1986 (3) TMI 346 - HC - Indian Laws

Jewellery pledge breach deemed criminal breach of trust by court

The court determined that the breach of the pledge agreement constituted a criminal breach of trust due to the petitioners' dishonest intention. It found ... - Issues Involved:1. Whether the breach of the pledge agreement constituted a civil liability or a criminal breach of trust.2. Whether the petitioners were entrusted with the pledged jewellery and if their actions amounted to criminal misappropriation.3. Whether the issuance of process by the Magistrate was justified based on the allegations and evidence presented.4. The scope of the High Court's power under Section 482 of the Code of Criminal Procedure to quash the complaint.Detailed Analysis:1. Civil Liability vs. Criminal Breach of Trust:The primary issue was whether the breach of the pledge agreement by the petitioners gave rise to a civil liability or amounted to a criminal breach of trust. The court noted that while a breach of contract typically results in civil liability, certain circumstances could imply a dishonest or fraudulent intention, thereby constituting a criminal breach of trust. The court emphasized that every criminal breach of trust involves a civil wrong, but not every civil wrong constitutes a criminal offence. The court referred to the Supreme Court's observation in Jaswantrai Manilal Akhaney v. The State of Bombay, stating that the presence of mens rea (criminal intent) is crucial to sustain a criminal prosecution.2. Entrustment and Misappropriation:The court examined whether the petitioners were entrusted with the pledged jewellery and if their actions amounted to criminal misappropriation. It was established that the jewellery was pledged as security for the payment of a debt, creating a fiduciary relationship between the parties. The court cited the Supreme Court's observations in Som Nath Puri v. State of Rajasthan, which clarified that the term 'entrusted' encompasses various fiduciary relationships, including pledger and pledgee. The court concluded that the petitioners were entrusted with the jewellery and had dominion over it, thus satisfying the definition of criminal breach of trust under Section 405 of the Indian Penal Code.3. Issuance of Process by the Magistrate:The court evaluated whether the Magistrate's decision to issue process against the petitioners was justified. It was observed that at the stage of issuing process, the Magistrate is primarily concerned with the allegations made in the complaint and the evidence supporting it. The Magistrate is not required to meticulously weigh the evidence as if conducting a trial. The court referred to Smt. Nagawwa v. Veeranna Shivalingappa Konjalqi and others, which stated that the Magistrate must be prima facie satisfied that there are sufficient grounds for proceeding against the accused. The court found that the Magistrate had exercised discretion appropriately and had given cogent reasons for issuing process against the petitioners.4. High Court's Power under Section 482 of the Code of Criminal Procedure:The court discussed the limited jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure to quash a complaint. It reiterated that the High Court cannot examine the correctness of the allegations at this stage and can only quash proceedings if no offence is made out on the face of the complaint. The court cited Smt. Nagawwa and subsequent Supreme Court decisions, emphasizing that the High Court should not interfere unless the complaint fails to disclose any offence or suffers from legal defects. In the present case, the court found that the allegations and accompanying documents prima facie constituted an offence under Section 406 of the Indian Penal Code against certain petitioners.Separate Judgment:The court allowed Criminal Revision No. 170/82, quashing the complaint against the petitioner who was the Chairman of the Company, as it was highly doubtful that he had knowledge of the episode. However, Criminal Revision Petitions No. 178/82 and 179/82 were dismissed, and the parties (other than the Chairman) were directed to appear before the concerned court on 10th April 1986.