Holding

The Supreme Court held that the appellants were not guilty of criminal breach of trust and set aside the conviction under Section 409 IPC.

Summary

The appellants, Narendra Pratap Narain Singh and Puran Singh, were in charge of government agricultural seed stores and were charged under IPC sections 409, 467 and 471 for allegedly preparing forged bills and receiving payments for credit sales to village level workers, contrary to government circulars prohibiting such sales. The trial court convicted them; the High Court set aside the forgery convictions but upheld the breach of trust conviction with a reduced fine. The Supreme Court examined whether the appellants honestly participated in the long‑standing practice of credit sales, whether the second appellant could be liable for acts committed before he assumed charge, and whether the prosecution proved dishonest misappropriation or forgery. Finding that the practice of credit sales was officially tolerated, that the bills and receipts were genuine, that no dishonest intent or conspiracy was established, and that the second appellant was not in charge at the relevant time, the Court set aside the conviction under section 409. Both appeals were allowed and the appellants were acquitted.

Issues considered

The appellant(s) committed criminal breach of trust punishable under Section 409 IPC despite the established practice of credit sales.
Whether the second appellant could be held liable for offences alleged to have occurred before he took charge of the seed store.
The prosecution proved the forging of bills/receipts and dishonest misappropriation of government property.
Whether the concurrent findings of fact by the lower courts warranted interference by the Supreme Court.

Legislation cited

Indian Penal Code, 1860s. 24, s. 405, s. 409, s. 467, s. 471

Subjects

criminal breach of trustforgerycredit salesgovernment seed storeIPC 409IPC 467IPC 471public servantevidenceconcurrent findingsappellate jurisdiction

Judgment

,

A NARENDRA PRATAP NARAIN SINGH AND ANR.
v.
STATE OF U.P.

APRIL 3, 1991

"B [S. RATNAVEL PANDIAN AND K. JAYACHANDRA
REDDY JJ.]

Constitution oflndia, 1950: Article 136--Concurrent findings of
fact-interference oilly in exceptional circu1nstances--1''indings perR
verse, pre1ermitting' manifest errors and glaring injirmi1ies-Interfe- >-
'C rence-'-Justified.

Indian Penal· Code, 1860: Sections 405, 409 467 and 471-
Criminal · breach ·of crust· and misappropriation-Government seed
'store-Established practice· of credit sales to village level workers-
' Government circulars prohibiting such sales~Jssued from time to
to 'time-"Yet practice continued-'-Persons in charge followed the estab-
lished practice-Whether' committed any offence and liable to be
'punished.

During 196<ki5 the first appellant was incharge of a seed store attacheil
to a Block DevelopmenfOffice. The seed store was catering to the needs
IE Of cultivators. The fil'Sl'appellant was charged with an offence of breach
of trust, punishable ·mider Section '409'IPC on the allegation' that he
pt'epared' forged bills' to the tune of Rs:1591.04 in the names of some
village level workers'as if they were supplied certain articles on credit in
disregard of the Government's instructions prohibiting credit sale.

IF Liller ,'the Secottd'appellant fuok charge Of the seed store relieving
·the first appellant.'iie"was ~!so charged with the· offence of breach of
· trust under Seetion·'409 IPC in tespect of certain articles and misap-
propi-iation ilf a suni Rs.450.28.

111·&ddiWni to the charges under section 409 lPC,' both the appel-
1G l tants were also eharged With offenc~s punishable under sections 467 an'd
'471 !Pc. y

Before the Trial Court; the first appellant pleaded that the bills
were genuine and that the materials were actually supplied to the Yillage
level workers on credit. He denied the charges of defalcation and also
H making bogus entries in the records. The second appellant disputed the

'88
N.P.N. SINGH,v. STA'.fE OF U.P.

charge of misappropriation and staf~d that he received P~fl,payme11t .i'?P A .
respect of the bill in question and, had. deposited· the. s,aid amount ii]
Government treasury.

The Trial Court convicted, both the appe!Ja11ts a11~:Se11te'l~ed them ,
to undergo various t~rms of. imprisonmenUor•'lff"'1S!'J' ·'!'Ider, Sections)
467 and 471 IPC as also a l'i11e of. Rs.500• for tl)e offepce. u11der. secti\)n 1 B 1
409IPC. .

