SUSHIL KUMAR GUPTA

JOY SHANKAR BHATIACHARYYA

February 23, 1970

[A. N. RAY AND I. D. DUA, JJ.] B

Criminal Trial-Secretary of co.operative society charged under ss. 408 and 411 AJ.P.C.-Joint trial with abettors-Acquittal of abettors-Effect on coriviction of the principal accused.

Criminal breach of trust-User by accused of money entrusW!d, contrary to rules-Ratification by Directors-No power to ratify-Effect of

Misjoinder of chargts-No prejudice to accused.

Constitution of India, 1950, Art 134(1) (c)-Certificate by High Court-Judicial discretion to be exercised by High Cour,,

The appellant, who was the Secretary of a Cooperative Society and was responsible for the cash and maintenance of the accounts of the D Society, was charged with the offences of criminal breach of trust and falsificatiol\ of accounts under ss. 408 and 477-A, I.P.C. He was tried along with 5 others who were charged with the offence of abetment of the offences.

The, trial court acquitted all of !hem, but the appellate court (the Court of Judicial Commissioner) convicted the appellant and acquitted the others. The appellate Court held that the appellant had advanced money against the rules of the Society and also 10 various persoflb not entitled to it, that the .appellant had thereby committed criminal breach E of trust and either mi>.appropriated or misapplied the funds of the Society dishonestly to benefit himself or his relations and friends. The appellate Court certified that the case was a fit one for appeal to this Court under Art. 134(t)(c), but, the order granting the certific&te did not "disclose on its face what exactly was the difficulty of the appellate Court and what question of outstanding difficulty this Court was to settle.

in appeal to this Court, F

HELD: (I) The acquittal of the co-accused was not based on the finding that there was no falsification of accounts or embezzlement.

Therefore, the appellant could n.ot contend that no offence was committed because of the acquittal of the co-accused. [773 G-DJ

(2) On the finding of the appellate court, it was not a mere civil liability of the appellant. The appellant's manner of dealing with the money entrusted to his custody constituted criminal breach of trust.

The Directors had no authority under the bye-laws to give any directions contrary to the bye-la\VS and so, could not ratify the violation of the bye-laws.

Any resolution ratifying the use of trust money contrary_ to the directions contained in the bye-Jaws would not validate, the breach of the bye-laws.

[7750; 776 A-CJ

- (3) There was no misjoinder of charges and no prejudice was caus-ed to the appellant. [776 F]

( 4) . The appellate Court should not have granted the certiJicate, under Art. 134(\)(c) in the present case. The word 'certify' in "the Article

postulates the exercise of judicial discretion by the appellate Court and the certificate shcuid ordinarily show on the face of it that the discretion was invokcM ano properly exercisCd.

This Court should be in a position to koow that the appellate Court has not acted mechanically but bas appli"

its n1ind. n certificate under this clause is impermissible on questions of fact. \Vhen the case does not disclose a substantial question of law or principle the certificate granted by the appellate Court is liable to be revoked by this Court, though such. pl'in1a facie non-disclosure would not by itse\t :mtomatically invalidate the ccr'ificate. [777 A-Cl

CRIMINAL

APPELLATE JURISDICTION : Criminal Appeal No. 131 of 1967.

Appeal from the judgment and order dated January 9, 1967 of the Judicial Commissioner's Court Tripura, Agartala in Criminal Appeal Case No. 8 of 1963.

M. K. Ramamurthi, J. Ramamurthi and Vineet Kumar, for the appellant.

H. R. Khanna and R. N. Sachthey, for the respondent.

The Judgment of the Court was delivered by

Dua, J.

Pursuant to a complaint by Shri Joy Shanker Bhattacharyya, the appellant Sushi! Kumar Gupta was tried in the court of Assistant Sessions Judge, Tripura on the following charges :

" ( 1) That you in between the month of September, 1958 and July, 1959 at Agartala P. S. Kotwali being a servant viz. Secretary in the employment of the Tripura Central Marketing Co-operative Society Ltd., and in such capacity entrusted with certain property to wit a total sum of Rs. 18,200 being the fund of the Society committed criminal breach of trust in respect of the said property and thereby committed an offence punishable under s. 408 of the Indian Penal Code and within the cognizance of this Court.

Secondly : that you in between the period of September, 1958 and July, 1959 at the same place being a Secretary in the employment of the Tripura Central Marketing Co-operative Society Lid., wilfully and with intent to defaud, falsified certain books and other relevant apers. to wit cash book etc., which belonged to the said society, your employer and thereby commiited an offence punis)lable under s. 477-A of the Indian Penal Code and within the cognizance of this Court."

As the appellant was tried jointly along with five others who have been. acquitted and as it. was arged on behalf of the appellant that m view of the acqutttal of his co-accused'the appellant

also should have been acquitted, the charges against them may also be reproduced :

"That Sushi! Kumar Gupta, Secretary of the Tripura Central Marketing Co-operative Society Ltd., in between the period of September, 1958 and Jufy, 1959 at Agartala p.s. Kotwali committed the offence of criminal breach of trust in respect of Rs. 18,200 and that you the aforesaid persons at the same place and time abetted the said Shri Sushi! Kumar Gupta in the commission of the same offence of criminal breach of trust in respect of the said amount which was committed in consequence of your abetment and that you hii_ve thereby committed an offence punishable under s. 109, I.P.C. read with s. 408, I.P.C. and within my cognizance.

