IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR WEDNESDAY, THE 2ND FEBRUARY 2011 / 13TH MAGHA 1932 CRL.A.No. 773 of 2003 ------------------------------------ CC.100/2000 of ENQUIRY COMMR. & SPL. JUDGE, TRIVANDRUM .................... APPELLANT/1st ACCUSED: P.C.RAVI, S/O CHELLAPPAN NAIR, FORMERLY SHOP MANAGER, MAVELI STORE, CHERIYANADU. BY ADV. SRI.P.VIJAYA BHANU SRI.TONY MATHEW RESPONDENT/COMPLAINANT: STATE OF KERALA REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY PUBLIC PROSECUTOR SRI.B.VINOD THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 02/02/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: M.Sasidharan Nambiar, J. -------------------------------------- Crl.A.No.773 of 2003 -------------------------------------- JUDGMENT Appellant was Shop Manager of Maveli Store, Cheriyanadu during the period 24.4.1990 to 13.3.1991. He was the first accused in C.C.No.100/2000 on the file of Special Judge (Vigilance), Thiruvananthapuram. He was convicted and sentenced for the offences under Section 13 (2) read with Section 13(1)(c) of Prevention of Corruption Act and Section 409 of Indian Penal Code. This appeal is filed challenging the conviction and sentence. 2. Prosecution case was that appellant was the Shop Manager of Maveli Store, Cheriyanadu from 24.4.1990 to 13.3.1991. Second accused was the Helper during 24.12.1990 to 13.3.1991. Third accused was the Helper during 27.4.1990 to 4.12.1990 and fourth accused was the Helper during 10.12.1990 to 24.12.1990. It was alleged that appellant entered into a criminal conspiracy with the remaining accused, who were the Helpers, to CRA 773/03 2 misappropriate the commodities received at Maveli Store and in furtherance of the object of criminal conspiracy, they committed misappropriation by wilfully omitting to maintain the Daily Stock-cum-Sales Return, Cash Book, Remittance Register, Weekly Statement-cum-Sales Return, etc. and by not accounting for the sales proceeds and misappropriated an amount of Rs.1,14,589/- and thereby committed the offences. 3. PW16, the Assistant Manager(Inspection), along with PW17, the Junior Manager (Inspection), conducted inspection of Maveli Store, Cheriyanadu on 6.3.1991 and 7.3.1991 and prepared Exhibit P13 report. It was found that only an incomplete Stock Register was available in the Maveli Store. Cash Book, Imprest Pass Book, Imprest Vouchers, Liability Register, Daily Remittance Register, Shortage Register and Up-to-date Stock Register were not available. As inspection was conducted earlier up to the period prior to 30.9.1990, inspection was restricted to the period 1.10.1990 to 6.3.1991. It was found that basic CRA 773/03 3 records were not maintained even after lapse of ten months, as the Maveli Store started functioning with effect from April 1990. It was found that as per the cash, though Rs.3099.60 should have been in the cash chest, only Rs.2,018/- was found and thereby there was a shortage of cash of Rs.1,081/-. It was also found that there was misappropriation of Rs.1,50,516.05. The inspection was conducted in the presence of the appellant and the other accused. Exhibit P13(a) statement was given and signed by the appellant admitting that there was a shortage of Rs.1,49,010.30. Appellant could not explain the shortage and in the statement, he submitted that, to explain the shortage, the records are to be examined again in detail. In Exhibit P13 report, it was specifically stated that for fixing the actual loss and misappropriation, a detailed inspection is necessary. On receipt of Exhibit P13 report, PW8, the Regional Manager, directed PW17 to conduct a detailed inspection. PW17 conducted a detailed inspection and submitted Exhibit P2 report along with Exhibit P2(a), details CRA 773/03 4 of liability and trading particulars, based on the consignment notes by which the commodities were received at the Maveli Store as well as the Weekly Statements furnished from the Maveli Store to the Unit Depot. PW17 found that value of the commodities received at the Maveli Store as per the consignments from 24.4.1990 to 13.3.1991 was Rs.12,18,011.70. Commodities worth Rs.73,473.85 were found issued on credit basis under noon feeding programme. After receipt of Exhibit P13 report, appellant was suspended on 14.3.1991. On effecting the suspension, appellant handed over charge to PW9. Exhibit P7 was the charge report prepared by the appellant in his own handwriting. In Exhibit P7, appellant furnished the details of the commodities available at the Maveli Store as well as the cash available and the shortage of cash and the records which were handed over to PW9. PW17 found that value of the commodities handed over by the appellant to PW9 under Exhibit P7 was Rs.18,173.20. It was found that deducting the value of the commodities which were CRA 773/03 5 available when appellant handed over charge to PW9 and that of the commodities issued on