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Judgments of Supreme Court of India and High Courts

Amandeep Arora vs State Of Punjab on 28 May, 2019

279 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH

CRM-M-22262-2019
Date of decision: May 28, 2019

Amandeep Arora
….Petitioner
Versus
State of Punjab
….Respondent

CORAM: HON’BLE MR. JUSTICE ARVIND SINGH SANGWAN

Present: Mr. J.S. Toor, Advocate
for the petitioner.

Mr. Joginder Pal Ratra, DAG, Punjab.

ARVIND SINGH SANGWAN, J. (Oral)

Prayer in this petition is for quashing of FIR No.20 dated

28.01.2010 registered under Sections 420, Section406, Section34 IPC at Police Station City

Khanna and for setting-aside the order dated 14.01.2013 passed by the

Judicial Magistrate Ist Class, Khanna vide which the petitioner has been

declared as proclaimed offender.

On 16.5.2019, the following order was passed :-

“Counsel for the petitioner has submitted that the
FIR was registered against 03 persons namely Jagdish Lal,
Gagandeep Arora and Amandeep Arora (the petitioner
herein) with the allegations that the complainant is a NRI
and he has entered into a partnership with the accused
persons in order to run a joint business and a dispute has
arisen between the parties regarding sharing of profit and

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loss and the accused persons have failed to pay the share
of the complainant. It is further submitted that the
petitioner has travelled abroad and therefore, vide
impugned order dated 14.01.2013, he was declared as
proclaimed offender without following the procedure laid
down as per the amended provisions of SectionCr.P.C. Chapter
VII-A and without securing the presence of the petitioner
as per law, as he was residing abroad. In the meantime, 02
other accused persons, who were facing the trial were
discharged by the trial Court vide judgment dated
25.04.2013 as it was found that no offence punishable
under Section 406 IPC was made out against those
accused persons.

Counsel for the petitioner has also argued that,
thereafter, the complainant filed a revision challenging the
order dated 25.04.2013 passed by the trial Court and the
revision was dismissed by the Additional Sessions Judge
on 30.11.2014 and this order has attained finality.

Counsel for the petitioner has relied upon the
judgment passed by the Division Bench of this Court
“Sudo Mandal @ Diwark Mandal vs State of Punjab”,
2011(2) RCR (Criminal) 453, wherein it has been held
that where the co-accused of a person who was declared as
proclaimed offender stands acquitted and the order has
attained finality then, no purpose will be served in
directing such person to face the trial.

Notice of motion.

Mr. Sidakmeet Singh Sandhu, AAG, Punjab who is
present in the Court accepts notice on behalf of the
respondent.

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Counsel for the petitioner is directed to supply a
copy of paper-book to counsel for the State during course
of the day.

List again on 28.05.2019.

In the meantime, the petitioner is directed to deposit
the costs of Rs.2,00,000/- with the Punjab and Haryana
High Court Advocates Bar Association.”

Counsel for the petitioner has placed on record the receipt

dated 24.5.2019 showing the deposit of costs of Rs.2,00,000/- by way of a

cheque with the Punjab and Haryana High Court Bar Association.

Counsel for the petitioner has submitted that the petitioner is

residing abroad since long and the co-accused of the petitioner, who has

faced the full length trial stands discharged vide judgment dated 25.4.2013.

The operative part of the order reads as under :-

“I have perused the record of the file. From the
above said complaint, the specific amount of
Rs.3,70,46,307/- belonging to the share of complainant is
alleged to have been misappropriated. In the compromise
dated 6.11.2009 arrived at between the parties, such
amount is show to be Rs.47,51,075/- whereas, in the
inquiry report dated 7.1.2010 of the police placed on
record, there is reference of amount of Rs.75,00,000/-. In
the original complaint, it is stated by complainant that a
legal partnership deed was drafted and signed by Notary
Public with appropriate witnesses in 2004 whereas, in
statement recorded under Section 161 Cr.P.C., he says that
he became partner in the firms already existing, consisting
of accused as partners. The complainant himself is not
clear as to the amount allegedly misappropriated by

