Against the Judgment and Order dated 15.3.1996 passed by the Special Judge, (C.B.I), Patna, in Special Case No. 34 of 1990 ------------ Criminal Appeal (S.J.) No. 47 0f 1996 BIDYUT KUMAR PAL, SON OF SHRI BENODE KUMAR PAL, 14, PROFESSOR BACHELORS QUARTERS, SAIDPUR HOSTEL CAMPUS, P.S. KADAMKUAN, TOWN AND DISTRICT PATNA. ------- APPELLANT Versus THE STATE OF BIHAR ------- RESPONDENT ------- For the Appellant : Mr. Gouranga Chatterjee, Advocate For the Respondent : Mr. Bipin Kumar Sinha, SC, CBI WITH Criminal Appeal (S.J.) No. 51 0f 1996 BHISHMA PRASAD SHARMA SON OF HARIDWAR PRASAD RAI, RESIDENT OF MOHALLA BALUGHAT, P.S. TOWN (MUZAFFARPUR), DIST. MUZAFFARPUR. ------- APPELLANT Versus THE STATE OF BIHAR (THROUGH THE S.P., C.B.I.) ------- RESPONDENT ------- For the Appellant : Mr. Pramod Kumar, Advocate with Mr. Ravi Bhardwaj, Adv. For the State : Mr. Bipin Kumar Sinha, S.C., C.B.I. --------- P R E S E N T THE HON’BLE JUSTICE SMT. ANJANA PRAKASH Anjana Prakash, J: Both the Appellants have been convicted under Section 420 of the Indian Penal Code and sentenced to One year Rigorous Imprisonment as also under Section 420 read with 120B of the Indian Penal Code and sentenced to One year Rigorous 2 imprisonment and a fine of Rs. 3,000/- in default of which Three months Rigorous Imprisonment. The Appellant Bidyut Kumar Pal has also been convicted under Section 477-A of the Indian Penal Code and sentenced to Rigorous Imprisonment for Two years and under Sections 13(1)(d)/13(2) of the Prevention of Corruption Act, 1988 and sentenced to One year Rigorous Imprisonment and a fine of Rs. 1,000/- in default of which Rigorous Imprisonment for Two months by the Special Judge, C.B.I. South Bihar, Patna, by a Judgment dated 15.3.1996 in Special Case No. 34 of 1990. 2. The case of the prosecution briefly stated is that while Appellant Bidyut Kumar Pal was posted as a Clerk in Patna University Branch of Allahabad Bank during 1989, he allegedly entered into a criminal conspiracy with Appellant Bhishma Prasad Sharma, Proprietor of the Prabhat Printing Press, Muzaffarpur, and wrongly credited a sum of Rs.1,88,253/- to his firm‟s Account a cheque meant for Vishwamitra Paper Industry Ltd. on 31.3.1989 which Bhishma Prasad Sharma periodically withdrew between 04.04.1989 and 21.10.1989. 3. To prove the requirements of the Sections, the prosecution examined ten witnesses out of whom PW-1 (Ashok Kumar Sinha) is formal and only on the point of his introduction on the account opening form (Ext.2 and 2/A) of Appellant Bhishma 3 Prasad Sharma. Similarly, PW-2 (Bhuneshwar Singh) former Bank Manager of Allahabad Bank is merely on the production of Current Ledger and Log Book marked X and Y for identification. 4. P.W. 3 Madhusudan Rai Sharma was the Assistant General Manager of Allahabad Bank, who proved the sanction for the prosecution of the Appellant Pal. In his cross-examination, he stated that in Banks there is a provision for daily, weekly and monthly balancing. It is when this balancing of figures is done, the defects are detected. In the concerned Bank, there was no balancing being done. He further stated that sometimes there was mistake in totalling of the figures. 5. P.W.4 George Joseph was an employee of the State Bank of India, Bailey Road Branch. In Court, he brought the Ledger Book of his bank which was certified by the then Branch Manager Marked as Ext.4. Undisputedly, Cheque No. A74/100/403567 was dated 16.03.1989 to the tune of Rs.1,88,203/- and was to be credited to Vishwamitra Paper Industries Ltd. The same had been sent to the State Bank of India from Allahabad University Branch for clearance and had been processed by him. The cheque is marked as Material Ext.-I and his signature on the same is marked Ext.5. When the cheque was cleared, the amount was paid to Allahabad Bank. The concerned ledger-sheet is marked Ext.4-A. The next 4 cheque no.A/74/100/406112 dated 18.03.1989 for the amount of Rs.33594.40 was issued by the Director, Primary Education, in favour of Prabhat Printing Press, Muzaffarpur. The said cheque had also been received by the State Bank of India for clearance from Allahabad Bank, Patna University Branch and the same was cleared by him. The Cheque is exhibited as Material Ext. I/A and his signature on the same is marked as Ext.5/A. He stated that the first cheque was sent to his bank on 30.03.1989 from Allahabad Bank and on the same day he had debited the amount from the account holder. 