H.R. Krishnan, J.
1. These two appeals are by the two accused persons convicted iii the same case (Trial No. 38 of 1961 in the Ujjain District). It is worth mentioning that there are three more appeals by the appellant in No. 31 (Ranchhodlal) for similar offences committed by him in the same capacity, that is, that of the Sarpanch of the Mandal Panchayat Ujjain. All these five appeals had to be heard and disposed of at about the same time in view of their similarity and the overlapping of the background and certain points of defence. There has been some delay in their disposal because when they were partly heard in August and September 1983 it was found by me that it was impossible to understand the lenghty and involved Hindi judgments in two of the tour trials and the examination of the accused in all of them, without translations. This being ordered was done in course of a few months and the hearing was completed in March and April 1964.
2. The appellant in Appeal No. 31 Ranchhodlal has been convicted under three counts, the most important being one under Section 409 I.P.C. of the criminal breach of trust in respact of a larger part of of a sum Rs. 7000/- withdrawn by him from the fund of the Mandal Pauchayat Ujjain in his capacity as the Sarpanch of the institution. For this he has been sentenced to rigorous imprisonment for four years and to a fine of Rs. 1500/- with further rigorous imprisonment in default for one year. The second count under which he has been convicted is the use of two documents as receipts for two sums of money respectively of Rs. 1000/- and Rs. 2100/- knowing or having reason to know that they are forgeries; accordingly under Section 487 read with Section 471, I.P.C. he has been sentenced to rigorous imprisonment for four years. The third count is the labrication of accounts to cover up the breach of trust by fraudulent conversion of the said amounts; for this he has been convicted under Section 417A, I.P.C. and sentenced to rigorous imprisoment for two years. All the substantive sentences are to run concurrently.
3. The appellant in Appeal No. 29 has been convicted under Section 467 for the forgery of a receipt and has been sentenced to rigorous imprisonment for two years.
4. In the Sessions Trial out of which the appeals arose the controversy was comparatively simple and a straight one. In regard to Ranchhodlal it was whether out of the sum of Rs. 7000/- which he admittedly drew out of the Mandal Panchayat funds on 23.2.1956 for the Barnagar Kesur Road, he did spend Rs. 2400/- on the said purpose; and if he did, whether the withdrawal and expenditure on that purpose were justified in the absence of a sanction for the current year 1955-56; and if it was not, whether it involved an element of fraud justifying a conviction for criminal breach of trust. Secondly, whether he had really given any of the three sums of Rs 1000/- Rs. 1500/- and Rs. 2100/- for purposes which according to his own admission were other than the one for which he took the money. Further, if indeed he did make these payments to these persons, whether these conversions were justifiable and did not amout to fraudulent conversion attracting the provisions of Section 409, I.P.C. Similarly, the question would be in regard to the genuineness of what he has called the 'private cashbook' maintained outside the office of the Mandal Panchayat and the two receipts, respectively for Rs. 1000/- and Rs. 2100/-, were fabricated or genuine.
5. In regard to the appellant in Appeal No. 29 it was even simpler. Whether his statement given in writing to the Inspector of Panchayat on 2.5.1958 (Ex. 54) amounts to a confession that he had forged the receipt, itself exhibited as P. 43; and further, whether it would be inadmissible for having been obtained by a person in authority under threats; the same confession having been retracted during the trial, this Court would have to see if there is sufficient independent material of a corroborative nature as would justify the conviction.
6. Stated thus, the questions that arose in the trial would seem to be clear enough and depending for their answers mostly on documentary material and the admissions of the two accused persons themselves in regard to the handling of the money. However, the investigation itself was prolonged very considerably, and even when the case came up to Sessions, the trial Court has allowed a staggering quantity of extraneous matter to be introduced tifi the record has become bulky and the judgment a veritable nightmare of length and obscurity. We shall in this appeal concentrate our attention on the problems indicated above.
7. At the relevant time the appellant Ranchhodlal was occupying three offices at different levels in the Panohayats in the District of Ujjain. At the lowest he was the Sarpanch of the Gram Panchayat Jalodia; higher up he was the Sarpanch of the Kendra Panchayat Bangred which consisted of several Gram Pan-chayats including that of Jalodia at the same time he was also the Sarpanch of the Mandal Panchayat of Ujjain which in its turn included a number of Kendra Panchayats and was generally responsible for the management and supervision of rural reconstruction activities, and also happened to be the channel through which Government money used to flow into the different Panchayat units for the construction of roads, school, Panchayat or hospital buildings or wells and the like. Actually, he used to live sometimes at his village Jalodia and sometimes in the town of Barnagar. Barnagar Pargana as such was not a unit in the Panchayat Department. The appellant Shankarrao Bhonsle occupier a comparatively humble position as the Sarpanch of Gram Panchayat Kamanpura. We are concerned with a village called Udsingha in this Gram Panchayat area.
8. The allegations which are the subject-matter of the case are based primarily on documents prepared for the most part by the accused Ranchhodlal and one by Shankarrao Bhonsaleanda large number of account books among which the most important is the one which in this case is numbered Ex. P. 29. There are letters from higher authorities to Ranchhodlal as well as his answers. The oral evidence itself is purely explanatory of the written material and consists of the statements of Maganlal Dalal Panchayat Inspector who investigated the doings of the accused persons in connection with the withdrawal and disposal of Government money placed in the funds of the Mandal Panchayat. Then there is the investigating officer Vijaysingh Modi who was the last of three or four police functionaries that studied the papers and examined witnesses in connection with different expenses. There is the examination of the accused Ranchhodlal which runs into 125 headings and that of Shankarrao Bhonsale which is in more modest length. Though quite a number of allegations made in defence of the admitted conversions by Ranchhodlal had to be supported by witnesses, he did not call any in defence and took the position that it was the duty of the prosecution to disprove whatever he stated and otherwise his statement should be accepted in toto. I shall certainly come to this in time; but the point to be noted here is that nothing very special emerges out of the oral evidence independently of the documentary materials. Neither Dalal nor Modi has brought any material on independent personal knowledge; but have only tried to make sense out of the very difficult and obscure mess that was placed before them by Ranchhodlal. Thus in the following discussion the emphasis will be for the most part on what is admitted y the accused themselves and what is patent from the documents written by them.
