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Cites 10 docs - [View All]
The Indian Trusts Act, 1882
The Code Of Criminal Procedure, 1973
Section 53 in The Indian Trusts Act, 1882
Section 120B in The Indian Penal Code
Section 34 in The Indian Penal Code
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Supreme Court of India
Madhavrao Jiwaji Rao Scindia & ... vs Sambhajirao Chandrojirao Angre & ... on 9 February, 1988
Equivalent citations: 1988 AIR 709, 1988 SCR (2) 930
Author: M Rangnath
Bench: Misra Rangnath
           PETITIONER:
MADHAVRAO JIWAJI RAO SCINDIA & ANR. ETC.

	Vs.

RESPONDENT:
SAMBHAJIRAO CHANDROJIRAO ANGRE & ORS. ETC.

DATE OF JUDGMENT09/02/1988

BENCH:
MISRA RANGNATH
BENCH:
MISRA RANGNATH
OZA, G.L. (J)
DUTT, M.M. (J)

CITATION:
 1988 AIR  709		  1988 SCR  (2) 930
 1988 SCC  (1) 692	  JT 1988 (1)	279
 1988 SCALE  (1)261
 CITATOR INFO :
 D	    1991 SC1260	 (70)
 R	    1991 SC2176	 (49)
 RF	    1992 SC 604	 (104)


ACT:
     Criminal Procedure	 Code, 1973: Section 482-Prosecution
at the	initial stage-Quashing	of-Test	 to  be	 applied  by
Court-Whether uncontroverted  allegations establish  a prima
facie offence-Whether  expedient in  interest of  justice to
permit prosecution to continue.
     Indian Penal  Code, 1860: Sections 34, 120-B, 406, 467-
Allegation that	 officers of Trust in collusion with trustee
created tenancy	 in respect  of trust  flat-Whether case  of
breach of  trust-Whether amounts  to a	criminal offence  or
only a civil wrong.
     Indian Trusts  Act	 1882:	Section	 53-Lease  of  trust
property-Allegation that officers of Trust in collusion with
trustee	 created  tenancy  in  respect	of  flat  of  trust-
Prosecution   under    Section	 406,	467   I.P.C.-Whether
maintainable.



