Unintended breach of trust will not be counted as criminal offence

HYDERABAD: IF a person faces the problem of dishonour of cheque he received from another, then he should move an appropriate court under relevant sections of the Negotiable Instruments Act for remedy. If he files a complaint for the offences under Sections 406 (punishment for criminal breach of trust) and 420 (cheating) of IPC, instead of resorting to remedy under Section 138 of NI Act, it is nothing but abuse of the process of law.

Every breach of trust may not result in a penal offence of criminal breach of trust, as an act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a civil court. A breach of trust with mens rea (guilty mind) is an important aspect to attract the provisions under Sections 406 and 420 IPC. The ingredients in order to constitute a criminal breach of trust are: i) entrusting a person with property or with any dominion over property ii) that person entrusted - dishonestly misappropriating or converting that property to his own use, or dishonestly using or disposing of that property and so on.

In a case before the High Court, the petitioner-accused sought to quash the proceedings initiated against him in a case registered for the offences punishable under Sections 406 and 420 IPC.The brief facts of the case are that the complainant ran a chit fund business and petitioner-accused was a subscriber of chit. In the fourth month he became the successful bidder of the said chit and received the bid amount. But, he failed to pay the last four monthly subscriptions, and issued a bank cheque for such an amount which was returned by the bank for “insufficient funds”. The complainant then, without pursuing the proper course of action, filed the said complaint. The complaint was referred for police investigation and the same was registered for offences punishable under Sections 420 and 406 IPC. Aggrieved, the accused moved the high court for relief.

The petitioner-accused’s counsel told court that his client engaged in the business of tents and crockery supplies. He could not pay the last four installments as his business premises was acquired by the government during road widening. In fact, the petitioner had no intention to defraud the complainant. The cheque issued by him was dishonoured as he could not keep sufficient balance due to acquisition of his shop. The complainant, instead of proceeding under Section 138 of Negotiable Instruments Act, filed the present complaint. Therefore, the petitioner is entitled for quashing of the proceedings against him, he argued.

The state public prosecutor submitted that the ingredients of Sections 420 and 406 are absent in the present case as the transaction pertains to a chit fund business and the petitioner happened to be subscriber of a chit.

After hearing the case, Justice G Shyam Prasad said it was obvious that every breach of trust may not result in a penal offence of criminal breach of trust, as the act of breach of trust involves a civil wrong in respect of which a civil action can be initiated. For dishonour of cheque, the respondent-complainant has got the remedy of approaching the appropriate court under Section 138 of the NI Act. But he has filed the present complaint against the petitioner-accused, which is nothing but an abuse of the process of law.