Bhaskar Jyoti De vs Pegasus Capital and Allied Services Ltd.

A.K. Patnaik, J.—This is an application u/s 397/401 and Section 482 of the Code of Criminal Procedure, 1973, (for short, "the Code of Criminal Procedure, 1973), read with Article 227 of the Constitution of India, for quashing the complaint case No. 420(A)/l 998 pending in the Court of learned Deputy Commissioner, East Khasi Hills, Shillong.

The aforesaid complaint case has been filed by the opposite party-company against the Petitioner. The allegations in the complaint briefly are that the Petitioner was working as Managing Director of the opposite party-company. The opposite party-company had a corporate office in Mumbai and the affairs of the said corporate office was being looked after by the Petitioner. The opposite party-company suspended its operation in Mumbai with effect from 31.3.1996 and shifted its corporate office from Mumbai, and the Petitioner tendered his resignation from service of the said company on 15.7.1996 after having discharged his functions as the Managing Director of the company for a period of 16 months. After suspension of operation in Mamba and resignation by the Petitioner as Managing Director of the opposite party-company, the accommodation provided to the Petitioner at the company''s expenses in Mumbai became redundant and security deposit of Rs. 5 lacs furnished to the owner of the house in Mumbai, Mr. Shashi N. Dhume, was refunded to the Petitioner for making deposit to the account of the opposite party-company. The said amount of RS. 5 lacs has not been refunded to the opposite party-company by the Petitioner. Further, an amount of Rs. 45,000/- being the deposit made for three telephones used by the Petitioner while he was functioning as Managing Director of the company was also to be refunded by the Petitioner. Further, during the tenure of the Petitioner as Managing Director of the opposite party-company transactions amounting to Rs. 10,33,545.53 remained unsupported by vouchers/documents as per books of accounts for the year ending 31.3.1996 and an amount of Rs. 29,06,728/- remained to be recovered from the Petitioner. The particulars of transactions have been given in paragraph-8 of the complained. The aforesaid amounts of Rs. 5 lacs. Rs. 45,000/-, Rs. 10,33,545.53 and R.29,06,728/- totalling to a sum of Rs. 44,85,273.53 have been misappropriated by the Petitioner. Further, the Petitioner has deliberately withheld some documents/claques belonging to the opposite party-company which have been listed in paragraph-9 of the complaint. The Petitioner was therefore liable to be proceeded against and punished for commission of offences u/s 405/415, Indian Penal Code, punishable u/s 406/420, Indian Penal Code. The aforesaid complaint was filed on 16.11.1998 and on behalf of the complainant Sri Subhrajeet Dutta Choudhury was examined on oath by the Magistrate, and on 20.11.1998, the Magistrate passed an order issuing bailable warrant against the Petitioner. Aggrieved, the Petitioner has filed the present revision Petitioner for quashing the said complaint case.

Mr. A.S. Bhattacharjee, learned Counsel for the Petitioner, submitted that the offence alleged to have been committed by the Petitioner were all in Mumbai and, therefore, the Court in Shillong had no jurisdiction to inquire into and try the offences. He referred to the provision of Section 177, Code of Criminal Procedure 1973, which provides that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. He submitted that the word , ''ordinarily'' was interpreted by the Supreme Court in Narumal Vs. State of Bombay, and it was held by the Supreme Court that the word ''ordinarily'' would mean "except where provided otherwise in the code." According to Mr. Bhattacharjee, therefore, the offence of criminal breach of trust alleged against the Petitioner in the complaint can only be inquired into and tried in Court in Mumbai and not in the Court in Shillong the said offence having been allegedly committed within the local jurisdiction of Courts in Mumbai. He cited the decision of the Calcutta High Court in Bijoyanand Patnaik Vs. Mrs. K.A.A. Brinnand, it which it was held that in case of a complaint u/s 406, IPC where neither the entrustment nor conversion had taken place within the territorial jurisdiction of the Court where the complaint was lodged, the Court had no jurisdiction and the proceedings instituted there were bad in law and without jurisdiction.

