Gauhati High Court
Crl.Rev.P./586/2012 on 26 September, 2025
Author: Manish Choudhury
Bench: Manish Choudhury
Page No. 1/16
GAHC010010572012
2025:GAU-AS:13376
THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
CRIMINAL REVISION (P) NO. 586/2012
Sri Binod Kr. Agarwala, Son of Late Khubchand
Agarwala, Liquidator, Statfed, Khanapara,
Guwahati-22.
..................Petitioner
-Versus-
1. Sri Ram Borah, Son of Sri Bharat Chandra Borah,
Resident of Boiragimoth, P.O. Boiragimoth, P.S. &
Dist. - Dibrugarh, Assam.
2. Sri Paban Rajkonwar, Son of Sri Golap Ch.
Rajkonwar, Vill - Milan Nagar 3 Lane, Natun Siring
Gaon, P.O. Nirmali Gaon, Dist. & P.S. Dibrugarh,
Assam.
3. Sri Prasanta Kr. Dutta, Son of Brirendra Nath Dutta,
Vill - Kalalihamari, Durgesh Das Road, P.O. & P.S.
- Dibrugarh, Dist. - Dibrugarh, Assam.
4. The State of Assam.
...................Respondents
Advocates :
Petitioner : Mr. A. Choudhury, Advocate
: Mr. D. Gogoi, Amicus Curiae
Respondent nos. 1, 2 & 3 : Mr. M. Sharma, Advocate
Respondent no. 4 : Mr. R.R. Kaushik, Additional Public Prosecutor, Assam
Dates of Hearing : 11.09.2025
Page No. 2/16
Date of Judgment & Order : 26.09.2025
BEFORE
HON'BLE MR. JUSTICE MANISH CHOUDHURY
JUDGMENT & ORDER
The present criminal revision petition under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973 ['CrPC' and/or 'the Code'] is preferred taking exception to a Judgment and Order dated 07.08.2012 passed by the Court of learned Sessions Judge, Dibrugarh ['the Revisional Court', for short] in Criminal Revision no. 18[2] of 2012.
2. The criminal revision petition, Criminal Revision no. 18[2] of 2012 was preferred by the respondent no. 1 herein against an Order dated 23.04.2012 passed by the Court of learned Chief Judicial Magistrate, Dibrugarh [hereinafter referred to as 'the Trial Court', for short], in G.R. Case no. 1781 of 2008. By the Order dated 23.04.2012, the Trial Court upon examination of the materials on record; and after hearing the submissions of the prosecution side and the defence side, proceeded to frame a charge under Section 409, IPC against the three accused persons. After framing the charge, the charge was read over and explained to the three accused persons. On being read over and explained the charge, the three accused persons pleaded not guilty and claimed to be tried. The Trial Court had also ordered, by the Order dated 23.12.2012, for issuance of summons to the prosecution witnesses and posted the case for recording of evidence.
