Fazl Ali, J.This is an application on behalf of one Harakrishna Mahatab, who has been convicted u/s 406, I.P.C. and sentenced to there months rigorous imprisonment and to a fine of Rs. 200.

2. The facts of the case have been set out in great detail in the judgments of the Courts below and I shall only briefly refer to them. In the year 1927 when the petitioner was the Chairman of the District Board of Balasore a resolution was passed on 23rd March 1927, by the Education Sub-Committee of the District Board that the unspent balance of the previous year should be spent in sanctioning building grants to a number of Middle English Schools in the District including the Middle English School at Agarpara provided that certain conditions were accepted by the Managing Committees of those schools. The Sub-Committee proposed to allot a sum of Rs. 2,000 to Agarpara while sums allotted to other Middle English Schools were in some cases less, in some cases more and in several cases the same as that allotted to Agarpara. On 27th March 1927 the Managing Committee of the Agarpara School passed a resolution to the effect; that the proposed grant be accepted by the school and an agreement be entered into on the lines suggested by the District Board. It may be mentioned her that sometime before the date the Agarpara School Committee had applied for a building grant to the District Board and estimated cost of the building to be about Rs. 7,500. The School Committee, therefore, while accepting the grant also resolved that they should arrange to contribute the balance of the estimated amount to the general school fund and that the grant made by the District Board be with drawn before the 31st March which was the end of the financial year.

3. On 28th March 1927 the committee executed an agreement in favour of the Chairman of the District Board, one of the clauses in which runs as follows.

That we will contribute the balance of the estimated amount to the general school final and the whole money will be deposited rote Postal Saving Bank and the building will be done by the contractor appointed by the Board and paid from the fund according to form District Board Engineering Department ales and the site and the plan of the school will have to be approved by the District Board authorities and the District Inspector of Schools. Balasore.

4. I may mention here that the petitioner was at the time this arrangement was executed not only the Chairman of the District Board but he was also the President of the Committee of the Agarpara Middle English School and he was one of the signatories to this agreement in this latter capacity along with the Secretary of the committee and the Headmaster of the school. On 29th March 1927, the petitioner as the Chairman of the District Board issued a cheque in favour of the Agarpara Middle English School and on the same day the cheque was cashed and money was made over to the petitioner as the President of the School Committee. On 30th April 1927 the Education. Sub-Committees resolution of 23rd March 1927, was confirmed by the District Board.

5. Sometime in May 1927, there was fresh election of members for the District Board and in October 1927, Babu Gopal Prasad Das who is the present Chairman of the District Board was elected Chairman in place of the petitioner. The new Chairman belonged to a totally different school of thought and was by no means friendly with the petitioner and soon after he came into power it was decided by the District Board to ask for a refund of the amounts of money that had been granted to the various M.E. Schools including Agarpara when the petitioner was the Chairman. So on 29th December 1929, a letter was issued by the new Chairman to the Secretary of Agarpara M.E. School asking him to refund the amount of Rs. 2,000 to the District Board and pointing out that the grant had not been made according to the rules laid down in the Education Code. On 9th January 1928 the Headmaster of the Agarpara M.E. School sent a reply in which he said that the grant could not be refunded as a portion of it had already been spent In purchasing materials for the school building and the remainder had been advanced for the manufacture of bricks and purchase of other materials. The District Board asked again for a refund of the money on 31st January 1928, and. In februery 1928, the School Committee recorded the following resolution in the minute book.

In view of the fact; that Chairman, District Board, Balasore, has asked the Secretary to refund the building grant of Rs. 2,000, and (that the amount has already been spent in purchasing some materials and in giving advances for the purchase of some materials, the committee regret that the amount of Rs. 2,000 cannot be refunded.

