1. This Criminal Miscellaneous application is for the quashment of proceedings pending before learned S.D.M. Sukkur initiated on direct complaint under sections 406, 409 and 420/34, P.P.C.
2. The brief facts leading to this application are that the complainant /respondent No.2 is Managing Director of Sukkur Beverages Limited, Sukkur whereas the petitioners are running Pak Tools Industries at Lahore. Admittedly there are business relations between the parties and in the year 1980 the respondent No.2 placed an order with the petitioners firm for 'fabrication and supply of Filler and Crowner units having 40 heads, 8 crowner heads with capacity of 350 b.p.m. Each for being installed in the Sukkur Beverages Limited. The agreed price was Rs.8.5 lacs if the delivery was made by February, 1981 and if the delivery was delayed, the price would be Rs.8 lacs only.
3. Admittedly the petitioners received Rs.12 lacs from respondent No.2 in various amounts between 27-4-1980 and 15-5-1982 towards the payment for supply of above machinery. As the petitioners failed to supply the goods and misappropriated and committed breach of trust in respect of the above-mentioned sum of Rs.12 lacs the respondent No.2 filed direct complaint in the Court of learned S.D.M. Sukkur who after holding preliminary inquiry under S.202, Cr.P.C. Ordered the issue of bailable warrants against the petitioners in the sum of Rs.50,000 each.
4. I have heard Mr. M.A. Rashid for the petitioners, Messrs A.Q. Halepota and Shaikh Ayaz for respondent No.2 and Assistant Advocate-General for the State.
5. A preliminary objection was raised by the learned counsel for the respondents that the application under section 561-A, Cr.P.C. Is not maintainable in view of fact that alternate remedy under section 249-A, Cr.P.C. Has not been availed of by the petitioners. This point has been discussed at length in the case of Mian Munir Ahmed v. The State 1985 SCMR 257. In the reported case the petitioner had moved application under section 249-A, Cr.P.C. In the trial Court which was dismissed. Their Lordships have discussed this question and have held in para. 16 as follows:-- "The powers of the trial Court under sections 249-A, Cr.P.C. And 265-K, Cr.P.C. Are co-extensive with the similar powers of the High Court under section 561-A, Cr.P.C. And both can be resorted to.
6. It would, of course, be proper to approach the trial Court in the first instance but there is nothing to bar the High Court from entertaining, in appropriate cases, an application under section 561-A, Cr.P.C. Directly:"
7. It will, however, have to be seen whether the instant case is an appropriate case in which the application under section 561-A, Cr.P.C. Be entertained directly without the petitioners having recourse to section 249-A, Cr.P.C. In this context it will be pertinent to peruse the wording of section 249-A, Cr.P.C. Which is reproduced as under:--- "249-A. Power of Magistrate to acquit accused at any stage. --Nothing in this Chapter shall be deemed to prevent a Magistrate from acquitting an accused at any stage of the case if, after hearing the prosecutor and the accused and for reasons to be recorded, he considers that the charge is groundless or that there is no probability of the accused being convicted of any offence."
8. It will be seen that for passing an order under section 249-A, Cr.P.C. The trial Court has to hear the prosecutor and accused and also record reasons for the consideration that charge is groundless or that there is no probability of the accused being convicted of any offence. It is argued by the learned counsel for the petitioners that the case before the learned Magistrate has not proceeded.
9. He has already on holding preliminary inquiry come to the conclusion that prima facie case is made out and hence has issued the process. As such it will be an exercise in futility to approach the same Magistrate for a finding that the charge was groundless and there was no probability of accused being convicted of any offence. It is submitted by the learned counsel for the respondents that the Court may direct the Magistrate to dispose of the application under section 249-A, Cr.P.C.
10. Within a specific period. However, the argument of learned counsel for petitioners 4ppears to have some force in the circumstances of the case that it will be exercise in futility to approach the trial Court at this stage for consideration that charge was groundless and there was no probability of the accused being convicted of any offence. In my opinion this is appropriate case wherein the application under section 561-A, Cr.P.C. Could be entertained directly.
11. Next we come to the merits of the case as to whether any interference under section 561-A, Cr.P.C, is warranted. It may be pointed that provisions of section 561-A, Cr.P.C. Are much wider in scope than the provisions of section 249-A, Cr.P.C. Section 561-A, Cr.P.C. Reads as under:-- "561-A. Saving of inherent power of High Court. Nothing in this Code shall be deemed to limit or affect the inherent power of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice."
