B.N Katju, J.:— This is an application under Sec. 482 Cr. P.C praying that the proceedings against the applicant in Criminal Case No. 341 of 1979 under Section 408 I.P.C pending in the Court of the Judicial Magistrate, Dehradun be quashed.
2. According to the application a complaint dated 3-4-1979 was filed against the applicant and his sister opposite party No. 2 by opposite-party No. 1 under Section 408 I.P.C in the Court of the Judicial Magistrate 1st Class, Dehradun in which it was stated that opposite-party No. 1, the applicant, opposite-party No. 2 and the mother of opposite-party No. 1 are members of a partnership firm which is running a public school at Dehradun known as Col. Brown Cambridge School. A current account bearing No. 13029 was opened in the Union Bank of India, Dehradun in the name of Col. Brown Cambridge School which was operated by the mother of opposite-party No. 1 and the applicant. The applicant is also the acting principal of the school and opposite party No. 2 is his secretary. The school except standard X reopened after the winter vacation on 29-1-1979 and standard X reopened on 15-1-1979. The fee of such term was charged in the beginning of each term. With a view to make wrongful gain the applicant and opposite-party No. 2 opened a New account in the Union Bank of India, Dehradun in the name of N.S Educational Society without the consent or approval of the other partners. The applicant and opposite-party No. 2 received huge sums of money of the Col. Brown Cambridge School on 29-1-1979 or thereafter which ran into many lacs and did not deposit the said amount in the Union Bank, of India, Dehradun but diverted the said amount in their newly opened account of N.S Educational Society in the Union Bank of India, Dehradun with a view to gain illegally and dishonestly misappropriate or convert to their own use the said amount.
3. The applicant and opposite-party No. 2 thus in the capacity as servants of the partnership of the Col. Brown Cambridge School committed criminal breach of crust in respect of the funds of the School entrusted to them as such servants which was punishable under Section 408 I.P.C
4. A plain reading of the complaint indicates that the applicant was a partner of the partnership firm which was running the Col. Brown Cambridge School. Even if he was acting as the Principal of the School he did not cease to be a partner of the said firm. The money of the partnership received by him was neither received by him in any fiduciary capacity nor was it entrusted to him. The dominion which a partner has over the partnership property is the dominion which every owner has over his property. The dominion of an owner over his property is not as a result of entrustment but is the result of ownership. Similarly the dominion of a partner over partnership property is the result of ownership and not the result of entrustment. Before a person can be held guilty under Section 408 I.P.C it must be established that his dominion over the property was the result of entrustment. A partner cannot, therefore, be held guilty under Section 408 I.P.C for committing criminal breach of trust with respect to partnership property. I am fortified in my view by the decisions of the Supreme Court in Debabrata Gupta v. S.K Ghosh† 2. and the decision of the Calcutta High Court in Bhuban Mohan Das v. Surendra Mohan Das 3..
5. It has been held in Velji Raghavji Patel v. State Of Maharashtra (Supra).
“Upon the plain reading of S. 405 I.P.C it is obvious that before a person can be said to have committed criminal breach of trust it must be established that he was either entrusted with or entrusted with dominion over property which he is said to have converted to his own use or disposed of in violation of any direction of law, etc. Every partner has dominion over property by reason of the fact that he is a partner. This is a kind of dominion which every owner of property has over his property. But it is not dominion of this kind which satisfies the requirements of S. 405. In order to establish “entrustment of dominion” over property to an accused person the mere existence of that person's dominion over property is not enough. It most be further shown that his dominion was the result of entrustment. Therefore, as rightly pointed out by Harris, C.J the prosecution must establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties, entrusted to the accused persons. If in the absence of such a special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or in other words cannot be held to have been “entrusted” with dominion over partnership properties.”
6. It has been held in Debabrata Gupta v. S.K Ghosh (Supra):
“This Court in Patel's case (Supra) approved the decision of the Calcutta High Court in Bhuban Mohan Das v. Surendra Mohan Das (Supra) and said that before criminal breach of trust is established it must be shown that the person charged has been entrusted with property or with dominion over the property. In other words, the offence of criminal breach of trust under Section 406 of the Indian Penal Code is not in respect of property belonging to the partnership but is an offence committed by the person in respect of property which has been specially entrusted to such a person and which he holds in fiduciary capacity.”
7. It has been held in Bhuban Mohan Das v. Surendra Mohan Das (Supra):
“However I am satisfied that in ordinary case where a partner, receives moneys or an asset belonging to a partnership, or holds money or assets of a partnership, he does not hold that money in a fiduciary capacity.”
It appears to me that in those circumstances it cannot be said that a partner who receives or holds property of a partnership is entrusted with the property or dominion over it.”
8. The result, therefore is that even if all the allegations made in the complaint are accepted no offence under Section 408 I.P.C is made out against the applicant.
9. This application is accordingly allowed and the proceedings against the applicant in Criminal Case No. 341 of 1979, Sanjay Singh v. Thakur Abhai Singh (supra) under Section 408 I.P.C pending in the Court of the Judicial Magistrate 1st Class, Dehradun are quashed.