REPORTABLE IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION CRIMINAL  APPEAL NO.   1980          OF 2010

(Arising out of S.L.P. (Crl.) No. 7338 of 2007)

ASOKE BASAK — APPELLANT (S)

VERSUS

STATE OF MAHARASHTRA & ORS. — RESPONDENT (S)

J U D G M E N T

D.K. JAIN, J.:

Leave granted.

2. This appeal, by special leave, arises out of the judgment and order dated  

9th October 2007, delivered by the High Court of Bombay in Criminal  

Application No. 2854 of 2004 in a petition filed by the appellant and one  

Mr. Krishna Rao, proforma respondent No.5 herein, under Section 482 of  

the Code of Criminal Procedure, 1973 (in short “the Code”). The High  

Court  has,  by  the  impugned  judgment,  declined  to  quash  a  criminal  

complaint  filed  by  respondents  No.2  to  4  in  this  appeal  against  the  

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appellant and others for offences under Sections 405 and 409 read with  

Section 34 of the Indian Penal Code, 1860 (for short “the IPC”).

3. Briefly stated, the facts, necessary for disposal of the present appeal, may  

be stated thus:

The appellant was the Chairman of the Maharashtra State Electricity  

Board (for short “MSEB”). Respondent No.2 - M/s Datar Switchgear Ltd. is  

a  company  which  had  entered  into  various  contracts  with  MSEB  for  

installation of Low Tension Load Management System.  Respondents No.3  

and 4 are the senior officials of respondent No.2; respondent No.1 is the  

State of Maharashtra and the aforestated respondent No.5 is one of the co-

accused.  

4. On 2nd March, 2001 respondent No.2 deposited an amount of  `5 lakhs  

with MSEB as security deposit in lieu of bank guarantee to be used for  

tenders to be filed by respondent No.2 from time to time in the future.  

The conditions of tender and supply provided that:

“This security deposit in cash or in the form of bank guarantee  or otherwise is for the due performance of the material/contract  and the same shall be liable to apportion towards amount due or  becoming due  by  the  supplier  on  his  failure  to  execute  this  order or any other contract and in the event of non fulfilment of  the terms and conditions of the contract.”

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Certain  disputes  arose  between  MSEB  and  respondent  No.  2.   On  16th  

September 2003, respondent No. 2 informed MSEB that they were no longer  

interested in participating in any tenders which may be floated by MSEB  

and sought immediate refund of the said amount of `5 lakhs.

5. The Chief Engineer (Distribution), MSEB vide his letter dated 6th March  

2004, informed respondent No.2 that the deposit  of  `5 lakhs had been  

adjusted  by  MSEB  against  the  dues  payable  by  respondent  No.2  to  

MSEB.

6. On receipt of the said communication,  on 29th June 2004, respondents  

No.2  to  4  filed  Complaint  No.1881  of  2004  before  the  Court  of  the  

Judicial  Magistrate,  First  Class,  Pune  against  the  appellant  and  other  

senior  officials  of  the  MSEB under  Sections  405  and  409  read  with  

Section 34 of the IPC. The Judicial Magistrate,  First  Class, Pune took  

cognizance and issued summons against  all  the accused named in the  

complaint.

7. Being aggrieved by the order of the Magistrate taking cognizance of the  

complaint, appellant preferred the afore-stated petition under Section 482  

of  the  Code  before  the  High  Court  of  Bombay  for  quashing  of  the  

complaint.

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8. As  stated  above,  the  High  Court,  by  the  impugned  judgment  has  

dismissed the said petition. The High Court has inter alia¸ observed that  

a prima facie case has been made out against the accused; the defence of  

the  accused  would  be  examined  on  merits  at  the  time  of  trial;  the  

availability of a civil remedy does not preclude a criminal law remedy  

and this alone cannot be a ground for quashing the complaint and it was  

not incumbent on the complainant to plead the role of each and every  

accused as due to the principle of vicarious liability under Section 34 of  

the IPC, if two or more than two persons intentionally do a thing jointly,  

it’s  the same if  each of them had done it  individually,  since common  

intention presupposes prior concert. Hence, the present appeal.

