IN THE COURT OF THE III ADDITIONAL SESSIONS JUDGE
EAST GODAVARI AT KAKINADA
Present: Sri G.GOPICHAND III Additional Sessions Judge
Tuesday, the 17th day of March, 2020
CRIMINAL APPEAL No.301 of 2016
From what court the appeal is :II Addl. Judicial Magistrate of First preferredClass Court, Kakinada.
Number of the case in that Court:C.C.No.1 of 2010
Number of the Appeal:C.A.No.301 of 2016
Name and description of the : 1.Kongarapu Venkateswara Rao, S/o. Appellants Mutyalu, Aged 52 years, C/Yadava, Employee in Kakinada Municipal Corporation, R/o. Dora Apartment, 3rd Floor, Vijayendranagar, Kakinada.
2.Mallela Venkata Rama Sastry, S/o. late Sarma, aged 41 years, C/Brahmin, Employee in Kakinada Municipal Corporation, R/o. D.No.6-7-4/1, Basivireddy Vari street, Suryaraopeta, Kakinada.
3.Errapothu Rukmini Kumari, W/o. Kanchana Raghu, aged 56 years, Employee in Kakinada Municipal Corporation, R/o. D.No.3-16-C.10/2, Thriveni Towers, Santhi Nagar, Kakinada.
4.Dandasi Lakshmi, W/o. Late Srinivasarao, aged 52 years, C/Srisaina, Employee in Municipal Corporation, R/o. D.No.4-133/9, Vakalapudi, Srinivasanagar, Kakinada.
5.Vedula Chandra Sekhar, S/o. Late Satyanarayana, aged 48 years, C/Brahmin, Employee in Municipal Corporation, R/o. D.No.1-21-15/1, Gongeyulavari street, Kondayyapalem, Kakinada.
6.Machagiri Yesu Babu, S/o. Bulliyya, aged 40 years, C/Yerukula, Employee in Municipal Corporation, R/o. D.No.1- 81, S.Atchyutapuram, Kakinada.
7.Gurrapu Maruthi Premaswaroop, S/o. Lakshmojirao, aged 40 years, C/SC, Employee in Municipal Corporation, R/o. D.No.3-12-5, Recherlapeta, Kakinada.
8.Borra Ramarao, S/o. Krishnamurthy, aged 50 years, C/Gowda, Employee in Kakinada Municipal Corporation, R/o. D.No.62-1-38, Market street, Kakinada.
9.Katta Bhaskararao, S/o. Veeraju, aged 60 years, C/Padmasali, Retd. Employee in Municipal Corporation, R/o. Vijayadurga Residency, Gandhi Nagar, Kakinada.
2 :10.Sirivarapu Bhushana Rao, S/o. Suryarao, aged 59 years, C/Koppulavelama, Retired Employee in Municipal Corporation, R/o. D.No.19- 10-2, Chilukuri Towers, Suryaraopeta, Kakinada.
11.Jaladi David Ananda Kumar, S/o. Amrutharao, aged 45 years, C/Adi Andhra, Employee in Municipal Corporation, R/o. D.No.68-5-10, Ashok Nagar, Kakinada. (Accused Nos.1 to 3, 6 to 11, 13 & 14)
Name and description of the : State rep. by Additional Public Prosecutor, Kakinada. respondent
The sentence and order under : In the result, accused Nos.1, 2 and 12 found guilty and convicted for the offence under which it was imposed in the lower Sec.408 I.P.C., and sentenced to undergo Court. simple imprisonment for a period of 2 years and to pay fine of Rs.2,000/- IDSI for one month each. Further, A.1, A.2 and A.12 convicted for the offence under Sec.409 I.P.C., and sentenced to undergo simple imprisonment for a period of 2 years and to pay fine of Rs.3,000/- each IDSI for one month each. The accused Nos.1 to 11, 13 and 14 found guilty and convicted for the offence under Sec.477A I.P.C., and sentenced to undergo simple imprisonment for a period of 6 months and to pay a fine of Rs.5,000/-n each IDSI for one month each. A.1 to A.14 convicted for the offence under Sec.120-B I.P.C., r/w Sec.408, 409 and 477A I.P.C., and sentenced to undergo simple imprisonment for a period of 6 months and to pay fine of Rs.1,000/- each IDSI for one month each. All the sentences shall run concurrently.
Whether confirmed/modified or : Reversed, if modified the REVERSED modification
Date of presentation:08.06.2016
Date of filing:09.06.2016
Notice issued by Court to appear :13.06.2016 Bail bonds if appellant has been : --- let out on bail
Appellant ordered to appear :23.08.2016 Date of hearing:02.03.2020
Date of judgment:17.03.2020
This criminal appeal coming on 02.03.2020 for final hearing before me in the presence of Sri M.Jawahar Ali, Advocate for Appellant Nos.1, 2, 4, 5, 7, 9, 10 and 11/ Accused Nos.1, 2, 6, 7, 9, 11, 13 and 14 and of Sri N.Narasinga 3
Rao, Advocate for 3rd Appellant/Accused No.3 and of Sri R.Satyanarayana,
Advocate for Appellant Nos.6 and 8/Accused Nos.8 and 10 and the Addl. Public Prosecutor, Advocate for Respondent and the matter having stood over for consideration till this day, this Court delivered the following:
J U D G M E N T
This appeal is filed by the accused Nos.1 to 3, 6 to 11, 13 and 14 in
C.C.1/2010 on the file of II Addl. Judicial Magistrate of First Class Court,
Kakinada, challenging the calendar and Judgment dt:31.5.2016 whereunder accused Nos.1, 2 and 12 are convicted of the offence under Sec.408 I.P.C., and sentenced to undergo simple imprisonment for a period of 2 years and to pay fine of Rs.2,000/- IDSI for one month each. A.1, A.2 and A.12 are further convicted of the offence under Sec.409 I.P.C., and sentenced to undergo simple imprisonment for a period of 2 years and to pay fine of Rs.3,000/- each
IDSI for one month each. The accused Nos.1 to 11, 13 and 14 are convicted of the offence under Sec.477A I.P.C., and sentenced to undergo simple imprisonment for a period of 6 months and to pay a fine of Rs.5,000/- each
IDSI for one month each. A.1 to A.14 are convicted of the offence under
Sec.120-B I.P.C., r/w Sec.408, 409 and 477A I.P.C., and sentenced to undergo simple imprisonment for a period of 6 months and to pay fine of
Rs.1,000/- each IDSI for one month each. All the sentences are directed to run concurrently.
2. The brief facts which are leading to the filing of the present appeal are as follows:
a) Before the II Addl. Judicial Magistrate of First Class, Kakinada, the
Inspector of Police, C.I.D., R.C.I.U., Rajamahendravaram, filed charge sheet against the accused Nos.1 to 14 for the offences punishable U/s 409, 477-A, 420 and 120-B IPC relating to Cr.No.7/2006 of C.I.D., P.S., Hyderabad.
