2006 (2) TMI 696 - SC - Indian Laws

Summary

Issues Involved:
1. Quashing of the process issued by the Chief Judicial Magistrate (CJM), Alipore.
2. Allegations of criminal conspiracy and misappropriation of trust assets.
3. Validity and revocability of the mutual and reciprocal trusts.
4. Entrustment and breach of trust under Section 406 of the Indian Penal Code (IPC).
5. Allegations of cheating under Section 420 of IPC.
6. Applicability of inherent powers under Section 482 of the Code of Criminal Procedure (Cr.PC).

Issue-Wise Detailed Analysis:

1. Quashing of the Process Issued by CJM, Alipore:
These appeals challenge the High Court of Calcutta's refusal to quash the process issued by the CJM, Alipore, for alleged offenses under Sections 120-B, 406, 417, and 420 of the IPC. The CJM had held that a prima facie case was made out against the accused.

2. Allegations of Criminal Conspiracy and Misappropriation of Trust Assets:
The complainant, a former employee of the MP Birla Group, alleged that the accused conspired to misappropriate assets worth Rs. 2400 crores, which were vested in public charitable institutions through five mutual and reciprocal trusts. The complaint stated that these trusts were irrevocable and that the accused created false evidence to show that the trusts were dissolved before the execution of a will by Smt. Birla, which purportedly transferred all assets to R.S. Lodha.

3. Validity and Revocability of the Mutual and Reciprocal Trusts:
The complainant argued that the mutual wills and trusts executed by the couple in 1981, 1982, and 1988 were irrevocable and intended for charity. The accused, however, contended that the trusts were expressly revocable, and Smt. Birla had the authority to dissolve them and make new nominations.

4. Entrustment and Breach of Trust under Section 406 of IPC:
The complainant alleged that the accused, by revoking the trusts and converting the assets for personal gain, committed criminal breach of trust. The accused argued that there was no valid entrustment of property to constitute an offense under Section 406, IPC, as the trusts were private and revocable, and Smt. Birla had absolute power over the trust property.

5. Allegations of Cheating under Section 420 of IPC:
The complaint included allegations of cheating, claiming that R.S. Lodha induced Smt. Birla to sign the will by false representation, thereby converting charitable assets to his personal property. The accused argued that the complaint did not disclose the ingredients of the offense of cheating.

6. Applicability of Inherent Powers under Section 482 of Cr.PC:
The accused sought the quashing of the criminal proceedings under Section 482, Cr.PC, arguing that the complaint was frivolous, vexatious, and constituted an abuse of the process of law. The court held that the issues raised in the complaint involved complicated questions of civil law that should be decided in regular civil proceedings and not in a criminal court.

Conclusion:
The Supreme Court dismissed the appeals, holding that the complaint disclosed sufficient grounds to proceed with the criminal case. The court emphasized that the allegations of criminal conspiracy, misappropriation, and breach of trust needed to be fully inquired into, and it was premature to dismiss the complaint at this stage. The court reiterated that the observations made should not be construed as an opinion on the merits of the case.