Telangana High Court
K Pullareddy vs The State Of Telangana on 14 February, 2025
THE HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL APPEAL No. 796 OF 2018
JUDGMENT:
This appeal is filed by the appellant/A1 aggrieved by the
conviction recorded by the I Addl.Spl.Judge for SPE & ACB Cases-
cum-V Addl.Chief Judge, CCC, Hyderabad, in CC.No.62 of 2007,
dt.28.02.2018, for the offences under Sections 13(1)(c)& (d)(ii)
r/w.Section 13(2) of Prevention of Corruption Act, 1988 and under
Sections 409, 420, 468 and 471 of the Indian Penal Code and
sentenced to undergo Rigorous Imprisonment for a period of 2
years and to pay a fine of Rs.2 lakhs for the offence under Section
468 of IPC; to undergo rigorous Imprisonment for a period of 5
years and to pay a fine of Rs.5 lakhs for the offence under Section
409 of IPC: to undergo Rigorous Imprisonment for a period of 2
years and to pay a fine of Rs.50,000/- for the offence under
Section 13(2) of the Prevention of Corruption Act; to undergo
rigorous Imprisonment for a period of 2 years and to pay fine of
Rs.50,000/- for the offence under Section 13(1)(d)(ii) r/w.Section
13(2) of the Prevention of Corruption Act; to undergo Rigorous
Imprisonment for a period of 2 years and to pay a fine of Rs.2
lakhs for the offence under Section 420 of Indian Penal Code; to
undergo Rigorous Imprisonment for a period of two years for the
offence under Section 471 of the Indian Penal Code.
2. Heard learned counsel for the appellant and learned
Assistant Public Prosecutor for the respondent-State.
3. The appellant is Accused No.1 who was working as
Statistical Officer in NSS Cell in Higher Education Department,
Secretariat, Hyderabad. He was tried along with A2-State Liaison
Officer in the Higher Education Department, and A3-Chief
Manager, SBI.
4. The case of the prosecution is that all the three accused
entered into a criminal conspiracy. A1 alleged to have forged the
signatures of Joint Secretary and Principal Secretary of Higher
Education (PW.1) in the note file and also the signature of State
Liaison Officer (A2). A savings bank account was opened in the
SBI, bearing SB A/c.No.5450, and the NSS grants amounts to a
tune of Rs.4,11,98,094/-, were deposited. Out of the said funds,
an amount of Rs.91,76,794/- was withdrawn and misappropriated
by A1, in conspiracy with A2 and A3.
5. The alleged fraud came into light when PW.2, who was newly
appointed in the Department as State Liaison Officer and took
charge on 21.10.2003, went to the bank to deposit a cheque for an
amount of Rs.2,27,85,000/- with the authorization letter of
Additional Secretary, Higher Education. The bank people denied to
credit the cheque in the account and asked for authorization from
the appellant (A1). PW.2 came to know that A1 was operating the
account for the past 4 years with the authorization of A2. After
reconciliation of accounts, it was found that, in between
11.03.2002 to 24.10.2003, there was a withdrawal of
Rs.91,76,794/-, which amount was unaccounted for. After PW.2
took charge, an amount of Rs.7,02,794/- was withdrawn by the
appellant without permission of PW.2.
6. Explanation was called for from the appellant. An amount of
Rs.6,72,794/- was remitted into the NSS account after
explanation was asked, and the appellant allegedly undertook to
repay the misappropriated amount by paying Rs.50,000/- per
month.
7. The Chief Accounts Officer-PW.10, in the office of Director of
Collegiate Education was asked to take up special audit on the
government accounts operated by appellant in the SBI
A/c.No.5450. Complaints were also received from ten universities
stating that they have not received an amount of Rs.35 lakhs
during the period from 2000 to 2003. The audit found a shortfall
of Rs.83,83,07,429/-, and it was found that the appellant forged
the signatures of A2-State Liaison Officer and misappropriated the
amount. Complaint was filed with the CID. Crime was registered
for the offences under Sections 409, 468, 471 of the Indian Penal
Code and under Sections 13(1)(c) and (d) r/w.Section 13(2) of the
Prevention of Corruption Act.
