Supreme court Judgment on essential ingredients of offences punishable U/S 409, 420 & 477A of IPC

 Ingredients necessary to prove a charge under Section 409 IPC:

41. Section 409 IPC pertains to criminal breach of trust by a public servant or a banker, in respect of the property entrusted to him. The onus is on the prosecution to prove that the accused, a public servant or a banker was entrusted with the property which he is duly bound to account for and that he has committed criminal breach of trust. (See: Sadupati Nageswara Rao v. State of Andhra Pradesh, ((2012) 8 SCC 547)).

42. The entrustment of public property and dishonest misappropriation or use thereof in the manner illustrated under Section 405 are a sine qua non for making an offence punishable under Section 409 IPC. The expression ‘criminal breach of trust’ is defined under Section 405 IPC which provides, inter alia, that whoever being in any manner entrusted with property or with any dominion over a property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property contrary to law, or in violation of any law prescribing the mode in which such trust is to be discharged, or contravenes any legal contract, express or implied, etc. shall be held to have committed criminal breach of trust. Hence, to attract Section 405 IPC, the following ingredients must be satisfied:
(i) Entrusting any person with property or with any dominion over property;
(ii) That person has dishonestly mis-appropriated or converted that property to his own use;
(iii) Or that person dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation of any direction of law or a legal contract.

43. It ought to be noted that the crucial word used in Section 405 IPC is ‘dishonestly’ and therefore, it pre-supposes the existence of mens rea. In other words, mere retention of property entrusted to a person without any misappropriation cannot fall within the ambit of criminal breach of trust. Unless there is some actual use by the accused in violation of law or contract, coupled with dishonest intention, there is no criminal breach of trust. The second significant expression is ‘mis-appropriates’ which means improperly setting apart for ones use and to the exclusion of the owner.

44. No sooner are the two fundamental ingredients of ‘criminal breach of trust’ within the meaning of Section 405 IPC proved, and if such criminal breach is caused by a public servant or a banker, merchant or agent, the said offence of criminal breach of trust is punishable under Section 409 IPC, for which it is essential to prove that:
(i) The accused must be a public servant or a banker, merchant or agent;
(ii) He/She must have been entrusted, in such capacity, with property; and
(iii) He/She must have committed breach of trust in respect of such property.

45. Accordingly, unless it is proved that the accused, a public servant or a banker etc. was ‘entrusted’ with the property which he is duty bound to account for and that such a person has committed criminal breach of trust, Section 409 IPC may not be attracted. ‘Entrustment of property’ is a wide and generic expression. While the initial onus lies on the prosecution to show that the property in question was ‘entrusted’ to the accused, it is not necessary to prove further, the actual mode of entrustment of the property or misappropriation thereof. Where the ‘entrustment’ is admitted by the accused or has been established by the prosecution, the burden then shifts on the accused to prove that the obligation vis-à-vis the entrusted property was carried out in a legally and contractually acceptable manner.

Ingredients necessary to prove a charge under Section 420 IPC:

46. Section 420 IPC, provides that whoever cheats and thereby dishonestly induces a person deceived to deliver any property to any person, or to make, alter or destroy, the whole or any part of valuable security, or anything, which is signed or sealed, and which is capable of being converted into a valuable security, shall be liable to be punished for a term which may extend to seven years and shall also be liable to fine.

47. It is paramount that in order to attract the provisions of Section 420 IPC, the prosecution has to not only prove that the accused has cheated someone but also that by doing so, he has dishonestly induced the person who is cheated to deliver property. There are, thus, three components of this offence, i.e., (i) deception of any person, (ii) fraudulently or dishonestly inducing that person to deliver any property to any person, and (iii) mens rea of the accused at the time of making the inducement. It goes without saying that for the offence of cheating, fraudulent and dishonest intention must exist from the inception when the promise or representation was made.

48. It is equally well-settled that the phrase ‘dishonestly’ emphasizes a deliberate intention to cause wrongful gain or wrongful loss, and when this is coupled with cheating and delivery of property, the offence becomes punishable under Section 420 IPC. Contrarily, the mere breach of contract cannot give rise to criminal prosecution under Section 420 unless fraudulent or dishonest intention is shown right at the beginning of the transaction. It is equally important that for the purpose of holding a person guilty under Section 420, the evidence adduced must establish beyond reasonable doubt, mens rea on his part. Unless the complaint showed that the accused had dishonest or fraudulent intention ‘at the time the complainant parted with the monies’, it would not amount to an offence under Section 420 IPC and it may only amount to breach of contract.

Ingredients necessary to prove a charge under Section 477-A IPC:

49. The last provision of IPC with which we are concerned in this appeal, is Section 477A, which defines and punishes the offence of ‘falsification of accounts’. According to the provision, whoever, being a clerk, officer or servant, or employed or acting in that capacity, wilfully and with intent to defraud, destroys, alters, mutilates or falsifies any book, electronic record, paper, writing, valuable security or account which belongs to or is in possession of his employer, or has been received by him for or on behalf of his employer, or wilfully and with intent to defraud, or if he abets to do so, shall be liable to be punished with imprisonment which may extend to seven years. This Section through its marginal note indicates the legislative intention that it only applies where there is falsification of accounts, namely, book keeping or written accounts.