credit basis under noon feeding programme, from the value of the commodities received at the Maveli Store, the total amount which should have been remitted to the Bank is Rs.11,26,364.70. Verifying the remittance in the Bank, PW17 found that total remittance was only Rs.10,10,857.50. Adding Rs.86.50 which was the cash handed over by the appellant to PW9, as seen from Exhibit P7, it was found that value of the unaccounted commodities was Rs.1,15,420.70. Finding that there will be fluctuations in the value and the economic cost would be more than the value shown in the consignment notes, computing an average of the minimum of 20% and maximum of 35% during the relevant period, worked out at 25.85%, PW17 fixed the said amount at Rs.29,836.25. Adding it to Rs.1,15,420.70, the amount misappropriated was fixed at Rs.1,45,256.95. PW17 fixed the liability with 18% interest on that amount, making a total of Rs.1,68,179.70. Based on Exhibit P13 report, PW8 CRA 773/03 6 submitted a report to the Superintendent of Police, Alappuzha. Crime No.128/1992 of Chengannur Police Station was registered under Exhibit P53 FIR. Finding that an offence under Prevention of Corruption Act is attracted, the case was transferred to the Vigilance and V.C.No. 10/96/VACB, Alappuzha was registered under Exhibit P58 FIR. 4. PWs 19, 20 and 25 conducted the investigation. After completing the investigation and obtaining Exhibit P55 order issued by PW22, the Managing Director of Kerala State Civil Supplies Department, granting sanction sanction to prosecute the accused, charge was laid before Special Court (Vigilance), Thiruvananthapuram. It was taken cognizance for the offences under Sections 409, 468, 477A read with Section 120B of Indian Penal Code and Section 13 (1)(c) read with Section 13(2) of Prevention of Corruption Act, 1988. 5. All the accused pleaded not guilty. Prosecution examined twenty five witnesses and marked fifty eight CRA 773/03 7 exhibits. After closing the prosecution evidence, accused were questioned under Section 313 of Code of Criminal Procedure. When called up to adduce evidence, appellant examined DW1 and got marked Exhibits D1 to D9. 6. Learned Special Judge, on the evidence, found that appellant, being the Manager of the Maveli Store, is liable to account for the commodities received at the Maveli Store from the Unit Depot, after giving the intent and received under consignments and even if some commodities were received by the other accused, who are only Helpers, it is for the appellant to account for the same. Based on Exhibits P5 and P6 consignment notes relating to Maveli Store, Cheriyanadu and Exhibits P26, P27, P28 and 44 Weekly Statements-cum-Sales Return prepared and sent by the appellant and Exhibit P2 report prepared by PW17, learned Special Judge found that total value of the commodities consigned to the Maveli Store, Cheriyandu during the period from 24.4.1990 to 13.3.1991 was Rs.12,05,817/-. Deducting Rs.7,775/-, covered by the inadmissible portion of CRA 773/03 8 Exhibits P5(s) and P5(ah) consignment notes, the total value of the commodities for which appellant has to account was Rs.11,98,042/-. Based on the evidence, it was found that total amount remitted by the appellant in the Banks was Rs.10,15,003/- and adding Rs.73,744/-, being the value of the commodities issued on credit basis under noon feeding programme and the value of the commodities handed over to PW9, evidenced by Exhibit P7, namely, Rs.18,173/- and cash of Rs.86.50, rounded to Rs.87/-, which was handed over by the appellant to PW9, the amount which was found short and not accounted by the appellant was found Rs.91,305/-. Learned Special Judge found that the said amount was fraudulently and dishonestly misappropriated by the appellant and he thereby committed the offence under Section 13(2) read with Section 13(1)(c) of Prevention of Corruption Act. Learned Special Judge found that evidence do not establish that appellant committed offences under Sections 120B, 477A or 467 of Indian Penal Code. He was acquitted of the said offences. Appellant was CRA 773/03 9 also found guilty and was convicted for the offence under Section 409 of Indian penal code. Learned Special Judge acquitted accused 2 to 4 finding that prosecution did not establish any of the charges levelled against them. After hearing the appellant on the question of sentence, he was sentenced to rigorous imprisonment for three years and a fine of Rs.20,000/- and in default, rigorous imprisonment for one more year for the offence under Section 13(2) read with Section 13(1)(c) of Prevention of Corruption Act. He was also sentenced to rigorous imprisonment for three years for the offence udner Section 409 of Indian Penal Code. But, no fine was imposed for the said offence, in view of the fine awarded for the other offence. He was also granted the benefit under Section 428 of Code of Criminal Procedure. 