P. J. Sebastian v. State of Kerala

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE K. BABU ``` ``` WEDNESDAY, THE 29[TH] DAY OF JUNE 2022 / 8TH ASHADHA, 1944 ``` ``` CRL.MC NO. 2854 OF 2022 ``` ``` AGAINST THE ORDER/JUDGMENT IN CC 344/2015 OF JUDICIAL FIRST CLASS MAGISTRATE COURT, DEVIKULAM ``` ## **`PETITIONER/S:`** ``` P.J.SEBASTIAN AGED 71 YEARS PANACHINANICKAL HOUSE, THALUMKANDOMKARA, MANKULAM.P.O., IDUKKI., PIN – 685561 ``` ``` BY ADVS. SOORAJ T.ELENJICKAL RENOY VINCENT ASWIN KUMAR M J HELEN P.A. ARUN ROY SHAHIR SHOWKATH ALI ``` ## **`RESPONDENT/S:`** ``` STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, PIN – 682031 ``` ``` BY ADV PUBLIC PROSECUTOR ``` ## **`OTHER PRESENT:`** ``` SMT REKHA S, SR PP ``` ``` THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 29.06.2022, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ``` ``` CRL.MC NO. 2854 OF 2022 ``` ``` 2 ``` ## **K. BABU, J. ==================== Crl. M.C. No. 2854 of 2022** **====================** Dated this the 29[th] day of June, 2022 ## **O R D E R** The prayer in this Crl.M.C. filed under Section 482 of the Code of Criminal Procedure is the following; “ This Hon’ble Court may be pleased to quash AnnexureIII Final Report in Crime No.VC 13/2009 of Vigilance, Idukki, presently pending as C.C. No. 344/2015 on the files of the Judicial First Class Magistrate Court Devikulam and all its consequent proceedings as abuse of process of law and to secure the ends of justice. ” 2. The petitioner stands chargesheeted as accused No. 2 in CC No. 344/2015 on the file of the Judicial First Class Magistrate Court, Devikulam alleging offences punishable under Sections 409, 420, 465, 468, 471 and 477(A) read with Sections 34 and 120(B) of the Indian Penal Code, 1860. 3. Accused No.1 in this case died and therefore, the charges against him stood abated. 4. The petitioner was the President of the Service ``` CRL.MC NO. 2854 OF 2022 ``` ``` 3 ``` Co-operative Bank, Mankulam during the period from 1993 to 2002. Accused No. 1 was the Secretary-cumAccountant of the Service Co-operative Bank. During the tenure of the petitioner, a petition was moved by the Joint Registrar of Co-operative Societies (General) Idukki to the Superintendent of Police, Idukki seeking investigation in the anomalies stated to have been brought out in the audit of the Service Co-operative Bank, Mankulam during the year 1999 to 2000. Consequently, Crime Nos. 187/2002, 202/2004 and 43/2005 were registered at Munnar Police Station. Crime No. 202/2004 formed the foundation of the final report under challenge in this case. 5. The matter was referred to the Vigilance and Anti Corruption Bureau which registered VC No. 13/2009 of VACB, Idukki. After completing the investigation, factual report alleging offences including offences coming under the PC Act, 1988 was filed before the Director of Vigilance. However, sanction was not accorded to prosecute accused No. 1 as provided in Section 19 of the PC Act, 1988. Therefore, the VACB submitted final report ``` CRL.MC NO. 2854 OF 2022 ``` ``` 4 ``` alleging offences punishable under IPC against the petitioner and the other accused before the Judicial First Class Magistrate’s Court, Devikulam. 6. The prosecution alleged that Sri. Shylajan (Accused No.1) the then Secretary-cum-Accountant of the Service Co-operative Bank, Mankulam and the petitioner, who was the President of the Bank jointly abused their official position as a bank employee and the President respectively of the bank misappropriated an amount of Rs. 3,00,427/- with a fraudulent and dishonest intention and thereby cheated the bank. It is further alleged that the petitioner and the other accused misappropriated Rs. 3,00,427/- being the sale proceeds of black pepper sold to one Sri. V.G. Eldho, a spice-merchant, by withdrawing the same from their joint account No. S-128 maintained in the name of the Mankulam Service Cooperative Bank in the Idukki District Co-operative Bank through cheque No. 19273 on 11.06.1999. The accused were alleged to have misused their official position as public servants. They jointly committed criminal breach of ``` CRL.MC NO. 2854 OF 2022 ``` ``` 5 ``` trust, forgery, falsification of account, thereby they cheated the bank. 7. The final report reveals that the petitioner and the other accused sold 1650.70 kgs of black pepper worth Rs. 3,00,427/- from the stock of the bank on 02.06.1999. The amount was credited to the joint account maintained by the petitioner and the accused No.1. A sum of Rs. 3,00,000/- was withdrawn through cheque No. 19273 dated 11.06.1999. The cheque was signed by the petitioner and accused No.1. This transaction was not entered in the day book, cash flow, cash book, ledger and general ledger etc. According to the prosecution, as per the bye-law of the Co-operative Society, all money transactions should be entered in the day book, cash flow, cash book, ledger and general ledger. But, the above transactions were not entered in those registers. The prosecution mainly relied on the statements of CW2 and CW3, the Audit Report, audit note, the audit certificate, the bye law of the bank and other documents relating to the alleged transactions, maintained at the bank. ``` CRL.MC NO. 2854 OF 2022 ``` ``` 6 ``` 8. The following facts are not in dispute; (a) 1650.70 kgs of black pepper worth Rs. 3,00,427/- from the stock of the bank was sold to one Sri. V.G. Eldho on 02.06.1999. (b) A sum of Rs. 3,00,427/- was credited to the account maintained by the bank in the joint names of the petitioner and the other accused in the capacity as President and Secretary respectively. (c) A sum of Rs. 3,00,000/- was withdrawn through cheque No. 19273 dated 11.06.1999; the cheque was drawn jointly by the petitioner and the other accused. 