LEX/BDHC/0127/1985

BLD
IN THE SUPREME COURT OF BANGLADESH
(HIGH COURT DIVISION)
Cr. Rev. 17 of 1984
Decided On: 25.07.1985
SAMARENDRA NATH HALDER Vs. THE STATE
Hon'ble Judges/Coram:
Anwarul Hoque Chowdhury & Mohammad Ismailuddin Sarker, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: M.A. Aziz, Advocate
Subject: Criminal
Mentioned IN
Acts/Rules/Orders:
Code of Criminal Procedure, 1898 (CrPC) - Section 561A; Penal Code, 1860 - Section 405, Penal Code, 1860 - Section 406
Case Note:
a) Criminal of of contract can amount to criminal breach of trust--When a contract creates a trust in respect of the property which
is alleged to have been misappropriated it will amount to an offence of criminal breach of trust--In case of purchase of goods a
person entrusted to discharge the obligation by purchasing and delivering the goods will be trustee for the unspent money in his
hand and if there is any misappropriation of that amount it will be an offence of criminal breach of trust--Bangladesh Penal Code
(XLV of 1860 S 405.

b) Whether a legal representative of the trustee can be held criminally liable for the breach of trust--Whether a criminal
proceeding against such a person is liable to be quashed--A trust is an obligation attached to the ownership of the property and it
can be traced in the hands of the legal representative--A mere retention of the unspent money will not amount to criminal
misappropriation but if retention is followed by an intention to wrongfully deprive the owner of its use and secure it for his own
benefit it will amount to criminal breach of trust--There exists a prima facie case and there is nothing to quash the proceeding--
Code of Criminal Procedure (V of 1898) S. 561 A
JUDGMENT
Anwarul Hoque Chowdhury, J.
1. This Rule arises out of an application under Section 561A of the Code of Criminal Procedure. Facts leading to this, in short, are that the
Sub-Divisional Officer, Khulna (Sadar) lodged a petition of complaint with the Sub-Divisional Magistrate, Khulna on 18.8.83 against the
petitioner Samarendra Nath Halder son of late Surendra Nath Halder alleging that Surendra Nath, father of the petitioner who was Chairman
of the Union Parishad received an amount of Taka 62,500/- for procurement of paddy. A quantity of 263 maunds, valued at Tk. 32,875/-
was procured and duly deposited but the balance amount of Tk. 29,625/- was not adjusted by depositing and in the meantime the father died
leaving his son Samarendra Nath Halder. It is further alleged that several attempts were made by the Government to realise the money form
Samarandra Nath but Samarandra Nath Halder did not honour the obligation in violation of thetrust which devolved upon him. On this the
Sub-Divisional Magistrate took cognizance in the matter and started a criminal case on 12.9.83 under Section 406 of the Penal Code and
issued a warrant of arrest against the petitioner.
2. The petitioner surrendered before the Sub-Divisional Magistrate and he was allowed to be enlarged on ad-interim bail on condition to pay
off the dues and this Order was passed on 9.11.83. On 20.3.84 after 4 months of that Order the petitioner without paying the dues moved a
petition before this Court and obtained a Rule to show cause as to why the proceeding that is pending before the Sub-Divisional Magistrate
against the petitioner should not be quashed.
3. Mr. M.A. Aziz, the learned counsel appearing for the petitioner submits that the initiation and continuance of the proceeding is improper,