8. During the course of investigation, it was found that
Appellant opened the Savings Bank account in the State Bank of
India, Amberpet branch to deposit the cheques received towards
Central Government's share for NSS programme. Appellant forged
the signatures of the Joint Secretary and Principal Secretary for
opening the said account. The letter dated 06.03.2002 was also
filed into the bank which was addressed to the Chief Manager
(A3), authorizing appellant (A1) to operate the account on behalf of
A2. Appellant deposited a total amount of Rs.4,11,98,094/- as
central government share of NSS grants for A.P.State in the SB
account in between 08.03.2002 to 30.06.2003, and the amount
was released to 13 universities in the State of A.P. for conducting
NSS programs. A2 also signed in the cash book for transaction of
the bills for central shares that were withdrawn. The investigation
further revealed that out of the total amount of Rs.4,11,98,094/-,
only an amount of Rs.3,28,25,635/- was sent to the Universities
and the appellant withdrew an amount of Rs.91,76,794/- which
was misappropriated. An amount of Rs.8,78,883/- was deposited
by appellant/A1, and A1/appellant also undertook to pay
Rs.50,000/- per month till realization of the misappropriated
amount. The investigation revealed that A1, A2, and A3 conspired
to misappropriate the funds. Accordingly, charge sheet was laid.
9. The learned Special Judge framed charges against the
appellant under Sections 13(1)(c) &(d)(ii) r/w.13(2) of Prevention of
Corruption Act, 1988 and under Sections 409, 420, 468, 471 &
120-B of the Indian Penal Code against A1; under Sections
13(1)(c)& (d) (ii) r/w.13(2) of Prevention of Corruption Act, 1988
and Sections 409 r/w.109 of IPC against A2; under Sections 409,
420 & 120-B of IPC against A3.
10. The learned Special Judge considering the evidence of the
prosecution witnesses PWs.1 to 29, Exs.P1 to P54, found favour
with the prosecution version of involvement of appellant/A1 only,
and convicted him. However, A2 and A3 were acquitted.
11. The learned Senior Counsel appearing for appellant would
submit that A2 and A3, who were co-conspirators according to the
investigation were acquitted of all the charges. It is not known as
to how the appellant had mis-appropriated the amount when the
allegation is one of criminal conspiracy. No sanction was accorded
either under the Prevention of Corruption Act or under Section
197 of Cr.P.C. Since the transactions were during the course of
discharge of public duties, sanction is required both under
Sections 197 of Cr.P.C. and also under the PC Act. For the reason
of there being no sanction, the trial is void and without
jurisdiction. Accordingly, the appeal has to be allowed.
12. Learned Counsel further argued that there is absolutely no
admissible evidence placed before the Court. The prosecution
failed to prove that the appellant forged signatures in Ex.P4-note
file or the bank documents. Merely stating that the appellant
forged the documents would not suffice without the corroborating
evidence of an expert. PWs.1 and 2 are the main witnesses to the
prosecution case, who contradicted one another. The evidence of
PW.1 is hearsay and PW.2's evidence is on the basis of an
assumption. Though, hand writing expert's opinion under Ex.P54
was placed on record, however, the expert who conducted the
analysis was not examined. As such, Ex.P54 cannot be read
against the appellant. The prosecution further failed to prove that
the universities did not receive the NSS funds allocated to them,
and the allegation of misappropriation is not substantiated by any
evidence.
13. Lastly, the Senior Counsel submits that the Investigation
Officer was not examined and the appellant did not have the
opportunity to prove the omissions and contradictions which crept
into the evidence during the course of trial. In the present facts,
non-examination of the Investigating Officer has caused prejudice
to the defence of the appellant.
14. On the other hand, learned Public Prosecutor has filed
synopsis of arguments. In the synopsis, it is mentioned that
PW.29 obtained sanction proceedings by the then Government
against A1 and the same was filed along with charge sheet,
however, it was not brought on record. It is further mentioned that
PW.1 has stated about A1 preparing the note file-Ex.P4. Since
PW.1 never signed in the note file as Joint Collector and denied
his signature, the appellant is responsible for forgery. The
prosecution, did not confine to Ex.P29- enquiry report of PW.9,
but produced witnesses to prove the case against the appellant. A
copy of the G.O.M.No.14, which is the sanction order issued by
the Chief Secretary to the Government granting sanction under
Section 197 of Cr.P.C. to prosecute the appellant is appended to
the synopsis.