50. In an accusation under Section 477A IPC, the prosecution must, therefore, prove—(a) that the accused destroyed, altered, mutilated or falsified the books, electronic records, papers, writing, valuable security or account in question; (b) the accused did so in his capacity as a clerk, officer or servant of the employer; (c) the books, papers, etc. belong to or are in possession of his employer or had been received by him for or on behalf of his employer; (d) the accused did it wilfully and with intent to defraud.

Supreme Court

CHIEF JUSTICE OF INDIA N.V. RAMANA JUSTICE SURYA KANT JUSTICE HIMA KOHLI

N. Raghavender Vs. State of Andhra Pradesh, CBI

CRIMINAL APPEAL NO. 5 OF 2010

13th December 2021

Author: Surya Kant, J.

Citation: 2021 ALL SCR (ONLINE) 761

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How to appreciate evidence in case of offence of criminal breach of trust?

We have perused the entire record and the evidence. We find
that the case could have been conducted in a more proper and
appropriate manner. Learned APP is right in submitting that trial court
could have been more vigilant in conducting the trial. At the relevant
time, the amount which was not accounted for was a substantial amount
i.e. Rs. 95,396/-. The Investigating officer ought to have taken pains to
produce the prosecution witnesses cited in support of the prosecution
case. The record shows that efforts were made by the Prosecutor for
getting summons issued at times, even bailable warrant were issued, but
for the reasons best known to the Investigating Agency, the persons who
claimed to have deposited money with the post office did not come
forward to depose in favour of the prosecution.
7. The evidence of PW1, PW2 and PW3 who were from the
department shows that entire record was scanned by them. They seized
the record. The record also shows that several receipts were seized
which were executed in the name of persons who paid money towards

money order. The record is relevant to the allegations made. The
prosecution witnesses 1, 2 and 3 calculated the amount of Rs. 95,396/-
which was not accounted for. In the normal circumstances, respondent
being a Branch Post Master of Kausa post office must have been made
responsible and accountable. Being a Branch Post Master, it was the
responsibility and duty of the respondent to explain the circumstances
and allegations made.
8. We cannot loose site of the fact that prosecution has to establish its
case beyond reasonable doubt. The seizure of record from the residence
of respondent was not supported by Panchas but the same was
supported by the Investigating Officer. The investigating officer in the
cross-examination stated that receipt books were sealed after the
panchnama was drawn but there was no reference of the same in the
panchnama. He further stated that receipt books do not bear signature
of Panchas but he denied suggestion that panchnama was fabricated.
The Investigating officer has averred that he did not seized original
money order receipts from witnesses i.e. sender of money orders. This is
serious lacuna on the part of Investigating Officer. The Investigating
Officer ought to have obtained specimen signature and hand-writing
expert report while conducting investigation. For the reasons best known

to Investigating Officer, we do not find such an evidence was brought on
record. These are matters where confidence of people is involved. The
Investigating Agency ought to have been more vigilant in conducting
investigation in such cases. In this fact of scenario and considering the
nature of quality of evidence, benefit would be derived by the accused
person for the lacunas, lapses and defects in the prosecution evidence. It
is the cardinal principle of criminal jurisprudence that on mere conjectures
and surmises a person cannot be held guilty and punished. 
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 547 OF 2002
State of Maharashtra 
V/s.
Mrs. Mandabai Ashok Sawant,

CORAM : NARESH H. PATIL AND
PRAKASH D. NAIK, JJ.
Dated:28th July, 2016.
Citation: 2016 ALLMR(CRI)4065

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Whether sanction for prosecution is required for prosecution of public servant for offence U/S 409 of IPC?

 In Shambhoo Nath Misra v. State of U.P. and others[1], at paragraph-5, this Court held that:

"5. The question is when the public servant is alleged to have committed the offence of fabrication of record or misappropriation of public fund etc. can he be said to have acted in discharge of his official duties. It is not the official duty of the public servant to fabricate the false records and misappropriate the public funds etc. in furtherance of or in the discharge of his official duties. The official capacity only enables him to fabricate the record or misappropriate the public fund etc. It does not mean that it is integrally connected or inseparably interlinked with the crime committed in the course of the same transaction, as was believed by the learned Judge. Under these circumstances, we are of the opinion that the view expressed by the High Court as well as by the trial court on the question of sanction is clearly illegal and cannot be sustained."

In Parkash Singh Badal v. State of Punjab and others[2], at paragraph-20, this Court held that:

"20. The principle of immunity protects all acts which the public servant has to perform in the exercise of the functions of the Government. The purpose for which they are performed protects these acts from criminal prosecution. However, there is an exception. Where a criminal act is performed under the colour of authority but which in reality is for the public [pic]servant's own pleasure or benefit then such acts shall not be protected under the doctrine of State immunity."

and thereafter, at paragraph-38, it was further held that:

"38. The question relating to the need of sanction under Section 197 of the Code is not necessarily to be considered as soon as the complaint is lodged and on the allegations contained therein. This question may arise at any stage of the proceeding. The question whether sanction is necessary or not may have to be determined from stage to stage."

In a recent decision in Rajib Ranjan and others v.

