23 February 1970
Supreme Court


Case number: Appeal (crl.) 131 of 1967






DATE OF JUDGMENT: 23/02/1970


CITATION:  1971 AIR 1543            1970 SCR  (3) 770  1970 SCC  (1) 504  CITATOR INFO :  R          1985 SC 628  (47,74)

ACT:      Criminal   Trial-Secrctary  of   co-operative   society charged  under  ss. 408 and 477  A.I.P.C.-Joint  trial  with abettors-Acquittal  of abettors-Effect on conviction of  the principal accused.      Criminal  breach  of  trust-User by  accused  of  money entrusted,  contrary to rules-Ratification  by  Directors-No power to ratify-Effect of      Misjoinder of charges-No prejudice to accused.      Constitution of India, 1950, Art  134(1)(c)-Certificate by  High Court-Judicial discretion to be exercised  by  High Court.

HEADNOTE: The  appellant,  who  was the  Secretary  of  a  Cooperative Society and was responsible for the cash and maintenance, of the  accounts of the Society, was charged with the  offenses of  criminal breach of trust and falsification  of  accounts under  ss. 408 and 477-A, I.P.C. He was tried along  with  5 others who were charged with the offence of abetment of  the offenses.   The, trial court acquitted all of them, but  the appellate   court  (the  Court  of  Judicial   Commissioner) convicted  the  appellant and acquitted  the.  others.   The appellate  Court held that the appellant had advanced  money against the rules of the Society and also to various persons not entitled to it, that the appellant had thereby committed criminal  breach  of  trust and  either  misappropriated  or misapplied  the funds of the Society dishonestly to  benefit himself or his relations and friends.  The ’appellate  Court certified  that  the case was a fit one for appeal  to  this Court  under  Art. 134(1) (c), but, the order  granting  the certificate  did not disclose on its face what  exactly  was the  difficulty of the appellate Court and what question  of outstanding difficulty this Court was to settle.     In appeal to this Court,     HELD : (1) The acquittal of the co-accused was not based on  the finding that there was no falsification of  accounts or embezzlement.  Therefore, the appellant could not contend that  no offence was committed because of the  acquittal  of



the co-accused. [773 G-D]     (2)   On the finding of the appellate court, it was  not a  mere civil liability of the appellant.   The  appellant’s manner  of dealing with the money entrusted to  his  custody constituted criminal breach of trust.  The Directors had  no authority under the bye-laws to give any directions contrary to  the bye-laws and so, could not ratify the  violation  of the  bye-laws.   Any resolution ratifying the use  of  trust money  contrary to the directions contained in the  bye-laws would  not validate the breach- of the bye-laws. [775G;  776 A-C]     (3)   There   was  no  misjoinder  of  charges  and   no prejudice was caused to the appellant. [776 F]     (4)   The  appellate Court should not have  granted  the certificate, under Art. 134(1)(c) in the present case.   The word ’certify’ in the Article 771 postulates  the  exercise.  of judicial  discretion  by  the appellate  Court and the certificate should ordinarily  show on  the  face  of it that the  discretion  was  invoked  and properly  exercised.  This Court should be in a position  to know that the appellate Court has not acted mechanically but has  applied its mind.  A certificate under this  clause  is impermissible on questions of fact.  When the case does  not disclose  a  substantial question of law or  principle  -the certificate. granted by the appellate Court is liable to  be revoked  by  this  Court,  though  such_  prima  facie  non- disclosure would not by itself automatically invalidate  the certificate [777 A-C]

JUDGMENT: CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 131  of 1967.      Appeal  from  the judgment and order dated  January  9, 1967 of the Judicial Commissioner’s Court Tripura,  Agartala in Criminal Appeal Case No. 8 of 1963.      M.  K. Ramamurthi, J. Ramamurthi and Vineet Kumar,  for the appellant.      H. R. Khanna and R. N. Sachthey, for the respondent.      The Judgment of the Court was delivered by      Dua,  J.  Pursuant to a complaint by Shri  Joy  Shanker Bhattacharyya, the appellant Sushil Kumar Gupta was tried in the  court  of  Assistant Sessions  Judge,  Tripura  on  the following charges                   "(1)  That  you in between  the  month  of               September, 1958 and July, 1959 at Agarwala  P.               S. Kotwali being a servant viz.  Secretary  in               the   employment   of  the   Tripura   Central               Marketing  Co-operative Society Ltd.,  and  in               such capacity entrusted with certain  property               to  wit  a total sum of Rs. 18,200  being  the               fund of the Society committed criminal  breach               of  trust in respect of the said property  and               thereby committed an offence punishable  under               s. 408 of the Indian Penal Code and within the               cognizance of this Court.                   Secondly : that you in between the  period               of September, 1958 and July, 1959 at the  same               place  being a Secretary in the employment  of               the  Tripura  Central  Marketing  Co-operative               Society  Ltd.,  wilfully and  with  intent  to               defaud,  falsified  certain  books  and  other               relevant  papers to wit cash book etc.,  which



