K. Ramamurthy and Others vs State

Arunachalam, J.—The Petitioners 6 in number in Crl. M.P. No. 9739 of 1990, are A-1 to A-6 in C.C. No. 94 of 1990, pending on the file

of the Judicial Magistrate No. III, Salem.

The Petitioner in Crl. M.P. No. 10427 of 1990, is A-1, in the same calender case.

Both these petitions have been filed, invoking the inherent powers of this Court u/s 482 Code of Criminal Procedure to call for the records and

quash the pending prosecution, as not maintainable and an abuse of process of Court.

Both these petitions are disposed of together, since they relate to the same calender case and the questions involved are also common. The

Respondent, Inspector of Police, C.B.C.I.D. Salem, registered the complaint of the Director of Technical Education, Madras-25, dated 20-2-

1990, as Crime No. 9 of 1990, against the Petitioners in both the petitions, on 6-3-1990 and after completion of investigation filed the final report

against all the accused on 18-4-1990 before the trial Magistrate, alleging commission of an offence punishable u/s 409 I.P.C. by A-1 (first

Petitioner in Crl. M.P. No. 9739 of 1990) and abetment of the said offence by the other accused in the case, punishable with the aid of Section

109 I.P.C.

Facts which led to the filing of this prosecution will have to be narrated in brief. The Petitioners in Crl. M.P. No. 9739 of 1990, who are A-1 to

A-6 in the calender case, are the Trustees of a Trust called ""Pallava Samooganala Arkkattalai situated at No. 86-B, Park Street, Salem-1, the first

Petitioner being its chairman. The trust came into existence on 27th August, 1986 and its main object was to establish and maintain schools and

colleges of all kinds, professional, technical and commercial. The trustees applied to the Government of Tamil Nadu, through the Director of

Technical Education, Madras, for permission to start an Engineering College in the name and style of ""Pallava Engineering College"" at

Kanavaipudur, Salem District, under the self-financing scheme.

By G.O.Ms. No. 429 dated 17-4-1984 (Department of Education, Science and Technology), the Government had approved proposals for

opening of self-financing private engineering colleges by private managements Trusts, subject to certain condition. One of the main conditions

stipulated was, that the Educational Trust should provide an endowment of Rs. 30,00,000/- in cash jointly in the name of the Trust and the

Director of Technical Education. The endowment fund of Rs. 30,00,000/- can be created either in one lump sum before starting of the college or in

four instalments being Rs. 12,00,000/-. The money can be invested in the Nationalised Banks/Scheduled Bank/Government of India

undertakings/State Government undertakings, whichever the Trust may prefer. The Income from the endowment fund should be utilised fully to

meet the recurring and non-recurring expenditure of the institution, without expecting any aid from the Government for any purpose at any time,

now to in future. The Arakkattalai reported compliance of the condition of the deposit of a sum of Rs. 12,00,000/- in the joint account of the

Director of Technical Education and the Trust, for the creation of endowment of Rs. 30,00,000/-. Thereafter, the Government of Tamil Nadu by

G.O.Ms. No. 1399, Education Department, dated 29-8-1988, permitted the Arakkattalai, Salem, to start a private Engineering College called

Pallava Engineering College, under the self-financing scheme from 1988-89.

A few events that had happened prior to 29-8-1988, will have to be necessarily stated to appreciate the case of the prosecution and the

arguments advanced by the counsel appearing for the Petitioners, in these two petitions. The Arakkatalai opened a current account, (No. 26051)

on 3-10-1986 with the Union Bank of India, Salem. The application was signed by A-1 to A-6 and the account was to be operated by A-1 along

with either A-2 or A3. On 3-7-1989, the Arakkatalai wanted Union Bank of India, Salem Branch, to grant credit facilities to it, for meeting a

portion of the endowment amount. The request of the Arakkatalai was recommended by A-7 the bank Manager and SOD limit of Rs. 9,00,000/-

for a period of 3 months, was sanctioned for the Trust, by the Bank. The obtaining of this credit facility was a private transaction between the

Arakkattalai and the Bank and the Director of Technical Education had no knowledge about this.

On 2-8-1988, a joint deposit reinvestment certificate of Union Bank of India A. No. 1980067/207/88 was issued for Rs. 12,00,000/- in the

joint names of the Director of Technical Education, Madras-25, and the Chairman of the Pallava Samooganala Arakkattalai. The due date for

repayment was 2-8-1993, at the end of 60 months, the maturity value being Rs. 19,66,320/-. On the same date, the original and xerox copy of the

fixed deposit receipt, were submitted to the Director of Technical Education with a covering letter. A request was made for recommendation, for

the granting of licence to start a new Engineering College, under the self-financing scheme, at an early date. On 3-8-1988, the original fixed deposit

receipt was taken back, after verification by the Director of Technical Education.

On 3-10-1988 the Arakkattalai sent a letter to A-7 the Branch Manager of the Bank signed by A-2, requesting conversion of the deposit

reinvestment certificate into a fixed deposit receipt, since the Arakkattalai proposed to draw interest accrued in every quarter. A resolution of the

Board of Directors of the Trust dated 14-10-1988 was enclosed. On the same day fixed deposit No. NSAM/001225/194/88 was issued by A-7

for a period of 60 months at with interest 10% per annum, in the joint account of Director of Technical Education and Chairman of Pallava

Samooganala Arakkattalai. This change in the nomenclature of the deposit was effected without the knowledge and concurrence of the Director of

Technical Education. The interest on the fixed deposit, was collected by the Arakkattali and credited in their current account No. 26051. The

interest so collected by the Trust, was without the knowledge of the Director of Technical Education and the collected amount was not utilised to

meet the expenditure of the proposed college.

On 4-2-1989, A-1 again dishonestly addressed a letter to A-7, the Branch Manager of the Bank, to cancel the fixed deposit receipt

aforementioned and issue another fixed deposit receipt in the name of the Arakkattalai alone, to facilitate raising of a loan of Rs. 9,00,000/- on the

reissued fixed deposit receipt. A resolution dated 4-2-1989 of the Board of Trustees of the Arakkattalai was also enclosed. The resolution stated

that the request was made to the Bank in order to enable them to raise a loan of Rs. 9,00,000/- from the Bank to adjust the SOD of Rs.

9,00,000/- availed of from the Bank. In pursuance of this letter, A-7 issued F.D. receipt No. NSAM/001258/194 for Rs. 12,00,000/- dated 2-8-

1988 for 60 months, with interest at 10% per annum, in lieu of FDR.NSAM No. 1225/194, in the sole name of Pallava Samooganala Arakkattali,

after dishonestly deleting the name of Director of Technical Education. This change was also effected without the knowledge and concurrence of

the Director of Technical Education. A-7 did not even refer this matter to the Director of Technical Education. The interest on this reissued fixed

deposit was also utilised by the Arakkattalai.

