Kerala High Court
K.M.Mathew vs State Of Kerala on 25 July, 2025
2025:KER:55049
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
FRIDAY, THE 25TH DAY OF JULY 2025 / 3RD SRAVANA, 1947
CRL.A NO. 2496 OF 2010
AGAINST THE JUDGMENT IN CC NO.56 OF 2003 OF ENQUIRY
COMR.& SPECIAL JUDGE, KOZHIKODE.
APPELLANT/ACCUSED:
K.M.MATHEW
KOCHUPURAKKAL HOUSE, P.O.ANAKKAL,
KANJIRAPPALLY,, KOTTAYAM DISTRICT.
BY ADVS.
SRI.S.RAJEEV
SHRI.JOSY ANTONY
RESPONDENT/COMPLAINANT/STATE:
STATE OF KERALA
PUBLIC PROSECUTOR, HIGH COURT OF KERALA,,
ERNAKULAM., (VC-16/2002 OF VACB, WAYANAD).
SPL PP VACB RAJESH.A,SRPP VACB REKHA.S
THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD
08.07.2025, THE COURT ON 25.07.2025 DELIVERED THE
FOLLOWING:
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CRL.A.2496 OF 2010
2
CR
JUDGMENT
Dated this the 25th day of July, 2025
This criminal appeal, filed under Section 374 of the
Code of Criminal Procedure, 1973 (hereinafter referred to as
‘Cr.P.C.’ for short), is at the instance of the sole accused in
C.C.No.56/2003 on the files of the Enquiry Commissioner and
Special Judge, Kozhikode. He assails judgment in the above
case dated 30.11.2010.
2. Heard the learned counsel for the
appellant/accused and the learned Special Public Prosecutor
appearing for Vigilance and Anti-Corruption Bureau. Perused
the relevant documents.
3. I shall refer the parties in this appeal as
‘accused’ and ‘prosecution’ hereinafter for easy reference.
4. Precisely speaking, the prosecution case is
that, the accused while working as a Lower Division Clerk (LD
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Clerk) in Kerala State Housing Board (KSHB), Wayanad
Division, Kalpetta, during the period from 04.06.1998 and
14.12.2000, abused his official position and committed
criminal misconduct and thereby, dishonestly and fraudulently
misappropriated an amount of Rs.86,332/- (Rupees eighty six
thousand three hundred and thirty two only), which was
collected by him, being the cashier, as part of repayment
made by the loanees from the Kerala State Housing Board.
Thus the accused alleged to have committed offences
punishable under Sections 409, 468 and 420 of the Indian
Penal Code (hereinafter referred to as ‘IPC‘ for short) as well
as under Section 13(1)(c) and (d) r/w. Section 13(2) of the
Prevention of Corruption Act, 1988 (hereinafter referred to as
‘the PC Act‘ for short).
5. The Special Court took cognizance for the
offences and proceeded with trial. During trial, PW1 to PW12
examined and Exts.P1 to P27 were marked on the side of the
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prosecution. On completion of prosecution evidence, even
though the accused was questioned under Section 313(1)(b)
of Cr.P.C. and provided opportunity to adduce defence
evidence, no evidence adduced on the side of the accused.
6. Thereafter, the trial court addressed the
question as to whether the accused misappropriated
Rs.86,332/-, as alleged, while he was holding the post of L.D.
Clerk in the Kerala State Housing Board, Wayanad Division,
Kalpetta office in between the period 04.06.1998 and
14.12.2000 and finally, the accused was found guilty for the
offences punishable under Section 13(2) r/w. Section 13(1)(c)
and (d) of the PC Act and thereby, he was convicted and
sentenced for the said offences while acquitting him for the
offences punishable under Sections 409, 468 and 420 of IPC.
7. While assailing the verdict of the trial court,
the learned counsel for the accused argued that, the trial court
entered into conviction merely based on conjectures and
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surmises and the prosecution miserably failed to adduce
convincing evidence to prove misappropriation of Rs.86,332/-
by the accused with fraudulent and dishonest intention.
