STATE OF HIMACHAL PRADESH v. LIAK RAM — 1998 DIGILAW 89 (HP)

JUDGMENT R.L. KHURANA, J.—The State has directed the present appeal against the judgment dated 29.9.1993 of the learned Additional Chief Judicial Magistrate, Nahan, passed in Criminal Case No. 10/2 of 1992/89 whereby the respondent was acquitted of the offence under Section 408, Indian Penal Code. 2. Briefly stated, the prosecution story is this. The respondent is a member of Panog Multi Purpose Co-operative Society, Tehsil Shillai, District Sirmaur. He was appointed as a salesman of the said Society under resolution dated 21.10.1985 (Ex. PW-8/A) on a monthly salary of Rs. 100/-. The respondent worked as such salesman from 8.11.1985 to 30.6.1986. During the period the respondent worked as salesman, he failed to render accounts to the Secretary of the Society. The respondent was found to have failed to account for a sum of Rs. 9,442.80 paise belonging to the Society. He admitted his liability to that extent on 28.8.1986 vide a writing Ex. PW-2/C whereby he undertook to repay the said amount. He did not pay the amount inspite of notice dated 25.11.1986. In the meanwhile5 the accounts of the Society came to be audited by the Inspector, Co-operative Societies. As per the audit report Ex. PW-5/A for the year 1985-86, the respondent was found to have embezzled a sum of Rs. 8,771.51 paise as cash in hand and stock to the extent of Rs. 789/-. Or. the matter having been reported to the police, a case under Section 408, Indian Penal Code came to be registered vide FIR No. 18 of 1987 on 22.1.1987 at Police Station Renukaji. 3. On having been put to trial, the respondent pleaded not guilty. Though during the course of evidence the case of the respondent has been that of denial simpliciter and he had also denied having admitted any liability either before the Secretary of the Society or before the auditor, during his examination under Section 313, Code of Criminal Procedure, the respondent has come up with the plea that he had paid the entire amount to Shiv Ram, the Secretary of the Society on 20.9.1986 after deducting the amount of carriage and rent of the shop vide receipt Ex. DW-1/A. 4 The prosecution in support of its case examined nine witnesses in all. The respondent examined one witness in defence. DW-1/A. 4 The prosecution in support of its case examined nine witnesses in all. The respondent examined one witness in defence. The learned Magistrate upon consideration of the material placed before him came to the conclusion that the prosecution had failed to bring home the offence against the respondent beyond a reasonable doubt. He, therefore, vide the impugned judgment acquitted the respondent of the offence charged against him. 5, Admittedly, the respondent during the relevant period was working as a salesman with the Panog Multi-purpose Co-operative Society. In his capacity of being the salesman, he was handling the cash and stock of the society. The respondent had resigned from the post of salesman in July, 1986. The evidence coming on the record shows that the audit of the accounts of the Society was carried out by P W-5 Uttam Singh during the period 8.1.1987 to 15.1.1987. As a result of such audit, the respondent was found to have committed emezzlement to the tune of Rs. 8,771.51 paise in respect of cash in hand and to the tune of Rs. 789/- in respect of the stock. The report of audit is Ex.PW-5/A the correctness of which was admitted by the respondent. 6. Ex. PW-2/E is the writing dated 8.1.1987 whereby the respondent is alleged to have admitted having spent the amount of Rs. 8771.51 paise of the Society and undertaking to repay the same at an early date. The respondent has denied having executed the writing Ex. PW-2/E. He has denied his signature thereon. However, the fact that some money of the Society was retained by the respondent and kept by him for his personal use stands fully proved from the fact that as per the respondents own showing a sum of Rs. 6,130/- was paid by him to PW-2 Shiv Ram, Secretary of the Society vide receipt Ex. DW-1/A on 20.9.1986 after deducting the amount of carriage and rent in respect of the shop. As stated above, the respondent had resigned from the job as salesman of the Society in July 1986. Even if it be accepted that the amount was paid back by him to PW-2 vide receipt Ex.DW-1/A, such amount was paid by him only on 20.9.1986, that is, about two months after he had resigned. He had thus unlawfully retained the amount belonging to the Society, his master, and had failed to account for the same. Even if it be accepted that the amount was paid back by him to PW-2 vide receipt Ex.DW-1/A, such amount was paid by him only on 20.9.1986, that is, about two months after he had resigned. He had thus unlawfully retained the amount belonging to the Society, his master, and had failed to account for the same. Thus, on the face of it, the respondent is guilty of temporary embezzlement. 7. Insofar as receipt Ex. DW-1/A is concerned, no reliance can be placed thereon. It is significant to note that initially the original receipt was not produced by the respondent. Only a Photostat copy thereof was placed on record during the course of cross-examination of PW-2 on 7.12.1989. The case put up by the respondent thus was that the original receipt had been taken into possession by Jeet Ram Kalta, ASI during the investigation of the case. In other words, such original receipt was not in possession of the respondent. 8. Surprisingly though, on 27.9.1992 an application came to be made by the respondent for recalling PW-2 Shiv Ram for futher cross-examination in respect of the original receipt Ex.DW-1/A. PW-2 Shiv Ram was further cross-examined by the respondent on 21.12.1992 and during the course of such further cross-examination the original receipt dated 20.9.1986 Ex. DW-1/A came to be produced by the respondent. 9. Nothing has come on the record to show as to how the respondent came to possess the receipt Ex. DW-1/A which receipt as per his own showing had been taken into possession by ASI Jeet Ram Kalta during the investigation of the case. The fact remains that the respondent failed to account for the money of the Society while quitting his job and had illegally retained such money with him. Such money as per his own showing was repaid by him only on 20.9.1986. From the evidence coming on record coupled with the plea taken by the respondent himself, the offence under Section 408, Indian Penal Code, stands proved against the respondent beyond a reasonable doubt and he is held guilty for the said offence. 