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2026 DAILYLAW 16766 (HP)

State of Himachal Pradesh v. Shankar Dutt

2026-02-28

Sandeep Sharma

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JUDGMENT : Sandeep Sharma, J. Instant criminal appeal filed under Section 378 of Code of Criminal Procedure, lays challenge to judgment of acquittal dated 06.09.2007 passed by learned Additional Sessions Judge, Fast Track Court, Kangra at Dharamshala, District Kangra, H.P. in Criminal Appeal No.6-J/2005/2003, whereby learned Court below, while setting aside the judgment of conviction and order of sentence dated 20/23.09.2003 passed by learned Additional Chief Judicial Magistrate, Jawali, District Kangra, Himachal Pradesh, in Criminal Case No.57-II/95/93, acquitted the respondent-accused (hereinafter ‘accused’) from offence punishable under Section 408 of Indian Penal Code. 2. Precisely, the grouse of the appellant/State, as has been highlighted in the appeal and further canvassed by Mr. Vishal Panwar, learned Additional Advocate General representing the appellant, is that learned Additional Sessions Judge, Fast Track Court, Kangra at Dharamshala, District Kangra, H.P., committed a grave error, while ignoring confessional statement Ext. P-8, which was duly proved by the prosecution by examining accused. He states that prior to the recording of the confessional statement, accused, after having admitted his guilt, deposited a sum of Rs.46,000/- with the society, as such, there was no occasion, if any, for the learned Court below to acquit the accused. 3. To the contrary, Mr. Ajay Sharma, learned Senior Advocate for the accused, while supporting the impugned judgment of acquittal recorded by learned Appellate Court, vehemently argued that bare perusal of statements recorded by the prosecution witnesses clearly reveals that no amount was embezzled by the accused in his capacity as a salesman, rather certain items stored in the shop were spoiled and were thereafter removed. He stated that as per statements given by the prosecution witnesses though audit party took into consideration value of certain articles, which were never sold, but were removed being damaged and liability qua the same was imposed upon the accused. Mr. Sharma, stated that though bare perusal of Ext. P-8 suggests that accused had deposited Rs.46,000/- towards loss, but that cannot be treated as an admission, if any, on his part qua the alleged offence. 4. Having heard learned counsel for the parties and perused material available on record vis-a-vis reasoning assigned in the impugned judgment of acquittal dated 06.09.2007 passed by learned Appellate Court, this Court finds no illegality or infirmity in the same, as such, no interference is called for. FIR Ext. 4. Having heard learned counsel for the parties and perused material available on record vis-a-vis reasoning assigned in the impugned judgment of acquittal dated 06.09.2007 passed by learned Appellate Court, this Court finds no illegality or infirmity in the same, as such, no interference is called for. FIR Ext. PW-7/A came to be lodged against the accused on the basis of complaint Ext. PW1/A made by Assistant Registrar Cooperative Societies on 01.08.1992, wherein he alleged with regard to embezzlement of amount to the tune of Rs.1,24,718.32 in Sihal Agriculture Cooperative Society (in short “Society”). During investigation, Police found that accused had been working as a salesman with the society since the year 1987. During audit of the society, it transpired that sum of Rs.1,24,718.32 had not been deposited by the accused after conducting the sale of articles entrusted to him. After registration of FIR, society by way of resolution removed the accused from service, but before that accused deposited sum of Rs.46,000/- towards the loss, which subsequently came to be termed as confessional statement and was exhibited as Ext. P-8. After completion of investigation, police presented challan in the competent Court of law, which on the basis of material adduced on record proceeded to frame charge against the accused under Sections 408 and 409 of Indian Penal Code. 5. Prosecution with a view to prove the guilt of the accused examined as many as ten witnesses. Accused, besides examining himself as DW-1, also examined one defence witness namely Shankar Dutt as DW-2. 6. Learned trial Court on the basis of evidence found that though no case is made out against the accused under Section 409 of Indian Penal Code and accordingly, acquitted him for said offence, but convicted him for offence punishable under Section 408 Indian Penal Code, while placing heavy reliance upon Ext. P-8 i.e. confessional statement made by the accused. 7. Being aggrieved and dissatisfied with the aforesaid judgment of conviction and order of sentence recorded by learned trial Court, accused preferred instant appeal, praying therein for his acquittal. It is important to note that no appeal whatsoever came to be filed at the behest of the appellant/State qua the acquittal of the accused under Section 409 of Indian Penal Code, as such, findings qua the same have attained finality. 