8. It is pointed out by the learned counsel for
the accused further that going by the evidence of PW2 (clerk)
as well as PW9 (Accounts Officer), it is emphatically clear that,
apart from the accused/appellant, other persons, viz., James,
PW2 and other contractual employees also, received amount
from the loanees during the period. It is also pointed out that,
according to PW9, the Accounts Officer, the amount received
for the period in between 07.07.1999 and 23.07.1999 were
deposited in bank and therefore, no misappropriation during
the relevant period. It is also pointed out that Shri.Raveendran,
the Accounts Officer who was responsible for verifying the
cash book and daily books to ensure that the amounts
collected on each day were remitted to the bank on the next
day was spared by the prosecution without citing him as a
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6
witness or examining him. According to the learned counsel
for the accused, since the amounts as per the prosecution
evidence were collected not only by the accused but also by
PW2 and other contractual employees, and when there was
failure on the part of the Accounts Officer to verify the same, in
a criminal prosecution, merely because the accused was
entrusted to deal with the cash section as cashier by itself is
insufficient to fasten the criminal culpability upon him.
Therefore, the learned counsel for the accused pressed for
grant of benefit of doubt to the accused. The learned counsel
also conceded that when the accused was suspended from
the service, he paid the amount for getting him reinstated.
9. Resisting this argument, the learned Special
Public Prosecutor zealously argued that as per Ext.P3 Office
Order, proved through PW5, the accused, who joined as LD
clerk in the office, was assigned the job of collection of cash,
DD, cheque, maintenance of cash books and other registers
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related to collection of cash, sale of application forms, receipt
and registration of new application forms during the relevant
period. Therefore, it is his sole responsibility to ensure the
receipt of money as per the office order and remit the same to
the bank on the next day. Even if some supervisory latches
could be found on the part of the Accounts Officer, the same
by itself is not sufficient to hold that the accused is innocent.
He also pointed out that as per Ext.P21, the statements of
amount collected and remitted starting from 01.04.1998 to
23.07.1999, it could be seen that the total amount of
Rs.86,332/- was not remitted to the bank. Therefore, the
accused is the person who misappropriated the amount. In
such view of the matter, the finding of the trial court that the
accused committed offences punishable under Section
13(1)(c) and (d) r/w 13(2) of the PC Act is only to be
sustained.
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10. The learned Special Public Prosecutor
placed decision of this Court in Vijayakumar K. V.State of
Kerala, reported in 2016 KHC 635 : 2016(4) KHC SN 30 :
2016(2) KLD 498 : 2016 (4) KLT SN 76, with reference to
paragraph No.14 that, once it is proved by the prosecution that
there was entrustment and there was no proper accounting of
the amount entrusted, then the burden shifts to the accused
to prove that there was no misappropriation and explain the
irregularities found in the disbursement. Further if entrustment
is proved and explanation given by the accused is not
satisfactory or there was no proper explanation, then it can be
presumed that the accused had committed the offence of
criminal breach of trust and misappropriation. The modus
operandi of the accused, how he committed the
misappropriation etc need not be proved by the prosecution.
The fraudulent intention of the accused can be inferred only
from the attending circumstances and those things cannot be
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9proved by the prosecution by direct evidence and it has to be
inferred from the circumstantial evidence adduced by the
accused on this aspect. The same ingredients of criminal
breach of trust and misappropriation have to be proved by the
prosecution for convicting the accused for the offences under
S.13(1)(c) of the PC Act, 1988 as well. This was so held in the
decisions reported in Jaikrishnadas Manohardas Desai and
another v. State of Bombay, 1960 KHC 694: AIR 1960 SCC
889:1960(c) SCR 319 : 1960 CriLJ 1250, Krishan Kumar v.
