The Bombay High Court, sitting at its Aurangabad bench, has quashed criminal proceedings initiated against the President and members of a trust, holding that a Magistrate cannot issue process for the offences of criminal breach of trust (Section 406, IPC) and cheating (Section 420, IPC) simultaneously as they are “mutually exclusive.” In a judgment pronounced on September 15, 2025, Justice Kishore C. Sant set aside the orders of the JMFC, Kannad, and the Additional Sessions Judge, Aurangabad, citing a failure to specify the criminal liability of each accused and a misapplication of legal principles.
Background of the Case
The petitioners, who are the President and members of the Shri Chatrapati Shivaji Shikshan Prasarak Mandal, challenged an order by the Additional Sessions Judge, Aurangabad, which had upheld a Magistrate’s decision to issue process against them. The proceedings were initiated based on a private complaint filed by a member of the same trust.
The complainant alleged that the trust, which owns land at survey No. 40/2, had illegally sold plots. While an initial layout of 84 plots was sanctioned and sold, and another 22 plots were subsequently sold, the complaint focused on 28 further plots (bearing Nos. 107 to 134) that were allegedly demarcated in an open space and sold to persons close to the trustees. It was claimed that these sales were conducted without obtaining the mandatory prior sanction from the Charity Commissioner under Section 36 of the Maharashtra Public Trust Act. The complainant contended that these actions constituted criminal breach of trust, cheating, and forgery.
The learned Judicial Magistrate First Class (JMFC), Kannad, after recording a verification and calling for a police report under Section 202 of the Cr.P.C., issued process against the petitioners for offences under Sections 406, 420, and 468 read with 120-B of the Indian Penal Code. A revision application filed by the trustees was dismissed by the Additional Sessions Judge, leading to the present writ petition before the High Court.
Arguments of the Parties
Appearing for the petitioners, Senior Counsel Mr. A. P. Mundargi argued that no ingredients of the alleged offences were present. He submitted that the allegations in the complaint were not specific and failed to attribute any particular role to any of the individual petitioners. A key legal argument advanced was that “there is no principle of vicarious liability applicable in the criminal law unless statutes provide specifically.” Furthermore, he contended that Sections 406 and 420 of the IPC cannot go together.
Representing the complainant (respondent No. 2), Advocate Mr. Rahul Joshi submitted that the complaint clearly made out a case for investigation. He argued that plots were sold illegally in violation of Section 36 of the Maharashtra Public Trust Act. It was pointed out that some purchasers were relatives of the trustees, which indicated malafide intent, and that the transactions resulted in an unlawful loss to the trust. He also alleged that the sale consideration was not reflected in the trust’s audit reports.
Court’s Analysis and Findings
Justice Kishore C. Sant, after hearing the parties, found substance in the arguments of the learned senior counsel for the petitioners. The Court observed that the complaint failed to establish a case of vicarious liability, stating, “Allegations are that when these petitioners were trustees of the trust, plots are sold. No specific role is attributed to any of the petitioners. There is nothing to indicate that as to how each of the petitioner is liable for criminal action.”
The Court relied on the Supreme Court’s judgment in Shyam Sunder Ors. Vs State of Haryana, which held that “There is no vicarious liability in criminal law unless the statute takes that also within its fold.”
Most significantly, the High Court addressed the issuance of process for both cheating and criminal breach of trust. The judgment noted, “Considering the submissions of the learned senior counsel that sections 406 and 420 cannot go together and these are mutually exclusive. This court finds that the learned Magistrate has committed an error in issuing summons under both these sections.”
The Court also found the police report submitted under Section 202 Cr.P.C. to be deficient, observing that it “is not specific and does not specifically speak as to which of the accused is criminally liable.” The revisional court, the High Court found, had also failed to appreciate these crucial legal aspects.
Decision of the Court
Concluding that the order issuing process was unsustainable in law, the High Court allowed the criminal writ petition. The Court set aside the order dated 24-01-2018 passed by the JMFC, Kannad, and the subsequent confirming order dated 23-11-2023 passed by the Additional Sessions Judge, Aurangabad. Consequently, the criminal proceedings against the petitioners were quashed.
