Mohd Raji vs State

D.P.S. Chauhan, J.—In criminal case No. 77 of 1982, the Special Judicial Magistrate (Cooperative)/Metropolitan Magistrate Shishamau, Kanpur under its order dated 19-11-1985 while convicting the applicant u/s 408 IPC, sentenced him to 1 year''s R.I. together with a fine of Rs. 500/- and he while convicting the other co-accused-Muzaffar Ali-Under Sections 408/109 IPC sentenced him to 6 months R.I. together with a fine of Rs. 2000/-. Against this conviction, applicant preferred appeal No. 244/85 which was dismissed by the I Vth Addl. Sessions Judge, Kanpur on 23rd July, 1986. The present revision, which is outcome of the aforesaid conviction and sentence, was admitted by this Court on the question of sentence on 10-8-1986.

Sri. P.N. Misra, Senior Advocate, appearing for the applicant, prayed for granting leave to address the Court on the merit of the matter, which prayer was opposed by the learned Addl. Public Prosecutor. His objection was that since the revision wad admitted, after hearing learned Counsel for the applicant only on the question of sentence, the applicant is left with no right to address the Court on the merit.

The revision application, of course, was admitted on the question of sentence and obviously it was done so as this Court was not satisfied on merit. The object of admitting the revision on question of sentence might have been for giving rehabilitating treatment, or the sentence being on the excessive side.

The remedy of revision not being the remedy as of right and as such no applicant, in a routine course, or as of right, can claim or be permitted to address the Court on the merit of the matter when his revision was admitted on the question of sentence. To permit such a practice would be contrary to the policy of the administration of justice as it would amount to reversal of the order passed at the admission stage and the same would loose its sanctity. Such an approach would be impermissible. Accordingly no applicant, whose revision application is admitted on the question of sentence, can as a matter of course or as of right address the Court on merit of the matter at the time when the case is taken up for hearing.

However, any such order admitting the revision on the question of sentence can not curtail the power of the Court to interfere on the merit of the matter and it would always be open to the Court to grant leave, if satisfied regarding miscarriage of justice, to address the Court on merit of the matter as the very object of confirmation of the reversionary jurisdiction on the Superior Courts is to give a kind of paternal supervisory jurisdiction to correct the miscarriage of justice arising from misconception of law, irregularity of procedure and like infirmities. The power of the Court can neither be circumscribed nor can be allowed to be circumscribed. Where there has been no failure of justice the High Court will not interfere in revision even though there may have been any irregularity or impropriety in the proceedings but where there has been failure of justice it is not only the province of the High Court to interfere, but is its duty to do so.

The facts, in brief, are that the applicant was the Chairman and one Muzaffar Ali was the Secretary of the Kanpur Canvas Vastu Adyogic Utpadan Sahkari Samiti Ltd. (hereinafter referred to as ''the Samiti''), which is a Society registered under the U.P. Co-operative Societies Act, 1965 (hereinafter referred as ''the Co-operative Societies Act'') at the relevant time. The Samiti was one of the members of the District co-operative Bank (hereinafter referred to as ''the Bank'') which advanced "loan to the Samiti after fixing its cash-credit limit. The Committee of Management of the Samiti, under its resolution, authorized the Chairman and the Secretary for the transaction of its business with the Bank. On 29-6-1974, applicant took a sum of Rs. 1000/- as loan for the purpose of treatment of his wife and Rs. 3000/- as advance on executing receipt therefore. On 30-6-1974, he also took a sum of Rs. 500/- as loan for the purpose of repair of the house. The applicant was found to have taken the amount as aforesaid in violation of Bye-laws nos-113 and 114 of the Samiti (hereinafter referred to as ''the Bye-laws'') without prior sanction of the Registrar Co-operative Societies and did not deposit the amount in spite of being asked to do so by the District Industries Officer Kanpur. He was held to have committed criminal breach of trust by using money in violation of the direction of Bye-laws 113 and 114 of the Bye-laws of the Samiti.

On the basis of the above facts the learned Counsel for the applicant submitted that the present is a case where there has occasioned failure of justice as the applicant could not have been fastened with any liability of guilt u/s 408 IPC as not being clerk or servant and further he not having committed any criminal breach of trust would not, even otherwise, be liable to be fastened, the liability of guilt u/s 406 IPC for the reason of non-user of the money, in question, in violation of any direction of law.

The questions for consideration as have arisen in the present case leading to the miscarriage of justice, are-

(i) Whether the conviction of the applicant u/s 408 IPC, who if held to be not the clerk or servant of the Samiti would be valid?

(ii) Whether the user of the money of the samiti would be criminalbreach of trust if the same is held to be not in violation of the direction of law but in violation of the direction of the bye-laws.

Considering the matter and finding prima facie weight in the submission regarding miscarriage of justice, leave to address the Court on merit of the matter as prayed for was granted.

