Holding

A conviction for criminal misappropriation and conspiracy cannot be sustained on the basis of the Superintending Engineer’s report alone; without cogent, unimpeachable proof of non‑payment, the circumstantial evidence is incomplete and the convictions must be set aside.

Summary

The Supreme Court examined the convictions of several government officers accused of embezzling funds allocated for a rural employment scheme in Punjab. The prosecution relied on the report of a Superintending Engineer, thumb‑impression comparisons, alleged extra‑judicial confessions and circumstantial evidence to prove conspiracy, falsification of records and criminal misappropriation under the IPC and the Prevention of Corruption Act. The Court held that the Superintending Engineer’s assessment of lesser work, without independent, unimpeachable proof that payments were not actually made to the labourers, was insufficient to establish the offence of embezzlement. Moreover, thumb‑impression evidence taken without a magistrate’s order and the alleged confessions were inadmissible. Consequently, the chain of circumstantial evidence was deemed incomplete, and the convictions were set aside, with the appeals largely allowed (except a few dismissed).

Issues considered

The adequacy of circumstantial evidence, including the Superintending Engineer’s report, to prove criminal misappropriation, embezzlement and conspiracy under IPC ss. 466, 468, 471, 477‑A, 120B and the Prevention of Corruption Act.
Whether over‑payment to labourers for allegedly less work can, by itself, establish the offence of embezzlement without proof of non‑payment.
The admissibility of thumb‑impression evidence not taken under the Identification of Prisoners Act.
The evidentiary value of extra‑judicial confessions made before a departmental officer.
Whether the prosecution’s evidence satisfied the requirement of a complete chain of circumstantial evidence to exclude reasonable doubt.

Legislation cited

Code of Criminal Procedure, 1973s. 313
Identification of Prisoners Acts. 3, s. 5
Indian Penal Code, 1860s. 120B, s. 466, s. 468, s. 471, s. 477-A
Prevention of Corruption Acts. 5(1)(d)

Subjects

criminal misappropriationembezzlementconspiracycircumstantial evidencefalsification of recordsPrevention of Corruption Actthumb impression evidenceextra‑judicial confessionevidentiary standards

Judgment

_.....,.,
INDERJIT SINGH AND ORS. ETC. A
v.
STATE OF PUNJAB AND ORS.

JULY 13, 1995
B
[G.N. RAY AND FAIZAN UDDIN, JJ.]
'""'
Indian Penal Code, 186(}-Sections 466, 468, 471, 477-A and 120B-Of-
fence of Criminal misappropriation and conspiracy-Case of embezzlement
by deliberately falsifying records by government officers-Circumstantial
evidence-Mere over payment to w01kers on account of less work done-Not
c
sufficient evidence to convict accused-Cliain of circumstantial evidence not
complete-Conviction based on sumiise and conjecture-Not legally sus-
tainable.

The Government of India initiated a crash scheme of rural employ- D
ment to give relief in the rural areas by executing some intensive projects
to give employment on all the districts in the state of Punjab. Under the
~ terms of the scheme, for each district, ten lacs of rupees were allocated
and over and above, a sum of rupees two and a half lacs were also allowed
for implementing the scheme. Six projects were started by the Public
Works Department (drainage section) in the district of Amritsar. The E
projects were meant to desilt six drains and the amount allotted to each
of the six projects were expected to be spent by the end of the financial
year, March 31, 1972. A complaint was filed to the Chief Engineer
' .. (drainage) alleging that although huge amounts were reportedly spent on
desilting a drain but actually nothing had been done at the spot. Superin· F
tending Engineer (Vigilance) was ordered to enquire into the allegations.
Reports submitted indicated embezzlement of huge amount by the officials
~~ concerned in implementing the said projects. Investigations were con-
ducted and six first information reports were registered pertaining to all
the six projects. Amongst the accused, Executive Engineer was stated to be
man-incharge of all these projects and the other accused persons were G
sub-Divisional Officers, Sectional Officers, Sub-Divisional Clerks .
.,..
According to the prosecution, the embezzlements were pursuant to
criminal conspiracy of the accused persons and while perpetrating the
offences, they had also forged and falsified the records as genuine. The H
59
60 SUPREME COURT REPORTS [1995] SUPP. 2S.C.R.

