P. Govinda Menon, J.
1. Criminal Appeal 333 of 1961 is filed by the State against the Judgment of the District Magistrate of Quilon acquitting the respondent who was charged for offences of criminal breach of trust and falsification of accounts, offences punishable under Sections 409 and 477A I.P.C. Criminal Revision Petition 297 of 1961 is filed by P. W. 3, the complainant for setting aside the order of acquittal. As these have been heard together and arise out of the same judgment, a common order is passed.
2. P. W, 3, Kuttappan Nair is the proprietor of Krishnan Nair's Watch Company, Emakulam. The respondent was the Manager of the Quilon branch. Several types of watches, clocks, time-pieces, etc., used to be entrusted to the respondent for sale. The head office at Emakulam maintains the stock register in respect of each of the articles so entrusted. Ext. P-4 is the stock register. Stocks were made over to the branch under transfer notes duly acknowledged by the Manager. There is no dispute with regard to the entrustment of stocks. In respect of the daily sales of articles the Manager had to issue sale chits and prepare daily statements of sales and send them to-the head office. Sale proceeds had to be deposited in the Palai Central Bank and the receipts obtained from the bank had to be sent to the head office.
3. P. W. 1 the cashier had visited the Quilon branch in March and on verification had found the stock and accounts correct. His next visit was on 29th June, I960. When he checked, he found shortage in stock, several bills, and the money collected thereunder were seen not entered m the daily statement and the amounts were not seen remitted into the bank. P. W. 1 would have it that the accused admitted having utilised the amount so realised for his use and left the shop leaving the keys on the table. He, therefore, contacted the Proprietor by phone. P. W. 3 came over to Quilon and after satisfying that moneys had been misappropriated, laid a complaint Ext. P-21 before the Quilon East Police Station. After investigation the accused was charge-sheeted.
4. The accused denied misappropriation of any money and stated that all the moneys collected by him as sale proceeds had been made over to the proprietor. According to him a false case had been foisted on him, because he demanded enhanced commission on the sale of unaccounted smuggled goods which they were dealing in. The learned District Magistrate observed;
In view of the very clear admission of P. W. 3 that he used to visit Quilon branch and receive money directly in person from the accused and also receive money by money orders and post parcels sent by the accused, there is a good deal of doubt as to the truthfulness of the transaction in the Quilon branch.
He then relied on Ext. D-2 a letter alleged to have been sent by D. W. 2 and finally wound up by saying that, 'though there may be grave suspicion against the accused, mere suspicion cannot be substituted for proof,' and acquitted the accused.
5. As stated earlier there is no dispute regarding the actual entrustment of stocks to the accused. It is also clear that bill NoSection 3034 to 3100 in bill book Ext. P-l as well as bill NoSection 3201 to 3221 in Ext. P-2 bill book admitted in the handwriting of the accused had not been included in the daily statement of accounts. There is no case that these do not represent real sales effected by the accused. The daily statement Ext. P-3 dated 29-6-60 contains only bills up to 3083 and in all the subsequent daily statements sent to the head office none of the-above mentioned bills were mentioned. The sales under these bills in Ext. P-l and P-2 are of articles covered by the stock register and entrusted to the accused. P. Ws. 1 and 3 have also with reference to the stock register given-evidence that certain other watches and clocks not include in these bills were found missing.
6. Entrustment being thus proved and admitted by the accused, the question that arises for decision is whether the accused had- misappropriated the money. For a conviction under Section 409 not only entrustment, but also dishonest misappropriation has to be made out by the prosecution.
In the case in Krishna Kumar v. Union of India, : 1959CriLJ1508 it was stated:
It is not necessary or, possible in every case to prove in what precise manner the accused person has dealt with or appropriated the goods of his master. The question is one of intention and not a matter of direct proof but giving a false account of what he has done with the goods received by him may be treated as strong circumstance against the accused person. In the case of a servant charged with misappropriating the goods of his master the elements of criminal offence of misappropriation will be established if the prosecution proves that the servant received the goods, that he was under a duty to account to his master and had not done so. If the failure to account was due to an accidental loss then the facts being within the servant's knowledge, it is for him to explain the loss. It is not the law of this country that the prosecution has to eliminate all possible defences or circumstances which may exonerate him. If these facts are within the knowledge of the accused then he has to prove them. Of course the prosecution has to establish a prima facie case in the first instance. It is enough to establish facts which give rise to a suspicion and then by reason of Section 106 of the Evidence Act to throw the onus on him to prove his innocence.
