LexVELJI RAGHAVJI PATEL versus STATE OF MAHARASIITRA
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A B c D VEUI RAGHAVn PATEL v. STATE OF MAHARASIITRA December 11, 1964 [RAGHUBAR DAYAL AND J. R. MUDHOLKAR, JJ.] Indian Penal Code, 1860 (Act 45 of 1860), ss. 403 and 409-PDl'tner- Failure to account for monies of firm-If guilty of criminal breach of trust or dishonest misappropriation of property. The appellant was the working partner in a firm. It was agreed among the partners that he should carry on the work of recovery of the dues of the partnership. On the allegation that he misappropriated certain auma and also failed to depooit in bank some collections as he was required to do, he was convicted for the offence of criminal breach of trust under s. 409, Indian Penal Code. In appeal to the Supreme Court it was con- tended that as he realised the sums in his capacity as partner and utilised them for the business of the partnership, he was only liable to render accounts to his partners and his failure to do so would not amount to cri- minal breach of trust. HELD : The appellant could not be said to have been guilty of criminal breach of trust. Though as a partner he had dominion o\·er the property of the partoer- ship for the purpose of criminal breach of trust the mere existeoce of such dominion is not enough. I~ must be further shown that his dominion wu the result of entrustment, that is, the prosecution must establish that the E dominion over the partnership assets was, by a specific agreement, entrusted to the accused. (432 E-GJ Bhuban Mohan Rana v. Surendra Mohan Das, l.L.R. (1952) 2. Cal. 23 (F.B.) approved. Even if there was a mandate to the appellant with respect to aome dues to collect and deposit in bank, faliure to do so would not constilllle F the offence, as he was also authorised by the other partners to spend the money for the business of the partnership. [434 D-EJ G H The appellant would not also be guilty. of dishonest misappropriation of property, nnder s. 403 of the code, because, he had nndefined owner- ship along with the other partners over all the assets of the partnership and as such owner, in whichever way, and with whatever intention he used the property, he would not be liable for misappropriation. [434 HJ CluMINAL APPELLATE JURISDICTION : Criminal Appeal No. 43 of 1963. Appeal by special leave from the judgment and order dated February l, 1963 of the Bombay High Court in Criminal Appeal No. 972 of 1962. 0 .P. Rana, for the appellant. P. K. Chatterjee and B. R. G. K. Achar, for the respondent. .t30 SUPllEME COUllT lll!PORTS (1965] 2 S.C.ll • The Judgment of the Court was delivered by A Mudholkar J. In this appeal from the judgment of the Bombay High Court the question which falls to be considered is whether a partner can be convicted under s. 409, Indian Penal Code on the ground that his failure to account for monies belonging to the firm in which he was a partner amounts to B criminal breach of trust. The admitted facts are briefly these : The firm, Messrs. Bharat Silp Pramandal, which was formed for carrying on the business of building construction, originally C conisted of eight partners and the appellant was its working partner. This firm was constituted in the year 1954. But on February 6, 1957 three of the partners retired and the business was continued by the remaining five partners. Disputes arose amongst them, which were referred to arbitration of Mr. J. T. Desai, a Solicitor. Apparently, in pursuance of his award a D fresh agreement (Ex. N) was entered into by the partners on June 4, 1958. By virtue of this agreement the appellant's share in the firm's business was to be of 50 nP. in a rupee while the other partners had different shares in the remaining 50 nP. Nagindas Jivraj Mehta, who is the complainant in this case had a share E to the extent of 6 nP. Under this agreement the parties decided not to undertake new work. The agreement required the appel- lant to complete all the accounts and prohibited from borrowing money in the name of the firm. It required him "to use his best efforts to realise all pending bills, security deposits, claims etc." as well as to dispose of the plant, machinery etc. The agreement F also provided that partners, other than the appellant, would procure, if the need arose, further finance to the maximum limit of Rs. 25,000/- but that if a sum in excess of this amount was required, that excess was to be brought in by all the partners including the appellant "i
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