IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:03.09.2010 CORAM THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR Crl.O.P.No.3914 to 3916 of 2007 & M.P.No.1 of 2007 Crl.O.P.Nos.3914 & 3915 of 2007 K.Ramesh .. Petitioner/Accused No.6 Vs State rep. by Inspector of Police CCIW/CID Dharmapuri Unit Dharmapuri (Cr.No.1 of 2002) .. Respondent / Complainant PRAYER: Criminal Original Petition filed under section 482 of Criminal Procedure Code praying to call for the records and quash the Final Report and proceedings in C.C.No.255 of 2003 on the file of the District Munif-cum-Judicial Magistrate, Pochampalli in as much as the petitioner/Accused No.6 is concerned. Crl.O.P.Nos.3915 of 2007 K.Ramesh .. Petitioner/Accused No.4 Vs State rep. by Inspector of Police CCIW/CID Dharmapuri Unit Dharmapuri (Cr.No.1 of 2002) .. Respondent/Complainant PRAYER: Criminal Original Petition filed under section 482 of Criminal Procedure Code praying to call for the records and quash the Final Report and proceedings in C.C.No.256 of 2003 on the file of the District Munif-cum-Judicial Magistrate, Pochampalli in as much as the petitioner/Accused No.4 is concerned. Crl.O.P.No.3916 of 2007 R.Subramani .. Petitioner/Accused No.5 Vs State rep. by Inspector of Police CCIW/CID https://hcservices.ecourts.gov.in/hcservices/ Dharmapuri Unit Dharmapuri (Cr.No.1 of 2002) .. Respondent /Complainant PRAYER: Criminal Original Petition filed under section 482 of Criminal Procedure Code praying to call for the records and quash the Final Report and proceedings in C.C.No.254 of 2003 on the file of the District Munif-cum-Judicial Magistrate, Pochampalli in as much as the petitioner/Accused No.5 is concerned. For Petitioners: Mr.D.Bharatha Chakravarthy for M/s.Sai Bharath and Ilan For Respondent : Mr.I Paul Nobel Devakumar Govt. Advocate (Crl.side) ----- ORDER K.Ramesh, who figures as Accused No.6 in C.C.No.255 of 2003 and Accused No.5 in C.C.No.256 of 2003 on the file of the District Munif-cum-Judicial Magistrate, Pochampalli has brought-forth Crl.O.P.No.3914 of 2007 and Crl.O.P.No.3915 of 2007 for quashing the criminal proceedings initiated against him in the respective Calender cases referred to above. R.Subramani, the fifth accused in C.C.No.254 of 2003 on the file of District Munif-cum-Judicial Magistrate, Pochampalli has brought forth Crl.O.P.No.3916 of 2007 to quash the said criminal proceedings initiated against him. Since all the three cases came to be initiated based on three final reports filed in one and the same case viz., Crime No.1 of 2002 registered on the file of the respondent police, all these Criminal Original Petitions are taken up together for consideration and disposal by a common order. 2.The facts leading to the filing of the above said Criminal Original Petitions, in brief, are as follows:- K.Ramesh, the petitioner in Crl.O.P.No.3914 of 2007 as well as Crl.O.P.No.3915 of 2007 was appointed as Cashier in the Branch office of the Krishnagiri Taluk, Agricultural Producers Marketing Cooperative Society on 02.05.1990 and was holding the post till 10.03.2005. Similarly R.Subramani, the petitioner in Crl.O.P.No.3916 of 2007 was appointed on 29.12.1994 as Cashier in the Head Office of the Krishnagiri Taluk Agricultural Producers Marketing Cooperative Society. He worked there as Cashier upto 10.12.2006. Sri Karthikeya Cotton Merchants, Kallavi and Selvanayagi Gin and Press Private Limited, Kolinchivadi, Tharapuram had transactions with the above said Co-operative Society. Cotton was supplied by the said Co-operative Society to the above said merchants on credit basis. However, both the merchants turned out to be defaulters and despite such default, the Society continued to supply cotton to them on credit basis. The amounts due from the said cotton merchants were not fully recovered. Hence the Registrar of Co-operative Societies ordered an enquiry into the affairs of Krishnagiri Taluk Agricultural Producers Marketing https://hcservices.ecourts.gov.in/hcservices/ Cooperative Society under the provisions of the Tamil Nadu Co- operative Societies Act, 1983. The Deputy Registrar of Co- operative Societies, Krishnagiri conducted an enquiry under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983 and submitted a report alleging certain irregularities, namely, supply of cotton on credit basis to the above said cotton merchants even after they proved to be