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2023 Supreme(Online)(Bom) 23506
BOMBAY HIGH COURT
KISHORE C. SANT, J
Ramesh Dadarao Bagdure – Appellant
Versus
The State of Maharashtra – Respondent
Criminal Writ Petition No. 1323 of 2022
For the Appellants/Petitioners:Senior Advocate Mr.V. D. Hon i/by Mr. S. S. Manale
For the Respondents: Smt. D. S. Jape, Mr. P. P. More
Criminal charges against partners required clear evidence of fraudulent intent; mere disputes are civil matters.
Headnote:(A) Indian Penal Code - Sections 406, 420 - Criminal breach of trust and cheating - Petitioners are partners in a firm and disputes arose regarding partnership accounts and alleged misappropriation - It was held that the acts were purely civil and did not amount to criminal offences. (Paras 21, 22)
(B) Article 226 - Scope of power - Courts should not issue criminal process in civil disputes unless clear criminal intent is established. (Paras 21, 22)
Facts of the case:
Petitioners formed a partnership firm and later disputes led to allegations of cheating and misappropriation against them. Respondent alleged suppression of partnership deeds and misappropriation of funds.
Findings of Court:
The learned Magistrate and Sessions Court erred in concluding that the dispute was criminal in nature when it was essentially a civil matter concerning partnership accounts.
Issues: Whether the actions of the petitioners amounted to criminal breach of trust and cheating.
Ratio Decidendi: The court ruled that mere disputes between partners do not constitute criminal offences unless there is clear evidence of fraudulent intent. The conditions for claiming a criminal breach of trust were not satisfied in this case.
Result: Writ Petition allowed and orders of lower courts quashed.
| Table of Content |
|---|
| 1. discovery of partnership formation and subsequent allegations. (Para 1 , 2 , 3) |
| 2. details of property usage and claims of remuneration. (Para 4 , 5 , 6) |
| 3. court's analysis of civil versus criminal nature of disputes. (Para 8 , 9) |
| 4. arguments on the nature of partnership and allegations of cheating. (Para 10 , 11 , 12 , 13) |
| 5. court's final conclusions on partnership conduct and legal outcomes. (Para 19 , 20 , 21 , 22 , 23) |
1. This Writ Petition is filed with a prayer to quash and set aside an order passed by the learned Additional Sessions Judge, Nilanga dated 17.08.2022 in Criminal Revision No. 2/2022. By way of this impugned order, the learned Sessions Judge has rejected the criminal revision application and confirmed the order passed by the learned Judicial Magistrate First Class, Nilanga dated 22.12.2020. The learned JMFC had passed the order directing issuance of summons against present petitioners for the offences punishable under Sections 420 , 406 read with 34 of the Indian Penal Code .
2. The facts are like this that the present petitioners formed a partnership firm with respondent no.2 and two other partners. The partnership deed was executed on 29.10.2002 under the name of M/s. Bhagwant Warehouse. The partnership was to carry business of a Warehousing. The firm started business from 29.10.2002. Partner no. 1 – Pandurang Attal and partner no.2 i.e. respondent no.2 were to look after the partnership business of the firm. The Warehouse was to be constructed on the land belonging to Pandurang Attal, i.e. Gat No. 240 situated at Omerga (Hadga) Tq. Nilanga, Dist. Latur. He had no objection to use the land for the Warehouse. The land of partner no.1 i.e. present petitioner no.1 from the same Gat was also to be used by the partnership firm. Pandurang Attal expired and therefore one other partnership under name of Bhagwant Warehouse started into between petitioner no.1 and petitioner no.2 on 21.12.2013. This new firm also carries a business in the name and style of Bhagwant Warehouse. Thus, there were two different partnership firms, one in which there were five partners including the present petitioners, Pandurang Attal and respondent no.2 in the name as M/s. Bhagwant Warehouse, Omerga executed on 29.10.2002 and other in which both petitioners and late Pandurang Attal executed on 21.12.2013 were partners in the name as Bhagwant Warehouse.
3. It is case of respondent no.2 that as per the partnership deed, the land belonging to Pandurang Attal from Gat No.240, ad-measuring 1 Hec. 93 R and the land of present petitioner no.1 adjacent to the above land from the same Gat ad-measuring 81 R was decided to be used for a Warehouse over the said land. The permission was obtained for construction of Warehouse from the Deputy District Registrar (Co.op), Latur as per licence no. 14/2003 dated 12.03.2003. The proposal thereafter was submitted for finance loan to the State Bank of Hyderabad Branch at Nilanga after the recommended by NABARD. The term loan of Rs.19.80 Lacks to the firm was sanctioned by the said Bank (SBH) and the NABARD also sanctioned subsidy of Rs.592,100/- to the firm. After construction of Warehouse, the firm had started business of Warehousing. In the year 2008, the respondent no.2 started his own business at Latur and thereafter the business of the firm was managed by late Pandurang Attal and present petitioner no.2. The respondent no.2 did not take any remuneration from the said firm as it was agreed that the entire remuneration will be paid after closer of account of bank loan. In 2010, it was informed by the petitioners and Pandurang Attal to respondent no.2 that the Buldhana Urban Credit Co-operative Society, branch Nilanga (Buldhana Society for short) made a request for taking warehouse on rental basis and the same was given on rental basis, as respondent no.2 consented for the same. Since the authority for signing papers had given to the present petitioners and Pandurang Attal, the res
