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TMI Blog2021 (11) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Sadar Police Station, which was registered as FIR No.08 of 2015, dated 07.01.2015 under Sections 420 and 406 of the IPC against the Respondent No.1. The Appellant reported that the Respondent No.1, in the month of March, 2013, had informed him that Loan could be availed from the Syndicate Finance Pvt. Ltd., Mumbai, for the incomplete Hotel Project of his son with marginally lower rate of interest than the Nationalized Banks as also liberal moratorium period. The Respondent No.1 being known to the Appellant's close relative and having handled the Hotel Loan Project of his relative's wife, the Appellant agreed to the proposal. Pursuant thereto, for the said purpose the Respondent No.1 took a total sum of Rs. 42,70,000/- (Rupees forty two lakhs and seventy thousand) only, in two tranches by executing two Money Receipts, the first comprising of Rs. 12,70,000/- (Rupees twelve lakhs and seventy thousand) only, in March, 2013, and the second being a sum of Rs. 30,00,000/- (Rupees thirty lakhs) only, in August, 2013 as "Promoter's Capital Contribution." That, the Appellant suspected that the Respondent No.1, instead of investing the money for the required purpose, invested it in "N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the fact that the Respondent No.1 had committed "breach of trust to dishonestly cheat the Appellant." It was also recorded by the Learned Trial Court that if the Respondent No.1 was upright with his contention, he would have called his Witness Tanmai Majumdar for examination which he did not. Thirdly, it was observed that if there was no fraud or cheating committed by the Respondent No.1, there was no requirement for him to comply with the phone call made by the Appellant to him on 04.11.2014 and issue the three Cheques, instead he would have approached the Police Station regarding the threat. Accordingly, it was concluded that the Prosecution had been able to establish the ingredients of the offence under Sections 406 and 420 of the IPC beyond a reasonable doubt. (iv) Dissatisfied with the Judgment of Conviction and Order on Sentence, the Respondent No.1 was before the Learned First Appellate Court, which while reversing the Judgment of the Learned Trial Court, concluded in sum and substance that there was no material evidence on record to prove that the Respondent No.1 had dishonestly misappropriated the money or converted it to his own use or disposed it of in violation of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided.-No appeal shall lie from any judgment or order of a Criminal Court except as provided for by this Code or by any other law for the time being in force: Provided that the victim shall have a right to prefer an appeal against any order passed by the Court acquitting the accused or convicting for a lesser offence or imposing inadequate compensation, and such appeal shall lie to the Court to which an appeal ordinarily lies against the order of conviction of such Court." [Emphasis supplied] (ii) In Mallikarjun Kodagali (Dead) Represented through Legal Representatives vs. State of Karnataka and Others (2019) 2 SCC 752, a three Judge Bench of the Hon'ble Supreme Court, was considering the following; "8. The rights of victims, and indeed victimology, is an evolving jurisprudence and it is more than appropriate to move forward in a positive direction, rather than stand still or worse, take a step backward. A voice has been given to victims of crime by Parliament and the judiciary and that voice needs to be heard, and if not already heard, it needs to be raised to a higher decibel so that it is clearly heard. 9. With this background, we need to consider the questions that aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of H.P. vs. Karanvir (2006) 5 SCC 381. That, the Respondent No.1 had induced the Appellant to deliver the money to him with dishonest intention with the promise that the Loan for the purpose mentioned would be obtained by him. Having practiced deceipt, the provisions of Section 420 of the IPC are also fulfilled. Hence, the Judgment of the Learned First Appellate Court, being misdirected be set aside and that of the Learned Trial Court restored. To further fortify his contentions, succour was drawn from the ratiocination of State of Punjab vs. Pritam Chand and Others (2009) 16 SCC 769 and Sangeetaben Mahendrabhai Patel vs. State of Gujarat and Another (2012) 7 SCC 621. 5. Per contra, Learned Counsel for the Respondent No.1 submitted that the Learned First Appellate Court has rightly set aside the Magisterial Judgment which was bereft of reasons for the conviction of the Respondent No.1. That, the FIR, Exhibit 16, gives a false narrative, as only one Cheque had bounced at the time the FIR was lodged. The G.R. Case is also confined to the bouncing of one Cheque only but there are no supporting documents to show that the Cheque was returned. Although the Prosecution has tried to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Appellate Court was in error in reversing the order of Conviction? 9.(i) To address the first Question formulated hereinabove, I briefly delve into the provision of the Sections. Section 405 of the IPC defines the offence of criminal breach of trust and Section 406 of the IPC is the penal provision for the offence. Section 405 IPC reads as follows; "405. Criminal breach of trust.-Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust." Explanations 1 and 2 of the provision are not being extracted herein for the reason that it is not necessary for the facts of the instant case. The essential ingredients for an offence under Section 405 of the IPC are as under; "1. A person should have been entrusted with property or entrusted with dominion over p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,70,000/- (Rupees two lakhs and seventy thousand) only, was handed over to the Respondent No.1 by the Appellant and vide Exhibit 14, another Money Receipt of the same date, a sum of Rs. 30,00,000/- (Rupees thirty lakhs) only, was handed over by the Appellant to the Respondent No.1. The execution of Exhibits 12, 13 and 14 dated 14.04.2014, were witnessed by P.Ws. 8 and 9. Admittedly, money did not change hands on that date, but had been made over in the months of March, 2013 and August, 2013, however, Exhibit 1 the Agreement, clarifies this aspect, inasmuch as it reads inter alia as follows; "And whereas, the actual payment of Rs. 10,00,000/- (Rupees Ten Lakhs) only and Rs. 2,70,000/- (Rupees Two Lakhs Seventy Thousand) only was made to the Second party in the month of March, 2013 for the purpose of processing of Rs. 50,000,000/- (Rupees Five Crore) only for said Project Loan. ......" It is further stated that; "The Second Party thereafter demanded Rs. 30,00,000/- (Rupees Thirty Lakhs) only from the First party as Promoter's Capital contribution. Since, the proposal brought in was from a reputed institution, the First Party managed Rs. 30,00,000/- (Rupees Thirty Lakhs) only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g adjudication. The Hon'ble Court held that the mere inability of the Appellant to return the Loan amount could not give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention was shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the Complaint and material were to be taken on their face value, no such dishonest representation or inducement could be found or inferred. In the matter at hand before this Court, it was not, in fact, a Loan taken by the Respondent No.1 but he had assured the Appellant by placing a proposal before him that he would help him avail Loan for which 2% Processing Fee advance payment for the Loan of Rupee Five Crores was required and thereafter taken a sum of Rs. 42,70,000/- (Rupees forty two lakhs and seventy thousand) only, from the Appellant. No mens rea has been proved on such act of the Respondent No.1. (v) Admittedly, "entrustment" has been established in the matter at hand, yet it is trite to state that mere "entrustment" cannot constitute the offence under Section 405 of the IPC. To establish an offence under this Section, the fact of entrustm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave taken place between "Sancha Bahadur Subba, Son of Late A.B. Subba and Ramesh Sharma, son of Muktinath Sharma." It is not established by any documentary evidence from the Indian Chamber of Commerce that he was their Employee. Assuming he was, no proof has been furnished to establish that he dealt with the Loan Section of the Bank. It was also not proved by the Prosecution that the Draft Indenture dated 02.12.2013 referred to by the Witness, was prepared by the Respondent No.1. In fact, the Witness has not been able to establish who the parties between whom the Draft Indenture dated 02.12.2013 was executed. According to him, "I thereafter, stated to the investigation officer through a letter dated 26.06.2015 that our office had received a draft indenture dated 02.12.2013 executed between the Indian Chamber of Commerce where the address of the office has been mentioned as "Cock Burn Lane, Church Road, Kolkotta". I took the same draft and referred/verified it with the business finance leader and Mr. Tanam Subba, proprietor of hotel Basera for authentication." The Witness further stated, "...........While going through the draft indenture I had also noticed that the same had been ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Section provides for an aggravated case of cheating and dishonestly inducing delivery of property, the offence for which is defined under Section 415 of the IPC as follows; "415. Cheating.-Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat." Explanation.-A dishonest concealment of facts is a deception within the meaning of this section." Section 420 of the IPC reads as under; "420. Cheating and dishonestly inducing delivery of property.-Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said Company, however, Exhibit 10 relied on by the Prosecution, which is the File containing the Account transactions of one Naina Kumari Subba, does not indicate any such act by the Respondent No.1. The investments made in the said Securities are only in the name of P.B. Subba and Naina Kumari Subba evidently in the year 2011 and do not bear the name of the Respondent No.1. He has admitted that he did not have any proof that the Respondent No.1 had deposited the money in Nirmal Bang Securities Pvt. Ltd. for his personal benefit. On pain of repetition, it may be stated here that this would have been an impossibility considering that "Nirmal Bang Broking House" closed down in 2011 while the Appellant had handed over money to the Respondent No.1 in 2013. The entire matter of the Appellant appears to pivot around the dishonouring of the Cheque Exhibit 15, for a sum of Rs. 10,00,000/- (Rupees ten lakhs) only, issued by the Respondent No.1 to the Appellant on 30.12.2014, on the ground of insufficiency of funds in the Account of the Respondent No.1 pursuant to which, he lodged the FIR Exhibit 16. It is worth noting that Exhibit 1 was executed between the parties and mere breach o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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