Criminal Revision Nos.1767 v. State of Punjab

HON'BLE MR.JUSTICE A.N.JINDAL Present: Mr.N.S.Swaich, Advocate – amicus curiae for petitioners Vijay Kumar and Balbir Ram. Mr.Avnish Mittal and Mr.S.S.Kamboj, Advocates for petitioner Baldev Singh. Mr.Gautam Dutt, Advocate for petitioner Malwinder Singh Mr.Amit Chaudhary, Assistant Advocate General, Punjab. A.N.JINDAL, J.- This judgment of mine shall dispose of twenty-one revision petitions bearing Nos.1767, 1832 to 1840, 1854, 1878, 1878 to 1884 and 2269 to 2271 of 2004. Out of these Criminal Revision Nos.1767 and 1832 to 1840 of 2004 have been filed by accused – petitioner Vijay Kumar; Criminal Revision Nos.1878 to 1884 of 2004 have been filed by accused – petitioner Malwinder Singh; Criminal Revision Nos.2269 to 2271 of 2004 have been filed by accused – petitioner Baldev Singh, and Criminal Revision No.1854 of 2004 has been filed by accused – petitioner Balbir Ram. Challenge in all the twenty-one petitions is to the judgment dated 31.08.2004 passed by Additional Sessions Judge (Adhoc) – Fast Track Court, Sangrur, dismissing the appeals of the accused – petitioners against the judgment dated 9.6.2003 passed by the Chief Judicial Magistrate, Sangrur convicting and sentencing the accused accordingly. The matters relate to the mis-utilisation of the funds/loan amount given for self-employment to the persons belonging to backward classes at a subsidized rates, with specific purpose. Accused Baldev Ram Criminal Revision Nos.1767 of 2004(O&M) [3] is one of the loanees; accused Vijay Kumar is the proprietor of M/s Garg Trading Company, who issued false quotations and when cheque of loan amount was sent to him, he after deducting some amount paid the remaining amount to the loanee; accused Baldev Singh and Malwinder Singh were the field officers of the Punjab Backward Classes Land Development and Finance Corporation (for brevity `the Corporation') at the relevant time and they conducted false verification of applications and documents of the loanee/accused, but they failed to furnish the report regarding utilization of the loan amount by the loanee/accused and conspired with other accused to mis-utilise the amount. The accused were classified into three categories:- In the first category, accused - Vijay Kumar, who has filed ten revision petitions against his conviction (maintained upto the Appellate Court) in all the ten challans under Section 406 read with Section 120-B of the Indian Penal Code 1860, is the proprietor of M/s Garg Trading Company. IInd category consists of accused Malwinder Singh and Baldev Singh. They are the Field Officers of the Corporation, deputed to make verification with regard to accuracy of their demand and utilization of the loans by the applicants. Malwinder Singh has filed seven revisions petitions against his conviction in seven cases (maintained upto the Appellate Court). Accused Baldev Singh has filed three revision petitions against his conviction in three cases (maintained upto the Appellate Court). Both of them were convicted under Section 406 read with Section 120-B IPC. Criminal Revision Nos.1767 of 2004(O&M) [4] In the third category, are the loanees, namely; Dev Dass, Balbir Ram, Joga Singh, Magh Singh, Bhajan Dass, Abdul Zabar, Des Raj, Avtar Singh, Ram Dass and Karam Singh. All the ten loanees were convicted and sentenced to undergo rigorous imprisonment for a period of 1½ years, each, under Section 406 IPC. However, only Balbir Ram – accused/ petitioner, whose conviction has also been upheld by the Appellate Court has chosen to challenge his conviction by filing revision petition. The allegations, in almost all the cases are identical. However, for the adjudication of the revision petitions, the facts are being taken from Challan No.104 dated 8.6.2000. As per the this challan, accused Balbir Ram – loanee applied for loan in the year 1993 for opening a shop of electric goods. Alongwith other documents, loanee was to attach the proof with regard to mode of spending the money, from whom he was to purchase the articles and quotations for the same. The verification of the loan application was made by accused Baldev Singh – Field Officer, who recommended a loan of Rs.20,000/- to the loanee, which was approved by the Corporation on 22.9.1993. The loanee was required to pay a sum of Rs.1000/- as margin money. The accused – Field Officer after getting the mortgage deed and other documents duly executed sent the case to the Corporation and after verification of the documents, payment of Rs.19,000/- was made to the loanee in the shape of cheque. The accused placed quotation of Rs.4,000/- only, payable to accused Vijay Kumar, proprietor of M/s Garg Trading Company. As per the agreement, utilisation report of the amount disbursed to the loanee was to be submitted to the Head Office of the Corporation, but the same was not submitted. On making verification Criminal Revision Nos.1767 of 2004(O&M) [5] by Vinod Kumar, Assistant