THE HON’BLE SRI JUSTICE K.C. BHANU CRIMINAL APPEAL No. 1066 OF 2009 JUDGMENT: This Criminal Appeal, under Section 378(1) and (3) of the Code of Criminal Procedure, 1973, by the State is directed against the Judgment, dated 31.12.2004 in C.C. No. 22 of 2003 on the file of the II Additional Judicial Magistrate of I Class, Kadapa, whereunder and whereby Respondents No. 1 to 4/A1 to A4 were acquitted of the charges under Sections 420, 406, 409, 477-A and 109 of the Indian Penal Code, 1860 (for short, ‘IPC’). 2. The brief facts that are necessary for disposal of the Appeal may be stated as follows: Accused No.1, who is an employee in Cooperative Department, enrolled as a Member of the House Building Society of Class-IV Employees, Kadapa, Accused Nos. 2 to 4 were the office bearers of the Society and Accused No.5 was the Auditor in Co- operative Department and he audited the accounts of the House Building Society. The Kadapa District Class IV Employees House Building Society (for brevity “the Society”) was registered on 09.04.1969 with Registration No. 1198 to get house sites to the members of the Society. Ac.5.00 of land was allotted to the Society near Kadapa town. The Society got the plans approved under the presidentship of Accused No.3. It had constructed an office room in the vacant site near Plot No. 61 and the Committee decided to construct a school building, health centre in the remaining site near the plot. Accused No.1 wanted to get this vacant site for his own purpose, convinced the Committee members to allot Ac.0.07 cents of land to his wife, who was a non-member, and got a resolution passed by Accused No.3 and others, for the purpose of establishing a sewing centre and obtained a lease deed for Rs.150/- per month for a period of 15 years. It is further alleged that Accused No.1 cheated the members of the Society and got executed the sale deed in favour of his wife by Accused No.3, believing them that it was a registered lease deed, without paying Rs.1,24,000/- and obtained the land in favour of his wife. Accused No.3 colluded with Accused No.1 and executed the sale deed in favour of the wife of Accused No.1 and kept the members of the Society under darkness. Accused No.1 misappropriated Rs.1,24,000/-. Accused Nos. 2 to 4, being the members of the Committee, remained silent over this illegal transaction. Accused Nos. 2 and 3 made false debits relating to the expenditure in the cash books and thus misappropriated the funds of the Society. Accused No.5, who was the departmental auditor and who audited the accounts, passed the bills knowing that they were false. The District Cooperative Officer, Kadapa, who came to know about the irregularities and illegalities in the affairs of the Society, ordered an enquiry under Section 52 of the Andhra Pradesh Cooperative Societies Act, 1964 and appointed P.W.3 as an Enquiry Officer, who, after conducting an enquiry, submitted a detailed report. The District Collector, Kadapa issued sanction order to launch prosecution against the accused. Based on Ex.P1 - complaint, police registered a case and investigated into. They seized certain documents during the course of investigation and examined the witnesses and filed the charge sheet. 3. When charges under Sections 420, 406, 409, 477- A and 109 IPC. were framed against the accused, read over and explained to them in Telugu, they pleaded not guilty and claimed to be tried. 4. In support of its case, the prosecution examined six witnesses P.Ws.1 to 6 and got marked 16 documents i.e. Exs.P1 to P16. No evidence either oral or documentary was adduced on behalf of the accused. 5. After considering the evidence on record, the trial Court found that there is no evidence to show that the accused committed the offences with which they were charged and accordingly, acquitted them. Challenging the same, the present Appeal is filed. 6. Now the points for determination are whether the prosecution proved its case beyond all reasonable doubt for the charges leveled against the accused and whether the judgment of the trial Court is correct, legal and proper? 7. Learned counsel representing the learned Public Prosecutor contended that there is evidence of P.W.3, which would clearly go to show that Accused Nos. 2 and 3 swallowed the amounts of the Society by showing the expenditure for laying roads, survey stones in the lay out, but as a matter of fact, no roads were laid and that the auditor colluded with the members of the Society. She further contended that the evidence of P.W.3 coupled with the documents seized i.e. the cash book and resolutions, would clearly go to show that the funds of the Society have been misappropriated by the accused, by producing false vouchers and bills and, therefore, they are liable for punishment. 8. On the other hand, learned counsel appearing for Respondent Nos. 1 to 4/A1 to A4 contended that there is no evidence to show that the accused made entries in Ex.P3, that the entries in Ex.P3 and the other vouchers, which were used knowing them that they are false, have not been sent to the expert along with the admitted signatures and the writings of the accused persons and therefore, the trial Court after elaborate consideration of evidence on record, rightly acquitted the accused and absolutely there are no grounds to interfere with the same. 9. One of the golden principles that was passing through the web of criminal justice system is that the accused is presumed to be innocent unless the contrary is proved. It is also equally settled that the prosecution has to establish its case beyond all reasonable doubt. By an order of acquittal, the presumption of innocence is further strengthened. No doubt, the Appellate Court has full power to re-appreciate the evidence on record, but at the same time, it can do so when there are compelling and substantial reasons. Some of the compelling and substantial reasons are; 1) a perverse finding is given by the trial Court, 2) admissible evidence has been overlooked, 3) inadmissible evidence was taken into consideration, and 4) the findings are not based upon the evidence on record. To know whether the findings are based upon proper appreciation of evidence on record or not, it is necessary to refer to the evidence adduced by the prosecution. 