On 7-2-1989 a loan application signed by A-1 for the Arakkattalai, for the sanction of a loan of Rs. 9,00,000/- against the latest fixed deposit

receipt for Rs. 12,00,000/-, was sent to the Bank and the fixed deposit receipt itself was handed over to the Bank as security. On the same date

A-7 chose to sanction the loan of Rs. 9,00,000/-. On 29-5-1989, the Director of Technical Education issued a show cause notice to the Trust on

becoming aware of these transactions and thereafter on 15-6-1989 the Arakkattalai by a letter signed by A-2 accompanied by a resolution dated

14-6-1989, asked the bank to include again in the fixed deposit receipt the name of the Director of Technical Education. The Bank immediately

complied with this request and a fixed deposit receipt NSAM 001324/194/88 was issued for Rs. 12,00,000/- in favour of both the Director of

Technical Education and the Chairman of the Pallava Samooganala Arakkattalai, dated 2-8-1988. The fixed deposit was to mature on 2-8-1993

after 60 months and the interest was 10% per annum.

Alleging that the conversion of the deposit reinvestment certificate into a fixed deposit as stated above was illegal and dishonest and further by

the obtaining of a loan of Rs. 9,00,000/- on the converted fixed deposit, as an agent of the Trust, A-1 had committed criminal breach of trust, let

alone the illegal collection of the interest accrued, which had been utilised not to meet the expenditure of the proposed college, but deposited into

the private current account of the Arakkattalai, this prosecution was initiated.

Mr. N.T. Vanamamalai, learned senior counsel appearing on behalf of the Petitioners in Crl. M.P. No. 9739 of 1990 contended, that out of

31 witnesses cited in the final report, the first two were the Director and the Assistant Director of Technical Education, while the third, fourth and

fifth were the bank officials. Witnesses 6 and 7 speak of the two Government orders issued by the Government of Tamil Nadu, while witnesses 8

to 29 State about the purchase of land by the Arakkattalai. The last two witnesses are the investigating officers. According to the learned Counsel,

the object of both the Government Orders, was to disinvolve financial commitments to the Governments, while permitting private Trusts to open

Engineering Colleges on self- financing basis. He urged that the money deposited by the Arakkattalai in the Bank, was the money or the property

of the Arakkattalai itself and though the Director of Technical Education may have a right to operate the joint account, the money deposited can

never belong to him. The Arakkattalai cannot commit criminal breach of trust in respect of its own money. Even if it were to be held that the act of

the Arakkattalai was wrong or irregular and it could not have taken out a loan on the fixed deposit or appropriated the interest accrued, there was

no breach of trust and at the worst if can be called ""indiscretion"". The dominant intention was to save the Trust from its heavy burden of interest

and therefore, there was no motive of wrongful gain. He also contended, that all that had been done by the Trust in changing the nomenclature of

the deposit was, what they were entitled to do and if at all, an endowment can become effective. It can only be after prior concurrence was

granted by the All India Council for Technical Education, New Delhi. Till such concurrence was granted, there cannot be a beneficiary and,

therefore, there was no endowment in law. He further submitted, that the interest accrued cannot be touched by the Trust, only after the institution

came into being and before that, the only option open to the Government was to withdraw the permission granted and nothing further. In the event

of the Engineering College coming into being, and thereafter conditions stipulated were not fulfilled by the Arakkattalai, then the Government would

have the right to take over the Engineering College at any time, with all its immovable and moveable properties including the endowment cash

balances without paying any compensation. He strenuously contended, that the Government Order contemplated two different points of time, with

regard to non-compliance of conditions and in the first stage withdrawal of permission alone was feasible. He brought to my notice the usual

banking practice and the effect of the contract between a bank and the customer under the banking Regulation Act. He also submitted that under

the Indian Trusts Act, beneficiary must be indicated with certainty. He finally contended that there was no mens rea to commit the offence, since

there was no diminution or danger of diminution of the money in deposit. None were harmed nor there was any monetary loss to the Government

or the institution.

Mr. Sukumaran, learned Counsel appearing on behalf of the Petitioner in Crl. M.P. No. 10427 of 1990 contended, that except the evidence

of P.Ws.3 to 5, who are the bank officials, who also not implicate him, A-7 there was no offence whatsoever even with regard to violation of bank

regulations and, therefore, no question of abetment of the offences allegedly committed by other Petitioners in so far as he (A-7) was concerned

would arise. He pointed out certain provisions of the Manual of Instruction circular issued by the Union Bank of India and justified the action of this

Petitioner in changing the nomenclature of the deposit, since the deposit receipts did not mark on the face of it any lien or a charge in favour of the

Director of Technical Education. He urged that the deposit had been made by the Arakkattalai for a limited purpose of starting college at the

instance of the, Arakkattalai and therefore, the Arakkattalai was the depositor within the meaning of the bank instructions. Therefore, he pleaded

for exoneration, of the bank officer.

Mr. A. Alagiriswami, the learned Advocate General contended, that clause 4 of G.O.Ms. No. 429 showed how the fund endowed will have

to be utilised. According to the learned Advocate General, the income from the Fund cannot be withdrawn by the Arakkattalai and utilised for

other purposes. It would be wrong to contend, that only after the institution came into being, the endowment would be operative, since the

condition was, that the income from the endowment fund should be utilised fully to meet the recurring and non-recurring expenditure of the

institution without expecting any aid from the Government for any purpose at any time, now or in future. He submitted that the due date of maturity

of the deposit reinvestment certificate dated 2-8-1988 was 2-8-1993 and the maturity value was Rs. 19,66,320/-. The sum over and above Rs.

