Full Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS MONDAY, THE 14TH DAY OF AUGUST 2023 / 23RD SRAVANA, 1945 AGAINST THE ORDER/JUDGMENTCC 356/2016 OF JUDL. MAGISTRATE OF FIRST CLASS, KOTHAMANGALAM PETITIONER/ ACCUSED : P.P.MOHAMMAD, AGED 73 YEARS, S/O. PAREETHU PILLAI, PALLIPPATTU PUTHENPURA HOUSE, PUTHUPPADY P.O, MUVATTUPUZHA, ERNAKULAM DISTRICT BY ADVS. SRI.BABU KARUKAPADATH SMT.AMRIN FATHIMA SRI.MITHUN BABY JOHN SMT.M.A.VAHEEDA BABU SRI.P.U.VINOD KUMAR RESPONDENTS/ COMPLAINANT & DEFACTO COMPLAINANT :
1 STATE OF KERALA, THROUGH THE SUB INSPECTOR OF POLICE, KOTHAMANGALAM POLICE STATION, KOTHAMANGALAM P.O, ERNAKULAM DISTRICT, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM - 686 691 2 V.V MUHAMMAD, AGED 57 YEARS, S/O. VAPPUTTY, VELIYATHUKUDY HOUSE, B.O.C ROAD, PERUMBAVOOR, ERNAKULAM - 683 542 BY ADVS. SRI.K.A.ANISH SRI.K.A.ANISH SRI.T.K.HASSAN SRI.K.PAUL KURIAKOSE SRI.T.A.RAFEEK CHERTHALA
BY SRI.C.N PRABHAKARAN, PUBLIC PROSECUTOR THIS OP (CRIMINAL) HAVING COME UP FOR ADMISSION ON 14.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
BECHU KURIAN THOMAS, J.
=-=-=-=-=-=-=-=-=-=-=-=-= O.P.(Crl.) No.617 of 2017 -=-=-=-=-=-=-=-=-=-=-=-= Dated this the 14th day of August, 2023
JUDGMENT
Two partners of a business establishment closed down their business. Subsequent to the closure, one of the partners is alleged to have commenced the same line of business. Alleging that the name of the earlier firm was being used for the new business, a crime was initiated. The partner who faces the prosecution has come up under Article 227 of the Constitution of India seeking to quash the criminal proceedings against him.
2. Sri.P.P.Mohammad and Sri.V.V.Muhammad, along with their wives were partners in a business establishment called “M/s.Copper
Chemical Manufactures”. Both Muhammeds were Joint Managing Partners. On 16.03.2015, the business of the partnership was stopped on realising that it was no longer viable to continue. Cessation of business was intimated to the tax authorities on 30.06.2015. However, on 23.12.2015, a crime was registered with the Kothamangalam Police Station as FIR No.2215 of 2015 alleging that Sri.P.P.Mohammad was selling the products of the partnership firm in the name of “M/s.Copper Chemical Marketing” and has thereby committed criminal breach of trust and cheating on Sri.V.V.Muhammad.
3. In the FI Statement, the defacto complainant alleged that the
entire stock of the prior partnership firm had been sold and the closure of the business was intimated to the Sales Tax Authorities on 30.06.2015. However, he noticed that the products of the erstwhile partnership were found in the market and that the accused was indulging in sale of the same products using the erstwhile partnership firm's name and brand under a business by the name M/s.Copper Chemical Marketing and that the said act was committed without the knowledge of the defacto complainant and with intent to cause unlawful gain to the accused and unlawful loss to the defacto complainant.
4. After investigation, a final report was filed alleging that the
accused had after closure of the partnership business been selling the products under the brand name and address of the erstwhile partnership without any licence and the “Copper Chemical Marketing” establishment was selling 1 Kg. packets of copper sulfate in the cover of the erstwhile partnership by filling copper sulfate in such packets using the brand name of M/s.Copper Chemical Manufactures and kept it for sale on 24.12.2015 and thereby committed the offences under Sections 406 and 420 of the Indian Penal Code, 1860.
