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2018 DIGILAW 317 (GAU)

Prasanna Jyoti Borthakur v. State of Assam

2018-02-20

HITESH KUMAR SARMA

body2018
JUDGMENT & ORDER : 1. This is an application, filed under Sections 482 of the Cr.PC, seeking quashment of the FIR, dated 06.12.2016, filed by the respondent No. 2, who is the Vice Chairperson of the Amguri Municipal Board against the accused-petitioners, who are working as LDA (General and Accounts) and Assistant Tax Daroga of the aforesaid Municipal Board respectively for commission of misappropriation of tax collected during the financial year 2015-2016 to the tune of Rs. 3,14,934/-. 2. On receipt of the FIR, the Amguri Police Station registered a case, being No. 173/2016, under Sections 420/409 of the IPC. 3. Heard Mr. D Das, learned senior counsel for the accused-petitioners. Also heard Mr. NK Kalita, learned Additional Public Prosecutor, appearing for the State respondent No. 1 as well as Mr. C Baruah, learned counsel for the respondent Nos. 2 and 3. 4. I have perused the petition as well as the annexures furnished therewith. 5. Mr. D. Das, learned Senior counsel for the accused-petitioners has referred to the provisions of Sections 67-E (6) and 67-G of the Assam Municipal Act, 1956 (hereinafter referred to as the 1956 Act). He has further referred to the provisions of Section 54 of the 1956 Act. For the purpose of this case, this Court would like to quote the relevant portions of Sections 67-E (6), 67-E (8), 67-E (9) and 67-G of the 1956 Act which read as follows:- "67-E (6) -The Auditor may- (i) require by a notice, in writing, the production before him, or before any officer subordinate to him, of any document which he considers necessary for the proper conduct of the audit; (ii) require by a notice, in writing, any person accountable for, or having the custody or control of any document, cash or article, to appear in person before him or before any officer subordinate to him; (iii) require any person so appearing before him, or before any officer subordinate to him, to make or sign a declaration with respect to such document, cash or article or to answer any question or prepare and submit any statement and cause physical verification of any stock of articles in course of examination of accounts. 67-E (8) - The Board of the Municipality at a meeting shall consider the report of the Auditor alongwith test audit report of the C & AG as early as possible and shall, if necessary, take prompt action thereon, and shall also, if necessary, surcharge the amount of any illegal payment on the person making or authorising it, and charge against any person responsible therefore, the amount of any deficiency or loss incurred due to the negligence or misconduct of such person or any amount which ought to have been, but is not, brought in to account by such person, and shall in every such case, certify the amount due from such person: Provided that any person aggrieved by an order of payment of certified sums may appeal to the State Government whose decision on such appeal shall be final. 67-E (9) - Any person who willfully neglects, or refuses to comply with requisition made by the Auditor or the officer subordinate to him or refuses to comply with any order or direction given by the Board under sub-section (8), shall be liable for any legal action against him as may be considered necessary and appropriate by the Board of the Municipality. 67-G- Placing of Audit Report- (1) The Chief Municipal Officer shall place the audited financial statement, the balance sheet and the report of the Auditor and his comments together with test audit report of the C&AG thereon, before the Board of the Municipality. (2) The Chief Municipal Officer shall remedy any defect that has been pointed out by the Auditor in his report." The provisions of Section 54 of the 1956 Act reads as follows:- "54-Liability for loss, waste or misapplication of funds and property- (1) Every Chairman, Vice-Chairman, Commissioner, officer or servant of a Municipal Board, including a Government servant whose services are lent to the Board, shall be liable for the loss, waste, or miss-application of any money or other property owned by or vested in the Municipal Board, if such loss, waste or mis-application is a direct consequence of any illegal act, omission, neglect or misconduct on his part, and a suit for compensation may be instituted against him in any Court of compete jurisdiction by the Board. (2) Every such suit shall be instituted within one year after the date on which cause of action arose." 6. (2) Every such suit shall be instituted within one year after the date on which cause of action arose." 6. In view of the above provisions, learned senior counsel for the accused-petitioners has submitted that the Municipal Board involved in this matter has not exhausted the procedure laid down in the aforesaid provisions, and therefore, the findings recorded by the respondent No. 2/Vice Chairman in his enquiry report, as regard misappropriation of an amount of Rs. 3,14,934/- by the present accused-petitioners, cannot sustain since the respondent No. 2 is not an officer authorised under the 1956 Act to make an enquiry. Rather the provisions mentioned above, make it appear that duty of the officers to whom the tax collectors are subordinates is to verify the financial statements as well as countersign the same. To a pointed query made by this Court, whether non-compliance of Section 54, 67, etc of the 1956 Act, the accused-petitioners will be absolved of the criminal liability to which he replied that this is subject to findings recorded by the authorised Audit officer and cannot be on the basis of a finding recorded by an officer not authorised by the 1956 Act. 7. On the other hand, the learned counsel for the respondent Nos. 2 and 3 who are respectively the Vice-Chairman and Chairman of the Amguri Municipal Board has submitted that this being a financial irregularity cannot appropriately be quashed in view of the decision rendered by the Honble Supreme Court in the case of Parbatbhai Aahir @ Parbatbhai Bhimsinbhai Karmur vs. State of Gujarat and Anr., reported in (2017) 9 SCC 641 which aspect will be dealt with after a while. 