Supreme Court restores acquittal of telephone cashier in breach of trust case: entrustment not proved, High Court shifted burden

The Bench began with the settled position on appeals against acquittal. In Chelloor Mankkal Narayan Ittiravi Nambudiri (supra), the Court noted that an appellate court has full power to review the evidence but must give due weight to the trial court's view on credibility, the presumption of innocence, the accused's right to the benefit of doubt and the advantage the trial judge had in seeing the witnesses. It then set out the ingredients of Sections 405 and 409 of the Penal Code. Entrustment of property, or dominion over it, and dishonest misappropriation, conversion or use are both essential, and even temporary misappropriation falls within the offence, as R. Venkatakrishnan v. CBI explained.

On entrustment, the Court relied on the admissions of PW12, the first Investigating Officer. He said the complainant did not produce the cashbook, balance sheet, daily register, audit report or rough cashbook, and that no subscriber told him of non-receipt of a receipt or of disconnection. These documents were the basis of entrustment, and without them it was difficult to hold that cash was entrusted to the appellant. The appellant had sought the daily cash handover register and the stock register of receipt books, and the Department did not produce them. The trial Court was justified in drawing an adverse inference under Section 114(g) of the Evidence Act, and the High Court was wrong to say it was for the appellant to produce the registers. The non-production, together with the IO's admissions, pointed to such material not being available with the complainant at all.

On seizure, both panch witnesses (PW6 and PW7) turned hostile, the IO did not obtain the appellant's signature on the seizure panchnama or date his own, and no list of seized articles was given to the appellant. The Court held there was non-compliance with Sections 100(4) and 100(7) of the Code and that the seizure could not be proved on the IO's word alone. Relying on Sunder Singh v. State of Uttar Pradesh and State of Punjab v. Balbir Singh, it accepted that non-compliance with Section 100 does not by itself vitiate a seizure, but said it weighs in the accused's favour when read with the other doubts, especially in an appeal against acquittal. Exhibit 9, the ten-page printed list of telephone numbers and amounts, bore no signature or handwriting of the appellant and nothing connected him to its figures. Exhibit 8, the receipt books, had no record showing they were supplied to him.

The Court also found a second infirmity. After reversing the acquittal, the High Court sentenced the appellant for the first time without hearing him on sentence. Mukesh Kumar Yadav Vs. The State (UT of Andaman & Nicobar Islands), a recent decision, was recalled for the rule that an appellate court convicting after reversing an acquittal must hear the convict on sentence. Since the conviction itself could not stand, nothing turned on this. The Court further held that the High Court erred in treating the appellant's failure to explain the seized documents as an incriminating circumstance. Rabindra Kumar Dey Vs. State of Orissa was referred to for the rule the onus on the prosecution never shifts, and the High Court had shifted the burden to the appellant.

The Court concluded that the prosecution failed to prove entrustment, that the material was insufficient to show misappropriation, and that there was no evidence of dishonest intention. The judgment dated 12.10.2017 of the High Court in Criminal Appeal No. 278 of 2002 was set aside. The acquittal recorded by the Chief Judicial Magistrate, Aurangabad in RCC No. 80163 of 1996 on 20.02.2002 was restored, the appellant was acquitted of the offence under Section 409 of the Penal Code, his bail bonds were cancelled, and the appeal was allowed.