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Balwinder Kumar vs M/S R.N. Highways (P) Ltd on 17 August, 2018

CRM-M-37409-2014 -1-

IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH

CRM-M-37409-2014 (OM)
Date of decision: 17.08.2018
Balwinder Kumar
… Petitioner
Vs.

M/s R.N. Highways (P) Ltd.
… Respondent
CORAM: HON’BLE MR. JUSTICE ARVIND SINGH SANGWAN

Present: Mr. A.D.S. Sukhija, Advocate
for the petitioner.

Mr. Raghav Gulati, Advocate for
Mr. Bhupinder Ghai, Advocate
for the respondent.

*******

ARVIND SINGH SANGWAN, J. (ORAL)

Prayer in this petition is for quashing of criminal complaint

No.11154 of 05.06.2008 titled as R.N. Highways (P) Ltd. Vs. Balwinder

Singh and others (Annexure P-1) and the summoning order dated 24.08.2009

(Annexure P-2), vide which the petitioner has been summoned to face the

trial under Section 406 of the Indian Penal Code (for short ‘IPC’).

Brief facts of the case are that the respondent-complainant

(hereinafter referred as ‘complainant’) filed the aforesaid complaint in the

year 2008 against petitioner Balwinder Kumar, Recovery Manager of HDFC

Bank (for short ‘Bank’) along with J.P. Singh, Regional Manager, Rajesh

Bhatia, Manager Legal Cell and one Tarun Likha, Manager of the Bank,

Branch Sector-8, Chandigarh under Sections 390, 392, 403, 406, 420, 424,

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426, 427 IPC with the allegations that the complainant is Director of R.N.

Highways Pvt. Ltd. and is authorized to file the complaint by virtue of

resolution dated 16.05.2008. The complainant-company had purchased a

machine Tata Hitachi Ex-110 by availing the loan/finance from the Bank.

Later on, due to financial problem of the complainant-company, installments

of the loan amount could not be paid and on 30.01.2008, the petitioner along

with other accused named in the complaint, who were employees of the

Bank, had taken possession of the aforesaid machine in a reckless manner

and the same was kept in the stock yard under their supervision. Thereafter,

the complainant lodged the complaint with the police where conciliation

efforts were made. The accused persons produced a letter dated 20.08.2006

given by Kamal Kant Puri, authorized representative of complainant,

requesting the Bank to take possession of the machine. It is further stated that

said Kamal Kant Puri had misappropriated the company’s asset. Later on, a

Memorandum of Settlement was effected between the Bank and the

complainant and as per the settlement (Annexure P-3), the complainant paid

an amount of Rs.13,75,000/- to the Bank on 14.03.2008 as full and final

payment towards the loan amount and the Bank issued receipts dated

17.03.2008. The Bank further issued a release memo in respect of the

machine, addressed to M/s Sanjeev Goel, Stock Yard, Panchkula on

20.03.2008. It is further stated on 21.03.2008, the complainant was allowed

to inspect the machine along with an Engineer and found that some vital parts

of the machine are missing and there are dents and damage due to careless

mishandling. A list of damages and deficiencies was prepared and given to

the petitioner, however, there was no response. Later on, the complainant

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approached Mr. J.P. Singh, Regional Manager of the Bank and gave a

complaint dated 03.04.2008 and the complainant was assured that needful

will be down within 72 hours. Thereafter, the complainant-company issued a

notice dated 20.04.2008 but there was no response from the accused persons.

It is further stated in the complaint that since the complainant is suffering loss

of earning of Rs.7,000/- per day, which amounted to Rs.7.00 lacs, w.e.f.

30.01.2008 onwards, thus, it was prayed that the accused be summoned and

punished according to law.

After the complainant led its preliminary evidence, in which the

complainant appeared as CW1 and proved on record the settlement as Ex.C2,

the trial Court vide impugned order dated 24.08.2009 (Annexure P-2)

summoned the petitioner under Section 406 IPC only, however, no

summoning order was passed against accused No.2 to 5, other office bearers

of the Bank. The trial Court relied upon Clauses 1 3 of the settlement

Ex.C2, where it was specifically mentioned that the Bank shall keep the

machine in its trust and good condition and shall return the same to the

complainant in the same good condition, in which it is being taken into trust.

This petition was filed in the year 2014 and vide order dated

03.11.2014, further proceedings before the trial Court were stayed.

