STATE OF MAHARASHTRA Vs. OUSEPH VERGHESE

JUDGEMENT

(1.) Respondent - accused Ouseph Varghese together with one other person by name Babu Thomas alias K, T. Thomas had made an application to the Registrar of firms, Nagpur, for the registration of the firm in the name of "Popular sindicate. Central Avenue Road, Nagpur". The said firm was registered in the office of the Registrar of Firms under Restration No. 609 / 65-66. Thereafter the accused and the said Thomas started this firm in the year 1965 and it nad branches at Amroti, Akola, Jalgaon and some other places. The Head - Office was situated at Popular Chambers, Central Avenue Road, Nagpur-2. The said firm started a schme known as 'Chit Scheme'. Under the said scheme a person could become a member by agreeing to pay to the firm Rs, 1. Rs. 2 or Rs, 5 daily for 170 days, Then a group of 25 persons contributing equal amount, i. e , either Re. 1, Rs. 2 or Rs. 5 per day was to be formed. The period of the said scheme as declared was 200 days. However, the member was not required to pay his subscription for all 200 days but he was required to pay only for 170 days. The firm used to issue Pass books to its members. It had also appointed some persons to collect subscription amount from the members and the members were given pass books, and it was the duty of the collector to make entry in the pass-book in respect of the amount paid by the subscriber or the member According to the scheme, after the first ten days after collection of the group of persons was commenced, an auction was to be held by taking bids of the members of a particular group for the amount climed by them and the person whose bid was accepted was to get the amount after expiry of 5 days from the date of auction. but this was also in the nature of a loan. He could get this amount after he produces two [sureties from out of the group and who had not taken any loan amount from the firm. If he was unable to give such sureties then the auction was to take place over again. If a person wanted to withdraw the amount before 114 days then he was to get Rs, 60 less and if he wanted to take the amount before the expiry of 130 days, there was a deduction of Rs, 50 and if a person wanted to take the amount before the expiry of 150 days, he was to get Rs. 40 less. The pass book issued was to be in force till the expiry of the period of Chit i. e. 200 days. The member was entitled to get back the amount after the expiry of 200 days subject to deduction of Rs. 10 as a commission of the firm. It was also stipulated that if the amount paid by the person or member was less than Rs, 10, then he was not entitled to get anything, The person who paid Re 1 for 170 days was to get at the expiry of the said period Rs. 190 The office of the firm was working on all the days except sunday and under the rules the firm had reserved the right to itself to amend or change or modify the rules. The firm issued pamphlets like Articles B calling upon the people to join the Chit fund in whatever group they desire and representig to the people that they will be getting loan without intrest. Application forms like Article A were printed. Thus the firm started its business in the name and style of 'Popular Syndicate' Many persons joined the schme of the firm. The firm had appointed P. W. 1 Narayan Chimurkar as one of the bill collectors and subsequenly he was appointed as an Accountant from September 1967. It is the case of the prosecution that in Noveber 1967, both the partners of the firm went to the their offices and did not return In October when some people had been to the office of the firm, they did not find the respondent - accused or other partner there and therefore, the members began to demand bacK their amount. The staff members of the firm were unable to meet these demands and hence they approached the police. However, thereafter a complaint was lodged with the police by Sayed Husen, the complainant in the present case, on 19-11-1967 and on this complaint a crime was registered under section 406 and 420 of the Indian Penal Code against the accused persons.

(2.) It seems that during the course of investigation on 20 -11-1967 and 21-11-1967 the police attached under Panchnamas (exhs 16 and 17) various documents, registers and records of the firm and other articles liKe Clock, Tubelights, Ceiling - fans, steel Cupboards etc. P. S, I. Madhukar Chcube (P, W. 11) sent Messages to all Superitendents of police all over India for arresting the respondent accused. For sometime Shri Choube was in charge of investigation and then the investigation was entrusted To the State C. I. D., as per orders of the Inspector General of Police. From the record it Seems that there after P, W. 12 Narayan Ganpatrao, Head constable, C. I. D. Nagpur Unit, made further investigation in the matter. According to him, he prepared statements of accounts, produced by him before the court which are marked by the trial Court as Articles 54, 55 and 56 from Article 53. which is said to be the accounts of the firm written by Narayan Chimurkar (P. W. 1 ) The said account book is for the period commencing from 5-5-1967 to 8-11-1967. After completing the investigation, charge-sheet was filed before the Court against tne respondent- accused and it is was alleged therein tnat the accused with other partner started the firm with the intention to earn money by dishonest and fraudulent means. It was further alleged that they absconded from Nagpur and misappropriated the amount of Rs. 1339 of complainant Syed Husenali, his brother Syed Vajirali and Pandurang Patel. Thus it was the case of the prosecution that the respondent accused cheated these persons and others and misappropriated a total amount of Rs. 58,269- 68 p. The learned Magistrate of the trial Court framed charges against the accused-respondent undar section 420 and 406 of the Indian Penal Code for having cheated The above said there persons and for having misappropriated the amount of Rs. 1329 between the period from March 1967 to October 1967, During the course of the trial the prosecuting examined in all 12 witnesses, nanely. Narayan Chimurkar (P. W.1), who was appointed as Accountant of the firm, Sk. Habib Abdul Sattar. who was working as a Bill Collector with the firm. The prosecution further examined another bili collector namely, Nizamuddin Abdul Razaq and Suman Mahadeo Gupta. The prosecution also examined complainant Syed Husenali a Hotel keeper and a member of the Chit-fund, Shrikrishna Shioram. Clerk of the Registrar of Firms, Pandurang Motiram Tayade, a subscriber of the Chit-fund Wajirali Usmanali another subscriber and Purushottam Mangalayya, who was Police Inspector and who arrested the eccused-respondent in April 1969. The Panch witness, namely, Chandrabhan who had attested the Panchanamas Fxhs. 16 and 17 about the seizure of the articles by the police was also examined. The prssecution also examined the Police Officers, viz, Police Sub-Inspector Choube and Narayan Ganpatrao.

