Full Judgment Text
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PETITIONER:
SARDAR SARDUL SINGH CAVEESHAR
Vs.
RESPONDENT:
STATE OF MAHARASHTRA(And Connected Appeals)
DATE OF JUDGMENT:
18/03/1963
BENCH:
ACT:
Evidence-conspiracy-Criminal Breach of trust-Meaning and
proof of conspiracy--Evidentiary value of Good character of
an accused in a criminal case-Indian Penal Code (Act XLV of
1860), ss. 120-B, 409, 109-Indian Evidence Act, 1872 (1 of
1872), ss. 10, 53, 55 Expl.
HEADNOTE:
Double Jeopardy-Applicability of rule-Law finally and
authoritatively decided by Supreme Court as to
interpretation of the constitution-If a substantial question
of law-Constitution of India, Arta. 20 (2), 145 (3).
After the discovery of the conspiracy, ten conspirators
including the appellants were put to trial before the
Sessions judge under s. 120-B of the Indian Penal Code and
also each one of them separately under s. 409 read with s.
109 of the said Code. The charge was that they, alongwith
one Shankar Lal and Doshi, both of them deceased entered
into a criminal conspiracy at Bombay and elsewhere between
or about the period from September 20, 1950 to December 31,
1950, to commit or cause to be committed criminal breach of
trust in respect of Government securities or proceeds
thereof or the funds of the Empire of India Life Assurance
Co. Ltd., Bombay, acquiring its management and control and
dominion over the said property in the way of business as
Directors, Agents or attorneys of the said company. The
learned Sessions Judge convicted six accused persons under
s. 120 B, read with s. 409 of the Indian Penal Code and
sentenced them to various terms of imprisonment. The rest
four accused persons were acquitted. Against the acquittal
State preferred an appeal to the High Court and the
convicted accused persons also filed appeals against their
convictions. The. Government appeal was allowed and the
appeals of the convicted accused persons were dismissed by
the High Court. These appeals by special leave have been
preferred only by five accused persons against their
conviction and sentences. In these appeals, the Court pro-
ceeded on the basis as it was manifest and indeed not
disputed
379
that there was a conspiracy and the only question for con-
sideration was whether all or some of the appellants were
parties to it.
Held, that the essence of conspiracy is that there should be
an agreement between persons to do one or other of the acts
described in the section. The said agreement may be proved
by direct evidence or may be inferred from acts and conduct
of the parties. But s. 10 of the Evidence Act intro. duces
the doctrine of agency and if the conditions laid down
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therein are satisfied, the acts done by one are admissible
against the co-conspirators. The section can be analysed as
follows : (1) There shall be a prima facie evidence
affording a reasonable ground for a court to believe that
two or more persons are members of a conspiracy; (2) if the
said condition is fulfilled, anything said, done or written
by any one of them in reference to their common intention
will be evidence against the other; (3) anything said, done
or written by him after the intention was formed by any one
of them; (4) if it would also be relevant for the said
purpose against another who entered the conspiracy whether
it was said, done or written before he entered the
conspiracy or after he left it; and (5) it can only be used
against a co-conspirator and not in his favour.
Held, that so far as the appellant in criminal appeal No.
82/62 is concerned, applying the test laid down by this
Court, the two conspiracies are not the same offence. The
ingredients of both the offences are totally different and
they do not form the same offence within the meaning of Art.
20 (2) of the Constitution and, therefore, that Article has
no relevance to the present case. Further, there are no
permissible grounds for upsetting the concurrent findings of
both the courts below that the appellant was a member of the
conspiracy.
Leo Boy Prey v. The Superintendent, District Jail, Amritsar,
[1958] S. C. R. 822 and The State of Bombay v. S. L. Apte,
[1961] 3 S. C. R. 107, relied on.
Sardul Singh Caveeshar v. State of Bombay, [1958] S.C.R.
161, referred to.
As the question raised regarding interpretation of Art. 20
(2) of the constitution has already been decided by this
Court, it cannot be held that the question raised involves a
substantial question of law as to the interpretation of the
Constitution within the meaning of Art. 145 (3) of the
Constitution.
State of Jammu & Kashmir v. Thakur Ganga Singh, [1960] 2 S.