6. P.W. 5, Firoz Raza, was an employee of Allahabad Bank, who brought the Ledger Book and proved entry dated 31.03.1989 which was in the hand writing of Appellant Pal marked Ext.6. He stated that the entry was on the basis of the cheque and pay-in-slip. As per procedure, the particular in the pay-in-slip was filled by the party depositing the cheque and the Cashier receives the clearing cheque whose handwriting was marked Ext.7. He further stated that the cheque and pay-in-slip on which basis the cheque was credited pertained to the current account of Vishwamitra Paper Industries Ltd., but the same was credited in the current account of Prabhat Printing Press. In his cross-examination, he stated that the Patna University Branch was under staffed and 5 there was always a crowd of Professors and Students in the Branch and customers used to enter the working area. According to him, if a wrong entry was detected at the time of comparison of figures, the Bank realised the amount with penal interest from the party. On a specific query, he stated that usually higher officials compared the entries and often a wrong entry was corrected at their level itself. He further stated in his cross-examination that entry dated 31.03.1989 was penned through with red ink and an endorsement had been made that it was wrongly credited and that “payment not to be made before 04.04.1989” 7. P.W. 6 R. S. Srivastava, the Regional Manager Allahabad Bank, stated about the mode in which transactions are made in the bank. Seeing Material Ext.-A, which is the disputed cheque, he stated that as per the procedure, it must have been placed for clearance before the Assistant. Normally, when a cheque comes to the Assistant, after making entries of the same, he sends it for clearance and on advice, the amount is credited and the entry of the same is made in different registers including the Long Book and the Day Book. Every 2-3 days comparison is made of the Ledger Book, Long Book and the Day Book by 3-6 persons. He stated that on account of pressure of work sometimes entry is made in wrong ledger, but when detected on comparison, 6 corrective steps are taken in that regard. He stated in his cross- examination that on 31st March, the bank is overworked. 8. P.W. 7 Kiran Kumar was a Clerk-cum-Cashier in the check period and he was responsible for making entries in the Long Book/Day Book. He proved the Long Book entry as Ext.8 series. He pointed out a wrong entry having been made in the long book with regard to the account of Vishwamitra Paper Industries Ltd. by one Anil Kr. Verma. He conceded that the University Branch was over busy branch and wrong entries sometimes occurred in the long book. He further stated that a lot of university pensioners had their account in the said branch and the students also came to Branch for quick work on account of which there was always pressure of work. He further testified that when mistake crept in, they were rectified at their level itself and when this particular mistake was detected, it was also rectified. He also gave affirmative answer to a definite cross-examination of Appellant Sharma that entries in the Day book, Ledger Book and Long book was not influenced by any of the customers and the customer had nothing to do with the entries of Ledger book, Day book and Long book. 9. P.W. 8 Dharmendra Sharma is merely on the point of sanction for prosecution of Appellant Pal. 7 10. P.W. 9 Sanjay Sarin is the Investigating Officer who has proved the Written Report (Ext.9) and the formal First Information Report (Ext.10). He has merely stated about the formal part of the investigation which he had conducted. In his cross- examination, he corroborated that against the mistaken entry „wrongly credited‟ was noted. He conceded that during investigation he did not find any material to support that Appellant Sharma and Prabhat Printing had knowledge of the wrong entry before the First Information Report was instituted and Appellant Sharma had deposited Rs.1,45,000/- on notice and the Bank had claimed another Rupees Twenty Nine Thousand for the wrongful withdrawal. On seeing Ext.7, which is the pay-in-slip of the concerned cheque, he admitted it did not contain the particulars of the disputed cheque. 11. P.W.10 Kashmira Singh is a formal police witness on the submission of charge sheet. 12. One is inclined to conclude, that after close of evidence, in sum total, the case ended where it had started with the sole exception of the Prosecution having legally proved the error of Appellant Pal and withdrawal by Appellant Sharma. 