Achutananda Dash vs The State of Orissa

P.K. Mohanti, J.—Both the Criminal Revisions have been heard together and will be disposed of by this common judgment.

The Petitioner was the Secretary of the Governing Body of the Gopabandhu Science College, Athgarh during the period from 2-9-1962 to 18-11-1966. He was also a member of the Orissa Legislative Assembly, the Chairman of the Zilla Parishad and a practising lawyer during that period. He resigned from Secretaryship and the resignation was accepted with effect from 18-11-1966. The accounts of the College for the period from 20-9-1962 to 31-3-1967 were audited in May, 1967 and the Auditor reported that a sum of Rs. 24,194/- was recoverable from the Petitioner. In a meeting of the Governing Body of the College held on 11-6-1967 the audit report was considered. The Petitioner was present in the meeting as a member of the Governing Body. He promised to pay the amount If actually found due against him on proper verification of accounts. On 12-11-1967 F.I.R. was lodged by Lingaraj Jena, the Head Clerk of the College, for prosecution of the Petitioner u/s 406, Indian Penal Code for the alleged misappropriation of a sum of Rs. 24,193 89 After investigation the police submitted charge-sheet u/s 406, Indian Penal Code. At the time of framing charge, the amount alleged to have been misappropriated was split up calendar year wise. In G.R. Case No. 169 of 1967 charge was framed for misappropriation of a sum of Rs. 15,277.98 during the calendar year 1965 and in G.R. Case No. 169-A of 1967 for misappropriation of the balance amount of Rs. 8912.60 during the calendar year of 1966.

The Petitioner denied the charge and contended that the case was foisted against him on account of his political rivalry with the President of the College. He contended that monies advanced to him had been utilised for purposes of the College and that nothing was outstanding against him.

After trial, the learned Magistrate convicted the Petitioner u/s 403. Indian Penal Code and sentenced him to undergo R.I. for four months in G.R. Case No. 169 of 1967 and R.I. for two months in G.R. Case No. 169-A of 1967. On appeal, the learned Additional Sessions Judge confirmed the conviction and the sentences.

It is worthwhile to mention at this stage that in G.R. Case No. 169 of 1967 though the Petitioner was charged for the alleged misappropriation of a sum of Rs. 15,277.98 the prosecution led evidence for misappropriation of a sum of Rs. 10,531.29 during the year 1965. The lower appellate Court held that a sum of Rs. 9544/- only was entrusted to the Petitioner and that he failed to account for the same. In G.R. Case No. 169-A of 1967 the Petitioner was charged for misappropriation of a sum of Rs. 8912.60 during the year 1966. But the appellate Court found that only a sum of Rs. 3.100/- was entrusted to the Petitioner and he failed to account for the same. Though it was alleged that the Petitioner was the custodian of the cash the Courts below came to hold that Lingaraj Jena, the Head Clerk-cum-Accountant, was the custodian of the cash and he was in charge of maintenance of accounts. The trial Court also came to hold that the accounts were maintained irregularly. Both the Courts below disbelieved the prosecution case about certain items of advances alleged to have been made to the Petitioner and discarded the cash book entries in respect of these items. While disbelieving the cash book entries the appellate Court observed that it was not improbable that Lingaraj Jena, the Head Clerk-cum-Accountant, made the entries as he though fit to give a genuine colour to a fictitious transaction.

The main contention of the Petitioner is that on the facts proved, a case u/s 403, Indian Penal Code has not been made out. It is contended that the essential element of an if offence u/s 403, Indian Penal Code is dishonest misappropriation and in the present case what had been proved is mere retention of money and not misappropriation. It is argued that mere retention is not enough to establish misappropriation.

What is criminal misappropriation is defined u/s 403, Indian Penal Code. A person will be guilty of that crime only when it is proved that he dishonestly misappropriated the property or converted it to his own use.

"Dishonestly" is defined u/s 24, Indian Penal Code as doing anything with the intention of causing wrongful gain to one person or wrongful loss to another person. To "appropriate" means setting apart or assigning to a particular person or use and to "misappropriate" means "improperly setting apart for use to the exclusion of the owner." "Converts" means appropriation and dealing with property of another without right as if it is his own property.

In the present case, it appears to me that the prosecution has failed to establish that the Petitioner misappropriated or converted the amount in question to his own use and that too dishonestly. Dishonestly may be proved by evidence or may be presumed from the circumstances, but under no circumstances can it be assumed as a matter of course. There is no evidence worth the name that the Petitioner appropriated the amount in question dishonestly to his own use or that he dealt with it for some other purpose.