7. Learned senior counsel appearing for the appellant and learned Public Prosecutor were heard. 8. Argument of the learned senior counsel is that prosecution did not establish the entrustment or misappropriation or any fraudulent or dishonest intention. It CRA 773/03 10 was argued that though Exhibits P13 and P2 reports were relied on by the learned Special Judge and prosecution got marked Exhibits P5 and P6 book containing the consignment notes and also got marked Exhibits P5(a) to P5 (ak) and P6(a) to P6(m) consignment notes, no evidence was let in with regard to the details of the commodities received under each of the consignment notes or the details of the commodities shown Exhibits P26, P27, P28 and P44 Weekly Statements furnished by the appellant and therefore, there is no evidence on the exact quantity of the commodities entrusted, sold or misappropriated by the appellant. It was argued that it was the learned Special Judge who calculated the value of the commodities based on the consignment notes and weekly statements, without supporting evidence and entered the finding and even the consignment notes, which were not proved, were relied on and if those unmarked consignment notes are excluded, there may not be any shortage in the value of the commodities and therefore, the conviction is not sustainable. CRA 773/03 11 9. Learned senior counsel also argued that there is absolutely no evidence to prove that there was any dishonest intention on the part of the appellant to misappropriate any amount and in the absence of any dishonest or fraudulent intention, as is clear from the proved facts, it is clear that appellant had furnished correct weekly statements to the unit depot and in such circumstances, even if there was any shortage due to his inexperience or lack of knowledge or negligence, it will not amount to a dishonest misappropriation and therefore, on the ground of shortage alone, appellant cannot be convicted. Learned senior counsel also pointed out that Exhibit P7 charge report itself shows that stock register was taken away by the Assistant Manager (Inspection) and evidence of PW16 corroborates that evidence and in such circumstances, when prosecution did not seize or produce the relevant records, appellant cannot be find fault for the same and in any case, on the evidence, appellant could not have been convicted. Finally, it was submitted that sentence CRA 773/03 12 awarded is excessive and it warrants interference, in case, the conviction is to be confirmed. 10. Learned Public Prosecutor pointed out that when PW17 was examined and Exhibit P2 report along with Exhibit P2(a) statement was marked, correctness of the commodities received at the Maveli Store, prepared by PW17 based on the consignment notes, was not challenged and in such circumstances, appellant cannot dispute that commodities were received at the Maveli Store as assessed by PW17. It was also pointed out that learned Special Judge analysed each of the consignment notes marked and omitted to be marked with reference to the weekly statements prepared by the appellant himself and forwarded to the unit depot and finding that there were corrections in Exhibits P5(s) and P5(ah), Rs.7,775/-, being the value of the corrected commodities, were deducted. It was found that Rs.91,305/- was unaccounted and appellant has no explanation for the said shortage. It was argued that appellant did not maintain the stock registers properly or CRA 773/03 13 the cash book and hence, it is clear that there was dishonest intention on the part of the appellant to misappropriate the amount and in such circumstances, the conviction is perfectly legal. It was also pointed out that in any case, it is conclusively established that there was a shortage of Rs.1,869.65 in cash, which should have been there as per the cash book, as admitted by the appellant himself in Exhibit P7 and no further evidence is necessary with regard to misappropriation of the said amount. 11. Exhibit P4 proceedings issued by the Managing Director, Kerala State Civil Supplies Corporation, provides the procedure to be followed on opening a Maveli Store. It shows that Shop Manager is in over all charge of the Store and is directly responsible for cash, goods traded in the Store, furniture and other assets of the Store. It further shows that Shop Manager shall ensure proper maintenance of the Store and is responsible for maintaining maintenance of stock accounts, assets register, consignment register, issue of bill for all sales, remittance of sales proceeds of CRA 773/03 14 every day on the next day, to keep proper account for imprest expenses, send daily sales returns and other periodicals and open the Store on all days except Sundays and notified holdings observing the timings and to display the stock-cum-price board showing the available stock and the price. It also shows that it is for the Shop Manager