LexSTATE OF PUNJAB versus PRITAM CHAND AND ORS.
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174 SUPREME COURT REPORTS (2009] 3 S.C.R. A order of trial court. Hence the present appeal. Partly allowing the appeal and remitting the matter to High Court, the Court HELD: 1. High Court should not have in a summary · B manner dismissed the appeal after having recorded that a criminal case may arise even when breach of contract is also there and there is no bar for prosecution under the criminal law. Having said so, the High Court came to an abrupt conclusion that because two views are C possible as to whether the allegation made was of a civil dispute or of a criminal nature no interference was called for. The approach is clearly erroneous. [Para 9] (177-H; 178-A] D Rajesh Bajaj v. State NCT 01 Delhi 1999 (3) SCC 259 and Trisuns Chemical Industry v. Rajesh Agarwal and Ors. 1999 (8) sec 686, relied on. 2. Section 406 IPC deals with punishment for criminal breach of trust. In a case under Section 406 the E prosecution is required to prove that the accused was entrusted with property or he had dominion over the property and that the accused misappropriated or converted the property to his own use or used or disposed of the property or willfully suffered any person F to dispose of the property dishonestly or in violation of any direction of law prescribing the mode in which the entrusted property should be dealt with or any legal contract express or implied which he had entered into relating to carrying out of the trust. [Para 4] (176-B] G Case Law Reference: 1999 (3) sec 259 1999 (8) sec 686 Relied on. Relied on. Para 6 Para 8 H CRIMINAL APPELLATE JURISDICTION: Criminal Appeal .. .. STATE OF PUNJAB v. PRITAM CHAND AND ORS . 175 ....... No. 1069 of 2004. A From the Judgment and Order dated 16.10.2002 of the High Court of Punjab and Haryana at Chandigarh in Criminal Appeal No. 28-DBA of 1991. Ajay Pal and Arun K. Sinha for the Appellant. B Rajeev Singh, Rajesh Prasad Singh and Jaspreet "" Gogia(NP) for the Respondent. The Judgment of the Court was delivered by c DR. ARIJIT PASAYAT, J. 1. Challenge in this appeal is to the judgment of a learned Single Judge of the Punjab and Haryana High Court dismissing the appeal filed by the State of Punjab against the judgment of acquittal recorded by learned ... Judicial Magistrate, 1st Class, Samana. The respondents were D charged for alleged commission of offence punishable under Section 406 of the Indian Penal Code, 1860 (in short the 'IPC'). ; They were partners of one Jagdamba Rice Mills to whom the paddy was entrusted for milling by the Punjab State Civil Supplies Corporation Ltd. (in short the 'Corporation') during the E -i year 1983-84. It was alleged that the accused failed to account for the paddy and thus misappropriated the same. Pursuant to ' arbitration clause between the parties an arbitrator was o( appointed and an award of Rs.1,81,315.43 was rendered in favour of the Corporation. The trial Court acquitted the accused F on the ground that the matter arose out of breach of contract, the same was of civil nature and a criminal case against the accused was not made out. 2. High Court endorsed the view and dismissed the G ji appeal. 3. In suprort of the appeal, learned counsel for the State ~ submitted that the High Court's judgment is totally unreasoned .. as no reason has been indicated. Merely because there was allegedly a breach of contract, that cannot in all cases rule out H 176 SUPREME COURT REPORTS [2009) 3 S.C.R. A the criminal prosecution. It is pointed out that even the arbitration ,., award on which reliance has been placed by the trial Court to direct acquittal, was a factor in favour of the Corporation and without examining the ingredients of Section 406 IPC the trial Court and the High Court directed acquittal. B 4. Section 406 IPC deals with punishment for criminal breach of trust. In a case under Section 406 the prosecution is required to prove that the accused was entrusted with property ,.. or he had dominion over the property and that the accused c misappropriated or converted the property to his own use or used or disposed of the property or willfully suffered any person to dispose of the property dishonestly or in violation of any - direction of law prescribing the mode in which the entrusted property should be dealt with or any legal contract express or D implied which he had entered into relating to carrying out of the trust. ..
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