defaulters and thus, a loss was caused to the above said Co-operative Society by the default committed by Sri Karthikeya Cotton Merchants, Kallavi and Selvanayagi Gin and Press Private Limited, Kolinchivadi, Dharapuram. It was also found out that cotton worth Rs.17,67,078/- was supplied on credit to Sri Karthikeya Cotton Merchants, Kallavi, even though the said merchant was already a defaulter and that entries were made in the books of the Society, as if Sri Karthikeya Cotton Merchants, Kallavi sold back cotton worth Rs.17,67,078/- and the said cotton was in turn sold to one Ramasamy Chettiar. It was also found out that despite the fact that Selvanayagi Gin and Press Private Limited was a defaulter, repeatedly cotton was supplied on credit basis to the said cotton merchant to the tune of Rs.83,33,832/-, out of which a sum of Rs.29,74,089/- alone was recovered. 3. Under such circumstances, based on the report, a complaint was preferred by the Deputy Registrar, Co-operative Societies, Krishnagiri and the same was registered as Crime No.1 of 2002 on the file of the respondent police against 13 persons for alleged offences punishable under Sections 408, 409 and 477-A I.P.C . The Inspector of Police, CCIW/CID, Dharmapuri unit, who conducted the investigation, on completion of such investigation, submitted three final reports in one and the same Crime Number viz., Crime No.1 of 2002 and the same were taken on file by the District Munif-cum-Judicial Magistrate, Pochampalli as C.C.Nos.255 of 2003, 256 of 2003 and 254 of 2003 respectively. The petitioner in Crl.O.P.Nos.3914 and 3915 of 2007, viz., Ramesh has been implicated in C.C.Nos.255 and 256 of 2007 for the alleged irregularities that took place in the Branch Office of Krishnagiri Taluk, Agricultural Producers Marketing Cooperative Society. Similarly, Subramani, the petitioner in Crl.O.P.No.3916 of 2007 has been implicated in C.C.No.254 of 2003 for the alleged irregularities found out in the Head Office of Krishnagiri Taluk, Agricultural Producers Marketing Cooperative Society. Since Ramesh and Subramani had signed the day books authenticating the entries therein as cashiers in the Branch Office and Head Office respectively, they were arraigned as accused on the allegation that they had helped the Secretary and other accused in committing the irregularities of misappropriation, breach of trust and falsification of records. Though the petitioners were not shown to be one of the accused persons in the First Information Report, they have been arraigned as accused in the respective final reports on the strength of the allegation that they abetted the commission of offences by the other officials of the Co-operative Society. 4. The criminal proceedings initiated against them in C.C.Nos.255, 256 and 254 of 2003 respectively based on the final reports submitted by the respondent in Crime No.1 of 2003, are https://hcservices.ecourts.gov.in/hcservices/ sought to be quashed on the ground that there is no material to sustain a prosecution of the petitioners and that the prosecution itself has been launched on an assumption that the petitioners would have helped the Secretary and other officials of the Co- operative Society in committing the offences of misappropriation, breach of trust and falsification of records. The criminal proceedings are sought to be quashed on the ground that the recitals regarding the responsibility of the cashiers are against the concerned provisions of the Bye-laws of the Co-operative Society concerned. 5. On the other hand, the petitions are resisted by the respondent contending that the petitioners, being Cashiers, affixed their signatures in the day book on the close of the business on each day; that the false entries, if any, made by others could have been noticed by them; that such false entries could have been brought to the notice of the higher authorities and that the failure to do so would prove the connivance of the petitioners with the other accused in the commission of offences, for which criminal prosecution has been launched against the petitioners in the respective Calender cases. 6. This Court heard the submissions made by Mr.Sai Bharath, learned counsel for the petitioners in all the criminal original petitions and Mr. I.Paul Nobel Devakumar, learned Government Advocate (Crl.side) representing the respondent. The materials available on record were also perused. 