C. R. 346 relied on.
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Held, that from the relevant provisions of s. 53 and the
Explanation to s. 55 of the Evidence Act., it is clear that
the evidence of general reputation and general disposition
is relevant in a criminal proceeding. Under the Indian
Evidence Act, unlike in England, evidence can be given both
of general character and general disposition. Disposition
means the inherent qualities of a person; reputation means
the general credit of the person amongst the public. There
is a real distinction between reputation and disposition. A
man may be reputed to be a good man, but in reality be may
have a bad disposition. The value of evidence as regards
disposition of a person depends not only upon the witness’s
perspicacity but also on his opportunities to observe the
person as well as the said person’s cleverness to hide his
real traits. But a disposition of a man may be made up of
many traits, some good and some bad, and only evidence in
regard to a particular trait with which the witness is
familiar would be of some use.
But, in any case, the character evidence is a very -week
evidence; it cannot out weight the positive evidence in
regard to the guilt of a person. It may be useful in
doubtful cases to tilt the balance in favour of the accused
or it may also afford a background for appreciating his
reactions in a given situation. It must give place to
acceptable positive evidence. The opinion expressed by the
witnesses does credit to the accused, but, in the face of
the positive evidence it cannot turn the scale in his
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favour.
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeals Nos. 67,
136 and 172 of 1959 and 82 and 83 of 1962.
Appeals by special leave from the judgment and order dated
November 3, 1958 in Criminal Appeals Nos. 196, 256 and 363
of 1958.
B. B. Tawakley and S. C. Mazumdar, for the appellant (in
Cr. A. No. 67159).
S. C. Mazumdar, for the appellant (in Cr. A. No. 136/59).
T. S. Venakataraman, for the appellant (in Cr.
A. No. 172/59).
381
N. N. Keshwani, for the appellant (in Cr. A. No. 82/62).
C. B. Agarwala, K. L. Misra, Advocate General, U. P.
Mangala Prasad Baghari, Shanti Sarup Khanduja, Malik Arjun
Das and Ganpat Rai, for the appellant (in Cr. A. No.
83/62).
N. S. Bindra, D. R. Prem and R. H. Dhebar, for the
respondent in all the Appeals.
1963. March 18. The judgment of the Court was delivered by
SUBBA RAO J.-These appeals by special leave arise out of two
judgments of the High Court of Bombay, one that of Vyas and
Kotval JJ., dated March 31, 1958, and the other that of Shah
and Shelat JJ., dated November 3, 1958, in what, for
convenience of reference,, may be described as the Empire
Conspiracy Case.
At the outset it would be convenient to state briefly the
case of the prosecution. One Lala Shankarlal, a political
leader and Vice-President of the Forward Bloc and a highly
competent commercial magnate, and his nominees held the
controlling block of shares of the Tropical Insurance
Company Limited, hereinafter called the "Tropical", and he
was the Chairman and Managing Director of the said company.
He had also controlling voice in another company called the
Delhi Swadeshi Cooperative Stores Ltd. The said Delhi
Stores held a large number of shares of the Tropical. In or
about the middle of 1948, Sardar Sardul Singh Caveeshar, who
was controlling the People’s Insurance Co. Ltd. and other
concerns in Lahore, and Kaul, a practising barrister, came
to Delhi. During that year the former was the President of
the Forward Bloc and Shankarlal was its Vice-President.
Shankerlal,
382
Caveeshar and Kaul conceived the idea of purchasing the
controlling block of 63,000 shares of the Jupiter Insurance
Company Ltd., hereinafter referred to as the "’Jupiter", a
prosperous company, in the name of the Tropical from the
Khaitan Group which was holding the said Jupiter shares.
But the financial position of the Tropical did not permit
the said purchase and so they thought of a fraudulent device
of purchasing the said Jupiter shares out of the funds of
the Jupiter itself. Under an agreement entered into with
the Khaitan Group, the out of the 63,000 shares of the
Jupiter was fixed at Rs. 33,39,000/-, and the purchasers
agreed to pay Rs. 5,00,000/- in advance as "’black money"
and the balance of Rs. 28,39,000/-, representing the actual
price on paper, within January 20, 1949, i. e., after the
purchasers got control of the Jupiter. After the purchase,
Shankarlal Group took charge of the Jupiter as its Directors
after following the necessary formalities, sold the
securities of the Jupiter for the required amount,and paid
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the balance of the purchase money to the Khaitan Group-
within the prescribed time. In order to cover up this
fraud various manipulations were made in the relevant
account books of the Jupiter. There would be an audit
before the end of the year and there was every likelihood of
detection of their fraud. It, therefore, became necessary
for them to evolve a scheme which would bring in money to
cover the said fraud perpetuated by the Directors of the.