3. The case of the prosecution, in brief, is that all the accused are employees in Municipal Corporation, Kakinada, in Town Planning and Account
Sections and A.15 worked as Commissioner, Municipal Corporation, Kakinada 4 and he died during investigation and so, his name is not included in the charge sheet. A.1 is the Junior Assistant (Shroof) clerk, A.2 is the Junior Assistant B- 7 (Shroof), A.3 is the Senior Assistant, A.4 to A.10 are the Junior Assistants,
A.11 is the Senior Assistant, A.12 is the Attender, A.13 is the Senior Assistant,
A.14 is the Town Planning Supervisor and in-charge of Town Planning Officer of Municipal Corporation, Kakinada.
b) P.W.1 Karanam Venkateswarlu, Municipal Commissioner, Municipal
Corporation, Kakinada, submitted a report to the Additional Director General of Police, CBCID, Hyderabad, stating that some irregularities were committed in the Town Planning Section of Municipal Corporation, Kakinada. During local inspections for the years 2004 and 2005 the audit officer has noticed certain irregularities wherein the Town Planning and Accounts Section staff have used/admitted forged challans, causing financial loss to the Municipal
Corporation. The District Audit Officer, Kakinada in detailed enquiry has noticed the embezzlement of amount of Rs.26.68 lakhs through forged challans covering period from 1999-2000 to 2004-2005. Basing on the report given by P.W.1, a case in Crime No.7/2006 under Secs.408, 409, 477-A, 120-
B I.P.C., of CID P.S., was registered by Y.Sudhakar, Senior Executive officer,
C.I.D. Chief Office, Hyderabad.
c) During the course of investigation, V.Paparao, Sub Inspector of
Police, C.I.D., R.C.I.U., Rajamahendravaram, had visited Municipal
Corporation Office, Kakinada and obtained concerned records and audit reports for the years 1999-2000 to 2004-2005 and seized them. Chitta registers, miscellaneous receipt registers and fake numbered challans of accounts section were also seized. The consolidation registers, individual building application registers and original building files were also obtained from Town Planning Section, Municipal Corporation, Kakinada.
d) The process for remittance of challans and approval of building applications is that the applicants who are seeking building permission shall submit an application in the prescribed form along with site plans drawn by a licensed surveyor in the town planning section. The required licence fees and 5 building permission fee shall be paid by the applicant and the building applications will be forwarded to the concerned clerk who in-turn will forward to the concerned TPBO/TPS. Thereafter the concerned TPBO/TPO will make field inspection and recommend for approval and the concerned assistants calculate the fee and they put their signatures on top of the challans.
Thereafter the challans will be paid by the applicant in the Municipal Treasury and the shroff as the custodian of Municipal Treasury receives the challans in triplicate along with cash duly entering the cash particulars in chitta register by giving serial number duly certifying the challan with office stamp.
Thereafter the particulars of the amount paid by the applicant will be entered in Miscellaneous Register by the concerned clerk in Accounts Section and a receipt in original will be given to the applicant. After the technical remarks are made by TPO/TPS/TPBO, the Commissioner will approve the building applications basing on the remarks of the Town Planning staff and the Town
Planning staff has to verify the challans with Chitta Registers ensuring the remittance and the Accountant and the Manager have to verify and certify the
Chitta Registers every day and the Municipal Commissioner has to verify the
Chitta Register once in a week.
e) As per the verification of the files, the challans were found to be fake and the numbers given to the other challans of other heads for similar amounts were given again to these challans. The challans in question of building applications were containing the numbers of the other challans of other sections of the Municipal Treasury. The fake challan numbers were noted on the building application and registers as if the amounts mentioned in the challans were remitted into Chitta. The challan numbers of the registered building applications and the challan numbers noted in the chitta are appearing as one and the same, but the amounts, the names of the applicants and the nature and purpose of remittances are entirely different. Therefore, the challans and receipts of Town Planning were misappropriated by adopting the challan numbers of genuine remittances made to the sections by adopting fake challans modus operandi and the staff of Town Planning Section and 6
Accounts section misappropriated an amount of Rs.26,68,356/- by not remitting to the Municipal Treasury. The above swindling occurred during the period from 1999 to 2005. The details of the challans which were prepared fraudulently along with names of the applicants, building application numbers and the names of the licensed surveyors were given by the TPO on 12.5.2005 to the then Commissioner. So, the Commissioner ordered a detailed enquiry to be taken up by District Audit Officers, State Audit, East Godavari District and suspended A.3 to A.5 and A.9 on 19.4.2005 and A.1, A.12 and A.14 on 20.4.2005. During the audit conducted in the year 2003-2004 it was noticed that certain receipt amounts were misappropriated by adopting fake challan numbers towards remittance of building licence fee and other fees connected with the approval of plans like water harvest pit charges, tree guard charges, development charges etc.
f) A.3 to A.11 being G1 to G4, the clerical staff of the Town Planning
Section colluded with A.1, A.2 and A.13 of account section and misappropriated the Municipal funds and on receipt of building applications along with challans, G-1 clerk entered the same in the consolidated register and distributed the same among other clerks basing on the jurisdiction where the individual constructs the building. The concerned clerks have to enter the receipts of applications in individual building application registers and verify the said challans and amounts with the chitta and M.R. registers to see whether challans are genuine or not and later forwarded the same to the Town
Planning Officer to visit the proposed building site of the applicant to certify the building application with specific remarks or recommendations for approval. But G-1 to G-4 clerks who are A.3 to A.11 in pursuance of their common intention and prior conspiracy have intentionally failed to reconcile the receipts of challans with chitta and M.R. registers and simply forwarded the applications to the Town Planning Officer. Thus A.3 to A.11 are liable for punishment as they willfully neglected to cause necessary verification and reconciliation of challans. P.Ws.3 to 64 and others have remitted the amounts at the Municipal Treasury Counter only as per the challans issued at the 7 account section and town planning section of the Municipal Corporation,
Kakinada. Some of them paid the amounts to A.12, who is working as
Attender and later got challan copies and got approved their building applications from A.12. Those challan amounts were not traced with the concerned registers i.e., Chitta and M.R. A.12 also colluded with the other accused and collected the amounts from the building applicants and swallowed the said amounts and misappropriated the said amount.
g) A.14 who is working as Town Planning Officer willfully neglected to maintain subsidy register during his tenure and failed to check the individual
B.A. registers of his section and he failed to detect the frauds committed by his subordinates i.e., clerical staff A.3 to A.11. During the investigation and on verification of the seized Chitta Registers, Miscellaneous Registers,
Consolidation Registers for the years 1999 to 2005, most of the challan amounts remitted towards approval of building applications were not entered in Chitta and M.R. as per the following statement.
Total B.A. Amount paid by Building Total amount Total amount involved Applicants misappropriated remitted at SBI Rs. Rs. Rs. 250 26,65,500 25,61,101 1,04,399
According to the Audit report total number of B.A. Applications were received during the five years are 250 and misappropriated amount is
Rs.26,68,356/-.
The list of the employees i.e., G1 to G4 in Town Planning section and the building applications misappropriation as per individual building application registers.
S.No. Name of the Seat Period of working Total individual ConcAmount erneRs. d From To 1 Sri K.Bhaskara G1 01-05-1999 30-04-2001 6,428 Rao (A.11) 2 Smt. E.Rukmini G1 04-04-2001 18-04-2005 10,05,335 Kumari (A.3) 10,11,763 1 Sri B.Rama Rao G2 01-04-1999 04-04-2001 8,541 (A.10) 2 Sri P.Gangarao G2 01-12-2001 18-04-2005 4,96,678 8 (A.5) 5,05,219 1 Sri V.Chendra G3 29-12-1999 03-04-2001 78,816 (A.7) 2 Sri Yesubabu G301-12-2001 07-10-2004 73,959 (A.8) 3 Smt. G308-10-2004 31-12-2004 18,309 G.Narasamamba (A.4) 4 Sri G301-01-2005 18-04-2005 40,549 G.M.P.Swaroop (A.9) 2,11,633 1 Sri P.Ganga (A.5) G4 01-04-1999 30-04-2001 14,984 2 Smt. D.Lakshmi G404-05-2001 31-07-2003 1,19,692 (A.6) 3 Smt. G401-08-2003 18-04-2005 6,97,810 G.Narasamamba (A.4) 8,32,486 Grand Total 25,61,101 Amount remitted 1,04,399 Difference of amount with 2,856 respect to audit report Total 26,68,356
A.1 and A.2 of accounts section in Municipal Corporation are also responsible for the misappropriation of the amounts individually. A.1 worked during 6.4.2001 to 20.4.2005 and he misappropriated Rs.24,52,332/- whereas
A.2 worked during 1.4.1999 to 5.4.2001 and he misappropriated
Rs.1,08,769/- out of the total misappropriation amount of Rs.25,61,101/-.
