Velji Raghavji Patel v. State of Maharashtra

1965 SCR (2) 429 · AIR 1965 SC 1433

Court: Supreme Court of India (Criminal Appellate Jurisdiction)
Case: Criminal Appeal No. 43 of 1963
Decided: 11 December 1964
Bench: J.R. Mudholkar, Raghubar Dayal (judgment by J.R. Mudholkar, J.)
Citation: 1965 SCR (2) 429
Equivalent citations: AIR 1965 SC 1433 (as printed in the judgment)
Provisions: Indian Penal Code, 1860, s. 405 and s. 409 (now Bharatiya Nyaya Sanhita, 2023, s. 316(1) and s. 316(5))
Indian Penal Code, 1860, s. 403 (dishonest misappropriation of property) (now Bharatiya Nyaya Sanhita, 2023, s. 314)

Headnote

Criminal breach of trust · IPC s. 405 (BNS s. 316(1)) · IPC s. 409 (BNS s. 316(5)) · IPC s. 403 (BNS s. 314) · Partner and partnership property · Entrustment of dominion by special agreement

The case, in the Court's words

In this appeal from the judgment of the Bombay High Court the question which falls to be considered is whether a partner can be convicted under s. 409, Indian Penal Code on the ground that his failure to account for monies belonging to the firm in which he was a partner amounts to criminal breach of trust. [SCR p. 430]

Held

Upon the plain reading of s. 405, I.P.C. it is obvious that before a person can be said to have committed criminal breach of trust it must be established that he was either entrusted with or entrusted with dominion over [...] which he is said to have converted to his own use or disposed of in violation of any direction of law etc. [SCR p. 433]
Every partner has dominion over property by reason of the fact that he is a partner. This is a kind of dominion which every owner of property has over his property. But it is not dominion of this kind which satisfies the requirements of s. 405. In order to establish "entrustment of dominion" over property to an accused person the mere existence of that person's dominion over property is not enough. It must be further shown that his dominion was the result of entrustment. [SCR p. 433]
Therefore, as rightly pointed out by Harris C.J., the prosecution must establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties, entrusted to the accused person. If in the absence of such a special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or in other words [...] to have been "entrusted" with dominion over partnership properties. [SCR p. 433]
It is obvious that an owner of property, in whichever way he uses his property and with whatever intention will not be liable for [...] and that would be so even if he is not the exclusive owner thereof. As already stated, a partner has, undefined ownership along with the other partners over all the assets of the [SCR p. 434]
If he chooses to use any of them for his own purposes he may be accountable civilly to the other partners. But he does not thereby commit any misappropriation. [SCR p. 435]

Result

in the result we allow the appeal and set aside the conviction and sentence passed against him. [SCR p. 435]

Editorial note: subsequent treatment

Editorial note: the passage on entrustment of dominion was quoted and approved in Pratibha Rani v. Suraj Kumar (1985) and is discussed in Rashmi Kumar v. Mahesh Kumar Bhada (1996).

The headnote consists of extracts from the Court's judgment, selected by The Daily Bench for convenience. The selection is not part of the judgment, is not a law report and should not be cited. It may contain errors; rely on the official judgment. Library reference TDB-LL BNS-316/02 is our own cataloguing label and is not a citation.