Jupiter in the acquisition of its 63,000 controlling shares.
For that purpose, Shankarlal and his group conceived the
idea of purchasing the controlling interest in another
insurance company so that the funds of that company might be
utilized to cover up the Jupiter fraud. With that object,
in or about September 1949, Shankarlal and 9 of his friends
entered into a conspiracy to lift the funds of the
Empire of India Life Assurance Company Ltd., hereinafter
referred to as the "Empire", to cover up the Jupiter
383
fraud. This they intended to do by purchasing the
controlling shares of the Empire, by some of them becoming
its Directors and Secretary, and by utilizing the funds of
the Empire to cover up the defalcations made in the Jupiter.
The following were the members of the conspiracy : (1)
Shankarlal, (2) Kaul, (3) Metha, (4) Jhaveri and (5)
Doshi--all Directors of the Jupiter-and (6) Guha, the
Secretary of the Jupiter, (7) Ramsharan, the Secretary of
the Tropical, (8) Caveeshar, the Managing Director of the
People’s Insurance Co., (9) Damodar Swarup, a political
worker who was later on appointed as the Managing Director
of the Empire. (10) Subhedar, another political worker, (11)
Sayana, a businessman of Bombay, and (12) Bhagwan Swarup,
the nephew of Shankarlal and a retired Assistant
Commissioner of Income-tax of the Patiala State. After
forming the conspiracy, the controlling shares of the Empire
were purchased in the name of Damodar Swarup for an
approximate sum of Rs. 43,00,000/-. For that purpose
securities of the Jupiter of the value of Rs. 48,75,000/-
were withdrawn by the Directors of the Jupiter without a re-
solution of the Board of Directors to that effect and
endorsed in the name of Damodar Swarup again without any
resolution of the Board of Directors to that effect.
Damodar Swarup deposited the said securities in the Punjab
National Bank Ltd., and opened a Cash-credit account in the
said Bank in his own name. He also executed two promissory
notes to the said Bank for a sum of Rs. 10,00,000/- and Rs.
43,00,000/- respectively. Having opened the said account,
Damodar Swarup drew from the said account by means of
cheques a sum of Rs. 43,00,000/- and paid the same towards
the purchase of the said Empire shares. Out of the said
shares of the Empire, qualifying shares of twenty were
transferred in each of the names of Damodar Swarup, Subhedar
and Sayana, and by necessary resolutions Damodar Swarup
became the Managing
384
Director and Chairman of the Empire and the other two, its
Directors, and Bhagwan Swarup was appointed its Secretary.
The conspirators having thus taken control of the Empire
through some of them, lifted large amounts of the Empire to
the tune of Rs. 62,49,700/- by bogus sale and loans, and
with the said amount they not only recouped the amounts paid
out of the Jupiter for the purchase of its controlling
shares and also the large amounts paid for the purchase of
the controlling shares of the Empire. After the conspiracy
was discovered, in due course the following ten of the said
conspirators, i. e., all the conspirators excluding
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Shankarlal and another, who died pending the investigation,
were brought to trial before the Court of the Sessions judge
for Greater Bombay under s. 120-B of the Indian Penal Code
and also each one of them separately under s. 409, read
with s. 109, of the said Code : (1) Kaul,(2) Metha, (3)
Jhaveri, (4) Guha, (5) Ramsbaran,(6) Caveeshar, (7)
Damodar Swarup, (8) Subhedar, (9) Sayana, and (10) Bhagwan
Swarup. The gravemen of the charge against them was that
they, along with Shankarlal and Doshi, both of them
deceased, entered into a criminal conspiracy at Bombay and
elsewhere between or about the period from September 20,
1950 to December 31, 1950 to commit or cause to be committed
criminal breach of trust in respect of Government securities
or proceeds thereof or the funds of the Empire of India Life
Assurance Co. Ltd., Bombay, by acquiring its management and
control and dominion over the said property in the way of
business as Directors, Agents or Attorneys of the said
Company. The details of the other charges need not be given
as the accused were acquitted in respect thereof.