The learned Magistrate in para 19 of his judgment in G.R. Case No. 169-A of 1967 holds:

The circumstances in which the moneys were taken by the accused after giving receipts, or after signing in the account slips shows that there was no dishonest intention in the beginning when the accused took the amount, but the dishonest intention developed only subsequently in him after his resignation was accepted in the Governing Body to make some wrongful gain by misappropriating the funds.

He has not referred to any evidence, direct or circumstantial in support of his conclusion that the Petitioner developed dishonest intention subsequent to the acceptance of his resignation.

The appellate Court in para 11 of its judgment in Criminal Appeal No. l05-C of 1975 arising out of G.R. Case No. 169-A of 1967 holds:

As discussed by the learned lower Court even if the purpose when the Appellant received the amounts was not dishonest, the illegal retention of this public money for a long time with the Appellant makes his intention dishonest. The Appellant failed to discharge the trust in the mode fixed by law. Therefore he clearly committed an offence within the meaning of Section 405, Indian Penal Code.

On this finding the question arises as to whether dishonest intention on the part of the Petitioner has been conclusively established so as to hold him guilty u/s 403, Indian Penal Code.

That is contended on behalf of the State is that the Petitioner had to spend the amounts for the purposes of the College or to refund the same and since he did not do so, that would amount to misappropriation.

Mere retention of money in the absence of any evidence of dishonesty does not amount to criminal misappropriation. The mere fact that the retention was for a long time is no ground for imputing criminal intention. It cannot be assumed, in the absence of evidence to show or circumstances to infer, that the Petitioner misappropriated the amount dishonestly. The possibility of his not having refunded the amount due to negligence or inadvertence or forgetfulness cannot be excluded. Some overt act has to be proved in order to show dishonest intention, besides the mere retention of money for a long period. No period was fixed within which the money had to be refunded. The Petitioner was also not asked to refund the money at any time before acceptance of his resignation. If the money advanced is not paid, the law allows only a civil suit and not a criminal proceeding. In the case of mere retention it is not possible to say that it is dishonest. Besides mere retention, there must be some definite act to show dishonest intention.

Failure to account for the money proved to have been received by the accused is generally considered to be a strong circumstance against the accused. This, however, is a piece of evidence pointing to dishonest intention and is not conclusive. The failure to account may in some cases be due to, among other things, mere stupidity, inadvertence, negligence, forgetfulness or even a perverse attitude taken by the accused that he is not liable to account, while there may be other evidence in the case pointing to the accused having acted quite honestly. In such a case the accused cannot be convicted even though he may have failed or omitted to account for the money received by him. There should be some indication which would justify a finding that the accused definitely had the intention to cause wrongful loss to the College or to have wrongful gain for himself. Ordinarily that would be shown by some overt act which went beyond mere retention of money. This view is supported by authorities. In the case of Harakrishna Mahatab Vs. Emperor, , it was held:

....the essential thing to be proved in case of criminal breach of trust is whether the accused was actuated by dishonest intention or not. As the question of intention is not a matter of direct proof, the Courts have from time to time laid down certain broad tests which would generally afford useful guidance in deciding whether in a particular case the accused had or had not mens rea !or the Crime. So in cases of criminal breach of trust the failure to account for the money proved to have been received by the accused or giving a false account as to its use is generally considered to be a strong circumstance against the accused. We should, however, not lose sight of the principle and make a universal formula of what is after all only an indication of or a piece of evidence pointing to dishonest intention.

The above decision was approved by the Supreme Court in Krishan Kumar Vs. The Union of India, . In the case of Jethanand Betab Vs. The State of Delhi (Now Delhi Administration), , the Court held:

The principal ingredient of the offence being dishonest misappropriation or conversion which may not ordinarily be a matter of direct proof, entrustment of property and failure in breach of an obligation to account for the property entrusted, if proved, may in the light of other circumstances, justifiably lead to an inference of dishonest misappropriation or conversion. Conviction of a person for the offence of criminal breach of trust may not, in all cases, be founded merely on his failure to account for the property entrusted to him, or over which he has dominion, even when a duty to account is imposed upon him, but where he is unable to account or renders an explanation for his failure to account which is untrue, an inference of misappropriation with dishonest intent may readily be made.

