Munna Lal vs State of Uttar Pradesh
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Criminal Appeal Nos. 102404 of 1961
Decision Date: 17 April 1963
Coram: K.N. Wanchoo, P.B. Gajendragadkar, K.C. Das Gupta
Munna Lal versus the State of Uttar Pradesh was decided by the Supreme Court of India on 17 April 1963. The judgment was authored by Justice K N Wanchoo, and the bench comprised Justices K N Wanchoo, P B Gajendragadkar and K C Das Gupta. The petitioner in the case was Munna Lal and the respondent was the State of Uttar Pradesh. The official citation for the decision is 1964 AIR 28 and 1964 SCR (3) 88, with further citator references listed as R 1964 SC 33 (25), R 1968 SC1292 (7), R 1971 SC1525 (13), R 1973 SC 913 (14) and RF 1992 SC 604 (125). The matters before the Court concerned the Prevention of Corruption Act, 1947, specifically sections 5 and 5A, as well as section 239 of the Code of Criminal Procedure, 1898. The issues raised involved an investigation carried out by an officer who was not authorised under the Act, whether any irregularity in the investigation could vitiate the trial, the sufficiency of sanction obtained to prosecute four original cases, the subsequent splitting of those cases into seven, and whether the sanction covered the three newly created cases that involved the same facts and amounts.
The factual background recorded that the appellant, Munna Lal, served as the cashier of the Municipal Board of Hardwar. In his capacity, he was responsible for ensuring that any cash receipts exceeding Rs 4,000 were deposited either in the treasury or in the Imperial Bank. An audit of the Board’s accounts revealed that a total sum of Rs 52,144, which had been received by the Board, had not been deposited as mandated by the applicable rules. Following a complaint lodged by the Chairman of the Board, a Sub‑Inspector of Police initiated an investigation, leading to a charge under section 409 of the Indian Penal Code. That charge was subsequently withdrawn, and the accused were discharged on the ground that the matter was covered by section 5(2) of the Prevention of Corruption Act. Thereafter, a new investigation was undertaken by an officer who, as required by section 5A of the Act, was duly authorised; however, this investigation essentially involved the authorised officer reviewing the records of the earlier investigation and deciding to commence fresh prosecutions based on those earlier findings. Sanction under section 5(2) of the Act was obtained for the original four cases, in which the appellant and his brother were jointly charged. The trial court then split those four cases into seven separate proceedings. In three of the newly created cases, only the appellant was tried. The trial judge found the appellant guilty under section 5(2) read with section 5(1) of the Act, imposing a term of imprisonment and a monetary fine.
The appellant appealed to the High Court, which affirmed the conviction but reduced the term of imprisonment and set aside the fine. The appellant then obtained special leave to appeal to this Court. In the appeal, two principal points were urged. First, it was contended that the investigation was irregular and not conducted in accordance with section 5A of the Act because it was not carried out by a person authorised under that provision. Second, it was argued that sanction had been obtained only for the original four cases and that no separate sanction had been secured for the three new cases that arose after the splitting of the original prosecutions.