7. It is a fact admitted on behalf of the respondent that, in the report of the Deputy Registrar under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983, the petitioners herein were not found fault with for the alleged loss caused to the Co- operative Society. It is also a fact which is not in dispute that the First Information Report was registered against other persons alone and the petitioners in these petitions were not shown as offenders therein and that only in the final reports , they have been shown to be the persons, who also committed the offence of abetting the other offenders to commit the offence punishable under Sections 408, 409 and 477-A I.P.C. An allegation has also been made in the final reports that there was a conspiracy, pursuant to which the said offences were committed and hence they are charged with the above said offences read with section 120-B and 109 I.P.C. The main allegation based on which the petitioner in Crl.O.P.Nos.3941 and 3915 of 2007 viz., Ramesh has been implicated in C.C.Nos.255 of 2003 and 256 of 2003 as per the concerned final reports, is as follows: "He is responsible for the maintenance of the Day book when writing the Day book he has to verify the cotton sale bill, delivery challan etc., If there is any sale amount not paid, he has to report the same to the superior officers without making any entry in the Day book, after making the correct entries in the Day book he has to obtain the signatures of the Secretary, Assistant Secretary and https://hcservices.ecourts.gov.in/hcservices/ Branch Manager in the Day book" The very same allegation is made against Subramani, the petitioner in Crl.O.P.No. 3916 of 2007 filed against C.C.No.254 of 2003. At the cost of repetition, the concerned allegation is extracted herein: "Accused No.5 is responsible for the maintenance of the Day book. When writing the Day book he has to verify the cotton sale bill, delivery chalan etc., If there is any sale amount not paid, he has to report the same to the superior officers without making any entry in the Day book, after making the correct entries in the Day book he has to obtain the signatures of the Secretary, Assistant Secretary and Branch Manager in the Day book" 8. From the above, it is quite obvious that the petitioners are sought to be held liable on the sole ground that they were the persons shouldering the responsibility to write the Day book and for any incorrect entry in the Day book regarding the sale bill, Delivery challan etc., they were accountable. On the other hand, it is the contention of the learned counsel for the petitioners that the above said allegation has been made totally ignoring the bye-law which casts the responsibility of maintaining the Day book on the Secretary and that the cashiers affix their signatures only to authenticate the entries made in the Day book regarding the incoming or outgoing cash through them. 9. In support of his contention, the learned counsel for the petitioners drew the attention of the Court to the Bye-laws of Krishnagiri Taluk Agricultural Producers Marketing Cooperative Society. It says that the Cashier should work under the control of the Branch Manager;that there shall be double lock method for the safety of the cash; that the Cashier is jointly responsible for the safety of the cash and that the Cashier is responsible for the daily cash incoming and outgoing and also for bringing the cash from the Bank and distribution of the same. It is the further contention of the learned counsel for the petitioners that the Cashiers are expected to make entries regarding the cash transactions and in order to authenticate the said entries alone their signatures are affixed and that the entire responsibility of maintaining the Day book is on the Secretary or Branch Manager, as the case may be. It is also the further contention of the learned counsel for the petitioners that the Cashiers do not have any authority to sell cotton to the cotton merchants and on the other hand, it is the responsibility of the Branch Manager or Secretary, as the case may be; that as per Bye-law 6(2) relating to auction sale in the Co-operartive Society, only members are permitted to take part in the auction; that the merchants whose names are approved by the Executive committee of the Co-operative Society alone shall be allowed to purchase cotton on credit basis and that such merchants who take delivery of cotton on credit basis should make payment within thirty days and on failure, no further credit should be allowed to such merchant. The learned counsel for the petitioners further pointed out that the question of allowing a https://hcservices.ecourts.gov.in/hcservices/ merchant to take part in the auction and get cotton supplied on credit basis is with the Executive Committee of the Co-operative Society and the Cashiers do not have anything to say in such matters. 