13. It has been submitted on behalf of the Appellant Bidyut Kumar Pal that admittedly he was no where in the picture 8 when the disputed account was opened which obviates the possibility of a link between the two accused. Further, the bonafides of the Appellants could be inferred from the fact that the account had been kept alive till such time as the mistake was finally detected six months later and only small amounts had been periodically debited as also money had been credited in the said account in this period. Had the intention been to defraud the Bank, all the money would have been withdrawn at one go and account could have been rendered dead or closed after the withdrawal. The conduct of Appellant, Sharma, in returning the said amount on notice from the Bank also pointed to his innocent conduct. Further submission is that apart from the Prosecution having proved the fact of detection of error in the Ledger Book, it has not brought any evidence to demonstrate a meeting of minds between the two accused persons in defrauding the Bank. Moreover, in the light of evidence of P.W.6, the Regional Manager of the Bank, who accepted that the Bank recognized the fact that there was a possibility of wrong entries on account of which the procedure of checks and balance had been introduced, the factum of wrong entry should be condoned. 14. The counsel for the CBI contends that once the Court is apprised of the occurrence of wrong entry admitted by the 9 appellants, they deserve to be convicted and no further proof is required. 15. Having heard the parties, this Court is of the view that it will be drawn into the inevitable pitfall of pronouncing a judgment clouded by individual perception and philosophy if it accepts the factual arguments advanced. It is of the opinion that the instant case, deceptively simple, in fact raises multi-level issues and requires adjudication on the legal touchstone as to whether in the facts of the case the Appellants committed an act with or without mens rea; whether the actus reus proceeded from a mens rea/ scienter i.e. intent to deceive, defraud and as to what is the extent of proof required of the Prosecution and corresponding duty of the Court while issuing a rule. 16. To go back to the inception of trial one finds that Appellant B. K. Pal was charged under section 420 Indian Penal Code for having fraudulently and dishonestly induced the Bank to deliver Rs.1,75,055/- on the basis of false and fictitious entry and under section 477-A for having falsified the bank ledger as also under section 13(1)(d)/13(2) of the Prevention of Corruption Act for 10 having abused his official position for obtaining pecuniary advantage for co-accused to the tune of the amount mentioned above. 17. Accused B. P. Sharma along with accused Pal stood charged under section 420 and 120-B Indian Penal Code for having conspired to cheat the bank by fraudulently and dishonestly inducing the bank to deliver the said amount as also under section 420 Indian Penal Code simiplictor. 18. A reading of Section 420 and 477-A and 120-B Indian Penal Code reveals that section 420 Indian Penal Code incorporates cheating defined in section 415 Indian Penal Code, wherein, deceit, fraud or dishonesty are the key words. „Fraudulently‟ and „Dishonestly‟ are defined in sections 24 and 25 Indian Penal Code. To find the meaning of deceit one has to refer to the Dictionary. The Chambers Dictionary defines deceit as anything intended to mislead another; fraud; falsehood. Thus, the three words appear more or less synonymous of each other. 11 Section 24 and 25 Indian Penal Code are reproduced below for easy reference. “24. “Dishonestly”---- Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing “dishonestly” 25. “Fraudulently”--- A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise.” 19. Both the sections as well as definition of deceit notably incorporate the word „intent‟ as the prime moving force. 20. Section 477-A Indian Penal Code also speaks of “an act done willfully and with intent”. Thus, Sections 420 and 477-A Indian Penal Code do not proscribe an act simplicitor unless it is „intended‟ to defraud or cheat. On a plain reading of these Sections, one finds there is no ambiguity in the constitution of law preventing fraud. 