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1964 Supreme(Raj) 61

High Court Of Rajasthan
Judgename : C.B.Bhargava
CHIRANJILAL SHARMA - Appellant
Versus
RAJA RAMSINGH - Respondent
Criminal Revn. 545 Of 1963
Decided On : 03/19/1964

Advocates Appeared:
C.K.Garg, S.R.Goyal

A partner cannot be held liable for a charge under Section 406 of the Indian Penal Code for not rendering accounts to any partner and for withholding the share of profits of the other partner when the accounts have not been gone into and it has not been ascertained whether there have been any profits in the partnership business at all and what sum is due to the complainant in these profits.

Headnote:

CRIMINAL PROCEDURE CODE - SECTION 561-A - QUASHING OF CRIMINAL PROCEEDINGS - OFFENCE NOT DISCLOSED - PARTNERSHIP - CRIMINAL BREACH OF TRUST - SECTION 406, I. P. C. - PARTNER NOT LIABLE FOR NOT RENDERING ACCOUNTS AND WITHHOLDING SHARE OF PROFITS OF OTHER PARTNER - PROPER REMEDY IS A PARTNERSHIP SUIT.

Fact of the Case:

The complainant and the petitioner entered into a partnership agreement to run a transport business. The petitioner was accused of not paying his share of the capital, not rendering accounts, concealing partnership books, and removing the truck from Jaipur without permission. The complainant filed a complaint against the petitioner under Sections 420, 120-B, and 406 of the Indian Penal Code.

Finding of the Court:

The court held that the allegations in the complaint did not constitute any offence under Section 420 or Section 406 of the Indian Penal Code. The court found that the petitioner was not entrusted with the truck or dominion over it, and there was no allegation of misappropriation or conversion of the truck. The court also held that a partner cannot be held liable for a charge under Section 406 of the Indian Penal Code for not rendering accounts to any partner and for withholding the share of profits of the other partner when the accounts have not been gone into and it has not been ascertained whether there have been any profits in the partnership business at all and what sum is due to the complainant in these profits.

Issues: 1. Whether the allegations in the complaint constitute an offence under Section 420 or Section 406 of the Indian Penal Code? 2. Whether a partner can be held liable for a charge under Section 406 of the Indian Penal Code for not rendering accounts to any partner and for withholding the share of profits of the other partner when the accounts have not been gone into and it has not been ascertained whether there have been any profits in the partnership business at all and what sum is due to the complainant in these profits?

Ratio Decidendi: 1. The court held that the allegations in the complaint did not constitute any offence under Section 420 or Section 406 of the Indian Penal Code because there was no allegation of deception, fraud, or dishonesty, and the petitioner was not entrusted with the truck or dominion over it, and there was no allegation of misappropriation or conversion of the truck. 2. The court held that a partner cannot be held liable for a charge under Section 406 of the Indian Penal Code for not rendering accounts to any partner and for withholding the share of profits of the other partner when the accounts have not been gone into and it has not been ascertained whether there have been any profits in the partnership business at all and what sum is due to the complainant in these profits.

Final Decision: The court quashed the criminal proceedings pending against the petitioner.

Judgment


C. B. BHARGAVA, J.

( 1 ) THIS is an application by Chiranjilal one of the accused under Section 561-A read with Sections 435 and 439 of the Code of Criminal Procedure for quashing certain criminal proceedings which are being taken against him in this Court of additional Munsif Magistrate Jaipur East.

( 2 ) ON 8th June, 1963, the opposite party Raja Ramsingh filed a complaint, against the petitioner nd others under Sections 420, 120-B and 406 of the Indian Penal code on the following facts, that the opposite party after his retirement, from the military started transport business. The petitioner persuaded him to enter into a partnership and a partnership deed was executed between them on 6th september, 1962. The partnership was to be in the name of Associated Transport operators. In order to carry out the business of partnership, it was agreed to purchase a truck -- price of which, was to be equally paid by the partners. Accordingly truck No. RJL 5047 was purchased from one Madhesingh for Rs. 19,500/-, The petitioner, did not pay his share of the capital but only paid Rs. 2,000 /-and urged the complainant to make the payment and promised to reimburse, him later on. Subsequently Rs. 6000/- more were taken from the opposite party for being paid to Madhe Singh. The petitioner took the entire management of the business in his own hands on the plea that the opposite party had, not sufficient experience of the business. All the accounts were maintained by the petitioner, and for some the account books were kept at 52 Sansar Chand road, Jaipur where opposite party was carrying on his old business, For sometime the partnership work continued but later on the petitioner told him that the track had gone out of order and need repairs. So the truck was left at the workshop of fazul Uddin Mistry. In the third week of. February 1963 the opposite party came to know that the petitioner had removed the truck from the workshop of Fazul Uddin without his permission. Although according to the agreement between the (parties the truck was to run within Jaipur City only yet on enquiry the petitioner informed him that, the truck was being plied at Pali where he had been able to secure some work of profit. It is further alleged in the complaint that after the purchasing of the truck whatever profits accrued in the partnership business have all been kept by the petitioner and nothing had been paid to the opposite party, nor he had rendered accounts of the same. That the petitioner in collusion with the other accused had also caused the disappearance of the accost-books and when the opposite party lodged a protest he as beaten and a false report was made against him in the police. It is also alleged that the petitioner was not disclosing the whereabouts of the truck and was not prepared to return the ac count books of the partnership; The sum and substance of the above allegations is that :

1. the opposite party was induced to pay for the purchase of the truck more than Ms agreed share of money. 2. the petitioner who was maintaining the accounts and running the truck had not rendered the accounts and had not paid the complainants share of profits. 3. the petitioner had unlawfully taken away the books of account of the partnership and was not returning them. 4. the petitioner had removed the truck from Jaipur without the complainants permissions- and was not prepared to disclose its whereabouts.

( 3 ) THE learned Munsif Magistrate racorded the statements of the complainant and of the witness Shri Pribhu Dayal. No additional facts were brought out in the statements of these two persons. The complainant however, admitted that the truck was at Pilani and requested the Court to issue a warrant fur its seizure. The learned Magistrate on 8th July, 1963, having been satisfied on, the above materials registered a case under Section 420 of the Indian Penal Code against the accused and issued bailable warrants against them. Against that order the petition














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