Learned counsel for the petitioner has submitted that at the time,

when the loan was obtained by the complainant, the petitioner was not a

signatory and he is only a signatory to the settlement Ex.C2 and in response

to the said settlement, the Bank has offered to hand over possession of the

machine to the complainant and it is the vicarious liability of the Bank, who

has entered into the settlement with the complainant. It is further submitted

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that the complainant had inspected the machine and thereafter, he had entered

into the settlement and the Bank consistently requested the complainant to

take possession of the machine, but he denied. Counsel for the petitioner has

further submitted that even the complainant has filed a suit for mandatory

injunction praying for a decree to direct the Bank/its officials to hand over

the possession of the machine in perfect working condition and vide

judgment dated 20.01.2016, the Civil Court dismissed the suit by making the

following observations: –

“The plaintiff has also relied upon the evidence of PW-2

Amrinder Singh. Though, he had tendered in evidence his

affidavit when the plaintiff had a chance to lead evidence, but

did not again step into the witness box for the purpose of cross-

examination and the evidence of the plaintiff was closed by the

orders of the Court. However, he again stepped into the witness

box during rebuttal evidence, which was objected to by the

counsel for the defendants before the cross-examination. Since

in the rebuttal evidence the plaintiff can only be allowed to lead

evidence on the issues the onus of which was upon the

defendants, and therefore, his affidavit during rebuttal evidence

cannot be read in evidence particularly when he failed to

appear for cross-examination when the plaintiff had a chance to

lead evidence in affirmative. Even otherwise, his cross-

examination is very vital wherein he had stated that he does not

have any proof regarding his presence on the spot or in the

police station as mentioned by him in the affidavit. He had not

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signed any of the documents relied upon by the plaintiff alleged

to have been executed on 30.1.2008 when the machine was

confiscated by the defendant bank. He has never been named in

the plaint to have been present on the said date and his evidence

appears to be only an afterthought just to fill up the lacuna in

the present case. Moreover, he has specifically deposed in the

cross-examination that he does not have any proof to show that

there is any difference in the condition of the machine when it

was picked up and when the release order of the same was

issued by the bank on 20.3.2008. He has further deposed that he

cannot tell if here is any mechanical or technical defect in any

machine or vehicle. Therefore, the fact remains that the oral

evidence relied upon by the plaintiff is not trustworthy and the

Director of the plaintiff company namely Mohinder Singh

through whom the present suit has been filed, has not stepped

into the witness box and an adverse inference in this regard is to

be raised against the plaintiff.

Much reliance has been placed by learned counsel for the

plaintiff on the documents Ex.PE and Ex.PF. At the very outset,

it is pertinent to observe here that firstly the original of these

documents have never seen the light of the day and it is a settled

law that a photocopy of the document is not admissible in

evidence. Learned counsel for the plaintiff has stated that the

execution of Ex.PF has not been denied by the defendants. Even

in such a scenario the contents of the said documents are

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inadmissible in evidence only being a photocopy thereof as it is

only the execution which has been admitted, but the contents

thereof have nowhere been admitted by the defendants.

Moreover, a perusal of the said document nowhere suggests that

the machine was in working condition at the time when the same

was confiscated by the defendant bank on 30.1.2008. The same

only refers to the fact that the machine was in a good condition.

However, the same is a relative term and it nowhere raises a

presumption that the machine was in a working condition on the

said day. Moreover, the plaintiff has also failed to prove that the

machine was not in working condition on the day the release

memo was issued to him by the defendant bank. As far as the

document Ex.PE is concerned, the same is also a photocopy of

document and even otherwise the same has been nowhere

purported to have been signed by any of the official of the

defendant bank. Therefore, in these circumstances, I am of the

considered opinion that the plaintiff has miserably failed to

prove the allegations leveled by it in the plaint, and as such,

both these issues are decided against the plaintiff and in favour

of the defendants.

ISSUE NO.3.

The plaintiff has filed the present suit for mandatory

injunction and recovery of losses suffered by it. Although, the

plaintiff has failed to prove its case on merit, but the same is

maintainable under the provisions of Specific Relief Act, 1963

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and Section 9 of Code of Civil Procedure, 1908. This issue is,

therefore, decided in favour of the plaintiff an against the

defendants.

ISSUE NO.4.

The plaintiff has filed the present suit for mandatory

injunction and recovery of losses suffered by it. Though, in the

head note of the plaint and the relief clause, the plaintiff has not

stated the amount which is sought to be recovered in view of the

losses suffered by him as alleged in the plaint, but in Para no.

23(ii) of the plaint, he has quantified the alleged losses to the

tune of Rs. 43,37,500/-. The plaint is to be read in its entirety

and merely because no amount has been written in the head

note and the relief clause of the plaint and particularly when the

alleged losses have been quantified by him in Para no. 23(ii)of

the plaint, is no ground not to file the ad-valorem court fee.

Therefore, the suit is to be valued on the relief of recovery of Rs.

