Safiya Malik

The High Court of Madhya Pradesh Single Bench of Justice Rajesh Kumar Gupta, on Friday (January 16), dismissed petitions seeking to set aside the charges and allowed the prosecution to proceed. The allegations relate to public-distribution wheat entrusted for delivery to designated outlets that was allegedly diverted from the authorised route, unloaded mid-way, and stored in private premises. The Court said that diversion of goods away from the assigned delivery point itself constitutes misappropriation for criminal breach of trust under Section 407 IPC, and proof of actual sale or disposal of the goods is not mandatory to make out the offence.

The petitions arose from a common First Information Report registered following a surprise inspection conducted by officials of the District Supply Office, Vidisha, at a private agro mill premises. During the inspection, large quantities of wheat packed in gunny bags without Food Corporation of India markings were found stored. Upon verification, the wheat was identified as foodgrains meant for distribution under the Public Distribution System for beneficiaries holding Below Poverty Line cards.

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The inquiry revealed that wheat issued by the State Civil Supplies Corporation for transportation to fair price shops was not delivered at the designated destinations. Instead, it was allegedly unloaded mid-way and stored in private godowns. Based on the inquiry report, an FIR was registered initially under the Essential Commodities Act, and during investigation, offences under Sections 406 and 407 of the Indian Penal Code were added.

The petitioners raised varying contentions, including claims of being lessors of godowns, transporters acting under contractual obligations, owners who had rented out premises, and truck drivers acting under instructions. It was also contended that no specific Control Order was cited and that the dispute was contractual in nature with recoveries already effected. The State opposed the petitions, relying on the inquiry report, seizure material, and charge-sheet forming part of the record.

The Court recorded that the inquiry report forming part of the charge-sheet expressly noted violation of the Public Distribution System (Control) Order, observing that “the inquiry report… specifically records violation of Clause 6(4) of the Public Distribution System (Control) Order, relating to unauthorized storage and diversion of PDS food grains.”

At the stage of framing of charge, the Court stated that “the Court is required to see whether the basic ingredients of the offence are prima facie disclosed, and not whether the prosecution has meticulously pleaded every statutory provision.”

With respect to the defence that certain petitioners were merely godown lessors or owners, the Court observed that “such defence raises a pure question of fact, requiring evidence as to possession, knowledge, and participation,” and further recorded that “such defence cannot be adjudicated in proceedings under Section 482 CrPC.”

Addressing the argument that recovery of cost or penalty extinguished criminal liability, the Court observed that “civil liability and criminal liability may coexist, and the mere fact that monetary recovery has been made does not obliterate criminality if the essential ingredients of the offence are otherwise disclosed.”

On contradictions in statements relied upon by some petitioners, the Court stated that “contradictions and inconsistencies in statements are matters of appreciation of evidence, and not grounds for quashing proceedings at the stage of charge.”

Regarding offences under Section 407 IPC, the Court recorded that "Once entrustment is established, any deviation from the agreed purpose may amount to criminal breach of trust. Criminal breach of trust is made out when entrusted property is dealt with in violation of legal direction or contract, even if temporary or without permanent loss. Dishonesty can be inferred from circumstances. Diversion of goods mid-way from the designated delivery point constitutes misappropriation by a carrier. Actual sale or disposal is not mandatory to establish the offence".

The Court also recorded that “failure to quote the precise Control Order or its clause in the FIR or charge does not vitiate prosecution, so long as the nature of violation is disclosed,” and that “procedural lapses or technical defects cannot defeat the object of the Essential Commodities Act at the threshold.”

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The Court recorded that “the allegations relating to entrustment, diversion, unauthorized storage and breach of trust by carriers clearly disclose prima facie offences under Sections 3/7 of the Essential Commodities Act and Sections 406/407 IPC.”

It was directed that “the defences raised by the petitioners involve disputed questions of fact, requiring appreciation of evidence, and therefore cannot be examined in proceedings under Section 482 CrPC. The Trial Court is empowered under Sections 216 and 217 Cr.P.C. to alter or modify charges at any stage, if evidence so warrants,” and observed that “no prejudice is caused to the petitioners at this juncture.”

“All the five petitions are dismissed,” while clarifying that “the observations made herein are prima facie in nature and shall not prejudice the Trial Court during trial.”

Advocates Representing the Parties

For the Petitioners: Shri Sameer Kumar Shrivastava, Advocate; Shri Abhijeet Singh Tomar, Advocate; Shri Romesh Pratap Singh, Advocate; Shri Pawan Singh Raghuvanshi, Advocate

For the Respondents: Shri Dinesh Savita, Public Prosecutor

Case Title: Naresh Sawnla v. State of Madhya Pradesh & Connected Matters
Case Numbers: M.Cr.C. Nos. 9185/2015, 12241/2014, 9918/2015, 9919/2015, 554/2016
Bench: Justice Rajesh Kumar Gupta