JUDGMENT : B.C. Das, J. - The Petitioner stands convicted u/s 409, Indian Penal Code and sentenced to undergo R.I. for two years and to pay a fine of Rs. 5, 000/-. He stood his trial in the Court of the Assistant Sessions Judge, Cuttack. Hill appeal before The Additional Sessions Judge, Cuttack stands dismissed. 2. The Petitioner was the Mg. Director from 25-1-1963 till 14-7 -1964 of the Orissa Trunk and Enamel Works Ltd., Dargah bazar, Cuttack which is a Pilot Project Company of the State Government incorporated under the Companies Act and manufacturers steel trunks, suit cases and enamel works. The authorised capital is Rs. 3,00,000/- out of which Rs. 1,33,500/- has been subscribed by the Government of Orissa and Rs. 32,000/- by the private enterpriser, the father of the Petitioner. A sum of Rs. 1,45,500/- has been paid up comprising Rs. 1,33,500/- by the Government and Rs. 12,000/- by the Petitioner?s father. The Petitioner had first taken over charge as General Manager from his father with effect from 20-7-1961 and thereafter was appointed the Mg. Director with effect from 22-1-1963. 3. The Board of Directors consist of five members. The director of Industries, Dy. Director of Industries (Pilot Project), Industrial Engineer and the District Industries Officer, Cuttack were the Government nominees on the Board. The fifth member was the partner himself. 4. At the quarterly meeting of the Board on 26-10-1964 the partner as the Mg. Director furnished to the Board two copies of a list consisting of two parts namely of persons to whom advances had been made as on 27-9-1964 and of sundry debtors, showing a sum of Rs. 61,727.18 paise outstanding against these debtors. The Dy. Director of Industries had presided over the meeting. He asked the Petitioner to furnish addresses of these debtors for which another meeting was held on 30-10-1964. The Petitioner furnished the same list against without any further particulars. Meanwhile, on inquiry some of the items in the list were found to be fictitious. Since the Petitioner did not file detailed addresses of the sundry debtors and persons to whom moneys had been advanced, he was again caned upon to do so and it was resolved not to release any money in favour of the Petitioner till the outstanding dues were collected and a true picture of the financial position of the company placed before the Board of Directors. 5. 5. The next meeting was held on 4-12-1964. The Petitioner attended this meeting but did not bring with him the proceedings book as a result of which the proceeding of the last meeting could not be read and confirmed. At this meeting he was confronted with the result of the inquiries that had been made so far and he admitted that some of the transactions shown in the list were in fact factitious and identified these items and further pointed out that one of the persons shown in the list against whom a sum of Rs. 10,522.10 paise had been shown was his brother-in-law. 6. As a result of the resolution at this meeting on 4-12-964 the Petitioner was ordered to be removed from office of the Mg. Director which was subsequently confirmed at a general body meeting. A first information report with the police at the Lalbag P.S. was lodged against the Petitioner in respect of misappropriation of a sum of Rs. 58,649/- as revealed by then. 7. In his defence the Petitioner had stated that he was the Mg. Director from 25-1-1963 till 4-12-1964 when he was removed from the office. He denied having furnished any list and also the allegation that inspite of demand he had not supplied the detailed addresses of the persons from whom money was due and further that he ever made any admission about any such misappropriation. 8. His allegation on the other hand was that the company was formerly running at a loss at Kendrapara and at Cuttack, the Official Directors wanted him to wind up the company; he did not agree to the proposal and the Official Directors forcibly removed him from office and in order to protect themselves they foisted this criminal case an him and it is because of the mismanagement of the Official Directors that the company had sustained loss. 9. It has been urged an behalf of the Petitioner that his position vis-a-vis the firm was nothing other than that of a partner and that there could be no question of any entrustment to him of any of the funds or as assets of the company, more (sic) because it was a private limited company which was in the nature of a partnership firm. 10. 10. In support of this position reliance has been placed an the case of Velgi Radhajee v. State of Maharastra 1965 S.C.D. 824, where their Lordships held that a partner using the partnership assets for his own use was not liable u/s 403, Indian Penal Code. It was painted out that every partner has his dominion over, his property by reason of the fact that he is a partner, but this was a kind of dominion which every owner of property has aver his property. It was emphasised that it was not dominion of this kind which satisfies the requirement of Section 405, Indian Penal Cod and it must be further shown that his dominion was the result of entrustment. Their Lordships went on to further observe that: Therefore...the prosecution must establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties, entrusted to the accused person. If in the absence of such special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or, in other words, cannot be held to have been entrusted with dominion over partnership properties. 11. It is thus evident that even in the case of a partner there can be special situations arising out of special agreement which are capable of clothing the partner with the obligations of a trustee. As pointed out by the learned Asst. Sessions Judge on the authority of the case reported in Jeswantrai Manilal Akhaney v. The State of Bombay AIR 1956 S.C. 575 , See, 405, Indian Penal Code does not contemplate creation of a trust with an the technicalities of the law of trust. 