R. Vijaykumar[3], at paragraph-18, this Court has taken the view that ... "even while discharging his official duties, if a public servant enters into a criminal conspiracy or indulges in criminal misconduct, such misdemeanour on his part is not to be treated as an act in discharge of his official duties and, therefore, provisions of Section 197 of the Code will not be attracted".
Public servants have, in fact, been treated as special category under Section 197 CrPC, to protect them from malicious or vexatious prosecution. Such protection from harassment is given in public interest; the same cannot be treated as shield to protect corrupt officials. In Subramanian Swamy v. Manmohan Singh and another[4], at paragraph-74, it has been held that the provisions dealing with Section 197 CrPC must be construed in such a manner as to advance the cause of honesty, justice and good governance.

Reportable

Supreme Court of India

Inspector Of Police & Ors vs Battenapatla Venkata Ratnam & Anr on 13 April, 2015

Bench: Kurian Joseph, Adarsh Kumar Goel

           CRIMINAL APPEAL NO. 129 OF 2013

Citation;2015 CRLJ 2942 SC

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Whether a person can be held guilty for misappropriation of money if money is not entrusted to him?

On this evidence, it is obviously impossible to hold that the money ever came to be entrusted to the accused. Without proof of entrustment, there can be no question of the appellant being found guilty of the offence under Section 409 R.P.C.

Supreme Court of India

Roshan Lal Raina vs State Of Jammu & Kashmir on 23 March, 1983

Equivalent citations: AIR 1983 SC 631, 1983 CriLJ 975, 1983 (1) Crimes 1076 SC, 1983 (1) SCALE 292, (1983) 2 SCC 429

Bench: O C Reddy, S M Ali

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Whether misappropriation of public funds is done by public servant by obtaining more money from public otherwise than legal dues?

The sum of Rs. 398/4/6 correctly realised from the cultivators by the applicant as canal d

ues thus came into his hands as a trustee on behalf of the State Government & the findings of fact show that he discharged that trust properly by depositing that amount in the Government treasury. So far as the balance of Rs. 198/9/6 is concerned, that amount was never due to the Government. It was, therefore, never the property of the Government at any stage When the applicant realised this sum of money, it did not become Government property, nor did he ever become its trustee on behalf of the Government.

At the same time, he could not become the trustee of this money on behalf of the cultivators from whom he realised this money because, when they handed over the money to the applicant, they purported to surrender all their rights in that money. Their intention was that the money should go to the Government and it was in pursuance of that intention and for its fulfilment that they handed over the money to the applicant. Thereafter, therefore, it cannot be said that the money was held by the applicant as a trustee on their behalf.

The cases, where a person hands over his property to another intending to retain his rights in that property, are totally distinguishable from the present case. In cases, where the right in the property is retained by the person who hands over the property to another person who misappropriates it, the question of an offence of criminal breach of trust being committed may arise, even though the entrustment of the property may have been obtained by wrongful representations.

In such a case, it is possible that two different offences -- one of committing criminal breach of trust and another of cheating by obtaining delivery of the property by false representations --may have been committed and it may" be possible to convict the person committing the acts for any one of those offences or both of them. In a case like the present one, where the money was realised by the applicant representing that the amount was due as canal dues, no entrustment of the property with the applicant, either on behalf of the State or on behalf of the persons who paid the money, came into existence.

The only offence, which, on these facts, the applicant can be held liable for, is the offence of cheating and obtaining delivery of property by commission of that offence which would be punishable under Section 420, Penal Code. We may say with respect that the remarks made by the Full Bench of the Madras High Court in Emperor v. John Melver, AIR 1936 Mad 353 (A) and the remarks made by the Law Lords in Lake v. Simmons, 1927 AC 487 . (B) support our view. In such a case as the present one, the appropriate provision of law is only Section 420, Penal code, where Section 409, Penal Code, cannot apply at all.

Allahabad High Court

Surendra Pal Singh vs The State on 18 September, 1956

Equivalent citations: AIR 1957 All 122, 1957 CriLJ 170

Bench: V Bhargava, Sahai

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When offence of criminal misappropriation of property U/S 409 of IPC is not made out?

 The only question which arises for consideration in this appeal is whether the appellant could be said to have committed criminal breach of trust in respect of the receipt-book. There can be no doubt and that it is amply proved by the oral evidence on record read with the list Ex. PA that the receipt book was entrusted to the appellant in his capacity as Patwari on 6th November, 1967 when he took charge of his post. It must equally be taken to be established that the receipt book was not in the room of the appellant when the lock was broken open and charge was forcibly taken from him on 29th December, 1967. Vide Ex. PF and PG. The receipt book was thus not returned by the appellant though he was bound to do so at the time of handing over of charge to his successor. But from this it does not necessarily follow that the appellant committed criminal breach of trust in respect of the receipt book. Section 409 can be invoked only if it can be shown that the accused being in any manner entrusted with property or with dominion over property in his capacity as public servant committed criminal breach of trust in respect of that property. The offence of criminal breach is defined in Section 405 and an essential ingredient of this offence is that the accused being in any manner entrusted with property or with dominion over property, dishonestly misappropriates or converts to his own use that property or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged or of any legal contract, express or implied, which he has made touching the discharge of such trust. Here as we have already pointed out, the appellant was admittedly entrusted with the receipt-book or in any event with dominion over it, but there is no evidence to establish that he dishonestly misappropriated the receipt book or converted it to his own use or dishonestly used or disposed of the receipt book. It is quite possible that the appellant might have lost or mislaid the receipt book and hence he might have been unable to return it to the superior authorities. What the section requires is something much more than mere failure or omission to return the receipt book. The prosecution has to go further and show that the appellant dishonestly misappropriated or converted the receipt book to his own use or dishonestly used or disposed of it. That, we are afraid, the prosecution has not been able to do in the present case. We are, therefore, of the view that the appellant was wrongly convicted under Section 409.

