HON’BLE SRI JUSTICE B. CHANDRA KUMAR Criminal Appeal No. 996 of 2003 Date: 23.03.2010 Between: Kanduri Venkata Ramana .. Appellant/Accused And The State, rep. by Sub-Inspector of Police, CBI/SPE, Visakhapatnam, Through Standing Counsel CBI, High Court of A.P.,Hyderabad. .. Respondent/Complainant HON’BLE SRI JUSTICE B. CHANDRA KUMAR Criminal Appeal No. 996 of 2003 Judgment: This Appeal is directed against the judgment, dated 04-09- 2003 in C.C.No.7 of 2001 on the file of the Special Judge for CBI Cases, Visakhapatnam, whereby and whereunder the Accused was convicted for the offences punishable under Section 409 of IPC and Sections 13(2) read with 13(1)(c) and (d) of the Prevention of Corruption Act, 1988 (hereinafter referred to as ‘Act’), and was sentenced to undergo rigorous imprisonment for one year and to pay a fine of Rs.500/-, in default to undergo simple imprisonment for six months for the offence under Section 409 of IPC. He was also sentenced to undergo rigorous imprisonment for one year and to pay a fine of Rs.500/-, in default to undergo simple imprisonment for six months, for each offence under Section 13 (1) (c) read with 13 (2) and Section 13 (1) (d) read with 13 (2) of the Act. However, he was found not guilty of the offence under Section 477(A) of IPC and was acquitted of the same. 2. For the sake of convenience, hereinafter the Appellant will be referred to as accused. 3. The brief facts of the case are as follows: The Accused was working as a Counter Clerk in the office of the Telecom District Manager, Bharat Sanchar Nigam Ltd., Vizianagaram District from 15-09-1998 to 14-11-2000. The duty of the Accused was to receive cash, bank drafts and cheques from the public towards payment of telephone bills and issue receipts to that effect and to deposit the cash collected by him with the Divisional Cashier on the same day. The allegation against the Accused is that on 16-10-2000, while he was managing cash counter No.2, having received an amount of Rs.917/- from one V. Ananda Rao (PW-1) on behalf of one M. Satyanarayana Raju, who is the owner of telephone No.31295, and an amount of Rs.1,735/- from one A. Mohan Rao (PW-5) on behalf of one Mohammad Abdul Rahman, who is the owner of telephone No.29119, and an amount of Rs.2,467/- from one Ganti Uma Sankar (PW-3) towards the telephone bill of his daughter Ganti Srilakshmi, owner of STDPT, D.No.10-2-13, Near Old Bus Stand, Putchalaveedhi, Vizianagaram, did not remit the cash to the telecom department and also changed the mode of payment from cash to cheque, and issued his own cheque bearing No.007990, dated 16- 10-2000 in favour of AO (TR) O/o TDM, BSNL, Vizianagaram as a consolidated amount towards the telephone bill charges of the above referred telephone numbers. It is further alleged that on 19-10-2000 the Accused, having received an amount of Rs.5,616/- towards telephone bill of telephone No.23789 from one Chippada Ramesh, did not remit the cash, but issued his own cheque bearing No.007991, dated 19-10- 2000 in favour of AO (cash), BSNL, office of the TDM, Vizianagaram and falsified the TRC list mentioning mode of payment through cheque. It is also alleged that on 27-10-2000 the Accused, having received an amount of Rs.4,656/- from one R. Ramesh Babu towards telephone bill of telephone No.26271 pertaining to one K. Ambica and an amount of Rs.6,759/- towards telephone Bill of telephone No.21375 belonging to K. Suresh and issued receipt to that effect, did not remit the cash to the telecom department and falsified the TRC list mentioning the mode of payment through cheque. However, he issued his cheque for Rs.11,415/- bearing No.007993, dated 27-10-2000 in favour of Accounts Officer (TR), BSNL, office of TDM for a consolidated clearance of bills of telephone Nos.26271 and 21375. It is also alleged that when all cheques issued by the Accused, when presented in the clearing house by SBI, vizianagaram, they were dishonoured by the District Co-Operative Central Bank Ltd., Vizianagaram for lack of sufficient funds in S.B. Account No.12105 of the Accused. Thus the Accused had misappropriated an amount of Rs.22,150/- without remitting the same to the Telepcome Department and had falsified the accounts. After obtaining sanction order, the charge sheet was filed alleging that the accused had committed the offences punishable under Sections 409 and 477-A of IPC and Sections 13(2) read with 13 (1) (c) and (d) of the Act. 4. The Accused pleaded not guilty to the charges framed against him and therefore, the prosecution, in order to prove its case, examined PWs.1 to 14 and marked Exs.P1 to P40. On behalf of the Accused, DWs.1 and 2 were examined and Ex.D1 was marked. 5. The learned Special Judge, after considering the oral and documentary evidence adduced by both parties, believed the case of the prosecution and convicted and sentenced the accused as stated above. 6. The learned counsel for the Accused submitted that on some occasions due to heavy rush at the counters, there may be shortage of amount for any reason and that when there is shortage of amount, the usual practice is to issue personal cheques of the person, who was managing the counter, for the deficit amount and such practice has been spoken by the prosecution and defence witnesses. It is also submitted that unfortunately the cheques issued by the Accused were dishonoured for want of sufficient funds, but as soon as the accused learnt about the dishonour of the cheques, he paid the amount on 14-11-2000 and no loss occurred to the BSNL and that there is no misappropriation of the amount. His main submission is that even otherwise the question of dishonest intention does not arise since it is a case of shortage of amount at the counter. He has also taken me through the entire oral and documentary evidence adduced by the prosecution and defence witnesses and referred to certain admissions made by the prosecution witnesses. He has also referred to the written statements filed by the Accused, the plea taken by the Accused, and the explanation given by him for the shortfall of the amount. 