9. While the investigation into all these cases brought out irregularities of a serious nature in regard to a very large sum of money allotted from time to time in lump grants of Rs. 30000/- to Rs. 40000/- on each occasion, this particular case is in regard to the sum of Rs. 7000/- already mentioned. Therefore it is convenient in this as well as in the other similar cases, briefly to indicate the system and the methods according to which the authorities provided the funds. There were the Panchayats at three levels each of them being a body corporate and having its own fund. Ultimately the fund was public money for the most corning from grants and to a small extent at the village level matching contributions for works of public utility. Since we are not concerned here with any item from the members of the public as matching contribution we need not examine the manner in which it was raised and spent. But the Government grants came from higher levels and were ultimately allotted with reference to each of the sane-tioned scheme, as the case may be, a road or a building or a well, approved by a planning committee for the district. Actually the Collector as the chairman of the planning committee would send a list of the approved schemes along with a note of the sanctioned amounts to the Mandal Panchayat. They would be lumped together and the amount sanctioned for that purpose would be sent as a cheque. Naturally, the sanction was by the year; but the year for these purposes was the one beginning with the 1st July and ending with the 30th June, that is to say, the agricultural year with which the rural community was familiar. Side by side with the panchayat institutions there were the Co-operative Banks, usually the Central Co-operative Banks with their branches at different centres. The funds of the different Panchayat units were kept in these banks so that the cheques from above could be cashed by the Mandal Panchayat in one of them and the allotments whenever payable to the Gram Panchayat, the book transfers made straightway into the funds, thereby saving any of the lunctioMaries from the inconvenience and a temptation of handling the money. The point to note is that the money granted to any of the panchayat institutions should go into its fund for the account and disposal of which the Sarpanch would be responsible. While most of the actual expenditure would be done by the Gram Panchayats the Mandal Panchayat was the main channel through which the money used to flow and was charged under the law with the duty of supervision.
10. In this Mandal Panchayat at the relevant time there was of course the fund maintained in the Co-operative Bank at Barnagar; but there was a small complication. Whenever a lump grant came, the Sarpanch that is, Ranchhodlal would open a separate khata or ledger so that there were several khatas in which the Mandal Panchayat kept its money. This was of course somewhat confusing, but by itself, was not an indication of any dishonest practice.
11. On the actual working level, before any money was paid out from the Mandal Panchayat fund to the village Panchayat fund there were certain essential preliminaries. First and foremost the scheme or the work should be one that was sanctioned for the paiticular financial year; if there was no sanction, there would be no funds. Secondly, out of the estimated cost of the project a certain proportion-which was fixed by the planning Committee and ultimately by the Collector had to be found by the residents of that locality; if it was not found, the sanctioned amount would not be paid by the Mandal Panchayat unless there was a separate direction. The responsibility was of the Gram Panchayat acting through the Sarpanch. In the evidence mention has been made of 'construction committees', (nirman samitis). Under the law the Gram Panchayat could constitute village committees consisting of some of its own members for advisory purposes; but a 'nirman samiti' for taking, the money allotted for any scheme or project and spending it on its own responsibility was unknown. No committee which did not include the Sarpanch and other members of the Panchayat could be given money at all. If any committees including outsiders had constituted themselves they were not competent to receive the monies from the Mandal Panchayat or from Government.
12. It appears that in course of the year 1955-56 that is, July 1955 to June 1956 considerable monies had been allotted under different lumped grants, to the Mandal Panchayat for expenditure on the schemes listed and forwarded by the Collector to the Sarpanch, that is, Ranchhodlal. They were, under the rules, to be given to the Gram Panchayat concerned in the manner and under the restrictions already outlined. Normally, the Sarpanch need not withdraw the money as such and need only direct either by himself for through the Panchayat Inspectors in his area, book transfers and apprise the allotted panchayats of the same. However, large amounts had been taken out and remained unaccounted for and at times, not even mentioned in the books of the Mandal Panehayat. Therefore, when these irregularities were detected by the Director of Rural Uplift, Madhya Bharat, sometime in March and April 1956, there was a stir and the usual demands for proper accounts and explanations; Letters and notices were sent out to Ranchhodlal calling upon him to explain and account for it. There were evasions and the papers of the Mandal Panchayat were seized in April and May. But one tell-tale book which has figured in this and the others cases, was not with the Mandal Panchayat accounts but has been called a. 'private book' or 'Kird' of withdrawals and disposals, of monies by Ranchhodlal and kept with him as personal property at Barnagar. In this case it is numbered Ex. P/29.
There was also another private book which is not material to the present case but has been referred to casually, namely, an account of private dealings, that is to say, loans to and recumbent from the Mandal Panchayat fund made by Ranchhodlal. Sometime in May, he gave the Director a list of projects on which he said he had spent the monies he had withdrawn. But even at that time this private 'kird' if it existed at all, was not made over. The Collector went on demanding all accounts and vouchers but that was also put off sometimes by saying that the accounts were not upto-date and the vouchers had not all come; sometimes by asserting that they had been given to the auditors who had come to audit the accounts or were being retained for that purpose and the like. At a late stage, may be, in June, Ranchhodlal tried to invite the auditors to audit his private kird which they refused: because they were only interested in the books of the-Mandal Panchayat and would not concern themselves with any private registers. Ultimately, after more exchange oil letters and explanations and complaints Ranchhodlal was removed from his office as the Sarpanch of the Mandal Panchayat sometime in November. Some of the papers and vouchers that were left in the office at that time have been exhibited in this case and will be considered for what they are worth.