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accused. Secondly, till date, settlement of accounts has
not been made between the parties. Neither any case has
reportedly been filed for rendition of accounts before any
authority/Court. Further, a partner has undefined
ownership along with other partners over all the assets of
the partnership. If he chooses to use any of them for his
own purpose, he may be accountable civilly to the other
partners. But, he does not thereby, commit any
misappropriation. Admittedly, partnership firms have not
yet been dissolved as per law and the partners have
dominion in common over the property and the respective
shares allotted to each of the partners. Unless, the
dissolution of firm is taken place and account is settled, all
the partners of the firm have dominion in common over
the property and, therefore, if any of the partners
misappropriated the property of the firm, it cannot be said
that he has committed criminal breach of trust. The
essential ingredients to construe the offence under Section
406 IPC of entrustment of the property is missing in this
case. Reference, for my this view, can be made to the
citation Hari Mohan Vs. State of Rajasthan and
another, 2007 (2) 821.

In view of what is discussed above, no ground is
made out to frame charges against accused for any
offence. Accused, namely, Jagdish Lal and Gagandeep
Batra are, accordingly, discharged. File be consigned to
record room.”

Counsel for the petitioner has further argued that the trial Court

has recorded categorical findings that during the subsistence of the

partnership firm, even if it is alleged by the one partner as other partner has

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misappropriated the property of the firm, no offence under Section 406 IPC

is made out.

Counsel has further submitted that thereafter, the complainant

Raghubir Singh Dhillon has filed a revision challenging the aforesaid order

on 25.4.2013 before the Court of Sessions and after hearing the contesting

persons, who faced the trial, the said revision petition was dismissed by

passing the following order :-

“5. I have heard the learned counsel appearing for the
respective parties and gone through the record of the case
sparingly.

6. Assailing the order of discharge passed by the
learned trial Court, learned counsel for the revisionist has
argued that the learned trial Court has neither considered
the facts nor the law in the correct perspective, and as
such reached on an erroneous judgment, which is liable to
be set aside by accepting the present revision petition.
Elaborating this , learned counsel for the revisionist has
argued that the view of the learned trial Court is
erroneous for the reasons that at the time of framing of
charge, the learned trial Court is not to weigh the
prosecution evidence in between the lines and at the time
of framing charge, ti is not to be seen as to how much
amount has been embezzled or misappropriated by the
accused as the same can be decided only during the trial.
He further submitted that since the respondents have
cheated the revisionist who is also one of the partner
during business transaction, as such, the respondents are
also criminally liable. He further submitted that although
the complaint under Section 138 of the Negotiable
Instruments Act has been filed against the respondent

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No.1 and 2, but the respondents No.1 and 2 can be held
liable under Section 420 IPC apart from the Section 138
of the Negotiable Instruments Act. He further submitted
that if the firm has not yet been dissolved and the
respondents had misappropriated the share of the
revisionist, then all the respondents being partners are
liable for breach of trust as they had the malafide
intention from the very beginning to grab the share of the
revisionist. He further submitted that by passing the
impugned order, the learned trial Court has scuttled the
process of law and wrongly discharged the respondents
No.1 and 2. With these submissions, he prayed that the
instant petition may be allowed and the trial Court is
directed to frame the charge against the respondents No.1
and 2 under Sections 420/Section406 IPC.

7. On the other hand, learned counsel for the
respondent has argued that the learned trial Court has
passed very well reasoned order. He further submitted
that the learned trial Court has rightly held that a charge
under Sections 406/Section420 IPC could not be framed against
the respondent No.1 and 2 as according to the version of
the complainant, they are partners with him and can not
be accused of an offence in respect of property belonging
to respondents No.1 and 2 as well as revisionist as
partners. He further submitted that at the best the liability
of the respondents would be only of a civil nature. With
these submissions, he prayed for the dismissal of the
instant revision petition.

8. I have filtered the submissions of learned
counsel for the parties and find that the revisionist has
lodged a complaint against the respondents inter alia on
the ground that he entered into a partnership with the
respondents No.1 and 2 to run joint business and they set