Supreme Court of India

Sardar Singh vs State Of Haryana on 1 November, 1976

Equivalent citations: AIR 1977 SC 1766, 1977 CriLJ 1158, (1977) 1 SCC 463

Bench: A Gupta, P Bhagwati

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Whether accused prosecuted for offence punishable under S 409 of IPC can be released if they deposit misappropriated amount in bank?

 The applicants are behind bars since 2.8.2013. As the
record shows that most of the persons are traced, though the
false record of 7/12 extract was created for giving them loan, this
Court holds that subject to some conditions, bail can be granted
to the applicants. There is no possibility of their absconding. If the
employer wants separate action can be taken for recovery of the
amount in respect of which loss is caused due to the conduct of

the applicants.
4. In the result, the application is allowed. The applicants
are to be released on bail on their furnishing PR and SB of Rs.
50,000/- (Rupees fifty thousand) each with one solvent surety of
like amount in C.R. No. 124/2012 registered in Dindrud Police
Station for offences punishable under sections 465, 468, 467,
471, 406, 409, 420 and 34 etc. of I.P.C., subject to condition that
each of them first to deposit amount of Rs. 3,00,000/- (Rupees
three lakh) in the account of District Bank in respect of aforesaid
society and in respect of aforesaid loan transaction. Only after
depositing of their individual share of their amount, they are to be
released on bail. They are not to tamper the prosecution
witnesses. 
IN THE HIGH COURT AT BOMBAY
APPELLATE SIDE, BENCH AT AURANGABAD
CRIMINAL APPLICATION NO. 4407 OF 2013
Navnath s/o. Shesherao Solanke & Anr. ....Applicants.
Versus
The State of Maharashtra ....Respondents.

CORAM : T. V. NALAWADE, J.
DATED : 8th October, 2013.
Citation; 2014ALLMR(Cri)1804, 2014(2)BomCR(Cri)574

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Whether Magistrate can release accused prosecuted for offence punishable U/S 409 of IPC?

At this stage, it may be useful to quote the observations of this Court in "Ambarish Rangshhi Patnigere V/s {11} Cri. Application No.3362/2009 State of Maharashtra" referred supra, which reads thus -

"17. It may be noted here that the learned Counsel for intervener contended that the Magistrate did not have jurisdiction to grant bail because the offences under Sections 467 and 409 IPC, carry punishment which may be life imprisonment. According to the learned Counsel, if the offence is punishable with sentence of death or life imprisonment, the Magistrate cannot grant bail under Section 437(1) Cr. P.C. unless there are special grounds mentioned therein. He relied upon certain authorities in this respect including Prahlad Sigh Bhati vs. NCT, Delhi & Anr. JT 2001 (4) SCC 116. In that case, offence was under Section 302 which is punishable with death sentence or life imprisonment and is exclusively triable by Court of Sessions. The offence underSection 409 is punishable with imprisonment for life or imprisonment for 10 years and fine. Similarly, the office under Section 467 is also punishable with imprisonment for life or imprisonment for 10 years and fine. Even though the maximum sentence which may be awarded is life imprisonment, as per Part I of Schedule annexed to Cr.P.C., both these offences are triable by a Magistrate of First Class. It appears that there are several offences including under sec.326 in the Indian Penal Code wherein sentence, which may be awarded, is imprisonment for life or {12} Cri. Application No.3362/2009 imprisonment for lesser terms and such offences are triable by Magistrate of the First Class. If the Magistrate is empowered to try the case and pass judgment and order of conviction or acquittal, it is difficult to understand why he cannot pass order granting bail, which is interlocutory in nature, in such cases. In fact, the restriction under Sec. 437(1) Cr. P.C. is in respect of those offences which are punishable with alternative sentence of death or life imprisonment. If the offence is punishable with life imprisonment or any other lesser sentence and is triable by Magistrate, it cannot be said that Magistrate does not have jurisdiction to consider the bail application. In taking this view, I am supported by the old Judgment of Nagpur Judicial Commissioner's Court in Tularam & Ors. vs. Emperor 27 Cri.L.J. 1926 page 1063 and also by the Judgment of the Kerala High Court in Satyan Vs. State 1981 Cr.L.J. 1313. In Satyan, the Kerala High Court considered several earlier Judgments and observed thus in paras 7 and 8 :-

"7. According to the learned Magistrate Section 437(1) does not empower him to release a person on bail if there are reasonable grounds for believing that he has committed an offence punishable with death or an offence punishable with imprisonment for life. In other words the learned Magistrate has interpreted the expression "offence punishable with death or imprisonment for life" in Section 437(1) to include all offences where the punishment extends to imprisonment for life. This reasoning, no doubt, is seen adopted in an old Rangoon Case H.M. Boudville v.

