Case BriefsHigh Courts

Delhi High Court: Suresh Kumar Kait, J., addressed a matter involving the determination of jurisdiction with regard to the occurrence of a crime.

The instant petition was filed under Section 482 of the Criminal Procedure Code, 1973 in regard to quashing an FIR for the offences under Sections 420/406 of Penal Code, 1860.

Facts of the instant case:

Since 2009, the petitioner through his sole partnership had been undertaking the business of fresh/dehydrated onions and garlic and other perishable items export to various countries like Europe, Gulf and rest of Asia.

In January 2018, the Complainant’s office, Tiger Logistics, approached the Petitioner and one Makbul Sheikh- salesman of Tiger Logistics. Makbul Sheikh represented to the petitioner that respondent 2 is a commission agent and can provide cost-efficient and reliable services.

Petitioner, based on the transit time of 21 days promised by Tiger Logistics, entered into a sales contract with his customer Sadro SRL, an importer based in Italy. Upon such commitment, the Petitioner provided 13 bookings to Respondent 1 for 26 containers.

The Petitioner only as a goodwill gesture as a sincere exporter and upon the insistence of the representatives of Tiger Logistics paid an amount of Rs.10,76,100 through cheque.

Over the month of January 2018, petitioner had sent 26 shipments of fresh onions through but the shipment did not reach the Port f Naples within 21 days.

Petitioner issued an email to the representatives of Tiger Logistics based out of Gujarat expressing his concerns with regards to the delay of 14 days in the delivery of the shipment of fresh onions.

Due to the Petitioner’s growing concern over the delay in delivery of shipments and risk of loss with every passing day, the Petitioner on 16-04-2018 issued another email to the representatives of Tiger Logistics based out of Gujarat expressing his concern over the delay.

The above-stated delay was acknowledged and accepted and in light of the same representatives of the Tiger Logistics apologized for the delay in the delivery.

However, to the dismay of the petitioner, there was complete failure on the art of the logistics service as promised.

Petitioners were subjected to a huge loss due to the delay in shipments. Respondent 2 started demanding approximately Rs 37 lakhs from the petitioner. Since there was an utter failure of shipping services provided by Tiger Logistics which cannot claim any part of the payment from the petitioner.

Since the petitioner did not pay the above-stated amount, present FIR was registered against the petitioner.

Analysis, Law and Decision

Bench referred to the Supreme Court decision in V.V. Jose v. State of Gujarat, (2009) 3 SCC 78  wherein it was held that even in a case where allegation were made in regard to the failure on the part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 IPC could have been said to be made out.

Further, it was held in the above that, a matter which essentially involves dispute of a civil nature should not be allowed to be the subject matter of a criminal offence, the latter being not a shortcut of executing a decree which is non-existent.

Court in regard to the instant matter made an observation that:

“It is trite that an inquiry and trial with respect of an offence shall be conducted by the Court within whose local jurisdiction occurrence in question is said to have taken place and thereby cause of action has arisen. Section 178 and Section 179 of CrPC. are merely exceptions to this principle enumerated in Section 177, and their scope should not be enlarged on analogous consideration.”

Bench added that for determination of offences alleged to have been committed under Section 406 of the Penal Code 1860, Section 181 of CrPC lays down the jurisdiction of such court where “the offence was committed or any part of the property which is the subject of the offence was received or retained.”

 Jurisdiction and Breach of Trust

In view of the above-stated, Court held that,

Since the transaction between the parties in relation to the transaction of goods took place in Gujarat, the representations and meeting took place in Gujarat, the goods were shipped from Pipavav Port Gujarat, bill of ladings were released from Ahmedabad Gujarat, the invoices were raised by the entity based out of Gujarat and the jurisdiction of such invoices were subject to the court of Gujarat, therefore, applying the direct principles of Section 181, only the court situated in Gujarat can exercise jurisdiction over the alleged criminal breach of trust, if any.

 In case of Jai Prakash v. Dinesh Dayal: (1989) 39 DLT 376, this Court held that where the accused is carrying on business in a city, agreement to supply to complainant’s branch office at that city is entered within the local jurisdiction of that city, institution of complaint at New Delhi on the ground that the complainant’s head office situated there, is without jurisdiction.