3. The genesis of the criminal proceeding of G.R. Case no. 1781 of 2008 was a First Information Report [FIR] lodged by one Sri B.K. Nath as Liquidator of M/s Statfed before the Officer In-Charge, Dibrugarh Police Station, Dibrugarh on 20.09.2008. In the FIR, the informant stated that the Assam State Cooperative Marketing & Consumers Federation Ltd. ['M/s Statfed', for short] suffered substantial loss due to mismanagement and embezzlement of its Page No. 3/16 fund. It was stated that the Registrar of Cooperative Societies, Assam vide a Notification dated 16.06.2006 cancelled the registration of M/s Statfed. With cancellation of the registration, a Liquidator was appointed and the Liquidator took over possession of the assets of M/s Statfed for the purpose of liquidation of its claims and liabilities. The FIR further stated that at the relevant time, the three accused persons viz. [i] Ram Borah, Branch Manager, Statfed ['the respondent no. 1']; [ii] Paban Rajkonwar, Sub- Accountant ['the respondent no. 2']; and [iii] Prasanta Kumar Dutta, Sub- Accountant, were posted at Dibrugarh Branch of M/s Statfed in the capacities so mentioned. After liquidation, a Senior Inspector of Cooperative Societies was made Custodian of the Dibrugarh Branch of M/s Statfed. It was alleged that despite repeated requests, the respondent no. 1-accused did not handover complete charge of Dibrugarh Branch to the said Senior Inspector of Cooperative Societies, Dibrugarh-Custodian. Despite directions made by the Deputy Commissioner, the respondent no. 1-accused did not follow such direction. After much efforts, the Custodian took over possession of the entire documents and registrars pertaining to Dibrugarh Branch of M/s Statfed during the period from 11.09.2006 to 15.09.2006 from the respondent no. 1-accused. Thereafter, the Liquidator, M/s Statfed got the entire accounts of Dibrugarh Branch of M/s Statfed for the period from 15.06.2006 to 31.07.2007 audited through four Senior Auditors of the Cooperation Department, Government of Assam. Upon such audit, it came to light that the three accused persons had misappropriated huge amount of money from Dibrugarh Branch of M/s Statfed. It was alleged that the respondent no. 1-accused misappropriated a total amount of Rs. 1,05,52,819.54 by showing fake payments under different heads. The FIR further alleged that the respondent no. 2-accused misappropriated a total amount of Rs. 13,01,587.38. Similarly, the respondent no. 3-accused was behind misappropriation of an amount of Rs. 24,99,189.03.
4. On receipt of the FIR, the Officer In-Charge registered it as Dibrugarh Police Station Case no. 458 of 2008, with corresponding G.R. Case no. 1781 of Page No. 4/16 2008, under Section 409 r/w Section 34 of the Indian Penal Code [IPC] and entrusted the investigation to a Sub-Inspector of Police attached to Dibrugarh Police Station. In the course of investigation, the I.O. recorded the statements of the witnesses and made seizure of a number of articles, documents, etc. After completing the investigation of Dibrugarh Police Station Case no. 458 of 2008, the I.O. submitted a charge-sheet under Section 173[2], CrPC vide Charge-Sheet no. 271/2010 on 26.09.2010 finding a case well established for commission of the offence under Section 409 r/w Section 34, IPC against the three respondents herein.
5. After submission of the Charge-Sheet, the Trial Court taking cognizance, issued processes against the three charge-sheeted accused persons for securing their appearance. Upon receipt of the summons, the three accused persons appeared before the Trial Court and on applications being made, they were allowed to go on bail by the Trial Court. It was after appearance of all the three charge-sheeted accused persons, the Trial Court upon perusal of the materials on record and after hearing the learned counsel for both the sides, proceeded to frame the charge under Section 409 r/w Section 34, IPC against all three of them by the Order dated 23.04.2012.
6. Aggrieved by and dissatisfied with the charge so framed, one of the three charge-sheeted accused persons, namely, Sri Ram Bora [the respondent no. 1] approached the Revisional Court by filing Criminal Revision no. 18[2] of 2012. The Revisional Court by an Order dated 16.05.2012 while calling for the case records of G.R. Case no. 1781 of 2008, stayed further proceedings of G.R. Case no. 1781 of 2008.
7. Subsequently on 07.08.2012, the Revisional Court by the impugned Judgment disposed of the criminal revision remanding the matter back to the Trial Court for framing of charge of criminal breach of trust under the appropriate provisions provided in the Penal Code. Challenging the Judgment Page No. 5/16 dated 07.08.2012, the Liquidator as the revision petitioner has preferred the present revision petition.
8. I have heard Mr. A. Choudhury, learned counsel for the petitioner along with Mr. D. Gogoi, learned Amicus Curiae; Mr. M. Sarma, learned counsel for the respondent nos. 1, 2 & 3; and Mr. R.R. Kaushik, learned Additional Public Prosecutor for the respondent no. 4, State of Assam.
