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2025 (8) TMI 1217
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....alita Kumari v. State of Uttar Pradesh (2014) 2 SCC 1, more particularly paragraphs 49, 50 and 53 to 56, and held as follows: "24. Applying the law to the facts of this case, undisputedly loans have been taken by the respondent No.2 for purchase of machineries. The machineries have not been purchased and the money, which had been taken for purchase of machinery, has been misappropriated for the use of respondent No.2. The facts on the face of it prima facie discloses a cognizable offence. The learned CMM and the learned PDJ have erred in not directing the registration of the FIR as the offence alleged of directly comes within the four corners of the Constitution Bench Judgment of Lalita Kumari vs. State of U.P. (supra). The complaint of the Petitioner discloses a cognizable offence i.e. criminal breach of trust in respect of the terms of contract that was agreed upon, which requires to be investigated by the police despite taking into account the fact that borrowed amounts stand repaid to the Petitioner or the fact that proceedings before the arbitral tribunal are ongoing. Therefore, this Court is of the opinion that a cognizable offence has been alleged against respondent No.2 a....
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....of 2018 under Section 9 of the Arbitration and Conciliation Act, 1996 A & C Act; (iii) a complaint before the Deputy Commissioner of Police, Economic Offences Wing EOW, New Delhi, (iv) arbitration proceedings under the A & C Act before a sole Arbitrator claiming an amount of Rs.24.97 crore together with interest, and (v) steps under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement Of Security Interest Act, 2002 SARFAESI Act, whereupon Hero took possession of the collateral security and sold and appropriated the proceeds received towards part satisfaction of his dues. d. NCLT on the recommendation of the Committee of Creditors approved a resolution plan for revival of Benlon by an order dated 20.10.2020. e. A second complaint was lodged by Hero before the Special Commissioner of Police, EOW, New Delhi, on 11.07.2019. Close on the heels thereof, Hero lodged a complaint under Section 156(3) of the Cr. PC Complaint Case No.12271 of 2019 before the Chief Metropolitan Magistrate, Patiala House Courts CMM on 27.07.2019. On 28.08.2019, EOW submitted a detailed Status Report that no cognizable offence was made out in terms of the decision in La....
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....tly 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 wilfully suffers any other person so to do, commits "criminal breach of trust". 9. It would appear on a bare reading of the above provision that an offence of criminal breach of trust is committed if the accused (i) being entrusted with 'property' or 'dominion over property' (ii) dishonestly misappropriates such property or converts thereof for own use, or, dishonestly uses or disposes of such property (iii) violating any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which the accused has made touching the discharge of such trust; or (iv) wilfully suffers any other person to do so. 10. It does not admit of any doubt that the term "entrusted" in Section 405, IPC is crucial and governs both "with property" immediately following it as well as "with any dominion over property" occurring thereafter. Since the word "en....
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....beneficial ownership in the money so advanced to Benlon was intended to be transferred to it and it was not intended that it was to keep the money intact in its possession and make no use of it at all, whether or not interest was paid on it. In our opinion, on the plain terms of the loan agreement and the facts that have unfolded, the appellant or, for that matter, Benlon could not be said to have committed any offence. 15. Even if it is assumed that the appellant was entitled in terms of the loan agreement to only utilise the money for the purpose of purchase of machinery and not for any other purpose and that the money lent had to be returned together with interest, the facts on record reveal that breach, if any, of the trust had occasioned because Benlon and its directors were forced by circumstances beyond their control not to purchase the machinery owing to the incident of fire which ravaged the plant within a week of receipt of the loan amount and not because the appellant had any dishonest intention of causing wrongful gain to himself and/or wrongful loss to Hero. So long Hero received the monthly instalments for repayment of the loan on time, i.e., till April/May 2018, it ....