2008 Supreme(SC) 945

2008(4) Supreme 374
SUPREME COURT OF INDIA
S.B. Sinha and H.S. Bedi, JJ.
V.R. Dalal & Ors. — Petitioners
versus
Yougendra Naranji Thakkar & Anr. — Respondents
Criminal Appeal No. 925 of 2008
[Arising out of SLP (Crl.) No. 6351 of 2006]
Decided on : 16-05-08

IMPORTANT POINT
Where the first ingredient of criminal breach of trust, that is, entrustment is missing, the same would not constitute a criminal breach of trust.

Headnote:Indian Penal Code, 1860 – Section 405 – Complaint petition by Respondent complainant alleging that accused persons partners of another firm conspired with each other so as to deprive complainant from deriving the benefits of a firm by dissolving the firm N.M. Raiji and Company behind his back – The firm M/s. N.M. Raiji and Company was a firm of chartered accountants – Some business allegedly had been transferred-Complainant alleged that accused had committed criminal breach of trust in respect of income and goodwill of the firm- Complainant’s case that his income from said firm would have been 5% from the profit of the said firm which was estimated at 30% wherefrom he had allegedly been deprived, as he was not made a partner in the new firm – Writ petition – High Court, by reason of impugned judgment, dismissed writ petition filed by appellants – Appeal – Held M/s. Gandhi Dalal and Shah admittedly was constituted as a partnership firm on 1.12.2000 – Said partnership firm was constituted on the premise that four partners of M/s. N.M. Raiji and Company were representing the firm Dalal and Shah – Once the said partnership did not take off and the partnership deed was cancelled as it had never been acted upon, the question of any wrongful act on the part of the appellants did not arise – Appellants by no stretch of imagination could be said to have committed an offence particularly when admittedly new firm had been cancelled from its very inception – If the new firm had not derived any income, question of depriving claimant therefrom does not arose – Whether the constitution of the said firm was illegal or mala fide, thus, need not be gone into as by reason thereof the respondent No. 1 could not be said to have suffered any loss – Impugned judgment being unsustainable set aside accordingly – Summons issued by Magistrate against appellants quashed – Appeal allowed. (Paras 13 to 17)

        Indian Penal Code, 1860 – Section 405 – Commission of an offence in terms of Section 405 – Ingredients of – Where the first ingredient of criminal breach of trust, that is, entrustment is missing, the same would not constitute a criminal breach of trust. (Para 14)

        Constitution of India, 1950 – Article 142 – When a proceeding is found to be an abuse of the process of court, this Court in exercise of is jurisdiction under Article 142 of the Constitution of India may not allow it to continue – For the said purpose, the fact of the matter can be looked into. (Para 16)

       Facts of the case :

        1. Complaint petition was filed by Respondent complainant alleging that accused persons partners of another firm conspired with each other so as to deprive complainant from deriving the benefits of a firm by dissolving the firm N.M. Raiji and Company behind his back. The firm M/s. N.M. Raiji and Company was a firm of chartered accountants. Some business allegedly had been transferred. Complainant alleged that accused had committed criminal breach of trust in respect of income and goodwill of the firm. Complainant’s case that his income from said firm would have been 5% from the profit of the said firm which was estimated at 30% wherefrom he had allegedly been deprived, as he was not made a partner in the new firm. Writ petition filed by appellants was dismissed by High Court.

        2. Present appeal has been filed against said order of High Court.

       Findings of the Court :

        Appellants by no stretch of imagination could be said to have committed an offence particularly when admittedly new firm had been cancelled from its very inception.If the new firm had not derived any income, question of depriving claimant therefrom did not arose. Whether the constitution of the said firm was illegal or mala fide, thus, need not be gone into as by reason thereof the respondent No. 1 could not be said to have suffered any loss. Impugned judgment being unsustainable set aside accordingly. Summons issued by Magistrate against appellants were quashed.

       Result : Appeal allowed.