IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 06th DAY OF DECEMBER, 2017 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON’BLE MR.JUSTICE JOHN MICHAEL CUNHA CRIMINAL APPEAL NO.885 OF 2011 BETWEEN:
THE STATE OF KARNATAKA BY ASHOK NAGAR POLICE STATION BENGALURU. ... APPELLANT (By SMT :NAMITHA MAHESH, HCGP) AND:
D NARAYANA SWAMY S/O LATE DASAPPA AGED ABOUT 45 YEARS, R/A HOSAPETE VILLAGE, HANGAMKOTE POST, SIDDALIGATTA TALUK, KOLAR DISTRICT. ... RESPONDENT (By Sri: NAGARAJ DAMODAR, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(1) & (3) PRAYING TO GRANT LEAVE TO FILE AN APPEAL AGAINST THE JUDGMENT DATED:28.12.10 PASSED BY THE PRESIDING OFFICER, FAST TRACK COURT-I, BENGALURU CITY IN CRIMINAL APPEAL NO.855 OF 2006 - ACQUITTING THE RESPONDENT FOR THE OFFENCE PUNISHABLE UNDER SECTION 409 AND 477A OF IPC AND CONFIRM THE JUDGMENT AND ORDER OF CONVICTION AND SENTENCE DATED:28.3.06 PASSED BY THE IV ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU IN C.C.NO.8272 OF 1995. THE SPP/STATE PRAYS THAT THE ABOVE ORDER MAY BE SET ASIDE.
***** THIS CRIMINAL APPEAL COMING ON FOR HEARING THIS DAY, RAVI MALIMATH J., DELIVERED THE FOLLOWING:
J U D G M E N T The case of the prosecution is that the complainant is the Divisional Marketing Officer of the Andhra Pradesh State Handloom Weavers’ Cooperative Society Limited, Bengaluru(‘APCO’ for short). It is a Public Enterprise of the Government of Andhra Pradesh. The main object of the company is to supply raw material to the Weavers’ Society for production of Handloom cloth, procuring the finished products from them and marketing the same through their dealers. The object was to encourage the poor weaver members. There are about 17 sales units and one cloth godown at Bengaluru and in various places in the rest of the State of Karnataka and Kerala. One such sales emporium is situated at St. Patrick Shopping Arcade, Residency Road, Bengaluru. Sri. D. Narayanaswamy, Assistant Salesman was posted to work as Assistant Sales Manager. He reported for duty on 18.4.1992 after the transfer of one N. Lakshmaiah. The respondent/accused was the custodian of all the properties of the society including stocks, cash and furniture etc., His duty was to submit indents for the required varieties to the Stock Divisional Marketing Officer, Bengaluru and to get the stocks by way of transfer from the godown by acknowledging such stocks and sell them in the sales emporium. It was also his duty to sell clothes and remit the cash on next day in the bank and to submit a statement to the Divisional Marketing Officer, Bengaluru. He had to maintain the accounts and meet the expenditure with prior approval of the Divisional Officer. He had to supply clothes on credit basis as per the orders of the Divisional Office to the employees of reputed organizations and banks on the basis of the undertaking given by the salary disbursing authorities for recovering the amounts on installment basis. He had to recover the amounts from the loanees and to remit the same to the Divisional Office.
2. The Divisional Office had deputed J. Lakshminarayana to conduct the physical verification of the stock as on 31.3.1994. He conducted the physical verification and submitted his report on 28.4.1994. He found a shortage of Rs.24,689.70. A memo dated 29.04.1994 was issued to the respondent/accused. He remitted Rs.4,000/- by way of Andhra Bank pay order No.506470 dated 17.5.1994. Inspite of repeated requests, he did not pay the balance amount of Rs.20,711.50 paise. Thereafter, a direction was issued to J. Lakshminarayana to conduct an enquiry against the respondent/accused. The Officer contacted the loanees in person and got confirmation regarding the balance amount. The Inspecting Officer reported in his letter dated 3.10.1994 that the accused has cheated APCO society to the tune of Rs.1,72,780.50 paise. In certain cases, the accused had drawn the cheque amount in his personal name instead of drawing, in the name of the society, thereby, he misappropriated Rs.25,038.55 paise. The accused has drawn credit bills in fictitious names by mentioning false address and has committed misappropriation of Rs.94,459.25 paise. The company has issued notices to the persons who availed credit facilities. Some loanees have received the notices and have not confirmed the loan balances. Some notices were returned on the ground that the addresses were not found. Therefore, the bills have been drawn in fictitious names. The amount involved was Rs.21,025/-. During inspection, some employees have availed the credit facility. They were not available for confirmation. In this regard, Rs.32,257.45 paise has been misappropriated. The accused has therefore committed criminal breach of trust and misappropriation of Rs.1,93,492/-. Based on the said complaint, an FIR was registered in Cr.No.6 of 1995 under Sections 408, 468 and 420 of Indian Penal Code. Investigation was taken up. A charge sheet was filed against the respondent/accused for the above said offences. The accused appeared before the Court. He denied the charges and claimed to be tried.
