Uday Narayan Panda Vs. State - Court Judgment

Excerpt:
- state financial corporations act, 1951 [63/1951]. section 29; [p.k. tripathy, a.k. parichha & n.prusty, jj] discharge of loan orissa forest act (14 of 1972), section 56 confiscation of vehicle - held, the authorities under section 56 of the orissa forest act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of orissa state financial corporation when such vehicles were purchased on being financed by the orissa state financial corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. on the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the department which initiated the confiscation proceeding. apart from that, the claim of the orissa state financial corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the state financial corporation act, 1951 or the heirs and successors of such persons. procedure is provided in the act, 1951 and the rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. if such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. the financial corporation is concerned with repayment of loan either from the property or persons offered as surety. thus, a vehicle, which is subject matter of confiscation proceeding under the act, 1872, being not available to the orissa state financial corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the orissa state financial corporation. agreement between the orissa state financial corporation and the loanee is a pure and simple contract governed by the provisions of the contract act, 1872 read with the provisions in the act, 1951 and its rules. on the other hand, a confiscation proceeding under the act, 1972 is punitive in nature for commission of a forest offence. thus, by virtue of the provision in section 56 read with section 64 (2) of the act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by orissa state financial corporation. by doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the orissa state financial corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. in other words, on payment of the sale proceeds of the confiscation proceeding to the orissa state financial corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. such a concept is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002 orissa 130 overruled]. -- state financial corporations act, 1951. section 29; discharge of loan orissa forest act (14 of 1972), section 56 confiscation of vehicle - held, the authorities under section 56 of the orissa forest act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of orissa state financial corporation when such vehicles were purchased on being financed by the orissa state financial corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. on the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the department which initiated the confiscation proceeding. apart from that, the claim of the orissa state financial corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the state financial corporation act, 1951 or the heirs and successors of such persons. procedure is provided in the act, 1951 and the rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. if such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. the financial corporation is concerned with repayment of loan either from the property or persons offered as surety. thus, a vehicle, which is subject matter of confiscation proceeding under the act, 1872, being not available to the orissa state financial corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the orissa state financial corporation. agreement between the orissa state financial corporation and the loanee is a pure and simple contract governed by the provisions of the contract act, 1872 read with the provisions in the act, 1951 and its rules. on the other hand, a confiscation proceeding under the act, 1972 is punitive in nature for commission of a forest offence. thus, by virtue of the provision in section 56 read with section 64 (2) of the act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by orissa state financial corporation. by doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the orissa state financial corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. in other words, on payment of the sale proceeds of the confiscation proceeding to the orissa state financial corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. such a concept is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002 orissa 130 overruled]. - 6. it was contended on behalf of the petitioner that under law the accused petitioner was not supposed to be the custodian of the cash (see rule 41 of the orissa co-operative societies rules, 19g5) that the prosecution has failed to prove entrustment, and that the entries in the cash book rather show that p. but in that it has signally failed. i had verified on 1-7-1974. i endorsed it in the cash book (ext. i fail to understand how these help the defence. 8. finally it was contended that the prosecution has failed to establish entrustment of the cash which is more consistent with the defence pleas and as laid down in air1953sc478 (c. ) the prosecution has failed to establish the two ingredients of offence under section 406, i. in that it has failed to prove entrustment as well as the manner of dishonest misappropriation of the property. thus the case against the petitioner has been well established and his conviction and sentence in the circumstances seem justified and proper calling for no interference.orderk.b. panda, j.1. the petitioner has been convicted under section 406, i.p.c. and has been sentenced to undergo rigorous imprisonment for one year and to pay a fine of rs. 5,000/- in default to undergo rigorous imprisonment for another four months by the s. d. j, m, karanjia which has been confirmed in appeal.2. the prosecution case in brief is thus. the petitioner admittedly worked as the secretary of the karanjia cooperative circle government employees co-operative society from 14-9-1974 to 25-9-1974, i. e., for ten days. he made over charge to his successor one sri a.r. mohapatra (p. w. 4) on 25-9-1974 by virtue of a resolution of the board of directors dated 23-9-1974 as it was found that the petitioner was a member of two of the societies which is against rule. it was alleged by the prosecution that the petitioner made over charge of his office to p. w. 4 excepting cash in hand amounting to rs. 1,814.15 p. being asked to make over the cash to p. w. 4 the petitioner stated that he had done so to the president (p. w. 5) the informant. the petitioner repeated this before p. w. 5 but that not being a fact, p. w. 5 lodged information (ext. 12) at karanjia p. s. about the misappropriation of the amount by the petitioner on 26-9-1974. consequently p. w. 7 the officer-in-charge of karanjia p. s. registered a case under section 406, i.p.c. and finally charge-sheeted