Mangleshwari Prasad vs State Of Bihar

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 22 January, 1954

Coram: B.K. Mukherjea, V. Bose, Bhagwati

In this case, the Court noted that the matter concerned an appeal by special leave from a judgment of the High Court of Judicature at Patna. The High Court had affirmed the conviction and the sentence of rigorous imprisonment for seven years that had been imposed on the appellant by the Second Assistant Sessions Judge in Gaya. The appellant, identified as Mangleshwari Prasad, was a public servant employed as a Tax Daroga by the Gaya Municipality. Working under the appellant was a peon named Ram Dayal Singh. The routine handling of tax collections was described in detail. Various tax collectors who were responsible for levying taxes on behalf of the municipality would collect the amounts due each day and then deliver the cash to the appellant. On 8 November 1949 the appellant received a sum of Rs 3,773-10-9, and on 10 November 1949 he received an additional sum of Rs 4,240-3-3. The appellant’s usual practice was to place the monies received into a cash box, which he then carried at the close of the day to a vault located in the premises of the Imperial Bank of India. The keys to both the cash box and the vault remained in the appellant’s possession. The next day the appellant prepared a triplicate challan to authorize the deposit of the cash. He transmitted the three-part challan to the Treasury through the peon Ram Dayal Singh. After the Treasury Officer affixed his initials, the peon returned the challan to the appellant. The appellant then proceeded to the bank vault, retrieved the cash box, and deposited the money with the bank in accordance with the instructions on the challan. The challans were required to bear the signatures of both the Accountant and the Cashier of the municipality, the initials of the Treasury Officer, and a stamp of the bank indicating receipt of payment; the bank stamp displayed the initials of the cashier who accepted the funds. Of the three parts of the challan, one was handed to the depositor, another was retained by the bank, and the third was sent by the bank, after about a month, to the municipal office. Upon receipt of the bank’s part, the municipal Accountant entered the corresponding details in the municipality’s cash book. The bank also sent scrolls to the Treasury Account offices to inform them of the deposits that had been made, and it recorded the deposits in its pass book, which was updated periodically. The appellant kept a notebook in which he recorded the receipts received from the tax collectors and summed them at the end of each day. He also maintained a separate cash book in which he recorded all receipts and disbursements. The peon Ram Dayal Singh also kept a notebook in which he noted the amounts that the appellant received from the tax collectors each day.

Dayal Singh also kept a notebook in which he recorded each day the amounts that the Appellant received from the tax collectors. After the Appellant received the daily challans that related to the deposits, he stored those challans in an almirah. The almirah served as a place where the challans could be inspected when the accounts of the payments made to the municipal bank needed to be reconciled. By the fifth day of October 1949 a sum of Rs 4,887-4/- had been collected, but that amount had not been placed in the bank by the ninth day of November 1949. In response, the Appellant prepared two challans, numbered 257 and 263, on the ninth of November 1949. The first challan covered Rs 2,522/- and the second covered Rs 2,365-4/-, together amounting to the total of Rs 4,887-4/-. He forwarded these two challans to the Treasury Officer for the Officer’s initials, using the peon Ram Dayal Singh as the messenger. A further sum, Rs 5,262-1-3, had been collected by the twenty-ninth of October 1949 and, similarly, remained undeposited as of the eleventh of November 1949. On that date the Appellant drew up challan number 225 for the entire amount of Rs 5,262-1-3 and again sent it to the Treasury Officer for initials through the same peon. In the normal course of business the Appellant handed both the amounts of Rs 4,887-4/- and Rs 5,262-1-3, together with their respective challans, to the peon, who then delivered them to the bank. The bank’s cashier stamped each challan to acknowledge receipt of payment and initialed the stamps. After the deposits were made, the peon returned the stamped challans to the Appellant. Those stamped copies later appeared in the regular challan file when the Auditor requested them. Consistent entries showing the deposits of these two sums were also recorded in the bank’s scrolls, in the pass book, and in the municipal accounts that were maintained by the municipality.

The amounts of Rs 3,773-10-9, which had been collected on the eighth of November 1949, and Rs 4,240-3-3, collected on the tenth of November 1949, were not found in the bank scrolls, the pass book, or the municipal account books, even though the Appellant claimed that they had been deposited through the peon Ram Dayal Singh on the ninth and the eleventh of November respectively. The auditors discovered this discrepancy while conducting the municipal audit on or about the thirteenth of January 1950. When the auditors questioned the Appellant about the missing entries, he produced two additional challans, numbered 264 and 268, taken from the almirah. Challan 264 bore the date of the ninth of November 1949 and challan 268 bore the date of the eleventh of November 1949. The auditors alleged that these two challans had been forged. They further alleged that the signatures of the municipal accountant and cashier, the initials of the Treasury Officer, and the bank’s stamps that were supposed to indicate receipt of payment – together with the cashier’s initials on the stamps – were either missing or not genuine.