Learned Sessions judge made an elaborate enquiry, considered
the innumerable documents filed and the oral evidence
adduced in the case and came to the conclusion that Accused
1, 2, 4, 5, 6 and 10
385
were guilty of the offence under s. 120-B, read with s. 409
of the Indian Penal Code and sentenced them to various term
of imprisonment. Accused 6, i. e., Caveeshar, was sentenced
to suffer rigorous imprisonment for 5 years, and accused 10,
i. e., Bhagwan Swarup, to rigorous imprisonment for a period
of 5 ears and also to pay a fine of Rs. 2,000/- and in
default to suffer rigorous imprisonment for a further period
of six months. He acquitted accused 3, 7, 8 and 9.
The State preferred an appeal to the High Court against that
part of the-’..judgment of the learned Sessions judge
acquitting some of the accused; and the convicted accused
filed appeals against their convictions. The appeal filed
by Caveeshar, Accused-6, was dismissed in limine by the High
Court. The appeals filed by ’the other convicted accused
against their convictions were dismissed and the appeal by
the State against the acquittal of some of the accused was
allowed by the High Court. Accused-7 was sentenced to 5
years’ rigorous imprisonment, accused-8 to 3 years’ rigorous
imprisonment and accused 9 to 3 years rigorous imprisonment.
Accused 6, 7, 8, 9 and 10 have, by special leave, preferred
these appeals against their convictions and sentences. We
are not concerned with the other accused as some of them
died and others did not choose to file appeals.
At the outset it may be stated that none of the learned
counsel appearing for the accused questioned the factum of
conspiracy; nor did they canvass the correctness of the
findings of the Courts below that the funds of the Empire
were utilized to cover up the fraud committed in the
Jupiter, but on behalf of each of the appellants a serious
attempt was made to exculpate him from the offence. But, as
the defalcations made in the finances of the Jupiter and the
386
mode adopted to lift the funds of the Empire and transfer
them to the coffers of the Jupiter will have some impact on
the question of the culpability of the appellants, we shall
briefly notice the modus operandi of the scheme of
conspiracy and the financial adjustments made pursuant
thereto.
We have already referred to the fact that Shankarlal Group
purchased the controlling shares of the Jupiter from Khaitan
Group and that as a consideration for the said purchase the
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former agreed to pay the latter Rs. 5,00,000/- as "black
money" and pay the balance of about Rs. 28,39,000/-on or
before January ’-IO, 1949. After Shankarlal Group became
the Directors of the Jupiter, they paid the said amount from
and out of the funds of the Jupiter. To cover up that
fraud, on January 11, 1949, the Directors passed a
resolution granting a loan of Rs. 25,15,000/- to Accused-6,
on the basis of an application made by him, on equitable
mortgage of his properties in Delhi : (see Ex. Z-22). They
passed another resolution sanctioning the purchase of plots
of the Delhi Stores, a concern of Shankarlal, for a sum of
Rs. 2,60,000/-. It is in evidence that Accused-6 had no
property in Delhi and that the said plots were not owned by
the Delhi Stores. The said loan and the sale price of the
plots covered by the said resolutions were really intended
for drawing the money of the Jupiter for paying the Khaitan
Group before January 20,194-9. But some shareholders got
scent of the alleged fraud and issued notices; and the
Directors were also afraid of detection of their fraud by
the auditors during their inspection at the close of the
year 1949. It, therefore, became necessary to show in the
accounts of the Jupiter that the loan alleged to have been
advanced to Accused-6 was paid off. For this purpose the
Directors brought into existence the following four
transanctions : (1) a loan of Rs. 5,00,000/- advanced to
Raghavji on November 5, 1949; (2) a loan of
387
Rs. 5,30,000/- to Misri Devi on December 12, 1949; (3) a
fresh loan of Rs. 5,30,000/- to Caveeshar, Accused-6 on
November 5, 1949; and (4) a transactions of purchase of
54,000 shares of the Tropical for Rs. 14,00,000/- on May 25,
1949 and December 20, 1949. These four ficticious transa-
ction were brought about to show the discharge of the loan
advanced to Caveeshar, Accused-6. Further manipulations
were made in the accounts showing that parts of the loans
due from Raghavji, Misri Devi and Caveeshar and also the
price of the Tropical shares were paid by Caveeshar. These
paper entries did not satisfy the auditors and they insisted
upon further scrutiny. It is the case of the prosecution
that Shankarlal and his co-conspirators following their
usual pattern conceived the idea of getting the controlling
interest of the Empire, which had a reserve of Rs. 9 crores.
