' FAROOQ ALI CHANNA , J.---The applicant was convicted under section 420/406 P.P.0 by learned VIIth Civil Judge/Judicial Magistrate (South) (hereinafter referred to as trial court) in Criminal Case No,428/2007, culminated F.I.R No,119/2007, Police Station Frere and sentenced to undergo R.I. For 3 years under section 420 P.P.C. And 2 years under section 406 P.P.0 with fine of Rs,20,000, in default thereof to suffer S.I. For one month more. Both the sentences were ordered to run concurrently. The conviction and sentence was upheld by learned IIIrd Additional. Sessions Judge, Karachi (South)
(hereinafter referred to as Appellate \court), vide judgment 13-3-2012 passed in Criminal Appeal No,13/2012, which are impugned in this criminal revision application.
2. Briefly facts of the case are that complainant Munir Ahmed lodged F.I.R that he purchased a flat in project known as Al Wahid Homes from its owner Aizazuddin and made payments under various flat and sold the same to third party against high price. Builder also issued threats and refused to hand over the possession of flat, therefore the complainant lodged F.I.R.
3. The investigating officer after completing investigation submitted challan, the trial court after recording the evidence convicted and sentenced the applicant. The Appellate court maintained the conviction as referred hereinabove.
4. Learned counsel for applicant has contended that solely dispute between the applicant and the respondent was purely of civil nature as the respondent had purchased the flat from the applicant and made part payment, however since the respondent had failed to pay the balance amount of sale consideration, therefore the applicant cancelled the booking of the subject flat and served such notice upon respondent, as such no case of breach of trust is made out.
5. Learned counsel for respondent and learned D.P.G. Have not controverted the submissions of learned counsel for the applicant and have admitted that the dispute between the parties is of civil nature, therefore they have filed civil suit. They have further contended that the respondent has received back the amount of Rs, 35,00,000 against the amount paid by him to applicant for booking of flat.
6. On scanning the impugned judgment of Appellate Court, it manifests that Appellate Court has acquitted the respondents of charge under section 420, P.P.C., however while maintaining the conviction under section 406, P.P.C. The Appellate Court has observed as under:- "In our case the complainant is a purchaser, and the appellant is the builder/seller. He received money time to time and the day came when the property i,e, the flat was supposed to hand over to the complainant, he parted with by selling it to a third party on much higher price, though it could be the complainant in whose favour the conveyance/sub-lease could have been executed, though till then the ownership of the flat was not transferred to him but he had gained the beneficial interest in the subject flat. The letter Ex.5/D clearly shows that appellant was bound to execute the sublease in favour of the complainant. So at the time when such letter was issued the relationship between the complainant and the appellant stood ceased and subsequent domain/control over the subject flat by the appellant was not termed as a seller but as a trustee to discharge his obligation to execute lease in favour of the appellant. The entrustment shall not be taken as technically actual transfer of the property. It could be implied as in that case it was, even if the owner is in possession of the property, he is holding the property as a trustee on behalf of the person from whom money is taken. It is an offence under section 406 of Pakistan Penal Code because the language of the section categorically provides that if a person with dishonest intention violates the legal contract which prescribes the mode in which the trust is to be discharged then it amounts to criminal breach of trust. Let us take the instance of hypothecation of property, the goods remain in possession of the owner and for the money lent, an interest is created in that property of the person lending the money."
The observation of Appellate Court appears to be misinterpretation of section 406, P.P.C.
Admittedly, the respondent had entrusted nothing to the applicant, the amount paid by respondent was against purchase/ booking of flat under certain terms and conditions, enumerated in the agreement and violation of any term and condition of the agreement will constitute a dispute of civil nature and not a criminal case. The applicant during trial has not denied the part payment received by him against the sale of flat, however his contention was that since the respondent despite the service of notices failed to clear the outstandings, therefore, the booking of subject flat was cancelled. The plea of applicant in his statement under section 342, Cr.P.C. Reads as under:-- "1 am innocent and falsely implicated in this case, complainant booked a flat No,307, Al-Wahid Homes, Frere Town, Karachi, in the sum of Rs,28,95,000. The complainant made payment from time to time of Rs, 11,50,000. I produce the copy of agreement and application form signed by the complainant on 10-11-1997 as Exh.12-A, I produce the copy of schedule form at Exh.12-B, I also produce the copy of receipt at Exh.12-C. I issued notices to the complainant for further payment.
Complainant was directed to pay amount but he failed to do so. Thereafter as per procedure and terms and condition this flat was cancelled due to nonpayment / clearance of dues. He was asked to get the amount, which he denied. Thereafter I made an application to S.H. 0, Police Station Frere dated 5-5-200 against the complainant, I produce the copy of application.
Thereafter police registered false F.I.R against me due to pressure from the complainant side.
Thereafter I obtained bail from Honourable Sessions Court. Complainant has also filed Civil Suit No,1319 of 2007 before the Honourable High Court of Sindh. I produce the Photostat copy of suit as Exh.12-D. I am innocent and pray for acquittal."
7. The respondent/complainant in his evidence, before trial court during cross examination, has admitted that as per terms and conditions of the booking, the company was empowered to cancel the booking of flat and refund the amount after deduction of some charges. The respondent has also admitted that he has filed Civil Suit No,1319/2007 for specific performance, declaration, permanent injunction, mesne profit and damages, as such the respondent himself has realized that it was the case of civil nature, the facts mentioned in F.I. R does not constitute criminal offence.
The difference between the breach of contract and breach of trust is very thin i,e, in former there is intention to dishonestly embezzle the amount whereas in the latter this important ingredient is missing and substituted by inactivity on the part of one party to honour the terms and condition of the contract.
8. Apart from above, for the sake of arguments, if it is taken into consideration that besides the case of civil nature, the ingredients of criminal offence are attracted, preference be given to civil court to decide the controversy between the parties regarding the disputed facts. In a case reported as PLD 1993 SC 399 (Badaruddin v. Mehr Ahmed Raza, Additional Sessions Judge, Jhang and 6 others) the Honourable Supreme Court while referring to the cases reported as 1972 PCr.LJ 1130 (Jamot Ghulam Muhammad and others v. The State) and 1989 PCr.LJ 1883 (Khan alias Khanu and others v. The State) has held as under:-- "There is no dispute about the fact that ingredients of criminal offences such as, under sections 420, 406, 467, 468 and other cogent offences are similar as would appear in most cases of breach of contract. No doubt in such cases both remedies on criminal as well as civil sides are available and can be pressed into service but guidelines in the case-law show that civil courts be given preference and allowed to decide such disputed facts. In such circumstances it is the duty of the criminal court to act with circumspection and exercise power with utmost care and caution before it is persuaded to employ its process for compelling attendance."
9. For the above reasons, discussions and law laid down by the honourable apex Court the impugned judgment is the outcome of misinterpretation of law, therefore liable to be set aside.
Accordingly, I set aside the conviction and sentence, awarded to the applicant by trial court upheld by the Appellate court and acquit him of the charge under section 406, P.P.C .
' Criminal Revision application is allowed.