15. Having gone through the record, the period of alleged mis-
appropriation was in between 11.03.2002 to 24.10.2003. During
the above mentioned period, the NSS grant amount that was
received is Rs.4,11,98,094/-. Out of the said amount
Rs.3,28,25,635/- was disbursed and misappropriation was found
at Rs.82,97,911/- (after deducting the amount of Rs.6,72,794/-,
which was deposited by the appellant).
16. PW.1 was working as Prl.Secretary, Higher Education during
the relevant time. The enquiry/investigation into the alleged
misappropriation of NSS funds was triggered when PW.2, who
took charge as State Liaison Officer went to the Bank to deposit a
cheque for Rs.2,27,85,000/-. The Branch Manager informed that
the account could be operated by Appellant only, and none else.
Mr.M.A.Quddus-PW.5 was holding the additional charge of State
of Liaison Officer until PW.2 took charge. The NSS cell was under
the control of State Liaison Officer, Higher Education. A2 was the
State Liaison Officer till his retirement on 31.03.2003, and
thereafter PW.5 took over. The NSS funds were received in the
form of cheques in the name of State Liaison Officer, which were
deposited in the account standing in the name of State Liaison
Officer in the SBI, Amberpet Branch. According to the
prosecution, the account was opened by the appellant under the
authorization of A2. Ex.P16 is the account opening form, which
mentions the name of the account holder as the State Liaison
Officer, National Service Scheme, Higher Education Department,
H-Block, Secretariat. It is further mentioned in Ex.P16 that the
account would be operated by the appellant who was the
Statistical Officer in the office of State Liaison Officer, National
Savings Scheme.
17. Since the cheque deposited by PW.2 was not accepted,
enquiry was conducted. In the enquiry, it was known that the
appellant was operating the said account by depositing the
cheques received in the name of State Liaison Officer and from
there, the amounts were disbursed to different Universities.
However, on the basis of audit conducted by PW.10 vide Ex.P30-
audit report, and PW.23 vide Ex.P43-report, there was a total
misappropriation of Rs.82,97,911/-.
18. The entire case rests on (i) the Departmental Enquiry
conducted by PW.9-Commissioner, Enquiries, (ii) the audit
conducted by PW.10-Deputy Director/Chief Accounts Officer in
Collegiate education, and also (iii) the audit conducted by PW.23
who worked as Audit Officer on deputation from State Audit
Department in the office of Economic offences Wing, CID,
Hyderabad. PW.23 conducted audit on the basis of memorandum
issued by the DIG, Economic Offences Wing, CID.
Evidence of PW.9 and her Enquiry Report-Ex.P29:
19. PW.9-Commissioner, Enquiries, conducted enquiry against
the appellant and found misappropriation of Rs.83,07,429/- and
gave her finding under Ex.P29-enquiry report. PW.9 stated during
trial that, the said misappropriation was done by the appellant by
opening the account in the SBI, Amberpet branch. During the
course of cross-examination, PW.9 admitted as follows:
"......It is true that all the funds released by Central
Government were deposited in the bank account of
S.B.I, Amberpet branch. I have not called for the
statement of account from the SBI, Amberpet and
reconcile the amounts received from the Central
Government to the said account to know whether they
were properly deposited in the account or not."
In her re-examination, PW.9 stated that:
"Question: You are not empowered to conduct an
enquiry in allegation of forgery and fraud?
Answer: I think I am competent to take up the enquiry
because earlier also I have dealt with similar cases. The
said offence is mis-appropriation, embezzlement and
therefore I have enquired into it.
.............I am not aware that PW.2 in Ex.P29 is
accused No.2 in this case. The witness adds that he
came into picture as his signature was forged. It is true
that PW.2-Shankaraiah in Ex.P29 has not specifically
mentioned that who has forged his signature."
