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L. Dhanya Naik Vs. State - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtKarnataka High Court
Decided On
Judge
Reported in1977CriLJ654
AppellantL. Dhanya Naik
RespondentState
Excerpt:
.....the cash book and the pass book, committed suicide. according to him, seshachar used to keep the cheque book and it was he who prepared the cash book, the pass book the counterfoils as well as the disputed cheques. however, he acquitted revanna, the accountant, as well as the two contractors. it is significant to point out that 'preparation of cash account' was the function of seshachar, the first division clerk, while 'supervision of office work' was entrusted to revanna, the accountant, as such, the writing of cash book, pass book and the preparation of payment order, counterfoils of cheques, as well as the cheques themselves were to be done either by seshachar or by revanna, so far as the appellant l. similarly, he had to check up the total in the cash book as well as in the..........undisputed that ramachandra setty (p.w. 1) conducted the audit and he inspected the general cash book, cheque counterfoils, treasury schedules, vouchers and connected papers. his audit reports are exhibits p-1 and f-2 and it is more than clear that the specific acts of defalcation were committed and the two contractors were paid much more than what can be found due and payable to them.8. as evident from the prosecution evidence, the cheque book although required to be kept by l.d. naik, was in fact in the custody of seshachar, first division clerk, the cash book, pass book, counterfoils and the cheques themselves are admittedly in the handwriting of seshachar. this is so stated by s. laxminarayana raju (p.w. 4) and b.l. rangaswamy (p.w, 5) the two witnesses who belong to the very same.....
Judgment:

D.B. Lal, J.

1. These three Criminal Appeals having been connected and consolidated arise out of a judgment of the Sessions Judge at Chitradurga, convicting the appellant L.D. Naik, the then Block Development Officer, Hosadurga, under Sections 467/34, 477-A/34 and 409/34 of the Indian Penal Code and sentencing him to three years Rigorous Imprisonment and to pay a fine of Rs. 500/-and in default to undergo further Rigorous Imprisonment for three months each for the offences under Sections 467/34 and 409/34 of the Indian Penal Code, and sentencing him to one year Rigorous Imprisonment and to pay a fine of Rs. 200/- and in default to undergo Rigorous Imprisonment for one month under Section 477-A/ 34 of the Indian Penal Code. The Prosecution case was that the appellant L.D. Naik was working as Block Development Officer, Hosadurga, during the years 1968-69 along with K.H. Seshachar under him as the First Division Clerk, and Revana working under him as an Accountant in the same office. Besides these officials, there were two contractors namely, K.K. Mohiyuddm and Anjanappa to whom several works of the Taluk Board were entrusted and they were engaged to complete these works. According to the arrangement in vogue in that office, the account of the Taluk Board used to be kept at the Sub-Treasury of Hosadurga and the payments were to be made through cheques which were prepared by K.H. Seshachar, supervised by the Accountant Revanna, and ultimately signed by L.D. Naik the appellant, before the amounts were drawn from the treasury. Accordingly, on 4-10-1968, the counterfoil of cheque No. 1963 was written by K.H. Seshachar and the amount of Rs. 149.47 was written therein for payment of royalty. Thereafter, when the cheque itself was prepared, the figure was inflated to Rs. 6718.45 and this was the cheque that was sent to the treasury for encashment. The cheque was drawn in the name of Anjanappa, contractor, and the latter withdrew that amount from the treasury. Similarly, on 10-1-1969, the counterfoil of cheque No. 2048 was prepared for Rupees 24.96 which was payable for electric charges. However, the. cheque itself was prepared for Rs. 9824.26 which was again in favour of Anjanappa, contractor. Thereafter, the. said contractor withdrew that amount' from the treasury. The third case related to cheque No. 9400 of which the counterfoil contained the figure of Rupees 26.40 which was for T.A. Bill payable to a certain Headmaster, Subsequently, the cheque itself was inflated and the amount of Rs. 9855/- payable to K.H. Mohiyuddin, contractor, was shown and the said amount was withdrawn by the contractor from the treasury, in this manner, Rupees 6569.02 in respect of cheque No. 1963, Rs. 9800/- in respect of cheque No. 2048 and Rs. 9828.60 in respect of cheque No. 9400 were drawn in excess and the offences of forgery, falsification of accounts as well as criminal breach of trust were committed by these public servants, it appears, subsequently an audit was conducted and the Superintendent Ramachandra Setty discovered the defalcation committed by these public servants. Accordingly he submitted the detailed report. Thereafter, a complaint to the police was instituted at the instance of one T. Siddappa, the then Block Development Officer, and all these public servants along with the two contractors were arrayed as accused.

