N. RAGHAVENDER versus STATE OF ANDHRA PRADESH, CBI

Citation: [2021] 12 S.C.R. 57 · Decided: 13-12-2021 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Disposed off

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Judgment (excerpt)

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[2021] 12 S.C.R. 57
57
N. RAGHAVENDER
v.
STATE OF ANDHRA PRADESH, CBI
(Criminal Appeal No. 5 of 2010)
DECEMBER 13, 2021
[N. V. RAMANA, CJI, SURYA KANT AND
HIMA KOHLI, JJ.]
Prevention of Corruption Act, 1988 – s.13(2) r/w s.13(1)(d)
– Penal Code, 1860 – ss.409, 420, 477A – Criminal breach of trust
by public servant or Banker – Strong suspicion short of conclusive
proof – Case of prosecution that accused no.3-brother-in-law of
appellant-Branch Manager opened an account of the Academy of
which he was Treasurer – Allegedly, appellant and the other co-
accused also working in the Bank conspired with accused no.3 by
allowing withdrawal of amounts from the said account, despite
insufficient funds – Appellant was further accused of pre-maturely
encashing two FDRs belonging to a customer which amount was
transferred to the aforesaid account – Co-accused acquitted by
Trial Court – Appellant held guilty concurrently – On appeal, held:
Material on record does not disclose conspiracy between the accused
persons – Further, there were sufficient funds in the account for
passing the three cheques in question – Mere issuance of the
aforesaid loose cheques, not sufficient to conclude that the appellant
acted unlawfully or committed criminal misconduct – There is also
serious dispute on the factum of whether or not the customer had
sought the premature withdrawal and subsequent transfer of the
proceeds of FDRs to the account of Academy – He was the best
person to throw light on the said fact, but he was not examined
which is materially fatal to the prosecution’s case – On facts, no
financial loss was caused to the Bank/customer – Direct and relevant
evidence being withheld, benefit of doubt extended to appellant –
Prosecution failed to prove charges u/ss.409, 420 & 477A, IPC
against the appellant beyond reasonable doubt – Conviction u/
s.13(2) r/w s.13(1)(d), PC Act also cannot be sustained.
Criminal Law – Mixed questions of law and facts – Concurrent
view taken by Courts below – Scope of interference – Discussed.
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SUPREME COURT REPORTS
[2021] 12 S.C.R.
Penal Code, 1860 – ss.409, 420 and 477A – Charges under
– Necessary ingredients to prove – Discussed.
Criminal Law – Mens rea – Held: Crucial word used in s.405,
IPC is ‘dishonestly’ – It pre-supposes the existence of mens rea –
Penal Code, 1860 – s.405.
Penal Code, 1860 – s.405 – ‘Entrustment of property’ –
Burden to prove – Initial burden; shifting of burden – Discussed.
Banking/Banks – Conventional bank transactions –
Relationship between the Bank and the Customer – Discussed.
Criminal Law – Standard of proof – Domestic enquiry vis-à-
vis criminal charge – Discussed.
Words & Phrases– ‘intent to defraud’ u/s.477-A – Elements
of – Discussed – Penal Code, 1860 – s.477-A.
Disposing of the appeal, the Court
1. Section 409 IPC pertains to criminal breach of trust by a
public servant or a banker, in respect of the property entrusted
to him. The onus is on the prosecution to prove that the accused,
a public servant or a banker was entrusted with the property
which he is duly bound to account for and that he has committed
criminal breach of trust. The entrustment of public property and
dishonest misappropriation or use thereof in the manner
illustrated under Section 405 are a sine qua non for making an
offence punishable under Section 409 IPC. The crucial word used
in Section 405 IPC is ‘dishonestly’ and therefore, it pre-supposes
the existence of mens rea. The second significant expression is
‘mis-appropriates’ which means improperly setting apart for ones
use and to the exclusion of the owner. Unless it is proved that
the accused, a public servant or a banker etc. was ‘entrusted’
with the property which he is duty bound to account for and that
such a person has committed criminal breach of trust, Section
409 IPC may not be attracted. ‘Entrustment of property’ is a wide
and generic expression. While the initial onus lies on the
prosecution to show that the property in question was ‘entrusted’
to the accused, it is not necessary to prove further, the actual
mode of entrustment of the property or misappropriation thereof.
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Where the ‘entrustment’ is admitted by the accused or has been
established by the prosecution, the burden then shifts on the
accused to prove that the obligation vis-aÌ-vis the entrusted
property was carried out in a legally and contractually acceptable
manner. [Paras 41-43, 45][81-D-F; 82-C-D, G-H; 83-A-B]
Sadupati Nage

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