Criminal Appeal No 193 of 1971
Appeal by Special Leave from the Judgment and Order dated 11 5 71 of the Orissa High Court in Criminal Appeal No 1470
Gobind Das Mrs Sunanda Bhandare A K Mathur A K Sharma and MS Bhandare for the Appellant
SC Agarwal and GS Chatterjee for the Respondent
The Judgment of the Court was delivered FAZAL ALl J
In this appeal by special leave the appellant has been convicted for criminal misconduct under s52 read with S51 c of the Prevention of Corruption Act 1947 and sentenced to rigorous imprisonment for three years
He has also been convicted under section 51d of the Prevention of Corruption Act but no separate sentence has been passed thereunder
The appellant preferred an appeal to the High Court of Orissa against the order of the Special Judge which was however dismissed and the convic tions and sentences imposed on him were confirmed by the High Court
Thereafter an application for leave to appeal to this Court was made before the High Court which having been refused the appellant obtained special leave from this Court and hence this appeal
After going through the judgments of the Courts below we are constrained to observe that the High Court as well as the Trial Court have made a wholly wrong approach in apply ing the provisions of the Prevention of Corruption Act in the case of the appellant
Put briefly the prosecution case was as follows The appellant was the Additional District Magistrate Cuttack from September 1964 to June 1966 and in that capaci ty he was in 442 overall charge of the Nizarat and land acquisition sections of the Collectorate
Sayad Allamuddian Ahmed PW 8 was the District Land Acquisition Officer and one A Ballav Pradhan PW 9 was the Nizarat Officer whereas Prahalad Mahapatra PW 1 was the Nazir and Rajkishore Das PW 2 was the Assistant Nazir under PW 1 PW 3 Bhakta Charan Mohanti was the Land Acquisition Inspector
It appears that a number of lands had been acquired by the Government for certain public projects in various villages particularly Mauza Balichandrapur with which we are concerned in the present case
A huge compensation amount to be given to land owners had been deposited in the treasury for payment to them
It appears that a sum of Rs 3179385 had been disbursed by July 24 1964 leaving a balance of Rs 11650 61 but no disbursement could be made between July 24 1964 and January 20 1965 as the villagers refused to accept the payments and wanted the Land Acquisition proceedings to be withdrawn
The prosecution case further is that the appellant as Addi tional District Magistrate attended a meeting at the Secre tariat in the office of the Secretary of Works Department at Bhubaneswar on September 25 1964 where certain decisions were taken
There appears to be some divergence of opinion between the appellant and the prosecution on the delibera tions of the aforesaid meeting which we shall consider later
It is further alleged that on January 9 1965 the appellant directed the Nazir to pay him a sum of Rs 10000from the cash which remained with the Nazir PW 1 for the purpose of distributing the amount to the land owners of the village Balichandrapur
As however the ADM s visit to Balichandrapur could not materialise because the Executive Engineer with whom he was to go there was not available the visit was postponed and the ADM went to some other place
On January 20 1965 the appellant again took a sum of Rs 10000 from the Nazir and decided to visit the village Balichandrapur along with the Executive Engineer and the Land Acquisition Inspector
It is said that the SDO PWD also accompanied the party to the village Balichandrapur and the case of the appellant is that the Land Acquisition Inspector also travelled to Bali chandrapur with the appellant though this fact is disputed by the Land Acquisition Inspector
It is however the admitted case of the prosecution that there was no dis bursement in village Balichandrapur and thereafter the amount of Rs 10000 was not deposited with the Nazir but remained in the personal custody of the appellant who ap pears to have retained it dishonestly for about six months
This is the gravamen of the charges against the appellant
We may also mention that the amount was paid to the Nazir towards the end of September 1965 when it was deposited in the treasury
On receiving certain applications the Vigi lance Organisation of the State of Orissa instituted an inquiry against the appellant and after completing the same lodged a formal FIR on May 13 1966
The appellant thereafter was challaned under various sections of the Prevention of Corruption Act and ultimately convicted as indicated above
The case of the appellant was that he had no doubt withdrawn a sum of Rs 10000 from the Nazir on January 9 1965 but on his return from tour as he could not disburse the money to the 443 villagers he had returned it to the Nazir at Cuttack on January 13 1965
When however he again decided to go to the village with the Executive Engineer and others on Janu ary 20 1965 he again directed the Nazir to pay him the amount for disbursement
He went to the village Balichan drapur and tried to persuade the villagers to accept the compensation amount so that the Government project may be started as soon as possible
The villagers wanted some other alignment to be made or the compensatioion to be increased and the appellant persuaded them to accept part payment and assured them that he will try to get the amount increased
It was also the definite case of the appellant that in the meeting held in the secretariat on September 25 1964 the appellant was expressly directed to proceed to the spot and persuade the villagers to accept the compensation money and it was in consequence of this mandate from the Secretary of works Department that the ADM proceeded to the village Balichandrapur and made all possible efforts to persuade the tenants to accept compensation even by holding out promises to them
Unfortunately however the villagers refused to accept the compensation and the party had to come back to Cuttack disappointed
The appellant further seemed to suggest that although he had failed to persuade the villagers to accept the money he had not com pletely lost all hopes and that there was a possibility of the villagers coming round to his point of view and ulti mately decide to accept the compensation and for this reason the appellant returned the sum of Rs 10000 to the Nazir on his return from the village but directed him not to deposit the same in the treasury or to make any entry in the Cash Register so that if the villagers came to Cuttuck to demand the money they could be given the same immediately without any formality of a fresh withdrawal
The appellant further averred that because of some personal jealousies a false complaint was made against him which necessitated an inquiry
The Courts below accepted the prosecution case and disbelieved the version of the defence completely
The High Court has found that as the entrustment was proved and admitted by the appellant himself and the explanation given by him was absolutely false this would lead to the irre sistible inference that the appellant had temporarily misap propriated the money
It was also suggested by the prosecu tion that at the relevant time the appellant was building a house and he had already applied for loans from the Govern ment and it may be that for this purpose he might have been in need of the money to build his house