12,00,000/- was the income out of the deposit reinvestment certificate. In terms of the agreement executed by the Arakkattalai dated 5-2-1987,

they have agreed to abide by the conditions stipulated in G.O.Ms. No. 429 dated 17-4-1984. They have also agreed to deposit Rs. 12,00,000/-

initially as endowment before the opening of the college and the balance in three instalments over a period of three years. The last clause in the

agreement shows, that in the event of the Arakattalai not fulfilling the conditions agreed upon, the permission granted for opening of the Engineering

College shall be withdrawn at any time and the Government will have the right to take over the Engineering College at any time with all its

properties including endowment cash and cash balances without paying any compensation. He further pointed out that G.O.Ms. No. 1399, which

accorded permission to Arakkattalai, to start an Engineering College in the name and style of ""Pallava Engineering College"" has specifically taken

note of the deposit already made of Rs. 12,00,000/- in the joint account of the Trust and the Director of Technical Education towards the creation

of an endowment of Rs. 30,00,000/-. If the Arakkattalai had not deposited Rs. 12,00,000/- which was an obligation imposed or a condition

precedent for the granting of the permission, the Government would not have permitted starting of the Engineering College. Once the deposit is

made on an agreement and as a condition precedent, it was not open for the Petitioners to contend that the money belonged to them and they

could act as they liked. The learned Advocate General particularly referred to a letter dated 2-8-1988 addressed by A-1 on behalf of the Trust to

the Director of Technical Education, that he was submitting the original and xerox copy of the deposit reinvestment certificate No. A.

1980067/207/88 of Union Bank of India dated 2-8-1988 by creating the first instalment of the endowment for Rs. 12,00,000/- in the joint names

of Director of Technical Education and Chairman of the Arakkattalai as per letter No. H1/88 dated 1-8-1988. In this letter request had been

made for granting of licence to start a new Engineering College under self-financing scheme, at an early date. The deposit reinvestment certificate

was returned on the next day, on acknowledgment, to the Arakkatalai and this was the property that was entrusted to the accused, which had

been misutilised with an ulterior motive dishonestly, constituting criminal breach of trust. It was specifically pointed out by reference to documents

forwarded to Court u/s 173 Code of Criminal Procedure that the interest accrued on these deposits had been credited in the current account, held

exclusively by the Arakkattalai. Further, every time the nomenclature of the deposit was changed, without the knowledge of the Director of

Technical Education. The deposit receipt bears the same date viz., 2nd August, 1988. The deposit reinvestment certificate would have yielded Rs.

19,66,320/- on the date of its maturity, the total of which belonged to the joint holders with a condition attached, touching the discharge of such

property and any violation thereof, would attract criminal liability. The present fixed deposit would yield only a 10% annually and would certainly

fall short of the maturity value contemplated in the deposit reinvestment certificate, initially issued. The Petitioners had no right whatsoever to obtain

a loan on the fixed deposit, after dishonestly changing its nomenclature, and apply it to purposes beyond the scope of the endowment created. By

having drawn interest that had accrued, the value of the security, which was reduced, had been applied by the Petitioners to their own use and,

therefore, there was wrongful gain to them and wrongful loss to the endowment. The interest drawn had not been redeposited.

Both the learned Counsel had placed before me certain decided cases which I will consider at the relevant context.

Before going into the factual details, it must be stated, that the principles of law, which would permit the sparing exercise with circumspection

of the powers u/s 482 Code of Criminal Procedure by this Court, are well settled. Commencing from the earliest case in R.P. Kapur Vs. The State

of Punjab, up till the decision of the apex Court in State of U.P. Vs. R.K. Srivastava and Another, the law enunciated reflects those established

principles. In exercising this jurisdiction the High Court is not permitted to embark upon an enquiry whether the allegations in the complaint or the

charge sheet inclusive of the documents accompanying either of them, are likely to be established by evidence or not. That function will have to be

relegated to the trial Magistrate, when evidence is placed before him. As has been observed by the Supreme Court, it was neither possible nor

advisable to lay down any inflexible rules to regulate this jurisdiction, but the High Court would be guided by the allegations set out In the complaint

or the charge sheet, spelling out the offences alleged or otherwise. The test is, if taking the allegations in the complaint as they were, without adding

or subtracting anything, no offence was made out, then the High Court would be justified in quashing the proceedings in exercise of its inherent

powers. On the other hand, if it cannot be said that no prima facie case for trial had been made out, the High Court would have exceeded its

jurisdiction in quashing the prosecution u/s 482 Code of Criminal Procedure.

It becomes necessary to notice at this stage, the ingredients necessary to constitute the offence of criminal breach of trust.

The accused must have been entrusted with property or dominion over it and

The accused must have

(a) dishonestly misappropriated or converted to his own use that property, or

(b) dishonestly used or disposed of that property or willfully suffered any other person so to do in violation of

(i) any direction of law prescribing the mode in which such trust is to be discharged;

or (ii) of any legal contract made touching the discharge of such trust.

The meaning of the word ""trust"" as contemplated in Section 405 I.P.C., was considered by the Supreme Court in Jaswantrai Manilal Akhaney Vs.

The State of Bombay, . It was observed as hereunder:

When Section 405 which defines ""criminal breach of trust"" speaks of a person being in any manner entrusted with property, it does not

contemplate the creation of a trust with all the technicalities of the law of trust. It contemplates the creation of a relationship whereby the owner of

property makes it over to another person to be retained by him until a certain contingency arises or to be certain event. The person who transfers

possession of the property to the second party still remains the legal owner of the property and the person in whose favour possession is so

transferred has only the custody of the property to be kept or disposed of by him for the benefit of the other party, the person so put in possession

only obtaining a special interest by way of a claim for money advanced or spent upon the safe keeping of the thing or such other incidental

expenses as may have been incurred by him.

Their lordships further observed that:

where securities have been delivered with a view to cover the repayment of any overdraft by the pledgor Bank to the pledgee Bank and it is

agreed that they are to be disposed of on the arising of a stipulated contingency only, then by the very fact of the delivery of the securities to the

bailee the latter becomes a trustee in terms of the contract, not for all purposes, but only for the limited purpose indicated by the agreement

between the parties.

A trust is an obligation annexed to ownership of the property and arising out of a confidence resposed to in and accepted by the owner or

declared and accepted by him, for the benefit of another or of another and the owner, as contemplated u/s 3 of Indian Trusts Act, 1882 (Act No.

2 of 1882). If there was no original confidence, then there can be no trust. The word ""trust"" is comprehensive covering not only the relationship of

trustee and beneficiary, but also that of a bailor and bailee, master and servant, pledger and pledgee and all other relations which postulate

existence of a fiduciary relationship between the complainant and the accused. In the normal course, a breach of contract will give rise to a civil

liability alone, but there may be circumstances where the alleged breach is so grave and wanton as to warrant an inference of dishonest and

fraudulent intention on the part of the accused in which case it will constitute criminal breach of trust. Every offence of criminal breach of trust

involves a civil wrong, but every breach of trust to become criminal must have the requisite mens rea.

