SAJAL GARAG Vs. STATE OF U P

JUDGEMENT

(1.) This revision has been directed against the order dated 3.9.2011 passed by Special Judicial Magistrate (C.B.I.) Ghaziabad in Complaint No. 451 of 2011, Smt. Maju Gupta v. M/S Ghaziabad Shares Service Put. Ltd. and another, through its Director Sajal Garg and Smt. Sangita Garg by the impugned order learned Magistrate summoned the revisionist to face trial for offence under Section 406 I.P.C. In the complaint respondent No. 2 has alleged that her husband Anil Kumar Gupta and the accused-revisionists were members of the family; in the year 2003 Anil Kumar Gupta sold some of his property and received Rs. 36,58,700.00 as consideration Anil Garg former director of the firm came to Anil Kumar Gupta and asked for a loan of Rs. 36,58,700.00 to purchase land for the firm. This was upto between Anil Garg and Anil Kumar Gupta that Anil Garg shall pay 15% interest on money borrowed and the money would be returned on demand and alongwith interest. Anil Kumar Gupta believed Anil Garg and passed on the aforesaid amount of money. The loan stands out till date and it is a part of firm assets on 11.3.2005 the accused-revisionists changed the name of erstwhile M/S Ghaziabad Shares Service Pvt. Ltd to M/s Chhappraula Real Estate Pvt. Ltd. and the accused entered into the shoes of Anil Garg. They are still directors of the firm. Anil Kumar Gupta expired and the complainant is his heir. Now the complainant asked accused-revisionists director to return the money but they have not returned and responded satisfactorily instead they misbehaved with the complainant. A registered notice was given to the accused-revisionists asking them to repay the money but the same has not been done. Another notice was served but to no avail. This shows the accused-revisionists have no intention to pay the money and they have committed breach of trust making themselves liable for punishment under Sections 420 and 406 I.P.C. In support of the allegations in the complaint the complainant examined herself under Section 200 Cr.P.C. and Sri Pradeep Kumar Garg under Section 202 Cr.P.C., they have deposed supporting the allegations of the complainant. After hearing the complainant and examining the complaint and the statement of witnesses the Special Judicial Magistrate drew up the impugned order summoning the revisionist to face trial for offence under Section 406 I.P.C. Learned counsel for the revisionists argues that a complaint itself shows that the money was borrowed by Anil Garg on interest at the rate of 15% per annum and this transaction was civil in nature and no offence under Section 406 I.P.C. was made out as there was no entrustment followed by criminal breach of trust. Learned counsel refers to two case laws. In the case of G. Sagar Suri v. State of U.P., 2000 AIR(SC) 754, decided on 28.1.2000, paragraph 13 is quoted below:

(2.) Hon'ble High Court in the case of Ram Narain Agarwal v. Rajendra Kumar,1984 ACCR 77, observed in paragraph 6 as follows:

(3.) Learned counsel for the respondent No. 2 assisted by the learned Additional Government Advocate submits that the transaction between Sri Anil Kumar Gupta and Anil Garg was based on trust as they were partners in the same firm. Now the accused-revisionists have entered into the shoes of Anil Garg as directors of the firm and since the money was borrowed for purchasing the land for the firm it was the directors that were responsible to pay the money alongwith interest and having not paid the amount on demand they have committed breach of trust punishable under Section 406 I.P.C. In the case of Ram Narain Aggarwal v. Rajendra Kumar . The Hon'ble Court has stressed that there is a very thin line of difference between a case of breach of contract and a case of cheating (in this case criminal breach of trust). A mere breach of contract is not, necessarily cheating the dishonest or fraudulent intention of the accused-revisionists inducing the loan of money to enter into the contract should have changed the nature of the transaction. A mere refusal to repay money or carry on the firm with together is not criminal breach of trust and does not entail a criminal liability. In the case of at hand the money was borrowed for interest and money with his interest is being demanded. The complainant does not claim any share in the firm business on account of transactions. The transactions took place originally between the husband of the complainant and the then director of the firm. The present directors did not induce the complainant to advance money only to be foreclosed. To bring the transaction within the definition of criminal breach of trust there must be some entrustment and followed by breach of the same. The breach must have been disclosed or as fraudulent act and the borrowing money cannot mean to be a fraudulent act.