1. This is an appeal by Accused 1 from his conviction for an offence of forgery punishable under Section 467 of the Indian Penal Code and for an offence of falsification of accounts under Section 477-A by the court of session, Bangalore, which sentenced him to rigorous imprisonment for a period of three years and a fine of Rs. 500 for the offence of forgery and in default of payment of fine to rigorous imprisonment for three months, and rigorous imprisonment for a period of two years for the offence of falsification of accounts. The direction of the court of session was that the sentences shall run concurrently.
2. The material facts are these: There was a co-operative society known as the Multipurpose Co-operative Society in the town of Pavagada in the district of Tumkur. There was a Board of Directors otherwise also known as the Committee which was in management of that co-operative society. Accused 1 was the Assistant Secretary of that Society from the, year 1951. Accused 2 who was the Inspector of Co-operative Societies in Pavagada was the Ex-officio Secretary for the period between November 22, 1956 and June 2, 1957. Accused 3 was a clerk in that society from the year 1955.
3. According to the evidence of P. W. 3 who is one of the partners of a firm known as Tallam Subbaraya Setty and Sons which will be referred to in the course of this judgment as the Tallam firm, Accused I went to the shop of the firm in Bangalore on February 12, 1957 and purchased cloth of the value of Rs. 2,759-6-0 out of which a sum of Rs. 259-6-0 was paid in cash. Accused 1, it appears, asked for two months time to pay the balance, but was asked to produce a letter of authority from the society authorising credit purchases. P. W. 3 proceeded to state that two clays later accused 3 came with Exhibit P-8 which purported to be a copy of a resolution of the society authorising the credit purchase along with Exhibit P-9, a covering letter written by accused 1, and on their production the goods which had been purchased were delivered on February 16, 1957.
4. Exhibit P-8 which purports to be a copy of the original resolution authorised Accused 1 to purchase goods of the value of Rs. 3.000 from the Tallam firm and also to credit the sum payable towards the price of the goods to the account of the Tallam firm in the books of the society.
5. The evidence of P. W. 2 who was the Assistant Registrar of Co-operative Societies in Tumkur and who made an enquiry into this purchase, was that the purchase made from the Tallam firm was taken to the stock of Pavagada Society. This he stated in his report Exhibit P-5.
6. On March 29, 1957 the Secretary, Accused 2, wrote a letter Exhibit P-12 to the Tallam firm in which he stated that a sum of Rs. 2500 out of the price payable for the goods had been credited to the firm's account in the Society's book and that a sum of Rs. 240 had been paid to the clerk of the firm. He added that the remaining amount would be sent within a month's time. It appears that when there was neglect to pay this sum of money to the firm as undertaken, the firm made a demand for payment through a lawyer's letter and that demand was repudiated by the society on the ground that the purchase was an unauthorised purchase.
7. There was an investigation in consequence of this controversy made by the Registrar of Co-operative Societies through P. W. 2, the Assistant Registrar. There was also an audit made by P. W. 7, the District Auditor. P. W. 2 was of opinion that Exhibit P-8 which purported to be a copy of the society's resolution was a forgery.
8. It was in this situation that the three accused, namely, the Assistant Secretary who is Accused 1, the Ex-officio Secretary who is Accused 2, and the clerk who is Accused 5, were prosecuted for offences of forgery and falsification of accounts and they were committed to the court of session to stand a trial for these offences therein.
9. Both Accused 1 and 2 were charged with the offence of having forged the copy of the resolution Exhibit P-8. Accused 1 was charged in addition, with an offence punishable under Section 477-A, namely, an offence of falsification of accounts. Accused 3 was charged with an offence punishable under Section 471 of the Indian Penal Code for having used as genuine the forged document Exhibit P-8.
10. I should mention here that the offence of falsification of accounts with which Accused 1 was charged consisted, according to the prosecution, of having opened a current deposit account for the Tallam firm and made false entries on page 71 of the current deposit account book of the society and at page 195 of the cash book. The entry made in the current deposit account books was to the effect that the sum payable to the Tallam firm was standing to the credit of that firm in the current deposit account. In the cash book, entries were made to the effect that a sum of Rs. 1760 was paid to the Tallam firm on April 14, 1957 and that a sum of Rupees 240 had been paid to that firm on March 29. 1957.