The Addl. D.G., C.I.D., A.P., Hyderabad, addressed a letter to the Secretary to the Government, Municipal Administration and Urban Development for sanction of the prosecution and accordingly, sanction was granted on 25.4.2009 and all the accused obtained anticipatory bail. After completion of investigation, P.W.82 P.Murali Krishna Reddy, Inspector of Police, C.I.D.,
R.C.I.U., Rajamahendravaram, filed charge sheet.
4. The learned II Addl. Judicial Magistrate of First Class, Kakinada took cognizance of the offences punishable U/s 408, 409, 477-A and 120-B IPC against the accused Nos.1 to 14 and registered the case as C.C.No.1/2010.
5. After appearance of accused Nos.1 to 14 before the learned Magistrate, they were furnished with the copies of documents relied by the prosecution in 9 compliance of Sec.207 Cr.P.C and thereafter charges U/s 408, 409, 477-A and 120-B IPC against the accused Nos.1 to 14 were framed, read over and explained to them in Telugu, they denied the same, pleaded not guilty and claimed to be tried.
6. During the course of trial, the prosecution examined P.Ws.1 to 82 and exhibited Exs.P-1 to P-72.
7. The accused Nos.1 to 14 denied the incriminating material available in the evidence of prosecution witnesses when they were examined U/s 313
Cr.P.C. No oral evidence is adduced by the accused, but on behalf of the accused, Exs.D.1 to D.23 are marked.
8. The learned Magistrate after evaluating the material placed before him by the prosecution and after considering the defence of the accused, found
A.1, A.2 and A.12 guilty of the offences under Secs.408, 409 I.P.C., and found
A.1 to A.11, A.13 and A.14 guilty of the offence under Sec.477-A I.P.C., and found A.1 to A.14 guilty of the offence under Sec.120-B r/w Secs.408, 409 and 477-A I.P.C., and convicted them of the said offences and imposed the sentences as stated supra vide calendar and Judgment dt:31.5.2016.
9. Challenging the impugned conviction and sentence, the present appeal is filed by A.1 to A.3, A.6 to A.11, A.13 and A.14 on the following grounds:-
a) The Judgment of the trial Court is contrary to law, weight of evidence and probabilities of the case.
b) The trial failed to consider the fact that the material witnesses openly admitted before the Court that the fake and forged challans were floated from outside into the Municipality and failed to consider the fact about the variation between genuine challans comparing with 1170 fake challans and the very nexus between 1170 challans and A.1 and A.2 who said to have been ;worked as Shoroffs.
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c) The trial Court ought to have considered the fact that all 1170 fake challans were entered into by 3rd parties and mislead the office and all the accused are innocent persons.
d) The trial Court failed to appreciate the documents marked on behalf of the accused and more particularly wrongly interpreted that Exs.D.1 to D.3 are Photostat copies though they are certified copies which were confronted to the Municipal Commissioner/P.W.1.
e) The trial Court failed to consider the admissions of the Municipal
Commissioner/P.W.1 and P.Ws.70 to 72 auditors during their evidence that there is no act of misappropriation on the part of the accused and wrongly interpreted in its Judgment that the prosecution has proved the guilt of all the accused as per the evidence of P.W.1.
f) The trial Court wrongly interpreted regarding Ex.P.10 job chart that as per Ex.P.10 Job chart, accused are bound to make the cursive verification but they failed to do so in the present case etc., even though there is no such definition with regard to the duties of the accused in Ex.P.10.
g) The trail Court failed to even discuss the evidence of P.W.81 i.e.,
Prime Investigation Officer who have categorically admitted in the witness box that his investigation is silent about the genuinity of the challans and he failed to obtain the report from FSL etc.
h) The trial Court ought to have given benefit of doubt to the appellants as the prosecution is completely failed to prove its case.
10. Separate appeals are filed by A.4, A.5 and A.12 vide Criminal Appeal
Nos.331/2016, 317/2016 and 308/2016 respectively and they are being disposed simultaneously along with this appeal.
11. Heard the arguments of learned counsel for appellants and the learned
Additional Public Prosecutor.
12. The learned counsel for the appellants argued that the accused have nothing to do with the fake challans and the said challans were created by the 11 strangers but not by the Employees in Municipal Corporation, Kakinada and the persons who want to make any construction will approach a private surveyor who will prepare the plans and they will take steps for payment of the necessary fee in the Treasury of the Municipal Corporation and even they though thousands of applications are filed during the relevant period i.e., 1999-2004, only 250 applicants have enclosed fake challans to their applications while submitting their building applications. So, there is every possibility on the part of the private surveyors who are engaged by the building permission applicants to create the said fake challans. He further argued that the prosecution for establishing the guilt of the accused for the offence under Sec.409 I.P.C., has to prove that any amount was entrusted by any person to the accused and they misappropriated the said amount, but the building applicants who are examined by the prosecution as P.Ws.3 to 64 have not stated that they entrusted any amounts to A.1 and A.2, who are working as Shoroffs and who are expected to receive money from the applicants for issuing challans. So, the question of misappropriation of any amount by A.1 and A.2 does not arise.
He further argued that even though offences under Sec.408, 409 I.P.C., are similar in nature and only the public servants can be charged for the offence under Sec.409 I.P.C., the learned Magistrate has erroneously convicted the accused Nos.1, 2 and 12 of the offence under Sec.408 I.P.C., also. He further argued that all the accused are not working in the same section of the Municipal Corporation and the account section and building section and other sections of the Municipal Corporation are situated in different locations so there is no possibility on the part of the accused to conspire together for the purpose of misappropriation of any amount. He further argued that the prosecution has also failed to establish that the accused have created false accounts and so, charge under Sec.477-A I.P.C., is also not proved by the prosecution. He further argued that P.W.70, who is working as an auditor deposed that the fake challans do not contain the signatures of A.1 and A.2 and they are not tallying with the genuine challans 12 and thus, it is clear that A.1, A.2 have not created any fake challans. He further argued that the investigating officers have not gathered any evidence to find out who created the said fake challans, but simply because the accused worked in the Municipal Corporation at the relevant time they are falsely implicated. He further argued that some of the employees who worked in the
Municipal Corporation at the relevant time obtained a G.O., for withdrawing the prosecution against them for the similar offences, but the accused in this
C.C.1/2010 are falsely implicated even though they have nothing to do with the alleged offences.
The learned counsel for the appellants further argued that the
Investigating Officer has not obtained specimen hand writings of the accused for sending the disputed challans to the hand writing expert for comparing the writings on the said challans with the hand writings of the accused particularly
A.1 and A.2. No material is seized from the accused for establishing that they created the fake challans. He further argued that if really any amount was misappropriated by the accused, the Municipal Corporation, Kakinada, is expected to initiate Departmental Enquiry against the accused to find out who is responsible for the said misappropriation, but no such enquiry was conducted by the Municipal Corporation. He further argued that the trial Court has erroneously convicted the accused of the offences with which they are charged, so the appeal has to be allowed.
The learned counsel for the appellant in support of his contention relied on a Judgment of our Hon’ble High Court in “Public Prosecutor, High Court of A.P., Hyderabad vs. Yelamanchili Venkateswararao”, reported in 2005 (2) ALT (Crl.) 457 (A.P.) wherein it was held that “Where there is no evidence of criminal breach of trust or falsification of accounts, accused is entitled to acquittal”.
He also relied on a Judgment of Hon’ble Apex Court in “Chandraiah vs.
