# AFFAIRS,. WEST BENGAL v. S. K. ROY February 12, 1974

- **Citation:** [1974] 3 S.C.R. 348
- **Court:** Supreme Court of India
- **Decided:** 1974-02-12
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/affairs-west-bengal-v-s-k-roy-february-12-1974-6060
- **Pages:** 8

## Headnote

348
SUPERINTENDENT & REMEMBERANCER OF LEGAL
A
AFFAIRS,. WEST BENGAL. .
v.
S. K. ROY
February 12, 1974.
f.M. H. BEG, Y. V. CHANDRACHUD AND R. S. SARKARIA, JJ.]
B
~Vest Bengal Crin1i11al. Law A1nend1ne11t (Special Court)
~let, 1949-Jtein
2 of the Schedule read wtth s. 409 J.P.C.-What constitutes criminal breach of
lrlHf.
The respondent, a public servant, was tried by a Special Court constituted
under the West Bengal Criminal Law Amendment (Special Courts) Act, 1949,
for collecting premiums and issuing receipts on behalf of LI.C. in respect of the
policies of some Pakistani Policy Holders. He was charged for criminal breach
C
of trust in respect of such premium5 by making false adjustments of receipts of
such premiums through the Bank in Pakistan in relevant books of accounts.
Item 2 of the Si;:hedule in the Act describes the offence as an "offence punishable u/s. 409 l.P.C. if committed by a public servant or by an agent of the
Government in respect of property with which he is entrusted.
The Special Court came to the conclusion that the respondent purported to
act, at the relevant time, as a public servant, but as no money was entrusted to
D
the respondent in his capacity as a public servant, the respondent was entitled to
an aquittal for an alleged offence punishable u/s. 409 I.P.C. under the
proviso
to sec. 4(1) of the Act, there -could be no conviction for that offence.
Against the acquittal of the respondent, the Legal Remembrancer of West
Bengal filed an appeal before the High Court. The High Court also held that !he
respondent, having no power to receive money in cash from the policy holders
did not act in his capacity of a public servant while he received the money from
the policy holders in ca~h in Caolcutta.
Although it did not quash the order of
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acquittal, the apparent result of its findings was that the trial of the respQndent,
b~ing without jurisdiction, was null and void, so that the respondent could be
retired.
The only question for decision was whether the respondent be said to be
acting in his capacity as a public servant when he received the monies from the
policy-holders which he misappropriated. Allowing the appeal.
HELD : (i) The gravamen of the offence of Criminal breach of trust is the
F
dishonest misappropriation of the money or property which comes into the possession or under the control of a public servant who has the ostensible authority to
receive it, even though, technically speaking, from the point of view of the distribution of departmental duties under internal rules of an office, it may not be
within the scope of his authority or duty to accept the money. The fact that a
public servant acts fraudulently in the exercise of his duties as a public servant
to get dominion or control over some property will be an aggra\·ating and not
an exculpating circumstance. The ";:ntrustment" results from what !he person
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handing over money or property is made to think, understand and believe about
the purpose for which he hands over money or p_roperty to a p1;1blic serv~nt. If
this takes place because of and due to the exercise of the offic1al authonty, the
requirements of S. 409 I.P.C. are satisfied. To constitute an offence u/s 409,
I.P .C., it is not required that misappropriation must necessarily take place after
the <.:reation of a legally correct entrustment or dominion over property. S. 409
covers both types of cases. that is. those where the receipt of property is itself
fraudulent or those where the public servant misappropriates it. All that is required is "cntrustment". [353 Bl
B
(II) In the present case, there is evidence and findings of the Special Court
to show that the respondent was actually representing to the policy-holders that
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SUPDT. LEGAL AFFAIJl.S V. S. IC. ROY (Beg, /.)
349
they could ~
their ;-~::nu in Cal'1utta to him and he iliued receipts pur4
porting to act in bis o
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capacity. 11lere is, therefore, nexus between the
actll!ll official copacit

## Text

348
SUPERINTENDENT & REMEMBERANCER OF LEGAL
A
AFFAIRS,. WEST BENGAL. .
v.