12. As already pointed it is admitted fact that the respondent No.2 had placed an order for supply of machinery with the petitioners for which they received Rs.12 lacs. It is not the case of the petitioners that they have supplied the machinery to the respondent No. 2 but they contend that their failure to supply the machinery does not constitute a criminal offence but is only a case of breach of contract for which civil remedy is available to the respondent No. 2. It is further contended that criminal case has been filed to subject the petitioners to undue harassment and indignity and that this mala fide intention of the complainant (respondent No.2) is evident from the fact that not only petitioner No.1 has been dragged in the direct complainant but his three sons viz. Petitioners Nos. 2 to 4 have also been roped in. In rebuttal the learned counsel for respondent No.2 have submitted that the offences under sections 420, 406 and 409, P.P.C. Are made out against petitioners because of their act of not only not supplying the machinery but also is misappropriating the amount of Rs.12 lacs kept in trust with them for the purpose of supply of machinery and in selling away the machinery. It is alleged in the complaint as under:- "That the accused have thus cheated the complainant, committed criminal breach of trust of a huge sum of Rs.12 lacs entrusted by them for fabrication and supply of the above descript Filler/ Crowner and other auxillary equipments; dishonestly misappropriated and converted to their own use that amount and dishonestly disposed of the Filler and Crowner to another party at a much higher price in violation of the legal contract between the complainant and the accused."
13. It is further submitted by the learned counsel for the respondents that the D. Ds. Issued in favour of petitioners the details of which are shown in the complaint clearly show that the D.Ds. Were issued not only in favour of the firm of the petitioners but were also issued in the names of all the four petitioners. The last three demand drafts dated 15-5-1982 appear to be issued in the name of respondents Nos.2, 3 and 4. It is further submitted that the criminal conduct of the petitioners is apparent from the fact that not only that they have not supplied the machinery ordered .For but they have not returned or at least offered to return the amount of Rs.12 lacs which was entrusted to them for the purpose of supply of the goods ordered. It is also contended by the learned counsel for respondent No.2 that the civil and criminal cases many a times overlap. They have relied on a judgment of learned Single Judge of this Court reported in PLD 1971 Kar. 937. In the reported case learned Single Judge has allowed application under section 561-A, Cr.P.C. But has discussed elaborately the nice distinction between a civil and criminal case. It will be useful to reproduce relevant portion of observations of the learned Single Judge:- "The ingredients of offences under sections 420, 403 and 406 are to a substantial extent available in most cases of breach of contract. Similarly a default by a borrower in repayment of a debt without admission of liability may also frequently partake of character of an offence under section 406, P.P.C. There are numerous other instances of default in transactions purely civil nature but' which often appear to answer fully the ingredients of a criminal offence and with a little clever glossing over every such case could be converted into an earnest prosecution. It is here that a Court is called upon to act with circumspection and to exercise the utmost care and caution before it is persuaded to employ its process for compelling attendance. This duty is heavier in private complaints which relate to transactions apparently civil in nature. The tendency to view a criminal action as a handy means to constrain a person's conduct cannot be under-scored. It is this growing abuse of the process of a criminal Court that has to be guarded against. This difficulty for the Court itself often arises on account of the overlapping nature of a civil and criminal cause.
14. But yet with a prudent application of mind it should be possible to draw a distinction between the two. It is perhaps well to remember that the word 'crime' suggests that not only should a man have brought about the forbidden actus but also that the line of conduct which he had voluntarily continued to that conclusion was inspired, or at least accompanied, by mens rea. The accused, in other words, shall have been actuated by a legally reprehensible attitude of mind. A Court will not in the exercise of its inherent powers under section 561-A, Cr.P.C. Readily interfere with a criminal proceeding with a view to quashing it. But the High Court will interfere in the exercise of its inherent jurisdiction if it was satisfied that the resort to criminal proceedings is doing something which is not warranted by law or is with a design to harass a person and not to secure the ends of justice."
15. Learned counsel for respondent No.2 have also relied on the case reported in PLD 1962 Kar. 303. In the reported case the complainant had given Rs.2,500 to a contractor for constructing the roof of the house of complainant and the contractor had purchased some material out of this money for the job but he subsequently removed material and misappropriated the material as well as the balance money remaining with him and failed to execute the job as promised in the writing. He disappeared from the scene and, therefore, it was held that it clearly showed his dishonest intention and. As a result, therefore, an offence under section 406, P.P.C. Stood clearly established against him and the punishment awarded by the trial Court was enhanced by the High Court.
16. The petitioners are being prosecuted for the offences punishable under section 406, P.P.C. For criminal breach of trust, under section 409, P.P.C. For criminal breach of trust as a merchant and under section 420, P.P.C. For cheating and dishonestly inducing delivery of property. It will be pertinent to see the contents of relevant sections. Criminal breach of trust is defined in section 405, P.P.C. As under:-- "405. Criminal breach of trust.-- Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust'."
17. Section 406 provides for punishment for criminal breach of trust. Section 409 provides punishment for criminal breach of trust committed in respect of property entrusted to a merchant in the way of his business.
18. Section 415 defines cheating which reads as under:-
415. Cheating.-- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do so or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to 'cheat'.
19. Illustration (g) which can be relied upon by the petitioners is also reproduced as under: "(g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract."