On appeal, the High Court set aside tl)e conviction of the app,el.
Iants under ~ections 467. and 471 IPC, and. '!Ph~ld. th~ conviction unci~r,
section 409 IPC; but reduced. the fme to R&,250. T.he Respo11deot-Sta}e.
has not preferred any appeal.
c
In the present appeals, the appellaIJts, cha1Jenged1the_ le)lali,ty. of
their conviction under section. 409 we. .
The first appellant contend.ed that the lo,11g e1•tablisl)ed practjce of r
credit sale was continuing• till.1969-70 despite Gpvernme_lit cir~uiai-s,to., D 1
stop the practice 811d so in 1965, he was not a~· fault in mal)il'g credit
sales. It was also contended that there was np. motive1illJ )\is part to,
misappropriate the goods. The second appeQant coote11ded that he
issued only receipts and realised the moneya~.d in th~. absence of any
conspiracy having been proved, he was not go.illy of any misappropria-
tion of money. · . ·· .

Allowing the appeals, tl)is Court,

HELD: 1. The long established practice of crec\it sale. of sei;dj,
fertilisers, pesticides etc. from the Government Agricylt11re s.,.d_S~res,
continued for some time, at least till the fast circular 1"sued O!J..26.7.6~,
The repeated issuance of the circulars indicate t'1at inspitlj of these,
circulars, the practice of credit sale was in vogue. -:\ close scr'!~Y of the
evidence and records show that the superior officers, jnspite of the
circulars, did not take a very serious view of the credit s.•'•
to th!',
cultivators. In fact, by· circular dated 2.8.67, the Direct11r of Agri-
culture while impressing the prohibition of credit sale, gave OIJIY a war'.'- G.
ing that the erring officials would be held 'personally responsi.ble to pay
..
the outstanding amount'. The ap:>ellants could not be mulcted with the
criminality of breach of trust for following the established practice 11f.
credit sale through village level workers. [lCiOG-H; lOIA-1!]

2. Since the High Court has set aside the conviction of the appel-
·- _. ' ..
H
90 SUPREME COURT REPORTS [ 1991] 2 S.C.R.

A lants under Sections 467 and 471 IPIC, the prosecution case of forging
the bills and receipts and using them as genuine, is 'not true'. Also the
fact that the State has not filed any appeal necessarily follows that the ~

explanation given in defence of the appellants that the bills and cash
receipts were not bogus but genuine has been accepted by the High
Court. As such the prosecution did not satisfactorily prove even the
fl temporary misappropriation of the amount in dispute. I10 lB-D]

3. Admittedly the first appellant handed over the charge to the
second appellant on 2.9.65 and till then the first appellant was incharge )-

of both the seed stores. The first appellant submitted his compliance
report on 3.9.65. Hence the second appellant who had not taken charge
of the seed store till 2.9.65 could not be held liable for an offence under
c Section 409 IPC in respect of the amount covered by the bills in question
which we1re all prepared between 29.7.65 to 12.8.65 i.e. earlier to the
second appellant's taking over charge. The finding of the Trial Court
that both the appllants have committed breach of trust by preparing
false bills has to be rejected and the resultant conclusion based on such
D finding is liable to be set aside. I lOlG-H; 102A-B] "'-

4. Both the appellants cannot be jointly charged on the allegation
that on 4. 7 .64 th1iy being the public servants of the seed store committed
breach of trust, "ince admittedly they were working at different places
and not at the sa1ne seed store. Also the prosecution has not satisfacto-
E rily established the main ingredient of 'dishonesty' against either of the
appellants, even though at the worst, it may be said that the first appel-
taut was guilty of dereliction of his duty in not collecting the outstanding ,_
amount by taking appropriate steps. When the conviction recorded by
the Trial Court under Section 467 IPC is set aside by the High Court as
against which no appeal is preferred by the State, the second appellant
F cannot in a,ny way be fastened with the criminality of misappropriation
for issuing; the cash receipts in question. A close examination of the
entire evidence and documents do not reveal any material worth men-
tinning fo1· jointly fastening both the appellants with the offence of
criminal breach of trust punishable under Section 409 IPC. There is
also no evidence that there was any conspiracy, pre-concert or concert y

G of minds of the appellants or any pre-arranged plan between the two
appellants to commit the offence or offences complained of. [103B-D]

5. Though this Court normally does not interfere with the concur-
rent findings of fact except in exceptional circumstances, this is a fit
case for interference since !ioth the Courts below instead of dealing with
H the intrinsic merits of the evidence of the witnesses, have acted pre-
N.P.N. SINGH v: STATE OF U.P. [PANDIAN. J.] 91

versely by summarily disposing of the case, pretermitting the manifest A
errors and glaring infirmities appearing in these cases. [103E-F]

[Having regard to the undertaking of the appellants not to claim
back wages, the Court observed that in case the appellants, pursuant
to their acquittal, are reinstated in service by the State Government
they will not be having any claim for back wages from the date of B
suspension upto the date of their reinstatement.]

_., CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
Nos. 664 & 665 of 1979.

From the Judgment and Order dated 8.5. 1979 of the Allahabad C
High Court in Criminal Appeal Nos. 158 & 157 of 1977.

R.K. Garg and M.M. Kashtriya for the Appellants.

Dalveer Bhandari for the Respondent.
D
The Judgment of the Court was delivered by

S. RATNAVEL PANDIAN, J. These two criminal appeals are
preferred by the appellants, namely-Narendra Pratap Narain Singh
and Puran Singh w~o were arrayed as accused Nos. 1 and 2 before the
Trial Court, against the judgments dated 8.5. 1979 rendered in Crimi- E
nal Appeal Nos. 158 and 157 of 1977 on the file of Allahabad High
Court, Lucknow arising out of Sessions Trial Nos. A-210 and 228 of
1974 whereby the High Court by a common judgment and order set
aside the convictions and sentence under Sections 467 and 471 IPC
but, however, upheld their conviction under Section 409 IPC and
reduced the substantive sentence of imprisonment to the period al- F
ready undergone and the sentence of fine from Rs.500 to Rs.250 and in
default to undergo rigorous imprisonment for six months in each of the
cases.

• The material facts as unfolded from the records can be stated
ilim: G
There was a Block Development Office in the district of Sultan-
pur known as Dhanpatganj Block to which a seed store known as
Semrauna seed store was attached. The seed store was to cater the
needs and requirements of the cultivators for seeds and fertilisers etc.
During 1964-65, the first appellant was incharge of that seed store. On H
92 SUPREME COURT REPORTS [1991] 2 S.C.R.

A 2.9.65, he was relieved by the second appellant on transfer from
Kurebhar.

According to the prosecution, the first appellant in his official
capacity was entrusted with fertilisers, pesticides, seeds etc. which
were meant to cater the needs of the cultivators within Semrauna area.
B In 1965, there were several village level workers. It is said that on
29. 7. 65, the first appellant prepared forged bills in the names of some
village level workers (hereinafter referred to as VLWs) bearing bill
Nos. 57, 59, 60, 61, 62 and 64 of book No. 7767 as if the VLWs were
supplied with articles of Agricultural Department on credit, the total
amount of which being Rs.1591.04 and thereby committed breach of
trust, punishable under Section 409 IPC. The indictment against the
c second appellant is that he being a public servant of the said Agri-
culture Department committed breach of trust of the articles
mentioned in bill Nos. 11, 17 and 18 of book No. 7767 and misap-
propriated a sum of Rs. 450.26. Apart from the above charges levelled
against each of them, they were individually and collectively charged
D for offences punishable under Section 467 and 471 !PC.

The defence of the first appellant was that all those bills were not
fictitious and bogus but were genuine and that the materials were
supplied to the VLWs as reflected in the concerned bills. He denied
the charge of defalcation and also making bogus entries in the records.
E He further stated that on transfer, he relieved the second appellant at
Kurebhar but was holding dual charge of both Semrauna and Kurebhar
simultaneously till the second appellant took charge of Semrauna area
and that he used to supply fertilisers, seeds etc. to the village workers
on credit on the basis of the long established practice and under the
orders of the superiors. The defence of the second appellant was that
F he received the part payment relating to bill No. 11 and deposited the
said amount in Government treasury and that he had not misappro-
priated any amount. The Trial Court, repelling their defence, con-
victed both the appellants under all the charges and sentenced them to
various terms of imprisonment with the direction that all the substan-
tive sentences shall run concurrently. Jn addition to the sentence of
G imprisonment, a fine of Rs.500 was imposed for the conviction under
Section 409 IPC.

As the High Court has now set aside the conviction of the appel-
lants under Sections 467 and 471 IPC and as the State has not preferred
any appeal as against that acquittal, we are not called upon to deal
H with the case relating to those two charges. Hence, this appeal is
N.P.N. SINGH v. STATE OF U.P. [PANDIAN, J.] 93

confined only with regard to the legality of the conviction of these two A
appellants under Section 409 IPC.

