Jaikrishnadas Manohardas Desai v State of Bombay 1960

हिंदी में पढ़ने के लिए यहां क्लिक करें

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J.C. SHAH, J. – At a trial held with the aid of a common jury in Case No. 38 of the V Session 1955 before the Addional Sessions Judge, City Court, Greater Bombay, the two appellants were convicted of offences under Secon 409 read with Secon 34 of the Indian Penal Code. The Addional Sessions Judge sentenced the first appellant to suffer rigorous imprisonment for five years and the second appellant to suffer rigorous imprisonment for four years. In appeal, the High Court of Bombay reviewed the evidence, because in the view of the Court, the verdict of the jury was viated on account of a misdirecon on a maer of substanal importance, but held that the convicon of the two appellants for the offence under Secon 409 read with Secon 34 of the Indian Penal Code was, on the evidence, not liable to be set aside. The High Court accordingly confirmed the convicon of the two appellants but reduced the sentence passed upon the first appellant to rigorous imprisonment for three years and the sentence against the second appellant to rigorous imprisonment for one year. Against the order of convicon and sentence, the appellants have appealed to this court with special leave.

2. The facts which gave rise to the charge against the two appellants are briefly these: On 15-6-1948, the Texle Commissioner invited tenders for dyeing Pugree Cloth. The Parikh Dyeing and Prinng Mills Ltd., Bombay – hereinafter to be referred to as “the company” – of which the first appellant was the Managing Director and the second appellant was a Director and technical expert, submied a tender which was accepted on 27-7-1948, subject to certain general and special condions. Pursuant to the contract, 2,51,05 3⁄4 yards of cloth were supplied to the company for dyeing. The company failed to dye the cloth within the spulated period and there was correspondence in that behalf between the company and the Texle Commissioner. Approximately 1,11,000 yards out of the cloth were dyed and delivered to the Texle Commissioner. On 25-3-1950, the company requested the Texle Commissioner to cancel the contract and by his leer dated 3-4-1950, the Texle Commissioner complied with the request, and cancelled the contract in respect of 96,128 yards. On 20-11-1950, the contract was cancelled by the Texle Commissioner in respect of the balance of cloth and the company was called upon to give an account without any further delay of the balance undelivered and it was informed that it would be held responsible for “material spoiled or not accounted for”. On December 4, 1950, the company sent a statement of account seng out the quanty of cloth actually delivered for dyeing, the quanty of cloth returned duly dyed and the balance of cloth viz. 1,32,160 yards remaining to be delivered. Against the cloth admied by the company remaining to be delivered, it claimed a wastage allowance of 2412 yards and admied liability to deliver 1,29,748 yards lying with it on Government account.

3. It appears that about this me, the company was in financial difficules. In December 1950, the first appellant le Bombay to take up the management of a factory in Ahmedabad and the affairs of the company were managed by one R.K. Patel. In June 1952, an applicaon for adjudicang the two appellants insolvents was filed in the Insolvency Court at Ahmedabad. An insolvency noce was also taken out against the two appellants at the instance of another creditor in the High Court at Bombay. Proceedings for winding up the company were commenced in the High Court at Bombay. In the meanme, the mortgagee of the machinery and factory of the company had entered into possession under a covenant reserved in that behalf, of the premises of the factory of the company.

4. The Texle Commissioner made aempts to recover the cloth remaining undelivered by the company. A leer was posted by the Texle Commissioner on 16-4-1952, calling upon the company to deliver 51,756 yards of cloth lying with it in bleached condion to the Chief Ordnance Officer, Ordnance Depot, Sewri, but the leer was returned undelivered. It was ulmately served with the help of the police on the second appellant in October 1952. Thereaer on 7-11-1952, another leer was addressed to the company and the same was served on the second appellant on 25-11-1952. By this leer, the company was reminded that 1,35,7263⁄4 yards of cloth were lying with it on account of the Government and the same had to be accounted for, and that the instrucons to deliver 51,756 yards to the Chief Ordnance Officer, Ordnance Depot, Sewri, had not been aended to. The Texle Commissioner called upon the company to send its representatives to “clarify the position” and to account for the material. Aer receiving this leer, the second appellant aended at the office of the Texle Commissioner and on 27-11-1952, wrote a letter stating that “the main factors involved in not delivering the goods in finished state was that the material was very old”, was “dhobi-bleached in different lots”, was “bleached under different conditions and therefore unsuitable for vat colour dyeing in heavy shades”, that it varied in length, weight, and finish and had “lost affinity for vat colour dyeing”. It was also stated that the company had in dyeing the basic material, suffered “huge losses” estimated at Rs 40,000. It was then stated: “We are, therefore, however prepared to cooperate with the Government and are willing to make good the government’s bare cost. Please let us know the detail and the actual amount to be deposited so that we may do so at an early date. We shall thank you if we are given an appointment to discuss the maer as regards the final amount with respect to the balance quantity of the basic material.”