A prosecution produced a number of witnesses to prove that although
vouchers had been prepared in their names, they had neither worked on
such projects nor did they receive any payment. The prosecution also
prepared the list of the .labourers whose names were mentioned in the
vouchers and alleged that a number of such persons did not reside within
a radius of four miles from the site of work. Some labourers were examined
B who admitted that they had worked in those projects and they had also
signed out some of the vouchers but they stated that they were paid less
I-
amount than what was shown in the vouchers. According to the prosecu-
tion, the thumb impression taken by the police were compared with the
thumb impressions on the vouchers said to have been affixed by the
c labourers but it was found that the thumb impressions of the officials
tallied with some of the thumb impressions on the vouchers. The prosecu-
tion relied on the alleged confession made by Sub- Divisional Officer and
Sectional Officer before Superintending Engineer, who had been deputed
to conduct investigation on the spot. The Special Judge after considering
the evidence adduced in the case convicted and sentenced all the accused
D
u/s 5(1) (d) of the Prevention of Corruption Act and u/ss 466, 468, 471,
477-A_and 120-B of the Indian Penal Code.

In appeal, the High Court while giving the benefit of doubt to the
Executive Engineer and also to the Sub Divisional Clerk, confirmed the
E convictions of the other accused. The High Court held that there was no
direct evidence against the accused persons _in support of the charges
levelled against them; that the testimony of those witnesses produced by
the prosecution to prove that they had neither worked on such projects
nor did they receive any payment, had lost its value because it was not
F possible to come to a conclusion that they were the same persons in whose . •'
names the vouchers were prepared; that the list of labourer!' also suffered
from the same disability; that it was difficult to rely upon the testimony of
those witnesses who stated that they were paid less amount than what was _...
shown in the vouchers as the said labourers were examined ten years
thereafter; that regarding the Reports of the finger print experts that in
G some cases the vouchers prepared in the names of various persons bore
thumb impressions of a single person, there were conflicting reports given
by the experts regarding the same thumb impression; that the specimen
~
thumb impressions of the appellants had not been taken under the order
of the Magistrate in accordance with Sec. 3 of the Identification of
H Prisoners Act, so such thumb impression should not be accepted; that the
INDERJITSINGH v. STATEOFPB. 61
:,.
alleged extra judicial confession made before Superintending Engineer A
had lost its evidentiary value in view ?f the fact that the Superintending
Engineer did not mention about this incident of confession in the report,
since admitted in cross-examination. The High Court strongly relied on
Rule 738 of the Departmental Financial Rules which contain that the wages
of members of the work charged establishment should be drawn and paid
B
according to Form D.F.R. (P.W.) 29 and indicated that payment to the
~
labourers were not made by filling such forms; that in none of the vouchers
for payment, the full home address of the labourers was incorporated so
as to make it impossible to trace them and by such process, the direct
evidence of embezzlement stood delibertely obliterated and such inference
was further fortified from the impeccable testimony of the Superintending c
Engineer, a senior officer who.deposed that his investigations at the spot
revealed that much less work had been done than the details of work
mentioned in the records prepared to indicate the actual performed in
implementing the projects and as he had no reasons to falsely inculpate
junior officers dealing with the disbursement of wages to the labourers,
D
the testimony of the Superintending Engineer was not to be doubted; that
from the said investigation and the enquiry held at the spot, a conclusion
could be drawn that large amounts out of the government funds allocated
~
to execute the six projects, were misappropriated and embezzled by the
officers dealing with the disbursement of the wages; that the facts so
established were consistent with the hypothesis of the perpetration of the E
crime of embezzlement; that the evidence of the Superintending Engineer,
regarding lesser work done and the factum that the wages were alleged to
have been paid to the labourers on the basis of vouchers from which it was
.,. impossible to trace them, had completed the chain of circumstances which
did not leave any reasonable ground for the conclusion inconsistence with F
the innocence of the officers dealing with the disbursement of the wages
and hence the prosecution case should be accepted.

On the question as to whether all the accused could be held guilty of
committing the offence of criminal misappropriation and conspiracy, the G
High Court held that the Sub-Divisional Ofiicers were empowered to make
payments to the labourers and to maintain the records of the case; that
each payment made by the Sub-Divisional Officers was required to be
witnessed by another official who was required to certify the payments; that
it had been conclusively proved that the Sub-Divisional Officers and the
Sectional Officers dealing with the funds should be held guilty of con- H
62 SUPREME COURT REPORTS (1995] SUPP. 2 S.C.R.

A spiracy and embezzlement and also of criminal misconduct u/s S(l)(d) of
the Prevention of Corruption Act; that though the Executive Engineer was
in over all charge of the products but it was manifest that he did not
participate in the dibursement of wages to the labourers, so he should be
given the benefit of doubt though the department might deal with him in
suitable manner for failure in the charges of his duties efficiently. The High
B Court acquitted the Sub-Divisional Clerk of the charge u/s 466 and 477 A
of the Indian Penal Code by giving him benefit of doubt in view of the fact
that this thumb impression allegedly affixed on the vouchers could not be
held to have been proved by admissible convicing evidence. Sentences of
other accused who had been sentenced to undergo RI for more than one
c year by trial court were reduced to one year's imprisonment. These appeals
had been filed against the judgment of the High Court.