Jupiter securities worth about Rs. 45,00,000/- were endorsed
in favour of Accused-7, who in his turn endorsed them in
favour of the Punjab National Bank Ltd., for the purpose of
opening a cash-credit account therein. On October 5, 1950,
under Ex. Z-9, the controlling shares of the Empire were
purchased from Ramsharan Group and the consideration
therefor was paid from and out of the money raised on the
Jupiter securities. The Directors of the Jupiter had to
make good to the Company not only the amounts paid out of
the jupiter funds to purchase the controlling shares of the
Jupiter, in regard to which various manipulations were made
in the Jupiter accounts, but also about Rs. 45,00,000/worth
of securities transferred in the name of Damodar Swarup.
Having purchased the controlling shares of the Empire,
Shankarlal and his colleagues got their nominees., namely,
Accused 7, 8 and 9 as Directors and Accused-10 as the Secre-
tary of the Empire. On November 27, 1950, a resolution of
the Directors of the Empire sanctioned the purchase of Rs.
20,00,000/-- worth of Government
388
Securities alleged to belong to the Jupiter. Though the
securities were not delivered, two bearer-cheques dated
October 26, 1950 and October 27, 1950 for Rs. 15,00,000/-
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and Rs. 5,00,000/- respectively were made out and cashed and
the said moneys were utilized to cancel the loan alleged to
have been advanced to Raghavji and for the purchase of the
Tropical shares for Rs. 1,4,00,000/-. But the conspirators
had still to make good the securities transferred in favour
of Accused 7 and other amounts. The Directors again
sanctioned 12 loans, the first six on November 27, 1950
totalling Rs. 28,20,000/- and the other six on December 18,
1950 totalling Rs. 42,80,000/- admittedly to fictitious
loanees. 12 bearer-cheques for an aggregate of Rs.
71,00,000/- were issued by Accused-10 between December 19
and 23, 1950. This amount was utilized for getting 5 drafts
for different amounts in favour of Accused 1 and 2, the
Directors of the Jupiter, Accused-4, its Secretary, and
Accused-5, the Secretary of the Tropical (see Ex. Z-230).
The said drafts were sent to Bombay and one of the said
drafts was utilized for paying off the loan of Misri Devi
and the other Drafts for Rs. 57,00,000/- were paid into the
Jupiter account in the Punjab National Bank Ltd., Bombay.
This amount was utilized to cover up the loss incurred by
the Jupiter by reason of its securities worth about Rs.
45,00,000/- assigned in favour of Accused-7 and also by
reason of the securities worth Rs. 20,00,000/- alleged to
have been sold to the Empire on November 27, 1950. It is,
therefore, manifest, and indeed it is not disputed before us
now, that Shankarlal and his co-conspirators, whoever they
may be, had conspired together and lifted large amounts of
the Empire and put them into the Jupiter coffers to cover up
the loss caused to it by their fraud. Therefore in these
appeals we proceed on the basis that there was a conspiracy
as aforesaid and the only question for consideration is
whether all or some of the appellants were parties to it.
389
Before dealing with the individual cases, as some argument
was made in regard to the nature of the evidence that should
be adduced to sustain the case of conspiracy, it will be
convenient to make at this stage some observations thereon.
Section 120-A of the Indian Penal Code defines the offence
of criminal conspiracy thus
"When two or more persons agree to do, or
cause to be done an illegal act, or an act
which is not illegal by illegal means, such an
agreement is designated a criminal
conspiracy."
The essence of conspiracy is, therefore, that there should
be an agreement between persons to do one or other of the
acts described in the section. The said agreement may be
proved by direct evidence or may be inferred from acts and
conduct of the parties. There is no difference between the
mode of proof of the offence of conspiracy and that of any
other offence : it can be established by direct evidence or
by circumstantial evidence. But s. 10 of the Evidence Act
introduces the doctrine of agency and if the conditions laid
down therein are satisfied, the acts done by one are
admissible against the co-conspirators. The said section
reads :
"Where there is reasonable ground to believe
that two or more persons have conspired
together to commit an offence or an actionable
wrong, anything said, done or written by any
one of such persons in reference to their
common intention, after the time when such
intention was first entertained by any one of
them, is a relevant fact as against each of
the persons believed to be so conspiring as
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well for the purpose of proving the existence
of the conspiracy as for the purpose of
showing that any such person was a party to
it."