12. Reference has however, been made to the decision of this Court in Kalinga Tubes Ltd. v. Shanti Prasad AIR 1963 Orissa 189, wherein it was held that a Private Ltd. company was in substance a partnership and the relationship amongst different groups in the matter of the conduct of the affairs of the company is to be examined on the footing that they were partners. But it was entirely in a different context that this position was held to obtain in respect of a Private Ltd. Company. But it was entirely in a different context that this position was held to obtain in respect of a Private Ltd. Company. The question there was whether an agreement amongst the partners who holds shares in equal proportions to make named partner the chairman to have equal representation in the Board of Directors and not to sell the shares to the public, which agreement had not been incorporated in the article of association, could be enforced against the public company to which the private company was? subsequently converted. The Court did not have to deal with an issue as in here or in the context of the responsibility of a Mg. Director in a private Ltd. company which has a jurisdiction personality of its own as distinct, from the partners, and owns the assets of the company. In any event, the position 808 explained by their Lordships of The Supreme Court in their decision referred to earlier concludes The issue. 13. On the other hand, the learned courts below have concurrently found that the Petitioner in the capacity of a Mg. Director of the Company was all in all in respect outs funds and properties with full dominion over them. The properties of the company had been entrusted to his charge. There were two Account Nos. 1 and 2 of the Company with the Bank. Account No. 2 was operated solely by the Petitioner and amount No. 1 jointly by him and the chairman. The Petitioner was depositing money collected from the sale-proceeds of the finished goods into Account No. 1. Moneys used, to be received from a third party by the chairman were being deposited in the same account No. 1. Moneys used to be released from Account No. 1 by transfer in favour of the Mg, Director into account No. 2 for meeting the expenses of the company. The Management of the company was entirely in his bands. The mere fact that the Board of Directors controlled him and that he derives his powers from The Board of Directors cannot possibly change the position of the Mg. Director vis-a-vis the company. It was the Mg. Director who had powers to file return and statements, in the Board meeting and the Board used, to release money from Account No. 1 only on the satisfaction about the genuiness of the needs of the Mg. Director. The Mg. Director vis-a-vis the company. It was the Mg. Director who had powers to file return and statements, in the Board meeting and the Board used, to release money from Account No. 1 only on the satisfaction about the genuiness of the needs of the Mg. Director. The Mg. Director was entirely responsible for maintenance of accounts and for getting them audited. It is in evidence that the Mg. Director was merely exercising the delegated powers of the Board but no documentary evidence has been produced in that behalf. But the finding is that though there was no delegation of financial powers in writing by the chairman to the Petitioner for all practical purposes, be had been entrusted with the Management of the affairs of The company. 14. Thus, The conclusion arrived at is that the Petitioner was controlling the activities of the company regarding production of goods, sale of goods, purchase of raw materials, payment of salaries and other charges and accordingly the Petitioner was liable for the goods sold by him and the moneys obtained. An that apart, since it is not in dispute that the Petitioner was the Mg. Director of the Company, his position was undoubtedly not merely that of an agent but also to some extent in the nature of a trustee. Reference may be made to the case of R.K. Dalmia v. Administration of Delhi AIR 1962 S.C. 1881. This must conclude the question thus raised on behalf of the Petitioner which is without substance. 15. That takes us to the next question raised in support of the Petitioner, namely, that the documents relied upon by the? Courts below in proving the contents of the list are inadmissible and are not worthy of reliance. 16. Exts. 27 and 27/1 are the statements of accounts of Account No. 1 and Account No. 2 respectively with the Indian overseas Bank, Cuttack Branch. Exts. 7, 10, 11, 17/1, 18/1, 19 and 21 are copies of the proceedings of the meetings of the Board of which Exts. 7, 10, and 11 are the copies of the proceedings of 26.10.1964/30.10.1964 and 4.12.1964 respectively and Ext. 17/1 is also a copy of the proceeding of the meeting on 3.9.1964. Exts. 8 and 13/1 are the copies of the lists, Ext. 13 being the F.I.R. in the case. 17. 7, 10, and 11 are the copies of the proceedings of 26.10.1964/30.10.1964 and 4.12.1964 respectively and Ext. 17/1 is also a copy of the proceeding of the meeting on 3.9.1964. Exts. 8 and 13/1 are the copies of the lists, Ext. 13 being the F.I.R. in the case. 17. The aforesaid copies of the proceedings of the different meetings have been obtained from the Government Secretariat and the Courts have accepted the evidence that the proceedings at the meetings are drafted on the basis of the discussions that take place and after approval of the Chairman the copies are made and sent to all Directors and to Government in regular course of official business. The Mg. Director writes out the proceedings in the Proceeding Book which is placed in the next meeting of the Board for confirmation and the Book remains in the custody of the Mg. Director. These proceedings forwarded to Government bear the signature of the Chairman. 18. It does not admit of any dispute, as the Courts below have recognised, that unless Exts. 7, 8 and 13/1 are believed, conviction cannot be sustained. 