Union of India, 1959 KHC 635 : AIR 1959 SC 1390 : 1960(1)
SCR 452 : 1959 CriLJ 1508, State of Kerala v. Vasudevan
Namboodiri, 1987 KHC 518 : 1987(2) KLT 541 : 1987 KLJ 270
: 1987 (1) KLT SN 7, Bagga Singh v. State of Punjab, 1996
KHC 3288 : 1996 CriLJ 2883 (SC), Vishwa Nath v. State of J
& K., 1983, KHC 420 : AIR 1983 SC 174 : 1983(1) SCC 215 :
1983 SCC (Cri)173 : 1983 CriLJ 231, Om Nath Puri v. State of
Rajasthan, 1972 KHC 414 : AIR 1972 SC 1490 : 1972 (1) SCC
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10630 : 1972 SCC (Cri) 359 : 1972 (3) SCR 497 : 1972 CriLJ
897, T Ratnadas v, State of Kerala, 1999 KHC 2074 : 1999
CriLJ 1488, State of Rajasthan v. Kesar Singh, 1969 CriLJ
1595, Roshan Lal Raina v. State of Jammu & Kashmir, 1983
CriLJ 975 and Raghavan K v. State of Kerala, 2012 KHC 420.
11. In addition to that, the decision of this Court
in Ravinathan L. v. State of Kerala, reported in 2023 (4) KHC
530 also has been placed to contend that the ingredients to
prove offence under Section 409 of IPC as well as under
under Section 13(1)(c) of the PC Act are one and the same.
12. In view of the rival argument, the points arise
for consideration are :
1. Whether the trial court is justified in finding that
the accused committed offence punishable under
Section 13(1)(c) r/w 13(2) of the PC Act?
2. Whether the trial court is justified in finding that
the accused committed offence punishable under
Section 13(1)(d) r/w 13(2) of the PC Act.
3. Whether the verdict under challenge would
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11require any interference?
4. The order to be passed
13. Point Nos.1 to 4:
This crime was registered when PW9 took charge of
the Accounts Officer in the office on 14.07.1999. PW9
deposed that when he joined as Accounts Officer on
14.07.1999, the accused Mathew as well as one Rajan were
working as clerks in the office and cash section was dealt by
the accused since there was no separate cashier post.
Thereafter, when he had verified the account, he found some
shortage of amount and the matter was reported to the then
Executive Engineer. The Executive Engineer who was
examined as PW11 also supported the version of PW9 in this
regard. When the Executive Engineer reported the matter to
the higher authority, the audit party inspected the office and
PW3 had prepared Ext.P21, statement of receipts and
remittance of cash from 01.04.1998 to 23.07.1999, referring to
the original receipts of 254 numbers marked as Ext.P22 series
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and bank remittance books. According to PW9, as per Ext.P-
2(a), the relevant pages of cash book from 24.07.1999 to
08.10.1999, the opening balance as on 27.07.1999 was ‘nil’.
But as per Ext.P21 supported by Ext.P22 series, there was
shortage of Rs.86,332/-. As per Ext.P3, the charge of the cash
section was entrusted to the accused with effect from
04.06.1998 to 14.12.2000. It is true that PW2 and PW9 gave
evidence that, apart from the accused, PW2 and other
contractual employees collected the money. Insofar as
collection of money as per Ext.P21, supported by Ext.P22
series, is concerned, there is no much dispute. The question
herein is whether the accused, who held the charge of cashier,
got entrustment of the money collected being the cashier,
failed to remit Rs.86,332/- and in turn, misappropriated the
amount with dishonest and fraudulent intention. It is an
admitted fact that, after registration of this crime, the accused
remitted the amount and thereby, he was reinstated in service
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after revoking his suspension. The evidence of PW1 is that, he
was the Executive Engineer, Kerala State Housing Board,
Wayanad Division, from 16.08.2001 onwards and his office
dealt with the advancing of loans for the construction of
houses and repayments. According to PW9, the accused was
the cashier entrusted with the above work from 04.06.1998 to
14.12.2000. It was through him, Ext.P1 cash book for the
period from 10.02.1998 to 31.03.1998 and Ext.P2 cash book
for the period from 24.07.1999 to 08.10.1999 were marked
and the relevant page of Ext.P-2(a) would show that as on
24.07.1999, the amount was shown as ‘Nil’. As pointed out by
the learned counsel for the accused, during cross-
examination, PW1 stated that in between 07.07.1999 and
23.07.1999, Rs.9,23,414/- was collected and Rs.9,72,914 was
remitted. He also admitted that the entries in the cash book
were made by the clerk concerned and the Accounts Officer
would check the same. It is the duty of the clerk to entrust the
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daily collection to the Accounts Officer and the money should
be kept in the chest for remittance to the bank on the next day.
