Madras High Court
Surendran vs The Deputy Superintendent Of Police on 15 November, 2019
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
Crl.O.P.(MD).No.13210 of 2017
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 15.11.2019
CORAM:
THE HONOURABLE MR. JUSTICE N.ANAND VENKATESH
Crl.O.P.(MD).No.13212 of 2017
and
Crl.M.P(MD)Nos.8938 and 8939 of 2017
Surendran ... Petitioner
Vs.
1.The Deputy Superintendent of Police,
Commercial Crime Investigation Wing,
Vilupuram (In Charge),
Thanjavur Sub Division.
2.The Inspector of Police,
Commercial Crime Investigation Wing,
Tiruchirappalli.
(Ref.Crime No.1 of 2010)
3.K.Athmanathan,
The Deputy Registrar of Cooperative Societies,
Musiri Circle, Tiruchirappalli District. ... Respondents
PRAYER: Criminal Original Petition is filed under Section 482 of
Cr.P.C, to call for records in C.C.No.106 of 2016 on the file of the
Judicial Magistrate, Musiri and quash the charge sheet and
consequential all further proceedings as against the petitioner.
For Petitioner : Mr.K.Shanmugaraja Sethupathi
for Mr.D.Senthil
For R1 and R2 : Mr.K.Suyambulinga Bharathi,
Government Advocate (Criminal Side)
http://www.judis.nic.in1/16
Crl.O.P.(MD).No.13210 of 2017
ORDER
This Criminal Original Petition has been filed seeking to quash the final report filed by the respondent police before the learned Judicial Magistrate, Musiri, in C.C.No.106 of 2016.
2. The case of the prosecution is that the Secretary, Clerk and other employees of the Co-operative Societies had granted loan to several persons and had caused loss to the society by misappropriating the funds. In this case, there are totally seven accused persons and the petitioner has been arrayed as A4.
3.The criminal complaint itself came to be given in this case by the Deputy Registrar of Co-operative Societies, based on the enquiry conducted under Section 81 of the Co-operative Societies Act. Based on the enquiry report that was filed by the enquiry officer, the accused persons were identified and specific findings were given against them in the enquiry report. Originally, it was only as against six persons, FIR came to be registered.
4.A careful reading of the enquiry report prepared by the enquiry officer of the Co-operative Society shows that for each of http://www.judis.nic.in2/16 Crl.O.P.(MD).No.13210 of 2017 the transaction, specific allegation has been made against the concerned persons and the amount that has been misappropriated by them has also been specifically dealt with. The enquiry officer was also examined by the investigating officer, during the investigation and he has almost reiterated the same findings, while his statement was recorded under Section 161 (3) Cr.P.C. It is seen that neither in the enquiry report that was filed pursuant to the enquiry conducted under Section 81 of the Co-operative Societies Act nor in the 161 statement that was recorded initially from the enquiry officer, the name of the petitioner was mentioned. In fact, the petitioner was the Special Officer of co-operative society, during the relevant point of time. The name of the petitioner has been added in the final report only based on the further statement that was recorded.
5.The learned counsel for the petitioner submitted that the involvement of the accused persons in this case and the amount that was misappropriated by them, has been clearly categorized under each loan and the same is reflected both in the enquiry report as well as in the 161 statement recorded from the enquiry officer. The work of the Special Officer is transitory in nature, since a Special Officer is on deputation basis to the concerned co-operative http://www.judis.nic.in3/16 Crl.O.P.(MD).No.13210 of 2017 society and at the best, he can only verify the accounts and records and there is no way for a Special Officer to find out whether the documents produced in a society are genuine or forged.
6.The learned counsel submitted that even if the further statement that was recorded by the police is taken as it is, at the best, it can only lead to a conclusion that there was dereliction of duty on the part of the petitioner and that by itself cannot constitute an offence of cheating and criminal breach of trust.
7.The learned counsel for the petitioner in order to substantiate his submission, relied upon the judgment of this Court in Anbalagan Vs. State, made in Crl.OP(MD)No.20309 of 2016 etc., dated 20.07.2018.
