KAILASH KUMAR SANWATIA versus STATE OF BIHAR AND ANR.

Citation: [2003] SUPP. 3 S.C.R. 314 · Decided: 02-09-2003 · Supreme Court of India · Bench: DORAISWAMY RAJU · Disposal: Dismissed

Judgment (excerpt)

A 
B 
KAILASH KUMAR SANWATIA 
v. 
STATE OF BIHAR AND ANR. 
SEPTEMBER 2, 2003 
[DORAISWAMY RAJU AND ARIJIT PASA Y AT, JJ.] 
Penal Code, I 86~ection 405 ands. 409 r/w s.34-Money delivered 
at the cash counter of bank for preparing bank drafts-Money stolen and 
C charges of criminal breach of trust framed against the bank officials-Trial 
Court convicted the Head Cashier and person responsible for counting the 
money-First Appellate Court and High Court acquitted them for lack of 
cogent and credible evidence on point of entrustment-On appeal Held, 
even if entrustment of money was proved it needs to be decided whether 
D there was any dishonest misappropriation, conversion, use or disposal of 
the property-Ingredients of the offence are not present if person entrusted 
with money is incapacitated from performing the job due to a fortuitous or 
intervening situation-Acquittal upheld. 
E 
The appellant carried a sum of Rs. 1,50,200 to a bank for taking 
F 
demand drafts. The amount was handed over to the bank officials. The 
peon of the bank later on informed the appellant that the money 
handed over by him was missing from the cash counter. Charges under 
Section 409 read with Section 34 IPC were framed against all the 
officials concerned; they pleaded innocence. Trial Court convicted the 
Head Cashier and the person responsible for counting the money and 
sentenced them to undergo imprisonment for two years each. The First 
Appellate Court and the High Court acquitted them for lack of 
G credible and cogent evidence, but recorded a finding as regards 
handing over and missing of the money. Hence this appeal. 
The appellant contended that whatever be the manner of 
entrustment if the factum of entrustment is established then the 
H manner of entrustment is not relevant. 
314 
KAILASH KUMAR SANWATIA v. STATE 
315 
Dismissing the appeal, the Court 
HELD : 1. The basic requirement to bring home the accusations 
under Section 405 IPC are the requirements to prove con-jointly 
entrustment and whether the accused was actuated by the dishonest 
intention or not, misappropriated it or converted it to his own use to 
the detriment of the persons who entrusted it. The question of intention 
is not matter of direct proof; certain broad tests are envisaged which 
would generally afford useful guidance in deciding whether in a 
A 
B 
particular case the accused had mens rea for the crime. (319-D) 
C 
2. Section 409 IPC deals with criminal breach of trust by public 
servant, or by banker, merchant or agent and in order to bring it in 
application, entrustment has to be proved. Conviction is sustainable if 
two ingredients are to be proved, which are : (i) the accused, a public D 
servant, or banker or agent was entrusted with property of which he 
is duty bound to account for; and (ii) the accused has committed 
criminal breach of trust. (318-F, G] 
3. In the instant case, even if it was proved that the money was E 
entrusted, it needs to be decided as to whether the accused had 
dishonestly misappropriated or converted the same to their own use 
or dishonestly used or disposed of that property. The money was 
admittedly taken away from the cash counter and it is not the case of F 
the prosecution that the same was given to the accused to obtain bank 
drafts and they took it away. The bank drafts could not be prepared 
due to an intervening situation as somebody stole the cash. The 
ingredients necessary to constitute criminal breach of trust are absent, 
even if there is loss of money. If a person entrusted with money is G 
incapacitated from carrying out the job due to a fortuitous or 
intervening sitution that will not bring in the applicability of Section 
405 IPC or Section 409 IPC, unless misappropriation, or conversion 
to personal use or disposal of property is e~tablished. The courts. below 
did not look at the issues from these vitally relevant angles due to which H 
316 
SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R. 
A the accused persons cannot be convicted under Section 409 IPC. 
(319-F-H, [320-A, BJ 
B 
c 
D 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 
904 of 1996. 
From the Judgment and Order dated 19.3.96 of the Patna High Court 
in Crl. R. No. 20 of 1988. 
S. B. Upadhyay, R.R. Dubey and Santosh Mishra for the Appellant. 
Anil Kumar Jha for the Respondent No. 1. 
G.S. Chatterjee (NP) for the Respondent No. 2. 
The Judgment of the Court was delivered by 
ARIJIT PASAYA T, J. : The appeal is at the instance of 

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