V. D. Raveesha vs The State Of Karnataka

REPORTABLE 2024 INSC 1060

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CRIMINAL) NO.980 OF 2024 [@ DIARY NO.85 OF 2024]

V. D. RAVEESHA …PETITIONER

VERSUS

THE STATE OF KARNATAKA …RESPONDENT

JUDGMENT

AHSANUDDIN AMANULLAH, J.

The present petition impugns the Final Judgment and Order dated

11.10.2023 (hereinafter referred to as the ‘Impugned Order’) passed by

the High Court of Karnataka at Bengaluru (hereinafter referred to as the

‘High Court’) in Criminal Revision Petition No.653/2020, whereby the

High Court confirmed the Judgment and Order dated 25.08.2020 passed Signature Not Verified Digitally signed by

in Criminal Appeal No.29/2018 by the learned VI Additional District and Nirmala Negi Date: 2025.03.19 19:04:58 IST Reason:

Sessions Judge, Tumakuru (hereinafter referred to as the ‘Appellate

Court’) which had affirmed the conviction recorded and sentence 2

awarded to the petitioner, by the learned Additional Senior Civil Judge

and Chief Judicial Magistrate, Tumakuru (hereinafter referred to as the

‘Trial Court’) vide Judgment and Order dated 26.04.2018 in

C.C.No.1218/2012.

FACTUAL OVERVIEW:

2. The petitioner (hereinafter also referred to as the ‘accused’) had

purchased a vehicle bearing Registration No.KA-41-2298 by obtaining

financial assistance of Rs.3,00,000/- (Rupees Three Lakhs) from M/s

Shriram Transport Finance Company Limited (hereinafter referred to as

the ‘Company’). A Loan-cum-Hypothecation Agreement (hereinafter

referred to as the ‘Agreement’) was entered into between the accused

and the Company whereby the above-mentioned vehicle was

hypothecated in favour of the Company and the same was duly

notified/marked in the Registration Certificate of the said vehicle. Though

the accused had paid one or two instalments, but thereafter, he defaulted

and despite several requests, the accused did not make further

payments. Accordingly, since as per the terms of the Agreement, the

vehicle could be seized by the Company, on 18.02.2011, the concerned

Branch Manager of the Company seized the vehicle and took it to the

police station. At that time, it was revealed that the petitioner, without

repaying the loan of Rs.2,95,000/- (Rupees Two Lakhs Ninety-Five 3

Thousand) had forged and created (i) receipt no. AD 0873936 for having

repaid the loan amount; (ii) No-Objection Certificate, and; (iii) Form

No.35 purported to have been issued by the Company, by forging the

signatures of the authorized signatories and had also sold the vehicle to

one Savithramma. In short, it was alleged that the petitioner, without

discharging the entire loan liability due towards the Company, sold off the

vehicle by producing forged documents before the Regional Transport

Office (hereinafter referred to as ‘RTO’) and getting the hypothecation

cleared.

3. On the basis of these allegations, the Company’s Branch

Manager lodged complaint leading to lodging of First Information Report

bearing Crime No.34/2011 on 18.02.2011 under Sections 406 1, 4202 and

4683 read with 344 of the Indian Penal Code, 1860 (hereinafter referred

to as the ‘IPC’). On 16.11.2011, Chargesheet was filed against the

petitioner under Sections 406, 468, 420, 465 and 471 of IPC in the case

registered as C.C. No.1218/2012 before the Trial Court.

1

‘406. Punishment for criminal breach of trust.—Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.’ 2 ‘420. Cheating and dishonestly inducing delivery of property.—Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.’ 3 ‘468. Forgery for purpose of cheating.—Whoever commits forgery, intending that the document or electronic record forged shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.’ 4 ‘34. Acts done by several persons in furtherance of common intention.—When a criminal act is done by several persons, in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone.’ 4

4. Before the Trial Court, the prosecution examined PW1 to PW13

and got marked Ex. P1 to Ex. P32 and got exhibited one Compact Disc

as M.O.1. The petitioner chose not to lead any defence evidence on his

behalf, except producing a document marked as Ex. D1. On a

consideration of the materials before it, the Trial Court found the

petitioner guilty of offences under Sections 406, 468, 465, 420 and 471

of the IPC and sentenced him to rigorous imprisonment (hereinafter

abbreviated to ‘R.I.’), simple imprisonment (hereinafter abbreviated to

‘S.I.’) and fine(s), as under:

IPC Section Conviction and Sentence 406 Fine of Rs.5,000/-.

In default of payment of fine, to undergo three months’ S.I. 468 Two years’ R.I. along with fine of Rs.3,000/-.

In default of payment of fine, to undergo further three months’ S.I. 465 Fine of Rs. 5,000/-.