Secondly : that Shri Sushi! Kumar Gupta, Secretary of the Tripura Central Marketing Co-operative Society Ltd. in between the period of -September, 1958 and July, 1959 at Agartala p.s. Kotwali committed the offence of falsificaiion of accounts and that you the aforesaid persons at the same place and time abetted the said Shri Sushi! Kumar Gupta in the commission of the same offence of falsification of account which was committed in consequence of your abetment and that you have thereby committed an offence punishable u/s 109, I.P.C. read with s. 477-A of the I.P.C. and within my cognizance."

"The trial court acquitted all the six accused persons. An appeal against the acquittal of all of them was preferred under s. 417 (3), Cr. P.C. in the court of the Judicial Commissioner, Tripura.

That court allowed the appeal against S. K. Gupta only and dismissed it as against the others.

S. K. Gupta was held guilty of the offence of criminal breach of trust under s. 408, I.P.C. and also of the offence of falsification of accounts under s. 477-A, l.P.C. regarding the sum of Rs. 18,200. He was sentenced under each count to undergo rigorous imprisonment for one year, the sentences to be concurrent.

The convict S. K. Gupta has appealed to ibis Court on certificate granted under Art. 134 ( 1 )( c) of the Constitution. The order granting the certificate does not disclose on its face what exactly the difficulty of the court of the Judicial Commissioner is and precisely what question of outstanding difficuliy this Court is desired to settle. On behalf of the appellant his learned advocate Shri Ramamurthy, however, addressed elaborate arguments questioning the order of the learned Judicial Commissioner allowing

the appeal against the appellant S. K. Gupta's acquittal. His challenge was based on three main contentions.

The fourth point that the learned Judicial Commissioner erred in law in considering Ex. P-59 to be admissible ii} evidence, in disagreement with the trial court, according to which it was hit by s. 24, Indian Evidence Act, was not allowed to l;>e argued in this Court because this ground was not taken in the grounds of appeal.

The first contention seriously pressed on behalf of the appellant is that in view o( the acquittal of his co-accused who were tried along with him the court of the Judicial Commissioner was wrong in law in holding that there was falsification of accounts and embezzlement of the funds of the Tripura Central Marketing Co-operative Society.

This submission is unacceptable.

The acquittal of the other co-accused as affirmed by the learned Judicial Commissioner is not based on the finding that there was no falsification of accounts and no embezzlement of the funds of the Society.

S. K. Gupta, appellant, it may be pointed out was the Secretary of the Society since April 13, 1957 when the first general meeting of the Society was held and was in that capacity entrusted with its funds. He worked as such till August 10, 1960.

He was accordingly responsible for the cash and maintenance of current accounts of the Society during the period in question.

Turning to the Bye-laws of the Society, bye-law no. 41 prescribes the duties of the Secretary. According to this bye-law ihe Secretary has inter alia :

"(3) To make disbursement and to obtain vouchers and to receive payments and pass receipts, under the general or sp.cial orders of the Board of Direciors on this behalf from time to time.

( 4) To keep all accounts and registers required by the rules.

(13) To countersign cash book in token of the balance being correct and to produce the cash balance whenever called upon to do so by the Chairman or any person authorised to do so ..

In the absence of the Secretary the Board of Directors may authorise the Manager to perform the duties of the Secretary.

The Board of Directors may also authorise the Manager to perform any of ihe duties of the Secretary to facilitate H the working of the Society.

Receipts passed on behalf of the Society shall be sigJned by the Secretary.

Share certificates and otherdocuments shall be signed by the Secretary and one member of Board of Directors jointly."

Byelaw 42 contains directions regarding advances against pro- .duce of goods and clause ( 1) of this byelaw provides :

"(1) The Board of Directors shall, at the beginning of the session, fix the amount of advance, indicating the percentage of the market price of produce or goods pledged with the society, that may be granted to a member. Such limits may be fixed for difierent commodities and varied from time to time according to fluctuation in markets or otherwise.

It shall also be competent for the Board of Directors to call on a borrower at any time before the due date to repay a portion of the loan or advance issued or to produce additional security for the outstanding Joan or advance withln a time fixed by them, if in their opinion, there is fall or likely to be a fall in the market value of the produce or goods pledged."

Under byelaw 44 loans may be granted to members in suitable "Cases on such terms and conditions as regards individual and maximum limits, repayment of loan, rate of interest thereon etc., as may be fixed by the Board of Directors from time to time. According tci the learned judical Commissioner "the overall picture" emerging from the evidence on the record, to quote his own words, it :

"(1) A sum of Rs. 18,200/- was said to have been disbursed in 1958 and 1959.

(2) It was said to have been repaid in the last week of June, 1959 towards the end of the co-operative year of 1959 and Jong after the maximum period of 6 months allowed by rule 42 ( 4) of the byelaws.