11. The Sessions Judge acquitted accused 2 and 3 of the offences with which they were charged, but convicted Accused 1 of both the offences with which he was charged. Accused 1 appeals.
12. I shall now first consider the correctness of the conviction for the offence of forgery which is assailed by Mr. Krishnamurthy, the learned Advocate for the appellant. The document which according to the prosecution was forged is Exhibit P-8, and that document reads:
'Taluka Multipurpose Co-operative Society Limited, Pavagada. Ref. No. 168 of 56-57. Dated 13-2-57. Proceedings of the meeting of the Directors of Taluka Multipurpose Co-operative Society, Limited, Pavagada, held on the dated 13-2-57.
'(6) In the matter of bringing clothon credit bv M. Ganga-dhariah. Asst Secretary of our society from Bangalore.
It is unanimously resolved that M. Gangadhariah,Assistant Secretary of the Society, can purchase cloth to the extent of Rs. 8000 from the under mentioned clothmerchant:
Thallam SubbarayaSetty and Sons, Nagarthpet, Bangalore and credit the same to their accountand that the same should be repaid within 2 months.
Sd/- B. Ramakrishna Gowda,
Pavagada Taluk MultipurposeCo-operative Society Limited, Pavagada
There is undisputed evidence that this document which purports to be a copy of a resolution stated to have been passed by the society is in the handwriting of accused 1, The evidence given by the handwriting expert who was examined as P. W. 4 makes it clear that this document was written by Accused 1 and, that part of the evidence of the handwriting expert which was acted upon by the Sessions Judge was not impeached by Mr. Krishnamurthy. Indeed in his examination under Section 342 of the Code of Criminal Procedure, Accused 1 did not dispute that it was in his writing. It is also proved beyond doubt by the evidence of the handwriting expert P. W. 4 that this document was authenticated as a true copy of Accused 2 who was the Ex-officio Secretary. Accused 2 did not dispute that he had so authenticated the copy of the resolution when he was examined under Section 342 of the Code of Criminal Procedure. P. W. 5 who became the President of the Society in the year 1954 and continued to be so in the year 1957 gave evidence that the Board of Directors nr the Committee passed no such resolution as that of which Exhibit P-8 purports to be a copy. He produced Exhibit P-20 which is the book in which the proceedings of the Board of Directors are recorded and pointed out that on February 13, 1957 which is the date on which, according to Exhibit P-8, a resolution was passed there was no meeting of the Board of Directors and that no resolution stated to have been passed by the Board of Directors was recorded in Exhibit P-20. P. W. 6 who was the Inspector of Society in June and July 1957 and P. W. 7 who was the District Auditor who audited the accounts of the society also gave evidence that the investigation made by them revealed that no resolution had been passed by the Board of Directors or the Committee on February 13, 1957 authorising the purchase of goods on credit from the Tallam firm.
13. The court of session on the basis of all this evidence, came to the conclusion that the Board of Directors did not pass any resolution on February 13, 1957 of which Exhibit P-8 purports to be a copy. It does not appear to me that I should dissent from that conclusion reached by the Sessions Judge since the various pieces of evidence to which I have referred make it abundantly clear that no resolution such as that to which Exhibit P-8 refers, was passed by the Board of Directors in that way.
14. But, nevertheless, on February 13, 1957 Accused 1 wrote Exhibit P-8 in which it was stated that a resolution had been passed by the Board of Directors authorising the credit purchases from the Tallam firm. It was made to appear in Exhibit P-8 that a resolution had been passed by the Board of Directors to that effect and indeed Exhibit P-8 contains what was supposed to be a verbatim copy of the resolution. After Accused I wrote out that copy of the resolution on Exhibit P-8, Accused 2 affixed his signature to it underneath the words 'True Copy'. So it was that the charge which was framed against Accused 1 and 2 was to the effect that they had forged the document Exhibit P-8. The charge reads:--
'That you A-1 M. Gangadharaiah and A-2 B. Ramakrishna Gowda, on the 13th day of February, 1957, forged a resolution purporting to be a resolution passed by the Committee of Directors of the Multi-Purpose Co-operative Society, Pavagada, authorising purchases cm credit of cloth to an extent of Rs. 3,000 from Messrs. Tallam Subraya Setty and Sons, Bangralore, intending that it shall be used for the purposes of purchasing moveable property, viz., cloth for the society, and thereby cheated by forgery the said Society and the said Messrs. Tallam Subraya Setty and Sons, and that you thereby committed an offence punishable under Section 467 I. P. C. and within my cognizance.'