To the same effect is the decision in J. M. Desai v. State of Bombay, : 3SCR319 , where it is stated:
Direct evidence to establish misappropriation of the cloth over which the appellants had dominion is undoubtedly lacking, but 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 be made.
7. There has been no accounting of the missing articles nor has proof been adduced as to how the accused paid off the amount admittedly collected by him under the sales evidenced by the bills in Exts. P-l and P-2. The learned District Magistrate relied on a letter Ext. D-2 alleged to have been sent by the Manager of the Emakulam office regarding the sale of certain kinds of articles. The letter is written in a letter paper containing the letter head of Krishnan 'Nair's Watch Company. Though D. W. 2 and P. W. 3 had stated that the handwriting in Ext. D-2 closely resembles the handwriting of D. W. 2, he has denied the handwriting and signature. The learned District Magistrate has on a comparison of the handwriting and signature of D. W. 2 found that the letter was really written by D. W. 2. It contained instructions given about the mode of sale of certain kinds of watches which had to be done secretly and about the alteration of stock in the stock register. The apparent resemblance of handwriting is no guarantee of its genuineness. Even assuming that the letter was really written by D. W. 2, it is not explained how the letter would be binding on the proprietor and how that would afford a justification for the accused for what he had done.
8. P. W. 3 has stated in his evidence that he used to visit Quilon branch and receive money directly in person from the accused and also receive money 6y money orders and post parcels sent by the accused, but no attempt has been made to prove that the money received by the accused under these bills Exts. P-l and P-2 were paid over to P. W. 3. In the daily statement Ext. P-3 dated 29-6-1960 bills up to 3083 are entered. So bill NoSection 3084 to 3100 in Ext. P-l and bill NoSection 3201 to 3221 in Ext. P-2 should have been sales after that. There is no case that any money was paid to P. W. 3 on 29-6-60 or thereafter. There is thus no title of evidence to prove the payment or receipt of money by P. W. 3. The accused has placed reliance on Ext. D-1 series for proving that he had sold watches, etc., on prior occasions also under bills which bills were not entered in the daily statement and moneys had not been remitted in the bank and in ail these cases there is no complaint of non-receipt of money. Apart from the fact that there is no evidence to substantiate this statement, the prosecution has succeeded in proving that Ext. D-1 series do not represent genuine bills. It must be noted that these bills were produced at the time of cross-examination of P. W. 3 by the accused. There is no explanation how the bills happened to be with him and why they were not in the office where they ought to have been if they were genuine bills.
9. Ext. D-l bill book contains bill NoSection 3902 to 4000. Bill No. 3902 is dated 4-9-1959 and it is marked separately as Ext. D-l (a). The daily statements sent from the quilon branch from' 1-9-1959 to 31-3-1960 are Ext. D.-3. It is seen that bill NoSection 3902 to 4000 are not entered in the corresponding daily statements. Ext. P-3 is the daily statement dated -29-6-1960 wherein only bills upto No. 3083 have been entered. P. W. 3 has sworn that the bills are serially numbered from 1 to 5000 and that each bill book contains 100 numbers. If one bill book is taken for seven Naye Paise sales tax transactions another book will be taken for two Naye Paise sales tax transactions. P. W. 3 has not been cross-examined on this point. It has come out in evidence that' the bill books are not printed by the Manager in each branch. In the light of the evidence that the bills are serially numbered and if on 29-6-1960 the number used has come up only to 3083 the bill numbers 3902 to 4000 could not have been used on any date prior to 29-6-1960. It has also been proved that bills bearing NoSection 3901 to 4000 had been used only from 29-10-1960 onwards nearly four months after the accused left the service. Ext. P-23 is that bill book and Ext, P-24 is the bill book containing bill NoSection 3801 to 3900 and Ext. P-25 is the bill book containing bill Nos. 4001 to 4100. P. W. 3 has proved that Exts. P-23, P-24 and P-25 are genuine bill books. On a careful consideration of the evidence and the circumstances of the case, I am tempted to agree that Ext. D-l is a false bill book got up for the purpose of this case. The accused has, therefore, not succeeded in proving that the moneys collected by him by the sale of the watches, etc., had been properly accounted and the irresistible inference is that he had utilised those moneys for his own use.
10. The prosecution has adduced evidence that during this period the accused was subscribing to chitties at the rate of Rs. 15/- a day. He was only getting a salary of Rs. 120/- per mensem. His wife was only a school teacher. There is no evidence that he was having any commission on the sales nor was he having any other income beyond his salary. There is no explanation as to how in such a position he was able to subscribe Rs. 15/- a day to these chitties. This is a very important circumstance.
