Sunday, 11 October 2015

Whether master is liable for criminal breach of trust for act of his servant of misappropriation of property

 Indian Penal Code, 1860 - Section 407 - Criminal breach of trust - Vicarious liability - No criminal liability on the master for the act of his servant - No allegation of mens rea - Accused cannot be held guilty.
"Criminal breach of trust" is an ingredient, part and parcel of offence under Section 407 of the I.P.C. Independent section seems to have been incorporated to govern particular category of persons entrusted with the property. On reference to definition of criminal breach of trust as contained in Section 405 of the I.P.C., it can be seen that "mens rea" is an essential ingredient. Misappropriation or conversion of property to his own use by the person entrusted with the property, in order to constitute criminal breach of trust must be done dishonestly i.e. with an intention to cause wrongful gain to one (himself) and wrongful loss to another (the complainant). This is evident from the use of the word "dishonestly" prefixing the clause "misappropriates or converts to his own use property...."
Considering the facts and circumstances of the present case, in the light of the definition of criminal breach of trust, it must be said that the petitioner is being prosecuted as carrier, for the act of an employee, who tampered with the envelope and removed cash from the same. In other words, the petitioner is being prosecuted by "vicarious liability". The complainant may be justified in filing a suit for compensation against present petitioner for tortious act of his servant by virtue of doctrine of vicarious liability. But, the same relationship cannot fasten criminal liability upon the master for the act of his servant, especially when the crime alleged contains "mens rea" as its essential ingredient. Mens Rea is a state of mind, guilty intention. And unless it is found that accused had the guilty intention to commit the crime, he cannot be guilty of comitting the crime.
Bombay High Court
Manoj Chandulal Shah vs The State Of Maharashtra & Ors. on 28 February, 2001
Equivalent citations: 2001 BomCR Cri, (2001) 2 BOMLR 540, 2001 (2) MhLj 867

Bench: N Dabholkar


1. By this writ petition present petitioner desires this Court to invoke its supervisory Jurisdiction under Article 227 of the Constitution of India as also inherent powers as conferred by Section 482of the Cr.P.C.. 1973 and quash and set aside the criminal prosecution lodged against him which is registered as Case No. 23/P/95 pending In the Court of 7th Metropolitan Magistrate. Dadar, Bombay.
Petitioner has also prayed for monetary compensation from the Respondents for his allegedly illegal and unlawful arrest and detention which he had to suffer at the hands of Respondents.
2. The facts giving rise to the present writ petition can be narrated as follows :-
The petitioner is Managing Director of M/s. Big Gay Courier Private Limited, having registered office at Dhobi Talao, Bombay. The business is courier service agency and the agency has many offices within Bombay and other major cities In India. M/s. Blue Sky Courier Worldwide Express is petitioner's regular client. Respondent Nos. 2 to 5 are police officers of Greater Bombay police force.
Petitioner claims that by telephonic message of Respondent No. 4 communicated through Respondent No. 5. he was called at N. M. Joshi Marg Police Station on 8th November, 1994. Petitioner expressed readyness to be available on 9th, but was then asked to come on 10th. On 10th November, 1994 at about 8.30 p.m. when the petitioner reached police station. Respondent No. 4 was not available. At about 9.15 p.m. Respondent No. 4 talked to the Petitioner on telephone, in abusive and insulting language. Petitioner was asked to bring all his Bangalore staff to Bombay for interrogation. Petitioner informed him that the Bangalore staff was already interrogated by Ashok Nagar Police Station, Bangalore.
Thereafter, petitioner was asked to handover receiver to Respondent No. 5 and after conversation with Respondent No. 4 on telephone, petitioner was arrested by Respondent No. 5 in connection with C. R. No. 221 of 1994 of N. M. Joshi Marg Police Station for the offence underSection 407 of the Indian Penal Code.
It is the grievance of the petitioner that he was not allowed to contact his family on phone. He remained in the lock-up for the night. There is no dispute that the petitioner was produced before the Magistrate's Court on 11th November and was remanded to police custody upto 14th November, 1994 whereafter he was shifted to Magistrate's custody and bailed out.
