[Cites 6, Cited by 0]
Bombay High Court
The State Of Mah. vs Ramesh Laxminarayan Bangad on 2 February, 2026
2026:BHC-AUG:4400
{1} CRI APPEAL 689 OF 2002 & 690 OF 2002
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CRIMINAL APPEAL NO. 689 OF 2002
The State of Maharashtra
Through Police Station, Kadim
District Jalna. ....Appellant
(Ori. Complainant)
Versus
Ramesh s/o Laxminarayan Bangad
Age : 45 years, R/o. Gandhi Chaman,
Old Jalna, Jalna. ....Respondent
(Ori. Accused)
.....
WITH CRIMINAL APPEAL NO. 690 OF 2002
The State of Maharashtra
Through Police Station, Kadim
District Jalna. ....Appellant
(Ori. Complainant)
Versus
Ramesh s/o Laxminarayan Bangad
Age : 45 years, R/o. Gandhi Chaman,
Old Jalna, Jalna. ....Respondent
(Ori. Accused)
.....
APP for Appellant - State : Mr.S.M.Ganachari
Advocate for Respondent - Accused : Mr.N.S,Ghanekar
.....
CORAM : ABHAY S. WAGHWASE, J.
RESERVED ON : 28 JANUARY, 2026
PRONOUNCED BY : 02 FEBRUARY, 2026
JUDGMENT :
1. State vide Criminal Appeal No.689 of 2002 assails judgment
and order of acquittal of present respondent/original accused from
{2} CRI APPEAL 689 OF 2002 & 690 OF 2002
charge under Section 420 of the Indian Penal Code (IPC) passed by
learned 5th Joint Judicial Magistrate First Class, Jalna in RCC No.26
of 1998.
In Criminal Appeal No.690 of 2002, prayers are raised for
enhancement of sentence awarded by learned 5 th Joint Judicial
Magistrate First Class, Jalna, in RCC No.26 of 1998 for offence under
Section 406 of the IPC.
2. As evidence in above both proceedings is common, above
proceedings are dealt with common Judgment and order.
Criminal Appeal No.689 of 2002 :
3. According to learned APP, prosecution was launched against
present respondent for commission of offence under Sections 406
and 420 of the IPC on receipt of complaint against accused Ramesh
Laxminarayan Bangad from Vishwanath Narayan Kale and others
dated 31-12-1997. Learned APP pointed out that, accused constituted
a Society by name "Sanjog Sahakari Gruh Nirman Sanstha" in which
46 members had enrolled themselves. That, complainant and other
members deposited Rs.40,000/- each with accused and remaining
amount of Rs.60,000/- was received as loan by Society from
{3} CRI APPEAL 689 OF 2002 & 690 OF 2002
Maharashtra State Co-operative Housing Finance Corporation
(hereinafter referred to as "the Finance Corporation"). The loan for
Society was acknowledged and approved by the Finance Corporation,
which extended loan to Society for construction of houses. The loan
amount was received by the accused and he gave said amount to the
complainant and others. Learned APP pointed out that complainant
and other members had time to time paid the installments towards
repayment of the loan to the accused. However, complainant and
other members were in receipt demand notice from the Finance
Corporation. He pointed out that, thereafter it was revealed to
complainant and others that the amount deposited by them with the
accused was misappropriated with dishonest intention for personal
interest. There was criminal breach of trust and therefore, on receipt
of complaint, he pointed out that, investigation was undertaken and
on finding sufficient evidence, accused was duly chargesheeted.
4. It is his further submitted that entire case of prosecution is
based on oral and documentary evidence. He pointed out that star
witness in the above trial was the PW1 Vishwanath Narayan Kale
complainant and an independent witness PW7 Narayan Keshavrao
Ingle, who was a Auditor, who had detected the irregularities,
{4} CRI APPEAL 689 OF 2002 & 690 OF 2002
committed by accused. Learned APP took this Court through
testimonies of both PW1 and PW7 and would submit that from their
evidence it has clearly emerged that there was not only breach of
trust but also cheating with dishonest intention. Learned APP
emphasized that since inception, there was intention to cheat and
therefore, necessary ingredients for attracting offence under Section
420 of the IPC are also available in the case before learned trial
Court. However, according to him, the same has not been correctly
appreciated and accused is wrongly acquitted from charge of 420 of
the IPC and therefore, he urges to allow the appeal on re-
appreciation of evidence.
Criminal Appeal No. 690 of 2002 :
5. In this appeal by State, quantum of sentence awarded by
learned trial Court for commission of offence under Section 406 of
the IPC is questioned on the ground that meager sentence has been
awarded when learned trial Court itself was satisfied regarding
availability of sufficient evidence to attract culpability under Section
406 of the IPC. He pointed out that, sentence ought to have been in
consonance with the gravity of offence. According to him, accused
had committed breach of trust of over 46 members including
{5} CRI APPEAL 689 OF 2002 & 690 OF 2002
complainant by misappropriating the funds paid by them time to
time towards installments and converting the funds for his own use.