State of A.P., and another” reported in AIR 2004 Supreme Court 252 wherein it was held that 13 “Mere negligent act on the employees of post office in passing vouchers itself is not sufficient to convict them under Sec.409 I.P.C.”
He also relied on another Judgment of Hon’ble Apex Court in “Kailash
Kumar Sanwatia vs. State of Bihar and another”, reported in 2003 Cri.
L.J. 4313 wherein it was held in para No.10 as follows:- “In the instant case even if it was proved as contended by learned counsel for the appellant, that money was entrusted which fact is borne out by the admitted case about missing of money from the cash counter of the bank, one factor which needs to be decided is whether the accused had dishonestly misappropriated or converted to his own use the property entrusted or dishonestly used or disposed of that property. As presented by the prosecution, the money was taken away from the cash counter. It is not the case of prosecution that money which was given to the accused – Gautam Bose and the cash peon to obtain bank drafts was taken away by accused-Gautam Bose or the cash peon Ganaori Sao. Because of an intervening situation, the disappearance of the cash due to theft by somebody else the bank drafts could not have been prepared and handed over to the appellant. Even if there is loss of money, the ingredients necessary to constitute criminal breach of trust are absent. If due to a fortuitous or intervening situation, a person to whom money is entrusted is incapacitated from carrying out the job, that will not bring in application of Section 405 I.P.C., or Section 409 I.P.C., unless misappropriation, or conversion to personal use or disposal of property is established. Unfortunately, the
Courts below have not looked at the issues from these vitally relevant angels. The inevitable conclusion is that accused persons cannot be convicted under Section 409 I.P.C. This, however, will not stand in the way of the appellant getting such relief as available in law otherwise by pursuing a suitable remedy”.
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He also relied on another Judgment of Hon’ble Apex Court in “State of
Kerala vs. M.Gopalan”, reported in 2001 (1) ALT (Crl.) 292 (SC) wherein it was held in para 3 that “According to the prosecution case it was on 27th
February, 1979 that the respondent obtained signatures from different payees in the acquittance roll but actually did not pay a single pie to any one of those payees.
Assuming that to be so, the alleged misappropriation on 27.2.1979 was not the subject-matter of the charge concerning misappropriation. Unless the prosecution was able to establish that the respondent had misappropriated the amount, prior to 26.2.1979, charge under Section 409 I.P.C., could not stand scrutiny. The High Court, therefore, rightly took note of this fact situation and came to the conclusion that if any shortage was found after 26.2.1979, the respondent may be liable to make good the shortage and there could be civil liability but he could not be convicted on the ground that he had misappropriated the amount prior to 26.2.1979. The prosecution miserably failed to establish that the respondent committed any misappropriation during the period 12.3.1977 to 26.2.1979. The High Court, therefore, acquitted the respondent and in our opinion, rightly”.
He further relied on a Judgment of Hon’ble Orissa High Court in “Okila
Luha vs. State of Orissa”, reported in 1984 CRI. L.J. 1828 wherein it was held that “Conviction could not be based merely on basis of an audit report which is of an inconclusive character”.
He also relied on a Judgment of Hon’ble Madras High Court in “Gnanasekaran vs. The State”, reported in 1984 CRI. L.J. NOC 149 (Madras) wherein it was held that “To bring home guilt of the offence of criminal breach of trust and embezzlement under Sec.477A and S.409 the prosecution was bound to establish that the property was 15 entrusted to the accused and that he had misappropriated it”.
He also relied on a Judgment of Hon’ble Apex Court in “Roshan Lal
Raina vs. State of Jammu and Kashmir”, reported in AIR 1983 Supreme
Court 631 wherein it was held that “Without proof of entrustment, there can be no question of the accused being found guilty of the offence under Section 409 of the Code. In the instant case, the accused was a tourist clerk in a Dak Bungalow and it was alleged that a sum of Rs.70.80 was collected by him from the tourists staying there and was misappropriated by him. However, it was not proved that the money was ever entrusted to him by the Choukidar who used to collect the money. It was held that the conviction of accused under Section 409 was illegal”.
He also relied on another Judgment of Hon’ble Apex court in “Binod
Kumar & others vs. State of Bihar & another”, reported in 2015 (1)
Criminal Court Cases 002 (S.C.) wherein it was held in para No.16 as follows:- “Section 406 I.P.C., prescribes punishment for criminal breach of trust as defined in Section 405 I.P.C. For the offence punishable under Section 406 I.P.C., prosecution must prove:
(i)that the accused was entrusted with property or with dominion over it and
(ii)that he (a) misappropriated it, or (b) converted it to his own use, or (c) used it, or (d) disposed of it.
The gist of the offence is misappropriation done in a dishonest manner. There are two distinct parts of the said offence. The first involves the fact of entrustment, wherein an obligation arises in relation to the property over which dominion or control is acquired. The second part deals with misappropriation which should be contrary to the terms of the obligation which is created”.
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He also relied on a Judgment of Hon’ble High Court in “Chita
Narasimha Prasad and another vs. Sub Inspector of Police,
CBI/SPE/Visakhapatnam”, reported in 2006 (1) ALT (Crl.) 165 (A.P.) wherein it was held that “Where there is no evidence against an accused, regarding conspiracy to commit the offences, he is entitled to benefit of doubt and acquittal”.
13. The learned Addl. P.P., argued that the trial Court has properly appreciated the material placed before it and rightly convicted the accused of the offences with which they are charged and there are no merits in the appeal, so the appeal may be dismissed.
14. Now, the points for determination in this appeal are:
1) Whether A.1 to A.14 conspired together and in pursuance of said conspiracy whether A.1, A.2 and A.12 misappropriated the amounts paid by the various building applicants and whether A.1 to A.11, A.13 and A.14 have created false accounts in the registers of the Municipal Corporation, Kakinada?
2) Whether the impugned conviction and sentence awarded against the appellants 1 and 2 herein for the offences under Secs.408, 409, 477-A and 120-B I.P.C., and against the remaining appellants for the offences under Sec.477-A and 120-B I.P.C., is sustainable?
3) Result of the appeal?
15. POINT Nos.1 and 2:-
As it is the specific case of the prosecution that A.1, A.2 and A.12 misappropriated the amounts of various building applicants having conspired with the other accused, the prosecution at the first instance has to prove that all the accused conspired together for misappropriating the amounts deposited by the various building applicants and accordingly A.1, A.2 and A.12 have created fake challans in the name of building applicants and they also created false accounts and thus A.1, A.2 and A.12 misappropriated the amounts.
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16. For the sake of ready reference, Section 405 I.P.C., which defines
Criminal breach of trust, Sec.408 I.P.C., which prescribes punishment for criminal breach of trust by clerk or servant, Sec.409 I.P.C., which prescribes punishment for criminal breach of trust by public servant, or by banker, merchant or agent, Sec.477-A I.P.C., which prescribes punishment for falsification of accounts and Sec.120-B I.P.C., which prescribes punishment of criminal conspiracy are mentioned below.
Sec.405 Criminal breach of trust:
Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, 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, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits “criminal breach of trust”.
Sec.408 Criminal breach of trust by clerk or servant:
Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may be extend to seven years, and shall also be liable to fine.
Sec.409 Criminal breach of trust by public servant, or by
banker, merchant or agent:
Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
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Sec.477-A Falsification of accounts:
Whoever, being a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant, willfully, and with intent to defraud, destroys, alters, mutilates or falsifies any (book, electronic record, paper, writing), valuable security or account which belongs to or is in the possession of his employer, or has been received by him for or on behalf of his employer, or willfully, and with intent to defraud, makes or abets the making of any false entry in, or omits or alters or abets the omission or alteration of any material particular from or in, any such (book, electronic record, paper, writing), valuable security or account, shall be punished with imprisonment of either description for a term which may extend to seven years or with fine, or with both.