9. Mr.  Nagendra  Rai,  learned  senior  counsel  appearing for  the  appellant  

assailed the decision of the High Court in not exercising its jurisdiction  

under  Section  482  of  the  Code  as  fallacious  on  the  ground  that  the  

complaint, assuming to be correct in its entirety, does not disclose the  

commission  of  an  offence  under  Section  409  IPC  by  the  appellant.  

According to the learned counsel, the subject matter of the complaint is  

purely  civil  in  nature  and the complaint  amounts  to  an  abuse  of  the  

process of court.  In support of his  assertion that in this type of cases the  

courts  should  be  loathe  to  take  cognizance,  in  the  brief   written  

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submissions filed on behalf of  the appellant,  reliance is  placed on the  

decisions of this Court in  Inder Mohan Goswami & Anr.  Vs. State of   

Uttaranchal & Ors.1, K.L.E. Society & Ors. Vs. Siddalingesh2, Baijnath  

Jha Vs. Sita Ram & Anr.3, Suneet Gupta Vs. Anil Triloknath Sharma &  

Ors.4 and G. Sagar  Suri  & Anr.  Vs. State  of  U.P.  & Ors.5.   It  was  

contended that the non-refund of `5 lakhs by MSEB could not amount to  

criminal breach of trust as under the terms of the contract,  the MSEB  

could  adjust  the  said  amount  against  their  claims,  which  were  under  

various stages of adjudication.  

10. Relying heavily on the decision of this Court in S.K. Alagh Vs. State of   

Uttar Pradesh & Ors.6, learned counsel contended that the summoning  

order issued by the Magistrate is ex-facie illegal and vexatious in as much  

as  even as  per  the  allegations  in  the  complaint,  the  said  amount  was  

entrusted/bailed out to MSEB, which has not been made an accused and  

no role in this behalf has been assigned to the appellant.  It was asserted  

that  in  the  entire  complaint  there  is  not  even  a  whisper  that  the  

adjustment  in  question  was in  furtherance  of  a  pre-planned  action  by  

1 (2007) 12 SCC 1 2 (2008) 4 SCC 541 3 (2008) 8 SCC 77 4 (2008) 11 SCC 670 5 (2000) 2 SCC 636 6 (2008) 5 SCC 662

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MSEB  and  its  functionaries,  including  the  appellant,  so  as  to  attract  

Section  34  IPC.   It  was  thus,  pleaded  that  the  Magistrate  in  taking  

cognizance of the complaint had failed to take into consideration all these  

relevant factors and, therefore, the summoning order is liable to be set  

aside.   

11. Per  contra,  Mr.  Ranjit  Kumar,  learned  senior  counsel  appearing  for  

respondents No.2 to 4 urged that since the deposit was in the nature of an  

interest  free security,  solely for the purpose of ensuring that  contracts  

would be duly entered into if the tenders were awarded by MSEB to the  

respondents, it was in the nature of an entrust.  In support, reliance was  

placed on the decision of this Court in  Rai Bahadur Seth Jessa Ram  

Fatehchand Vs. Om Narain Tankha & Anr.7, wherein it was held that  

the fact that the security deposit did not attract interest, would lead to the  

inference that the deposit was an entrustment. It was further contended  

that  the  entrustment  with  MSEB enjoins  the  role  of  a  trustee  on  the  

natural  persons  who  controlled  the  MSEB  at  the  material  time,  and  

therefore in light of the decision of this Court in  Jaswantrai Manilal   

Akhaney  Vs. State  of  Bombay8, it  was  fallacious  to  contend that  the  

accused did not  have dominion over the  subject  deposit.   It  was  also  

7 AIR 1967 SC 1162 8 AIR 1956 SC 575

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contended that the remedies under the criminal law and civil law are not  

mutually exclusive but co-extensive; they differ in their content, scope  

and consequence and, therefore, even when a civil remedy is available, a  

criminal prosecution is not barred.

12. Relying heavily on a three-Judge bench decision of this Court in Suresh  

& Anr. Vs. State of U.P.9, wherein it was held that no overt act is needed  

on the  part  of  the accused to attract  Section 34 IPC,  if  he shares  the  

common  intention  with  others  in  respect  of  the  ultimate  criminal  act,  

learned counsel contended that in the instant case, the complaint clearly  

spells out the role of the appellant and, therefore, Section 34 IPC, which  

recognizes  the  principle  of  vicarious  liability,  is  clearly  attracted.  