7. Sri P. Kesava Rao, the learned Special Standing Council for CBI, submits that it is not only a case of misappropriation, but also a case of falsification of the accounts with dishonest intention. His main submission is that after the amounts have been received by the cashier, it is his duty to deposit the amount on the very same day. His main submission is that the Accused had erased the word ‘cash’ and changed the mode of payment as cheque and that itself shows that he had criminal intention and with a dishonest intention to misappropriate the amount, altered the records. It is also his submission that merely because the accused had paid the amount at a belated stage, that will not h absolve him from the charges framed against him. 8. Section 405 IPC defines criminal breach of trust, which is as follows: “405. Criminal breach of trust.-Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits “criminal breach of trust.” 9. Section 409 IPC is as follows: “409. Criminal breach of trust by public servant, or by banker, merchant or agent.- Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years and shall also be liable to fine.” 10. Section 13 of the Act deals with the criminal misconduct by a public servant. Section 13(1)(c) and 13(1)(d) of the Act are as follows: (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 to do so; or (d) if he,- (i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or 11. As seen from the above, the following ingredients have to be established; (1) that the accused was entrusted with the dominion over property and (2) that the accused misappropriated or converted the said property to his own use or dishonestly used or disposed of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged or of any legal contract expressed or implied. 12. In State of Karnataka v. Mazhar Alam[1], the issue of temporary misappropriation came up for consideration and it was held as follows. “In appropriate case if the court is satisfied that the accused had made good the loss that at the very highest this may be a ground for leniency but that it can never be a ground for a court to condone the entire act and hold that the offence has not been committed. The law makes a very clear provision for offences of temporary misappropriation and breach of trust and similarly, in cases where property has been removed fraudulently and dishonestly and theft or robbery has taken place it is necessary to very clearly lay down that the law envisages that the offence is complete when the ingredients of the section are satisfied. There can be no condonation of completed offences.” 13. In that case the defence of the accused was that the amount of Rs.10,500/- was not taken away by him but when it was being taken to the Head Post Office for deposit, bag was lost in the lorry while in transit. There was enough evidence on record to satisfy the court that the defence taken was plausible and at the earliest point of time the accused admitted the liability, made good the amount to the post office. On a combination of those factors, it was held that that was a case where the offence could not be said to have been completed and the facts of the case really constitute an exception to the general rule. 14. Now the point that arises for consideration is whether the accused dishonestly misappropriated the amount entrusted to him. 15. So, the principal ingredient of the offence appears to be dishonest misappropriation. Dishonest intention cannot be proved directly and must be inferred from the circumstances. It is also settled law that it is not enough if the prosecution establishes that the accused received the money. 16. Coming to the facts of this case, it is not in dispute that PWs.1 to 8 have entrusted certain amounts to the accused. The oral and documentary evidence adduced on behalf of the prosecution clinchingly establishes that on 16.10.2000 the accused received Rs.917/- towards telephone charges of Telephone No.31295 and that he had issued Ex.P2 a computer generated printed receipt. Similarly, the accused issued Ex.P4 receipt having received the telephone charges in respect of Telephone No.23143 on 16.10.2000. He had also received an amount of Rs.2467/- on 16.10.2000 and issued Ex.P5 receipt on the same day towards telephone bill for Telephone No.23143. According to PW.4, the accused received Rs.1735/- on 16.10.2000 and he issued Ex.P8 receipt in respect of Telephone No.29119. Similarly, the accused issued Ex.P11 receipt for Rs.5616/- towards telephone charges of Telephone No.23789. It is also the case of PW.7 that he paid Rs.5616/- towards telephone bill for Telephone No.23789 and that the accused issued Ex.P11 receipt. Ex.P14 is the receipt issued by the accused on 27.10.2000 pertaining to Telephone No.26271. According to PW.9, he had advanced hand loan of Rs.10,000/- to the accused and that he is owning telephone booth with Telephone No.21375 and that he had to pay Rs.6759/- towards telephone bill and that he requested the accused to pay the bill amount from out of the amount due to him and that the accused issued a receipt. 