Full Judgment Text
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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:
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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
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the accused, but sustained the order of the Magistrate
against the other two accused, appellants in Civil Appeal
No. 657 of 1986.
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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]
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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
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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
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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
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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
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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
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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