9. Mr. Choudhury, learned counsel appearing for the petitioner has submitted that the petitioner herein has preferred the revision petition in the capacity of the Liquidator, M/s Statfed as he was the informant in the case. Mr. Choudhury has submitted that a major percentage of M/s Statfed was owned by the Government of Assam and functioning of M/s Statfed was directly as well as indirectly controlled by the Government of Assam. Therefore, M/s Statfed is an instrumentality of the State. As the charge-sheeted accused persons were employees of M/s Statfed, the findings recorded by the Revisional Court that the accused persons are not 'public servants' under Section 21, IPC is erroneous. He has entirely based his argument on sub- clause [b] of Clause 'Twelfth' of Section 21 of the IPC. According to him, the employees of M/s Statfed like the three respondent-accused herein would come within the purview of Clause 'Twelfth' Section 21 of the IPC. Therefore, the Judgment dated 07.08.2012 is required to be interfered with. He has submitted that both the Trial Court and the Revisional Court are of the view that the ingredients of the offence of criminal breach of trust are present and therefore, the accused persons being public servants, the charge framed by the Trial Court under Section 409, IPC was proper. Therefore, the Judgment of the Revisional Court is required to be interfered with to that extent.
10. Mr. Sarma, learned counsel appearing before the respondent nos. 1, 2 & 3 has submitted, at the inception, that as per oral instructions received by him, the respondent no. 1 and the respondent no. 2 have expired during the Page No. 6/16 pendency of the present criminal revision petition. Therefore, if the Trial Court is to proceed hereinafter, it can only proceed against the respondent no. 3 on merits as the case would abate against the respondent no. 1 and the respondent no. 2. Mr. Sarma has submitted that the employees of erstwhile M/s Statfed cannot be treated as public servants. By no means, the three respondent-accused can be brought within the purview of the definition of 'public servant' provided by Clause 'Twelfth' of Section 21 of the IPC. It is evident from the FIR itself that M/s Statfed was a registered society under the provisions of the Assam Cooperative Societies Act. Since M/s Statfed was a registered cooperative society, the employees of M/s Statfed do not come within the ambit and scope of Section 21 of the Penal Code. He has further submitted that at the time of lodging of the FIR, M/s Statfed as a cooperative society was not in existence as a Liquidator was appointed in the meantime after cancellation of its registration.
11. I have considered the submissions of the learned counsel for the parties and have also perused the materials available in the records of G.R. Case no. 1781 of 2008, in original.
12. Having considered the submissions of the learned counsel for the parties, and the limited point on which the present criminal revision petition has been preferred, the only issue which has arisen for consideration is that whether the Revisional Court was justified in remanding back the matter to the Trial Court for framing charge of criminal breach of trust under the appropriate provision provided in the Indian Penal Code. The learned counsel for the revision petitioner has submitted that the only issue that is to be decided here is whether the three charge-sheeted accused persons come within the embrace of the definition of 'public servant' under Clause 'Twelfth' of Section 21 of the Indian Penal Code.
13. Admittedly, M/s Assam State Cooperative Marketing & Consumers Federation Ltd. ['M/s Statfed', for short] was registered under the Assam Cooperative Page No. 7/16 Societies Act, 1949 ['the Act, 1949' and or 'the 1949 Act', for short]. The Registrar of Cooperative Societies, Assam had cancelled the registration of M/s Statfed vide a Notification 16.06.2006 and upon cancellation of registration, a Liquidator was appointed who took over the possession of the assets of M/s Statfed for the purpose of liquidation of its claims and liabilities. The Liquidator so appointed, was the informant in Dibrugarh Police Station Case no. 458 of 2008, corresponding to G.R. Case no. 1781 of 2008, and is the petitioner in the present criminal revision petition.
14. It may be relevant to mention that the Registrar of Cooperative Societies, Assam was empowered under Section 65 of the Act, 1949 to cancel registration of a cooperative society registered under the Act, 1949. Under Section 66 of the Act, 1949, where an order of cancellation of registration of a society was made by the Registrar under Section 65, he could appoint any person to be the Liquidator of the society. The Liquidator so appointed, had inter-alia the power to take immediate possession of all assets, properties, effects and actionable claims of the society or to which the society was entitled and of all books, records, cash and other documents pertaining to the business of the society. The Liquidator was to act under the general control of the Registrar. Thus, it is evident that M/s Statfed prior to cancellation of its registration was a cooperative society registered under the 1949 Act.