S. K. ROY
February 12, 1974.
f.M. H. BEG, Y. V. CHANDRACHUD AND R. S. SARKARIA, JJ.]
B
~Vest Bengal Crin1i11al. Law A1nend1ne11t (Special Court)
~let, 1949-Jtein
2 of the Schedule read wtth s. 409 J.P.C.-What constitutes criminal breach of
lrlHf.
The respondent, a public servant, was tried by a Special Court constituted
under the West Bengal Criminal Law Amendment (Special Courts) Act, 1949,
for collecting premiums and issuing receipts on behalf of LI.C. in respect of the
policies of some Pakistani Policy Holders. He was charged for criminal breach
C
of trust in respect of such premium5 by making false adjustments of receipts of
such premiums through the Bank in Pakistan in relevant books of accounts.
Item 2 of the Si;:hedule in the Act describes the offence as an "offence punishable u/s. 409 l.P.C. if committed by a public servant or by an agent of the
Government in respect of property with which he is entrusted.
The Special Court came to the conclusion that the respondent purported to
act, at the relevant time, as a public servant, but as no money was entrusted to
D
the respondent in his capacity as a public servant, the respondent was entitled to
an aquittal for an alleged offence punishable u/s. 409 I.P.C. under the
proviso
to sec. 4(1) of the Act, there -could be no conviction for that offence.
Against the acquittal of the respondent, the Legal Remembrancer of West
Bengal filed an appeal before the High Court. The High Court also held that !he
respondent, having no power to receive money in cash from the policy holders
did not act in his capacity of a public servant while he received the money from
the policy holders in ca~h in Caolcutta.
Although it did not quash the order of
E
acquittal, the apparent result of its findings was that the trial of the respQndent,
b~ing without jurisdiction, was null and void, so that the respondent could be
retired.
The only question for decision was whether the respondent be said to be
acting in his capacity as a public servant when he received the monies from the
policy-holders which he misappropriated. Allowing the appeal.
HELD : (i) The gravamen of the offence of Criminal breach of trust is the
F
dishonest misappropriation of the money or property which comes into the possession or under the control of a public servant who has the ostensible authority to
receive it, even though, technically speaking, from the point of view of the distribution of departmental duties under internal rules of an office, it may not be
within the scope of his authority or duty to accept the money. The fact that a
public servant acts fraudulently in the exercise of his duties as a public servant
to get dominion or control over some property will be an aggra\·ating and not
an exculpating circumstance. The ";:ntrustment" results from what !he person
G
handing over money or property is made to think, understand and believe about
the purpose for which he hands over money or p_roperty to a p1;1blic serv~nt. If
this takes place because of and due to the exercise of the offic1al authonty, the
requirements of S. 409 I.P.C. are satisfied. To constitute an offence u/s 409,
I.P .C., it is not required that misappropriation must necessarily take place after
the <.:reation of a legally correct entrustment or dominion over property. S. 409
covers both types of cases. that is. those where the receipt of property is itself
fraudulent or those where the public servant misappropriates it. All that is required is "cntrustment". [353 Bl
B
(II) In the present case, there is evidence and findings of the Special Court
to show that the respondent was actually representing to the policy-holders that
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SUPDT. LEGAL AFFAIJl.S V. S. IC. ROY (Beg, /.)
349
they could ~
their ;-~::nu in Cal'1utta to him and he iliued receipts pur4
porting to act in bis o
·
capacity. 11lere is, therefore, nexus between the
actll!ll official copacity and tho conduct of tho Respondent to hold the Respondent
suiltf of the ol!ence u/s 409 !.P.C. which could be tri~ by the special court.
l3SS A-BJ
(State of U.P. and Ors, V. lJabu Ram Upadliya [1961) 2 SCR 679 and.S. N.
Pnri V. State »I Rajasthan [19721 3 S.C.R. 497 referred to.)
CRIMINAL AP!'ELLATE JURISDICTION : Criminal appeal No. 189 of
In~
I ,
From the Judgment and Order dated the 19th February, 1970 of
the Calcutta High Court in Govt. Appeal No. 7 of 1964.