10. It is not in dispute that P.W.3 was the Enquiry Officer appointed under Section 52 of the A.P. Cooperative Societies Act, 1964 to conduct an enquiry into the affairs of the Society and he submitted a report on 14.04.1994. It is also not in dispute that Accused No.1 was the member of the Society, Accused Nos. 2 to 4 were the office bearers of the Society and Accused No. 5 (since died) was the auditor in the Cooperative Department who audited the accounts of the Society from time to time. The Kadapa District Class IV Employees House Building Society was registered on 09.04.1969 with Registered No. 1198 to get the house sites to its members and Ac.5.00 was also allotted near Kadapa town. 11. The allegation against Accused No.1 is that he got registered Ac.0.8½ cents of land, worth about Rs.1,24,000/- in the name of his wife, who is not a member without there being any authorization and thus, misappropriated the said amount. Insofar as Accused Nos. 2 and 3 are concerned, they made false debit entries in the cash books. Insofar as Accused No.4 is concerned, he colluded with the President of the Society and forged the signatures. As per Rule 42 of the Andhra Pradesh Cooperative Societies Rules, 1964, the Society can sell the land to a non-member, but it shall take permission from the authorities concerned and all its Members. Ex.P2 (3) is the resolution dated 27.12.1992 whereunder a meeting was convened, 189 members were present and passed the resolution for selling the land to non-members. The accused also filed a document when they were examined under Section 313 Cr.P.C., which clearly goes to show that necessary permission was granted by the Divisional Cooperative Officer, Kadapa vide proceedings R.C.No. 3640/90-C, dated 27.10.1990 and as per the resolution, the accused are entitled to sell the waste land to the non-members of the Society. Therefore, the allegation that Accused No.1 unauthorizedly sold the property to one Smt. Kalyanamma, who is not a member, is wholly untenable and devoid of merit. Accused No.1 sold the land after the Society passed the resolution and the resolution was duly attested by P.W.4. Therefore, under no stretch of imagination, it can be said that Accused No.1 committed the offence punishable under any of the charges levelled against him. 12. Coming to the offences committed by Accused Nos. 2 and 3, it is alleged that they have misappropriated certain amounts of the Society by drawing the same with false entries made in the cash book - Ex.P3. Though Accused Nos. 2 and 3 are the office bearers of the Society, there was no evidence to show that any one of them has written the transactions covered under Ex.P3. No witness examined on behalf of the prosecution did say that some of the entries in Ex.P3 were incorrectly written by Accused No.2 or Accused No.3. Signatures, if any or the writings available on Ex.P3 entries have not been sent to the expert along with their admitted signatures and hand writings of A2 and A3 for comparison and opinion. Unless some of the entries in Ex.P3 were shown to have written by Accused No.2 or Accused No.3, it cannot be said that the amounts covered under Ex.P3 were misappropriated by Accused Nos. 2 and 3. It is not in dispute that every year, there was auditing by the departmental auditor, who used to verify the books of accounts of the Society. At the time of auditing, nothing was found with regard to the irregularities and illegalities allegedly committed by any one of the accused. The evidence of P.W.3 with regard to the falsification of accounts, misappropriation of funds of the Society by Accused Nos. 2 and 3 is only based upon the enquiry report. Admittedly, that report was not marked. Even otherwise, the report of the Enquiry Officer appointed under Section 52(e) of 1964 Act is not a substantive piece of evidence so as to convict the accused solely based upon the same. Unless it is shown that some of the entries in Ex.P3 were written by Accused Nos. 2 and 3, the question of misappropriation or withdrawing the amount does not arise. Therefore, the finding of the trial Court is correct insofar as Accused Nos. 2 and 3 are concerned. 13. The allegation against Accused No.4 is that he colluded with the President and other members of the Society and forged the signatures. Except the evidence of P.W.3 - Enquiry Officer, there is no other evidence to show that Accused No.4 forged the signatures on the documents. Admittedly, he is not a witness of forging the signatures on the document. Therefore, I am of the opinion that in the absence of any evidence, the trial Court has rightly acquitted the accused and I do not find any legal infirmity in the judgment rendered by the trial Court, so as to call for any interference by this Court. 14. The Criminal Appeal is, therefore, dismissed at the stage of admission, confirming the judgment dated 31.12.2004 in C.C.No. 22 of 2003 on the file of the II Additional Judicial Magistrate of I Class, Kadapa. ---------------------- (K. C. BHANU, J) 11th August 2009 ksld