Sec.120-B Punishment of criminal conspiracy:
1)Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
2)Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.
17. In order to establish the guilt of the accused for the offences under
Secs.408 and 409 I.P.C., the prosecution must prove that the accused were entrusted with the property or dominion over the property and they misappropriated it or converted it to their use or used it or disposed off.
18. The prosecution has examined as many as 82 witnesses and exhibited 72 documents whereas on behalf of the accused Exs.D.1 to D.23 are marked.
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19. P.W.1 Karanam Venkateswarlu, the then Municipal Commissioner,
Kakinada, is the first informant and it is he who gave report to the C.B.C.I.D.,
Hyderabad about the alleged offences whereas P.W.2 Ganti Nageswara Rao is the employee in Municipal Corporation, Kakinada. P.Ws.3 to 64 are the persons who submitted building applications seeking permission for construction of buildings on their own behalf or on behalf of their relatives.
P.Ws.65 to 69 are the private surveyors who are involved in preparing plans and in submitting the said plans in Municipal Corporation, Kakinada and if necessary to pay the necessary fee on behalf of the building applicants.
P.Ws.70 to 72 are the auditors who inspected the accounts of the Municipal
Corporation, Kakinada, for the relevant period. P.Ws.73 to 80 are the higher officials in the Municipal Administration whereas P.W.81 is the Investigating
Officer and P.W.82 is the successor of P.W.81 who filed charge sheet after obtaining sanction from the Government for prosecuting the accused.
20. The undisputed facts are that about 250 persons submitted building applications during 1999-2005 by enclosing challans towards the payment of necessary fee. The total challans enclosed to the said 250 building applications are 1170. There is also no dispute regarding the fact that the amounts covered by the said challans are not reflected in the accounts of the
Municipal Corporation, Kakinada and they are fake challans and they are not issued in the regular course of transaction in the Municipal Corporation,
Kakinada. There is also no dispute regarding the fact that the challan numbers mentioned in the said 1170 challans are tallying with the challans raised on the date mentioned on the said challans, but the amounts covered by the original challans and the fake challans are totally different. The purpose of obtaining the original challans is altogether different from the purpose mentioned in the fake challans. There is also no dispute regarding the fact that A.1 and A.2 worked as Shoroffs in the Treasury of the Municipal
Corporation, Kakinada and their duty is to collect the money paid through the challans for various purposes and to issue one copy of challan to the payee 20 after entering the amount mentioned in the challans. A.12 worked as attender in the Municipal Corporation, Kakinada, whereas A.3 to A.11, A.13 and A.14 worked in the Town Planning and Accounts Sections of Municipal Corporation,
Kakinada.
21. In order to find out whether any money was entrusted by any building applicant to A.1 and A.2 who are expected to collect money and issue counter foil of the challan to the concerned, the evidence of P.Ws.1 to 69 is relevant.
So, their evidence has to be scanned meticulously for determining the guilt or otherwise of the accused.
22. P.W.1 Karanam Venkateswarlu, who worked as Commissioner,
Municipal Corporation, Kakinada, from 1.8.2006 to 9.6.2007, is the first informant and he deposed that on 12.5.2005 the Town Planning Officer,
Kakinada, has submitted a report regarding the fake challans furnished by some of the building applicants and basing on the said report, the
Commissioner ordered for detailed enquiry and addressed letter to the District
Audit Officer, East Godavari, State Audit, East Godavari and on 15.5.2005 the
District Audit Officer submitted a report which is Ex.P.1 and five registers for the relevant period from 1999 to 2005 which are marked as Ex.P.2. He further deposed that out of 250 building applications 203 building applications were traced out and those are Ex.P.3 and they also traced out 1170 fake challan receipts which were not recorded in the miscellaneous registers and chitta registers and that Ex.P.4 is 40 chitta registers in respect of 1170 fake challans. The original 1170 receipts are marked as Ex.P.5 and the relevant miscellaneous registers are marked as Ex.P.6 and the consolidated registers with the fake challans are marked as Ex.P.7 and the report given by him to the Regional Deputy Director (Town & Country Planning), Rajamahendravaram is marked as Ex.P.8 and the building applications without any specific remarks approved by the then Municipal Commissioner (A.15) are marked as Ex.P.9 and the job chart of employees working in TPO wing Accounts Wing and 21
Manager through letter dt:22.8.2007 is marked as Ex.P.10 and the particulars of the staff during scam period is marked as Ex.P.11 and individual building register (B.A. register) belong to G1 to G4 of planning section is marked as
Ex.P.12 and a letter addressed by the then Commissioner, Municipal
Corporation, Kakinada to the Commissioner and Director of Municipal
Administration is marked as Ex.P.13.
P.W.1 is cross-examined at length by the counsel for the accused and in the cross-examination, P.W.1 deposed that the scam period is from 1.4.1999 to 31.3.2005 and as per rules, the audit will be commenced from the month of
June till March ending for each financial year and that no Departmental enquiry was conducted against A.1 to A.14 and no report was given by the
Commissioner against the accused to the local police and as per Ex.P.11, there are 17 persons worked in the accounts section, but the criminal action was initiated against only 4 persons, out of 15 persons worked in the Town
Planning Section, charge sheet was filed only against 9 persons. Even though 6 persons worked as Commissioners of Municipal Corporation, Kakinada, in the charge sheet only name of one commissioner is mentioned. He further deposed that as per the Municipal Administration, the audit will be completed every year. If the audit party find any lapse they will advise for rectification.
The auditor did not find out any lapse during 1999 to 2005. The certified copy of Municipal file dt:16.4.2005 is marked as Ex.D.1.
He further deposed that he cannot say whether any notice was issued by the Municipality to the building owners or beneficiaries who got benefited under fake challans without paying money to the Treasury and they did not give any report to the police against the said 250 building owners and no domestic enquiry was conducted against the said persons. He further deposed that he cannot say whether the fake and forged challans came from outside into the Municipality and he is not aware whether 9 applicants subsequently came and after confession about the fake challans paid regular amounts to the
Government Treasury and got approval. He admitted that the Government by issuing G.O. No.46, dt:18.1.2010 withdrawn the case against one set of 22 employees who also dealt with the issue relating to fake challans. The copy of the said G.O., is marked as Ex.D.2. He further deposed that against the first set of persons who dealt with the fake challans, criminal prosecution was launched and the case against second set of 28 persons was withdrawn by the
Government and that A.13 was shown in first set of persons. As per Ex.D.3, the action was initiated and the charge was dropped under Ex.D.2 G.O. and that in Ex.D.2 G.O., issued by the Government it was observed that it is only by confusion in understanding the newly introduced challans so charge was dropped. He further deposed that the section heads of Town Planning,
Revenue and Accounts Section were not made as accused. He admitted that the applications are to be submitted through licensed municipal surveyor and the applications shall contain the signature of the party and the licensed surveyor and at the time of submitting of applications, the surveyor will mention different head of accounts into which the building fees is to be remitted and the challan will be prepared in triplicate and the Town Planning
Section will not take the challan amount by cash and the amount will be remitted to Municipal Treasury (Sharoff). Out of three copies of challans, one will be given to the party, other will be go to the Town Planning Section and another will be go to the Accounts Section and the payment of challan is total responsibility of the applicant. He further deposed that as per column No.20 of technical report, the payment particulars will be checked by the Town
Planning Field Staff and the field staff were not shown as accused in the present case, except the T.P.O. He further deposed that there is no variation in the Chitta and it refects the true amount of challan and that the sharoff will collect all the amounts from all the sections and Chitta will be maintained by sharoff and at the end of the day, the chitta will be closed and amount will be sent to the bank on the next day and there are no instances of variation in the chitta amount during the said period. He admitted that the genuine challans are having full stamp on third copy and both the first and second copies are having half stamp and that the fake challans are containing full stamp and that he cannot say whether 1170 fake challans contain the signatures of the 23 accused and he did not compare the signatures on the fake challan and genuine challan and that they did not send the fake challans to the expert to ascertain forgery. He further deposed that most of the building applications are filed by the private surveyors and that the building application register
Ex.P.12 does not contain any column to inspect the details of payments made by the individuals. He further deposed that he did not issue notice to the building owners whose names were figured in the fake challans.
