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PETITIONER: KRISHAN KUMAR

       Vs.

RESPONDENT: THE UNION OF INDIA

DATE OF JUDGMENT: 21/05/1959

BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. IMAM, SYED JAFFER

CITATION:  1959 AIR 1390            1960 SCR  (1) 452

ACT: Criminal Trial-Misappropriation-Servant receiving goods  but failing  to  account  to  master--Proof  of  conversion,  if necessary--False  explanation  by servant,  whether  can  be taken into consideration-Prevention of Corruption, 1947  (II Of 1947), s. 5(1)(c).

HEADNOTE: The  appellant was employed as an Assistant Store Keeper  in the  Central Tractor Organisation, Delhi.  He took  delivery of a consignment of iron and steel received by rail for  the Organisation and removed them from the railway siding.   The goods  did  not  reach  the  Organisation.   The   appellant absented himself from duty on the following days and when he was called he gave a false explanation that he had not taken delivery  of  the  goods.  The appellant  1  was  tried  for misappropriation of the goods, under S. 5(1)(c)    of    the Prevention of Corruption Act, 1947.  At the 453 trial,  he took the defence that he had moved the  goods  to another  siding but this was not accepted and the  appellant was convicted.  The appellant contended that his  conviction was  bad  as  the prosecution had failed to  prove  that  he converted the goods to his own use and did not apply them to the purpose for which he had received them. Held,  that the appellant had been rightly  convicted.   The offence   of  misappropriation  was  established  when   the prosecution proved that the servant received the goods, that he was under a duty to account to his master and that he 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 was for him to explain the loss; it  was  not for  the prosecution to eliminate all possible  defences  or circumstances  which  may exonerate him.  The  giving  of  a false explanation was an element which the Court could  take into consideration in determining the guilty intention.  Harakrishna  Mehtab  v. Emperor, A.I.R.  (1930)  Pat.  209; Larnier  v.  Rex, (1914) A.C. 221; Emperor v.  Santa  Singh, A.I.R.  (1944)  Lah. 338; Emperor v.  Chattur  Bhuj,  (1935) I.L.R.  Pat. 108; Rex v. William, (1836) 7 C. & P.  338  and Reg v. Lynch, (1854) 6 Cox.  C. C. 445, referred to.

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JUDGMENT:     CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 114 of 1957. Appeal  by special leave from the judgment and  order  dated December  6, 1955, of the Punjab High Court (Circuit  Bench) Delhi  in Criminal Appeal No. 25-D of 1953, arising  out  of the  judgment and order dated August 27, 1953, of the  Court of  the  special judge at Delhi in Criminal Case  No.  3  of 1953.   R. L. Anand, and S. N. Anand, for the appellant.    H.     J. Umrigar, and R. H. Dhebar, for the respondent.    1959.   May 21.  The Judgment of the Court was  delivered by KAPUR J.-This appeal by special leave is brought against the judgment  and  order  of  the  High  Court  of  the   Punjab confirming the order of conviction of the appellant under s. 5(1)(c)  of  the Prevention of Corruption Act, 1947  (11  of 1947) (hereinafter referred to as the Act).  The High  Court reduced  the  sentence  of the  appellant  to  nine  months’ rigorous imprisonment. 454    The appellant was employed as an Assistant  Store  keeper in  the  Central Tractor Organisation at Delhi  and  amongst other  duties  his  duty  was  the  taking  of  delivery  of consignment  of goods received by rail for  Central  Tractor Organisation  and  in that capacity he is  alleged  to  have misappropriated a major portion of a wagon load of iron  and steel  weighing  about 500 Mds. received  at  Delhi  Railway Station  from  the Tata Iron & Steel Co.,  Tatanagar,  under Railway  Receipt  No. 039967 dated August  12,  1950.   This consignment  of  goods was taken delivery of on  October  2, 1950  at  the Lahori Gate Depot.  The consignment  had  been lying  at the Railway depot for a considerable time and  the Central   Tractor  Organisation  was,  before   taking   the delivery, making efforts to have the wharfage and  demurrage charges reduced but it only succeeded in getting a reduction of Rs. 100.  The appellant paid Rs. 2,332-4-0 for  demurrage by  means of credit notes P. N. and P. 0. on October 2,  and on the following day he paid a further sum of Rs. 57-3-0  by a  credit  note  P. Q. The prosecution case  was  that  this consignment  never reached the Central Tractor  Organisation and  that  the  appellant had removed these  goods  and  had misappropriated them.  He was absent from work after October 4,  1950, on the alleged ground of illness but he  was  sent for  on  October  7, and appeared  before  the  Director  of Administration  Mr.  F. C. Gera and he gave  an  explanation that  he (the appellant) had lost the Railway Receipt  along with  another Railway Receipt and blank credit  notes  which had  been  signed by the Petrol and Transport  Officer.   He also  stated that he did not know that the goods covered  by that   Railway  Receipt  had  been  cleared.    After   this explanation the appellant was. handed over to the police and a  case  was registered against him at the instance  of  Mr. F.C. Gera on October 7, 1950.    On  the  following  day, that is, October  8,  1950,  the appellant made a statement to Sub-Inspector Sumer Shah Singh that  he  had  given the goods to Gurbachan  Singh  who  was traced and in the presence of this Sub-Inspector who was not in  uniform at the time Gurbachan Singh handed over Rs.  200 to the appellant 455 which   the  Sub-Inspector  took  possession  of  and   then Gurbachan  Singh took the party which consisted of the  Sub-

