The Himachal Pradesh High Court has acquitted a former Extra Departmental Branch Postmaster accused of misappropriating depositors' money, holding that audit reports and entries in account books alone cannot establish entrustment of money in the absence of independent evidence.

The Court observed that the prosecution had failed to examine any depositor to prove that the alleged amounts were actually handed over to the accused. The Court accordingly held that the essential ingredients of criminal breach of trust under Section 409 of the Indian Penal Code (IPC) had not been established.

Justice Rakesh Kainthla remarked that: “The prosecution has not examined any depositor and has relied upon the audit report (Ex.PW-2/A), the statement of Thakur Ram (PW-2) and the account books to secure the conviction. This was not sufficient.”

The petitioner was working as an Extra Departmental Branch Postmaster at Dhundla Branch Post Office, under Lathiani Sub Post Office. The prosecution alleged that several depositors had handed over money to him, which he acknowledged through entries in their passbooks but failed to credit to their respective accounts. He was also accused of forging signatures of certain account holders and withdrawing money from their accounts.

The Trial Court convicted him under Sections 409 and 420 of the IPC and sentenced him to three years of rigorous imprisonment under each provision. The Additional Sessions Judge, Una, upheld the conviction.

Challenging the concurrent findings, the petitioner approached the High Court, arguing that the prosecution had failed to establish entrustment or dishonest misappropriation of the money.

The High Court observed that the prosecution had failed to examine any depositor to establish that the alleged money was actually entrusted to the petitioner. The Court held that entries in account books, even if regularly maintained, cannot independently establish liability without corroborative evidence.

The Court further observed that entrustment is an essential ingredient of an offence under Section 409 IPC and cannot be presumed merely from discrepancies in official records.

It also held that Sections 409 and 420 IPC involve distinct and mutually exclusive ingredients, as criminal breach of trust requires entrustment whereas cheating requires dishonest inducement from the inception.

Accordingly, finding no sufficient evidence to establish the alleged offences, the Court set aside the concurrent convictions and acquitted the petitioner.

Date of Decision: 06.11.2026