1 The present application is filed under Section 482 of the Code of Criminal Procedure, 1973, seeking quashment of the FIR being I-C.R. No.43 of 2013 registered with Surendranagar City Police Station, District Surendranagar, for the offences punishable under Sections 406, 409, 477A and 114 of the Indian Penal Code.

2 The facts of the case, in a nutshell, are as follows:

          2.1 The complainant, namely Mitalbhai Bharatbhai Kothari, lodged a complaint inter alia alleging that the accused persons, who were at the relevant point of time serving as trustees and office bearers of Satavdhani Gurudev Shri Poonamchandji Maharaj Smarak Trust, Surendranagar, in furtherance of their common intention and pursuant to a pre-conceived plan, committed offences of criminal breach of trust, misappropriation of trust funds, and other allied offences. It is the case of the complainant that an amount of Rs. 6,29,595/-, which had originally been received by the said trust by way of donation from Mahavirnagar Sthanakvasi Jain Sangh, Mumbai, was required to be retained and utilized strictly for the objects of the trust. However, the accused persons, with a dishonest intention to misappropriate the said amount, deliberately and falsely reflected the same in the books of accounts as a loan transaction. It is alleged that such false accounting entries were made with a view to create a facade of legitimacy and to facilitate diversion of the trust funds.

          2.2 The complainant has further alleged that, in order to give effect to such design, the accused persons convened meetings and passed resolutions which were illegal, unauthorized, and contrary to the objects of the trust. In pursuance thereof, the accused persons transferred the aforesaid amount on 08.07.2011 through a cheque drawn on the bank account of the trust in favour of another entity, namely Mahavir Seva Trust, Mumbai. It is alleged that some of the accused persons were directly or indirectly connected with the said trust, and therefore, the transfer was effected with an oblique motive to siphon off the funds. It is further alleged that, with a view to conceal the true nature of the transaction, the accused persons manipulated and falsified the records of the trust by altering the name of the beneficiary entity and by making incorrect and misleading entries in the books of accounts. According to the complainant, such acts were done in breach of the fiduciary duties cast upon the accused persons as trustees, who were entrusted with dominion over the trust property and were expected to act in good faith and in the best interest of the trust.

          2.3 The complainant has further averred that the said irregularities and acts of misappropriation came to light subsequently, whereupon, apprehending legal consequences and in order to cover up their illegal acts, the accused persons caused the said amount to be re-deposited in the account of the original trust on 11.08.2012. However, it is specifically alleged that such subsequent restitution would not absolve the accused persons of their criminal liability, inasmuch as the act of dishonest misappropriation and unauthorized utilization of the trust funds for the intervening period constitutes an offence in itself.

          2.4 It is, thus, the case of the complainant that the accused persons, acting in collusion with each other, abused their position as trustees, passed illegal resolutions, falsified accounts, and dishonestly diverted the trust funds, thereby committing offences punishable under the relevant provisions of law, which is subject matter of challenge before this Court by all the accused except accused No.6 who are applicant before this Court.

3. Heard learned advocate Mr. Dagli for the applicant, learned advocate Mr. Adesara for the respondent and learned APP Ms. Vrunda Shah for the respondent- State.

4. Learned advocate Mr. Dagli for the applicants submits that the entire prosecution has been initiated with an oblique motive, merely to harass and pressurize the applicants, particularly in view of the fact that the proceedings before the learned Charity Commissioner have culminated in favour of the present applicants. It is submitted by the learned advocate Mr. Dagli that the complainant, who claims to be a trustee for the last eight months, has alleged temporary misappropriation, which is wholly misconceived and contrary to the record. It is submitted that the complainant was well aware that the amount in question had in fact been duly deposited, but the same has been wrongly projected as misappropriation. It is further submitted that the reverse entry was made with the consent of all the trustees and that a circular/resolution to that effect was unanimously passed. The audit reports of the Trust, forming part of the present proceedings, reflect the said amount as donation in the books of account for the financial years ending 31.03.2008, 31.03.2009, 31.03.2010, and even in the audit report dated 31.03.2012.

          4.1 Learned advocate Mr. Dagli further submits that a dispute is pending before the Assistant Charity Commissioner, Surendranagar, wherein respondent No.2 - the present complainant had initiated proceedings by way of Change Reports Nos.132 of 2009 and 133 of 2009, which came to be allowed by the learned Assistant Charity Commissioner. Being aggrieved thereby, an appeal being Appeal No.49 of 2012 was preferred before the learned Joint Charity Commissioner. It is submitted by the learned advocate Mr. Dagli that the amount transferred to the account of Mahavir Seva Trust was subsequently returned along with interest of Rs.7,461/-. All transactions were carried out through banking channels and duly reflected in the accounts. Despite having full knowledge of the same and despite the resolutions being passed unanimously, the complainant has lodged the present FIR with mala fide intent.