In default of payment of fine, to undergo three months’ S.I. 420 Two years’ R.I. along with fine of Rs.3,000/-.

In default of payment of fine, to undergo further three months’ S.I. 471 Fine of Rs.5,000/-.

In default of payment of fine, to undergo three months’ S.I. 5

5. Aggrieved by the conviction and sentence awarded supra, the

petitioner filed Criminal Appeal No.29/2018, which came to be dismissed

by the Appellate Court. Thereafter, the petitioner filed Criminal Revision

Petition No.653/2020 before the High Court which has also been

dismissed vide the Impugned Order and the conviction and sentence,

imposed and affirmed by the Courts below, has been confirmed.

SUBMISSIONS BY THE PETITIONER:

6. At the outset, learned senior counsel submitted that the High

Court as well as the Appellate Court and the Trial Court committed error

in convicting the petitioner without considering his case. It was argued

that the Courts below failed to appreciate the fact that the petitioner had

repaid the loan amount and received the receipt (Ex. P9), No-Objection

Certificate (Ex. P8) and Form No.35 (Ex. P10) from the Company, after

clearing the loan. It was pointed out that the Company failed to produce

any document/ledger/booklet to show that the loan was not repaid by the

accused. Even the allegedly-forged Form No.35 was never produced

before the Courts.

7. It was argued that the prosecution failed to produce any

evidence/material to show how the disputed documents were fabricated

and by using which computer/printer. There is also no material placed on 6

record to connect the accused with the forged signatures. It was

submitted that in the absence of such evidence, the petitioner cannot be

convicted for the alleged offences in question.

8. It was submitted that Exs. P11 and P12 are said to be the formats

of the receipt and No-Objection Certificate, which the Company issues to

its customers. A customer entitled to receive Exs. P11 and P12 was not

examined before the Trial Court. When the loan pertaining to the said

customer is cleared and Exs. P11 and P12 were issued, there was no

reason for the Company to retain those documents with it. Therefore, no

importance could be attached to the said documents, and it was

submitted that the said two exhibits were not produced from proper

custody.

9. It was further submitted that all the witnesses were employees of

the Company and hence no reliance could be placed on their

depositions. It was pointed out that PW4 was the only independent

witness and PW13 did not support the case of the prosecution. It was put

forth that the prosecution failed to prove its case beyond reasonable

doubt and therefore, in the interest of justice, the Impugned Order be set

aside by acquitting the petitioner.

7

SUBMISSIONS BY THE RESPONDENT-STATE:

10. Per contra, learned counsel for the State of Karnataka submitted

that Courts below have rightly convicted and sentenced the accused

based on cogent grounds and the same does not call for any

interference by this Court. It was submitted that without repaying the

loan, the accused has sold the vehicle to PW4 and forged Exs. P8 to

P10. The disputed documents were forwarded to a handwriting expert

along with the admitted signature and handwritings of the accused. The

expert report (Ex. P28) fully supports the case of the prosecution.

Further, PW5, the Divisional Manager of the Company, has specifically

deposed that he never signed and issued Exs. P8, P9 and P10. It was

submitted that the evidence on record sufficiently demonstrates that it is

the accused alone who is the author of the forged and fabricated

documents. In these circumstances, it was canvassed that the

prosecution had proved the case beyond reasonable doubt. On these

grounds, learned counsel prayed for dismissal of the instant petition.

ANALYSIS, REASONING & CONCLUSION:

11. We have heard learned counsel for the parties and perused the

evidence on record as well as the orders of the Courts below. The issue

before us is whether the petitioner is guilty of committing offences under 8 Sections 406, 420, 468, 465 and 471 IPC, and if so, whether the

sentences imposed on him by the Trial Court and confirmed by the

Appellate Court and High Court call for interference.

12. The accused has not denied availment of the loan from the

Company and the subsequent sale of the vehicle made in favour of

Savithramma. However, he has taken the specific defence that he had

cleared the loan and closed the account. PW1, the informant who was

working as Manager in the Company, has specifically stated in his

evidence that the accused had not cleared the loan and got the

hypothecation cancelled on the basis of forged documents. He has

stated that Exs. P8, P9 and P10 are not issued by the Company and has

identified them as forged documents. PW1 has admitted the payment of

2-3 instalments made by the accused. As per the terms of the

Agreement, if any customer commits default in payment of 5 instalments,

the Company is empowered to seize the vehicle. He has further stated

that the Investigating Officer collected the sample writings and

signatures of the Divisional Manager of the Company as Exs. P13 and

P14. Similarly, the writing of the accused was also collected as Exs. P15

and P16. These documents were sent to the handwriting expert for

examination. This witness further stated that Exs. P11 and P12 are the

standard sample receipt and No-Objection Certificate which the

Company issues to its customers and these documents are prepared in 9

duplicate and one copy is retained with the Company. It was further

deposed that as per the Company’s rules, after clearance of the loan, the

No-Objection Certificate is to be issued after one week.

