State of Haryana vs Nawabuddin Khan

Harphul Singh Brar, J.—This is an appeal filed by the State of Haryana against the judgement of the learned Additional Sessions Judge,

Sonepat dated 4-1 -1991 vide which he set aside the judgment dated 3-5-1990 and the order dated 4-5-1990 of the Chief Judicial Magistrate,

Sonepat vide which accused Nawabuddin Khan, respondent in this appeal (hereinafter called the ''respondent) was ""convicted u/s 408 of the IPC

and was sentenced to undergo three years rigorous imprisonment and a fine of Rs. 500/-. In default of payment of fine, he was ordered to undergo

further rigorous imprisonment for three months.

Brief facts taken out from the judgment of the lower appellate Court are that respondent Nawabuddin Khan was employed as a Salesman in the

stores of various branches of Sonepat Central Consumer store, Sonepat. Charge was taken by him of the goods worth Rs. 91,690.52p. from the

Store Keeper of the said Store on 29-6-1982 and thereafter, he was supplied the goods from time to time to be sold in the said store. During the

period from 21-1-1982 to 21-9-1984, his total liability was Rs. 2,92,238/- as the goods of the value of the above mentioned amount were

entrusted to him for sale but he deposited only Rs. 1,38,752.89 p. and embezzled the goods of the value of Rs. 1,53,485.11 p.

The Assistant Registrar, Co-operative Societies, Sonepat sent a written complaint dated 6-5-1985 to the Police Station City, Sonepat through

the Superintendent of Police, Sonepat on the basis of which present case was registered against the accused u/s 408, IPC for having embezzled a

sum of Rs. 1,53,485.11 p. being the price of the goods supplied to him during the period he remained posted as a Salesman in the said store.

The respondent Nawabuddin Khan was charged by the trial Court u/s 408, IPC. He was tried for the aforesaid charge by the Magistrate and

was ultimately convicted and sentenced, as stated above in the first para of the judgment. On an appeal filed by the respondent, the learned

Additional Sessions Judge, Sonepat accepted his appeal and acquitted him.

Before the arguments were heard by the Lower Appellate Court, the learned counsel for the respondent Nawabuddin Khan placed on record a

certified copy of the award dated 7-11-1989 of the Sub-Registrar, Co-operative Societies, Karnal disclosing that the Sub-Registrar, Co-

operative Societies, Karnal had passed an award of Rs. 1,53,485.11 p. besides interest against the respondent in favour of Sonepat Central Co-

operative Society Ltd., Sonepat after holding that the said amount had been embezzled by the respondent., when he remained posted as Salesman

in the above said store. On the basis of the award of the Sub-Registrar, Co-operative Societies, Karnal dated 7-11-1989 and then relying on the

following authorities of the High Court, the Lower Appellate Court set aside the judgment dated 3-5-1990 and the order dated 4-5-1990 of the

Chief Judicial Magistrate, Sonepat by holding that as the Arbitrator has passed the award of the same amount on the same facts against the

accused, he cannot be held criminally liable for the said amount:-

(1) Hakam Singh v. State of Punjab, Cr. Misc. No. 429-M of 1987 decided on 20-2-1987;

(2) Harbhagwan Dass v. State of Punjab (1983) 2 RCR 156 P&H;

(3) Bant Singh v. The Dulley Co-operative Agricultural Service Society Ltd. (1987) 2 RCR 435 P&H, and

(4) Kashmira Singh v. State of Punjab (1989) 1 RCR 175 P&H.

The learned Additional Sessions Judge also noted an authority of this Court in Rajpal Singh Vs. State of Haryana, , wherein, it was held that civil

remedy provided Under Sections 54 and 55 of the Punjab Co-operative Societies Act (hereinafter called the Act) for recovering an embezzled

amount, does not bar criminal prosecution but he did not follow the same, as according to him, the judgment in Kashmira Singh''s case 1989 1

RCR 175 (supra) on which he had relied, was rendered later.

Learned counsel for the appellant State of Haryana, has contended that the criminal prosecution of the respondent was not debarred. The civil

remedy provided to the Co-operative Society under the Act and the criminal prosecution under the law can be taken side by side. He has cited

Amrik Singh v. State of Punjab (1989) 2 ACLR 778 P&H Niranjan Dass v. Punjab State Civil Supplies Corporation Ltd. Chandigarh (1991) 2

ACLR 873 P&H and D. C. Jain v. Union Territory, Chandigarh (1994) 1 RCR 202 : 1994 CLJ 115 P&H, to support his contention.

Learned counsel for the State has very fairly brought to our notice another judgment of this Court rendered in Criminal Revision No. 291 of

1994 dated 3-4-1995 Rajinder Singh v. State of Punjab (1995) 3 RCR 273, which is in line with the judgment referred to by the learned

Additional Sessions Judge for the proposition that no criminal proceedings on the same set of facts which were subject matter before the

Arbitrator, are maintainable. The learned State counsel submits that if the judgment cited by him in Amrik Singh''s case (1989 2 ACLR 78 (supra)

were brought to the notice of the learned Additional Sessions Judge or to the notice of the Hon''ble Judge of this Court while rendering judgment in

Rajinder Singh''s case (supra), the result perhaps, would have been different.