19. All the above Exts. relating to the proceedings have been supported by covering letters under which the copies had been forwarded to Government. Ext. 7 was obtained from the Government file. There is nothing to disprove Exts 7. Exts. 8 and 13/1 are admittedly not the original lists given by the Petitioner to the Board. They do not bear any certificate of being true copies or of having been compared nor has any body been examined to say that he had prepared the copies and neither of these bear any endorsement of the Mg. Director. 20. The Petitioner had given two copies at the meeting on 26-10-1964. One of these copies was placed in the Office of the Director of Industries in the relevant file relating to this company and the other remained with p.w. 1, the Dy. Director of Industries in his almirah; still another copy was given by the Petitioner on 30-10-1964 and was kept in his office file and that was taken over to the marketing file as directed by p.w. 11, Assistant Director of Industries and ex. Director of Industries in his almirah; still another copy was given by the Petitioner on 30-10-1964 and was kept in his office file and that was taken over to the marketing file as directed by p.w. 11, Assistant Director of Industries and ex. 8 is said to be this copy and had been checked as deposed to by p w. 11, Assistant Director of Industries who dealt with the tiles relating to the Pilot Project Company. 21. It is to be noted, the finding is that almost immediately after the police case was started the Office file and the copy that was with p.w. 1 in his almirah were found missing though by the date of F.I.R. the official file was available and p.w. 1 has said that Ext. 13/1 had been made out from the list in this tile and that he had personally verified this Ext. 13/1 with the list in the lost file. 22. The argument is that although Section 65 of the Evidence Act has been satisfied, the requirements of Section 63 of the Act have not been taken note of. But as is clear, p.ws. 1, 11 and 16 were fully acquainted with the contents of the list that had, been furnished by the Petitioner and they have deposed as already pointed out that those of Exts. 8 and 13/1 are not different from the originals supplied by the Petitioner, more so because p.w. 1 categorically depose that he had personally compared the original list in the office file with the copy as in the list, Ext. 13/1. 23. It is difficult, therefore, to see how there can be any question of any inadmissibility of all these documents in such a context. It is nothing more than a question of appreciation of the circumstances that may bear upon the reliability of these documents and I see no good reason to doubt The genuineness of any of The documents. Both the Courts were fully alive to the difficulty and this aspect has been dealt with at length in the light of the oral evidence on record. This part of the Petitioner?s case must also fail. 24. Both the Courts were fully alive to the difficulty and this aspect has been dealt with at length in the light of the oral evidence on record. This part of the Petitioner?s case must also fail. 24. The last contention is support of the Petitioner is that the prosecution has completely failed to establish as to what exactly was the loss sustained by the company and whether at all any of the items covered in the list furnished by The Petitioner did in fact form a part of the Actual assets of the company. It is emphasised that it is not enough merely that some of the items in the List have been proved to have been false or fictitious. It was essential further on the part of the prosecution to establish beyond reasonable doubt that even these false and fictitious items were in respect of moneys and other assets belonging to the firm. In other words, it is argued that there is nothing to correlate this list with The list of assets both in stock and in cash standing to the credit of the company at the time the list was furnished. 25. In support of this argument it has been emphasised that the opening and closing balance of the raw materials, finished goods and accounts of the company bad not been verified, nor the balance sheet for the year 63.64 and for the relevant part of the year 64.65 prepared. Admittedly also no internal audit had been done prior to the launching of the prosecution as contemplated by p.w. 16, the Additional Director of Industries. 26. This contention is not without substance and the facts emphasised referred to immediately above on behalf of the Petitioner do not admit of any dispute. Besides, the relevant prosecution witnesses clearly admit that although there are Register of sundry debtors and advances maintained by the Managing Director, he was not called upon by the Chairman at the meetings on any of the dates namely 26.10.1964, 30.10.1964 and 4.12.1964 to produce any of these registers. It is also the case of the prosecution itself that the Board does not and never did check the accounts nor physically verify the stock or progress of the company. These in fact are the concurrent findings of the Courts below. 27. It is also the case of the prosecution itself that the Board does not and never did check the accounts nor physically verify the stock or progress of the company. These in fact are the concurrent findings of the Courts below. 27. This demand from the Managing Director was not made notwithstanding what p.w. 16 bad deposed that it had been for the special purpose of reviewing the financial position of the company that the meetings on 26-10-1964 and 30-10-1964 had been specially convened and what is more notwithstanding the fact that p.ws. 16 deposes that what had prompted him in particular to do so was a serious case of misappropriation which had been brought to his notice in respect of another Pilot Project Company. 