20. Admittedly, PW.9 did not reconcile any of the bank
statements. She was not even aware that an authorization letter
was given by A2 in favour of appellant to open the accounts. PW.9
admitted that during the course of her enquiries, A2 was
examined as PW.2. During his examination, A2 did not state as to
who forged the signature. Further, as seen from the report of
PW.9, the witnesses were not even cross-examined by the
appellant.
Evidence of PW.10 and her Enquiry Report-Ex.P30:
21. PW.10 who worked as Chief Accounts officer in Collegiate
Education, was asked to conduct special audit. Accordingly having
concluded the audit, she submitted her report-Ex.P30 on
30.08.2004 finding that there is a shortfall of Rs.83,07,429/-. In
her cross-examination, PW.10 stated that:
"I have stated that even if it is construed that
authorization letter has been a forged one, without the
knowledge of A2, as a Head of the Office, he cannot
escape from the responsibility.
Joint Secretary was in-charge SLO, for certain period, but
Principal Secretary is not concerned with the accounts of
the department. The note-file with the signature of A2-
Joint Secretary and Principal Secretary was not furnished
to me."
22. PW.10 further admitted in her re-examination that:
"............I have mentioned in my report that cash books
were not produced before me and I also mentioned in my
report that I have verified the other records pertaining to
the NSS unit and the records in the NSS office arrived at a
conclusion and it was mentioned in page No.7. It is true
that it was mentioned in the audit report in page No.1 in
Ex.P30 that the other details of the cheque are not
forthcoming."
23. PW.10 in Special Audit Report-Ex.P30, observed as under:
"It is not complained by the DDO/SLO Sri M.Shankariah
(A2), or any other DDO/SLO subsequently in charge at any
time that the cheques were missing from the office. During
the period of Sri M.Shankariah, 3 bills of central share
drawn and amounts were deposited in SBI, Amberpet and
Sri M.Shankariah has signed in the cash book for the
transactions up to 31.03.2003 i.e., till his retirement. This
shows that he is fully aware of the transactions made at
SBI, Amberpet."
The finding of PW.10 was based on insufficient material, as
evident from her cross-examination. The crucial document of A2
authorising A1 to open the account was not provided to PW.10.
PW.10 found during enquiry that A2 dealt with transactions till
his retirement on 31.03.2003.
Evidence of PW.23 and his report Ex.P43:
24. PW.23 is the then Audit Officer on deputation from State
Audit Department in the office of Economic Offences Wing, CID,
Hyderabad. PW.23, in pursuance of directions by the DIG,
Economic Offences Wing, CID, conducted audit on the documents
collected by the Investigating Officer in the crime. Ex.P43 is the
report. According to PW.23, the total misappropriation was
Rs.82,97,911/- committed by appellant along with A2, PW.2,
PW.5, and PW.11.
25. PW.23 admitted in his chief-examination as follows:
"............Ex.P43 is the said report. As per my report,
there was a total mis-appropriation of Rs.82,97,911/-
committed by A1 along with A2, Mr.G.L.V.Prasad Rao
(PW.11), Mr.M.A.Quddus (PW.5) and Mr.D.Virajanand
(PW.2). A1 was the main conspirator for this
misappropriation. All of them were jointly and severally
responsible for the above said mis-approprition."
26. PW.23 admitted during the course of cross-examination as
under:
"It is true that as per my report the State Liaison Officer
was the Drawing Officer for the bills and he was
responsible for the drawing and disbursement. It is true
that it is mentioned in the report that the State Liaison
Officer was the Drawing and Disbursing Officer for the bills
relating to the Grant-in-aid. It is true that as per my report
the above said official was the only person authorized to
operate the a bank account with SBI, Amberpet branch. I
mentioned in Ex.P43-report that A1 got opened the account
bearing No.012000005450 with SBI, Amberpet on the basis
of the letter purported to have been written by A2. I got
summoned the relevant records from the SBI, Amberpet
branch to verify the facts. I did not obtain any opinion from
any expert with regard to the forged letter of A1 after
summoning the record from SBI. It is true that it is
mentioned in Ex.P43 report that A2 gave his explanation to
the Government that with his permission any other
authorized person can also open the account and operate
and also further mentioned that A1 was authorized to
deposit the cheques and D.Ds in the said account. It is true
that as per my report, A2 had full knowledge of the opening
of the account with SBI, Amberpet branch. It is true that the
State Liaison Officer is only authorized Officer to collect the
NSS funds from the Government and for the disbursement.