5. On December 29,1952, the premises of the company and the place of residence of the appellants were raided, but no trace of the cloth was found. A complaint was then filed with the police charging the two appellants with criminal breach of trust in respect of 1,32,4041⁄2 yards of cloth belonging to the Government.

6. There is no dispute that approximately 1,30,000 yards out of the cloth entrusted to the company by the Texle Commissioner for dyeing has not been returned. By its leer dated December 4, 1950, the company admied liability to deliver 1,29,748 yards of cloth, but this cloth has not been returned to the Texle Commissioner in spite of repeated demands. That the appellants, as Directors of the company had dominion over that cloth was not quesoned in the trial court. The plea that there were other Directorsof the company besides the appellants who had dominion over the cloth has been negaved by the High Court and in our judgment rightly. Direct evidence to establish misappropriaon of the cloth over which the appellants had dominion is undoubtedly lacking, but to establish a charge of criminal breach of trust, the prosecuon is not obliged to prove the precise mode of conversion, misappropriaon or misapplicaon by the accused of the property entrusted to him or over which he has dominion. The principal ingredient of the offence being dishonest misappropriaon or conversion which may not ordinarily be a maer of direct proof, entrustment of property and failure in breach of an obligaon to account for the property entrusted, if proved, may in the light of other circumstances, jusfiably lead to an inference of dishonest misappropriaon or conversion. Convicon of a person for the offence of criminal breach of trust may not, in all cases, be founded merely on his failure to account for the property entrusted to him, or over which he has dominion, even when a duty to account is imposed upon him, but where he is unable to account or renders an explanaon for his failure to account which is untrue, an inference of misappropriaon with dishonest intent may readily be made.

7. In this case, on a search of the factory on December 29, 1952, the cloth remaining to be delivered by the company was not found. At the trial, the appellants sought to explain the disappearance of the cloth from the factory premises where it was stored, on the plea that it was old and was eaten up by white-ants and moths, and had been thrown away as rubbish. This plea of the appellants was not accepted by the High Court and we think rightly. No informaon was given at any me to the Texle Commissioner aer December 4, 1950, that the cloth had been eaten up by white-ants and moths, and was therefore thrown away or otherwise destroyed. Nor was any evidence led in support of the plea by the appellants.

8. In this court, counsel for the first appellant contended that failure to return the cloth may give rise to a civil liability to make good the loss occasioned thereby, but in the circumstances of the case, the first appellant cannot be found guilty of the offence of criminal breach of trust. Counsel submied that the first appellant had le Bombay in 1950 and had seled down in Ahmedabad and was aending to a State of Bombayfactory in that town, that thereaer the first appellant was involved in insolvency proceedings and was unable to aend to the affairs of the company in Bombay, and if, on account of the pre- occupaon of the first appellant at Ahmedabad, he was unable to visit Bombay and the goods were lost, no criminal misappropriaon can be aributed to him. But the case pleaded by the appellant negaves this submission. The first appellant in his statement before the trial court admied that he oen went to Bombay even aer he had migrated to Ahmedabad and that he visited the mill premises and got the same opened by the Gurkha watchman and he found that the heap of cloth lying in the mill was geng smaller every me he visited the mill and on inquiry, he was told by the watchman that every day one baskeul of sweepings was thrown away. He also stated that he was shown several places in the compound of the factory where pits had been filled up with these sweepings, and that he found a small heap lying by the side of the “Tulsipipe gutter” and also in the warehouses in the mill premises. It is clear from this statement and other evidence on the record that even aer he migrated to Ahmedabad, the first appellant was frequently vising the factory at Bombay. The evidence also discloses that meengs of Directors were held from me to time, but the minutes of the Directors’ meetings have not been produced. The books of account of the company evidencing disbursements to the Directors of remuneraon for aending the meengs and the expenses for the alleged collecon and throwing away of the sweepings have not been produced. It is admied by the first appellant that the leer dated 27-11-1952, was wrien by the second appellant under his instrucons. In his statement at the trial, the first appellant stated that he was informed of the leer dated 26- 11-1952, from the Texle Commissioner and that he could not aend the office of that officer because he is aending to the insolvency proceedings and that he deputed the second appellant to aend the office and to explain and discuss the posion. He then stated, “We had informed the Commissioner that the company was prepared to pay for the cloth remaining after deducting the amount claimed as damages”. The letter dated 27-11-1952, was evidently wrien under the direcon of the first appellant and by that leer, liability to pay for the cloth aer certain adjustments for losses alleged to be suffered by the company in carrying out the contract was admied. By the leer dated December 4, 1950, liability to deliver the cloth was admied and by the leer dated 27-11-1952, liability to pay compensaon for the loss occasioned to the Government was affirmed. The appellants who were liable to account for the cloth over which they had dominion have failed to do so, and they have rendered a false explanaon for their failure to account. The High Court was of the opinion that this false defence viewed in the light of failure to produce the books of account, the stock register and the complete absence of reference in the correspondence with the Texle Commissioner about the cause of disappearance established misappropriaon with criminal intent.

