PETITIONER:
SUSHIL KUMAR GUPTA
Vs.
RESPONDENT:
JOY SHANKAR BHATTACHARYYA
DATE OF JUDGMENT:
23/02/1970
BENCH:
DUA, I.D.
BENCH:
DUA, I.D.
RAY, A.N.
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