Therefore, it is his submission that offence was against general
public, who had invested their hard earned money, but the same has
been misappropriated. Consequently, he submits that award of
sentence of RI for one month would not serve as deterent and he
urges to enhance the sentence.
6. In answer to above, Mr.Ghanekar, learned counsel for
respondent/accused would submit that in fact prosecution has failed
to make out case both for offence under Sections 420 as well as 406
of the IPC. He pointed out that, learned trial Court has rightly
acquitted accused from charge of Section 420 of the IPC, but
according to him, conviction recorded for offence under Section 406
of the IPC is in absence of any concrete evidence and therefore, said
conviction was challenged by way of separate proceedings, but
ultimately he supports acquittal from offence under Section 420 of
the IPC.
7. Heard. Perused the record. In support of their case, the
prosecution has adduced evidence of seven witnesses.
{6} CRI APPEAL 689 OF 2002 & 690 OF 2002
BRIEF ACCOUNT OF EVIDENCE IN TRIAL COURT
8. PW1 Vishwanath Narayan Kale, complainant, deposed that he
knew accused, who was chairman of "Sanjog Sahakari Gruh Nirman
Sanstha" constituted to provide houses to the members. That, he
also was a member as he wanted a house. He further deposed that
accused was chairman and his wife was builder. According to him, in
respect of construction cost of the house, an amount of Rs.40,000/-
was paid by him and remaining was obtained by way of loan from
the Finance Corporation in the name of each members. He testified
that he deposited Rs.40,000/- with accused and even other members
deposited said amount. Remaining amount of Rs.60,000/- was loan
aid extended by Finance Corporation to the society. That loan
amount was received by the accused. He further deposed that loan
was to be repaid in installments. He started making repayment to
accused of which accused initially used to issue receipts under his
signature and he has placed said receipts on record which are at
exhibits 32 to 74. According to him, in total Rs.60,000/- was repaid
towards loan installments with the accused. He claims that accused
issued him notice on 31-12-1996 conveying due of Rs.11,433.64 in
his name and therefore, he deposited the amount on 05-02-1997, but
he was again served with notice that too by the Finance Corporation
{7} CRI APPEAL 689 OF 2002 & 690 OF 2002
on 19-09-1997 regarding dues of Rs.11433. Therefore, he
approached Manager of Finance Corporation, but he was told that
said amount has not been received by Finance Corporation and
therefore, notices exhibits 75 and 76 are despatched. According to
him, similar notices were received by other members and then they
realized that amount paid by them to accused by installments was
not at all further deposited by accused with the Finance Corporation
and therefore, he lodged report. He also stated that District Deputy
Registrar, Co-operative Societies was approached, who constituted
team for audit, which revealed that accused has misappropriated
huge amounts.
Though above witness is subjected to cross-examination, above
averments of borrowing loan, paying it in installments with the
accused, has remained intact. In cross-examination, to a suggestion
he answered that amount towards repayment of installment was
given to accused as loan was obtained through him. He volunteered
that loan was given by Finance Corporation through Society.
Suggestion is given that interest has been paid over the loan amount.
Such cross-examination itself shows that transaction of loan is
not denied. Witness also volunteered in cross-examination that
amount is paid to accused and even receipts were received for the
{8} CRI APPEAL 689 OF 2002 & 690 OF 2002
same. Thus, testimony of PW1 complainant has virtually remained
unshaken.
9. Similarly, PW2 Vitthal Pawar, PW3 Anant Deshpande, PW4
Suresh Patil, PW5 Sudhakar Nemane are all the members of the \
Society and they like PW1 have testified about borrowing loan,
accused to be Chairman of the Society, they repaying loan by
installments and initially receiving receipts from accused. They all
have placed on record said receipts issued by accused under his
signature. PW8 Hanuman Sitaram Patil (P.I.) is the Investigating
Officer.
10. Star witness, as pointed out for prosecution, is Special Auditor
PW7 Narayan Keshavrao Ingle, who in his evidence at exh.279
testified about he being engaged by District Deputy Registrar, Co-
operative Society, Jalna for re-audit of the accounts of Society from
02-02-1990 to 31-03-1997. After conducting audit, he has tendered
report under his signature exh.282 and according to him, it was
revealed that the loan was sanctioned and disbursed by Finance
Corporation to the members from the year 1992 to 1998. He
elaborated that members deposited Rs.21,21,992/- with the accused,
{9} CRI APPEAL 689 OF 2002 & 690 OF 2002
whereas accused only deposited Rs.11,97,849.20 with the Finance
Corporation and as such, he did not deposit remaining amount of
Rs.9,24,143.58. He categorically deposed that he noticed that the
said amount was misappropriated and not deposited by accused. He
stated that findings of Auditor regarding misappropriation are at
page 8 and total misappropriated amount is Rs.11,29,277.95.
