Inherent jurisdiction and defective complaint allegations justified quashing where entrustment and conspiracy were not made out.

The complaint was held not to disclose criminal breach of trust or conspiracy because the accused could be connected only after the transaction had already occurred, and they were not shown to be ordinary directors at the relevant time. The essential ingredients of Section 409 IPC, including entrustment and the required position of control, were absent, especially as the person actually managing the company was not impleaded. Applying the principle that inherent jurisdiction may be used to prevent abuse of process and secure the ends of justice, the SC upheld quashing where the allegations, even taken at face value, did not make out the offences. The proceedings were therefore rightly quashed and the appeals failed.

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Issues: (i) Whether the criminal complaint disclosed the offences of criminal breach of trust and conspiracy so as to justify continuation of the proceedings, and whether the High Court was right in quashing the complaint and charge in exercise of inherent jurisdiction.

Analysis: The allegations in the complaint were examined as a whole and it was found that the accused respondents could come into the picture only after the transaction complained of had already taken place. On the complainant's own case, they were not even ordinary directors at the relevant time, while the person who actually held control and management was not impleaded. The essential ingredients of criminal breach of trust were absent, particularly entrustment and the position required for Section 409 of the Indian Penal Code, 1860. Applying the settled principle that inherent power may be used to prevent abuse of process and to secure the ends of justice, the Court held that where the complaint even if taken at face value does not disclose the alleged offence, quashing is justified.

Conclusion: The proceedings were rightly quashed; the complaint did not disclose offences under Sections 120-B and 409 of the Indian Penal Code, 1860, and the appeals failed.

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