8.Per contra, Mr.Suyambulinga Bharathi, learned Government Advocate (Criminal Side) appearing on behalf of the respondent police submitted that the present case involved misappropriation of funds belonging to the Co-operative Society. The learned Government Advocate (Criminal Side) also submitted that as a Special Officer, it is the duty of the petitioner to verify the records before the loan was sanctioned. The petitioner has failed to do his http://www.judis.nic.in4/16 Crl.O.P.(MD).No.13210 of 2017 duty and the specific allegation is that the petitioner was also part of the conspiracy along with other accused persons, which ultimately ended in a huge loss to the Co-operative Society.
9.The learned Government Advocate (Criminal Side) submitted that for the purpose of framing the charges and proceeding further with the trial, even a strong suspicion is enough and such a strong suspicion is available in the present case and the conspiracy between the parties will get unravelled only during the course of trial. The learned Government Advocate (Criminal Side) therefore, submitted that the present criminal original petition is liable to be dismissed and that a time limit can be fixed for the completion of the proceedings.
10.This Court has carefully considered the submissions made on either side and the material available on record.
11.The only issue that requires consideration of this Court is to see whether there is any prima facie material available against the petitioner in order to make the petitioner undergo the trial before the Court below.
http://www.judis.nic.in5/16 Crl.O.P.(MD).No.13210 of 2017
12.On a careful perusal of the records, it is seen that neither in the enquiry report, which came into existence after an enquiry was conducted under Section 81 of the Co-operative Societies Act nor in the 161 statement that was recorded from the enquiry officer, there was even a scrap of allegation made against the petitioner. In fact, the enquiry report and the 161 statement clearly categorized the loans and the misappropriation that was committed, has been matched to the concerned accused persons.
13.The petitioner has been added as an accused only on the ground that there was a subsequent statement that was made by the enquiry officer, during the course of investigation. The subsequent statement that was made by the enquiry officer is extracted here under.
“mnj nghy; jdp mYtyh;fs; rutzd;> Rnue;jpud; kw;Wk; jpUr;rpuhg;gs;sp khtl;l kj;jpa Tl;Lwt[ tq;fpapd; ruf nkw;ghh;itahsh; fypaK:h;j;jp Mfpnahiua[k; mth;fs; gzpg[hpe;j fhyf;fl;lj;jpy; mth;fsJ flikfisa[k;> bghWg;g[fisa[k; epiwntw;whky; ifahlYf;F cle;ijahf ,Ue;Js;sJk; gy Mz;Lfshf ele;Jte;Js;s ifahliy caupfhhpfSf;F bjhpag;gLj;jhkYk; ,Ue;Js;sJ tq;fp Mtz rhl;rpfs; K:yk; bjhpatUfpwJ. ,d;W jhq;fs; vd;id tprhhpf;f ehd; Mtzq;fis ghh;ifapl;L thf;FK:yk; Twpndd;.” http://www.judis.nic.in6/16 Crl.O.P.(MD).No.13210 of 2017
14.A reading of the subsequent statement shows that the petitioner, who is the special Officer of the co-operative society during the relevant point of time, has failed in his duty in identifying the misappropriation and has in a way enabled the accused persons to commit misappropriation and this was not even informed to the higher authorities. Only on this ground, the petitioner has been made as an accused in this case.
15.At this juncture, it will be relevant to rely upon the judgment that has been cited by the learned counsel for the petitioner in the case of Anbalagan Vs. State referred supra. That was also a case where the Special Officer was sought to be made as an accused in the very same society. The relevant portions of the judgment is extracted here under.