It is true that as per my report under Ex.P43 A1 made the
deposit of the funds, but had no authority to withdraw the
same."
27. According to PW.9, it was the appellant who was responsible
for the misappropriation. Similar view was taken by PW.10.
However, PW.23 stated that A1, A2, PW.2, PW.5 and PW.11 were
responsible. The said opinion of PW.23 was based on the
documents provided to him during the audit by the Investigating
Agency. PW.23 specifically stated that A2 had knowledge of
operating the account by A1 as A1 was issued the authorization
letter. Ex.P3 was sent to hand writing expert, but the expert was
not examined in Court.
28. It is admitted that the cheques were received in the name of
the 'State Liaison Officer'. A2 worked as State Liaison during the
relevant period until his retirement in the month of March, 2003.
Over a period of more than 3 years 7 months, cheques were being
received in the name of State Liaison Officer and deposited into
the account at Amberpet branch. The allegation is that A2, as the
State Liaison Officer, authorized appellant to operate the said
account. A2 was acquitted for the charges leveled against him. The
finding of the learned Special Judge that A2 was not involved in
the alleged misappropriation for the entire period of more than 3
years, when he was working as SLO, creates any amount of doubt.
The said finding is contrary to the enquiry and audit conducted by
PW.23.
29. The authorization letter-Ex.P3, which was enclosed to
Ex.P16-account opening form, was the basis for A1 to operate the
account over the said period of three years seven months. The
authorization was allegedly given by A2. However, A2 denied
having given any such authority under Ex.P3 during trial. One
fails to understands as to how A2 was kept in dark over a period
of more than 3 years, when cheques were being regularly received
towards NSS funds and deposited into the bank, and from there
directed to concerned Universities in the form of demand drafts
drawn in favour of the Universities.
30. From the evidence adduced by the prosecution, different
ledgers and registers, i.e., Ex.P5-Cash book from March, 2002
pertaining to State matching share (1 Register), Ex.P6-NSS grants
Central Share Register from March, 2002, Ex.P7-Release of NSS
grants Register from the year 1997-1998 to 2003-2004, Ex.P11-
Treasury Bill Register Vol.1 from June, 1999 to March, 2002, and
Ex.P12- treasury Bill Register Vol.II from April, 2002 to March,
2004, were maintained by the officials working in the office. The
said Exs.P5 to P7, Ex.P11 and Ex.P12 were maintained by
different officials in the office, reflecting the entire details of receipt
of NSS funds and their disbursal.
31. The Investigating Agency sent the disputed documents,
including the account opening form-Ex.P16, authorization letter-
Ex.P3, to the State Forensic Science Laboratory for the purpose of
examination and opinion. Though report was received vide Ex.P54,
for reasons best known to the prosecution, the expert who gave
opinion under Ex.P54 was not examined. Ex.P54 was marked
through the Investigating Officer. During the course of trial, the
public prosecutor informed the court that the person who issued
the FSL report was no more. As seen from Ex.P54, the Scientist
who examined the documents was Mr.M.A.Aleem, Assistant
Director, and the report was approved and forwarded by the Joint
Director, APFSL, Hyderabad. In the absence of the Assistant
Director, the prosecution ought to have produced the Joint
Director, APFSL. It is not clear as to who among the two died.
32. Before the Court below, sanction order of A2 was filed which
is Ex.P53. However, no sanction order which was issued to
prosecute the appellant, was filed. As seen from the Judgment of
the lower court, a day before the Judgment was to be pronounced,
the learned public prosecutor filed a petition to bring the sanction
order of A1 on record. However, the learned Special Judge refused
and wrote in the Judgment that the Court can take judicial notice
of the said sanction order.
33. After the arguments were heard, the learned Public
Prosecutor filed a memo along with a sanction dated 31.05.2007,
sanctioning prosecution against the appellant herein. Curiously,
both the sanctions though obtained in the year 2007, were not
placed on record during the course of trial. No petition is filed by
the prosecution under Section 319 of Cr.PC. to get the sanction
orders on record as additional evidence.