11. There is then the evidence of P. W. 1 that when the discrepancies were noticed and the accused was asked about it he confessed that he had utilised the cash and that he would make good the amount very soon. The accused thereafter left the key on the table and went out of the shop and did not return. There is no reason to doubt the testimony of P. W. 1. Having given the matter my most careful consideration, I have no hesitation in coming to the conclusion that the prosecution has proved that the offence of criminal breach of trust and falsification of accounts have been committed by the accused.
12. The learned Counsel for the accused has argued that whatever view may be taken about the evidence being an appeal against acquittal there are no 'substantial or compelling reasons' to set aside the order of acquittal. It was stated that the learned Judge who had the privilege of seeing and hearing the witnesses was not prepared. to accept their evidence and in an appeal against the order of acquittal the appellate Court should not ordinarily interfere with the trial Court's appreciation of the evidence, unless there are strong grounds to show that the trial Court has grossly misconducted itself in the appreciation of the evidence on record.
13. The powers of the appellate Court in an appeal against acquittal had been dealt with in the decision of the Privy Council in Sheo Swarup v. King Emperor, AIR 1934 PC 227 (2). It is stated:
Sections 417, 418 and 423 of the Code give to the High Court full power to review at large the evidence upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be reversed. No limitation should be placed upon that power, unless it be found expressly stated in the Code. But in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial judge as to the credibility of the witnesses, (2) the presumption of innocence in favour of the accused, a presumption certainly not weakended by the tact that he has been acquitted at his trial (3) the right of the accused to the benefit of any doubt, and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a judge who had the advantage of seeing the witness. To state this however is only to say that the High Court in its conduct of the appeal should and will act in accordance with rules and principles well known and recognised in the administration of justice.
14. These principles have been subsequently affirmed and reiterated by the Supreme Court in a series of cases. In some of these cases, it is true, their Lordships have emphasised the necessity of interference only on 'substantial and compelling reasons'. What really is 'compelling and substantial reason' has been made clear in a recent decision of the Supreme Court in Harbans Singh v. State of Punjab, : AIR1962SC439 where Das Gupta J. speaking for the Bench has observed as follows:
But on a close analysis, it is clear that the principles laid down by the Court in. this matter have remained the same. What may be called the golden thread running through all these decisions is the rule that in deciding appeals against acquittal the Court of appeal must examine the evidence with particular care, must examine also the reasons on which the order of acquittal was Based and should interfere with the order only when satisfied that the view taken by the acquitting Judge is clearly unreasonable. Once the appellate Court comes to the conclusion that the view taken by the lower Court is clearly an unreasonable one that itself is a 'compelling reason' for interference. For, it is a court's duty to convict a guilty person when the guilt is established beyond reasonable doubt, no less than it is its duty to acquit the accused when such guilt is not so established.
15. When the expression 'compelling reasons' is understood in the manner explained by the Supreme Court it is clear that the expression is not intended to place any restriction or impose any limitation on the appellate court's powers while hearing appeals against acquittal. Even in an appeal against the acquittal the appellate Court has full power to review the entire evidence on record and to come to its own independent conclusion on the question as to whether such evidence is sufficient to conclusively establish the guilt of the accused.
16. I have scrutinised the evidence carefully, bearing in mind the principles governing appeals against orders of acquittal, and have come to the conclusion that there was evidence which would clearly make out the offence charged against the accused. Where there is thus a total absence of any justification for rejecting the prosecution evidence and the learned Magistrate makes no real effort to assess the credibility of the evidence, and gives no understandable reasons to brush aside the evidence, this court is hound to examine the evidence and to give effect to its own independent conclusions on the evidence adduced in the case. On a careful and anxious consideration of the evidence, I have no hesitation in holding that the accused has been wrongly acquitted of the offence resulting in a miscarriage of justice. The order of acquittal is, therefore, set aside.
In the result I set aside the order of acquittal. The accused is found guilty and convicted of the offences under Sections 409 and 477-A I.P.C. For the offence under Section 409 I. P, C., I sentence him to undergo rigorous imprisonment for three months and for the offence under Section 477A, I.P.C., I sentence him to rigorous imprisonment' for three months; the sentences will run concurrently. The appeal filed by the State is allowed.
The revision petition is dismissed as being unnecessary.