STATE OF GUJARAT v. ISHWARLAL KHUMCHAND SHAH — 1992 DIGILAW 416 (GUJ)

J. N. BHATT, J. ( 1 ) IN this group of 11 acquittal appeals common questions are involved accused is common and the evidence is also virtually common Therefore upon the request and considering the facts and circumstances the entire group is being disposed of by this common judgment. ( 2 ) THE respondent is the original accused person. against whom 11 complaints were filed by complainant Shri Shirishchandra Fakirchand Shah before the Billimora Police alleging that the accused was in charge of writing of accounts financial matters and administration of the partnership firm run in the name of M/s. Fakirchand Bhikhabhai and Sons of Billimora during the period from January 1981 till the dale of complaint. ( 3 ) ACCORDING to the prosecution case the complainant and one Shri Nitinchandra Fakirchand Shah were the partners of the aforesaid registered partnership firm having its office at Billimora. The firm was dealing in building materials and motor car spare parts at Billimora. The accused Mr. I. K. Shah was engaged by the firm since 19 with a monthly salary of Rs. 250/- and he was working as an Accountant-cum-Cashier of the firm. ( 4 ) THE complainant alleged that the accused who was an Accountant of the firm had committed offences punishable under Sections 408 477 and 201 of the I. P. C. during the period 1980-81 in respect of a total amount of Rs. 1 2 836. 49 ps. According to the prosecution version when the audit of the accounts was to be made relating to the period of S. Y. 2036 the Chartered Accountant-cum-Auditor of the firm upon inquiry found that there were defalcations during the period 1980-81 in respect of the aforesaid amount. Therefore on different dates 11 complaints were filed against the accused person for the aforesaid offences. In short the prosecution case was that the accused Mr. I. K. Shah who was working as an Accountant of the firm was found guilty for the offences of criminal breach of trust mis-appropriation or falsification of accounts and for destruction of some of the books of accounts during the relevant period. Therefore complainant Shri Shirishchandra Fakirchand Shah a partner of the firm had filed 11 complaints and the accused came to be charge-sheeted in 11 criminal cases for the aforesaid charges. The accused denied all the charge against him and claimed to be tried. Therefore complainant Shri Shirishchandra Fakirchand Shah a partner of the firm had filed 11 complaints and the accused came to be charge-sheeted in 11 criminal cases for the aforesaid charges. The accused denied all the charge against him and claimed to be tried. It was not disputed that he was working in the said firm; by him. However he denied that he was in exclusive management and charge of the financial matters of the firm. He also denied that he was the only person who was writing books of accounts. It was also the version of the defence that complaints to screen and conceal his over-expenditure in the electioneering for the election of Billimora Municipality at the relevant period. In short all the allegations were seriously disputed by the defence. ( 5 ) UPON the appreciation of the facts and circumstances and the evidence on record the learned Trial Magistrate Valsad at Navsari acquitted the accused person in four criminal cases on 6. 3. 1984 and in remaining seven cirminal cases on 27. 2. 1984. Being aggrieved by the orders and judgments recording the acquittal in all the 11 criminal cases against the respondent- accused the appellant-State has come up in this appeal under Section 378 of the Code of Criminal Procedure 1973 (the Codefor short hereinafter) challenging the legality and validity of the said orders. ( 6 ) THE facts and greater details are enumerated in the impugned acquittal judgments and therefore it would not be necessary to repeat the entire conspectus of the facts elaborately enumerated in the impugned acquittal orders. However in order to appreciate the merits of the acquittal appeals and challenge against them it would be appropriate to mention some of the important facts in a tabulated form as follows: - sr. However in order to appreciate the merits of the acquittal appeals and challenge against them it would be appropriate to mention some of the important facts in a tabulated form as follows: - sr. Appeal Criminal Date of Charge Relevant Amount of Total No. No. Case No. impugned dates of alleged amount orders alleged defalcation defalcation - 1 1003 3312 6 408 and 19-1-81 2 500 477 20 1 0 IPC 23-1-81 1 300 4 800 -- 2 1006 3316 6 408 and 9-4-81 1 0 477 15 1 0 IPC 16-4-81 1 0 -- 3 0 3 1007 3315 6 408 and 26-3-81 2 0 477 28 1 500 IPC 1-4-81 500 -- 4 0 4 1008 3317 6 408 and 23-7-81 1 0 477 1 2 0 3 0 IPC -- 5 1094 3319 27 201 23 1 0 1 0 408 and 477 IPC 6 1095 3318 27 201 7 4 500 4 500 408 and 477 IPC 7 1096 3314 27 408 and 7-2-81 1 0 477 25 2 0 IPC 22-3-81 1 0 4 0 -- 8 1097 3320 7 201 30 1 0 1 0 408 and 477 IPC 9 1098 3313 27 408 and 2-2-81 1 0 477 6 1 0 IPC 25-1-81 700 2 700 - 10 1099 3311 27 408 and 6-12-80 1 0 1 0 477 IPC 11 1256 1713 27 201 11 408 and 13-10-80 477 7 73 836. 