The appellants contended that despite the absence of intrinsic
evidence from which irresistible conclusion about the guilt of the accused
D by eliminating any other hypothesis, could be drawn, the High Court had
jumped on the conclusion that the accused must be held guilty simply by
assuming that in order to cover up the crime of embezzlement improper
vouchers were prepared and bills were drawn showing greater volume of
the work when in fact lesser work as revealed in spot enquiry was executed;
that simply on the basis of the report of the Supertending Engineer, it was
E not open to the Court to draw a conclusion that Jess work had actually
been done; that even if Jess work had been done, the said fact did not
constitute the offence of embezzlement and falsification of the records in
perpetrating the crime of embezzlement until and unless it could ·be
convincingly proved by leading unimpeachable evidence that payment had
p not been actually made to the labourers but in the name of work charged
labourers, the bills were falsely drawn and money under the bill had been
misappropriated. The respondents contended that the accused hatched the
conspiracy to defraud the public exchequer and with such intention
deliberately prepared some vouchers showing alleged payments to various
labourers for the works done by them without giving particulars of such
G workers contrary to the instructions for maintaining vouchers in a par-
ticular manner, in order to make it impossible to verify tht: actual payment
by examining the c_oncerned labourers; that the Superintending Engineer
made spot enquiries about the quantum of work done in respect of the six
projects and he had deposed categorically that the work mentioned in the
H records on the basis of which the alleged payments had been made to the
INDERJIT SINGH v. STATE OF PB. 63

workers was much less than what had actually been done and that if such A
evidence was accepted, the falsification of records was writ large and the
case of embezzlement was also established beyond reasonable doubt and
that the courts below, therefore, had no hesitation in holding the accused
guilt) .. nd this court should not interfere with the concurrent findings
made by the Courts below. B
Allowing the appeals, this Court

HELD : Simply on the basis of the reports of the Superintending
Engineer that less work than what was stated in the records was done, the
case of embezzlement by deliberately falsifying the records was not estab- C
lished. Until and unless by cogent and unimpeachable evidence about the
factum of non payment to labourers of the amount drawn in their names
could be established, the case of embezzlement by the government officers
and misappropriation of government fund could not be sustained. The
Superintending Engineer might be a responsible officer but it would not
be safe to simply rely on his assessment of the work done and for basing D
the conviction, other convincing corroborative evidences about the quan-
tum of work done was necessary. In the facts of the case, it will not be just
and proper to accept the said report and deposition of Superintending
Engineer (Vigilance) to be conclusive about the quantum of work done.
That apart, unless and until the factum of non payment to the workers was E
established, over payment to the workers on account of less work done
could not be held to be sufficient evidence to convict the accused for the
offences alleged against them. Even if the local officers who were entrusted

-..,., with the task of payment to the labourers were careless and did not
actually ascertain the quantum of work executed by the labourers but made
payments to the labourer on the basis of work as indicated in the bills, F
such local officers might be held guilty of dereliction of duly but cannot be
held guilty for the offences alleged against them. In the instant case, the
chain of circumstantial evidence was far from being complete and the
conviction had been based more on surmise and conjecture than on the
basis of convincing and umimpeachable evidences. [73-F-H; 74-A-C] G
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
Nos. 12-21 of 1986 Etc.

From the Judgment and Order dated 15.5.85 of the Punjab &
Haryana High Court in Crl. A. Nos. 153-SB-156-SB, 161-SB & 174-SB-178- H
64 SUPREME COURT REPORTS (1995) SUPP. 2 S.C.R.

A SB of 1983.

Ram Jethmalani, D.V. Sehgal, Kamini Jaiswal, Arivind Nigam, Abani
Kumar Sahu, Rekha Palli and Monica Goswamy for the appellants.

R.S. Suri for the Appellants in Crl. A. Nos. -22-28/86.
B
Ujagar Singh, Arnita Gupta, R.S. Suri, Naresh Bakshi and Ranjit
Kumar for the Respondents.

