C. Jagannadhacharyulu, J.C.
1. This is an appeal filed under Section 417(3) Cr.P.C. by the complainant Shri Joy Sankar Bhattacharjee in Sessions Case No. 3 of 1962, on the file of the Assistant Sessions Judge of Tripura against the judgment of acquittal of the 6 accused respondents, out of whom the first was charged for offences under Sections 408 and 447-A, I.P.C. and the others under Sections 408 and 477-A I.P.C. read with Section 109 I. P. C.
2. The facts of the case according to the prosecution and as brought out in the evidence are as follows:
(a) The Bombay Co-operative Societies 'Act, (Bombay Act No. VII of 1925) was extended to the Union Territory of Tripura on 1.5.1959. The first respondent (Shri S.K. Gupta) was the Secretary of Tripura Central Marketing Co-operative Society {hereinafter called the C.M.S. from the inception of the Society and also during the relevant period between September 1958 to July 1959. He was entrusted with the funds of the C.M.S. and was responsible for the cash and maintenance of correct accounts of the society. But, contrary to the Bye-laws of the Society he got false entries made in the Cash Book showing that a sum of Rs. 700/- was disbursed on 9.9.1958 to the 5th respondent (Dhirendra Chandra Roy), a sum of Rs. 3,500/- disbursed to the 6th respondent (Ajit Chakraborty) on 6.9.1958, a sum of Rs. 3,000/- disbursed to the 2nd respondent (Haradhan Dey) on 21.3.1959, another sum of Rs. 2,000/- disbursed to the said respondent on 31.3.1959, a sum of Rs. 3,000/- disbursed to one A. Majumdar on 20.2.1959 and a sum oS Rs. 6,000/- to the 4th respondent (C.C. Das Gupta) towards 'dadan'. Thus, the 1st respondent (Shri S.K. Gupta) misappropriated a sum of Rs. 18,200/- and brought into existence false accounts, vouchers etc. in their names.
(b) The 1st respondent (S.K. Gupta) brought into existence entries in the Cash Book to show that the amounts were recovered from them, A sum of Rs. 3,500/- was said to have been recovered from the 6th respondent (Ajit Chakraborty) on 27.6.1959, a sum of Rs. 3,000/- from A. Majumdar on 28.6.1959, a sum of Rs. 700/ from the 5th respondent (Dhirendra Chandra Roy) on 27.6.1959, a sum of Rs. 5,000/- from the 2nd respondent (Haradhan Dey) on 29.6.1959 and a sum of Rs. 6,000/- from the 4th respondent (C.C. Das Gupta). In fact, no money was collected from them and the transactions were mere paper transactions.
(c) Again, at the beginning of the next Co-operative year the 1st respondent (S.K. Gupta) made false entries in the account books and brought into existence vouchers etc. to show that the sum of Rs. 18,200/-was disbursed to three persons. A sum of Rs. 2,200/- was said to have been paid or 2.7.1959 to the 2nd respondent (Haradhan Dey). A sum of Rs. 8,000/- was said to have been advanced to the 3rd respondent (Sudhir Ranjan Roy) on 3.7.1959 and a sum of Rs. 8,000/- was said to have been advanced to the 4th respondent (C.C. Das Gupta) on 6.7.1959. The alleged disbursements were, in fact, fictitious. The 1st respondent falsified the accounts and brought into existence the documents with the help of the other respondents.
(d) P.Ws. 2 (Amar Nath Chakraborty, Co-operative Extension Officer of Khowai Block) and 3 (Sourindra Mohan Biswas, District Auditor in the Co-operative Department, Tripura) audited the accounts of the Society and prepared Exts. P-33 and P-36, reports; Exts. P-37 and P-38 are the statements of accounts and Balance-sheets. Both of them mentioned in their reports that the-entries mentioned in the above Sub-Paras (a) to (c) were fictitious.
(e) P.W. 6 (Nihar Ranjan Roy) who was the Ex-Accountant of the C.M.S. filed Ext. P-54 complaint petition, dated 8.1.1960 before the Registrar of the Co-operative Societies on 9.1.1960 alleging that the 1st respondent (S.K. Gupta) committed criminal breach of trust and misappropriates the said sum of Rs. 18,200/-. P.Ws. 4 and 7 (Sailesh Ranjan Dutta and Manoranjan Deb) who were some of the members and Directors of the C.M.S. filed Ext. P-52, on 11.1.1960, complaint before the Registrar or Co-operative societies making similar allegations as those in Ext. P-54. The Registrar of Co-operative Societies passed Ext. P-55 order on 9.1.1960 and directed P.W. 5 (Kamendra Narayan Bhattacherjee), the then Deputy Collector of Tripura and the Assistant Registrar of Co-operative Societies to make an enquiry. P.W. 5 (Ramendra Narayan Bhattacherjee) made an enquiry and sent his report Ext. P-57, dated 16.1.1960, to the Registrar explaining the conditions of the Society and alleging that with the help of the respondents 2 to 5 the 1st respondent misappropriated a sum of Rs. 18,200/- by falsifying the accounts.
(f) The Chief Commissioner, Tripura, dissolved the Board of Directors of the C.M.S. by an order dated 10.8.1960 and appointed P.W. 1 (Joy Sankar Bhattacherjee) as Administrator of the C.M.S. Ext. P-2 dated 17.8.1960 is the Gazette Notification. P.W. 1 (Joy Sankar Bhattacherjee) took charge on 31.8.1960 as can be seen from Ext. P-3. He finished the scrutiny of the accounts before 1.9.1960, and filed the criminal case against the respondents on 7.11.1960, which was committed to the Sessions.