We have heard the learned counsel for the State at length and have also heard the learned counsel for the respondent.

Reference may be made to Section 54 of the Act which reads as under:-

(1) If in the course of an audit, inquiry, inspection or the winding up of a Co-operative Society it is found that any person, who is or was entrusted

with the organisation or management of such society or who is or has at any time been an officer or an employee of the society, has made any

payment contrary to this Act, the rules or the bye-laws or has caused any deficiency in the assets of the society by breach of trust or wilful

negligence or has misappropriated or fradulently retained any money or other property belonging to such society, the Registrar may of his own

motion or on the application of the committee liquidator or any creditor, enquire himself or direct any person authorised by him by an order in

writing in this behalf, to inquire into the conduct of such person.

Provided that no such inquiry shall be held after the expiry of six years from the date of any act or omission referred to in this sub-section.

(2) Where an inquiry is made under sub-section (1), the Registrar may, after giving the person concerned, an opportunity of being heard, make an

order requiring him to repay or restore the money or property or any part thereof, with interest at such rate, or to pay contribution and costs or

compensation to such extent, as the Registrar may consider just and equitable.

Under Sub-section (1) of Section 54 of the Act. the Registrar may enquire into the conduct of such a person who has caused any deficiency in

the assets of the society by breach of trust or wilful negligence or has mis-appropriated or fradulently retained any money or other property

belonging to the society. Where an inquiry is made under sub-sec. (1), the Registrar may, after giving the person concerned, an opportunity of

being heard, make an order requiring him to repay or restore the money or property or any part thereof, with interest at such rate, or to pay

contribution and costs or compensation to such extent, as the Registrar may consider just and equitable. The action taken by the Registrar u/s 54

of the Act, does not in any way, debar the society to take criminal action in accordance with law against the person concerned who has mis-

appropriated the money or other property belonging to the society. The power u/s 54 of the Act is conferred on Registrar merely to provide a

convenient safeguard to the interest of the co-operative society. The criminal liability of the individual, however, continues to subsist and once it is

held that a person has embezzled the money of the society, criminal action can decidedly be taken against him. To hold that the accused cannot be

held criminally liable for the same amount regarding which the Arbitrator has passed his award u/s 54 of the Act against him, is not a valid decision.

It has been clearly laid down by the Supreme Court in Rajeswar Prosad Misra Vs. State of West Bengal and Another, that criminal law and

Civil law car) run side by side. The two remedies are not mutually exclusive but clearly co-extensive and essentially differ in their content and

consequence. The object of the criminal law is to punish an offender who commits an offence against a person, property or the State for which the

accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This, however, does hot affect the civil remedies at all

for suing the wrong doer in cases like arson and accident etc. It is an anathema to suppose that when a civil Comedy is available, a criminal

prosecution is completely barred. The two types of action are quite different in content, scope and import. The co-operative society has got a right

to secure its financial interest and initiate action for recovery of the amount embezzled by the accused but at the same time, the society is not

debarred from taking the criminal action against the accused available to it under the law of the land.

We find that Pratibha Rani Vs. Suraj Kumar and Another, was neither noticed by the learned Additional Sessions Judge nor it was brought to

the notice of the Hon''ble Judge of this Court who delivered the judgment ill Rajinder Singh''s case 1995 (3) RCR 273(supra).We are of the firm

view that it is a clear mandate of the Supreme Court as laid down in Pratibha Rani Vs. Suraj Kumar and Another, that civil and criminal remedies

can run side by side as their purpose and effect are altogether different. Any contrary view expressed in any judgment of this Court, in our view,

does not lay down good law.

In view of our discussion made above, this appeal succeeds. The judgment of the learned Additional Sessions Judge dated 4-1-1991 is set

aside and the respondent is convicted u/s 408 of the Indian Penal Code.

The learned counsel for the respondent submits that he does not question the conviction of the respondent but prays that the respondent

convict be released on probation, as according to him, the instant case relates to the year 1984 and the respondent has already deposited the

amount determined against him by the Sub-Registrar. Co-operative Societies. We find the request of the counsel for the respondent as genuine.

The case was registered against the respondent in the year 1984 and he has already deposited the amount due against him with the authorities

concerned.

We thus order the release of the respondent-Nawabuddin Khan on probation of good conduct for one year, on his furnishing bond for keeping

peace and good behaviour to the Probation Officer of the district within two months from today. He shall up bear before the Probation Officer

when called for within the period of one year. The period of one year shall start from the date when he furnishes the requisite bond to the Probation

Officer.

This appeal is thus allowed in the above said terms.