8. It is important to note that no appeal whatsoever came to be filed at the behest of the appellant/State qua the acquittal of the accused under Section 409 of Indian Penal Code, as such, findings qua the same have attained finality. 8. Having carefully perused judgment of conviction and order of sentence recorded by learned trial Court, this Court has no hesitation to conclude that though learned Court below was convinced and satisfied that prosecution witnesses adduced on record by the prosecution had not supported the case of the prosecution with regard to commission of offence, if any, by the accused under Sections 408 & 409 of Indian Penal Code, but yet having taken note of confessional statement i.e. Ext. P-8, whereby accused, at the time of his removal from salesmanship, had deposited sum of Rs.46,000/-, it proceeded to convict him under Section 408 of Indian Penal Code. 9. If the statement made by PW-1 Mr. K.L. Sureli, Assistant Registrar, Cooperative Societies, Nurpur, is perused in its entirety, it suggests that he had no first hand knowledge with regard to misappropriation of funds, if any, allegedly committed by the accused, rather he, after having received resolution Mark-A from the society, prepared a complaint Ext. PW-1/A and forwarded the same to the Police Station Jawali for registration of case. He stated that society was under the supervision of Inspector, Cooperative Societies, Rehan, Shri Tarsem Paul. He admitted that Sub Inspector conducts audits of the societies quarterly, whereas Inspector of the society was supposed to inspect the societies once in a year. He categorically admitted that prior to his having sent complaint to the Police, he had not enquired about the genuineness and correctness of the contents of resolution Mark-A, but voluntarily stated that audit of the said society had already been completed and the complaint Ext. PW-1/A had been prepared on the basis of said audit. 10. PW-2 Chamel Singh, who was witness to the recovery memo Ext. PW-2/A, stated that record of the society was taken into possession by the police in his presence. He deposed that Pardeep Kumar is Secretary of the Society for the last 15 to 20 years, whereas Bishamber Dass became Pradhan of the Society in the year 1992. During his cross-examination, he stated that document Ext. PW-2/A was written prior to his signature. He deposed that Pardeep Kumar is Secretary of the Society for the last 15 to 20 years, whereas Bishamber Dass became Pradhan of the Society in the year 1992. During his cross-examination, he stated that document Ext. PW-2/A was written prior to his signature. He stated that prior to taking over the record into possession, Pradhan and Secretary opened the store and counted the items kept in the Store. 11. PW-3 Pardeep Kumar, Secretary of the Society, deposed that he was working as Secretary of the society since 1979 and society used to sell cereals, sugar, kerosene oil and rice etc supplied by the Civil Supply Corporation. He submitted that rest of the articles were being purchased from the open market and salesman used to bring the bills of the purchased items from the open market and thereafter, specific entries were made in cash book/ledger book etc. He deposed that sale proceed is usually prepared by the salesman, who used to hand over the cash and copy of sale proceeds to him. While stating that money received from the sale has to be deposited in the bank, he deposed that articles, which the committee used to purchase from the open market remains in the custody of the salesman of the society. He stated that audit was conducted and the accused admitted his guilt vide writing Ext. P-8. He further stated that accused has returned Rs.46,929/- to the society. Most importantly, this witness categorically stated that Audit Committee used to conduct the audit every year and admitted entries in the cash books and ledger books etc. as genuine and no audit para was ever made prior to the alleged incident. He deposed that though accused had given an application for tendering resignation on 31.03.1992, but since Rs.1,11,266/- was due from the accused, resignation tendered by him was not accepted. He submitted that he used to tell the Pradhan of the Society that the salesman was not depositing the cash after sale. He stated that he had not given in writing to the Pradhan of the society that the salesman was not depositing the whole amount of sale proceeds. He deposed that the store was taken into possession from the accused and thereafter he acted as a salesman in the store. He stated that the keys of the store remained with Pradhan during that period. He deposed that the store was taken into possession from the accused and thereafter he acted as a salesman in the store. He stated that the keys of the store remained with Pradhan during that period. He stated that though society had thrown the waste material from the store, but no entry had been made in any register regarding the disposal of the damaged articles. He admitted that general public had given in writing to the Pradhan of the Society that store of the society should not be opened till accused Shankar Dutt does not clear all his dues with the society. He denied that the members of the society and Pradhan of the society misappropriated the assets of the society and in order to save them, lodged a false case against the accused. 