             belonged  to the said society,  your  employer               and  thereby committed an  offence  punishable               under  S. 477-A of the Indian Penal  Code  and               within the cognizance of this Court."      As  the  appellant was tried jointly  along  with  five others  who  have  been acquitted and as if  was  argued  on behalf of the appellant that in view of the acquittal of his co-accused the appellant 772 also  should have been acquitted, the charges  against  them may -also be reproduced : -                  "That Sushil Kumar Gupta, Secretary of  the               Tripura Central Marketing Co-operative Society               Ltd., in between the period of September, 1958               and  July,  1959  at  Agartala  p.s.   Kotwali               committed  the offence of criminal  breach  of               trust  in respect of Rs. 18, 200 and that  you               the  aforesaid persons at the same  place  and               time  abetted  the said  Shri.   Sushil  Kumar               Gupta in the commission of the same offence of               criminal  breach  of trust in respect  of  the               said amount which was committed in consequence               of  your  abetment and that you  have  thereby               committed an offence punishable under s.  109,               I.P.C. read with s. 408, I.P.C. and within  my               cognizance.                   Secondly  : that Shri Sushil Kumar  Gupta,               Secretary of the Tripura Central Marketing Co-               operative  Society Ltd. in between the  period               of September, 1958 and July, 1959 at  Agartala               p.s.   Kotwali   committed  the   offence   of               falsification  of  accounts and that  you  the               aforesaid  persons at the same place and  time               abetted  the said Shri Sushil Kumar  Gupta  in               the   commission  of  the  same   offence   of               falsification  of account which was  committed               in  consequence of your abetment and that  you               have  thereby committed an offence  punishable               u/s  109,  I.P.C. read with s.  477-A  of  the               I.P.C. and within my cognizance." The  trial court acquitted all the six accused persons.   An appeal  against the acquittal of all of them  was  preferred under  s.  417 (3), Cr.  P.C. in the court of  the  Judicial Commissioner,  Tripura.   That  court  allowed  the   appeal against  S.  K. Gupta only and dismissed it as  against  the others.   S.  K.  Gupta was held guilty of  the  offence  of criminal  breach of trust under s. 408, I.P.C. and  also  of the  offence  of falsification of accounts under  s.  477-A, I.P.C.  regarding the sum of Rs. 18,200.  He  was  sentenced under  each count to undergo rigorous imprisonment  for  one year, the sentences to be concurrent.    The  convict  S. K. Gupta has appealed to this  Court  on certificate   granted   under   Art.   134(1)(c)   of    the Constitution.   ’Me order granting the certificate does  not disclose  on  its face what exactly the  difficulty  of  the court  of  the Judicial Commissioner is and  precisely  what question of outstanding difficulty this Court is desired  to settle.   On  behalf of the appellant his  learned  advocate Shri  Ramamurthy,  however,  addressed  elaborate  arguments questioning  the order of the learned Judicial  Commissioner allowing 773 the  appeal against the appellant S. K.  Gupta’s  acquittal. His,  challenge  was based on three main  contentions.   The fourth point that the learned Judicial Commissioner erred in



