the order passed by the Chief Judicial Magistrate. The Sessions Judge noticed the fact that the Corporation had initiated arbitration proceedings against the appellant and had -6- Criminal Revision No.1713 of 2001. also filed a complaint under Section 138 of the Negotiable Instruments Act and that the filing of criminal complaint alleging commission of an offence punishable under Section 406 of the Indian Penal Code was an abuse of the process of the Court. The Corporation filed a further Revision before this Court and a learned Single Judge of this Court set aside the orders passed by the Courts below. Thus, as there was no prima facie evidence of entrustment of paddy or shortage of rice supplied to the Corporation, the Hon'ble Supreme Court held that the dispute was of civil nature and no offence under Section 406 of the Indian Penal Code was made out. It was not held in Kailash Verma's case (supra) that the existence of an arbitration clause between the parties bars launching of criminal proceedings. In this case, the accused prima facie misappropriated and defalcated the paddy causing loss to the tune of Rs.70,53,253/- to the Federation. In this case receipts Exhibits P.1 to P.18, by which the paddy was shown to have been supplied to the accused, proved entrustment of paddy to the accused. Rajinder Garg (P.W.1) and Tarlok Chand Verma (P.W.2) had stated, in certain terms, that the paddy had been supplied to the accused when they stated that one of the partners of the firm of the accused had received the paddy. The trial Court did not believe this testimony of these witnesses. It has also come on record that the accused had deposited an amount of Rs.59,87,400/- with the Federation against the amount of paddy -7- Criminal Revision No.1713 of 2001. supplied to the accused. This fact also goes a long way to prove that the paddy had been entrusted to the accused by the Federation. In view of the above, the reasoning adopted by the learned trial Judge in acquitting the accused cannot be accepted. As such, there exists a manifest illegality in the judgment of acquittal resulting in miscarriage of justice. For the aforesaid reasons, this revision petition is allowed, the order of acquittal of accused-respondent Sunil Kumar is set aside and the matter is remanded to the trial Court to pass a fresh judgment after hearing the parties. It is made clear that the trial Court should not, in any way, be influenced by any observation made by this Court touching the merits of the case while dealing with this revision petition. March 19 , 2010. ( MOHINDER PAL ) ak JUDGE