In view of the above-discussed law and the facts and circumstances of the case, the registration of FIR in question in Delhi is an abuse of the process of law.

“Investigating Agency and Court should not be made an instrument of compelling a party to come to a place far away from his own place, to submit to the jurisdiction of a Court which actually has none.”

Hence, in the instant case, FIR was without jurisdiction and therefore the complainant attempted to seek unlawful recovery of money which was purely commercial matter.[Ramesh Boghabhai Bhut v. State, 2020 SCC OnLine Del 1475, decided on 23-11-2020]

Case BriefsHigh Courts

Bombay High Court: A Division Bench of R.K. Deshpande and N.B. Suryawanshi, JJ., while addressing an issue with regard to the deduction of pension by the Bank without any confirmation from the employer, observed that,

“The pension payable to the employees upon superannuation is a ‘property’ under Article 300-A of the Constitution of India and it constitutes a fundamental right to livelihood under Article 21 of the Constitution of India.”

“Pension cannot be deducted without authority of law.”

Petitioner a retired assistant foreman had a basic pension of Rs 1,334 as on 01-10-1994, consequent upon an increase in the pension and dearness allowance, the basic pension of Rs 25, 634 was fixed, for which the petitioner was entitled to and accordingly he was paid.

Right to Information Act, 2005

In the month of August, 2019 petitioner’s pension was reduced without consent or knowledge of the petitioner and thus he filed an application under the Right to Information Act, 2005 to know the reason for deduction and details as to the revision of the pension during the period 2015-16 and 2016-17.

Excess Payment of Pension

Respondent stated that there was an excess payment of pension to the petitioner.

Petitioner in view of the above approached the Court challenging the action of the respondent and sought a further direction to the respondents to restore the position in respect of payment of pension, prevailing prior to the deduction which commenced from 01-08-2019.

Excess Payment by SBI

State Bank of India-respondent stated that an amount of Rs 872 per month was erroneously paid in excess to the petitioner due to technical error in the system.

Reserve Bank of India

According to Circular No.RBI/2015-16/340-DGBA.GAD.No.2960/45.01.001/2015-16 dated 17-3-2016, clause (c), the bank claims to have an authority to recover the excess payment to the petitioner.

“c) In case the pensioner expresses his inability to pay the amount, the same may be adjusted from the future pension payments to be made to the pensioners. For recovering the over-payment made to pensioner from his future pension payment in installments 1/3rd of net (pension + relief) payable each month may be recovered unless the pensioner concerned gives consent in writing to pay a higher installment amount.”

Employer’s stand is very clear in the present case that the fixation of the petitioner’s pension was correct and proper.

Further, the employer has supported the claim of the petitioner and has no role to play in the matter of reduction of pension or its recovery.

Bench states that it is not the authority of the Bank to fix the entitlement of the pension amount of the employees other than the employees of the respondent-Bank.

Hence the action of the Bank to reduce the pension of the petitioner is unauthorised and illegal.

Furthermore, the Bank has failed to demonstrate any technical error in the calculations.

With regard to the RBI clause as stated above, Court stated that “once we hold that in fact there was no excess payment made to the petitioner, the question of applicability of the instructions issued by the RBI or undertaking given by the petitioner does not arise.” 

Principles of Natural Justice

Without following the principles of natural justice in the manner of either carrying out correspondence with regard to the correctness of the pension or an explanation in respect of the deduction, the said action on the part of the Bank is arbitrary, unreasonable, unauthorised and in flagrant violation of the principles of natural justice.

Breach of Trust

Bank is the trustee of the pensioner’s account and has no authority in the eyes of the law to dispute the entitlement of the pension payable to the employees other than those who are employed in the bank.

To tamper with the account is nothing but a breach of trust.

Court directed Bank to refund the amount of Rs 3,26,045 to the petitioner by crediting it in his pension account with interest at the rate of 18% p.a. from the date of deduction.

Further, the bank is required to be directed to pay the costs of Rs 50,000 to the petitioner towards the expenses of this petition.

Unfortunately, the time has come to tell the Bank that the aging is natural process, which leads to weakening of the body and mind.