In this case, the Court observed that the suspicion of embezzlement of the two sums and of forgery of the two challans was attached both to the appellant and to the peon, Ram Dayal Singh, and that consequently both of them were tried before the Second Assistant Sessions Judge, Gaya, on a number of charges that included conspiracy, embezzlement and forgery. The learned Sessions Judge acquitted the peon, Ram Dayal Singh, of all of those charges but convicted him of an offence under Section 409 in conjunction with Section 109 of the Indian Penal Code. The Judge reasoned that, in his opinion, had the peon not remained silent and had not concealed the appellant’s actions, the appellant would never have been able to embezzle the two sums; for this reason the peon was sentenced to four years’ rigorous imprisonment. Regarding the appellant, the learned Sessions Judge concluded that he was guilty of every offence with which he had been charged except for the charge of conspiracy under Section 120(b) of the Indian Penal Code. The appellant appealed to the High Court of Judicature at Patna. The High Court acquitted the peon of the fresh charge that the Sessions Judge had framed against him and discharged him entirely, while it affirmed the conviction of the appellant and imposed the same sentence as earlier ordered by the Sessions Judge.

The Court further noted that the fact that the two amounts – Rs 3,773-10-9 and Rs 4,240-3-3 – had been embezzled could not be disputed. These collections, which were made on 8 November 1949 and 10 November 1949 respectively and were handed over by the tax collectors to the appellant, never reached the bank, were not credited in the municipal account, and did not appear in the scrolls or the pass book. The challans numbered 264 and 268, bearing the dates 9 November 1949 and 11 November 1949 and produced by the appellant as proof of payment, were exhibited as Exhibits 20 and 20(a). The prosecution proved that these challans were forged because the signatures of the municipal accountant and cashier, the initials of the treasury officer, as well as the bank receipt stamp and the cashier’s initials on the stamp, were not genuine. Moreover, there were substantial discrepancies between the stamp normally used by the bank and the stamp actually found on Exhibits 20 and 20(a). Both lower courts commented that the stamp on those exhibits was not the bank’s official stamp but rather one applied in the office of the Tax Daroga, using an old stamp that had been in use there up to the year 1944. That old stamp remained in the appellant’s custody, kept on his table during working hours, and could therefore be used by either the appellant or the peon, Ram Dayal Singh, to imprint the falsified stamp on challans 264 and 268.

The stamp that had been retained by the appellant on his desk during working hours could be employed by either the appellant himself or by the peon, Ram Dayal Singh, whenever either of them wished to imprint it on challans numbered 264 and 268. The appellant’s own notebook recorded entries that gave the impression that the sums in question had been received by him from the tax collectors on 8 November 1949 and 10 November 1949 respectively. In contrast, the notebook kept by the peon did not list all of the components that made up the two amounts of Rs 3,773-10-9 and Rs 4,240-3-3. Instead, the peon’s entries for those dates were annotated with the terms “Baqui” or “Nahin Jama,” indicating that the monies had not been deposited in the bank. At the bottom of the peon’s notebook, totals were written in English by the appellant, showing the same two amounts as recoveries on the corresponding dates. This pattern of entries, taken together with the other material presented by the prosecution, was used to demonstrate that the appellant, either acting alone or in collusion with the peon, was responsible for both the embezzlement of the funds and the forged documents.

The appellant, however, sought to place the entire blame on the peon. He alleged that the peon had forged the signatures of the municipal accountant and cashier, as well as the initials of the treasury officer, and had then presented the forged challans to the appellant. According to this version, the appellant merely removed the money from the municipal vault and handed it to the peon for deposit in the bank. The peon, instead of actually paying the money at the bank counter, allegedly affixed the old stamp that was lying on the appellant’s desk, forged the initials of the bank cashier, and returned the completed challans to the appellant. The appellant claimed that he had no reason to doubt the authenticity of the challans and therefore stored them in the almirah together with genuine ones. By this narrative, the appellant attempted to disavow any liability for the theft and the forgeries.

The High Court rejected the appellant’s contention. The court held that the appellant habitually accompanied the peon to the bank counter when deposits of the collected amounts were to be made. Nevertheless, the court observed that the evidence did not support a finding that the appellant was present on every occasion of deposit. It was noted that the appellant accompanied the peon only when the sums to be deposited were large or when his presence was deemed necessary to persuade the bank cashier to accept a substantial amount of change. This limitation on the appellant’s accompaniment weakened his argument that he had no knowledge of the fraudulent acts.