13. Though by the end of June 1956 whatever the appellant Ranchhodlal had to say had been said and by November of that year all the papers of the Mandal Panchayat had been seized, the investigation into his alleged doings went on for nearly two years. Nobody can approve of such delay; but one extenuating feature is the bewildering way in which the papers and notes whenever made have been kept. Sometimes the writing are no better than that of madmen. Anyway, after investigation rive cases (one said to be still pending) were started against Ranchhodlal and one of them against the other co-accused as well in respect of individual amounts withdrawn on different dates in that year 1955-56.
14. It is against this background which is of course common to all these cases, that we have to see how the appellants have handled part or whole of the sum of Rs. 7000/- taken by the Sarpanch of the Mandal Panchayat, namely, Ranchhodlal, on 23.2.1956, The feeble suggestion made at one stage of the trial that it was just a loan or an advance and that there was no trust created can be dismissed with bare mention. He has taken the money out and given a receipt to the Mandal Fanchayat, that is, to himself that the money was being taken for the work on the Barnagar Kesur Road. The most astounding part of the story is that there was no sanction in that year for that project. It was actually an old project for which Rs. 1,00,000/- had been provided in the previous financial year and in the list of sanctioned schemes for that year, which is Ex. F/9 on this file, not Only is the Barnagar Kesur Road not mentioned as a sanctioned scheme, but also is it expressly noted that Rs. 1,00,000/- having already been given in the previous year for this purpose, there was nothing given in this year. Anyway, the appellant took out the money for this purpose. On the same day, he noted in his private kird, that is, Ex. P./29, which he describes as 'Book of the Five Year Plan Constructions in Barnagar Pargana', that he distributed Rs. 4900/-out of this sum. No names are mentioned ; but Rs. 2400/- are noted as salaries and expenses on the persons working on the said road, Rs. 1500/- for a school building at Piplu village, and Rs. 1,000/- for a school building at Udsingha. We may complete the story and mention that the balance of Rs. 2100/- is said to be paid to one Ramchandra Sharma of Ubradia a few weeks later on 15.3.1956 in response to a written request by him and on a receipt ostensibly signed by Ramchandra Sharma Sarpanch, Ubradia Gram Panehayat. As far as Ranchhodlal is concerned, we will have to investigate the factum and the propriety of these disposals.
15. The side issue in regard to Shankarrao Bhonsle centers round the sum of Rs. 1000/- said to have been given to him on a receipt exhibited here as P./43. The prosecution case is that these amounts were not paid at all to anybody and were just retained and misappropriated by Ranchhodlal. As will be presently set out, the circumstances were very unusual and accordingly the Inspector of Panchayats, that is, P.W. 1 Maganlal Dalai called upon Shankarrao to state whether indeed he had received Rs. 1000/-. This the Inspector had to, because in course of the same financial year a sum of 1000/-jallotted for the Udsingha school building was book transferred at the instance of the Inspector of and had been applied to the purpose. No second Rs. 1000/- had appeared in the Panchayat books, which meant that it had either not been paid at all or had been misappropriated by the Sarpanch of the Gram Panchayat. Anyway, the first letter of the Inspector remaining unanswered he sent what can be called stiff reminder to Shankarrao Bhonsle stating, inter alia, that if he failed to answer the question, legal steps would be taken. Now Shankarrao appeared before the Inspector and handed in a letter which is exhibited as P/54 in this case :
In reply to your letter.... I have to state the following: In fact I did not get any money for the construction of the pathshala. I had private money dealings with the Sarpanch of that time by which he means the Mandal Sarpaneh the appellant Ranchhodlal because his village is outside the Bangred Kendra Panchayat). Therefore, he made me write an illegal receipt and hand it over to him. The amount meant for this work has been brought into the account of the Gram Fanchayat Kamanpur maintained by the District Cooperative Bank Barnagar Branch. Because of this I have not even given any regular receipt to the Mandal Panchayat Ujjain. I have had no concern with the said amount (of 1000/-).
As already noted, the case against Shankarrao centers round this letter and the other circumstances like the book transfer of another Rs. 1000/- which makes the receipt of this Rs. 1000/- highly improbable. The crucial question would be, whether there is independent material corroborating this confession which has been retracted and whether the corroboration is sufficient to justify^ conviction.
16. As far as Ranchhodlal is concerned, he has in effect admitted conversion according to himself of Rs. 4600/- out of the Rs. 7000/- under the three headings set out earlier. He claims to have spent the Rs. 2400/- by authorising Ganpatlal to pay oft certain persons that had worked on the road. Apart from the fact that there was no sanction for the road in that year, the question would be, whether one is satisfied that this sum of Rs. 2400/- had in fact been disbursed in the manner set out by him. In regard to the three other separate amounts, the question is two-fold; factually, whether these were indeed paid to the three persons named by Ranchhodlal, one of whom of course is the caucused. The two others have not been called as witnesses. If the monies have not been paid to them they have of course been misappropriated by Ranchhodlal and there would be freach of trust by this misappropriation. If they had been paid at all, the question would be, whether this admitted conversion is one that is not criminal and cannot be punished in a criminal Court though there might be a claim for recoupement in the civil Courts.
17. Though the problems staled above can be examined in a straightforward and impersonal manner, the appellant Ranchhodlal has set up a very elaborate and high winded defence ranging from personalities and nigh politics to what he considers points of law derivable from certain reported cases. The last should certainly be examined for what it is worth and applied to the facts of the present case if there is any real analogy.