Commending us to the decision of this Court in Shiva Nath Prasad Vs.  

State of W.B. & Ors.10, learned counsel submitted that in a case under  

Section  409,  the  question  of  entrustment  has  to  be  examined  on  the  

strength of the evidence led by the complainant  and, therefore,  at  this  

stage, it is pre-mature to return a finding on the applicability of the said  

provision or to hold that the case is of a civil nature.

9 (2001) 3 SCC 673 10 (2006) 2 SCC 757

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13. Learned counsel also argued that while taking cognizance of a criminal  

offence and issuing process against the accused, the court is not required  

to pass a reasoned order, as pleaded by learned counsel for the appellant.  

In support, reliance was placed on the decisions of this Court in  Kanti   

Bhadra Shah & Anr. Vs. State of W.B.11, U.P. Pollution Control Board  

Vs. Mohan Meakins Ltd. & Ors.12 and Dy. Chief Controller of Imports   

& Exports Vs. Roshanlal Agarwal & Ors.13.   Relying on the decisions of  

this  Court  in  Hareram Satpathy  Vs. Tikaram Agarwala & Ors.14 and  

Nirmaljit Singh Hoon Vs. The State of West Bengal & Anr.15, learned  

counsel  for  the  respondents  strenuously  urged  that  at  the  stage  of  

issuance of summons the Magistrate has to satisfy himself that there was  

sufficient  material  to merely proceed,  and not  to sustain a conviction.  

According to the learned counsel, there was sufficient material before the  

Magistrate on the basis whereof he took cognizance of the complaint.  

Learned counsel also invited our attention to the notice dated 22nd March  

2004, issued by respondent No.2 to the functionaries of MSEB, including  

the appellant, repudiating their stand that the adjustment of `5 lakhs was  

in terms of the chamber summons dated 29th October 2002, in support of  

11 (2000) 1 SCC 722 12 (2000) 3 SCC 745 13 (2003) 4 SCC 139 14 (1978) 4 SCC 58 15 (1973) 3 SCC 753

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his  submission  that  the  conduct  of  the  officials  of  MSEB  was  

contumacious.  It was thus, contended that the High Court was justified  

in  not  exercising  its  jurisdiction  under  Section  482  of  the  Code,  

particularly  when  only  summons  had  been  issued  to  the  appellant  to  

appear in court.  

14. Before  examining  the  merits  of  the  rival  submissions,  it  would  be  

appropriate to briefly notice the scope and ambit of the jurisdiction of the  

High Court under Section 482 of the Code.  It needs little emphasis that  

although the jurisdiction of the High Court under the said provision is  

very wide but it is not unbridled.  The High Court is required to exercise  

its inherent powers under Section 482 of the Code  sparingly, carefully  

and cautiously, ex debito justitiae to do real and substantial justice and to  

prevent abuse of the process of court.  One of the situations’ when the  

High  Court  would  be  justified  in  invoking  its  powers  is  where  the  

allegations in the first information report or the complaint, as the case  

may be, taken at their face value and accepted in their entirety do not  

constitute the offence alleged.  (See:  R.P. Kapur  Vs. State of Punjab16  

and Rupan Deol Bajaj & Anr. Vs. Kanwar Pal Singh Gill & Anr.17.)

16 AIR 1960 SC 866 17 (1995) 6 SCC 194

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15. In G. Sagar Suri ‘s case (supra), this Court had observed thus:

“Jurisdiction under Section 482 of the Code has to be  exercised  with  great  care.  In  exercise  of  its  jurisdiction  the  High  Court  is  not  to  examine  the  matter superficially. It is to be seen if a matter, which  is essentially of a civil nature, has been given a cloak  of  criminal  offence.  Criminal  proceedings are  not  a  short cut of other remedies available in law. Before  issuing process a criminal court has to exercise a great  deal of caution. For the accused it is a serious matter.  This Court has laid certain principles on the basis of  which  the  High Court  is  to  exercise  its  jurisdiction  under Section 482 of the Code. Jurisdiction under this  section  has  to  be exercised to  prevent  abuse of  the  process of any court or otherwise to secure the ends of  justice.”