2. After the submission of the charge-sheet, however, K.H. Seshachar, the First Division Clerk in whose handwriting both the counterfoils as well as the cheques existed besides the cash book and the pass book, committed suicide. The prosecution produced 20 witnesses including Ramachandra Setty (P.W. 1) the Superintendent who conducted the audit. G. Venkatachala Rao (P.W. 2) and Ramaiah (P.W. 3) belonged to the same office. They came to state about the general distribution of work in that office. S. Laxminarayana Raju (P.W. 4) B.L. Rangaswamy (P.W. 5) and H. Hayath Sab (P.W. 6) also belonged to the same office. They came to state about the signatures and identified them to be of the appellant L.D. Naik. They also proved the handwriting of the deceased Seshachar. Besides these three witnesses, D. Sunkappa (P.W. 9), D. Hanumanthappa (P.W. 10), and G. Srinivasa Murthy (P.W. 15) who belonged to the Sub-treasury of Hosadurga also came to prove the signatures of both Seshachari and the appellant L.D. Naik. A. Lingaiah (P.W. 16) was produced as the Handwriting Expert and he could tell that the signatures on the impugned cheques were of the appellant L.D. Naik. The witness Abdul Ghani (P.W. 11) and K.S. Sanna Katappa (P.W. 12) were the shroffs of the treasury and they came to state that higher amounts were paid to the two contractors. Chowdappa (P.W. 13) and M. Veerabhadrappa (P.W. 14) have stated for the bill pertaining to electricity. In fact, the said bill was paid in cash although the counterfoil of the cheque No. 2048 was prepared for that amount. The cheque was ultimately inflated to Rupees 9824.26 to facilitate the alleged defalcation. T. Siddappa Block Development Officer (P.W. 17) sent the police complaint and he also stated about the procedure for payment through cheques which was in vogue in the office. P.W. 7 D. Suryanarayana was the Headmaster who came to state that he had not submitted any T.A. Bill. The rest of the witnesses were Police Officers.

3. There was a denial on the part of the appellant L.D. Naik that the signatures over the cheques were his or that he was responsible for any forgery, falsification of accounts of criminal breach of trust. According to him, Seshachar used to keep the cheque book and it was he who prepared the cash book, the pass book the counterfoils as well as the disputed cheques. However, L.D. Naik in the capacity of Block Development Officer was required to sign the cheques but when the same were produced before him he disowned his signatures on these cheques. Similarly, the accused Revanna also denied the charges. According to him, Seshachar never took him into confidence and he alone did all this work for which he cannot be held responsible. The two contractors - accused however stated that they had done some construction work for the Taluk Board and bona fide believed that the cheques were paid in lieu of that work. As such, they encashed the cheques and they could not be stated to have committed the offence of criminal breach of trust.

4. The accused did not produce any defence.

5. The learned Sessions Judge believed the prosecution evidence in so far as it related to L.D. Naik, appellant, and convicted and sentenced him in the manner stated above. However, he acquitted Revanna, the Accountant, as well as the two contractors. As such, only L.D. Naik, Block Development Officer, has come up in appeal before this Court.'

6. So far as the rules were concerned for disbursement of payment through cheques, there does not appear to be any dispute. Rule 11 of the Taluk Board Budget and Account Rules, 1960 provided for payment of money only through cheques drawn upon the treasury and these cheques were obviously to be signed by L.D. Naik being the Block Development Officer. Rule 16 lays down that a payment order was to be drawn up and this payment order was to be prepared by the Accountant, in this case Revanna, and without such payment order the cheque could not be prepared. Rule 17 deals with the preparation and signing of cheques obviously on the basis of the payment order. Rules 18 and 68 provided for the custody of cheque book which was to be with the Block Development Officer, in the present case L.D. Naik, Rule 24 deals with the maintenance of pass book while. Rule 27 enjoined that all departmental payments were to be made through cheques. Rules 24-A and 33 deal with the reconciliation of treasury schedules with the cash book and in case there were any differences between the total shown in the cash book and the total shown in the treasury schedule,. it could be pointed out to the treasury for reconciliation. On behalf of the appellant, the learned Counsel does not dispute that these rules were no doubt required to be observed. But the question is how far the observation of these rules was made in the office. Besides these rules the prosecution also placed Ext. P-8 which is an order regarding the distribution of work in the office. It is significant to point out that 'preparation of cash account' was the function of Seshachar, the First Division Clerk, while 'Supervision of office work' was entrusted to Revanna, the Accountant, As such, the writing of cash book, pass book and the preparation of payment order, counterfoils of cheques, as well as the cheques themselves were to be done either by Seshachar or by Revanna, So far as the appellant L.D. Naik was concerned he was to sign the cheques and as such he was required to see the payment order before signing the cheque. Similarly, he had to check up the total in the cash book as well as in the treasury schedule lest there might be some difference. In that case, he had to seek the reconciliation. Since he did not perform these duties, the prosecution case was instituted against him both for forgery of cheques and falsification of accounts therein coupled with the offence of criminal breach of trust.

