2004 INSC 0164
                                    SUPREME COURT OF INDIA

                                          State of Andhra Pradesh

                                                      Vs.

                                                M.C. Venkulu

                                            Crl.A.No.11 of 1998

                               (Doraiswamy Raju and Arijit Pasayat JJ.)

                                                 05.02.2004

                                                   ORDER

Heard.

1. State of Andhra Pradesh calls in question legality of judgment rendered by a learned
Single Judge of the Andhra Pradesh High Court directing acquittal of the respondent.

2. The respondent faced trial for alleged commission of offence punishable under Section
409 of the Indian Penal Code, 1860 (in short 'the IPC') and accusations against him were to
the effect that after having withdrawn an amount of Rs.4952.40, he disbursed only a part of it
and misappropriated the balance. At the relevant point of time, the respondent was working
as the Head Clerk and PW-9 was working as Lady Medical Officer in Primary Health Centre
at Warangal. According to the prosecution, the respondent was entrusted with the task of
encashing the bills and collecting the money from the State Bank of Hyderabad Branch at
Gajwel, and disburse the amount to the staff for various purposes for which the money was
permitted to be withdrawn. Though the money was admittedly withdrawn, according to the
prosecution, the same was not utilised for the purpose for which it was withdrawn and on the
contrary, the accused misappropriated it. In the statement recorded under Section 313 of the
Code of Criminal Procedure, 1973 (in short 'Cr.P.C.'), the accused accepted withdrawal of
the money, but stated that he had disbursed the amount and returned a part of it to PW-9 and
had obtained a receipt for it. This part of the accused's claim was disputed by PW-9, who
stated that the receipt produced was forged. Be that as it may, the accused was found guilty
by the Trial Judge and the conviction and sentence imposed were maintained by the first
appellate court. By the impugned judgment, the High Court reversed the conclusions by
holding that entrustment was not proved and, therefore, Section 409 IPC was not attracted to
the facts of the case.

3. In support of the appeal, learned counsel for the appellant-State submitted that when the
appellant had accepted withdrawal of the money, there was no question of proving any
further entrustment independently. In the present case, when the accused himself accepted
withdrawal of the money, the question of proving any further entrustment does not arise. Per

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contra, learned counsel for the accused submitted that though the accused had admitted
withdrawal of the money, he had taken a specific stand about refund of the balance amount
to PW-9. Certain other points were also urged, which were not considered by the High Court.
Section 409 IPC can be invoked if it is shown that the accused being in any manner entrusted
with dominion over property in his capacity as public servant committed criminal breach of
trust in respect of that property. Criminal breach of trust is defined in Section 405 IPC. Once
entrustment is admitted or proved, it would be for the accused to account for the money
entrusted.

4. We do not think it necessary to go into the other questions, as raised by learned counsel for
the respondent. Since the High Court limited its consideration only to the question of
entrustment, we shall deal with that question only. In view of the admitted position, the High
Court was patently in error in holding that entrustment was not established. In the fitness of
things, the matter should be heard by the High Court. The parties shall be permitted to
substantiate their stands on the basis of evidence on record, and the High Court shall consider
the matter afresh and dispose it of in accordance with law. We make it clear that we have not
expressed any opinion on the various issues raised by the parties, except on the question of
entrustment, which we find, the High Court had not correctly decided.

5. The appeal is disposed of accordingly.

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