Crime and Punishment - I

Moot Proposition 1

On 01/04/2016, TashiRane, Manager of XYZ Bank, Ranchi, lodged one First Information
Report with the Ranchi Police Station alleging therein that on being requested by one DenzilTopno,
the proprietor of M/s. ABC Medicine Distributors, Ranchi, the bank had sanctioned a cash credit
loan of Rs.5 lacs for smooth running of the business of the said DenzilTopno. Under the loan-cum-
hypothecation agreement dated 01/04/2010, the stocks of medicine of M/s. ABC Medicine
Distributors, Ranchi, were hypothecated with the bank against the cash credit facilities. Under the
said agreement, DenzilTopno undertook not to assign, sell, pledge, charge, underlet or otherwise
encumber or part with the possession, custody or beneficial interest in respect of the hypothecated
property without the previous consent in writing of the bank. It was further agreed by and between
the parties thereto that in case of any default in payment of installment within the time stipulated
therein, or breach of any undertaking by M/s ABC Medicine Distributors, Ranchi, the bank shall
have the right to take possession of the hypothecated property and sell the same and appropriate the
sale proceeds towards the outstanding dues. Although the said DenzilTopno, in course of time
repaid a part of the loan amount to the bank, nevertheless, it was found that he, without clearing the
outstanding amount, being to the tune of Rs. 3 lacs, sold out the entire stock of medicine which was
hypothecated with the bank, without prior permission, in utter disregard of the terms and conditions
of the agreement. Neither did he remit the sale proceeds to the bank towards the outstanding dues.

On the basis of the said First Information Report, the case was investigated into and the
police submitted a charge sheet before the court of the Chief Judicial Magistrate, Ranchi. Taking
cognizance of the offence, the Ld. Magistrate by order dated 01/08/16 ordered framing of charge
against the accused DenzilTopno under Sections 406 /420 of the Indian Penal Code.

Aggrieved by the said order dated 01/08/2016, the accused DenzilTopno has approached
the High Court of Jharkhand, Ranchi, invoking Section 482 of the Code of Criminal Procedure for
quashing the entire criminal proceedings instituted against him on the ground that no ingredient
constituting the alleged offences under Sections 406/420 of the Indian Penal Code have been made
out.