Above witness is also extensively cross-examined, wherein
suggestion given that accused was not Chairman has been flatly
denied by him. He is put question on the recital of agreement to
sale. He admitted that receipts were issued to members of Society of
the amount which they deposited towards repayment of loan to the
Finance Corporation. He also answered that he has seen bank
accounts of Society. He admitted that figure of Rs.9,24,143.58 is the
difference between the amount credited with the Finance
Corporation and it is reflected in the accounts of the Society.
11. For attracting offence under Section 420 of the IPC, it is
incumbent upon prosecution to substantiate that accused since
inception has criminal intention and mens rea to cheat the members.
Here, it has come on record that initially, when installments were
repaid, the same were accepted by accused and he also issued
{10} CRI APPEAL 689 OF 2002 & 690 OF 2002
receipts acknowledging the repayment. Therefore, at the initial
stage, there was no criminal intention. Therefore, it cannot be said
that with the sole intention of cheating the members, accused had
made them members of Society and made them borrow loan and
subsequently cheated them by not depositing the initial amount
received from members to the Finance Corporation. Therefore, there
being no evidence about dishonest intention from inception to cheat,
learned trial Court, in the considered opinion of this court, has
rightly acquitted accused from charge under Section 420 of the IPC.
12. On re-appreciation of above evidence, it is clearly emerging
that witnesses are deposing about repaying loan installments to the
accused, who was the Chairman and who had formed the housing
Society and who had taken efforts for initiating finance from Finance
Corporation. All witnesses including some of the members of the
housing Society, has deposed about receiving receipts towards the
repayment made by them. The same bears signature of the accused.
Therefore, there is sufficient evidence regarding entrustment of
installments to accused.
13. There is evidence of complainant on the point of he being
{11} CRI APPEAL 689 OF 2002 & 690 OF 2002
served with notice for dues from Finance Corporation, which has
remained intact. Similarly, other members have also been served
with said notice. They all unanimously state that they had regularly
paid installments towards repayment of loan to the accused.
Accused, in the capacity fo the Chairman, was custodian of the said
installments and he was entrusted with the amount to be repaid to
the Finance Corporation. Such evidence has not be dislodged during
cross-examination of the any of the witnesses.
14. Here, though there was charge for offence under Sections 420
and 406 of the IPC and though it is submitted by learned counsel for
accused that such sections cannot co-exist and antithetical, here
learned trial Judge has only convicted accused for offence under
Section 406 of the IPC.
For attracting above charge, it is incumbent upon prosecution
to demonstrate existence of -
firstly, accused to be entrusted with property or with domain over the
property.
secondly, there was dishonest misappropriation of the same for own
use and such misappropriation or conversion should be in violation
of law.
{12} CRI APPEAL 689 OF 2002 & 690 OF 2002
The Hon'ble Apex Court has insisted for such ingredients in the
cases of State of Haryana and others v. Ch. Bhajan Lal and others,
AIR 1992 SC 604; Radheyshyam and Ors. v. State of Rajasthan and
Ors., MANU/SC/1257/2024.
The High Court of Allahabad and the High Court of Patna have
also insisted for such ingredients in cases of Sajal Garg and Ors. v.
State of U.P. and Ors,. MANU/UP/1556/2012, and Vinod Kumar and
Others v. State of Bihar and Another, 2024, SCC Online Pat 8588
respectively.
15. In the light of above essential ingredients, on re-appreciation of
evidence, here, there is ample evidence showing entrustment of
amount of installments towards repayment of loan to accused.
Signature by accused over receipts towards initial repayment not
being refuted, explicitly suggests that he had been entrusted amount
to installments to be further repaid to Finance Corporation. Finance
Corporation having not received the repayment of loan, has issued
plural notices to complainant and other members. Special Auditor
PW7 who is an expert in Audit, has also stepped in the witness box
and has also tendered detail report about alleged financial
irregularities. Thus, there is indeed sufficient evidence regarding
{13} CRI APPEAL 689 OF 2002 & 690 OF 2002
commission of offence under Section 406 of IPC.
16. Learned APP, while arguing for Criminal Appeal No.689 of
2002, expressed dissatisfaction of State for awarding sentence of one
month and according to him, it is too meager going by magnanimity
of the offence. According to him, while awarding said sentence, no
proper reasoning is recorded. However, while answering to point
no.3, after hearing accused as well State on sentence, said sentence
has been awarded. This Court does not find the sentence to be
inadequate so as to interfere.
Therefore, both appeals, challenging the acquittal for offence
under Section 420 of the IPC and for awarding sentence of one
month for offence under Section 406 of the IPC to be less, being
devoid of merit, deserve to be dismissed. Accordingly, following
order is passed :
ORDER
Criminal Appeal Nos.689 of 2002 and 690 of 2002 are
hereby dismissed.
( ABHAY S. WAGHWASE )
JUDGE
SPT