21. Similarly 120-A, the defining section of section 120-B says that when two or more persons agree to do or cause to be done---- (1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy. Word illegal has been defined in Section 43 of the Indian Penal Code which says: 12 43. “Illegal, “Legally bound to do”--- The word „illegal‟ is applicable to everything which is an offence or which is prohibited by law, or which furnishes ground for a civil action; and a person is said to be “legally bound to do” whatever it is illegal in him to omit. 22. It is noteworthy that illegal incorporates three conditions; firstly when a person does something which is an offence simplicitor or, secondly, something which is prohibited by law and thirdly, it furnishes ground for a civil action. Interestingly, in the present case, the Appellants have not done anything which is an offence by virtue of the act alone or which is prohibited by law since it cannot be said that appellant Pal while making entries committed an offence or he was prohibited by law to commit a mistake. Similarly, the action of appellant Sharma in withdrawing the amount is referable to his intent in withdrawing the money from his account. 23. In the present case, both the appellants admitted their mistake in the statement recorded under section 313 Cr. P. C. but the question is whether the said statements can be construed as an admission of guilt exonerating the prosecution of its paramount duty to demonstrate presence of mens rea/ scienter. 13 24. Roscoe Pound in Introduction to Sayre, Cases on Criminal Law (1927) said: “Historically, our substantive criminal law is based upon a theory of punishing a vicious will. It postulates a free agent confronted with a choice between doing right and doing wrong and choosing freely to do wrong.” 25. Also a well known fundamental principle of Criminal Law is that a crime consists of both mental and physical element. Mens rea or scienter is the mental element, whereas, actus reus is the physical element. There must be an active and live link between the actus reus and the mental activity which must be put to strict proof. It is only in situations of strict liability proof of voluntary participation in the mere act is enough evidence. 26. Thus, Courts, when called upon to adjudicate on question of scienter / mens rea, cannot give a finding concentrating on the actus reus alone since there is no scope of proceeding on assumptions in criminal law. The Courts cannot prejudge the issue by assuming „mens rea’ when law requires quite the opposite. The Court can neither abdicate its duty in determining 14 the presence of mens rea nor can it permit the Prosecution to get away without proving the same. It is not permitted to interpret it to mean it imposes penalty for negligent conduct alone, and it can be compelled to interpret the Rule only to apply to intentional wrongdoing. When the ingredient of criminal intent is necessarily woven into the sections, proof of the same is neither condonable nor dispensable. Undoubtedly, mens rea being a state of mind, more often than not, it can only be proved circumstantially. 27. Also the Courts scrutinizing the actions of a human being have to be more than wary in deducing intent since, “to err is human” even though it may not be divine to forgive in a Court of law. The inevitable fallibility of a Man in its very existence cannot be undermined. Judge‟s responsibility is heavy when a man‟s life and liberty hangs precariously upon his decision. Nothing can be left to chance, doubt or conjecture. 28. It is relevant to note here that our Penal Code makes negligence an offence only under exceptional circumstances when public safety at large is concerned (Sections 279, 280, 282, 284 15 and 289 Indian Penal Code) or it ends in the extreme result of death (304-A Indian Penal Code). 29. Moreover, it is elementary that Section 101 of the Evidence Act enjoins the burden of proof on the Prosecution. Sections 111-A, 113-A, B, and 114-A of the Evidence Act gives liberty to the Court to raise certain presumptions in favour of the prosecution to ease its burden and circumscribes the presumption of innocence bestowed on an accused but significantly ill intent is not one of it. Resultantly, in all cases which require criminal intent/scienter or mens rea to be proved by the prosecution as a material fact, failure to do so would entitle the accused to acquittal or discharge. 30. As Lord Denning J. would say in Hosegood Vs. Hosegood (1950) 66 TLR (Pt.1) at p.738 “When people say that a man must be taken to intend the natural consequences of his acts, they fall into error: there is no „must‟ about it; it is only „may‟. The presumption of intention is not a proposition of law but a proposition of ordinary good sense. It means this: that as a man is usually able to foresee what are the natural consequences of his action, so it is, as a rule, reasonable to infer that he did foresee them and intend them. But, while that is an inference which may be drawn, it is not one 16 which must be drawn. If on all the facts of the case it is not the correct inference, then it should not be drawn.” 