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Arunachalam v. State Of Kerala
Factual and Procedural Background
The revision petitioner, who was the secretary of a co-operative society, was prosecuted for misappropriation of funds amounting to Rs. 1000 by falsifying the society's accounts and a separate case of criminal breach of trust involving Rs. 385.63. The petitioner was charged under Sections 409 and 477A of the Indian Penal Code (IPC). The trial court convicted and sentenced him to rigorous imprisonment for two years under Section 409 and six months under Section 477A. The appellate court confirmed the convictions but reduced the sentence under Section 409 to one year and six months, maintaining the sentence under Section 477A. The revision petition challenges the correctness of these decisions.
Legal Issues Presented
- Whether the revision petitioner, as the secretary of the co-operative society, is a "public servant" within the meaning of Section 21 of the IPC, thereby attracting liability under Section 409 IPC for criminal breach of trust.
- Whether the evidence sufficiently proves the commission of criminal breach of trust by the revision petitioner.
- Whether the conviction and sentence under Sections 409 and 477A IPC are legally sustainable.
Arguments of the Parties
Revision Petitioner’s Arguments
- There is no legal evidence to hold the accused guilty of any offence.
- The conviction under Section 409 IPC is manifestly illegal as it wrongly assumes that the accused is a "public servant".
Prosecution’s Arguments
- Evidence from witnesses including the auditor and deputy registrar established misappropriation and the accused’s role as secretary during the material time.
- Documents such as audit reports and day books demonstrate falsification of accounts and failure to hand over cash balance as required by the society’s bye-laws.
- The accused breached trust by not entrusting money to the president as mandated, establishing criminal breach of trust.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Karnam Siddappa v. State of Mysore (AIR 1958 Mysore 82) | Secretary or president of a co-operative society is not a "public servant" under Section 21 IPC. | Used to support the conclusion that the revision petitioner is not a public servant for Section 409 IPC purposes. |
| Shridhar v. Emperor (AIR 1935 Bombay 36) | Definition and scope of "public servant" under IPC. | Referred to in determining the status of the accused as a public servant. |
| Sombari Behara v. Emperor (35 Madras Weekly Notes 1337) | Interpretation of "public servant" in relation to co-operative society officials. | Supported the view that secretaries of co-operative societies are not public servants. |
| S. R. Bhattacharya v. State (AIR 1970 Calcutta 557) | Clarification on the scope of "public servant". | Confirmed that society secretaries do not fall under the category of public servants. |
| State v. Amulya Ratan (AIR 1969 Patna 173) | Secretary acting as agent of bank may be liable under Section 409 IPC. | Distinguished from the present case where no evidence showed the accused acted as an agent of a bank. |
Court's Reasoning and Analysis
The court examined the prosecution evidence, including witness testimonies and documentary exhibits, and found sufficient proof of misappropriation and criminal breach of trust by the revision petitioner. However, the court found that the lower courts erred in holding the accused to be a "public servant" under Section 21 IPC. The court analyzed the statutory definition of "public servant," particularly clause (10) of Section 21, and concluded that the secretary of a co-operative society does not fall within this definition as he did not perform duties such as taking or expending property for any secular common purpose of a village, town, or district. The court referred to multiple precedents to support this conclusion. Further, the court distinguished the case from those where the secretary acted as an agent of a bank, which would attract Section 409 IPC liability. Since no such evidence existed here, the conviction under Section 409 IPC was set aside. Instead, the court held that the offence committed falls under Section 408 IPC (criminal breach of trust by clerk or servant) and altered the conviction accordingly. The sentence was modified taking into account the lesser charge, the accused's young age, and lack of prior convictions. The sentence under Section 477A IPC was confirmed.
