SOM NARTH PURI versus THE STATE OF RAJASTHAN

SOM NARIB PURI

THE STATE OF RAJASTHAN

February 15, 1972

[J.M. SHELAT, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ.J

Penal Code, Indian (45 of 1860)-Section 405, 409-Criminal Breach of Trust-'Entrusted,' ffleaning.

The appellant who was an employee of the Indian Airlines Corpora-tion was convicted under s. 409, Penal Code, and section 5(2) read with section 5(1) (c) of the Prevention of Corruption Act, 1947. The e.ppzllanfs duty was to make reservations for the passengers. The pJ:ac-tice was that whenever the quota was full intending travellers were re-quired to pay trunk telephone charges for enabling the Corp<iration to obtain relc::r.se of seats from quotas 'lllotted to other centres. The appel-lant \vllc was incharge of this arrangem-ent, it was allt!ged, collected Rs. 184.90 towards trunk telephones charges but actually deposited with/ the corporation 9nJy sum of Rs. 44.90 and misappropriated the balance. The 1nod11s operandi, it was alleged, was that he would demand higher amoutli for Trunk Call charges than was Jik.ely to .be in<1Urred and be \vould isslJe correct receipt for this amount on behalf of the corporation bnt aitor making the trunk call, he would alter the counterfoil with the octual amount of trunk call charges. In the appeal ,to this Court it was urge.ct that since the prosecution case as disclosed by: the evidence was that .the appellant had collected excess charges representing them to be actual charges for trunk calls and not that any excess over the actual charges would be returned to the appellant be could not be convicted either under s. 5(2) read with S(l)(c) of the Prevention of Corruption Act or uud~r s. 409 penal code, because, the important ingredient, viz., enlhli;t-ment cf the amount was abs,ent.

Dismissing the appeal,

HELD : (i) The expression 'entrusted' in section 409 is used in W.<le sense and inc\udes all cases in whic;b property is voluntarj!yJ1anded O'fr ior specific purpose and is dishonestly disposed ·<>f contrary to the terms on which possession !)as been handed over. As long as tlr: accused is gh en possession of property for. specific purpose or to deal with it in <: particular manner, the ownership being in some person other than the accmed, he can be said to be entrusted with that property to be applied' in accordance with the terms of entrustment and for the benefit of the owner. It may be -that person to whom the property is handed over may tc an agent of the person to whom it .is entrusted or to whom it ma1• belong in which <)lse, if the ag:nt who comes into possession of it on behuif of his principal, fraudulently misaPPl'OPriates the property, he is nonetheless guilty of criminal, breach of trust, because, as an uent be ls enlru~ted with it. person authorised· to collect moneys on behalf of •nother II entrusted with the money when the ..mounts are paid to him, and though the person paying may no longer have any 'Proprietary in· terest, nonetheless, the person on whose behalf it was collected become the owner as soon as the amount is handed ovrlr to the person so autho-rised to collect on his behalf. (502 DJ

4i18 SUPREME COURT REPORTS

The State v. Dahyalal Da/patram, A.LR. 1960 Born. 53; Ir. re: Ram Soonder Poddar & Ors. 1878 (2) Cal. LR. 515; In re: Ramappa, (1911) 22 M.LJ. 112; In re: Venkata Raghunatha Sastri, (1923) 45 M.L.J. 133 and the, Crown Prosecutor v. J. Mclyer and K. S. Narasimhachari, 69 M.L.J. 681, referred to.

(ii) In the present case the amounts for trunk call cjiarges were demanded on behalf of the Corporation and we"> paid to the Corporation. .The receipts in respect of the sums were given on behalf of the Corpe· ration and it would be the Corporation th~t would b<> liable directly to the p<>rson who had paid this amoun4 if no trunk calls were made, or any excess over the actual amoun.t of the trunk calI charges was charged by it. The amount was not paid by passengers to the accused as f>uch but to thr~ corporation and as soon a~ the receipt for the amount actually re-ceived from the passengers was given by the ac'Cused on behalf of the corpoartion, he was .entrusted with that an1ount. His subsequent con- duct in falsifying the counterfoils '3Dd fraudulently misappropriating tho.! JLmount would make him guilty of criminal breach of trust under s. 409 I.P.C., as also under section 5(2) read with section 5(1)(c) of the Act. [604 E·H]

were

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 101 of 1969.