3. The learned Assistant Sessions Judge framed charges against the 1st respondent under Sections 408 and 477-A I.P.C. and framed charges against the other respondents under the same Sections read with Section 109 I.P.C. for abetment. After trial, he held that though the 1st respondent was entrusted with a sum of Rs. 18,200/- of the C.M.S., the prosecution failed to prove that the 1st respondent misappropriated the money or that he disbursed the money in violation of the Bye-laws and that the prosecution also failed to prove that the 1st respondent got false entries made in the account books and brought into existence false documents. So, he acquitted the respondents.
4. Being aggrieved with the judgment of acquittal, the complainant filed the appeal with the leave of this Court under Section 417 (3) Cr.P.C.
5. Before entering into the merits of the case, it has to be mentioned that the C.M.S. was registered as a Co-operative Society No. 209 on 25.3.1957 under Tripura Cooperative Societies Act. But the Bombay Co-operative Societies Act (Bombay Act No. VII of 1925) was extended to the Union Territory of Tripura on 1.5.1959. Section 72 is the saving section, which shows that the Co-operative Societies which were in existence and which were registered under the Tripura Co-operative Societies Act of 1358 T.E. should be deemed to be registered under the Bombay Co-operative Societies Act, though their bye-laws should, so far as the same are not inconsistent with the express provisions of this Act, continue to be in force until altered or rescinded.
So, the C.M.S. in question is governed by the Bombay Co-operative Societies Act (Bombay Act No. VII of 1925). The Tripura Administration also framed Tripura Cooperative Societies Rules on 1.10.1959. The C.M.S. in question had at first 33 members as can be seen from the evidence of P.W. 4. Now it has 77 members, as can be seen from Ext. P-53 (Members Register). The C.M.S. passed a resolution on 13.4.1957 as can be seen from Ext. P-(a) appointing the 1st respondent as the Secretary of the C.M.S. Accordingly, the 1st respondent Shri S.K. Gupta worked as Secretary of the C.M.S. from that date up to 10.8.1960.
6. Ext. P-41 is the Bye-laws of the C.M.S. in question. Rule 2 therein lays down the objects for which the Society was formed. It runs as follows:
(i) To arrange for the sale of products of the members or purchase by the Society,, to the best advantage;
(ii) To advance loans to members on the security of their produce, raw or processed;
(iii) To rent or own godowns and processing yards to facilitate storage, processing and sale of goods;
(iv) To process raw material belonging to the members or purchased by the society;
(v) To arrange packing and grading of the produce of the members;
(vi) To supply to members through their local society or otherwise manure, seed, implements, raw materials etc. required for their business, and also essential domestic requirements;
(vii) To sell to its members as well as to other consumers all articles of consumption, bought by it either by itself or in combination with other societies;
(viii) To encourage thrift, self-help and co-operation among its members;
(ix) To undertake all other activities calculated to further the objects mentioned in-(i) to (viii) above.
7. Rule 3 shows how the funds can be raised by the C.M.S. It also shows that, when the funds are not utilized in business of the society, then they should be invested or deposited as required by Section 35 of the Bombay Co-operative Societies Act, but that no investment should be made under Section 20(e) of the Indian Trusts Act.
8. Rule 41 lays down the duties of the Secretary. They are:
(1) To summon and attend all General and Board meetings of the Society.
(2) To record the proceedings of such meeting in the Minute Book.
(3) To make disbursement and to obtain vouchers and to receive payments and pass receipts, under the general or special orders of the Board of Directors on this behalf from time to time.
(4) To keep all accounts and registers required by the rules.
(5) To prepare all the registers, vouchers, balance sheets and other documents required for the transaction of the business of the society,
(6) To conduct correspondence and to supply all needful information to the members.
(7) To see that the audit memo is placed before the Board of Directors, for consideration, without delay and to take further steps in regard to rectifications and submission of an audit rectification report to the Auditor in time.
(8) To guide, supervise and control the work of the salaried staff of the society and its branches and do all other work which may be entrusted to him by the Board.
(9) To receive agricultural produce and other goods in the Society's godowns and to be responsible for their safety while they are there.
(10) To realize the sale proceeds.
(11) To conduct the sales and supervise weighments etc.
(12) To purchase and sell the articles of domestic needs and agricultural requisites at reasonable rates, subject to the approval of general or specific instructions of the Board of Directors.
(13) To countersign cash book in token of the balance being correct and to produce the cash balance whenever called upon to do so by the Chairman or any person authorized to do so.
In the absence of the Secretary the Board of Directors may authorize the Manager to perform the duties of the Secretary.
The Board of Directors may also authorize the Manager to perform any of the duties of the Secretary to facilitate the working of the Society.
Receipts passed on behalf of the Society shall be signed by the Secretary. Share certificates and other documents shall be signed by the Secretary and one member of Board of Directors jointly.
9. Rule 42 lays down the conditions -when loans may be advanced on the security of produce or goods. As the decision in the case depends upon the enforcement of Rule 42, it is advantageous to reproduce the same. It runs as follows:
(1) the Board of Directors shall, at the beginning of the season, fix the amount of advance, indicating the percentage of the market price of produce or goods pledged with the society, that may be granted to a member. Such limits may be fixed for different commodities and varied from time to time according to fluctuation in markets or otherwise.
It shall also be competent for the Board of Directors to call on a borrower at any time before the due date to repay a portion of the loan or advance issued or produce additional security for the outstanding loan or advance within a time fixed by them, if in their opinion, there is fall or likely to be a fall in the market value of the produce or goods pledged.
(2) No advance shall be granted until the produce is deposited in a godown or a building approved by the Society and is completely under Society's control.
(3) The goods stored will be insured at reasonable market rates against theft at the cost of the members concerned.