The appellant argued that the sanction obtained covered only the original four cases and did not extend to the three additional cases that gave rise to the present appeals, contending that the sanction was issued under section 5 (2) of the Act and not under section 5 (1) (c), and therefore it could not confer jurisdiction on the Special Judge to try the appellant under section 5 (1) (c) read with section 5 (2). The Court held that section 5A of the Act is mandatory rather than directory, so an investigation carried out in violation of that provision is illegal. However, such illegality does not vitiate the trial’s results unless it is shown to have caused a miscarriage of justice, and it does not affect the court’s competence or jurisdiction to try the case. In these appeals, no miscarriage of justice resulting from the illegal investigation was demonstrated. The Court followed the precedent set in H.N. Rishbud & Inder Singh v. State of Delhi [1955] I SCR 1150 and distinguished the decision in State of Madhya Pradesh v. Mubarak All [1959] Supp. 2 SCR 201. The Court noted that, pursuant to section 239 of the Code of Criminal Procedure, 1898, the Special Judge’s decision to separate the trial of the appellant on certain items for which a sanction existed does not imply an absence of sanction for those items. The sanction originally granted for the four cases was deemed to cover the three subsequent cases as well. The wording of the sanction indicated that the sanctioning authority had section 5 (1) (c) in mind, because it referred to misappropriation and embezzlement of the Board’s money, offences specifically enumerated in section 5 (1) (c). Consequently, the sanction, as worded, would encompass a case of misappropriation or conversion either committed by the appellant himself or facilitated by him through others. The Court concluded that the sanction was sufficient to confer jurisdiction on the Special Judge to take cognizance of the cases that form the subject of the present appeals. The judgment concerned criminal appellate jurisdiction under Criminal Appeal Nos. 102404 of 1961, filed by special leave against the Allahabad High Court’s order dated 21 December 1960 in Criminal Appeals Nos. 737, 738 and 744 of 1960. Counsel for the appellant and counsel for the respondent were on record. The judgment, delivered on 17 April 1963 by Justice Wanchoo, addressed three appeals arising from separate trials before the Special Judge, Saharanpur, under section 5 (2) of the Prevention of Corruption Act, No. 2 of 1947, with the appellant being the same individual in all three matters. The brief facts necessary for the present considerations were then introduced.
In the present case the appellant, who had been employed as cashier of the Municipal Board of Hardwar since 1932, was responsible for safeguarding the Board’s cash and for ensuring that any amount in his possession exceeding Rs 4,000 was promptly deposited either in the treasury or in the Imperial Bank at Roorkee. An audit of the Board’s accounts was conducted in 1949, and on 24 May 1949 the auditor reported that money received by the Board between 20 April 1949 and 23 May 1949, amounting to Rs 52,144, had not been deposited in either the treasury or the Imperial Bank as required. The auditor’s report was forwarded to the Chairman of the Board, who summoned the cashier, Munnalal, to obtain an explanation for the alleged misappropriation. According to the record, the appellant admitted that he had used part of the undeposited funds to pay for his daughter’s marriage and to finance his shop, that he had handed approximately Rs 10,000 to Rs 11,000 to the Executive Officer, and that the remaining balance was kept at his residence. The Board demanded that the appellant immediately reimburse the loss, but he failed to do so. Consequently, the Board suspended him and referred the matter to the police for investigation. The police registered a case under section 409 of the Indian Penal Code and, after completing their investigation, prosecuted the Executive Officer, the appellant, and the appellant’s brother, who at the relevant time served as Assistant Cashier. The High Court transferred the case to a magistrate in Meerut, but the magistrate did not proceed because an application was made to withdraw the case on the ground that it was covered by section 5(2) of the Prevention of Corruption Act, No 2 of 1947. The magistrate therefore discharged all three accused. Subsequently, the appropriate sanction was obtained for prosecution under section 5(2) of the Act, and four separate prosecutions were instituted against the appellant and his brother. The Special Judge, however, held that a joint trial of the appellant and his brother was not feasible for certain amounts alleged to have been embezzled, and ordered that the appellant be tried separately in three distinct proceedings for those particular sums, while the remaining amounts would be tried together in four trials involving both the appellant and his brother. In total, seven trials were conducted. The present appeals do not concern the appellant’s brother, who was acquitted, nor do they involve four of the earlier trials; they are limited to three trials that relate to three specific sums of money. Appeal No 102 concerns Rs 1,623 ¼ received between 14 April 1949 and 23 May 1949 that was not accounted for; Appeal No 103 concerns Rs 9,611 ¾ 6 received between 20 April 1949 and 24 May 1949 that was not accounted for; and Appeal No 104 concerns Rs 43,087 ⅓ received between 20 April 1949 and 24 May 1949 that was also not accounted for.