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up three firms and each firm complainant is having 40%
share. He submitted that business was started in the year
2004 and as per his share, he is entitled of his share
amounting to Rs.3,70,46,307/, but the respondents No.1
and 2 did not pay the said amount and they have
misappropriated the share of the complainant.
Admittedly, partnership firm has not been dissolved so
far. In Bhuban Mohan VS. Surindra Mohan, AIR
1951, Calcutta 69, a Full Bench of the Hon’ble Calcutta
High Court held that a charge under Section 406 IPC can
not be framed against a person who according to the
complainant is a partner with him and is accused of an
offence in respect of property belonging to both of them
as partners. Furthermore, in Anil Saran Vs. State of
Bihar and others, 1995 SCC (Criminal) page 1051, the
Hon’ble Supreme Court held that the partnership firm is
not a legal entity, but a legal mode of doing business by
all the partners. Until the firm is dissolved as per law and
the accounts settled, all the partners have dominion in
common over the property and funds of the firm. Only
after the settlement of account and allotment of respective
shares, a partner become owner of his share. As referred
above, in the instant case, neither the partnership firm has
been dissolved as per law nor the accounts settled. In the
ratio of law Anil Saran Vs. State of Bihar (Supra),
unless the dissolution of firm is taken place and account
is settled, complainant and respondents No.1 and 2 being
partners of the firms have dominion in common over the
property and even if the respondents No.1 and 2
misappropriated the property of the firms, it can not be
said that they have committed criminal breach of trust.
The imputations alleged by the revisionist against the
respondents No.1 and 2 have been done in their capacity
as partners of the firms. Keeping in view of the judicial

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verdicts referred above, in my view, from the material on
record, the very essential ingredients to construe the
offence of criminal breach of trust and cheating are
missing in the instant case and therefore, for want of the
legal requirement having not been fulfilled, this Court has
no option but to concur with the findings arrived at by the
learned trial Court. Consequently, I find no illegality or
impropriety in the order passed by the learned trial Court,
whereby the Court has discharged the accused-
respondents.

9. For the foregoing reasons, I find no merit in the
present revision petition and the same is accordingly
dismissed. Lower Court record be sent back along with
copy of this order and file of the revision petition be
consigned to the record room.”

Counsel for the petitioner has submitted that both the Courts

below have concurrently held that no offence under Section 406 IPC is

made out as it is only the case of the complainant that he, along with other

accused, was a partner in the firm and the partners have committed criminal

breech and trust during the subsistence of the firm and, therefore, the

complainant has a civil remedy for the rendition of his account.

Counsel has further argued that the order dated 14.1.2013

passed by the trial Court declaring the petitioner a proclaimed offender is

without following the procedure laid down under Section 82(3) Cr.P.C. as

no proper communication was made at the ordinary place of his residence.

Counsel has further argued that that the since the petitioner was residing

abroad and even the provision to Section 105 Cr.P.C. and amended

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provisions of Sections 105-A and Section105-B of Cr.P.C. were not adhered to by

the trial Court before declaring the person a proclaimed offender.

Counsel for the petitioner has further relied upon “Sudo

Mandal @ Diwark Mandal vs State of Punjab”, 2011(2) RCR

(Criminal) 453, wherein it has been held that where the accused persons,

who have faced the trial and were acquitted, the proceedings even against

the absconding accused can be quashed if the evidence produced by the

prosecution is untrustworthy.

Counsel for the petitioner has further argued that in the instant

case, both the Courts below while acquitting the co-accused has recorded a

categorical finding that no offence under Section 406 IPC is made out and

accordingly, they were discharged and therefore, putting the petitioner at

trial, at this stage, is nothing but the misuse of process of law.

Reliance has also been placed upon Vinod Kumar Vs. State of

Punjab 2011 RCR (Criminal) 438, and Jaswinder Singh Vs. State of

Punjab, 2013(1) RCR (Criminal) 310, wherein a similar view has been

taken by this Court.

Learned State counsel, on the basis of the two orders passed by

the trial Court discharging the co-accused as well as the dismissal of the

revision petition filed by the complainant could not dispute the fact that a

categorical finding is recorded that during the subsistence of the partnership

firm, the complainant, who himself is a partner along with other accused

had no locus standi to register the FIR, as primarily it was a case of

settlement of account and the essential ingredients to constitute the offence

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of criminal breach of trust or cheating are missing from the bare perusal of

the FIR.

Accordingly, this petition is allowed, the impugned order dated

14.1.2013 declaring the petition to be proclaimed offender is set aside the

FIR No.20 dated 28.01.2010 registered under Sections 420, Section406, Section34 IPC at

Police Station City Khanna is, hereby, quashed.

The petition stands disposed of, accordingly.

( ARVIND SINGH SANGWAN )
May 28, 2019 JUDGE
satish

Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No

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