The learned Judge of the High Court has disposed of the appeals
in a very summary manner confirming the conviction of the appellants
under Section 409 IPC stating thus: B
" . . . . . . . . I have been taken through the evidence on
record. All the village level workers concerned were
examined by the prosecution and their statements show
that criminally misappropriated amounts were recovered
from them by the appellants but no fertiliser was issued to
them. There is no infirmity in the statements of these c
witnesses. Their statements satisfactorily make out an
offence under Section 409 IPC against two appellants in
both the cases . . . . . . . . . . . . . I am, therefore, of the
opinion that the conviction of the two appellants ordered
by the Trial Court under Section 409 IPC is justified."
D
By these two appeals, the appellants challenge the correctness of
their conviction. Mr. R.K. Garg, the learned senior counsel appearing
on behalf of the appellants contended, inter a/ia, stating that though
the Government had instructed that credit sales from the seed stores
be discontinued, yet the long established practice was continued and in
E
fact the Government was also well aware of this position and that it
was the reason why as late as 2.8.67, the Government had been
repeatedly issuing circulars inviting the attention of the employees
concerned to stop the practice of credit sales and warning that any
official or ofl)cer issuing will be held responsible to pay the outstand-
ing amount and, therefore, in such circumstances there could not be
F
any case of misappropriation in any form since from the very begin-
ning, the first appellant had been stating that credit sales had been
made. According to the learned counsel, there could not be any mo-
tive to misappropriate these goods belonging to the Agricultural De-
partment when such goods were available in the open market at
cheaper rates and that when the first appellant had no land in District
G
Sultanpur. It has been further urged that it is amply proved from the
evidence of the prosecution witnesses that credit sales had continued
till 1969-70 and that the village level workers used to take goods from
the seed stores on credit after giving receipts and used to distribute the
same to the fam1ers according to their needs and necessity and the
money was to be realised later on. H
94 SUPREME COURT REPORTS [ 1991] 2 S.C.R.

A The handing over the charge by the first appellant, it is said,
could not be done before 2 .9 .65 because he was asked to take charge at
Kurebhar without he being relieved at Semrauna and hence he had to
work at both the seed stores from 18.6.65 to 2.9.65.

Coming to the case of the second appellant, it was contended by
B the learned counsel that the second appellant issued only receipts and
realised money and hence in the absence of any conspiracy having
been proved, he could not be guilty of any misappropriation of money.
!-
Lastly, it has been submitted that at the worst, the first appellant
if at all found guilty would be guilty of breach of Government instruc-
tions which breach would not in any way fasten him with criminal
C liability and that the High Court without discussing the evidence in the
proper perspective has disposed of both the appeals on mere specula-
.tion, conjectures and surmises and as such the judgments are liable to
be set aside.

D The fact that there had been a practice of credit sales of seeds,
fertilisers, pesticides etc. from the Government Agricultural Seed
Stores is not in dispute. While it was the practice, a circular letter No.
IA-4390/Dues-129 dated 2.8.67 was issued by Director, Agriculture,
Uttar Pradesh, Lucknow to all Drawing and Disbursing Officers in the
Agriculture Department with copies endorsed to all Zonal Deputy
E Directors of Agriculture, Project Officer, Aligarh, Functional Deputy
Directors of Agriculture and Horticulture, the Development Officer,
Lucknow and all sections of the Directorate of Agriculture, U.P.
which letter reads thus:

"From the progress report of recovery of 'Current' dues, it
F has been observed that the seed store dues are mounting
year to year it goes to mean that the commodities pur-
chased from 95-Capital outlay are still sold and credit
otherwise the dues should not increase in this office circular
letter No. IA-7250/Dues-129 dated 21.10. 1964 and circular
No. 4934/Dues 29.7.1965 it was made clear that the
G practice of credit sales should be stopped and on your visits
to seed stores you should see that there was no credit sales
and take suitable action against official and officer res-
ponsible for such sales. It appears that these instructions
· have not been followed vigorously. Government has taken
serious exception to the practice of credit sales despite their
H orders stopping this practice.
N.P.N. SINGH v. STATE OF U.P. [PANDIAN, J.l 95

It is therefore, impressed again that credit sales of articles A
from the Government Agricultural seed stores is strictly
prohibited and any official or officer issuing stores or
authority sign their issue on credit be held personally
responsible to pay the outstanding amount. At the time of
handing over charge, all credit sales be a seed store
Incharge should be treated as shortage and recovery B
effected from him. Suitable action including assessment of
monetary responsibility, should also be taken against
supervising officials and officers who do not report credit
sales detected on their visits to seed stores to higher
authorities or who fail to recover the amounts from these
who sold commodities on credit at their own. A list of
credit sales, if any should invariably be attached to the
c
charge certificates to be sent to the higher officer(s) for
examination, record and taking action.

It may be once again emphasized that serious action will be
taken against those who permit or over look credit sales in D
defiance of Government Orders.