49 IPC - 1 2 836. 49 - learned Public Prosecutor Mr. D. K. Trivedi and the learned Counsel for the respondent-accused Mr. Adil Metha have taken this court through the entire excursion of the testimonial collections on record. Learned Public Prosecutor has highlighted certain circumstances and has contended that the impugned acquittal orders are required to be reversed. Learned Counsel Mr. Adil Metha while appearing for the accused has vehemently countenanced the submission made by the learned Public Prosecutor. ( 7 ) FIRSTLY it may be mentioned that the powers and scope of the Appellate Court in an acquittal appeal are undoubtedly very much circumscribed. It is a settled proposition of law that unless and until perversity is successfully pointed out or unreasonableness in the assessment of the evidence is successfully spell out it would not be expedient and safe for the Appellate Court to interfere with the acquittal recorded by the Trial Court. It is a settled proposition of law that unless and until perversity is successfully pointed out or unreasonableness in the assessment of the evidence is successfully spell out it would not be expedient and safe for the Appellate Court to interfere with the acquittal recorded by the Trial Court. As held by the Apex Court in the case of Awadhesh vs. State of M. P. AIR 1988 SC 1158 acquittal should not interfered with lightly unless the view taken by the Trial Court is perverse or unreasonable. In Dinanath Singh vs. The State of Bihar AIR 1980 SC 1199 the Apex Court of the land has clearly held that where the view taken by the Trial Court in acquitting the accused is reasonably possible even if a different view is possible on the evidence that is no ground for reversing the order of acquittal recorded by the Trial Court. In Tara Singh vs. State of M. P. AIR 1981 SC 950 the Apex Court has also held that if two views on appreciation of evidence are possible one supporting the acquittal and the other indicating conviction the Appellate Court should not in such a situation reverse the order of acquittal recorded by the Trial Court. Thus it is now very well settled that in absence of any material irregularity manifest error or illegality the High Court should not interfere with the order of acquittal recorded by the Trial Court even if a different view is possible on the evidence on record. However it must be remembered that the Appellate Court has the same powers in appreciating the evidence and coming to its conclusion on the question of facts but it should not interfere with the acquittal order unless it finds that the view taken by the Trial Court is unreasonable or perverse. If the view recorded by the Trial Court is reasonably justified the Appellate Court ordinarily should not interfere with that view merely because it thinks that another view preferable or better is possible in the situation. ( 8 ) THE submission raised before this Court in this group of 11 acquittal appeals are required to be examined in the light of the aforesaid legal proposition. ( 8 ) THE submission raised before this Court in this group of 11 acquittal appeals are required to be examined in the light of the aforesaid legal proposition. It is therefore incumbent upon the prosecution to show that the views and the ultimate conclusion reached by the Trial Court in recording the acquittals are perverse or unreasonable or against the evidence and unjustified. No doubt the allegations and the imputations made against the accused are very serious and of grave nature. However it is incumbent upon the prosection to prove the culpability of the accused person for the alleged offences punishable under sections 408 477 and 201 of I. P. C. without any shadow of doubt. The Trial Court upon critical analysis of the evidence and correct assessment of the evidence has given benefit of doubt while recording the acquittal orders. The learned Public Prosecutor has not been able to satisfy this Court that the views adopted by the Trial Court and the grounds upon which acquittals are founded are unreasonable or perverse in the circumstances. ( 9 ) THE learned Public Prosecutor has highlighted the following five circumstances and forcefully contended that the complicity of the accused for the aforesaid offences is established beyond reasonable doubt: (1) that the books of accounts were exclusively written in charge of the accused and they were not found at the time of audit (2) that the find of books of accounts of S. Y. 2025 and S. Y. 2027 from the custody of the accused by the Investigating Officer (3) that the conduct of the accused as he remained absent or