23. P.W.2 Ganti Nageswara rao, who worked as Senior Assistant in
Municipal Corporation, Kakinada, deposed that during 1999-2005 there was misappropriation of municipal funds nearly Rs.26,68,000/- in Town Planning
Section. In the cross-examination, he admitted that he did not verify the record relating to the misappropriation of Rs.26,68,000/-. He admitted that
Municipality traced 9 persons and recollected the difference amount and approved the plans.
24. P.Ws.3 to 64 are the persons who applied the building applications either directly or through the licensed surveyors on their own behalf or on behalf of their relatives. They deposed that they submitted building applications by paying necessary fee. Some of them deposed that they paid the amounts to A.12 and asked him for challans and later A.12 handed over the receipts and original challans to them and in the cross-examination, they deposed that they have no document to show that they paid any amount to
A.12. Through P.Ws.3 to 64, Exs.P.14 to 67 are marked and they are the copies of approved plans.
25. P.Ws.65 to 69 are the private surveyors, but they obtained licence from the Municipal Corporation, Kakinada, for preparing plans for construction of any building and for submitting the same in the Municipal Corporation for sanction on behalf of the concerned persons. P.Ws.65, 66 and 68 deposed that they used to pay the amount in Municipal Treasury on behalf of the 24 parties and they used to hand over the challan copies to them. Whereas
P.W.67 deposed that he used to guide the parties to pay the relevant fees in the Municipal Treasury. P.W.69 deposed that he used to prepare plan for building construction and he came to know about the misappropriation of
Rs.27,00,000/- in the Municipal Corporation, Kakinada.
26. P.W.70 D.Devadas George Muller, who worked as Assistant Audit Officer at State Audit Department, Kakinada, from 8.7.2004 to 21.4.2006 deposed that in the month of January, 2005, he conducted audit in the office of
Municipal Corporation, Kakinada, for the period from 1999 to 2004 and noticed fake challans and they checked them with chittas and challans and the amounts collected under challans were not remitted to Government account and that he submitted Ex.P.2 audit reports.
In the cross-examination, he deposed that during the time of his audit, they noticed that the general audit was conducted and there were no queries or suggestions pointed out in the general audit from 1999 to 2004 and the building applications seeking permission for construction will be around 600 to 700 per year and the total challans received during 1999-2004 may be around 15,000 to 20,000 and each challan has to be checked during the course of audit. He further deposed that the applications and challans will be prepared by building owners and they will be submitted in the office through the surveyors and remitting the amount is the duty of the building applicant or owner and that in their audit, they did not point out misappropriation in Town
Planning Section. He further deposed that the sharoff and accountant will sign on hundreds of challans every day and all the fake challans are having similar number with that of genuine challans and the fake challans are not having counter foils and they might have floated from outside and the audit department will not fix the responsibility without verifying the job chart.
Some of the building applications along with the fake and genuine challans are marked as Exs.D.7 to D.17.
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27. P.W.71 K.Neelakanta Reddy, who worked as District Audit Officer in the
State Audit Department, Kakinada, deposed that P.W.70 conducted the audit in the office of Municipal Corporation, Kakinada and submitted a report and he forwarded the same to the Head Office, Hyderabad.
28. P.W.72 P.Srinivasa Rao is the Successor of P.W.71 and he deposed about handing over of the original audit report to the C.I.D. Police during the investigation.
29. P.W.73 R.Govinda Raju, who is working as Junior Assistant, P.W.74 who is working as Revenue Inspector, P.W.75 T.Adiseshayya, who is working as
Senior Assistant, Engineering Section, P.W.76 J.Veerabhadra Rao, who worked as Accountant, P.W.77 K.Sri Sirish Kumar, who working as Superintendent,
Engineering Section, P.W.78 D.Jayakar, who worked as in-charge
Commissioner during June, 2007 to August, 2007, P.W.79 Alla Siva Koti
Prasad, who worked as Commissioner, from 7.8.2007 to 22.7.2008 and
P.W.80 Addepalli Narayana Raju, who worked as Regional Deputy Director,
Town and Country Planning of Municipal Corporation, Kakinada, deposed about the procedure for issuing challans and also about the fact that they came to know about the alleged misappropriation.
30. P.W.81 Ch.Syamala Rao, who worked as Inspector, RCIU, CID,
Rajamahendravaram, is the Investigating Officer and he deposed about the investigation conducted by him. The original F.I.R., is marked as Ex.P.68, the report of P.W.1 is marked as Ex.P.69 and the memo of Addl. D.G., C.I.D., authorizing him to conduct investigation is marked as Ex.P.70.
P.W.81 in his cross-examination deposed that there are seven sections in the Municipal Administration and the said sections are located in different buildings in the same compound and 120 witnesses examined by him did not state that they entrusted money to A.1 and A.2 individually and specifically and that as per their F.I.R., in the beginning only 8 accused were mentioned 26 and that the case was registered at the instance of the then Joint Collector Mr.
Dana Kishore, who is full additional charge of Municipal Commissioner,
Kakinada. He further deposed that there are about 1170 fake and forged challans and he seized them in this case, but they were not seized under a cover of mahajar and that the writings of the accused on the said 1170 fake and forged challans were not established. The genuine challans were raised with the same number of 1170 challans and he volunteers that the genuine challans numbers were used on fake challans and he did not investigate whether the purpose was served under the genuine challans and he did not send the fake challans and the genuine challans for comparison to F.S.L., and he did not obtain the specimen hand writing of all the accused and that the counter foils pertaining to 1170 fake challans were not seized by him from any section and he did not seize any documents from A.13 and no documents were seized from any of the accused and he did not seize the incriminating material from the possession of the accused individually. The building applicants are the beneficiaries who got their plan for approval and he does not know whether some of the building applicants repaid the amounts to the
Municipality by admitting their mistakes. He further deposed that one may not identify the genuine and fake challans with naked eye and he has not seized any seals from the Municipality and he did not refer any seal to the expert to find out whether the seals are genuine or not.
31. P.W.82 P.Murali Krishna Reddy, who is the successor of P.W.81, deposed that after obtaining sanction from the Government for prosecuting
A.1 to A.14, he filed charge sheet. The sanction order is marked as Ex.P.71 and the sanction order pertaining to the deceased A.15 is marked as Ex.P.72.
In the cross-examination, he deposed that the name of A.12 was not shown in the misappropriation column page No.12 and 13 of the charge sheet.
32. The genuine 1170 challans are marked as Ex.P.5. The said challans were obtained by various persons in the regular course of transaction for 27 various purposes. In some of the challans, the amount is in thousands and lakhs. Original Challan No.7396 dt:31.8.2004 was obtained by M.Srinivas, marketing contractor, Kakinada, towards market kisthi for the month of
August, 2004, for a sum of Rs.3,03,574/- whereas original challan No.7397 was obtained by one D.Madhavi Devi towards change of the name repairs to the tap in her house for a sum of Rs.200/-. I have verified the chitta book for the relevant period. As per the said chitta, on 31.8.2004, a total amount of
Rs.6,49,940/- was collected by the Treasury in the Municipality under challan
Nos.7332 to 7408. Under the last entry on the said date the sharoff, cashier, accountant and manager signed. On the next page, there is abstract for the month of August, 2004 and as per the said extract, a total amount of
Rs.34,28,470/- was collected under the challans and manager signed on the said page. The amount covered by challan No.7396 is clearly entered in the said chitta so also the amount covered by the challan old No.7397. So, as per the verification of the said book and also other chitta books, it is clear that the persons who are entrusted the duty of collecting money under the challans are maintaining the chitta in the regular course of transaction and every day sharoff, cashier, manager and accountant used to sign on the chitta and every month abstract is prepared showing the monthly account and that the manager of accounts section is signing on the said abstract. So, as per the said chitta book, it is clear that the persons who are collecting the amounts are entering the amounts in the chitta and duly maintaining the chitta register.
