Bombay High Court: The present petition was filed under Articles 226 and 227 of the Constitution and Section 482 of the Criminal Procedure Code, 1973 (‘CrPC’), assailing the legality, propriety, and correctness of an order passed by the Metropolitan Magistrate, 66th Court Andheri, Mumbai (‘Metropolitan Magistrate’), whereby process was ordered to be issued against the petitioners for the offences punishable under Sections 420 and 409 read with Section 34 of the Penal Code, 1860 (‘IPC’). N.J. Jamadar, J., held that withholding a portion of salary or emoluments by an employer did not amount to cheating or criminal breach of trust and Respondent 2-the complainant could agitate his rights on account of the alleged illegal change in service condition in appropriate proceedings, however, criminal proceedings were not the remedy.
Background
In 2008, Air India Limited (‘AIL’) amended the service conditions of its cabin crew, by entering into a bilateral agreement with All India Cabin Crew Association, in conformity with the provisions of Industrial Disputes Act, 1947 (‘the ID Act’). In 2010, AIL proposed to unilaterally deduct 25% of the applicant’s emoluments under the nomenclature of Revised Basic Pay on the recommendation of the Justice Dharmadhikari Committee Report. Without following the statutory mode of issue of notice of change under Section 9-A of the ID Act, AIL professed to withhold 25% of the Performance Linked Incentive, due to dire financial condition of AIL.
Thereafter, several Employees Union assailed the AIL notifications before this Court, whereby, this Court declared AIL’s act of deducting 25% of the emoluments as illegal and contrary to the statutory provisions contained in Section 9-A of the ID Act. The Court, however, directed that the workmen would be entitled to receive and would continue to have the same service benefits i.e., emoluments etc. as were being received by them on the date of the judgment. Further, it was clarified that AIL, if desired to change the conditions of service of its workers, shall give a notice of change to the workmen.
The complainant alleged, the accused did not issue any notice as directed by the Court, instead, the accused challenged the order passed by this Court in the Supreme Court and pursuant to the directions of the Supreme Court, AIL transferred the arrears of salary to the employees. However, the complainant and the co-employees were deprived of interest on the said amount, thus, the complainant alleged that withholding of salary and allowances without following due process of law amounted to offences punishable under Section 120-B, 409, 415, and 420 of IPC. By the impugned order dated 09-01-2023, the Metropolitan Magistrate observed that prima facie case to proceed against petitioners for the offences punishable under Sections 409 and 420 read with Section 34 of IPC was made out and thus process was issued. Being aggrieved by this decision, the petitioners preferred the present petition.
Analysis, Law, and Decision
The issue for consideration was “whether withholding of a portion of the salary or emoluments prima facie amounted to cheating or criminal breach of trust?”.
The Court opined that even if it considered that AIL could not have deducted a portion of salary or emoluments without giving a notice of change under Section 9-A of the ID Act, yet the fact that there was a penalty provided under Section 31(2) of the ID Act that if the change in conditions of service was effected without following the procedure prescribed under Section 9-A of the ID Act, did not imply that it constituted an offence of cheating.
The Court stated that the offence of cheating involved elements of deception, fraudulent, or dishonest inducement and thereby making a person to deliver any property or to consent that any person shall retain any property. The Court relied on Vijay Kumar Ghai v. State of W.B., (2022) 7 SCC 124 and Mariam Fasihuddin v. State, 2024 SCC Online SC 58, and held that the withholding of a portion of the salary or emoluments by no stretch of imagination could fall within the dragnet of the offence of cheating as the employer could not be said to have either deceived the employee or fraudulently, or dishonestly induced the employee to deliver the property or give consent to any person to retain the property or intentionally induced the employee to do or omit to do anything, which the employee would not do or omit, if he was not so deceived.
The Court stated that to constitute an offence of cheating, the intention of the accused should be dishonest since the inception of the transaction and in the present case, the act of AIL to deduct the Salary or emoluments was in exercise of its authority as an employer. The Court also stated that though such a deduction was illegal, however, it was a completely different thing to term the said deduction as cheating. The Court further stated that a same act might not amount to cheating and criminal breach of trust at the same time as for the offence of cheating, dishonest intention must exist at the inception of the transaction, whereas, for criminal breach of trust, there must exist a relationship between the parties, whereby one party entrusts another with the property as per law, albeit dishonest intention comes later.
The Court opined that the ingredients of the offence punishable under Section 409 of IPC could not be said to have been made out even if the allegations in the complaint were taken at par and it could not be said that there was any entrustment of any property by the employees with the employer. Moreover, in the present case, it could not be urged that the employer had acted in breach of any legal contract which the employer had made touching the discharge of trust.
The Court held that the essential ingredients of the offences of cheating and criminal breach of trust were prima facie not made out and undoubtedly, the complainant could agitate his rights on account of the alleged illegal change in service condition in appropriate proceedings, however, criminal proceedings were not the remedy. Further, the Court opined that the Magistrate seemed to have committed an error in not recording the verification statement of the complainant on oath.
The Court allowed the petition and held that the continuation of the prosecution of the petitioners amounted to abuse of the process of the Court and quashing the same would secure the ends of justice. Therefore, the impugned order was quashed and set aside.
[Rajiv Bansal v. State of Maharashtra, 2024 SCC OnLine Bom 1595, decided on 10-05-2024]
Advocates who appeared in this case :
For the Petitioners: Aniket Nikam, Mranal Mandhane, Shiva Gaur, i/b Nazish Alam
For the Respondents: S.R. Aagarkar, APP; K. V. Jagannathrao; Respondent 1-in-person
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