6. It appears that no further notice was taken by the District Board of this matter until 18th September 1928 when another letter was addressed to the Secretary asking him to send the pass book kept by the school. On 19th September 1928, the Headmaster replied that the Secretary and the President being away the letter could not be complied with. On 26th September 1928, the District Board repeated its demand for the pass book and threatened " steps " against the Secretary. On 28th September 1928, the Headmaster wrote again saying that the Secretary and the President were still away. Meanwhile the matter seems to have been communicated to Mr. Beal, the then Magistrate who wrote a letter to the Superintendent of Police on 29th September 1928, asking him to institute a case u/s 406, I.P.C., against the petitioner. The letter was treated as "the first information" and a case u/s 406 was started against the petitioner.

7. In the course of the police investigation the petitioner informed the police that the money in question had been advanced to one Krishna Chandra Das and one Aparti Sahu for the purpose of collecting materials for the building and for the manufacture of bricks. These men supported the version of the petitioner, and the materials which were said to have been collected as well as the bricks said to have been manufactured were shown to the investigating officer. The District Engineer was also deputed to verify the information, and it has been conceded both by the Sub-Inspector and the District Engineer in evidence that the materials shown to them might very well be worth Rs. 2,000. If; appears that the investigating officer was at first not inclined to send a charge sheet but submitted a report on 7th November 1928, in which having detailed the facts of the case, he expressed the opinion that it was doubtful if the case against the accused would stand in Court. Meawhile Mr. Beal had left the station and a charge sheet was ultimately submitted by the police on 18th January 1929, there being nothing definite on the record as to what order was passed and by whom on the report of 7th November 1928. It may be mentioned here that the entire sum of Rs. 2,000 had in the meantime been refunded by the Secretary, Agarpara "School, and this was done sometime between 29th September 1928, when the first information was lodged and 1st October 1928, when the Secretary sent a letter to the District Board with a, chalan showing the refund and explaining delay as being due to the fact that money was being raised by local subscriptions.

8. Now the receipt of the money not being denied by the petitioner, the vital question to be determined in the case was whether this was a case of anything more than a mere civil liability, or in other words, whether the prosecution had established the dishonest intention of the accused beyond reasonable doubt. The lower appellate Court as well as the trial Court have drawn strong inferences against the petitioner on two main grounds. It is pointed out in the first place that the terms of agreement of 28th March 1927, where entirely ignored by the petitioner, and it has also been held that the story put forward by the petitioner as to the manner and circumstances under which the money was advanced to Krishna Chandra Das and Aparti Sahu is wholly false. As to the former ,ground the learned Sessions Judge has himself conceded that if the materials for the building were really purchased as alleged by the defence, however irregular the action of the appellant might be and however contrary it might be to the agreement entered into with the District Board, there would be no offence u/s 406, I.P.C. In fact the prosecution evidence itself discloses that several other schools also have not acted in strict accordance with similar agreements executed by them. It is admitted that in several cases the money was not deposited in the Cooperative Bank. It is also admitted that in many cases the type plan provided by the District Board was entirely ignored, and the District Engineer frankly concedes that the rule about constructing buildings according to the District Board type plan is honoured more in breach than in observances. Besides, it is to be remembered that the District Board had made a grant of only of Rs. 2,000 to the school and the balance of the amount required for the bulding was to be supplied by the School Committee. In these circumstances it is by no means improbable that the members of the School Committee with the petitioner at its head, would try to arrange to have the building constructed as economically as possible even though it may technically involve the breach of the agreement entered into, with the District Board. It should also not be overlooked that the petitioner being the Chairman of the District Board and being in that capacity the person in whose favour the agreement had been entered auto, may have quite honestly felt that the rules might very well be relaxed by the District Board in favour of the Agarpara M. E. School and that the School Committee need not for the time being at, any rate stick to the letter of the agreement. The terms of the agreement also do not suggest that any infringement of the conditions laid down there would involve criminal liability. About the only question which has to be seriously considered is whether the defence put forward in this case that certain advance had been made to Krishna Chandra Das and Aparti Sahu for the purchase of materials as well as for the manufacture of bricks, can be definitely held to be false on the materials before the Court. Now it is true that the Courts below have come to a finding that the defence story is entirely false, and a finding of fact is not usually interfered with in revision; but as in this case the finding is not based on any positive evidence, but upon inference drawn from certain circumstances arising from the evidence, and all the materials on which the finding is based are set forth in the judgments of the Courts below, it is open to the accused to ask us to consider if the conclusions arrived at by the Courts below are warranted by these materials.