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incompetent and without jurisdiction and that the ingredients, of Section 406 of the Penal Code are totally lacking against the petitioner and
that for the fault of his father he cannot be held responsible vicariously which liability is unknown to criminal Law and therefore the proceeding
need be quashed.
4. No one appears for the opposite party. We however, examined the matter and considered the submission made by the learned Counsel.
5. Under Section 561A of the Code of Criminal Procedure in exercise of the inherent jurisdiction, a proceeding can be quashed if the
proceeding amounts to an abuse of the process of the court and for ends of justice. An abuse of the process of the court would arise when the
charges as framed do not reveal an offence on the facts stated or they do not constitute any offence under the Law from the evidence
primafacie on record, continuation of which would be an abuse of the process of the court. abuse of court- charges/stated facts/
evidence dont indicate offence
6. In the instant case the government entrusted the money with the late father of the petitioner for the specific purpose of procuring rice for the
Government. The father of the petitioner acted half way through, keeping the rest of the entrusted amount with him and thereafter died leaving
the money in his hand as part of his property to be inherited by his son.
7. It appear from records that in the instant case the petitioner when granted bail under took to pay back the balance within 9.11.83. This may
amount to an acceptance of the trust obligation and inheritance of the property and money subject to the trust obligation.
son undertook to pay so accepted the trust obligation and
the inheritance
8. It was contended that in the instant case money was paid in advance to purchase paddy and hence non-payment of the money or non-
delivery of the paddy would amount to a breach of a contract which is a civil liability and for that no criminal proceeding shall lie.
9. True, a mere breach of a contract is not synonymous with criminal breach of trust but when a contract creates a trust in respect of the
property which is alleged to have been misappropriated, Section 405 of the Penal Code shall be attracted.
10. A trust can be created by a written document. It can also be created by the operation of Law as a resultingtrust or may be spelt out
when it is so implied. Thus, if in a particular situation one would stand in relation to the other in a fiduciary relationship or in a position of
confidence, a trust relationship would be spelt out.
11. In case of purchase of goods a person entrusted to purchase shall discharge the obligation by purchasing and delivering the goods, entruste
to purchase but he will yet be a trustee for the unspent money that would remain in his hands, as a resulting trust and he would be under a
trust obligation to deliver the unspent money to the owner and if there is any misappropriation of the same, Section 405 of the Code shall be
attracted.
12. Under the Law of trust a property can be traced even into the hands of a legal representative or a legatee. A person cannot transfer more
interest than he has in the property, so also a person cannot inherit minus the obligations and the encumbrance that are attached to the
ownership of the property inherited.
13. A trust is an obligation attached to the ownership of the property and it will be followed and traced till it reaches a person who can be
called a bonafide purchaser for value in good faith without knowledge of the trust.
14. In the instant case therefore, the money can be traced into the hands of the petitioner. It is, thus, not an inheritance of any criminal liability,
as alleged.
15. Next it is contended that a mere retention of the unspent money may amount to a breach of a trust but no criminal breach of trust and
for that a civil suit will lie but not a criminal proceeding.
16. A mere retention will not amount to a criminal misappropriation but if that retention is followed by an intention to wrongfully deprive the
owner of its use and secure it for his own benefit even for a temporary period, the said would attract Section 405 of the Code.
17. It all depends on the intention. This mental Act or intention to deprive the legal owner of its use, even temporarily is the gist of this offence.
This criminal intention, which however always need to be proved by evidence, is the prime factor which distinguishes it from embezzlement.
18. In fact in every criminal misappropriation there exists initially an element of this civil wrong and a breach of a contract but when it crosses
the limit of a civil wrong it become criminal in nature.
19. Some decisions of this court had been referred to by the learned counsel to show that when money is paid in advance to a shop keeper to
import some goods for the buyer, the failure on the part of the shop keeper to import or to deliver the goods would amount to a breach of a
contract and no criminal proceeding would lie.
20. There is no dispute with that. But in cases like this a distinction need be made to find out whether the money was in fact paid in advance as
part payment or as loan, thereby transferring to the other side the full legal ownership of the money subject to the condition to deliver the

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goods on full payment or repay the loan as contracted for or whether the money was given to another person to do with it or to buy with it
some specified goods or Article or to hand over the money to a third person as an agent without transferring to the agent or to the servant or
the contractor the legal ownership of the money but handing of the money only on confidence to do with it the specified job for which the said
money was entrusted.
21. In the former there is no trust but a mere contract but in the latter there is a trust. Both would arise out of a contract and failure on both
will be the cause of a breach of a contract but failure in the former would cause a civil wrong and in the latter a criminal offence if it crosses the
limit of mere retention followed by an intention to cause wrongful gain and wrongful loss. No other points urged. All the points having been
answered in the negative, we find no substance in this Rule. We find there exists a prima facie case which if proved will call for a punishment
and there is nothing to quash the proceedings at this stage. Let the proceeding continue and be completed in accordance with Law,
expeditioly.
In the result, this Rule is discharged.
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