1991 (4) TMI 468 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of the conviction under Section 409 IPC.
2. Practice of credit sales and its implications.
3. Allegations of forgery and use of forged documents.
4. Entrustment and misappropriation of property.
5. Liability of the second appellant for actions before taking charge.
6. Conspiracy and joint liability.
7. Appellants' entitlement to back wages upon acquittal.

Issue-Wise Detailed Analysis:

1. Legality of the Conviction under Section 409 IPC:
The High Court had confirmed the conviction of the appellants under Section 409 IPC, but the Supreme Court examined whether the essential elements of criminal breach of trust were satisfied. The Court noted that the entrustment of property was not disputed, but the prosecution failed to prove dishonest misappropriation or conversion of property by the appellants. The Court found that the High Court did not adequately discuss the evidence or the legal question of dishonest misappropriation, leading to the conclusion that the conviction under Section 409 IPC could not be sustained.

2. Practice of Credit Sales and Its Implications:
The Court acknowledged the long-standing practice of credit sales from government seed stores, despite circulars prohibiting such sales. The repeated issuance of circulars indicated that the practice continued, and the superior officers did not take serious action against it. The Court concluded that following the established practice of credit sales could not be considered criminal breach of trust.

3. Allegations of Forgery and Use of Forged Documents:
The High Court had acquitted the appellants of charges under Sections 467 and 471 IPC, and the State did not appeal this acquittal. The Supreme Court noted that this acquittal implied the prosecution's failure to prove that the bills and receipts were forged or fraudulently used. Consequently, the Court accepted the appellants' defense that the documents were genuine.

4. Entrustment and Misappropriation of Property:
The prosecution alleged that the first appellant misappropriated amounts covered by certain bills. However, the evidence showed that the amounts were deposited before the CID investigation began. The Court found no outstanding amounts and noted that the first appellant's defense that the bills were genuine was accepted by the High Court. Therefore, the prosecution did not prove temporary misappropriation.

5. Liability of the Second Appellant for Actions Before Taking Charge:
The second appellant took charge of the seed store on 2.9.65, and the bills in question were prepared before this date. The Court found it illogical to hold the second appellant liable for actions taken before he assumed charge. Therefore, the second appellant could not be held liable for the alleged misappropriation under Section 409 IPC.

6. Conspiracy and Joint Liability:
The Court found no evidence of conspiracy or pre-arranged plan between the appellants to commit the alleged offenses. The prosecution failed to establish any concert of minds or pre-concert between the appellants. Consequently, the charge of criminal breach of trust against both appellants could not be sustained.

7. Appellants' Entitlement to Back Wages Upon Acquittal:
The appellants submitted affidavits stating they would not claim back wages if reinstated. The Court observed that, based on this undertaking and the case's circumstances, the appellants would not be entitled to back wages from the date of suspension to reinstatement, despite ordinarily being entitled to such wages upon acquittal.

Conclusion:
The Supreme Court allowed the appeals, setting aside the convictions and sentences awarded by the High Court, and acquitted the appellants. The Court also noted the appellants' undertaking not to claim back wages if reinstated, directing that they would not be entitled to back wages from the suspension date to reinstatement.