In Corpus Juris Secundum, Volume XXX, Page 243, the meaning of ""Endowment"" has been stated as hereunder:

In its broadest connotation, the word has been defined as meaning that which is bestowed or settled on a person or an institution ''also property,

fund, or revenue permanently appropriated to any object. It is understood in common acceptation as a fund yielding income for the support of an

institution and defined as property or pecuniary means bestowed as a permanent fund, as the endowments of a college, a hospital, or a library; that

particular fund, or part of the fund, of the institution, bestowed for its more permanent uses, and usually kept sacred for the purposes intended. In a

more restricted sense, the bestowment of money as a permanent fund, the income of which is to be used in the administration of a proposed work.

The word, as generally used, implies a permanent fund, the earnings of which are devoted to the support of the endowed institution, as

distinguished from sums received more or less casually and intermittently for the current expenses of the institution, and, in a particular connection,

it has been held that ""endowment"" does not necessarily mean that it must consist of land, but that it may consist of a stipend rents, emoluments, and

advantages of any kind.

In P. Ramanathan Aiyar''s ""The Law Lexicon"" 1987 Edition at page 390 the meaning of ""endowment"" is as follows:

Property or money bestowed as a permanent fund; property held in trust for any charity; (as) ''the endowments of a college, a hospital'' or a

library.... An Endowment is a gift in perpetuity, of which the usufruct is continually accruing; as to give a sum of money, of which the interest may

serve to endow a public institution.

Now the stage is set to scrutinise the factual details placed before me, in the light of the authorities cited, and on the basis of the ingredients

necessary to constitute the offence alleged, with specific reference to the word ""endowment"", which forms part of the Government Orders and the

agreement executed by A-1 to A-6, in favour of the Government of Tamil Nadu. It has to be then seen, if a cause had been made out for the

exercise of inherent powers.

In 1984, on receipt of representations from the public and educational institutions, the Government of Tamil Nadu considered the question of

starting some more Engineering Colleges in the State, to cater the needs of aspiring students. While so, some private managements/educational

trusts came forward to establish and run new private Engineering Colleges on self-financing basis, without involving any financial commitment to the

Government. The Director of Technical Education recommended grant of permission, to open private Engineering Colleges, by private

managements/educational trusts on self-financing basis, subject to certain conditions. The Government approved the proposal of the Director of

Technical Educational on the basis of non-involvement of any financial commitment to the Government both under recurring and non-recurring

items, for ever, subject to certain conditions. Clause 4 of the earliest Government Order No. 429 dated 17-4-1984 imposed an important

condition which runs hereunder:

The Private Managements/Educational Trust should provide an Endowment of Rs. 30.00 lakhs (Rupees Thirty lakhs in cash jointly in the name

of Trust duly registered under the Societies Registration Act and in the name of Director of Technical Education. The Endowment Fund of Rs.

30.00 lakhs (Thirty lakhs only) can be created either in one lump-sum before starting of the college or in instalments as detailed below:

I Year (before opening of College) Rs. 12.00 lakhs

II Year ("") Rs. 6.00 lakhs

III Year ("") Rs. 6.00 lakhs

IV Year ("") Rs. 6.00 lakhs

Total Rs. 30.00 lakhs

The money can be invested in the Nationalised Banks/Scheduled Bank/Government of India Under takings/State Government undertakings

whichever the Trust may prefer. The income from the Endowment fund should be utilised fully to meet the recurring and non-recurring expenditure

of the institution without expecting any aid from the Government, for any purpose at any time, now or in future.

Clause 15 reserved the power of the Government to withdraw the permission granted to the private Managements in the event of non-fulfilment of

the stipulated conditions. It also had the right to take over the Engineering College in question at any time, with all its immovable and movable

properties, including endowment and cash balances without paying any compensator.

It is only on the basis of this Government Order, that the Pallava Samooganala Arakkattalai applied to the Government for permission to start

a private Engineering College in the name and style of ""Pallava Engineering College at Kanavaipudur, Salem District, under the self-financing

scheme with effect from 1988-89. The Director of Technical Education by this letter dated 1-3-1988 addressed to the Arakkattalai stated that

after considering the existing conditions, starting of any new Engineering College, under any scheme was not recommended to the Government.

However, if the Arakkattalai wished to submit the proposal in complete form for possible consideration at a later date, they may formulate

necessary proposals as per the terms and conditions stipulated in G.O.Ms. No. 429 dated 17-4-1984. This letter also stated that regarding the

creation of fixed deposit, in this connection, instructions had to be awaited and payment should be made, only when directed to do so. It is

thereafter that the Arakkattalai deposited Rs. 12,00,000/- on 2nd August, 1988, in the Union Bank of India, Salem Branch, and obtained a

deposit reinvestment certificate in the joint names of the Director of Technical Education, Madras, and the Chairman, Pallava Samooganala

Arakkattalai, Salem. As stated earlier, while narrating the facts, this deposit reinvestment certificate on maturity, 60 months later, would have

yielded Rs. 19,66,320/-. If the deposit reinvestment certificate had continued to exist as it was, it would not have been possible to draw interest on

the deposit periodically, till the deposit matured five years thereafter. The certificate also reads that it was not transferable. Soon after the deposit

reinvestment certificate was issued by the Bankers in the joint names, A-1 had forwarded a letter dated 2-8-1988 to the Director of Technical

Education, Guindy, Madras, intimating the creation of the first instalment of the endowment of Rs. 12,00,000/- as per the directions of the Director

of Technical Education, in his letter No. H1/88 dated 1-8-1988, producing therewith, fixed deposit receipt, original and xerox copy, in this letter

A-1 while requesting the Director of Technical Education to acknowledge, had pleaded for recommendation, for granting of licence, to start the

new Engineering College under the self-financing scheme, at an early date. The contents of this letter taken along with Clause 4 of G.O.Ms. No.

429 dated 17-4-1984 show, that both the Government and the Pallava Samooganala Arakkattalai understood, that the payment of the first

instalment of Rs. 12,00,000/- and creating of the endowment was a condition precedent for the granting of licence permission to start the new

Engineering College. It was only to satisfy the Director of Technical Education the compliance of a part of the condition under Clause 4, A-1 had

forwarded the original as well as the xerox copy of the deposit reinvestment certificate, to the Director of Technical Education. This deposit

reinvestment certificate must have been in the usual course, according to the prosecution, in the custody of the Director of Technical Education.

However the Arakkattalai had taken back the original deposit reinvestment certificate alone, after verification on 3-8-1988, on a proper

acknowledgement. As rightly contended by the learned Advocate General, if the deposit reinvestment certificate had been retained by the Director

of Technical Education, as it must have been, there would have been no scope whatsoever for misutilisation of the funds, of this certificate. It has to

be, therefore, concluded, that the deposit reinvestment certificate, which is property within the meaning of Section 405 I.P.C. had been entrusted

with Pallava Samooganala Arakkattalai, by the Director of Technical Education.

