1. This is an appeal by the State against the acquittal of the respondent, whose conviction under Section 408, Penal Code has been set aside by the Additional Sessions Judge. Thana. In 1947 a co-operative society called 'Kainad Vibhag Adiwasi Kamgar Sahakari Sangh Ltd.', was started at Kainad in Dahanu taluka. The Secretary of this society, one Nargolkar, resigned on 29-11-1948. On 10-12-1948 a Khata was opened in the name-of the respondent. The entries made in this Khata show that on that day Rs. 4492-9-6 were paid to the respondent. Some amounts were taken back from the respondent between 10-12-1948 and 9-1-1949 for the expenses of the Society.
On 9-1-1949 the Managing Committee of the Society passed a resolution appointing the respondent as its Honorary Secretary. As Secretary of the Society it was his duty to transact all business on behalf of the Society, to organise the sale of the produce of the Society, to collect and realise the sale proceeds, to spend monies on behalf of the Society and to supervise the accounts of the Society. Witness Vinayak Phanse then used to write the accounts of the Society under the instructions of the respondent.
The monies received for the Society were kept with the respondent and from these monies he used to pay the amounts required for the expenditure of the Society. The amounts realised by the Society were debited in the Khata of the respondent and the amounts that were expended for the expenses of the Society were credited in this Khata.
On 30-3-1949 the amount of the Society lying with the respondent was Rs. 3054-2-3. A statement of account purporting to be a statement of transactions done by the respondent, Ex. 10, was then submitted to the Managing Committee and was passed by it. This shows that the amounts received and spent on behalf of the Society were debited and credited in the Khata of the respondent. In 1950 the balance with the respondent was Rs. 23,069-2-3. The auditor look an objection to such a large amount being allowed to remain with the respondent. In spite of this objection large funds of the Society continued to be kept with the respondent.
On 30-9-1951 the respondent had with him Rs. 33,772-3-3 belonging to the Society. As the Society was then in need of funds, the Chairman of the Society, witness Bhise asked the respondent to pay back the amount to the Society. The respondent admitted his liability; he paid about Rs. 4,000/- up to March 1952 and informed Bhise that he was not able to pay any more, amount and that he wanted some more time.
On 5-3-1952 Bhise wrote to the respondent calling upon him to pay the amount. He also complained to the Registrar, Co-operative Societies, that the respondent had misappropriated large amounts belonging to the Society. On 3-3-1952 the respondent wrote to the Chairman, stating that he was ashamed that he had not been able to pay off the amount of the Sangh and he asked for time to enable him to pay it.
On 2-4-1952 the auditor, Co-operative Societies, called upon the respondent to produce the cash balance of the Sangh lying with him. The respondent replied to this letter on 4-4-1952 and asked for time till 15-4-1953. On 10-4-1952 the respondent was asked to credit the amount in the Dahanu Branch of the Bombay Provincial Cooperative Bank before 1G-4-1952. As he did not do so, the Managing Committee of the Sangh decided to refer the matter to arbitration. The arbitrator made his award on 14-7-1952. The Society thereafter recovered the entire amount awarded to it by purchasing some immoveable properties belonging to the respondent, his brother and his mother.
Thereafter a complaint, was lodged against the respondent for committing an offence punishable under Section 409, Penal Code. He was charged with committing criminal breach of trust in respect of Rs. 28,906-8-3 belonging to the Society between 1-4-1951 and 31-3-1952 and thereby committing an offence punishable under Section 409, Penal Code.
2. The respondent pleaded not guilty to the charge. He denied that he was the Secretary or Treasurer of the Society. He stated that even prior to his so-called appointment) as Secretary on 9-1-1949, the Sangh had opened a personal Khata in his name and that monies of the Sangh were kept with him and withdrawn from him from time to time. He stated that this position continued after 9-1-1952.
His contention, therefore, was that the amounts of the Sangh had been deposited with him from time to time, that there was consequently a relationship of debtor and creditor between him and the Sangh and that the monies had not been entrusted to him in his capacity as Secretary of the Sangh. He also denied that he had any dishonest intention to misappropriate the funds of the Society.
3. The defence of the respondent was not accepted by the trying Magistrate, who came to the conclusion that he was guilty of the offence punishable under Section 408, Penal Code. Accordingly he convicted him under this section and sentenc-ed him to one year's rigorous imprisonment and a fine of Rs. 100/-. Against his conviction and the sentence passed upon him the respondent appealed to the Sessions Court.
The learned Additional Sessions Judge, who heard the appeal, accepted his contention that the amounts of the Society had been deposited with him, that consequently there was a relationship of debtor and creditor between the respondent and the Society and that the failure of the respondent to pay to the Society the amounts of the Society lying with him did not constitute any criminal offence. Accordingly he set aside the conviction of and the sentence passed upon the respondent and acquitted him. Against this order of acquittal, the State of Bombay has come in appeal.
4. The Chairman of the Society, Bhise, has stated in his evidence that the respondent was appointed as Secretary after the previous Secretary, Nargolkar, had resigned on 29-11-1948 and that this appointment was confirmed by the Executive Committee on 9-1-1949. This statement would suggest that the respondent started working as Secretary after Nargolkar had resigned and even before his formal appointment was made on 9-1-1949.
Mr. Jahagirdar has contended that the prosecution case in both the lower Courts, however, was that the respondent became the Secretary of the Society on 9-1-1919. He has relied on another statement made by Bhise that the respondent acted as Secretary of the Society from 9-1-1949 to March 1952. Phanse, who used to write the accounts of the Society, has also stated that the respondent used to transact the business of the Society after his appointment as Secretary on 9-1-1949. To the same effect is the evidence of Pendse, who is a sub-auditor in the co-operative department.