P. K. Chatterjee and G. S .. Chatterjee, for the Appellant.
Hardayal Hardy and S.11/cumar Ghose for the Respondent.
The Judgment of the Court was delivered by
BEG, / •. This is an appeal on a certificate of fitness of the case for
aPP«al to this Court granted by the Calcutta High Court under Arti•
c!e 134 t 1) ( c) of the Constitution of India.
The Respondent was tried Jiy a Special Court constituted under the
West Bellltal Criminal I,.aw Amendment (Special Courts) Act XXI of
1949 (Hereinafter referred to 11_8 'the Act'), which empowers the Spe·
cia1 Court. set up under it .. !Ji try offences mentioned in the Scheduled
annexed to the _Act. Item 2 of the.schedule is :
"An offence punis]\ab1e under section 409 I.P:c. if committed by a public seryl!Jlt or by a person dealing with property belonging to government as an agent of gavernment in
respect of property with which he is entrusted or over which
he has domain in his capacity of a public servant or in the
!Way of his business as such agent".
The proviso to Section 4(1) of the Act reads asfollows:
"Provided that when . trying any case, a Special C011rt
may also try any offenece other than an offence specified in the
schedule, with which the accused may under the Code of
Criminal Procedure, 1898, be charged at the same trial".
The Special-Court framed the following charge against the respondent:
"That you, between 12th May, 1958 and 7th May, 1959
.Hindustan Building 9iJcutta, btljng a Pub. Servant, to wit,
Supdt of Pakistan Section (Pak Unit) of H'mdustan Co-of)erarative Life Insurance Society, Unit of LIC of India Calcutta
and in that capacity entrusted with or with domi~tion ove;
.the premiums of some Pakistan Policy Holders, amounting to
. about Rs. 2350-49 np., collecte\i by you directedly from
these policy-holders or their representatives viz. 6 •. 7. 8,
and 15 and other, under receipts 6 (Ext. 3 series other than
Ex. 315) issued by you on behalf of the said LIC in respect,
of the Policies of those policy-holders committed Criminal
breach of trust in respect of such pre~iums by making false
. adjustments of recaipt of such amounts through the Bank in
lO~L9S4 Sup CI/74
350
SUPREME COURT REPORTS·
[ 19741 3 S.C.L
Pakistan in relevant books (Exts. 5, 8, and 9 series) and
thereby committed an otfence punishable under section 409 of
the Indian Penal Code, and within the jurisdiction of this
Court."
·
No other charge was framed.
The Special Court recorded findings of fact on the strength of the
admitted position that the respondent was serving as a Superintendent
of the Pak Section of the Hindustan Cooperative Life Insurance Society
which was a unit of the Life Insurance Corporation Calcutta during the
period to which the charge relates, and of receipts given by the respondent himself for monies paid to him in Calcutta coupled with entries
in the premium register folio in the handwriting of the respondent,
falsely showing that the ambllllts realised by the respondent had not
been paid by the policy holders so that their names appeared in the
"Demand List".
The Special Court had forn.mlated two point for determination as
follows :
· "(1 ) whether the accused. was the
Superintendent of
Pakistan Section (Pak Unit.} of Hindustan Cooperative Life
.Iniurance Society between 12th May 1958 and 7th of May
1959?
(2) Whether he, being in any manner entrusted with domination over property in the capacity of a public servant, committed criminal breach of trust in respect of that property"?
On point No. I, it held :
"It has been established by the evidence on record, beyond
any shadow of 'doubt, 'that during the relevant period the
accused was serving as Superintendent of Pakistan Section of
Ifindustan Cooperative Life Insurance Society, a Unit of
L.I.C. in Calcutta.
This Unit was known as "Pak Unit."
On point No. 2, it held.:.