about the period of audit of the accounts (4) that the filing of Special Suit No. 55 of 1981 by the firm against the accused for recovery of Rs. 1 10 0 (5) that the modus operandi of showing Rs. 1 0 less in the opening balance on the subsequent day. Relying upon the aforesaid five circumstances it is contended that the guilt of the accused for the aforesaid offences is succinctly established without any shadow of doubt. Having examined the aforesaid five circumstances in the light of the evidence emerging from the record of the appeals the aforesaid submission raised by the learned Public Prosecutor cannot be subscribed to. No doubt the conviction could be based on circumstantial evidence when direct evidence is not possible. Having examined the aforesaid five circumstances in the light of the evidence emerging from the record of the appeals the aforesaid submission raised by the learned Public Prosecutor cannot be subscribed to. No doubt the conviction could be based on circumstantial evidence when direct evidence is not possible. However it must be noted that before a person could be found guilty with reference to mere circumstantial evidence each of the circumstance relied upon must be clearly established and the proved circumstances taken together must be such as reasonably to exclude the probaility of innocence. It is a settled proposition of law that in case of circumstantial evidence the circumstances must be established and the chain of evidence furnished by these circumstances should be so complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused. The circumstances on which the reliance is placed by the learned Public Prosecutor do not even lead to a reasonable conclusion that the respondent-accused is guilty for the aforesaid offences in all the criminal evidence only if every other reasonable hypothesis of guilt is completely excluded and the circumstances are wholly inconsistent with the innocence of the accused. An analysis of the circumstantial evidence relied upon by the learned Public Prosecutor in this group of appeals does not in the opinion of this Court lead to an unerring certainty or conclusion that the respondent-accused was guilty for the offences punishable under Sections 408 477 and 201 of I. P. C. ( 10 ) THE principles are that each circumstance relied upon by the prosecution must be established by cogent succinct and reliable evidence; that the circumstance relied upon must be such as cannot be explained on any hypothesis except the guilt of the accused. In other words the circumstances must be missing and they must unequivocally point to the guilt of the accused and exclude any hypothesis consistent with his innocence. It may also be mentioned that in order to attract the rigours of the provisions of Section 408 of I. P. C. the prosecution is obliged to prove the following material ingredients: (1) that the accused was the clerk or the servant of the person reposing trust (2) that he was in such capacity entrusted with the property in question or with dominion over it (3) that he committed cirminal breach of trust in respect of it. The cirminal breach of trust is defined in Section 405 of I. P. C. To constitute an offence of criminal breach of trust there ought to be a dishonest mis-appropriation by a person in whom confidence is placed as to the custody or management of the properly in respect of which the breach of trust is charged. Obviously therefore there must be an entrustment and there must be mis-appropriation or conversion to ones own use or any violation of any legal direction or of any legal contract and thirdly the mis-appropriation or conversion or disposal must be with a dishonest intention. It must be shown by the prosecution beyond reasonable doubt that there was an entrustment on any person with property or with any dominion of the accused over the said properly. It must also be proved without any shadow of doubt that the person entrusted dishonestly misappropriated or converted to his own use that property or disposed of that property. There is a distinction between cirminal misappropriation or criminal breach of trust. In cirminal mis-appropriation the property comes into the possession of the accused by some casualty or otherwise and thereafter the accused mis-appropriates it. Whereas in case of criminal breach of trust the accused is lawfully entrusted with the property and he dishonestly mis-appropriates the same or wilfully suffers any other person to do so instead of discharging the trust attached to it. Section 477a prescribes punishment for an offence of falsification of accounts. This Section speaks of two offences: (1) falsification of accounts and (2) making or abetting the making of false entry. According to prosecution case the accused had made false entries in the books of accounts and had mis-appropriated the money entrusted to him. The