Acquits Accused in FCI Misappropriation Case - Lack of Proof of Entrustment – P&H HC

In a significant ruling, the Punjab and Haryana High Court, presided over by Justice Deepak Gupta, has acquitted the accused in a case filed by the Food Corporation of India (FCI) for alleged misappropriation of paddy. The court, in its judgment on 17th April 2023, dismissed the revision petition filed by the FCI, stating that the prosecution had failed to establish the crucial element of entrustment of the property to the accused.

The case, Criminal Revision No. 1526 of 2006, stemmed from an FIR registered in 1992 at the Sadar Amritsar Police Station, under Section 406 IPC (Indian Penal Code). The FCI had alleged that the accused, in their capacity as millers, had misappropriated 1657 bags of paddy, weighing 1055 quintals 50 kg and 942 grams, belonging to the corporation.

According to the prosecution, the paddy was stored in the premises of M/s Free India Rice Mills in Sangrana Sahib, as part of an agreement for milling purposes. The millers were entrusted with the task of milling the paddy into rice and delivering it to the FCI. The prosecution further contended that the accused had breached this trust by misappropriating a significant portion of the paddy.

During the trial, the FCI submitted evidence to support its claims. However, the court observed that the prosecution failed to prove the crucial aspect of entrustment of the paddy bags to the accused. The court cited an internal inquiry conducted by FCI officials, which concluded that the custody of the paddy bags remained with the FCI and not the accused millers. The inquiry report, produced as evidence by the accused, stated that the FCI officials had been negligent in storing the paddy and were responsible for the losses incurred.

The court further noted that a civil suit for recovery filed by the FCI, based on the same allegations, had already been dismissed by a civil court. This dismissal, despite a lesser burden of proof compared to a criminal case, bolstered the court's view that the prosecution's evidence was insufficient to establish the misappropriation of the paddy.

Court upheld the trial court's judgment of acquittal, emphasizing that the burden was on the petitioner (FCI) to demonstrate the illegality or impropriety of the trial court's decision. The court found no merit in the revision petition and dismissed it accordingly.

Date: 17th April 2023

FCI vs Satwant Singh and others