15. As per Section 85 of the Act, 1949, every registered cooperative society shall be deemed to be a body corporate by the name under which it was registered, with perpetual succession and the common seal, and with power to hold property, to enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was registered.
16. Section 21 of the Indian Penal Code had provided for the definition of 'public servant'. In the case in hand, only the definition provided for 'public servant' Page No. 8/16 by Clause 'Twelfth' of Section 21 is at issue. As per Clause 'Twelfth' of Section 21, every person [a] in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government; or [b] in the service or pay of a local authority, a corporation established by or under a Central, Provincial or State Act or a Government Company as defined in Section 617 of the Companies Act, 1956 would come within the definition of 'public servant'.
17. It is pertinent to state that a clear distinction lies between a body which is created by or under a statute and a body which is governed by certain statutory provisions for its proper maintenance and administration. There is distinction between a body which is created by a statute and a body which, after having come into existence, is governed in accordance with the provisions of a statute. A registered cooperative society like M/s Statfed falls in the second category. A registered cooperative society is governed by the Cooperative Societies Act of the concerned State and are not statutory bodies. It is also distinct from a local authority or a corporation established by or under a statute or a Government Company. A registered cooperative society is only a body corporate and it is subject to the control of the statutory authorities like Registrar of cooperative societies, the Government, etc.
18. What are corporations established by or under an Act have been lucidly explained by the Hon'ble Supreme Court of India in the case of Dalco Engineering Private Limited vs. Satish Prabhakar Padhye and others, [2010] 4 SCC 378, in the following manner :-
21. Where the definition of 'establishment' uses the term 'a corporation established by or under an Act', the emphasis should be on the word 'established' in addition to the words 'by or under'. The word 'established' refers to coming into existence by virtue of an enactment.
It does not refer to a company, which, when it comes into existence, is Page No. 9/16 governed in accordance with the provisions of the Companies Act. But then, what is the difference between 'established by a Central Act' and 'established under a Central Act'?
22. The difference is best explained by some illustrations. A corporation is established by an Act, where the Act itself establishes the corporation. For example, Section 3 of the State Bank of India Act, 1955 provides that a bank to be called State Bank of India shall be constituted to carry on the business of banking. Section 3 of the Life Insurance Corporation Act, 1956 provides that
3. Establishment and incorporation of Life Insurance Corporation of India.--[1] With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be established a Corporation called the Life Insurance Corporation of India.' State Bank of India and Life Insurance Corporation of India are two examples of corporations established by 'a Central Act'.
23. We may next refer to the State Financial Corporations Act, 1951 which provides for establishment of various financial corporations under that Act. Section 3 of that Act relates to establishment of State Financial Corporations and provides that 'the State Government may, by notification in the Official Gazette, establish a financial corporation for the State under such name as may be specified in the notification' and such financial corporation shall be a body corporate by the name notified. Thus, a State Financial Corporation is established under a Central Act. Therefore, when the words 'by and under an Act' are preceded by the words 'established', it is clear that the reference is to a corporation established, that it is brought into existence, by an Act or under an Act. In short, the term refers to a statutory corporation as Page No. 10/16 contrasted from a non-statutory corporation incorporated or registered under the Companies Act.
19. Section 617 of the Companies Act, 1956 had outlined the companies which would fall in the category of Government Companies. The Cooperative Society registered under the 1947 Act had no existential relationship with the Companies Act, 1956.
20. In the case of S.S. Dhanoa vs. Municipal Corporation, Delhi and others, reported in [1981] 3 SCC 431, one of the issues which arose was whether the expression 'corporation' contained in Clause 'Twelfth' of Section 21 would also bring within its ambit a cooperative society and whether the employees of a cooperative society would come under Clause 'Twelfth' of Section 21 of the IPC. Explaining the meaning of the term 'corporation' with reference to Section 21, IPC, the Hon'ble Court has held as under :-
7. Clause Twelfth of Section 21 of the Penal Code, 1860 protects two classes of public servants viz. [a] every person in the service or pay of the government or remunerated by fees or commission for the performance of any public duty by the government, and [b] every person in the service or pay of a local authority, a corporation established by or under a Central, Provincial or State Act or a Government company as defined in Section 617 of the Companies Act, 1956.....