In reply, Mr. M.Bhuyan, learned Counsel appearing for the opposite party-company, submitted that Section 178(c) of the Code of Criminal Procedure, 1973, provides that where an offence is a continuing one, and continues to be committed in more local areas than one, it may be inquired into or tried by a Court having jurisdiction over any of such local areas. He argued that so long as the Petitioner does not refund the amount alleged to have been misappropriated by him and return the documents alleged to have been retained by him in the complaint, the said offence is a continuing one, and has also been committed in Shillong because the registered office of the opposite party-company is located in Shillong. Mr. Bhuyan further referred to the provision of Sub-section (4) of Section 181, Code of Criminal Procedure, 1973, which provides that any offence of criminal misappropriation or criminal breach of trust may be inquired into or tried by a Court within whose local jurisdiction the offence was committed or any part of the property which is the subject of the offence was received or retained, or was required to be returned or accounted for, by the accused person. According to Mr. Bhuyan, since the misappropriated amounts and the documents which are the subject matter of the offence were required to be returned or accounted for to the opposite party-company in its registered office in Shillong, the Court in Shillong had the jurisdiction to inquire into or try the offences alleged in the complaint. He cited the decision of the Supreme Court in Trisuns Chemical Industry Vs. Rajesh Agarwal and others, in support of his aforesaid submission.

In Trisuns Chemical Industry v. Rajesh Agarwal, (supra), the Supreme Court held that u/s 190, Code of Criminal Procedure, 1973, any Magistrate of the first class has the power to take cognisance of any offence, no matter that the offence was committed within his jurisdiction or not and that such Magistrate taking cognisance of an offence need not necessarily have the territorial jurisdiction to try the case as well. The said decision of the Supreme Court in Trisuns Chemical Industry, therefore, is not on the point as to whether the Court has the jurisdiction to inquire into and try a case. The provisions in Chapter-XII of the Code of Criminal Procedure, 1973, relate to jurisdiction of criminal courts in inquiries and trials. The said Chapter-XIII of the Code of Criminal Procedure, 1973, starts which Section 177 which provides that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. It has been held in Narumal v. State of Bombay (supra) that the word ''ordinarily'' in Section 177 means "except where provided otherwise in the code". Since the language of Section 177, Code of Criminal Procedure, 1898 (old) has been retained in Section 177, Code of Criminal Procedure, 1973, the said word ''ordinarily'' in Section 177, Code of Criminal Procedure, 1973, would also mean "except where provided otherwise in the code." In other words, if some other provisions in the Code of Criminal Procedure, 1973 provides that an offence can be inquired into and tried by a Court other than the Court within whose local jurisdiction it was committed, such Court can also inquire into and try the said offence. One such provision is in Sub-section (4) of Section 181, Code of Criminal Procedure, 1973, which is quoted hereinbelow:

181(4). Any offence of criminal misappropriation or of criminal breach of trust may be inquired into or tried by a Court within whose local jurisdiction the offence was committed or any part of the property which is the subject of the offence was received or retained, or was required to be returned or accounted for, by the accused person.

A plain reading of the aforesaid Sub-section (4) of Section 181, Code of Criminal Procedure, 1973, would show that any offence of criminal misappropriation or criminal breach of trust may be inquired into or tried by a Court within whose local jurisdiction any part of the property which is the subject matter of the offence was required to be returned or accounted for by the accused person. The, even where an offence of criminal misappropriation or criminal breach of trust is committed in Mumbai, the Court in Shillong may try the offence of criminal misappropriation or criminal breach of trust if any part of the property which is the subject matter of the offence was required to be returned or accounted for by the accused person in Shillong. In paragraph-1 of the complaint in the present case, it has been stated that the registered office of the opposite party-company is in Nongrim Hills, Shillong, and the case of the opposite party-company is that the Petitioner was required to return or account for the properties which are the subject matter of the offence of criminal breach of trust in Shillong. As to whether or not the Petitioner was required to return or account for the properties which are the subject-matter of the offence of criminal breach of trust in Shillong is a matter which can only be decided by the trial Court on the basis of evidence that are adduced by the parties. At this stage, when no evidence has been adduced, it is not possible for this Court to hold that the properties which are the subject-matter of the offence of criminal branch of trust in the complaint were not required to be returned or accounted for by the Petitioner in Shillong, and hence this Court cannot quash the complaint pending in the Court of Deputy Commissioner, East Khasi Hills, Shillong on the ground that the Court in Shillong has no territorial jurisdiction to inquire into and try the offence alleged in the complaint