34. The grant of sanction is a sacrosanct act, involving
application of mind by the sanctioning authority to the documents
and other material supplied by the Investigating Agency. In the
absence of the sanction orders being placed on record, the
accused loses the right of cross-examining the sanctioning
authority. The accused is entitled to demonstrate that the
sanction orders were issued without application of mind, or
without considering the material on record.
35. The question of conviction under Prevention of Corruption
Act does not arise when there is no sanction.
36. Section 19 of Prevention of Corruption Act reads as under:
"19. Previous sanction necessary for prosecution.--
(1) Prosecution of Judges and public servants.--(1) No
court shall take cognizance of an offence punishable
under Sections 7, 10, 11, 13 and 15 alleged to have been
committed by a public servant, except with the previous
sanction [save as otherwise otherwise provided in the
Lokpal and Lokayuktas Act, 2013]
(a) in the case of person who is employed in connection
with the affairs of the Union and is not removable from
his office save by or with the sanction of the Central
Government, of that Government;
(b) in the case of a person who is employed in connection
with the affairs of a State and is not removable from
his office save by or with the sanction of the State
Government, of that Government;
(c) in the case of any other person, of the authority
competent to remove him from his office.
37. Section 197 of Cr.P.C reads as under:
"197.Prosecution of Judges and public servants.-(1) When
any person who is or was a Judge or Magistrate or a
public servant not removable from his office save by or
with the sanction of the Government is accused of any
offence alleged to have been committed by him while
acting or purporting to act in the discharge of his official
duty, no Court shall take cognizance of such offence
except with the previous sanction.-
(a) in the case of a person who is employed or, as the
case may be, was at the time of commission of the
alleged offence employed, in connection with the
affairs of the Union, of the Central Government;
(b) in the case of a person who is employed or, as the
case may be, was at the time of commission of the
alleged offence employed, in connection with the
affairs of a State, of the State Government.
[Provided that where the alleged offence was
committed by a person referred to in clause (b) during
the period while a Proclamation issued under clause
(1) of Article 356 of the Constitution was in force in a
State, clause (b) will apply as if for the expression
"State Government" occurring therein, the expression
"Central Government" were substituted.]
38. The case projected by the prosecution is that A2 authorised
A1 for opening the account in SBI Amberpet branch vide Ex.P3.
The account was opened to deposit the NSS cheques, and
thereafter, to disburse to the concerned universities. It is also
admitted that there was no separate account which was opened by
the department for the purpose of depositing NSS funds. No
government orders were obtained for operating accounts relating
to NSS grants, according to PW.23.
39. The appellant did not have the opportunity to cross-examine
the hand writing expert or the persons who issued the sanction.
For reasons best known, the sanction orders, both under Section
197 of Cr.P.C and under Section 19 of Prevention of Corruption
Act, were not placed on record. As already stated, no petition is
filed by the prosecution to place the Sanction orders on record as
additional evidence. Unless the sanction orders are placed on
record in accordance with the procedure, the said documents
cannot be looked into.
40. The findings by PW.10 and PW.23 would clearly show that
several persons were involved in the misappropriation on the basis
of records and registers maintained in the office. The learned Trial
Judge accepted the denial of A2 in giving the authorization letter-
Ex.P3 to A1 to open the bank account, and that the note-file Ex.P4
was not signed by PW.1 on the basis of assumptions, in the
absence of expert evidence.
41. In Mariam Fasihuddin and Ors. vs. State by Adugodi
Police Station and another 1 , the Honourable Supreme Court
discussed the ingredients of Section 468 of IPC, which are
extracted as under:
"The offence of forgery under
Sections 468 and 471 IPC:
33. The offence of 'forgery' under section 468
IPC postulates that whoever commits forgery, intending
that the document or electronic document forged, shall be
used for the purpose of cheating, shall be punished with
2024 SCC OnLine SC 58
imprisonment of either description for a term which may
extend to seven years, and shall also be liable to fine.
Whereas Section 471 IPC states that whoever
fraudulently or dishonestly uses as genuine any documents
which he knows or has reason to believe it to be a forged
document, shall be punished in the same manner as if he
had forged such document.
