Gnanasekaran vs State by Inspector of Police, C.C.I.W, C.I.D, Cuddalore

K.M. Natarajan, J.—This revision is directed against the judgment of the learned Sessions Judge, Cuddalore, confirming the conviction and

sentence passed by the learned Judicial First Class Magistrate, Chidambaram, against the Petitioner under Sections 477-A , and 409, I.P.C., to

under go R.I- for 3 months and to pay a fine of Rs. 500 in default to undergo R.I. for three months under each offence.

The brief facts of the case which are necessary for the disposal of this revision may be stated as follows:

The Petitioner herein was the Secretary of Chettithangal Village Co-operative Agricultural Credit Society from January, 1974 till 3rd

September, 1974. One Nadanakunjithapatham (first accused), was the President of the said Society from 27th December, 1973. to 15th

February, 1974. P.W. 1, the Deputy Registrar of Co-operative Societies, Cuddalore, ordered an enquiry u/s 65 of the Tamil Nadu Co-operative

Societies Act, under Ex.P3. As per the said order, P.W. 2 conducted an enquiry relating to the transactions of the above Society from 15th June,

1974 to 3rd September, 1974. During the enquiry, P.W. 2 noticed that there was an entry about the sale of 5 bags of Bulgarian Urea, in the stock

register, Ex.P4, but there was no corresponding entry in the Sales Chitta, Ex.P7 and the day book Ex.P8 and there was no bill for the same. He

also noticed sale of bags of CAN Urea on 15th February, 1975, for Rs. 308.35 supported by bills and necessary entries in the relevant register.

He examined the first accused and on the basis of the entries made in Exs.P4, P7 and P8, he submitted the report, Ex.P1, to P.W. 1, who in turn

lodged the complaint Ex.P2. P.W. 3, the Inspector, C.C.I.W, C.I.D, investigated the case and filed the charge sheet against the President of the

Society (the first accused) and the Petitioner, second accused.

The plea of the accused was one of denial. The learned Magistrate acquitted the first accused, but convicted the Petitioner on the basis of the

entry about the sale of 5 bags of Bulgarian Urea in Ex.P4, under Sections,447A and 409, I.P.C., and sentenced him as stated supra. On appeal,

the learned Session Judge, confirmed the said conviction and sentence. Hence the aggrieved second accused has preferred this revision.

Mr. V. Gopinathan, learned Counsel for the Petitioner, submitted that P.W. 2 who conducted the enquiry u/s 65 of the Cooperative Societies

Act, did not examine the entries in the stock register, Ex.P4, and also the cash book, that the entire conviction WHS based on the entry of 5 bags

under Ex.PS, while there was no corresponding entry in the sales chitta and day book and that does not mean that the entry under Ex.P5, is a false

one, that the prosecution has to prove the necessary ingredients by positive and acceptable evidence and that the mere false entry or failure to

account for itself is not sufficient to warrant a conviction u/s 477-A, I.P.C., or u/s 409, I.P.C. and the onus of the prosecution never shifts to the

accused.

On the other hand, the learned Public Prosecutor submitted that there was dishonest suppression of the value of Rs. 530.70 being the sale of 5

bags of urea in the corresponding registers Exs.P7 and P8, and further a suggestion was put to P.W. 2 that the said entry was made on the basis of

sale of CAN urea on that day, which itself proves that the entry under Ex.P5 is false and that there was no need for the prosecution to prove as to

what the Petitioner had done with the amount, and hence, no interference is called for in this revision.

In the instant case, the entire conviction was based on the entry of sale of 5 bags of Bulgarian Urea on 15th February, 1975 under Ex. P5 in the

stock book, Ex.P4, while there was no corresponding entry in Exs.P7 and P.8, viz., the sales chitta and the day book. The Petitioner was hot

examined by the enquiry officer, P.W. 2, during the enquiry u/s 65 of the Tamil Nadu Co-operative Societies Act. The Petitioner completely

denied the receipt of the urea and the evidence of the prosecution regarding the entries under Exs.P5, P7 and P8. P.W. 2 has no personal

knowledge of the transaction and he was only an enquiry officer. Further, there was no evidence regarding the duties and obligations of the

Petitioner in his capacity as Secretary. The prosecution has not chosen to examine the concerned authority of the Tamil Nadu Co-operative

Marketing Federation, who was said to have supplied 158 bags of Bulgarian Urea on 3rd February, 1975. P.W. 2 also admitted in his evidence

that the person who had audited the accounts of the Society previously would have verified the stock position. But none of them was examined nor

the audit report was marked. P.W. 2 has categorically admitted that he cannot say as to who made the entry ''no sales'' in Ex.P8 on 15th

February, 1975, and who had signed at the last column of Ex.P5 in green ink. According to P.W. 2, at the time of enquiry, one Rajan was the

Secretary and not the Petitioner. No person who was conversant with the signature of the Petitioner was examined and no attempt was made to

prove either the handwriting or the signature of the Petitioner in Ex.P5 and also in Exs.P7 and P8. Further, apart from the mere entry in Exs.P5, P7

and P8, no other investigation was made to prove that the said entry is false and that the Petitioner had misappropriated the value of the goods.

There was no evidence also to show that the Petitioner was in financial difficulties during the relevant period.

