Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2017 Supreme(Online)(Sikk) 4

Satish K. Agnihotri, CJ
Prem Singh Tamang – Appellant
Versus
State Of Sikkim – Respondent
Crl. A. No. 01 of 2017 | Crl. A. No. 02 of 2017

Advocates:
For the Appellants/Petitioners: K. T. Bhutia, Bandana Pradhan, D. K. Pradhan, Sarita Bhusal, N. Rai, Tamanna Chettri, Malati Sharma
For the Respondents: A. Mariarputham, Karma Thinlay, N. P. Sharma, A. J. Sharma, Santosh K. Chettri, Pollin Rai

Criminal misappropriation and breach of trust are completed upon the unauthorized diversion of funds, regardless of whether the money is subsequently refunded or if the public exchequer does not suffer permanent financial loss.

Headnote:(A) Indian Penal Code, 1860 - Sections 120B, 403, 406 - Prevention of Corruption Act, 1988 - Sections 13(1)(d)(ii), 13(2) - Criminal conspiracy, misappropriation of funds, and criminal breach of trust - Government funds intended for developmental scheme were diverted through unauthorized channels to non-beneficiaries - Subsequent refund of misappropriated money does not absolve the commission of the offence at the time of diversion. (Paras 21, 26, 27, 28)

(B) Evidence Act, 1872 - Section 114(g) - Adverse inference - Mere non-production of certain documents like the list of suppliers does not vitiate the prosecution case if other substantial evidence exists to prove the charges. (Para 29)

(C) Appellate Jurisdiction - Scope - Courts will not interfere with convictions based on a careful appreciation of evidence unless the findings are perverse or unsupported by law. (Para 11)

Facts of the case:
Two individuals were convicted of misappropriating public funds meant for a state-sponsored animal husbandry distribution scheme. The funds, which were to be released only upon official approval, were diverted to individuals who did not meet eligibility criteria for the scheme. These individuals, upon receipt, transferred the cash to a public servant. Although a portion of the funds was later returned, the prosecution alleged criminal breach of trust, conspiracy, and corruption.

Findings of Court:
The court found that the evidence, including bank documents, vouchers, and the systematic issuance of funds to ineligible persons, established criminal conspiracy and breach of trust. It noted that temporary misappropriation remains an offence under the law regardless of subsequent restitution.

Issues: Whether the diversion of funds to ineligible persons constitutes criminal breach of trust and whether the subsequent refund of funds provides a valid defense against charges of misappropriation.

Ratio Decidendi: The court held that the offence of criminal misappropriation is completed when the property is dishonestly used or diverted, regardless of whether a refund is made later. Once criminal intent and the violation of prescribed modes of disbursement are established, the conviction stands even if no permanent financial loss is sustained.

Result: The conviction of the primary public servant was upheld across all counts. The other individual's conviction under the anti-corruption law was set aside due to their non-public servant status, but their conviction for criminal breach of trust and conspiracy was maintained, with the sentence modified.

Table of Content
1. context of criminal appeals regarding misappropriation and corruption. (Para 1 , 2 , 4)
2. parties argument: credibility of witnesses and procedural validity of sanctioned payments. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11)
3. evidence of illegal disbursement channel and subsequent attempt to refund funds. (Para 13 , 14 , 15 , 18 , 21)
4. evaluation of partisan witness testimony and reliance on documented evidence. (Para 16 , 17 , 19 , 20 , 22 , 34 , 36)
5. application of sections 403, 406 ipc and pc act 1988 ingredients. (Para 26 , 27 , 28)
6. admissibility of evidence and limitations of adverse inferences. (Para 29 , 30 , 31 , 32 , 33 , 35)
7. final orders on conviction, sentencing, and set-off periods. (Para 37 , 38 , 39)

JUDGMENT

(28.06.2017)