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Inspector,  Dharam Vir of the Central  Tractor  Organisation and  witness Kartar Singh to the premises, of Amar Singh  at Kotia  Khan  where  iron and steel  goods  were  seized  and recovery  memos  prepared.   Of the  goods  covered  by  the consignment  seven  packages were later recovered  from  the Lahori Gate Goods Depot.  The  defence of the appellant was that he took delivery  of the  goods  on October 2 and 3 and removed them  to  another Railway Siding known as Saloon Siding where the goods of the Central Tractor Organisation used occasionally to be stacked in order to save wharfage and demurrage.  In his evidence he stated  that he removed these goods to the Saloon Siding  on October  2 and 3 by means of a truck of the Central  Tractor Organisation  which  was  driven  by  Sukhdev  Singh.    The appellant  produced  Sukhdev  Singh and  two  chowkidars  in support of his defence that he had removed these goods  from the  Lahori Gate Depot to the Saloon Siding by means of  the truck of Sukhdev Singh and on some on carts.  The High Court has  not  accepted this evidence.   Therefore  the  position comes  to this that the goods received in  that  consignment were, according to the appellant’s own showing, removed from the  Lahori  Gate  Depot  but it is  not  proved  that  they reached’  the  Saloon  Siding and they  did  not  reach  the Central  Tractor Organisation.  There is also the fact  that the appellant gave false explanation on October 7, 1950,  as to  what had happened to the Railway Receipt or  the  credit notes  which  he  had  received  from  the  Central  Tractor Organisation  and  there  is  the  further  fact  that   the appellant  was absent from duty from October 4 to October  7 till he was sent for Mr. F.C. Gera.  The  prosecution  also tried to show that  the  goods  were removed by Gurbachan Singh to Amar Singh’s place from  where certain iron and steel goods were recovered.  Now these iron and  steel  goods  do not tally with the  goods  which  were received from Tatanagar under Railway Receipt No. 039967 and the goods 456 seized from Amar Singh’s place have not been shown to be  of the Tata Iron & Steel Co’s manufacture.  Therefore the  case reduces  itself to this that the appellant took delivery  of the  goods.  These goods were removed-from the  Lahori  Gate Railway  Depot by the appellant and they never  reached  the Central  Tractor  Organisation.  The prosecution  sought  to connect the goods found at Amar Singh’s place with the goods received, taken delivery of and removed by the appellant but they  failed  to do so because neither the identity  of  the goods  is the same nor has Gurbachan Singh been produced  to depose that it was the appellant who asked him to remove the goods for being taken to Amar Singh’s place.  In  this  view of the matter the question for  decision  is whether  the  case of the prosecution should be held  to  be proved that the appellant had misappropriated the goods.  It emerges  from  the evidence of both parties that  the  goods were received by the appellant and removed by him; and  they never  reached  the Central Tractor  Origanisation.   Indeed before the High Court it was not disputed that the appellant took delivery of the whole consignment at Lahori Gate  Depot and  "  he  was responsible for the actual  removal  of  two considerable portions of the consignment on the 2nd and  3rd of October.  " The offence of which the appellant; has been convicted is s. 5(1) (c) of the Act which is as follows:-               5.    (1) " A public servant is said to commit               the offence of  criminal  misconduct  in   the               discharge of his duty