Since there can be no forgery within the meaning of Section 463 of the Indian Penal Code unless there is a dishonest and fraudulent preparation of a false document or part thereof, it was necessary for the charge to state that Exhibit P-8 was a false document prepared dishonestly or fraudulently. It should have further stated if the Prosecution case was that the document was prepared dishonestly, whether the intention with which the document was prepared, was, to cause wrongful gain to some one or wrongful loss to another. Although the charge is not as specific as it should have been on this matter, it did however state that Exhibit P-8 was forged with the intention that it may be used for purchasing cloth for the society from the Tallam firm. Since from the evidence of P. W. 3. it transpires that P. W. 3 would not have sold the cloth to the society except on the production of an authority from the society to make a credit purchase, it is clear that the meaning of the charge is that Exhibit P-8 was forged for the fraudulent purpose of making P. W. 3 believe in the existence of the authority to make that purchase, although there was no such authority. Although it may be that there is no evidence that the intention with which Exhibit P-8 was prepared was to cause wrongful gain to the society or wrongful loss to the seller, it is obvious that if Exhibit P-8 can be said to be a forgery it was prepared fraudulently in that sense.
15. But the material and more crucial question is whether Exhibit P-8 is a forgery and whether Accused 1, as found by the Sessions Judge, was the person who forged it. Beyond the fact that Exhibit P-8 is in the writing of Accused 1 and was authenticated as a true copy of Accused 2, there is no other evidence directly bearing on the question as to who was the author or the forgery. But if it is established that no resolution such as the one set out in Exhibit P-8 was ever passed by the Board of Directors, it should follow if the other ingredients necessary for the establishment of an offence of forgery exist, that the document Exhibit P-8 is a false document within the meaning of Section 463.
16. Not unnaturally, when Accused 1 and Accused 2 were examined under Section 342 Code of Criminal Procedure, each of them tried to make it appear that not he but the other was the person who committed the forgery. Accused 1 stated that he did no more than to write Exhibit P-8 to the dictation of Accused 2, who, according to Accused 1, read out what purported to be a resolution from a book which he was holding in his hand. He produced also a written statement in which he stated that he honestly believed from the fact that Accused 2 dictated the resolution that the resolution of the company did exist. Accused 2, on the contrary, slated that Accused 1 brought to him Exhibit P-8 and since he further explained that it was an urgent matter and that he should sign it, he trusted him and without verification affixed his signature to it.
17. The Sessions Judge was disposed to take the view that what was stated by Accused 2 was far more probable than that stated by Accused 1 and thought that Accused 2 was inveigled by Accused 1 into authenticating the forged document The criticism made by Mr. Krishnamurthy of this process of reasoning employed by the Sessions Judge was that he treated the statement made by Accused 2 in his examination under Section 342 as substantive evidence which could be used against Accused 1 and that in so far as the Sessions Judge made that statement the foundation of the conviction of Accused I, the conviction could not be sustained. Mr. Krishnamurthy also urged that the explanation given by Accused 1 as to the circumstance in which he wrote Exhibit P-8 was as probable if not more probable than the explanation given by Accused 2 and that there was no justification for the Sessions Judge to prefer the explanation offered by Accused 2 to that given by Accused 1.
18. Mr. Krishnamurthy made the further submission that since the charge was a joint and composite charge against both the accused and since the meaning of that charge was that both the accused collaborated in committing an offence of forgery, it was not possible for the Sessions Judge to make out a new case for the Prosecution and to find that there was no such collaboration on the part of the two accused but that only one of them was the architect of the forgery and the other only an innocent victim.
19. Before considering the validity of this submission, I should mention certain admitted facts. P. W. 2 who is one of the Assistant Registrars gave evidence that bye-laws of the society which were marked Exhibit P-3 did not contain any specific or express provision authorising the society to make credit purchases. P. W. 5, the President of the Society, admitted that during a long period preceding Exhibit P-8, the society had been making purchases of cloth and other commodities on credit and carrying on business in those commodities. In Exhibit P-5 which was a report prepared by P, W. 2 he stated that the society was in the habit of making such credit purchases since the year ,1952 from various merchants at Bangalore, Hindpur, Madakasira and other places. He was of opinion that it was not illegal to make those credit purchases and stated:
'At this point I have to submit that it is not illegal to make credit purchases. All business houses do it.' * *
The fact that goods were bought on credit is established by the credit invoices issued by the merchants and filed in the invoices file of the society.