.....Clause Twelfth does not use the words 'body corporate', and the question is whether the expression 'corporation' contained therein, taken in collocation of the words 'established by or under a Central, Provincial or State Act' would bring within its sweep a cooperative society. Indubitably, the Cooperative Store Limited is not a corporation established by a Central or State Act. The crux of the matter is whether the word 'under' occurring in clause Twelfth of Section 21 of the Penal Page No. 11/16 Code, 1860 makes a difference. Does the mere act of incorporation of a body or society under a Central or a State Act make it a corporation within the meaning of clause Twelfth of Section 21? In our opinion, the expression 'corporation' must, in the context, mean a corporation created by the legislature and not a body or society brought into existence by an act of a group of individuals. A cooperative society is, therefore, not a corporation established by or under an Act of the Central or State Legislature.
8. A corporation is an artificial being created by law having a legal entity entirely separate and distinct from the individuals who compose it with the capacity of continuous existence and succession, notwithstanding changes in its membership. ..........The term 'corporation' is, therefore, wide enough to include private corporations. But, in the context of clause Twelfth of Section 21 of the Penal Code, 1860, the expression 'corporation' must be given a narrow legal connotation.
9. Corporation, in its widest sense, may mean any association of individuals entitled to act as an individual. But that certainly is not the sense in which it is used here. Corporation established by or under an Act of Legislature can only mean a body corporate which owes its existence, and not merely its corporate status, to the Act. For example, a Municipality, a Zilla Parishad or a Gram Panchayat owes its existence and status to an Act of Legislature. On the other hand, an association of persons constituting themselves into a company under the Companies Act or a society under the Societies Registration Act owes its existence not to the Act of Legislature but to acts of parties though, it may owe its status as a body corporate to an Act of Legislature.
Page No. 12/1621. It is, therefore, clear that a registered cooperative society is distinct from a corporation established by or under an act of Legislature and also local authorities like a Municipality, a Zilla Parishad, etc.
22. The Revisional Court has inter-alia observed that the Magistrate is required to see at the time of framing charge whether there is a prima facie case for framing a charge or whether there is a prima facie material or ground for presuming that the accused had committed the offence. The Revisional Court after perusal of the materials on record, had reached the view that there is certainly a prima facie case for presuming about commission of the offence of criminal breach of trust. Since there is a prima facie case for presuming commission of the offence of criminal breach of trust against the charge-sheeted accused persons the order of framing the charge of criminal breach of trust cannot be faulted. The Revisional Court has proceeded to observe that under what provisions of the law the accused should be punished for criminal breach of trust would depend upon the evidence adduced at the time of hearing. The Revisional Court has further observed that in order to constitute an offence under Section 409, IPC, one of the ingredients is that the accused against whom the charge of criminal breach of trust is brought must be a 'public servant' committing the offence in the capacity of the public servant, or by any one in course of business as a banker, merchant, factor, broker or agent as defined in Section 409, IPC. The Revisional Court has further observed that as the revision petitioner therein does not come within the definition of any of such persons, the charge under Section 409, IPC should not perhaps be framed as one of the basic ingredients of framing the charge under Section 409, IPC is absent in the case. The Revisional Court is also of the view that since charge can be altered at any time before pronouncement of the judgment, mere defect in framing a charge or framing a charge under an inappropriate section of law cannot vitiate the entire proceeding. The Revisional Court, in the facts and circumstances of the case, has further observed that when there is prima facie material against the revision petitioner for presuming commission of Page No. 13/16 the offence of criminal breach of trust mere defect in framing charge under an improper section would not affect the merit of the case. Observing so, the Revisional Court has found the case to be a fit one to remand to the Trial Court for framing the charge of criminal breach of trust under the appropriate provision provided in the Penal Code. The Revisional Court has further observed that the Trial Court shall consider the materials on record and frame charge under the appropriate provisions of law.