Appeal by special leave from the judgment and order dated April 16, 1969 of the Rajasthan High Court in S. B. Criminal Appeal No. 558 of 1966.

A. S. R. Chari and S. B. Wad, for the appellant.

K. !3· Mehta, for the respondent.

The Judgment of the Court was delivered by

Jaganmohan Reddy, J. This is an appeal by special leave against the judgment of the Rajasthan High Court. The accused was initially charged on three counts, firstly, under section 5(2) read with section S(l)(c) of t!ie Prevention of Corruption Act 1947 (hereinafter referred to as 'the Act'), secondly, under section 409, I.P.C., and .thirdly, under section 477A, I.P.C. Thereafter on 15-1-1964 another Special Judge charged him on two counts, namely, under section 5(2) read with section 5 (1)( c) and section 5(2) read with section 5(1)(w) of the Act. After the trial, the appellant was, however, convicted under section 409, I.P.C. and section 5(2) read with section 5(1 )(c) and (d) of the Act and sentenced to rigorous imprisonment of 18 months and fine of Rs. 250/- under_ section 409, I.P.C. and 18 months' rigorous i!fl-prisonment and fine of Rs. 250/- under section 5(2) read with sections 5(1)(c) and 5(l)(d) of the Act. The sentences on both these counts were directed to run concurrently. The I;iigh Court, however, thought that the Special Judge had not recorded any conviction under section 5(l)(d) of the Act and in that view con-firmed the conviction and sentence of the appellant of 18 months' rigorous imprisonment on each of the coun~. namely, under

s. N. PUR\ v. STATE (Jagamnohan Reddy, J.)

A. section 409, I.P.C. and section 5(2) read with ;1ection 5(1)(c) of the Act, but reduced the fine for each of the ·offences from Rs. 250/· to Rs. 150/-.

The appellant was employed as Traffic Assistant in the Indain Airlines Corporation's office at Jaipur and his duty was to make reservations of the pasre.ngers intending to go by air and issue tickets. As it happens, when the quota of seats allotted to Jaipur is full, intending travellers who request for uccommoda-tion· would be required _to pay trunk telephone charges for enabl· ing the Airlines Corporation to obtain release of seats from quotas allotted to other centres. The practice of the Airlines was to collect the approximate charges and issue receipt therefor and if seat was available, the reservation would be confirmed and accommodation given to the passengers if seats could be released from other centres for Jaipur. Tin appellant who was incharge of these an:angements between 16-2-62 and 30-8-62, collected Rs. 184.90 towards trunk telephone charges but actually deposited witli the Airlines Corporation sup1 of Rs. 44.91 and misappro-D priated the balance of Rs. 139.99. The modus operendi followed by him, it is alleged, 'Yl\S tha.t he would demand higher amount for Trunk Call charges than were likely to be incurred and he would issue correct receipt for those amounts on behalf of. the Airlines Corporation but· after making the trunk call, he would alter the counter-foil with the actual amount of trunk call charges. On the same day he WO!!ld make daily return showing the actual amounts and deposit them with the Cashier. typical sample of the receipts given by him on behalf of the Airlines Corporation is Exhibit 40 which i.s as follows :-

"INDIAN AIRLINES CORPORATION NEW DELHI.

No. 354577 Station : Jaipur.

Date : 30-8-62.

Received with thanks from M/s. M/Travels, Jaipur sum.,of Rupees Twentythree and forty nP, being the amount T /Call charges to Udaipur and AMD for re-lease· of seat.

'for INDIAN AIRLINES °CORPORATION.

Sd/-Cashier".