43,37,500/- for the purposes of court fee and jurisdiction.

However, the plaintiff has only affixed the court fee of Rs.35/-,

and is liable to pay the ad-valorem court fee on the amount of

recovery, but has failed to pay the same. Therefore, this issue is

decided against the plaintiff and in favour of the defendants.

RELIEF.

Thus, in view of my findings made on the issues supra, the

suit of the plaintiff fails and the same stands dismissed with no

order as to costs.”

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Learned counsel for the petitioner has argued that process of

advancement of loan, its repayment and taking the possession of the machine

was done by the Bank, which is not arrayed as an accused and only role

assigned to the petitioner was that he was a signatory to the Memorandum of

Settlement. It is further argued that the trial Court has summoned the

petitioner only under Section 406 IPC and no other official of the Bank was

summoned in this regard. Learned counsel has further argued that from the

bare perusal of the complaint and the statement of the complainant, no

offence under Section 406 IPC is made out against the petitioner.

Learned counsel for the petitioner has relied upon Anup

Sarmah Vs. Bhola Nath Sharma and others, 2013 (1) RCR (Crl.) 62, in

which the Hon’ble Supreme Court has held as under: –

“In view of the above, the law can be summarised that in an

agreement of hire purchase, the purchaser remains merely a

trustee/bailee on behalf of the financier/financial institution and

ownership remains with the latter. Thus, in case the vehicle is

seized by the financier, no criminal action can be taken against

him as he is re-possessing the goods owned by him.

If the case is examined in the light of the aforesaid settled

legal proposition, we do not see any cogent reason to interfere

with the impugned judgment and order. The petition lacks merit

and, accordingly, dismissed.”

Learned counsel for the petitioner has further relied upon a

judgment of the Hon’ble Supreme Court in Sharad Kumar Sanghi Vs.

Sangita Rane, 2015 (2) RCR (Crl.) 120, to submit that where the allegations

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are pertaining to the Managing Director or any officer of the Company and

the complaint is filed only against the officials, by not impleading the

company, in the absence of any specific allegation against the officials,

complaint is liable to be quashed.

Learned counsel has also relied upon S.K. Alagh Vs. State of

U.P. and others, 2008 (2) RCR (Crl.) 79, where the allegations against the

company were made under Section 406 IPC and the complaint was filed

against the Managing Director of the Company and the Company was not

arrayed as an accused, the proceedings were quashed.

Learned counsel for the petitioner has also relied upon M/s

GHCL Employees Stock Option Trust Vs. M/s India Infoline Limited,

2013 (2) RCR (Crl.) 519, wherein the Hon’ble Supreme Court has held that

breach of trust or cheating are both civil wrong as well as criminal offence

and under certain situations, where the act alleged would predominantly be a

civil wrong, such an act does not constitute a criminal offence.

Learned counsel for the petitioner has lastly argued that in view

of the judgment of the Hon’ble Supreme Court in Dhariwal Tobaco

Products Ltd. and others Vs. State of Maharashtra and another, 2009 (1)

RCR (Crl.) 677, the petitioner though has a remedy of filing revision petition

against the summoning order under Section 397 Cr.P.C. yet can also file a

petition under Section 482 Cr.P.C. as alternative remedy and the petition filed

under Section 482 Cr.P.C. cannot be dismissed only on the ground that

remedy of revision was available to the accused persons.

In reply, learned counsel for the respondent has argued that from

the bare perusal of the complaint, offence under Section 406 IPC is made out

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against the petitioner, as he being the representative of the Bank, had entered

into the settlement and promised to keep the machine in its trust and good

condition. The petitioner had further undertaken that the machine shall be

returned in the same good condition, in which it has been taken in trust. It is

further submitted that in pursuance to the Memorandum of Settlement, the

complainant has performed his part of the settlement and has paid the entire

loan amount and when he had gone to inspect the machine on 21.03.2008, he

found that vital parts of the machine were missing and some parts are

replaced with junk and there is damage to the machine. It is also submitted

that despite issuance of a notice and assurance given by the Bank, the

machine was not restored to its original condition and therefore, prima facie

offence under Section 406 IPC is made out and the trial Court has rightly

summoned the petitioner, as he was the official incharge of the Bank, on

whose representation, the complainant deposited the entire loan amount,

trusting that the machine will be restored to its original condition.

Learned counsel has further submitted that till date, despite a

period of more than 10 years has been passed, the machine is still lying with

the Bank and the complainant has already filed an appeal challenging the

aforesaid Civil Court judgment dated 20.01.2016, vide which the civil suit for

mandatory injunction filed by the complainant, was dismissed.