20. It is contended by the learned counsel for the respondents that the amount was admittedly entrusted to the petitioners for the supply of goods which admittedly they have not supplied and also have not returned the amount in question. It will be for them to prove that their case comes within the ambit of illustration (g) to section 415 and Court can come to that conclusion only after recording evidence. Furthermore, it is contended by them that the amount which was entrusted to the petitioners has not been returned but has been misappropriated and put to use by them and even the machinery has been sold by them and as such ingredients of criminal offences alleged against them are clearly made out from the facts of the complaint.
21. Learned counsel for the petitioners has relied on series of case-law in support of his contention. In case reported in 1983 P Cr. L J 1585 a learned Single Judge of this Court quashed the proceedings pending in the trial Court on direct complaint under sections 406, 419 and 420, P.P.C. In that case there was dispute over matrimonial matters and a suit was filed by daughter of petitioner No. 1 for dissolution of marriage with the brother of respondent No.1 who also filed a suit for restitution of conjugal rights. A direct complaint was filed in the meantime by respondent No.1 against the petitioner in order to harass him and his near relations alleging therein that he had sold two buffaloes and ox to the petitioner for Rs.14,000. Which amount he had not received. There was also delay in filing the complaint and it was held that neither complaint nor statements of prosecution witnesses disclosed the commission of offence and ingredients of offence .Of cheating or misappropriation mentioned therein. Failure of the applicants to pay price of buffaloes and matrimonial dispute between the parties related inter se resulted in filing delayed complaint in order to pressurise them with mala fide intention. It may be noted that there. Is no admission of the alleged transaction by the petitioners.
22. PLD 1973 Kar. 478 late Chief Justice Tufail Ali A. Rehman's quashed the proceedings pending in the Court where husband had filed a complaint against were and others complaining of her being enticed away with cash and valuables three years, previously, were in the meantime had filed suit for divorce and - also a criminal case against the husband. It was held "that prosecution story was incredible and charge was not likely to succeed and, therefore, prosecution could not be allowed to continue to harass the accused as ends of justice did not contemplate forcing of trial likely to result only in acquittal".
23. PLD 1967 SC 317 their Lordships while discussing the powers of High Court under section 561-A, Cr.P.C. Observed "that the High Court should be extremely reluctant to interfere in a case where competent Court has, after examining the evidence adduced before it, come to the view that a prima facie case is disclosed and has framed charge or summoned the accused to appear unless it can be said that the charge on its face or the evidence even if believed does not disclose any offence".
24. Thus, we have to see whether the evidence produced by the respondent No.2 before the learned trial Court was such that even if believed it does not disclose any offence.
25. I have perused the complainant and the evidence of complainant recorded under section 200, Cr.P.C. And evidence of only witness Mubashir Kazmi who is Manager of the Sukkur Beverages Limited recorded under section 202, Cr.P.C. The facts alleged therein show that the petitioners persuaded the respondent No.2 to place an order with them for the supply of the machinery and auxiliary parts and also obtained payment of Rs.12 lacs towards sale price of said machinery. There is no allegation that at the time of alleged inducement the petitioners had dishonest intention not to supply the goods ordered. Rather the evidence on record shows that in performance of contract the petitioners had fabricated machinery. However, dishonest intention is attributed to the petitioners after the construction of machinery. It is alleged that after the machinery was constructed /fabricated, the petitioners dishonestly sold it away to some other party on higher price and also misappropriated the amount of Rs.12 lacs received by them.
26. The main ingredients of criminal misappropriation is that there should be entrustment of property viz. Physical transfer of the property. The machinery in question was not handed over to the respondent No. 2 and as such there was no question of its transfer to the petitioners. However, the amount of Rs.12 lacs was transferred by respondent No.2 to the petitioners and the question is whether this transfer was by way of trust or not. Admittedly this amount was paid towards sale price. In the Pakistan Penal Code (Vol. III) by Shaukat Mahmood 1982 edition at page 1674 the learned author writes: Where B instructed A, a jeweller to make a gold chain and handed him Rs.300 towards the cost of gold and the cost of making it. A did not deliver the chain on the stipulated day nor did he return the money. A was prosecuted for an offence under section 406, P.P.C., it was held that though A was guilty of dishonest and dishonourable conduct in not making the chain, he could not be said to have misappropriated the money because when it was paid to him it became his. His obligation thereafter was to produce the gold chain. This he failed to do and B could recover the money from A as money paid on a consideration which had wholly failed. That however would not make it a criminal act, as there was no entrustment in the case, there could be no question of an offence under section 406.
27. This view is based on a case reported in AIR 1951 Cal. 206.
28. It may be pertinent to refer to the facts of case reported in PLD 1971 Kar. 937 the observations from which have already been reproduced above. In that case the complainant had alleged that he had paid Rs.3,000 to the accused for the supply of fish and the accused neither supplied the fish to them nor returned the amount paid by him. It was held that even if it was assumed that said facts were true and that the accused has not acted fairly and reasonably to return the complainant's money and not supplied the contracted fish yet there was even no suggestion that the accused acted with fraudulent intention to deceive the complainant and consequently the proceedings were quashed.