17. According to PW.11, he was working as Accounts Officer in the office of the General Manager, Telecom District, Vizianagaram. He was enjoined with the duties of checking of T.A. Bills, miscellaneous bills and TRA (Telecom Revenue Accounts) daily register etc. He was supervising about14 clerks. There were two counters in his office at that time. The accused was managing counter No.2. Computers were provided at the counters. Each counter clerk was having a separate password for the computer at his counter. At the time of payment of amounts covered by the bills to the counter clerks they issue receipts to the customers. The computer generated receipts contain particulars like receipt number, mode of payment, telephone number and amount etc. After the work at the counter is over, the counter clerk has to handover the cash collected during that day to the Divisional Cashier in the same office. The counter clerks prepare telecom revenue collection lists every day. The Assistant Accounts Officer used to verify TRC lists produced by the counter clerks everyday. The Cashier concerned after collecting the cash at the counters, notes the denominations of the currency notes in a register maintained by him. The Divisional Cashier would remit the cash into the account of BSNL in State Bank of India, Main Branch, Vizianagaram. The cheques and DDs would be submitted by the counter clerks before PW.11 along with TRC lists. According to PW.11, there is no practice of counter clerks retaining the cash payments made by the customers for their personal use and issuing cheques on their accounts for the corresponding amounts. Ex.P27 is the attested true copy of TRC list dated 16.10.2000 generated on the computer and Ex.P27 contain the initials of the accused as counter clerk. Ex.P27 was supplied by their office to the CBI, Visakhapatnam. 18. The specific case of the prosecution is that the accused, having collected the payments in respect of the above referred telephone numbers, has issued cheques towards the payment of telephone bills. Ex.P27 reveals receipt of amount by a cheque No.7990, which was issued by consolidating the amounts of Rs.917/-, Rs.1735/-, and Rs.2467/- pertaining to three telephone bills of Telephone Nos.31295, 29119 and 23143 respectively. The said cheque No.7990 was issued by the accused on 16.10.2000 favouring the A.O (T.R.), BSNL, Vizianagaram. The said cheque is Ex.P20, which bears the signature of the accused. Ex.P28 is the certified copy of TRC list dated 19.10.2000, which shows that on 19.10.2000 an amount of Rs.5616/- was paid by way of cheque, vide cheque No.007991. Ex.P22 is the cheque bearing No.007991, dated 19.10.2000 for Rs.5616/-. Ex.P29 shows that the bills pertaining to Telephone Nos.26271 and 21375 were collected by way of a cheque bearing No.007993 for Rs.11,415/-. Ex.P23 is the cheque bearing No.007993 bearing the signature of the accused. Ex.P14 is the receipt generated by the accused and it pertains to Telephone No.26271. Thus, the accused, admittedly, issued cheque Nos.007990, 007991 and 007993 for Rs.5,119/-, Rs.5616/- and Rs.11,415/- respectively. Ex.P31 the cash denomination register shows that on 16.10.2000 the accused officer collected at his counter a total amount of Rs.1,92,620/-, on 19.10.2000 Rs.54,357/- and on 27.10.2010 Rs.1,61,534/-. 19. During cross-examination, PW.11 admitted that when the accused officer issued cheques on his account in respect of payments due under different telephone numbers he did not check on that day as to who issued the cheques. He says that he had only verified the correctness of the amounts and numbers and the name of the payee. He has also admitted that even when the accused officer issued one cheque for the amounts pertaining to three telephone numbers by mentioning the numbers on the reverse of the cheque, he did not object saying that one person cannot pay the amount covered by the bill pertaining to telephone of another person by cheque. He has also admitted that when the said cheques were bounced he did not question theaccused officer about the said dishonour of the cheques. According to PW.11, after the cheques were dishonoured, the accused officer paid the due amount to the department i.e., the amounts covered by the cheques by way of cash. He has also admitted that their office did not receive any complaints from any customer against the accused officer and no departmental action was initiated against the accused officer. 20. PW.12 G. Loknadha Rao was working as Accounts Officer (Cash) in the office of the General Manager, Telecom District, BSNL, Vizianagaram. According to him, the accused officer was working under him and that the accused attended the office on 16.10.2000, 19.10.2000 and on 27.10.2000 and that he identified the signatures of the accused in the attendance register. This witness has also admitted that the amount covered by a bill pertaining to the telephone of Mr.’X’ can be paid by way of a cheque issued on the account of Mr.’Y’, his friend and such payment is valid and acceptable. He says that he had also seen the cheques issued by the accused officer while sending them for clearance and remittance. He has also admitted that he did not question the accused officer as to why he issued cheques for payment of bills pertaining to telephones of the different customers. He has also admitted that after the cheques issued by the accused officer were dishonoured, he immediately paid the amount to the department in cash towards the amount covered by the cheques. He says that he did not suspect any irregularities on the part of the accused officer. He has also admitted that no charge memo was issued to the accused. According to him, if there is any shortage of the cash collected in the counter, the counter clerk will have to make good the amount from his pocket at the end of the day. He further says that there will be heavy collections on the last day of payment of bills and if there are any shortages, the counter clerks will make good the deficit on their own even without brining the same to their notice. He has also admitted that he did not receive any complaint against the accused officer from the customers. He has also admitted that ultimately the amount due to the department, in so far as the amounts covered by the dishonoured cheques, was collected. 