After hearing learned counsel for the parties, I find merit in the

present petition, for the following reasons: –

(a) Admittedly, the petitioner is an employee of the Bank and the

Bank is not arrayed as an accused in the complaint. As per own

case of the complainant, it had obtained the loan from the Bank

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and after having failed to repay the same, possession of the

machine was taken by the Bank. It is only subsequent thereto,

when the talks for some settlement were there between the parties

and the Memorandum of Settlement was arrived at between

them, the petitioner, being an official of the Bank, had signed the

same on behalf of the Bank and therefore, the vicarious liability,

if any, is of the Bank, who is not arrayed accused in the

complaint.

(b) There is no allegation in the complaint that the petitioner is

incharge of the yard, where the machine is lying and even there is

no allegation that the petitioner had removed vital parts of the

machine. In the absence of any such allegation in the complaint,

or in the statement of the complainant, the petitioner alone cannot

be held guilty to have committed the offence under Section 406

IPC remotely, especially when the Bank is not arrayed as an

accused. Therefore, in view of judgment of the Hon’ble Supreme

Court in Sharad Kumar Sanghi’s case (supra) and S.K. Alagh’s

case (supra), the prosecution of the petitioner is not maintainable.

(c) Even otherwise, from the bare perusal of the complaint, offence

of criminal breach of trust is not made out. It has been held by the

Hon’ble Supreme Court in Ashok Basak Vs. State of

Maharashtra and others, 2014 (4) RCR (Crl.) 789 that in order

to prove the offence of criminal breach of trust, the complainant

should satisfy that the accused was entrusted with the property or

entrusted with dominion over the property; secondly that such

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person has dishonestly misappropriated or converted to his own

use of that property or dishonestly used or disposed of the

property or willfully suffered any person to do so; and thirdly,

such misappropriation, conversion, use or disposal was in

violation of any direction of the law prescribing the mode, in

which such trust is to be discharged or of any legal contract,

which the person has made touching the discharge of the trust.

Therefore, it is apparent that there are no allegation against the

petitioner that he was entrusted with the machine, which was

taken into possession by the Bank and it is also not the case of

the complainant that the petitioner was entrusted with dominion

over the property. The complaint also does not reveal the second

and third condition as the machine is lying in the yard of the

Bank and therefore, the petitioner has not dishonestly

misappropriated any property of the complainant, as he was

discharging his job as an official of the Bank and only allegation

against him is that he was signatory to the Memorandum of

Settlement.

(d) In view of the judgment of the Hon’ble Supreme Court in V.Y.

Jose and another Vs. State of Gujarat and another, 2009 (1)

RCR (Crl.) 869, the primary dispute between the complainant

and the petitioner is with regard to return of the machine, in the

condition, in which its possession was taken and qua this, the

complainant had already filed a civil suit for mandatory

injunction, which stands dismissed at first instance and therefore,

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primarily, the dispute is of civil nature, as the complainant can

claim the relief of mandatory injunction as well as can seek

compensation from the Bank, in accordance with law.

(e) Though the petitioner has levelled allegations against four

officials, however, the trial Court has summoned only the

petitioner to face the trial and the complainant has not challenged

the summoning order qua other officials, against whom, there are

similar allegations, as against the petitioner. Even otherwise,

though the complainant has filed the complaint under various

Sections of the Indian Penal Code, the trial Court has summoned

the petitioner only under Section 406 IPC and from a bare perusal

of the complaint, the ingredients of Section 406 IPC are not made

out, as the Bank had repossessed the vehicle in accordance with

law.

(f) The arguments raised by counsel for the respondent that the

petitioner has alternative remedy of filing the revision petition

before the Court of Sessions, at this stage, when the present

petition is pending for the last 04 years and the proceedings were

stayed, cannot be entertained, as even otherwise, in view of the

judgment of the Hon’ble Supreme Court in Dhariwal Tobaco

Products Ltd.’s case (supra), present petition cannot be

dismissed only on this account.

(g) In view of the judgment of the Hon’ble Supreme Court in M/s

GHCL Employees Stock Option Trust’s case (supra), it is

apparent that dispute between the complainant and Bank is

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predominant qua civil wrong and therefore, the act on behalf of

the petitioner being an official of the Bank, does not constitute a

criminal offence.

For the reasons stated above, present petition is allowed. The

criminal complaint No.11154 of 05.06.2008 titled as R.N. Highways (P) Ltd.

Vs. Balwinder Singh and others (Annexure P-1) and the summoning order

dated 24.08.2009 (Annexure P-2) are hereby quashed.

[ ARVIND SINGH SANGWAN ]
17.08.2018 JUDGE
vishnu

Whether speaking/reasoned : Yes/No

Whether Reportable : Yes/No

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