When prosecution for misappropriation against partner of partnership firm can be quashed?

 In this backdrop of the matter, the fact that the
complaint was lodged fourteen (14) years after the
original date of partnership without accounting for the
delay and having failed to specify any recent dates on
which the alleged offence of cheating/misappropriation
were allegedly committed by petitioner no. 1, the
motive behind the FIR becomes very questionable
since it has not even been mentioned in the complaint
that the complainant at any time in writing
demanded production of the Partnership accounts or
Books during the long period of 14 years. His
allegation of having verbally made such demand only
on 20.03.2012 without any explanation of the previous
delay also hits his case badly, specially considering
that he seeks to impute the allegations of criminal
misappropriation/ breach of trust upon his admitted
Partner in respect of the Partnership money, which, as
has been observed earlier, is not legally sustainable.
For the aforesaid reasons, in the opinion of this Court,
continuation of the criminal proceedings against the
petitioners would be a clear abuse of the process of
Court.22.
IN THE HIGH COURT AT CALCUTTA
 (Criminal Revisional Jurisdiction)
 Appellate Side
Present:
The Hon’ble Justice Sudip Ahluwalia
C.R.R. 3393 of 2014
Smt. Malabika Mondal & Anr.
Vs.
The State of West Bengal & Anr.

Judgment On : 20-05-2016

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When Karta of joint Hindu family can be called upon to give account for past transaction?

The brings us to Mr. Rajagopala Sastri's second argument.While admitting the legal position that in the absence of any evidence of fraud or misappropriation the Karta cannot be called upon to account for the past transactions, learned Counsel stresses the responsibility of the Karta to establish what are the assets available for partition. In support of this, the learned Counsel drew our attention to the decision in Parmeshwar Dube v. Gobind Dube(1). That case laid down the rule that in the absence of fraud or other improper conduct the only account the Karta of a joint family is liable for is to the existing state of the property divisible; but that this did not mean that the parties were bound to accept the statement of the Karta as to what the property consisted of and an enquiry should be directed by the court in a manner usually adopted to discover what in fact the property consisted of at the date of the partition. 

Supreme Court of India

K. V. Narayanaswami Iyer vs K. V. Ramakrishna Iyer And Ors on 26 March, 1964

Equivalent citations: 1965 AIR 289, 1964 SCR (7) 490

BENCH:

GUPTA, K.C. DAS
SUBBARAO, K.
DAYAL, RAGHUBAR

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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

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