18. Before doing so, it is conventiont to dispose of the vehement 'personal' or 'political' defence contained in the suggestions put to the witnesses, especially, the Inspector of Panchayats and also elaborated in the statement of the accused. The appellant claims to be a saintly and an enthusiastic worker for the good of the villagers and to have got himself charged with the mission when he heard the Prime Minister lecture upon the importance of village uplift In some all-India Conference. Accordingly, he began to devote himself to this cause irrespective of formalities of procedure and accounting, with which in any event he was not very familiar, and in regard to which he had not been properly trained by the officers of the department. But these were not the reasons why since April 1956 he was being questioned and, treated like one that had embezzled public monies and held out as the object of hatred and scorn. The real reason was that two of the Ministers of Madhya Bharat at that time Dr. Premsingh Rathor, who was in charge of the Panehayats and Shri Manoharsingh Mehta, this Rathor's friend and co-member of the same Political faction disliked him and contrived to bring him down from his position of influence and respect simply because he belonged to another faction. Actually they promised and gave Maganlal Dalai rapid and undeserved promotion and thereby instigated him to get cases started against the appellant. The investigating officer Modi is, according to the appellant, a relation of Manoharsing Mehta and made common cause with these two Ministers and the Inspector. This and similar cases have thus been brought as a device to harass the appellant.
19. It is surprising that any person claiming to have some intelligence should in all seriousness seek to defend himself in this manner. The actual language used in the suggestions and the statement is quite unbecoming and I have only given a gist of what the appellant has been saying. As a matter of fact, the discovery of the appellant's doings and the mysterious way, parts of allotments totalling to several lakhs had been disappearing, had been made by the Director of Panchayats early in 1956. If anything, it was a belated discovery because already things were in such a mess that it took two years to investigate and clear it. Far from being overzealous in dealing with the appellant, the authorities had been rather slow, having taken about two years between the Director's discoveries and the appellant's own immediate explanations till the actual starting of the cases. More than that, by the time the cases were started, neither of the two Ministers was in the Government. This part of the defence, therefore, is as pointless as it is spiteful and need not be discussed any further.
20. It is not easy to summarize in a few pointed sentences what exactly is the legal defence in this and similar cases. Broadly speaking, however, the appellant tries to derive from a number of reported cases which will be referred to presently, that (i) whenever somebody is charged with criminal misappropriation or criminal breach of trust of money, he need only state that he had paid it to this or that person who may or may not be the one who is entitled to receive the money or to whom the accused has to pay the money in accordance with the direction or trust. Once the accused says that, it would be for the prosecution to establish that he did not pay it to the person or spend it in the manner he avers; it the prosecution does not, Courts should believe that he made these payments, (ii) Secondly, the persons to whom the accused asserts he has made the payment need not be the one competent to receive it; if the accused says that he thought that he was entitled to receive it may be, in some other context and for some other Treason than the one arising in his case; he should still be believed and exonerated. Such conversion or misfeasance would not be criminal and may at worst call for a claim in the civil Court, (iii) Thirdly, the accused need only explain but is not bound to prove the explanation; if the prosecution is unable to disprove the correctness of the explanation, the accused should be acquitted. As it is sought to derive these breath-taking propositions from certain citations, it is only proper that they should be examined and then the appropriate principles formulated.
21. The three ruling? on which most reliance is placed are Syed Karim Sahib v. Emperor 1986 Mad WN 1019; Harakrishna Mahtab v. Emperor AIR 1930 Pat 209; and Mangilal v. State I L R (1953) 3 Raj 706.
22. The first of these cases is, as it were, the sheet anchor of the appellant Ranchhodlal's defence. It is a Single Bench decision on an application in criminal revision, by the President of Village, Panchayat Board who was charged with breach of trust in respect of two sums of 1078/- and 100/- respectively and was actually convicted in respect of two other sums of 250/- and 1H5Irespectively drawn on altogether different occasionsi the High Court actually holding that in the circumstances of the case there-was prejudice on this account. Apart from this, the High Court actually found as a fact that though the President of the Panchayat Board had actually withdrawn the amounts for purposes than the routine expenses on sweepers, lamp lighters, bill collectors, and the like, he had really spent them in paying for these services; these were essential and the expenditure was legitimate and moie than that, within the special charge of the President who had in any event to see that the functioning of the Panchayat Board did not come to a standstill. Therefore, the Court held that though there had been an application of money drawn for one purpose towards another, the-latter was in satisfaction of pressing necessities and in discharge of the special duties cast upon the President of the Panchayat Board. Accordingly, his acts were held to be innocent under the criminal law.
23. In Harakrishna Mahtab's case, AIR 1930 Pat 209 (Supra) which is a Divisional Bench decision, the position was altogether dissimilar to that of the pre-sent one. There certain monies had been out and spent in accordance with the directions while one District Board was in power, When a new District Board came into power they tried to reopen the matter and put the person in charge of the building, into trouble. But the High Court itself held that all this was faction it vindictiveness and accordingly acquitted the appellant before it. One general principle, however, appears in that case. There the appellant had made the false step of giving false accounts apropos of which it was remarked.
Failure to account for the money proved to have-been received by the accused or giving a false account as to its use is generally considered to be a strong: circumstance against the accused. But he must not be convicted on it alone. It is only an indication or piece of evidence pointing to dishonest intention and must be considered along with other facts of the case.
Actually, in that particular case the Court held that the facts in favour of the accused more than neutralized the effect of this piece of evidence.
24. In the third case, ILR (1953) 3 Raj 706 (Supra) (Single Bench) it was held:
In a trial under Section 406, I.P.C. where the accused admits having received the money alleged to have been misappropriated by him but defends himself by saying that he had made it over to the proper person the onus does not lie upon the accused to prove the payment but upon the prosecution to prove non payment and it is only where the latter is proved that the guilt can be held to have been brought home to the prisoner.