On 24th September, 1994 a complaint was lodged by one I. H.Keshwani with N. M. Joshi Marg Police Station. He claimed that on 31st August, 1994 he entrusted sealed envelope, addressed to his daughter at Bangalore to M/s. Blue Sky Courier Worldwide Express. The packet contained a letter, greeting card, couple of documents (power of attorney), cash Rs. 5,500/-book and magazine. Petitioner contends that the complainant had not disclosed that packet contained cash. On 1st September, 1994 complainant while at Lonawala could speak to his daughter on telephone. He was informed by the daughter that she received envelope which was already opened and which contained only book and magazine. She also informed lhat she had lodged complaint about the same with Ashok Nagar Police Station, Bangalore. Complainant spoke to M/s. Blue Sky Courier when Mr. Devraj. the owner of M/s. Blue Sky Courier requested the complainant to come on the next day. Mr. Devraj informed the complainant that the envelope was entrusted to the Company of Petitioner for transmission to Bangalore.
It is the claim of complainant that on 3rd September, 1994 he was telephonically asked by Ashok Kumar and Mr. Shah, respectively, the General Manager and Managing Director of M/s. Big Guy Couriers, as to what were his expectations. They also requested to withdraw the complaint.
N. M. Joshi Marg Police Station recorded statements of 4 witnesses i.e. Devraj (proprietor of M/s. Blue Sky Courier), Mehmood Ulfat Shaikh (Manager of M/s. Big Guy Courier), Tukaram Mokal and Vinayak Malekar who are the employees of M/s. Big Guy Courier. (It is pointed out that the statements of Devraj and Mehmood were recorded on 19th September. 1994; five days prior to registration of offence). According to complainant, inspite of these statements there is no revealation as to what happened to the alleged currency, nor the witnesses have been able to throw light as to who must have opened the envelope. There is no allegation in the complaint against the petitioner.
Thus, according to the petitioner, complaint as well as material collected during the investigation does not disclose any offence committed by present petitioner and therefore it is the claim of complainant that arrest effected by Respondent No. 5 at the instance of Respondent No. 4 was mala fide. Representations to Respondent Nos. 1 and 2 also received cool response, although the petitioner had specifically alleged therein that the arrest was mala fide and at the behest of Respondent- No. 3, who is a close friend of complainant.
It is in the light of above circumstances, petitioner prays for monetary compensation from the Respondents and also for quashing the prosecution instituted against him.
3. So far as claim of compensation, petition stands frustrated because, It is informed by both the lawyers that Respondent No. 4 Mr. Shukla expired sometime In November, 2000.
As far as Respondent No. 5 is concerned, Advocate Mr. Shirsat opened his arguments by fairly conceding that although he was not allowed to contact his family on telephone, Respondent No. 5 was helpful In sending message himself and therefore, now he does not wish to press his claim for compensation as against Respondent No. 5.
Mr. Shirsat tried to press his claim of compensation against Respondent No. 3 by relying upon the contents in the petition that Respondent No. 3 was instrumental, being a close friend of original complainant. For the purpose, he also referred to the contents in affidavit of Respondent No. 5 to the effect that he acted on the instructions of his superiors.
The claim for compensation, either as against Respondent No. 3 or to some extent also against Respondent Nos. 4 and 5, need not be entertained. The petitioner has approached this Court under Article 227 in its supervisory jurisdiction. The claim for compensation is based on contention that he was wrongfully arrested and detained. It Is not the claim that he was detained without obtaining appropriate orders from the competent legal authorities. The detention Is claimed to be wrongful because basically there is no offence made out against him for which he could have been arrested.
The claim for compensation in writ jurisdiction cannot be without reference to Article 21 of the Constitution of India, although the same is not expressly referred in the body of the petition. Under the rules of procedure as contained In Bombay High Court Appellate Side Rules, 1961, it would be the Division Bench which would be required to hear the claim. The claim cannot be entertained by a Single Judge, much less with the powers with which this Court Is armed, byArticle 227 of the Constitution of India or Section 482 of the Cr. P. C., 1973.
Respondent No. 3 is impleaded in his official capacity. No' individual is named, nor served as in the case of Respondent Nos. 4 and 5.
