{1} CRI APPEAL 689 OF 2002 & 690 OF 2002 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD CRIMINAL APPEAL NO. 689 OF 2002 The State of Maharashtra Through Police Station, Kadim District Jalna. ….Appellant (Ori. Complainant) Versus Ramesh s/o Laxminarayan Bangad Age : 45 years, R/o. Gandhi Chaman, Old Jalna, Jalna. ….Respondent (Ori. Accused) ….. WITH CRIMINAL APPEAL NO. 690 OF 2002 The State of Maharashtra Through Police Station, Kadim District Jalna. ….Appellant (Ori. Complainant) Versus Ramesh s/o Laxminarayan Bangad Age : 45 years, R/o. Gandhi Chaman, Old Jalna, Jalna. ….Respondent (Ori. Accused) ….. APP for Appellant – State : Mr.S.M.Ganachari Advocate for Respondent - Accused : Mr.N.S,Ghanekar ….. CORAM : ABHAY S. WAGHWASE, J. RESERVED ON : 28 JANUARY, 2026 PRONOUNCED BY : 02 FEBRUARY, 2026 JUDGMENT : 1. State vide Criminal Appeal No.689 of 2002 assails judgment and order of acquittal of present respondent/original accused from 2026:BHC-AUG:4399 {2} CRI APPEAL 689 OF 2002 & 690 OF 2002 charge under Section 420 of the Indian Penal Code (IPC) passed by learned 5th Joint Judicial Magistrate First Class, Jalna in RCC No.26 of 1998. In Criminal Appeal No.690 of 2002, prayers are raised for enhancement of sentence awarded by learned 5th Joint Judicial Magistrate First Class, Jalna, in RCC No.26 of 1998 for offence under Section 406 of the IPC. 2. As evidence in above both proceedings is common, above proceedings are dealt with common Judgment and order. Criminal Appeal No.689 of 2002 : 3. According to learned APP, prosecution was launched against present respondent for commission of offence under Sections 406 and 420 of the IPC on receipt of complaint against accused Ramesh Laxminarayan Bangad from Vishwanath Narayan Kale and others dated 31-12-1997. Learned APP pointed out that, accused constituted a Society by name “Sanjog Sahakari Gruh Nirman Sanstha” in which 46 members had enrolled themselves. That, complainant and other members deposited Rs.40,000/- each with accused and remaining amount of Rs.60,000/- was received as loan by Society from {3} CRI APPEAL 689 OF 2002 & 690 OF 2002 Maharashtra State Co-operative Housing Finance Corporation (hereinafter referred to as “the Finance Corporation”). The loan for Society was acknowledged and approved by the Finance Corporation, which extended loan to Society for construction of houses. The loan amount was received by the accused and he gave said amount to the complainant and others. Learned APP pointed out that complainant and other members had time to time paid the installments towards repayment of the loan to the accused. However, complainant and other members were in receipt demand notice from the Finance Corporation. He pointed out that, thereafter it was revealed to complainant and others that the amount deposited by them with the accused was misappropriated with dishonest intention for personal interest. There was criminal breach of trust and therefore, on receipt of complaint, he pointed out that, investigation was undertaken and on finding sufficient evidence, accused was duly chargesheeted. 4. It is his further submitted that entire case of prosecution is based on oral and documentary evidence. He pointed out that star witness in the above trial was the PW1 Vishwanath Narayan Kale complainant and an independent witness PW7 Narayan Keshavrao Ingle, who was a Auditor, who had detected the irregularities, {4} CRI APPEAL 689 OF 2002 & 690 OF 2002 committed by accused. Learned APP took this Court through testimonies of both PW1 and PW7 and would submit that from their evidence it has clearly emerged that there was not only breach of trust but also cheating with dishonest intention. Learned APP emphasized that since inception, there was intention to cheat and therefore, necessary ingredients for attracting offence under Section 420 of the IPC are also available in the case before learned trial Court. However, according to him, the same has not been correctly appreciated and accused is wrongly acquitted from charge of 420 of the IPC and therefore, he urges to allow the appeal on re- appreciation of evidence. Criminal Appeal No. 690 of 2002 : 5. In this appeal by State, quantum of sentence awarded by learned trial Court for commission of offence under Section 406 of the IPC is questioned on the ground that meager sentence has been awarded when learned trial Court itself was satisfied regarding availability of sufficient evidence to attract culpability under Section 406 of the IPC. He pointed out that, sentence ought to have been in consonance with the gravity of offence. According to him, accused had committed breach of trust of over 46 members including {5} CRI APPEAL 689 OF 2002 & 690 OF 2002 complainant by misappropriating the funds paid by them time to time towards installments and converting the funds for his own use. Therefore, it is his submission that offence was against general public, who had invested their hard earned money, but the same has been misappropriated. Consequently, he submits that award of sentence of RI for one month would not serve as deterent and he urges to enhance the sentence. 