This section, as the opening words indicate, will come into
play only when the Court is satisfied that
390
there is reasonable ground to believe that two or more
persons have conspired together to commit an offence or an
actionable wrong, that is to say, there should be a prima
facie evidence that a person was a party to the conspiracy
before his acts can be used against his co-conspirators.
Once such a reasonable ground exists, anything said, done or
written by one of the conspirators in reference to the
common intention, after the said intention was entertained,
is relevant against the others, not only for the purpose of
proving the existence of the conspiracy but also for proving
that the other person was a party to it. The evidentiary
value of the said acts is limited by two circumstances,
namely, that the acts shall be in reference to their common
intention and in respect of a period after such intention
was entertained by any one of them. The expression "’in
reference to their common intention" is very comprehensive
and it appears to have been designedly used to give it a
wider scope than the words "in furtherance of" in the
English law ; with the result, anything said, done or
written by a coconspirator, after the conspiracy was formed,
will be evidence against the other before he entered the
field of conspiracy or after he left it. Another important
limitation implicit in the language is indicated by the
expressed scope of its relevancy. Anything so said, done or
written is a relevant fact only "as against each of the
persons believed to be so conspiring as well for the purpose
of proving the existence of the conspiracy as for the
purpose of showing that any such person was a party to it.
It can only be used for the purpose of proving the existence
of the conspiracy or that the other person was a party to
it. It cannot be used in favour of the other party or for
the purpose of showing that such a person was not a party to
the conspiracy. In short, the section can be analysed as
follows : (1) There shall be a prima facie evidence
affording a reasonable ground for a Court to believe that
two or more persons are
391
members of a conspiracy ; (2) if the said condition is
fulfilled, anything said, done or written by any one of them
in reference to their common intention will be evidence
against the other; (3) anything said, done or written by him
should have been said, done or written by him after the
intention was formed by any one of them ; (4) it would also
be relevant for the said purpose against another who entered
the conspiracy whether it was said, done or written before
he entered the conspiracy or after he left it ; and (5) it
can only be used against a co-conspirator and not in his
favour;
With this background let us now take the evidence against
each of the appellants and the contentions raised for or
against him. But it must be stated that it is not possible
to separate each of the accused in the matter of
consideration of the evidence, for in a case of conspiracy
necessarily there will be common evidence covering the acts
of all the accused. We may, therefore, in dealing with some
of the accused, consider also the evidence that will be
germane against the other accused.
We shall first take the case of Accused-6, Caveeshar, who is
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the appellant in Criminal Appeal No. 82 of 1962. So far as
this appellant is concerned the learned Sessions judge found
that he was a member of the conspiracy and the High Court
confirmed that finding. It is the Practice,, of this Court
not to interfere with concurrent findings of fact even in
regular appeals and particularly so in appeals under Art.
136 of the Constitution. We would, therefore, approach the
appeal of this accused from that perspective.
Learned counsel for this appellant argued before us that the
said accused was convicted by the Sessions judge for being a
member of the conspiracy in the Jupiter case in respect of
his acts pertaining
392
to that conspiracy and therefore he could not be convicted
over again in the present case on the basis of the facts on
which the earlier conviction was founded; in other words, it
is said that he was convicted in the present trial for the
same offence in respect of which he had already been
convicted in the Jupiter case and such a conviction would
infringe his fundamental right under Art. 20 (2) of the
Constitution, and in support of this contention reference
was made to certain decisions of the Supreme Court of the
United States of America. The said Article reads :
"No person shall be prosecuted and punished
for the same offence more than once."