The Judgment of the Court was delivered by

c G.N. RAY, J. These twenty eight criminal appeals are directed
against a common judgment dated May 15, 1985 passed by the High Court
of Punjab and Haryana in Criminal Appeal Nos. 153-SB to 156-SB, 161-SB,
174-SB to 178-SB, 185-SB to 189-SB, 193-SB, 199- SB to 202-SB and
205-SB to 207-SB of 1983 and two Criminal Revisions Nos. 773 and 774 of
D 1983 since treated as appeals by the Punjab and Haryana High Court. All
the said appeals arose out of the judgment passed by the learned Addi-
tional Sessions Judge exercising the powers of Special Judge, convicting
and sentencing the appellants. As the facts and circumstances were similar
in all the said 28 appeals, they were disposed of by the High Court of
Punjab and Haryana by a common judgment. Before this Court also all the
E above 28 appeals have been heard analogously and they are being dis-
posed of by a common judgment.

The prosecution case in short is that the Government of India
initiated a crash scheme of rural employment to give relief in the rural
F areas by executing some intensive projects to give employment in all the
districts in the State of Punjab, Under the instruction of Government of
India, the Development Commissioner and Secretary to the Government
of Punjab ·apprised all the Deputy Commissioners in the State of Punjab
about such Scheme. Under the terms of the said crash scheme. for each
G district, ten lacs of rupees were allocated. Over and above, a sum of rupees
two and a half lacs were also allowed for implementing the said scheme.
The said scheme was centrally controlled scheme in the shape of grant-in-
aid. For implementing the said crash scheme, six projects were started by
· the Public Works Department (drainage Section) in the district of Amrit-
sar. Shri Kailash Chand was the Superintending Engineer and Shri Kuldip
H Singh Sidhu was the Executive Engineer concerning the said projects.
INDERJIT SINGH v. STATE OF PB. [G.N. RAY, J.] 65

These six projects were meant to desilt six drains, namely, Sakki Nullah, A
Kasur Nullah, Sohal Drain, Jhabal Drain, Kairon Drain and Devi Dass
Pura Drain. The amounts allotted to each of the six projects were expected
to be spent by the end of the financial year. March 31, 19972. One Chanchal
Singh of village Jhabai filed a complaint to the Chief Engineer (drainage)
alleging that although huge amounts were reportedly spent on desilting B
Jhabal Drain but actually nothing had been done at the spot. Such com-
plaint was processed and in due course in April, 1972, the Minister
concerned ordered Superintending Engineer (Vigilance) Shri B.R. Saini,
or Public Works Department to enquire into the allegations. Shri Saini
thereafter visited the sites to all the six projects and submitted his reports
indicating that embezzlement of huge amount by the officials concerned c
had taken place in implementing the said projects. On the basis of such
report, investigations were conducted by the Vigilance Bureau and after
the completion of investigations, six first information reports were
registered in July, 1973, pertaining to all the six projects. Amongst the
accused in the Criminal cases instituted on the basis of the said F.1.Rs. Shri D
KS. Sidhu. Executive Engineers, was stated to be the man-incharge of all
these projects. The other accused person were Sub-Divisional Officers,
Sectional Officers, Sub-Divisional Clerks. They were divided into six
groups to execute the work under Shri KS. Sidhu. According to the
prosecution, during the police investigation it was detected that a sum of E
Rs. 4,35,832 was embezzled in connection with implementation of Sakki
Nullah Project, Rs. 7,74,000 was embezzled relating to Kasur Nullah
Project, Rs. 1,46,803 was embezzled in respect of Sohal Drain Project, Rs.
1,62,291 was embezzled in relation to Jhabal Drain Project, Rs. 78,638 was
embezzled relating to Kairo11 Drain Project and Rs. 1,02,413 was embez- F
zled in respect of Devi Dass Pura Drain Project, It was further found on
the basis of the investigation that the embezzlements were pursuant to
criminal conspiracy of the accused persons and while perpetrating the
offences, they had also forged and falsified the records and used such false
and fabricated records as genuine. The accused were eventually tried in six .
separate trials relating to each of .the said projects by a Special Judge G
appointed by the State Government under Section 6 of the Criminal Law
(Amendment) Act, 1952. The accused however, in their statements made
under section 313, Code of Criminal Procedure, denied the charges and
pleaded innocence. The Special Judge after considering the evidence ad-
duced in the case convicted and sentenced all the accused under Section H
66 SUPREME COURT REPORTS l1995] SUPP.2S.C.R.

A 5(1) (d) of the Prevention of Corruption Act and under Sections 466. 468,
471, 477-A and 120-B of the Indian Penal Code and passed various
sentences for the said offences as referred to in the judgment of the learned
trial Judge.

