- While giving the judgement on a case, the Supreme Court specified certain criteria which need to be fulfilled in order for the offence to come under section 409, 420, 477-A of IPC and section 13(2) and 13(1)(d) of the PC Act.
- The provisions of all such sections are discussed here in this article.
- Further, the judgement of the SC in the N. Raghavender v. State of Andhra Pradesh, CBI is also discussed with respect to these sections mentioned above.
In a recent judgement, Chief Justice of India, Justice N. V. Ramana, along with 2 other Supreme Court judges, Justice Surya Kant and Justice Hima Kohli, defined the various ingredients necessary to charge an accuse with Sections 409, 420, and 477A of Indian Penal Code (IPC) and Sections 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988 (PC Act).
- This section deals with the criminal breach of trust. The accused under this section is entrusted with a property that he/she dishonestly misappropriates or converts to his own use.
- This is also applicable when the accused dishonestly uses or disposes of that property. This misappropriation should be in violation of any laws which are related to the property entrusted.
- If the person makes any contract with another violating the trust or wilfully allows others to do so, then also he/she is said to have committed a criminal breach in trust.
- The 2 fundamental ingredients of criminal breach of trust under this section are “dishonestly” and “misappropriate”. This section is non-cognizable, bailable and the trial can take place under a magistrate of 1st class.
- This section of the IPC deals with criminal breach of trust in respect of property entrusted to the accused, which is the same as section 405.
- But under this section, the accused has to be a public servant, banker, merchant, factor, broker, attorney, or agent and the property has to be associated with the position of the accused.
- The use of the term “dishonestly” in the above section shows that the presence of mens rea is a mandate for the application of these 2 sections.
- Here the term “entrustment of property” means that the prosecution just has to prove that there has been a misappropriation of the property entrusted and not the actual method of misappropriation.
- This section covers cognizable and non-bailable offences and the trial can be held under a 1st class magistrate. If found guilty under this section, a person is sentenced to imprisonment for life or a term which can extend up to 10 years along with fine.
SECTION 420, IPC
- This section of IPC deals with cheating and altering or destroying the whole or part of any valuable security. If a person is accused of misleading and inducing the deceived to deliver any property to them or the cheater, it will also be dealt with under this section.
- If the accused alters or destroys anything which is signed and sealed and can be converted into a valuable security, it will be taken under this section.
- If convicted under this section, the convict will be sentenced to 7 years of imprisonment with fine. This section also deals with cognizable and non-bailable offences and the trial can be undertaken by a 1st class magistrate.
- Under this section, the prosecution has to prove that the accused has cheated someone and the deceived person was induced to deliver some kind of property.
- Along with the above-mentioned point, if we add mala fide intentions, it completes section 420 of IPC.
- If there is a breach of contract, it will not come under this section until and unless it is proved that the party had mala fide intentions at the time of signing the contract.
SECTION 477-A, IPC
- This section takes under account any act done wilfully with mala fide intentions to defraud, destroy, alter, mutilate or falsify any book, paper, writing, valuable security, or account.
- The act should be done by a clerk, officer or servant, or someone who acts as these 3.
- The documents mentioned above should belong to or be in the possession of his employer or be given to him on behalf of his employer.
- This act should be done with a wrong intention to add or omit or alter or help in these.
- If the prosecution is able to prove the above points, the accused would be convicted.
- This section deals with non-cognizable and bailable offences.
- And if found guilty the accused will be sentenced with imprisonment of 7 years or fine or both.
- This section of IPC deals with criminal conspiracy.
- Subsection (1) reads that whoever is involved in any criminal conspiracy act with a punishment such as death, imprisonment for life, rigorous imprisonment for 2 years or more will be treated like he/she has abated in the act.
- Subsection (2) reads that if any act of criminal conspiracy is performed other than the above-mentioned offences then the punishment for such acts would be imprisonment of 6 months or fine or both.
SECTION 13(1)(C), PC ACT
This clause says that when a person who is in possession of a certain property due to his position as a public servant misappropriates it or uses it for his/her own use, he has committed the act of criminal misconduct.
This clause reads that a public servant, when
(i) By corrupt means acquires monetary gains for himself/herself or others;
(ii) By abusing his power acquires monetary gains for himself/herself or others;
(iii) In position, helps others to gain monetary interest without public interest; is said to have committed criminal misconduct.
SECTION 13(2), PC ACT
This section defines punishment for a public servant if he is found guilty of criminal misconduct.This punishment includes imprisonment for 4 years which can be extended to 10 years along with fine.
In this case, N. Raghavender v. State of Andhra Pradesh, CBI, the accused no. 1 and appellant Mr. Raghavender challenged the order of Andhra Pradesh High Court, who held him guilty for criminal conspiracy. Accused no. 1 along with accused no. 2, Sandhya Rani, took undue advantage of their positions in Sri Rama Grameen Bank, Nizamabad Branch, where they worked. They conspired with accused no. 3, Mr. C. Vinay Kumar, who was the brother-in-law of accused no. 1 and was treasurer of Nishita Educational Academy to fraud the bank. Nishita Educational Academy had an account in Sri Rama Grameena Bank, Nizamabad Branch with an initial deposit of Rs. 5,00,000, which was taken care of by Mr. Kumar.
One day, the appellant issued certain loose-leaf cheques and withdrew a sum of Rs. 2,50,000 from the academy’s account and did not update the same in the bank ledger. He continued this practise and withdrew Rs. 4,00,000 and Rs. 3,50,000 from the academy account in the same manner.
The last amount of Rs. 3,50,000 was withdrawn in favour of accused no. 3, but the signature used in the cheque did not tally with that of Mr. Kumar. Altogether, a sum of Rs. 14,00,000 were credited in the academy’s account, but the ledger showed only Rs. 4,00,000. It was alleged that the rest were used in balancing the previously withdrawn Rs. 10,00,000.
Apart from this the appellant had also withdrawn 2 immature FDRs which were in the name of Mr. B. Satyajeet Reddy and amounted to Rs. 10,00,000 and Rs. 4,00,000. When the auditor came to know about these illegal transactions, Mr. Raghavender was transferred and the Chairman of Sri Rama Grameena Bank filed a complaint in the CBI.
CBI registered the case under sections 409, 477(A), and 120B IPC, and Section 13(2) r/w 13(1)(c) & (d) of the PC Act. After the trial, Special Judge, CBI cases, Hyderabad sentenced accused no. 1 with 5 years of rigorous imprisonment and fines under section 120-B, 420, 409, 477-A of IPC and 13(2) r/w 13(1)(c) & (d), while acquitting the other 2 accused. This decision was challenged by the appellant in the Andhra Pradesh High Court who dismissed the criminal appeal.
Judgement By The Supreme Court-
The court held that-
- There was no financial loss to the bank.
- No monetary loss to Mr. B. Satyajeet Reddy or any other customer.
- The evidence does not point towards any conspiracy between the co-accusers.
Therefore, these acts do not fall under the ambit of sections 409, 420, and 477-A of IPC and are not criminal misconduct.