In R.K. Dalmia Vs. Delhi Administration, the meaning of the word ""property"" u/s 405, 409 and 22 of the Penal Code was considered. It was

stated that ""the word ""property"" is used in the penal Code in a much wider sense than the expression ""movable property"". There is no good reason

to restrict the meaning of the word ""property"" to movable property only when it is used without any qualification in Section 405 or in other sections

of the Penal Code. Whether the offence defined in a particular section of the Penal Code can be committed in respect of any particular kind of

property will depend not on the interpretation of the word ""property"", but on the fact whether that particular kind of property can be subject to the

acts covered by that section. It is in this sense that it may be said that the word ""property"" in a particular section covers only that type of property

with respect to which the offence contemplated in that section can be committed."" The Supreme Court in that case considered the dominion over

the property of two person having authority to operate jointly on the accounts of a company, with a Bank, and one of them delivering blank signed

cheques to the other. It was held that the effect of the person delivering the blank cheques signed by him to the accused, might amount to putting

the accused in sole control over the funds in the bank and there would not remain any question of the accused''s having joint dominion with the

former, over those funds and the accused could alone commit criminal breach of trust, in respect of the funds. It was also stated, that it could not

be held, that the accused had obtained control over the funds by cheating the person who had delivered blank cheques, as he got them on the

representation that they would be used for the legitimate purpose of the company, but later used them for the purpose not connected with the

company and that, therefore, he could not commit the offence of criminal breach of trust. The requirements of Section 409 I.P.C., according to the

apex Court, would be satisfied, if the person be an agent of another and that other person entrusts him with property or with any dominion over

that property in the course of his duties as an agent. The term ""Agent"" was not restricted only to those persons who carried on the profession of

agents.

It is only after deposit reinvestment certificate, came into existence and accepted by the Director of Technical Education, G.O.Ms. No. 1399

dated 29-8-1988 was issued. This Government Order states, that the Director of Technical Education had forwarded the proposal of the Pallava

Samooganala Arakkattalai with necessary documents and agreements in support of the proposal. It also states that the Arakkattalai had already

deposited a sum of Rs. 12,00,000/- in the joint account of the Trust and Director of Technical Education, Madras, towards the creation of an

endowment of Rs. 30,00,000/-. It is only on the basis of the proposal, taken along with the documents and agreement in support of the proposal,

that the Government after examination it, had permitted the Arakkattalai to start a private Engineering College with effect from 1988-89. The

Government Order also reads that the Pallava Engineering College shall be affiliated to the Madras University and it should also abide by the Rules

and Conditions prescribed by the University, besides the conditions stipulated in G.O.Ms. No. 429, Education, dated 17-4-1984. This

Government Order makes it apparent, that the grant of permission to start a private Engineering College was made only, on being satisfied about

the deposit of Rs. 12,00,000/- in the joint names of the Trust and the Director. This Government Order also stipulates that the non-fulfilment of any

of the conditions by the Arakkattalai, would result in the permission granted, being liable to be withdrawn at any time and the Government having

the further right to take over the Engineering College with all its properties, movable and immovable, including endowment and cash balances

without paying any compensation. It would be difficult at this stage to hold, that the Government would have given permission to start the

Engineering College even without the deposit of Rs. 12,00,000/-, since this sum could be deposited at any time before the opening of the college.

According to Mr. N.T. Vanamamalai, this sum could have been deposited in the joint names of the Arakkattalai and the Director, after

concurrence was obtained from the All India Council for Technical Education and till then the deposit even if made would not have the effect of

creating an endowment. There appears to be a fallacy in this argument, for the Trust had chosen to deposit the money in the Bank, in the joint

names, even after the letter of the Director of Technical Education, addressed to it on 15-6-1988, stating that the proposal had been deferred for

the present. The deposit was made in pursuance of the letter of the Director of Technical Education dated 1-8-1988 who had in March 86,

represented Arakkattalai to wait, before creating a fixed deposit and that this deposit was a condition precedent is also evident from the letter

dated 2-8-1988 addressed by A-1 to the Director of Technical Education, pleading for recommendation of the grant of a licence to start a new

Engineering College towards which, the first instalment of Rs. 12,00,000/- to create the endowment, as directed, had been made.

It is, therefore, clear that the Arakkattalai had been not only entrusted with deposit reinvestment certificate, which is property within the

meaning of Section 405 I.P.C., but had also dominion over that property.

It has to be now seen whether A-1 to A-6, who had been entrusted with property, had converted to their own use that property in violation of

any direction of law prescribing the mode in which the Trust had to be discharged or of any legal contract, express of implied, which they had

made touching the discharge of such Trust or wilfully suffered the Bank so to do. I am unable to agree with the submission of the learned Counsel

for the Petitioners, at this stage, that before the starting of the Engineering College, the Government would only have the authority to withdraw the

permission granted and will have no right whatsoever, to take over the endowment and cash balances without paying any compensation, since the

Engineering College itself had not come into existence. This view of mine is based on the agreement signed by A-1 to A-6, which stipulates, that

the Arakkattalai would abide by the conditions, which form part of G.O.Ms. No. 429 dated 17-4-1984, and extracted thereunder. G.O.Ms. No.

429 of 1984 reads, that the income from the endowment fund should be utilised fully to meet the recurring and non-recurring expenditure of the

institution without expecting any aid from the Government for any purpose at any time, now or in future. Therefore, once an endowment is created,

as a condition precedent for the grant of permission to start an Engineering College, the income from the endowment fund had only to be utilised

for the expenditure, recurring and non-recurring of the institution to be established without expecting any aid from the Government for any purpose

at any time then or later. It is obvious that the income which would derived from the deposit of Rs. 12,00,000/- in the joint names, would only be

utilised for the purpose or the proposed institution and cannot be taken away for the repayment of a loan, which the Trust had obtained from the

Bank, to facilitate it to make the deposit of the first instalment of the endowment fund of Rs. 12,00,000/-. The object of the Government is not far

to seek, for the interests of the institution, which was likely to come into existence, from the date of the Government Order dated 29-8-1988, had

to be protected. At any rate, the possibility of the contents of clause 4 of the Government Order dated 29-8-1988, capable of being split up into

two, independent and different clauses may have to be considered only after further evidence is brought on record.

If the Trust had not requested the Bank to change the deposit reinvestment certificate into a fixed deposit, the joint holders of the receipt

namely, the Director of Technical Education and the Arakkattalai jointly would have been entitled at the end of 60 months to receive a sum of Rs.