The High Court in the impugned judgment has held that there was no
B direct evidence against the accused persons who were appellants before the
High Court in support of the charges levelled against the accused and the
prosecution has relied only upon circumstantial evidence. Coming to the
circumstantial evidences sought to be relied on by the prosecution, the High
Court has held that the prosecution, in all the said cases, produced a number
·C of witnesses to prove that although vouchers had been prepared in the name
of the said witnesses, they had neither worked on such projects nor did they
receive any payment. The High Court has, however, held that the testimony
of those witnesses had lost its value because it was not possible to come to a
conclusion that they were the same persons in whose names the vouchers
D were prepared. It has been categorically held by the High Court that the
witnesses did not prove one way or the other whether the payments were
actually made on the vouchers which contained their names.

The prosecution also prepared the list of the labourers whose names
were mentioned in the vouchers but according to the prosecution a number
E of such persons did not reside within a radius of five miles from the site
of work. The High Court has commented upon the said evidence by
indicating that the said evidence suffered from the same disability, and the
evidence did not positively pinpoint that the persons named in the list were
the same who were named in the vouchers. It has been indicated by the
p High Court that it is not possible to infer from the evidence that the
persons named in the lists were in fact those labourers in whose names the
vouchers had been prepared. It was not unlikely that the labourers who
were actually engaged were residing more than 7 miles away from the site
of work. The High Court has therefore held that upon evidence of that
nature, the guilty of the accused could not be held to have been proved.
G
The prosecution examined some labourers who admitted that they
had worked in those projects and they had also signed out some of the
vouchers but they stated that they were paid less amount than what was
shown in the vouchers. It has been held by the High Court that it was
H difficult to rely upon the testimony of such witnesses for the purpose of
INDERJIT SINGH v. STATE OF PB. [G.N. RAY, J.] 67

holding the accused guilty of recording inflated payments in the vouchers. A
It has been indicated by the High Court that the said witnesses had
received payments and executed the voucher in 1972 but the said labourers
were examined ten years thereafter and it is difficult to believe that even
though the said witnesses received less payment, they would keep quiet and
sleep over the matter for such a long period and would not make any
B
compalint to the higher authorities. The Reports of the finger print experts
that in some cases the vouchers prepared in the names of various persons
bore thumb impressions of a single person, were taken into consideration
by the High Court. The High Court has noted that there are conflicting
reports given by the experts regarding the same thumb impression. The
High Court has also indicated that even if it is accepted, despite the c
conflicting reports of the experts, that one person had received the pay-
ment on behalf of others, such fact could not establish that the payments
were not made at all. It has been indicated by the High Court· that such a
possibility cannot be ruled out that a member of the same family might
have out his thumb impression on various vouchers relating to the other D
members of the family. The High Court has held that this evidence is highly
unsatisfactory and is quite inadequate to come to a conclusion that the
appellants had committed embezzlement.

During the investigation of the cases thumb impressions of Vijay
Kumar, Special Officer, Surjit Singh, Sub-Divisional Clerk, who were con- E
nected with the Kasur Nullah Project and thumb impression of Inderjit
Singh Sectional Officer, connected with the Kairon Drain Project were
obtained. According to the prosecution, the thumb impression taken by the
>- police were compared with the impression on the vouchers said to have
been affixed by the labourers but it was found that the thumb impressions F
of the said officials tallied with some of the thumb impressions on the
vouchers. On the basis of such evidence, the prosecution contended that
the said evidence established that the said accused fabricated certain
vouchers pursuant to the conspiracy to commit embezzlement of the
Government funds. The High Court has not accepted the said evidence. It
has been indicated by the High Court that if the specimen thumb impres- G
sions of the appellants had not been taken under the orders of the
Magistrate in accordance with Section 5 of the Identification of Prisoners
Act, such thumb impressions should not be accepted. It has been held by
the High Court that there is no guarantee that the thumb impressions which
were compared with the thumb impressions on the vouchers were in fact H
68 SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.

A of the appellants. Referring to a decision of this Court in Mahmood v. State
of U.P., AIR (1976) SC 69 wherein this Court has held that the specimen
finger print of the appellants not having been taken under the orders of a
Magistrate in accordance with Section 5 of the Identification of Prisoners
Act, would raise suspicion about the conduct of investigation and in view
of possibility of fabrication of the evidence furnished by the finger print
B expert, it would not be proper to sustain the conviction of the accused on
the basis of such expert evidence. The High Court has also indicated that
before the trial Court the accused had applied to get their thumb impres-
sions compared with those on the disputed vouchers but such prayer was
declined by the trial court. The prosecution relied on the alleged confession
c made by Shri J.N. Sood, Sub-Divisional Officer and Shri Hukam Chand,
Sectional Officer, before Shri B.R. Saini, Superintending Engineer, who
had been deputed to conduct investigation on the spot. According to Shri
Saini, the said persons threw themselves before him and confessed that no
work had actually been done at the spot and they had pleaded for mercy.
D The said Shri Saini also stated that the Executive Engineer (Civil) Shri
Sidhu was also present at the time and he felt thoroughly ashamed. The
High Court, however, has not accepted the case of extra Judicial confession
and it has been held by the High Court that the alleged extra judicial
confession has lost its evidentiary value in view of the fact that Shri B.R.
Saini did not mention about this incident of confession in his report, since
E admitted in cross-examination. The High Court is of the view that no
reliance should be placed on such extra judicial confession said to have
been made before Shri Saini.