The prosecution asserted that the amounts in question had been received by the appellant during the periods specified and that he had failed to deposit those sums either in the treasury or in the Imperial Bank at Roorkee, as the established rules required. The appellant essentially acknowledged receiving the money, except for a few items that the Special Judge also found to have been received by him. He further admitted that his official duty was to place any receipt exceeding Rs 4,000/- in the Imperial Bank or the treasury at Roorkee. Nevertheless, his defence was inconsistent concerning the disposition of the monies that he undeniably received. Initially, he attempted to demonstrate that he had deposited the amounts. In an alternative line of argument, he claimed that a long‑standing practice existed in the Board’s office whereby the Executive Officer and other Board employees would periodically obtain advances from the cashier by submitting slips, with the cashier acting as a banker for all officers and servants, including the Executive Officer. Although those advances were supposed to be repaid to the cashier at the beginning of the following month when the pay of the borrowers was drawn, in reality repayment did not always occur. Consequently, the continual granting of such advances, sometimes of considerable size, prevented the money from being deposited in the treasury as mandated by the rules because the advances were continually being made to officers and servants of the Board.
The appellant therefore maintained that he had not diverted the money for his personal use but had instead advanced it to the officers and servants of the Board in accordance with the customary practice that had endured for many years. He further asserted that such advances were extended even to the highest officer of the Board, namely the Executive Officer, and that all the officers were aware of this practice and also knew that the monies were not being deposited in the Bank or the treasury at Roorkee as required by the regulations. After evaluating the evidence, the Special Judge held that it was proved that the sums forming the subject of the charge, except for two items, had indeed been received by the appellant. The Judge also concluded that, apart from certain items, the appellant had dishonestly or fraudulently misappropriated or otherwise converted to his own use the property entrusted to him or under his control as a public servant, or had permitted another person to do so. Accordingly, the appellant was found guilty under section 5(2) of the Act read with section 5(1)(c). The Special Judge sentenced the appellant to five years of rigorous imprisonment for the cases giving rise to Appeals Nos 102 and 103, ordering that those sentences run concurrently. He also sentenced the appellant, in the case arising from Appeal No 104, to five years of rigorous imprisonment and a fine.
In the matter that arose from appeal No. 104, the Special Judge had ordered a fine of Rs. 42,000 and a term of five years’ rigorous imprisonment, a sentence that was apparently not made concurrent with the other convictions. The appellant subsequently filed three separate appeals before the High Court, and the High Court heard all three appeals together. While the High Court affirmed the Special Judge’s findings of guilt in each of the three cases, it exercised its discretion to reduce each of the three sentences to two years’ rigorous imprisonment and to make the sentences run concurrently. In addition, the High Court set aside the fine, reasoning that, although the appellant was found guilty, the money involved had largely been advanced to officers and servants of the Board rather than being converted for his personal use. The present proceedings before this Court arise by way of special leave to appeal against those High Court judgments. The appellant’s counsel has urged two principal points, contending that, on the basis of those points, the trial should be declared illegal and set aside.
The first point raised by the appellant concerns the alleged irregularity of the investigation, specifically that it did not comply with section 5A of the Act. Section 5A provides that no police officer below the rank of Deputy Superintendent may investigate an offence punishable under the Act outside the presidency towns without a first‑class magistrate’s order. According to the record, the initial investigation was conducted by a sub‑inspector of police, after which a case under sections 409 and 406 of the Indian Penal Code was filed against the appellant, his brother, and the Executive Officer; that case was later withdrawn. Following the withdrawal, sanction was obtained to prosecute the appellant and his brother under section 5(2) of the Act, and a subsequent investigation was said to have been carried out as required by section 5A. However, the evidence shows that the “investigation” consisted merely of the authorised officer reviewing the earlier sub‑inspector’s files and filing four prosecutions on that basis. Although the literal requirement of section 5A was formally satisfied, its spirit was not, because the substantive investigative work was performed by the unauthorised sub‑inspector. In H.N. Rishbud & Inder Singh v. State of Delhi (1), this Court held that section 5A is mandatory, not directory, and that an investigation contravening it is illegal. The Court further observed that cognizance taken on a police report that breaches a mandatory investigatory provision does not automatically invalidate the trial unless the illegality caused a miscarriage of justice. Accordingly, even if section 5A was not substantively complied with, the trials cannot be declared illegal unless a miscarriage of justice resulting from the irregular investigation is proved. The appellant’s counsel was unable to demonstrate any such miscarriage, and, on an alternative basis, the substance of the prosecution’s case was essentially admitted.