(4) The period of advance shall be restricted to a maximum term of six months. Renewal for a further period of six months may be granted by the Board of Directors on such terms and conditions as it thinks fit.
(5) The rate of interest on such advance shall not exceed 1 pies per rupee per month. But it should not be less than one pie per rupee per month.
(6) The Society is not responsible for any damage or deterioration of the goods, but will store the goods in such a way as not to make themselves to deteriorate.
10. Thus, under Rule 41 the 1st respondent was bound to make disbursement and to obtain vouchers and to receive payments and pass receipts under the general and special orders of the Board of Directors in that behalf from time to time. He was put in charge of the accounts, vouchers, registers and other documents of the society and was bound to maintain them properly. Under Rule 42 firstly he could advance moneys only to members of the society. Secondly, he could grant advance only on security of produce to be deposited in a godown or a building approved by the society, which should be completely under the control of the society. Thirdly he could not advance any loan for a period exceeding 6 months. Renewal for a further period of 6 months could be granted only by the Board of Directors. Fourthly interest was also to be collected.
11. The case of the prosecution is that the 1st respondent, however, purported to advance a sum of Rs. 18,200/- to 6 persons (out of whom there were two members of the society), that he did not obtain the prior sanction of the Board of Directors to make the advances, that he committed criminal breach of trust and disregarded the bye-laws, that he manipulated the accounts regarding the said amount and that he misappropriated the money.
12. The following are the particulars relating to the said disbursements:
Date Amount Name of the loance Ext. Nos. in the
accounts etc.
(1) 6.9.1958 Rs. 8,500/- Ajit Chakraborty P 45(a)
(6th respondent) P 17.b, P 18a
(2) 9.9.1958 RS. 700 Dhirendra Chandra Roy P 42 (a)
(5th respondent) P 17a, P 18
(3) 20.2.1959 Rs. 3,000/- A. Majumdar P 51, P 17e, P 18a
(4) 10.3.1959 Rs. 6,000/- C.C. Das Gupta P 46, P 17f, P 18e
(4th respondent)
(5) 21.3.1959 Rs. 8,000/- Haradhan Deb. P 48, P 17c, P 18b
(2nd respondent)
(6) 31.3.1959 Rs. 2,000/- Haradhan Deb. P 48, P 17d, P 18c
(2nd respondent)
Regarding the above entries it is to be noticed that the 4th respondent accused (C.C. Das Gupta) and the 2nd respondent accused (Haradhan Deb) alone were members of the society as can he seen from the Sl. Nos. 19, 20 of Ex. P-53 Members Register. The others were not members of the society. So the 1st respondent purported to lend moneys to 3 non-members. The evidence of P.W. 1 (Joy Sankar Bhattacharjee) and P.W. 6 (Nihar Ranjan Roy) shows that the 4th respondent is the maternal uncle of the 1st respondent. The 4th respondent also admitted in Ext. P-56 that he is related to the 1st respondent. He was also an employee of the C.M.S. The evidence of P.W. 1 shows that the 2nd respondent was an employee under C.T.S., of which the 1st respondent was the chairman and that the 2nd respondent was also an employee of the C.M.S. Their evidence shows that the other loaners are the friends of the 1st respondent. So, the disbursements were alleged to have been made to 2 members employees and 3 non-members. The evidence also shows that none of them was a Jute grower. No jute was taken as security.
The Vouchers Nos. were not noted in Exts. P-17c, P-17d and P-17f. There is over-writing of the date of 20.2.59 in Ext. P-18d Vouchers. P.W. 6 (Ex-Accountant of the C.M.S.) stated that the debit entries were bogus and that therefore he did not sign Exts. P-18 to P-18e. P.W. 8 (Ex-Cashier of the C.M.S.) deposed that he wrote Exts. P-18 to P-18d but that the endorsements of receipt on their reverse were not signed before him. He further deposed that the five alleged lances were not present when the vouchers were prepared and that no disbursement was made by him under any voucher. It is the evidence of P.Ws. 1 and 6 that the Offices of C.M.S. and C.T.S. were situated in the same building and that both the respondents 1 and 2 were connected with both. So, the 1st respondent got up some entries and vouchers in the names of his relations, friends and employees to show that a sum of Rs. 18,200/- was disbursed to them. As can be seen from Ext. P-1, there was no resolution authorizing the 1st respondent to make any advance towards 'Dadan' for jute to the; above persons. As such, there was flagrant violation of Rules 41 and 42 of Ext. P-41 by the 1st respondent.
13. The case of the 1st respondent is that he was in Calcutta from 1.8.1958 to 14.9.1958 and that therefore he did not make any disbursement on 6.9.58 and 9.9.1958, He let in the evidence of D.W. 2 (Anil Chand Bhattacherjee) Traffic Assistant of Indian Air Lines at Agartala Office and D.W. 3 Sushil Kumar Maity, Manager of the Palace Hotel in Calcutta to prove his case. The evidence of D.W. 2 is that Ticket No. B-745811 was issued to the 1st respondent on 30.7.1958, that the 1st respondent performed the journey on 1.8.1958 and that he returned from Calcutta to Agartala on 14.9.1958 by Ticket No. 395255.
The evidence of P.W. 3 is that the 1st respondent stayed in the Palace Hotel in Calcutta from 1.8.1958 to 14.9.1958, as can be seen from Ext. D-12 Boarder Register. Exts. D-13 and D-13a show that the 1st respondent was in the said Hotel on 6.9.58 and 9.9.1958. Though there is some mistake regarding the number of the return Air Lines ticket, P.W. 6 (Nihar Ranjan Roy) admitted in his cross-examination that the 1st respondent stayed in Calcutta for about one month. P.W. 8 (Sukendu Bhattacherjee) also stated that the 1st respondent stayed in Calcutta for about 7/8 days. So, the 1st respondent did not actually make the payments on 6.9.1958 and 99-1958 to the loanees.