Rs. 23.40

On 31-8-62, one M.D. Singh qf_the Mercury Travel Agency, Jaipur complained to D.S. Gupta, Incharge of the Office of the Indian Airlines Corporation a~ Jaipur that the appellant had

collected Rs. 23.40 for proposed trunk call charges from the ·1i. Agency but made no call and no seat was allotted to the passenger of the Mercury Travel Agency, even though one was available and that ~eat was given by B. S. Gupta to someone else. B. S. Gupta quesljioned the appell!!_nt who then made. confession of his having collected the amount but not having made call. After making this confession he immediately resigned his job. preliminary inquiry was conducted by the Area Manager who thereafter lodg-ed the First Informaticm Report. The accused denied having collected the amounts or of having issued the receipts and fur-ther stated that whatever amounts were collected by him were paid in the office of the Airlines everyday.

Both the Courts foµnd on the evidence that the appellant used to make trunk calls whenever he was on duty from the Indian Airlines Corporation office at Jaipur for the relea5e of seats and that he would call for and receive trunk call charges from intend· ing passengers. It was further held proved that the appellant gave receipts Exhibited in the case which were in his own hand-writing and signed by him; and that it was he who realised the total sum of Rs. 185 /- which was entrusted to him and over which he had ®minion in his capacity as public servant We have already pointed out that the !Iigh Court did not confirm the conviction of the appellant under section. 5(2) re~d with section 5(1 )(d) on the assumption that the said Special Judge had not convicted the accused for that offence, and since there is no appeal by the State against this part of the judgment, the contention on behalf of the State that he was convicted under section 5(1)(d) has no merits and cannot be sustainCcl.

On behalf of the appellant it was urged before the High Court that as the appellant had to face trial extending over more than 3 years incurring enormous expenses for coming tq and from Chandigarh where he was practising law and was also in Jail for some time, the benefit of the Probation of Offenders Act ·should be given to him. This contention was rejected because the pro-visions of that Act were inapplicable in view of his conviction under section 409, I.P.t:;. As the offence cif criminal breach of trust under section 409, .J:.P.C. is punishable with imprisonment for life, the High Court, in our view, was right because the pro-visions of section 4 are only applicable to case of a·person found guilty of having committed an offence no~ punish~ble wi~ death or imprisonment for life. part from this rea9omn_g, section 18 of the Probation of Offenders Act makes the pl'OVISions of that Act inapplicable to an Offence under sub-section (2) of section S of the Prevention of Corruption Act.

On behalf of the appellant it is submitted by the learned Advo-cate that the prosecution case as d~losed by the evidence was tlrat 'the appellant had collected exc,ess charges from the p11S9engers

representing them to be the actual charges for trunk calls and not that any excess over the actual charges would be returned to them. In view of this evidence, the appellant could not be con-victed either under secl;ion 5(2) read with section 5(l)(c) of the Act or under section 409, I.P.C. because the important ingredient which is entrustment of the amounts is absent. In order that any amount can be said to be entrusted it should be lawfully made over, but in this case the appell.aD.t obtained the amount by cheat-ing and by the commission of an offence. If there was no en-trustment of the moneys to the appellan~. he could not be con, victed either under section 409 or under section 5(2) read with 5(1)(c) of the Act and is accordingly entitled to an acquittal on both these charges. In support of this contention reliance has been placed on Surendra Pal Singh v. The State('), where Bench of the Allahabad High Court held that the amounts collected from cultivators by the Canal Amin in excess of the amount actually due from them and misappropriated by him, did not amount to an entrustment as he could not be trustee of that money on behalf of the cultivators from whom he realised it because when they handed over the money to the accused, they purported to surrender all their rights in that money, nor could it be said that this money had become the property of the Government at any stage for him to be considered trustee on }ts behalf. This decision was, how-ever, disapproved in The Stal&. v. Dahyalal Dalpatram('), by Bench of the Bombay High Court, view with which the High Court agreed. In that case the accused who was employed as Talati in the Revenue Department, was invested with the authority to collect land revenue and fines. He was ordered to recover from the land-holders who had defaulted in paying the moneys but hav-ing collected the,m, he did not pay them into 11he Government Treasury as required by the rules made under the Land Revenue Code. The accused was convicted under section 409, I.P.C. On the question that when the accused collected the amount as tax alleged to ·be due by the land-holder thouj!h the liability whereof could not be·enforced according to Jaw, coµJd it be said that he was then entrusted with the money, the High Court after noticing that the Atlahabad High Court appears to have taken the view that public servant collecting the money claiming that it was due to the State but which in fact was no~ due to th~ State, could not be regarded as entr\isted with the money collected. by him. held that that was not necessary ingredient of section 405. The learned Advocate sought to distinguish this case on the ~round that in the Bombay case there was definite direction f.o collect specific amount and when that amount was collected there was ll' entrustment of that money which was lawfully collected, as such ~-!he accused was riitbtlv convicted. · It was further contended that if looked at from thr !l('lint of view of the passen2ers from whom (I) A.1.R. 1957 All. 122. (2) A.l.R. 1960 Bom. 53,