In the earlier decision the Court explained that an illegality in the investigative stage does not automatically invalidate the jurisdiction of the trial court. The Court stated that the only circumstance in which the earlier investigation could prejudice the trial is when the illegality can be shown to have caused a miscarriage of justice. The Court further observed that even when an investigation is conducted in violation of a mandatory provision, the competence and jurisdiction of the trial court remain intact so long as the case has actually proceeded to trial and a miscarriage of justice has not been demonstrated. Accordingly, the Court held that the mere fact of irregularity in the investigation, or the failure to comply substantively with section 5A, does not render the subsequent trials illegal unless the appellant can prove that the irregularity resulted in a miscarriage of justice. Counsel for the appellant was not able to demonstrate any such miscarriage in the present proceedings. On the contrary, the appellant essentially accepted the substantive allegations of the prosecution and only raised certain mitigating circumstances in his defence. Hence, the claim that the trial was tainted by the irregular investigation could not be sustained.
Counsel for the appellant also referred to the judgment in State of Madhya Pradesh v. Mubarak Ali. In that case an objection was raised at the very outset of the trial before the Special Judge, asserting that the investigation had been conducted in breach of section 5A. The High Court directed that the defect be remedied by ordering the Deputy Superintendent of Police to carry out a fresh investigation while the matter remained before the Special Judge. The High Court’s order was appealed to this Court and the appeal was dismissed. The present Court considered that the Mubarak Ali case could not assist the appellant because, unlike that case, no objection to the investigation was raised at the commencement of the trial here; the trial was allowed to run to its conclusion. Consequently, the principle laid down in Mubarak Ali does not apply, and the precedent set in Rishbud’s case is controlling. The appellant therefore cannot contend that the trial was vitiated unless he can show prejudice resulting from the illegal or irregular investigation. As already observed, no such prejudice has been established, and it could not be shown given the appellant’s alternative defence. Accordingly, the contention is rejected. The next contention raised by the appellant pertains to the issue of sanction.
In this matter it was contended that the proceedings lacked a proper sanction because only four cases had originally been filed before the Special Judge with the requisite sanction, and that those four cases had subsequently been divided into seven separate cases. The argument further asserted that the three additional cases created by the division were not supported by any sanction, and that two of the present appeals, identified as appeals Nos. 102 and 103, originated from those split‑up cases. It was also submitted that the sanction obtained was not made under section 5(1)(c) of the Act but only under section 5(2), and that, consequently, the Special Judge did not have jurisdiction to try the appellant under the combined provision of section 5(1)(c) read with section 5(2). The Court examined these submissions and held that they possessed no merit. While it accepted that the Special Judge had indeed divided the original four cases into seven, it observed that there was no dispute that the monetary values involved in the three newly created cases were wholly contained within the amounts that had been charged in the original four cases, each of which had been sanctioned. The Court further noted that, pursuant to section 239 of the Code of Criminal Procedure, the Special Judge was empowered to separate the trials of different items for reasons of convenience, such as the difficulty of conducting a joint trial. This procedural step did not, however, extinguish the original sanction. The sanction that had been granted for the four cases continued to extend to the three cases that emerged from the division, thereby preserving the jurisdiction of the Special Judge over all the split‑up proceedings.