It is further clear that the amounts under the said challans are being paid by different persons for different purposes.
33. I have verified the building applications 609/2004 which contain 5 fake challans and as per the said file, it is clear that the said application is filed by one K.Bhagavan on 1.9.2004 and in the said application, he has mentioned that under challan No.7398, he paid a sum of Rs.840/-. Five fake challans bearing Nos.7394 to 7398 are enclosed to the said building applications.
Challan No.7394 is for a sum of Rs.10/- towards building application fee, 28 challan No.7395 for a sum of Rs.1,270/- towards building plan, challan
No.7396 is for a sum of Rs.600/- towards material storage charge and challan
No.7397 is for a sum of Rs.600/- for tree guard deposit, challan No.7398 is for a sum of Rs.840/- towards development charges and all the said challans are
dated 31.8.2004 and somebody signed on the said challans in the column
meant for the signature of the commissioner.
34. On verification of the chitta dt:31.8.2004, it is clear that the challan
No.7394 is for a sum of Rs.70/- towards TT, challan No.7395 is for a sum of
Rs.100/- towards TT, challan No.7397 is for a sum of Rs.3,03,074/- towards building plan and challan No.7398 is for a sum of Rs.20/- towards NE. So, the amount and purpose mentioned in the fake challans bearing Nos.7394 to 7398 is totally different from the amount and purposes mentioned in the original challans obtained by the several persons.
35. A careful comparison of original challans with the said fake challans makes clear that the fake challans enclosed to the said building applications are duplicate copies and they contain the seal of Municipal Office, Kakinada, but whereas on the genuine challans, the original copy contains only half of the seal of the Municipal Office, Kakinada. The signatures and the writings on the original challans dt:31.8.2004 are totally different with the signatures and writings of the purported staff of the Municipal Corporation, Kakinada, on the fake challans. As the amounts covered by some of the original challans is much more than the relevant fake challans, it is very clear that on the fake challans, the persons who floated the said challans, mentioned the challan numbers by finding out what are the challan numbers that are being issued on the relevant date. So, the challan numbers mentioned on the fake challans are having corresponding original challans on the relevant date. So, just by looking on the fake challans, it is not possible to find out that they are fake challans as they contain the relevant challan number issued on the particular date. So, in the circumstances, it is clear that the persons who floated the 29 said fake challans are even not aware of the actual amounts covered by the corresponding original challans.
36. The floating of the fake challans was first noticed by a building inspector who inspected some of the buildings on 11.5.2005. On 11.5.2005 the said building inspector submitted a report to the then Municipal Commissioner,
Kakinada, stating that he has verified certain buildings which were constructed after obtaining sanctioned plans and found some deviations to the approved plans and some of the plans were given to the applicants by the then
Commissioner without the specific recommendation by the T.P.O. In the said report, he has stated about the deviation committed by 7 persons who obtained sanctioned plan. In the said report, he also stated that the challans enclosed with the plan submitting by the applicant at the time of building plan approval were found fraud and fake and that the owner has mislead the
Municipality by putting financial loss. So, he stated that the drastic steps may be initiated against the buildings regarding fake challans, deviations and unauthorized constructions. In another report dt:16.4.2005 submitted by the building inspector, he stated that the applicant or the licensed surveyor has willfully made forgery of the challans. So, it is the concerned building inspector who after verification of the certain buildings that are being constructed after obtaining sanctioned plan found that the then Commissioner,
Municipal Corporation has sanctioned the plans even without specific remarks of the building inspector and without verifying the challans enclosed by the said applicants. The certified copy of the report of the Senior Building
Inspector and remarks of the Commissioner is marked as Ex.D.1 during the cross-examination of P.W.1. So, later the Municipal Corporation, Kakinada, having entertained a suspicion that several building applicants might have furnished fake challans, conducted a detailed audit and in the detailed audit conducted by P.W.70, he found that 1170 fake challans are floated in
Municipal Corporation, Kakinada, during 1999 to 2004.
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37. It is pertinent to note that as per the evidence of P.W.70, who conducted the audit during the relevant time, 15,000 to 20,000 challans were raised every year and every year 600 to 700 building applications were submitted in the Municipal Corporation, Kakinada. So, during the relevant period spreading for a period of 5 years, there might be 3500 building applicants who submitted their applications by enclosing necessary challans to the said building applications. Out of them only 250 persons enclosed the fake challans. At the initial point of time, the suspicion was only against the private surveyors who assisted the owners of the building in preparing the plan and getting sanction of the said plan. It is not the case of the prosecution that any other fake challans are found relating to any other activity in the Municipal
Corporation. Daily challans are being issued by the account section for various purposes by collecting various amounts. But only fake challans are enclosed to the building applications. So, the Investigating Officer has to make efforts to find out whether the said 250 persons engaged a common surveyor or a group of identical surveyors for submitting plans in the Municipal Corporation,
Kakinada, along with the challans. One cannot expect that an individual building applicant would venture to enclose fake challans along with his building application. Somebody who is well versed with the day to day activity in the accounts section and also in the building section of the Municipal
Corporation only can venture to float the fake challans while submitting the building applications. The private surveyors like P.Ws.65 to 69 will be having knowledge about making of payment under the challans and obtaining copy of challan and the relevant challan numbers that are being given on a particular date. If really, A.1 and A.2 who are dealing with issuing of challan after collecting the amounts from the persons who paid the amount in the cash counter, they might have misappropriated the amounts relating to the other challans obtained by the several persons, but the floating of fake challans was made only while submitting building applications. As per the evidence of some of the prosecution witnesses, it is clear that after the Municipal Corporation noticed about the floating of fake challans, it issued notices to the some of the 31 building owners who obtained sanctioned plan by enclosing fake challans and collected the amounts from them.
38. The prosecution has not examined even a single person who directly paid the amount either to A.1 or A.2 who are working as sharoffs in the account section of the Municipal Corporation, Kakinada, at the relevant time.
The prosecution in order to establish the charge against the accused for the offence under Sec.408 or 409 I.P.C., has to prove that any person whose name is mentioned in 1170 fake challans has paid any amount directly to A.1 or A.2 for obtaining challans. The Investigating Officer has not recovered any incriminating material from A.1 and A.2 for establishing that they prepared the fake challans and they put the stamps of the Municipal Corporation, Kakinada, on the said challans. When A.1 and A.2 issued number of challans every day and their writings are available on the original challans, the Investigating
Officer is expected to send the original challans and fake challans along with the specimen hand writings of A.1 and A.2 to the hand writing expert for determining whether the fake challans contain the hand writings of A.1 and
A.2, but the Investigating Officer has not taken any such steps. Whereas the witnesses examined by the prosecution did not state that they paid any amount directly to A.1 and A.2 and obtained the challans. The Investigating
Officer was also not able to seize the fake seals of the Municipal Corporation,
Kakinada, which are affixed on the fake challans. As per the material available on record, it is clear that A.1 and A.2 have properly maintained the chitta book and they issued the challans every day in regular course of transaction. The
M.R. books are also being maintained in the regular course of transaction.
