1987 (4) TMI 406 - HC - Companies Law

Summary

Issues: Allegations of misappropriation and breach of trust regarding security deposits made by employees of a company.

The judgment delivered by M. K. Chawla J. of the High Court of Delhi pertains to a case where a petition/complaint was filed against the Managing Director, directors, Deputy Manager (Finance), and Chartered Accountant of a company under sections 406, 409, and 418 of the Indian Penal Code. The complainant alleged that the accused issued a circular inviting security deposits from employees, which were not deposited as required by law. The Metropolitan Magistrate dismissed the complaint, stating a lack of evidence showing misappropriation. The petitioner contended that non-payment of the security amount itself proved misappropriation, but the respondents argued there was no evidence to support the allegations. The defense highlighted the absence of proof of dishonest intention, a crucial element for criminal misappropriation and breach of trust under sections 405 and 406 of the IPC. The court emphasized that mere retention or delay in payment may not establish dishonest intention or the offense. The accused claimed the security amount was credited to the complainant's account with interest, as he failed to surrender the receipt or execute an indemnity bond, as required. The court noted that the company had complied with the provisions of the Companies Act regarding deposits, as confirmed by the auditors, which negated the petitioner's contentions. The judgment upheld the Metropolitan Magistrate's decision, finding it in line with legal principles and supported by the evidence on record, leading to the dismissal of the revision petition.

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