12. PW-4 Bishamber Dass, the Pradhan of the Society, deposed that accused misappropriated the articles, which were entrusted to him for sale. He submitted that when the audit of the society was conducted by the Auditor Gian Singh, then it was found that Rs.1,24,000/- had been misappropriated by the accused. He also submitted that accused had admitted his guilt before him in a written document, which he handed over to the police. He submitted that accused had deposited Rs.46,000/- with the society. In his cross-examination, he stated that there are seven members in the society. He admitted that as per rules, the salesman had to deposit the sale proceeds with the Secretary every day. The audit of the society was conducted for the period between 01.07.1991 to 25.4.1992 and prior to afore period, no audit was conducted. In the month of June, 1991, the Cooperative Inspector checked the stock and same was found less and thereafter, the accused has paid the money for that deficiency. He admitted that no notice was ever served upon the accused. He deposed that in the month of December, 1991, during the annual general meeting, the accused was apprised orally that the committee will inspect the store and thereafter on 23.12.1991, the committee made written request to Inspector for the inspection. He denied that audit of the society was conducted in the absence of the accused. He deposed that in the month of December, 1991, during the annual general meeting, the accused was apprised orally that the committee will inspect the store and thereafter on 23.12.1991, the committee made written request to Inspector for the inspection. He denied that audit of the society was conducted in the absence of the accused. He admitted that he had knowledge that the accused used to give the articles to the general public on credit basis, but he feigned ignorance to the fact that persons, used to take the articles on credit from the society including the members of the society. He denied that though store was opened in the absence of Shankar Dutt, but voluntarily stated that Shankar Dutt opened the store himself. He denied that admission Ext.P-8 made by the accused was forcibly obtained from him. 13. PW-6 Gian Singh, Audit Inspector, stated that he remained as Auditor in Nurpur Division from 1985 onwards. He stated that he conducted the audit of the Society for the period between 01.07.1991 to 30.06.1991, 01.7.1991 to 31.12.1992 and 01.04.1992 to 25.04.1992 as per the instructions of the Assistant Registrar Co-operative Societies. He deposed that accused remained absent in the audit proceedings despite of the fact that notice was given to him. He further deposed that after conducting the audit, he had given his audit report, as per which sum of Rs.1,11,266.53 was found misappropriated by the accused and on different dates he deposited Rs.46,929/- for the period between the 14.2.1992 to 25.3.1992. The sum of Rs.64,337.55 remained outstanding against the accused. Similarly, an amount of Rs.60,380.77 was found to have been misappropriated by the accused from 01.4.1992 to 25.4.1992. The total amount recoverable from the accused was, therefore, Rs.1,24,718.32. During his cross-examination, he admitted that he has conducted the audit of the concerned society for the first time. He admitted that he had not conducted the physical verification of the store articles. He stated that he had verified the stock in the store as per the entries in the register in presence of Secretary. 14. If the statements made by all the material prosecution witnesses are read in conjunction, they clearly suggest that damaged items were removed from the store, but no inventory with regard to same was prepared. He stated that he had verified the stock in the store as per the entries in the register in presence of Secretary. 14. If the statements made by all the material prosecution witnesses are read in conjunction, they clearly suggest that damaged items were removed from the store, but no inventory with regard to same was prepared. It also emerges from the statements of afore witnesses that though factum with regard to non-deposit of certain amounts at different intervals had been received by the Managing Committee on a number of occasions, but no notice was ever issued to the accused. 15. PW-6 Gian Chand, who conducted the audit of the society, categorically admitted that he had not carried out the physical verification of the store articles. He deposed that he did not see worn out/damaged items in the store, whereas other prosecution witnesses i.e. Secretary and Pradhan, categorically stated that worn out articles were removed from the store. Though auditor conducted audit on the basis of sale purchase receipts, but he was never informed by the society with regard to removal of certain items on account of their being perished, as a result thereof, certain items were subsequently shown to have been removed or sold by the accused, who thereafter failed to deposit the amount. 