All that this means is, if an accused person shows that he followed the direction and paid to the person entitled to receive it either on account of a direction or because of the very purpose for which the money had been taken, he should be believed unless the prosecution proves the contrary. But the position changes completely when, being directed to pay to X or having taken the money for purpose P, the accused says that he gave it to another person Y or spent it to another purpose Q; In that event, the direction being contravened and the purpose changed on the initiative of the accused himself, it would be for him to show, first, that he did actually pay or spend in that manner, and secondly, that though it is not in accordance with the original direction or purpose, still the general circumstances were such that this conversion as admittedly it is does not become dishonest or criminal. In other words, every conversion calls for an explanation; but there may be circumstances in which a conviction may be innocent as far as the criminal court is concerned because of pressure or general considerations of policy. All this is only another manner of saying that there is a presumption that a person has been following the directions given to him for the disposal of money on the purpose for which he took the money and that may have to be rebutted, if necessary, by the prosecution, On the contrary, when a person has changed the purpose and disobeyed the direction it is for him to show that the conversion it being nothing other than that was Justified, there being no presumption that a breach has been committed.
25. In addition to these three rulings, quite a number of other rulings have been cited apparently in elucidation of the principles the Courts should follow in dealing with a case of criminal misappropriation or criminal breach of trust. These general principles are unexceptionable and may be briefly touched upon. For example, in Rex v. V. Krishnan AIR 1940 Mad 329 there are headings of a charge to the jury setting out these principles. Attention has been drawn to the dicta regarding entrustment and the meaning of misappropriation and also the circumstances in which the user of the money by the accused for apparently another purpose will not become dishonest or fraudulent. 'Misappropriation' has been described as the wrongful setting apart or the assigning of a sum of money to a purpose or use to which it should not be lawfully assigned or set apait. Now, the word 'lawful' may mean either appropriate in the context and with due regard to the responsibilities of the person entrusted with the money; it may also mean lawful with reference to a direction or purpose for which, the money has to be spent. May be, the handing over of a purse of money to a person walking in the bazaar is not illegal in itself; but an accused person who draws public money which is entrusted to him for a specific purpose, cannot just give it away and pretend that he has discharged his trust and at any rate his breach is not criminal.
26. In this Madras case the person who was paid money had valid and proper claims against the Board; but when the money had been drawn for the satisfaction of one claim it was actually paid in satisfaction of another claim which, however, was genuine and could be made by the recipient. There was no controversy about the actual payment and the genuineness of the other claim. Accordingly, conversion as it was in the strict sense, it was not criminal misappropriation or criminal breach of trust.
27. The appellant has also drawn attention to the dicta of the Supreme Court in Bhagat Earn v. State of Punjab : AIR1954SC621 . It is difficult to find any of these principles calling for application in the instant case though as principles they are no doubt binding on this Court. Similarly in Jaikrishnadas v. State of Bombay : 3SCR319 it was held-
To establish a charge of criminal breach of trust, the prosecution is not obliged to prove the precise mode of conversion, misappropriation or misapplication by the accused of the property entrusted to him or over which he has dominion. The principal ingredient of the offence being dishonest misappropriation or conversion which may not ordinarily be a matter of direct proof, entrustment of property and failure, in breach of an obligation, to account for the property entrusted, if proved, may in the light of other circumstances, justifiably lead to an inference of dishonest misappropriation or conversion. Conviction of a person for the offence of criminal breach of trust may not, in all cases, be founded merely on his failure to account for the property entrusted to him, or over which he has dominion, even when a duty to account is imposed upon him, but where he is unable to account or renders an explanation for his failure to account which is untrue, an inference of misappropriation with dishonest intent may readily as made.
Thus, it is clear that none of these rulings lend support to the theory propounded by the appellant which I have set out before.
28. The principles I would formulate are, firstly, whenever an accused person is charged with criminal breach of trust or criminal misappropriation it would be for the prosecution to show that monies were put is his trust or under his domain. Once this is done, it would be for the accused to show in a I proprietor manner that he has disposed of the monies in accordance with the direction or in a manner consistent with the trust that had been created. It may not be necessary for him in every case to show this by direct evidence. If it is patent that the monies I have been spent in accordance with the direction and for the purpose for which they were taken, then courts may believe it even though there is no formal: evidence. If i on the contrary there is anything wrong in the manner in which the accused obtains the money, then it is for him to show that the irregularity in the taking of the money is apparent and not real. Similarly, when he claims to have parted with the money to one that is not authorized to receive it,: or not in accordance with the purpose for which he has been given the money, there is no presumption that such a thing has happened and it is for the accused to show that he did actually make the payment in contravention of the purpose and the direction.
29. Secondly, though all conversions of monies entrusted would prima facie be criminal, there may be circumstances in which they are not so, and at any rate, do not attract the criminal law. A typical in, stance is of the Panchayat Board President in the Madras case 1936 Mad WN 1019 (supra). There was a pressure on the institution which, but for the conversion by paying the essential services, would have come to a stand still; there was also a duty imposed upon the President of the Panchayat Board to keep those services going. In those circumstances the moment he establishes as it is his duty to establish that has actually spent the sums on the purpose for which he s claims to have spent them and they are found to be urgent and the accused under a personal duty to keep the services going, then he can be exonerated.
30. Thirdly, whenever an accused is under a duty to explain, his explanation should be sympathetically considered, and if it is in itself plausible and generally consistent with the normal and honest discharge of duties, it should be accepted. But when the explanation involves an unusual and patently irregular happening, the accused should prove it like any other fact, and further establish that the irregularity is, apparent and not real or that there were special. circumstances in which he was forced to adopt an, apparently irregular course for saving the institution or the beneficiary from worse consequences.