34. There are two primary components that need to be
fulfilled in order to establish the offence of 'forgery', namely
: (i) that the accused has fabricated an instrument;
and (ii) it was done with the intention that the forged
document would be used for the purpose of cheating. Simply
put, the offence of forgery requires the preparation of a false
document with the dishonest intention of causing damage or
injury.3
35. The offences of 'forgery' and 'cheating' intersect and
converge, as the act of forgery is committed with the intent
to deceive or cheat an individual."
The question of convicting the appellant under Section 468 of
Indian Penal Code, assuming that A1 has fabricated signatures in
Exs P3 and P4, does not arise.
42. The ingredients of Section 471 of IPC were discussed by the
Honourable Supreme Court in the case of Deepak Gaba and Ors.
vs. State of Uttar Pradesh and Ors. 2, which are extracted as
under:
(2023) 3 SCC 423
"21. Section 471 IPC is also not attracted. This Section is
applicable when a person fraudulently or dishonestly uses
as genuine any document or electronic record, which he
knows or has reasons to believe to be a forged document or
electronic record. This Court in Mohd. Ibrahim [Mohd.
Ibrahim v. State of Bihar, (2009) 8 SCC 751 : (2009) 3 SCC
(Cri) 929], has elucidated that the condition precedent of an
offence under Section 471IPC is forgery by making a false
document or false electronic record or part thereof. Further, to
constitute the offence under Section 471IPC, it has to be
proven that the document was "forged" in terms of Section
470, and "false" in terms of Section 464 of IPC .
22. Section 470 lays down that a document is "forged" if
there is:
(i) fraudulent or dishonest use of a document as genuine;
and
(ii) knowledge or reasonable belief on the part of the
person using the document that it is a forged one.
Section 470 defines a "forged document" as a false document
made by forgery.
23. As per Section 464 IPC, a person is said to have made a
"false document":
(i) if he has made or executed a document claiming to be
someone else or authorised by someone else;
(ii) if he has altered or tampered a document; or
(iii) if he has obtained a document by practising deception,
or from a person not in control of his senses.
24. Unless the document is false and forged in terms of
Sections 464 and 470IPC respectively, the requirement of
Section 471IPC would not be met."
Once it is not proved that the documents were forged, and the
appellant had knowledge that the documents were forged, the
question of convicting under Section 471 does not arise.
43. The learned Sessions Judge, on the basis of assumption that
the appellant was the person responsible to fabricate the
authorization letter-Ex.P3 and also Ex.P4-note file, convicted the
appellant under Sections 468 and 471, which is erroneous.
44. Admittedly, the funds were entrusted to the then State
Liaison Officer-A2 till his retirement on 31.03.2003. Thereafter,
PW.5 took over as State Liaison Officer, till PW.2 took charge from
PW.5 on 21.10.2003.
45. The ingredients of Section 409 of IPC were discussed by the
Honourable Supreme Court in the case of N. Raghavender vs.
State of Andhra Pradesh 3, which are extracted as under:
"45. Section 409IPC pertains to criminal breach of trust by a
public servant or a banker, in respect of the property entrusted
to him. The onus is on the prosecution to prove that the
accused, a public servant or a banker was entrusted with the
property which he is duly bound to account for and that he
has committed criminal breach of trust. (See Sadhupati
Nageswara Rao v. State of A.P. [Sadhupati Nageswara
Rao v. State of A.P., (2012) 8 SCC 547 : (2012) 3 SCC (Cri)
979 : (2012) 2 SCC (L&S) 638] )
(2021) 18 SCC 70
46. The entrustment of public property and dishonest
misappropriation or use thereof in the manner illustrated
under Section 405 are a sine qua non for making an offence
punishable under Section 409IPC. The expression "criminal
breach of trust" is defined under Section 405IPC which
provides, inter alia, that whoever being in any manner
entrusted with property or with any dominion over a property,
dishonestly misappropriates or converts to his own use that
property, or dishonestly uses or disposes of that property
contrary to law, or in violation of any law prescribing the mode
in which such trust is to be discharged, or contravenes any
legal contract, express or implied, etc. shall be held to have
committed criminal breach of trust. Hence, to attract Section
405IPC, the following ingredients must be satisfied:
46.1. Entrusting any person with property or with any
dominion over property.