Emperor, AIR 1925 Rang 129 : (1925) 26 Cri LJ 427 while interpreting the phrase "an offence punishable with death or transportation for life" in Section 497 Cr. P.C. 1898. But that case was dissented from in Mahammed Eusoof v. Emperor, AIR 1926 Rang 51: (1926) 27 Cri LJ 401). The Rangoon High Court held that the prohibition against granting bail is confined to cases where the sentence is either death or alternative transportation for life. In other words, what the Court held was that the phrase "death or transportation for life" in Section 497 of the old Code did not extend to offences punishable with transportation for life only, it will be interesting to note the following passage from the above judgment :

"It is difficult to see what principle, other than pure empiricism should distinguish offences punishable with transportation for life from offences punishable with long terms of imprisonment; why, for instance, the detenu accused of lurking house trespass with a view to commit theft, for which the punishment is fourteen years imprisonment, should be specially favoured as against the individual who has dishonestly received stolen property, knowing that it was obtained by dacoity, for which the punishment happens to be transportation for life? It cannot seriously be argued that the comparatively slight difference in decree of possible punishment will render it morally less likely that the person arrested will put in an appearance in the one case rather than the other. On the other hand the degree of difference is so great as between transportation for life and death as to be immeasurable. A prudent Legislature will, therefore, withdraw from the discretion of the Magistracy cases in which, if guilt is probable, even a man of the greatest fortitude may be wiling to pay a material price, however, exorbitant, for life."

 The above decision has been followed by the Nagpur High Court in the case reported in Tularam v. Emperor, AIR 1927 Nag 53 : (1926) 27 Cr. LJ 1063).

"8. The reasoning applies with equal force in interpreting the phrase "offence punishable with death or imprisonment for life" So long as an offence under section 326 is triable by a Magistrate of the First Class there is no reason why it should be viewed differently in the matter of granting bail from an offence under Section 420 I.P.C. for which the punishment extends imprisonment for 7 years or any other non-bailable offence for which the punishment is a term of imprisonment."

It would be illogical and incomprehensible to say that the magistrate who can hold the trial and pass judgment of acquittal or conviction for the offences punishable with sentence of life imprisonment or lesser term of imprisonment, for example in offences under S. 326, 409, 467, etc., cannot consider the application for bail in such offences. In fact, it appears that the restriction under Sec. 437(1) (a) is applicable only to those cases which are punishable with death sentence or life imprisonment as alternative sentence. It may be noted that in Prahlad Sigh Bhati (supra), in para 6, the Supreme Court held that even though there is no legal bar for a Magistrate to consider an application for grant of bail to a person who is arrested for an offence exclusively triable by a Court of session, yet it would be proper and appropriate that in such a case the Magistrate directs the accused person to approach the Court of Session for the purposes of getting the relief of bail. This may be applicable to many cases, wherein the sentence, which may be awarded, is not even life imprisonment, but the offence is exclusively triable by court of Sessions for example offences punishable under Sections 306, 308, 314,315, 316,399, 400 and

Bombay High Court

The Balasaheb Satbhai Merchant ... vs The State Of Maharashtra on 21 September, 2011

Bench: A. V. Potdar

Cri. Application No.3362/2009

Citation;2012(2) BOM C R(CRI)841

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Whether sanction for prosecution is required for offence of misappropriation by public servant U/S 409 of IPC?

The   applicant   had   urged   that   his   prosecution
would stand vitiated on the ground that no valid prior
sanction was obtained before filing of the charge­sheet.
Learned Magistrate had considered the facts of the case
and   had   held   that   since   the   applicant   was   being
prosecuted   under   section   409   of   I.P.C.,   there   was   no
question of obtaining valid sanction and moreover conduct
of the accused was sufficient to frame charge against him
under   section   409   of   the   Indian   Penal   Code. 
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CRIMINAL REVISION APPLICATION NO. 139 OF 2003
Sakharam s/o. Abhimanyu Gavane .
Versus
The State of Maharashtra 
CORAM :  SMT.SADHANA S. JADHAV,J.
DATED : 23.04.2015
Citation; 2015 ALLMR(CRI)4259

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When power of attorney holder can be prosecuted for offence U/S 409 or S 420 of IPC?

Admittedly, in this case the accused/petitioner was the power of Attorney Holder of the firm/Kirti Electricals, of which his brother is said to be the proprietor. The petitioner submitted the quotation on behalf of firm for supply of Generator set. Entire quotation amount of Rs. 2,60,000/- was handed over to the accused-petitioner by way of Bank Draft and he received the Bank Draft on behalf of the firm being its power of attorney holder. He himself deposited the amount in the Bank account of the firm which was being operated by him and also withdrew the entire amount, thereafter closed the Bank account. The Generator set, which was supplied, was defective and delivered in broken condition and immediately thereafter when the defective condition of the Generator was brought to the notice, the same was taken back by the supplier. But in spite of repeated requests the petitioner did not take any step for supply of new Generator set by way of replacement of the broken/defective Generator set nor returned back the amount received by him. As such, the petitioner having got himself fully involved in the matter may be as a power of attorney holder, cannot get himself absolved of both his civil as well as criminal liability.