"The evidence on record, both oral and documentary, is
overwhelming to show that the accused, as Superintendent of
Pak Unit of Hindustan Cooperative Insurance Society in Calcutta, directly realised premiums in cash front some Pakistani
Policy Holders and misappropriated the amounts after making false entries in some of the
relevant registers and
accoimt papers maintained in his section of the l'l1Juranee
Society." v
Thus, it is clear that the Special Court came to the conclusion
that the capacity in which the respondent purported to act, when
receiving the moneys which he misappropriated, was that of "Superintendent of the Pak Unit of Hindustan Cooperative Life Insurance
·Society in Calcutta," a part of the Life Insurance Corporation of India
at the relevant time. It was this capacity which enabled the respondent
to put forward his authority to receive the sums of money, and, therefore to realize the amounts paid by the deceived policy holders who
.•ppeared as witnesses and were rightly believed by the Special Court
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SUPDT. LEGAL AFFAIRS V. s. K. ROY (Beg,/.)
351
despite the denial. of the
respondent that he did not
personally
receive the amounts but had, mechanically and in good faith, signed
the receipts put up before him by Clerks. The respondent's suggestions\
that it may have been the Clerks who had received monies anct thus
deceived him as well as the policy holders, wa.~ rightly rejected Q}' the
Special Court. Nevertheless, the Special Coud came to the conclusion
that, as no money was entrusted to the respondent in his capacity
as a public servant, the respondent was en\!tled to an acquittal for an
alleged offience punishable under Section 409 Indian Penal Code. It
also held that, as no alternative charge could be framed under section
406 I.P.C. under the proviso to Section 4(!) of the Act, there could
be no conviction for that offence. 'It held that an alternative charge
could not be framed by it in addition to the charge under Section
409 I.P.C. on the same facts and also that a Special Court could not,
after taking cognisance of an offence mentioned in the schedule, convict the accused for a different offence in the alternative. For that very
reason, it also refused to apply Section 403 I.P.C. under the proviso to
Section 4(1) of the Act.
·
The Legal Remembrance of West Bengal had appealed to the
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High Court against the respondent's acquittal. It appears that there
the Counsel for the State did not challenge the finding that the respondent had no authority to receive cash payments of premiums. It
was conceded that this was not his duty as a Superintendent. It also
quoted the following finding of the Special Court :
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"It further appears from the evidence on record that the
Pak Unit had no authority· to make any such collection of
premiums. The Pakistani Policy holders could not even make
any cash pa}'ments of premium in the cash counter of the
Hindustan Insurance Society. The Pakistani policy holders, of
course, could transfer thejr policies to Indian Unit with the
permission of the two Governments the Indian Government
and the Pakistan Government and · after showing satisfactorily the certificates of migration from Pakista.n to India.
Unless he became an Indian National be could not make such
transfer of policies. If such transfer was made the policy
went out of the administrative control of the Pak Unit."
After citing item No. 2 of the schedule set out above, the High
Court went on to observe that the following three conditions are
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required for an offence punishable under Section 409 · Indian Penal
Code:
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"(i) That the o:ffence is committed by a public servant.
· (ii) The offence had been committed by the public servant acting in his capacity as a public servant.
(iii} The property in respect of which the offence is
committed must have been entrusted to him or that
he had domination over that property in bis capacity
as a pnblic· servant."
352
SUPREME COURT REPORTS
[ 1974 J 3 S.C.R.
It held that the prosecution had to show that the en.trusted property
or dominion over property "in any manner whatsoever" was secured by
the respondent "in his capacity as a public servant." It then observed
that "to that extent" the provisions in Section 409 I.P.C. were distinguishable from the offence specified as item 2 in the Schedule. Further
more. it held that the Special Court had "rightly decided that the respondent having no power to receive money in cash from the policy
holders did not act in his capacity o.f a public servant while he received
tlie money from the policy holders in cash in Calcutta." It also
observed:
"It is quite possible that the respondent.had deceived the
policy holders when he received cash m~ny from them ~elu
ding them to believe that those were vahd payments towards
premium and the payees had been put to damage, loss and
harm which make him liable to be proceeded against for
cheating. But when it is found that the respondent had acted
clearly beyond and outside Ms duties as a Public servant having well defined duties which do not include cash receipt of
premium, the offence which he committed is not criminal
breach of trust punishable under section. 409 I. P. C. within
the meaning of item No. 2 in the schedule of Act XXI of
1949, the Court had no jurisdiction to proceed with the trial
as the offence does not fall within the schedule : the proper
course for the learned Judge was to discharge the respondent".