31. It would be proper now to apply these principles to each of the four items of disbursal set up by the appellant Ranchhodlal. The common points in regard to all of them is that they have not been recorded in the appropriate books of the Mandal Panchayat. On the other hand, the private register or kird is brought out at late stages without having been shown to the Director or to the Collector immediately on the demand for the books. Equally damaging is the circumstance that the appellant could not draw any money in course of that year for the Barna-gar Kesur Road; because a perusal of the sanction Fist shows no sanction for this scheme and more than that, an express mention that Rs. 100000 having been sanctioned in the previous year for this purpose, there was nothing more to be spent in this year (Ex. P 9) At all events, having drawn the money without sanction, one would expect the Sarpanch to deposit it in the office of the Mandal Panchayat, at any rate, if he did spend it, he should spend it on the same purpose taking care to show that these expenses are not the duplicates of the ones already incurred out of the grant of Rs. 100000. Actually, something on these lines is sought to be shown in regard to Rs. 2400; I shall consider it separately after disposing of the three other items.
32. These three items are as already noted, Rs. 1000 for the school building at Udsingha, Rs. 1500 for the Piplu school building both paid out immediately on the withdrawal of the money and Rs. 2100 for minor irrigation work in Ubradia paid on 15.3.1956 ostensibly on a written request by one Ramchandra Sharma. None of them is covered by the purpose for which the money was withdrawn. We would have expected the accused to prove that these amounts were paid, by calling the witnesses and the books of the institutions for whose benefit the money is supposed to have been given or any other material. Even where the alleged recipient is the co-accused, there are still means of trying to prove it by showing the receipt in the books of the receiving panchayat or by calling persons who did the work on which this amount was expended. Literally nothing on these lines was done; on the contrary, the appellant takes the position that once he says money was paid to somebody, he should be believed unless the prosecution proves the contrary. There may be circumstances in which this can be taken; but the instant case is not such. It is not at all like the case of 1936 Mad WN 1019 (supra).
33. Taking up the case of the Udsingha school building, there is no doubt an amount of Rs. 1000 for a school building in this village had been sanctioned for that year. But there was no direction to the appellant to pay it and actually the amount of Rs. 1000 for this purpose was withdrawn by the Inspector of Panchayats and paid into the village panchayat fund by book transfer. There is no doubt about its having taken place because it is in the books, and the expenses incurred on the school building were out of this money. If indeed another Rs. 1000 had been given directly to the Sarpanch, namely, Shankarrao Bhonsle, then it should be finding its place in the books of that village Panchayat. The argument on behalf of Ranchhodlal in regard to this and similar payments is that after all his duty ended with making the payment to the proper recipient and if the latter did not bring it in his books and did not spend it for the purpose indicated, then he (Mandal Panchayat Sarpaneh) cannot be blamed for it. The fallacy of the argument is twofold. In these cases the appellant was not under a duty to pay these persons; nor were they the proper ones to receive the monies he claims to have paid them. In cases of trust the duty arises out of the direction. If any, from the authorities sanctioning the amounts or from the responsibility of the trustee himself as in the Madras case. Here there was no direction as such and in fact the money was taken expressly for some other purposes and converted. Therefore, the factum of the payment to these persons-Whatever its legal consequences-has to be established by the person who alleges that he paid. This can be proved by examination of the recipients, on the receipts and the books, if any, maintained at the recipients' hand. By that test the story of Shankarrao's receiving Rs. 1000 becomes fictitious. This I am finding without taking into account at this stage the confession by him to this effect-made before the Inspector, The very circumstances and the manner in which this appellant is supposed to have changed his mind immediately after bringing the money and on meeting Shankarrao Bhonsle casually at Barnagar is unconvincing.
Again, the funds for this building had been independently provided and neither of the persons concerned, that is, the present appellant had taken a care to deposit the additional Rs. 1000 either in the Gram Panchayat fund or as a refund back into the Mandal Panchayat fund. At the top of it, we have the fact that the private kird or cashbook was not in existence or at any rate, was not shown to the Director or to the Collector at the earliest stages which shows that these entries were written up later on.
34. In course of the argument in this connection it was pointed out that possibly the Udsingha building had been built sometime after the alleged payment to Shankarrao Bhonsle, but I fail to see what connection it has with the appellant's story, because Rs. 1000/- as sanctioned, had been provided for it independently of this payment in the manner already mentioned. Thus there is no doubt that the story of paying Rs. 1000/- to Shankarrao Bhonsle is false.
35. There is the further point that even in the event of the appellant having paid to Shankarrao Bhonsle he would still be guilty of fraudulent conversion because there was no pressure on him and he had taken the money for some other purpose. But as the finding is, it is unnecessary to go into that aspect of the matter.
36. Coming to the next payment, that is, the sum of Rs. 1500/- said to have been given for the construction of a school building at Piplu, the position is even more confused and the story of Ranchhodlal even more unconvincing. Here again, the appellant Ranchhodlal having withdrawn Rs. 7000/- for another purpose, says that he suddenly remembered that there was a school building to be constructed at village Piplu and then he gave Rs. 1500/- on the same day to Nanuram Jadav. It is certainly a mystery why he should have selected this personage who has nothing to do with the Gram Panchayat of Piplu, nor even with the so-called Building Committee of the type which seems to have grown up all over the place ostensibly to advise the Gram Panchayat in the matter of these constructions. As with the other payments, the name of this recipient also seems to be an afterthought. This might not have been of much consequence if the one now named is the person that would in due course of official business have actually received the money. But in this panchayat that person was Narayanrao Jadav President or the Piplu Gram Panchayat which is of course a different man from Nanuram Jadav. Again, there is no receipt from Nanuram Jadav or as for that matter, neither he nor Narayanrao has been called as a witness by the appellant to prove this payment.
