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State of Kerala Vs. Kunhikannan Nair - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtKerala High Court
Decided On
Case NumberCriminal Appeal No. 438 of 1956 (M)
Judge
Reported inAIR1958Ker103; 1958CriLJ518
ActsIndian Penal Code (IPC), 1860 - Sections 408
AppellantState of Kerala
RespondentKunhikannan Nair
Appellant Advocate M.U. Isaac, Public Prosecutor
Respondent Advocate T. Balakrishna Paniker, Adv.
DispositionAppeal allowed
Excerpt:
- - (even so, the evidence for the prosecution is that all cash in his hands should be kept in the society's safe and should, along with the vouchers for any advances made, be available for check by inspecting officers. p-8 snows, knew very well what were the sums for which he had to account and he did account for them to the extent to which he had expended the money for the purposes of the society. 1 is that under the rules, the money should have been in the society's safe and should have been produced for his verification. in the circumstances we fail to see how it can be said that the accused was never called upon to account for the sums he had drawn under exts. the only possible inference from the failure of the accused to do so is that, even at the time he made the statement ext......allowed to retain up to rs. 5000 of the society's money does not mean that he could expend this money on purposes other than the purposes of the society, or, as is argued on his behalf, that his liability in respect of this money is a mere civil liability to render an account. there can be no doubt that if in respect of any money of the society in his hands it is proved that he has converted the money to his own use or expended it for purposes other than the purposes of the society, he would be guilty of criminal breach of trust, for, such conversion or expenditure must necessarily be dishonest. the question then is whether, in this case, there is proof of such conversion.7. we consider that there is. it was not the accused's case when he made the statement ext. p-8, which it is not.....
Judgment:

Raman Nayar, J.

1. The State appeals against the acquittal of the accused in this case of a charge under Section 408, I. P. C.

2. The following facts are proved and are undisputed. The accused was a Director and the paid Secretary of the . Balussery Producers' cum Consumers' Co-operative Society, and Pw. 4 was its President. Under bye-law 19 (a) of the bye-laws of the Society, a copy of which has been marked as Ext. P-ll, the president is its ex-offi-cio treasurer and is in charge of all its properties. Under bye-law 19 (b), the Secretary is its executive head and carries on the administration subject to the general control of the President.

For the purpose of carrying on the day to day administration, the Secretary is, from time to time, entrusted with the funds of the Society to the extent necessary, and bye-law 20 (b) lays down that the Secretary shall not keep more than Rs. 5000 at a time including the amounts with the procurement or other agents. (Even so, the evidence for the prosecution is that all cash in his hands should be kept in the Society's safe and should, along with the vouchers for any advances made, be available for check by inspecting officers.) On 17-9-1954, the accused drew a sum of Rs. 1000 from the funds of the Society passing the receipt, Ext. P-6, in the following terms : 'Received from the Balsurry P. C. C. Section Ltd., Rs. 1000 being the advance for remittance of audit fee.' On 8-10-1954, he drew Rs. 4800 being as the receipt, Ext. P-2, passed by him states, 'the advance to meet the bill of workshop, petrol bill and the spare parts of the lorry'. Ext. P-2, but not Ext. P-6, was passed by the President, Pw. 4, but the President being the treasurer in custody of the funds of the Society, it may be taken that in both cases the accused was entrusted with the money by Pw. 4 for the purposes mentioned in the receipts.

On 12-10-1954 Pw. 2, one of the directors of the Society, made the complaint, Ex. P-l, to the District Collector (who is the Registrar for P. C. C. Societies) alleging that the accused and Pw. 4 were misappropriating the funds of the Society. The Collector directed Pw. 1, the District Supply Officer, to enquire into the matter and accordingly, Pw. 1 went to the Society on 15-10-'54 and examined and seized its account books as also Ext. P-2 and Ext. P-6 and other vouchers. The accused was not available for examination on that day, but he appeared before Pw. 1 on 19-10-1954 and, on being questionedwith reference to the vouchers and the accounts, he made the statements, Ext. P-8, the relevant portions of which may be reproduced :

'..... As regards voucher No.425 (Ext. P-6) for Rs. 1000 even though I had paid Rs. 6.79 and Rs. 231, the balance of Rs. 90 was also expended. This should be seen in the suspense register. Regarding voucher No. 501 (Ext. P-2) for Rs. 4800, J have since remitted Rs. 497-6-9 and Rs. 315-13-4. The balance is with me.

I am. keeping it as it is sometimes difficult to meet the president. Payments are made by me towards expenses and then adjusted. I shall remit the balance immediately ......

I have not utilised any amount for my own purposes. I cannot say whether the President has utilised any money for his own private purposes.'

3. It may be noted that neither advance was entered in Ext. P-4 the suspense account, in which they ought to have been entered. Apart from the sums mentioned by him in Ext. P-8 (which the prosecution accepts were duly accounted for) the accused had accounted for a sum of Rs. 8 by way of travelling expenses on 20-9-1954, and for a further sum of Rs. 100-11-6 on 15-10-1954.