PW2 supported entrustment of the cash to the accused while
he was working in the same office as a clerk. According to
him, in Ext.P1 cash book, entries starting from 10.02.1998 to
31.03.1998 were made and thereafter, as per Ext.P2 cash
book, the 1st entry was made on 24.07.1999 and no other cash
book were maintained in between 01.04.1998 and 23.07.1998.
During cross-examination, PW2 testified that some receipts
were written by him, some receipts were written by James and
the accused. He also deposed that when Mathew joined the
service, there was no practice of preparing day book in the
office and the Accounts Officer was bound to verify cash and
records daily. PW3, V.J.Gopan, the Accounts Officer from
16.02.2001 in the office, supported preparation of Ext.P21 by
him and also shortage of Rs.86,332/- and according to him,
the amount in between 07.07.1999 and 27.09.1999 was
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omitted to be remitted in the bank. He also supported Ext.P22
series entrusted to the police. PW4 is another Accounts
Officer, who worked in the office during 2000 March onwards
and he also supported misappropriation of Rs.86,332/-. PW5,
Sri.V.Valsakumar, who worked as the Executive Engineer
during February, 1999 to February 2001, deposed that during
this period, the accused was in-charge of cash collection and
remitting the same to the bank. As per Ext.P3 office order, it
was the duty of the cashier to keep the collection. He also
submitted that during the period 01.04.1998 to 23.07.1999, no
cash book maintained in the office, as he understood later.
Thus, through him, by Ext.P4, attendance register, the
employment of the accused was proved. PW7 deposed about
remittance of some amount in the current account No.148 of
Nedungadi Bank by the Kerala State Housing Board,
Wayanad Division. In this matter, the sanction order
permitting prosecution of the accused got marked as Ext.P24
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by examining PW6, Sri.P.M.John, who was the authorised
officer to prove the same and he deposed about issuance of
Ext.P24 after verifying the prosecution records in this case and
after applying his mind. PW10 and PW12 are the investigating
officers and Ext.P27 is the FIR registered in this crime on
07.07.1999. Later, PW10 investigated the crime. PW12, in
support of Ext.P21 account statement prepared by PW3 as on
20.08.1998 except Rs.5/- all other amounts were remitted in
the bank. In order to show remittance of loan, PW8, one
among the loanees, was examined and he stated that he had
remitted Rs.2,501/- on 08.07.1999 as per Ext.P11 receipts.
Since the trial court found commission of offences under
Section 13(1)(c) and (d) r/w 13(2) of the PC Act by the
accused, it is necessary to extract the provisions to find out
the ingredients to see the offences are made out in this case.
Therefore, the provisions are extracted as under:
“13. Criminal misconduct by a public
servant.– (1) A public servant is said to commit the
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17offence of criminal misconduct,–
(a) if he dishonestly or fraudulently
misappropriates or otherwise converts for his own
use any property entrusted to him or any property
under his control as a public servant or allows
any other person so to do; or
(b) if he intentionally enriches himself illicitly
during the period of his office.
Explanation 1.–A person shall be presumed to have
intentionally enriched himself illicitly if he or any
person on his behalf, is in possession of or has, at any
time during the period of his office, been in possession
of pecuniary resources or property disproportionate to
his known sources of income which the public servant
cannot satisfactorily account for.
Explanation 2.–The expression ”known sources of
income” means income received from any lawful
sources.
(2) Any public servant who commits criminal
misconduct shall be punishable with imprisonment for
a term which shall be not less than four years but
which may extend to ten years and shall also be liable
to fine.”
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14. On prosecution of the penal provisions,
dishonest and fraudulent misappropriation or conversion
otherwise of any property entrusted to a public servant or any
property under his control as a public servant, or allowing any
other person to do so, or if he intentionally enriches himself
illicitly during the period of his office himself or any other
person on his behalf, is an offence punishable under Section
13(1)(c) and (d) r/w.Section 13(2) of the PC Act. In this case,
the evidence of PW2 and PW9 have been given much
emphasis by the learned counsel for the accused/appellant to
contend that apart from PW2, other contractual employees
collected money daily and therefore, it is unsafe to hold that
the accused/appellant misappropriated the amount as alleged,
even though in order to save his job and to avoid his
suspension, he had remitted back the amount.