HEADNOTE:
%
     A trust  with the	settler, her  son and two others, as
trustees was  created. Part of the trust property included a
large house.
     Respondents in  Criminal Appeal  No. 658  of 1986, were
employed as  Secretary and Manager of the trust between 1976
and June,  1981. On  a complaint  filed in  the court of the
Metropolitan Magistrate by one of the trustees alleging that
these two  officers, in conspiracy with one of the trustees,
son of	the settler,  and his  wife, had  created  documents
showing tenancy	 in respect  of a  flat of  the large house,
forming part  of  the  trust  property,	 in  favour  of	 the
aforesaid trustee's wife, summons were directed to be issued
against the  aforesaid four  accused for offences punishable
under sections	406 and 467 read with section 34 and 120B of
the IPC.
     The accused  persons challenged  the proceedings before
the High  Court which quashed the proceedings against two of
the accused,  but sustained  the  order	 of  the  Magistrate
against the  other two	accused, appellants  in Civil Appeal
No. 657 of 1986.
931
     Appeals against  the aforesaid order were filed in this
Court both  by the  two accused,  whose prosecution  was not
quashed, as also the complainant.
     On behalf	of the	accused-appellants, it was contended
that the trust-deed authorised the trustee to look after the
affairs of  the trust,	but the	 tenancy in  favour  of	 the
trustee's wife	could  not  be	considered  as	creating  an
interest in  favour of	the  trustee  as  the  wife  was  an
independent person  having her own income, that there was no
mens rea  involved for	initiating criminal proceedings and,
at the most it amounted to a civil wrong, and that the court
machinery should not be permitted to be utilised for private
vengeance as the mother and the son had fallen out.
     On behalf	of the complainant it was urged that in view
of s.  53 of  the Indian  Trusts Act, it was a clear case of
breach of  trust  and  that  every  breach  of	trust  would
simultaneously be  a civil wrong and a criminal offence, and
an  opportunity	 should	 be  given  to	the  complainant  to
establish  his	 case  by  leading  evidence,  and  that  no
objection could be taken at the preliminary stage.
     Allowing the  appeal of  the accused and dismissing the
appeal of the complainant, the Court,
^
     HELD: When	 a prosecution at the initial stage is asked
to be  quashed, the test to be applied by the court is as to
whether the uncontroverted allegations, as made, prima facie
establish the offence. It is also for the court to take into
consideration  any   special  features	which  appear  in  a
particular case	 to consider  whether it is expedient and in
the interest of justice to permit a prosecution to continue.
This is	 so on	the basis  that the court cannot be utilised
for any	 oblique purpose  and where  in the  opinion of	 the
court chances  of  an  ultimate	 conviction  is	 bleak	and,
therefore, no  useful purpose  is likely  to  be  served  by
allowing a  criminal prosecution  to continue, the court may
while taking  into consideration the special facts of a case
also quash  the proceeding  even  though  it  may  be  at  a
preliminary stage. [934G-H; 935A]
     A case of breach of trust may be both a civil wrong and
criminal offence.  But there  would  be	 certain  situations
where it would predominantly be a civil wrong and may or may
not amount  to criminal	 offence. The instant case is one of
that type where, if at all, the facts may constitute a civil
wrong and  the	ingredients  of	 the  criminal	offence	 are
wanting. [935B-C]
932
     Having regard  to the relevant documents, including the
trust deed  and the correspondence following the creation of
the  tenancy  and  taking  into	 consideration	the  natural
relationship between  the settler  and the  son and his wife
and the	 fall out  and the fact that the trustee's wife does
not claim  any interest	 in the	 tenancy, the  criminal case
should not  be continued.  The criminal	 proceedings against
the appellants-accused are quashed. [934F; 935C-D]



JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos. 657-58 of 1986.

From the Judgment and Order dated 13.2.1986 of the High Court of Bombay in Criminal Application No. 120 of 1984.

Dr. L.M. Singhvi, Ram Jethmalani, Dalveer Bhandari, Mrs. Madhu Bhandari, S.S. Khanduja, A.M. Khanwilkar and A.S. Bhasme for the Appearing parties.

The Judgment of the Court was delivered by RANGANATH MISRA, J. Both the appeals are by special leave and are directed against the same judgment of the Bombay High Court on an application under section 482 of the Code of Criminal Procedure. The High Court by the impugned decision quashed the prosecution against two of the four accused persons. The two accused persons whose prosecution has not been quashed are appellants in Criminal Appeal No. 657 of 1986 while the complainant assails the decision of the High Court quashing the prosecution of the two accused persons in Criminal Appeal No. 658 of 1986.

Rajamata Smt. Vijaya Raje Scindia of Gwalior created a trust on 23rd of February, 1966, known as "Srikrishna Madhava Trust" with four trustees in all including the settler, the other three trustees being Mr. Madhavrao Jiwajirao Scindia, Col. Eknath Trimbak Patil and Kumar Shanbhajirao Chandrojirao Angre. Madhavrao is the son of the settler while the other two, though residents of Gwalior, are not members of the family. 'Vijay Vilas' a large house located in the Bombay city constituted a part of the trust property. Russi Homi Awary and Damodar Rangrppa Shenoy, respondents in Criminal Appeal No. 658 of 1986, were employed as Secretary and Manager respectively of the Trust between 1976 and 1982. Flat No. 15 of 'Vijay Vilas' was in the occupation of the Sushiladevi Kathait on tenancy basis. In June, 1981, the said tenant surrendered the tenancy and on 9th of June, 1981, the 933 Secretary issued a certificate to the effect that the tenancy had terminated. On 31st of March, 1982, the said Secretary issued another certificate to the effect that the aforesaid tenancy terminated with effect from 1st April, 1980, after the entire rental liability had been liquidated. On the allegation that the two officers of the Trust in conspiracy with trustee Madhavrao and his wife Smt. Madhavi had created documents showing tenancy in respect of that flat in favour of Smt. Madhavi, a complaint was filed by trustee Angre in the Court of the Metropolitan Magistrate, 28th Court, Esplanade, Bombay on 27th July, 1983. Summons were directed to be issued against the four persons referred to above for offences punishable under sections 406, 467 read with sections 34 and 120-B of the Indian Penal Code. The accused persons challenged the proceedings before the High Court by filing an application under section 482 of the Code and prayed for quashing of the criminal case. By the impugned order dated 13th February, 1986 the High Court quashed the proceedings so far as accused Nos. 2 and 4 were concerned but sustained the order of the Metropolitan Magistrate in regard to the remaining two accused persons. Hence these appeals have been filed as already stated.