          4.2 It is submitted by the learned advocate Mr. Dagli that the complainant has suppressed material facts, namely that, for the very same grievance, he had earlier approached Charkop Police Station, Mumbai, whereupon an inquiry was conducted. In response thereto, one Sureshbhai Navrottambhai Doshi had submitted an explanation stating that the amount in question was originally taken as an interest-free loan in the year 1998 from Mahavirnagar Sthanakvasi Jain Sangh, which had collected funds with the assistance of trustees of Mahavir Seva Trust. Since the said Sangh became inactive, the loan amount was treated as a donation and transferred to Mahavir Seva Trust for educational purposes. It is submitted by the learned advocate Mr. Dagli that, subsequently, with a view to clear the said amount, a cheque was issued by Mahavir Seva Trust on 08.07.2011 and the amount was repaid on 12.01.2012. All such transactions were effected through cheques and the decision for repayment was taken unanimously in the meeting of the Trust Board dated 05.05.2010. The said amount was consistently reflected in the audit accounts for the years 2009, 2010, 2011 and 2012, and detailed communication in this regard was also addressed to the Police Inspector, Charkop Police Station.

          4.3 Learned advocate Mr. Dagli submits that, having failed to secure any action before the Mumbai Police, the complainant has initiated the present proceedings with a view to malign the reputation of the trustees and to harass them. It is contended that the present case does not disclose any offence of misappropriation or under Section 477A of the Indian Penal Code. The amount in question was neither utilized for personal gain nor withdrawn in cash, on the contrary, it was duly reflected in the books of accounts and transferred between trusts for bona fide purposes, ultimately being repaid.

          4.4 It is submitted by the learned advocate Mr. Dagli that, on account of the impugned FIR, the applicants have suffered irreparable harm and damage to their reputation. In the aforesaid circumstances, it is prayed that the present application be allowed. It is lastly submitted that the case of the applicants squarely falls within the parameters laid down by the Apex Court in State of Haryana vs. Bhajan Lal reported in 1992 Supp (1) SCC 335, and therefore, the impugned FIR deserves to be quashed and set aside.

5. Per contra, learned advocate Mr. J.A. Adesara appearing for the respondent has submitted that the complainant's name came to be entered in the Public Trust Register (PTR) as a trustee of Satavdhani Gurudev Shree Poonamchandraji Maharaj Smarak Trust on 27.08.2012, pursuant to the order dated 14.07.2012 passed by the learned Assistant Charity Commissioner, Surendranagar in Change Report No.132 of 2009. It is submitted that accused Nos.1 to 4 were trustees of the said Trust and were managing its affairs. Pursuant to the aforesaid order, the applicants came to be removed from the PTR. The said order has been challenged before the learned Joint Charity Commissioner, Rajkot, and the same is pending, however, it is contended that the said proceedings have no bearing on the present FIR. It is further submitted by the learned advocate Mr. Adesara that, on 21.01.1994, Mahavirnagar Sthanakvasi Jain Sangh, Mumbai, a registered public trust, had entered into an agreement with the aforesaid Trust at Surendranagar for granting a donation for a specific purpose. Accordingly, an amount of Rs.6,29,595/- was donated by the said Sangh to the Trust at Surendranagar. However, the applicants, being trustees, with an intention to misappropriate the said amount, allegedly reflected the donation as a loan in the books of accounts. It is submitted by the learned advocate Mr. Adesara that Mahavirnagar Sthanakvasi Jain Sangh never demanded return of the said amount, and that the said Trust is entirely distinct from Mahavir Seva Trust, which is a separate registered entity.

          5.1 It is further submitted by the learned advocate Mr. Adesara that applicant Nos.1 and 5, along with one Kalyanjibhai Ujamji Shah, were trustees of Mahavir Seva Trust, Mumbai, and in collusion with each other, they transferred the amount of Rs.6,29,595/- to the said Trust. It is submitted that Mahavir Seva Trust had never extended any loan or donation to the Trust at Surendranagar. Despite this, a resolution dated 05.05.2010 was passed, purportedly to regularize the accounts of the preceding five years and to return the amount of Rs.6,29,595/- to Mahavir Seva Trust, Mumbai. It is further submitted by the laerned advocate Mr. Adesar that, on 22.06.2011, an amount of Rs.3,70,000/- was transferred to another trust, namely Bharat Ratna Gurudev Shree Ratnachandraji Maharaj Smarak Trust, Surendranagar, and thereafter, on 08.07.2011, the amount of Rs.6,29,595/- was transferred from the account of the Trust at Surendranagar to Mahavir Seva Trust, Mumbai.It is contended that the aforesaid transfers were made in collusion with a view to misappropriate the funds.

