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Reportable

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.953 OF 2015 (@ Special Leave Petition (Crl.) No. 330 of 2015)

Mr. Robert John D’Souza and others … Appellants

Versus

Mr. Stephen V. Gomes and another … Respondents

J U D G M E N T

Prafulla C. Pant, J.

1. This  appeal  is  directed against  order  dated 9.10.2014,

passed  by  the  High  Court  of  Karnataka  at  Bangalore  in

Criminal  Petition  No.  658  of  2014  whereby  said  court  has

dismissed the  petition,  and declined to  quash  the  Criminal

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Complaint case No. 357 of 2012, filed by respondent No. 1,

against the appellants.

2.  Brief facts of the case are that a Society named – Mukka

Welfare Society  was constituted on 28.3.1970 for  charitable

work and social service, registered under Karnataka Societies

Registration Act, 1970.  Appellant No. 1, appellant No. 2 and

appellant  No.  3  were  President,  Secretary  and  Treasurer

respectively, while appellant Nos. 4 to 7 were Directors of the

Society.  Other appellants are their relatives.  A piece of land

bearing  S.  No.  239/10  measuring  0.50  acres  in  Village

Suratkal, Taluk Mangalore, was purchased by the Society vide

registered  sale  deed  dated  28.1.1978 from one  Smt.  Kaveri

Hengsu.  It is alleged by the complainant (respondent No. 1)

that appellant Nos. 1 to 7, being members of  the Executive

and  Directors  of  Mukka  Welfare  Society,  misusing  the

position, held Board Meetings on 22.9.1995 and 13.10.1995

facilitating the sale of the above mentioned land in favour of

their relatives (appellant Nos. 7 to 12).  The sale deeds were

executed  on  16.2.1996.   It  is  further  stated  that  the

purchasers (appellant Nos. 7 to 12), executed sale deeds in the

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same  year  in  favour  of  the  Directors  of  the  Society.   It  is

alleged  by  the  complainant/respondent  No.1  that  the

appellants  have  fraudulently  usurped  the  property  through

the  sale  deeds  mentioned  above,  and  thereby  committed

cheating.   

3. The  criminal  complaint  filed  by  respondent  No.  1  was

registered by the 1st Additional Senior Civil Judge and Chief

Judicial Magistrate, Mangalore, DK, who, after recording the

statement of the complainant under Section 200 of the Code of

Criminal  Procedure, 1973 (for short “CrPC”),  summoned the

appellants vide order dated 13.4.2012 in respect of  offences

punishable under Sections 406, 409, 420 read with Section 34

of  Indian  Penal  Code  (IPC).   The  appellants  filed  Criminal

Revision Petition No. 58 of 2012 before the Principal Sessions

&  District  Judge  of  D.K.  District  at  Mangalore,  which  was

dismissed  vide  order  dated  6.2.2013.  Thereafter,  the

appellants filed a petition under Section 482 CrPC before the

High Court  and the  same was  also  dismissed.   Hence  this

appeal through special leave.

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4. We  have  heard  learned  counsel  for  the  parties  and

perused the papers on record.

5. The impugned orders passed by the High Court and the

other authorities below are challenged before us mainly on the

following grounds: - (i) Respondent No. 1/complainant is not a member of the

“Mukka  Welfare  Society”  nor  is  he  in  any  manner

connected with the affairs of the Society, as such he has

no locus to file the criminal complaint. (ii) The  sale  deeds  in  question  were  executed  in  the  year

1996,  and  the  criminal  complaint  is  filed  malafide  by

respondent No. 1 after a period of fourteen years, in the

year 2010, as such the courts below have erred in law in

not taking note of said fact. (iii) The courts below have erred in law in not appreciating

that the complaint in question was filed to get personal

vendetta by respondent No. 1 against the Directors of the

Society. (iv) The courts below further erred in not considering the fact

that the complainant/respondent No. 1 had earlier filed a

complaint,  with  same  set  of  facts,  before  the  Deputy

Commissioner,  Dakshin  Kannada,  Mangalore,  and  the

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same  was  sent  to  Police  Station  Suratkal  for

investigation,  and  the  Circle  Inspector,  after

investigation,  did  not  find  any  offence  to  have  been

committed by the appellants, as the dispute was purely

of civil in nature. (v) Ingredients  of  the  offences  punishable  under  Sections

406, 409 and 420 IPC are not made out. (vi) None of the transactions of  sale in question is against

any bye-law or clause of Memorandum of Association of

the Society.