The settler and the accused being mother and son, an attempt was made to bring about a settlement but that having failed the appeals have been heard on merit and are being disposed of by this common judgment.

Dr. Singhvi,, learned counsel appearing for the accused appellants has contended that the criminal proceedings are without any basis and if at all, a civil wrong may be said to have been caused. According to him, the trust deed authorised trustee Madhavrao to look after the affairs of the Trust. The flat had been tenanted at a particular rent when the tenant vacated; and a new tenant had to be inducted-it being the common case that the flat was intended for tenancy-Madhavi wanted to be the tenant and at the rate of rent which the outgoing tenant was paying, a new tenancy was created. Under the law applicable to tenancies in Bombay, a higher rent is not chargeable and as such no higher amount of rent could be claimed by the Trust in regard to the flat. The wife of the trustee is an independent person having her own income and the tenancy in favour of Madhavi cannot be considered to be creating an interest in favour of the trustee. Dr. Singhvi further relied upon a lawyer's notice issued on behalf of the trust calling upon Madhavi to surrender the tenancy in favour of the Trust failing which action was threatened. Madhavi volunteered to surrender the tenancy and thus there was really no 934 justification, according to Dr. Singhvi, for initiating criminal proceedings. In the facts and circumstances of the case narrated above, the appellants' counsel contended that there was no mens rea for the offences as alleged and at the most it amounted to a civil wrong. He argued that the mother and the son had fallen out and on that score the machinery of the Court should not be permitted to be utilised for private vengeance.

Mr. Jethmalani, appearing for the complainant, on the other hand, maintained that it was a clear case of breach of trust and according to him every breach of trust would simultaneously be a civil wrong and a criminal offence and if summons have been issued by the Metropolitan Magistrate on the basis of the complainant's allegations, no objection could be taken at the preliminary stage. It is appropriate that the complainant should be given an opportunity to establish his case by leading evidence. He relied upon the provisions of section 53 of the Indian Trust Act which provides:

"No trustee, and no person who has recently ceased to be a trustee, may, without the permission of a principal Civil Court of original jurisdiction, buy or become mortgagee or lessee of the trust-property or any part thereof; and such permission shall not be given unless the proposed purchase, mortgage or lease is manifestly for the advantage of the beneficiary."

We have considered the relevant documents including the Trust deed as also the correspondence following the creation of the tenancy. We have also kept in view the submissions advanced on behalf of the parties by their respective counsel. We have further taken into consideration the natural relationship between the settler and the son and his wife and the fall out.

The legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to 935 continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage.

Mr. Jethmalani has submitted, as we have already noted, that a case of breach of trust is both a civil wrong and a criminal offence. There would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. We are of the view that this case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offences are wanting. Several decisions were cited before us in support of the respective stands taken by counsel for the parties. It is unnecessary to refer to them. In course of hearing of the appeals, Dr. Singhvi made it clear that Madhavi does not claim any interest in the tenancy. In the setting of the matter we are inclined to hold that the criminal case should not be continued.

Criminal Appeal No. 657 of 1986 is allowed and the criminal prosecution against the two appellants being Madhavrao and Russi Homi Avari is quashed. In view of what we have stated above, Criminal Appeal No. 658 of 1986 has to fail and is dismissed.

N.P.V.					   Appeal dismissed.
936