A.D.V. REDDY, J

(1) IN these petitions, the point that arises for consideration is whether the payment made towards Chit funds constitute entrustment which is one of the ingredients for the offence under Section 406 I. P. C accused 1 to 5 of whom A4 is since dead, were partners of srijagagturu brikrishna Prabhu Commercial Corporation, Bandarulanka, running Chit fund transactions of various denominations of Rs. 10000/-, 5000/- and 2500/- etc. Al was the managing partner, while a6 was a Bill Collector. The procedure followed was that in each of these denominations those who were willing to contribute had to pay a certain sum each week and every two weeks there would be an auction and the lowest bidder would get the amount and out of the profit 5% would be taken out as commission and the rest of it would be divided and distributed among the members as dividends and the person who is the lowest bidder would also continue to make the payments due and also execute a promote for the amount taken by him The complainant who is a doctor, at the instance of A5 who was a native doctor and who was sometimes bringing patients to him, started contributing to three such chits, one for Rs. 10000/- in his minor daughters name and two for Rs. 5000/- each in his own name and in his sons name and towards these three chits, he had contributed Rs. 7500/-, 4925/- and 4875/ -. The bonus declared was Rs. 1200/- Ks. 1870/- and 1116/- buc of this bonus the Company paid him only the first sum of Rs. 1200/- and in all a sum of Rs. 19786/- was still due to hirrti According to the complainant when he had approached these accused for payment of these amounts, they had promised to pay it but were postponing and later on his approaching P. W. 1. an advocate, there were talks with the accused and the accused had stated that they had invested these monies in a bus-transport business and promised to pay the amount but they had failed to pay and hence he had filed three complaints for offences under Section 406 I. P. C. He examined himself as p. W. 1. and six other witnesses in support of his case.

(2) THE accused in their statements, while admitting that P. W. 1. was a subscriber of the cnit funds, stated that he was not regular in his payments and that the payments made by him do not amount to entrustment to attract the provisions of Section 405 I P. C.

(3) THE Magistrate held that there was entrustment within the meaning of Section 406 I. P. C. and there was also wrongful conversion of the monies so entrusted and convicted the accused of the offence under Section 406 I. P. C. in each of the cases and sentenced each of them to undergo R I. for six months in each of the cases. On appeal the sessions Judge held that the payments on instalments towards chit fund do not constitute entrustment, within the meaning of Section 405 I. P. C. that it is more in the nature of a business resembling that of a Bank and that the liabillity is civil and in that view set aside the conviction of all the accused in the three cases and aquitted them of the charges. Hence these revision petitions.

(4) AS stated already, the only point that arises now for consideration is whether the payments made towards the chit fund transactions amount to entrustments within the meaning of beoion 408 I P C. There is hardly any discussion in the Judgment of the appellate court with regard to this aspect of the case. He has merely stated as follows :-IN the present case, there is no entrustment as contemplated under Section 405 I. P. C. The transaction between the parties in these three cases is like a business resembling a banki The money deposited with the company of the accused is not an entrustment. In the case of entrustment, the person that handed over any property to another continues to be its owner. But in the present case if the ownership is retained, the bid and the payments become unauthorised acts. He has further stated that the learned Addl. Public Prosecutor, Grade I has conceded that the liability is civil and there is no tntrustment as contemplated under Section 405 I. P. C. As pointed out by a Bench of this court in In re Narayana following the decision of the Madras High Court in Public Prosecutor V. Subbanna "a concession wrongly made on behalf of the accused cannot stand in the way of the appellate court setting aside a conviction based on such a concession; similarly a concession wrongly made by the Public Prosecutor should not, in our opinion, stand in the way of an appeal against acquittal based on that concession being allowed. "

(5) THIS shows that concession wrongly made either by the accused or by the Public Prosecutor are not stumbling blocks for the court coming to the right conclusions on the questions raised before it. Therefore the concession made by the Addl Public rosecutor in this case as to there being only a civil liability y has to be igneted and it has to be seen whether the entrapment amounts to an entiustment under Section 405 I. P. C.

(6) THE Sessions Judge was of the opinion that the entrustment in this case is similar to an entrustment made to a Bank while making a deposit and gives rise to a civil liability. In Somanath V. State of rajasthan the Supreme Court stated as follows :"section 405 I. P. C. merely provides, whoever being in any manner entrusted with property or with any dominion over the property, as the first ingredient of the criminal breach of trust. The words "in any manner" in the context are significant. The section does not provide that the entrustment of the property should be by someone or the amount received must be the property of the person on whose behalf it is received As long as the accused is given possession of the property for a specific purpose or to deal with it in a particular manner, ownership being in some person other than the accused, he can be said to be entrusted with that property to be applied in accordance with the terms of entrustment and for the benefit of the owner.