The decision of the Calcutta High Court in B. Patnaik v. Kaa Brinnand, (supra), cited by Mr. Bhattacharjee, to the effect that where neither the entrustment nor conversion had taken place within the territorial jurisdiction of the Court where complaint was lodged, the Court had no jurisdiction and the proceedings instituted there were bad in law and without jurisdiction, was delivered when the provisions of the Code of Criminal Procedure, 1898 (old) were in force. Sub-section (2) of Section 181, Code of Criminal Procedure, 1898 (old) reads as follows:

(2) Criminal misappropriation and criminal breach of trust. - The offence of criminal misappropriation or of criminal breach of trust may be inquired into or tried by a Court within the local limits of whose jurisdiction any part of the property which is the subject of the offence was received or retained by the accused person, or the offence was committed.

The aforesaid Sub-section (2) of Section 181, Code of Criminal Procedure, 1898 (old), did not contain a provision as in Sub-section (4) of Section 181, Code of Criminal Procedure, 1973 that an offence of criminal misappropriation or of criminal breach of trust may be inquired into or tried by a Court within whose local jurisdiction any part of the property which is the subject matter of the offence was required to be returned or accounted for by the accused person. Hence, the decision of the Calcutta High Court in B. Patnaik''s case is of no assistance to the Petitioner. As has been held above, if it is established before the trial Court in the present complaint case that the Petitioner was required to return or account for any part of the property which is the subject matter of the offence of criminal breach of trust in the complaint case within the local limits of the Court in Shillong, the Court in Shillong will have the jurisdiction, but if it is established before the trial Court that the Petitioner was not required to return or account for any part of the property which is the subject matter of the offence of criminal breach of trust in the complaint case within the local jurisdiction of the Court in Shillong, then the trial Court will not have the jurisdiction to inquire into and try the complaint case.

It was next submitted by Mr. Bhattacharjee, learned Counsel for the Petitioner, that the allegations made in the complaint would show that the dispute between the parties is really a civil dispute, and hence on this ground the complaint filed by the opposite party-company should be quashed. Mr. M. Bhuyan, learned Counsel for the opposite party-company, on the other hand, relied on the decision of the Supreme Court in Trisuns Chemical Industry''s case in support of his submission that a complaint cannot be quashed by the High Court only on the ground that the allegations in the complaint reveal a civil dispute between the parties so long as the said allegations also disclose a criminal offence. I find a lot of force in the aforesaid submission of Mr. Bhuyan. In Trisuns Chemical Industry''s case, the Supreme Court quoted its earlier observation in Rajesh Bajaj Vs. State NCT of Delhi and Others, to the following effect:

It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions.

After quoting the aforesaid observations, the Supreme Court held in the said case of Trisuns Chemical Industry:

We are unable to appreciate the reasoning that the provision incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself.

Thus, the fact that the allegations in the complaint in the present case reveal a civil dispute between the parties cannot be a ground for quashing the complaint so long as the allegations in complaint also reveal commission of an offence.

It was finally contended by Mr. Bhattacharjee, learned Counsel for the Petitioner, that Sri Subhrajeet Dutta Choudhury is not one of the Directors of the opposite party-company and, therefore, had no locus standi to file the complaint. In paragraph-1 of the complaint, it has been stated that the opposite party-company is duly represented by Sri Subhrajeet Dutta Choudhury, one of its Directors, and that he is duly empowered by a special resolution adopted by the Board of Directors of the company to file the complaint case for and on behalf of the opposite party-company. As to whether these statements made in the complaint case are true is a matter which can only be decided after evidence are led by the parties and not at this stage when no evidence at all has been led by the parties.

No other grounds having been raised by Mr. Bhattacharjee, learned Counsel for the Petitioner at the time of hearing of this revision. I dismiss this revision petition.