the petitioner resulting in his conviction as aforesaid.3. the petitioner in his statement admitted that he was secretary of the society during the period in question. but asserted that the sum of rupees 1,8,14.15 p. was not with him, but with the president who according to the rules is the custodian of the cash. he however admits under ext. 6 series that the entries in the cash book of the society between 15-9-74 and 25-9-74 have been made by him and that he had taken charge of the cash of those days.4. the prosecution examined 7 witnesses and the defence one. p. w. 1 is the vice-president of the society, p.w. 2 is the witness to the seizure of the documents, p. w. 3 is a member-director of the society, p. w. 4 is the successor of the accused, p. w. 5 is the president of the society, p. w. 6 is the secretary at the time of trial and p. w. 7 is the investigating officer.d. w. 1 is a temporary peon of the society.5. on an assessment of the oral and documentary evidence the learned court below came to the finding that whatever may be the rules, the cash was being handled by the secretary and not by the president. the alleged defalcated cash of rs. 1,814.15 p. was similarly with the secretary which he had not made over to the president and that it is he who has misappropriated the amount and so convicted him.6. it was contended on behalf of the petitioner that under law the accused petitioner was not supposed to be the custodian of the cash (see rule 41 of the orissa co-operative societies rules, 19g5) that the prosecution has failed to prove entrustment, and that the entries in the cash book rather show that p. w. 5 was the custodian of the cash and not the petitioner.7. the pith of the argument centred round rule 41 of the orissa co-operative societies rules which provides thus:41. officer who will maintain account books etc. the committee shall specify which of the officers of the society shall:(a) keep books of accounts:(b) keep custody of cash and stores; (c) keep other books and registers and (d) prepare returns and statements. provided that person charged with keeping of accounts shall not be in charge of cash except under a special or general order of the registrar.relying on this it was strenuously argued that the secretary was keeping accounts and therefore without any special order of the registrar he was not put in charge of the cash. the presumption. therefore, is that it was not the secretary who was in charge of the cash that presumption has not been rebutted. whatever might be the rules, the facts of a particular case have to be looked into. in the instant case for the defence to succeed has undoubtedly to make out a case as though in fact the custodian of the cash was the president and not the secretary. but in that it has signally failed. basing on a statement of p. w. 1 to the effect that-during the daily sale of the society i do not remain present. once i had verified the stock and cash. at that time some amount was with the secretary and he told that some amount was with the president and after bringing the same from him had shown me. it was during the period of brajabandhu mohapatra. i had verified on 1-7-1974. i endorsed it in the cash book (ext. b). according to my report on that day, cash was with the president.it was argued that the defence is borne out by this evidence. also from the evidence of p. w. 3 the following was pointed out,i do not know whether there is any resolution or any bye-law that the secretary will keep cash of the society, but from the very beginning, the secretaries have been doing this. i have not seen where the secretary was keeping money.i fail to understand how these help the defence. rather they undermine the defence. so far as p. w. 4 the successor of the accused is concerned, it was argued that he could not say where the accused was keeping cash. this also does not help the defence in any way. so far as p. w. 5 is concerned, he is the informant who stoutly denied to have received any cash from the secretary. his evidence is that he sometimes goes on tour. if that be so, it is difficult how he would be receiving cash at the end of the day's transaction. further from ext. 6 series it is clear that the daily transactions were being made by the secretary petitioner. as they indicate, some days transactions on the expenditure side are much more than what is on the income side. thus unless he was in possession of the cash it was difficult for him to meet the expenses. this is a factor for consideration and that weighs against the defence. again the cash book shows that several days' transactions are put before the president on a single day and his signature obtained. much was made of an endorsement (ext. a) in the cash book of b. mohapatra the predecessor of the petitioner, but that is utterly barren of substance inasmuch as it only reiterates what the rule says and there was no need to make mention of it in the cash book. p. w, 5 only admits that at the end of the co-operative year that is 1st july, 1974 he deputed staff to different societies for cash verification and not on other days. he seems to be consistent in his stand. it was suggested to p. w. 5 vaguely that out of grudge he put the petitioner in this difficulty. but that makes no sense inasmuch as the petitioner himself laid blame on the president. p. w. 6 supports the prosecution case but it is alleged that by that time the rules had been amended and so need not be discussed. much was made of the fact that no witness was examined to state as to where the accused was keeping cash. it is to the special knowledge of the petitioner and therefore it is not expected that a witness could be in a position to depose to that effect.8. finally it was contended that the prosecution has failed to establish entrustment of the cash which is more consistent with the defence pleas and as laid down in : air 1953 sc478 (c.m. narayan v. state of trav-co.) the prosecution has failed to establish the two ingredients of offence under section 406, i.p.c. in that it has failed to prove entrustment as well as the manner of dishonest misappropriation of the property. the cash book itself and the oral evidence prove beyond doubt that it was the secretary who was dealing with cash and while making over charge he has not made over the cash to the president. therefore, the entrustment is not only admitted but it is proved; so far as the manner of misappropriation it is none of the business of the prosecution to establish as to the mode in which the petitioner appropriated the sum. thus the case against the petitioner has been well established and his conviction and sentence in the circumstances seem justified and proper calling for no interference.9. as such the appeal is dismissed. the appellant has to surrender to the bail bond to serve out the unexpired period of sentence.