19,66,320/-. By the act of A-1 to A-6 in having converted the deposit reinvestment certificate into a fixed deposit receipt, the latter yielding only

10% interest as well as making it possible to draw the interest accrued every three months certainly results in a wrongful loss to the endowment

and a wrongful gain to the Trust. That prima facie Petitioners 1 to 6 had the mens rea to commit the offence, is apparent for without informing the

Director of Technical Education, they had, with the active complicity and aid of A-7, converted the deposit reinvestment certificate in the joint

names of the Director of Technical Education and the Arakkattalai, initially into a fixed deposit in their joint names and latter converted it over again

into a fixed deposit in the name of the Arakkattalai alone, to facilitate drawing a loan of Rs. 9,00,000/-, as well as for appropriating interest on the

fixed deposit for themselves. The Director of Technical Education or the endowment created cannot be concerned with the loan of Rs. 9,00,000/-

availed of by the Petitioners to pay the initial instalment of Rs. 12,00,000/- to create an endowment and that separate debt of the Arakkattalai may

have to be wiped out by them, in a different way and not be utilising the funds of the endowment created for a particular purpose. There was a

wrongful loss, because not only the interest on the fixed deposits had been appropriated for the purposes not contemplated by the Government

Order, but also the total maturity value has been substantially reduced. The learned Advocate-General has pointed out, on the records available

before Court, that interest on the fixed deposit had been periodically drawn and credited in the private current account of the Arakkattalai. The

contention of the learned Counsel for the Petitioners, that by this method of converting the deposit reinvestment certificate into a fixed deposit

receipt, the Arakkattalai was facilitated in discharging its prior loan and had also the benefit of paying a lesser interest on the loan obtained, cannot

be held to be bonafide, at this stage, when material on that aspect is not yet available on record. The way in which the transactions had been done

behind the back of the Director of Technical Education, actively abetted by A-7 would not permit an inference being drawn, before further

evidence is brought on record, that there was bonafides, in every act of the Petitioners and if at all there was anything wrong, it was only

indiscretion. It appears prima facie that the Arakkattalai could not have touched or utilised the income accruing out of the deposit of Rs.

12,00,000/- to wipe out its private loan with the Bank, since it was contrary to the terms and conditions agreed upon, on which the permission to

start the Engineering College was granted. One cannot overlook the permission to start a College, to be granted by the Government, and the

concurrence to be obtained from the All India Council cannot be equated, for without the permission from the Government, the very basis, of

establishing the private Engineering College would get knocked out. The ""permission"" and ""concurrence"" operate in different fields and at different

points of time and, therefore, the argument that as long as there was no concurrence from the All India Council, there was no beneficiary at all,

cannot be accepted. May be after evidence is adduced, it may still be possible to go into the question of mens rea of the accused. As the records

stand to-day I have the least hesitation in rejecting the premature plea that there was no mens rea to commit the offence alleged and the dominant

intention was to save the Arakkattalai from the heavy burden of interest. At the risk of repetition, it will have to be stated, that the heavy burden of

interest which the Arakkattalai may have to meet, was of its own making and could not bind the endowment after the deposit was made. Once the

deposit had been made in the joint names of the Director of Technical Education and the Arakkattalai, individual action, keeping the Director of

Technical Education in the dark, contrary to the conditions of the Government Orders and the agreement, appears to be whimsical, reckless and

dishonest, as well. Such action was against the fiduciary relationship, which existed, on the creation of the endowment.

The meaning of the word ""endowment"", referred to in paragraphs 19 and 20 above certainly shows, that in common acceptation it is a fund

yielding income for the support of an institution and defined as property or pecuniary means bestowed as a permanent fund, as the endowments of

an institution, bestowed for its more permanent uses, and usually kept sacred for the purposes intended. Further the word not only implies a

permanent fund, but takes in its fold the earnings accrued which had to be devoted to the support of the endowed proposed institution, as

distinguished from sums casually and intermittently received for the current expenses of the institution. In other words, endowment is a gift in

perpetuity of which the interest accrued may serve to endow a public institution. Therefore, the conversion of the deposit reinvestment certificate, in

the individual name of the Arakkattalai only, for the specific purpose of appropriating the interests accrued and for repaying the private loan of the

Arakkattalai, certainly would be contrary to the legal contract touching the discharge of the Trust.

It is true that the person who transfers possession of property to another, as in this case, still remains the legal owner of the property and the

Director of Technical Education in whose favour possession of the deposit reinvestment certificate was transferred had only the custody of that

property to be kept or disposed of by him for the benefit of the other party. The Director of Technical Education so put in possession of property

had obtained a special interest for the safe keeping of the property, for the achievement of the object envisaged in the Government Orders and the

agreement, for the ultimate benefit of the proposed Engineering College. Section 405 Indian Penal Code, does not contemplate, that the property

in respect of which an offence of criminal breach of trust may be committed, must be the property which belonged to the complainant, once there

was entrustment of property. It mattered little whether the complainant on whose behalf the property was entrusted, was the owner thereof or not.

Hence the oft repeated argument of the learned Counsel for the Petitioners, that as the owner of money deposited, the Arakkattalai was entitled to

dispose it of as it liked, has to be outright rejected. The beneficiary comes into existence soon after the Government granted permission to start the

Engineering College and the submission, that only after the concurrence of the All India Council the beneficiary would commence to exist, does not

have merit. Even at this stage before reference is made to the authorities and the Banking Practice and Regulations, the argument of the learned

senior counsel, that this prosecution was politically motivated has to be disposed of. This argument, though advanced in passing, needs

consideration in view of the intensity with which it was propelled. I have carefully perused the entire records and no politics, as such, prima facie is

evident, except that one of the accused happens to be a politician. This argument has to be stated only to be rejected, since there is no foundation

on which, this contention could be supported.

The speed with which A-7, the Petitioner in Crl. M.P. No. 10427 of 1990 has acted every time in changing the nomenclature of the deposit or

whatever had been asked for by the Arakkattalai, on the same day, shows that he was ready to serve instantly as in ""fast food counters"", without

realising his responsibility as a banker, especially when he was fully aware of the endowment created for a specific purpose and the deposit

reinvestment certificate having stood in the joint names of the Director of Technical Education and the Chairman of the Arakkattalai. The argument

that any lien or charge was not apparent on the face of the deposit reinvestment certificate can have no meaningful significance, for it was A-7, who

had acted throughout, commencing from the issue of the deposit reinvestment certificate till it again got transformed into a fixed deposit, in the joint

names, after certain clumsy transactions in between. It also passes one''s comprehension as to why every other subsequent documents relating to

the ""deposit"", had to be ante-dated as 2-8-1988, though the deposits themselves came into being on different dates. At this stage, it will not be

possible to hold, that the ingredients of the offence of abetment, are not attracted, on the facts placed before Court, by the prosecution. Abetment

is capable of being inferred from various circumstances even if it be, the bank officials have not implicated A-7, specifically.