·4-L1031 SuJ)CJ/72

trunk call charges were collected, they had not entrusted the ll;lOney to the accused because they had parted with the proprietary rights thereon and if viewed from the point of view of the Airlines Corporation, the money collected did not become the property of the Corporation and consequently there was no entrustment of i!.

There can be no doubt that before public servant can be convicted of an offence under section. 5 ( 1 He) or under section 409, I.P.C. the property which is said to have been misappro-priated must be entrusted to him. Section 405 merely provides, whoever being in any manner entrusqed with property or with any dominion over the property, as the first ingredient of the criminal breach of trust. The words 'in any manner' in the con-text are significant. The section does not provide that the entrust-ment of property should be by someone or the amount recieved must be the property of the person on whose behalf it is received. As long as the ac9.use.d is given possession of property for specific purpose Qr to deal with it in particular manner, the ownership being in some person other than the accused, he can be said to be entrusted with that property to be applied in accordance with the terms of entrustment and for the benefit of the owner. The expression 'entrusted' in section 409 is used in wide sense and includes all C¥!:,S in w. hich property is voluntarily handed over for specific purpc!"se and is dishonestly disposed of contrary to the terms on which possession has been handed over. It .may be that person to whom the property is handed over may be an agent of the person to whom it is entrusted or 10 whom it may belong, in which case if the agent who comes into possession of it on be-half of· his principal, fraudulently misappropriates the property, he is nonetheless guilty of criminal breach of trust because as an agent he is entrusted with it. person authorised to collect moneys on behalf of another is entrusted with the money when the amounts are paid to him, and though the person paying may no longer have ·any properietary interest nonetheless the person on whose behalf it was collected becomes the owner as soon as the amount is handed over to the person so authorised to oollect on his behalf. This view of ours is well supported by decisions of different High Courts in this country for neru·ly century, few of which alone need be exrunined.

In the matter of Ram Soonder Poddar & Ors.('), Deputy Magistrate convicted the ·accused under seetion 406, I.P.C., an offence over which he had jurisdiction, instead of under section 409, I.P.C. which was co~izable only by the Court of Session. On revision the High Court held that the proceedings were contrary io law and the Deputy Magistrate was directed to commit the accus-ed for trial by the Court of Session. It' appears that the accused who were charged were Treasury employees. One of the accused

was allowed to write the Treasury Cash Book which was the duty of the Treasurer. Talcing advantage of it, he misappropriated Rs. 16/- by scoring off the entry in the account book. In this mis-appropriation he was assisted by the other accused who was em-ployed to do stamp work. While holding the trial to be without jurisdiction, it was observed that seer.ion 409 does 'not as supposed by the Deputy Magistrate, require the property in respect of which criminal breach of trust is committed, to be the property of Gov-ernment, but only requires that it should be entrusted to public servant in his capacity.as such public servant. In re: Ramappa([1]), the accused who was the Superintendent of some Coffee Curing Works was convicted 9f criminal breach of trust by misappropriat-ing large sum of money made up of amounts which he had receiv-c ed from the Manager on the false pretence that they were required for paying .coolies who garbled coffee. One of the arguments urged against the conviction was that the receipt of the money by false representation amounted to an offence of cheating and that the sub-sequent appropriation of it by the accused to his own use was not criminal breach of trust as the criminal intent was present at.the time of the receipt of the moneys from the Manager. Benson and Sundara Aiyar, JJ., while rejecting that argument, observed :

"When the accused received the money he did so as servant of the Company for the express purpose of using it for his master's benefit in particular way. He was, therefore, entrusted with the money and his apP!'o:. priating it to himself clearly amounts to criminal breach of trust".