3. In order to prove its case, the prosecution examined 21 witnesses and marked 194 documents. Ex-D1 was marked on behalf of the respondent/accused. The trial court convicted the respondent/accused for the offence punishable under section 409 Indian Penal Code and sentenced him to undergo simple imprisonment for eight months and to pay a fine of Rs.2,000/- and in default of payment of fine, to undergo further simple imprisonment for two months. He was convicted for the offence punishable under section 477-A Indian Penal Code and sentenced to undergo simple imprisonment for six months. Both sentences were ordered to run concurrently. Aggrieved by the same, the respondent/accused preferred Crl.A.No.855 of 2006 before the Fast Track Court-1, Bengaluru City. By the order dated 28.12.2010, the appeal was allowed and the respondent/accused was acquitted of the offences punishable under sections 409 and 477-A Indian Penal Code. Questioning the order of the Appellate Court and seeking conviction of the respondent/accused under Sections 409 and 477-A Indian Penal Code, the State has filed this appeal.
4. Smt. Namitha Mahesh, learned HCGP appearing for the appellant-State submits that the order of the first appellate court is erroneous. That the Appellate Court failed to consider the evidence and the material on record. That the trial court having rightly considered the evidence and the material on record, the appellate Court has wrongly reversed the judgment of the trial court. That the reasons assigned by the Appellate Court are unsustainable. Only because cloth has been sold on credit basis and no payments have been made, cannot be a ground to hold that the prosecution has failed to prove its case under Section 409 Indian Penal Code. The further reasoning of the Appellate Court that some persons have received notices and some have not, would not indicate that the case of the prosecution against the accused is ill founded. Hence, she pleads that appeal be allowed by confirming the conviction passed by the trial court.
5. On the other hand, learned counsel Sri. Nagaraj Damodhar appearing on behalf of the respondent/accused defends the same. He contends that the prosecution has failed to appreciate the material and the evidence on record and therefore, the Appellate Court has rightly interfered with the same. That the prosecution having failed to prove its case, the Appellate Court was justified in reversing the order of conviction. The respondent’s counsel submits that in view of the long pending litigation against the accused, he has constantly been harassed by the prosecution. The accused has lost his job. He has no avocation. He is doing agricultural work and trying to eke out his livelihood. He submits that the respondent/accused is innocent and he has been wrongly implicated.
6. Heard learned counsels and examined the records.
7.(a) PW-1 is the Manager of APCO. He has stated in his evidence that there is total misappropriation to the tune of Rs.1,93,492/-. He has not worked with the accused. That he was appointed as Manager after the misappropriation was detected.
(b). PW-2 is the complainant. He has stated in his evidence that he was working during the years 1993 to 1996 as Division Office Marketing Officer. The accused was working as Assistant Sales Manager in the APCO Fabrics Sale Emporium situated at Residency Road, Bengaluru. The accused joined duty on 18.4.1992 and he succeeded one Lakshmaiah. After his transfer, the accused was appointed as incharge manager on 5.6.1993. From that date, the accused was Incharge manager till 12.4.1994. The accused was receiving the goods and material from the Division Office. He had to sell them and remit the cash the next day in the bank and send the statement to the Division Office. He was authorized to sell handloom clothes to the organizations on credit and to recover money and remit the same to the Division Office. For verification of the account of the Sales Emporium, Residency Road, Bengaluru, PW-2 appointed one Lakshminarayan, who submitted his report on 28.4.1994. He found shortage of Rs.20,711.50 paise. Based on the same, accused has remitted Rs.4,000/- only. He has further stated that he ordered Lakshminarayan to carry out a thorough inspection. Accordingly, on 30.10.1994, he submitted a final report and noticed misappropriation of Rs.1,72,780.50 paise apart from cash deficit of Rs.20,711/-. It was indicated in the report that the accused had raised bills in the names of fictitious persons by selling cloth and misappropriated the amount. The audit report was marked as Ex-P2. Ex-P2(A), Ex-P2(B), Ex-P2(C) and Ex-P2(D) are the enclosures of the said report. Ex-P3 and Ex-P4 are the recovery register. Cash bills books are marked as Ex-P5 to Ex-P18. He has further stated that the Auditor has clarified the misappropriation in four categories.