The building inspectors at the time of granting sanction are expected to verify the amounts covered by the challans which are enclosed along with the building applications and to find out whether the said amounts are reflected in the chitta and M.R. books. Had the said 250 applications are carefully scrutinized by the concerned building inspector before recommending the sanction certainly they would have noticed that the amounts covered by the 32 fake challans which are enclosed to the building applications are not reflected in the chitta and M.R. registers. But the concerned building inspectors have not verified the same and so, even though 1170 fake challans are floated for a period of 5 years, the same was not detected by the concerned staff. So, it can be said that there was negligence on the part of the concerned building inspectors who are expected to verify the genuineness of the challans enclosed to the building applications. But the building inspectors who processed the said building applications are not the accused in the present case.
39. As per the version of the prosecution, the then Commissioner who was figured as A.15 has approved more than 50 building applications even without any specific remarks made by the concerned Town Planning Officer, but however, even before the filing of charge sheet, A.15 died, so, the case against him was abated. So, it appears that the then Municipal Commissioner and the persons who are concerned with the processing of the building applications are not deligent in issuing sanctioned plans which are furnished by 250 building applicants. After finding that 250 building applicants have furnished fake challans, the Municipal Commissioner is expected to issue notice to the said persons to collect the amounts from them and to deposit the same in the Treasury. It appears that the Municipal Commissioner has collected some amounts from some persons but the details are not furnished by the prosecution. The persons who benefited by floating the fake challans are the building applicants. If necessary notices are issued by the building applicants and the amounts are collected from them, they would come out with a true version as to whom they entrusted the matter and to whom they paid the amounts, but no such investigation is made by the Investigating
Officer.
40. It is pertinent to note that even though regular audits were conducted from 1999 to 2004, the auditors who conducted the audits have not traced 33 any fake challans which are enclosed to the building applications. The auditors during regular course of transaction verified the original challans, chitta and M.R. books and found that they are properly maintained. Had the auditors who conducted regular audit verified some of the building applications to tally the amounts covered by the challans obtained by the said building applications with the chitta and M.R. books, they ought to have noticed that some of the challans are fake. But the auditors also did not make any such efforts. Only during detailed audit conducted by P.W.70 and his team they verified each and every challan and they found 1170 fake challans are floated.
As A.1 and A.2 are dealing with the cash counter and as the other accused are concerned with the building section, they are implicated in this case even though no knowledge is imputed to them about the floating of the fake challans.
41. It is pertinent to note that during the relevant period, several persons also worked in the accounts section and building section and charges are framed against 28 other persons who worked in the relevant sections during the relevant period. But the Government has issued Ex.D.2 G.O.,
dt:18.01.2010 for dropping the further action against said 28 persons. It is
pertinent to note that in the said G.O., the name of A.13 herein is also mentioned in serial No.20, but even though the Government have dropped the further action against A.13, charge sheet was filed against him and he was convicted by the trial Court. In Ex.D.2 G.O., the Government have stated that it examined the written statements and defense of the charged officers and observed that most of them are not directly related to misappropriation and there was confusion in understanding the newly introduced challan system, and therefore decided to drop further action against the charged officers by giving benefit of doubt. So, the Government have dropped further action against some of the charged officers by giving benefit of doubt. But no such
G.O., was issued in favour of the accused in C.C.1/2020. As per the said G.O., it is clear that the Government is of the opinion that there was confusion in 34 understanding the newly introduced challan system by the staff members of the Municipal Corporation, Kakinada.
42. So, considering all the circumstances, I am of the opinion that the prosecution has miserably failed to establish that A.1 and A.2 have collected any amount covered by the fake challans from the relevant persons and they misappropriated the said amount without remitting the same into the
Treasury. The prosecution also failed to establish that any of the accused have created false entries in the account books as the account books, chitta and M.R. books are dealing with the original challans and they are being maintained in the regular course of transaction and every day the concerned persons used to sign in the said chitta register. The prosecution also failed to establish that there was any conspiracy among the accused in order to misappropriate the amounts that were paid by some of the building applicants.
43. The ratio laid down by the various decisions relied on by the learned counsel for the accused which are referred supra are applicable to the facts of the present case. In the instant case also the prosecution has miserably failed to explain that any amount was entrusted either to A.1 and A.2 or any other accused i.e., A.12 and they misappropriated the said amount. No doubt there is a lapse on the part of some of the employees in Municipal Corporation,
Kakinada, in checking the fake challans enclosed to some of the building applications but slackness on the part of the employees in Municipal
Corporation cannot be a ground for convicting the accused in the present case of the offences with which they are charged. It is for the Municipal
Corporation, Kakinada, to take necessary departmental action against the persons who are expected to verify each and every building application and the challans enclosed to the said building applications. But simply because A.1 and A.2 are concerned with the cash transaction and simply because the other accused are working in the building department, they cannot be convicted of the offences with which they are charged. The prosecution has miserably 35 failed to establish that any of the fake challans contain the hand writings and signatures of A.1 and A.2 and the other accused are having knowledge of the floating of the said fake challans along with the building applications. So, in the circumstances, I hold that the prosecution has miserably failed to establish the guilt of A.1, A.2 and A.12 of the offences under Secs.408 and 409 I.P.C.
The prosecution also miserably failed to establish the guilt of the accused
Nos.1 to 11, 13 and 14 of the offence under Sec.477-A I.P.C., and A.1 to A.14 of the offence under Sec.120-B I.P.C., r/w Sec.408, 409 and 477-A I.P.C. So, the appellants are entitled to be acquitted of the said offences with which they are charged.
44. A perusal of impugned Judgment makes clear that the learned
Magistrate has not properly appreciated the material placed before him and he
has not considered the fact that the prosecution has failed to establish that any amount is directly paid to A.1 and A.2 and it is they who created the fake challans. So, in the circumstances, I hold that the impugned conviction and sentence passed against A.1 to A.3, A.6 to A.11, A.13 and A.14 is liable to be set aside. So, I hold that the conviction and sentence awarded against the appellants herein for the offences U/s 408, 409, 477-A and 120-B I.P.C., is not sustainable. So, the point Nos.1 and 2 are answered in favour of the appellants/accused Nos.1 to 3, 6 to 11, 13 and 14.
45. POINT No.3:
In the result, the appeal is allowed by setting aside the conviction and sentence passed against the accused Nos.1 and 2 of the offences under
Secs.408, 409, 477-A and 120-B r/w Secs.408, 409 and 477-A I.P.C., and accused Nos.3, 6 to 11, 13 and 14 of the offences under Secs.477-A and 120-
B r/w Secs.408, 409 and 477-A I.P.C., vide calendar and Judgment dated 31.05.2016 in C.C.No.1/2010 on the file of II Additional Judicial Magistrate of
First Class, Kakinada. Accordingly, the accused Nos.1 and 2 are acquitted of
the offences under Secs.408, 409, 477-A and 120-B r/w Secs.408, 409 and 36 477-A I.P.C., and accused Nos.3, 6 to 11, 13 and 14 are acquitted of the offences under Secs.477-A and 120-B r/w Secs.408, 409 and 477-A I.P.C.
Fine amount, paid by the appellants / accused Nos.1 to 3, 6 to 11, 13 and 14 shall be refunded to them after expiry of revision time.
Dictated to the Stenographer (Grade -I), transcribed by her, corrected
and pronounced by me in open Court, this the 17 th day of March, 2020.
Sd/- G.Gopichand,
III ADDL. SESSIONS JUDGE,
KAKINADA.
APPENDIX OF EVIDENCE
No oral or documentary evidence is adduced on either side
Sd/- G.Gopichand,
III A.S.J.
1) Copy to the Registrar (Vigilance) High Court of Andhra Pradesh at Amaravathi, Nelapdu, Guntur District.
2) Copy to the District Court, Rajamahendravaram.
3) Copy to the II Addl. J.F.C Magistrate, Kakinada.
FAIR JUDGMENT IN
C.A.301/2016, DT.17.03.2020.