The previous case in which this accused was convicted was in
regard to a conspiracy to commit criminal breach of trust in
respect of the funds of the Jupiter and that case was
finally disposed of by this Court in Sardul Singh Caveeshar
v. State of Bombay (1). Therein it was found that Caveeshar
was a party to the conspiracy and also a party to the
fraudulent transactions entered into by the Jupiter in his
favour. The present case relates to a different conspiracy
altogether. The conspiracy in question was to lift the
funds of the Empire, though its object was to cover up the
fraud committed in respect of the Jupiter. Therefore., it
may be that the defalcations made in Jupiter may afford a
motive for the new conspiracy, but the two offences are
distinct ones. Some accused may be common to both of them
some of the facts proved to establish the Jupiter conspiracy
may also have to be proved to support the motive for the
second conspiracy. The question is whether that in itself
would be sufficient to make the two conspiracies the one and
the same offence. Learned counsel suggests that the
question raised involves the interpretation of a provision
of the Constitution and therefore the appeal of this accused
(1) [1958] S. C. R. 161.
393
will have to be referred to a Bench consisting of not less
than 5 judges. Under Art. 145 (3) of the Constitution only
a case involving a substantial question of law as to the
interpretation of the Constitution shall be heard by a Bench
comprising not less than 5 Judges. This Court held in State
of Jammu & Kashmir v. Thakur Ganga Singh (1), that a
substantial question of interpretation of a provision of the
Constitution cannot arise when the law on the subject has
been finally and effectively decided by this Court. Two
decisions of this Court have construed the provisions of
Art. 20 (2) of the Constitution in the context of the
expression "same offence." In Leo Roy Frey v. The
Superintendent, District Jail, Amritsar (2), proceedings
were taken against certain persons in the first instance
before the customs authorities under s. 167 (8) of the Sea
Customs Act and heavy personal penalties were imposed on
them. thereafter, they were charged for an offence under s.
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120-B of the Indian Penal Code. This Court held that an
offence under s. 120-B is not the same offence as that under
the Sea Customs Act. Das C. J., speaking for the Court,
observed :
"The offence of a conspiracy to commit a crime
is a different offence from the crime that is
the object of the conspiracy because the
conspiracy precedes the commission of the
crime and is complete before the crime is
attempted or completed, equally the crime
attempted or completed does not require the
element of conspiracy as one of its
ingredients. They are,therefore, quite
separate offences."
This Court again considered the scope of the words "’same
offence" in The State of Bombay v. ,S. L. Apte (3). There
the respondents were both convicted and sentenced by the
Magistrate under s. 409 of the Indian Penal Code and s. 105
of the Insurance Act. Dealing with the argument that the
(1) [1960] 2 S.C.R.346.
(2) [1958] S. C. R. 822, 827,
(3)[1961] 3.S.C.R.,107,114.
394
allegations of fact were the same, Rajagopala Ayyangar J.,
rejecting the contention, observed on behalf of the Court :
"To operate as a bar the second prosecution
and the consequential punishment thereunder,
must be for ‘the e same offence’. The crucial
requirement, therefore, for attracting the
Article is that the offences arc the same i.
e., they should be identical. If, however,
the two offences are distinct, then
notwithstanding that the allegations of fact
in the two complaints might be substantially
similar, the benefit of the ban cannot be
invoked. It is, therefore, necessary to
analyse and compare not the allegations in the
two complaints but the ingredients of the two
offences and see whether their identity is
made out."
This decision lays down that the test to ascertain whether
two offences are the same is not the identity of the
allegations but the identity of the ingredients of the
offences. In view of the said decisions of this Court, the
American decisions cited at the Bar do not call for
consideration. As the question raised has already been
decided by this Court, what remains is only the application
of the principle laid down to the facts of the present case.
cannot, therefore, hold that the question raised involves a
substantial question of law as to the interpretation of the
Constitution within the meaning of Art. 145 (3) of the
Constitution.
In the present case, applying the test laid down by this
Court, the two conspiracies are not the same offence : the
Jupiter conspiracy came to an’ end when its funds were
misappropriated. The Empire conspiracy was hatched
subsequently, though its ’Object had an intimate connection
with the Jupiter in that the fraud of the Empire was concei.
ved and executed to cover up the fraud of the
395
Jupiter. The two conspiracies are distinct offences. It
cannot even be said that some of the ingredients of both the
conspiracies are the same. The facts constituting the
Jupiter conspiracy are not the ingredients of the offence of
the Empire conspiracy,, but only afford a motive for the
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latter offence. Motive is not an ingredient of an offence.
The proof of motive helps a Court in coming to a correct
conclusion when there is no direct evidence. Where there is
direct evidence for implicating an accused in an offence,
the absence of proof of motive is not material. The
ingredients of both the offences are totally different and
they do not form the same offence within the meaning of Art.