prosecution is obliged to establish the following ingredients to attract the rigors of the offence of falsification of accounts by a clerk: (1) The person coming within its purview must be a clerk officer or servant or acting in the capacity of a clerk officer or servant. The prosecution is obliged to establish the following ingredients to attract the rigors of the offence of falsification of accounts by a clerk: (1) The person coming within its purview must be a clerk officer or servant or acting in the capacity of a clerk officer or servant. (2) He must wilfully and with intent to defraud- (i) destory alter mutilate or falsify any book paper writing valuable security or accounts which (a) belongs to or is in possession of his employer or (b) has been received by him for or on behalf of his employer or (ii) make or abet the making of any false entry in or omit or alter or abet the omission or alteration of any material particular from or in any such book paper writing valuable security or account. Thus the offence is complete under this Section that when accounts are falsified with an intent to defraud and alteration of accounts is made after mis-appropriation will obviously come within the ambit of this Section if it is a part of the scheme to deprive an other of this money. ( 11 ) IN some of the criminal cases. it was also alleged by the prosecution that the accused had destroyed the books of accounts. Therefore the accused was also charged for the offences punishable under Section 201 of the I. P. C. in 4 criminal cases out of the 11 criminal cases. In order to bring home the offences punishable under Section 201 of the I. P. C. the prosecution is obliged to establish: (1) that the offence is committed (2) that the accused knew or had reason to believe the commission of such an offence (3) that with such knowledge or belief he (a) caused any evidence of the commission of that offence to disappear or (b) gave any information relating to that offence which he then knew or believed to be false (4) that he did so as aforesaid with the intention of screening the offender from legal punishment (5) If the charge be of an aggravated form it must be further proved that the offence in respect of which the accused did as in (3) and (4) supra was punishable with death or imprisonment for life or imprisonment extending to ten years. In short before conviction under Section 201 can be recorded it must be shown to the satisfaction of the court that the accused knew or had reason to believe that an offence had been committed and having got this knowledge tried to screen the offender by disposing of the incriminating material. Therefore it is required to be examined in the light of the aforesaid legal scenario that the accused is found guilty for the offences punishable under Section 408 477 and 201 of the I. P. C. beyond reasonable doubt. The question which is required to be examined is whether the prosecution in any of these cases has proved the culpability of the accused beyond reasonable doubt. To this the answer would be in the negative. ( 12 ) THE version of the prosecution that the accused was exclusively in charge of writing accounts and cash transactions of the firm during the relevant period is; not only proved to the hilt but disproved in the evidence of the prosecution. It is very clear from the-evidence of prosecution witnesses Mr. Ramanbhai Budhabhai Patel and Mr. Jaikishan Babarbhai in all the matters that the accused was not the only Accountant and Cashier of the firm. It is also clearly proved that one Mr. Shanti Lal Modi was also won king as Accountant and Cashier at the relevant time. The evidence of prosecution witness is contrary to the evidence of the complainant Mr. Shirish Chandra Shah. Thus the allegation of the prosecution that the accused was in charge of the cash exclusively very and was dealing with the financial transactions and writing accounts books of the firm at the relevant point of time is not proved at all. Not only that the said Mr. Shanti Lal Modi is also not examined by the prosecution. No reasonable explanation whatsoever is put forth for non-examination of such an important witness. It may also be noted that at one point of time at the cross-examination the complainant himself has admitted that Mr. Shanti Lal Modi was also working and dealing with the financial matters of the firm at the time when the accounts were audited. ( 13 ) IT is also very clear from the evidence that complainant Mr. Shririshchandra has no personal knowledge about the involvement of the accused in the financial irregularities and alleged mis-appropriation. Shanti Lal Modi was also working and dealing with the financial matters of the firm at the time when the accounts were audited. ( 13 ) IT is also very clear from the evidence that complainant Mr. Shririshchandra has no personal knowledge about the involvement