13. PW3-Nagabhushana is a Legal Executive in the Company and he

has supported the statement of PW1. PW5-Nandakumar is the Divisional

Manager of the Company. According to this witness, after the repayment

of the entire loan by the customer the concerned branch forwards the file

seeking No-Objection Certificate from him (PW5). He has specifically

stated that the case-file pertaining to the accused’s loan has never come

to his office and he had not issued Ex. P10 at any point of time. He has

denied the signature on Ex. P10 as being his and deposed that the

document is forged.

14. PW8-Venkataramaiah is a Junior Executive in the Company. He

has deposed that during the relevant period when the accused is stated

to have repaid the loan, he was working as a cashier in the relevant

branch. He has specifically stated that being cashier of the Company’s

branch, he has not issued Ex. P9 and has not received any payments

from the accused. This witness has also deposed that the Investigating

Officer had obtained the signatures and writings of the accused as also

PW5.

10

15. PW4-the husband of Savithramma has stated that he purchased

the vehicle from the accused in the name of his wife. He also stated that

the accused on his request brought the Clearance Certificate from the

office of the RTO, Nelamangala. PW9-Dinesh Kumar is the Police Sub-

Inspector who has deposed about receiving Exs. P9 and 10 from RTO,

Nelamangala. He further states that he forwarded the sample

handwritings, signatures and Exs. P8 to P10 along with sample

documents secured from PW1 being Exs. P11, P12 and P19 to the

handwriting expert.

16. PW11-Syed Asgar Imam is a retired Assistant Director of the

Forensic Sciences Laboratory, Bangalore. This witness is an expert

witness in the case and had submitted an expert report being Ex. P28.

This witness has specifically deposed that the signatures found on Exs.

P8 and P9 were forged. This witness also specifically stated that it was

the accused who had made the D5, D6 and D7 signatures on Ex. P10. It

was stated that the signatures found on these documents were not the

signatures of PW5, who is the competent person to issue these

documents on behalf of the Company.

17. It is undoubtedly true that some of the prosecution witnesses are

officials working in the Company, but just for that reason they cannot be

termed as interested witnesses. Except a bald allegation, no material 11

has been placed on record by the accused to show any enmity or ill-will

against him by these witnesses, to bolster the argument of false

incrimination. As stated earlier, the accused took a specific defence that

he had repaid the entire loan amount. However, nothing has been

produced to show how the amount was repaid, when it was repaid, and

by which mode it was repaid. Having taken a specific defence, it was for

the accused to lead evidence and probabilize his defence. In our view,

the accused has failed in this regard.

18. In fact, the Court is a little surprised as to how the petitioner, even

before this Court, has taken the stand that the documents are genuine

and not forged and/or fabricated, when the entire evidence, both oral as

well as documentary, clearly reveal to the contrary. Moreover, there is no

record, whatsoever, forthcoming to show that the accused had repaid the

loan. Obviously, the act of repayment of the loan, had the petitioner

actually paid back the loan, could have been demonstrated by bringing

before the Courts documents to indicate that money was transferred

from his account/source to the financier-Company. This has not been

done.

19. At this stage, and subject to what we have stated infra, it would

suffice to say, that for the purposes of establishing the petitioner’s guilt,

there was sufficient and reliable material, which rightly the Courts below 12

have believed and relied upon. Thus, no infirmity in the same having

been found, the conviction needs no interference. On the point of

sentencing, we find that the Trial Court’s view, affirmed by the High

Court, may need some tinkering, which we shall deal with in the

penultimate paragraph. Needless to state, the sentence(s) awarded to

the petitioner shall run concurrently.

20. In Delhi Race Club (1940) Limited v State of Uttar Pradesh,

(2024) 10 SCC 690, a recent decision by a Coordinate Bench of this

Court, it has been elucidated as under:

‘Difference between criminal breach of trust and cheating

35. This Court in its decision in S.W. Palanitkar v. State of Bihar [S.W. Palanitkar v. State of Bihar, (2002) 1 SCC 241 :

2002 SCC (Cri) 129] expounded the difference in the ingredi- ents required for constituting of an offence of criminal breach of trust (Section 406 IPC) vis-à-vis the offence of cheating (Section 420). The relevant observations read as under : (SCC p. 246, paras 9-10)

“9. The ingredients in order to constitute a criminal breach of trust are : (i) entrusting a person with property or with any dominion over property; (ii) that person entrusted :

(a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal con-

tract made, touching the discharge of such trust.