(c). In the first instance, the accused raised bills in the names of fictitious persons and sold clothes to strangers and misappropriated Rs.94,459.25 paise. The accused has shown 20 fictitious persons working in Steel Authority of India. Some customers were said to be working in State Bank of Travancore, BTS, LIC office and Saint Patrick School. The Inspecting Officer tried to trace the said persons by visiting the said place, but all were fictitious persons. The particulars are shown in Annexure-1, invoices books Exs-P5 to Ex-P9. The persons are shown as outsiders. The accused has signed the invoices as manager. Secondly as per Annexure-2, the accused has received the amount from the customers and has not credited the same to the company. The accused has received blank cheques from the customers and later filled his name and drawn the cash and misappropriated Rs.25,038.55 paise. In the third category, the company issued notices to the loanees. Some have not replied. In this category, the accused has misappropriated Rs.21,025.65 paise. In the fourth category, the accused has visited door to door and collected the due amount and has misappropriated Rs.32,257.45 paise. The Auditor found shortage of cash on hand of Rs.20,711.50 paise. In all four categories put together, there is a total misappropriation of Rs.1,93,492/-.
(d). He has referred to Ex-P192, who is the loanee- Nagesh. But the said person has not taken cloth on credit.
Ex-P4 is a register wherein the accused has entered Rs.2,224/- clothing given on credit. Ex-P6 is the receipt book wherein receipt for Rs.9,446/- has been raised. The auditor issued notice Ex-P191 to Nagesh. He has denied the same. Lakshminarayan since expired, he identified his signature at Ex-P2, the Audit report. In his further evidence, PW-2 has stated that in the earlier evidence, he has stated that the agreement forms as 17.2 and they are vide Ex-P19 to Ex-P190. Only by seeing the serial number, he has stated like that. He has stated that serial Nos.27 to 30, 33, 37, 47, 57, 59, 85, 88, 111, 135, 142, 143, 162 and 163 are not produced and are not available. He has stated instead of Exs-P19 to Ex-P190, it may be read as Ex-P19 to Ex-P173.
(e). PW-3 is a Typist in St. Joseph College. He has stated that he purchased clothes on credit from APCO showroom. The accused was working as Salesman. He had paid last instalment amount of Rs.1,246.45 paise in the hand of the accused. The accused has assured to make clearance entry.
(f). PW-4 was also working in St. Joseph’s College. He has stated during the year 1993, he purchased cloth of Rs.500/- on credit when the accused was salesman. He has repaid the amount.
(g). PW-5 is the attender in St. Joseph College. He has stated that the accused was salesman when he purchased cloth on credit. The last payment of Rs.320/- was given in the hand of the accused.
(h). PW-6 is the attender in St. Joseph College. He has also stated that the accused was working as Manager when he purchased cloth from the showroom. He had purchased clothes by issuing withdrawal slip and payment of dues by taking the slips.
(i). PW-7 is the Librarian of St. Joseph College. He has also purchased clothes by issuing withdrawal slips. He has repaid all the instalments.
(j). PWs-8, 9, 10 and 11 have narrated identical evidence with different amounts.
(k). PW-12 was working in SBI. PW-14 is an employee of Syndicate Bank. They have stated that they purchased clothes at the showroom by giving blank cheques in the hand of the accused. The accused has filled his name and withdrawn the amounts. Later, they came to know that the said amount were due by them.
(l). PW-15 is the Junior Assistant in BMTC. He has stated that he has taken cloth on credit. So also is the identical evidence of PWs-16, 18, 19, 20 and 21. However, PW-18 has turned hostile.
8. Based on these evidences, the trial court was of the view that the respondent/accused has created bogus and fictitious names, seals, credit bills and has misused the amounts in the first category. In the second category, he has collected the amount from the loanees and misused the same without remitting the same. In the third category, the auditor has found the accused has collected amount from different loanees and misused the same. In the last category, the respondent/accused has collected the amount from the customers and has not remitted it to the Divisional Office. Therefore, in all, the respondent/accused has committed misappropriation of Rs.1,93,492/-. The evidence of the witnesses were also on the same lines. After examining the evidence of all the witnesses, the trial court convicted the accused. The conclusion arrived at was based on the evidence of the witnesses who have indicated different amounts of cloth purchased by them, the instalments repaid by them, the cheques given to the accused etc., Therefore, the prosecution has established its case beyond all reasonable doubt with regard to the misappropriation in the four categories by the accused.
9. The prosecution has also relied on the audit report vide Ex-P2 to indicate that the Auditor has noticed all these misappropriations made by the accused.