23. The respondent no. 1 in this criminal revision petition was the revision petitioner in Criminal Revision no. 18[2] of 2012 before the Revisional Court. The respondent no. 2 and respondent no. 3 in this criminal revision petition had also been charge-sheeted in G.R. Case no. 1781 of 2008 along with the respondent no. 1 herein. All the three respondents are similarly circumstanced as all of them were charge-sheeted and thereafter, the charge under Section 409, IPC was framed by the Trial Court vide the Order dated 23.04.2012.
24. Section 405 of the IPC has defined the offence of criminal breach of trust. An offence of criminal breach of trust involves the facts of [a] entrustment of the property; and [b] a dishonest misappropriation or conversion of the property by the agent to his own dues; or [c] dishonest use or disposal of the property in violation of the law prescribing the mode in which the entrustment is to be discharged; or [d] dishonest use or disposal of the property in violation of the terms of any legal contract either expressed or implied regarding the discharge of the entrustment, or willfully allowing some other person to do so. Section 406, IPC has provided for punishment for committing the offence of criminal breach of trust simpliciter. Section 407, IPC has provided for punishment if the offence of criminal breach of trust is committed by one being entrusted with property as a carrier, wharfinger or warehouse-keeper in respect of such property. If a person, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over Page No. 14/16 property, commits criminal breach of trust in respect of that property, then the person is to be punished as per the provisions of Section 408, IPC.
25. Section 409, IPC reads as under :-
409. Criminal breach of trust by public servant, or by banker, merchant or agent.--Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with 1 [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
In order to sustain a conviction under Section 409, IPC, prosecution has to establish two ingredients, namely, [i] the accused, a public servant or a banker or agent, was entrusted with the property of which he is duty bound to account for; and [ii] the accused has committed criminal breach of trust. What amounts to criminal breach of trust has already been provided under Section 405, IPC.
26. The three accused persons charge-sheeted in connection with G.R. Case no.
1781 of 2008, that is, the respondent nos. 1 - 3 herein were employees of M/s Statfed, which was a cooperative society registered under the provisions of the Assam Cooperative Societies Act, 1949. The present revision petition has been preferred solely claiming that the three accused persons would come within the purview of the definition of 'public servant' as defined by sub-clause [a] or sub-clause [b] of Clause 'Twelfth' of Section 21 of the Indian Penal Code. It has clearly emerged from the above discussion that the three accused persons were neither in service or pay of a local authority nor a corporation established by or under a Central, Provincial or State Act nor a Government company as defined in Section 617 of the Companies Act.
Page No. 15/16It is not in doubt that the three accused persons were not in the service or pay of the Government or were remunerated by fees or commission for the performance of any public duty by the Government. Therefore, by no stretch, the three accused persons would fall within sub-clause [a] or sub- clause [b] of Clause 'Twelfth' of Section 21 of the IPC.
27. In view of the findings reached at with the reasons assigned, this Court holds that the three accused persons were not 'public servants' under Clause 'Twelfth' of Section 21 of the IPC. In view of the same, the present criminal revision petition is found to be bereft of any merit and therefore, it is liable to be dismissed. It is accordingly dismissed. As a result, the Trial Court shall proceed to frame the charge in the manner, as observed by the Revisional Court. Since the FIR was lodged as far back as in the year 2008, it is expected that the Trial Court would proceed with the matter with expedition.
28. In so far as the submission advanced on behalf of the respondent nos. 1 - 3 regarding death of two of the three accused persons is concerned, the issue whether the criminal proceeding would abate against them or not is a matter to be decided by the Trial Court on the basis of the materials placed before it. As no verifiable materials are placed before this Court on the issue except oral submission, this Court has refrained itself from making any observation on merit in the matter of abatement of criminal proceedings against any of the three accused persons.
29. The TCR is to be sent back forthwith.
JUDGE Page No. 16/16 Comparing Assistant