One of the essential peculiarities of this case is that as many as three witnesses examined by the prosecution to prove its case namely PWs 6 7 and 8 had been declared hostile and the Public Prosecutor sought permission of the Court to cross examine those witnesses which was readily allowed
According to the prosecution these witnesses tried to help the accused and made certain statements which sup ported the case of the appellant and therefore had to be crossexamined by the prosecution
Having regard to the stand taken by the parties the matter lies within a very narrow compass
So far as the entrustment of Rs 444 10000 is concerned that is undoubtedly admitted by the appellant and the only explanation given by him is that he had returned the money to the Nazir after his return from the village Balichandrapur and he had also directed the Nazir not to deposit the money in the treasury
If once the explanation of the accused is disbelieved or proved to be absolutely false then it is quite natural that he must be presumed to have retained the money with himself for a period of six months
Although the Onus lies on the prose cution to prove the charge against the accused yet where the entrustment is proved or admitted it will be difficult
for the prosecution to prove the actual mode or manner of misappropriation and in such a case the prosecution would have to rely largely on the truth or the falsity of the explanation given by the accused
In Jaikrishnadas Manohar das Desai and Anr
vs State of Bombay1 this Court observed as follows The principal ingredient of the offence being dishonest misappropriation or conversion which may not ordinarily be a matter of direct proof entrustment of property and failure in breach of an obligation to account for the property entrusted if proved may in the light of other circumstances justifiably lead to an inference of dishonest misappropriation on conversion
Convic tion of a person for the offence of criminal breach of trust may not in all cases be founded merely on his failure to account for the property entrust ed to him of over which he has dominion even when a duty to account is imposed upon him but where he is unable to account or renders an explanation for his failure to account which is untrue an infer ence of misappropriation with dishonest intent may readily be made
 The Courts below appear to have convicted the appellant on the basis of the decision referred to above and have held that since the explanation given by the appellant was false an inference of misappropriation could reasonably be drawn against him
This proposition cannot be doubted
But the question is whether the explanation given by the appellant in this case can be said to be absolutely false  Another question that arises is what are the standards to be em ployed in order to judge the truth or falsity of the version given by the defence  Should the accused prove his case with the same amount of rigour and certainty as the prose cution is required to prove a criminal charge or it is sufficient if the accused puts forward a probable or reason able explanation which is sufficient to throw doubt on the prosecution case  In our opinion three cardinal prin ciples of criminal jurisprudence are well settled namely 1 that the onus lies affirmatively on the prosecution to prove its case beyond reasonable doubt and it cannot derive any benefit from weak ness or falsity of the defence version while prov ing its case 1  324 445 2 that in a criminal trial the accused must be presumed to be innocent unless he is
proved to
be guilty and 3 that the onus of the prosecution never shifts
It is true that under section 105 of the Evidence Act the onus of proving exceptions mentioned in the Indian Penal Code lies on the accused but this section does not at all indicate the nature and standard of proof required
The Evidence Act does not contemplate that the accused should prove his case with the same strictness and rigour as the prosecution is required to prove a criminal charge
In fact from the cardinal principles referred to above it follows that it is sufficient if the accused is able to prove his case by the standard of preponderance of probabil ities as envisaged by section 5 of the Evidence Act as a result of which he succeeds not because he proves his case to the hilt but because probability of the version given by him throws doubt on the prosecution case and therefore the prosecution cannot be said to have established the charge beyond reasonable doubt
In other words the mode of proof by standard of benefit of doubt is not applicable to the accused where he is called upon to prove his case or to prove the exceptions of the Indian Penal Code on which he seeks to rely
It is sufficient for the defence to give a version which competes in probability with the prosecution version for that would be sufficient to throw suspicion on the prosecution case entailing its rejection by the Court
This aspect of the matter is no longer res integra but is concluded by several authorities of this Court
In Harbha jan Singh vs State of Punjab 1 this Court observed as follows But the question which often arises and has been frequently considered by judicial decisions is whether the nature and extent of the onus of proof placed on an accused person who claims the benefit of an Exception is exactly the same as the nature and extent of the onus placed on the prosecution in a criminal case and there is consensus of judicial opinion in favour of the view that where the burden of an issue lies upon the accused he is not re quired to discharge that burden by leading evidence to prove his case beyond a reasonable doubt
That no doubt is the test prescribed while deciding whether the prosecution has discharged its onus to prove the guilt of the accused but that is not a test which can be applied to an accused person who seeks to prove substantially his claim that his case falls under an Exception
Where an accused person is called upon to prove that his case fails under an Exception law treats the onus as dis charged if the accused person succeeds in proving a preponderance of probability
 As soon as the preponderance of probability is proved the burden shifts to
the prosecution which has still to discharge its original onus
It must be remembered that basically the original onus 1   241 446 never shifts and the prosecution has at all stages of the case to prove the guilt of the accused beyond a reasonable doubt
 The same view was taken in a later case in State of UP vs Ram Swarup  Anr1 where this Court observed as follows That is to say an accused may fail to establish affirmatively the existence of circum stances which would bring the case within a general exception and yet the facts and circumstances proved by him while discharging the burden under section 105 of the Evidence Act may be enough to cast a reasonable doubt on the case of the prosecu tion in which event he would be entitled to an acquittal
The burden which rests on the accused to prove the exception is not of the same rigour as the burden of the prosecution to prove the charge beyond a reasonable doubt
