TMI Blog2020 (4) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... ny floated by them. The documents produced before this Court indicate that Form C Registration Certificate of Establishment was obtained on 26.2.2014 and Value Added Tax Registration Certificate was issued on 19.9.2013 indicating that the actual operations had commenced only after the resignation of petitioners from respondent No.2 Company. It is only when a property entrusted to accused has been dishonestly misappropriated or converted to his own use, the accused can be held culpable for the offence under Section 405 of IPC. In the instant case, there are no allegations whatsoever that either at the time of employment or at the time of resignation, any property was entrusted to petitioners. Though in the complaint it was alleged that the software belonging to respondent No.2 was stolen and the same was made use of to procure rival business, but the material referred above clearly indicates that even the title or right to the said software vested with the Smart comm and not with respondent No.2. That apart, there is no allegation whatsoever in the charge-sheet that petitioners herein have committed any theft of such a software - in the absence of any material to show that ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir use. The accusations leveled against the petitioners are wholly baseless. The learned counsel further submitted that though petitioners incorporated the Company when they were in the services of respondent No.2, no business was transacted by the petitioners during the said period. Sales tax registration as well as the certificate of establishment were obtained subsequent to resignation and the operation was commenced only after resignation of petitioners, as such the petitioners have not violated the terms of employment. 5. Further, learned counsel pointed out that even though in the complaint it was alleged that petitioners herein had committed the theft of software belonging to respondent No.2, yet, the material on record clearly indicate that exclusive right over the alleged software was with Smartcomm. The prosecution itself has relied on the certificate issued by Smartcomm, which reveals that Smartcomm was the sole and exclusive distributor for the product MDT 730 to India and other countries. Smartcomm alone owned the IP rights for the product including product design, specifications, software development kit (SDK) and such other characteristics and the Smartcomm appoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the very same software used by respondent No.2 and thereby a clear case of breach of trust punishable under Sections 406 and 408 of Indian Penal Code is made out. 9. Considered the submissions and perused the records. There is no dispute with regard to the fact that petitioners were employed by respondent No.2 and as on the date of tendering their resignation, accused No.1 was holding the position of Director Solution and accused No.2 was holding the position of Director Sales and Marketing. There is also no dispute that petitioners were bound by the undertaking given by them to respondent No.2. The terms read as under: 1. Undertaking by the Employee In consideration of my employment/contract by CERT InfoTrack Telematics Private Limited, I hereby agree as follows: 1.1. I will make full and prompt disclosure to CIT of all inventions, developments, improvement, modifications, discoveries and methods (all of which are called collectively termed developments hereinafter), whether patentable or not, made or conceived by me or under my direction during my employment, whether or not made or conceived during normal working hours or on the premises of CIT or using the Inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company floated by them. The documents produced before this Court indicate that Form C Registration Certificate of Establishment was obtained on 26.2.2014 and Value Added Tax Registration Certificate was issued on 19.9.2013 indicating that the actual operations had commenced only after the resignation of petitioners from respondent No.2 Company. Under the said circumstance, whether the act of petitioners in incorporating the Company during their tenure of service under respondent No.2 make out the offences under Sections 405, 406 and 408 of IPC is the moot question that requires to be considered in this case. 11. In order to attract the ingredients of offence under Section 405 of IPC, (a) a person should have been entrusted with property, or entrusted with dominion over property; (b) that person should dishonestly misappropriate or convert to his own use that property, or dishonestly use or dispose of that property or willfully suffer any other person to do so; (c) that such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding the settlor. A large house constituted part of the trust property. The respondent and the complainant were acting as Secretary and Manager of the Trust and the house owned by the Trust was in the possession of a tenant. The tenant vacated the building and the allegation in the complaint was that two officers of the Trust, in conspiracy with one of the trustees and his wife, created documents showing tenancy in respect of that house in favour of the wife of the trustee. Another trustee filed a criminal complaint alleging that there was commission of the offence under Sections 406, 467 read with Sections 34 and 120- B of the IPC. The accused persons challenged the proceedings before the High Court under Section 482 of the Code of Criminal Procedure and the High Court quashed the proceedings in respect of two of the accused persons. It was under those circumstances that this Court observed: (SCC Headnote) Though a case of breach of trust may be both a civil wrong and a criminal offence but there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. The present case is one of that type where, if at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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