Judgment:
Rekha Kumari, J.
1. This is an application under Section 482 of the Code of Criminal Procedure for quashing the order dated 8-5-2003 passed by Sri Manoj Kumar Singh, Judicial Magistrate, 1st Class, Patna in Complaint Case No. 500 (M)/97 by which he has rejected the prayer of the petitioners refusing to discharge him under Section 245 Cr. P.C.
2. O.P. No. 1 (complainant) filed the complaint against the petitioners alleging therein that the petitioners in the name of firm M/s. R.J. Poly Pvt. Ltd. applied for establishment of industries at Maroofganj, Patna City for manufacturing of P.P. Films and H.D.E.F. bags. As per schedule and after thorough enquiry the complainant-Bihar State Financial Corporation sanctioned a term loan of Rs. 8.25 lacs on 18-3-1987 and the accused petitioners executed the legal documents mortgage deed and accepted the terms and conditions of the sanction and repayment of loan and the loan amount was disbursed in their favour to the tune of Rs. 6,81,400/- and they purchased the machinery etc. and established the unit. It is further alleged that the petitioners defaulted in payment of loan and the complainant sent many demand notice, recall notice and legal notice as also take over notice and on 1st February, 1995 inspection was made at the mortgage site by the officials of the Corporation and it was found that film extractor along with other materials assessories have been removed by the accused persons with a motive not to pay the dues of the Corporation-complainant. The O.P. complainant then sent a show cause notice and reminders regarding removal of the machines etc. but no satisfactory reply was given by the petitioners. On the other hand, the petitioners made a proposal for one time settlement. The amount due with them was 15.78 lacs but that also was not paid by them. Therefore, the complaint case was filed as the petitioners with a motive not to pay the dues of the Corporation illegally removed the hypothecated and mortgaged assets and even wanted to cheat the complainant for their wrongful gain.
3. Thereafter the cognizance was taken under Sections 420 406 120B of the Indian Penal Code. The petitioners appeared. O.P. No. 1 examined three witnesses before charge and proved some documents. The petitioners filed a petition under Section 245(1) Cr. P.C. for their discharge. The learned Magistrate after hearing both the parties and after considering the evidence adduced before charge found that there was sufficient material against the petitioners for framing of charge under Sections 406 420 120B of the I.P.C. Accordingly, he rejected the prayer of the petitioners.
4. Heard learned Counsel for the petitioners, counsel for O.P. No. 1 and the learned A.P.P. appearing for the State.
5. Learned Counsel for the petitioners submitted that no offence under Section 420 I.P.C. is made out in this case. For constituting an offence under Section 420 I.P.C. there must be dishonest intention from the very beginning but there was nothing to show such dishonest intention on record. The evidence, on the other hand, shows that the petitioners had paid more than 4 lacs. Therefore, no offence under Section 420 I.P.C. is made out. He further submitted that though the tools and machineries are hypothecated to the complainant-Corporation the ownership did not change and it remained the properties of the petitioners in absence of any endorsement. So, no case of criminal breach of trust arises here. He also submitted that the evidence of P.W. 3 would also show that P.P. film extractor was available at the site and on this ground also no offence under Section 406 I.P.C. was made out.
6. He also submitted that as there was an agreement between the parties and the allegations disclose that there has been violation of the terms and conditions of the agreement, only civil liability arises against the petitioners. The petitioners have also mortgaged the valuable piece of land and the loan amount and interest can be realised from selling those properties.
7. Learned Counsel for O.P. No. 1 defended the order and submitted that in view of the evidence adduced on behalf of the complainant-O.P. there was sufficient material to frame charge under the aforesaid sections and the lower Court was justified in refusing the petition of the petitioners filed under Section 245(1) Cr. P.C.
8. It appears from the deposition of P.W. 3 filed by O.P. No. 1 that on earlier occasion the P.P. film machine was available in 1995, when they visited the site machinery was not available. His evidence also shows that the petitioners had given in writing that the machines have been sent for repairing but in spite of several notices the machines were not brought to the site. A prima facie case, therefore, is made out that the petitioners dishonestly removed the machines with a motive not to pay the dues.
9. As regards the submission of the learned Counsel that there was no entrustment of the machines to the petitioners to constitute an offence under Section 406 I.P.C. the decision of this Court in the case of Mahesh Prasad Manjhi and Anr. v. The State of Bihar and Anr. reported in 1999 (3) PLJR 90 was referred in this regard wherein it has been held that 'word 'entrusted' has to be understood in a wider sense, all that is necessary is that the ownership or beneficial interest in the property, which is subject matter of the offence should be in some person other than the accused. In the case of mortgage or hypothecation, the ownership does not pass to the persons in whose favour the mortgage or hypothecation is created, but it does create 'a beneficial interest' in his favour, if the property is removed without his consent and in violation of the terms of the agreement in that regard, prima facie, the offence of criminal breach of trust is made out.
10. sI am in respectful agreement with the above decision and as in this case also the petitioners removed the hypothecated machines in violation of the terms of the agreement, a prima facie case under Section 406 I.P.C. is made out against the petitioners.
11. Then though the case is one violation of breach of agreement giving rise to civil liability, as the intention of the petitioners was prima facie dishonest, the petitioners are liable for criminal action also.
12. A prima facie case for an offence under Section 406 I.P.C. is made out against the petitioners and the impugned order cannot be quashed.
13. I do not want to express my opinion as to whether any offence under Section 420 I.P.C. is made out against the petitioners. The same would be decided during trial.
14. In the result, this application is dismissed.
15. It is, however, made clear that any observation made in this order would not cause any prejudice to the trial Court in final adjudication of the case.