The evidence of P.Ws. 6 and 8 shows that the 1st respondent was signing blank cheques and keeping them with P.W. 8. Their evidence also shows that P.W. 8 was having the cash with him and dealing with it in the absence of the 1st respondent and that the 1st respondent was verifying the vouchers and signing the accounts after he returned back. So, P.W. 8 must have made the payments on 6.9.1958 and 9.9.1958; but the 1st respondent is not absolved from his liability since he is the person in charge of the cash, accounts etc. according to the Bye-laws. So, as rightly held by the learned Assistant Sessions Judge, the 1st respondent (S.K. Gupta) must be held to be responsible for the above payments also.
14. That the above transactions were shady is clear from the fact that the amounts were said to have been collected towards the end of the Co-operative year of 1959 and that an identical sum of Rs. 18,200/- was shown once again to have been disbursed (but this time to 3 persons). The following are the particulars about the collections said to have been made:
Sl. No. Date. Amount. Name of the person Ext Marks.
alleged to have paid.
1. 27.6.1959 Rs. 700/- Dhirendra Chandra Roy. Exts. P-19 & P-21.
2. 27.6.1959 Rs. 3,500/- Ajit Chakraborty. Exts. P. 19 (b), P-21.
3. 28.6.1959 Rs. 3,000/- A. Majumdar. Exts. P-19 (c), P. 21a.
4. 29.6.1959 Rs. 5,000/- Haradhan Dey. Exts. P-20, P-21f.
5. 80.6.1959 Rs. 6,000/- C.C. Das Gupta. Exts. P-19 (a), P-21c.
15. The said amount of Rs. 18,200/- was again shown to have been disbursed within. a few days and at the commencement of the next Co-operative year as under:
Sl. No. Date. Amount. Name of the loance, Ext. Marks.
1. 2.7.1959 Rs. 2,200/- Haradhan Deb Exts. P-26 & P-25.
(2nd respondent).
2. 8.7.1959 Rs. 8,000/- Sudhir Ranjan Roy Exts. P-26 (a), P-25a.
(3rd respondent).
3. 6.7.1959 Rs. 8,000/- C.C. Das Gupta Exts. P-26 (b), P-25f.
(4th respondent).
16. Thus, the amount of Rs. 18,200/-covered by the earliest entries was shown to have been collected towards the end of the Co-operative year and again disbursed in the beginning of the next Co-operative year, within a few days.
17. P.W. 6 (Ex-Accountant) stated that no money was collected under Exts. P-19, P-19(a), P-19 (b), P-19 (c) and P-20. To the same effect is the evidence of P.W. 8 (the Ex-Cashier). There is clinching evidence to show that the alleged collections covered by Exts. P-19, P-19 (a), P-19 (b), P-19 (c) and P-20 were never made and that no amount, in fact, was collected from the loances. Ext. P-56 is the statement of the 4th respondent C.C. Das Gupta before P.W. 5 (Asstt. Registrar of Cooperative Societies) which runs as follows:
I am a member of the Tripura Central Marketing Co-operative Society. I have been taking advance from this Society and purchasing jute on its behalf and depositing the jute to the society. I was a paid employee of this society from 1st November, 1957 to 28th February, 1959 oil a monthly pay of Rs. 100/- only. I took an advance of Rs. 6000/- from the society on 10th March, and gave it as deaden to 25 or 30 tribal of Kulai, Kan-chanpur area. I do not exactly remember whether I took further sum of Rs. 2,000/'-. I executed a document for Rs. 8,000/- on condition that I will deliver jute up to that amount to the society at a rate prevailing in Agartala market premium less one rupee on 6th July, 1959 A.D. The last date of delivery of jute was 15th October, 1959. I gave dadan of Rupees 2,000/- to 5 or 6 tribals of Kulai Kanchanpur area. I every now and then enquired from the society (Secretary of the Society) whether jute is to be delivered to the godown and the Secretary of the society told me that he could not say anything about purchase of jute before audit is complete. Secretary Sri Section K. Gupta is my relative. The persons to whom I issued dadan had learnt that society will not transact in jute this year and they did not give to me. I have not got any document for the dadan issued to the tribals. I have heard that the tribals had disposed of the jute I advanced for. I have asked them to refund my money. They are willing as they have expressed to me that they will give more quantity of jute next year for the money advanced. Thus, I believed that I shall be able to realise this amount, advanced so far, by 31st Chaitra next (Approximately middle of April, 1960) and repay back to the society. If they do not refund the money I promise to repay the amount by the 31st Chaitra even though I do not get this amount from the parties after borrowing the amount from my friends and relatives.' Therein the 4th respondent stated that he received only Rs. 6,000/- as advance on 10.3.1959, but that he did not remember exactly whether he took any further sum of Rs. 2,000/- and that he executed a document for Rs. 8,000/- agreeing to deliver jute to the society by 15.10.1959. So, the 4th respondent did not state that he repaid Rs. 6,000/-. But the learned Asstt Sessions Judge misappreciated Ext. P-56 and stated in para 43 of his judgment that Ext. P-56 is vague and does not show that the 4th respondent did not pay off Rs. 6,000/- and that he did not. borrow Rs. 8,000/- afresh.
