Criminal Appeal No 114 of 1957
Appeal by special leave from the judgment and order dated December 6 1955 of the Punjab High Court Circuit Bench Delhi in Criminal Appeal No 25 D of 1953 arising out of the judgment and order dated August 27 1953 of the Court of the special judge at Delhi in Criminal Case No 3 of 1953
R L Anand and section N Anand for the appellant
H J Umrigar and R H Dhebar for the respondent
May 21
The Judgment of the Court was delivered by KAPUR J
This appeal by special leave is brought against the judgment and order of the High Court of the Punjab confirming the order of conviction of the appellant under section 51c of the Prevention of Corruption Act 1947 11 of 1947 hereinafter referred to as the Act
The High Court reduced the sentence of the appellant to nine months  rigorous imprisonment
454 The appellant was employed as an Assistant Store keeper in the Central Tractor Organisation at Delhi and amongst other duties his duty was the taking of delivery of consignment of goods received by rail for Central Tractor Organisation and in that capacity he is alleged to have misappropriated a major portion of a wagon load of iron and steel weighing about 500 Mds
received at Delhi Railway Station from the Tata Iron  Steel Co Tatanagar under Railway Receipt No 039967 dated August 12 1950
This consignment of goods was taken delivery of on October 2 1950 at the Lahori Gate Depot
The consignment had been lying at the Railway depot for a considerable time and the Central Tractor Organisation was before taking the delivery making efforts to have the wharfage and demurrage charges reduced but it only succeeded in getting a reduction of Rs 100
The appellant paid Rs 2332 4 0 for demurrage by means of credit notes P N and P 0
on October 2 and on the following day he paid a further sum of Rs 57 3 0 by a credit note P Q
The prosecution case was that this consignment never reached the Central Tractor Organisation and that the appellant had removed these goods and had misappropriated them
He was absent from work after October 4 1950 on the alleged ground of illness but he was sent for on October 7 and appeared before the Director of Administration Mr F C Gera and he gave an explanation that he the appellant had lost the Railway Receipt along with another Railway Receipt and blank credit notes which had been signed by the Petrol and Transport Officer
He also stated that he did not know that the goods covered by that Railway Receipt had been cleared
After this explanation the appellant was
handed over to the police and a case was registered against him at the instance of Mr FC Gera on October 7 1950
On the following day that is October 8 1950 the appellant made a statement to Sub Inspector Sumer Shah Singh that he had given the goods to Gurbachan Singh who was traced and in the presence of this Sub Inspector who was not in uniform at the time Gurbachan Singh handed over Rs 200 to the appellant 455 which the Sub Inspector took possession of and then Gurbachan Singh took the party which consisted of the Sub Inspector Dharam Vir of the Central Tractor Organisation and witness Kartar Singh to the premises of Amar Singh at Kotia Khan where iron and steel goods were seized and recovery memos prepared
Of the goods covered by the consignment seven packages were later recovered from the Lahori Gate Goods Depot
The defence of the appellant was that he took delivery of the goods on October 2 and 3 and removed them to another Railway Siding known as Saloon Siding where the goods of the Central Tractor Organisation used occasionally to be stacked in order to save wharfage and demurrage
In his evidence he stated that he removed these goods to the Saloon Siding on October 2 and 3 by means of a truck of the Central Tractor Organisation which was driven by Sukhdev Singh
The appellant produced Sukhdev Singh and two chowkidars in support of his defence that he had removed these goods from the Lahori Gate Depot to the Saloon Siding by means of the truck of Sukhdev Singh and on some on carts
The High Court has not accepted this evidence
Therefore the position comes to this that the goods received in that consignment were according to the appellant s own showing removed from the Lahori Gate Depot but it is not proved that they reached  the Saloon Siding and they did not reach the Central Tractor Organisation
There is also the fact that the appellant gave false explanation on October 7 1950 as to what had happened to the Railway Receipt or the credit notes which he had received from the Central Tractor Organisation and there is the further fact that the appellant was absent from duty from October 4 to October 7 till he was sent for Mr FC Gera
The prosecution also tried to show that the goods were removed by Gurbachan Singh to Amar Singh s place from where certain iron and steel goods were recovered
Now these iron and steel goods do not tally with the goods which were received from Tatanagar under Railway Receipt No 039967 and the goods 456 seized from Amar Singh s place have not been shown to be of the Tata Iron  Steel Co s manufacture
Therefore the case reduces itself to this that the appellant took delivery of the goods
These goods were removed from the Lahori Gate Railway Depot by the appellant and they never reached the Central Tractor Organisation
The prosecution sought to connect the goods found at Amar Singh s place with the goods received taken delivery of and removed by the appellant but they failed to do so because neither the identity of the goods is the same nor has Gurbachan Singh been produced to depose that it was the appellant who asked him to remove the goods for being taken to Amar Singh s place
In this view of the matter the question for decision is whether the case of the prosecution should be held to be proved that the appellant had misappropriated the goods
It emerges from the evidence of both parties that the goods were received by the appellant and removed by him and they never reached the Central Tractor Origanisation
