False entries, unpaid power bills: Kerala High Court upholds conviction of former police cashier for diverting Rs 3.6 lakh

Justice A Badharudeen was hearing appeals challenging the woman’s conviction in 2009.

Evidence established misappropriation

• The high court held that the prosecution had successfully established two key elements of the offence: entrustment of funds and failure to account for them.
• The records and witness testimony clearly showed that the funds withdrawn from the treasury were handed over to the accused in her capacity as cashier and entered in the official cash books.
• However, the electricity dues for the relevant period remained unpaid.
• Further evidence revealed falsified entries showing disbursement of funds to various units through money memos, though those units confirmed that they had never received the amounts.
• The court also noted instances where pages of the money memo register were torn or altered, suggesting attempts to conceal the diversion of funds.

Administrative assistant cleared

• While the cashier was convicted, the administrative assistant who had been arraigned as the second accused was acquitted by the trial court.
• The high court observed that the evidence indicated the assistant had actually reported discrepancies in the records and alerted the authorities to the irregularities.
• Records showed that he had sent messages to various units seeking confirmation about the receipt of funds and had submitted reports pointing out errors in the cash book and missing documents.
• These actions, the court noted, undermined the allegation that he had conspired with the cashier.

Court rejects challenge to sanction

• The high court held that the sanction order clearly showed that the sanctioning authority had examined the records and applied his mind before granting approval for prosecution.
• It noted that the order specifically recorded that the Director General of Police (DGP) had carefully examined the materials relating to the allegations before issuing the sanction.
• Relying on precedent from the Supreme Court in State of Madhya Pradesh v. Jiyalal, the court observed that the prosecution is not required to examine the sanctioning authority in every case where the sanction order itself demonstrates due application of mind.

Final verdict

• After analysing the evidence and legal arguments, the high court concluded that the trial court’s findings were supported by the materials on record.
• Finding that the prosecution had proved entrustment of funds and their misappropriation by the cashier, the court dismissed the appeals and upheld the conviction and sentence imposed by the special court.

Allegations of misuse of government funds

• According to the prosecution, Pushpakumary served as cashier in the SP’s office between 1995 and 1997.
• As cashier, she was responsible for handling government cash and maintaining financial records such as cash books and money memo registers.
• Investigators alleged that during this period she misappropriated funds withdrawn from the treasury for paying electricity charges of the police telecommunication office.
• The prosecution’s case was that several contingent bills were drawn from the Sub Treasury at Vellayambalam for paying electricity dues, but the amounts were never remitted to the electricity department.
• Instead, the money was allegedly diverted and the records manipulated to conceal the misappropriation.
• The alleged misappropriation spanned multiple transactions.

• In one case alone, an amount of Rs 45,495, drawn between June 1996 and July 1997 for electricity payments, was not remitted.
• In another instance, Rs 89,030, withdrawn through four contingent bills between December 1996 and May 1997, was allegedly diverted instead of being used to pay electricity charges.
• The prosecution further alleged falsification of entries in the cash book and the creation of false disbursement records through money memos.
• In certain cases, relevant pages from official registers were allegedly removed or altered to hide the irregularities.
• Overall, the sanction order issued by the DGP referred to misappropriation amounting to Rs 3,61,011 between November 1995 and June 1997.

Trial court’s findings

• During the trial, the prosecution examined 25 witnesses and produced more than 50 documents, including cash books, contingent registers, treasury bill books and money memos.
• Witnesses testified that the contingent bills were encashed and the money handed over to the cashier, who had control over the funds.
• Entries in the cash books also showed that the amounts had been received by the accused.
• However, verification with the electricity department revealed that the payments had not been made.
• Communication with various telecommunication units also showed that the amounts recorded as disbursed through money memos had never reached the intended recipients.
• The trial court convicted her under sections 13(2) read with 13(1)(c) of the Prevention of Corruption Act, 1988, pertaining to criminal misconduct by a public servant, and sections 409 (criminal breach of trust by public servant), 477A (falsification of accounts), 201 (causing the disappearance of evidence of an offense or giving false information to screen an offender) and 120B (criminal conspiracy) of the Indian Penal Code in different cases.
• The court sentenced her to rigorous imprisonment in several cases along with fines, directing that the substantive sentences would run concurrently.

Defence challenges conviction

• The defence argued that the trial court had wrongly appreciated the evidence and that key procedural lapses undermined the prosecution case.
• One of the main arguments raised was that the general diary of the office had not been properly maintained during the relevant period.
• The defence contended that proper diary entries could have revealed who actually carried the cash to various sub-units, and that the accused should not be penalised for the office’s failure to maintain such records.
• The defence also questioned the evidentiary value of teleprinter and wireless messages used by investigators to confirm that the funds had not reached the intended units.
• These messages, the defence argued, amounted only to “negative evidence”.
• Another major contention concerned the sanction for prosecution.
• The defence argued that the DGP, who had issued the sanction order permitting prosecution, had not been examined as a witness during the trial.