Case title: C. Bala Malleshwar Rao, G Chandrashekhar, Syed Anwar Hussain, G. Damodar, K.L. Rama
Rao, V. Satyanarayana.
Case No: Criminal appeal No.729 of 2007, Criminal Appeal No.737 OF 2007, Criminal Appeal No.793 OF
2007, Criminal Appeal No.828 OF 2007, Criminal Appeal No.850 OF 2007.
Dated on: 16th April,2024.
Quorum: Hon’ble Sri Justice K. Surender.
Facts of the case:
The Registrar of Osmania University addressed a letter dated 03.12.1993 in the form of complaint to the Director General, Anti -Corruption Bureau alleging that: there was large scale embezzlement in payment of over time allowances contrary to the financial rules and procedure; Printing material purchased by Director-A1 along with other employees resulted in misappropriation of funds; Purchase of press equipment by A1 along with other employees deliberately without usage to gain illegally. Accordingly, the case was registered on 01.01.1994 and investigation was taken up. During 1990-91 to 1992-93, A1 issued self-cheques amounting to Rs.28,99,343.43ps. The said cheques were encashed by A2 and A4. The said amount meant for overtime allowances to the employees were disbursed to an extent of Rs.11,13,339.59 ps and misappropriated the balance of Rs.17,86,003.84 ps punishable under Section 13(1) (c ) and 13(2) of Prevention of Corruption Act. A1, for the very same orders issued self-cheques and third-party cheques to an extent of Rs.54,71,964.18ps to A2, A3, A7 to A11, who have encashed the cheques. It was shown that printing material worth Rs.36,55,560/- was purchased. However, the remaining amount of Rs.18,16,404-18 ps was not accounted, punishable under Section 13(1)(c)and Section 34 of IPC. A1 has issued self-cheques amounting to Rs.5,08,502.50ps and A2, A5 and A6 encashed the said cheques. An amount of Rs.25,470/- was given for private orders and the remaining amount of Rs.4,83,032.50 ps was misappropriated, punishable under Section 13(1)(c) of Section 34 of IPC. A1, A3 to A5 and A7 to A11 have entered into criminal conspiracy while discharging their duties and misappropriated the amounts to an extent of Rs,17,86,003.84 PS, Rs.18,16,404.18 PS, Rs.1,18,10,000.26ps and Rs.4,83,032.50 PS for purchase of printing material, punishable under Section 409 A1, A3 to A5 and A7 to A11 have falsified accounts willfully with an intention to defraud the institution and caused wrongful loss to the printing press, Osmania University, Hyderabad to an extent of Rs,17,86,003.84 PS, Rs.18,16,404.18 PS, Rs.1,18,10,000.26ps and Rs.4,83,032.50 PS, punishable under Section 477-A 120-B The ACB, during the course of investigation, having collected documents and examining witnesses filed charge sheet for the offences under Sections 13(1)(c ) r/w 13(2) Section 13(1)(d)(1) & (ii) r/w 13 (2) of the Prevention of Corruption Act, under Section 409 r/w 120-B IPC and Section 477A r/w Section 120-B IPC. Learned Special Judge convicted A3 to A5 and A7 to A11 and sentenced to undergo rigorous imprisonment for a period of one year each under Sections 13(1) (c), 13(1)(d) (1) & (ii) r/w 13(2) of the Prevention of Corruption Act, 1988 r/w 34 IPC, Section 409 r/w 120-B IPC, Section 277-A r/w 120-B IPC. Aggrieved by the conviction recorded by the Principal Special Judge, City Civil Court at Hyderabad vide judgment in C.C.No.17 of 2000 dated 15.06.2007 for the offences punishable under Sections 13(1)(c ) r/w 13(2) Section 13(1)(d)(i) & (ii) r/w 13 (2) of the Prevention of Corruption Act, under Section 409 r/w 120-B IPC and Section 477A r/w Section 120-B IPC, these Criminal Appeals are filed.
Contentions of the appellant:
The learned Special Judge has relied heavily on the enquiry conducted by P.W.2 against A1, A3 and A4 and the enquiry report Exs.P15, 16 and 17 respectively. The findings in the enquiry report were made without examining the witnesses. The documents Exs.P1 to P14, P22 to P247 which are overtime bills, cash books, bank statements, cheques and registers were all marked through P.W.1, who was Assistant Registrar, Osmania University. Merely marking the said documents cannot form basis for the Court to rely upon the gist of all the documents. The prosecution ought to have exhibited before the Court as to how the misappropriation was done by the appellants herein. Enquiry was conducted only against A1 to A4 and there is no enquiry against any of the other accused. Merely on the basis of conclusions drawn in the enquiry, all the accused were convicted. It was A1 who had the cheque power, drawing and disbursing power and responsible for the accounts of the Osmania University press. It was A1 who had informed and acknowledged that the amounts received were in fact paid to the persons who had executed job work which are the outside agencies. Learned counsel for A5 and A7 submits that enquiry was not conducted against A5 and A7. That itself reflects that even the department did not have any doubt about the alleged involvement of A5 and A7. It was specifically stated by investigating officer that A3 to A11 were not concerned with purchase of printing material. Learned counsel appearing for A4 argued that A4 was not entrusted with any amounts and whatever amounts were asked to be disbursed by A1, was disbursed. The allegation that A4 was maintaining overtime allowance register and other record were not proved by the prosecution. The Learned Special Judge had relied on the alleged confession of A4 before the enquiry officer/P.W.2 that he had withdrawn amount and was also maintaining the records pertaining to overtime allowances, which formed basis for conviction, which is incorrect.