It is enough for the accused to show as in a civil case that the preponderence of probabilities is in favour of his plea While the Courts below have enunciated the law correct ly they seem to have applied it wrongly by overlooking the mode and nature of proof that is required of the appellant
A perusal of the oral and documentary evidence led by the parties goes to show that the Courts not only sought the strictest possible proof from the appellant regarding the explanation given by him but went to
the extent of mis placing the onus onthe accused to prove even the prosecu tion case by rejecting the admissions made by the prosecu tion witnesses and by not relying on the documents which were in power and possession of the prosecution itself on the speculative assumption that they were brought into existence by the accused through the aid of the officers
Further more the Courts below have failed to consider that once the appellant gives a reasonable and probable explana tion it is for the prosecution to prove affirmatively that the explanation is absolutely false
In a criminal trial it is not at all obligatory on the accused to produce evi dence in support of his defence and for the purpose of proving his version he can rely on the admissions made by the prosecution witnesses or on the documents field by the prosecution
In these circumstances the Court has to probe and consider the materials relied upon by the de fence instead of raising an adverse inference against the accused for not producing evidence in support of his defence because as we have already stated that the prosecu tion can not derive any strength or support from the weak ness of the defence case
The prosecution has to stand on its own legs and if it fails to prove its case beyond reasonable doubt the entire edifice of the prosecution would crumble down
Thus it would appear to us that both the Courts below have made an absolutely wrong approach in deciding the truth of the defence version and have not followed principles laid down by this Court in judging the case of the accused
The Courts below have based the conviction of the appel lant on the sole testimony of PW 1 the Nazir who has categorically stated 1 1975 1SCR 409 416 17 447 in the Court that the appellant had taken a sum of Rs 10000 on January 9 1965 and thereafter he never returned this amount to the Nazir until September 30 1965
The Courts below have chosen to place implicit reliance on the evidence of PW 1 completely ignoring the important admis sions made in favour of the accused by other prosecution witnesses some of whom were declared hostile and some of whom were not
Before analysing the evidence it may be necessary to describe the exact allegation made by the prosecution against the accused
The starting point of the case is a meeting which is said to have taken place in the Secretariat on September 25 1964 in which according to the appellant he was positively directed to visit the villages and persuade the land owners to receive the compensation and this formed the occasion for the ADM to have withdrawn the money to visit the spot with the money
According to the prosecution no such decision was at all taken in the meeting and the visit to the village Balichandrapur might have been for some other purpose and the question of distri bution was only a pretext invented by the accused to shield his guilt
We would therefore now take up the evidence regarding the meeting said to have taken place on September 25 1964
We might also mention that the learned Special Judge has believed the statement of the accused that he did attend the meeting in the Secretariat on September 25 1964 as would appear from the finding given by him at p 79 of the Paper Book
What the Special Judge has not accepted is the assertion of the accused that he had been directed to visit the village personally and distribute the amounts to the villagers
The meeting is said to have been called by the Secretary Works Department and therefore the Secretary Works Department was the best person who would have thrown light on the subject and would have clinched the issue
The Secretary Works Department was a Government servant and it was not at all difficult for the prosecution to have examined him to settle the controversy on this matter
For the reasons best known to the prosecution the Secretary Works Department was not at all examined and we have to decide this question on the basis of oral and documentary evidence produced by the prosecution
The Special Judge instead of drawing an adverse inference against the prosecu tion has placed the onus on the accused for not having summoned the Secretary Works Department as a witness in defence forgetting that it was part of the prosecution case itself that no decision to distribute the amount was taken in the meeting and therefore the money was not taken for distribution to tenants in the village but was misappropri ated
It was not for the defence to prove the prosecution case which formed the bulwark of the charge of misappro priation
Further more the Secretary Works Department was a high Officer of the Government and he could have thrown a flood of light on this question
Now coming first to the oral evidence PW 8 Sayad Allamuddin who was the Land Acquisition Officer Cuttack has testified to the fact that in the meeting held on September 25 1964 the appellant had been asked to take early action for payment of compensation money by going personally to persuade the tenants
Perhaps it was because of this statement that this witness was declared hostile and the prosecution 448 sought permission to cross examine him
The actual state ment made by him in the Court may be quoted thus The accused had been asked to take early action for payment of the compensation money by going personally and by persuading the tenants
It was the duty of the accused to see that compensa tion amounts were paid for land acquisition
 When the witness was declared hostile all that was elicited from him was as follows It is not a fact that I had not stated to Investigating Officer that the accused and the Executive Engineer persuaded the tenants to receive the compensation amount
It is not a fact that I had stated to the Investigating Officer that while we were returning some people wanted to take part payments for the lands already acquired but no payment was made by the accused as we were then leaving
 Thus the prosecution even in cross examination did not give any suggestion that the witness who was present in the meeting held on September 25 1964 had stated on earlier occasions that no decision was taken in the meeting direct ing the accused to visit the village and persuade the ten ants to receive the compensation amounts
He merely did not state to the police that when the accused and the Executive Engineer visited the spot they did not persuade the tenants to receive the compensation amounts
This was a case of a mere omission of a broad detail and not a case of contra diction
In these circumstances therefore the evidence of this witness on the question as to what transpired in the meeting and the nature of the directions given to the appel lant remains unchallenged and even if he was declared to be a hostile witness he does not cease to be a reliable witness
if the Court chooses to accept his testimony
Before proceeding further we might like to state the law on the subject at this stage