18. That the judgment of the learned Asstt. Sessions Judge regarding the construction of Ext. P-56 is incorrect is further clear from Ext. P-59. The Registrar of Co-operative Societies called upon the 1st respondent by his letter Ext. P-58, dated 18.3.1960, to explain the discrepancy in the annual return submitted -by the 1st respondent regarding the cash balance. The Co-operative Registrar stated in his letter Ext. P-58 that according to the Annual Return sent by the 1st respondent, there was a cash balance of Rs. 19,337.50 N.P. on 30.6.1959, but that from Ext. P-56 it was clear that the 4th respondent did not refund Rs. 6,000, and that he did not borrow a further loan of Rs. 6,000/- on 6.7.1959, that the 1st respondent however mentioned in the cash book that the 4th respondent refunded a sum of Rs. 6,000/- on 30.6.1959, that thus 'the 1st respondent furnished a wilful false return and committed an offence under section 60 of the Bombay Co-operative Societies Act and that 1st respondent should explain the discrepancy.
In reply to that, the 1st respondent sent Ext. P-59 letter which runs as follows:
With reference to your letter No. 2407/-2-209/COOP/59 dt. 18.3.60 I beg to state that the amount was taken in to cash on good faith according to a practice followed by commercial firm where accounts are closed even non-receiving amount in hard cash on the date of closing, and the amount was again been debited in the next year's account. This practice was followed due to ignorance which may not be correct procedure in co-operative accounting.
However, I assure you that all possible measures have been adopted so that this may not recur.
Taking all these circumstances into consideration you will be able to realise that this has been done simply in good faith.
19. Thus, the 1st respondent admitted that the 4th respondent did not pay off Rs. 6,000/- in cash, but that on account of good faith and according to the practice followed by commercial firms the amount was shown to have been collected in cash and debited in the next Co-operative year's account. So, Ext. P-59 is proof positive that credit items covered by Exts. P-19, P-19 (a), P-19 (b), P-19 (c) and P-20 are mere paper transactions.
The learned Asstt. Sessions Judge, however, rejected Ext. P-59 on the ground that it is hit by section 24 of the Indian Evidence Act. His reasoning is that Ext. P-58 contains a threat by the Co-operative Registrar that he would take action against the 1st respondent and that therefore Ext. P-59 reply could not be said to have been voluntarily made and that it is not admissible in evidence. In support of this contention he relied on State of Orissa v. Bhourilal Agarwal (1962) 1 Cri LJ 835 (Ori). In that case an accused made a statement before the Asstt. Sales Tax Officer under the Orissa Sales-Tax Act. It was held that the Asstt. Sales-Tax Officer, who was conducting inspection, search and seizure of accounts, was a person in. authority according to the Section 24 of Indian Evidence Act, that the statement of the accused made to him could not be said to be voluntary and that it was inadmissible in evidence. Sections 54 and 60(b) of the Bombay Co-operative Societies Act entitle the Cooperative Registrar to call for any information. So, the Registrar of Co-operative Societies brought to the notice of the 1st respondent the provisions of Section 60(c) of the Act and the 1st respondent sent Ext. P-59 in reply to it. As such the provisions of Section 17 and not of Section 24 of the Indian Evidence Act are attracted.
In In re, P. Narayana Murti AIR 1942 Mad 654, it was held that a confessional statement made on oath by an accused person before the Assistant Registrar of Co-operative Societies in an inquiry held by him in regard to certain forged cheques is not necessarily inadmissible under section 24 of the Indian Evidence Act. In Ram Singh v. State AIR 1959 All 518 it was held that to distinguish between a confession and an admission a simple test can be applied, that if the statement by itself is sufficient to prove the guilt of the accused, it is a confession, but that if, on the other hand, the statement falls short of it, it amounts to an admission. It was further held that the acid test which distinguishes a confession from an admission is that where a conviction can be based upon that statement alone, it is a confession and that where supplementary evidence is needed to authorize a conviction, then it is an admission. The 1st respondent gave Ext. P-59 explanation in reply to Ext. P-58. So it is not hit by section 24 of the Indian Evidence Act. Thus, Ext. P-59 supports Ext. P-56 and shows that the alleged repayments said to have been made by the loances as per Exts. P-19, P-19 (a), P-19 (b), P-19(c) and P-20 are all paper transactions.
(After considering the other circumstances and evidence of P.Ws. 1, 6, 8 and PW-1 in paras 20 to 22 and confirming the falsity of the transactions, the judgment proceeds.)
23. With regard to the 3 disbursements covered by Exts. P-26, P-26 (a) and P-26 (b) it is seen, firstly, that there was no resolution of the Board of Directors authorizing the disbursements under Exts. P-26, P-26 (a) and P-26 (b). Secondly, the 3rd respondent was not a member of the society. Thirdly, the loances were not Jute growers. They did not deliver any jute to the C.M.S. and the 1st respondent did not advance the alleged loans on the security of any jute. Fourthly, Exts. P-26, P-26 (a) and P-26 (b) came into existence within a few days after the alleged recoveries were made. Fifthly, the amount throughout had been identical viz. Rs. 18,200/-. Sixthly, as can be seen from Exts. P-42 (a), P-45, P-46, P-48 and P-51 the amounts said to have been advanced as mentioned in para 12 of this judgment, only were found to be outstanding, though the other amounts due from the loances were adjusted, and the same amount of Rupees 18,200/- had been shown to be the subject matter of a series of transactions of collections and disbursements. So, the 1st respondent continued and persisted in committing breach of trust and in acting contrary to the Rules 41 and 42 of Ext. P-41 bye-laws of the C. M. S.
24. The overall picture is, therefore, as follows:
(1) A sum of Rs. 18,200/- was said to have been disbursed in 1958 and 1959.
(2) It was said to have been repaid in the last week of June, 1959 towards the end of the Co-operative year of 1959 and long after the maximum period of 6 months allowed by Rule 42(4) of the Bye-laws.
(3) The same amount was again said to have been disbursed in a few days in. the first week of July commencing with the next Co-operative year (1959-60).