9. Counsel for the first appellant contended that probably the goods passed into the possession of the mortgagees of the assets of the company, but on this part of the submission, no evidence was led in the trial court. Counsel for the first appellant, relying upon the observaons in Shreekanah Ramayya Munipalli v. State of Bombay[(1955) 1 SCR 1177] also contended that in any event, a charge under Secon 409 read with Secon 34 of the Indian Penal Code cannot be established against the first appellant unless it is shown that at the me of misappropriaon of the goods, the first appellant was physically present. But the essence of liability under Secon 34 is to be found in the existence of a common intenon animang the offenders leading to the doing of a criminal act in furtherance of the common intenon and presence of the offender sought to be rendered liable under Secon 34 is not, on the words of the statute, one of the condions of its applicability. As explained by Lord Sumner in BarendraKumar Ghose v. King-Emperor [AIR 1925 PC 1, 7] the leading feature of Section 34 of the Indian Penal Code is “participation” in action. To establish joint responsibility for an offence, it must of course be established that a criminal act was done by several persons; the parcipaon must be in doing the act, not merely in its planning. A common intenon – a meeng of minds – to commit an offence and parcipaon in the commission of the offence in furtherance of that common intenon invite the applicaon of Secon 34. But this parcipaon need not in all cases be by physical presence. In offences involving physical violence, normally presence at the scene of offence of the offenders sought to be rendered liable on the principle of joint liability may be necessary, but such is not the case in respect of other offences where the offence consists of diverse acts which may be done at different mes and places. In Shreekanahcase, misappropriaon was commied by removing goods from a Government depot and on the occasion of the removal of the goods, the first accused was not present. It was therefore doubul whether he had parcipated in the commission of the offence, and this Court in those circumstances held that parcipaon by the first accused was not established. The observaons in Shreekanahcase in so far as they deal with Secon 34 of the Indian Penal Code must, in our judgment, be read in the light of the facts established and are not intended to lay down a principle of universal applicaon.

10. The High Court has found that the two appellants were liable to account for the cloth over which they had dominion and they failed to account for the same and therefore each had commied the offence of criminal breach of trust. The High Court observed: “In such a case, if Accused 1 and 2 (Appellants 1 and 2) alone were concerned with the receipt of the goods, if they were dealing with the goods all the me, if they were receiving communications from the Textile Commissioner’s office and sending replies to them, and if the part played by each of them is apparent from the manner in which they are shown to have dealt with this contract, then it is a case of two persons entrusted with the goods and a breach of trust obviously being commied by both of them”.

11. It was submied that the High Court erred in finding the appellants guilty of offences under Secon 409 of the Indian Penal Code when the charge framed against them was one under Secon 409 read with Secon 34 of the Indian Penal Code. A charge framed against the accused person, referring to Secon 34 is but a convenient form of giving noce to him that the principle of joint liability is sought to be invoked. Secon 34 does not create an offence; it merely enunciates a principle of joint liability for criminal acts done in furtherance of the common intenon of the offenders. Convicon of an accused person recorded, relying upon the principle of joint liability, is therefore for the offence commied in furtherance of the common intenon and if the reasons for convicon establish that the accused was convicted for an offence commied in furtherance of the common intenon of himself and others, a reference in the order recording convicon to Secon 34 of the Indian Penal Code may appear to be a surplusage. The order of the High Court recording the convicon of the appellants for the offence under Secon 409 of the Indian Penal Code is therefore not illegal.

12. It was submied for the first appellant that the sentence passed against him was unduly severe, and that in any event, no disncon should have been made between him and the second appellant in the maer of sentence. It is evident on the findings accepted by us that property of considerable value has been misappropriated by the first appellant. He was the Managing Director of the company and primarily, he had dominion over the property entrusted to the company. The second appellant was, though a Director, essenally a technician. Having regard to these circumstances, if the High Court has made a disncon between the two appellants, we ought not to interfere with the sentence, which by itself cannot be said to be excessive. The appeal fails and is dismissed.