Amrit Lal vs State Of Himachal Pradesh

Anoop Chitkara, J

When an employee of a Limited Company misappropriates the funds or cheats somebody, then whether Managing Director of the said Company

would be liable for criminal prosecution, is the proposition of law involved in the present revision petition.

Challenging the dismissal of criminal appeal by Sessions Court, upholding the conviction and sentence passed by trial court for offence of cheating

various employees by usurping the security amount to the extent of Rs. 32,500/-, the Managing Director of the said Company i.e. M/s Himachal

Courier Pvt. Ltd. has come up before this Court.

On 5.12.1992, Shiv Pal (PW1), who was posted as head constable at Mandi gave a written complaint to its SHO. The complainant Shiv Pal

informed the SHO of Police Station, Sadar Mandi that Himachal Courier Pvt. Ltd. has its headquarters at Hospital Road Mandi. Amrit Lal was its

Managing Director. He was cheating people by taking security to the extent of Rs. 2,000/- to 5,000/- in lieu of providing jobs. He (Shiv Pal) further

states that lots of complaints have been received to this extent. He further stated that he was not paying any salary to its employees and those

employees who had already deposited security and when they demanded the refund of their security, then he refused to do so. Head Constable, Shiv

Pal, also mentioned that the acts of the Managing Director make out a case of cheating and it might lead to defamation of City and the State. He

requested the SHO of concerned Police Station to take legal action against Managing Director of Himachal Courier Pvt. Ltd. On the complaint, Ext.

PA, the police registered the FIR captioned above. In the investigation, the police was able to trace 11 persons, who had given security and

complained that the amount was not returned to them. Some of them complained that they were given cheques in lieu of the security amount, which

were bounced due to ‘insufficiency of funds’, in the accounts of the Company. After completion of investigation, the Officer In-charge of the

Police Station lodged prosecution by filing a report under Section 173(4) of the Cr.PC.

Vide order dated 1.10.1996, learned Chief Judicial Magistrate, Mandi charged the accused in the following terms:

“That during the period June, 1992 to December, 1992 at various places in H.P. you dishonestly cheated S/Sh. Shyam Lal, Rakesh Kumar,

Damola, Phul Chand Gupta, Dharam Singh, Dhian Singh Chauhan, Jial Lal Chauhan, Som Krishan Chauhan, Sher Singh Kashyap, Charanji Lal

Sharma and Dola Ram by inducing them to deliver an amount of Rs. 32,500/- and you thereby committed offence punishable under Section 420 IPC

and within my cognizance.â€​

The accused did not plead guilty and claimed trial.

Apart from complainant PW1, HC Shiv Pal, the prosecution has also examined various employees whose security money was either not paid or the

cheques in lieu thereof had bounced.

To prove this, the prosecution had examined number of employees. The prosecution also examined the Manager of Kangra Central Cooperative

Bank and Canara Bank to prove the issuance of cheque books and the dishonour of the cheques in question.

Apart from Investigating Officer, the prosecution examined other formal witnesses and closed its evidence.

In the statement under Section 313 Cr.PC, the accused admitted that he was the Managing Director of the Company. He also admitted that he had

issued advertisement asking for the appointment of persons to work in the Company. He also admitted that he had hired/taken accommodation for rent

to run the Courier Company and denied that he had not paid any rent for the same. He admitted that the accounts were being maintained by the

persons employed by him for the said purpose and that the Courier Company was working and PW4 (Neena Thakur) was also working as Clerk.

In answer to Question No. 10 put to accused Amrit Lal under Section 313 Cr.PC, he explained that entries were made by Dharam Singh. He has

also admitted that he called Sher Singh for interview and interview letter was also issued to him, which was cancelled by him. He clarified that

cheques were issued by Dharam Singh, who was employee of the Company. He further explained that lot of appointments were cancelled. In answer

to Question No. 37, he explained that he was innocent and a conspiracy was hatched against him by its employees. He further stated that when came

to know that Dharam Singh had issued bogus cheque, then he withdrew all the money from bank and paid the same to all creditors by cash, however,

accused did not lead any evidence in defence.

Vide above captioned judgment, learned trial court convicted the accused for commission of offence punishable under Section 420 of IPC and

sentenced him, as captioned above.

Feeling aggrieved against the conviction, the convict filed an appeal before Sessions Court, however, vide above captioned judgment, learned

Sessions Court did not interfere with the trial court’s judgment and upheld the conviction.

Challenging the dismissal of appeal against the conviction, the petitioner/convict has come up before this Court under Section 397 read with

Section 401 of Cr.PC by invoking revisionary jurisdiction of this Court.

ANALYSES AND REASONING.

In the trial large number of employees were testified. It is worthwhile to refer relevant portion of the evidence of those employees. PW7, Sher

Singh, stated that he was given appointment letter, Ext.PW7/A, and he had paid Rs. 2,000/- as security. In his cross-examination, he explicitly stated

that Dharam Singh had handed over receipt, Ext. PW7/C to him and he had also paid money to Dharam Singh in presence of the accused. In his

further cross examination he admitted that everything appears to be “CHALBAJIâ€​ of Dharam Singh.