Orissa High Court

Jayendra C. Shah @ Jayendra Ch. ... vs State Of Orissa on 9 November, 2005

Equivalent citations: 2006 CriLJ 847, 2005 II OLR 737,CLT(2006)Supp.Crl.16

Bench: N Prusty

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When offence of criminal misappropriation of property U/S 409 of IPC is not made out?

In the instant case even if it was proved as contended by learned counsel for the appellant, that money was entrusted which fact is borne out by the admitted case about missing of money from the cash counter of the bank, one factor which needs to be decided is whether the accused had dishonestly misappropriated or converted to his own use the property entrusted or dishonestly used or disposed of that property. As presented by the prosecution, the money was taken away from the cash counter. It is not the case of prosecution that money which was given to the accused-Gautam Bose and the cash peon to obtain bank drafts was taken away by accused-Gautam Bose or the cash peon Ganaori Sao. Because of an intervening situation, the disappearance of the cash due to theft by somebody else the bank drafts could not have been prepared and handed over to the appellant. Even if there is loss of money, the ingredients necessary to constitute criminal breach of trust are absent. If due to a fortuitous or intervening situation, a person to whom money is entrusted is incapacitated from carrying out the job, that will not bring in application of Section 405 IPC or Section 409 IPC, unless misappropriation, or conversion to personal use or disposal of property is established. Unfortunately, the courts below have not looked at the issues from these vitally relevant angles. The inevitable conclusion is that accused persons cannot be convicted under Section 409 IPC. 

Supreme Court of India

Kailash Kumar Sanwatia vs The State Of Bihar And Anr on 2 September, 2003

Bench: Doraiswamy Raju, Arijit Pasayat.

Citation; AIR2003SC3714, 2003CriLJ4313,(2003)7SCC399, 

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Whether disposal of goods hypothecated as security for loan amounts to offence of criminal breach of trust?

In the instant case, a serious dispute has been raised by the learned counsel appearing for the respective party as to whether on the face of the allegations, an offence of criminal breach of trust is constituted or not. In our view, the expression 'entrusted with property' or 'with any dominion over property' has been used in wide sense in Section 405 I.P.C. Such expression includes all case in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of in violation of law or in violation of contract. The expression 'entrusted appearing in Section 405 I.P.C. is not necessarily a term of law. It has wide and different implication in different context. It is, however, necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. The expression 'Trust' in Section 405I.P.C. is a comprehensive expression and has been used to denote various kinds of relationship like the relationship of trustee and beneficiary, bailer and bailee, master and servant, pledger and pledger. When some goods are hypothecated by a person to another person. the ownership of the goods still remains with the person who has hypothecated such goods. The property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in other person and the offender must hold such property in trust for such other person or for his benefit. In a case of pledge, the pledged article belongs to some other person or for his benefit. In a case of Pledge, the pledged article belongs to some other person but the same is kept in trust by the pledgee. In the instant case, a floating charge was made on the goods by way of security to cover up credit facility. In our view, in such case for disposing of the goods covering the security to cover up credit facility. In our view, In such case for disposing of the goods covering the security to cover up credit facility. In our view, in such case for disposing of the goods covering the security against credit facility the offence of criminal breach of trust is not committed. 

Supreme Court of India

Central Bureau Of Investigation, ... vs Duncans Agro Industries ... on 9 July, 1996

Equivalent citations: JT 1996 (6), 227 1996 SCALE (5)99,AIR1996SC2452,1996CriLJ3501, 1996(3)Crimes60(SC),(1996)5SCC591,

BENCH:

RAY, G.N. (J)
G.B. PATTANAIK (J)

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Whether Magistrate can frame alternative charge U/S 420 of IPC along with charge U/S 409 of IPC?

 The third contention raised on behalf of the revision applicant is that the learned Chief Judicial Magistrate has ordered to frame a charge under Sections 406, 408 and 409 as well as under Section 420 read with Section 114 of I.P.C. It is vehemently urged before me that the offences punishable under Sections 406 to 409 and offence under Section 420 cannot go together. The applicant has come before this Court before the actual framing of the charge against him and only after the order of framing the charge is passed. It must be mentioned that it is always open for a criminal Court to frame charges alternatively. A person can alternatively be charged under Sections 406 to 409 or under Section 420, I.P.C. It is true that the ingredients of Sections 406 to 409 and the ingredients of Section 420 are required to be considered. The offence under Sections 406, 408 or 409 and the offence under Section 420 could not go together. But if the alternative charge is framed, it could not be said that an alternative charge is illegal or invalid. In the case of Sunil Kumar Paul v. State of West Bengal AIR 1965 SC 706 :1965 (1) Cri LJ 630 the charge-sheet was framed against the accused only under Section 409, but the Appellate Court had found the accused guilty of the offence punishable under Section 420 instead of Section 409 and had convicted the accused under that Section and the said decision has been approved by the Apex Court by observing as under :-

Where a public servant was charged and tried by the Special Court for an offence under Section 409, I.P.C, but a charge under Section 420, I.P.C. could have been framed by the Special Court under Section 236, Cr. P.C. on the basis of the allegations in the charge-sheet, the trial Court or the appellate Court can, in law, convict the accused of that offence instead of an offence under Section 409, I.P.C. if it be of the view that the offence of cheating had been established. This would be in accordance with the provisions of Section 237, Cr.P.C.