Although it did not quash the order of acquittal, the apparent result
of its findings was that the Trial of the respondent, being without jurisdiction, was null and void so that the respondent could be retired.
We are unable to concur with the view of the High Court that the
ingredients of the offence specified as item 2 of the schedule differ in:
any respect from those required by Section 409 I. P. C. for the conviction. of a public servant who com!Ilits criminal ·misappropriation in
respect of property which has been entrusted to him or over which
he acquires dominion or control in any manner as a public servant.
All that the entry in the schedule purports to do is to indicate that
offences punishable under Section 409 I.P.C. triable by the Special
Courts are limited to those of criminal breach of trust committed by
public servants in their capacities as public servants and do not embrace offences by other classes of persons mentioned in Section 409
I.P.C.
The only question which arises for decision in the case before us is :
could the respondent be said to be acting in his capacity as a public
servant when he received the monies from policy holders which he misappropriated? Obviously, the offence punishable under Section 400
I. P. C. is not within the scope of the prescribed duties ·or authority
of the public servant. The law does not authorise any public servant
--0r, for that matter, anybody else-to commit a crnninal breach
of trust. There are, however, two distinct parts involved in the commission of the offence of criminal breach of trust. The first consists
of the creation or an obligation in relation to the property over which
dominion or control is acquired by the accused. The second is a misB
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SUPOT. LEGAL AFFAIRS V. S. K. ROY (Beg, J:)
353
appropriation or dealing with the property dishonestly and contrary
to the terms of th~ obligation created.
In the case of an offence by a
public servant punishable under section 409 I. P. C. the acquisition of
dominion or control over the property must also be in the capacity of a
public servant punishable under section 409 I. P. C. the acquisition of
a public servant, to get the control or dominion over property annexed
with an obligation. The gravamen of the offence 1s the dishonest misappropriation of the money or property which comes into the possession
or under the control of a public servant who has the ostensible authority
to receive it even though, technically speaking, from the point of view
of the distribution of departmental duties under internal rules of an
office, it may not be within the scope of his authority or duty to accept
the money.
The fact that a public servant acts fraudulently in the exercise of his duties as a public servant to get dominion of control over
some property will be an aggravating and not an exculpating circumstances. The "entrustment" results from '!Yhat the person handing over
money or property is made to think, understand, and believe about the
purpose for which he hands over money or property to a public servant.
If this takes place because of an due to the exercise of the official
authority the requirements of Section 409 I. P. C. are satisfied. There
may be cases in which a person who parts with property to a public servant may have done so for reasons or in a manner so completely disconnected with the official capacity of the public servant that it may
not be reasonably possible to conceive of it as an offence connected
with or committed in the course of perf.ormance of any official duty
at all so that official capacity becomes really irrelevant. Ordinarily, it
is the ostensible or apparent scope of public servant's authority when
receiving propert~ and not its technical limitations, under some internal
rules of the department or office concerned, and the use made by the
servant of his actual official capacity which would, in our opinion,
determine whether there is a sufficient nexus or connection between
the acts complained of and the official capacity so as to bring within
the ambit of section 409 Indian Penal Code.
It is true tqat there is the finding of the Special Court, quited by
the High Court and set out above by us, that Pakistani policyholders
could not have made any transfer of their policies to the Indian Unit
of the Hindustan Insurance Society without producing certificates of
migration and obtaining the permission of both Indian and Pakistani
Governments. But, there is evidence and there are findings on it given
by the Special Court that the respondent was actually representing to
the policyholders that they could make their payments in Calcutta
to him and he issued receipts purporting to act in his official
capacity. In other words, he misused his official capacity, and, under
its garb and the column of his office, obtained payments and issued
receipts. 'The policyholders did not know the correct position and
would not have made payments to the respondents but for the .possession and use by him of his official capacity. We think that there is
sufficient ostensible nexus between the actual official capacity and the
conduct of the respondent for us to hold that the entrustment or dominion was obtained by the respondent over monies of policyholders in
his official capaclty or as a public servant who, consequently, became
354
SUPREME COURT REPORT~
[ 1974 J 3 5.C.R.
charged with the duty, as a public servant, and, indeed, even more
so as a public servant, to act honestly with regard to sums thus received
by him.