6. In  the  counter  affidavit  filed  on  behalf  of  respondent

No.1, it has been stated that the complainant came to know of

the transactions of sale, only in the year 2009, whereafter he

complained before the Deputy Commissioner, D.K., as such

the  issue  raised  as  to  delay  in  filing  the  complaint  is

unfounded.   It  is  further  stated  that  the  Mukka  Welfare

Society  receives  donations  from  various  institutions  and

general public.  The allegation of personal vendetta, pleaded

in  the  appeal  by  the  appellants,  has  been  denied  in  the

counter affidavit.  Lastly, defending the orders passed by the

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courts  below,  it  is  stated  that  the  courts  below  have

committed no error of law.

7. Arguments  were  advanced  by  learned  counsel  for  the

parties  on  the  above  lines  pleaded  before  us.  Having

considered  the  submissions  of  the  learned  counsel  for  the

parties  what  is  apparent  in  the  present  case  is  that  the

complainant is not the member of Mukka Welfare Society.  It

is  also  not  disputed  that  the  sale  deeds  in  question  were

executed way back in the year 1996 and the complainant, who

is not even member of the Society, raises the issue that the

sale deeds were executed for the benefit of the Directors of the

Society, after a long gap of more than twelve years. Sale deeds

in question are registered, and not declared null and void by

any  court  of  law.   It  is  also  relevant  to  mention  here  that

admittedly earlier a complaint was made by the complainant

to the Deputy Commissioner in the year 2009, which was got

investigated by the police and the result of the investigation

was that no offence was found committed by the appellants on

the ground that the dispute is of civil in nature.

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8. In view of the above facts, apparent on the record, we are

of  the view that  the High Court  and the courts below have

committed grave error of law in ignoring the same.  Needless to

say  that  to  constitute  an offence  punishable  under  Section

406 IPC, the essential ingredient is the “entrustment” of the

property.   The  complaint  filed  by  the  complainant  nowhere

discloses that the land in question purchased in the year 1978

was entrusted to the Society for the benefit of others.  It is only

after  entrustment  is  shown,  it  can  be  said  that  there  was

criminal breach of trust. 9. In  Ram  Narayan  Popli  v.  Central  Bureau  of

Investigation1,  this  Court,  per  majority,  has  explained

“entrustment” in paragraph 363 as under: - “The term “entrustment” is not necessarily a term of law.  It may have different implications in different contexts.   In  its  most  general  signification  all  it imports  is  the  handing  over  possession  for  some purpose which may not imply the conferring of any proprietary right at all.”

10. In  State  of  Gujarat  v.  Jaswantlal  Nathalal2,  this

Court in paragraph 8 has observed that a mere transaction of

sale cannot amount to an entrustment. 1 (2003) 3 SCC 641 2 AIR 1968 SC 700

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11. At this stage we also think it proper to observe that in the

present case, even if the allegations made in the complaint are

taken  to  be  true,  the  ingredients  of  the  offence  punishable

under Section 409 IPC for which appellants are summoned,

are also not made out.  To constitute an offence punishable

under  Section  409  IPC,  apart  from  entrustment,  it  is  also

essential  requirement  that  it  should  be  shown  that  the

accused has acted in the capacity of a public servant, banker,

merchant,  factor,  broker,  attorney  or  agent.   It  is  nowhere

shown in the complaint that the appellants have acted in any

of the above capacities.

12. As far as offence of cheating is concerned, the same is

defined  in  Section  415  IPC,  for  which  the  punishment  is

provided under Section 420 IPC.  Section 415 reads as under:- “415.  Cheating.  –  Whoever,   by  deceiving  any person,  fraudulently  or  dishonestly  induces  the person so deceived to deliver  any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived  to  do  or  omit  to  do  anything  which  he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage  or  harm  to  that  person  in  body,  mind, reputation or property, is said to “cheat”.

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Explanation.  –  A  dishonest  concealment  of facts  is  a  deception  within  the  meaning  of  this section.