46.2. That person has dishonestly misappropriated or
converted that property to his own use.
46.3. Or that person is dishonestly using or disposing of
that property or wilfully suffering any other person so to do in
violation of any direction of law or a legal contract.
47. It ought to be noted that the crucial word used in
Section 405IPC is "dishonestly" and therefore, it pre-supposes
the existence of mens rea. In other words, mere retention of
property entrusted to a person without any misappropriation
cannot fall within the ambit of criminal breach of trust. Unless
there is some actual use by the accused in violation of law or
contract, coupled with dishonest intention, there is no criminal
breach of trust. The second significant expression is
"misappropriates" which means improperly setting apart for
ones use and to the exclusion of the owner.
48. No sooner are the two fundamental ingredients of
"criminal breach of trust" within the meaning of Section
405IPC proved, and if such criminal breach is caused by a
public servant or a banker, merchant or agent, the said offence
of criminal breach of trust is punishable under Section 409IPC,
for which it is essential to prove that:
(i) The accused must be a public servant or a banker,
merchant or agent;
(ii) He/She must have been entrusted, in such capacity,
with property; and
(iii) He/She must have committed breach of trust in respect
of such property.
49. Accordingly, unless it is proved that the accused, a
public servant or a banker, etc. was "entrusted" with the
property which he is duty-bound to account for and that such
a person has committed criminal breach of trust, Section
409IPC may not be attracted...."
The question of conviction under Section 409 of Indian Penal Code
does not arise unless entrustment is proved.
46. The defence of A2 is one of denial, as already discussed.
Over a period of more than 3 years, cheques were being received
in the name of State Liaison Officer and several other officials
dealt with the relevant files, and also the amounts were disbursed
to different Universities on the basis of requirement. It is not
possible for the appellant alone to have committed the alleged acts
of misappropriation and forgery etc., which technically were not
proved. Admittedly, according to PW.23, even before filing of
charge sheet, the involvement of A1, A2, PW.2, PW.5 and PW.11
was evident from the investigation and audit conducted. However,
no steps were taken to array PW.2, PW.5 and PW.11 as accused.
PW.9-enquiry officer without examining any documents, gave
report Ex.P29, opining that only A1/appellant was responsible.
Similarly, PW.10 found only appellant responsible for
misappropriation, when the ledgers, registers and other
documents, as discussed above, give a different picture. The
enquiry of PW.1 and PW.10 is biased, with a view to implicate
appellant only, while safeguarding the interest of others who were
involved. PW.9, PW.10, and PW.23 were carried away by the fact
that the appellant addressed a letter dt.21.02.2004 (Ex.P2) to the
Principal Secretary informing that the appellant remitted an
amount of Rs.7,02,794/- in SBI Amberpet branch, and undertook
to deposit an amount of Rs.50,000/-, till the total amount was
received. According to PW.2, the misappropriation was known
after verifying the records on 03.12.2003. The defence of the
appellant since inception is one of denial as seen from the enquiry
report of PWs.9, 10, and 23, and also before the trial Court. As
already discussed, the involvement of PW.2, PW.5, PW11 and A2
was apparent. The manner in which enquiries were conducted and
charge sheet was laid, the appellant was made a scapegoat.
47. For the reasons mentioned above, since there is no sanction
under Prevention of Corruption Act, conviction under Sections
13(1)(c) and (d)(ii) r/w. 13(2) of the Prevention of Corruption Act,
are also set aside.
48. The acquittal of the appellant is on technical grounds and
not on merits. The outcome of this Judgment cannot, in any
manner, be used by the appellant for claiming any benefits,
whatsoever.
49. Accordingly, Criminal Appeal is allowed setting aside the
conviction recorded by the I Addl.Spl.Judge for SPE & ACB Cases-
cum-V Addl.Chief Judge, CCC, Hyderabad, in CC.No.62 of 2007,
dt.28.02.2018, and the appellant (A1) is acquitted. Since the
appellant is on bail, his bail bonds shall stand discharged.
_________________
K.SURENDER, J
Date: 14.02.2025
tk