General Manager of the Corporation, it came to light that the money was not utilised by the loanee for the purpose, it was given to him, rather the money was misutilised by him in connivance with accused Vijay Kumar and Baldev Singh. Similarly, other loanees, namely; Dev Dass, Joga Singh, Magh Singh, Bhajan Dass, Abdul Zabar, Des Raj, Avtar Singh, Ram Dass and Karam Singh also applied for loans. The accused Baldev Singh and Malwinder Singh, both Field Officers of the Corporation either made false verification reports or did not report to the Head Office with regard to utilisation of the loan amount and they connived with the other accused in misutilising the loan amount. Thereafter, Vinod Kumar, Assistant General Manager and Balbir Chand Puri, Audit Officer conducted an enquiry and submitted a report that the loanees took cash amount from accused Vijay Kumar, proprietor of M/s Garg Trading Company instead of starting any business with the loan amount. On the basis of the said enquiry, the Executive Director of the Corporation got the present cases registered against the accused. Consequently, they were arrested. On completion of the investigation, ten different charge reports No.96 to 105 were filed against them. Finding a prima facie case, the accused were charged for the offences under Section 406/120-B of the Indian Penal Code 1860, to which they pleaded not guilty and claimed trial. In order to substantiate the charges, the prosecution led almost the identical evidence in all the ten cases. Shri Padam Chand Chhabra, Manager of Union Bank of India, Criminal Revision Nos.1767 of 2004(O&M) [6] Sangrur while appearing in all the ten cases has proved copy of the account book of M/s Garg Trading Company. Vinod Kumar, Assistant General Manager has proved the enquiry report along with the covering letter, vide which it was reported that the loan amount was mis-utilised and no shop was opened by any loanee (the accused). Hasan Singh Naib Tehsildar-cum- Executive Magistrate, Sangrur has also proved his endorsement. Taale Ram Inspector, Anti Fraud Staff has proved the recovery memo for taking into possession the record pertaining to the accused, from Rakesh Kumar, Senior Assistant, Legal Branch. Karamjit Singh Sekhon, Field Officer has proved letter showing details of the amount due towards various accused. Rakesh Kumar, Field Officer and ASI Mukhtiar Singh, Anti Fraud Staff has also proved the recovery memo. Khushwas Singh – complainant, the- then Executive Director of the Corporation has proved the letter asking for registration of the criminal case against the accused persons. When examined under Section 313 CrPC, all the accused denied the incriminating circumstances appearing against them and pleaded their false implication in the case. However, they led no evidence in defence. On scrutiny, the Trial Court convicted and sentenced them accordingly. The appeals, preferred by them have also been dismissed with some modification in the sentence. Arguments heard. The crucial question involved in the case are, “whether the accused having obtained the amount from the Corporation, misutilised the same?” and as to “whether the Field Officers in connivance with the loanee Criminal Revision Nos.1767 of 2004(O&M) [7] as well as the trader Vijay Kumar cheated the Corporation?” The counsel for the petitioners have argued that the loan amount had been advanced in 1993 and 1994, whereas, the First Information Report was lodged on 11.6.1999, as such the action against the petitioners being beyond the period of limitation as provided under Section 468 CrPC is not maintainable. The maximum sentence for the offence under Section 406 IPC being 3 years, the FIR could be lodged within three years only. In this regard, it needs mention that the audit was conducted and enquiry report was filed on 9.4.1998 and the Corporation vide its letter dated 17.3.1998 informed the Senior Superintendent of Police, Sangrur to register the case. Thus, the fraud having come to light only in the year 1998, the action cannot be said to be time-barred, as the FIR was lodged within the prescribed period, after the crime was detected. It appears to be an organised crime having been committed by the loanees with the connivance of the trader and the Field Officers of the Corporation in order to make misuse of the scheme floated by the Government to help the poor and unemployed youth. So far as the submission of the counsel that as per terms of the loan agreement, the non-return of loan amount authorises the Corporation to recover the amount along with penalty and it does not give rise to any criminal action, it is observed that the amount was entrusted to the loanees under a particular scheme with a direction to use the same in a particular manner. The idea behind advancing the loan was not to incur interest, but to settle the unemployed youth. Thus, the use of the entrusted money in violation of certain directions and non-return of the same was