Indeed before the High Court it was not disputed that the appellant took delivery of the whole consignment at Lahori Gate Depot and  he was responsible for the actual removal of two considerable portions of the consignment on the 2nd and 3rd of October
 The offence of which the appellant has been convicted is section 51 c of the Act which is as follows 5
1  A public servant is said to commit the offence of criminal misconduct in the discharge of his duty c if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do  The word dishonestly  is defined in section 24 of the Indian Penal Code to be  Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person
is said to do that thing dishonestly 
457  Fraudulently has been defined in the Indian Penal Code in section 25 as follows  A person is said to do a thing fraudulently if he does that thing with intent to defraud but not other  wise Wrongful gain includes wrongful retention and wrongful loss includes being kept out of the property as well as being wrongfully deprived of property
Therefore when a particular thing has gone into the hands of a servant he will be guilty of misappropriating the thing in all circumstances which show a malicious intent to deprive the master of it
As was said by Fazl Ali J in Harakrishna Mahtab vs Emperor 1  Now I do not mean to suggest that it is either necessary or possible in every case of criminal breach of trust to prove in what precise manner the money was spent or appropriated by the accused because under the law even temporary retention is an offence provided that it is dishonest 
I must point out that the essential thing to be proved in case of criminal breach of trust is whether the accused was actuated by dishonest intention or not
As the question of intention is not a matter of direct proof the Courts have from time to time laid down certain broad tests which would generally afford useful guidance in deciding whether in a particular case the accused had or had not mens area for the crime
So in cases of criminal breach of trust the failure to account for the money proved to have been received by the accused or giving a false account of its use is generally considered to be a strong circumstance against the accused
 The offence under section 51c is the same as embezzlement which in English law is constituted when the property has been received by the accused for or in the name or on account of the master or employer of the accused and it is complete when the servant fraudulently misappropriates that property
Halsbury s Laws of England Vol 10 3rd Edition p 787 In Larnier vs Rex 2 the offence of embezzlement was 1 AI R 1930 Patna 209
2  458 described as a wilful appropriation by the accused of the property of another
A court of Justice it was said in that case cannot reach the conclusion that the crime has been committed unless it be a just result of the evidence that the accused in what was done or omitted by him was moved by the guilty mind So the essence of the offence with which the appellant was charged is that after the possession of the property of the Central Tractor Organisation he dishonestly or fraudulently appropriated the property entrusted to him or under his control as a public servant and deprived the owner ie Central Tractor Organisation of that property
It is not necessary or possible in every case to prove in what precise manner the accused person has dealt with or appropriated the goods of his master
The question is one of intention and not a matter of direct proof but giving a false account of what he has done with the goods received by him
may be treated a strong circumstance against the accused person
In the case of a servant charged with misappropriating the goods of his master the elements of criminal offence of misappropriation will be established if the prosecution proves that the servant received the goods that he was under a duty to account to his master and had not done so
If the failure to account was due to an accidental loss then the facts being within the servant s knowledge it is for him to explain the loss
It is not the law of this country that the prosecution has to eliminate all possible defences or circumstances which may exonerate him
If these facts are within the knowledge of the accused then he hag to prove them
Of course the prosecution has to establish a prima facie case in the first instance
it is not enough to establish facts which give rise to a suspicion and then by reason of section 106 of the Evidence Act to throw the onus on him to prove his innocence
See Harries CJ in Emperor vs Santa Singh In the present case the appellant received the consignment of goods which came from Tatanagar
It is admitted that he removed them and it was found by 1 AIR 1944 Lah 338 at P 346
459 the High Court that they never reached the Central Tractor Organisation
He gave an explanation in court which has been found to be false
Before Mr F C Gera he made a statement to the effect that he had lost the Railway Receipt and therefore had never got the delivery of the goods which was also false
In these circumstances in our opinion the court would be justified in concluding that he had dishonestly misappropriated the goods of the Central Tractor Organisation
The giving of false explanation is an element which the Court can take into consideration
Emperor vs Chattur Bhuj 1
In Rex vs William 2
Coleridge J charged the jury as follows  The circumstances of the prisoner having quit ted her place and gone off to Ireland is evidence from which you may infer that she intended to appropriate the money and if you think that she did so intend she is guily of embezzlement
Again in Reg vs Lynch 3 Moore J said  You have further the fact that after getting the money the prisoner absconded and did not come back till he was in custody
You may infer that he intended to appropriate this money and if so he is guilty of embezzlement
 The appllent s counsel relied on certain observations in certain decided cases which according to his submission support his contention that the prosecution has to prove not only receipt of goods by the accused but also to prove that he converted them to his own use and did not apply them to the purpose for which he received them