Therefore, the learned Judicial Magistrate will have to bear in mind the ingredients of 406 to 409 as well as the ingredients Section 420 and then to consider as to whether the present revision applicant would be alternatively charged under Sections 406 to 409 and Section 420, IPC.

Equivalent Citation: 1998CriLJ216, 1997GLH(2)394

IN THE HIGH COURT OF GUJARAT

Criminal Misc. Appln. No. 970 of 1987

Decided On: 25.04.1997

 Ranjitkumar Chakravarti Vs. Co-operative Bank of Baroda Ltd. and Ors.

Hon'ble Judges/Coram:
S.D. Pandit, J.

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Whether offence U/S 409 of IPC is made out when there is no fiduciary relationship between complainant and accused ?

Penal Code, 1860, Section 409 - Offence under--Word "trust" used in Section 409-- Significance of--existence of fiduciary relationship between complainant and accused is necessary.

The word 'trust' is a comprehensive expression which has been used in Section 409 of the Indian Penal Code as covering not only the relationship of Trustee and beneficiary but also that of bailor and bailee, master and servant, pledger and pledgee, guardian and ward and all other relations which postulate the existence of fiduciary relationship between the complainant and the accused. In the instant case neither there exists any such fiduciary relationship between the Cashier and the accused nor does any such relationship exists in respect of the disputed amount between the Company and the accused. Admittedly the Company was the owner of the cash in the chest. There is nothing on the record to show that the Company entrusted the cash of the chest to the accused, 'Entrustment' relationship between them. In the instant case the Cashier who says to have handed over the money to the accused was not the owner and so was not competent to create a fiduciary relationship between himself and the accused. The prosecution has thus failed to prove beyond doubt that the cash which was found short was entrusted to the accused and that they have committed criminal breach of trust.

 Citation: 1983(7)ACR529, 1984 (10) ALR 1, 1983 AWC 957 All, 1984CriLJ76

IN THE HIGH COURT OF ALLAHABAD

Government Appeal Nos. 1697, 1698, 1699 and 1700 of 1978

Decided On: 24.08.1983

 State
Vs.
K.P. Jain

Hon'ble Judges/Coram:
R.A. Misra, J.

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Whether charge can be amended to correct amount misappropriated and embezzled ?

A charge serves the purpose of notice or intimation to the accused drawn up according to specific language of law giving clear and unambiguous or precise notice of the nature of accusation that the accused is called upon to meet in the course of a trial. The object of a charge is to warn an accused person of the case he is to answer. It cannot be treated as if it was a part of ceremonial. Gainful reference for the purpose may be made on the case of V.C. Shukla Vs. State, reported in 1980 SCC (Cri.)

695. The Criminal Procedure Code gives ample power to the court to alter or amend a charge provided that the accused has not to face a charge for the new offence or is not prejudiced either by keeping him in dark about that charge or in not giving him a full opportunity to meet it andputting forward any defence open to him on the charge finally preferred against him.

In the instant case, a charge had already been framed showing the accused to have defalcated and embezzled an amount of Rs.5,24,610/-. However, after the completion of full accounting it transpired that the actual amount defalcated and embezzled was Rs.44,40,323/- and this actual amount of defalcation and embezzlement was sought to be incorporated in place of the original amount of Rs.5,24,610/- . Apparently, no altercation or modification in the charge was sought and merely the amount misappropriated and embezzled was sought to be rectified. Therefore, there was no new fact being introduced or charge being framed. The accused party had notice of the amount of embezzlement and defalcation that had been fastened upon him and mere change of the amount does not amount to an alteration and modification of the charge. So far as the question of marking the document is concerned, the reasonings assigned by the Revisional Court are cogent and are upheld.

Patna High Court - Orders

Rajnikant Rakesh vs State Of Bihar & Anr on 6 February, 2009

Citation; 2009 CRLJ2149 Patna

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Basic principles to be followed while framing charge U/S 409 of IPC

Sections 233 to 239 deal with the joinder of charger, and they speak not only of an accused being charged with offences, but of such charges being tried separately or jointly. Section 233states that for every distinct offence of which any person is accused, there shall be a separate charge and every such charge shall be tried separately, except in the cases mentioned in ss. 234, 235, 236 and 239. It is clear that the general rule is theat there should be a separate trial for each distinct offence of which a person is accused. It follows that each item of property of which an accused is alleged to have committed breach of trust, constitutes one distance offence and that, in general, it would be necessary to have as many trials as there be distinct offences of criminal breach of trust committed by the accused. But s. 222(2) provides that when the accused is charged with criminal breach of trust, the charge may be with respect to the gross sum embezzled within a period of one year and that the charged so framed shall be deemed to be a charge of one offence within the meaning of s. 234. The charge framed in the present case was with respect to the gross sum embezzled within a period of more than twelve months, the period being between March 6, 1949 and June 30, 1950. The charge therefore was in contravention of the provisions of s. 222(2). This defect in the charge, however, did not lead to any prejudice to the accused in the trial and therefore did not vitiate the trial, in view of the provisions of s. 537 of the Code.

