Telangana High Court
K Pullareddy vs The State Of Telangana on 14 February, 2025
THE HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL APPEAL No. 796 OF 2018
JUDGMENT:
This appeal is filed by the appellant/A1 aggrieved by the conviction recorded by the I Addl.Spl.Judge for SPE & ACB Cases- cum-V Addl.Chief Judge, CCC, Hyderabad, in CC.No.62 of 2007, dt.28.02.2018, for the offences under Sections 13(1)(c)& (d)(ii) r/w.Section 13(2) of Prevention of Corruption Act, 1988 and under Sections 409, 420, 468 and 471 of the Indian Penal Code and sentenced to undergo Rigorous Imprisonment for a period of 2 years and to pay a fine of Rs.2 lakhs for the offence under Section 468 of IPC; to undergo rigorous Imprisonment for a period of 5 years and to pay a fine of Rs.5 lakhs for the offence under Section 409 of IPC: to undergo Rigorous Imprisonment for a period of 2 years and to pay a fine of Rs.50,000/- for the offence under Section 13(2) of the Prevention of Corruption Act; to undergo rigorous Imprisonment for a period of 2 years and to pay fine of Rs.50,000/- for the offence under Section 13(1)(d)(ii) r/w.Section 13(2) of the Prevention of Corruption Act; to undergo Rigorous Imprisonment for a period of 2 years and to pay a fine of Rs.2 lakhs for the offence under Section 420 of Indian Penal Code; to 2 undergo Rigorous Imprisonment for a period of two years for the offence under Section 471 of the Indian Penal Code.
2. Heard learned counsel for the appellant and learned Assistant Public Prosecutor for the respondent-State.
3. The appellant is Accused No.1 who was working as Statistical Officer in NSS Cell in Higher Education Department, Secretariat, Hyderabad. He was tried along with A2-State Liaison Officer in the Higher Education Department, and A3-Chief Manager, SBI.
4. The case of the prosecution is that all the three accused entered into a criminal conspiracy. A1 alleged to have forged the signatures of Joint Secretary and Principal Secretary of Higher Education (PW.1) in the note file and also the signature of State Liaison Officer (A2). A savings bank account was opened in the SBI, bearing SB A/c.No.5450, and the NSS grants amounts to a tune of Rs.4,11,98,094/-, were deposited. Out of the said funds, an amount of Rs.91,76,794/- was withdrawn and misappropriated by A1, in conspiracy with A2 and A3.
5. The alleged fraud came into light when PW.2, who was newly appointed in the Department as State Liaison Officer and took charge on 21.10.2003, went to the bank to deposit a cheque for an 3 amount of Rs.2,27,85,000/- with the authorization letter of Additional Secretary, Higher Education. The bank people denied to credit the cheque in the account and asked for authorization from the appellant (A1). PW.2 came to know that A1 was operating the account for the past 4 years with the authorization of A2. After reconciliation of accounts, it was found that, in between 11.03.2002 to 24.10.2003, there was a withdrawal of Rs.91,76,794/-, which amount was unaccounted for. After PW.2 took charge, an amount of Rs.7,02,794/- was withdrawn by the appellant without permission of PW.2.
6. Explanation was called for from the appellant. An amount of Rs.6,72,794/- was remitted into the NSS account after explanation was asked, and the appellant allegedly undertook to repay the misappropriated amount by paying Rs.50,000/- per month.
7. The Chief Accounts Officer-PW.10, in the office of Director of Collegiate Education was asked to take up special audit on the government accounts operated by appellant in the SBI A/c.No.5450. Complaints were also received from ten universities stating that they have not received an amount of Rs.35 lakhs during the period from 2000 to 2003. The audit found a shortfall 4 of Rs.83,83,07,429/-, and it was found that the appellant forged the signatures of A2-State Liaison Officer and misappropriated the amount. Complaint was filed with the CID. Crime was registered for the offences under Sections 409, 468, 471 of the Indian Penal Code and under Sections 13(1)(c) and (d) r/w.Section 13(2) of the Prevention of Corruption Act.
8. During the course of investigation, it was found that Appellant opened the Savings Bank account in the State Bank of India, Amberpet branch to deposit the cheques received towards Central Government's share for NSS programme. Appellant forged the signatures of the Joint Secretary and Principal Secretary for opening the said account. The letter dated 06.03.2002 was also filed into the bank which was addressed to the Chief Manager (A3), authorizing appellant (A1) to operate the account on behalf of A2. Appellant deposited a total amount of Rs.4,11,98,094/- as central government share of NSS grants for A.P.State in the SB account in between 08.03.2002 to 30.06.2003, and the amount was released to 13 universities in the State of A.P. for conducting NSS programs. A2 also signed in the cash book for transaction of the bills for central shares that were withdrawn. The investigation further revealed that out of the total amount of Rs.4,11,98,094/-, only an amount of Rs.3,28,25,635/- was sent to the Universities 5 and the appellant withdrew an amount of Rs.91,76,794/- which was misappropriated. An amount of Rs.8,78,883/- was deposited by appellant/A1, and A1/appellant also undertook to pay Rs.50,000/- per month till realization of the misappropriated amount. The investigation revealed that A1, A2, and A3 conspired to misappropriate the funds. Accordingly, charge sheet was laid.
9. The learned Special Judge framed charges against the appellant under Sections 13(1)(c) &(d)(ii) r/w.13(2) of Prevention of Corruption Act, 1988 and under Sections 409, 420, 468, 471 & 120-B of the Indian Penal Code against A1; under Sections 13(1)(c)& (d) (ii) r/w.13(2) of Prevention of Corruption Act, 1988 and Sections 409 r/w.109 of IPC against A2; under Sections 409, 420 & 120-B of IPC against A3.
10. The learned Special Judge considering the evidence of the prosecution witnesses PWs.1 to 29, Exs.P1 to P54, found favour with the prosecution version of involvement of appellant/A1 only, and convicted him. However, A2 and A3 were acquitted.
11. The learned Senior Counsel appearing for appellant would submit that A2 and A3, who were co-conspirators according to the investigation were acquitted of all the charges. It is not known as to how the appellant had mis-appropriated the amount when the 6 allegation is one of criminal conspiracy. No sanction was accorded either under the Prevention of Corruption Act or under Section 197 of Cr.P.C. Since the transactions were during the course of discharge of public duties, sanction is required both under Sections 197 of Cr.P.C. and also under the PC Act. For the reason of there being no sanction, the trial is void and without jurisdiction. Accordingly, the appeal has to be allowed.
12. Learned Counsel further argued that there is absolutely no admissible evidence placed before the Court. The prosecution failed to prove that the appellant forged signatures in Ex.P4-note file or the bank documents. Merely stating that the appellant forged the documents would not suffice without the corroborating evidence of an expert. PWs.1 and 2 are the main witnesses to the prosecution case, who contradicted one another. The evidence of PW.1 is hearsay and PW.2's evidence is on the basis of an assumption. Though, hand writing expert's opinion under Ex.P54 was placed on record, however, the expert who conducted the analysis was not examined. As such, Ex.P54 cannot be read against the appellant. The prosecution further failed to prove that the universities did not receive the NSS funds allocated to them, and the allegation of misappropriation is not substantiated by any evidence.
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13. Lastly, the Senior Counsel submits that the Investigation Officer was not examined and the appellant did not have the opportunity to prove the omissions and contradictions which crept into the evidence during the course of trial. In the present facts, non-examination of the Investigating Officer has caused prejudice to the defence of the appellant.
14. On the other hand, learned Public Prosecutor has filed synopsis of arguments. In the synopsis, it is mentioned that PW.29 obtained sanction proceedings by the then Government against A1 and the same was filed along with charge sheet, however, it was not brought on record. It is further mentioned that PW.1 has stated about A1 preparing the note file-Ex.P4. Since PW.1 never signed in the note file as Joint Collector and denied his signature, the appellant is responsible for forgery. The prosecution, did not confine to Ex.P29- enquiry report of PW.9, but produced witnesses to prove the case against the appellant. A copy of the G.O.M.No.14, which is the sanction order issued by the Chief Secretary to the Government granting sanction under Section 197 of Cr.P.C. to prosecute the appellant is appended to the synopsis.
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15. Having gone through the record, the period of alleged mis- appropriation was in between 11.03.2002 to 24.10.2003. During the above mentioned period, the NSS grant amount that was received is Rs.4,11,98,094/-. Out of the said amount Rs.3,28,25,635/- was disbursed and misappropriation was found at Rs.82,97,911/- (after deducting the amount of Rs.6,72,794/-, which was deposited by the appellant).
16. PW.1 was working as Prl.Secretary, Higher Education during the relevant time. The enquiry/investigation into the alleged misappropriation of NSS funds was triggered when PW.2, who took charge as State Liaison Officer went to the Bank to deposit a cheque for Rs.2,27,85,000/-. The Branch Manager informed that the account could be operated by Appellant only, and none else. Mr.M.A.Quddus-PW.5 was holding the additional charge of State of Liaison Officer until PW.2 took charge. The NSS cell was under
the control of State Liaison Officer, Higher Education. A2 was the State Liaison Officer till his retirement on 31.03.2003, and thereafter PW.5 took over. The NSS funds were received in the form of cheques in the name of State Liaison Officer, which were deposited in the account standing in the name of State Liaison Officer in the SBI, Amberpet Branch. According to the prosecution, the account was opened by the appellant under the 9 authorization of A2. Ex.P16 is the account opening form, which mentions the name of the account holder as the State Liaison Officer, National Service Scheme, Higher Education Department, H-Block, Secretariat. It is further mentioned in Ex.P16 that the account would be operated by the appellant who was the Statistical Officer in the office of State Liaison Officer, National Savings Scheme.
17. Since the cheque deposited by PW.2 was not accepted, enquiry was conducted. In the enquiry, it was known that the appellant was operating the said account by depositing the cheques received in the name of State Liaison Officer and from there, the amounts were disbursed to different Universities. However, on the basis of audit conducted by PW.10 vide Ex.P30- audit report, and PW.23 vide Ex.P43-report, there was a total misappropriation of Rs.82,97,911/-.
18. The entire case rests on (i) the Departmental Enquiry conducted by PW.9-Commissioner, Enquiries, (ii) the audit conducted by PW.10-Deputy Director/Chief Accounts Officer in Collegiate education, and also (iii) the audit conducted by PW.23 who worked as Audit Officer on deputation from State Audit Department in the office of Economic offences Wing, CID, 10 Hyderabad. PW.23 conducted audit on the basis of memorandum issued by the DIG, Economic Offences Wing, CID. Evidence of PW.9 and her Enquiry Report-Ex.P29:
19. PW.9-Commissioner, Enquiries, conducted enquiry against the appellant and found misappropriation of Rs.83,07,429/- and gave her finding under Ex.P29-enquiry report. PW.9 stated during trial that, the said misappropriation was done by the appellant by opening the account in the SBI, Amberpet branch. During the course of cross-examination, PW.9 admitted as follows:
"......It is true that all the funds released by Central Government were deposited in the bank account of S.B.I, Amberpet branch. I have not called for the statement of account from the SBI, Amberpet and reconcile the amounts received from the Central Government to the said account to know whether they were properly deposited in the account or not."
In her re-examination, PW.9 stated that:
"Question: You are not empowered to conduct an enquiry in allegation of forgery and fraud?
Answer: I think I am competent to take up the enquiry because earlier also I have dealt with similar cases. The said offence is mis-appropriation, embezzlement and therefore I have enquired into it.11
.............I am not aware that PW.2 in Ex.P29 is accused No.2 in this case. The witness adds that he came into picture as his signature was forged. It is true that PW.2-Shankaraiah in Ex.P29 has not specifically mentioned that who has forged his signature."
20. Admittedly, PW.9 did not reconcile any of the bank statements. She was not even aware that an authorization letter was given by A2 in favour of appellant to open the accounts. PW.9 admitted that during the course of her enquiries, A2 was examined as PW.2. During his examination, A2 did not state as to who forged the signature. Further, as seen from the report of PW.9, the witnesses were not even cross-examined by the appellant.
Evidence of PW.10 and her Enquiry Report-Ex.P30:
21. PW.10 who worked as Chief Accounts officer in Collegiate Education, was asked to conduct special audit. Accordingly having concluded the audit, she submitted her report-Ex.P30 on 30.08.2004 finding that there is a shortfall of Rs.83,07,429/-. In her cross-examination, PW.10 stated that:
"I have stated that even if it is construed that authorization letter has been a forged one, without the knowledge of A2, as a Head of the Office, he cannot escape from the responsibility.12
Joint Secretary was in-charge SLO, for certain period, but Principal Secretary is not concerned with the accounts of the department. The note-file with the signature of A2- Joint Secretary and Principal Secretary was not furnished to me."
22. PW.10 further admitted in her re-examination that:
"............I have mentioned in my report that cash books were not produced before me and I also mentioned in my report that I have verified the other records pertaining to the NSS unit and the records in the NSS office arrived at a conclusion and it was mentioned in page No.7. It is true that it was mentioned in the audit report in page No.1 in Ex.P30 that the other details of the cheque are not forthcoming."
23. PW.10 in Special Audit Report-Ex.P30, observed as under:
"It is not complained by the DDO/SLO Sri M.Shankariah (A2), or any other DDO/SLO subsequently in charge at any time that the cheques were missing from the office. During the period of Sri M.Shankariah, 3 bills of central share drawn and amounts were deposited in SBI, Amberpet and Sri M.Shankariah has signed in the cash book for the transactions up to 31.03.2003 i.e., till his retirement. This shows that he is fully aware of the transactions made at SBI, Amberpet."
The finding of PW.10 was based on insufficient material, as evident from her cross-examination. The crucial document of A2 13 authorising A1 to open the account was not provided to PW.10. PW.10 found during enquiry that A2 dealt with transactions till his retirement on 31.03.2003.
Evidence of PW.23 and his report Ex.P43:
24. PW.23 is the then Audit Officer on deputation from State Audit Department in the office of Economic Offences Wing, CID, Hyderabad. PW.23, in pursuance of directions by the DIG, Economic Offences Wing, CID, conducted audit on the documents collected by the Investigating Officer in the crime. Ex.P43 is the report. According to PW.23, the total misappropriation was Rs.82,97,911/- committed by appellant along with A2, PW.2, PW.5, and PW.11.
25. PW.23 admitted in his chief-examination as follows:
"............Ex.P43 is the said report. As per my report, there was a total mis-appropriation of Rs.82,97,911/- committed by A1 along with A2, Mr.G.L.V.Prasad Rao (PW.11), Mr.M.A.Quddus (PW.5) and Mr.D.Virajanand (PW.2). A1 was the main conspirator for this misappropriation. All of them were jointly and severally responsible for the above said mis-approprition."
26. PW.23 admitted during the course of cross-examination as under:
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"It is true that as per my report the State Liaison Officer was the Drawing Officer for the bills and he was responsible for the drawing and disbursement. It is true that it is mentioned in the report that the State Liaison Officer was the Drawing and Disbursing Officer for the bills relating to the Grant-in-aid. It is true that as per my report the above said official was the only person authorized to operate the a bank account with SBI, Amberpet branch. I mentioned in Ex.P43-report that A1 got opened the account bearing No.012000005450 with SBI, Amberpet on the basis of the letter purported to have been written by A2. I got summoned the relevant records from the SBI, Amberpet branch to verify the facts. I did not obtain any opinion from any expert with regard to the forged letter of A1 after summoning the record from SBI. It is true that it is mentioned in Ex.P43 report that A2 gave his explanation to the Government that with his permission any other authorized person can also open the account and operate and also further mentioned that A1 was authorized to deposit the cheques and D.Ds in the said account. It is true that as per my report, A2 had full knowledge of the opening of the account with SBI, Amberpet branch. It is true that the State Liaison Officer is only authorized Officer to collect the NSS funds from the Government and for the disbursement. It is true that as per my report under Ex.P43 A1 made the deposit of the funds, but had no authority to withdraw the same."15
27. According to PW.9, it was the appellant who was responsible for the misappropriation. Similar view was taken by PW.10. However, PW.23 stated that A1, A2, PW.2, PW.5 and PW.11 were responsible. The said opinion of PW.23 was based on the documents provided to him during the audit by the Investigating Agency. PW.23 specifically stated that A2 had knowledge of operating the account by A1 as A1 was issued the authorization letter. Ex.P3 was sent to hand writing expert, but the expert was not examined in Court.
28. It is admitted that the cheques were received in the name of the 'State Liaison Officer'. A2 worked as State Liaison during the relevant period until his retirement in the month of March, 2003. Over a period of more than 3 years 7 months, cheques were being received in the name of State Liaison Officer and deposited into the account at Amberpet branch. The allegation is that A2, as the State Liaison Officer, authorized appellant to operate the said account. A2 was acquitted for the charges leveled against him. The finding of the learned Special Judge that A2 was not involved in the alleged misappropriation for the entire period of more than 3 years, when he was working as SLO, creates any amount of doubt. The said finding is contrary to the enquiry and audit conducted by PW.23.
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29. The authorization letter-Ex.P3, which was enclosed to Ex.P16-account opening form, was the basis for A1 to operate the account over the said period of three years seven months. The authorization was allegedly given by A2. However, A2 denied having given any such authority under Ex.P3 during trial. One fails to understands as to how A2 was kept in dark over a period of more than 3 years, when cheques were being regularly received towards NSS funds and deposited into the bank, and from there directed to concerned Universities in the form of demand drafts drawn in favour of the Universities.
30. From the evidence adduced by the prosecution, different ledgers and registers, i.e., Ex.P5-Cash book from March, 2002 pertaining to State matching share (1 Register), Ex.P6-NSS grants Central Share Register from March, 2002, Ex.P7-Release of NSS grants Register from the year 1997-1998 to 2003-2004, Ex.P11- Treasury Bill Register Vol.1 from June, 1999 to March, 2002, and Ex.P12- treasury Bill Register Vol.II from April, 2002 to March, 2004, were maintained by the officials working in the office. The said Exs.P5 to P7, Ex.P11 and Ex.P12 were maintained by different officials in the office, reflecting the entire details of receipt of NSS funds and their disbursal.
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31. The Investigating Agency sent the disputed documents, including the account opening form-Ex.P16, authorization letter- Ex.P3, to the State Forensic Science Laboratory for the purpose of examination and opinion. Though report was received vide Ex.P54, for reasons best known to the prosecution, the expert who gave opinion under Ex.P54 was not examined. Ex.P54 was marked through the Investigating Officer. During the course of trial, the public prosecutor informed the court that the person who issued the FSL report was no more. As seen from Ex.P54, the Scientist who examined the documents was Mr.M.A.Aleem, Assistant Director, and the report was approved and forwarded by the Joint Director, APFSL, Hyderabad. In the absence of the Assistant Director, the prosecution ought to have produced the Joint Director, APFSL. It is not clear as to who among the two died.
32. Before the Court below, sanction order of A2 was filed which is Ex.P53. However, no sanction order which was issued to prosecute the appellant, was filed. As seen from the Judgment of the lower court, a day before the Judgment was to be pronounced, the learned public prosecutor filed a petition to bring the sanction order of A1 on record. However, the learned Special Judge refused and wrote in the Judgment that the Court can take judicial notice of the said sanction order.
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33. After the arguments were heard, the learned Public Prosecutor filed a memo along with a sanction dated 31.05.2007, sanctioning prosecution against the appellant herein. Curiously, both the sanctions though obtained in the year 2007, were not placed on record during the course of trial. No petition is filed by the prosecution under Section 319 of Cr.PC. to get the sanction orders on record as additional evidence.
34. The grant of sanction is a sacrosanct act, involving application of mind by the sanctioning authority to the documents and other material supplied by the Investigating Agency. In the absence of the sanction orders being placed on record, the accused loses the right of cross-examining the sanctioning authority. The accused is entitled to demonstrate that the sanction orders were issued without application of mind, or without considering the material on record.
35. The question of conviction under Prevention of Corruption Act does not arise when there is no sanction.
36. Section 19 of Prevention of Corruption Act reads as under:
"19. Previous sanction necessary for prosecution.--
(1) Prosecution of Judges and public servants.--(1) No court shall take cognizance of an offence punishable 19 under Sections 7, 10, 11, 13 and 15 alleged to have been committed by a public servant, except with the previous sanction [save as otherwise otherwise provided in the Lokpal and Lokayuktas Act, 2013]
(a) in the case of person who is employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of that Government;
(b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the State Government, of that Government;
(c) in the case of any other person, of the authority competent to remove him from his office.
37. Section 197 of Cr.P.C reads as under:
"197.Prosecution of Judges and public servants.-(1) When any person who is or was a Judge or Magistrate or a public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction.-
(a) in the case of a person who is employed or, as the case may be, was at the time of commission of the 20 alleged offence employed, in connection with the affairs of the Union, of the Central Government;
(b) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of a State, of the State Government.
[Provided that where the alleged offence was committed by a person referred to in clause (b) during the period while a Proclamation issued under clause (1) of Article 356 of the Constitution was in force in a State, clause (b) will apply as if for the expression "State Government" occurring therein, the expression "Central Government" were substituted.]
38. The case projected by the prosecution is that A2 authorised A1 for opening the account in SBI Amberpet branch vide Ex.P3. The account was opened to deposit the NSS cheques, and thereafter, to disburse to the concerned universities. It is also admitted that there was no separate account which was opened by the department for the purpose of depositing NSS funds. No government orders were obtained for operating accounts relating to NSS grants, according to PW.23.
39. The appellant did not have the opportunity to cross-examine the hand writing expert or the persons who issued the sanction. For reasons best known, the sanction orders, both under Section 197 of Cr.P.C and under Section 19 of Prevention of Corruption 21 Act, were not placed on record. As already stated, no petition is filed by the prosecution to place the Sanction orders on record as additional evidence. Unless the sanction orders are placed on record in accordance with the procedure, the said documents cannot be looked into.
40. The findings by PW.10 and PW.23 would clearly show that several persons were involved in the misappropriation on the basis of records and registers maintained in the office. The learned Trial Judge accepted the denial of A2 in giving the authorization letter- Ex.P3 to A1 to open the bank account, and that the note-file Ex.P4 was not signed by PW.1 on the basis of assumptions, in the absence of expert evidence.
41. In Mariam Fasihuddin and Ors. vs. State by Adugodi Police Station and another 1 , the Honourable Supreme Court discussed the ingredients of Section 468 of IPC, which are extracted as under:
"The offence of forgery under
Sections 468 and 471 IPC:
33. The offence of 'forgery' under section 468
IPC postulates that whoever commits forgery, intending that the document or electronic document forged, shall be used for the purpose of cheating, shall be punished with 1 2024 SCC OnLine SC 58 22 imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
Whereas Section 471 IPC states that whoever fraudulently or dishonestly uses as genuine any documents which he knows or has reason to believe it to be a forged document, shall be punished in the same manner as if he had forged such document.
34. There are two primary components that need to be fulfilled in order to establish the offence of 'forgery', namely : (i) that the accused has fabricated an instrument; and (ii) it was done with the intention that the forged document would be used for the purpose of cheating. Simply put, the offence of forgery requires the preparation of a false document with the dishonest intention of causing damage or injury.3
35. The offences of 'forgery' and 'cheating' intersect and converge, as the act of forgery is committed with the intent to deceive or cheat an individual."
The question of convicting the appellant under Section 468 of Indian Penal Code, assuming that A1 has fabricated signatures in Exs P3 and P4, does not arise.
42. The ingredients of Section 471 of IPC were discussed by the Honourable Supreme Court in the case of Deepak Gaba and Ors. vs. State of Uttar Pradesh and Ors. 2, which are extracted as under:
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(2023) 3 SCC 423 23 "21. Section 471 IPC is also not attracted. This Section is applicable when a person fraudulently or dishonestly uses as genuine any document or electronic record, which he knows or has reasons to believe to be a forged document or electronic record. This Court in Mohd. Ibrahim [Mohd.
Ibrahim v. State of Bihar, (2009) 8 SCC 751 : (2009) 3 SCC (Cri) 929], has elucidated that the condition precedent of an offence under Section 471IPC is forgery by making a false document or false electronic record or part thereof. Further, to constitute the offence under Section 471IPC, it has to be proven that the document was "forged" in terms of Section 470, and "false" in terms of Section 464 of IPC .
22. Section 470 lays down that a document is "forged" if there is:
(i) fraudulent or dishonest use of a document as genuine; and
(ii) knowledge or reasonable belief on the part of the person using the document that it is a forged one.
Section 470 defines a "forged document" as a false document made by forgery.
23. As per Section 464 IPC, a person is said to have made a "false document":
(i) if he has made or executed a document claiming to be someone else or authorised by someone else;
(ii) if he has altered or tampered a document; or
(iii) if he has obtained a document by practising deception, or from a person not in control of his senses.
24. Unless the document is false and forged in terms of Sections 464 and 470IPC respectively, the requirement of Section 471IPC would not be met."
24Once it is not proved that the documents were forged, and the appellant had knowledge that the documents were forged, the question of convicting under Section 471 does not arise.
43. The learned Sessions Judge, on the basis of assumption that the appellant was the person responsible to fabricate the authorization letter-Ex.P3 and also Ex.P4-note file, convicted the appellant under Sections 468 and 471, which is erroneous.
44. Admittedly, the funds were entrusted to the then State Liaison Officer-A2 till his retirement on 31.03.2003. Thereafter, PW.5 took over as State Liaison Officer, till PW.2 took charge from PW.5 on 21.10.2003.
45. The ingredients of Section 409 of IPC were discussed by the Honourable Supreme Court in the case of N. Raghavender vs. State of Andhra Pradesh 3, which are extracted as under:
"45. Section 409IPC 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 Sadhupati Nageswara Rao v. State of A.P. [Sadhupati Nageswara Rao v. State of A.P., (2012) 8 SCC 547 : (2012) 3 SCC (Cri) 979 : (2012) 2 SCC (L&S) 638] ) 3 (2021) 18 SCC 70 25
46. 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 409IPC. The expression "criminal breach of trust" is defined under Section 405IPC 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 405IPC, the following ingredients must be satisfied:
46.1. Entrusting any person with property or with any dominion over property.
46.2. That person has dishonestly misappropriated or converted that property to his own use.
46.3. Or that person is 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.
47. It ought to be noted that the crucial word used in Section 405IPC 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 "misappropriates" which means improperly setting apart for ones use and to the exclusion of the owner.26
48. No sooner are the two fundamental ingredients of "criminal breach of trust" within the meaning of Section 405IPC 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 409IPC, 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.
49. 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 409IPC may not be attracted...."
The question of conviction under Section 409 of Indian Penal Code does not arise unless entrustment is proved.
46. The defence of A2 is one of denial, as already discussed. Over a period of more than 3 years, cheques were being received in the name of State Liaison Officer and several other officials dealt with the relevant files, and also the amounts were disbursed to different Universities on the basis of requirement. It is not possible for the appellant alone to have committed the alleged acts of misappropriation and forgery etc., which technically were not 27 proved. Admittedly, according to PW.23, even before filing of charge sheet, the involvement of A1, A2, PW.2, PW.5 and PW.11 was evident from the investigation and audit conducted. However, no steps were taken to array PW.2, PW.5 and PW.11 as accused. PW.9-enquiry officer without examining any documents, gave report Ex.P29, opining that only A1/appellant was responsible. Similarly, PW.10 found only appellant responsible for misappropriation, when the ledgers, registers and other documents, as discussed above, give a different picture. The enquiry of PW.1 and PW.10 is biased, with a view to implicate appellant only, while safeguarding the interest of others who were involved. PW.9, PW.10, and PW.23 were carried away by the fact that the appellant addressed a letter dt.21.02.2004 (Ex.P2) to the Principal Secretary informing that the appellant remitted an amount of Rs.7,02,794/- in SBI Amberpet branch, and undertook to deposit an amount of Rs.50,000/-, till the total amount was received. According to PW.2, the misappropriation was known after verifying the records on 03.12.2003. The defence of the appellant since inception is one of denial as seen from the enquiry report of PWs.9, 10, and 23, and also before the trial Court. As already discussed, the involvement of PW.2, PW.5, PW11 and A2 28 was apparent. The manner in which enquiries were conducted and charge sheet was laid, the appellant was made a scapegoat.
47. For the reasons mentioned above, since there is no sanction under Prevention of Corruption Act, conviction under Sections 13(1)(c) and (d)(ii) r/w. 13(2) of the Prevention of Corruption Act, are also set aside.
48. The acquittal of the appellant is on technical grounds and not on merits. The outcome of this Judgment cannot, in any manner, be used by the appellant for claiming any benefits, whatsoever.
49. Accordingly, Criminal Appeal is allowed setting aside the conviction recorded by the I Addl.Spl.Judge for SPE & ACB Cases- cum-V Addl.Chief Judge, CCC, Hyderabad, in CC.No.62 of 2007, dt.28.02.2018, and the appellant (A1) is acquitted. Since the appellant is on bail, his bail bonds shall stand discharged.
_________________ K.SURENDER, J Date: 14.02.2025 tk