Dealing with a case u/s 409, Indian Penal Code their Lordships of the Supreme Court in the case of Sardar Singh Vs. State of Haryana, , observed as follows:

The offence of criminal breach is defined in Section 405 and on essential ingredient of this offence is that the accused being in any manner entrusted with property or with dominion over property, dishonestly misappropriates or converts to his own use that property or dishonestly uses or disposes of that property in violation or 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. Here, as we have already pointed out, the Appellant was admittedly entrusted with the receipt-book or in any event with dominion over it, but there is no evidence to establish that he dishonestly misappropriated the receipt-book or converted it to his own use or dishonestly used or disposed of the receipt-book. It is quite possible that the Appellant might have lost or mislaid the receipt-book and hence he might have been unable to return it to the superior authorities. What the section requires is something much more than mere failure or omission to return the receipt-book. The prosecution has to go further and show that the Appellant dishonestly misappropriated or converted the receipt-book to his own use or dishonestly used or disposed of it.

( The italics is mine ).

Prosecution has not proved any overt act on the part of the Petitioner which would constitute dishonest intention. There is absolutely no allegation far less any proof that the Petitioner made use of any false testimony or gave any false explanation or made any suspicious alteration or interpolation in the accounts. Before acceptance of the resignation of the Petitioner there was no demand for the amount entrusted or at least for an account showing how the amounts were utilised. After acceptance of the resignation, the accounts were audited in absence of the Petitioner. When the audit report was brought to his notice he said that he would examine the cash books and whatever amount would be found due, he would pay up. Thereafter no opportunity was given to him to examine to cash books, the ledgers the receipts granted by him for the advances and the vouchers. The Petitioner gave evidence that he utilised the money entrusted to him for the purposes of the College and that utilisation certificates were duly submitted to the authorities sanctioning the funds. Letter No. 134 dated 25-2-1975 of the Principal of the College (marked as Ext. 2/5) clearly shows that utilisation certificates were duly submitted for the grants received from Government during the years 1964-65, 1965-66 and 1966-67. If actually the amounts of Government grant had not been spent in full and portions thereof were lying unspent with the Petitioner, the utilisation certificates would not have been issued from the College office.

At any rate, failure to account for the money entrusted may not be sufficient to hold the Petitioner guilty, particularly when there was irregular maintenance of accounts. It appears from the findings of the Courts below that advances though in many instances recovered and adjusted have not been properly credited to the accounts. According to the Resolution dated 13-2-1966 of the Governing Body the cash book was required to be written up and signed daily by the Secretary, the Principal and the Head Clerk-cum-Accountant. But it appears that the cash book has never been put up for signature of the Principal of the College. It was also not put up daily for signature of the Petitioner. Lingaraj Jena, the Head Clerk-cum-Accountant, who was examined as the principal witness for the prosecution admitted that he used to get the cash book signed by the Petitioner once in a month during the period from 1963 to 1965. The proceedings of the meeting of the Governing Body held on 28-11-1963 shows that the President after examining the cash book entries found that advances paid to different persons though in many instances were recovered and adjusted had not been properly credited in the receipt side and on the contrary such amounts of advances had again been shown on the expenditure side. The Governing Body found that maintenance of accounts was irregular and that it was difficult to find out what advances had been recovered and what amount was outstanding. In its Resolution dated 18-12-1966 the Governing Body observed that the financial rules and the earlier resolution about receipts and expenditures and cash balances being struck off dally had not been followed.

Another unsatisfactory feature of the case is that Lingaraj Jena, the principal witness for the prosecution, admitted in cross-examination that during the period from 1-9-1966 till 18-11-1966 the gross expenditure was Rs. 31,143.08 and that the Petitioner had spent this amount though he had drawn Rs:10,000/- only during that period. Thus it would appear that the Petitioner had spent Rs. 21,143.08 from his own funds and if there was any fund of the College with him, that was accounted for by the aforesaid amount. It also appears that in 1965 the total income of the College was Rs. 194178.45 and the total expenditure was Rs. 19693.46. The Petitioner was receiving the funds and spending the amounts. The excess amount spent during the year 1965 comes to Rs. 2515.01. Similarly during the year 1966 the total income of the College from various sources was Rs. l,00,328.31 and the total expenditure was Rs. 1,05,963.25. The excess amount spent for the College was Rs. 5634.94 All the advances and expenditures of the College having been taken into account in the account books and the alleged advances to the Petitioner being out of the total income of the College, there can be no misappropriation by the Petitioner when about Rs. 8,000/- was spent by him for the College in excess of the income. At any rate the complicity of the Petitioner in the crime is full of suspicion and he is entitled to the benefit of doubt.

In the result, the conviction and the sentences are set aside and both the criminal revisions are allowed. The bail bonds executed by the Petitioner be cancelled.

Criminal revision allowed.