Adding to its conclusion, Court stated that the Bank officials must realize that tomorrow it may be their turn, upon superannuation, to fight for the pension or post-retiral benefits. The thought process, therefore, to be adopted should be of a person in a situation like the petitioner.

Respect, dignity, care, sensitivity, assistance, and security would automatically follow.

Senior Citizens

It is a high time for the Banks to create a separate cell and to device a method to provide personal service through the men of confidence, at the door-step to the old aged, disabled and sick persons who are the senior citizens.

Bench directed registry to forward the copies of the Judgment to the Centralized Processing Pension Centres of all the Nationalized Banks and also to the Reserve Bank of India and the Chief Secretary, Government of Maharashtra, to consider the question of the constitution of separate cell and release of appropriate guidelines so as to attain the constitutional goal of providing respect, dignity, care, sensitivity, assistance and security to all the pension account holders in the Banks.[Naini Gopal v. Union of India, LD-VC-CW-665 of 2020, decided on 20-08-2020]

Case BriefsHigh Courts

Punjab and Haryana High Court: Hari Pal Verma, J. allowed the petition filed for quashing of FIR under Section 482 of Code of Criminal Procedure, 1973 on the ground that the matrimonial dispute had been resolved by mediation.

An FIR was filed against the petitioner’s husband accusing him of cruelty and breach of trust against her under Sections 498-A, 406 and 120-B of the Indian Penal Code, 1860. The parties were directed for the process of mediation and they further decided to compromise before the Mediation and Conciliation Center, Barnala. The complainant agreed upon the settlement agreement and stated that she had no objection on quashing of the all the proceedings against the petitioner.

The present court directed the learned Chief Judicial Magistrate, Barnala to get the statements recorded and send its report in order to check the genuineness of the compromise. Further the same was received by the Court and it stated that it was unnecessary to continue the proceeding before the trial court.

Relying on the decision of Supreme Court in Gold Quest International (P) Ltd. v. State of Tamil Nadu, (2014) 15 SCC 235 which held that under matrimonial or civil property disputes of criminal nature if the parties have entered into settlement then it is legal to quash the proceeding under Section 482 of Code of Criminal Procedure along with Article 226 of the Constitution of India; this Court allowed the petition for quashing of FIR and all subsequent proceedings as per compromise entered between the parties. [Sheenu Gupta v. State of Punjab, 2019 SCC OnLine P&H 1399, decided on 02-08-2019]

Case BriefsHigh Courts

Kerala High Court: R. Narayana Pisharadi, J.  allowed a petition filed under Section 482 of Code of Criminal Procedure, 1973 (hereinafter ‘CrPC’) by the accused who were charged with the offences of criminal breach of trust, forgery and criminal conspiracy under Sections 406, 466, 467, 471 and 120B of Penal Code, 1860 (hereinafter ‘IPC’).

In the instant case, the partition of a family property took place and a part of the common property was set aside for conducting certain divine and charitable acts. This property was to be managed by the eldest member of the family as a trustee. First petitioner, who was the member of the family managed the aforementioned property as a trustee for the other members of the family since 1970. In order to grab this property, the first petitioner entered into a conspiracy with the Village Officer and forged the public register substituted his name as the owner of the property. Thereafter, the first petitioner gifted the aforesaid property to the second petitioner, his daughter. Execution of this settlement deed was in violation of the provisions contained in the partition deed. Thus, petitioners had committed the offences punishable under Sections 406, 466, 467, 471 and 120B of IPC.

K. Gopalakrishna Kurup, learned counsel for the petitioners argued that it was doubtful that immovable property can be the subject matter of the offence of criminal breach of trust. He also contended that the affirmations in the complaint did not clarify the offences alleged against the petitioners.

The learned counsel for complainants, Alex M. Scaria contended that the court must take into consideration each of the allegations made in the complaint as accurate to determine if the ingredients of the offences alleged were made out or not.

Reliance was laid upon R.K. Dalmia v. Delhi Admn., AIR 1962 SC 1821 to observe that the term ‘Property’ under Section 405 of IPC was not restricted to ‘movable’ property. Therefore, the immovable property can also be the subject matter of commission of an offence of criminal breach of trust. The Court noted that there was an absence of any averment in the complaint regarding entrustment of property in question. With such absence, one of the basic ingredients of the offence of criminal breach of trust was not made out against the accused.