Judgment:
ORDER

K.B. Panda, J.

1. The petitioner has been convicted under Section 406, I.P.C. and has been sentenced to undergo rigorous imprisonment for one year and to pay a fine of Rs. 5,000/- in default to undergo rigorous imprisonment for another four months by the S. D. J, M, Karanjia which has been confirmed in appeal.

2. The prosecution case in brief is thus. The petitioner admittedly worked as the Secretary of the Karanjia Cooperative Circle Government Employees Co-operative Society from 14-9-1974 to 25-9-1974, i. e., for ten days. He made over charge to his successor one Sri A.R. Mohapatra (P. W. 4) on 25-9-1974 by virtue of a resolution of the Board of Directors dated 23-9-1974 as it was found that the petitioner was a member of two of the Societies which is against rule. It was alleged by the prosecution that the petitioner made over charge of his office to P. W. 4 excepting cash in hand amounting to Rs. 1,814.15 p. Being asked to make over the cash to P. W. 4 the petitioner stated that he had done so to the President (P. W. 5) the informant. The petitioner repeated this before P. W. 5 but that not being a fact, P. W. 5 lodged information (Ext. 12) at Karanjia P. S. about the misappropriation of the amount by the petitioner on 26-9-1974. Consequently P. W. 7 the Officer-in-Charge of Karanjia P. S. registered a case under Section 406, I.P.C. and finally charge-sheeted the petitioner resulting in his conviction as aforesaid.

3. The petitioner in his statement admitted that he was Secretary of the Society during the period in question. But asserted that the sum of Rupees 1,8,14.15 p. was not with him, but with the President who according to the rules is the custodian of the cash. He however admits under Ext. 6 series that the entries in the Cash Book of the Society between 15-9-74 and 25-9-74 have been made by him and that he had taken charge of the cash of those days.

4. The prosecution examined 7 witnesses and the defence one. P. W. 1 is the Vice-President of the Society, P.W. 2 is the witness to the seizure of the documents, P. W. 3 is a Member-Director of the Society, P. W. 4 is the successor of the accused, P. W. 5 is the President of the Society, P. W. 6 is the Secretary at the time of trial and P. W. 7 is the Investigating Officer.

D. W. 1 is a temporary peon of the Society.

5. On an assessment of the oral and documentary evidence the learned Court below came to the finding that whatever may be the rules, the cash was being handled by the Secretary and not by the President. The alleged defalcated cash of Rs. 1,814.15 p. was similarly with the Secretary which he had not made over to the President and that it is he who has misappropriated the amount and so convicted him.