37. This is bad enough; but it one looks at the Piplu Fanchayat books, there is the most intriguing entry that on 9.1.1957 Rs. 500/- had been received from Government - Mandal Panchayat through Nanuram Jadav. This is the first time any money received from the Mandal Panchayat has been referred to in this book. What seems to have happened is that having mentioned Piplu in his explanation to the Director, the appellant seems to have been forced to think of somebody and named Nanuram. But it was somehow necessary to connect the Panchayat with that name and so the entry seems to have been made by somebody in his confidence and for his benefit much later so as to show some sort of connection. Now the confusion is worsened by the appearance of an entry in the private kird P/29 ostensibly dated 21.3.1956, that is, about a month after the supposed payment of Rs. 1500/-, of Rs. 1000/- being received from the Piplu School Building Committee the President of which is incidentally Narayanrao and not Nanuram. This sum again is supposed to have been applied by the Sarpanch of the Mandal Panchayat, that is the appellant, himself, for some miscellaneous work in connection with the panchayats. It is difficult to make any sense out of this, except to show that at one stage the appellant was trying to make out that out of the sum of Rs. 1500/- he is supposed to have paid Nanuram, Rs. 1000/- was refunded by Narayanrao and Rs. 500/- brought into the books of that Panchayat about a year later in the manner already referred to. As if this is not bewildering enough, in argument it was attempted to connect this 1000/- in the kird with certain payments made and vouched by Exs. D/18, D/19 and D/20 and mentioned in the Mandal Panchayat Register.
Now, there is no doubt that a sum of Rs. 1000/-, out of in fact much larger sums, had been spent in the manner mentioned in D/18, D/19 and D/20. But I do not see how it can be connected with Rs. 1000/-certainly withdrawn on 23.2.1956 for the Barnagar Kesur Road and then made over to Nanuram Jadav and then refunded by Narayanrao Jadav and mentioned in the private kird without any of these entries appearing in the Mandal Panchayat Registers. Thus, the position that emerges from these bewildering entries some made very late and some prima facie meaningless is that the appellant paid nothing to Nanuram or to anybody on 23.2.1956 but tried to work out some sort of explanation for the disappearance of Rs. 1500/. in his hands, this being part of the Rs. 7000/- withdrawn on 23.2.1958.
38. Apropos of this amount, as in fact with reference to the various items in these cases, there is a suggestion that Maganlal Dalai being evilly disposed to the appellant, suppressed or destroyed receipts. These suggestions have been denied and I have no doubt they are altogether baseless and made out of spite There is absolutely no evidence that Maganlal destroyed any receipts. Therefore, the story of this payment of 1500/- to somebody is false.
39. Here again, even in the event of the payment be established, there would still be conversion not justifiable by any pressure or special duty imposed on the appellant.
40. The third item admittedly converted is a sum of Rs. 2100/- said to have been paid to Ramchandra Sharma of Ubradia for minor irrigation work. The appellant's story is that having parted with Rs. 4900/- out of the 7000/- on the same day, he kept the 2100/- with him for sometime. On the 15th March, Ramchandra Sharma of Ubradia wrote a letter (Ex. P/47) stating that money had been sanctioned for minor irrigation work in his Gram Panchayat which he is supposed to be describing as Ubradia an anachronism of tell-tale significance as will presently appear. By that letter he requested that the amount might be paid to him and accordingly the appellant paid it and took a receipt from Ramchandra Sharma (Ex. P/46) which again describes him as the Sarpanch of the Gram Fanchayat Ubradia. These two documents were found along with the papers in the office of the Mandal Panchayat when in November 1956 the appellant was relieved and another Sarpanch took charge.
41 The whole story is unconvincing for the following reasons, Firstly, Ramchandra Sharma has not been called as a witness, the defence argument being the stock one in these cases, that is, after all the accused says that he paid Ramchandra and courts should believe him unless the prosecution proves that he did not. Secondly, there was no sanction for minor irrigation work for Ubradia in that year, that is, 1955-58, What is significant is that as stated by the Inspector, there was sanction for this amount in the year 1956-57, that is, from July 1956 to June 1957. Thirdly, that the Gram Panchayat concerned in which Ubradia was located and of which - Ramchandra Sharma was Sarpanch in March 1956 was not the Ubradia Gram Panchayat but the Ajanda Gram Panchayat. However, in October 1956 the name was changed to Ubradia Panchayat. Thus it is patent, whether or not Ramchandra Sharma has written the receipt and the letter, that these two papers came into existence after October 1956 and of course before charge was taken in November. Writing after the Ajanda Gram Panchayat had been renamed the Ubradia Gram Panchayat; and after sanction had been given for minor irrigation work and trying to antedate it to some time in the previous financial year, the fabricators of the two documents fell into the very common error of using the names and referring to the state of affairs at the time of the real fabrication of the documents which would itself belie their having been in existence on the earlier date in March. Thus, there is intrinsic evidence in the papers that no money could have been paid to Ramchandra Sharma or anybody else of Ubradia in Mardh 1956. And this, over and above the position that the money had not been taken for this purpose and the actual payment has not been proved. If there is any trace of doubt in regard to this conclusion, it is removed by the fact that the books of the Ajanda Ubradia - Panchayat do not show any such receipt, this being a matter o great significance when one bears in mind that the payment was outside the usual course of official business and not covered by any sanction. Thus in regard to this sum of Rs. 2100/- also there has been no real payment and the so-called receipt does not represent the true state of affairs.
42. This takes us to the examination of the alleged payment of Rs. 2400/- to Ganpatlal for distribution to people that had worked on the Barnagar Kesur Road. Now, the point is that the Barnagar Kesur Road had already been financed in the previous year and if persons that had worked on the road had not been paid out of the amount sanctioned in 1954-55, it would still be conversion to pay them out of the amount sanctioned in the next year which was expressly not meant for that project. But the learned Additional Sessions Judge does not go so far as that. He seems to be inclined to accept the papers adduced by the appellant that as a fact Rs. 2300/- out of this in round figures had been paid to some drivers, mechanics and others and that they had been employed on that road. Frankly, this is not convincing. Still, he finds that all but Rs. 117/- out of this Rs. 2400/- had been distributed to those who had worked on the project. If the facts are going to be reinvestigated, it is likely, I would have recorded another finding. But it is unnecessary as the State has not invited reconsideration of this finding in an appropriate manner. Anyway, this is a point in favour of the appellant and may be accepted for the purpose of this case. Thus, out of this Rs. 2400/-, Rs. 117/- had not been spent. Here again Ganpatlal was not an officer of the Panchayat charged with the duty of supervising this work or distributing the pay. He was, as the record shows, a part-time clerk in the Jalodia Gram Panchayat working on Rs 5/- a month. Therefore, the responsibility for this Rs. 117/- is that of the appellant and he has not satisfactorily shown that it was spent in the manner he himself alleges.