16. Though this Court is fully convinced that prosecution was not able to prove the guilt of the accused, if any, under Suction 408 of Indian Penal Code beyond reasonable doubt, but having carefully perused Ext.P-8, this Court is not persuaded to agree with learned Additional Advocate General that accused admitted his guilt. The accused, who was being removed on account of the alleged misappropriation, deposited a sum of Rs. 46,929/- for the period between 14.02.1992 and 25.03.1992, whereas as per audit, amounts of Rs. 64,337.55 and Rs. 60,380.77 were found outstanding against the accused. Thus, the total amount recoverable from the accused comes out to be Rs. 1,24,718.32. 17. Careful perusal of Ext. P-8 nowhere suggests that accused ever admitted his guilt, rather he simply stated that as per audit, sum of Rs.1,11,266/- shall be paid by him. While depositing Rs.46,000/-, accused asked for some more time to deposit the amount. Though Mr. Thus, the total amount recoverable from the accused comes out to be Rs. 1,24,718.32. 17. Careful perusal of Ext. P-8 nowhere suggests that accused ever admitted his guilt, rather he simply stated that as per audit, sum of Rs.1,11,266/- shall be paid by him. While depositing Rs.46,000/-, accused asked for some more time to deposit the amount. Though Mr. Vishal Panwar, learned Additional Advocate General, while referring to afore documents attempted to argue that accused admitted his guilt, but this Court is not persuaded to agree with afore submission for the reason that accused, after having perused audit report, was made to understand that sum of Rs.1,11,266/- was recovered from him, out of which he paid Rs.46,000/- with further undertaking that remaining amount shall be deposited within one month. Though in afore statement Ext. P-8, accused stated that in case he fails to deposit the amount, appropriate action in accordance with law could be taken against him, but certainly at no point of time he admitted that he had misappropriated the amount as indicated in aforesaid document Ext.P-8, rather he, after being pointed out by the society with regard to audit report, wherein Rs.1,11,266/- was shown to have been misappropriated, he voluntarily deposited a sum of Rs. 46,000/-. However, the mere deposit of some amount cannot be construed as an admission of guilt, rather same was required to be proved in accordance with law by the prosecution by leading cogent and convincing evidence. Since there is evidence adduced on record by the prosecution suggestive of the fact that certain items kept in the store of the society were removed on account of their perishment and same were not taken into consideration by the auditor while conducting audit, no case can be said to have been made out against accused under Section 408 of Indian Penal Code. 18. Moreover, to prove the case, if any, under Section 408 of Indian Penal Code, prosecution is required to prove dishonest misappropriation. Section 408 deals with criminal breach of trust, the ingredients whereof are provided under Section 405 of the Indian Penal Code. 18. Moreover, to prove the case, if any, under Section 408 of Indian Penal Code, prosecution is required to prove dishonest misappropriation. Section 408 deals with criminal breach of trust, the ingredients whereof are provided under Section 405 of the Indian Penal Code. As per the aforesaid provision of law, whoever, being in any manner entrusted with property, or having dominion over property, dishonestly misappropriates or converts that property to his own use, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, is said to have committed criminal breach of trust. 19. Admittedly, in the case at hand, no evidence ever came to be led on record with regard to dishonesty to prove the guilt, if any, of the accused under Section 408 of Indian Penal Code. Prosecution is required to prove that person concerned had dishonestly, misappropriated or converted to his own benefit, the property entrusted to him, or had dishonestly used or disposed of the entrusted property. Mere failure of the accused to discharge his admitted liability to the extent acknowledged by him in the ledger, in no case can be said to be dishonesty on his part. Simply because accused failed to deposit the amount, the liability whereof was acknowledged by him, would not be sufficient to hold that he committed the offence of criminal breach of trust. Though it can be inferred from Ext.P-8 that amount qua some articles sold by the accused was not deposited with the society, but once there is no allegation or evidence that accused had dishonestly used the articles for his own benefit or misappropriated the money received therefrom for his personal use, document Ext. P-8 cannot be used to conclude that an offence under Section 408 of the Indian Penal Code has been committed. 20. Consequently, in view of the detailed discussion made herein above, this Court finds no illegality or infirmity in the impugned judgment of acquittal passed by the learned trial Court, which appears to have been passed on the proper appreciation of facts and as such, same is upheld. Accordingly, present appeal fails and dismissed alongwith pending applications, if any. Bail bonds, if any, furnished by the accused stands discharged.