5. Sri.K.A.Babu, the learned counsel for the petitioner contended
that the prosecution allegations do not make out any offence as alleged. It was further contended that there is no evidence of any criminal breach of trust or any dishonest inducement warranting a criminal prosecution of the petitioner. It was submitted that the prosecution against the petitioner was an abuse of the process of the court and even if the entire allegations are assumed to be admitted, still none of the offences alleged are made out.
6. Sri.K.Paul Kuriakose, the learned counsel for the 2 nd respondent,
on the other hand, contended that the brand name of the erstwhile firm was used by the petitioner to market the products of the new business entity and that use of such a brand name was not permitted and hence his property rights have been infringed. According to the learned counsel, contrary to the understanding and agreement between them, the accused tried to make undue gain by using the name of the erstwhile partnership firm and therefore the prosecution is maintainable.
7. I have considered the rival contentions.
8. Admittedly, on 15.03.2015, the business of the firm M/s.Copper
Chemical Manufactures was stopped and the entire stock of the said firm were sold. The Tax Authorities were also informed on 30.06.2015 about the closure of the business. In the final report, there is no case for the prosecution that any stock of the erstwhile firm was used by the accused for his personal benefit. The only contention raised is that the packet containing the name of the erstwhile firm was used by the accused for marketing the products of the new business entity.
9. Assuming that the name had a value and the accused had
dominion over the said property, in the absence of any agreement being produced by the prosecution to show the mode in which such property should be used, it cannot be held that there was criminal breach of trust. When a partnership business is closed, neither of the partners have a right over the name of the erstwhile business firm, unless there is an agreement to the contrary entrusting the rights to any particular partner to use the said name to the exclusion of the other partner.
10. Even if it is assumed that the accused had used the old bags of
the erstwhile firm to fill the products of the new firm, it can give rise to a civil claim for damages. To attribute criminality to such a conduct, the prosecution must be able to establish dishonestly in the conduct. None of the statements of the witnesses have attributed any dishonesty to the accused in using such empty plastic covers.
11. Though the allegations may give rise to a civil claim, to attribute criminality, the complaint and the statements as a whole has to be
evaluated. The term dishonest misappropriation and dishonest conversion to own use are words that attribute criminality to a conduct. Merely because the report verbatim reproduces such terms, that by itself is not sufficient to attribute criminality to a conduct.
12. As held in Prof. R.K.Vijayasaradhy and Another v. Sudha
Seetharam and Another [(2019) 16 SCC 739], court can examine whether a matter which is essentially of a civil nature has been given a cloak of a criminal offence.
13. On a perusal of the final report and the statements in support
thereof this Court is of the view that the allegations reveal at the most, only a case of a civil nature. In such a view of the matter, this Court is of the opinion that even if the entire prosecution allegations are admitted, still an offence under Section 406 IPC is not made out.
14. As far as the offence under Section 420 is concerned, it is
evident that there is no dishonest or fraudulent inducement from the part of the accused and no property has been induced to be delivered to him and therefore the said offence is also not made out.
15. In the result, the prosecution against the accused in C.C.No.356
of 2016 on the files of the Judicial First Class Magistrate's Court, Kothamangalam is an abuse of the process of the court and hence the said proceedings are quashed.
This original petition is allowed as above. Sd/- BECHU KURIAN THOMAS, JUDGE RKM APPENDIX OF OP(CRL.) 617/2017 PETITIONER'S EXHIBITS : EXHIBIT P1 A TRUE COPY OF THE F.I STATEMENT DATED ALONG WITH FIR IN CRIME NO 2215/2015 OF KOTHAMANGALAM POLICE STATION EXHIBIT 2 A TRUE COPY OF THE FINAL REPORT/CHARGE IN C.C NO 356/2016 ON THE FILE OF THE HON'BLE JUDICIAL FIRST CLASS MAGISTRATE COURT, KOTHAMANGALAM EXHIBIT 3 A TRUE COPY OF THE MAHAZAR DATED NO 2215/2015