16. Bearing in mind the aforestated legal position in regard to the width of  

power of the High Court under Section 482 of the Code, we shall now  

advert to the facts at hand.  For the sake of ready reference, we may  

extract the relevant portions of the complaint containing allegations  

against the appellant.  These are:  

“7. On or about March 2001 an amount of  `5 Lacs was  caused  to  be  deposited  by  the  Company  as  Security  Deposit in view of Bank Guarantee to be used for tenders  to be filed by the Company with the MSEB from time to  time in the future. The payment was made on behalf of  the  Complainant  No.  1  by  the  Bank  of  Maharashtra  having its registered office at Lokmangal, Shivaji Nagar,  Pune. The said amount of  `5 Lacs was therefore in the  dominion  of  the  Accused.  The  amount  was  entrusted/bailed  to  the  MSEB by the Complainant  and  

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came under the dominion of the Accused and was to be  used as security for future contracts only, if any, and was  to be refunded if the Complainant Company so desired,  at any time. The amount was not to be used for any other  purpose  whatsoever.  Vide  letter  dated  9.7.2002,  the  MSEB  acknowledged  receipt  of  `5  Lacs  from  the  Complainant Company.

8. Vide letter dated 16.9.2003 the Company informed the  MSEB that it no longer desired (sic) to participate in any  tenders  floated  by  the  MSEB  and  sought  immediate  refund  of  the  amount  of  `5  Lacs.  On  16.9.2003,  the  Complainant  informed  the  MSEB  that  it  had  not  participated  in  any  tenders  under  the  said  Security  Deposit of `5 Lacs. It was expected and legally necessary  that the MSEB forthwith refund the said amount to the  Complainant as there were no tenders pending filed by  the Complainant Company on the date of seeking refund.

9. The Complainants were shocked and surprised that the  Accused (who had dominion over the amount of `5 Lacs)  started giving false excuses and pretences to avoid refund  of the entrusted/bailed amount. The whole approach of  the  accused  was  to  stifle  the  refund  of  the  amount  dishonestly and deprive the Complainant  Company the  use  of  its  own  money.  The  response  of  the  Accused  and/or on their behalf is of bogus and dodging with an  intention  to  drive  away  the  Complainant  and  avoid  refund anyhow…. …. .… .… .… .… .… …. …. .… ….  …. …. .… .… …. …. ….  

11. The Accused have therefore dishonestly and wilfully  with  common  criminal  intent  suffered  the  MSEB  to  refuse refund of `5 Lacs contrary to the provisions of law  and deprived wilfully  and dishonestly the Complainant  Company the use of its money and committed the offence  of criminal breach of Trust in terms (sic) of Sec. 405 r/w  Sec. 409 r/w Sec. 34 of the Indian Penal Code……”

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17. It is manifest from a bare reading of the afore-extracted paragraphs  

that the gravamen of the complaint against the appellant is that the  

said amount of  `5 lakhs was in the dominion of the accused, which  

was  entrusted  to  MSEB  for  a  specific  purpose  and,  therefore,  by  

adjusting  the  said  amount  for  some  other  purpose,  the  accused  

dishonestly  and  wilfully,  with  common  intention,  deprived  the  

complainant the use of the money and committed offence of breach of  

trust in terms of Section 405 read with Section 409 IPC.

18. Section 405, IPC  defines “criminal breach of trust” to mean:

“405.  Criminal breach of trust.—Whoever, being in  any  manner  entrusted  with  property,  or  with  any  dominion over property, dishonestly misappropriates or  converts  to  his  own use that  property,  or  dishonestly  uses  or  disposes  of  that  property  in  violation  of  any  direction  of  law prescribing  the  mode in  which such  trust  is  to  be  discharged,  or  of  any  legal  contract,  express  or  implied,  which  he  has  made  touching  the  discharge  of  such  trust,  or  wilfully  suffers  any other  person so to do, commits “criminal breach of trust”.