10. A contention was raised by the learned Counsel for the respondent that the trial of the respondent was without jurisdiction in view of the provisions contained in Section 72, H.PCo-operative Societies Act, 1968. 10. A contention was raised by the learned Counsel for the respondent that the trial of the respondent was without jurisdiction in view of the provisions contained in Section 72, H.PCo-operative Societies Act, 1968. Section 72(1) of the said Act, insofar as it is material for the purpose of the present case, reads: "(1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the Constitution, management, or business of a co-operative society arises— (a) a claim by the society for any debt or demand due to it from a member or an employee, or the nominee, heir or legal representative of a deceased member or an employee, whether such debt or demand be admitted or not; (b) ...... (c)....... (d) ...... (e) ...... such disputes shall be referred to the registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceeding in respect or such dispute." 11. Relying on these provisions, the learned Counsel has contended that in view of the words "no Court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute, by the Legislature while enacting Section 72, the respondent could not have been tried by any Court and the only remedy was to proceed in accordance with the provisions contained in Section 72. There is no force and merit in the contention of the learned Counsel for the respondent. Section 72 does not take away the jurisdiction of the Criminal Court to proceed against the person found to have committed a criminal offence. Section 2(7) of the H.P. Co-operative Societies Act, 1968, defines a dispute as follows: "Dispute means any matter capable of being the subject of civil litigation and includes a claim in respect of any sum payable to or by a co-operative society whether such claim be admitted or not." The expression "dispute” finds mention in Section 72 of the Act. Therefore, applying the definition contained in Section 2(7), there is no doubt that Section 72 applies only to civil disputes/liability and not to criminal liability. Another contention raised on behalf of the respondent is that at the most the commission on the part of the respondent to account for the money amounts to a civil wrong in the absence of mens rea. Another contention raised on behalf of the respondent is that at the most the commission on the part of the respondent to account for the money amounts to a civil wrong in the absence of mens rea. Therefore, he cannot be held guilty for the offence under Section 408, Indian Penal Code. It is well settled that a case of breach of trust is both a civil wrong and a criminal offence. Merely because a civil remedy is available the case for criminal breach of trust cannot be thrown out. A criminal liability is entirely different from the civil liability and under the law an accused can be simultaneously proceeded against for civil liability and for the criminal offence. Insofar as mens rea is concerned, the same is writ large on the facts of the case. Admittedly, the respondent was having the domain over the money of the Society which under the law he was bound to account for. He failed to do so inspite of the fact that he had tendered resignation from the job. Assuming that he has paid back the amount, he appears to have done so only after defalcation was detected. Consequently, the appeal is allowed. The impugned judgment of acqittal is set aside and the respondent is convicted of the offence under Section 408, Indian Penal Code. 12. Next arises the question of sentence to be imposed upon the accused. The offence under Section 408, Indian Penal Code, is punishable with imprisonment for life. Therefore, the benefit of Section 4, Probation of Offenders Act, 1958, cannot be made available to the accused. 13. in Ganeshbhai Shankarhhai v.The State of Gujarat, AIR 1972 SC 1618, the accused was acquitted by the trial Court but sentenced to four months rigorous imprisonment by the High Court. The Supreme Court on appeal, reduced it to the period of 19 days already served in view of the fact that the accused had secured another job after his acquittal and was working at it. 14. In State of Orissa v.Mukteswar Panda, 1986 Cr.LJ. 1025, the misappropriation was committed ten years back and whereas one department of the Government being dissatisfied with the acquittal of the accused decided to prefer appeal, another department restored the accused to his office. 14. In State of Orissa v.Mukteswar Panda, 1986 Cr.LJ. 1025, the misappropriation was committed ten years back and whereas one department of the Government being dissatisfied with the acquittal of the accused decided to prefer appeal, another department restored the accused to his office. In this background and in the peculiar circumstances of the case even though a substantive sentence was called for, the High Court of Orissa refrained from ordering one on the expectation that conviction and a lenient sentence would make the accused and society aware of the need to observe restraint and the rule of law meticulously. Accordingly, the accused therein was sentenced to substantive sentence till the rising of the Court and fine of Rs. 5,000. 15. Similarly, in Krupasindhu Prusty v. State of Orissa, 1987 Cr.L.J. 1426, since a period of thirteen years had elapsed since the commission of the sentence, the High Court of Orissa reduced the substantive sentence of imprisonment to the period already undergone while the amount of fine was enhanced to Rs. 750. The apex Court in Kassim Pillai Abdul v. State of Kerala, 1979 SCC (Cri) 102, also reduced the sentence of imprisonment to the period already undergone on the consideration that the accused therein had already returned the money misappropriated. 16. In the present case, the misappropriation took place in the year 1986. As many as twelve years have elapsed since then. The respondent has left his hob. He is also shown to have paid back the amount. Taking into consideration all the facts, I am of the opinion that no useful purpose would be served in sending the respondent to jail at this stage and that he deserves to be treated and dealt with leniently. I, therefore, sentence the respondent to imprisonment till the rising of the Court and to pay a fine of Rs. 10,000/-. In default of payment of fine, the respondent shall undergo simple imprisonment for a period of six months. The respondent, who is on bail, shall surrender himself to his bail bonds before the learned trial Court within a period of four weeks from today to receive the sentence imposed upon him by this Court. Appeal allowed.