Holding and Implications
The revision petition is allowed in part. The court sets aside the conviction under Section 409 IPC and convicts the accused under Section 408 IPC. The sentence under Section 408 IPC is rigorous imprisonment for nine months, to run concurrently with the sentence under Section 477A IPC, which is confirmed. The decision clarifies that secretaries of co-operative societies are not "public servants" within the meaning of Section 21 IPC and thus not liable under Section 409 IPC unless acting as agents of banks or in other capacities attracting that section. No new precedent is established beyond the application of existing case law to the facts of this case. The direct effect is the reduction of the severity of the conviction and sentence for the accused.
1. Sri. P. K. Venugopal, The learned counsel for the revision petitioner, Not only contends that there is no legal evidence to hold the accused (revision petitioner) guilty of any offence but also argues that his conviction under s. 409 ipc., On the assumption that he is a'public servant' is manifestly illegal.
2. The prosecution case briefly stated is as follows: the revision petitioner while acting in his capacity as the secretary of a co - operative society committed misappropriation to the tune of rs. 1000/ - by fraudulently striking the balance at rs. 127 - 88 on 8 - 9 - 1962 and showing the expenditure to be rs. 2237 - 07 instead of the actual expenditure of rs. 1237 - 07. The accused falsified the accounts to suit the above amount. Both the president and the secretary were proceeded against. It appears that the revision petitioner was absconding for some time and in the meanwhile the president was proceeded against and was ultimately acquitted. Apart from the sum of rs. 1000/ - referred to above, There was a case of criminal breach of trust in respect of a sum of rs. 385 - 63 also. The prosecution of the revision petitioner was for offences under s. 409 and 477a ipc. The trial court convicted him under both the charges and sentenced him to undergo r. I. For 2 years under s. 409 ipc., And six months under s. 477a. The appellate court while confirming the conviction under both the charges, Reduced the sentence under s. 409 to r. I. For one year and six months, Without altering the sentence under s. 477a. The correctness of the decisions of the courts below is challenged in this revision petition.
3. The prosecution has through the evidence of pw. 1 who was the auditor of the society and pw. 4 who was the junior supervisor of the co - operative circle in which the society situates, Established that there had been misappropriation. Pw. 6, The deputy registrar of co - operative societies also has given evidence that daring the material time the revision petitioner was working as the secretary of the society in question. Ext. P8 shows that he was a paid secretary of the society. Ext. P1 audit report gives the relevant facts with respect to the misappropriation. Ext. P2 is the day book of the society. On page 17 of ext. P2 which has been marked as ext. P2 (a) for the sake of identification, There is an entry to show the closing balance. On that page instead of showing the expenditure at rs. 1237 - 07 it was shown as rs. 2237 - 07, And a misappropriation of rs. 1000/ - was thus committed. Ext. P2 (b) relates to the cash balance on 6 - 6 - 1963. That shows that there was a balance of rs. 385 - 63 that day. This amount has not been banded over by the accused to his successor in office. Ext. P3 bye - laws of the society in clause. 23 (a) defines the duties of the president and secretary. As per the same, The secretary should entrust the cash balance daily to the president and in token thereof he should get a signature in the day book. It was the duty of the secretary to maintain correct and true accounts of receipts and expenditure. The said register does not show that any of the amounts in question has been entrusted by the secretary to the president. There is, Therefore, Clinching evidence to show that the money which the revision petitioner came into custody was not made over to the president as he was expected to do in terms of the bye - laws. I do not, Therefore, Find any merit in the contention advanced by the learned counsel for the revision petitioner that the commission of criminal breach of trust by the accused has not been proved.