OFFICER OF THE DISTRICT AGRICULTURE
OFFICER FAIZABAD. No. 1478/IV-Herti. General 67-
68 Dated Sept. 29, 1967."
E
A Copy of this letter was forwarded with an endorsement, read-
-~ ing "to all Block Development Officers and Seed store Incharges of
Faizabad District Officers with the remark that contents of above
circular letter may please be brought to the notice of all the field staff
·of yours block working under you for strict observance. These instruc-
tions should be adhered in all respect in regard to sale and supplies of F
Horticultural Commodities viz. plants, seeds etc. and the orders
should be noted by all concerned".

Thereafter, the Directorate of Agriculture, U.P. issued another
circular No. IA 3762i0ues-129(ii) dated 26th July 1968 pointing out
that the orders issued under various circulars viz Nos. IA-7259/Dues- G
129 dated 31.10.1964, No. IA-4934/Dues dated 29.7.1965 and No.
lA-4390/Dues-120 dated 2.8. 1967 should be followed carefully, which
circular of 1968 reads thus;

"3. It is again emphasized that credit sale of articles from
all Agricultural institutions if strictly prohibited. In case H
96 SUPREME COURT REPORTS [1991] 2 S.C.R.

A any credit sale is made from the Agricultural seed store/
Horticulture institutions, this is a very serious irregularity
that needs prompt and severe action. Since inspite of
orders such irregularities are being committed, it is neces-
sary to keep a watch over them, A quarterly list of such
credit sales, showing full details together with the name of
B
person responsible for the irregularity should invariably be
sent to this office with your own comments regarding
punishment. If any item of credit sale is omitted from the
quarterly list and the same is detected later an entry on
account of such omission will be made in the Character
Roll of the Supervisory Officer concerned. All inspecting
c officers on visits to seed stores and buffer godown and
other institutions should examine the store ledgers and bill
books to ensure that no credit sales have be,en made and in
case some such sales have been made take action as indi-
cated above.
D
4. It may please be kept in view that the receipts and
recoveries under the head 95 Capital outlay should equal to
the expenditure incurred thereunder. In case the receipts
and recoveries fall short in comparison to the expenditure,
the future allotments of funds will be reduced accordingly
and the drawing and disbursing officer responsible for
E drawing funds from 95 capital outlay called upon to explain
the irregularity and short fall in recovery.
;.
5. The above instructions should be brought to the notice
of all concerned under a regis~c;red cover for strict comp-
liance and the quarterly report for the quarter ending June
F
1968 submitted by 15.8.68.

Please acknowledge receipt of this letter.

Sd/-
R.R. Agarwal,
G Director''

The copy of the above circular was forwarded to all Functional
Deputy Directors of Agriculture and Horticulture and Jute Develop-
ment Officer, Lucknow and District Agriculture Officers and
Superintendent Govt. Gardens for information and necessary action.
H
N.P.N. SINGH v. STATE OF U.P. [PANDIAN, J.] 97

A cursory reading of both the circulars shows that inspite of the
circulars directing the practice of credit sales to be stopped, in reality A
the Jong established practice of credit sales was continued. Even after
the circular dated 2.8.67, the circulars were not strictly adhered to and
this necessitated the issue of circular dated 26.7.68. It seems that due
to the practice of credit sales, the seed store dues were mounting year
by year and that the Government took a very serious view of the B
continuance of credit sales and issued the circular dated 27.6.68. As we
have pointed out albeit, the case of the first appellant is that the old
practice of credit sales was continued and that he in fact sold the
articles to the VLWs and that none of the bills was bogus and they
were not dishonestly used as genuine. Similarly, the second appellant
has denied the charges. Now the High Court has set aside the convic-
tions of the appellants under Sections 467 and 471 IPC and the State c
has not preferred any appeal against this part of judgment acquitting
the appellants of these two charges and, therefore, it has to be con-
cluded that the charges of forging valuable security and using them as
genuine have to be held not proved.
D
The first charge in Criminal Appeal No. 664 of 1S'79 arising out
of STA No. A-210 of 1974 reads that these appellants on or about 29th
July 1965 and 12th August 1965 committed breach of trust of articles
mentioned in bill Nos. 57, 59, 60, 61, 62, and 64 of book No. 7767. The
following table will give the particular amount relating to each bill,
said to have been misappropriated: E
-\.
Date No. of bills Amount
29.7.65 and 12.8.65 57 138.00
." " 59 318.86
" " 60 495.94 F

" " 61 357.48
" " 62 155.26
" " " 64 125.50
G
---------------------
1591.04

Thus, the total amount alleged to have been misappropriated by
the appellants under the first charge is Rs.1591.04. This amount admit- H
98 SUPREME COURT REPORTS (1991] 2 S.C.R.

tedly have been deposited by the first appellant, NPN Singh. The Trial
Court in its judgment in Sessions Trial No. A-2 IO of 1974 has pointed
out in more than one place about the repayment of the amount by
deposit by the first appellant towards the six bills in question based on
the evidence of Add. DAO (Ag.) examined as PW-5 as follows:

B "He conceded that the money of these six bills in question;
57, 59, 60, 61, 62 and 64 has been deposited before the
C.I.D. Investigation commenced."