28. That being the position it remains open to a serious doubt as to how the prosecution has not even attempted to arrive at a correct picture of the state of affairs of the company even after some of the items in the list had been found to be false and fictitious. It is true that the concurrent findings of the Courts below are that the lists as in Ext. 8 and 13/1 had been in fact furnished by the Petitioner on 26-10-1964 and 30-10-1964 and that Petitioner had admitted quite a number of these items involving fairly large amounts to be fictitious and further have accepted the story of the prosecution that certain items had been found to be fictitious as revealed in course of the inquiry made under the direction of p.w. 16. 29. The Courts have, however, relied upon the fact that the list is nothing more than a detailed version of the relevant items of the abstract of statements of accounts furnished by the Petitioner as incorporated in the proceeding of the meeting on 26-10-1964 namely Ext. 7 which has not at all been questioned by the Petitioner in his statement u/s 342, Code of Criminal Procedure nor against which there is any evidence to discredit it. It is significant that the Courts have held that even though the prosecution has failed to establish the exact amount defalcated by the accused, the fact remains that he has not been able to account for the huge amounts of money as discussed at length in paragraphs 13 and 14 of the judgment of the trial Court. It is significant that the Courts have held that even though the prosecution has failed to establish the exact amount defalcated by the accused, the fact remains that he has not been able to account for the huge amounts of money as discussed at length in paragraphs 13 and 14 of the judgment of the trial Court. This, however, entirely pre-sup poses the correctness and accuracy of the abstracts of statement of accounts of the company as furnished by no other than the Petitioner himself whose conduct in the management of the company is questioned. It is of further importance that even in respect of the list itself as in Ext. 8 or 13/1 both the Courts below, do not entirely exclude the possibility that there exhibits might not have been correctly typed from the list alleged to have been given by the Petitioner. 30. What guarantee was there in these abstracts to ensure that they conveyed a true picture of the affairs of the company is extremely difficult to see. Even as the learned Counsel on behalf of the State points out that the entire basis for the prosecution to prove the misappropriation is based completely on several other abstracts such as this incorporated in the proceedings of the meetings. In other words the very basis on which the Courts have arrived at the, finding of misappropriation of particular items of moneys or stock is based on a comparison of the list with these abstracts the truth of which the prosecution itself questions. 31. It was not enough for the Courts below to arrive at the conclusion that the admission at the meeting by the Petitioner in respect of certain items in the list had in fact been, made. It was necessary to further investigate whether these admissions were also true. But there could possibly be no scope for arriving at such truth of these admissions, which have been retracted at the trial, on the basis of such documents as the abstract which is admittedly not in the prescribed form and is itself suspect and of which the list has been presumed by the Courts to have presented a detailed picture. 32. 32. The prosecution case virtually is that it was impossible for it to present such an independent picture of the true and correct state of affairs of the company in as much as all the accounts and records which would have enabled the prosecution to do so had not been parted with by the Petitioner when only the stocks were taken over as in Ext. 24. That may be entirely correct and it has been found to be so by the Courts below. But the point is that without such reliable and independent material available to the Courts there can be no escape from the fact that it would be impossible for the Courts to arrive at a finding as to whether at all any loss has been sustained as a result of the alleged misappropriation. The conduct of the Petitioner doubtless remains open to grave suspicion but no finding on this vital aspect of the matter can be arrived at on the basis of the documents of a questionable character prepared by no other person than the Petitioner himself whose very conduct in the preparation of such documents is the subject of suspicion. It is not as if the matter arises for consideration in civil proceedings where the probabilities of the issue may decide the question and in the absence of anything better the contents of Ext. 7 and other proceedings at the meetings containing the relevant abstract may probablise the story of misappropriation of the amount purported to be covered by the list Ext. 8 or 13/1. Here, the prose out ion has got to prove beyond all reasonable doubt not only that there has been some sort of a misappropriation but also that specific items of property belonging to the company has been misappropriated resulting in the loss of such property. Nothing sort of this can satisfy the requirements of law. 33. To none of these aspects have the Courts below directed themselves in any manner whatsoever. The appropriate Action against the Petitioner be a Managing Director on the facts proved may lielse where, in any other forum or in any other shape. But in the immediate context it must be held that the prosecution has conspicuously failed in establishing beyond reasonable doubt The crucial element of misappropriation of any property forming a part of the specific assets belonging to the company. 34. But in the immediate context it must be held that the prosecution has conspicuously failed in establishing beyond reasonable doubt The crucial element of misappropriation of any property forming a part of the specific assets belonging to the company. 34. In the result, therefore, the material on record falls far short of bringing home the guilt to the Petitioner. He is clearly entitled to the benefit of doubt. The order of conviction and sentence passed by the Courts below must be and is hereby set aside The Petitioner stands acquitted.