PW8, Som Krishan also testified that he was given appointment letter and he had also paid security of Rs. 2000/-. In his cross examination, he also

admitted that it was ‘Chalbaji’ of Dharam Singh and he further clarified that Dharam Singh belonged to his village and he allured him for the

employment.

PW9, Chiranji Lal, stated in the similar terms that appointment letter was given to him and in lieu of that Rs. 2000/- was taken form him as

security. In the cross examination he admitted that he had given security to Dharam Singh. He explicitly stated in his cross-examination that whole

fraud was done by Dharam Singh because he had charged the money.

PW14, Dola Ram, also testified that he had read advertisement in the Newspaper and then gave security of Rs. 2500/- by draft. In the cross-

examination he admitted that Dharam Singh had told him about the employment and advertisement.

PW16, Dhian Chand, also stated that he had given a security of Rs. 1200/- to Dharam Singh in his residence. He admitted that Dharam Singh had

issued joining report. He clarified that he never presented the cheque for encashment and cheque was issued by Dharam Singh and Jia Lal.

PW19, Rakesh Domal, testified that he had given security of Rs. 5,000/- after appointment and he had made a written complaint to SHO on

4.5.1993. Although this complaint was made after the registration of FIR and rather during its investigation.

PW16, Dhian Chand, also stated that he was given appointment letter when he was asked to join Shimla but there was no office available there.

He stated that when he asked the accused to refund the security, the accused has handed over a cheque Ext. PW16/B. However, the cheque

bounced because of non-availability of funds. In cross examination, he admitted that cheque was handed over to him by Dharam Singh and Jia Lal.

Shyam Lal testified as PW30 and stated that he was asked to deposit Rs. 1000/ - in Bilaspur, however, he was not given any salary. Subsequently,

the employees handed over a cheque of Rs. 1130/- to him but it was not encashed because of ‘lack of funds’. He stated that he did not receive

any money.

PW4, Neena Thakur, who was posted as Clerk in the Company admitted in the cross-examination that she was not sure about the handwriting of

the accused but she was able to identify the signatures.

Be that as it may, the prosecution did not send the signatures or handwriting papers for comparison from handwriting expert and PW4 (Neena

Thakur) cannot be termed as Expert to substitute to a Handwriting Expert.

Analyses of the above evidence reveals that Dharam Singh who was working as employee had defrauded other employees. The categorical

admission of his colleagues, who had implicated him, would not fasten any liability on the Managing Director of a Company and he would be entitled

for benefit of doubt.

Dharam Singh was also examined by the prosecution as PW13. He stated that he had worked in the Company from December, 1992 at

Dharamshala and after working for three months there, he was transferred to Shimla. In his cross-examination he admitted that although he had

worked for three months but he was given money only for two months. He denied the suggestion that accused asked him to join the service but he

intentionally did not join.

A scrutiny of the entire evidence coupled with explanation offered by accused under Section 313 Cr.PC makes it crystal clear that security

amount of some of the employees was although not returned/refunded but there is no evidence to conclude that convict had cheated any of the

employees. The categorical admission of the employees, especially PW7, PW8 and PW16 that it was Dharam Singh who had made the entire

‘Chalbaji’/fraud upon the accused and the Managing Director of the Company cannot be held criminally liable. The liability would be of the

Company and not of its Managing Director in the absence of any direct evidence accusing him of criminal conspiracy with Dharam Singh. This

evidence is not sufficient to hold the accused guilty of such offence,

A perusal of the judgment passed by trial court and appellate court reveals that both the Courts below were swayed by emotions because poor

people were cheated. The question is who cheated them and there is no evidence against the accused, rather the entire evidence goes against Dharam

Singh, whom the prosecution did not arraign him as accused but cited as prosecution witness i.e. PW13. Thus, the judgments of both the Courts below

are incorrect, illegal and call for no interference.

Another peculiar aspect of this case is that although FIR was registered on the basis of complaint made by Shiv Pal, Head Constable PW1, but he

did not tender in evidence even a single complaint which as per his initial complaint Ext. PA, he had received. Reference to Ext. PA the earliest

information, which led to registration of FIR reveals that Shiv Pal had specifically stated that he had received complaints from large number of people.

Instead of forwarding the said complaints, he himself became complainant and gave an information to police station, which led to registration of Daily

Diary and then later on FIR. Thus, whether in the initial complaint he defrauded employees, named Dharam Singh as a person responsible for fraud or

the petitioner Amrit Lal has been concealed by the prosecution. The possibility cannot be ruled out that to save Dharam Singh, the prosecution

withheld him even he was cited as a prosecution witness.

Given above, the prosecution lacks sincerity and professional approach. To conclude the evidence proved by the prosecution against the convict is not

sufficient to arrive at a conclusion of his guilt beyond reasonable doubt, hence he is entitled for benefit of doubt. Consequently, the revision petition is

allowed and the judgments passed by both Courts below are set aside. Fine deposited by the appellant/convict be refunded back to him. Pending

miscellaneous application(s), if any, also stand disposed of.