15. It is true that as per Ext.P-2(a) the amount
shown as on 24.07.1999 is ‘Nil’ and before that, for the period
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between 01.04.1998 to 23.07.1999, there was no entry made
in Ext.P2. In this connection, as per Ext.P21 supported by
Ext.P22 series, it could be gathered that an amount of
Rs.86,332/- out of the total amount of loan collected was not at
all deposited in treasury. Ext.P3, the office order, proved
through PW5, would emphatically make it clear that the
accused/appellant was entrusted with collection of cash by
doing the job of a cashier on the date of joining his duty and
he continued as the cashier to deal with cash, DD, cheque,
maintenance of cash books and other registers related to
collection of cash, sale of application forms, receipt and
registration of new application forms during the relevant
period. If so, it is the primary duty of the accused to see that
the collected amounts were properly deposited on the next
day without keeping the same otherwise. Since it is evident
from Ext.P3 that the accused/appellant was the cashier in
charge of collection of cash and as held above, when there is
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a shortage of Rs.86,332/-, as evident from Ext.P21, supported
by Ext.P22, the responsibility for the same is not upon any
other person and it is that of the accused. If at all, any other
persons were entrusted to receive the money, it is the duty of
the accused to vouch them and get the amount collected and
to deposit the same in the Treasury without fail. Here,
Rs.86,332/- failed to be deposited as evident from Ext.P21,
supported by Ext.P22 series. If so, the oral evidence of PW2
stating that in between 07.07.1999 to 23.07.1999
Rs.9,23,414/- was collected and Rs.9,72,914/- was deposited
in treasury by them is falsehood. The rationale is that there is
no question of remitting the excess of amount than the amount
collected. That apart, PW2, is none other than the colleague
of the accused in the same rank and his evidence in this way
as against Exts.P21 and P22 series is with a view to confuse
the court. As pointed out by the learned Special Public
Prosecutor, relying on the decision in Vijayakumar K’s
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case (supra), once it is proved by the prosecution that there
was entrustment and there was no proper accounting of the
amount entrusted, then the burden shifts to the accused to
prove that there was no misappropriation and explain the
irregularities found in the disbursement. Further if entrustment
is proved and explanation given by the accused is not
satisfactory or there was no proper explanation, then it can be
presumed that the accused had committed the offence of
criminal breach of trust and misappropriation. The modus
operandi of the accused, how he committed the
misappropriation etc need not be proved by the prosecution.
The fraudulent intention of the accused can be inferred only
from the attending circumstances and those things cannot be
proved by the prosecution by direct evidence and it has to be
inferred from the circumstantial evidence adduced by the
accused on this aspect.
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16. Thus, on overall evaluation of the evidence, it
could be gathered that the allegation of the prosecution that
the accused with dishonest and fraudulent intention
misappropriated Rs.86,332/- and later, deposited by him after
registration of the case. In such view of the matter, the finding
of the trial court that the accused committed offences
punishable under Section 13(2) read with Section 13(1)(c) and
(d) of the PC Act is only to be confirmed.
17. Regarding the sentence, some modification
can be considered, in view of the facts and circumstances of
the case.
18. Therefore, this criminal appeal stands
allowed in part. Accordingly, while confirming the conviction,
sentence imposed against the accused to undergo rigorous
imprisonment for 2 years each for the offence under Section
13(2) r/w 13(1) (c) and (d) of the PC Act is modified for a
period of 1 year each and to pay a fine of Rs.2,000/- (Rupees
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two thousand only) each. In default of payment of fine, the
accused shall undergo rigorous imprisonment for a period of
two weeks.
19. The substantive sentences shall run
concurrently and the default sentences shall run separately.
The order suspending sentence and granting bail to
the appellant shall stand vacated and the bail bond executed
by the appellant/accused stands cancelled. The
appellant/accused is directed to surrender before the special
court and to undergo the sentence within two weeks from
today, failing which, the special court shall execute the
sentence without fail.
Registry is directed to forward a copy of this judgment
to the trial court concerned for information and compliance.
Sd/-
A. BADHARUDEEN
JUDGE
nkr