IMPORTANT POINT
The court established that for a case under Section 406 of the IPC, there must be clear evidence of entrustment of property and dishonest misappropriation, which was not present in this case.

JUDGMENT :

Bibek Chaudhuri, J.

The petitioners have approached this Court under Article 226 of the Constitution, praying for setting aside the order of cognizance dated 06th October 2021 passed by the learned Judicial Magistrate Ist Class, Patna, in complaint Case No. 5518(c) of 2019 against the petitioners, holding inter alia that the complainant/ opposite party no. 02 had been able to establish sufficient ground for proceeding against the petitioners under Section 406/34 of the IPC and thereby issued process against the petitioners. Case of the complaint, in brief, is that on 29th May 2018, one Vikash Kumar Soni, proprietor of Fuel India Company, claimed to be authorized by the petitioner no. 01 company executed a franchise operated (FOFO) agreement with the complainant, under the terms and conditions that Fuel India, proprietorship concerned of Vikash Kumar Soni has been authorized by the petitioner no. 01, Jet Knitwears Ltd., Kanpur to sell and do marketing of the goods and products manufactured by Jet Knitwears Ltd.. It was agreed that Fuel India would open (FOFO) stores, as per the guidelines of petitioner no. 01 and accepts such appeals, to act as a FOFO stores for LYCOT brand of Jet Knitwears Ltd., to be only to the customers located in the territory. The exclusive stock point of the company was named as F.S. in the said agreement. As per the agreement, it was the duty of the F.S. to raise bill of products in face to face transactions to physical stores being the exclusive outlets in the territory. The FS was prohibited to market or sell the products using any internet site or mail order catalog, online mobile applications and other modes of Information technology without specific written authorization by the petitioner no. 01. It was also agreed that the complainant would deposit an amount of Rs. 10,00,00/-(Ten lakhs only) in favour of Jet Knitwears Ltd., Kanpur. As per the agreement, all billings to the second party will be done by the Fuel India, Kanpur and all the payment by second party will be deposited to Fuel India. Jet Knitwears Ltd. would assure in writing that agreement of business is as per its business policy. It was further stipulated in the agreement that goods would be supplied by the Jet Knitwears Ltd. on instructions of Fuel India. After getting the proper order on mail by FS, to FS which further would be distributed to FOFO in designated area as per the instructions of Fuel India. The complainant as well as Fuel India would get commission at the rate of 3% of the sale to FOFO stores which would be paid to Fuel India to the exclusive stock point company, i.e., the FS. It was further agreed by and between the parties that Fuel India would open FOFO stores on advance basis, for which goods would be supplied by FS. The payments for the same would be collected by Fuel India. The cheque/RTGS/DD of all FOFO stores collected would be in the name of Fuel India only. FF will not be responsible for any payment, collection or outstanding of the market. However, FS would help in future to resolve the issue of market amicably.

2. It is the case of the complainant that after execution of the said agreement on 29th May 2018, the complainant gave Rs.5,00,000/-(Five lakhs only) by two cheques on 30th May 2018 and 06th June 2018 to the petitioner no. 01. The complainant also pleaded that he spent Rs.4,00,000/-(Four lakhs only) in advertisement of business of accused no. 01, as per the instruction of the accused persons. He altogether paid Rs.2,40,000/-(Two lakhs Forty Thousand only), in favour of Fuel India on several dates starting from 28th June 2018, thereafter on 20th July 2018, the complainant also transferred Rs.40,000/-(Forty Thousand only) and on 30th July 2018, he transferred Rs.50,000/-(Fifty Thousand only) through NEFT in favor of the accused person. Thus, it is the case of the complainant that the accused person has not received Rs.1141000/-(Eleven lakh forty one thousand only) from the complainant. In spite o