The evidence showed that on the two occasions of 9 November 1949 and 11 November 1949 the peon identified as Ram Dayal Singh personally deposited sums of Rs 4,887-4-0 and Rs 5,262-1-3 with the Bank. The prosecution did not allege that the appellant was present with the peon at the bank on either of those specific dates. In fact, both the admitted deposits and the disputed transactions occurred on the same calendar days, namely 9 November 1949 and 11 November 1949. Consequently, the theory advanced by the High Court that the appellant was present at the bank whenever any deposit was made cannot be sustained in light of these facts. The record indicates that on the aforesaid dates the appellant did not accompany the peon to the bank for the purpose of making the deposits. It was asserted that the peon, after receiving the money from the appellant’s vault, deposited only the amounts of Rs 4,887-4-0 and Rs 5,262-1-3 and subsequently misappropriated Rs 3,773-10-9 and Rs 4,240-3-3. The Court must now examine whether the peon could have forged the two challans identified as Exhibits 20 and 20(a) and also embezzled the two sums on the very same dates. No direct evidence exists either to confirm or to deny the peon’s participation, so the case hinges entirely upon circumstantial evidence. Established jurisprudence requires that circumstantial evidence not only be consistent with the accused’s guilt but also be inconsistent with any claim of innocence. In the present matter only two individuals— the appellant and the peon Ram Dayal Singh— could possibly have been responsible for the alleged forgeries and the alleged embezzlement. If the peon can be conclusively shown not to have forged the documents or taken the money, the sole remaining possibility would be that the appellant performed those acts. The evidence shows the peon was literate only in Hindi, with all notebook entries written in Hindi, and no proof exists that he knew or wrote in English. Conversely, the appellant had served as a municipal officer for more than seventeen years, was proficient in English, and habitually maintained all official records in English. The Court has examined the original challans marked as Exhibits 20 and 20(a) together with the genuine challans of the Exhibit 18 series that were produced in the lower courts. Each of those challans requires the signatures of the Accountant and the Cashier, indicating a level of formality and familiarity with English that the peon could not have possessed. Accordingly, the circumstantial evidence points to the appellant as the only person capable of both forging the challenged documents and misappropriating the sums.

The Court observed that the challans marked as Exhibit 20 and Exhibit 20(a) bore the initials of the Municipality’s Treasury Officer and the receipt stamp of the Bank’s Cashier, and therefore the Court had no hesitation in concluding that the peon, Ram Dayal Singh, was absolutely incapable of forging those documents. Considering both the capacity to forge and the opportunity to do so, the Court found that the only person who could have produced the forgeries of the two challans was the Appellant himself. The Court further noted that the Appellant habitually postponed the deposit of monies with the Bank. In fact, the sums of Rs 4,887-4-0 and Rs 5,262-1-3, which were finally deposited on 9 November 1949 and 11 November 1949 under genuine challans numbered 257, 263 and 225, had actually been collected by the Appellant as early as 5 October 1949 and 29 October 1949 respectively. Consequently, the Appellant delayed the actual deposit of those amounts until the later dates of 9 November and 11 November, and it was unsurprising that he did not deposit on those dates the amounts of Rs 3,773-10-9 and Rs 4,240-3-3, which had been collected on 8 November and 10 November respectively, as alleged. The Court emphasized that the Appellant was aware that the portions of the challans forwarded by the Bank to the Municipality would not reach the Municipality for nearly a month after the dates of deposit, and that any embezzlement would therefore remain undiscovered for that period. Moreover, the Court remarked that the administration of the Gaya Municipality suffered from considerable laxity in financial controls, a circumstance that enabled the Appellant to embark upon this bold venture and misappropriate the amounts. The peon, Ram Dayal Singh, actually made the admitted deposits on the cited dates. If the Appellant’s version of events were accepted, the peon had been entrusted on 9 November 1949 with Rs 3,773-10-9 and Rs 4,887-4-0, a total of Rs 8,660-14-9, and on 11 November 1949 with Rs 4,240-3-3 and Rs 5,262-1-3, a total of Rs 9,502-4-6. The Court held that, should anyone be truly responsible for the forgeries and the attendant embezzlement, responsibility lay with the Appellant and not with the peon. After a meticulous examination of the evidence presented by the prosecution, both Courts below had concluded that the Appellant alone was accountable for the forgeries and the misappropriation of the funds. Having reviewed the material evidence, the Court saw no justification for disturbing the concurrent factual findings arrived at by the lower courts. Regarding the sentences, the Court expressed the view that, had the Appellant been prosecuted under the Prevention of Corruption Act, a different sentencing horizon would have applied.

In examining the alternative framework provided by the Prevention of Corruption Act of 1947, the Court noted that the statutory ceiling for punishment under that Act would have been a term of seven years’ rigorous imprisonment. Moreover, the special Court constituted under that legislation possessed the authority to impose a substantial monetary penalty, a fine that could have been assessed up to the full quantum of the amount that had been misappropriated. By contrast, the appellant had been convicted and sentenced to seven years’ rigorous imprisonment for the offence enumerated in Section 409 of the Indian Penal Code and to four years’ rigorous imprisonment for the offence described in Section 467 of the Indian Penal Code. On reviewing these sentences, the Court found that the aggregate punishment imposed was disproportionate to the conduct, especially when measured against the maximum punishment that could have been awarded under the Prevention of Corruption Act together with the possibility of a hefty fine. The Court therefore concluded that the ends of justice would be better served by moderating the custodial terms. Accordingly, it directed that each of the two sentences be reduced to a term of three years’ rigorous imprisonment, with both terms to run concurrently. The appeal was dismissed in all other respects; the conviction of the appellant was upheld, but the previously imposed terms of seven years and four years were substituted with two concurrent terms of three years each.