P. W. 5 admitted that the society was carrying on a large volume of business and that notwithstanding that magnitude being incompatible with any other hypothesis that that credit purchases would have been made, he made no investigation as to how the business was carried on. This is what he has stated at page 44:
'In spite of the large volume of business if the Pavagada Society, and with credit purchases not being sanctioned, I did not try to verify how such business could be carried on.'
20. So it becomes clear that although P. W. 2 stated that the bye-laws did not expressly authorise any credit purchases, the society was nevertheless making such credit purchases mid was acquiring stocks for its business in that way. It is clear from the evidence of P. W. 5 that those purchases were made without any formal resolutions having been passed by the Board of Directors at any stage or at any time. When therefore Accused 1 purchased goods of the value of Rs. 2,795-6-0 on February 12, 1957 from the Tallam firm, he must have made that purchase in the same old usual way in which the purchases used to be made by the society on credit even without the authority of a formal resolution. It was only the insistence of P. W. 5 on the production of an authority that was responsible for the preparation and production of Exhibit P-8. The question is whether the document was forged by Accused 1 or whether it was forged by Accused 2 or whether neither of them committed any act of forgery. The Sessions Judge was inclined to think that Accused 2 did not commit any offence of forgery and that it was not he that forged the document and his acquittal which has not been questioned has become conclusive. But the more material question is whether, on the material on record, the Sessions Judge was right in thinking that Accused 1 was the person who committed the offence of forgery.
21. Section 463 of the Indian Penal Code makes the preparation of a false document with intent to cause damage or injury or to support any claim or title or to cause any person to part with property or to enter into any express or implied contract or with intent to commit fraud or that fraud may be committed, a forgery. But what a false document is whose preparation becomes a forgery under Section 463 is explained by Section 464 which consists of at least three parts. It is not contended that Exhibit P-8 is a false document within the second and third parts, but it was said that it is a false document within the first part, and that first part reads:
'464. A person is said to make a false document -
First. -- Who dishonestly or fraudulently makes, signs, seals or executes a document or part of a document, or makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document or part of a document was made, signed, sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed or executed; * * ** * * * *'
The two elements therefore which impress upon a document the character of a false document are these. It must be a document dishonestly or fraudulently made and it should have been made with intention of causing a belief that it was made or executed by or by the authority if a person who did not make or execute it and with the knowledge that it was not so made or executed. So the question is whether these ingredients exist in the present case in which event alone Exhibit P-8 would be a false document and the person who made that document would have committed the offence of forgery. Although at one stage Mr. Krishnamurthy maintained the argument that since Accused 1 did not more than merely to write the body of Exhibit P-8 he could not he said to have prepared any false document within the meaning of Section 464, it seems to me that in advancing that argument he is on extremely slippery foundation since a false document is made not only when the whole of it is made but even in a case where a person makes only a part of it. That was the view taken by this court in Puttaraju v. State of Mysore, 1962-40 Mys LJ 880, which is binding on me.
22. Since Exhibit P-8 was prepared with the intention that it should be produced before the Tallam firm for securing the goods purchased on credit and since it was prepared for the purpose of making it appear that the resolution copied therein was made by the Board of Directors, the preparation of any part of Exhibit P-8 would be a forgery provided the person who prepared it knew that that resolution had not been passed by the Board of Directors. The material question therefore is whether Accused 1 when he wrote what purported to be the resolution of the Board of Directors in Exhibit P-8 knew that no such resolution had been passed.
23. To this question, the Sessions Judge did not address himself in this way. He appeared to have been of the view that since Accused 2 should be absolved from the responsibility for the preparation of Exhibit P-8 and since he stated in his examination under Section 342 of the Code that Exhibit P-8 was brought to him by Accused 1 for his signature and that he signed it mechanically, it should necessarily follow that Accused 1 was the person who had committed the offence. The Sessions Judge was not, in my opinion, as rightly contended by Mr. Krishnamurthy, right in depending entirely on the statement of Accused 2 which could not have been treated as substantive evidence against Accused 1 to found his conclusion that Accused 1 had committed the offence. It may be that that statement made by Accused 2, if it appeared to the Sessions Judge to be probable, could be sufficient material for exonerating Accused 2. But the exoneration of Accused 2 in that way cannot and could not, in my opinion, necessarily lead to the conclusion without there being any material to support it, that Accused 1 was the author of the forgery.