Section 154 of the Evidence Act is the only provision under which a party calling its own witnesses may claim permission of the Court to cross examine them
The section runs thus The Court may in its discretion permit the person who calls a witness to put any question to him which might be put in cross examination by the adverse party
 The section confers a judicial discretion on the Court to permit crossexamination and does not contain any conditions or principles which may govern the exercise of discretion
It is however well settled that the discretion must be judiciously and properly exercised in the interests of justice
The law on the subject is well settled that a party will not normally be allowed to cross examine its own witness and declare the same hostile unless the Court is satisfied that the statement of the witness exhibits an element of hostility or that he has 449 resiled from a material statement which he made before an earlier authority or where the Court is satisfied that the witness is not speaking the truth and it may be necessary to cross examine him to get out the truth
One of the glaring instances in which this Court sustained the order of the Court in allowing cross examination was where the witness resiles from a very material statement regarding the manner in which the accused committed the offence
In Dahyabhai Chaganbhai Thakker vs State of Gujarat1 this Court made the following observations Section 154 does not in terms or by neces sary implication confine the exercise of the power by the court before the examination in chief is concluded or to any particular stage of the exami nation of the witness
It is wide in scope and the discretion is entirely left to the court to exer cise the power when the circumstances demand
To confine this power to the stage of examination in chief is to make it ineffective in practice
A clever witness in his examination in chief faith fully conforms to what he stated earlier to
the police or in the committing court but in the cross examination introduces statements
in a subtle way contradicting in effect what he stated in the examination in chief
If his design is obvious we do not see why the court cannot during the course of his cross examination permit the person calling him as a witness to put ques tions to him which might be put in cross examina tion by the adverse party Broadly stated the position in the present case is that the witnesses in their statements before the police attributed a clear intention to the accused to commit murder but before the court they stated that the accused was insane and therefore he committed the murder
 A perusal of the above observations will clearly indicate that the permission to cross examination was upheld by this Court because the witnesses had categorically stated before the police that the accused had committed the murder but resiled from that statement and made out a new case in evidence before the Court that the accused was insane
Thus it is clear that before a witness can be declared hostile and the party examining the witness is allowed to cross examine him there must be some material to show that the witness is not speaking the truth or has exhibited an ele ment of hostility to the party for whom he is deposing
Merely because a witness in an unguarded moment speaks the truth which may not suit the prosecution or which may be favourable to the accused the discretion allow the party concerned to cross examine its own witnesses cannot be allowed
In other words a witness should be regarded as adverse and liable to be cross examined by the party calling him only when the Court is satisfied that the witness bears hostile animals against the party for whom he is deposing or that he does not appear 1  368 369 70
450 to be willing to tell the truth
In order to ascertain the intention of the witness or his conduct the Judge concerned may look into the statements made by the witness before the Investigating Officer or the previous authorities to find out as to whether or not there is any indication of the witness making a statement inconsistent on a most mate rial point with the one which he gave before the i previous authorities
The Court must however distinguish between a statement made by the witness by way of an unfriendly act and one which lets out the truth without any hostile inten tion
It may be rather difficult to lay down a rule of univer sal application as to when and in what circumstances the Court will be entitled to exercise its discretion under section 154 of the Evidence Act and the matter will largely depend on the facts and circumstances of such case and on the satisfaction of the Court on the basis of those circum stances
Broadly however this much is clear that the contingency of cross examining the witness by the party calling him is an extra ordinary phenomenon and permission should be given only in special cases
It seems to us that before a Court exercises discretion in declaring a witness hostile there must be some material to show that the wit ness has gone back on his earlier statement or is not speaking the truth or has exhibited an element of hostility or has changed sides and transferred his loyalty to the adversary
Further more it is not merely on the basis of a small or insignificant omission that the witness may have made before the earlier authorities that the party calling the witness can ask the Court to exercise its discretion
The Court before permitting the party calling the witness to cross examine him must scan and weigh the circumstances properly and should not exercise its discretion in a casual or routine manner
It is also clearly well settled that the mere fact that a witness is declared hostile by the party calling him and allowed to be crossexamined does not make him an unreliable witness so as to exclude his evidence from consideration altogether
In Bhagwan Singh vs State of Haryana1 Bhag wati J speaking for this Court observed as follows The prosecution could have been avoided requesting for permission to cross examine the witness under Section 154 of the Evidence Act
But the fact that the court gave permission to the prosecutor to cross examine his own witness thus characterising him as what is described as a hostile witness does not completely efface his evidence
The evidence remains admissible in the trial and there is no legal bar to base a convic tion upon his testimony if corroborated by other reliabIe evidence
 Applying these principles we would now examine the position
So far as PW Sayad Allamuddin was concerned he was the Land Acquisition Officer and merely because he happened to be working   391 92 451 under the accused there was no reason for him to depose falsely at a time when the appellant had been suspended and was facing a trial before the Special Judge
Further more on the basic point that the accused had been asked in the meeting to go personally to the village and persuade the tenants to receive compensation money nothing has been elicited from him even in cross examination to show that this statement was an after thought or was in any event incorrect or false
We shall presently show that this statement is supported by documents of an unimpeachable nature which have been produced by the prosecution itself and whose genuineness cannot be doubted