9. Before considering, however, the reasons given by the Courts below for rejecting the defence version, I wish to point out that there is a small gap in the prosecution evidence which does not seem to have been noticed by either of the two Courts in their judgments. I find from the judgment of the learned Sessions Judge that the entire correspondence about the refund of money was addressed by the district Board to the Secretary of Agarpara School and almost all the letters that were received in reply were written by the Headmaster or by the Secretary. Thus there is no evidence to show that at any time before the institution of the criminal case any demand for the money was made directly from the accused, and whatever the actual facts or the probabilities may be, there is no evidence even to show how far the accused was aware of this correspondence before the first information report was drawn up. In fact the last two letters of the Headmaster definitely refer to the fact that both the Secretary and the accused were away for the time being and, therefore, the demand made by the District Board could not be complied with. Assuming then that the accused had. actually set up a false defence in the case, it is to be considered whether that would in the circumstances of the case necessarily lead to an inference of dishonesty.

10. It must be remembered that nowhere in the whole correspondence which passed before the institution of the criminal case was there any suggestion that the petitioner was individually liable for the money, and once the School Committee had committed themselves to the statement that the money demanded by the District Board had been spent, as is evident from the letter of the Headmaster dated 9th January 1928, and the resolution of the School Committee dated 24th February 1928. there is nothing to be surprised at, if the accused prepared to adhere to that story, even though he found that he alone was being proceeded against. Remembering, then, that the accused may well have been somewhat handicapped by the previous statement made on behalf of the committee to which on the actual evidence, he may or may not have been a party, and remembering also that what the prosecution has to prove is the state of the mind of the accused at the point of time when, the alleged offence is said to have been committed and after the case against him had been started it is a, question requiring some consideration whether the mere setting up of a false defence in this case would necessarily raise on inference as to the dishonest intention of the accused at the critical point of time referred to above.

11. Passing on to the merits of the defence version, it appears to me on an examination of the materials found in the judgments of the Courts below that, although there are certain suspicious features in the evidence put forward or behalf of the defence yet it does not seem easy to say definitely that the story of the accused that certain advances had been made to court-witnesses-1 and 2 has been conclusively proved by the prosecution to be false. Both these persons are members of the School Committee and are interested in the school It is admitted that bricks can be manufactured more cheaply at Mahantipar than at Agarpara. The mere facts that the court-witness 1 is an old person and is a Vaisnab and has devoted himself to a temple do not seem to me quite sufficient to warrant the inference that he was incapable of assisting the school in procuring or supplying the building materials. The Courts below appear to have been greatly influenced by the fact that the building materials shown to the investigating officer were found at some distance from the present site of the school. It is, however, to be remembered that it is nobodys case that the new building was to be constructed on the present site. On the other hand there is evidence that another site has-been proposed for the building and one of the points raised by the prosecution itself is that even that site has not yet been definitely approved by the District Board. It has also been argued by the prosecution that a portion of the temple of which Court-witness 1 was in charge was built some years ago and that the materials found near about the temple were meant for the use of the temple. It may be that the theory evolved by the prosecution is correct, but after all the suggestion is based entirely on speculation and there is no reason entirely to exclude the supposition that the materials found near the temple might have been left after the temple had been built and the court-witness 1 might have been willing to make them over to the school at a. cheaper rate than at which they would be available in the market so the money was advanced to him.