to take delivery of the goods indented and to account the same in the respective registers and if any shortage is detected, it should be informed to the concerned unit depot and Regional Manager. It also provides that no sale shall be made on credit and cash collection should be kept in the cash chest, provided and the key of the cash chest and show room shall be kept by the Shop Manager on duty. It further shows that prompt accounting of the sales proceeds of the Corporation opened for the purpose should be made on the next day morning positively and till this arrangement is made, the sales proceeds shall be remitted by way of Demand Draft drawn in favour of Kerala State Civil Supplies Corporation which shall be credited in the collection CRA 773/03 15 account of the Unit Manager concerned. It is, therefore, conclusively established that being the Shop Manager, it is for the appellant to maintain all the required registers and also to take delivery of the commodities indented from the unit depot and account them in the respective registers and remit the sales proceeds in the account maintained for that purpose by Kerala State Civil Supplies Corporation on the very next day and the cash shall be kept in the cash chest and the key of the cash chest must be in the custody of the appellant. 12. The fact that Maveli Store, Cheriyandu started functioning with effect from 24.4.1990 and appellant was appointed the Shop Manager and appellant has been functioning as the Shop Manager till he was suspended by PW8, after receipt of Exhibit P13 report and appellant had given charge to PW9 on 14.3.1991 are not disputed. The fact that PWs 16 and 17 conducted inspection in the Maveli Store on 6.3.1991 and 7.3.1991 and prepared Exhibit P13 report in the presence of the appellant and Helpers and at CRA 773/03 16 the time of inspection, shortage of commodities were found and Exhibit P13(a) statement was furnished by the appellant stating that a shortage of Rs.1,49,010.30 was found and there was a deficit of cash, as out of Rs.3,833/- which should have been there as the sales proceeds, only Rs.1,081.67 was found. Appellant asserted that he is not in a position to explain the deficit at that point of time and explanation could be offered on examination of the accounts once again. As Exhibit P13 report was prepared on assumptions and it was recommended that a detailed inspection is necessary, after receipt of Exhibit P13 report, appellant was placed under suspension directing him to hand over charge to PW9. It was pursuant to the order of suspension, appellant handed over the charge to PW9 after preparing Exhibit P7 charge report in his own hand writing. Exhibit P7 shows the details of the commodities, the cash and records handed over to PW9 on 14.3.1991 and taken charge by PW9 on the same day. It further shows that cash handed over was Rs.86.50 and appellant had shown that the CRA 773/03 17 cash, which should have been there, as per the cash balance shown in the cash book, was Rs.1,956.15. Appellant himself has shown the variation as Rs.1,869.65, though he has shown that it is the imprest account. At Page No.5 of Exhibit P7, appellant has recorded that pass book is misplaced and a duplicate pass book was applied for. Exhibit P7 itself is sufficient to prove that as on 14.3.1991, when appellant was placed under suspension, though there should have been a cash of Rs.1,956.15, appellant handed over only Rs.86.50 and there was a shortage of Rs.1,869.65. 13. Though learned senior counsel argued that appellant had accounted the same, by producing Exhibits D1, D2, D4 to D6 bills, the shortage cannot be explained. Exhibits D1, D2 and D4 to D6 bills relate to the year 1990. Moreover, if these bills were there for remitting the amounts during the relevant period, appellant should have handed over those receipts along with other records and cash at the time of handing over the charge to PW9. Even if the entire amount covered by those bills produced by the CRA 773/03 18 appellant is accepted, it would come to only Rs.894.25 and the balance was not accounted. 14. There is force in the argument of the learned counsel appearing for the appellant that prosecution did not let in evidence in detail with reference to each consignment notes and the corresponding weekly statements sent by the appellant. But, I cannot agree with the argument of the learned senior counsel that on that ground, finding of the learned Special Judge, on a proper analysis of the consignment notes and weekly statements forwarded by the appellant, the shortages found out correctly are to be ignored or cannot be upheld. It is to be borne in mind that it was in the presence of the appellant, PWs 16 and 17 inspected the Maveli Store, verified the records and commodities and submitted Exhibit P13 report. It is clear that they satisfied the appellant that there was shortage of commodities to the