Allegations of misappropriation under IPC Sections 406 and 34 cannot proceed without evidence of entrustment and dishonest intent; mere inability to repay a loan does not constitute criminal breach of trust.

JUDGMENT :

ANIL KUMAR CHOUDHARY, J.

Heard the parties.

2. Though notices have validly been served upon opposite Party No. 2 yet no one turns on behalf of the opposite party No.2 in spite of repeated calls.

3. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Cr.P.C. with the prayer to quash the entire criminal proceeding arising out of C.P. Case No. 8721 of 2023 as well as order dated 18.12.2023 whereby and whereunder the learned Judicial Magistrate-1st Class, Dhanbad has found sufficient materials to proceed against the petitioners for having committed the offences punishable under Sections 406/34 of the Indian Penal Code.

4. Learned counsel for the petitioners submits that the charge has not yet been framed in this case.

5. The allegation against the petitioners is that the petitioners took Rs. 41,00,000/- from the complainant but did not repay the same. On the basis of the complaint, statement of the complainant on solemn affirmation and the statement of the inquiry witnesses, the learned Judicial Magistrate-1st Class, Dhanbad found sufficient materials to proceed against the petitioners and the co-accused person namely Kanchan Srivastava for having committed an offence punishable under section 406/34 of India Penal Code.

6. It is submitted by the learned counsel for the petitioners that the allegation against the petitioners is false and the case of the complainant is a case of absurdity. It is next submitted by the learned counsel for the petitioners that though in paragraph-5 of the complaint, the complainant claims to have paid Rs.82,00,000/- to the petitioner Nos. 1 and 2 by bank transaction and cash of Rs.20,00,000/- but the same has not been corroborated in the statement on solemn affirmation of the complainant and it is simply unbelievable that without preparing any document or proof of any receipt, such huge amount of money would have been paid to the petitioners. It is next submitted that even assuming for the sake of the argument that the allegation against the petitioners is true; still lending of money to the petitioners will not amount to entrustment as the word ‘entrusted’ has been used in Section 405 of the Indian Penal Code. It is further submitted that the petitioner No.1 is an Ex-Army Officer and the petitioner No.2 is working as a Principal in a school at Delhi and this case has been instituted only for the purpose of wrecking vengeance.

7. Learned counsel for the petitioners relies upon the judgment of the Hon’ble Supreme Court of India in the case of Arshad Neyaz Khan Vs. State of Jharkhand and Ors. reported in 2025 INSC 1151 wherein the Hon’ble Supreme Court of India has reiterated the trite law that every act of breach of trust may not result in a penal offence unless there is evidence of a manipulating act of fraudulent misappropriation of property entrusted to the accused persons and in that case as the complainant failed to establish the ingredients essential to constitute the offence and as the complainant failed to place any material on record to show as to how the complainant entrusted the property to the accused persons. Furthermore, the complainant also omitted to aver as to how the property entrusted to the accused persons was dishonestly misappropriated or converted to his own use, thereby committing a breach of trust. The Hon’ble Supreme Court of India quashed the complainant case and the F.I.R.

8. Learned counsel for the petitioners next relies upon the judgment of this Court in the case of M