10.(a) Under these circumstances, the trial court convicted the accused under Sections 409 as well as 477-A Indian Penal Code. However, on an appeal being filed by the accused, the appellate court has very casually considered the case of the prosecution. In less than five pages, it has totally reversed the judgment of the Trial Court. The first reason assigned by the appellate court is that based on the evidence of PWs-3 to 21, the same does not incriminate the accused. The second reason assigned by the appellate court is the receiving the cloth on credit basis would not incriminate him, unless there is evidence to show that the customers have paid the amounts to the accused through cheques or cash and the accused has misappropriated the same. The third reason assigned by the appellate court runs contrary to the evidence and the material on record.
(b). The witnesses PW-3 to PW-21 excluding PW-18 have clearly narrated that they have taken cloth on credit basis. In some cases, amounts were returned to the accused in his hand. In some cases, blank cheques were given to the accused in his hand. In the other category, there is material on record that the accused having received the cash has not remitted the same to the Division office. Therefore, to hold that only because the accused sold the cloth on credit basis, he is not guilty, runs contrary to the evidence and the material on record. Therefore, the first finding recorded by the appellate court cannot be sustained.
(c). The second reason is that even though the prosecution has charged the accused of receiving bills in the names of fictitious persons, some of the persons have received the notices and replied to the same. Therefore, the case of the prosecution cannot be accepted. We are unable to accept such submission. It is not the case of the prosecution that each and every person narrated in the audit report are fictitious persons. The names as narrated by the accused, found in the audit report were issued notices. Of all the persons who have received notices, it is only very few who have replied to the notices. There is no reply from the remaining fictitious persons, either because the addresses were improper or for other reasons. Therefore, to hold that since some persons have received notices, the entire case of the prosecution that all of them are not fictitious persons cannot be accepted. Such a finding cannot be accepted by us. The fictitious persons have been narrated in the audit report, which clearly indicate that the names and the addresses were created by receiving the amounts from them. Under these circumstances, we are of the view that the appellate court committed an error in reversing the finding of the trial court. It has in a very perfunctory manner dealt with the appeal. It has failed to consider the evidence led in by the prosecution. There is a blanket statement made by the appellate court that the evidence of PWs-3 to 21 cannot be accepted. There are no acceptable reasons assigned by the appellate court as to why it has chosen to differ with the view taken by the trial court. The view taken by the trial court was based entirely on the evidence of PWs-3 to 21. Therefore, even if the appellate court were to disagree with the view taken by the trial court, acceptable reasons would have to be assigned by it. As narrated above, both the reasons assigned by the appellate court run contrary to the evidence led in the prosecution and therefore cannot be accepted.
11.(a) It is further submitted at the Bar that a departmental enquiry was initiated against the accused and he was found guilty of the charges levelled against him. Consequently, he was terminated from service. The misappropriation is of the year 1994. It has been 23 years since the date of commission of the offence. He has already lost his job. It is submitted that apprehending his arrest, the accused obtained anticipatory bail. The amount involved is a sum of Rs.1,93,492/-. The learned counsel for the respondent/accused submits that the accused is also willing to make payment of the amount involved with reasonable rate of interest.
(b). The interest of the State is not just to secure a conviction leading to sentencing of the accused. Public money is also involved in this case. Therefore, keeping all these factors in mind, we are of the considered view that sentencing the accused for imprisonment at such a belated stage would not serve any purpose whatsoever. Having regard to the fact that he has already lost his job and obtained anticipatory bail apprehending his arrest, we deem it just and appropriate to direct the respondent/accused to pay a fine equivalent to the amount of loss sustained by the State. The amount involved in about Rs.1,93,492/-. Applying interest at 6% p.a. for the last 23 years, we find it appropriate to direct the respondent/accused to pay a fine in a round figure of Rs.4,50,000/-.
12. Hence, we pass the following order:-
The appeal is partly allowed. The order dated 28th December 2010 passed by the Fast Track Court-1, Bengaluru City in Crl.A.No.855 of 2006 is set-aside. The judgment of conviction passed by the IV Addl. CMM, at Bengaluru in C.C.No.8272 of 1995 dated 28.03.2006 is confirmed. However, the sentence imposed by the trial court is modified. The respondent/accused is sentenced to undergo imprisonment for the period that he has already undergone. He is directed to pay a fine in a sum of Rs.4,50,000/- before the trial court within a period four weeks from today. On such deposit being made, the same is directed to be handed over to Andhra Pradesh State Handloom Weavers’ Cooperative Society, who is represented by PW-2, the complainant or the present Managing Director of the said firm or the present designated Officer who has replaced PW-2.
Sd/- Sd/-
JUDGE JUDGE *mn/-