(4) Except the 2nd & 4th respondents, the others were not members of the Cooperative society and in this regard the 1st respondent disregarded sub-rule (1) of Rule 42 of the Bye-laws.
(5) The 1st respondent did not obtain any general or special orders of the Board of Directors to make the disbursements and violated Sub-rule (1) of Rule 42 of Ext. P-41.
(6) Exts. P-56 and P-59 show that the alleged collection of the monies in June 1959 was false and that the accounts were got up.
(7) The fact that a discount of Rupees 10/- was paid to cash a cheque on 29.6.1959 shows that the society had no funds on that day.
(8) None of the alleged loances was a Jute grower and no jute was deposited in the godowns of the society before the advances were made and in this regard the mandatory provisions of Sub-rule (2) of Rule 42 were also disregarded by the 1st respondent.
(9) A number of adjustments were made in the accounts to show that the sum of Rs. 18,200/- was disbursed.
(10) The three persons to whom ultimately the amounts were said to have been disbursed are interested in the 1st respondent. The 4th respondent C.C. Das Gupta is a relation of the 1st respondent as proved by P.Ws. 1, 6 and 8 and as admitted by the 4th respondent himself in Ext. P-56. The 3rd respondent Sudhir Ranjan Roy is a servant of D. W. 1 who is a Co-Director of the Match Factory and a friend of the 1st respondent. The 3rd respondent Haradhan Deb was appointed by the 1st respondent in the C.M.S. The 3rd respondent was also-an employee of the C.M.S. of which the 1st respondent was a Director.
25. As such the 1st respondent could bring into existence Exts. P-26, P-26 (a) and P-26 (b) in favour of his relation and friends. He committed criminal breach of trust and either misappropriated or misapplied the funds of the society dishonestly to benefit himself or his-relation and friends.
26. To get over the fact that there was no order of the Board of Directors to make the earlier disbursements of Rs. 18,200/- or the later disbursement of the same amount under Exts. P-26, P-26 (a) and P-26 (b), the 1st respondent appears to have made frantic efforts to get a resolution passed by the Board of Directors to ratify his action. The evidence of P.Ws. 4 and 7 shows that after P.W. 6 filed Ext. P-54 complaint on 9.1.1960 a meeting of the Board of Directors under the Chairmanship of J.K. Choudhury was convened on 10.1.1960 as per Ext. P-27. Earlier on 31.12.1959 a General Body meeting was called. But, on account of lack of quorum it was. adjourned to 1.1.1960 as can be seen from Ext. P-28. On 1.1.1960 some of the members of the Board of Directors left the meeting as can be seen from Ext. P-29.
The last meeting of the society was held on 6.5.1960 as per Ext. P-30 in which the resolutions passed as per Ext. P-27 were approved. Ext. P-27 shows that a resolution was passed approving the disbursements made by the 1st respondent. The resolution mentions that in spite of several irregularities, admitted, to have been committed by the 1st respondent, it ratified the same Ex-Post-facto. The fact that the meeting was held after P.W. 6 filed the complaint on 9.1.1960 throws suspicion about the manner in which the meeting was convened by the 1st respondent. However, it has to be noted that there is no Bye-law in Ext. P-41 which authorizes the Board of Directors to ratify the transactions subsequently. Sub-rule (3) of Rule 41 and Sub-rule (1) of Rule 42 are mandatory and provide for disbursements to be made only under the specific prior orders of the Board of Directors to be passed at the beginning of the season. Besides, the Board of Directors itself has. no power to advance loans to non-members of to act contrary to the Bye-laws. So the resolution is illegal and could not validate the illegal and criminal acts of breach of trust committed by the 1st respondent.
27. The contention of the learned Counsel for the respondents is that. As the 1st respondent obtained Exts. D-1 (a), D-1 (b) and D-1 (c) and some arbitration proceedings are pending, the liability of the 1st respondent is a civil one and that no prosecution can be maintained. It was also pointed out that P.W. 1 issued registered notices as can be seen from Ext. D-2 series calling upon the three respondents 2 to 4 to pay up the amounts outstanding against them, that P.W. 1 himself made some advances after he was appointed as Administrator without the security of goods and that therefore the liability is a civil liability. He relied on Mt. Sudeshara v. Emperor. AIR 1933 All 818, where it was held that criminal Courts should not be used for enforcing a civil claim. In Gopal Krishna Majumdar v. State of Tripura AIR 1955 Tri 35 it was held that every breach of dust is not criminal, that it may be intentional without being dishonest or that it may appear to be dishonest without being really so and that the Court should be slow to move because there is a tendency to secure speedy results by having recourse to criminal law. It was also held that it is only when there is evidence of a mental act of fraudulent misappropriation that the commission of embezzlement becomes an offence punishable as criminal breach of trust and that it is this mental act of fraudulent misappropriation that distinguishes an embezzlement amounting to a civil wrong or tort from the offence of criminal breach of trust punishable under Section 406 I.P.C.
These cases are distinguishable on the facts. In the present case the 1st respondent acted dishonestly in total violation of the Bye-laws of the C.M.S. and made an attempt to get over the criminal liability by finally trying to show that the amount of Rs. 18,200/- was disbursed to 3 persons viz. respondents 2 to 4 under Exts. P-26, P-26 (a) and P-26 (b). The evidence, already discussed, clearly shows that the 1st respondent did not act honestly, but that he acted dishonestly and violated the Rules 41 and 42 of the Bye-laws covered by Ext. P-41 and that he caused loss to the C.M.S. The amounts have not been so far recovered, though a period of about 8 years has elapsed. Even if Exts. D-1 (a), D-1 (b) and D-1 (c) are held to be true, still there was dishonest total violation of the Bye-laws of the C.M.S., as already pointed out. It is difficult to find that the 1st respondent had good faith in getting entries made that monies were collected in cash, though there was no collection in fact. It is equally difficult to believe that the 1st respondent was actuated by good faith in lending monies to non-members, as though the C.M.S. was a money-lending corporation.
