2008 Supreme(Pat) 1055
PATNA HIGH COURT
Sheema Ali Khan, J.
Broadway Foods Ltd.Thru.M.D.
Versus
State Of Bihar
Decided On : JULY 30, 2008
Headnote:Indian Penal Code, 1860-Section 406-Criminal breach of trust-To constitute an offence of criminal breach of trust it is essential that dishonest intention should be dominant at the time of the entrustment-Present dispute arising out of settlement of account in a business transaction-In a business transaction, parties cannot be said to have a criminal intention to misappropriate the money and the facts would constitute certain civil liabilities which can be settled by filing a suit-The sole purpose of launching a criminal case of present nature is to coerce the party to pay the disputed amount-There being no mens rea or criminal intention in the case, impugned order taking cognizance quashed. (Paras 10 to 12)
Sheema Ali Khan, J.
1. The petitioners have filed this application for quashing of the order dated 28.06.2006 passed by the Judicial Magistrate, First Class, Patna in Complaint Case No. 1118 (C) of 2006 whereby the court has taken cognizance under Section 406 of the Indian Penal Code.
2. The petitioners are officers of the Broadway Foods Limited company. The Company, appointed the opposite party No. 2 to become a Stockist in Patna and C & F agent at Hazaribagh (Jharkhand) and they entered into an agreement with the opposite party No. 2 for the said purpose. The opposite party claim that they were appointed as C & F agents for both places i.e., Patna and Hazaribagh. It is alleged that the complainant paid Rs. 5 Lacs as security for the purpose of becoming stockists and C & F agent at Patna and thereafter the complainant paid various amounts of money on various dates in lieu of supply of stock by the accused persons.
3. The main allegation on the basis of which the complaint has been filed is at paragraph Nos. 7, 8, 11 and 13. In para 7 of the complaint petition it has been mentioned that:
"That after taking the security money the company sent the goods to the complainant at both the places (Patna and Hazaribagh) for storing in their godown on various dates for Rs. 8,49,734.88/- (Eight lac forty nine thousand and seven hundred thirty four only). And according to the instruction of the company, the complainant transferred the goods of Rs. 1,31,400/-(One lac thirty one thousand and four hundred only) on 26.4.2005 to Sri Ram Trading and Rs. 1,13,242.32 (One lac thirteen thousand and two hundred forty two, and thirty two paisa only) on 13.6.2005 to K.N.O.P.S., Enterprises, Patna. So the balance of stock received by the complainant is about Rs. 600000/-(Six lacs only)."
4. It is alleged that after receiving the said goods, the complainant demanded a break-up of the bills and after preparing the bills the complainant went to the companys office at Mohali (Punjab) on several occasions and demanded the security money and break up of the bills and other expenses. It is alleged that the company is not settling the bills and thus has misappropriated the money.
5. The argument on behalf of the petitioners is two folds. Firstly, it has been submitted that in view of the fact that S.S. Enterprises, Hazaribagh was made C & F agent of the petitioners company at Jharkhand, all business transactions has taken place at Mohali (Punjab) or at Hazaribagh, the court at Patna has no jurisdiction to proceed with the matter, and, secondly it is submitted that according to the admitted facts made out in the complaint petition the complainant committed breach of contract which is purely of a civil nature and a case under Section 406 of the Indian Penal Code is not made out against the petitioners.
6. From the complaint petition, and particularly paragraph No. 7 it appears that the complainant had supplied goods to various persons on instructions of the company from Hazaribagh and Patna and stock of about Rs. 6 lacs was lying with the complainant and after returning the goods the petitioners demanded the break up bills which was allegedly hot given to the petitioners.
7. During hearing of this case it appears that the opposite party No. 2 stated that he is ready to settle the accounts and he has no objection in withdrawing the case if the accused persons would pay Rs. 8 lacs which is due to them. On the next date the complainant, however, resiled from his statement as the petitioners stated that they were prepared to pay Rs. 2 lacs only, which was not acceptable to the complainant.
8. Regarding the first contention raised on behalf of the petitioners that the Patna court has no jurisdiction to hear the matter, I think that this Court can not go into the question of jurisdictional error as specific cases have not been made out by the parties except to say that the opposite party No. 2 was a C & F agent at Jharkhand and Patna and the agreement was sig