7. It is also undisputed that Ramachandra Setty (P.W. 1) conducted the audit and he inspected the general cash book, cheque counterfoils, treasury schedules, vouchers and connected papers. His audit reports are Exhibits P-1 and F-2 and it is more than clear that the specific acts of defalcation were committed and the two contractors were paid much more than what can be found due and payable to them.

8. As evident from the prosecution evidence, the cheque book although required to be kept by L.D. Naik, was in fact in the custody of Seshachar, First Division Clerk, The cash book, pass book, counterfoils and the cheques themselves are admittedly in the handwriting of Seshachar. This is so stated by S. Laxminarayana Raju (P.W. 4) and B.L. Rangaswamy (P.W, 5) the two witnesses who belong to the very same office. It is therefore, clear that L.D. Naik the appellant was not responsible for the preparation of the counterfoil or the cheques. Similarly, he did not write cash book or the pass book. It is also clear from the evidence that the Accountant Revanna never performed his duties. Seshachar it appears alone was dealing with these payments. It is because of this that Revanna, Accountant, was acquitted by the learned Sessions Judge, It is nobody's case that the counterfoil was presented along with its corresponding cheque at one and the same time before the appellant. Therefore, it cannot be stated that the appellant could detect the difference in the two figures - one mentioned in the counterfoil and the other mentioned over the cheque. It is manifest the counterfoil was prepared earlier and on a subsequent date the cheque was written and Seshachar was responsible for writing both of them. As such, the appellant had no occasion to see the counterfoil and compare it with the cheque. It is also proved from the prosecution evidence that in the cash book, correct figures were depicted. These were the figures shown in the counterfoils. However, care was taken obviously by Seshachar to give a wrong total. This he obviously did so that the figure tallied with the amount shown in the treasury schedule. Therefore, when the cash book along with the treasury schedule was presented before the appellant, he was himself deceived, inasmuch as the two figures tallied. The total in the pass book was incorrect and obviously inflated to tally with the total shown in the treasury schedule. The only mistake committed by the appellant was that he did not himself add up the figures so that he could discover the correct total, it has also come in evidence that the seals were available on any table kept at the office. As such, Seshachar could easily make use of that official seal of the Block Development Officer and affix the same on the document. This is so stated by G, Srinivasamurthy (P.W. 15) who belonged to the same office In this background one has to see how far the responsibility rested with the appellant so that he can be stated to have committed the offence of forgery or of the falsification of the account. Similarly, can he be held guilty of the offence of criminal breach of trust.

9. It has been stressed on behalf of the appellant that the signatures over the disputed cheques are not his and therefore, he cannot be held responsible for these cheques, The contention of the learned Counsel does not appear to be correct. There was overwhelming evidence that the signatures were really of the appellant. It is so stated by the witnesses S. Laxminarayana Raju (P.W. 4), B.L. Rangaswamy (P.W. 5), H. Hayath Sab (P.W. 6), D. Sunkappa, Sub-Treasury Officer (P.W. 9), D. Hanumanthappa (P.W. 10) and G. Srinivasamurthy (P.W. 15). These witnesses were either officials working with the appellant in the same office or they were officials of the Sub-Treasury where the specimen signatures of the appellant were maintained. All of them stated that the signatures no doubt resemble those of the appellant. They could not be sure because they were not handwriting experts. They could only tell about the resemblance and the learned Sessions Judge himself compared the signatures which he could legally do. In his opinion also, the signatures were that of the appellant. Besides these witnesses the Handwriting Expert A. Lingiah (P.W. 16) gave a similar statement. There is no reason to disbelieve his opinion. In that connection it was submitted on behalf of the appellant that Seshachari was an Artist and he could imitate the signatures of the appellant. The deceased accused Seshachar being an Artist and being possessed of the art of imitation, is deposed to by the witnesses S. Laxminarayana Raju (P.W. 4), B.L. Rangaswamy (P.W. 5) and G. Srinivasamurthy (P.W. 15). That may be so. But it would not go to prove as a fact that the disputed signatures were the result of imitation committed by Seshachar. That is so because of the evidence given by the Expert A, Lingiah (P.W. 16) corroborated by so many other witnesses, who belonged to the same office and who had occasion to see the signatures of the appellant. I am therefore, of the opinion that the signatures of the appellant over the disputed cheques were proved.