The decision in the State of Kerala v. Kunhikannan Nair AIR 1958 Ker 103 relied on by the learned Counsel for the appellant is to the point. In that case it was proved that the Secretary of a Co-operative Society converted the money of the society in his hands to his own. use or expended the same for purposes other than those of the society. It was. held that he was guilty of criminal1 breach of trust, inasmuch as the conversion or the expenditure must be, necessarily dishonest. It follows that the 1st respondent is guilty of criminal breach of trust, since the conversion of the expenditure made by him was necessarily dishonest.
28. Another contention of the learned Counsel for the respondents is that the 1st respondent could not be held' liable because he was handing over signed blank cheques to P.W. 8 (Sukhendu Bhattacharjee) and that the 1st respondent was inexperienced. The decisions relied on by him in this regard have no application to the facts of this case. In R.K. Dalmia v. Delhi Administration 1962 (2) Cri LJ 805 : AIR 1962 SC 1821, one R and the accused could operate jointly on the accounts of an Insurance Company with a bank under the powers given by the Board of Directors. It was held that the effect of delivery of blank cheques by R signed by him to the accused might amount to putting the accused to sole control over the funds of the Insurance Company in the Bank and that there would not remain any question of the accused's having joint dominion with R over those funds and that the accused could alone commit criminal breach of trust in respect of the funds. In Anwarul Hasan: v. State 1953 Cri LJ 385 : AIR 1953 All 142 a person who had been acting as an honorary Secretary of a Co-operative Society was found to have deposited amounts less than what he received from the members in respect of the share money. Upon being threatened by the President of the Society with criminal proceedings if he did not make a clean breast of the matter, he wrote a letter stating that owing to inexperience he had committed mistake in totaling and that a sum of Rs. 17/- was due from him which he deposited. It was held that the letter contained only an explanation and not any admission, of guilty intention or any confession that he had misappropriated the money.
It is no valid excuse for the 1st respondent, who entered upon the management of the C.M.S. and knew fully well the Bye-laws as per Ext. P-41, to state that he was negligent in issuing blank cheques to P.W. 8 or that he was inexperienced. He had no business to take up the responsibility as the Secretary if he was inexperienced or if he was negligent in signing blank cheques and to cause loss to public body like the C.M.S.
29. Yet another contention of the learned Counsel for the respondents is that proof of mere retention of money or entrustment is not enough to prove the offence under section 409 and he relied on Robert Stuart Wauchope v. Emperor AIR 1933 Cal 800 where it was held that in cases of criminal misappropriation, the prosecution must always prove misappropriation and that it is not enough if it is proved that the accused had received the money and that the onus of proof never shifts from the prosecution. In the present case the prosecution proved criminal misappropriation and criminal misapplication of the funds of the society by the 1st respondent.
30. The next contention of the learned Counsel for the respondents is that unless there is proof of commission of criminal breach of trust and falsification of accounts, a charge under Section 477A I.P.C. cannot be sustained. He relied on C N. Krishna Murthy v. Abdul Sub-ban AIR 1965 Mys 128 : 1965 (1) Cri LJ 565. It was held that in order to bring home the guilt under Section 477A I.P.C., the prosecution has to prove that the accused had falsified the account books and made false entries therein wilfuly with intent to defraud the State. It was also held that, where the case for the prosecution was that the accused falsified the account books to cover up his own embezzlements and not somebody else's defalcations, but the charge of breach of trust, against him was not proved, then the case of the prosecution that the accused intentionally and deliberately falsified the account books to cover up his embezzlements must also fail for want of proof. In the present case the guilt of the 1st respondent under Section 408 I.P.C. is brought home to him. So, his guilt under Section 477A I.P.C. is also equally brought home to him and the above decision does not apply to the facts of the case.
31. The next contention of the learned Counsel for the respondents is that there was delay on the part of P.W. 1 in filing the complaint. The evidence of P.W. 1 is that after taking the charge on 31.8.1960 he finished the scrutiny of the accounts before 1.9.1960 and that he filed the case on 7.11.1960. So, there was a delay of about 12 months in filing the case. The contention of the learned Counsel for the respondents that P.W. 1 took time to make up his mind as to whom he should charge appears to be probable. For, the real persons who abetted the commission of the offences by the 1st respondent appear to be P.Ws. 6 and 8 (the Ex-Accountant and the Ex-Cashier of the C.M.S.). P.W. 8, the Ex-Cashier is no other than the elder brother of P.W. 5 the Assistant Registrar of Co-operative Societies. Blood is thicker than water. P.W. 1 evidently dropped P.W. 8, who too should have been prosecuted. But, the non-prosecution of P.Ws. 6 and 8 is not fatal to the case. The case depends mostly upon the circumstantial evidence and documents. The delay of two months on the part of P.W. 1 in filing the case does not absolve the 1st respondent from his criminal liability.
32. It was also contended by the learned Counsel for the respondents that though P.W. 1 stated in the complaint petition that he obtained the permission, of the Chief Commissioner to prosecute the respondents, he admitted in the cross-examination that he did not take any such permission. But, his evidence shows that he consulted the Co-operative Registrar and took his permission to file the case (vide Ext. P-61). In fact, it is not shown by the Counsel for the respondents that the permission of any officer was necessary before P.W. 1 could launch the prosecution.