It, however, appears that the High Court has strongly relied on Rule
F 7.38 of the Departmental Financial Rules which contain that the wages of
members of the work charged establishment should be drawn and paid
according to form D.F.R. (P.W.) 29 which is a combined pay bill and
acquittance roll form. Under this rule, it is necessary that a consolidated
bill in the said form should be prepared monthly where in full details of
the work charged establishment indicating the name, father's name, caste,
G full home address of the work charged employees and work charged
labourers are to be mentioned. The High Court has indicated that payment
to the labourers were not made by filling such form. In none of the
vouchers for payment, the full home address of the labourers was incor-
porated. For want of such detailed particulars, it was impossible to trace
H the labourers who allegedly received payments on the basis of vouchers,
INDERJIT SINGH v. STATE OF PB. [G.N. RAY, J.] 69

during the investigation of these cases. Although it was contended on A
behalf of the accused that the said form was not being used anywhere in
the State of Punjab and that the prevalent practice all over the State was
that the wages to the work charged labourers would be paid on the basis
of vouchers without mentioning their addresses, the High Court did not
accept such contention of the accused as the same was not supported by B

• any evidence and such suggestion was not even put to Shri B.R. Saini when
he came in the witness box to prove his reports. It has been held by the
High Court that it cannot be believed that the officers dealing with the
disbursement of wages to labourers were not aware of the said rules.
Hence, it could be safely concluded that the addresses of the labourers
were not mentioned in the vouchers so as to make it impossible to trace c
them and by such process, the direct evidence of embezzlement stood
deliberately obliterated. The High Court has also held that the contention
of the accused was that under para 1.3 of the Irrigation Manual of Orders,
it was the duty of the Divisional Accountant to check every voucher and
to return the incomplete and defective vouchers to the Sub-Divisional D
Officers for completion and correction but in no case, the vouchers on the
basis of which payments were made had been returned by Divisional
Accountant for correction and presentation according to the said Form No.
29. Such submission on behalf of the accused, however, has not been
accepted by the High Court by indicating that if the Divisional Accountant E
did not return the defective vouchers, it was a case of remiss on his part
but for such dereliction of duties committed by the Divisional Accountant,
the disbursing officers could not derive any benefit. In view of not main-
taining the vouchers in accordance with the said form containing the
detailed particulars of the work charged labourers, it has been held by the
F
High Court that the inference was inevitable that the disbursing officers
had omitted to mention the addresses of the labourers on the payment
vo,uchers with intent to embezzle the government funds. According to the
High Court, such inference is further fortified from the impeccable tes-
timony of Shri B.R. Saini, Superintending Engineer, who deposed that his
investigations at the spot revealed that much less work had been done than G
the details of work mentioned in the records prepared to indicate the
actual work performed in implementing the projects. The High Court has
held that Shri Saini deposed in all the cases and Shri Saini was a respon-
sible senior officer of the department and he had no reason to falsely
inculpate junior officers dealing with the disbursement of wages to the H
70 SUPREME COURT REPORTS (1995] SUPP. 2 S.C.R. .,(\'

A labourers. According to the High Court, the testimony of Shri Saini was
not to be doubted. The High Court has held that from the said investiga-
tions and the enquiry held at the spot, a conclusion can be drawn the large
amounts out of the government funds allocattd to execute the six projects,
were misappropriated and embezzled by the officers dealing with the
disbursement of the wages. The High Court has further held that the facts
B