Sri. N.T. Vanamamalai referred to Tannan''s Banking Law and Practice in India, 18th Edition, 1989, for, what deposit in joint names meant.

At page 194 the Author has stated, ""that the deposits are frequently received by bankers in the joint names of two or more persons and the

conditions subject to which such deposits are accepted, regulate the manner of their withdrawal. According to English law, payment to anyone to

the joint creditors gives a complete discharge to the debtor Wallace v. Kelsall 7 M.W. 364. This view was followed in India in the Full Bench

Decision of the Madras High Court in Annapurnamma v. Akkayya ILR 36 Mad 544 ""A passage in page 195 which reads as hereunder was also

referred to:

In McVoy v. The Belfast Banking Co. 1935 A.C. 24, the legal effect of a deposit receipt taken out in the joint names of two persons was

considered at great length by Lord Atkin but the conclusions there reached by the majority of the Law Lords, have left several important points

undecided.

As a follow up to the Author''s comment, the learned Counsel took me through the Full Bench decision of this Court in M. Annapuranamma v. U.

Akkaya ILR 36 M.D. 544. That was a case of a negotiable instrument in favour of several and discharged by one of the several payees. The

validity of such discharge was considered, and by a majority opinion it was held that one of the several payees of a negotiable instrument can give a

valid discharge of the entire debt, without the concurrence of the other payees. This view was doubted by the Rangoon High Court in Totaram

Krishna Patel v. Mt. Rahimat Bi and Ors. AIR 1937 Ran 227. I am unable to see how the view expressed by the Full Bench can have any bearing

on the facts involved in this prosecution, pointing to a commission the offence of criminal breach of trust.

Reference was then made to the Banking Regulation Act, 1949, and specifically to Section 45ZA in Chapter III-B as well as the proviso to

Clause 4 of Section 45ZC and Clauses 5 and 6 of Section 45ZE. Section 45ZA deals with nomination for payment of depositors'' money, where a

deposit was held by a banking company to the credit of one or more persons, permitting the depositor or the depositors, as the case may be, to

nominate in the prescribed manner, one person to Whom in the event of the death of the sole depositor or the death of all the depositors, the

amount deposited may be returned by the banking company. This section also has a proviso, that payment by a banking company shall not affect

the right or claim which any person may have against the person to whom any payment had been made under that section. Section 45ZC relates to

nomination for return of articles kept in safe custody with banking company and proviso to Clause (4) thereof reads that nothing contained in that

section shall affect the right or claim which any person may have against the person to whom the article was returned in pursuance of the provisions

of that sub-section. Section 45ZE relates to release of contents of safety lockers. Clauses (5) and (6) show that on the removal of the contents of

any locker by any nominee or jointly by any nominee and survivors as aforesaid, the liability of the banking company in relation to the contents of

the locker, shall stand discharged and that no suit, prosecution or other legal proceeding shall lie against the banking company for any damage

caused or likely to be caused, for allowing access to any locker, and liberty to remove the contents of such locker, in pursuance of the provisions

of Sub-section (1) or Sub-section (2), as the case may be. All these sections in the Banking Regulation Act cannot enure in favour of the

Petitioners, for we are not now concerned either with the civil liability of the Petitioners or any dispute inter se between the bank and the

Petitioners. I am unable to find any help to the case of the Petitioners, spiralling out of these provisions.

Thereafter Section 6 of the Indian Trust Act, 1882 was pointed out. This was for the purpose that, where a trust was created, the beneficiary

must be indicated with certainty. This aspect I have already considered and the beneficiary undoubtedly is the proposed Engineering College.

Simply because one of the conditions, prescribed, obtaining of concurrence, from the All India Council, it cannot be stated, that there was no

indication with certainty, of the beneficiary. Section 88 of the Indian Trust Act can also be usefully referred to.

Mr. Sukumaran, learned Counsel appearing on behalf of A-7 pointed out, that in terms of the ""Book of Instructions"" dealing with

administration and operations of the Union Bank of India, it will be in order for branches to agree to add/strike off/substitute the names of persons

to the existing names in the Deposit Receipt, prior to their maturity if all the depositors made such request in writing and the concerned persons

gave consent. Such transactions shall not merely on that account be regarded as involving renewal of the Deposit or premature repayment of the

Deposit provided the original term of the Deposit was not reduced in any case. This rule will not be useful for A-7, at this stage, since on the

available records, there was no consent or request in writing by the Director of Technical Education, for the change in the nomenclature of the

deposit receipt. Another Rule was referred to which reads, ""that Deposit Receipts in respect of Tender money, Guarantee money, etc., should be

issued in the name of the Government Department-Account (Name of the Depositor), after obtaining a letter from the depositor to the effect that

the deposit in question has been made as a security for due performance of his contract with the concerned Government Department and that, the

deposit may be held, renewed and released, according to the instructions of the concerned Government Department. This Rule also states that

Branches may issue Deposit Receipts in the name of Government Departments only, without insisting on adding the party''s name thereto if so

requested it must, however, be noted that the party''s name must be entered in the Deposit Register. The Deposit Register should be delivered with

a covering letter, stating the name of the party on whose account it had been issued and at the time of disposal of the Deposit, the Government

Department concerned should give specific instructions to the bank to credit the proceeds to the Party''s account. Deposit Receipt may also be

issued in the name of Agencies/institutions other than Government Departments like automobile dealers etc, for booking of automobiles or

towards"" earnest money or security deposit. The case on hand does not deal with any of the contingencies contemplated in this Rule, for in

pursuance of an agreement containing certain clauses, Rs. 12,00,000/- had been deposited in the joint names of the Director of Technical

Education and the chairman of the Arakkattalai. The awareness of A-7, of the transaction of the Arakkattalai with Government, to start the private

Engineering College is clearly visible from the remarks and recommendations made by A-7 on 3-7-1987, while recommending sanction of Rs.

9,00,000/- as S.O.D. to the Arakkattalai. That the helping hand of A-7, had played a very leading role, to facilitate whatever action the Trustees

of the Arakkattalai wanted to indulge in, which the prosecution christens as dishonest, is clearly discernible.