(3) The same amount was again said to have been disbursed in a few days in the first week of July commencing with the next cooperative year (1959-60),

( 4) Except the 2nd and 4th respondents, the others were not members of the Co-operative Society and in this regard the !st respondent disregarded sub-rule ( 1) of r. 42 of the byelaws.

( 5) The I st respondent did not obtain any general or special orders of the Board of Directors to make the disbursements and violated sub-rule ( 1) of r. 42 of Ext.

P-41.

(6) Ext. P-56 and P-59 show that the alleged collections of the monies in June 1959 was false and that the accounts were got up.

(7) The fact that a discount Qf Rs. 10/- was paid to cash a cheque on 29-6-1959 shows that the society had B no funds on that day.

(8) None of the alleged loanees was a Jute grower and no jute was deposited in th" godowns of the society before the advances were made and in this regard the mandatory provisions of sub-r. (2) of r. 42 were also disregarded by the 1st respondent.

( 9) A number of adjustments were made in the Accounts to show that the sum of Rs. 18,200/- was disbursed.

(10) The three persons to whom ultimately the amounts were said to have been disbursed are interested in the 1st respondent. The 4th respondent C. C. Das Gupta is a relation of the 1st respondent and proved by P. Ws 1, 6 and 8 and as admitted by the 4th respondent himself in Ext. P-56. The 3rd respondent Sudhir Ranjan Roy is a servant of D.W. 1 who is a co-Director of the Match Factory and friend of the 1st respondent. The 3rd respondent Haradhan Deb was appointed by the 1st respondent in the C.M.S. The 3rd respondent was also an employee of the C.T.S. of which the 1st respondent was a Director."

On the basis of these observations the appellant was held to have committed criminal breach of trust and to have either misappropriated or misapplied the funds of the Society dishonestly to benefit himself of his relations and friends.

Counsel failed to point out any legal infirmity in the final conclusion drawn in the impugned order from the overall picture. Indeed, counsel, after a faint attempt to find fault with this conclusion felt constrained to admit that the money had been advanced against the rules of the Society and also to the persons not entitled to it, his only contention in support of the appeal being that it did not constitute a criminal offence and that in any event the Board of Directors of the Society having ratified the advances, the foundation for the criminal charge must be deemed to have disappeared.

We are unable to agree.

H The offence of criminal breach of trust is committed when a person who is entrusted in any manner with property or with dominion over it. dishonestly misappropriates it, or converts it to his own use, or dishonestly uses it or disposes it Qf, in violation

of any direction of law prescribing the .mode in which the trust is to be discharged, or of any lawful contract, express or implied, made by him touching such discharge, or wilfully suffers any other person so to do.

The appellant's manner of dealing with the money entrusted to his custody clearly constitutes criminal breach of trust.

Counsel was not able to point out any provision which empowers the Directors to prescribe the mode of making advances, which violates or is in breach of, or contrary to the Byelaws. If the Directors possess no authority to give any directions contrary to the byelaws they can scarcely claim or assume power to ratify violation of the Byelaws in the matter of dealing with the trust money.

Our attention was not drawn to any over-riding provision conferring power on the Board of Directors to ratify use of the trust money contrary to the directions contained in the Byelaws. Exhibit P-27, the resolution of . the Board of Directors dated January 10, 1960, on which reliance in support of the argument was placed, merely states "investments made by the Secretary uptodafo are hereby approved" without pointing out the provisions under which such approval could validate breaches of the Byelaws.

Incidentally it may be mentioned that the learned Judicial Commissioner also entertained some suspicion about the manner in which the meeting, in which this resofotion was passed, was held.

This contention of the counsel must, therefore, be repelled.

In the last submission the counsel made a grievance against the joint trial of several accused persons on several items of embezzlement According to him there was a misjoinder of charges which vitiated the trial.

In our opinion, charges under s. 408 and s. 4 77-A, Indian Penal Code, could, in the circumstances of this case, be tried together and the joint trial of all the accused was proper and lawful. Our attention was not drawn to any provision of law against the legality of the joint trial. In any event no failure of justice in consequence of the joinder of charges was pointed out, with the result that the question of misjoinder of charges must be held to be of little conseq11ence at the stage of appeal. ·

Before closing we may point out, as has repeatedly been said by this Court, that there is normally no right of appeal to this Court in criminal matters except in cases provided by Art. 134 (l)(a) and (b) of the Constitution. Clause (c) of this Article empowers the High Court to certify cases to be fit for appeal to this Court. The word "certify" is a strong word; it posiulates exercise of judicial discretion by the High Court and the certificate should ordinarily show on the fce of it th.at the discretion was invoked and properly exercised. This Court should be in a position to know that the High Court has not acted mechanically

but has applied iis mind. A certificate under this clause is impermissible on questions of fact and when a case does not disCiose a substantial question of law or principle then the certificate granted by the High Court is liable to be revoked by this Court, though such prima facie non-disclosure would not by itself automatically invalidate the certificate. In the case in hand no substantial question of law or principle was made out'at the bar and the certificate wa5 clearly misconceived though it vaguely states that sevei:al questions of law are involved. The appeal fails and is dismissed.

V.P.S.

Appeal dismissed.

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