12. Apart from these speculations, however, the facts which in my opinion cannot be ignored are that the defence of the accused is supported by the sworn testimony of these two Court-witnesses and a large cuantity of building materials was shown to the police as well as to the District Engineer in the course of the police investigation, the finding of the trial Court being that these officers had been duped in believing that the materials were for the construction of the school building. As against this there is no direct evidence to negative the case of the accused, and whatever inference have been drawn by the Courts below are based more or less upon certain surmises which are described as probabilities. These surmises may possibly be good surmises but when we have to adjudge the guilt of the accused and the adjudging of the guilt depends upon the rejecting of the direct evidence in favour of the accused merely on the strength of a few surmises, all that can be safely said is that the 7ersion of the accused may in certain respects be open to suspicion, but it cannot be definitely held to be false.

13. On the other hand, the version that the amount advanced by the District Board had been spent in purchasing the materials is not a belated story but was given out by the Secretary of the School as soon as the committee was asked to refund the money. The School Committee consists of a number of members and nothing has been shown as to why all those persons should collude with the petitioner in the misappropriation of the money. The Headmaster of the M. B. School according to prosecution evidence, is an honest and respectable person, and it was he who was for sometime in correspondence with the District Board. The correspondence which passed between the School Committee and the District Board before the grant was made is enough to show that the School Committee was keen about a new building and had offered to contribute the bulk of the amount which the building was estimated to cost. It is thus a question to be considered whether all the members of the School Committee would suddenly become indifferent and disloyal to the interests of the school as to allow the petitioner to misappropriate the amount granted by he District Board. The learned Sessions Judge says at one place that the School Committee was not aware of the money having been received until it was called upon to refund the money, but there is nothing in the record to warrant this inference. It is also a circumstance to be taken into consideration that not one member of the School Committee or any other person of the locality is charging the petitioner with dishonesty. The petitioner, it is conceded, is considered to be a "big man" in the locality and is a zamindar paying Government revenue of about Rs. 10,000. He was formerly a member of the Legislative Council and it has been admitted in evidence that he has provided a site for the local dispensary free of cost. It also appears from the judgment of the trial Magistrate that the accused provided a site for the new school building at Agarpara. This will be clear from the following passage in the judgment of the trial Magistrate:

It cannot be said by any stretch of reasoning that the approval of the site by the accused oven if it be taken to be in his capacity as Chairman of the Board which certainly was not as he himself offered the site was sufficient observance of the terms of the agreement as laid down towards the concluding portion o para. 1.

14. Now it cannot of course be said that merely because the accused is a man of substance or because he is shown to have acted in a public spirited manner in some instances, he is incapable of committing criminal misappropriation, but I certainly require the prosecution evidence to be more clear and conclusive than it is in this case before I hold, that the accused has actually misappropriated the money criminally or that he intended to convert the money to his own use dishonestly. To hold this would be to hold what is neither definitely suggested nor proved that the accused intended to rob the M.E. School at Agarpara of the amount which through his own efforts had been secured for that institution. It is to be remembered that the new school was to be built within the zamindari of the petitioner and it is highly improbable that, the petitioner would risk his reputatiou in his own village by misappropriating the money which was intended for the school. Again the prosecution has not given any direct evidence to prove that the money had bean actually misappropriated by the petitioner or converted to his own use. The theory of the Magistrate was that the money had not been spent at all and was all along with the accused. The learned Sessions Judge, however, finds fault with this view of the Magistrate in the following passages:

I do not think, however, that learned Magistrate is right in his Krding that the money was lying intact will the appellant all the time between the receipt of it from the District Board and its illurid into treasury. No man in his sense is likely to keep such a largo sum of money bolonn;g to public institution in his house unnet: Siiuily for such a long time. The failure of the appellant to refund the money at once in spite of the two demands for refund conveyed by the District Board...proves conclusively that the money cannot then have been lying intact in the hands of the appellant.