It also appears from the judgment of the trial Magistrate that the prosecution case was that the respondent had worked as Secretary of the Society since 1949. We will, therefore, assume that the respondent became the Secretary of the Society on 9-1-1949 and worked as Secretary of the Society after the Managing Committee had passed a resolution appointing the respondent as Secretary and not during the month of December 1948.
5. It is not in dispute that the amounts of the Society, which used to be kept with the respondent, were not given to him as loans. It has, however, been strenuously urged by Mr. Jahagirdar that these amounts were deposited with him and that consequently he was a debtor of the Society. He has, therefore urged that these amounts cannot be said to have been entrusted to the respondent in his capacity as Secretary.
We are unable to accept these arguments of Mr. Jahagirdar.' It is true that during the month of December 1948 an amount of Rs. 4492/- and odd was kept with the respondent when, it may be assumed, he was not the Secretary of the Society and that some sums out of this amount were taken back from him for meeting the expenses of the Society. Prom 10-12-1948 to 9-1-1949 the respondent may, therefore, be said to have acted as a depositee.
Mr. Jahagirdar has, urged that this position continued even after his appointment as Secretary. He has relied on the statement of Phanse that as there was no Bank at Dahanu at that time and as they had to move in jungles, the cash of the Society was allowed to remain with the respondent, in whose name a Khata was opened. This statement of Phanse does not, however,mean that the respondent was to be regarded as a banker of the Society. AH that it means is that as there was no Bank, the respondent was allowed to keep with him the funds of the Society.
Mr. Jahagirdar has also invited our attention to the statement of Bhise that large sums were allowed to remain with the respondent, because he possessed extensive properties. This also does not show that the respondent was to be regarded as a banker of the Society. As the respondent had extensive properties, the Society felt that there was not much risk in allowing large amounts to lie with him. The position after 9-1-1949 was that the respondent; was the Secretary of the Society. As such Secretary he received the monies of the Society and also incurred expenditure on behalf of the Society.
The mere fact that he kept the surplus funds with himself would not constitute him a banker of the Society. It is true that all the amounts which he kept with himself and the amounts which he spent on behalf of the Society were debited and credited in his khata. This Khata has been referred to by Phanse as a personal Khata. By 'personal Khata' he obviously meant that the Khata was in the name of the respondent. A perusal of the entries made in this Khata shows that all the entries relate to amounts received for or spent on behalf of the Society. The Khata does not contain any entries relating to personal transactions of the respondent.
Although, therefore, the Khata was kept in the name of the respondent, it was really speaking a Khata of the Society, showing the amounts received by and lying with the respondent and those spent by him on behalf of the Society. Motiram Paurwall, who had audited the accounts of the Society in May, 1951 has deposed that he had verified the actual balance of Rs. 32,037-14-3 lying with the respondent. He would not have done so, if the amount had been kept with the respondent as a banker and not in his capacity as Secretary.
6. Mr. Jahagirdar has also emphasised the fact that although in 1950 the auditor had objected to large funds being allowed to remain with the respondent, the Society did not call upon the respondent to deposit the funds of the Society In a Bank and allowed the previous practice to continue.
The explanation for this has been given by Bhise, who has stated that he had told the auditor, who had raised the objection, that even if the respondent committed any misappropriation, there was no danger to the Society, as the respondent possessed extensive properties. The fact that the Society allowed large funds to lie with the respondent would not, therefore, show that the intention was to keep these funds with him as deposits. The respondent was then the Secretary of the Society and by keeping funds of the Society with him, he could not constitute himself a banker of the Society.
7. We are, therefore, unable to accept Mr. Jahagirdar's argument that the respondent was a banker of the Society, with whom the Society used to deposit its funds and that consequently the amounts cannot be said to have been entrusted to him. In our opinion, the amounts used to lie with the respondent in his capacity as Secretary. They must, therefore, be held to have been entrusted to him in his capacity as Secretary.
8. There can be no doubt that the respondent had misappropriated large amount of at least Rs. 25,343-8-3 which was found from him by the arbitrator, at least) temporarily. Bhise's evidence shows that the respondent had been askedto pay this amount, but he was unable to do BO. In his own letter written to Bhise on 8-3-1952 the respondent stated that he was unable to pay the amount and he asked for time to pay it. There can therefore, be no doubt that he had utilised the Funds of the Society for his own purposes. This would amount to misappropriation,
9. Mr. Jahagirdar has urged that the respondent cannot be said to have acted dishonestly, as he always admitted his liability to the Society. It is no doubt true that the respondent did not deny his liability to pay back the amounts of the Society lying with him. But that would not be sufficient to show that he did not act dishonestly. A person is said to act dishonestly when he does anything with the intention of causing wrongful gain to one person or wrongful loss to another person (See Section 24, Penal Code). By utilising the monies of the Society, the respondent had caused wrongful gain to himself, he had also caused wrongful loss to the Society in preventing the Society from using Its funds at least for a certain period.
10. We are accordingly of the opinion that the learned Additional Sessions Judge was wrong in setting aside the conviction of the respondent. We, therefore, allow the appeal and convict the respondent under Section 408, Penal Code.
11. As regards the sentence, the respondent has paid off the entire amount due from him. The offence was committed by him between 1-9-1051 and 31-3-1952. The complaint was lodged against him over 3 years ago on 17-7-1952. Since then various proceedings have been pending against the respondent. In view of these facts and also as the respondent had paid off the whole amount due to the Society, we think that it would be sufficient to meet the ends of justice if we impose a fine upon the respondent.
12. Accordingly, we convict the respondent under Section 408, Penal Code and sentence him to one day's simple imprisonment and a fine of Rs. 1,000/-. In default of payment of fine, the respondent shall undergo rigorous imprisonment for a period of 3 months. The respondent is given three months' time to pay the fine.
12. Appeal allowed