STATE OF MAHARASHTRA Vs. DEVAKINANDAN KANHYALAL AGARWAL ACCUSED

JUDGEMENT

(1.) THIS appeal by the State is directed against the acquittal of the respondent of offences under secs. 406 and 477a, I. P. C. The respondent was convicted of these offences by the Judicial Magistrate First Class, Poona Cantonment, who sentenced him under sec. 406 I. P. C. to rigorous imprisonment for six months and a fine of Rs. 200, in default, rigorous imprisonment for two months, and under sec. 477a, I. P. C, to rigorous imprisonment {or six months and a fine of Rs. 100, in default, rigorous imprisonment for one month, The substantive sentences were ordered to run concurrently. In appeal, the additional Sessions Judge, Poona, set aside the order of conviction and sentence and acquitted the respondent,

(2.) SHORTLY stated, the prosecution case was as follows:- Karasandas Bhanji, the complainant in this case, and Nevrekar are partners of a firm in Bombay called "a. Harish and Co. Bombay. " In 1955 they agreed with the respondent (who will hereafter be referred to as the accused) to start another partnership in Poona. Business of this partnership was started in Poona on 24th April 1955 A few days later on 28th April 1955, a partnership deed was executed between the three partners. The partnership deed provided that all the capital of the firm was to be supplied by Karsandas Bhanji and Nevrekar, who were to be the financing partners. The accused was to be the working partner and was to manage the shop of the firm in Poona. The business of the partnership was of supplying oats, barley, gram, etc. to stable owners and farm owners in Poona and to other wholesale dealers. The financing partners were to receive interest at 7 1/2 per cent, on the capital invested by them, and they were also entitled to 76 per cent, of the pro fits, the accused, being entitled to the remaining 24 per cent, of the profits. The losses were also to be shared in the same proportion. The financing partners were given the liberty of withdrawing any part of the capital invested by them. But there was a clause in the partnership deed, which provided that till the annual accounts were made up, none of the partners was entitled to withdraw any amount from the partnership by way of monthly withdrawals. The name of this partnership in Poona was to be "a. Harish and Co. , Poona. " The prosecution case is that initially the accused sent copies of bills and invoices to the financing partners, but later on stopped doing so. The financing partners wrote letters asking for the copies, and farther asking the accused to show them the accounts of the partnership, but the accused avoided compliance on one pretext or another. On 7th November 1955 the financing partners came to Poona, and there they closed the account of the partnership which had been opened in the Dena Bank, Poona. Some time later the complainant is alleged to have found that a cheque sent by a customer of the firm was presented by the accused for collection in his personal account. A complaint was then lodged with the police in Bombay, and the account books of the Poona firm were attached. On inspection of the accounts, the complainant found that there was a false entry in the accounts showing that an amount of Rs. 10,000 was paid to the financing partners on 7th November 1955. Hence he lodged a complaint under section 406 I. P. C against the accused at the Cantonment Police Station, Poona. He also got the account books audited. In the course of investigation, it was found that in order to show that the cash balance on hand on 7th November 1955 was more than Rs. 10,000, two false credit entries were made in the accounts, one of Rs. 633-8-0 on 2nd November 1955 as an amount received from one R. R Komandur. and another of Rs. 2611-8-0 on 3rd November 1955 as an amount received from L. W. Marable. It was also found during the investigation that the actual amount misappropriated by the accused in this manner was Rs. 6755. Accordingly the accused was tried for criminal breach of trust under sec. 406 I. P. C. in respect of the amount of Rs. 6755, and for falsification of accounts under sec. 477a, I. P. C. in respect of three items, namely, the credit entry of Rs. 633-8-0 dated 2nd November 1955, and the debit entry of Rs. 10,000 dated 7th November 1955.

(3.) THE accused denied that he was a partner of the complainant and of Nevrekar at the relevant time. He claimed that the complainant and Nevrekar backed out the partnership which was initially formed, that thereafter the shop in Poona was of his exclusive ownership, and that the relations between him and the complainant and Nevrekar were of debtor and creditors. He also claimed that an amount of Rs. 10,000 was in fact paid to the complainant and Nevrekar on 7th November 1955, and that neither the debit entry of Rs. 10,000 nor the two credit entries were false.