of the accused in the financial irregularities and alleged mis-appropriation. He has clearly admitted in the cross-examination in his evidence that though he is one of the partners of the firm he did not have the personal knowledge of the administration in the finance and accounts of the firm. Thus the evidence of the complainant ipso facto does not prove the guilt of the accused. Not only that there are material contradictions and infirmities in the evidence also which affect the very substratum of the prosecution story. ( 14 ) THE five circumstances as aforesaid and relied upon by the learned Public Prosecutor do not even cumlatively compiginate or connect the accused person with the culpability he is charged with. The very first circumstances relied upon is not proved. On the contrary it is noticed from the evidence that at least two persons were in charge of the accounts and financial transactions of the firm at the relevant point of time. Therefore the first circumstance does not take the prosecution case any further. The second circumstances with regard to the find or recovery of books of accounts from the accused does not help the prosecution to prove the guilt. It may be mentioned that such books of accounts were not found or recovered from the custody of the accused. On a detailed inquiry it is noticed that diaries relating to S. Y. 2025 and S. Y. 2027 were found by the Investigating Officer in course of the investigation from the custody of the accused. Could this aspect in any way lead to an unerring inference of the guilt of the accused with the offence he is charged with? To this the answer would be in the negative. The relevant year in question is S. Y. 2036. Only diaries of 10 years old were found from the custody of the accused. This accept does not in any way indicate the guilt of the accused. ( 15 ) THAT leads to the appreciation of the third circumstance relied upon by the learned Public Prosecutor. The relevant year in question is S. Y. 2036. Only diaries of 10 years old were found from the custody of the accused. This accept does not in any way indicate the guilt of the accused. ( 15 ) THAT leads to the appreciation of the third circumstance relied upon by the learned Public Prosecutor. In that he contended that the very conduct of the accused in remaining absent at the relevant time when audit was to be made and subsequently totally absenting from duty would be indicative of a guilty conscious. This submission may be subtle but in any way does not help the prosecution story. Such a conduct may be even plausible even in case of an innocent person. The accused at the relevant point of time was working as a servant in a private firm and when be was incriminated and imputed by the master obviously he may not like to continue with the work in the employment. Therefore mere remaining absent from work after the dispute with the master is at all not an indication pointing only the guilt of the accused. The fourth circumstance relied upon is in connection with the filing of Special Suit for the recovery of the dues by the firm. It is not in dispute that the partnership firm instituted a Special Suit No. 55 of 1981 for the recovery of an amount of Rs. 1 11 0 against the accused. Mere filing of such Suits against the accused does not even remotely prove the guilt of the accused. It is pointed out by learned Counsel Mr. Metha for the accused at the time of hearing that the said Special Suit came to be dismissed and the partnership firm employer has not questioned it in the higher forum. This statement is not disputed. Under the circumstances such an aspect of filing of a Special Suit for the recovery of the aforesaid amount is in no way connecting the accused with the complicity he is charged with. ( 16 ) LAST and the important circumstances which is relied upon by the prosecution is the modus operandi with which the accused allegedly mis-appropriated the amount. It is alleged that the accused mis- appropriated in all an amount of Rs. 1 2 836. 49 ps. during S. Y. 2036. Out of the said amount of an amount Rs. 73 836. It is alleged that the accused mis- appropriated in all an amount of Rs. 1 2 836. 49 ps. during S. Y. 2036. Out of the said amount of an amount Rs. 73 836. 