Learned Counsel for the applicant has made four fold submissions:

(i) That the conviction of the applicant u/s 408 IPC is unsustainable in the eye of law as he being the Chairman of the Samiti, which was elective office, was not clerk or servant;

(ii) That the finding of user of money in violation of bye-law Nos. 113 and 114 of the Bye-laws without obtaining prior sanction of the Registrar Cooperative Societies would not constitute criminal breach of trust, as the bye-laws of the Samiti are neither the law nor the same have the force of law and as such the applicant cannot be held guilty even u/s 406 IPC;

(iii) That even the bye-laws are held to be the law or having the force of law, the applicant in the absence of ingredient of dishonest intention could not have been held to have committed breach of trust as for taking money and owning the liability proper receipts were executed.

I proceed to deal with the submissions in serietum. The office of the Chairman of the Samiti was an elective office. The applicant was'' the elected Chairman. The Chairman has been made responsible for the control, supervision and guidance of the affairs of the Society. He is to exercise such powers and perform such duties as may be conferred on him by the Co-operative Societies Act, and the Rules framed there under, or the Bye-laws, or the resolution of the Committee of Management. When present, he has to preside over the meetings of the Samiti. He is not under the disciplinary control of the Samiti and can be removed from the office only by way of motion of no confidence. There does not exist any relationship governing the principle of Master and Servant, so far as the Chairman is concerned. He is a democratically elected person, and it is not his job to do any clerical work. The clerical job of writing or maintaining the records of the Samiti under the Cooperative Societies Act is of the Secretary. Under the scheme of the Act and Rules, the Chairman cannot be said or held to be the cleric or servant of the Samiti.

Now in the face of the finding that the applicant is not the clerk or servant of the Samiti, his conviction u/s 408 IPC cannot he upheld but the other aspect regarding liability of guilt u/s 406 IPC remains to be considered. For fastening liability u/s 408 IPC, it is necessary to establish that the applicant committed criminal breach of trust within the meaning as defined u/s 405 IPC. In the present case, a categorical finding was recorded by the Court below that the applicant used the money in violation of direction under bye-laws Nos. 113 and 114 of the Bye-laws by not having obtained the prior sanction from the Registrar, Cooperative Societies. The question that emerges for consideration is as to whether the bye-laws of a Cooperative Society can be regarded as law or having the force of law within the meaning of the word ''Law'' used in Section 405 IPC. It thus becomes imperative to find out distinction between the law and the bye-laws.

Law is definitely a scheme of social control as distinct from the self control whereas the bye-laws of a Cooperative Society are nothing but a scheme of self control. They are not the expression of the will of the sovereign affirming an order which to be enforced by the Government machinery of the State directed to the realization of same real or imaginary goal. The question as to whether the bye-laws of a Cooperative Society come within the definition of law, or the same have the force of law is no more reintegrate. Supreme Court, in a case Co-operative Central Bank Ltd. and Others Vs. Additional Industrial Tribunal and Others, , has held that the bye-laws of Cooperative Society are neither the law, nor the same have the force of law. The relevant portion is extracted below:

We are unable to accept the submission that the bye-laws of a Cooperative Society framed in pursuance of the provisions of the Act can be held to be law, or to have the force of law. It has no doubt been held that, if a statute gives power to a government or other authority to make rules, the rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute. The principle, however, do not apply to bye-laws of the nature that a cooperative society is empowered by the Act to make. The bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a Society. They may be binding between the persons affected by them, but they do not have the force of a statute.

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The bye-laws that can be framed by a society under the Act are similar in nature to the Articles of Association of a Company incorporated under the Companies Act and such Articles of Association have never been held to have the force of law.

In above view of the matter, any user of money in violation of the direction of bye-law 113 and 114 of the Bye-laws without obtaining the prior sanction of Registrar Cooperative Societies would not constitute violation of direction of law within the meaning u/s 405 IPC and thus the applicant cannot even otherwise be held guilty u/s 406 IPC.

In view of the finding on the second submission, the third submission has become redundant.

The fourth submission regarding civil liability has got substance. No doubt the applicant was liable to pay back the money taken by him from the Samiti, but the liability was of civil nature. The money was recoverable by adopting a process other than launching a criminal proceeding as the applicant admitted his liability by executing receipts. So in cases like the present one, where liability is purely of civil nature, a party cannot be allowed to be encouraged to have resorted to criminal proceedings and such a tendency needs check. Civil rights have to be kept distinct from criminal remedies under the statute.

Accordingly, I hold the applicant not guilty and allow the revision after setting aside the conviction of the applicant u/s 408 IPC and also the sentence. Applicant is on bail. He need not surrender. His bail bonds shall stand cancelled and sureties shall stand discharged. The fine, if paid, shall be refunded to the applicant.