All that remains now is to refer to the decisions cited. The Supreme Court in Allahabad Bank Ltd. Vs. Commissioner of Income Tax, West

Bengal, was considering the contribution to the Trust by the employer for payment of pension to the employees. The point involved was whether

such contribution was business expenditure to be allowed as deduction under the provisions of the income tax Act. On facts, the payment of

pension and the amount thereof was found to have been left to the discretion of the employer with no obligation on Trustees to pay the pension. It

was held that the beneficiaries had not been indicated with reasonable certainty and the sum was not spent for purpose of business and, therefore,

cannot be allowed as deduction. I have already held that the beneficiary has been indicated with certainty and it was the proposed Engineering

College. I am unable to comprehend how this decision would attract the facts of the present case.

Reference was made to (a) Allahabad Bank Ltd. Vs. Commissioner of Income Tax, West Bengal, (b) (Krushanadan v. Bhagwandas) AIR

1978 Bom 153 and (c) Indranarayan Vs. Roop Narayan and Another, In case (a) it was held that a deposit made by a Hindu of his money in the

joint names of his wife and himself or himself and another person as either or survivor, does not on his death constitute a gift by him to her or

another and the burden lies on the person alleging a gift, to prove that a gift was intended. It was also observed that the Post Office Savings Bank

Rules do not touch rights inter se between depositors. In case (b) it was held that deposit by A in the joint names of himself and B payable to either

or survivor was not gift of money by A to B. Referring to Section 81 of the Trusts Act, it was observed that on the death of one, there was a

resulting trust in favour of his heirs, unless facts and circumstances showed a contrary intention. In case (c) it was held that the disagreement

between the father and son, on the facts stated therein, was not a declaration of intention to separate from the family. The case relates to the

member of a joint family and the joint account held by the father and the son. These three cases cannot even remotely stand comparison, on facts

projected in this prosecution.

In Tahir Vs. State, the Allahabad High Court considered the essentials required to establish an offence u/s 409 I.P.C. On facts, it was held that

Kamdara had not to be entrusted with property, but it was the Supervisors, who were in charge of this property''

In D. Dhanaya Naik v. State (Sic), while considering the legal ingredients u/s 409 I.P.C., on facts, it was found, that there was no dishonesty,

for the Appellant himself had been duped by Seshachari, who had committed suicide before the trial could commence.

Further, the following cases were also placed before me in relation to the ingredients necessary to constitute the offence of criminal breach of

trust:

(1) (Somanathpuri v. State of Rajasthan) 1976 Cri.L.J. 8971;

(2) (Tagroop Singh v. State of Punjab) 1980 Cri. L.J. P&H 68;

(3) (Rt. Rev. George Devadoss v. Aasirwadam) 1968 L.W. Cri. 185;

(4) The State of Gujarat Vs. Jaswantlal Nathalal, ; and

(5) United Commercial Bank Ltd. Vs. Okara Grain Buyers Syndicate Ltd. and Another,

These decisions have been rendered on the particular facts arising in each one of these cases. The views expressed in these cases positively show,

that there cannot be a rigid or universal rule as to when the ingredients of the offence can be stated to be attracted, for naturally such conclusions

will have to be essentially based on the facts unfurled in every prosecution. The usefulness of these decisions, may loom large, after evidence is

brought on record during the course of trial and certainly not at this stage.

Specific reference was made to the decisions of the Supreme Court in Jaswantrai Manilal Akhaney Vs. The State of Bombay, , for the

purpose, that an act done by a person justified by law or by mistake of fact believing himself to be justified by law, in good faith would not be an

offence as provided u/s 79 I.P.C. On ""justification in good faith"", evidence will have to be brought on record, before the impact of the ingredients

could be canvassed in their favour, by the Petitioners concerned. The Supreme Court in paragraph 15 of its judgment observed that ""The

Appellant cannot avail himself of the exception of Section 79 simply by saying that he believed that in law he was entitled to deal with the securities

as the property of the Exchange Bank, as he attempted to do in his written statement. If he had further proved that he believed in good faith that

the Co-operative Bank was indebted to his bank, his belief that he was justified by law in dealing with the securities as the property of the bank

may have helped to bring him within the exception. But as there was no mistake about the basis fact, the provisions of Section 79, Indian Penal

Code are not attracted to this case."" Hence, at this stage the law laid down by the Supreme Court cannot come to the rescue of the Petitioners, to

halt the pending prosecution in its track.

On the contrary the decision in Khandu Somu v. State of Maharashtra 1962 Cri.L.J. (S.C.) 593 (Surendranath Basu v. Emperor) ILR 1938

Cal 257; (In re: Venkatagurunatha Sastri) 1923 Cri.L.J. 452; (Sailendra Nath Mitter v. Emperor) I.L.R.I. Cal 493 and (R.K. Dalmia v. Delhi

Administration ) (Sic) show, that a dishonest misappropriation for a time only, was misappropriation within the meaning of Section 403 I.P.C. and

it was no defence to a charge of misappropriation that the officials who had misappropriated the amount entrusted with them for a particular

purpose, had subsequently disbursed that amount for the intended purpose after the matter was reported to the higher authorities. Further

surreptitious withdrawal of a security deposit by an employee before settlement of his account would amount to criminal breach of trust. Again if

the accused, who had pledged pronotes with the complainant as security for loan, subsequently induced the complainant to hand over those

pronotes, pretending their requirement, to collect monies from the debtors out of which he would repay the complainant, but disposed of those

pronotes and appropriated the proceeds could well be liable for an offence u/s 406 I.P.C. In one of these cases (I.L.R. 1 Cal 493) the Manager of

a bank branch received Government pronotes from a constituent under contract of pledge as security for overdraft granted to the latter and had

them entered into the bank books. The pronotes in the possession of the bank had banker''s lien, apart from the pledge it constituted. The manager

became entrusted with dominion over the pronotes to hold them as security against the overdrafts. If, before satisfaction of the overdraft account

the manager returned the pronotes to the constituent thought shown in the books as deposited, the manager was liable for criminal breach of trust

and the constituent for abetment thereof.

Similarly if one partner is given authority by other partners to collect monies in respect of the firm, he gets entrusted with dominion ever

property and if he misappropriates he comes within the provisions of Section 405 I.P.C.

It is, therefore, apparent that the case law placed before me cannot be usefully relied upon by the Petitioners, at this stage, on this basis of their

intended defence, which cannot be gone into in the exercise of inherent powers.

Since all the contentions of the learned Counsel for the Petitioners have been rejected, the net result is that these petitions deserve dismissal.

Accordingly, both the petitions stand dismissed.

However, the trial Court shall dispose of the calender case on its inherent merits without being influenced by any of the observations made

during the course of this order.