Moreover, the Court cited Ramesh Dutt v. State of Punjab, (2009) 15 SCC 429 to observe that the execution of the settlement deed by the first petitioner in favor of his daughter did not constitute the offence of forgery. Furthermore, the Court held that an attempt was made by the complainant to showcase a matter of civil nature, as a matter of criminal nature. In these circumstances, the first information report, which was based on the complaint, was liable to be quashed. Consequently, the petition was allowed.[Damodara Panicker v. State Of Kerala, 2019 SCC OnLine Ker 1789, decided on 06-06-2019]

Case BriefsHigh Courts

Kerala High Court: The Bench of T.V. Anil Kumar, J., while pronouncing an order quashed the criminal proceedings stating them to be of a civil dispute.

The facts of the case as presented in the present case are that, the prosecution case as against the petitioner is that, he after having obtained a mobile post-paid connection in his name, failed to discharge his liability for user charges for a period of 5 months. Allegation was that petitioner incurred a monetary liability of Rs 97,678 and after making a part payment of Rs 10, 580 he kept the balance in arrears. According to the prosecution, the default amounts to an offence of cheating punishable under Section 420 IPC.

Petitioner’s case is made out in the following manner, that the transaction in question is based on an agreement between the parties which turns the alleged liability to be purely of civil nature, due to which the petitioner sought consequential criminal proceedings to be quashed.

High Court on marshalling the materials on record, concluded by stating that, the transaction involved between the parties is of a civil dispute as a purported liability of the petitioner seems to have been arisen from breach of promise or agreement.

“Mere breach of trust or agreement will not by itself amount to a criminal offence under Section 420 IPC.”

Therefore, as the legal proposition does not match the materials on record as well as the allegations, the criminal proceedings require to be quashed in view of the above stated. [Abdul Hakkem v. State of Kerala, 2019 SCC OnLine Ker 974, Order dated 08-03-2019] 

Case BriefsSupreme Court

Supreme Court: In the matter where the Court was deciding the question as to whether disciplinary proceedings can be initiated before the closure of recording of prosecution evidence in the criminal case, based on the same facts, the bench of T.S. Thakur, CJ and A.M. Khanwilkar, JJ held that the pendency of the criminal case cannot be the sole basis to suspend the disciplinary proceedings initiated against the respondent for an indefinite period.

In the present case, the criminal trial against the respondent was pending for around 10 years and the Chhattisgarh High Court had stayed the disciplinary proceedings initiated by the appellant bank until the completion of the same based on the reasoning that the respondent may suffer disadvantage and prejudice if she was compelled to disclose her defence in the departmental proceedings, which is likely to be used in the criminal case pending against her. Disagreeing with the aforementioned view of the High Court, the Court said that It is well-settled that there is no legal bar to the conduct of the disciplinary proceedings and criminal trial simultaneously. However, no straightjacket formula can be spelt out and the Court has to keep in mind the broad approach to be adopted in such matters on case to case basis.

In one of the clauses of the Memorandum of Settlement it was mentioned that “if within the pendency of the proceedings thus instituted is put on trial such proceedings shall be stayed pending the completion of the trial.” The Court said that the term “completion of the trial” thereat, must be construed as completion of the trial within a reasonable time frame. This clause cannot come to the aid of the delinquent employee – who has been named as an accused in a criminal case and more so is party to prolongation of the trial.

Pendency of criminal trial for around 10 years, by no means, can be said to be a reasonable time frame to withhold the disciplinary proceedings. The Court took this view on the principle underlying the former part of the same clause, which envisages that if the Authority which has to start the prosecution refuses/fails to do so within one year from the commission of the offence, the departmental action can proceed. The Court, hence, held that the remedy of writ being an equitable jurisdiction and keeping in mind the larger public interests especially in cases of involvement of the employees of the Public Sector Banks in offence of breach of trust and embezzlement, the principle laid down in Stanzen Toyotetsu India Private Limited vs. Girish V., (2014) 3 SCC 636, where it was held that the departmental proceedings cannot be suspended indefinitely or delayed unduly, should be applied. [State Bank of India v. Neelam Nag, 2016 SCC OnLine SC 946, decided on 16.09.2016]