(3.) The accused on his part denied the allegations made by the prosecution. In his statement under Section 342 of the Code of Criminal Procedure he admitted that the Popular Syndicate is a registered firm and he was a partner of the said firm. He further admitted that a pamphlet like Article Band application form like Article A was published by the Syndicate for attracting people to become members. He also admitted that it was provided in the scheme that if the subscriber paid Rs. 170 for 170 days, then he used to get Rs, 190 after a period cf 200 days. He further admitted that this scheme was extended from Rs 1 daily to Rs. 5 daily He further admitted that the bill collectors used to collect the amount from the members and than used to pay the same to the firm. He further admitted the passbooks issued by the Popular Syndicate which are on record to be the pass-books of the firm. According to the accused, for the last 9 or 10 mohths P. W. 1 Chimurkar was managing the syndicate and money was also deposited with him. However, he admitted that it is true that the above money must have been deposited in the Syndicate. He further admitted that the office was closed before the claim of the complainant was received. He further admitted that complainant Pandurang vide pass-book No. 225 had deposited the amount with the Syndicate. When a question was put to him that he had left the Popular Syndicate in the month of November 1967 and his whereabouts were not known, he contended that he was keeping the manager in the office and when he returned from the branches he saw the office was sealed by the police. A question was put to him that P. W. 9 Choube made extraordinary efforts to search him and he went to many places such as Verul, Delhi and ultimately he was apprehended in Ranchi in Bihar carrying on again a Chit-Fund business under a different name. To this question the accused replied that at Ranchi he was serving in Ashok Banking business and he produced an appointment letter and relieving order. He further conteneded that the Popular Syndicate had to receive amount from Husenali and, therefore contended that Husenali might have reported the matter to the police because of the enimity, So far as the seized articles were concerned, according to the accused the property was his and it should be returned to him. He. admitted in his statement that the Syndicate had no bank account with any bank because, according to him, there was no need to keep the money in the bank. Finally he stated that the the Popular Syndicate has to received near about two lakhs of rupees from others. Promissory notes were not returned to him and, therefore, he could not recover the loan back. He further stated that he had no intention to deceive anybody and if the account books, etc. were not seized, he would have received much more amount from others and then paid to the persons, but as the police sealed and seized all the material, he became helpess to carry the business or to return the money to the members. He further stated that he has been acquitted by another Court in the similar proceeding. Thus in substance it was the case of the accused that he could not carry on the business or return money because the Registers, account-books and other property was seized by the police and the police had sealed the Syndicate office itself He further contended that he had no intention to cheat people. Thus the accused denied the allegations made against him by the prosecution. The learned judcial Magistrate, First Class, afrer going through the evidence on record, came to the conclusion that the accused has dishonestly misappropriated the amount entrusted to him. The learned Magistrate further found that the accused had admitted the entrustment of the amount in puestion to the Popular Syndicate of which he was the partner. The learned Magistrate further found that once it is proved that money was entrusted to the person, burden shifts on him to show that as to what he did with the money and the accused has failed to discharge this burden. He has further drawn an adverse inference of guilt against the accused from the fact that he was absconding and was carrying on business under a different name in Renchi Thus considerning the admissons of the accused, the account-books Article 53. his running away from place of business and not maintaining accounts of the firm in any other bank, the learned Judicial Magistrate First Class, came to the conclusion that the prosecution has proved beyond dout that the accused had dishonestly misappropriated the amount of Husainali, Vazirali and Pandurang However the learned Judicial Magistrate found that the charge under section 420 of the Indian Code was not required to be considered after seeing the nature of the prosecution case and the evidence. Therefore ultimately the learned Judicial Magistrate convicted the accused for an offence punishable under section 406 of the indian Penal Code and sentenced him to undergo rigorous imprisonment for six months and to pay a fine of Rs. 500 or in default of payment of fine further rigorous imprisonment for three months. The learned Magistrate also passed consequential order regarding disposal of property. Thus the learned Ma gistrate convicted the accused for the offence under section 406 of the Indian Penal Code only,