10. It is also the contention of the learned counsel for the petitioners that the Cashiers do not have the responsibility and they are not expected to verify the stock in trade, the cotton sold on credit etc.; that they are the responsibilities of the Branch Manager or the Secretary, as the case may be; that the entries in the Day book regarding such supply of cotton from the Co-operative Society or the cotton brought to the Co-operative Society shall be made by the Branch Manager or Secretary himself and that the petitioners being Cashiers, cannot be found fault with for any false or wrong entry, in this regard , made in the Day book. 11. On the other hand, it is the contention of the learned Government Advocate (Crl.side) that the petitioners being Cashiers, who have access to the Day book, could have verified the correctness of the entries made therein, not only regarding the cash inflow and outflow, but also regarding the cotton brought to the Cooperative Society and cotton supplied by the Co-operative Society to the merchants; that any discrepancy found therein ought to have been noticed by them and the same should have been intimated to the higher officials and that since the petitioners failed to do so, there is every reason to believe that they were also acting in connivance with other accused persons. It is the further contention of the learned Government Advocate (Crl.side) that despite the fact that Sri Karthikeya Cotton Merchants, Kallavi and Selvanayagi Gin and Press Private Limited, Kolinchivadi, Dharapuram were defaulters, the Society continued to supply cotton to the said merchants on credit basis and in order to suppress the said fact, false entries have also been made, as if cotton worth Rs.17,67,078/- was redelivered by Sri Karthikeya Cotton Merchants, Kallavi to the Society and the same was sold to one Ramasamy Chettiar. 12. It may be true that such erroneous or false entries could have been made. But, this Court is at a loss to understand how the petitioners who are cashiers, are held responsible for such entries made by the Branch Manager or Secretary concerned. From the Bye-Laws, it is clear that the Cashiers are responsible for the entries regarding cash transactions alone. The stock verifications, receipt of cotton by the Society and the supply of cotton from the Society to the merchants are not within the control of the petitioners who are Cashiers. Therefore, this Court is of the considered view that the petitioners, have been implicated only on assumption and surmises that without their connivance, the Secretary, Branch Manager or other accused persons could not have committed the offences alleged against him. Such a prosecution based on surmises and suppositions, is obnoxious and cannot be sustained. https://hcservices.ecourts.gov.in/hcservices/ 13. For all the reasons stated above, this Court comes to the conclusion that there is no material, whatsoever, to prosecute the petitioners for the offences alleged against them in the respective calender cases and hence the criminal prosecution launched against them in C.C.Nos. 255 of 2003, 256 of 2003 and 254 of 2003 are liable to be quashed. This Court hasten to add that no opinion is expressed regarding the allegations made against the other accused persons. 14. In the result, these Criminal Original Petitions are allowed and criminal proceedings initiated against the petitioners in C.C.Nos.255 of 2003, 256 of 2003 and 254 of 2003 are quashed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar gpa To 1. The Inspector of Police CIW/CID Dharmapuri Unit 2. The District Munsif-cum-Judicial Magistrate Pochampalli 3. The Chief Judicial Magistrate, Dharmapuri Copy to: The Section Officer, Criminal Section, High Court, Madras. 3 ccs To M/s.Sai, Bharath and Ilan., Advocate, SR.65467 Crl.O.P.Nos.3914 to 3916 of 2007 NSM(CO) sra 15/09/2010 https://hcservices.ecourts.gov.in/hcservices/