33. The learned Counsel for the respondents also argued that the circumstantial evidence in the case is not sufficient to prove the guilt of the respondents. He relied on a number of decisions, which have laid down the general principle that, in a case depending upon conclusions to be drawn from circumstances, the cumulative effect of the circumstances must be such as to negative the innocence of the accused and to bring the offences home to him beyond any reasonable doubt. Vide Bhagat Ram v. State of Punjab 1954 Cri LJ 1645 : AIR 1954 SC 621; Babu Singh v. State of Punjab 1964 (1) Cri LJ 566 (SC) and Malsawn Lushai v. Manipur Administration AIR 1966 Manipur 2. In the present case the facts and the evidence, already discussed, go to show that there is legal proof of the guilt of the 1st respondent beyond all reasonable doubt. Though the other respondents might or might not have been aware of the provisions of the Bye-laws of the C.M.S., the 1st respondent is at least liable to be convicted.
34. It was pointed out that the 1st respondent was previously prosecuted for an offence under section 61 of the Bombay Co-operative Societies Act (Act VII of 1925) in a Criminal Case No. 539 of 1960 on the file of the Magistrate of 1st Class, Sadar, Tripura in Agartala on the ground that the 1st respondent committed an offence under section 60 of the said Act in submitting the annual return of the C.M.S. for the Co-operative year ending on 30.6.1959, inasmuch as the 1st respondent showed that the advance amount of Rs. 6,000/- was realized from the 4th respondent though, in fact, it was nest realized then. Ext D-8 is a certified copy of the judgment of the Magistrate, which shows that the Rules under the Act were framed on 1.10.1959, that they were not retrospective in operation and that their breach on 4.8.1959, the date on which the 1st respondent submitted the return, was not punishable. So, the Magistrate acquitted the 1st respondent.
The learned Assistant Sessions Judge referred to Ext. D-8 and held that it is not a bar to the subsequent prosecution of the 1st respondent under sections 408 and 477A I.P.C. As can be seen from Section 403 Cr.P.C. and Article 20 of the Constitution of India, the 1st respondent is liable to be prosecuted for the offices in question inasmuch as he was not previously prosecuted for the same offences. The offences under Sections 60 and 63 of the Bombay Co-operative Societies Act are different from the offences under the Indian Penal Code. So, the previous acquittal of the 1st respondent for offences under Sections 60 and 61 of the Bombay Co-operative Societies Act is no bar to the present prosecution.
35. The last contention of the learned Counsel for the respondents is that this is an appeal by a private party under Section 417 (3) Cr.P.C. and that unless there are compelling circumstances for interference, this Court should not interfere with the judgment of the lower Court and that the acquittal of the respondents by the lower Court raises a further presumption of their innocence. He relied on Dhirendra Nath Mitra v. Mukunda Lal Sen AIR 1955 SC 534. It was held that it might well be that a different view of the evidence could have been taken, but that was not enough to justify interference in revision, when there was an application by a private party to set aside an order of acquittal. It was also held that it is to be remembered that no right of appeal is conferred in such cases though there is provision for appeal against acquittals and that the Court must exercise the revisional powers very sparingly. This decision lays down the powers of a revisional Court.
In Balbir Singh v. State of Punjab (1957) Cri LJ 481 : AIR 1957 SC 216 it was held that it is now well settled that, though the High Court has full power to review the evidence upon which an order of acquittal is founded, it is equally well settled that the presumption of innocence of the accused is further reinforced by his acquittal by the trial Court and that the views of the trial Judge as to the credibility of the witnesses must be given proper weight and consideration. It was also held that there must be substantial and compelling reasons for the appellate Court to come to a conclusion different from that of the trial Judge.
But, in the latest decision of the Supreme Court reported in Durgacharan Naik v. State of Orissa AIR 1966 SC 1775 the case law on the subject was reviewed. It was held that the power conferred by Clause (a) of Section 423 Cr.P.C. which deals with an appeal against an acquittal, is as wide as the power conferred by Clause (b) which deals with an appeal against conviction and that the High Court's powers in dealing with a criminal appeal are equally wide, whether the appeal in question is one against acquittal or against conviction. It was further held that the test suggested by the expression 'substantial and compelling reasons' for reversing a judgment of acquittal is not to be construed as a formula which has to be rigidly applied in every case and that, therefore, it is not necessary that before reversing a judgment of acquittal the High Court must necessarily characterize the fandom’s as perverse.
On a thorough examination of the evidence, oral and documentary, it is to be seen that the learned Asstt. Sessions Judge went wrong in construing Ext. P-56 and in rejecting Ext. P-59. He did not consider the fact that the 1st respondent was obliged to encase a cheque on 29.6.1959 by foregoing a sum of Rs. 10/- towards discount. He did not consider the effect of the claim of transactions regarding the identical amount of Rs. 18,200/- shown to have been disbursed at one time, collected at the end of the Co-operative year and again disbursed in the beginning of the next Co-operative year. He did not consider the effect of the dishonest and flagrant violation of the Bye-laws 41 and 42 in Ext. P-41 by the 1st respondent in alleging that he disbursed the amounts to non-members of the C.M.S. without any prior orders of the Board of Directors and without any security of jute and the consequent loss caused to the C.M.S. by his misappropriation or mis-application of the funds of the C.M.S. So, the judgment of the lower Court cannot be said to be correct so far as the 1st respondent is concerned.
36. Thus, it is proved beyond all reasonable doubt that the 1st respondent is guilty of the offence of criminal breach of trust under Section 408 I.P.C. and also of the offence of falsification of accounts under Section 477A I.P.C. regarding the sum of Rs. 18,200/-. He is, therefore, convicted under Sections 403 and 477A I.P.C. He is sentenced to undergo R.I. for one year under each count. But, the sentences would run concurrently and the appeal, so far as the 1st respondent is concerned is allowed and the judgment of the lower Court regarding him is set aside. The appeal regarding the other respondents is dismissed.