law in- considering Ex.  P-59 to be admissible in  evidence, in disagreement with the trial court, according to which  it was hit by s. 24, Indian Evidence Act, was not allowed to be argued  in this Court because this ground was not  taken  in the grounds of appeal.     The first contention seriously pressed on behalf of  the appellant is that in view of the acquittal of his co-accused who  were  tried along with him the court  of  the  Judicial Commissioner  was  wrong in law in holding  that  there  was falsification  of accounts and embezzlement of the funds  of the  Tripura Central Marketing Co-operative  Society.   This submission is unacceptable.  The acquittal of the other  co- accused as affirmed by the learned Judicial Commissioner  is not based on the finding that there was no falsification  of accounts  and no embezzlement of the funds of  the  Society. S.  K.  Gupta,  appellant, it may be  pointed  out  was  the Secretary of the Society since April 13, 1957 when the first general  meeting  of the Society was held and  was  in  that capacity  entrusted with its funds.  He worked as such  till August  10,  1960.  He was accordingly responsible  for  the cash  and  maintenance of current accounts  of  the  Society during  the period in question.  Turning to the Bye-laws  of the  Society,  bye-law no. 41 prescribes the duties  of  the Secretary.   According  to this bye-law  the  Secretary  has inter alia :                  "(3)  To  make disbursement and  to  obtain               vouchers  and  to receive  payments  and  pass               receipts, under the general or special  orders               of the Board of Directors on this behalf  from               time to time.                   (4)    To keep all accounts and  registers               required by the rules.                   (13)   To  countersign cash book in  token               of  the balance being correct and  to  produce               the  cash balance. whenever called upon to  do               so by the Chairman or any person authorised to               do so.                    In the absence of the Secretary the Board               of  Directors  may authorise  the  Manager  to               perform the duties of the Secretary.                    The Board of Directors may also authorise               the  Manager to perform any of the  duties  of               the  Secretary to facilitate, the  working  of               the Society.                    Receipts passed on behalf of the  Society               shall  be,  signed by  the  Secretary.   Share               certificates and other- 774               documents shall be signed by the Secretary and               one member of Board of Directors jointly." Byelaw  42 contains directions I regarding advances  against proof goods and clause (1) of this byelaw provides :                  "(1)  The Board of Directors shall, at  the               beginning  of the session, fix the  amount  of               advance,  indicating  the  percentage  of  the               market price of produce or goods pledged  with               the society, that may be granted to a  member.               Such  limits may be fixed for  different  com-               modities   and  varied  from  time   to   time               according   to  fluctuation  in   markets   or               otherwise.                   It  shall also be competent for the  Board               of Directors to call on a borrower at any time               before the due date to repay a portion of  the               loan   or   advance  issued  or   to   produce



             additional  security for the outstanding  loan               or advance within a time fixed by them, if  in               their opinion, there is fall or likely to be a               fall  in  the market value of the  produce  or               goods pledged."     Under  byelaw  44  loans may be granted  to  members  in suitable  cases  on  such terms and  conditions  as  regards individual  and maximum limits, repayment of loan,, rate  of interest  thereon  etc.,  as may be fixed by  the  Board  of Directors  from  time  to time.  According  to  the  learned judicial  Commissioner "the overall picture" emerging  .from the evidence on the record, to quote his own words, it                   "(1)  A  sum of Rs. 18,200/- was  said  to               have been disbursed in 1958 and 1959.                    (2)   It was said to have been repaid  in               the last week of June, 1959 towards the end of               the co-operative year of 1959  and long  after               the maximum period of 6 months allowed by rule               42 (4) of the byelaws.                    (3)   The  same amount was again said  to               have  been  ,disbursed in a few  days  in  the               first  week of July commencing with  the  next               cooperative year (1959-60).                    (4)   Except the 2nd and 4th respondents,               the  others  were  not  members  of  the   Co-               operative  Society and in this regard the  1st               respondent disregarded sub-rule (1) ,of r.  42               of the byelaws.                    (5)   The  1st respondent did not  obtain               any general or special orders of the Board  of               Directors   to  make  the  disbursements   and               violated sub-rule (1) of r. 42 of Ext. P-41. 775                  (6)     Ext.   P-56 and P-59 show that  the               alleged collections of the monies in June 1959               was false and that the accounts were got up.                  (7)     The  fact  that a discount  of  Rs.               10/-  was paid to cash a cheque  on  29-6-1959               shows  that the society had no funds  on  that               day.                   (8)    None  of the alleged loanees was  a               Jute  grower and no jute was deposited in  the               godowns  of  the society before  the  advances               were  made  and in this regard  the  mandatory               provisions  of sub-r. (2) of r. 42  were  also               disregarded by the 1st respondent.                   (9)    A  number of adjustments were  made               in  the Accounts to show that the sum  of  Rs.               18,200/- was disbursed.                   (10)   The    three   persons   to    whom               ultimately the amounts were said to have  been               disbursed   are   interested   in   the    1st               respondent.   The  4th respondent  C.  C.  Das               Gupta is a relation of the 1st respondent  and               proved by P. Ws 1, 6 and 8 and as admitted  by               the 4th respondent himself in Ext.  P-56.  The               3rd respondent Sudhir Ranjan Roy is a  servant               of  D.W. I who is a co-Director of  the  Match               Factory and friend of the 1st respondent.  The               3rd  respondent Haradhan Deb was appointed  by               the  1st  respondent  in the  C.M.S.  The  3rd               respondent was also an employee of the  C.T.S.               of which the 1st respondent was a Director."      On  the basis of these observations the  appellant  was held to ,have committed criminal breach of trust and to have