9. The allegation against the petitioner and the other accused is that, though the amount withdrawn was entered in the day book, it was not entered in the cash book as expenses. The crux of the prosecution allegations is that, a sum of Rs. 3,00,427/- was misappropriated jointly by the petitioner and the other accused. The audit note relied on by the prosecution contains the allegation that the Secretary of the Co-operative Society, who is the principal employee has not made entries in the day book ``` CRL.MC NO. 2854 OF 2022 ``` ``` 7 ``` honestly and he fraudulently withdrew a sum of Rs. 3,00,000/- on 11.06.1999 and Rs.25,100/- on 23.03.2009 and thereby misappropriated a sum of Rs.3,25,100/-. The auditor reported that accused No. 1 created forged documents for the purpose of misappropriating the above mentioned sum from the account of the Co-operative Society. The prosecution alleges that the amount was misappropriated by accused No. 1 with the knowledge of the petitioner. CW2, the present Secretary of the Bank, stated that accused No. 1 had withdrawn the amount with the knowledge of the petitioner. He further stated that, as per the bye-law of the Co-operative Society, the records relating the transactions in the Society were to be maintained by the Secretary and the Secretary is responsible for any omissions or irregularity in the maintenance of the entire records relating to the transactions. CW2 further stated that the President and the Secretary are jointly responsible for the operation of accounts in the name of the bank. The President is also responsible to see that the ``` CRL.MC NO. 2854 OF 2022 ``` ``` 8 ``` entries in the day book are tallying with the balance money. CW2 added that during the relevant period, the Secretary was responsible for the maintenance of the entire records relating to the transactions as Secretary and a peon were the only employees at that time. The prosecution relied on the bye-law of the bank to fasten the criminal liability on the petitioner. As per the bye-law, the President is the ex-officio treasurer of the cash of the bank. It further says that accounts are to be maintained jointly by the President and the Secretary of the bank. The President has a responsibility to see that the entries in the day book are tallied with the balance money in the bank and the President has to sign the day book after ascertaining that the entries are getting tallied with the balance. 10. The learned counsel for the petitioner submitted that, the materials placed before the Court, prima facie, do not disclose any offence against the petitioner. 11. Per contra, the learned Senior Public Prosecutor ``` CRL.MC NO. 2854 OF 2022 ``` ``` 9 ``` submitted that, as per the bye-law, the President and the Secretary are jointly responsible for the maintenance of the day book and the other transactions. 12. On an appreciation of the statements of the witnesses relied on by the prosecution (CWs 2 & 3) and the audit note, the misappropriation was allegedly done by accused No. 1, who was the then Secretary. The role attributed to the petitioner, who was the then President, as per the material is that he had knowledge regarding the alleged misappropriation done by accused No. 1. The audit note does not show any material to connect the petitioner with the alleged transactions. 13. The learned Senior Public Prosecutor contended that, the role of the petitioner is evident from the fact that he was one of the drawees in the cheque by which the amount of Rs. 3,00,000/- was withdrawn. The audit report relied on by the prosecution and other materials would show that the amount was withdrawn jointly by the President and the Secretary and the same was entered in the day book. As per the bye law, the President was only ``` CRL.MC NO. 2854 OF 2022 ``` ``` 10 ``` required to verify the entries in the day book and affix his signature thereon. The prosecution has no case that the alleged transaction was not entered in the day book. The prosecution allegations centred around the non-entering of the amount drawn in the cash book and other related documents. The statements of the witnesses and audit report clearly pointed out that the then Secretary, who was the only ministerial staff available during the relevant period was responsible for the maintenance of all transactions. 14. The learned Senior Public Prosecutor contended that, the President has the responsibility to verify the other relevant records and inaction on his part in not verifying those records amounts to willful omission. 