12. Clause 8 of the Tamil Nadu Co-operative Manual deals with the prosecution against the Departmental Officers which reads thus:
Prosecution against the Departmental Officers:-
''Departmental Officers are working on foreign service in Co-operative organisation as Chief Executive Officers or otherwise and at times in additions to their regular government post, they are also holding http://www.judis.nic.in7/16 Crl.O.P.(MD).No.13210 of 2017 additional charge of the post of Special Officers in more than one co-operative society and functioning as such. They are holding supervisory posts also over such institution. The Act or the Bylaw of the society do not differentiate a regular or additonal charge Chief Executive Officer / Special Officer and both are the same in the eyes of law. These officers either in a regular capacity and more so in the additional capacity or in a supervisory capacity may not have the chance to scruitinise each and every transactions of the society. They would have failed to check and scruitinise the accounts and or excercise effective control over the subordinate staff resulting in the criminal irregularities, frauds and offences under IPC committed by the staff. Failure of such nature ie., failure to discharge their duties properly or negligence, or omissions, unless the inquiry, inspection or investigation officer finds it prima facie, that such officers with malafide criminal intention committed criminal breach of trust and or criminal misappropriation and or aided and abetted such criminal offences by the subordinate staff, will not fasten criminal liability on such officers. On the other hand, the failure of this nature, will be failure to discharge their duties properly or negligence and this may be dealt with through disciplinary proceedings. Hence the departmental officers who are not directly involved in the frauds or misappropriations need not be included as deliquents, in a routine manner, in the inquiry reports or complaints filed with the police.” http://www.judis.nic.in8/16 Crl.O.P.(MD).No.13210 of 2017 From the aforesaid provision, it is clear that if the officers who have been posted to supervise the societies failed to discharge their duty properly such officers will not fasten criminal liability unless prima facie shows that such officers with malafide criminal intention committed criminal breach of trust or criminal misappropriation or aided and abetted such criminal offences by the supporting staff.
13. In the circular issued by the Registrar of Co- operative Societies, Chennai in R.C.No.228696/19/CP1 dated 11.12.1991 also, the same thing reiterated. For proper appreciation, the relevant portions of the said letter are extracted here under:
“3. Taking criminal action against the departmental officers holding chief executive or administrative and other supervisory posts in the Cooperatives who are involved vicariously has also been examined. The departmental officers, working have no chance to scrutinize each and every transactions of the society. Though they may have an overall control, they cannot be held criminally liable, for all the criminal irregularities committed by the staff working under them. Though they fail to check and scrutinize the accounts etc., or exercise effective control over subordinate staff such failure may not deserve http://www.judis.nic.in9/16 Crl.O.P.(MD).No.13210 of 2017 criminal action. On the other hand, the failure of this nature, will be failure to discharge their duties properly or negligence and this may be dealt with through disciplinary proceedings. Hence it is informed that the departmental officers who are not directly involved in the frauds or misappropriations need not be included as delinquents, in a routine manner, in the inquiry reports or complaints filed with the police."
14. In S.Gunasekaran Vs. State represented by the Inspector of Police (supra), this Court has quashed the Criminal proceedings against the Special Officer stating that the Criminal prosecution cannot be initiated for lapse / negligence in supervising work, which is extracted below:-
“8. The learned Government Advocate (Crl.Side) would submit that as per a resolution passed in the society the petitioner was responsible for the day-to- day affairs of the society and to supervise the records and the transactions of the society. The learned Government Advocate (Crl.side) would further submit that as per the materials available on record it is clear that he has failed to discharge his duties properly and the said acts of the accused would amount to offences as enumerated in the charge sheet.
9. In my considered opinion, such a negligence may create only a civil liability and there cannot be any vicarious liability in the criminal law. Even to initiate http://www.judis.nic.in10/16 Crl.O.P.(MD).No.13210 of 2017 proceedings against the petitioner under Section 87 of the Tamil Nadu Co-operative Societies Act, the sine quo non is wilful negligence resulting in loss to the society and not a mere negligence. When that be so, a mere negligence to look into the records properly, in my considered opinion, would not satisfy any of the ingredients of the offences alleged against him.”