However, learned Counsel for petitioner has submitted that in view of death of Respondent No. 4, he would not press the claim for compensation, and therefore, scope of present writ petition restricts to considering whether the prosecution lodged against the present petitioner on the basis of complaint by Shri I. H. Keshwani is sustainable or is required £o be quashed.
4. It is settled legal position that the High Court should be slow in interfering with the prosecutions filed before the Courts of Magistrates. It is only when no offence whatsoever Is made out against the petitioner, even after taking into consideration the averments made by the complainant, on their face value and unrebutted, this Court would step-in to quash the proceedings in order to prevent abuse of process of law.
5. Learned Advocate of the petitioner, Mr. Shirsat has taken me through the complaint of Mr. I. H. Keshwani, as also the statements of all the four witnesses recorded during the course of investigation which form the foundation of the prosecution under challenge.
Learned A.P.P. Ms. Kejriwal and Mrs. Sangeeta Shinde representing Respondent No. 5, after referring to police papers, have confirmed that there is no 6th witness cited in the charge-sheet.
On going through the complaint dated 19th September, 1994 the only contents those can remotely touch present petitioner are as follows :-
1. M/s. Blue Sky Couriers to whom the envelope was entrusted, further entrusted the envelope to M/s. Big Guy Courier, the Courier Company owned by the petitioner.
2. Ashok Kumar, the General Manager and Shri Shah, the Managing Director, of M/s. Big Guy Courier, contacted the petitioner on telephone on 3rd September, 1994.
It is not the case of complainant that the petitioner has any role in handling the parcel or envelope delivered for transmission. It is also not the claim of complainant lhat the petitioner personally took Interest and contacted him to settle the matter.
The statement of Devraj, owner of M/s. Blue Sky Courier, is capable of establishing that he had received the packet given by Mr. Keshwani for transmission to Bangalore and he further entrusted the same to M/s. Big Guy Courier. (Mr. Devraj also stales that it was not informed to him that the packet contained any cash. But this is not material for the purpose of present writ petition, although may assume importance. If the matter enters trial.) Mehmood Ulfat Shaikh is the manager of M/s. Big Guy Courier who received the envelope from Devraj on 31st August, 1994. According to Mr. Vinayak Malekar, the clerk of M/s. Big Guy Courier as also Mr. Tukaram Mokal, other employee, the envelope was entrusted to Company's employee Mr. Tiwari to be given to P.O.B.C, - Patel On Board Courier. Mr. Tiwari had also collected all other envelopes and parcels for onward transmission.
Beyond this, no other details can be gathered from the evidence of all the five witnesses as collected by the Investigation Officer. To describe in one sentence, it can be said that, investigation has not reached the person, who physically opened the envelope and removed the contents of it, which is the grievance of the complainant.
Advocate Mrs. Shinde representing Respondent No. 5. on instructions, informed that Mr. Tiwari was interrogated during the course of Investigation, but no useful information could be gathered from him.
Thus, as a result of investigation it reveales that the sealed envelope tendered by the complainant for transmission to his daughter at Bangalore was received by M/s. Blue Sky Courier (Mr. Devraj}, and was further entrusted to M/s. Big Guy Courier (Mehmood Ulfat Shaikh), and was passed to Patel On Board Courier through Mr. Tiwari.
There is no evidence that any of the person, while receiving the envelope complained of its already being open or suspected to have been tampered. The sealed envelope in transit, as ordinary course of human conduct, would not be accepted by a person, if he suspects that the same was opened or tampered. Since there is no evidence of such complaint on record, it can be said that envelope appears to have reached the hands of Tiwari in sealed condition.
What happened to envelope thereafter is a matter of guess work. Suffice it to say that material collected during investigation does not include anything, which will connect present petitioner to the act of tampering with the envelope, even if we accept the allegations of complainant that the envelope did contain cash and the same was missing when reached his daughter.
6. The learned A.P.P. Ms. Kejriwal pointed out that offence is registered under Section 407 of the I.P.C., whereby a carrier entrusted with the property is liable to be punished, If he commits criminal breach of trust with regard to the said property. She has also relied upon definition of "person" as incorporated in Section 11 of the I.P.C., which includes any Company or association or body of persons whether incorporated or not.