either  misappropriated  or  misapplied  the  funds  of  the Society dishonestly to benefit himself of his relations  and friends.  Counsel failed to point out any legal infirmity in the  final conclusion drawn in the impugned order  from  the overall picture.  Indeed, counsel, after a faint attempt  to find  fault with this conclusion felt constrained  to  admit that  the money had been advanced against the rules  of  the Society and also to the persons not entitled to it, his only contention  in support of the appeal being that it  did  not constitute  a  criminal offence and that in  any  event  the Board  of  Directors  of the  Society  having  ratified  the advances,  the  foundation for the criminal charge  must  be deemed to have disappeared.  We are unable to agree.      The  offence of criminal breach of trust  is  committed when  a person who is entrusted in any manner with  property or With dominion over it, dishonestly misappropriates it, or converts  it  to  his own use,  or-dishonestly  uses  it  or disposes it of in violation 776 of  any direction of law prescribing the mode in  which  the trust  is  to  be discharged, or  of  any  lawful  contract, express or implied, made by him touching such discharge,  or wilfully suffers any other person so to do.  The appellant’s manner  of dealing with the money entrusted to  his  custody clearly  constitutes criminal breach of trust.  Counsel  was not  able  to  point out any provision  which  empowers  the Directors  to prescribe the mode of making  advances,  which violates or is in breach of, or contrary to the Byelaws.  If the  Directors,-possess no authority to give any  directions contrary  to the byelaws they can scarcely claim  or  assume power  to ratify violation of the Byelaws in the  matter  of dealing  with the trust money.  Our attention was not  drawn to  any over-riding provision conferring power on the  Board of  Directors to ratify use of the trust money  contrary  to the directions contained in the Byelaws.  Exhibit P-27,  the resolution of the Board of Directors dated January 10, 1960, on  which reliance in support of’ the argument  was  placed, merely  states "investments made by the  Secretary  uptodate are  hereby  approved" without pointing out  the  provisions under  which  such approval could validate breaches  of  the Byelaws.  Incidentally it may be mentioned that the  learned Judicial Commissioner also entertained some suspicion  about the  manner in which the meeting, in which  this  resolution was passed, was held.  This- contention of the counsel must, therefore, be repelled.      In  the  last submission the counsel made  a  grievance against  the  joint  trial of  several  accused  persons  on several items of embezzlement.  According to him there was a misjoinder  of  charges which vitiated the  trial.   In  our opinion,  charges  under s. 408 and s. 477-A,  Indian  Penal Code,  could,  in the circumstances of this case,  be  tried together  and the joint trial of all the accused was  proper and lawful.  Our attention was not drawn to any provision of law  against the legality of the joint trial.  In any  event no  failure  of  justice in consequence of  the  joinder  of charges  was pointed out, with the result that the  question of  misjoinder  of  charges must be held  to  be  of  little consequence at the stage of appeal.      Before closing we may point out, as has repeatedly been said  by  this  Court, that there is normally  no  right  of appeal  to  this Court in criminal matters except  in  cases provided :by Art. 134 ( 1 ) (a) and (b) of the Constitution. Clause  (c)  of  this Article empowers  the  High  Court  to certify cases to be fit for appeal to this Court.  The  word "certify"  is  a  strong word;  it  postulates  exercise  of



judicial  discretion by the High Court and  the  certificate should ordinarily show on-the face of it that the discretion was invoked and properly exercised.  This Court should be in a  position  to  know  that the High  Court  has  not  acted mechanically 777 but  has applied its mind.  A certificate under this  clause is  impermissible on questions of fact and when a case  does not disclose a substantial question of law or principle then the  certificate granted by the High Court is liable  to  be revoked  by  this  Court,  though  such  prima  facie   non- disclosure would not by itself automatically invalidate  the certificate.  In the case in hand no substantial question of law or principle was made out at the bar and the certificate was  clearly  misconceived  though it  vaguely  states  that several questions of law are involved.  The appeal fails and is dismissed. V.P.S.                  Appeal dismissed. OSupCI(NP)701-5 778