In hypothecation, ownership remains with the debtor; thus, criminal breach of trust is not established unless property is entrusted. Cheating requires fraudulent intent at the time of inducement, which was not present.

JUDGMENT

Mr. Deepak Gupta, J.

This order shall dispose of two petitions titled above, both filed under Section 482 Cr.PC, involving similar facts; and amongst same parties.

2.1 In CRM-M-45835-2022, petitioners pray to quash FIR No.33 dated 10.02.2020 under Sections 420, & 406 IPC, registered at Police Station Rohtak Civil Lines, District Rohtak; and the report under Section 173 Cr.P.C. filed under Sections 406, 420, 120B/34 of IPC alongwith all the subsequent proceedings arising therefrom.

2.2 In CRM-M-55249-2022, prayer is to quash FIR No.267 dated 28.8.2019 under Sections 420, & 406 IPC, registered at Police Station Rohtak Civil Lines, District Rohtak; and the report under Section 173 Cr.P.C. filed under Sections 406, 420, 120B/34 of IPC alongwith all the subsequent proceedings arising therefrom.

2.3 Petitioner Sanjay is in transport business. He alongwith his wife Sunil Kumari runs a transport company in the name of Jaishree Salasar Transport Pvt. Ltd. Petitioner Chander Singh is the father and petitioner Satish Kumar is the brother of Sanjay.

3.1 Facts are being noticed from CRM-M-45835-2022. It is contended that in order to expand the business of the firm, petitioner Sanjay, in his personal capacity took a loan from the respondent N: 2 - Kotak Mahindra Bank to purchase 03 trucks. Petitioner Chander Singh i.e., father of Sanjay is the co-borrower; whereas petitioner Satish Kumar i.e., brother of Sanjay is the guarantor. Initially, some installments were paid, but later on petitioner failed to pay rest of the installments and the account was declared as Non-Performing Asset (NPA). Copies of loan statements in respect of 03 trucks are Annexures P-1 to P-3. In order to recover the loan amount, the respondent - bank initiated arbitration proceedings. Awards were passed. In order to execute the awards, execution applications (copies Annexures P-4 to P-6) were filed before learned Addl. District Judge, Jhajjar. But, those applications were either dismissed as withdrawn or were dismissed (vide Annexures P-7 to P-9) for the reason that no details of the property owned by the Judgment Debtors were filed. It is alleged that without disclosing anything about the arbitration proceedings, complainant-bank approached the court of Ld. Chief Judicial Magistrate, Rohtak and got registered the FIRs in question by moving application under Section 156(3) Cr.P.C.

3.2 FIR N: 33/2020 (subject matter of CRM-M-45835-2022) was got registered by the bank with regard to three trucks; whereas, FIR N: 267/2019 (subject matter of CRM-M-55249-2022) was got registered by the bank with regard to two trucks referred in FIR N: 267/2019 (subject matter of CRM-M-55249-2022), which were purchased in the name of the firm.

3.3 It is to be noted that the Two trucks were purchased in the name of the firm - Jaishree Salasar Transport Pvt. Ltd., in which Sunil Kumari is also the partner.

4. Learned counsel contends that intention of the petitioners was never to cheat the bank or to commit any breach of trust and it is a simple case of non-payment of EMIs, which has been converted into a criminal litigation by misusing the process of law. It is urged that in case of hypothecation, ownership of movable property and possession thereof remain with debtor and so, offence of criminal breach of trust as defined under section 405 of IPC, is not made out. It is contended further that since ownership of the hypothecated vehicles vested in the petitioners, so question of misappropriation of said articles by the petitioners does not arise. It is also argued that there is no averment in the FIR to show that at the time of issuance of hypothecation documents, petitioners had any intention to cheat the complainant Bank and so, the offence of cheating is also not made out. It is further submitted that even if allegations made in the FIR are taken to be true, then also no criminal liability can be made out and at the best, it is a case of civil dispute arising out of breach of contrac