•
so established are. consistent with the hypothesis of the perpetration of the
crime of embezzlement. The High Court has further held that the evidence
of Shri B.R. Saini, Superintending Engineer, regarding lesser work done
and the factum that the wages were alleged to have been paid to the
labourers on the basis of vouchers from which it was impossible to trace
c them, have completed the chain of circumstances which do not leave any
reasonable ground for the conclusion inconsistent with the innocence of
the officers dealing with the disbursement of the wages. Hence, the High
Court has held that from the aforesaid facts, the prosecution case should
be accepted.
D
Co~ing to the question as to whether all the accused can be held
guilty of committing the offence of criminal misappropriation and con-
spiracy, the High Court has held that it was not disputed that Shri Sidhu
had empowered the Sub-Divisional Officers to make payments to the
labourers. The Sub-Divisional Officers were required to maintain the
E records of the cash. Each payment made by the Sub-Divisional Officers
was required to be witnessed by another official who was reqmred to certify
the payments. The High Court has held that in the present cases, the
disbursement of wages was made by the Sub-Divisional Officers which was
witnessed by the Section Officers who certified payment on each voucher.
In that view of the matter, the High Court has held that it has been
F conclusively proved that the Sub-Divisional Officers and the Sectional
Officers dealing with funds should be held guilty of conspiracy and embez-
zlement. Accordingly, they should also be held guilty of criminal miscon-
duct under Section 5 (1) ( d) of the Prevention of Corruption Act. The High
Court has held that though the Executive Engineer, Shri Sidhu was in over
G all cd~abrge of the pfrojects but hit is bmanifestHthat he. dbid not part~dcipatehin
the 1s ursement o wages to t e 1a ourers. ence, it ecomes evt ent t at
though he was responsible for the execution of the work to the Superin-
tending Engineers, he was not directly involved in payment of wages to the
labourers. The High Court, therefore, has given him the benefit of doubt
by indicating that the department may, however, deal with him in a suitable
H manner for failure in the discharge of his duties efficiently.
INDERJIT SINGH v. STATE OF PB. [G.N. RAY, J.] 71

Coming to the question of conviction of the Sub-Divisional Clerk, A
Shri Surjit Singh, under Section 466 and 477A of the Indian Penal Code,
the High Court has indicated that the said Shri Surjit Singh was convicted
as his thumb impressions were found affixed on the vouchers containing
alleged thumb impressions of Subeg Singh, Mohinder Singh and Hans Raj.
The High Court has acquitted him by giving benefit of doubt in view of the
B
fact that the thumb impression of the said Shri Surjit Singh could not be
held to have been proved by admissible convincing evidence. Accordingly,
the High Court has acquitted the Executive Engineer Shri Sidhu and the
said Sub-Divisional Clerk by giving them benefit of doubt but the convic-
tions of the other accused were upheld by the High Court. The High Court,
however, reduced the sentences to one year's rigorous imprisonment if any c
of the accused had been sentenced to undergo rigorous imprisonment for
more than one year by the trial Court.

Mr. Ram Jethamalani, Senior Advocate, appearing for Inderjit Singh
and others in the group of these Criminal appeals, has very strongly D
contended that the High Court has not accepted most of the circumstantial
evidences sought to be relied upon by the prosecution by giving cogent
reasons. He has submitted that it is only unfortunate that ultimately on
surmise and conjecture, the convictions have been upheld by the High
Court on the ground that the Superintending Engineering Shri Saini was a
responsible officer and since he made enquiry at the spot and found that E
the work in respect of the said six projects was less than what was
mentioned in the records, the case of conspiracy and embezzlement have
been conclusively proved. Mr. Jethmalani has submitted that simply on the
basis of the report of the Superintending Engineer, it was not open for the
Court to draw a conclusion that less work had actually been done. The F
quantum of work actually done had not been proved by leading any oth.:r
convincing evidence or examining independent witnesses for that purpose.
The Court has not accepted any other evidence for the purpose of holding
that less work had bean done in respect of the said six projects. The
Reports of Shri Saini is based on the personal assessment of the said
Superintending Engineer and it is not unlikely that the said Reports are G
erroneous. Mr. Jethamalani has also submitted that even if it is assumed
that less work had been done, the said fact does not constitute the offence
of embezzlement and falsification of the records in perpetrating the said
crime of embezzlement until and unless it can be convincingly proved by
leading unimpeachable evidence that payment had not been actually made H
72 SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.