value of Rs.1,49,010.30. It is thereafter PW17 conducted a detailed inspection and furnished Exhibit P2 report along with Exhibit P2(a) statement showing the CRA 773/03 19 details of each of the commodity received at the Maveli Store, including its weight and value. Though PW17 or the other officers of Civil Supplies Department, who were examined, did not give evidence with reference to the contents of each of the consignment notes or the details of the commodities received thereunder, evidence of PW17 shows that said report was prepared with reference to the consignment notes available at the Maveli Store as well as at the unit depot and on comparing each with the other and satisfying that there are same corrections in the consignment notes available in the Maveli Store as well as in the unit depot. PW17 also deposed how he fixed the shortage based on this data. PW17 was not cross-examined with reference to the correctness of the commodities or the weight of each of the commodity recorded in Exhibit P2(a) statement. There is no case for the appellant, when PW17 was cross-examined, that quantum of the commodities recorded in Exhibit P2(a) statement are not correct or are not in accordance with the quantity of the commodities CRA 773/03 20 noted in Exhibits P5 and P6 consignment notes. Similarly, it is not disputed that Exhibits P26, P27, P28 and P44 weekly statements were prepared by the appellant himself and forwarded to the unit depot. Evidence of PW17 also shows that Exhibit P2 report was prepared with reference to the said statements also. Learned Special Judge elaborately considered each of the consignment notes with reference to the weekly statements and found that receipt of the consignments is established by the entries in the weekly statements prepared by the appellant and forwarded to the unit depot. Though learned senior counsel argued that learned Special Judge was not justified in relying on the unmarked consignment notes, as no evidence was let in with reference to the said contents, learned Special Judge found that there are corresponding entires with regard to the said unmarked consignment notes in the weekly statements furnished by the appellant. Even if it is taken that as the respective consignment notes were not proved and therefore, they cannot be relied upon, the CRA 773/03 21 corresponding entires made by the appellant himself in the weekly statements establish that those commodities were received at the Maveli Store. If that be so, learned Special Judge was justified in finding that there was shortage with reference to the entires in the weekly statements forwarded by the appellant himself. 15. Learned senior counsel has no case that any of the findings of the learned Special Judge with reference to the consignment notes are not in accordance with the details shown in the weekly statements. In such circumstances, it is not necessary to discuss in detail each of the consignment notes relied upon by the learned Special Judge. Evidence conclusively establish that the commodities, noted by PW17 in Exhibit P2(a) statement, were received at the Maveli Store, Cheriyanadu. 16. As stated earlier, being the Shop Manager, it is the responsibility of the appellant to enter the commodities so received in the stock register as well as show the details of the commodities sold and the balance on each day. CRA 773/03 22 Appellant has no case that he maintained the registers as provided under Exhibit P4 proceedings of the Managing Director of Kerala State Civil Supplies Corporation. Evidence conclusively establish that there was shortage of commodities when appellant handed over charge to PW9 on 14.3.1991. That shortage has been worked out by PW17 in Exhibit P2 report. True, PW17 did not value the commodities with reference to the bullet prevailing on the respective months. PW17 assessed the value taking the economic cost on an average of 25.85%. Even if that excess is not added to the total value of the commodities, there is shortage. Learned Special Judge in fact deducted Rs.7,775/-, being the amount covered by the items, corrected in Exhibits P5(s) and P5(ah) consignment notes and also deducted the amount covered by Exhibits D1, D2 and D4 to D6 series of bills produced by the appellant before the court and fixed the shortage at Rs.91,305/-. In fact, on the evidence, amount covered by Exhibits D1, D2 and D4 to D6 bills could not have been given credit to as CRA 773/03 23 they relate to much earlier period. Whatever it be, on the evidence, I find no reason to interfere with the findings. 17. Then the only question is whether, for this shortage, it could be said that appellant misappropriated the amount with a dishonest or fraudulent intention. Argument of the learned senior counsel is that appellant joined there only on 24.4.1990 and he was inexperienced and if due to his lack of knowledge of the procedures or accounts