21. PW.13 is the Investigating Officer. He says that on source information and as per the orders of the Superintendent of Police, CBI, he registered a case in R.C.27(A)/2000 on 06.12.2000 under Sections 409 and 477-A IPC and Section 13(2) read with 13(1)(c) and (d) of the P.C. Act, against the accused and Ex.P35 is the original FIR. He has also admitted that he did not receive any written complaint from any of the officers of the BSNL with regard to the information in Ex.P35. PW.14 K.K. Narayanan was working as Sub-Inspector of Police, CBI, Visakhapatnam. He says that during the course of investigation, he collected certain documents and also seized certain documents from the accused, examined some of the witnesses and filed charge sheet. 22. On behalf of the accused, DW.1 A.S.N. Guptha and DW.2 Sailada Venkata Ramana were examined. According to DW.1, the accused issued Exs.P20, P22 and P23 cheques favouring the department towards the amounts payable by six subscribers to the department under the bills served upon the subscribers and that the said cheques were dishonoured when presented by the department for collection. Subsequently, the accused officer paid those amounts covered by three bounced cheques along with surcharge. He says that in view of the payment made by the accused officer, the department did not sustain any loss, even temporary loss. He says that the department is only concerned about the payment of the telephone bill by the subscriber and that any person can pay the bill amount of any subscriber in any form. However, in the cross-examination, he has admitted that there was no practice in the department of counter clerk collecting cash from the subscribers at the counter and retaining the same and issuing a personal cheque on his account favouring the department in lieu of the cash payment collected at the counter. He has also admitted that the clerk at the counter who collected the telephone bills in cash must deliver the cash to the Divisional Cashier on the same day at the end of the working hours. According to DW.2, he was working as counter clerk at counter No.1 during the relevant period. He says that friends and known subscribers can make a request to the counter clerk to pay the bill amount on their behalf by way of cheques and the department is only concerned about the collection of the bill amount from the subscriber and not about the mode of collection. He further deposed that the subscribers pay from outside the window and counter clerks transact work from inside the room through the window and a table with drawer and a chair was provided at each counter for the clerk. He says that there is no safety for keeping cash and that a rubber band will be put round each wad of money paid and the same will be kept in the drawer and that at the closure of the working hours, cash will be counted. He further says that the staff and sub staff will be moving in the room and their table drawers are accessible to those persons. He says that the counter clerks will be getting up from their seats to answer telephone calls or at the call of a superior officer. He says that if any shortage of money is found at any counter at the end of the day the counter clerk concerned shall make good the deficit. He says that on 16.10.2000 he found the accused officer in an agitated mood at his counter and counting the money twice. He says that when he enquired with the accused, the accused stated that there was a deficit of amount equal to the bill amounts of two subscribers. He says that similarly on 19.10.2000 also there was a deficit of cash amount. He says that he had also encountered such problem and there was a deficit of cash at his counter and that he had paid the said amount from his pocket to the department. He says that while issuing receipts on computer at speed, the word “cheque” or “cash” may some times be wrongly entered for the other word. 23. From the evidence discussed above, it is clear that the accused was a counter clerk and that he had issued three cheques Exs.P20, P22 and P23 favouring the department towards the bill payable by six subscribers as referred supra. Admittedly, the cheques were bounced and immediately the accused had paid the amount. It is also an admitted case that the department did not sustain any loss. It is not in dispute that none of the subscribers lodged any complaint to the officers concerned. It is also not in dispute that no telephone was disconnected and there was no loss to any subscriber. The accused, in his written statement, stated that on some occasions particularly on the last date of payment of telephone bills there used to be huge rush and the bill amounts paid by the subscribers will be tagged with a rubber band by noting