Exhibit 2 which is a note by this witness dated January 9 1965 long before an inquiry started against the accused contains categorically a statement which runs as follows In the last meeting held in the Secretariat the Secretary Works Department suggested that the ADM and the Executive Engineer R  B should try to persuade the villagers and make payment of the compensation
 This note further shows that the appellant proposed to pay a visit to the area along with the Executive Engineer and he had suggested that the ADM should take an amount of Rs 10000 for disbursement if the villagers agreed to receive compensation
This document according to PW 1 the Nazir who is the star witness of the prosecution was received by him as far back as January 9 1965 along with Ext 1 the order of the appellant directing the Nazir to pay him Rs 10000 
It would be impossible to suggest that as early as January 9 1965 the witness Sayad Allamuddin Ahmed PW 8 was fabricating this document regarding an event which had taken three or four months ago without any rhyme or reason
Thus Ext
2 fully corroborates the evidence of PW 8 on the point as to what transpired at the meeting held in the Secretariat and demolishes the prosecution case that no instructions were given to the appellant on Septem ber 25 1964 in the meeting for visiting the spot and per suade the tenants to accept compensation money
In these circumstances therefore we feel that the Trial Court was not at all justified in declaring PW 8 as a hostile wit ness or in allowing the prosecution to cross examine him
Even if he was cross examined his evidence appears to be fully acceptable and worthy of credence
He is a person of status and responsibility and there is nothing to show why he should depose falsely merely to help the accused knowing full well that being a Government servant he might be harmed if he made a false statement in order to support the appellant
This fact is further supported by another official docu ment which is Ext
10 namely the tour diary of the appel lant dated January 7 1965 to January 31 1965
In this diary the appellant as far back as January 7 1965 made a clear mention of the facts that transpired at the meeting and stated thus Discussed with Revenue Secretary regarding various allegations of Kanika Tahasil pending for enquiry
He also wanted that I should visit the spot and enquire into the matter 452 personally and also make a thorough enquiry into the various encroachments in different forest blocks of Kanika Tahasil This statement which is made in an official document in the discharge of his duties has been made even before the money was sought to be withdrawn from the treasury and at a time when there was no dispute at all regarding the question of misappropriation
This document also fully corroborates the evidence of PW 8
Thus from the evidence of the prosecu tion itself the fact that in the meeting held in the Secre tariat a decision was taken by Which the appellant was directed to visit the village Balichandrapur and persuade the tenants to accept the compensation has been amply proved
The only person who could have contradicted this fact or falsified the same would have been the Secretary Works Department in whose presence the meeting took place whom the prosecution did not choose to examine
On the materials produced by the prosecution itself it is manifest that the prosecution has miserably failed to prove that the visit of the ADM to the village Balichandrapur on Janu ary 9 1965 was not in connection with the payment of com pensation to the villagers as no such decision was taken in the meeting
The next question that arises is whether the appellant had actually taken the money for disbursement to the vil lage Balichandrapur
On this point also oral and documen tary evidence led by the prosecution clearly proves the version given by the appellant
To begin with PW 7 who was an Executive Engineer at the relevant
time has categor ically stated that he had accompanied the appellant to village Balichandrapur and the appellant did try to persuade the tenants to receive the compensation but they refused to accept the same
In this connection the witness deposed as follows The accused thereafter enquired from the parties as to on what terms they were willing to give up possession of their lands which had already been selected for acquisition
The parties stated that if they were paid compen sation at the rate of Rs 200 per gunth they would part with their lands
The accused stated that he did not have sanction for payment of Rs 200 per gunth and could not pay them off hand but if the parties wanted payment at the rate of Rs 150 per gunth he was willing to pay them cash at the spot
The parties did not agree
The accused said that they would be paid Rs 200 
when that rate would be sanctioned and he was going to write about it
 This witness was also declared hostile and that too not because he had not made the statement referred to above before the police but because of certain minor omissions in his statement before the police
These omissions consisted of the facts that there is no mention about the previous visit to Balichandrapur or that he had stated that while he was returning to Cuttuck he remained sitting in the car and the accused asked PW 3 to follow him with the bag 453 and things like that
It has however not been elicited from him in cross examination nor has it been argued that the witness had told the Investigating Officer that the accused had not met or had not talked at all with the ten ants in his presence in order to persuade them to accept the compensation
PW 6 Udaynath Parida who is a villager of Balichandra pur has categorically supported the statement of PW 7 that the accused had agreed to pay compensation at the rate of Rs 200 per gunth and persuaded them to give up possession but the villagers refused
In this connection the witness stated thus On hearing of the arrival of the accused we met him in Balichandrapur near the market place
We demanded payment of compensation money at a rate higher than what was proposed by Government
The accused and his party agreed to pay us compensation at the rate of RS
200per gunth and persuaded us to give up possession so that Government may not be forced to take possession forcibly with the help of police
 The accused had informed the villagers in cluding me that if we would be willing to accept the rate already fixed by Government at Rs 150 per gunth he would pay us at the spot This witness was also declared hostile merely because of certain facts which he had omitted to state before the police
Thus it would appear that all the prosecution witnesses PWs 6 7 and 8 had been allowed to be declared hostile without any justification and the Trial Court appear to have exercised its discretion mechanically in readily accepting the prayer of the prosecution without making any probe into the reasons for allowing the cross examination
Indeed if suck a discretion is freely exercised then the accused will suffer serious prejudice and will be deprived of taking advantage of any damaging admission made by the prosecution witnesses merely because the prosecution is allowed to cross examine them by declaring them hostile
Such a course of action would have serious repercussion on the fairness of the trial