In yet another portion of the judgment,'it is stated thus:

c "In this case, no bill is outstanding as all payments were
made before investigation by the C.l.D. This accused
N.P.N. Singh himself admitted to have deposited moneys
for these bills nos. 57, 59 to 62 and 64."

D As borne out from the records, the payments with regard to the
questionable bills made between l.9.65 to 29.6.66 were as follows:

S.No. Bill No. Amount Date and Amount paid

1. 57 138.00 19.12.65 Rs. 96.40
E 29.7.65/12.8.65 14.2.66 Rs. 41.40
-{-
Rs.138.00

2. 59 318.86 19.12.65 Rs.282.06
F 29.6.66 Rs. 36.80

Rs.318.86

3. 60 495.94 19.12.65 Rs.495.94
G
4. 61 357.48 19.12.65 Rs.185.48
6.1.66 Rs.172.00

Rs.357.48

H
N.P.N. SINGH v. STATE OF U.P. [PANDIAN, J.[ 99

5. 62 155.26 18.12.65 Rs.155.26
A
6. 63 125.50 L9.65 Rs.125.50

The above payments clearly establish that there is no outstanding
amount towards any one of the bills by 29.6.66. PWs 1 to 3 (VLWs)
have unanimously testified that they did not purchase anything from B
the first appellant on credit and also did not receive these bills in
question and have further deposed that they did not make payments as
shown in the cash receipts prepared by the second appellant. On the
contrary, the specific case of the appellant is that none of the bills or
cash receipts is either false, fictitious or bogus and they are all genuine
bills and receipts.
c
In this connection, it may be noted that the Block Pramukh, i.e.
PW-6 made the complaint Exh. Ka 16 dated 23.3.66 against the Dis-
trict Agriculture Officer to the Director of Vigilance complaining of
the irregularities and illegalities as having been committed by the then
Agriculture Officer, Sultanpur, The Vigilance Chairman referred the D
matter to the Government and thereupon the CID was directed to
make an enquiry into the matter. PW-8, the Deputy Superintendent,
Anti-Corruption, CID who was the then Inspector, CID made the
enquiry under the orders of the State Government and commenced his
investigation on 13.7.67. By the time the investigation started as
shown earlier, the entire amount covered by the questionable bills had E
been paid and there was no outstanding. A question may arise as to
whether there was any temporary misappropriation o.f the amount from
29.6.65 till the amount was repaid on 29.6.66 and\vhether the bills in
question ;.ere forged by the first appellant with a view to screen him-
self from his misdeeds.
F
One of the factors which weighed with the Trial Court for hold-
ing that these bills were bogus, was the absence of the signature of any
of the VLWs in any of the bills. The first appellant has attempted to
show that the practice of credit sale to the VLWs was in prevalence
and the amount subsequently recovered from the cultivators would be
adjusted. The appellants under the first charge are indicted with an G
offence of criminal breach of trust under Section 409 IPC. Section 405
defines 'criminal breach of trust'. The essential ingredients of Section
405 are:

(1) The accused must be entrusted with property or dominion
over property: · H
JOO SUPREME COURT REPORTS [19911 2 S.C.R.

(2) The person so entrusted must use that property or
A
(b) dishonestly use or dispose of that property or wilfully suffer
any other person to do so in violation

(i) of any direction of law prescribing the mode in which such
B trust is to be discharged, or

(ii) of any legal contract made touching the discharge of such
trust.

Vide Om Prakash Gupta v. State of U.P, [19571 SCR 423 and
C.M. Narayan v. State of Travancore-Cochin, AIR 1953 SC 479. We
c do not like to swell this judgment by citing all the decisions on this
aspect.