Satish K. Agnihotri, CJ

Both the appeals are directed against the common judgment and order of sentence dated 28.12.2016 in Sessions Trial (Vig.) Case No.02 of 2009 (05 of 2013), whereby and whereunder the appellant in Crl. A. No.01 of 2017 (hereinafter referred to as “A – 1”) was convicted of the offences under Section 403; Section 120B (2) read with Sections 403/406 of the Indian Penal Code, 1860 (in short, “IPC”) (in regard to cheque Nos.208236 and 208249) and Section 13(2) read with Section 13(1)(d)(ii) of the Prevention of Corruption Act, 1988 (in short, “PC Act”) (in regard to the amounts concerning with the said cheques and other cheques encashed through PW-40). A-1 was sentenced to undergo SI for a period of one year and to pay a fine of Rs.10,000/- (Rupees Ten thousand) only, in default to pay fine to further undergo further SI for a period of six months for the substantive offence committed under Section 13(2) read with Section 13(1)(d)(ii) of the PC Act. Further he was sentenced to undergo SI for a period of one year under Section 403 IPC and he was also sentenced to undergo SI for a period of six months under Section 120B(2) read with Sections 403/406 of the IPC. The appellant in Crl. A. No.02 of 2017 (hereinafter referred to as “A – 2”) was convicted of the offences under Section 406 IPC (in respect of cheque No.208249); Section 403 IPC (in reference to cheque No.208236) and Section 120B(2) read with Section 403/406 IPC/Section 13(1)(d)(ii)/(2) of the PC Act. He was sentenced to undergo SI for a period of one year and to pay a fine of Rs.5,000/- (Rupees Five thousand) only for an offence committed under Section 406 IPC. In default to pay fine amount, to further undergo SI for a period of three months. A-2 was further sentenced under Section 403 IPC to undergo SI for a period of eight months and for offence under Section 120B(2) read with Sections 403/406 IPC/Section 13(1)(d)(ii)/(2) of the PC Act to undergo SI for a period of six months. Thus, both the appeals are being considered together.

2. The provenance of filing of charge-sheet against A - 1 and 2 for allegedly having committed offences under Sections 468/120B(2) IPC; Sections 420/120B(2) IPC; Sections 403/120B(2) IPC; Sections 409/120B(2) IPC; and Sections 13(1)(d)(ii)/13(2) of the PC Act and other persons, namely, Keshu Agarwal (A - 3), Subash Tamang (A - 4) and Sanjay Agarwal (A - 5) for committing offences under Sections 468/120B(2) IPC; Sections 420/120B(2) IPC; and Sections 403/120B(2) IPC, was in pursuance of the order dated 04.03.2003 passed by this High Court in Writ Petitions No.03/98, 05/98, 03/99 & 06/99, wherein the Vigilance Department was permitted to register a regular case for alleged irregularities committed in respect of the purchase and distribution of milch cows by the Animal Husbandry & Veterinary Services (AH&VS) Department, Government of Sikkim. A Sikkim Vigilance Police Station (SVPS) Case No.RC-1/2003 was registered by the Vigilance Police on 12.03.2003 for the offences as afore-stated against A - 1 and 2 along with other three persons.

3. The learned trial Judge, on examination and appreciation of several witnesses produced by the Prosecution, held as under:-

“ 62. Resultantly, the Prosecut

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2017 Supreme(Online)(Sikk) 4

Satish K. Agnihotri, CJPrem Singh Tamang – AppellantVersusState Of Sikkim – RespondentCrl. A. No. 01 of 2017 | Crl. A. No. 02 of 2017

Criminal misappropriation and breach of trust are completed upon the unauthorized diversion of funds, regardless of whether the money is subsequently refunded or if the public exchequer does not suffer permanent financial loss.

Cases Referred (6)

Satish K. Agnihotri, CJ
Prem Singh Tamang – Appellant
Versus
State Of Sikkim – Respondent
Crl. A. No. 01 of 2017 | Crl. A. No. 02 of 2017