According to the learned A.P.P. since the envelope was entrusted to Company of petitioner as carrier, he is guilty and liable to be punished under Section 407. being a carrier of the envelope regarding which criminal breach of trust was committed. Of course she fairly conceded that material available on record is incapable of attributing physical indulgence of petitioner in the act of opening the envelope and misappropriating the contents. According to her, even if the envelope is opened, and amount is thereby misappropriated by any employee of the Company, petitioner would be liable by virtue of Section 407 of the I.P.C. Section 407 of the I.P.C. (relevant part) reads as follows :-
"407. Criminal breach of trust by carrier etc. :-Whoever, being en trusted with properly as a carrier, wharfinger or warehouse-keeper, commits criminal breach of trust in respect of such property, shall be punished...." (emphasis suplied) Thus, "criminal breach of trust" is an ingredient, part and parcel of offence under Section 407 of the I.P.C. Independent section seems to have been incorporated to govern particular category of persons entrusted with the property. On reference to definition of criminal breach of trust as contained in Section 405 of the I.P.C., it can be seen that "mens rea" is an essential ingredient. Misappropriation or conversion of property to his own use by the person entrusted with the property, in order to constitule criminal breach of trust must be done dishonestly i.e. with an intention to cause wrongful gain to one (himself) and wrongful loss to another (the complainant). This is evident from the use of the word "dishonestly" prefixing the clause "misappropriates or converts to his own use property. ....".
Coming to the facts of present case, on going through the averments in the complaint, grievance of the complainant Is somebody during the transit tampering with the parcel/packet that was entrusted to the Company of the petitioner. Who is that individual, has not been ascertained even at the conclusion of investigation, when charge-sheet was filed, as can be seen from evidence supporting the charge-sheet.
Considering the facts and circumstances of the present case, in the light of the definition of criminal breach of trust, it must be said that the petitioner is being prosecuted as carrier, for the act of an employee, who tampered with the envelope and removed cash from the same. In other words, the petitioner is being prosecuted by "vicarious liability". The complainant may be justified in filing a suit for compensation against present petitioner for tortious act of his servant by virtue of doctrine of vicarious liability. But. the same relationship cannot fasten criminal liability upon the master for the act of his servant, especially when the crime alleged contains "mens rea' as its essential Ingredient. Mens Rea is a state of mind, guilty intention. And unless it is found that accused had the guilty intention to commit the crime, he cannot be guilty of committing the crime.
In fact the material collected during the investigation leads to reasonable Inference that envelope/parcel went to Patel On Board Courier in sealed condition. If the same is tampered thereafter, petitioner cannot be said to be guilty of culpable negligence i.e. failure to exercise reasonable and proper care, and to take precautions to guard against injury to the property of complainant, submission of learned A.P.P. that since "act includes omission", failure to prevent misappropriation on the part of petitioner is sufficient to attract Section 407 of the I.P.C., cannot be sustained.
In the complaint or any of the statements of witnesses there is no material to indicate that the petitioner could have shared common intention of the servant to open the envelope and misappropriate the money. There is also no material to suggest that complainant was abettor by instigation, aid or illegal omission.
The facts circumstances may be sufficient to sue the petitioner for compensation, but are insufficient to constitute an offence contemplated by section 407 of the I.P.C. which incorporates "mens rea" as Us ingredient and in the given set of facts and circumstances at hands, the same cannot be attributed to the petitioner. Although technically petitioner was carrier of the envelope/parcel entrusted by the complainant, vicarious liability is not a media capable of causing conduction of Mens Rea.
7. This is thus a fit case in which no prosecution ought to have been filed, without reaching to a conclusion about the individual who had indulged in the act of opening envelope and removing the amount, much less against the petitioner alone for the act of his servant.
In the result, writ petition is partly allowed. Proceedings of Criminal Case No. 23/P/95 pending on the file of 7th Metropolitan Magistrate Court, Dadar. Mumbai are quashed. The Magistrate shall treat the case as disposed of and bail bond of the accused as cancelled.
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