High Court quashes complaint alleging breach of trust and fraud, finding it resembles a civil dispute

The High Court quashed a complaint under Section 561-A of the Cr.P.C. alleging breach of trust and fraud. The Court held that the Trial Court failed to apply the required legal standards in issuing summons, determining the complaint resembled a civil dispute rather than criminal offenses. Consequently, the High Court allowed the petition, setting aside the order issuing process and summons against the petitioners.

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Issues Involved:
1. Quashment of complaint under Section 561-A of the Code of Criminal Procedure.
2. Allegations of breach of trust and fraud under Sections 409, 420 RPC.
3. Vicarious liability of the Chairman of the Bank.
4. Jurisdiction and application of mind by the Trial Court in issuing summons.

Detailed Analysis:

Quashment of Complaint under Section 561-A of Cr.P.C.:
The petition was filed seeking the quashment of a complaint pending before the Forest Magistrate, Srinagar. The complaint alleged offences under Sections 409 and 420 RPC. The petitioners argued that the complaint did not make out a prima facie case against them and that the Trial Court had assumed jurisdiction improperly.

Allegations of Breach of Trust and Fraud under Sections 409, 420 RPC:
The complaint by the respondent alleged that her husband had availed a CC facility of Rs. 12.00 Lakhs from J & K Bank in 2007, and despite fulfilling all formalities, the sanctioned amount of Rs. 2.00 Crores was not granted. The respondent accused the petitioners of committing breach of trust and fraud by not returning the title deeds and revenue extracts.

Vicarious Liability of the Chairman of the Bank:
The petitioners contended that the Chairman of the Bank, who was sued as petitioner no. 2, had no role in the alleged offences. They argued that vicarious liability could not be imputed to the Chairman as the matter of sanctioning loans lies within the jurisdiction and powers of the Branch Managers. They cited several Supreme Court judgments, including Sunil Bharti Mittal vs. CBI, to assert that vicarious liability requires specific statutory provision and active role with criminal intent.

Jurisdiction and Application of Mind by the Trial Court in Issuing Summons:
The petitioners argued that the Trial Court did not apply its mind while issuing summons and assumed jurisdiction not vested in it. They emphasized that the Trial Court failed to consider whether the complaint, even if taken at face value, would lead to the conclusion that the petitioners were personally liable for any offence. They cited Supreme Court judgments, including Maksud Saiyed v. State of Gujarat, which require the Magistrate to carefully scrutinize the allegations and evidence before issuing summons.

Conclusion:
The High Court concluded that the Trial Court did not follow the necessary legal standards while entertaining the complaint and issuing summons. The complaint did not meet the basic ingredients of the alleged offences and was more of a civil dispute. Therefore, the High Court allowed the petition, quashing the complaint and setting aside the order dated 19th January 2019, which issued the process and summons against the petitioners.

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