24. It was necessary for the Prosecution to produce evidence that when Exhibit P-8 was written by Accused 1, he knew as required by Section 464, that the resolution which he copied in Exhibit P-8 did not exist. It is only in that event that Accused 1 could be convicted.
25. But of that, there was no evidence. Accused 1 stated that Accused 2 dictated the resolution from a book which he had in his hand and that what he did was to merely do the work of an amanuensis. The question is whether this explanation given by Accused 1 was in the circumstances acceptable. As I have said Accused J was the Assistant Secretary and there were at least two resolutions before the court of session passed by the Board of Directors explaining the duties of an Assistant Secretary. Exhibits D-1 and D-3 are the copies of those two resolutions. The resolution Exhibit D-1 which was passed on May 18, 1950 makes it the responsibility of the Assistant Secretary to be in charge of cloth, cement etc. and to carry on business therein, to purchase the articles required for the society, to maintain the daily accounts of the society in respect of cash sales and stock, and to be in charge of correspondence on behalf of the society. The further resolution passed on July 26, 1954 which is incorporated in Exhibit D-3 states that Accused 1 was confirmed as the Assistant Secretary in accordance with the previous resolution and entrusted with full responsibility. The President of the Society P. W. 5 summarised his evidence of these two documents Exhibits D-1 and D-3 as follows:--
'As per the resolutions of the Committee of Directors, the entire responsibility for the purchases and sales of the stocks, and the writing of the accounts, was vested in the Assistant Secretary.'
26. It is thus clear from these materials that it was no part of the Assistant Secretary's duties to keep himself acquainted with the resolutions of the Board of Directors or to post himself with knowledge about the resolutions passed by them from time to time. While this is so, there is undisputed evidence that the person who would be conversant with the resolutions of the Board of Directors was the Ex-officio Secretary namely, Accused 2. P. W. 5 stated this :
'The Ex-officio Secretary was attending every meeting of the committee of Directors. He was also signing at the end along with the Directors present.'
If these were the respective duties of the Assistant Secretary and the Secretary and if a document setting out a resolution alleged to have been passed by the Board of Directors was written by Accused 1 and authenticated by Accused 2, I do not find it possible to say merely by reason of the fact that the resolution referred to therein is proved to be a fictitious resolution, that Accused 1 had knowledge that it was a fictitious resolution, especially when Accused 2 whose duty it was to attend the meetings of the Board of Directors and to be present in those meetings authenticated the resolution set out in Exhibit P-8 to be a true copy of the resolution.
27. All that has been proved in this case is that the resolution set out in Exhibit P-8 was not passed by the Board of Directors, that Exhibit P-8 was written by Accused 1 and that Accused - authenticated the resolution in Exhibit P-8 as a true copy of the resolution. It Accused 2 whose duty it was to attend the meetings of the Board of Directors and to be present therein and who was also, as stated by P. W. 2, an Ex-officio member of the Committee of Directors in addition to his being an Ex-officio Secretary', certified the resolution to be a true copy of the resolution, and it it can be said, as the Sessions Judge said, that he was not aware that Exhibit P-8 recorded a fictitious resolution, it is going altogether too far to say that Accused 1 who was only an Assistant Secretary and who was in no manner concerned with the deliberation of the Board of Directors & their meetings and who would not be present there, should nevertheless be imputed with the knowledge that that resolution was a fictitious resolution. Now in this case both Accused 1 and 2 were accused of having forged Exhibit P-8 in collaboration. Each one of them tried to exculpate himself at the expense of the other. While the Secretary asserted that he had been imposed upon by the Assistant Secretary, the Assistant Secretary's assertion was that he merely wrote what he was asked to write.
