SAT NARAIN Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS petition under Section 561-A, Criminal Procedure Code, is directed against the order of the Judicial Magistrate Ist Class, Fazilka, dated July 2, 1971, whereby the petitioners were directed to be charged under Section 406, Indian Penal Code.

(2.) THE facts giving rise to this petition are that a case under Sections 420 and 406, Indian Penal Code, was registered against the petitioners on the following allegations:

(3.) THE main and the only contention raised on behalf of the petitioners is that under the scheme, the money paid by the subscriber to the company, was not an entrustment with the Directors and a relationship of debtor and creditor only was created. It is urged that Section 405, Indian Penal Code, does not cover the case of a loan or advance of money, especially when the money deposited or lent could be used or utilized as the property of the person with whom the deposit has been made or to whom the money had been lent. Support for this contention is sought from the view taken in State v. Tirath Dass wherein the facts were these. An amount of Rs. 10,000/- had been handed over to the accused to be sent to his firm in the first instance to be held by the firm for the purchase of goods. No interest was to be payable. Subsequently, the receipt of the amount was denied when it was demanded. On these facts it was held that the handing over the money could be termed as a deposit or as an advance. It was further noticed that the money was not to be returned in specie and the depositee was entitled to use the amount in his own business, but was bound to return the equivalent amount according to the directions of complainant. On a consideration of these facts, the view taken was that no case of entrustment had been made out. The following observation may be read with advantage: