The High Court · 2025

Judgment

THItr HON'BLE SRI JUSTICE K.SURENDER CRIMINAL APPEAL No. 796 OF 20t8 JUDGMENT: This appeal is liled by the appetlant/Al aggrieved by the conviition recorded by the I Addl.Spl.Judge for SpE & ACB Cases- cum-V Addl.Chief Judge, CCC, Hyderabad, in CC.No.62 of 2OOZ, dt.28.O2.2OI8, for the offences under Sections 13(l)(c)& (d)(ii) r/w.Section 13(2) of Frevention of Cormption Act, 1988 and under Sections 4O9, 12O,468 and 47 I 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.S lakhs for the offence under Section 4O9 of IPC: to undergo Rigorous Imprisonment for a period of 2 years and to pay a fine of Rs.S0,OOO/- for the offence under Section^ 13(2) of the Prevention of Corruption Act; to undergo Lr c) :/u' rigorous Imprisonment for a period of 2 years and to pay fine of Rs.50,OO0/- for the offence under Section 13(l)(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 line of Rs.2 Iakhs for the offence under Sectio n 42O 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.l) 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,O94/ -, were deposited. Out of the said funds, an amount of Rs.9 1 ,76,794 I - was withdrawn and misappropriated by A1, in conspiracy with ,{2 and A3.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 21.10.2O03, went to the bank to deposit a cheque for an 3 amount of Rs.2,27,85,000/- with the authorization ietter of Additional Secretary, Higher Education. The bank people denied to credit the cheque in the account and asked for authorization from the appellant (.41). PW.2 came to know that Al was operating the accouilt for the past 4 years with the authorization of A2. After reconciliation of accounts, it was found that, in between ll.O3.2OO2 t,) 24.1O.2OO3, there was a withdrawal of Rs.91,76,794/-, which amount was unaccounted for. After PW.2 took charge, an amount of Rs.7,O2,794/- 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 I was remitted into the NSS account after explanation was asked, and the appellant allegedly undertook to repay the misappropriated arnount by paying Rs.5O,00O/- per month.

7. The Chie{ Accounts Officer-PW. lO, in the office of Director of Collegiate Edur:ation was asked to take up special audit on the government accounts operated by appellant in the SBI A/c.No.5450. C)omplaints were also received from ten universities stating that they have not received an amount of Rs.35 lakhs during the period from 2O00 to 2003. The audit found a shortfall 4 of Rs.83,83,07,429 l-, 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, 471of 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. Appeiiant 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 beha.lf of

42. Appellant deposited a total amount of Rs.4,11,98,094 l- as central government share of NSS grants for A.P.State in the SB account in between 08.O3.2OO2 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 trarsaction of the bills for central shares that were withdrawn. The investigation further revealed that out of the total amount of Rs.4,1l,98,094 /-, only an arnount of Rs.3,28,25,635 /- was sent to the Universities I 5 artd 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.SO,OOO/- per month till realization of the misappropriated amount. The investigation revealed that A1, A2, andA3 conspired to misappropriate the funds. Accordingly, charge sheet was laid.

9. The lea-rned Special Judge framed charges against the appellant under Sections 13( 1 )(c) &(d)(ii) r lw .13(2) of Prevention of Corruption Act, 1988 and under Sections 4O9, 42O, 468, 471 &, 120-8 of the Indian Penal Code against A1; under Sections l3(1)(c)& (d) (ii) r/w. 13(2) of Prevention of Corruption Act, 1988 and Sections 4O9 rlw.1O9 of IPC against A2; under Sections 409, 42O & l2O B of IPC against A3.

10. The learned Special Judge considering the evjdence of the prosecution witnesses PWs.1 to 29, Exs.Pl to P54, found favour with the prosecution version of involvement of appellant/Al only, and convicted him. However, A2 and A3 were acquitted.

11. The learned Senior Counsel appearing for appellant would submit that 42 and A3, who were co-conspirators according to the investigation were acquitted of alt the charges. It is not known as to how the appellant had mis-appropriated the amount when the 5 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 tiial is void and without jurisdiction. Accordingly, the appeat 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 hle 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.l 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. I 7

13. Lasfly, rhe 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-dxamination of the Investigating Oflicer 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 Al and the same was filed along with charge sheet, however, it was not brought on record. It is further mentioned that PW. I has staled about A1 preparing the note file-Ex.P4. Since PW. I 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 o{ Cr.P.C. to prosecute the appellant is appended to tJre synopsis. 8

15. Having gone through the record, the period of alleged mis- appropriation was in between I1.O3.2jO2 to 24.1o.2oo3. During the above mentioned period, the NSS grant amount that was received is Rs.4,11,98,O94/-. 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.6,72,7941-, 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 Oflicer 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.O3.2O03, ald thereafter PW.S 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 ures-..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 accorint would be operated by the appellant who was the Statistical Officer in the office of, State Liaison Oflicer, National Savings Schenre.

17. Since the cheque deposited by PW.2 was not accepted, enquiry was r:onducted. In the enquiry, it was known that the appellant was operating the said account by depositing the cheques receir.ed in the name of State Liaison Officer and from there, the amounts were disbursed to different Universities. However, on tl-re basis of audit conducted by PW.lO vide Ex.P3O- audit report, and PW.23 vide Ex.P43-report, there was a total misappropriation of Rs.a2,97,9 I I / -.

18. The entire case rests on (i) the Departmental Enquiry conducted by PW.9-Commissioner, Enquiries, (ii) the audit conducted by PW.lO-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 oflice of Economic offences Wing, CID, 10 Hyderabad. PW.23 conducted audit on the basis of memorandum issued by the DIG, Economic Offences Wing, CID Euid.ence 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: "......1t is true that all the funds released bg Central Gouernment u.tere deposited in tlrc bank account of S.B.I, Amberpet branch. I haue ruot called for the statement of account from the SBI, Amberpet and reconcile tlrc amounts receiued from the Central Gouernment to the said account to knou-t uhetLer theg uere properlg deposited in the account or not." In her re-examination, PW.9 stated that: "Question: You are not empotuered to conduct an enquiry in allegation of forgery and fraud? Answer: I think I am competent to take up tLe enquiry because earlier also I lutue dealt utith similar cases. Tlrc said offence is mis-appropiation, embezzlement and th.erefore I haue enquired into it. ---,-.--\ \l \l I I I 11 ... .........1 am not aware tLlat PW.2 in Ex.p29 is acansed No.2 in this case. The witness adds that trc came into picture as his sigruature tuas forged. It is true that PW.2-Shankaraiah in Ex.P29 ho's not speciftcallg mentiotrcd that uho has forged his signature."

20. Admitterlly, PW.g 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 [)W.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 bv the appellant. Evidence of PW.7O and. her Enquiry Report-Ex.p3o:

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 l-. In her cross-examination, PW. 10 stated that: oI haue stated ttwt euen if it is construed that autlnrization letter ho,s been a forged one, uithout the knouledge of A2, as a Head of tte Office, he cannot escape fr<tm the responsibilitg. J 17 peiod, but Joint Secretary tDas in-charge SLO' for certaln accounts of Prtncipal Secretary is not concenred ruith tte natureo A2- The note- the dePartment. Joint Secret oru and H ncipal Secreta ru was not fu rnished le uith the to.,me."

22. PW.10 further admitted in her re-examination that: o1 o............1 haue mentioned in mg report that cash books u)ere not produced before 'me and I also mentioned in mg report that I haue uerified the other records pertaining to the NSS unit and tle records in the NSS office ariued at a conclusion and- it u'tas mentioned in page No'7' It is true that it utas mentioned in the audit report in page No'1 in Ex.P3O that tle other detaits of tle cheque are not forthcoming." PW.10 in Special Audit Report-Ex'P3o' observed as under: *It is not complained bg the DDO/ SLO Sri M'shankaiah (A2), or ang other DDO/ SLO subsequentlg in charge at ang time that the ch'eques utere missing from the office' Durinq iod o SN M. Shankaria 3 bills o central share drqu-tn and amounts LUere deposited in SBI, A mbe Sn M.S hankariah has s 1qned in the cash bookfor the .) 2003 i.e till his retiremen t. This transactions up to 31.O shotus that te is fulluau)are ofthe transactions madeat Amberpet." The finding of PW'IO was based on insufficient material' as evident from her cross-examination' The crucial document of A2 6 13 authorising Al to open the account was not provicled to PW. 1O PW.10 found during enquiry that A2 dealt with transactions till his retirement on 31.03.2003. Eaidence o;f I'W.23 dnd his report Ex.P43:

24. PW.23 is the then Audit Ofiicer on deputation from State Audit Department in the olfice 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 ttre 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.S, and PW.11.

25. PW.23 a(imitted in his chief-examination as follows: Ex.P43 is the said report. As per ntA report, there tuas a total mis-appropriation of Rs.82,97,911/- committetl by A1 along with A2, Mr.G.L.V.Prosad Rao (PW.11), Mr.M.A.Quddus (PW.S) and Mr.D.Virajanand (PW.2). A1 was the main conspirator -for this misappropiation. AII of them utere jointlg and seuerallg responsible for the aboue said mis-appropition.,

26. PW.23 aclmitted during the course of cross-examination as under: 74 ult is true that as.per my report the State Liaison Officer u.tas the Dranaing Offtcer for the bills and h.e u.tas responsible for the drauing and disbursement. It is true that it is mentioned in the report that the State Liaison Offtcer was the Drawing and Disbursing Officer for the bills relating to the Grant-in-aid. It is true that as per mg report the aboue said olficial u.tas the onlg person authorbed to operate tte a bank account u.tith SBI, Amberpet branch. I mentioned in Ex.P43-report that A1 got opened th.e account bearing No.O12OOOO0545O tttith SBI, Amberpet on the basis of the letter purported to haue been uitten bg A2. I got summoned the releuant records from tLe SBI, Amberpet branchto uerify the facts. I did not obtain any opinionfrom anA expert with regard to the forged letter of A1 afier summoning the record from SBI. It is true that it is mentioned in Ex.P43 reoort that A2 qaue his explanation to the Gouernment that Luith his permission arut other authorized person can also open. th.e account and operate and also further mentioned that A1 was authorized to deposit the chequ es and D.Ds in the said account. It is true that as per mu reoort, A2 had fulI knotttledq e of th,e ooenina of the account utith SBI, Ambe et branch. It is true that the State Liaison Officer is onlg authorbed Olficer to collect the JVSS/r,rnds from the Gouernment and for the disbursement. It is true that as per mA report under Ex.P43 A1 made the deposit of the funds, but had no authoitg to uithdrau th.e same," o 15

27. According to PW.9, it was the appellant who u.as responsible for the misappropriation. Similar view was taken by PW. 10. However, PW.23 stated that Al, A2, PW.2, PW.s and PW. 11 were responsible. The said opinion of PW.23 was based on the docuinents provided to him during the audit by the Investigating Agency. PW.23 specifically stated that A2 h,ad knowledge of operating the account by Al 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 periorl 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 Oflicer and deposited into the account at Amberpet branch. The allegation is that 42, 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 contra4r to the enquiry artd audit conducted by PW.23. 16

29. The authorization letter-Ex.P3, which was enclosed to Ex.P16-account opening form, was the basis for Al to operate the account over the said period of three years seven months. The authorization was allegedly given by A2. However, A2 denied havin'g 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.PS-Cash book from March, 2OO2 pertaining to State matching share (1 Register), Ex.P6-NSS grants Central Share Register from March, 2OO2, Ex.P7-Release of NSS grants Register from the year 1997-1998 to 2003-2004, Ex.Pl1- Treasury Bill Register Vol. 1 from June, 1999 to March, 2OO2, and Ex.P12- treasury Bill Register Vol.II from Apnl, 2OO2 to March, 2OO4., were maintained by the officials working in the office. The said Exs.PS to P7, Ex.Pll and Ex.P12 were maintained by different officials in the office, reflecting the entire details of receipt of NSS funds and their disbursal 1') 77 3 1 . 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 rehsons 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 reporl was no more. As seen from Ex.P54, the Scientist who examinerl 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 arnong 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 Al 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, 18

33. After the a-rguments were heard, the learned Public Prosecutor filed a memo along with a sanction dated 31.05.2007, sanctioning prosecution against the appeliant herein. Curiously, both the sanctions though obtained in the year 2007, were not placeil on record during the course of trial. No petition is hled by the prosecution under Section 319 of Cr.PC. to get the sanction orders on record as additional evidence

34. The grart 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 Preventlon of Corruption Act reads as under: n79. Preuious so.rr,ction necessdry for prosecution - (1) Prosecation of Judges and public seruants.-(1) No court shall take cognizance of an offence punishable t) 19 under Sections 7, 70, 11, 13 and 15 alleged to Lutue been committ<:d bg a public seruant, except ulith the preuious sanction [saue as ottrcntise otlrcrutise prouided in tLrc Inkpal and Lokayuktas Act, 20131 (a) in the case of person u.tho is emploged in connection utith the affairs of tle Union and is nbt remouable from his oJ"ftce saue bg or with the sanction of the Central Gouernment, of that Gouernment; (b) in the case of a person utha is emploged in connection tuith the affairs of a State and is not remouable from his offtce saue bg or with th.e sanction of the State Gouernment, of that Gouernment; (c) in the case of ang other person, of tte authoitA competent to remoue him from his office.

37. Section I97 of Cr.P.C reads as under: " 197. Pro.secution of Judges and public seruants.-(1) Wlrcn anA per-<;on tuho is or u-)as a Judge or Magistrate or a public se'ruant not remouable from his office saue by or uith the sanction of the Gouernment is accused of ang offence olleged to haue been committed bg him uhile acting or purporting to act in the discharge of his offlcial dutg, no Court slutll take cognizancg of suc:h offence except utith the preuious sanction.- (a) in tte case of a person uho ts emploged or, as the case tnaA be, was at the time of commission of tlrc I 2A alleged offence emploged, in connection ulith th'e affairs of the tJnion, of the Central Gouernment; (b) in tLrc case of a person who is employed or, as ttte case maA be, utas at the time of commission of the alleged offence emploged, in connection uith the affairs of a State, of tlte State Gouernment. [Prouided that uhere tle alleged offence uas committed bg a person referred to in clause (b) dunng the peiod tlhile a Proclantation issued under clause (1) of Article 356 of the Canstitution was in force in a State, clause (b) tuill apply as if for the expression " State Gouemment' occurring therein, the expression " Central Gouernment" rpere substituted.l

38. The case projected by the prosecution is that 42 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 conceined 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 additiona-l evrdence. Unless the sanction orders are placed on record in acc ordance with the procedure, the setid documents cannot be looked into.

40. The hndings by PW. 1O arrd PW.23 would clearly show that several persons u,ere involved in the misappropriation on the basis of records and registers maintained in the office. The learned Trial Judge accepted the denial of ,{2 in giving the authorization letter- Ex.P3 to A1 to open the bank account, and ihat the note-{ile Ex.P4 was not signcd 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 anotherl, the Honourable Supreme Court discussed the ingredients of Section 468 of IPC, which are extracted as utrder: nThe offence forgery Sections 468 and 477 IPC: 33. TLLe offence of 'forgery' under section 468 IPC postulates that uhoeuer commits forgery, intendirug that the document or electronic docament forged, slmll be used for the purpose of cteating, shall be punished with 12024 SCC OnLine SC 5l:t 'l 22 imprisonment of either description for a term which may ertend to seuen Aears, and shall also be liable to fine. lilor.os rahoeuer fraudulently or dishonestlg uses as genuine ang documents which he knows or has reason to belieue it to be a forged document, shall be punished in the same manner as if he Section 471 IPC states that had forged such document. 34. There are tuo pimary components that need to be fulfiUed in order to establi"sh the offence of 'forgery', namelg : (i) that the acansed has fabicated an instrument; and (ii) it utas done with the intention that the forged doanment tuould be used for the purpose of clrcating. Simplg put, the offence of forgery requires the preparation of a false document with the dishonest intention of causing damage or injury.t

35. TLLe offences of 'forgery' and 'ch-eating' intersect and conuerge, o.s the act of forgery is ammitted uith th.e intent to deceiue or cheat an indiuidual." 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 47 I of IPC were discussed by the Honourable Supreme Court in the case of Deepak Gaba and Ors. os. State of tlttar Pradesh qnd. Ors.2, which are extracted as under: ' (zoz:) s scc +zg 23 o27. Section 471 IPC is also not attracted. Ihis Section rls applicable uhen a person fraudulentlg or di.shonestlg uses as genuine ang document or electronic record., tahich he knows or has reasons to belieue to be a forged document or electronic record. This Court in Mohd_. Ibrahim [Mohd.. Ibrahim u. State of Bihar, (2009) 8 SCC 751 : (2OO9) 3 SCC Pd g2gl, has elucid"ated that the condition precedent of an offence under Section 471IPC i-s forgery by making a false dogument or false electronic record or part thereof. Further, to collstifitte the offence under Section 471IpC, it has to be prouen that the document uas "forged" in terms of Section 470, artd. "false" in terms of Section 464 of IpC . 22. Section 47O lags down ttnt a doalment is ,forged"" if tlrcre i"s: (i) fraudulent or dbhonest use of a doalment as genuine; (ii) knouledge or reasonable betief on the part of tte person using the document tlwt it is a forged one. Section 47O defines a 'forged docum.ent, as a false document made bg forgery. 23. As per Section 464 IPC, a person is said to haue made a "false doatment": (i) if he has made or executed a document claiming to be someone else or authorised bg someone else; (ii) if he has altered or tampered a document; or (ut) if lle has obtained a doo)ment bg practising deception, or from a person not in control o/ his senses.

24. Unless the document is false and forged in terms of Section s 464 and 47OI?C respectiuely, the requirement of Section 47IIPC utould not be met." 1 I 24 Once it is not proved that the documents were forged, and the appellant had knowledge that the documents lvere forged, the question of convicting under Section 471 does not a-rise.

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 47 l, which is erroneous.

44. Admittedly, the funds were bntrusted 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 21.1O.2OO3.

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 Pradeshs, which are extracted as under: o45. Section 4O9IPC pertains to ciminal breach of trust bg a public seruant or a banker, in respect of tle propertg entrusted to him. The onus is on the proseantion to proue that tLrc acansed, a public sen)ant or a banker u.tas entrusted with the propertg uhich he is duly bound to account for and thot he ho-s committed ciminal breach of tntst. (See Sadlapati Nagesuara Roo u. State of A.P. [Sadfutpati Nagesutara Rao u. State of A.P., (2012) 8 SCC 547 : (2012) 3 SCC Pn) 979 : (2012) 2 SCC (L&S) 6s8l ) '(zozt) ra scc zo 25

46. The entrustment of public propertg and dishonest misappropiation or use thereof in the manner illustrated under Section 4O5 are a sine qua non for making an offence punishable under Section 409IPC. TTe expression "ciminal breach o.f lrust" is defined under Section 405lPC uthich prouides, inter alia, that whoeuer beirry in anlj manner entnsted with propertg or uith ang dominion ouer a propertA, disLnnestly misappropriotes or conuerts to his ou.tn use that propertA, or dishonestly zses or drbposes of that propertg contrary to lau, or in uiolation of ang law prescibing tte mode in uhich such trust is to be dischcirged, or contrauenes anA legal contract, express or implied, etc. shall be held to haue committed ciminal breach of trust. Hence, to attract Section 405IPC, the follou.ting ingredients must be .satisfi.ed:

46.7. Entrusting ang person uith propertg or with ang dominion ouer propertA.

46.2. That person has dislanestlg misappropiated or conuerted that propertg to his oun use.

46.3. Or *at person is dishonestly using or dtsposing of that property or uilfully suffeing ang otlrcr person so to do in uiolation of ang direction of latu or a legal contract.

47. It ought to be noted that the crucial utord used in Section 4O5IPC is "dishonestlg" and. therefore, it pre-supposes tLe eistence of mens rea. In other uords, mere retention of property entrusted to a person without ang misappropiation cannot fall utithtn the ambit of ciminal breach of trust. LJnless there is some actual use by tle accused tn uiolatiort of law or antract, coupled uith dishonest intention, ttere i.s no ciminal breach of trust. The second significant expression rs "misappropriates" uhich means impropertg setting apart for ones use o.nd to tle exclusion of the outner. ,l 26 48, No sooner are th.e two fundamental ingredients of "criminal breach of trust" within the meaning of Section 4OSIPC proued, and if such criminal breach is caused by a public seruant or a banker, merchant or agent, the said offence of ciminal breach of trust is punishable under Section 409IPC, for uhich it is essential to proue that: (i) The accused must be a public seruant or a banker, merchant or agent; (iil He/ Sflr- must haue been entrusted, in such capocitg, wtth propertg; and (iiil He/ She must haue committed breach of trust in respect of such propertg.

49. Accordingly, unless it is proued that tlrc accused, a public seruant or o banker, etc. taas "entrusted" uith the propettA uhich he is dutg-bound to account for and tLnt such a person ha.s committed ciminal breach of trust, Section 4O9IPC mag 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 fi1es, 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.s and pW. l1 was evident from the investigation and audit conducted. However, no steps were taken to array PW.2, PW.s and PW. I I as accused. PW.9-enquiry officer without examining any documents, gave report Ex.P29, opining that only Al/appellant was responsible. Similarly, PW.l0 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 ald PW. lO is biased, with a view to implicate appellant only, while safeguarding the interest of others who were involved. PW.g, PW. 1O, and PW.23 were carried away by the fact tlrat the appellant addressed a letter dt.21.O2.2OO4 (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.SO,0OO /-, tillr the total amount was received. According to PW.2, the misappropriation was known after veri$ring 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.s, pwl L and A2 \ \ I I 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) rlw. 13(21 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 mzrnner, be used by the appellant for claiming any benefits, whatsoever.

49. Accordingly, Criminal Appeal is allowed setting aside the conviction recorded by tle I Addl.Spl.Judge for SPE & ACB Cases- cum-V Addl.Chief Judge, CCC, Hyderabad, in CC.No.62 of 2OO7, dt.28.O2.2018, and the appellant (A1) is acquitted. Since the appellant is on bail, his bail bonds shall stand q199llarg94,-- =- - //TRUE COPY// A.V.S.S.C.S,M. SARMA JOINT REGISTRAR SECTION O FFICER To, -Fivderabad 1 The Principal Special Judqe for SPE & ACB Cases-cum-lV Additional Chief ' ir;s",'Cli civii bourts, 2. The Superintendent, Central Jail' Chanchalguda' Hyderabad 3. The DSP, EOW, ClD, HYderabad 4 Two CCs to the Public Prosecutor, High Court for the State of Telangana' (with records' if anv) Hyderabad [OUT]

5. One CC to Sri Pulimamidi Shashidhar Reddy' Advocate [OPUC] 6. Two CD CoPies zz- VA/gh T i ir- I I E I HIGH COURT DATED:1410212025 JUDGMENT CRLA.No.796 of 2018 e.f, o o tr6- :i f q r€ 0'6. Y 2 i FEB 2015 , oFi:PATCH r:O t ( ( : I a' /D /l 4k // 45 ALLOWING THE CRLA