10. The ingredients of an offence of cheating are : (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to 13

do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases covered by (ii)

(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.”

36. What can be discerned from the above is that the of- fences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients:

In order to constitute a criminal breach of trust (Sec- tion 406 IPC) (1) There must be entrustment with person for property or dominion over the property, and (2) The person entrusted:

(a) Dishonestly misappropriated or converted prop- erty to his own use, or

(b) Dishonestly used or disposed of the property or wilfully suffers any other person so to do in violation of:

(i) Any direction of law prescribing the method in which the trust is discharged; or

(ii) Legal contract touching the discharge of trust (see : S.W. Palanitkar [S.W. Palanitkar v. State of Bihar, (2002) 1 SCC 241 : 2002 SCC (Cri) 129] ).

Similarly, in respect of an offence under Section 420 IPC, the essential ingredients are:

(1) Deception of any person, either by making a false or misleading representation or by other action or by omis- sion;

(2) Fraudulently or dishonestly inducing any person to deliver any property, or (3) The consent that any person shall retain any prop-

erty and finally intentionally inducing that person to do or omit to do anything which he would not do or omit (see : Harmanpreet Singh Ahluwalia v. State of Pun- jab [Harmanpreet Singh Ahluwalia v. State of Punjab, (2009) 7 SCC 712 : (2009) 3 SCC (Cri) 620]).

37. Further, in both the aforesaid sections, mens rea i.e. in- tention to defraud or the dishonest intention must be present, and in the case of cheating it must be there from the very be- ginning or inception.

xxx

40. To put it in other words, the case of cheating and dis- honest intention starts with the very inception of the transac- 14

tion. But in the case of criminal breach of trust, a person who comes into possession of the movable property and receives it legally, but illegally retains it or converts it to his own use against the terms of the contract, then the question is, in a case like this, whether the retention is with dishonest intention or not, whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case.

41. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudu- lent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence.

42. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence of breach of trust has been committed must be either the property of some person other than the accused or the bene- ficial interest in or ownership of it must be of some other per- son. The accused must hold that property on trust of such other person. Although the offence i.e. the offence of breach of trust and cheating involve dishonest intention, yet they are mutually exclusive and different in basic concept.

43. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e. since inception. In criminal breach of trust, mere proof of en- trustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously.

xxx 15

55. It is high time that the police officers across the country are imparted proper training in law so as to understand the fine distinction between the offence of cheating vis-à-vis crim- inal breach of trust. Both offences are independent and dis- tinct. The two offences cannot coexist simultaneously in the same set of facts. They are antithetical to each other. The two provisions of IPC (now BNS, 2023) are not twins that they cannot survive without each other.’ (emphasis supplied)

21. Though, having regard to the afore-enumerated position of law,

on an overall conspectus of the factual aspects juxtaposed with the

evidence on record, as regards fulfilment of the ingredients of Sections

406 and 420 of the IPC, at first sight, it may appear that the petitioner

cannot be convicted both under Sections 406 and 420 of the IPC, but, in

the present case, on a proper consideration of the issue in its entirety,

there is a fine distinction inasmuch as, there are two different persons

against whom the petitioner has committed the resepective offences

under the Sections supra: first, the Company and second, Mallikarjuna

(PW4 and husband of purchaser Savithramma). Thus, in the facts and

circumstances of the present case, evidently the petitioner is guilty of

offence committed against the Company punishable under Section 406

of the IPC and also, of offence committed against Mallikarjuna (PW4 and

husband of purchaser Savithramma) punishable under Section 420 of

the IPC.

16

22. Accordingly, for reasons aforesaid, the criminal Special Leave

Petition(s) stands dismissed, upholding the Impugned Order, with the

distinguishment of the offences committed supra and by, in the interest of

justice, reducing the sentence(s) awarded to one year and six months’

Simple Imprisonment. From the bail application it transpires that the

petitioner has already surrendered and presently is lodged in Central

Prison, Parappana Agrahara, Electronic City Post, Bangalore. Thus, he

is directed to serve the remaining period of the sentence as per this

order. This shall be notwithstanding that vide Record of Proceedings of

even date, we had dismissed the matter(s) simpliciter.

23. Registry shall communicate the order to the Superintendent ,

Central Prison, Parappana Agrahara, Electronic City Post, Bangalore

forthwith.

24. We do not propose to make an order as to costs. Pending I.A.s

do not subsist for consideration and are closed.

…………………………………….J. [SUDHANSHU DHULIA]

……………………………………J. [AHSANUDDIN AMANULLAH]

NEW DELHI 22nd OCTOBER, 2024