6. It was contended on behalf of the petitioner that under law the accused petitioner was not supposed to be the custodian of the cash (See Rule 41 of the Orissa Co-operative Societies Rules, 19G5) that the prosecution has failed to prove entrustment, and that the entries in the Cash Book rather show that P. W. 5 was the custodian of the cash and not the petitioner.

7. The pith of the argument centred round Rule 41 of the Orissa Co-operative Societies Rules which provides thus:

41. Officer who will maintain Account Books etc. The Committee shall specify which of the officers of the society shall:

(a) keep books of accounts:

(b) keep custody of cash and stores;

(c) keep other books and registers and

(d) prepare returns and statements.

Provided that person charged with keeping of accounts shall not be in charge of cash except under a special or general order of the Registrar.

Relying on this it was strenuously argued that the Secretary was keeping accounts and therefore without any special order of the Registrar he was not put in charge of the cash. The presumption. therefore, is that it was not the Secretary who was in charge of the cash That presumption has not been rebutted. Whatever might be the rules, the facts of a particular case have to be looked into. In the instant case for the defence to succeed has undoubtedly to make out a case as though in fact the custodian of the cash was the President and not the Secretary. But in that it has signally failed. Basing on a statement of P. W. 1 to the effect that-

During the daily sale of the Society I do not remain present. Once I had verified the stock and cash. At that time some amount was with the Secretary and he told that some amount was with the President and after bringing the same from him had shown me. It was during the period of Brajabandhu Mohapatra. I had verified on 1-7-1974. I endorsed it in the cash book (Ext. B). According to my report on that day, cash was with the President.

it was argued that the defence is borne out by this evidence. Also from the evidence of P. W. 3 the following was pointed out,

I do not know whether there is any resolution or any bye-law that the Secretary will keep cash of the Society, But from the very beginning, the Secretaries have been doing this. I have not seen where the Secretary was keeping money.

I fail to understand how these help the defence. Rather they undermine the defence. So far as P. W. 4 the successor of the accused is concerned, it was argued that he could not say where the accused was keeping cash. This also does not help the defence in any way. So far as P. W. 5 is concerned, he is the informant who stoutly denied to have received any cash from the Secretary. His evidence is that he sometimes goes on tour. If that be so, it is difficult how he would be receiving cash at the end of the day's transaction. Further from Ext. 6 series it is clear that the daily transactions were being made by the Secretary petitioner. As they indicate, some days transactions on the expenditure side are much more than what is on the income side. Thus unless he was in possession of the cash it was difficult for him to meet the expenses. This is a factor for consideration and that weighs against the defence. Again the Cash Book shows that several days' transactions are put before the President on a single day and his signature obtained. Much was made of an endorsement (Ext. A) in the Cash Book of B. Mohapatra the predecessor of the petitioner, But that is utterly barren of substance inasmuch as it only reiterates what the rule says and there was no need to make mention of it in the cash book. P. W, 5 only admits that at the end of the Co-operative year that is 1st July, 1974 he deputed staff to different Societies for cash verification and not on other days. He seems to be consistent in his stand. It was suggested to P. W. 5 vaguely that out of grudge he put the petitioner in this difficulty. But that makes no sense inasmuch as the petitioner himself laid blame on the President. P. W. 6 supports the prosecution case but it is alleged that by that time the rules had been amended and so need not be discussed. Much was made of the fact that no witness was examined to state as to where the accused was keeping cash. It is to the special knowledge of the petitioner and therefore it is not expected that a witness could be in a position to depose to that effect.

8. Finally it was contended that the prosecution has failed to establish entrustment of the cash which is more consistent with the defence pleas and as laid down in : AIR 1953 SC478 (C.M. Narayan v. State of Trav-Co.) the prosecution has failed to establish the two ingredients of offence under Section 406, I.P.C. in that it has failed to prove entrustment as well as the manner of dishonest misappropriation of the property. The Cash Book itself and the oral evidence prove beyond doubt that it was the Secretary who was dealing with cash and while making over charge he has not made over the cash to the President. Therefore, the entrustment is not only admitted but it is proved; so far as the manner of misappropriation it is none of the business of the prosecution to establish as to the mode in which the petitioner appropriated the sum. Thus the case against the petitioner has been well established and his conviction and sentence in the circumstances seem justified and proper calling for no interference.

9. As such the appeal is dismissed. The appellant has to surrender to the bail bond to serve out the unexpired period of sentence.