certainly to Criminal Revision Nos.1767 of 2004(O&M) [8] give rise to a criminal liability. The definite evidence has been led indicating that the loan amount was misappropriated and not used for the purpose for which it was spent, as such, there was no bar to initiate criminal action against the accused loanees as well as those who facilitated the crime. The learned counsel has relied upon the case of Pardeep Kumar vs. State of Haryana, 1996(2) RCR 791 (P&H), CBI New Delhi vs. Duncans Agro Industries Ltd., Calcutta, 1996(3) RCR 60 (SC), Sunita Bajaj vs. Punjab & Sind Bank , 1998(1) RCR 129 (P&H) and V.P.Malhotra & others vs. P.S.Taneja, 1995(2) RCR 504 in support of his argument that criminal proceedings could not be initiated in case of non- payment of loan amount. However, on perusal of the aforesaid cases, it is found that in the cited cases, the accused therein had taken commercial loan from a Commercial Bank, but, the aforesaid judgments are not applicable to the facts of the present case. The loan was not commercial as the Corporation was not a commercial establishment, but its objective was to see that persons belonging to Backward Classes are uplifted by providing them financial assistance by way of loan on subsidized rate, at its own cost. In case of criminal breach of trust, the gist of the offence is dishonest, misappropriation or conversion to the person's own use of property. This is a specific case of offence committed by a person in the position of a trustee. In this case, the money was entrusted to the accused/ loanee for a specific purpose as the amount was entrusted with the object to up-lift the people belonging to backward classes, by providing them loan at a subsidized rate of interest,, but the desired object was not achieved as the loanee/ accused did not open the shop of electronic goods for which the Criminal Revision Nos.1767 of 2004(O&M) [9] loan was disbursed. The report of Assistant General Manager Vinod Kumar speaks volumes of it. The faith reposed in the petitioners / loanees by the Government was betrayed by them in connivance with other accused Vijay Kumar and Field Officer Baldev Singh and Malwinder Singh, who facilitated the crime for ulterior motives. The essential thing to be proved in case of criminal breach of trust is whether the accused was actuated by dishonest intention or not. The failure to account for the amount shows that the material was not purchased from Vijay Kumar and further sale of goods by the loanees is also not proved. There is no documentary evidence to prove that the goods were ever sold to the loanees or they further sold any item to anybody and there are strong circumstances against the accused. It is not necessary or possible in every case to prove in what precise manner the accused has misappropriated the money, but element of offence of criminal breach of trust is established if the prosecution proves that amount was given to the accused for a specific purpose but the accused / loanee did not use that amount for which it was meant. They opened no shop of electric goods/ tailoring as agreed between the parties. Thus, the accused were under a duty to account for, in which they have apparently failed. Since the accused persons had obtained the amount under some obligations, therefore, they were under contractual obligation to utilise the money for specific purpose for which it was handed over to them. As regards the offence committed by Vijay Kumar, proprietor of M/s Garg Trading Company as well as Baldev Singh and Malwinder Singh, they being the Field Officers made false verification without asking for requisite documents and also did not send the utilisation certificates. As such, they are also equally liable along with loanees. The necessary Criminal Revision Nos.1767 of 2004(O&M) [10] ingredients of Section 406 IPC are reproduced as under:- “(i) the accused must be entrusted with property or dominion over property; (ii) the person so entrusted must - (a) dishonestly misappropriate or convert to his own use that property; or (b) dishonestly use or dispose of that property or willfully suffer any other person to do so in violation of - (i)any direction of law prescribing the mode in which such trust is to be discharged; or (ii)any legal contract made touching the discharge of such trust.” On bare reading of the Section, it transpires that it makes the person equally liable, who willfully suffer any other person to do the acts in violation of any law prescribing the mode in which such trust is to be discharged. As such, the criminal liability of Vijay Kumar and the Field Officers also cannot be excluded. So far as the quantum of sentence is concerned, it also commensurates with the crime committed by the accused – petitioners. Hence, finding no merit in the petitions, the same are hereby dismissed. Amicus curiae would be at liberty to claim remuneration from the competent authority, as per Rules. October 26, 2010 `gian' ( A.N.JINDAL ) JUDGE