The second contention advanced by the appellant was that there was no sanction authorising prosecution under section 5(1)(c) of the Act. The Court carefully reviewed the language of the sanction and found that it specifically alleged that the appellant had received money, misappropriated it by failing to credit the amount to the treasury, and thereby embezzled public funds. On the basis of these allegations, the sanction declared the appellant guilty of criminal misconduct and liable to prosecution under sections 409 and 406, as well as under section 5(2) of the Act. The Court observed that, although the sanction expressly referred to section 5(2), the description of the misconduct—misappropriation and embezzlement of Board monies—clearly invoked the provisions of section 5(1)(e), which in turn falls within the broader category covered by section 5(1)(c). The appellant argued that section 5(1)(c) requires a public servant to either convert property entrusted to him for his own use or to permit another person to do so. The Court held that the sanction’s reference to misappropriation and embezzlement effectively implicated conversion of the property to the appellant’s own use. Consequently, the Court found no substance in the appellant’s argument; the sanction, by describing misappropriation and embezzlement, satisfied the requirements of section 5(1)(c). Accordingly, the Court concluded that the sanction was sufficient to confer jurisdiction on the Special Judge to take cognizance of the cases from which the present appeals arose.
The Court observed that the wording of the sanction did not limit the reference solely to conversion by the appellant for his personal benefit. The language of the sanction, as it stands, would encompass a situation where the appellant himself misappropriates or converts the property to his own use, as well as a scenario where he permits another person to do so. Consequently, the Court held that the sanction was adequate to confer jurisdiction on the Special Judge to take cognizance of the matters from which these appeals arise.
Turning to the merits of the three appeals, the Court noted that counsel for the appellant had not, and rightly so, contended that the convictions were unwarranted. The sole point raised by counsel was that, according to the established facts, the appellant had employed the Board’s funds to forward them to the officers and servants of the Board, beginning with the highest officer, the Executive Officer. Moreover, counsel argued that the High Court’s evidence did not demonstrate that the appellant had converted any portion of the money for his own use, and therefore the appellant was more sinned against than sinning.
The Court agreed that, as the appointed cashier, the appellant was legally bound to adhere to the rules governing the custody of the Board’s cash that had been entrusted to him, and a failure to do so would render him guilty. Nevertheless, counsel asserted that the Executive Officer himself had been withdrawing money from the Board’s funds by issuing slips to the cashier, and that other officers and servants were engaging in the same practice. This conduct was reportedly well‑known, apparently even to the Chairman of the Board. Counsel maintained that it would be unfair to punish the appellant when he was merely complying with the demands of the Executive Officer and other officers and servants, many of whom he served under.
The Court observed that the evidence disclosed a scandalous state of affairs that was allowed to continue, with the Executive Officer himself being aware of and participating in that state. The appellant further claimed that the Chairman also knew of the situation and was at times a party to it, a contention the Court did not find to be incorrect. In view of these circumstances, the Court acknowledged the force of the appellant’s argument that he was more sinned against than sinning, and that any alleged misappropriation occurred because he felt compelled to satisfy the demands of the officers and servants, lest he incur their displeasure—a pressure he found difficult to resist. Accordingly, counsel reiterated that, having already been
The appellant had already spent more than ten months in jail, and the Court observed that, given the length of the punishment already imposed and the fact that the trial had been delayed for eleven years since 1949, this period of incarceration should be regarded as sufficient punishment for him. Ordinarily the Court does not interfere with the quantum of sentence in appeals filed under Article 136; however, the Court found that the particular circumstances disclosed in the present appeals warranted a different approach. Specifically, the Court noted that the officers and servants of the Board, including the highest officer, were behaving as if the Board’s money were their private property, and that the alleged misappropriation had occurred primarily because the appellant felt compelled to obey these officers and servants in order to avoid their displeasure. In view of this context, the Court concluded that the sentence the appellant had already served was adequate to achieve the ends of justice.
The Court further recorded that the counsel representing the State, identified as Mr. Mathur, did not feel justified in seeking confirmation of the reduced sentence that the High Court had granted on appeal, and the Court agreed with this assessment. Consequently, the Court dismissed the appeals, modifying the order so that the sentence in each case was reduced to the period already undergone by the appellant. The Court also directed that if the appellant was on bail, his bail bonds should be discharged with respect to these appeals. Accordingly, the appeals were dismissed and the sentence was reduced to the time already served.