15. Now I do not mean an to suggest that it is other necessary or possible in every case of err, anal breach of trust to prove in was precise manner the money was spent r appropriated by the accused: because under the law, even temporary retention is an offence, provided that it is dishonest, but all that I wish to emphasis is that where there is no direct evidence of misappropriation and one is left to surmise as to what use was can do by the accused of the money, of caught to require clearer evidence o dishonest intention than in a case where there is direct evidence to prove that the money was appropriated by the accused for a particular use which is inconsistent with his position as a tonsil the money. In fact there is more than one view which is possible on to evidence before us. There, is the son what extreme view taken by the caught below that the version of the accused as to his having spent the money in purchasing the materials from court-witnesses 1 and 2 is wholly false. There is also another view--a view f which is not entirely excluded by the circumstances of the case--that although the accused has made his case worse by a number of lies and by producing one or two suspicious documents, yet there may be residuum of truth in the defence story and that the bulk of money at least may have been actually spent or advanced for the purchase of the materials. There is also another theory possible, namely, that the accused, or the accused and the other members of the committee did hot like to refund the money to the District, Board, especially as the demand for the refund proceeded from the new Chairman who was by no means friend of the accused and that the accused and other members of the committee may have actually shared the belief that the District Board having once parted with the money in favour of the school was not justified in demanding it back and that the demand was being made out of spite against the accused who had been instrumental in securing the grant. It is true that this position was not clearly taken up in the correspondence between the School Committee and the District Board, but this may be due to the fact that the welfare of the school depended largely upon the aid which it received from the District Board and the School Committee, therefore, merely tried to put off the District Board rather than Court an open rupture. It may be mentioned that the other schools also did not readily accede to the demand of the District Board for a refund of the building grants it had made as will appear from the following statement of P.W. 1.

Before September 1928, none of the schools refunded the money advanced to them as grant. Most of the schools alleged their inability to refund the grant.

16. I may say here that it is not my concern to decide whether the School Committee would or would not be legally justified in treating the money as their own money and whether strictly speaking the property in the money would be with the school or with the District. "Board after the grant had been made. But if once it is conceded that it was possible for the School Committee to take that view, it would be a consideration which cannot be lost sight of in, deciding whether the accused was impelled by any dishonest motive or not; even assuming that the money was not spent by him in the way alleged but still was in his possession. It is to be remembered that although temporary retention of money may in certain cases be sufficient to constitute an offence, yet in a criminal case it is incumbent on the prosecution to prove that the retention was a dishonest one.

17. Now reading the judgments of the Courts below, I find that they have been largely influenced by the fact that the accused has given a false account of the use of the money. The learned Sessions Judge has also referred to the case of Harendra Kumar Ghosh Vs. Emperor, , where a Division Bench of Calcutta High Court, dealing with the special facts of that case, made the following observations:

The Courts below have found that certain sums of money came into the hands of the petitioner and that ho has failed to account for the them, in other words in ha has failed to prove how that money was legitimately used. The but can was in ball planed on the prosecution and when the prosecution succeeded in proving the receipt by as petitioner of the several amounts; it was for she petitioner to show that he had not converted them to his own uses. In these circumstances we do not think that the burden was wrongly placed upon the petitioner.

The learned Judge deduces from this the following legal proposition:

I think that when the prosecution has succeeded in proving that money which had been paid for a particular purpose has not boon used for that purpose, the onus of proving that the money has been used or that use of the money was not dishonest is upon, the accused since this is a matter within his special knowledge.

18. With all respect I must point out that the essential think to be proved in case of criminal breach of trust is whether the accused was actuated by dishonest intention or not. As the question of intention, is not a matter of direct proof, the Courts have form time to time, laid down certain broad tests which would generally afford useful guidance in deciding whether in a particular case the accused had or had not mens rea for the crime. So in cases of criminal breach of trust the failure to account for the money proved to have been received by the accused or giving a false account as to its use is generally considered to be a strong circumstance against the accused. We should, however, not lose sight of the principle and make a universal formula of what is after all only an indication of or a piece of evidence pointing to dishonest intention. The failure to account may in some cases be due to among other things, mere stupidity, bad legal advice, a disinclination to retract a foolish lie once told or even a perverse attitude taken by the accused that he is not liable to account, while there may be other evidence in the case pointing to the accused having acted quite honestly. In such a case the accused cannot be convicted even though he may have failed or omitted to account for the money received by him. As Mayne has pointed out in discussing the offence of breach of trust (Edn. 4, p. 661.)