6. In answer to above, Mr.Ghanekar, learned counsel for respondent/accused would submit that in fact prosecution has failed to make out case both for offence under Sections 420 as well as 406 of the IPC. He pointed out that, learned trial Court has rightly acquitted accused from charge of Section 420 of the IPC, but according to him, conviction recorded for offence under Section 406 of the IPC is in absence of any concrete evidence and therefore, said conviction was challenged by way of separate proceedings, but ultimately he supports acquittal from offence under Section 420 of the IPC. 7. Heard. Perused the record. In support of their case, the prosecution has adduced evidence of seven witnesses. {6} CRI APPEAL 689 OF 2002 & 690 OF 2002 BRIEF ACCOUNT OF EVIDENCE IN TRIAL COURT 8. PW1 Vishwanath Narayan Kale, complainant, deposed that he knew accused, who was chairman of “Sanjog Sahakari Gruh Nirman Sanstha” constituted to provide houses to the members. That, he also was a member as he wanted a house. He further deposed that accused was chairman and his wife was builder. According to him, in respect of construction cost of the house, an amount of Rs.40,000/- was paid by him and remaining was obtained by way of loan from the Finance Corporation in the name of each members. He testified that he deposited Rs.40,000/- with accused and even other members deposited said amount. Remaining amount of Rs.60,000/- was loan aid extended by Finance Corporation to the society. That loan amount was received by the accused. He further deposed that loan was to be repaid in installments. He started making repayment to accused of which accused initially used to issue receipts under his signature and he has placed said receipts on record which are at exhibits 32 to 74. According to him, in total Rs.60,000/- was repaid towards loan installments with the accused. He claims that accused issued him notice on 31-12-1996 conveying due of Rs.11,433.64 in his name and therefore, he deposited the amount on 05-02-1997, but he was again served with notice that too by the Finance Corporation {7} CRI APPEAL 689 OF 2002 & 690 OF 2002 on 19-09-1997 regarding dues of Rs.11433. Therefore, he approached Manager of Finance Corporation, but he was told that said amount has not been received by Finance Corporation and therefore, notices exhibits 75 and 76 are despatched. According to him, similar notices were received by other members and then they realized that amount paid by them to accused by installments was not at all further deposited by accused with the Finance Corporation and therefore, he lodged report. He also stated that District Deputy Registrar, Co-operative Societies was approached, who constituted team for audit, which revealed that accused has misappropriated huge amounts. Though above witness is subjected to cross-examination, above averments of borrowing loan, paying it in installments with the accused, has remained intact. In cross-examination, to a suggestion he answered that amount towards repayment of installment was given to accused as loan was obtained through him. He volunteered that loan was given by Finance Corporation through Society. Suggestion is given that interest has been paid over the loan amount. Such cross-examination itself shows that transaction of loan is not denied. Witness also volunteered in cross-examination that amount is paid to accused and even receipts were received for the {8} CRI APPEAL 689 OF 2002 & 690 OF 2002 same. Thus, testimony of PW1 complainant has virtually remained unshaken. 9. Similarly, PW2 Vitthal Pawar, PW3 Anant Deshpande, PW4 Suresh Patil, PW5 Sudhakar Nemane are all the members of the \ Society and they like PW1 have testified about borrowing loan, accused to be Chairman of the Society, they repaying loan by installments and initially receiving receipts from accused. They all have placed on record said receipts issued by accused under his signature. PW8 Hanuman Sitaram Patil (P.I.) is the Investigating Officer. 10. Star witness, as pointed out for prosecution, is Special Auditor PW7 Narayan Keshavrao Ingle, who in his evidence at exh.279 testified about he being engaged by District Deputy Registrar, Co- operative Society, Jalna for re-audit of the accounts of Society from 02-02-1990 to 31-03-1997. After conducting audit, he has tendered report under his signature exh.282 and according to him, it was revealed that the loan was sanctioned and disbursed by Finance Corporation to the members from the year 1992 to 1998. He elaborated that members deposited Rs.21,21,992/- with the accused, {9} CRI APPEAL 689 OF 2002 & 690 OF 2002 whereas accused only deposited Rs.11,97,849.20 with the Finance Corporation and as such, he did not deposit remaining amount of Rs.9,24,143.58. He categorically deposed that he noticed that the said amount was misappropriated and not deposited by accused. He stated that findings of Auditor regarding misappropriation are at page 8 and total misappropriated amount is Rs.11,29,277.95. Above witness is also extensively cross-examined, wherein suggestion given that accused was not Chairman has been flatly denied by him. He is put question on the recital of agreement to sale. He admitted that receipts were issued to members of Society of the amount which they deposited towards repayment of loan to the Finance Corporation. He also answered that he has seen bank accounts of Society. He admitted that figure of Rs.9,24,143.58 is the difference between the amount credited with the Finance Corporation and it is reflected in the accounts of the Society. 