He referred to Ghulam Haider vs Emperor4 In re Ramakkal  Others 5 Bolai Chandra Khara vs Bishnu Bejoy Srimani 6 Bhikchand vs Emperor 7 Pritchard vs Emperor 8
So broadly stated this submission does not find support even from the cases relied upon by the appellant s counsel
They are all decisions on the peculiar circumstances of each case
In Ghulam Haider s case 4 1 Patna 108
5 AIR 1938 Mad
2 1836 7 C  P 338
6 AIR 1934 Cal
3 7 AIR 1934 Sindh 22
4 AIR 1938 Lah
8 AIR 1928 Lah
460 the proposition was qualified by saying that proof of receipt and failure to account  is a long way towards proof of misappropriation but not the whole way
 In that case the books in which receipts ought to have been entered were not produced and there was absence of  clear accounts
 In Ramakkal s case 1 the accused was the receiver of a currency note found by a child and it was held that  mere intention to misappropriate or even preparation to that end was not an offence
It was a case brought to the High Court at an intermediate stage for quashing the charge and the High Court did not do so
Bolai Chandra Khara s case 2 only emphasised that proof of one element of the criminal breach of trust is not enough for conviction and proof of non payment of money collected by a gomastha must be given by the prosecution
In Bhikchand s case 3 it was held that it is only on proof of non payment of money received by the accused that  presumption will arise of misappropriation
 In Pritchard s case 4 also the prosecution did not produce the books of account showing nonpayment
All these decisions must be confined to their peculiar facts and in their ultimate analysis do not support the proposition contended for by the appellant
What the prosecution have proved in this case is that the appellant took delivery of the goods on October 2 and 3
His own statement on oath shows that he removed these goods from the Railway Siding
This removal is also proved by documentary evidence in the form of gate passes
There is also proof of the fact that the goods did not reach the Central Tractor Organisation
The appellant has given an explanation that he removed these goods to the Saloon Siding
This explanation has not been accepted
The pro secution have also proved that the appellant in the first instance gave a false explanation that he had not taken delivery of the goods
He had absented himself from duty and had to be called by the Officer in charge
He has set up the defence of removal to the Saloon Siding which was not accepted
1 AIR 1938 Mad
3 AIR 1934 Sindh 22
2 AIR 1934 Cal 425
4 AIR 1928 Lah
461 The prosecution also set out to prove that the goods were disposed of by the appellant by giving them to one Gurbachan Singh who in turn put these at the premises of Amar Singh and some steel goods were  recovered from there but the prosecution have neither produced Gurbachan Singh nor has it been proved that the goods are part of the consignment which was taken delivery of by the appellant
If under the law it is not necessary or possible for the prosecution to prove the manner in which the goods have been misappropriated then the failure of the prosecution to prove facts it set out to prove would be of little relevance
The question would only be one of intention of the appellant and the circumstances which have been above set out do show that the appellant in what he has done or has omitted to do was moved by a guilty mind
In our opinion the appellant was rightly convicted and we would therefore dismiss this appeal
Appeal dismissed


Summary:
A public notice under section 221 of the Income tax Act 1922 was published on May 1 1045 requiring every person whose total income exceeded the maximum amount which was not chargeable to income tax to file returns for the assessment year 1945 46
On January 5 1950 the assessee submitted a voluntary return showing an income of Rs 1935 for the assessment year 1945 46 and added a footnote to the return that his wife had sold her old ornaments and deposited a sum of Rs 59026 with the Assar Syndicate in which he was a partner
The Income tax Officer who had discovered these credits while examining the accounts of the Assar Syndicate ignored the voluntary return and on February 27 1950 issued a notice under section 341 of the Act calling upon the assessee to submit his return
On March 14 1950 the assessee submitted an identical return
The Income tax Officer made the assessment on February 26 1951 and included the sum of Rs 59026 in the total income of the assessee
The assessee contended that the assessment was invalid as it was completed more than four years after the end of the assessment year in violation Of section 341b
The appellant contended that the voluntary return was no return as it did not disclose any taxable income and the assessment was valid under the proviso to section 343 Of the Act having been made within one year of the notice issued under section 341
Held that the assessment was invalid
The voluntary return filed by the assessee even though it did riot disclose any taxable income was a good return and could not be ignored
As such no question arose under section 341 of income escaping assessment and the Income tax Officer was not justified in issuing the notice under section 341
The proviso to section 343 was applicable only when there was a Proper notice issued under section 341 and the appellant could not take advantage of the time allowed by this proviso
The assessment was clearly made beyond four years of the end of the assessment year 1945 46 and was time barred
Harakchand Makanji  Co vs Commissioner of Income tax All India Groundnut Syndicate Ltd vs 115 Commissioner of Income tax 1953 25 ITR go and P section Rama Iyer vs Commissioner of Income tax 1957 33 ITR 458 approved
Commissioner of Agricultural Income tax vs Sultan Ali Gharami  B K Das  Co vs Commissioner of Income tax and Commissioner of Income tax vs Govindlal Dutta 1957 33   disapproved