15. The learned counsel for the petitioner countered and submitted that the President was not responsible for the preparation of all records other than the day book and it was the sole responsibility of the Secretary, who was then in-charge of the maintenance of the accounts. ``` CRL.MC NO. 2854 OF 2022 ``` ``` 11 ``` 16. The question to be considered is whether the prosecution has placed any material to prima facie show that the petitioner had any involvement in the transactions and creation of documents by accused No. 1 which resulted in misappropriation. The legal position is well settled that when a prosecution at the initial stage is sought to be quashed, the test to be applied by the Court is as to whether the uncontroverted allegations as made prima facie, establish the offence. 17. The learned counsel for the petitioner relying on the judgment in **Manik Taneja vs. State of Karnataka (2015 (7) SCC 423)** submitted that where, in the opinion of the Court, the chances of ultimate conviction are bleak and no useful purpose is likely to be served by allowing a criminal prosecution to continue, the Court may quash the proceedings even though it may be at a preliminary stage. The learned Senior Public Prosecutor relying on **State, by the Inspector of Police, Chennai v. S. Selvi and Another (2018 (1) KLD 198 (SC) = (2018) 13 SCC 455)** contended that ``` CRL.MC NO. 2854 OF 2022 ``` ``` 12 ``` where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained, the Court will be justified in framing charge and proceed with the trial. 18. In the present case, at the most the prosecution materials give rise to a mere suspicion. No materials are placed by the prosecution which give rise to a ‘grave suspicion’ against the petitioner. 19. In **State, by the Inspector of Police, Chennai v. S. Selvi and Another (Supra)** while considering the scope of Sections 227 and 228 of Cr.P.C. the Apex Court held thus; “6. It is well settled by this Court in a catena of judgments including Union of India v. Prafulla Kumar Samal [Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4 : 1979 SCC (Cri) 609], Dilawar Balu Kurane v. State of Maharashtra [Dilawar Balu Kurane v. State of Maharashtra, (2002) 2 SCC 135 : 2002 SCC (Cri) 310], Sajjan Kumar v. CBI [Sajjan Kumar v. CBI, (2010) 9 SCC 368 : (2010) 3 SCC (Cri) 1371], State v. A. Arun Kumar [State v. A. Arun Kumar, (2015) 2 SCC 417 : (2015) 2 SCC (Cri) 96 : (2015) 1 SCC (L&S) 505], Sonu Gupta v. Deepak Gupta [Sonu Gupta v. Deepak Gupta, (2015) 3 SCC 424 : (2015) 2 SCC (Cri) 265], State of Orissa v. Debendra Nath Padhi [State of Orissa v. Debendra Nath Padhi, (2003) 2 SCC 711 : 2003 SCC (Cri) 688], Niranjan Singh Karam Singh Punjabi v. Jitendra Bhimraj Bijjaya [Niranjan ``` CRL.MC NO. 2854 OF 2022 ``` ``` 13 ``` Singh Karam Singh Punjabi v. Jitendra Bhimraj Bijjaya, (1990) 4 SCC 76 : 1991 SCC (Cri) 47] and Supt. & Remembrancer of Legal Affairs v. Anil Kumar Bhunja [Supt. & Remembrancer of Legal Affairs v. Anil Kumar Bhunja, (1979) 4 SCC 274 : 1979 SCC (Cri) 1038] that the Judge while considering the question of framing charge under Section 227 of the Code in sessions cases (which is akin to Section 239 Cr.PC pertaining to warrant cases) has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out; where the material placed before the court discloses grave suspicion against the accused which has not been properly explained, the court will be fully justified in framing the charge; by and large if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his rights to discharge the accused. The Judge cannot act merely as a post office or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the statements and the documents produced before the court, any basic infirmities appearing in the case and so on. This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the materials as if he was conducting a trial.” 20. In the instant case the prosecution failed to produce any material that gives rise to a grave suspicion against the petitioner. 21. The basic principle of criminal jurisprudence is that element of mens rea and intention must accompany the culpable act or conduct of the accused. The materials ``` CRL.MC NO. 2854 OF 2022 ``` ``` 14 ``` placed by the prosecution before the Court, do not disclose anything to connect the petitioner with the alleged misappropriation. Accused No. 1 is no more. The charges against him stood abated. The continuation of the prosecution against the petitioner will only result in abuse of the process of law. Therefore, the entire proceeding is liable to be quashed. The Crl.M.C is allowed. The proceedings against the petitioner in C.C. No. 344/2015 on the file of the Judicial First Class Magistrate’s Court, Devikulam are hereby quashed. The Criminal M.C. is allowed as above. **Sd/K. BABU, JUDGE** LU ``` CRL.MC NO. 2854 OF 2022 ``` ``` 15 ``` ## **`APPENDIX OF CRL.MC 2854/2022`** ## **`PETITIONER ANNEXURES`** ``` ANNEXURE1TRUE COPY OF THE JUDGMENT DATED 27.08.2010 IN C.C.NO.379/2004 ON THE FILES OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT, DEVIKULAM ANNEXURE2TRUE COPY OF THE JUDGMENT DATED 30.12.2011 IN C.C.NO.222/2005 ON THE FILES OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT, DEVIKULAM ANNEXURE3THE CERTIFIED COPY OF THE FINAL REPORT/CHARGE SHEET SUBMITTED IN C.C.NO.344/2015 ON THE FILES OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT, DEVIKULAM ``` ## **`// TRUE COPY // PA TO JUDGE`**