28. Accused 1 was not charged with the offence of having made any misrepresentation to Accused 2, that any resolution had been passed by the Board of Directors authorising credit purchases and that Accused 2 was made to authenticate a fictitious resolution. That was not the Prosecution case. If it was the intention of the Prosecution to make that accusation against Accused 1. that should have been a subject matter of a specific and clear charge and Accused 2 should have been a Prosecution witness who should have been called to give evidence about it so that Accused 1 may have the opportunity to test the truth of that evidence by cross-examination. If indeed both of them are made co-accused and both of them were charged with having in concert brought into existence a forged document and each one of them tried to shift the blame on the other, the exculpation of one and not of the other merely on the statement made by him under Section 342 of the Code of Criminal Procedure, would not have the support of either reason or justice.
29. It is not my purpose to consider in this appeal the correctness of the acquittal of Accused 2. That is not the question before me. But if he was acquitted by the Sessions Judge, the reason for his acquittal which the Sessions Judge found in the statement he made under Section 342, could not constitute the foundation for the conviction of Accused 1.
30-39. The evidence in the case, in my opinion, envelopes the matter in any amount of doubt. Who exactly it was that was responsible for the incorporation of a fictitious resolution in Exhibit P-8, is a matter which remains in a state of obscurity. It is as difficult to say that any of the two accused were responsible for its incorporation as it is difficult to say whether any one else who was in charge of the administration of the society was responsible for it. It may be that the society which was carrying on business with stocks whose acquisition used to be made by purchases made on credit, desired to have such stock for its business, from the Tallam firm and that some one who was in charge of the administration thought that it was innocuous to make it appear to the Tallam firm that there was authority for the purchase. The preparation of Exhibit P-8 is as consistent with the innocence of Accused 1 as it is with the innocence of Accused 2. If it is doubtful as the Sessions Judge thought that Accused 2 intended to bring into existence a false document, it is equally doubtful that Accused 1 intended to make any false document, so long as the only part played by him was to merely write out what is found in Exhibit P-8 without there being any evidence that what is contained in Exhibit P-8 was the product of his own imagination.
40. But Mr. Government Pleader urged that Accused 1 stated when be was examined under Section 342 that there was no meeting of the Board of Directors on February 13, 1957 and that I should therefore say that he knew that there was no resolution passed by the Board on that date. I do not think that it is possible for Mr. Government Pleader to use that answer in that way. Accused 1 was told by the Sessions Judge that according to the Prosecution evidence no meeting of the Board of Directors was held on February 13, 1957, and to that the answer of Accused 1 was that no meeting was held. But that answer does not mean that when Accused 1 wrote Exhibit P-8 he knew that he was aware that no such meeting was held or that no resolution had been passed by the Board of Directors such as the one set out in Exhibit P-R.
41. Mr. Government Pleader next depended upon Exhibit P-26 which was a letter addressed by Accused 1 to the Secretary of the Society on October 7, 1957 in which he stated that for a period of three years he had been purchasing cloth without a resolution passed by the Committee. This was what he stated with regard to the purchases made from the Tallam firm. In depending upon Exhibit P-26 the Government Pleader is asking me to give ex post facto operation to what is contained therein. Exhibit P-26 was written nearly 8 months after Exhibit P-8 and by then the investigation into the affairs of the society had demonstrated that the resolution referred to in Exhibit P-8 was fictitious resolution. It is therefore not surprising that when Accused I stated in Exhibit P-26 that the purchase was made without a resolution, he was only stating a fact which had been subsequently established.
42. The next submission made by Mr. Government Pleader however, was that there is something in the evidence of P. W. 3 which demonstrated beyond any doubt that Accused 1 knew when he prepared Exhibit P-8 that there was no resolution of the Board of Directors on February 13, 1957. He pointed out to me that P. W. 3 cave evidence that when Accused 1 came to his shop in Bangalore on February 12, 1957, he asserted that there was a resolution of the Board of Directors authorising purchases on credit and that he went back to Pavagada to forward a copy of that resolution. Mr. Government Pleader urged that it even on February 12, 1957 Accused 1 asserted that Board of Directors had passed a resolution and if in Exhibit P-8 he wrote a resolution purporting to be that of February 13, 1957, nothing was easier than to conclude that Accused 1 had the intention to fabricate a false document.