In Venkata Raghunatha Sastri('), ,Spencer, J., held that where person who had pledged promissory notes with another as secu-rity for loan dishonestly induced the latter to hand over the same to him by pretending that he required the same for collecting money from his creditors with .the aid of which he would pay cash to the complainant, his act constituted an offence of cheating punishable under section 420, l.P.C. and tha~ when he dishonestly disposed of the notes in violation• of his contract with ~e pledgee to use the money collected in paying off his debt, there was both entrustment and dishonest misappropriation and that the conviclion for the off-ence of criminal breach of trust under section 406, l.P.C. was legal.

Both these cases were referred to in The Crown Prosecutor v. J. Mclver and K. S. Narasimhachari('). Tlie facts in thi~ case also were somewhat similar to those in Venkataraghunatha Sastri's case('). Madhavan Nair, J (as he then was) examined the mean-'ing of the word 'entrusted' in section 406 and rejected similar contention as was urged in this case on behalf of the appellant that when fhe accused by deceiving the complainant fraudulently and

(2) (1923) 4l M.L.J. 133

(I) (1911) 22 M,L,J. 112.

(4) 4l M.L.J. 133.

(3) 69 M.L.J. 681.

dishonestly ind~ced hint to part with the property in questioa, the offence of cheatmg was complete and that there is no room for fur-ther holding that the ac~used have committed criminal breach of trust also by their subsequent misappropriation of the property.

In the case before us, the practice which was being followed by the Jaipur office of the Indian Airlines Corporation is spoken to by M. U. Menon, P.W. 6, who was Personal Assistant to the General Manager of the National Engineering Industries Ltd., Jrupur. He says that on 16-2-1962 his General Manager had ~ected ~ t". issue instir~ctions to t)le accounts branch for arrang-mg for flight !Ickets by rur for Delhi. He first rang up the Indian Airlines Corporation 'ab.out the air passage for eight persons and received reply from that office that 8 tickets were not available at Jaipur and they would iiy from Udaipur and Ahmedabad by trunk calls. After some time the Indian"-Ai!Iines_ Corporation people rang up telling him that tickets can be arranged and he should send the money runounting to Rs. 410.50 which included trunk call charges of Rs. 26.50. He therettpon . sent slip, Exhibit P-6 to the accounts department for further necessary action. There was no cross-exrunination on behalf of the accused. Similarly Ganesh Singh, P. W. 3 who is working for the National Engineering Indus-tries Ltd., Jaipur said that when his people contacted Indian Airlines Corporation on telephone and enquired about the fare etc., they would ask for trunk call charges along with the amount for tickets. This would be paid and in fact he pointed out to the accused and said that he might be one of the persons whom he' met at the office and after he paid the amounts for the tickets and irunk call charges, he would obtain receipt and give it to the company. This evidence read with other evidence Which has been accepted by both the Courts would show that whatever may have been the criminal in-tention of the accused, the amounts for trunk call charges ,were demanded on behalf of the Indian Airlines Corporation and '\YCfe paid to the Corporation. The receipts in respect of the sums were given on behalf of the Corporation and it would be the Corporation that would be liable directly to the person who had paid this amount, if no trunk calls were made, br any excess ever the actlial .amount of the trunk call charges was charged by it. The amount was not paid by passengers to the accused as such but to the Indian Airlines Corporation and as soon as the r~pt for ·the amount actually received from the P}.1ssengers was given by the accused on behalf of the Corporation, he was entrusted with that amount. H"IS sub-sequent conduct in falsifying the counter-foils and fradulently mis-appropriating the amounts would make hint guilty of critninal breach of trust punishable under section 409, I.P.C. as also under section S(2) read with section S(l)(c) of the Act. There is, therefore, no merit in this appeal and it is accordingly dismissed. K.B.N. Apptal dismissed.