49 ps is alleged to have been mis-appropriated by the accused in November 1980 for which he was tried in the Trial Court in Criminal Case No. 1713 of 1983 Criminal Appeal No. (1256/84 ). Though the charges are very serious the prosecution the prosecution has not remained serious to establish those charges. The modus operandi of showing Rs. 1 0 less in the opening balance on the subsequent day is not important but the important thing to be proved is who played that modus operandi. Has it shown by the prosecution that such act is done by the accused and nobody else? To this the answer would be in the negative. Unfortunately for the prosecution there is no clear convincing and reliable evidence to prove that the accused mis-appropriated the aforesaid amount and that he falsified the entries in the accounts or that he destroyed the accounts. The material ingredients attracting the rigours of the aforesaid offences are not proved by the prosecution beyond reasonable doubt. Therefore the acquittal recorded by the Trial Magistrate in all the aforesaid 11 trials could not be successfully assailed in this group of appeals. ( 17 ) A reliance is also placed by the learned Public Prosecutor on the voluminous documentary evidence relating to the accounts which are alleged to have been falsified. It may be mentioned at this stage that the entries in books of accounts or the evidence of books of accounts ipso facto without any corroborating evidence would not be sufficient to prove the guilt of the accused. Entries in the books of accounts are supporting and corroborative evidence. Mere entries from the books of accounts relied upon by the prosecution are not sufficient to charge a person with liability even under the provisions of Section 34 of the Evidence Act. No person can be straightaway charged with the liability merely on the basis of entries in books of accounts when such books of accounts regularly kept in the course of business the prosecution is bound to establish the entrustment criminal breach of trust and falsification of accounts by substantive evidence. No person can be straightaway charged with the liability merely on the basis of entries in books of accounts when such books of accounts regularly kept in the course of business the prosecution is bound to establish the entrustment criminal breach of trust and falsification of accounts by substantive evidence. Obviously therefore the prosecution is not in a position to make any slice of profit out of the documentary evidence relating to cash memos receipts and counter-foils of cheque and slip book produced at Exhs. 56 to 993 relied upon to prove the guilt of the accused. Therefoer the evidence of a hand-writing expert and the Auditor or Chartered Accountant also does not prove the guilty of the accused beyond reasonable doubt. ( 18 ) THE decision of the Supreme Court in case of Janeshwae Das vs. State of U. P. reported in AIR 1981 SC 1646 is squarely attracted in this group of appeals. It was held in that case that a conviction under Section 409 of the I. P. C. can be recorded only if the prosecution prove beyond reasonable doubt the entrustment and mis-appropriation of the entrusted properties by the accused. In that case though entrustment of certain open godowns was proved but there was no evidence either direct or circumstantial to show that the accused had mis-appropriated any of the articles in the godowns the accused could not be presumed to have mis-appropriated the articles merely on the ground that he failed to give any explanation for the shortage and his conviction could not be sustained. ( 19 ) INCIDENTALLY it also be mentioned that the defence version is that the complainant Mr. Shirishchandra Shah who is one of the partners of the firm had played mischief to show that he had spent less amount in the local municipal election is also required to be seriously examined. It is not in dispute that the complainant Mr. Shirishchandra Shah had contested in the Billimora Municipal Election and he succeeded in it. The prosecution witness Mr. Ramanbhai Budhabhai Patel has clearly admitted in his evidence that the complainant Mr. Shirishchandra Shah had made large expenditure in the electioneering of the local municipal election. It is not in dispute that the complainant Mr. Shirishchandra Shah had contested in the Billimora Municipal Election and he succeeded in it. The prosecution witness Mr. Ramanbhai Budhabhai Patel has clearly admitted in his evidence that the complainant Mr. Shirishchandra Shah had made large expenditure in the electioneering of the local municipal election. Therefore it was contended that the aforesaid version of the defence in order to conceal and screen the heavy expenditure in the electioneering made by the complainant in the municipal election cannot easily be ruled out. Since the prosecution has failed to establish the guilt of the accused beyond reasonable doubt this question is not required to be examined at this stage in further and greater deatails. ( 20 ) HAVING examined the facts and circumstances emerging from the evidence on record and on the critical re-appraisal of the testimonial collection while viewd in the light of the relevant case laws as aforesaid this Court has no hesitation in holding that all these 11 acquittal appeals are devoid of any substance and are required to be dismissed. In the result all aforesaid 11 acquittal appeals are dismissed. A copy of this judgment shall be kept in other ten acquittal appeals. Application Dismissed. .