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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: %      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. 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

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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 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

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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 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

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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