The charge could have been split up into two charges, one with respect to the offence of criminal breach of trust committed with respect to the amount embezzled between March 6, 1949 and March 5, 1950 and the other with respect to the amount embezzled between March 6, 1950 and June 30, 1950. The two offences of criminal breach of trust could have been tried together in the present case, as the offences were said to have been committed in pursuance of the criminal conspiracy entered into by the accused, All the offences committed in pursuance of the conspiracy are committed in the course of the same transaction and therefore can be tried together at one trial, in view of sub s. (1) of s. 235 of the Code which provides that if in one series of acts so connected together as to form the same transaction, more offences than one are committed by the same person, he may be charged with and tried at one trial for every such offence. It is therefore clear that no prejudice was caused to the accused by the defect in the charge.

Supreme Court of India

State Of Bombay vs Umarsaheb Buransaheb Inamda on 23 January, 1962

Equivalent citations: 1962 AIR 1153, 1962 SCR Supl. (2) 711

BENCH:
DAYAL, RAGHUBAR
DAS, S.K.
SUBBARAO, K.

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Whether second trial in respect of defalcation is permissible in absence of adequate explanation?

In that view of the matter, there being nothing on record to show that the three items of defalcation for which the petitioner has been charged were not within the knowledge of the prosecution, as the learned Additional Sessions Judge has also noticed that the learned Assistant Public Prosecutor failed to satisfy him as to why these three items were not included in the previous trial, and further, in the absence of any adequate explanation for its non-inclusion in the previous trial in spite of resort to Section 222(2) of the Code of Criminal Procedure, I am inclined to hold that it will not be conducive to justice in the circumstances of the case, rather it will be vexatious, to have a piecemeal trial like this. In my opinion it was a fit case in the circumstances as they stand, in which these three items also could well have been included in the previous trial. That being the position. I would hold that the present trial should not continue, and the proceedings against the petitioner are accordingly quashed.

Patna High Court

Chittaranjan Saha vs The State on 15 July, 1959

Equivalent citations: AIR 1960 Pat 168, 1960 CriLJ 503

Bench: S Misra, T Nath

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Whether it is illegal to try several offences U/S 409 of IPC separately?

The  normal rule is that there should be a charge  for each
distinct  offence,  as provided  in s.  233  of  the  Code.
Section 222 mentions what the contents of the charge  should
be.   It is only in certain circumstances that the court  is
authorised  to Jump up the various items  with  respect  to
which criminal breach of trust was committed and to  mention
the  total  amount  misappropriated within  a  year  in  the
charge.  When so done, the charge is deemed to be the charge
of one offence.
(ii)Section 234 is an enabling provision and is an exception
to  a. 233 of Code of Criminal Procedure.  There is  nothing
illegal  in trying each of the several offences  separately.
[287 E]
(iii)Assuming without deciding, that these offences could be
said  to  have been committed in the  course  of  the same
transactions,  the  separate  trial  for  certain   specific
offences  is  not illegal.  Section 235 too is an  enabling
section. 

Supreme Court of India

Ranchhodlal vs State Of Madhya Pradesh on 27 November, 1964

Equivalent citations: 1965 AIR 1248, 1965 SCR (2) 283

BENCH:
DAYAL, RAGHUBAR
SUBBARAO, K.
AYYANGAR, N. RAJAGOPALA

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When prosecution under S 409 of IPC is liable to be quashed

 At this stage we also think it proper to observe that in the
present case, even if the allegations made in the complaint are
taken to be true, the ingredients of the offence punishable
under Section 409 IPC for which appellants are summoned,
are also not made out. To constitute an offence punishable
under Section 409 IPC, apart from entrustment, it is also
essential requirement that it should be shown that the
accused has acted in the capacity of a public servant, banker,
merchant, factor, broker, attorney or agent. It is nowhere
shown in the complaint that the appellants have acted in any
of the above capacities.
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.953 OF 2015
(@ Special Leave Petition (Crl.) No. 330 of 2015)
Mr. Robert John D’Souza and others … Appellants
Versus
Mr. Stephen V. Gomes and another … Respondents
Citation; 2015 CRLJ 4040 SC

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Whether court can grant anticipatory bail when there are allegations of corruption and misappropriation of public funds?

Having considered the submissions made by learned counsel for the parties, and after considering the gravity of the offence, circumstances of the case, particularly, the allegations of corruption and misappropriation of public funds released for rural development, and further considering the conduct of the appellants and the fact that the investigation is held up as the custodial interrogation of the appellants could not be done due to the anticipatory bail, we are of the opinion that the High Court has rightly cancelled the anticipatory bail granted to the appellants by the Additional Sessions Judge, Jalgaon. Therefore, we are not inclined to disturb the same. Accordingly, we decline to interfere with the order of cancellation of anticipatory bail, passed by the High Court.

Sudhir Vs. State of Maharashtra and another

[Criminal Appeal Nos.1286-1287 of 2015 arising out of S.L.P. (CRL.) Nos. 1753-54 of 2015]

Dated;October 01, 2015.

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