In support of the contention that mere false entry is not sufficient and further evidence to prove the ingredients are necessary, the learned

Counsel for the Petitioner relied on the following decisions of our High Court: Rama Rao v. The Sub Inspector of Police, Kalahasti Station, 1937

M.W.N. 566, Kuppuswami In re, 1966 1 M.L.J. 409 : 1966 L.W. (Crl.)58 and Vasuvevan In re 1971 L.W. Crl. 2.

In Rama Rao v. The Sub Inspector of Police, Kalahasti Station, 1937 M.W.N. 566 King, J, observed as follows:

Where an accused is prosecuted u/s 409. I.P.C., of criminal breach of trust, the fundamental principle of law which has to be considered in

disposing of the case is this, that the burden of proving the accused''s guilt rests throughout upon the prosecution and that if the prosecution

evidence does not of itself discharge that burden, its deficiencies cannot be supplemented by any finding that the accused has not proved the

innocence.

The prosecution cannot rest content with proving mere false entries to bring home to the accused that money had been misappropriated, without

further evidence to prove that the accused attempted to suppress all traces of his embezzlement by any manipulation of the accounts, or evidence

of the financial circumstances of the accused which would render probable a case of misappropriation.

In Kuppuswami, In re 1966 1 M.L.J. 409: 1966 L.W. (Crl.) 58 Ananranarayanan, J., held as follows:

There can be no doubt whatever that as a matter of civil liability persons entrusted, in their official capacities, with the stock in a public retail depot,

established for supply of goods to customers might properly be held for the value of stock which had disappeared owing to carelessness or

negligence of malpractices of any kind, on the part of any of the officers. But criminal liability is a totally different matter, and the ingredients of the

offence punishable u/s 409 of the Penal Code, have been laid down in the Penal Code itself and in innumerable decisions. Not only must there be

an initial entrustment of the goods, but there should be a subsequent dishonest conversion to the use of the concerned accused, viz., breach of

trust; that alone constitutes criminal breach of trust. The bare fact of the disappearance of certain goods with not an iota of evidence about the

handling of those goods by the accused persons, or their disposal of them, is not sufficient. Criminal liability has to be strictly proved and cannot be

based upon conjecture or probabilities, however reasonable that conjecture might be as the criminal jurisprudence is cleat that convictions cannot

be based on mere suspicion or conjecture.

In Vasudevan In re, 1971 L.W. Crl. 2 Somasundaram, J., following the above, held as follows:

In order to establish an offence u/s 409, I.P.C., not only there must be an initial, entrustment of the goods, but there should be a subsequent

dishonest conversion to the use of the concerned accused, that alone constitutes criminal breach of trust. The bare fact of the disappearance of

certain goods without an iota of evidence about the handling of those foods by the accused person, or their disposal by them, is not sufficient..

The above decisions are on all fours applicable to the facts of the instant case.

Per contra, the learned Public Prosecutor relied on the decision reported in Krishan Kumar Vs. The Union of India, and contended that it is

not necessary or possible in every case to prove in what precise manner the accused person has dealt with or appropriated the goods. The above

quoted case was u/s 5(1)(c) of the Prevention of Corruption Act, 1947, and where the accused had to rebut the presumption against him. Further,

even in that case, their Lordships of the Supreme Court have observed as follows:

In the case of a servant charged with misappropriating the goods of his master the elements of criminal offence of misappropriation will be

established if the prosecution proves, that the servant received the goods, that he was under a duty to account to his master and had not done so...

Of course the prosecution has to establish a prima facie case in the first instance. It is enough to establish facts which give rise to a suspicion and

then by reason of Section 106 of the Evidence Act, to throw the onus on him to prove his innocence.

In the instant case, the prosecution has not adduced any evidence to prove that the accused had secured the goods and he was under a duty to

account to the Society and that be has made false entries, etc. After going through the above cited decision, I find that the above decision is not

applicable to the facts of the present case.

The learned Public Prosecutor relied next on the decision reported in Jaikrishnadas Manohardas Desai and Another Vs. The State of Bombay,

and contended that to establish a charge of criminal breach of trust, the prosecution is not obliged to prove the precise mode of conversion,

misappropriation or misapplication by the accused of the property entrusted to him or over which he has dominion. In the said decision, their

Lordships of the Supreme Court have observed as follows:

... 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...

The said decision is not at all applicable to the facts of the present case.

The learned Public Prosecutor relied on the suggestion made to P.W. 2, that by mistake the entry in Ex.P5 WAS made and contended that the

said suggestion itself establishes the case of the prosecution. It is well established that in our criminal jurisprudence, the accused is entitled to put

forth inconsistent pleas and the onus of the prosecution never shifts. In my view, the stray suggestion put to P.W. 2 would sot automatically

establish that the Petitioner bad made false entries and thereby misappropriated the value of the goods.

Thus, on a careful consideration of the materials placed before me, the evidence adduced by the prosecution is not capable of sustaining the

legal conviction of the Petitioner under any of the charges.

In the result, the conviction and sentence awarded to the Petitioner are set aside and he is acquitted. The bail bond, executed by the Petitioner

shall stand cancelled; The fine amount paid, if any, is directed to be refunded to the Petitioner forthwith. This revision will accordingly stand

allowed.