10. It has to be ascertained then as to whether the appellant could be indicted for these offences. In order to bring home the charge of criminal breach of trust by a public servant, there have to be an entrustment, thereafter misappropriation or conversion to one's own use or use in violation of any legal direction or of any legal contract and finally the misappropriation or conversion or disposal must be with a dishonest intention. In order to be dishonest the property must be misappropriated or converted with the intention of causing wrongful gain to one person or wrongful loss to another, that is, with the intention to cause gain by unlawful means, of property to which the person gaining it is not legally entitled or the loss by unlawful means of property to which the person losing it is legally entitled. As such, every offence of criminal breach of trust though it involves a civil wrong in respect of which the complainant may seek his redress for damages in a civil court yet, every breach of trust in the absence of mens rea or criminal intention cannot legally justify a criminal prosecution. In short, intention is the gist of the offence. In the present case, what has been proved against the appellant? He did not keep the custody of the cheque book. He did not see the payment order.

He did not call for the counterfoil when the cheque was presented before him. He did not total up each and individual entry of the cash book or pass book so as to know if a wrong total was given. Besides these nothing can be imputed against him. All this conduct no doubt points out to a certain negligence on his part in performing his official duties. For that negligence he can be proceeded for damages in a Civil Court or even department ally for dereliction of duty. There is no evidence that the appellant himself misappropriated the amount or enabled others to misappropriate the same. There is no circumstance to infer that he was governed by any criminal intention so that he can be stated to have acted dishonestly while signing these cheques. As such, the finding of the learned Sessions Judge that 'the appellant signed the cheques knowing full well that the counterfoil cheque was quite different from the cheque which had to be presented at the treasury and it contained an inflated figure than mentioned in the counterfoil cheque' cannot be borne out from the record. Nobody has come to state that both the counterfoil as well as the cheque were presented before the appellant at one and the same time so that he could detect the difference in the two figures. These acts of omission committed by the appellant, in my opinion, do not convey an impression that any dishonest intention was harboured by him or that he acted dishonestly. In short, he cannot be stated to have committed the offence of criminal breach of trust. Similar will be the position for the offence of forgery or of falsification of account. In fact, the appellant never prepared the cheque nor did he write down the cash book or the pass book. He never shared the criminal intention with Seshachar and it was the latter who prepared all these incriminating documents. The criminal intention was again a necessary ingredient for the offence of forgery under Section 463 of the Indian Penal Code. Similarly, dishonesty was a necessary ingredient for the offence of making a false document as mentioned in Section 4(54, Indian Penal Code. No such criminal intention can be inferred against the appellant. Therefore, in my opinion, he did not commit the offences of forgery, falsification of account or of criminal breach of trust.

11. The learned Counsel for the appellant also pointed out that the two contractors were acquitted by the learned trial Judge and that acquittal should necessarily lead to the acquittal of the appellant. That may not be correct to say so. While acquitting the two contractors, the learned trial Judge was rightly concerned with the case of the two contractors qua their contract work. In his opinion, the two contractors bona fide believed that payments were due and the cheques drawn were in lieu of those payments, With that belief, they had drawn the amounts from the treasury. As such, they could not be stated to have committed any offence. The case of the appellant was different. If he was governed with any dishonest intention, which he was not fortunately, he could be held guilty for enabling the two contractors to withdraw larger amounts to the detriment of the interest of the State. This he would have done obviously by not following the rules laid down for the preparation of the cheque and for the withdrawal of the amounts. As the dishonest intention was not there and dishonest misappropriation could not be inferred against him, he gets the benefit of the finding that he could not commit the offence of criminal breach of trust.

12. In this view of the matter, the learned Sessions Judge was in error in convicting the appellant under Sections 467, 477-A and 409, Indian Penal Code read with Section 34, Indian Penal Code. These appeals are allowed and the conviction as well as sentence of the appellant L.D. Naik, Block Development Officer are set aside. The appellant is on bail. His bail bonds are cancelled.


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