In the present case, the entrustment or dominion over the pro-
perty of the seed stores was not in dispute indeed there could be none.
D The essential questions that follow are; first, whether the first appel-
lant had dishonestly misappropriated or converted the property
entrusted to him to his own use or dishonestly used or disposed of that
property in violation of any direction of law prescribing the mode in
which such trust is to be discharged; secondly whether the second
appellant was also a privy to the alleged misappropriation; thirdly
E whether both the appellants forged false bills and cash receipts and
then fraudulently or dishonestly used such documents as genuine; and
fourthly whether the appellants in their capacity of public servants
dishonestly misappropriated or converted that property to their own
use or willfully suffered the Department by doing any act in violation
of the directions, thereby making themselves liable to be punished for
F the aggravated form of criminal breach of trust under Section 409 IPC.
The expression 'dishonestly' is defined under Section 24 of the Indian
Penal Code. It is true that the series of circulars issued by the Directo-
rate of Agriculture have laid down certain directions prescribing the
mode in which such trust was to be discharged.

G Notwithstanding such circulars, it appears that the long estab-
lished practice of credit sale of seeds, fertilisers, pesticides etc. from
the Government Agriculture Seed Stores continued for some time, at
least till the last circular issued on 26.7.68. The repeated issuance of
the circulars indicate that inspite of these circulars, the practice of
credit sale was in vogue. A close scrutiny of the evidence and records
H show that the superior officers inspite of the circulars did not take a
N.P.N. SINGH v. STATE OF U.P. (PANDIAN, J.I 101

very serious view of the credit sale to the cultivators. In fact, by cir-
A
cular dated 2.8.67, the Director of Agriculture, U.P. while impressing
the prohibition of credit sale, gave only a warning that the erring
officials would be held 'personally responsible to pay the outstanding
amount'. We, in the above circumstances, feel that the appellants
could not be mulcted with the criminality of breach of trust for follow-
ing the established practice of credit sale through VLWs. Since the B
High Court has set aside the conviction of the appellants under
Sections 467 and 471 IPC, holding "There is nothing on record to show
that any such document was forged by the appellants .

. . . . . . . . . . . . . . , . No such using of any forged documents was
done by the appellants ........ their conviction under Section 467
and 471, IPC is not justified", the prosecution case of forging the bills c
and receipts and using them as genuine, is to be held to have been
found to be 'not true'. As stated supra, the State has also not filed any
appeal against the order of acquittal under charges 467 and 471 IPC. It
necessarily follows that the explanation given in defence of the appel-
lants that the six bills in question and cash receipts were not bogus but D
genuine has been accepted by the High Court. Under these circums-
tances, the prosecution cannot be said to have satisfactorily proved
even the temporary misappropriation of the amount in dispute. In
fact, before the Trial Court, it was contended that there has not been
any dishonest misappropriation of the property entrusted to the appel-
lant,· but that contention was repelled by the Trial Court for the E
reasons shown in its· judgment which reasons, in our considered
-\
opinion, are not convincing in view of the peculiar facts and circums-
tances of this case. The High Court has not at all discussed the legal
question of dishonest misappropriation as contemplated under Section
405 IPC but has summarily disposed of the case without deeply going
• into the question of facts or law. F

The charge under Section 409 is levelled against both the appel-
lants. In our view, this charge against both the appellants cannot be
·• sustained for the reasons to be presently mentioned.

The then D.A.O. Sultanpur passed the transfer order of certain G
officials inclusive of these two appellants by his order dated 9.5.65
whereunder the first appellant was transferred from Semrauna to
block Kurebhar vice Puran Singh (second appellant) and the latter
from Kurebhar to Semrauna vice N.P.N. Singh, the first appellant. It
is not in dispute that the first appellant handed over the charge to the
second appellant on 2.9.65 and till then the first appellant was incharge H
102 SUPREME COURT REPORTS [1991] 2 S.C.R.

A of both the seed stores situated in Semrauna and Kurebhar. The first
appellant submitted his compliance report on 3.9.65 which is Exh.
Ka-15. If it is so, how the second appellant who had not taken charge
of seed store of Semrauna till 2.9.65 could be held to be liable for an
offence under Sec. 409 in respect of the amount covered by the bills in
question i.e. bill Nos. 57, 59 to 62 and 64 which were all prepared
B between 29.7.65 to 12.8.65 i.e. earlier to the second appellant joining
the block of Semrauna. Hence the finding of the Trial Court that both
the appellants have committed breach of trust by preparing false bills
has to be rejected and the resultant conclusion made on such finding is
liable to be set aside.