After going through the evidence of PWs 6 and 7 we see absolutely no reason to distrust their evidence
So far as PW 7 is concerned he is a very high officer being an Executive Engineer at the relevant time and in no way subor dinate to the appellant
He has admitted in his cross examination by the prosecution that even his confidential reports are not written by the accused
There is also nothing to show that he was in any way interested in the accused or was his great friend and supporter
In these circumstances he had no reason to make a false statement that the accused had visited the village and persuaded the tenants to accept the compensation
The evidence of the villager PW 6 Udayanath Parida who is an independent wit ness also proves that the accused had taken the money to the village and made efforts to persuade the tenants to accept the money
In fact the evidence of these two witnesses on this point follows as a logical corollary from the decision taken at the meeting held by the Secretary Works Depart ment where the appellant was 454 directed to visit the spot and persuade the tenants to accept compensation
The evidence of PW 7 is fully cor roborated by Ext
B a letter written by PW 7 Executive Engineer dated July 6 1966 a copy of which was sent to the appellant and other officers
In this letter which is addressed to the Assistant Engineer Road Office of the Chief Engineer Bhubaneswar PW 7 as Executive Engineer had clearly mentioned that he along with the appellant had visited the site at Balichandrapur and persuaded the tenants to accept the money by enhancing the amount to Rs 200 per gunth to which the tenants
agreed but for this the sanction had to be taken
It was however submitted by counsel for the State that this letter appears to have been brought into existence after the inquiry against the accused was launched in order to help him
This was an official letter and we do not see any reason why such a high officer as the Executive Engineer should have gone to the extent of fabricating an unnecessary letter to help the appellant against whom an inquiry had been ordered
Even if this letter be excluded from consideration the other evidence both oral and docu mentary clearly show that the appellant had visited the spot in village Balichandrapur on January 20 1965 with a view to distribute the compensation money and did make an attempt to persuade the tenants to accept the compensation but they refused to accept the same unless the compensation was raised to Rs 200 per gunth
As against this the prosecution relied merely on the fact that in the tour diary of the accused Ext
8 of the even date viz January 20 1965 as also in the office report there is no clear mention that the appellant tried to persuade the tenants to accept the money or that he had taken the money with him to the spot
These documents undoubtedly contain the statement regarding the visit of the appellant to the spot and some other matters
The question of actual distribution or persuasion of the tenants being a matter of detail does not appear to have been mentioned in those documents
It would have been necessary to be men tioned in the documents if the tenants had agreed to accept the money and if the money was actually disbursed to them
As the proposal suggested by the appellant did not materia lise there was no occasion for mentioning these facts in those documents
As we have already indicated it was not for the accused but for the prosecution to prove before raising an adverse inference against the accused that the visit of the appel lant to Balichandrapur was merely a hoax
On the materials placed before us not only the prosecution has miserably failed to prove this fact but the explanation given by the accused appears to be not only probable but proved by the accused even applying the standard of benefit of doubt
For these reasons therefore we do not agree with the finding of the Courts below that the accused did not take the money with him to Balichandrapur or made any attempt to distribute it to the tenants but has misappropriated and retained it dishonestly
We might mention here that PW 3 Bhakta Charan Mohanti is another Witness who has supported the case of the ac cused
But as 455 the witness has made inconsistent statements which sometimes go to support the prosecution and sometimes the accused and is further contradicted by his own tour diary and TA Bills we do not choose any reliance on the evidence of this witness
The next and the last question that falls for determina tion is as to whether or not the accused after returning from Balichandrapur handed over the money to the Nazir
It may be mentioned that the appellant had made no secret of the fact that after returning the money to the Nazir he had instructed him not to deposit the same in the treasury but to keep it out of cash for the reason which we have already indicated
In this connection we have only the word of PW 1 the Nazir as against the word of the appellant
The Nazir also does not appear to be a witness who is completely above suspicion
Crossexamination of this witness clearly re vealed that the manner in which he had kept the accounts was not at all satisfactory and he was in the habit of allowing huge amounts to remain with him without depositing them in the treasury and that he was also building a house for which he had taken some loans
Instead of applying a very strict standard to test the testimony of such a witness the High Court seems to have explained the irregularities committed by the Nazir PW 1 thus Heavy cash remaining with the Nazir that Ext
D discloses and the facts of the Nazir having secured housebuilding advance during September 1965 may raise speculations and surmises against the Nazir
 There are however important circumstances to indicate that the explanation given by the appellant is both probable and reasonable
PW 9 who was the Nizarat Officer and who had not been declared hostile emphasis ours has clearly stated that the amount was taken by the appellant for dis bursement
The witness further deposes that in March 1965 he had a discussion with the appellant regarding the amount of Rs 10000 taken by him and the appellant had then told him that the amount could not be disbursed as the tenants did not agree to take the amounts and that he had kept the amount with the Nazir
In this connection his statement is as follows In March 1965 I had a discussion with the accused regarding the amount of Rs 10000 taken by him and the accused then told me that the amount could not be disbursed as the tenants did not agree to take the amounts and that he had kept the amount with the Nazir
I did not make any enquiry from the Nazir regarding this as the balance amount as shown in the cash Book was the same in the cash sheet
The accused had told me that the Nazir had kept the amount of Rs 10000 outside the cash as per his instructions
 It is therefore clear from the admission made by this witness that the case of the accused that he had given money to the Nazir is fully supported by him because he has referred to the statement made to him by the appellant as far back as March 1965 when there was absolutely no dispute no inquiry and no allegation of misappropriation against the appellant