11. For attracting offence under Section 420 of the IPC, it is incumbent upon prosecution to substantiate that accused since inception has criminal intention and mens rea to cheat the members. Here, it has come on record that initially, when installments were repaid, the same were accepted by accused and he also issued {10} CRI APPEAL 689 OF 2002 & 690 OF 2002 receipts acknowledging the repayment. Therefore, at the initial stage, there was no criminal intention. Therefore, it cannot be said that with the sole intention of cheating the members, accused had made them members of Society and made them borrow loan and subsequently cheated them by not depositing the initial amount received from members to the Finance Corporation. Therefore, there being no evidence about dishonest intention from inception to cheat, learned trial Court, in the considered opinion of this court, has rightly acquitted accused from charge under Section 420 of the IPC. 12. On re-appreciation of above evidence, it is clearly emerging that witnesses are deposing about repaying loan installments to the accused, who was the Chairman and who had formed the housing Society and who had taken efforts for initiating finance from Finance Corporation. All witnesses including some of the members of the housing Society, has deposed about receiving receipts towards the repayment made by them. The same bears signature of the accused. Therefore, there is sufficient evidence regarding entrustment of installments to accused. 13. There is evidence of complainant on the point of he being {11} CRI APPEAL 689 OF 2002 & 690 OF 2002 served with notice for dues from Finance Corporation, which has remained intact. Similarly, other members have also been served with said notice. They all unanimously state that they had regularly paid installments towards repayment of loan to the accused. Accused, in the capacity fo the Chairman, was custodian of the said installments and he was entrusted with the amount to be repaid to the Finance Corporation. Such evidence has not be dislodged during cross-examination of the any of the witnesses. 14. Here, though there was charge for offence under Sections 420 and 406 of the IPC and though it is submitted by learned counsel for accused that such sections cannot co-exist and antithetical, here learned trial Judge has only convicted accused for offence under Section 406 of the IPC. For attracting above charge, it is incumbent upon prosecution to demonstrate existence of - firstly, accused to be entrusted with property or with domain over the property. secondly, there was dishonest misappropriation of the same for own use and such misappropriation or conversion should be in violation of law. {12} CRI APPEAL 689 OF 2002 & 690 OF 2002 The Hon’ble Apex Court has insisted for such ingredients in the cases of State of Haryana and others v. Ch. Bhajan Lal and others, AIR 1992 SC 604; Radheyshyam and Ors. v. State of Rajasthan and Ors., MANU/SC/1257/2024. The High Court of Allahabad and the High Court of Patna have also insisted for such ingredients in cases of Sajal Garg and Ors. v. State of U.P. and Ors,. MANU/UP/1556/2012, and Vinod Kumar and Others v. State of Bihar and Another, 2024, SCC Online Pat 8588 respectively. 15. In the light of above essential ingredients, on re-appreciation of evidence, here, there is ample evidence showing entrustment of amount of installments towards repayment of loan to accused. Signature by accused over receipts towards initial repayment not being refuted, explicitly suggests that he had been entrusted amount to installments to be further repaid to Finance Corporation. Finance Corporation having not received the repayment of loan, has issued plural notices to complainant and other members. Special Auditor PW7 who is an expert in Audit, has also stepped in the witness box and has also tendered detail report about alleged financial irregularities. Thus, there is indeed sufficient evidence regarding {13} CRI APPEAL 689 OF 2002 & 690 OF 2002 commission of offence under Section 406 of IPC. 16. Learned APP, while arguing for Criminal Appeal No.689 of 2002, expressed dissatisfaction of State for awarding sentence of one month and according to him, it is too meager going by magnanimity of the offence. According to him, while awarding said sentence, no proper reasoning is recorded. However, while answering to point no.3, after hearing accused as well State on sentence, said sentence has been awarded. This Court does not find the sentence to be inadequate so as to interfere. Therefore, both appeals, challenging the acquittal for offence under Section 420 of the IPC and for awarding sentence of one month for offence under Section 406 of the IPC to be less, being devoid of merit, deserve to be dismissed. Accordingly, following order is passed : ORDER Criminal Appeal Nos.689 of 2002 and 690 of 2002 are hereby dismissed. ( ABHAY S. WAGHWASE ) JUDGE SPT