Illustrations ……………”

13. From  the  above  language  of  the  Section,  one  of  the

essential ingredients for the offence of cheating is deception,

but in the present case, from the contents of the complaint it

nowhere reflects that the complainant was deceived or he or

anyone else was induced to deliver the property by deception.

What was done, was so reflected in the resolutions, and sale

deeds.

14. In  Mathavrao  Jiwajirao  Scindia  and  others  v.

Sambhajirao  Chandrojirao  Angre  and  others3,  a

three-Judge Bench of this Court has laid down the law as to

quashment  of  proceedings  under  Section  482  CrPC  as

follows:- “7.   The legal position is well settled that when a prosecution  at  the  initial  stage  is  asked  to  be quashed, the test to be applied by the court is as to whether  the  uncontroverted  allegations  as  made prima facie establish the offence. It is also for the court to take into consideration any special features which  appear  in  a  particular  case  to  consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on

3 (1988) 1 SCC 692

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the basis that the court cannot be utilised for any oblique  purpose  and  where  in  the  opinion  of  the court  chances  of  an  ultimate  conviction  is  bleak and,  therefore,  no  useful  purpose  is  likely  to  be served  by  allowing  a  criminal  prosecution  to continue,  the  court  may  while  taking  into consideration the special facts of a case also quash the  proceeding  even  though  it  may  be  at  a preliminary stage.”

15. In  Suresh  v.  Mahadevappa  Shivappa  Danannava

and another4, criminal prosecution was quashed by the Court

in respect offence of cheating noticing that the complaint was

filed after a lapse of ten years.

16.    In  Inder Mohan Goswami and another  v.  State of

Uttaranchal and others5, this Court in paragraphs 25 and

46 has observed as under: -

“25. Reference to the following cases would reveal that  the  courts  have  consistently  taken  the  view that  they  must  use  this  extraordinary  power  to prevent injustice and secure the ends of justice. The English  courts  have  also  used  inherent  power  to achieve  the  same  objective.  It  is  generally  agreed that the Crown Court has inherent power to protect its process from abuse. In  Connelly  v.  DPP (1964 AC 1254) Lord Devlin stated that where particular criminal  proceedings  constitute  an  abuse  of process, the court is empowered to refuse to allow the indictment to proceed to trial. Lord Salmon in DPP v.  Humphrys  (1977  AC  1) stressed  the

4 (2005) 3 SCC 670 5 (2007) 12 SCC 1

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importance of the inherent power when he observed that  it  is  only  if  the  prosecution  amounts  to  an abuse of the process of the court and is oppressive and  vexatious  that  the  judge  has  the  power  to intervene.  He  further  mentioned  that  the  court’s power  to  prevent  such  abuse  is  of  great constitutional  importance and should be jealously preserved.

xxx xxx xxx

46. The  court  must  ensure  that  criminal prosecution  is  not  used  as  an  instrument  of harassment or for seeking private vendetta or with an  ulterior  motive  to  pressurise  the  accused.  On analysis of the aforementioned cases, we are of the opinion that it is neither possible nor desirable to lay down an inflexible rule that  would govern the exercise  of  inherent  jurisdiction.  Inherent jurisdiction of the High Courts under Section 482 CrPC though  wide  has  to  be  exercised  sparingly, carefully  and  with  caution  and  only  when  it  is justified by the tests specifically  laid down in the statute  itself  and in the  aforementioned cases.  In view  of  the  settled  legal  position,  the  impugned judgment cannot be sustained.”

17. In  view  of  the  above  discussion  and  facts  and

circumstances of the case, we are of the view that none of the

offences for which the appellants are summoned, is made out

from the complaint and material on record.  We further find

that it is nothing but abuse of process of law on the part of the

complainant  to  implicate  the  appellants  in  a  criminal  case

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after a period of twelve years of  execution of registered sale

deeds in question, who is neither party to the sale deeds nor a

member of the Society.  Therefore, we allow the appeal and set

aside the orders passed by the High Court  and that  of  the

courts below.  Accordingly, the order passed by the Magistrate

summoning the appellants in the criminal complaint filed by

respondent  No.  1,  in  respect  of  offences  punishable  under

Sections 406, 409 and 420 IPC, also stands quashed.

……………….....…………J. [Dipak Misra]

     .……………….……………J.  [Prafulla C. Pant]

New Delhi; July 21, 2015.