8. The further submission made by the learned Senior counsel for the accused-petitioners is that in a similar case pertaining to financial year 2016-2017, the approach of the said Municipal Board is not the same with the present petitioners who are alleged to have committed misappropriation of fund during the financial year 2015-2016. 9. I have perused the affidavit filed by the respondent Nos. 2 and 3 and the reply thereto filed by the present accused-petitioners. 9. I have perused the affidavit filed by the respondent Nos. 2 and 3 and the reply thereto filed by the present accused-petitioners. It is found to be an admitted position that in respect of the financial irregularity/misappropriation during the financial year 2016-2017, there was an Audit held in accordance with Section 67 of the 1956 Act and a recovery proceeding has been initiated whereas in respect of the present petitioners pertaining to the financial year 2015-2016, no recovery proceeding has been initiated and rather the instant FIR has been filed. 10. From admitted facts, it appears to this Court that the measure taken by the Municipal Board in respect of the present accused-petitioners and in respect of the persons against whom recovery proceeding has been initiated for the year 2016-2017 are tangibly different. 11. In respect of the present accused-petitioners, the provisions of the 1956 Act, referred to above, has not been put into service while the same is done in respect of the persons against whom recovery proceeding is initiated for the financial irregularity during the financial year 2016-2017. 12. To a pointed query, the learned counsel for the respondent Nos. 2 and 3, Mr. C Baruah has submitted that FIR has not yet been lodged against the persons involved in the alleged misappropriation in 2016-2017. But, he is not sure about it. 13. On the other hand, the submission made by the learned counsel for the respondent Nos. 2 and 3 that in view of the decision in Parbatbhai Aahir (supra), this FIR cannot be quashed. I have considered such submission. It has been held by the Honble Supreme Court in the decision, referred to above, that "there is yet an exception to the principle set out in propositions (viii) and (ix) above. Economic offences involving the financial and economic well-being of the state have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance." 14. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance." 14. The instant case, in the considered view of this Court, is not governed by the said principle, in view of the fact that whether the present accused-petitioners are involved in the activity akin to a financial or economic fraud could have been examined by the Auditor, referred to in Section 67 of the 1956 Act and in the absence of that, on the basis of an enquiry held by a person not competent to do so, it cannot, prima facie, be held that they are involved in commission of financial or economic fraud. By saying so, this Court does not mean that the scope of examination of the matter under Section 67 of the 1956 Act is taken away. 15. The Amguri Municipal Board could have followed the same procedure as is adopted in the case of financial irregularity pertaining to the financial year 2016-2017. Therefore, the FIR filed for alleged misappropriation appears to be pre matured in view of the fact that Audit was not conducted by the authorised Audit officer and on the basis of opinion of the respondent No. 2, who is not competent to hold the enquiry, cannot prima facie be the basis of the FIR in the instant case. 16. It deserves to be mentioned herein that in the Audit report, annexed by the respondent Nos. 2 and 3 in the affidavit-in-opposition makes it clear that the relevant register pertaining to the financial year 2016-2017 could not be examined due to non-availability of the same. Para 1 of the Audit Report reads as follows:- "...................................Audit check of the above mentioned records for the year 2016-17 revealed that entries were made haphazardly in Tax challan register without recording reference of the receipt book number. Further, accordingly to the receipt books, it should bear the signature of tax collector countersigned by the Chairman AMB but the receipt counterfoil contains only the signature of Tax collector. Further, accordingly to the receipt books, it should bear the signature of tax collector countersigned by the Chairman AMB but the receipt counterfoil contains only the signature of Tax collector. Further, the challan registers were not countersigned by any superior officer for supervision before depositing the amount into the bank, which leads to the failure of cash management system which could be evidence from the fact that AMB could not produce receipt book and receipt book for the 2015-16. Reasons attributed for non production of the said records was that the records have been misplaced, and contemplating misappropriation previous Accountant and one Tax daroga were placed under suspension and FIR was lodged against them. Thus due to non production of receipt book, actual tax/fees collected during 2015-16 could not be ascertained in audit, however observed that due to lack of internal control mechanism in financial management misappropriation as contemplated by AMB occurred............................" From the contents of the Audit Report, as reproduced above, it appears that even the relevant register was not available before the Auditor for the financial year 2015-2016 for examination for the reasons indicated in the report itself. 17. That being so, leaving the scope open for the Amguri Municipal Board to relook into the issue involved as per the provisions of the 1956 Act, and to proceed accordingly, the FIR in the instant case stands quashed. 18. Accordingly, this criminal petition stands disposed of.