1996 Supreme(SC) 1027

1996(5) Supreme 462
SUPREME COURT OF INDIA
G.N. Ray and G.B. Pattanaik, JJ.
Central Bureau of Investigation, SPE, SIU (X), New Delhi -Appellant
versus
Duncans Agro Industries Ltd. Calcutta -Respondent
Criminal Appeal Nos. 657-58 of 1995
Decided on 9-7-1996
Counsel for the Parties :
For the Appellants : K.T.S. Tulsi, Additional Solicitor General, Vikas Pahwa, A.S. Bhasme, P. Parmeswaran, and A. Bhattacharya, Advocates.
For the Respondents : Shanti Bhushan and Rajinder Singh, Sr. Advocates, and P.N. Misra, Advocates.

IMPORTANT POINTS
1. For the purpose of quashing the complaint, it is necessary to consider whether the allegations in the complaint prima facie make out an offence or not and it is not necessary to scrutinise the allegations for the purpose of deciding whether such allegations are likely to be upheld in the trial.
2. The expression entrusted with property or with any dominion over property has been used in a wide sense in Section 405 IPC and such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of in violation of law or in violation of contract.

Headnote:(i) Indian Penal Code, 1860-Sections 120B r/ws 409, 420, 467, 468 and 471-FIRs lodged by CBI for offence under-Guiding Principles in quashing a criminal case-It is necessary to consider whether on face of allegations, a criminal offence is constituted or not.

       Held : For the purpose of quashing the complaint, it is necessary to consider whether the allegations in the complaint prima facie make out an offence or not. It is not necessary to scrutinise the allegations for the purpose of deciding whether such allegations are likely to be upheld in the trial. Any action by way of quashing the complaint is an action to be taken at the threshhold before evidences are led in support of the complaint. For quashing the complaint by way of action at the threshhold, it is, therefore, necessary to consider whether on the fact of the allegations, a criminal offence is constituted or not. (Para 17)

       (ii) Indian Penal Code, 1860-Section 405-Criminal breach of trust-Expression entrusted with property or with any dominion over property - Scope - Disposing of goods covering security against credit facility-Offence of criminal breach of trust not committed.

       Held : The expression entrusted with property or with any dominion over property has been used in a wide sense in Section 405 I.P.C. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of in violation of law or in violation of contract. The expression entrusted apperaing in Section 405 I.P.C. is not necessarily a term of law. It has wide and different implications in different contexts. It is, however, necessary that the ownership of beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. The expression trust in Section 405 I.P.C. is a comprehensive expression and has been used to denote various kinds of relationshiplike the relationship of trustee and beneficiary, bailor and bailee, master and servant, pledger and pledgee. When some goods are hypothecated by a person to another person, the ownership of the goods still remains with the person who has hypothecated such goods. The property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in other person and the offender must hold such property in trust for such other person of for his benefit. In a case of pledge, the pledged article belongs to some other person but the same is kept in trust by the pledgee. In the instant case, a floating charge was made on the goods by way of security to cover up credit facility. In our view, in such case for disposing of the goods covering the security against credit facility the offence of criminal breach of trust is not committed. (Para 18)

       (iii) Constitution of India-Art. 136-Indian Penal Code, 1860-Sections 120B r/ws 409, 420, 467, 468 and 471-High Court quashing FIRs lodged by CBI for offences under -First FIR was filed in 1987 and second in 1989- Respondents moved High Court only in 1991-High Court justified in holding that case was basically a matter of civil dispute-Civil suits for recovery of dues of Banks have been compromised on receiving payments-Compromise decrees amount to compounding of offence of cheating-Investigations in criminal cases still pending-No justification in proceeding further with conplaints -In special facts of case, decision of High Court in quashing complaints does not warrant interference.

       Held : In the facts of the case, it appears to us that there is enough justification for the High Court to hold that the case was basically a matter of civil dispute. The Banks had already filed suits for recovery of the dues of the Banks on account of credit facility and the said suits have been compromised on receiving the payments from the concerned Companies. Even if an offence of cheating is prima facie constituted, such offence is a compoundable offence and compromise decrees passed in the suits instituted by the Banks, for all intents and purposes, amount to compounding of the offence of cheating. It is also to be noted that long time has elapsed since the complaint was filed in 1987. It may also be indicated that although such FIRs were filed in 1987 and 1989, the Banks have not chosen to institute any case against the alleged erring officials despite allegations made against them in the FIRs. Considering that the investigations had not been completed till 1991 even though there was no impediment to complete the investigations and further investigations are still pending and also considering the fact that the claims of the Banks have been satisfied and the suits instituted by the Banks have been compromised on receiving payments, we do not think that the said complaints should be pursued any further. In our view, proceeding further with the complaints will not be expedient. In the special facts of the case, it appears tous that the decision of the High Court in quashing the complaints does not warrant any interference under Article 136 of the Constitution. (Para 20)