IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.18794 of 1999 PRASURAM SINGH SON OF SRI BRAHMADEO SINGH, RESIDENT OF VILLAGE- DAMANI, P.S. SIMARI,DISTRICT- BUXAR……………………………………… PETITIONER Versus 1. STATE OF BIHAR 2. THE MANAGING DIRECTOR, BIHAR STATE FINANCIAL CORPORATION, FRAZER ROAD, PATNA… OPP.PARTIES ----------- FOR THE PETITIONER:- MR. ADITYA NATH PANDEY,ADVOCATE FOR THE STATE:- MR. LALA KAILASH BIHARI PRASAD, SR.ADVOCATE FOR THE B.S.F.C.:- MR. MUKESH KR. THAKUAR, ADVOCATE ------------- 5 3-5-2010 Petitioner has preferred this application under section 482 of the Code of Criminal Procedure for quashing the order of cognizance dated 5-5-1999 passed by learned Chief Judicial Magistrate, Buxar in Simari P.S. Case No.35/98 , for offences under sections 406 and 420 of the I.P.C. Petitioner is accused in that case. 2. The F.I.R. contained in annexure1 to this application discloses that a written information dated 21/22 January 1998 on behalf of Bihar State Financial Corporation, Buxar Branch, Pakri Road, Ara was lodged with the Officer-in-Charge of the concerned police station alleging that the petitioner was sanctioned a term loan of Rs.2.36 lac and Seed capital of Rs.0.47 lac by the Corporation on 21-3-1988 for purchase of a new vehicle under a scheme known as SEMFEX scheme sponsored by Government of India, Ministry of Defence, New Delhi. The terms and conditions of the loan were communicated and accepted by the petitioner who executed a loan agreement dated 9-5-1988 and also 2 executed guarantee bond in favour of the Corporation in personal capacity for payment of entire dues of the Corporation with interest and other charges. From further allegations in the written petition it transpires that due to non-payment of the term loan Corporation sent legal notices under sections 30 and 29 of the Bihar State Financial Corporation Act, 1951. On failure to respond to the legal notice a pre- take over notice was also sent by the Corporation which was followed by an advertisement for sale on 19-8-1995 and finally take over order for seizure of the vehicle was issued on 13-3-1996. Further through letter dated 25-4-1996 the petitioner as promotor of the concerned vehicle was advised to hand-over the vehicle. On acceptance of best offer for sale of the vehicle it was sold to the person giving best offer but an opportunity was given to the petitioner that he could retain the vehicle on the terms and conditions through a letter dated 20-12-1996. When the petitioner avoided and did not take any action nor handed over the vehicle, then request was made to the District Magistrate, Buxar to get the vehicle seized but the vehicle was not found at the admitted place as per terms and conditions. Ultimately, when it became evident that petitioner as a loanee and guarantor was bent upon to causing loss to the Corporation by illegal and fraudulent concealment of the taken over and seized vehicle, the written complaint was lodged alleging breach of trust and cheating. 3. Learned counsel for the petitioner has submitted that there is no allegation in the F.I.R. which can constitute the offence of breach of trust. He further submitted that, in fact, no criminal offence is made out 3 and at best the allegations make out a case of breach of agreement creating civil liability. Learned counsel for the petitioner has placed reliance upon a judgment of the Supreme Court in the case of S.W.Palanitkar Vrs. State of Bihar, (2002) (1) SCC 241 to support the aforesaid contention. 4. On the other hand learned counsel for the Bihar State Financial Corporation has submitted that the allegations made in the F.I.R. disclosed that the trust which the Corporation had placed upon the petitioner as a promoter and guarantor had been breached by him by refusing to accept the lawful request of the Corporation and by depriving the Corporation of its right to seize vehicle in terms of agreement and the law under which notices were issued and the vehicle was seized. It is submitted that considering the judgment of the Supreme Court in the case of Central Bureau of Investigation Vrs. Dluncans Agro Industrie Ltd. Reported in (1996) 5-SCC 591 it has been held by this Court in several judgments, which have been noticed and followed by this Court recently in Cr.Misc.No.9982/99 (Hanuman Mal Sharma Vrs. The State of Bihar) disposed of on 22nd April 2010 and the settled view of this court is that in the event of mortgage/ hypothecation of a movable property, the ownership does not pass to the person in whose favour the mortgage/hypothecation is created, but it does create beneficial interest in his favour. Hence, if the property is removed without consent and in violation of the terms of the agreement in that regard, prima facie, the offence of criminal breach of trust can be said to be made out. It was further submitted by learned counsel for the 4 Corporation that the allegations also prima facie, make out a case of cheating. 5. The judgment relied upon by learned counsel for the petitioner was dealing with a case where the statement in the complaint did not suggest that any property in question was entrusted to the accused and on that basis, in the facts of that case, it was held that offence of criminal breach of trust was not made out. In respect of offence under section 420 of the I.P.C. also in that case it was found that there was mere failure to keep the promise and that could not amount to cheating. 6. In the present case as per allegations, the petitioner was required to keep the vehicle at a particular address and in spite of lawful order of seizure of the vehicle , it was kept concealed and not made available to the Corporation and as per allegation, this was done to cause illegal loss to the Corporation. Hence, the aforesaid judgment is of no help to the petitioner because of difference in the factual matrix of the case. 7. On considering the entire allegations in the F.I.R. it is not possible to hold that the order of cognizance is bad, or that no offence at all is made out even prima facie. Hence, this application for quashing the order of cognizance is found to be without any merits. It is dismissed accordingly. Naresh ( Shiva Kirti Singh, J.)