To constitute an offence under section 409 I. P. C. it is not required that misapprepriation must necessarily take place after the creation of a legally correct entrustment or dominfon over property. The
entrustments may arise in "any manner whatsoever".
That manner
may or may not involve fraudulent conduct rif the accused. Section
409 I. P. C. covers dishonest misappropriation in both types of cases,
that is to say those where the receipt of property is itself fraudulent
or improper and those where the public servant misappropriates what
may have been quite properly and innocentlv received. All that is required is what may be described as "entrustment" or acquisition of
dominion cover property in the capacity of a public servant who, as
a result of it, becomes charged with a duty to act in a particular way,
or at least honestly.
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A case cited before us, to ·support the contention that acquisition
of dominion or possession and control over property by an accused
would even if wrongful, be an "entrustment" or create an obligation
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the violation of which, by misappropriation,
would be punishable
under Section 409 I.P.C. if the accused used his official capacity to
obtain the property,
was : State of U.P. & Ors.
Vs. Babu Ram
Upadhya.
Again, in S. N. Puri Vs. State of Rajastha11, ·this Court, after
referring to decisions of different High Courts on the subject, held,
that "the expression "entrusted" is used in Section 409 I.P.C. in a
wide sense and include all cases in which property is voluntarily handed over for a specific purpose and is dishonestly disposed of contrary
to the terms on which possession has been handed over."
The obligation to act in a certain manner with regard to or to deal
honestly with property, over which a public servant obtains dominion
or control by the use of his official capacity, may arise either expressly
or impliedly.
Even if the respondent or the life Insurance Corporation, on whose behalf the respondent had purported to act, had not,
at the time of receipt of money from a policyholder, the legal right to
receive it, the respondent, who had certainly been entrusted with it by
the policyholders by reason of his official capacity, should have cor·
rectly shown it in the account books which ought not to have been
falsified by him. It could not be contended that even a mistaken receipt of money in official capacity does not create an obligation upon
the receiver as a public servant.
We think that it is enough if the
payment is made by a person dealing with a public servant in his capa·
/city as a public servant even if it is made on an erroneous assumption
which the public servant concerned does nothing to remove. Section
409 l.P.C. seems to us to be meant for the protection, among others,
of those sJealing with public servants purporting to have the authority
to act in a certain way in exercise of their official capacities. A legal
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SUPDT. LEGAL AFFAIRS V. S. K. ROY (Beg, /.)
355
defect in the scope of the ostensible authority of a public servant does
not prevent an entrustment to or an obligation to be fastened upon a
public servant in his capacity as a public servant if the facts of the case
establish, as they do in the case before us, the required nexus or connecticn between acts which create the obligation and the capacity. We,
therefore, hold that the respondent is guilty of an offence punishable
under section 409 J.P .C. which could be tried by the Special Court.
Mr. Hardy, appearing for the respondent, contended that, although
there could be a doubt whether the case would fall under Section 409
I.P.C. there could bo no such doubt that the respondent was guilty of
an offence punishable under Section 403 I.P.C. He also invited our
attention to certain facts : that, the offence was comn1itted more than
15 years ago; that, the respondent is now about 64 years in age; that,
he was dismissed as a result of the misappropriation committed by
him.
He submitted that we at this stage, convi~t the
responde.1t
under section 403 I.P.C. and then impose a fine upon him instead of
sending him to jail now.
He also indicated that the respondent was
a refugee from Pakistan who had apparently acted under the stress of
straitened circumstances. We do not find all these facts mentioned
in the judgments of the two Courts which were examined by us. However, in view of the fact that the offence was committed long ago, we
think that a less severe sentence than we would have otherwise awarded will meet the ends of justice. -
Accordingly, we allow this appeal and set aside the orders of the
Spedal Court and the High Court. We convict the respondent under
section 409 I.P.C. and we sentence him to one year's rigorous imprisonment and lo pay a fitle of Rs. 2,000/-, and, in default of payment of
fine, to undergo six mo_nth's further rigorous imprisonment.
S.C.
Appeal allowed.