In Criminal Appeal No. 665 of 1979 arising out of Sessions Trial
c No. A-228 of 1974, the first charge reads that both the appellants on
4. 7 .64 in their capacity as public servants and being in charge of the
seed store, Semrauna committed breach of trust of the goods shown in
bill Nos. 11, 17 and 18 of book No. 7767 to the value of Rs.450.26. In
that case also, there were charges under Section 467 !PC (three
D counts). We are not concerned of the offence under Section 467 as the
appellants now stand acquitted in this appeal also under those charges.
The evidence now adduced by the prosecution discloses that the first
appellant prepared the fictitious and bogus bill Nos. 11, 17 and 18
dated 4.7.64 for Rs.186.71, Rs.132.45 and Rs.155.46 respectively-all
totaling to Rs.480.26-which are the subject matter of the case under
E Section 409 IPC, and that the said amount of Rs.480.26 was misap-
propriated by the first appellant and that when the matter came up to
light, he started making payments by paying Rs.76 on 14.4.66 and
Rs.27.60 on 7.8.66 towards bill No. 11, and left an outstanding amount
·-
of Rs.376.66 and that thereafter no payment was payment and the
recoveries were made lateron on 2.12.69. It is further stated that the
F second appellant after taking charge from the first appellant on 2.9.65
made the entries of payments said to have been made on 14.4.66 and
7 .8.66. The second appellant had admitted that he received the pay-
ment towards bill No. 11 and deposited the same amount in Govern-
ment treasury and that as he did not oblige the CID Inspector by
making statement as per his choise, he is roped into this criminal
G offence. The first appellant states in his defence that the 'gram sewaks'
(i.e. VLWs) concerned made only part.payment and the balance of
Rs.376.58 was realized from his salary on 1.12.69 and the said amount
was deposited in the State Bank of India, Faizabad on 2.12.69 under
challan No. 99. Tlie Trial Court has convicted the second appellant on
the ground that the second appellant knowingly that the bills were
H forged by the first appellant, received the payment and prepared the
N.P.N. SINGH v. STATE OF U.P. [PANDIAN, J.] 103

receipts Exh. Ka 4 and Ka 5 for bill No. 11 of book No. 7767 and
A
thereby made himself liable for the commission of breach of trust. This
charge cannot be sustained both in law and facts for the reasons to be
mentioned. Admittedly, the first appellant was incharge of the block
at Semrauna till 2.9.65. According to this charge, the offence is said to
have been committed on 4.7.64 when the second appellant was work-
ing in the block of Kurebhar and, therefore, both the appellants can- B
not be jointly charged on the allegation that on 4.7.64 they being the
public servants of the seed store of Semrauna committed the breach of
trust. Secondly, the prosecution. has not satisfactorily established the
main ingredient of 'dishonestly' against any of the appellants, even
though at the worst, it may be said that the first appellant was guilty of
dereliction of his duty in not collecting the outstanding amount by
taking any appropriate steps in that regard. When the conviction
c
recorded by the Trial Court under Section 467 is set aside by the High
Court as against which no appeal is preferred by the State, the second
appellant cannot in any way be fastened with the criminality of misap-
propriation by issuing the cash receipts in question. A close examina-
tion of the entire evidence and documents do not reveal any material, D
worth mentioning for jointly fastening both the appellants with the
offence of criminal breach of trust punishable under section 409 IPC.
Further, there is no evidence that there was any conspiracy, pre-
concert or concert of minds of the appellants or any pre-arranged plan
between the two appellants to commit the offence or offences comp-
lained of. E

Though this Court normally does not inteffere with the concur-
rent findings of the fact except in exceptional circumstances, we for the
discussion made above feel that this is a fit case for interference at the
hands of this Court since both the Courts below instead of dealing with
the intrinsic merits of the evidence of the witnesses, have acted F
perversely by summarily disposing of the case, pretermitting the
manifest errors and glaring infirmities appearing in these cases.

In the result, both the appeals are allowed and the conviction
and sentences awarded by the High Court are set aside and the appel-
lants are acquitted. G

Before parting with the judgment, we would like to observe that
during the course of the hearing, it was submitted on behalf of the
appellants that in case of acquittal and consequent re-instatement in
service, the appellants would not claim their back wages. The appel-
lants have now filed two separate affidavits stating that they would not H
104 SUPREME COURT REPORTS [ J991] 2 S.C.R.

A claim back wages during the period they remained under suspension
and later under termination from service.

Based on the undertakings of the appellants not to claim back
wages and considering the facts and circumstances of the case, we
would like to observe that in case the appellants, pursuant to their
B acquittal, arc reinstated in service by the State Government unless for
some other reason, they, although ordinarily entitled for back wages,
will not be having any claim for the back wages from the date of
suspension upto the date of reinstatement.

G.N. Appeals allowed.