'Entrustment Basic Ingredient Of Criminal Breach Of Trust' : Supreme Court Restores Acquittal of Telephone Department Cashier

A bench of Justice Ujjal Bhuyan and Justice Atul S Chandurkar held so while setting aside the Bombay High Court judgment that had reversed the acquittal of the appellant, holding that the prosecution failed to produce the original cashbook, daily registers and audit report despite being called upon by the Investigating Officer.

It further observed that, without these documents, “it would be difficult to hold that there was, in fact, entrustment of the amount of cash to the appellant, which is one of the basic ingredients for constituting breach of trust.”

The appellant was serving as a Cashier-cum-Counter Clerk with the Telephone Department at Aurangabad. It was alleged that he collected telephone charges of Rs 8,73,737 from customers, out of which Rs 3,88,035 was credited to the Government account while Rs 4,75,702 was never credited. Thereafter, a case was registered under Sections 409, 477, and 420 of the IPC (now Section 316(5), 343, 318(4) of the BNS). However, charge was framed only under Section 409 IPC, which resulted in his acquittal as the trial court found the prosecution evidence “vague and general in nature.” It also noted that the seized registers could not be exhibited because witnesses did not support the prosecution, and held that the procedure under Section 100(7) of the Code of Criminal Procedure, 1973 (CrPC, now Section 103(7) of the Bharatiya Nagarik Suraksha Sanhita, 2023) was not followed when forty-six articles were allegedly seized from the appellant's house.

Subsequently, the Bombay High Court (Aurangabad Bench) reversed the acquittal, sentencing him to rigorous imprisonment for one year and a fine of Rs. 5,000, with one month's additional imprisonment in case of default.

Aggrieved by the Bombay High Court's reversal, the accused filed an appeal before the Supreme Court.

Before the Supreme Court, Senior Advocate BH Marlapalle and Senior Advocate Sudhanshu S Choudhari argued for the appellant that the High Court ignored the settled principles on interference with an acquittal, and substituted its own view merely because another view was possible. It was also submitted that entrustment and dishonest intention were not proved, and that the prosecution failed to produce the relevant records despite being ordered to do so, which warranted an adverse inference. It was further argued that the High Court wrongly shifted the burden of proof onto the appellant.

The respondent argued that the entrustment of Rs 8,73,737 was established. It was also contended that the trial court did not properly consider notice given to the appellant enquiring as to why the amount received from various customers had not been deposited (Exhibit 7), receipt books signed by the appellant (Exhibit 8), the list indicating credit of amount of Rs 4,75,700 (Exhibit-9), and the handwriting expert's opinion.

Relying on Chelloor Mankkal Narayan Ittiravi Nambudiri v State of Travancore-Cochin, the bench noted that in an appeal against acquittal the appellate court must give proper weight to the trial court's views on credibility, the presumption of innocence, the accused's right to the benefit of doubt, and the slowness of an appellate court in disturbing findings by a judge who saw the witnesses.

It further explained that criminal breach of trust under Section 405 requires entrustment of property, or dominion over it, and dishonest misappropriation, conversion, use or disposal. Further reliance was placed on R Venkatakrishnan v CBI, to observe that breach of trust simplicitor is not an offence unless associated with dishonest intention, though even temporary misappropriation falls within the offence.

The Court relied on the admission of the initial Investigating Officer (PW 12), where he deposed that the complainant did not produce the cashbook, balance sheet, daily register, audit report or rough cashbook, and that no subscriber complained of non-receipt of receipts or disconnection. On this, the bench observed as follows:

“The aforesaid admissions clearly indicate that despite being called upon by the IO to produce the original cashbook, audit report and other relevant documents including collection of amounts from subscribers, the same were not produced by the complainant, PW1 and other officers of the Telephone Department. These documents formed the basis of entrustment of property to the appellant.”

It added that the original cashbook or the daily register would have indicated the collection of cash by the appellant, leading to the position that he either did not deposit it or temporarily misappropriated it.

The trial court had drawn an adverse inference of the non-production of daily cash handover register and the stock register of receipt books supplied to appellant, on which the High Court had observed that the appellant ought to have produced the daily registers. Disagreeing with the High Court's view, the bench stated as follows:

“In our view, the trial Court was justified in drawing an adverse inference against the prosecution for its failure to place on record the relevant material that was in the custody of the Telephone Department, the complainant.”

With regards to the panch witnesses turning hostile, the Supreme Court held that “there are serious infirmities in proving the seizure with both the seizure witnesses not having supported the prosecution. Further, there was infraction of the requirements of Sections 100(4) and 100(7) of the Code due to its non-compliance. In this scenario, the seizure could not be held to be duly proved solely on the basis of deposition of the IO without any further corroboration.” It added that the burden of proving a valid seizure was on the prosecution.

Referring to Sunder Singh v State of UP and State of Punjab v Balbir Singh, the bench clarified that non-compliance with Section 100 does not by itself vitiate a seizure and is only an irregularity. However, it said that when this is considered cumulatively with other factors raising doubt on the prosecution case, “the same would weigh in favour of the appellant, especially in an appeal against acquittal.”

The bench found another material infirmity in the High Court's judgment as after arguments on 29.09.2017, the High Court reserved judgment and pronounced it on 12.10.2017, convicting and sentencing the appellant on the same day without hearing him on sentence. Referring to Mukesh Kumar Yadav v The State (UT of Andaman & Nicobar Islands), the Court noted that an appellate court which convicts an accused for the first time after reversing an acquittal “has to hear the convict on sentence.” It cannot remit the matter to the trial court only to impose a sentence.

Further, it was held that the High Court gave undue importance to the appellant's alleged inability to explain the seized documents. Relying on Rabindra Kumar Dey v State of Orissa, it held that the onus lies affirmatively on the prosecution, that the accused is presumed innocent, and that the onus of the prosecution never shifts. It concluded that the “High Court erred in shifting the burden on the appellant.”

Accordingly, the bench held that the trial court had rightly acquitted the appellant.

“The prosecution had failed to prove entrustment of property to the appellant. The material on record is insufficient to conclude that the appellant was guilty of misappropriation of that property. There is also no evidence whatsoever to indicate any dishonest intention on the part of the appellant that would have resulted in commission of an offence punishable under Section 409 of the Penal Code. The High Court committed an error in reversing the judgment of acquittal. It failed to give due weightage to the fact that the trial Court had an opportunity to consider the demeanour of witnesses after which on assessing the entire evidence, it acquitted the appellant,” the bench held.

“The judgment dated 12.10.2017 passed by the High Court in Criminal Appeal No.278 of 2002 is set aside. The acquittal of the appellant as recorded by the learned Chief Judicial Magistrate, Aurangabad in RCC No.80163 of 1996 dated 20.02.2002 is restored. The appellant is, accordingly, acquitted for the offence punishable under Section 409 of the Penal Code.”

Appearance:

For Appellant: Mr. BH Marlapalle, Sr. Adv.; Mr. Sudhanshu S Choudhari, Sr. Adv.; Mr. Vatsalya Vigya, AOR; Mr. Ajit Wagh, Adv.; Ms. Aanchal Rathore, Adv.; Mr. Avinish Kumar Saurabh, Adv.; Ms. Gautami Yadav, Adv.; Ms. Pranjal Chapalgaonkar, Adv.; Mr. Yash Singhania, Adv.

For Respondent: Mr. Aaditya Aniruddha Pande, AOR; Mr. Sachin Patil, AOR; Mr. Shrirang B Varma, Adv.; Mr. Siddharth Dharmadhikari, Adv.; Mr. Harshavardhan V. Ghadge, Adv.