          5.2 It is further submitted by the learned advocate Mr. Adesara that, on apprehending possible legal action, the said amount was subsequently returned from Mahavir Seva Trust, Mumbai to the Trust at Surendranagar on 11.01.2012. According to the respondent, this clearly establishes that, during the period from 08.07.2011 to 11.01.2012, the applicants had committed offences of criminal breach of trust and falsification of accounts punishable under Sections 406, 409, 477A and 114 of the Indian Penal Code. It is further submitted that, though an amount of Rs.7,461/- is shown as interest, the resolution dated 05.05.2010 does not contain any reference to such interest.

          5.3 It is lastly submitted by the learned advocate Mr. Adesara that the investigation is still in progress and, therefore, any interference at this stage would be premature. In the aforesaid circumstances, it is prayed that the present application be dismissed.

6. Learned APP Ms. Vrunda Shah has also supported the aforesaid submissions and has requested that the present application may be dismissed.

7. Having considered the above arguments referring the allegations made in the FIR, this Court has referred to the decision of the Apex Court in State of Haryana v. Bhajan Lal, reported in 1992 Supp (1) SCC 335, wherein the Apex Court has laid down the guidelines governing the exercise of inherent powers under Section 482 of the Code of Criminal Procedure which are reproduced hereinbelow:

          "102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we have given the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

          (i) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

          (ii) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

          (iii) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

          (iv) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

          (v) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

          (vi) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

          (vii) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

8. In order to determine whether the case of the applicants falls within any of the recognized parameters warranting interference, this Court has examined the allegations made in the FIR as well as certain undisputed facts, which are narrated hereinbelow:

          8.1 As per the FIR, the period of the alleged offence is stated to be from 08.07.2011 to 11.01.2012, whereas the FIR came to be lodged on 12.03.2013. It further transpires from the record that an application was submitted before Surendranagar City Police Station on 16.01.2013. Even if the said date is taken into consideration, there is an unexplained delay of approximately four months in lodging the FIR. Though this Court is conscious of the fact that delay, by itself, may not be a sole ground for quashing the FIR, it can certainly be taken into account along with other surrounding circumstances. The complainant claims to have been appointed as a trustee of Satavdhani Gurudev Shree Poonamchandraji Maharaj Smarak Trust, Surendranagar on 27.08.2012 pursuant to a Change Report accepted by the learned Assistant Charity Commissioner, Surendranagar. However, the said order was challenged before the learned Joint Charity Commissioner, who set aside the order of the Assistant Charity Commissioner and restored the names of the earlier trustees.

          8.2 It is alleged that misappropriation of funds was committed by the trustees during the period from 08.07.2011 to 11.01.2012. It further emerges that the learned Joint Charity Commissioner allowed the appeals and remanded the matter to the competent authority, where the proceedings are still pending. Subsequent Change Reports bearing Nos.126 of 2009 and 127 of 2009 were also subject matter of appeals being Nos.4 and 5 of 2010 before the learned Joint Charity Commissioner, Rajkot, which were allowed and remanded, and are still under consideration.

          8.3 The orders passed by the learned Joint Charity Commissioner were challenged by the complainant before the learned District Court however, both the appeals came to be dismissed with costs on 11.03.2011, i.e., prior to the lodging of the present FIR. It further emerges that the complainant had earlier approached Charkop Police Station, Mumbai with similar allegations against the present applicants, which were inquired into and thereafter filed. This material fact has not been disclosed by the complainant either in the FIR or in the reply filed before this Court. The allegation of so-called temporary misappropriation of funds, which were transferred to the account of Mahavir Seva Trust, is undisputedly in respect of transactions effected through banking channels. As per the report of M/s. D.V. Shah & Company, Chartered Accountants, who conducted the audit, the discrepancy is attributed to a clerical/computer error in mentioning the name of the Trust while recording the return of the amount. Subsequently, on 01.04.2008, a consent letter was executed by the trustees permitting such deposit, which is also duly acknowledged by the auditors.

          8.4 It further emerges that there were no cash transactions and that the amount allegedly transferred to Mahavir Seva Trust was ultimately returned along with interest. In such circumstances, the same cannot be construed as misappropriation on the part of the trustees.

          8.5 The dispute appears to stem from issues relating to entries in the Public Trust Register (PTR), and the present criminal proceedings appear to have been initiated with a view to malign the reputation of the trustees. In the considered opinion of this Court, the same amounts to a gross abuse of the process of law and squarely falls within categories (i) and (v) laid down in the case of Bhajan Lal (supra). Accordingly, the impugned FIR deserves to be interfered with.

9. Resultantly, this application is allowed. The impugned FIR registered being I-C.R.No.43 of 2013 at Surendranagar City Police Station, District Surendranagar as well as all consequential proceedings arising therefrom, are hereby quashed and set aside. Rule is made absolute accordingly.. Rule is made absolute accordingly.