43. But the clear answer to this argument is that when P. W. 3 was examined during investigation he never said anything about the assertion made by Accused 1 in that way. P. W. 3 did not state during the investigation that Accused 1 imparted the information to P. W. 3 on February 12, 1957 that there was a resolution of the Board of Directors authorising purchases on credit. It is, in my opinion, therefore not safe to act upon the evidence given by P. W. 3 on that matter at a subsequent stage before the court.
44. In my opinion, it is not established beyond reasonable doubt that when Accused 1 wrote Exhibit P-8 he knew that what was written there was a resolution which did not exist. His explanation in regard to the circumstances in which he wrote Exhibit P-8 is as acceptable as the explanation of Accused 2. I say so since it transpires from Exhibit P-5 which is the report prepared by P. W. 2 to be forwarded to the Registrar of Co-operative Societies that when Accused 2 was shown Exhibit P-8 he denied that the signature in Exhibit P-8 was his. So it was that that signature was compared with his admitted signatures by P. W. 4 who expressed the opinion that it was his. It was only thereafter that Accused 2 came forward with the explanation that he affixed his signature mechanically to Exhibit P-8 without making any verification of the contents thereof. If notwithstanding the sequel in which this explanation was forthcoming, it was considered acceptable by the Sessions Judge, I fail to see why and how he could have discarded the explanation of Accused 1 without there being really any justification for refusing to act upon it.
45. I should add that the doubt generated in my mind about the complicity of Accused 1 in the preparation of a false document stands enhanced by a letter Exhibit P-12 addressed by Accused 2 to the Tallam firm on March 29, 1957 which reads :
M/s. Tallam Subbaraya Setty and Sons, Bangalore.
Received your letter sent by your clerk D. C. Aswathanarayana Setty and noted the contents. There is an account in the Society in your name for Rs. 2500. Now Rs. 240 has been paid to your clerk. The remaining amount will be sent to you within one month's time. And also the amount will be settled as early as possible.
B. Ramakrishna Gowda,
Inspector of C. S. and Ex-officio
When Accused 2 was asked about this letter in his examination under Section 342, he stated that he wrote that letter on the representation of Accused 1 not knowing the correct position. This letter and the statement contained in Exhibit P-5 prepared by P. W. 2 which shows that the goods purchased from the Tallam firm were treated as part of the assets of the society, make it difficult for any one to think that there was on the part of Accused 1 the preparation of any false document with any fraudulent intent.
46. That being so, the conviction of Accused 1 for the offence punishable under Section 467 cannot be sustained, and it is accordingly set aside and he is acquitted of that offence.
47. What remains to be considered is the charge under Section 477-A of the Indian Penal Code- As I have observed this charge refers to two items of falsification. It reads:
'That you A-1 M. Gangadhariah on the 15th day of February, 1957, being a clerk and Assistant Secretary of the above Society, wilfully and with intent to defraud the said Society and the said Messrs Tallam Subraya Setty and Sons, Bangalore, opened fraudulently a Current Deposit account in the name of the latter, and made false entries at page 71 of the Current Deposit Book, and also at page 195 of the Cash Book, of the said Society, which were in the possession of your employers that is the society, and that you thereby committed an offence punishable under Section 477-A I. P. C. and within my cognizance.'
It will be seen from this charge that Accused 1 was charged with having made false entries at page 71 of the current deposit book and at page 195 of the cash book Exhibit P-27 is the current deposit book and Exhibit P-15 is the cash book. It is also seen from the charges that, according to the Prosecution, Accused I made false entries in the current deposit book not only by making false entries therein but also by opening a current deposit account fraudulently in the name of the Tallam firm. According to the Prosecution case, Accused 1 committed an offence under Section 477-A not only by reason of the false entries which he made in Exhibit P-27 but also by reason of the very opening of a current deposit account in the name of the Tallam firm.
48. But one thing which is undisputed is that all the entries in Exhibit P-27 at page 71 of that book and also the entries in Exhibit P-15 at page 195 of that book were made by Accused 3, the clerk, and not by Accused 1. All that is established is that Accused 1 has affixed his signature at the bottom of those pages in his capacity as the Assistant Secretary. Accused 3, however, was not charged with having made any false entries in any of these books, although he was the person who made those entries. On the contrary, the charge very strangely stated that Accused I had made false entries although he made no such entry, even if it could be said that the entries at those two pages of those two books were false entries. Mr. Government Pleader, however, urged that the very fact that Accused 1 was responsible for the opening of a current deposit account in the name of the Tallam firm was itself an act amounting to falsification of accounts. He also submitted that it was possible to infer from the evidence on record that the entries in the two books although made by Accused 3 were made by him under instructions from Accused 1. In regard to the act of opening a current deposit account, reliance was placed by Mr. Government Pleader on the answer given to the 13th question in his examination under Section 342 in which he stated that he opened the current deposit account since the opening of that account was authorised by Exhibit P-8.