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              (c)   if  he  dishonestly   or   fraudulently               misappropriates or otherwise converts for  his               own use any property entrusted to him or under               his control as a public servant or allows  any               other person so to do "; The  word  dishonestly’ is defined in s. 24  of  the  Indian Penal Code to be               " Whoever does anything with the intention  of               causing   wrongful  gain  to  one  person   or               wrongful loss to another person. is said to do               that thing dishonestly’. 457 " Fraudulently has been defined in the Indian Penal Code  in s. 25 as follows:               " A person is said to do a thing  fraudulently               if  he does that thing with intent to  defraud               but, not other-, wise." Wrongful gain includes wrongful retention and wrongful  loss includes  being  kept out of the property as well  as  being wrongfully   deprived   of  property.   Therefore   when   a particular  thing  has gone into the hands of a  servant  he will  be  guilty  of  misappropriating  the  thing  in   all circumstances  which show a malicious intent to deprive  the master  of it.  As was said by Fazl Ali, J., in  Harakrishna Mahtab v. Emperor (1):               "  Now  I do not mean to suggest  that  it  is               either necessary or possible in every case  of               criminal  breach  of trust to  prove  in  what               precise   manner  the  money  was   spent   or               appropriated by the accused; because under the               law,  even temporary retention is an  offence,               provided  that it is dishonest............   I               must point out that the essential thing to  be               proved in case of criminal breach of trust  is               whether the accused was actuated by  dishonest               intention   or  not.   As  the   question   of               intention is not a matter of direct proof, the               Courts  have  from  time  to  time  laid  down               certain  broad  tests  which  would  generally               afford useful guidance in deciding whether  in               a  particular case the accused had or had  not               mens  area  for  the crime.  So  in  cases  of               criminal  breach  of  trust  the  failure   to               account  for  the money proved  to  have  been               received  by  the ’accused or giving  a  false               account of its use is generally considered  to               be a strong circumstance against the accused."   The offence under s. 5(1)(c) is the same as  embezzlement, which  in English law, is constituted when the property  has been  received  by  the accused for or in  the  name  or  on account  of the master or employer of the accused and it  is complete when the -servant fraudulently misappropriates that property. (Halsbury’s Laws of England, Vol. 10, 3rd Edition, p.  787) In Larnier v. Rex (2) the offence  of  embezzlement was (1) A.I. R. (1930) Patna 209.     (2) (1914) A.C. 221, 458 described  as a wilful appropriation by the accused  of  the property  of  another.  A court of Justice, it was  said  in that  case "cannot reach the conclusion that ,the crime  has been  committed unless it be a just result of  the  evidence that  the  accused in what was done or omitted  by  him  was moved by the guilty mind."   So the essence of the offence with which the appellant was charged is that after the possession of the property of  the

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Central Tractor Organisation he dishonestly or  fraudulently appropriated  the  property entrusted to him  or  under  his control  as a public servant and deprived the  owner,  i.e., Central Tractor Organisation of that property.   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 a  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 hag to prove them.  Of course the prosecution has to establish  a prima facie case in-the first instance.  it  is not enough to establish facts which give rise to a suspicion and  then by reason of s. 106 of the Evidence Act  to  throw the onus on him to prove his innocence.  See Harries,  C.J., in Emperor v. Santa Singh In the present case the  appellant received the consignment of goods which came from Tatanagar. It is admitted that he removed them and it was found by (1)  A.I.R. (1944) Lah. 338 at P. 346. 459 the  High Court that they never reached the Central  Tractor Organisation.   He  gave an explanation in court  which  has been  found  to be false.  Before Mr. F. C. Gera he  made  a statement to the effect that he had lost the Railway Receipt and therefore had never got the delivery of the goods  which was also false.  In these circumstances, in our opinion, the court   would  be  justified  in  concluding  that  he   had dishonestly misappropriated the goods of the Central Tractor Organisation.  The giving of false explanation is an element which  the  Court can take into consideration.  (Emperor  v. Chattur  Bhuj (1)).  In Rex v. William (2).  Coleridge,  J., charged the jury as follows :"               The circumstances of the prisoner having quit-               ted  her  place  and gone off  to  Ireland  is               evidence  from -which you may infer  that  she               intended  to appropriate the money and if  you               think that she did so intend, she is guily  of               embezzlement".               Again in Reg v. Lynch (3), Moore, J., said:-               "  You  have  further  the  fact  that,  after               getting the money, the prisoner absconded  and               did not come back till he was in custody.  You               may infer that he intended to appropriate this               money,   and   if   so,  he   is   guilty   of               embezzlement." The  appllent’s  counsel relied on certain  observations  in certain  decided cases which, according to  his  submission, support his contention that the prosecution has to prove not only receipt of goods by the accused but also to prove  that he  converted them to his own use and did not apply them  to the  purpose  for which he received them.   He  referred  to Ghulam  Haider v. Emperor(4) ;In re Ramakkal &  Others  (5); Bolai Chandra Khara v. Bishnu Bejoy Srimani (6) Bhikchand v. Emperor  (7) ;Pritchard v. Emperor (8).  So  broadly  stated