(7) THE expression entrusted in Section 409 is used in a wide sense and includes all cases in which property is voluntarily handed over for a specific purpose and is dishonestly disposed of contrary to the terms on which possession has been banded oven it may be that a person to whom the property is handed over may be an agent of the person to whom it is entrusted or to whom it may belong, in which case if the agent who comes into possession of it on behalf of his principal, fraudulently misappropriates the property, he is nonetheless guilty of criminal breach of trust because as an agent he is entrusted with it a person authorised to collect moneys on behalf of another is entrusted with the moneys when the amounts are paid to him, and though the person paying may no longer have any proprietary interest none the less the person on whose behalf it was collected becomes the owner as soon as the amount is handed over to the person so authorised to collect on bis behalf. This view of ours is well supported by decisions of different High Courts in this country for nearly century".

(8) THEREFORE where the accused is given possession of property with a specific purpose or to deal with it in a particular manner, he can be said to be entrusted with the property to apply it in accordance with the terms of entiustment and if he dishonestly disposes of that property contrary to the terms, he is guilty of criminal breach of trust. Even under Section 405 I. P. C. what is contemplated for criminal breach of trust is the conversion, by one who in any manner is entrusted with property or with any dominion over property, to his own use in violation of any direction of law prescribing the mode in which such trust is to be discharged or of any legal contract, express or implied, which he has made touching the discharge of such trust. In the present case admittedly even as per the Chit Fund agreement, the money paid by subscribers has to be used only for the payment to the lowest bidder and the rest of it after deducting the commission; has to be divided and distributed among the subscribers and at the end of the period fixed for all payments, the subscriber or subscribers who were not bidders or successful bidders at any time and had not taken the amount till then have to be paid their amount. Therefore this shows that the money was entrusted by each of the subscribers to be utilised for themselves after the commission is deducted and the Corporation is only a mediator for collecting the money and distributing the same among the subscribers and if the Corporation had failed to utilise the money in that manner or it had used it for the private purposes of the parnets of the Corporation, it would amount to criminal breach of trust.

(9) THE fact that chit fund transactions are not exempted from the purview of entrustment is shown by the provisions of Section 409 I. P. C. which apply to all the monies banded over even to a banker in the way of his business. Bat as pointed out in Nadir AH Vs. State of U. P. the word "banker" has not been used in Section 409 I. P. C. is the technical sense of the Indian Banking Companies Act but signifies any person who discharges any of the functions of the customary business of banking and would therefore include a firm. Where a banker is entrusted with property and acts as its trustee, as in cases, where jewellery is deposited for safe custody, where a person delivers his share-scrips to the banker for sale when the market becomes favourable where a poison taking a loan from the banker, and pledges his goods with him as security etc. , in such cases if the banker commits dishonest conversion of the jewellery or the scrips or the goods he becomes liable under Section 409 I. P. C. But, a banker in the course of bis customary business also accepts deposits of money and is only bound to repay it to the depositor on demand or after a given period depending on the terms of the contract governing the deposit, and in such case the question arises whether it amount to entrustment to the banker. That depends on the relationship between the banker and the depositor and in cases where their relationship is only of debtor and creditor, there will be no entrustment as such attracting the provisions of Section 406 I. P. C. , but in cases where there is a fiduciary relationship or where there is an obligation cast to act in a particular way or deal with the funds in a particular manner it will amount to entrustment under Section 406 I. P. C. In the present cases the relationship of the complainant and the accused as the subscriber and the Company running the chit funds, is not that of a debtor and a creditor. It is a case of entrustment of the money for a particular purpose, i. e. of its being utilised for payment to the lowest bidder amongst the subscribers only and the excess after deducting the commission being distributed among the subscribers as bonus and not to be retained by the partners of the company or be utilised by them for their own business, "ireiefcie whatever money a subscriber has paid to the company, was in the custody of the company, those monies have to be spent among the subscribers and not utilised for the partners of the company in any case. Therefore, the payment of the chit fund in instalments is in the nature of an entrustment.

(10) IN the light of the above observations the Sessions Judge will have to consider whether after the entrustment, which is only one of the ingredients of offence under Section 406 I. P. C. , the further act of wrongful conversion bad been made out to constitute an offence under section 406 I. P. C, as he had not given any finding on the allegation that these monies had been invested by the Accused in a bus transpor business being run by them- The order of the Sessions Judge in the three cases is therefore set aside and the cases are remanded to him for disposal according to law in the light of the observations made above.