The main legal point established is that a loanee from a financial institution holds the property as a trustee and cannot alienate it without repaying the loan in full, as per the provisions of the State Financial Corporations Act, 1951, Section 29.

Sureshwar Thakur, J.

The instant appeal stands directed by the State of Himachal Pradesh against the impugned judgment rendered on 13.03.2007 by the learned Additional Sessions Judge, Shimla, in Cr. Appeal No. 4-R/10 of 04/01, whereby the learned Additional Sessions Judge, Shimla, camp at Rohru, acquitted the respondent (for short ‘accused’) for the offences charged.

2. The brief facts of the case are that respondent accused applied to the ‘Corporation’ for loan to enable him to install a rope way. The loan was sanctioned to him. He executed some documents. So long as the loan was not repaid, as per the terms of the agreement, the appellant could not in any way misappropriate, sell or dispose off in any manner the machinery or accessories, etc. It is alleged against him that in violation of such terms of agreement, he disposed off the machinery, assets, etc. to one Kundan Lal and thereby committed breach of trust, as these assets etc. were in trust with him so long as the loan had not been repaid. At this complaint Ext.PW-1/A was made which resulted into the registration of the F.I.R. After registration of the F.I.R. the matter was investigated. After completing all codal formalities and on conclusion of the investigation into the offence, allegedly committed by the accused challan was prepared and filed in the Court.

3. The accused stood charged for his committing offence punishable under Section 406 of the Indian Penal Code to which he pleaded not guilty and claimed trial.

4. In order to prove its case, the prosecution examined 18 witnesses. On closure of prosecution evidence, the statement of the accused under Section 313 of the Code of Criminal Procedure, was recorded in which he pleaded innocence and claimed false implication. He did not choose to lead any evidence in defence.

5. On an appraisal of evidence on record, the learned Additional Sessions Judge, Shimla returned findings of acquittal in favour of the accused.

6. The learned Deputy Advocate General has concertedly and vigorously contended qua the findings of acquittal recorded by the learned Additional Sessions Judge standing not based on a proper appreciation of evidence on record, rather theirs standing sequelled by gross mis-appreciation of material on record. Hence, he contends qua the findings of acquittal being reversed by this Court in the exercise of its appellate jurisdiction and theirs being replaced by findings of conviction.

7. The learned counsel appearing for the respondent has with considerable force and vigour contended qua the findings of acquittal recorded by the learned Additional Sessions Judge standing based on a mature and balanced appreciation of evidence on record and theirs not necessitating interference, rather theirs meriting vindication.

8. This Court with the able assistance of the learned counsel on either side has with studied care and incision, evaluated the entire evidence on record.

9. The order of acquittal recorded by the learned Additional Sessions Judge, Shimla, would suffer the ill-fate of its reversal by this Court only on invincible evidence existing on record connotative of the accused/respondent not holding absolute title as owner qua a ropeway which stood installed by him on financial assistance standing purveyed to him by H.P. State Financial Corporation (hereinafter referred to as the ‘Corporation’), whereupon hence he would not hold an absolute right of alienating it dehors his not repaying to the financial institution concerned the entire component of loan borrowed by him also would sequel a conclusion from this Court of with his not holding absolute dominion qua the property concerned whereupon the concomitant conclusion of its standing entrusted to him or his holding it in trust would stand engendered. However, with evidence standing evinced qua the factum of its standing not entrusted to him, the charge of his committing viz-a-viz it the offence of criminal breach of trust would founder. The learned First Appell