Contentions of the respondent:
It is not in dispute that amounts were entrusted to A1 as the Director for the purpose of disbursing overtime allowances and also purchase of stationery and other material. The amounts that were withdrawn by A1, who had the power to disburse amounts and make payments for purchase of stationery, has to account for the same. In the absence of giving details of payments made after withdrawing the amounts, would clearly reflect that A1 along with other accused have misappropriated the amounts that were entrusted to them. The entire documents that were collected during the course of investigation and examined by PWs.1
to 4 during enquiry that was conducted against A1 to A4 can be looked into by the criminal Court for the purpose of adjudicating upon the criminal acts committed by these public servants. In the said circumstances, learned Special Judge was right in convicting the accused.
Legal provisions:
Sections 13(1) (c) of the Prevention of Corruption Act: states that a public servant is guilty of an offence if he dishonestly converts property for his public use. Section 13(2) of the Prevention of Corruption Act: any public servant who commits a misconduct will be sent for a rigorous punishment for a year. Section 13(1)(d) (1) & (ii) of the Prevention of Corruption Act: obtaining pecuniary advantage by corrupt means. Section 409 IPC: criminal breach by a servant or the banker. Section 120-B IPC: being a part of a criminal offence with death penalty or imprisonment. Section 477A IPC: falsification of accounts.
Issue:
Whether the statements that were prepared on the basis of the documents available in the department can form basis to infer misappropriation and falsification of accounts, without there being any independent witnesses examined to support the allegation of drawing or
disbursing amounts in the names of individuals and Firms, or that such persons have not received amounts; Whether such statements prepared on the basis of enormous documents that were examined by witnesses can form basis to conclude guilt in the absence of proving each and every document before the Court below; Whether the learned Special Judge was right in invoking Section 106 of Indian Evidence Act on the basis of statements prepared by P.Ws.1
to 7 to convict the accused on the ground that the accused failed to discharge burden shifted on to them.
Courts judgement and analysis:
Appellants have totally denied the allegations leveled against them regarding any kind of misappropriation. Not a single witness is examined by the investigating agency to show that amounts were drawn, or cheques issued in favor of an individual or a firm and such amounts were not paid. Learned Special Judge believed the version of the prosecution witnesses regarding statements that were prepared and concluded that under Section 106 of Indian Evidence Act, the burden is on the accused to explain regarding the amounts that were withdrawn as such withdrawals and usage was to the exclusive knowledge of the accused. It is not in dispute and admitted that. The entire basis of P.W.2 finding A1, A3 and A4 guilty of the charges of misappropriation are the statements that were prepared under Exs.P1 and P35. The Court and the Investigating 30 Officer/P. W 8 heavily relied on Exs.P15 to P19 enquiry reports of P.W.2. The accused denied execution of any of the documents that were placed by the prosecution to show entrustment of the funds to them by A1.
Departmental enquiry conducted by any enquiry officer, who is appointed will conduct enquiry on the basis of preponderance of probabilities and inferences or conclusions will be drawn on the basis of the evidence that is placed before him and/or collected. However, in criminal cases, the principle of proof is beyond reasonable doubt, contrary to the procedure followed in the departmental enquiry. The Hon’ble Supreme Court in the case of Balvir Singh v. State of Uttarakhand held that when the prosecution has offered evidence which can be believed by the Court and convincing regarding the accused guilt beyond reasonable doubt, then the burden shifts on to the accused to present evidence regarding the facts peculiarly which are within the knowledge of the accused. The approach of the learned Special Judge in shifting the burden on to the accused to explain the opinion and inferences drawn during departmental enquiry is incorrect and it does not fall within the purview of Section 106 of Indian Evidence Act to draw adverse inference against accused and convict the accused. In view of above discussion, in the absence of any proof and direct evidence against the accused apart from the inferences drawn by P.Ws.1 to 3 and P.W.38, on the basis of the record found in the office, there cannot be any conviction for the offences alleged. The factum of entrustment to the appellants herein are assumptions on the basis of the withdrawals from Banks and payments made by A1 through cheques. Admittedly, self cheques were drawn and signed by A1. Not a single bank
witness is examined to show that at any point of time, self-cheques or the cheques of others were encased in the bank by any of these appellants.
The prosecution ought to have produced witnesses from the Bank to prove that cheques signed by A1 were withdrawn by the appellants herein. In the absence of any such proof, the question of these appellants abetting A1 in committing alleged misappropriation of the funds entrusted to A1 would not arise. The Hon’ble Supreme Court in the case of R. Sai Bharathi v. J. Jayalalitha held that entrustment has to be proved for establishing an offence of criminal misappropriation. The case is one of circumstantial evidence. The burden is on the prosecution to prove the circumstances of the case by admissible and legal evidence. All such circumstances cumulatively should form a complete chain pointing unerringly towards the guilt of the accused. The Hon’ble Supreme Court in the case of State of Uttar Pradesh v. Suhasi, Haricharan v. State of Rajasthan held that where if there are missing links in the chain of evidence adduced by the prosecution, benefit of doubt should go to the accused.
“PRIME LEGAL is a full-service law firm that has won a national award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer”.
Judgement reviewed by- Parvathy P.V
Click here to read the judgement