Much was made by the learned counsel for the 13 1104SCI76 456 State out of the fact that the accused had directed the Nazir to keep the amount outside the cash which betrayed the falsity of his explanation
A careful study of the circum stances in which the accused was placed would show that the accused was very much anxious to disburse the payments to the villagers he had tried to persuade them to accept the money but the villagers wanted more compensation and he had already taken steps to move the Government for increasing the amount of compensation to Rs 200 per gunth
In these circumstances therefore there may be some justification in his thinking that the money should be readily available to be paid as soon as the villagers decided to accept the same
It is possible that he may have made an error of judgment or calculation or he was rather too optimistic but this conduct by itself does not lead to the inference of dishonest inten tion to misappropriate the money
At any rate in view of the evidence of PW 9 the Nizarat Officer that the amount was given to the Nazir by the appellant which fact was disclosed to him as far back as March 1965 it will be difficult to accept the uncorroborated evidence and testimo ny of PW 1 the Nazir that he did not receive the money from the appellant after January 9 1965
Further more there were other important circumstances why no reliance should be placed on the evidence of the Nazir PW 1
It would appear from the evidence of the Nazir himself that on September 15 1965 the cash in the hands of the Nazir was Rs 111606657 out of which Rs 73681086 were for land acquisition proceedings
Admit tedly he did not deposit this amount until October 20 1965
He has given no explanation as to why he had kept such a huge amount with him without depositing the same in the Treasury
This was undoubtedly a grave lapse on the part of the Nazir and should have been taken notice by the Courts below
Exhibit D is the order of the appellant dated Septem ber 27 1965 by which the Nazir was directed to deposit the amount in the treasury and it was only on October 20 1965 as would appear from Ext
D4 that the Nazir deposited this amount in the treasury
The Nazir has given no explanation for this delay
Again it appears that the Nazir was also building a house and he had received advances from the Government which he had not repaid and the possibility that he might have himself misappropriated the money handed over to him by the appellant for the purpose of returning the advances cannot safely be excluded
It would appear that the Nazir had taken a loan of Rs 4500 on September 8 1965 and another loan of Rs 4500 was taken by him on Septem ber 27 1965 total being Rs 9000  and it is quite possible that the Nazir may have paid these amounts of the loans from out of the money given to him by the appellant
Finally even if the accused had not given any money to the Nazir PW 1 right from January 9 1965 he should have at least approached him and should have drawn the attention of the appellant to the fact that the money paid to him for the purpose of disbursement had not so far been deposited with him
No such thing was done by the Nazir
It was suggested by the prosecution that as the appellant was in charge of the Treasury the Nazir did not think it proper to interrogate him
It was however not a question of inter rogation
It was 457 only a question of a subordinate officer pointing out some thing of very great importance to a superior officer which a superior officer would never misunderstand
In view of these circumstances therefore we are not in a position to place implicit reliance on PW 1
There is yet another very important document which has been brought on record by the appellant which is Ext
A dated December 8 1965
This is a statement by PW 3 which to a very great extent supports the case of the accused but as we do not propose to rely on the evidence of PW 3 we would exclude this document from consideration
Another document Ext
H is a statement of the Accountant Ghansham Das which appears at p 215 of the Paper Book wherein Mr Ghansham Das clearly mentions that when he found that Rs 10000 were not traceable be brought the matter to the notice of the officer in charge and he was told by the Nazir that the amount of Rs 10000 had been left with him by the appellant with instructions not to refund in the treas ury
TIffs statement clinches the issue so far as the defence case is concerned and fully proves that the explana tion given by the appellant was correct
This document would also have falsified the evidence of PW 1 who has tried to put the entire blame on the shoulders of the appel lant
Unfortunately however the prosecution did not choose to examine Ghansham Das the Accountant who was a very material witness in order to unfold the prosecution narra tive itself because once a reasonable explanation is given by the appellant that he had entrusted the money to the Nazir on his return from Balichandrapur on January 20 1965 which is supported by one of the prosecution witnesses PW 9 as referred to above then it was for the prosecution to have affirmatively disproved the truth of that explanation
If Ghansham Das would have been examined as a witness for the prosecution he might have thrown a flood of light on the question
In his absence however Ext
H cannot be relied upon because the document is inadmissible
At any rate the Court is entitled to draw an inference adverse to the prosecution for not examining Ghansham Das Accountant as a result of which the explanation given by the appellant is not only reasonable but stands unrebutted by the prosecution evidence produced before the Trial Court
Having regard to these circumstances
it is not neces sary for us to consider the other documents like Exts
F G and E produced by the appellant because they do not throw much light on the question and the facts contained therein have been seriously disputed by the prosecution
Similarly we have not referred to the other documents produced by the prosecution which show the entry of the money received by the appellant and 50 on because these facts are not disputed by the appellant at all
On a consideration of the evidence and the circumstances we are satisfied that the appellant has been able to prove that the explanation given by him was both probableand reasonable judged by the standard of the preponderance of probabilities This being the position it was for the prosecution to prove affirmatively m what manner the amount was misappropriated after it had been transferred from the custody of 458 the appellant to the custody of the Nazir
Such proof is wholly lacking in this case
As the accused has given a reasonable explanation the High Court was in error in drawing an adverse inference against him to the effect that he had misappropriated the money
For these reasons the appeal is allowed the judgments of the Courts below are set aside the convictions and sentences imposed on the appellant are quashed and he is acquitted of the charges framed against him
PHP Appeal allowed


Summary:
The appellant who was the Additional District Magis trate in overall charge of the Nizarat and the Land Acqui sition sections of the Collectorate was charged for criminal misconduct under section 52 read with section 51c and 51  d of the Prevention of Corruption Act 1947
