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1988 Supreme(Mad) 215
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S A KADER
M. V. Bany and Another - Appellant
Versus
State - Respondent
Case No : Crl.M.Ps. 5387 and 5389 of 1985
Decided On : 22 April 1988
A partner, who receives partnership property has dominion over that property as a partner quite apart from any arrangement with his other partners, the fact that he is partner gives him dominion over the property and he does not hold that property in a fiduciary capacity.
Headnote:
CRIMINAL BREACH OF TRUST - PARTNERSHIP PROPERTY - S. 408, I.P.C. - A partner, who receives partnership property has dominion over that property as a partner quite apart from any arrangement with his other partners, the fact that he is partner gives him dominion over the property and he does not hold that property in a fiduciary capacity.
Fact of the Case:
The petitioners, partners in a firm, were charged with criminal breach of trust for allegedly misappropriating partnership assets. The second petitioner was the managing partner, while the first petitioner was an employee of the firm.
Finding of the Court:
The court held that the second petitioner, as managing partner, had dominion over the partnership property and did not hold it in a fiduciary capacity. The court also held that the first petitioner, as an employee of the firm, was not entrusted with or had dominion over the partnership assets.
Issues: Whether the second petitioner, as managing partner, was entrusted with or had dominion over the partnership property.
Ratio Decidendi: A partner, who receives partnership property has dominion over that property as a partner quite apart from any arrangement with his other partners, the fact that he is partner gives him dominion over the property and he does not hold that property in a fiduciary capacity.
Final Decision: The court allowed the petitions and quashed the proceedings against the petitioners.
These two Criminal Miscellaneous petitions are filed under S. 482 Cr.P.C. to quash the proceedings in C.C. 3664 of 1985 on the file of the II Metropolitan Magistrate, Madras. The first accused is the petitioner in Cr.M.P. 5389 of 1985 while the second accused is the petitioner in Cr.M.P. 5387 of 1985.
2. The brief facts of the case are these : The second accused M. V. Baby (petitioner in Cr.M.P. 5387 of 1985), M. C. Kuriakose, and Lalu Alex joined together and constituted a firm by and under the name of Kopanhagan Pharmaceuticals with its registered office at Pushpanagar, Madras 34. On a complaint given by M. C. Kuriakose, one of the partners, the respondent Sub-Inspector, Central Crime Branch, has filed a charge sheet against these two petitioners for offences under S. 408 and S. 408 read with S. 34, I.P.C. The allegation is that these two accused in furtherance of their common intention the first accused (petitioner in Cr.M.P. 5389 of 1985) being a clerk employed in the partnership firm and the second accused (petitioner in Cr.M.P. 5387 of 1985) being the managing partner of the said firm dishonestly converted the properties entrusted with them for their personal gain by lifting the goods without the knowledge of the other partners to the shop of the second accused at Piravan, Ernakulam Dt. Kerala, by booking the consignments in their names and made themselves liable for offences punishable under S. 408. I.P.C. by the first accused and S. 408 read with Section 34, I.P.C. by the second accused. The charge sheet has been taken of file by the II Metropolitan Magistrate, Madras and numbered as C.C. 3664 of 1985. It is to quash these proceedings the two accused have filed these petitions.
3. The second accused (petitioner in Cr.M.P. 5387 of 1985) is admittedly the Managing partner of the firm Kopanhagan Pharmaceuticals. It is his case that the other two partners, viz., M. C. Kuriakose and Lalu Alex did not bring in sufficient funds for the running of the business and it was the second accused, who invested large funds from his own resources and that the two other partners did not take any interest in the aforesaid partnership firm and virtually abandoned the business. The second accused, therefore, decided to close down the business. At his request, the first accused who was an employee of the firm disposed of some of the stock and the unsold stock was invoiced to the second accused's pharmacy at Piravan. In or about April 1983, all the three partners met and looked into the accounts and it was found that the other two partners M. C. Kuriakose and Lala Alex were liable to pay to the second accused Rs. 16, 000/- each. Instead of paying the amount tax Mr. M. C. Kuriakose has given the criminal complaint. It is also averred by the second accused that the two other partners have also filed suit on the file of the Sub-Court, Ernakulam in O.S. 614 and 615 of 1983 for rendition of accounts against the second accused. The car of the second accused has also been attached before judgment and on furnishing bank guarantee the accused has taken delivery of the vehicle. It is therefore contended by both the accused that there is no case for criminal breach of trust.
4. In order to bring home the guilt of criminal breach of trust to the accused, it must first be established that the accused was entrusted with property or with any dominion over the property and that the accused dishonestly misappropriated or converted to his own use that property in violation of any direction of law or any legal contract. The question, which arises for consideration, is whether the second accused who was the managing partner of the partnership firm Kopanhagan Pharmaceuticals was entrusted with the assets of the partnership firm.
5. It is well settled that the partner, who receives partnership property has dominion over that property as a partner quite apart from any arrangement with his other partners, the fact that he is partner gives him dominion over