4. However, I think, There is considerable force in the argument advanced by him that the courts below were wrong in taking it for granted that the secretary of a co - operative society is a'public servant' as defined in s. 21 of the indian penal code. It is rather strange that both the courts below did not bestow any serious thought on this aspect of the matter. 'public servant' has been defined in s. 21 i. P. C., And the portion relevant for our purpose reads as follows:
"the words "public servant" denote a person falling under any of the descriptions hereinafter following, Namely:
tenth every officer whose duty it is, As such officer, To take, Receive, Keep or expend any property, To make any survey or assessment or to levy any rate or tax for any secular common purpose of any village, Town or district, Or to make, Authenticate or keep any document for the ascertaining of the rights of the people of any village, Town or district;
by no stretch of imagination could it be said that the accused in relation to his employment as the secretary of the co - operative society would fall under any of the categories of officers mentioned in clause. 1 to 9 and 11 and 12 of s. 21 i. P. C. All that is necessary to find out is whether he would fall within clause (10) which is extracted above. Explanation i states that a person falling under any of the descriptions in s. 21 i. P. C. Is a public servant, Whether appointed by the government or not. So, The question is whether the accused, Who is the secretary of a co - operative society, In view of the fact that he may have to deal with the money belonging to the members of the society or with the amounts advanced by the various banks to the society, Could be construed to be a'public servant' within the meaning of s. 21 i. P. C. T am afraid, There is no evidence in this case to hold that the secretary of the society would fall within any of the clauses defining the class of officers who are to be treated as 'public servant' in s. 21 ipc. It bad been held by the various high courts that the president or the secretary of a co - operative society cannot he considered to be a'public servant' within the meaning of s. 21 i. P. C. The decisions in karnam siddappa v. State of mysore (air. 195s mysore 82), Shridhar v. Emperor (air. 1935 bombay 36), Sombari behara v. Emperor (35 madras weekly notes, 1337) and s. R. Bhattacharya v. State (air. 1970 calcutta, 557) are some of the decisions to which reference could be made. The learned state prosecutor has brought to my notice the decision of the patna high court reported in state v. Amulya ratan (air. 1969 patna 173), Wherein para. 18 and 19 it has been held that inasmuch as the secretary of the society was acting as the agent of the bank, He should be held to be liable under s. 409 i. P. C. The conviction in the said case, It may be noted, Is not because the secretary of the society as such satisfied the requirements of a "public servant", But because the provision of s. 409 i. P. C., Is so comprehensive enough as to bring within its fold not only public servant, But also banker, Merchant, Factor, Broker, Attorney or agent, Who in the way of his business is entrusted with property or with dominion of property if he commits criminal breach of trust in respect of such property. If, As a matter of fact, The secretary of the society acts as an agent of the bank as in the patna case referred to above, Be would squarely fall within the scope of s. 409 ipc. In this case there is no evidence to show that the revision petitioner in his capacity as the secretary of the society was acting either as as agent of a bank or in any other capacity to attract s. 409 ipc., Or that it was his duty as the secretary to take, Receive, Keep or expend any property, To make any survey or assessment or to levy and rate or tax for any secular common purpose of any village, Town or district etc., To bring him within clause. 10 in s. 21 of the code. It has, Therefore, To be held that the accused, As the secretary of the co - operative society, On the evidence in this case shows, Is to be held not a'public servant' within the meaning of s. 21 of the ipc., Or any other category of persons to whom s. 409 is made applicable. Therefore, The conviction under s. 409 ipc., Has to be set a side.
5. That does not however mean that no offence against the accused has been made out. The evidence on record would go to show that the accused has committed an offence which would rightly fall under s. 408 ipc. All the necessary evidence is here, And there is no case that any material prejudice would result if the charge is altered from s. 409 to 408 ipc. Therefore, In exercise of the power under s. 423 of cr. P. C., I convict the accused under s. 408 ipc. As for the conviction and sentence under s. 477a is concerned, It shall stand confirmed as has already been held by the court below.
6. Now, On the question of sentence, Considering the fact that the conviction has to be under s. 408 ipc., Not 409 ipc., The fairly young age of the revision petitioner and the representation that there had not been any prior instance of his having been found guilty of such offence, And with the hope that the consideration in the matter of awarding sentence by this court would help him to reform himself to become a better citizen, I sentence the revision petitioner - accused under s. 408 ipc., To undergo rigorous imprisonment for a period of nine months. The sentences under s. 408 and 477a ipc. Shall run concurrently. The revision is allowed to the extent indicated above.
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