The allegation against the appellant was that he withdrew a sum of Rs 10000 on 9 1 1965 on the ground that he wanted to distribute the said amount amongst the villagers whose land was acquired as the compensation that in fact the appellant never wanted to distribute the said amount and that he retainedthe money with him for about 6 months dishonestly and only after that the money was deposited in the Treasury
The defence of the appellant was that the Secretary of the Works Department called a meeting in the Secretariat on 25 9 1964 and that the appellant was expressly directed to proceed to the spot and persuade the villagers to accept the compensation money that it was pursuant to that mandate that the appellant withdrew the money on 9 1 1965 that he could not go to the village in question in that day because one of the officers who was to accompany him was not avail able that he therefore again deposited the money back with the Nazir and collected the money from him again on 20 1 1975 that he went there along with several officials that the villagers however refused to accept the compensa tion
The appellant was however hopeful of getting the compensation increased and to persuade the villagers to accept the increased compensation
He therefore on his return handed over the money to the Nazir however asked him not to deposit the same in the Treasury so that cash would be readily available as soon as needed
Nazir was examined by the prosecution and he denied having received the money as suggested by the appellant
Secretary of the Works Department was not examined by the prosecution
The Land Acquisition Officer PW 8 deposed that the Secretary directed the appellant to take action for payment of the compensation money to the villagers and that the appellant should personally persuade the villagers to accept the compensation
The said witness was however declared hostile on the ground that he did not state to the Police that when the appellant and the Executive Engineer visited the village they did not persuade the villagers to receive the compensation amount
PW 7 the Executive Engi neer deposed that he accompanied the appellant to the vil lage and that the appellant tried to persuade the villagers to receive the compensation but that they refused to accept the same
This witness was also declared hostile because of certain minor omissions in his statement before the Police
PW 6 one of the villagers also deposed that the appellant persuaded them to give up possession but the villagers did not agree
This witness was also declared hostile because he omitted state some facts before the Police
The Trial Court and the High Court relying on the evi dence of Nazir and certain documents convicted the appellant under section 51c and 51d read with section 52of the Prevention of Corruption Act 1947
12 1104SCI76 440 Allowing the appeal by Special Leave HELD 1
In a charge of misappropriation once the en trustment of money is proved and although the onus to prove the entrustment is on the prosecution
if the explanation of the accused is found to be false he must be presumed to have retained the money with himself
444 A B Jaikrishnadas Manohardas Desai and Anr
vs State of Bombay 324 followed
Three principles of criminal jurisprudence which are well settled are as under i that the onus ties affirmatively on the prosecution to prove its case beyond reasonable doubt and it cannot derive any benefit from weak ness or falsity of the defence version while prov ing its case ii that in a criminal trial the accused must be presumed to be innocent until he is proved to be guilty and iii that the onus of the prosecution never shifts
444 G H 445 A 3
Under section 105 of the Evidence Act the onus of proving exceptions mentioned in the Indian Penal Code lies on the accused but the said section does not at all indicate the nature and the standard of proof required
It is suffi cient if the accused is able to prove his case by the standard of preponderance of probabilities as envisaged by section 5 of the Evidence Act
445 A B Harbhajan Singh vs State of Punjab   241 and State of UP vs Ram Swarup  Anr
1975 1 SCR 409 416 17 followed
The accused succeeds if the probability of his version throws doubt on the presecution case
He need not prove his case to the hilt
It is sufficient for the defence to give a version which competes in probability with the prosecution version for that would be sufficient to throw suspicion on the prosecution case entailing its rejection by the court
445 B C 4
In a criminal trial it is not at all obligatory on the accused to produce evidence in support of his defence and for the purpose of proving his version he can rely on the admissions made by prosecution witnesses or on the documents filed by the prosecution
The courts below were not justified in drawing adverse inference against the accused for not producing evidence in support his defence
The prosecution cannot derive any strength or support from the weakness of the defence case
446 E G 5
The courts below erred in basing conviction of the appellant on the sole testimony of the Nazir completely ignoring the important admissions made in favour of the accused by other prosecution witnesses some of whom were declared hostile and some were not
446 H 447 A 6
No explanation is coming forth why the Secretary Works Department Who was a Government servant has not been examined
It was a part of the prosecution case that in the said meeting the Secretary did not direct the appellant to go to the village for making payment
The prosecution ought to have examined the Accountant who was a material witness in order to unfold the prosecution narrative itself
The court drew adverse inference for his non examination
447 DE 7
Section 154 of the Evidence Act confers
a discretion on the court to permit a witness to be cross examined by a party calling him
The section confers a judicial discretion and must be exercised judiciously and properly in the inter est of justice
The court will not norm
ally allow a party to cross examine his own witness and declare the same hostile unless the court is Satisfied that the statement of the witness exhibits an element of hostility
or that he has resiled from a material statement which he made before an earlier authority
448 G H 449 A 441 Dahyabhai Chhaganbhai Thakker vs State of Gujarat   368
69 70 followed
Merely because a witness in an unguarded moment speaks the truth which may not suit the prosecution or which may be favourable to the accused the discretion to allow the party concerned to cross examine his own witnesses cannot be allowed
The contingency _of permitting the cross examina tion of the witness by the party calling him is an extra ordinary phenomenon and permission should be given only in special cases
449 G H 450 C 8
On the facts the court found that the Trial Court wrongly exercised its discretion in permitting the prosecu tion to cross examine its own witnesses
451 F 9
Merely because a witness is declared hostile it does not make him unreliable so as to exclude his evidence from consideration altogether
450 E F Bhagwn Singh vs State of Haryana   391 92 followed
The court found that the defence version was ren dered probable by the testimony of witnesses as well as documents
457 A D 11
The Court found that the Nazir was not a reliable witness and that the courts below ought not to have acted on his sole testimony
455 C