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this  submission does not find support even from  the  cases relied  upon  by  the appellant’s  counsel.   They  are  all decisions  on the peculiar circumstances of each  case.   In Ghulam Haider’s case (4) (1)  (1935) I.L.R. 15 Patna 108.   (5)  A.I.R.   1938   Mad. 172. (2)  (1836) 7 C. & P. 338.       (6)    A.I.R.   1934   Cal. 425. (3)  1854 6 Cox.  C.C. 445.       (7)   A.I.R.  1934   Sindh 22. (4)  AI.R. 1938 Lah. 534.         (8)   A.I.R.   1928   Lah. 382. 460 the  proposition  was  qualified by  saying  that  proof  of receipt and failure to account " is a long way towards proof of misappropriation but not the whole way." In that case the books in which receipts ought to have been entered were  not produced  and  there was absence of "  clear  accounts."  In Ramakkal’s  case  (1)  the accused was  the  receiver  of  a currency  note found by a child and it was held  that’  mere intention to misappropriate or even preparation to that  end was not an offence.  It was a case brought to the High Court at  an  intermediate stage for quashing the charge  and  the High  Court did not do so.  Bolai Chandra Khara’s  case  (2) only  emphasised that proof of one element of  the  criminal breach  of trust is not enough for conviction and  proof  of non-payment  of money collected by a gomastha must be  given by the prosecution. In Bhikchand’s case (3) it was held that it is only on proof of non-payment of money received by  the accused that " presumption will arise of  misappropriation." In Pritchard’s case (4) also the prosecution did not produce the   books  of  account  showing  nonpayment.   All   these decisions  must be confined to their peculiar facts  and  in their  ultimate  analysis  do not  support  the  proposition contended for by the appellant. What  the prosecution have proved in this case is  that  the appellant took delivery of the goods on October 2 and 3. His own statement on oath shows that he removed these goods from the  Railway  Siding.   This  removal  is  also  proved   by documentary  evidence in the form of gate passes.  There  is also  proof  of the fact that the goods did  not  reach  the Central  Tractor Organisation.  The appellant has  given  an explanation  that  he  removed these  goods  to  the  Saloon Siding.   This explanation has not been accepted.  The  pro- secution  have also proved that the appellant in  the  first instance  gave  a false explanation that he  had  not  taken delivery  of the goods.  He had absented himself  from  duty and  had to be called by the Officer-in-charge.  He has  set up the defence of removal to the Saloon Siding which was not accepted. (1)  A.I.R. 1938 Mad. 172.     (3) A.I.R. 1934 Sindh 22. (2)  A.I.R. 1934 Cal, 425.     (4) A.I.R. 1928 Lah. 382. 461 The  prosecution also set out to prove that the  goods  were disposed of by the appellant by giving them to one Gurbachan Singh  who in turn put these at the premises of  Amar  Singh and  some  steel goods were’ recovered from  there  but  the prosecution have neither produced Gurbachan Singh nor has it been proved that the goods are part of the consignment which was taken delivery of by the appellant.  If under the law it is  not necessary or possible for the prosecution  to  prove the manner in which the goods have been misappropriated then the failure of the prosecution to prove facts it set out  to prove would be of little relevance.  The question would only be  one of intention of the appellant and the  circumstances

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which have been above set out do show that the appellant  in what he has done or has omitted to do was moved by a  guilty mind. In  our opinion the appellant was rightly convicted  and  we would therefore dismiss this appeal.                    Appeal dismissed.