A to the Labourers but in the name of work charged labourers, the bills were
falsely drawn an<l money under the bill had been misappropriated, no
order of conviction against th~ accused for the charges levelled against
them can be passed simply on a finding that less work had been done. He ..
has submitted that even if it is assumed that the local officers neglected in
discharging their responsibilities and duties, such officers may be held
B guilty in departmental proceedings for the dereliction of duties but certain-
ly cannot be convicted for the offence for which they were charged. Mr.
Jethmalani has also contended that the Divisional Accountant admittedly
did not return any of the vouchers for making payment on the score that
such voucher was incomplete and lacking in material particulars. Such fact
c really supports the case of the accused that for pajrnent of work charged
labourers, the maintenance of form P.W. 29 had been insisted upon. Mr.
Jethamalani has also submitted that the High Court has given benefit of
doubt to the two accused but unfortunately has upheld the conviction
against the other appellants without appreciating that the circumstantial
D evidence was miserably lacking to establish the complicity of the accused
in the offence alleged against them. Mr. Jethamalani has submitted that it
is unfortunate that despite the absence of intrinsic evidence from which
irresistible conclusion about the guilty of the accused by eliminating any
other hypothesis, can be drawn, the High Court has jumped on the con-
clusion that the accused must be held guilty simply by assuming that in
E order to cover up the crime of embezzlement improper vouchers were
prepared and bills were drawn showing greater volume of the work when
in fact lesser work, as revealed in spot enquiry, was executed. As from both
the said facts, namely, execution of lesser work than mentioned in the
records and payment to labourers on the basis of improper vouchers
lacking in detailed particulars, the prosecution case is not established even
F
if correctness of assumed facts is accepted, the conviction of the appellants
must be held to be illegal. He has, therefore, submitted that grave injustice
has been done to the accused and the appeals should be allowed by setting
aside convictions and sentences.

G The other learned counsel appearing for the appellants in the con-
nected appeals have adopted the arguments of Mr. Jethmalani and have
submitted that the convictions and sentences of the accused should be set
aside.

H Learned counsel appearing for the State of these appeals has, how-
..,, INDERJIT SINGH v. STATE OF PB. [G.N. RAY, J.) 73

ever, disputed the contentions made by Mr. Jethamalani and has contended A
that in the instant case, the concerned accused hatched the conspiracy to
defraud the public exchequer and with such intention deliberately prepared
, ,, some vouchers showing alleged payments to various labourers for the
works done by them without giving particulars of such workers contrary to
the instructions for maintaining vouches in a particular manner, in order
B
.-t· to make it impossible to verify the actual payment by examining the
concerned labourers. The learned counsel has also submitted that the
Superintending Engineer made spot enquiries about the quantum of work
done in respect of the six projects and he has deposed categorically that
the work mentioned in the records on the basis of which the alleged
payments had been made to the workers was much less than what had c
actually been done. The High Court has rightly pointed out that the said
Superintending Engineer was a responsible senior officer who had no
animus against any of the accused who were his subordinate officers and
his deposition should be accept. The learned counsel for the respondent
has submitted that if such evidence is accepted, the falsification of records
D
is writ large and the case of embezzlement is also established beyond
reasonable doubt. He has submitted that the Court below, therefore, had
no hesitation in holding the accused guilty and this Court should not
interfere with the concurrent finding made by the courts below and the
appeals should be dismissed.
E
After giving our anxious consideration to the facts and circumstances
of the case and the evidence adduced in the trials, it appears to us that
simply on the basis of the reports of the Superintending Engineer that less
work than what was stated in the records was done, the case of embezzle-
ment by deliberately falsifying the records is not established. Until and F
unless by cogent and unimpeachable evidence about the factum of non
payment to labourers of the amount drawn in their names can be estab-
lished, the case of embezzlement by the government officers and misap-
propriation of government fund cannot be sustained. The Superintending
Engineer may be a responsible officer but it would not be safe to simply
rely on his assessment of the work done and in our view, for basing the G
~ conviction, other convicting corroborative evidences about the quantum of
work done is necessary. In the facts of the case, it will not be just and
proper to accept the said report and deposition of Shri Saini to be
conclusive about the quantum of work done. That apart, Mr. Jethamalani
is justified in his contention that unless and until the factum of non payment H
74 SUPREME COURT REPORTS [1995) SUPP. 2 S.C.R.

A t-0 the workers is established, over payment to the workers on account of
less work done cannot be held to be sufficient evidence to convict the
accused for the offences alleged against them. Even if it is assumed that
the local officers who were entrusted with the task of payment to the
labourers were careless and did not actually ascertain the quantum of work ''
executed by the labourers but made payments to the labourers on the basis
B of work as indicated in the bills, such local officers may be held guilty of
dereliction of duty but they cannot be held to be guilty for the offences
alleged against them. In the instant case, the chain of circumstantial
evidence is far from being complete and the conviction, in our view, has
been based more on surmise and conjecture than on the basis of convicting
c and unimpeachable evidences. We, therefore, have no hesitation in dismiss-
ing criminal Appeals Nos. 22-28 of 1986 and allowing all the other appeals
preferred by the accused appellants and setting aside the conviction and
sentences passed against the said aµpellants.

RA Appeals allowed.