43. Now, to summarize the findings against Ranchhodlal, we find first, he withdrew Rs. 7000 ostensibly for the Barnagar Kesur Road though it was expressly mentioned in Ex. P/9 that there was no sanction in that year. Secondly, out of this amount he converted to other purpose at least 4700/- in round figure the break up of which is Rs. 1000/-, Rs. 1500/-aod Rs. 2100/- falsely alleged to have been paid respectively for a school building at Udsmgha, another school building at Piplu and minor irrigation works at Ubradia. In addition, a sum of Rs. 117/- or Rs 100/- in round figures has not been paid to the persons to whom the appellant alleges it had been mid for work on the said road. All these amounts were in trust with him for a particular purpose. This Shim guilty under Section 409 IPC. As already indicated he would still be guilty in respect of the 4600/ even if it is established that he had paid them to the three persons outside the purpose for which he was holding the money in trust. But on the factual findings, it is unnecessary to discuss it at length,
44. The private cashbook or kird Ex. P/29 seems to have been prepared after the Director started putting questions and asking for accounts and vouchers. 'Whenever it might have been made, the entries regarding these payments are falsely made so as to cover their having been converted for the appellant's private purposes. This is fabrication of accounts and at least in this case the fabrication is a clear indication of criminal breach of twit, this not being one of the cases where the fabrication is otherwise explicable. Anyway, it is a separate offence under Section 477A IPC.
45. Further, the two receipts produced, that is, F/43 by Shankarrao Bhonsle and P/47 ostensibly by Ramchandra Sharma do not represent the real state of affairs and are therefore forged. The former is certainly in Shankarrao's handwriting and therefore Ranchhodlal is guilty under Section 471 read with 467 IPC We do not know who has really signed the other receipt; but it is forged as it does not represent the true state of affairs and Ranchhodlal who has used it is guilty under Section 471 read with 467 IPC.
46. Coming to the case of Shankarrao Bhonsle as mentioned in paragraph 15, he confessed in writing to the Panchayat Inspector. Their was only a that that legal steps might be taken; but it is not a threat as would vitiate the confession. Even this was mentioned by the Inspector only when-after the letter calling upon the appellant Shankarrao to state whether he had received the money he did not come up with an answer. The appellant's own story is that he had given another written explanation which the Inspector tore away and then called upon him to give one that is, the present one as dictated by him. The Inspector of course denies it and would accept his denial. Throughout these investigations he has been acting fairly and has horn, if anything, a certain amount of softness to these appellants. In fact Shankarrao's assertion that the earlier explanation had been given 1st months before the present one makes his story quite absurd because the letter asking for an explanation went well within a month before the date of Ex. P/54. He also states that there was another villager present during the scene between him and the Inspector and that he is Ramsingh. At least some attempt could have been made to call this Ramsingh as a witness. Actually, there is nothing in the record to show that there was another explanation and this was obtained by force or by threats. We have seen the trend of the cross examination and the statement of the appellants and neither of them appears to be a person who would just write up a confession simply because the Inspector of Panchayats wanted it. There is therefore no doubt that this confession was given voluntarily and is admissible for what it is worth.
47. As against the co-accused Ranchhodlal it is of no consequence because it has been retracted and in fact has not in the foregoing discussion been used by me as evidence against him.
48. Even as against Shankarrao, this having been retracted in course of the trial may not be acted upon unless there is independent corroboration. The first piece of corroboration is from the very circumstances and manner of the alleged payment. There was no previous arrangement or discussion but it is asserted that when Ranchhodlal had come home with the money he saw Shankarrao at Barnagar and then suddenly decided that Rs. 1000/- should be passed on to him though only an hour or two before he had taken the money for some other purpose. The other piece of corroboration is that soon after the same amount allotted for this purpose in the Collector's list is withdrawn and book transferred to the Gram Panchayat of which Shankarrao is the Sarpanch. Obviously Shankarrao must have known it and if indeed he had already received Rs. 1000/- from the Sarpanch of the Mandat Panchayat, he should have done something about it. He would have deposited it in the Panchayat books of refunded it to the Mandal Panchayat or retaining it requested the Collector to increase the sanction to double the original amount. These circumstances, read with the absence of any entry in the Gram Panchayat books about the receipt of Rs. 1000/- goes a long way to corroborate Shankarrao's confession to the Panchayat Inspector. He is therefore guilty under Section 467 IPC.
49. As already noted in the beginning, the total! effective sentence on Ranchhodlal under the three-counts is rigorous imprisonment for four years and a fine of Rs. 1500/- under the first count, that is, 409 IPC, Though there is no application for enhancement of the sentence of fine, I may note, firstly that under Section 467 and 471 fine is compulsory, and in any event when there is defalcation of a particular amount, the fine has to be a good multiple of that amount unless there is an independent recovery or reimbursement. At least, the record does not snow that their has been a recovery or reimbursement so that the sentence of fine is extremely low. The sentence of imprisonment is also low; but possibly the Sessions Court took account of the fact that there were other and similar cases against Ranchhodlal in which there was a possibility of a conviction.
50. The appellant Shankarrao does appear to have been something like soft clay in the hands of Ranchhodlal with whom he says he had money dealings. So, the milder sentence of two years on him was-proper.
51. The convictions and sentences on both the appellants are upheld and both the appeals are dismissed.