49. Now it is seen from Exhibit P-27 that the current deposit account was opened in the name of the firm on February 15, 1937 two days after the preparation of Exhibit P-8. If Accused 1 has been acquitted of the charge of having committed offence of forgery as it is not possible to say that he was aware that the resolution referred to in Exhibit P-8 was a fictitious resolution, the mere fact that he opened a current deposit account pursuant to what was contained in that resolution can hardly amount to a falsification of accounts. No act amounts to a falsification of account unless as provided by Section 477-A there is an intent to defraud or there is a wilful and intentional falsification of accounts, -- and of that there is no evidence whatsoever. Beyond the fact that Accused 1 was responsible for the opening of a current deposit account which in the usual course of things was what he should have done pursuant to the arrangement under which the goods were purchased from the Tallam firm, there is no material from which it is possible to say that the opening of the current deposit account was actuated with any intention to defraud or was otherwise fraudulent or was wilfully made with intent to defraud. Further, since no offence can be said to have been committed under Section 477-A unless it can be said that the opening of the current deposit account is in the nature of a false entry, the question is whether the opening of the account involves the making of any false entry. I do not think it does. The goods were admittedly purchased from the Tallam firm and money was payable to that firm. So the books of the society in the ordinary course of business should contain an entry that the Tallam firm was a creditor. Now the entry made was an entry in the current deposit account. The resolution Exhibit P-8 is not very clear as to whether the amount should not have been credited in the current deposit account. The highest that could be said is that the amount was credited in the wrong book, and so it is surely not possible to say that there was any fraudulent intention in opening the current deposit account.
50. The next question to be considered is whether any false entries were made as stated in the charge in the current deposit account book Exhibit P-27 or in the cash book Exhibit P-15? Although according to the charge the entries were made by Accused 1, it had to be admitted by Mr. Government Pleader that all the entries on the two pages referred to in these books were made by Accused 3 as admitted by P. W. 5. Accused 3 was not charged with the offence of having made those entries or with an offence under Section 477-A. That being so, it is not possible to sustain the charge that Accused 1 made false entries when admittedly those entries were made by Accused 3. Mr. Government Pleader, however, constructed an argument that I must say that since those entries were written by Accused 3 under the instructions of Accused 1 and he had at the bottom of each one of those two pages affixed his signature, Accused 1 himself was guilty of falsification of accounts. This argument is plainly unsustainable since there is no evidence that Accused 3 wrote those entries under instructions from Accused 1. The signature affixed by Accused 1 at the bottom of those pages does not amount to any falsification or the making of false entries.
51. But Mr. Government Pleader urged that a sum of Rs. 1760/- which was debited to the Tallam firm was admittedly received by Accused 1 who did not pay it over to the Tallam firm. Mr. Government Pleader urged that that entry was therefore a false entry. But here again that entry was made not by Accused 1 but by Accused 3, and even if as contended by Mr. Government Pleader some money which was debited to the Tallam firm was taken by Accused 1 whatever other offence has been committed by that act, no offence amounting to falsification of accounts can be said to have been committed.
52. I should here point out that in discussing the charge of falsification of accounts the Sessions Judge traversed far beyond the accusation in the charge. Instead of confining his discussion to the accusation that false entries were made on page 71 of Exhibit P-27 and page 195 of Exhibit P-15, the Sessions Judge went on to discuss whether certain entries on pages 210 and 219 of Exhibit P-15 were also false entries and he came to the conclusion that they were. It is obvious that this discussion was both irrelevant and illegitimate since there was no charge in respect thereof.
53. In my opinion, the conviction of Accused 1 even in respect of the offence punishable under Section 477-A cannot be sustained.
54. The result is that this appeal is allowed and Accused 1 is acquitted of all the offences with which he was charged. The conviction and sentence passed on him in respect of both the charges framed against him are set aside. The bail bonds are cancelled.
55. Appeal allowed.