On 6-11-1954 he accounted for a sum of Rs. 640-11-2, but for the balance of Rs.. 3327-5-3, he has not to this date accounted. It is in respect of this sum that he was charged with breach of trust. (The charge, however, mentions the amount as Rs. 3558-5-3, the payment of Rs. 231-0-0 admittedly made by the acciised out of the advance of Rs. 1000 being missed apparently by oversight).

4. When questioned under Section 342, Cr. P. C. with respect to the two advances, the accused stated that he had spent the sum of Rs. 1000 taken under Ext. P-6 for the purposes of the Society and had duly accounted for that sum. As for the advance of Rs. 4800 he said that he had spent some amount for the Society having advanced certain amounts to certainparties for the purchase of materials, for lorry repairs etc., and that he was keeping the balance with him pending the determination of the exact amount due from him in the arbitration proceedings which had meanwhile been taken against him. He also filed a written statement in which he repeated that he had kept the balance with him since he was not informed what amount he had to return and since no account was taken by the Society.

5. The learned Magistrate took the view that the accused was primarily accountable to the President, P. W. 4; and that since there was no evidence of any demand by the latter for the balance due (but there was, on the contrary, evidence in the shape of the letters, Exts. D-6 and D-7, written by P. W. 4 to the accused indicating that the two were hand in glove) and since, further, there was no evidence that the accused was in straitened circumstances the mere retention of the money by him was not sufficient to prove dishonest conversion. In this view he held that the accused was only undera civil liability to account for the money and had not committed any criminal offence.

6. We are unable to agree. There is no denying the fact that the two sums covered by Exts. P-2 and P-6 were entrusted with the accused for the purposes specified in those documents. The mere fact that under bye-law 20 (b) the accused was allowed to retain up to Rs. 5000 of the Society's money does not mean that he could expend this money on purposes other than the purposes of the Society, or, as is argued on his behalf, that his liability in respect of this money is a mere civil liability to render an account. There can be no doubt that if in respect of any money of the Society in his hands it is proved that he has converted the money to his own use or expended it for purposes other than the purposes of the Society, he would be guilty of criminal breach of trust, for, such conversion or expenditure must necessarily be dishonest. The question then is whether, in this case, there is proof of such conversion.

7. We consider that there is. It was not the accused's case when he made the statement Ext. P-8, which it is not disputed was a purely voluntary statement, that he had expended the whole of the money covered by Exs, P. 2 and P-6 for the purposes of the Society. Nor was it his case even at the trial. After deducting the amounts mentioned by him there was admittedly a substantial sum still remaining in his hands. P. W. 1 is an officer, who in his own right, has powers of supervision over the Society, and his authority to investigate into its affairs as the nominee of the Collector who is the Registrar cannot be disputed. Although he has not said so in as many words it is apparent from his evidence, as also from the contents of the statement, Ext. P-8, that he questioned the act cased with reference to P. W. 2's complaint and with reference to the vouchers Exts. P-2 and P-6 and the account books of the Society. In other words, he called upon the accused to account for the sums covered by Exts. P-2 and P-6. The accused as Ext. P-8 snows, knew very well what were the sums for which he had to account and he did account for them to the extent to which he had expended the money for the purposes of the Society. The balance, he admitted, was with him and yet, as the evidence of P. W. 1 shows, he did not produce it. (That, by itself, should suffice to show that he did not have the money with him for the evidence of P. W. 1 is that under the rules, the money should have been in the Society's safe and should have been produced for his verification. Moreover the accused knew that he was facing an inquiry on a charge of misappropriation and it is inconceivable that he should not have produced the money before the inquiring officer if he really had it. The inference is that he must have spent it for other purposes. Instead, he promised that he would remit it, in other words, repay it to the Society, immediately. That he has not done up to this date and it is idle for him to pretend that it is because he does not know what amount was due from him. It would appear from the resolution, Ext,D (1a) dated 26-10-1953, passed by the Board of Directors (to which resolution the accused himself was a party in his capacity as a director) that some attempt was made to cover up the large sums remaining unaccounted for in the hands of the accused. It was said that these sums had been handed over to the Secretary because the President was not finding it convenient to attend and make payments at frequent intervals. Nevertheless the resolution required the accused to remit the money for which he had not yet accounted. This resolution was not complied with. Some time in 1954 the Board of Directors, was suspended and an executive officer was placed in charge of the Society. Thereupon the accused ceased to be the Secretary and had no authority whatsoever for retaining any of the Society's money in his hands. Yet the balance of the money, admittedly with him, was not paid over. In the circumstances we fail to see how it can be said that the accused was never called upon to account for the sums he had drawn under Exts. P-2 and P-6, and to pay back to the Society the amount that remained in his hands. The only possible inference from the failure of the accused to do so is that, even at the time he made the statement Ext. P-8, the balance of the money which ought to have been with him was not with him, and that he was therefore unable to produce it or make the promised remittance except to the extent of accounting for a sum of Rs. 640-11-2 on 6-11-1954. It would follow therefrom that he must have converted the money to his own use and no evidence of straitened circumstances is necessary for drawing this obvious inference.

8. We allow the appeal, convict the accused under Section 408, I. P. C. and sentence him to suffer rigorous imprisonment for one year.


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