Explanation  1.—A person,  being  an  employer  of  an  establishment  whether  exempted  under  section  17  of  the  Employees’  Provident  Funds  and  Miscellaneous  Provisions Act, 1952 (19 of 1952), or not who deducts  the employee’s contribution from the wages payable to  the employee for credit to a Provident Fund or Family  Pension Fund established by any law for the time being  in force, shall be deemed to have been entrusted with  the amount of the contribution so deducted by him and  if he makes default in the payment of such contribution  

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to the said Fund in violation of the said law, shall be  deemed to have dishonestly used the amount of the said  contribution  in  violation  of  a  direction  of  law  as  aforesaid.

Explanation  2.—A  person,  being  an  employer,  who  deducts  the  employees’  contribution  from  the  wages  payable to the employee for credit to the Employees’  State  Insurance  Fund  held  and  administered  by  the  Employees’  State  Insurance  Corporation  established  under the Employees’ State Insurance Act, 1948 (34 of  1948), shall be deemed to have been entrusted with the  amount of the contribution so deducted by him and if he  makes default  in the payment of such contribution to  the  said  Fund  in  violation  of  the  said  Act,  shall  be  deemed to have dishonestly used the amount of the said  contribution  in  violation  of  a  direction  of  law  as  aforesaid.”

19. It is plain that for constituting an offence of criminal breach of trust,  

the following ingredients must be satisfied:

“(a)  a  person  should  have  been  entrusted  with  property, or entrusted with dominion over property;  

(b) that person should dishonestly misappropriate or  convert  to his own use that property, or dishonestly  use or dispose of that property or wilfully suffer any  other person to do so;  

(c)  that  such  misappropriation,  conversion,  use  or  disposal should be in violation of any direction of law  prescribing  the  mode  in  which  such  trust  is  to  be  discharged, or of any legal contract which the person  has made, touching the discharge of such trust.” (See:  Indian  Oil  Corpn.  Vs.  NEPC India  Ltd.  & Ors.18;  

18 (2006) 6 SCC 736

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Onkar  Nath  Mishra  &  Ors.  Vs.   State  (NCT  of   Delhi) & Anr.19; Pratibha Rani  Vs. Suraj Kumar &  Anr.20;  Rashmi Kumar Vs. Mahesh Kumar Bhada21;  R.  Venkatkrishnan  Vs. Central  Bureau  of  Investigation22.)

20. In the instant case, we are unable to gather from the complaint any  

averment  which  may  suggest  that  `5  lakhs  was  entrusted  to  the  

appellant, either in his personal capacity or as the Chairman of MSEB  

and  that  he  misappropriated  it  for  his  own  use.  The  basis  of  the  

allegation is that the appellant had caused the MSEB to refuse return  

of the money to the complainant in order to wilfully and dishonestly  

deprive the complainant of its use. In this regard, it would be useful to  

refer to the following observations in S.K. Alagh’s case (supra):

“As, admittedly, drafts were drawn in the name of  the  Company,  even  if  the  appellant  was  its  Managing  Director,  he  cannot  be  said  to  have  committed  an  offence  under  Section  406  of  the  Penal  Code.  If  and  when  a  statute  contemplates  creation  of  such  a  legal  fiction,  it  provides  specifically  therefor.  In  absence  of  any  provision  laid  down  under  the  statute,  a  Director  of  a  Company  or  an  employee  cannot  be  held  to  be  vicariously liable for any offence committed by the  Company itself.”

19 (2008) 2 SCC 561 20 (1985) 2 SCC 370 21 (1997) 2 SCC 397 22 (2009) 11 SCC 737

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21. Admittedly, in the present case, the said amount was deposited by the  

complainant  company  with  MSEB  and  there  is  nothing  in  the  

complaint which may even remotely suggest that the complainant had  

entrusted  any  property  to  the  appellant  or  that  the  appellant  had  

dominion  over  the  said  money  of  the  complainant,  which  was  

dishonestly  converted  by  him to  his  own use,  so  as  to  satisfy  the  

ingredients  of  Section 405 of  the IPC.  In  the  absence of  any such  

specific  averment  demonstrating  the  role  of  the  accused  in  the  

commission  of  the  offence,  we  find  it  difficult  to  hold  that  the  

complaint, even  ex-facie,  discloses the commission of an offence by  

the appellant under Section 409 IPC, punishable under Section 406  

IPC.

