Criminal breach of trust needs clear dishonest misappropriation; mere retention and delayed complaint can defeat prosecution.

Territorial jurisdiction was upheld because part of the alleged retention of trust property occurred within Calcutta under Section 181(4) CrPC. The complaint nevertheless failed on substance because it did not clearly allege dishonest misappropriation or conversion, which are essential to criminal breach of trust; mere retention of trust monies was insufficient, and the conspiracy allegation could not survive on that same deficient foundation. The prosecution was also time-barred, as the alleged offence was complete once and for all, not continuing, and the complaint was filed beyond the three-year limitation period applicable to Section 406 IPC. The revisional application succeeded and the criminal proceeding was quashed.

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Issues: (i) Whether the Chief Metropolitan Magistrate, Calcutta, had territorial jurisdiction to entertain the complaint; (ii) whether the complaint disclosed the ingredients of criminal breach of trust and conspiracy; (iii) whether the complaint was barred by limitation under the Code of Criminal Procedure, 1973.

Issue (i): Whether the Chief Metropolitan Magistrate, Calcutta, had territorial jurisdiction to entertain the complaint.

Analysis: Section 181(4) of the Code of Criminal Procedure, 1973 permits inquiry or trial at the place where the offence was committed or where the property subject to the offence was received, retained, or was required to be returned or accounted for. The record showed that some fixed deposits were retained in banks within Calcutta, including receipts seized in connection with the investigation. On that basis, part of the alleged retention occurred within the local jurisdiction of Calcutta.

Conclusion: The complaint was within the territorial jurisdiction of the Calcutta court.

Issue (ii): Whether the complaint disclosed the ingredients of criminal breach of trust and conspiracy.

Analysis: Criminal breach of trust requires entrustment and subsequent dishonest misappropriation or conversion in breach of the obligation. The complaint alleged retention of trust monies in personal names and in the name of Jain Swetambar Society, but it did not contain a clear averment that the petitioners dishonestly misappropriated or converted the amounts for their own use. Mere retention, without an allegation of dishonest misappropriation causing wrongful gain or wrongful loss, was insufficient to constitute an offence under Section 405 of the Indian Penal Code, 1860, and the conspiracy allegation also could not stand independently on the same deficient foundation.

Conclusion: The complaint did not disclose the necessary ingredients of the alleged offence.

Issue (iii): Whether the complaint was barred by limitation under the Code of Criminal Procedure, 1973.

Analysis: For an offence punishable under Section 406 of the Indian Penal Code, 1860, the period of limitation under Section 468(2)(c) of the Code of Criminal Procedure, 1973 is three years. The complaint was filed more than three years after the latest dates on which the alleged misappropriation was said to have come to light. The offence was held to be one committed once and for all and not a continuing offence, so the limitation period could not be extended on that basis.

Conclusion: The complaint was barred by limitation.

Final Conclusion: The revisional application succeeded, the impugned order refusing discharge was set aside, and the criminal proceeding was quashed for want of a disclosed offence and for limitation.

Ratio Decidendi: A complaint for criminal breach of trust must contain a clear allegation of dishonest misappropriation or conversion, and where the alleged offence is complete once and for all rather than continuing, prosecution must be initiated within the statutory limitation period.

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