15. In N.Baskaran Vs. The State rep. by Inspector of Police, C.C.I.W., CID, Trichy (supra), after referring to the decision in S.Gunasekaran Vs. State represented by Inspector of Police (supra), has observed in paragraph Nos. 5 and 6 as follows:
''5. It is further submitted that in similar facts, this court in 2008 (1) Crimes 681 (Mad.) (S.Gunasekaran Vs. State rep. By Inspector of police), quashed the charge laid against the Special Officer categorically stating that criminal prosecution cannot be initiated for lapse/negligence in supervisory work, which is extracted below:-
“8. The learned Government Advocate (Crl.Side) would submit that as per a resolution passed in the society the petitioner was responsible for the day-to- day affairs of the society and to supervise the records and the transactions of the society. The learned Government Advocate (Crl.Side) would further submit that as per the materials available on record it is clear http://www.judis.nic.in11/16 Crl.O.P.(MD).No.13210 of 2017 that he has failed to discharge his duties properly and the said acts of the accused would amount to offences as enumerated in the charge-sheet.
9. In my considered opinion, such a negligence may create only a civil liability and there cannot be any vicarious liability in the criminal law. Even to initiate proceedings against the petitioner under Section 87 of the Tamil Nadu Co-operative Societies Act, the sine quo non is wilful negligence resulting in loss to the society and not a mere negligence. When that be so, a mere negligence to look into the records properly, in my considered opinion, would not satisfy any of the ingredient of the offences alleged against him.”
16.This Court had the occasion to deal with the nature of duties that are performed by a Special Officer in Co-operative societies. After analyzing the same, this Court categorically found that if the Special Officers, who are posted to supervise the co- operative societies, failed to properly discharge their duties, the same will not fasten any criminal lability, unless there is a prima facie material to show a criminal intention to commit criminal breach of trust or criminal misappropriation or to aid or abet the said crime.
17.This Court has held that such dereliction of duty or negligence may create only a civil liability and the concept of http://www.judis.nic.in12/16 Crl.O.P.(MD).No.13210 of 2017 vicarious liability cannot be applied in criminal law, unless the same is specifically provided by any special enactment. Even to initiate proceedings under Section 87 of the Co-operative Societies Act, the test required is willful negligence and not mere negligence. When such is the requirement even for the recovery proceedings under Section 87 of the Co-operative Societies Act, the requirement to criminally prosecute a Special Officer is even more stringent and there must be materials to show his direct involvement in the crime, with a criminal intent. Negligence including willful negligence by itself will not constitute a crime.
18.In the present case, neither in the enquiry report nor in the first statement that was given to the police by the enquiry officer, there is any reference to the Special Officer. At the fag end of the investigation, by recording a further statement from the enquiry officer, the petitioner has been added as an accused on the allegation that he failed in his duty to stop the misappropriation and inform the same to the higher authorities. The petitioner has been added as an accused without any material whatsoever except the ipse dixit made in the further statement given by the enquiry officer. http://www.judis.nic.in13/16 Crl.O.P.(MD).No.13210 of 2017
19.In the considered view of this Court, there is absolutely no material to make the petitioner face the ignominy of trial before the Court below. The continuation of the proceedings as against the petitioner will only result in an abuse of process of Court and the same requires interference of this Court in exercise of its jurisdiction under Section 482 of Cr.P.C.
20.In the result, the proceedings in C.C.No.106 of 2016 on the file of the Judicial Magistrate, Musiri, is hereby quashed, insofar as the petitioner is concerned and accordingly, this Criminal Original Petition is allowed. The trial Court is directed to complete the proceedings as against the other accused persons within a period of six months from the date of receipt of a copy of this order. Consequently connected miscellaneous petitions are closed.
15.11.2019 Index: Yes/No Internet: Yes/No das http://www.judis.nic.in14/16 Crl.O.P.(MD).No.13210 of 2017 To
1.The Judicial Magistrate, Musiri.
2.The Deputy Superintendent of Police, Commercial Crime Investigation Wing, Vilupuram (In Charge), Thanjavur Sub Division.
3.The Inspector of Police, Commercial Crime Investigation Wing, Tiruchirappalli.
4.The Additional Public Prosecutor, Madurai Bench of Madras High Court, Madurai.
http://www.judis.nic.in15/16 Crl.O.P.(MD).No.13210 of 2017 N.ANAND VENKATESH, J.
das Order made in Crl.O.P.(MD).No.13212 of 2017 and Crl.M.P(MD)Nos.8938 and 8939 of 2017 Dated:
15.11.2019 http://www.judis.nic.in16/16