22. We shall now examine whether the appellant is vicariously liable for  

the afore-mentioned offence with the aid of Section 34 of the IPC.  

The essence of liability under Section 34 IPC is the existence of a  

common intention.   A common intention implies  pre-arranged plan  

and  acting  in  concert  pursuant  to  the  pre-arranged  plan.   In  

Ramaswami Ayyangar & Ors. Vs. State of Tamil Nadu23, this Court  

had  observed  that  the  essence  of  Section  34  IPC  is  simultaneous  

23 (1976) 3 SCC 779

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consensus of the minds of persons participating in the criminal action  

to bring about a particular result.  It is true that to attract Section 34,  

no overt  act  is  needed on the  part  of  the  accused if  he shares the  

common intention with others in respect of the ultimate criminal act,  

which may be done by any one of the accused sharing such intention.  

Nonetheless,  Section  34  IPC  clearly  envisages  pre-concert  or  pre-

planning, which may even develop at the spur of the moment but such  

plan must precede the act constituting the offence.  It is equally true  

that it may not be possible in every case to have direct evidence of a  

common intention and it may have to be inferred from the facts and  

circumstances of each case.

23. In Dani Singh & Ors. Vs.  State of Bihar 24, this Court had observed  

thus:

“Common  intention”  implies  prearranged  plan  and  acting  in  concert  pursuant  to  the  prearranged  plan.  Under  this  section  a  preconcert  in  the  sense  of  a  distinct previous plan is not necessary to be proved.  The  common  intention  to  bring  about  a  particular  result  may  well  develop  on  the  spot  as  between  a  number of persons, with reference to the facts of the  case  and  circumstances  of  the  situation.  Though  common intention may develop on the spot, it must,  however,  be  anterior  in  point  of  time  to  the  

24 (2004) 13 SCC 203

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commission  of  offence  showing  a  prearranged  plan  and prior concert.”

24. Thus,  in  order  to  attract  Section  34  of  the  IPC,  the  complaint  in  

question  must,  prima  facie,  reflect  a  common  prior  concert  or  

planning amongst the appellant and other accused.  Having carefully  

gone through the complaint, we are of the view that it does not reveal  

any pre-concert or pre-planning whereby all the accused had decided  

to misappropriate the said amount.  It is pertinent to note that MSEB,  

in whose coffers the said amount was credited, has not been arraigned  

as an accused in the complaint.  Be that as it may, having come to the  

conclusion that the ingredients of Section 409 IPC are not satisfied  

against the appellant, the question of his acting in concert with others  

does not arise.  We are, therefore, convinced that Section 34 IPC is  

not attracted against the appellant.

25.  In light of the above-noted conclusions, we are of the opinion that no  

prima facie case has been made out against the appellant in respect of  

offence under Section 409 read with Section 405, even with the aid of  

Section 34 of the IPC.  Therefore, it was a fit case where the High  

Court should have exercised its powers under Section 482 of the Code  

by quashing the complaint against the appellant.

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26. Resultantly, the appeal is allowed; the impugned order in relation to  

Criminal Application No.2854 of 2004 is set aside and the order of the  

Magistrate  taking  cognizance  against  the  appellant  in  Complaint  

No.1881 of 2004 is quashed.  

.……………………………………J.            (D.K. JAIN)  

                             .…………………………………….J.           (H.L. DATTU)

NEW DELHI; OCTOBER 8,  2010

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL  APPEAL NO.   1980      OF 2010 (Arising out of S.L.P. (Crl.) No. 7338 of 2007)

ASOKE BASAK — APPELLANT (S)

VERSUS

STATE OF MAHARASHTRA & ORS. — RESPONDENT (S)

O R D E R

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In the judgment pronounced on 8th October,  

2010, in paragraph 13, the words, “` 5 lacks”  

shall be read as   “` 5 lakhs.”

                           ..................J                 [ D.K. JAIN ]

                                    ..................J

                                    [ H.L. DATTU ]

      New Delhi,        October 22, 2010.  

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