31. Here, I am also reminded of a very engaging decision of the US Supreme Court oft referred to on question of „intent/scienter/ mens rea’. Facts of the case were that one Morisssette went hunting in December, 1948, to a popular hunting ground where signboards of “Danger—Keep Out—Bombing Range” were extensively displayed. When luck evaded him in gaming, to recover his loss, he loaded three tons of spent bomb casings thrown into piles and flattened them in a nearby farm by driving a truck over them and sold them to realise the expenses of petrol. He was charged under section 18 U.S.C. 641 which provides that “whoever embezzles, steals, purloins, or knowingly converts property of the United States is punishable with fine and imprisonment………..” 32. He all along admitted the facts enumerated by the prosecution but denied „intent‟ in removing the spent bomb casings. The Trial Court, however, was unimpressed, and ruled: “[H]e took it because he thought it was abandoned and he knew he was on government property…That is no defense … I don‟t think anybody can have the defense 17 they thought the property was abandoned on another man‟s piece of property.” The court stated: “I will not permit you to show this man thought it was abandoned… I hold in this case that there is no question of abandoned property” The Court refused to submit or to allow counsel to argue to the jury whether Morissette acted with innocent intention. (Italics supplied) It charged: “And I instruct you that if you believe the testimony of the government in this case, he intended to take it… He had no right to take this property….[A]nd it is no defense to claim that it was abandoned because it was on private property….. And I instruct you to this effect: that if this young man took this property (and he says he did), without any permission (he says he did), that was on the property of the United States Government (he says it was), that it was of the value of one cent or more (and evidently it was), that he is guilty of the offense charged here. If you believe the government, he is guilty…. The Question on intent is whether or not he intended to take the property. He says he did. Therefore, if you believe either side, he is guilty.” Petitioner‟s counsel contended, “But the taking must have been with a felonious intent.” The court ruled, however: “That is presumed by his own act.” “The Court of Appeals suggested that “greater restraint in expression should have been exercised,” but affirmed the conviction because, “As we have interpreted the statute, appellant was guilty of its violation beyond a shadow of doubt, as evidenced even by his own admissions.” 33. Morissette was convicted by the Trial Court and his appeal was dismissed by the Appellate Court on the said reasoning. 34. One of the vexed questions the US Supreme Court was confronted with, was as to whether the Trial Court was correct 18 in its approach in not explaining to the Jury the requirement of intent in the facts of the case and presuming the same once Morissette had accepted the sequence of events. Much argument was raised on omission of the word „intent‟ in the section but the Supreme Court tracing the history of the legal position of the United States held that the “Congress has omitted any express prescription of criminal intent from the enactment before us in the light of an unbroken course of judicial decision in all constituent states of the Union holding intent inherent in this class of offence, even when not expressed in a statute”. 35. It further went on to say where intent of the accused is an ingredient of the crime charged, its existence is a question of fact which must be submitted to the Jury for the reason that presumptive intent had no place in the case, and it would conflict with the overriding principle of presumption of innocence with which the law endows the accused, and which extends to every element of the crime. 19 36. The US Supreme Court also explained the contention that an injury can amount to a crime only when intended was no provincial or transient notion. The unshakeable notion was as universal and persistent in mature systems of law as belief in freedom of the human will and a consequent ability and duty of the normal individual to chose between good and evil. 37. Radin‟s, explanation in Intent, Criminal, 8 Encyc.Soc.Scio.126, 130, is very relevant here. According to him, “The question of criminal intent will probably always have something of an academic taint. Nevertheless, the fact remains that the determination of the boundary between intent and negligence spells freedom or condemnation for thousands of individuals. The watchfulness of the jurist justifies