The mere failure to render accounts is not itself a criminal breach of truss, unless it appears on the whole facts that the money is dishonestly withheld or has been dishonestly converted to the prisoners use.

And again at p. 659:

The usual evidence of broach of trust in regard to money received for the purpose payment over is either non-payment or non-accounting or false accounting.

19. The last passage is rather important, because, Mayne rightly points out, non-accounting or false accounting is after all a mere piece of evidence to prove) broach of trust. It is also to be noticed that the learned author has taken care in the above passage to refer to those cases only when money is received for the purpose of payment over. Now, the case of Harendra Kumar Ghosh Vs. Emperor, to which I have referred is a case directly in point. There the accused was a tax daroga and cashier of Maymansingh municipality. It was obviously his duty to pay the money realized as tax to the municipality and note keep it himself. If, therefore, the accused in that case kept the money with himself and failed to account for it, the Courts were obviously justified in drawing an inference against him. I do not mean to suggest that if it is found in the present case that the accused has given a false account as to the use of money, that would not raise an inference or possibly even a strong inference against the accused. But I do not think that the present case is easily distinguishable from the case of the tax daroga, because in the present case the, accused being the head of the institution in whose favour the grant has been made was the proper person to receive the money and may have also; quite honestly felt that he had some discretion to decide as to what would be the proper and most economical way of applying the money for the school building, especially when the bulk of amount required for the new building was going to be supplied by the School Committee. It is further to be observed that the condition that the money granted by the District Board was to be kept in the Post Office Savings Bank did not involve any restriction on the depositors power of withdrawal and applied as much to the money advanced by the District Board as to the money to be raised by the School Committee, and this being so, it cannot be seriously contended that this condition was meant as a precaution against misappropriation.

20. The conclusion which I have arrived at may be summed up as follows:

21. There is no doubt that the terms of the agreement entered into between the School Committee and the District Board were completely ignored by the former and it is also not easy to accept She version of the accused in all its full-Mess, yet in my opinion it has not been proved beyond reasonable doubt that She accused had either dishonestly misappropriated or oven dishonestly retained the money which he admittedly received from the District Board. In order to debit the accused with a dishonest intention in this case it should have been shown clearly among other things that the accused did not intend to apply the money granted by the District Board to the Agarpara School either then or later on. On this point, however, there is neither any definite suggestion by the prosecution necessarily pointing to this conclusion. The Courts below have taken the view that the accused has given a false account as to how the money was used and this is sufficient to prove his dishonest intension. As I, however, have pointed out, one may not be prepared to go so far as she Courts below, but even assuming that the accused has given a false account as to the use of the money that may be a strong circumstance against She accused, but it is by no means conclusive in this case, because it has to be weighed along with other circumstances which are in favour of the accused and which, have not been fully appreciated by the Courts below. Unfortunately also the trial Court did not, while examining the accused u/s 342, specifically draw his attention to the circumstances that weighed with the Court and which in the opinion of the trial Court were unfavourable to the accused. The Courts below have also drawn conclusions against court-witnesses 1 and 2 in certain matters without their having been specifically questioned about these matters. To give one instance only the figure 7 in one of the vouchers having been found to be in a different ink the trial Court drew certain inferences against the defence, although it was conceded before us at the time of argument that the attentation of the Court witnesses or the accused was not drawn to the alleged interpolation and no attempt was made to get an explanation from them about it. In my opinion the evidence adduced in the case does not conclusively establish the dishonest intention of the accused or a case of criminal liability and the accused is entitled to the benefit of doubt.

22. I would, therefore, allow this application, set aside the conviction and sentence of the accused and set him at liberty. The bail bond executed by the accused will be cancelled, the fine if paid will be refunded.

23. I would like to add that Mr. Acharya, who appeared on behalf of the Crown argued the case with great earnestness and ability and there was hardly anything which could be said on behalf of the prosecution that was left unsaid by him in the course of his long elaborate argument.

Dhavle, J.

I agree.