20 (2) of the Constitution and, therefore, that Article has
no relevance to the present case.
The next question is whether this appellant was a party to
the Empire conspiracy. He was a close associate of
Shankarlal in the political field, he being the President of
the Forward Bloc and Shankarlal being its Vice-President.
That is how they were drawn together. There is also
evidence that out of the 63,000 shares of the Jupiter that
were purchased in August, 1949 by Shankarlal Group, 4475
shares were allotted to this appellant. It is, therefore,
clear that Accused-6 though ex facie he was neither a
Director nor an office-bearer in the Jupiter, had heavy
stakes in it. We have already noticed that after the
purchase of the said shares from and out of the Jupiter
funds, a bogus loan in the name of Accused-6 for a sum of
Rs. 25,15,000/- was shown in the Jupiter accounts and later
on it was substituted by other manipulations. [His Lordship
then proceeded to consider the evidence.]
x x x x x x x x
Both the Courts on the basis of the aforesaid evidence came
to the conclusion that Accused-6 was
396
a member of the conspiracy and we cannot say that there is
no evidence on which the Courts could have come to the
conclusion to which they did. there are no permissible
grounds for upsetting this finding under Art. 136 of the
Constitution.
As regards the sentence passed against this accused, the
Sessions Judge sentenced him to undergo rigorous
imprisonment for a period of 5 years, whereas he sentenced
Accused 7, 8 and 9 to undergo rigorous imprisonment for a
period of 3 years only. We do not see any justification for
this distinction between the said accused in the matter of
punishment. Accused6 had already been convicted and
sentenced in the Jupiter case; and on the evidence it does
not appear that he had taken a major part in the Empire
conspiracy, though he was certainly in it. In the
circumstances, we think that a sentence of 3 years’ rigorous
imprisonment would equally suffice in his case. We,
therefore, modify the sentence passed on him and sentence
him to undergo rigorous imprisonment for 3 years. Subject
to the aforesaid modification, the appeal preferred by
Caveeshar, Accused-6, is dismissed.
We shall now proceed to consider the appeal preferred by
Damodar Swarup, Accused-7 i. e., Criminal Appeal No. 83 of
1962. Accused-7 was the Managing Director and Chairman of
the Empire during the period of the conspiracy. On October
17, 1950 he was elected the Chairman of the Board of
Directors of the Empire and appointed as Managing Director
on a salary of Rs. 2,000/per month for a period of one year.
He was removed from the post of Managing Director at the
meeting of the Board of Directors held on March 12, 1951.
The misappropriation of the funds of the Empire, which is
the subject-matter of the conspiracy, were committed during
the period of his Managing Directorship i. e., between
397
September 20 and December 31, 1950. The prosecution case is
that Accused-7 was a party to the conspiracy, whereas the
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defence version is that he was a benamidar for Shankarlal,
that he took part in the proceedings of the Board of
Directors bona fide, believing that there was nothing wrong,
that the resolutions were implemented by Accused- 10 under
the directions of Shankarlal and that the moment he had a
suspicion that there was some fraud, he took immediate and
effective steps not only to prevent the rot but also to
investigate and find out the real culprits. The question is
which version is true.
It would be useful to have a correct appreciation of the
evidence to know the antecedents of Accused-7. [His Lordship
then proceeded to consider the evidence.]
x x x x x x
Learned counsel for Accused-7 contends that the following
two important circumstances in this case established that
Accused-7 was a victim of circumstances and that he was
innocent : (1) Two prominent publicmen of this country with
whom the accused worked gave evidence that he was a man of
integrity; and (2) the accused took active steps to unravel
the fraud and to bring to book every guilty person; if he
was a conspirator, the argument proceeds, it was incon-
ceivable that he would have taken such steps, for it would
have certainly recoiled on him. We shall consider these two
aspects now. [His Lordship then proceeded to consider the
evidence.]
x x x x
The question is what is the evidentiary value of good
character of an accused in a criminal case. The relevant
provisions are s. 53 and the Explanation to s. 55 of the
evidence Act. They read :
Section 53. In criminal proceedings the fact
398
that the person accused is of a good character is relevant.
Explaination to 8. 55. In sections 52, 53,
54 and 55, the word "character" includes both
reputation and disposition; but except as
provided in section 54, evidence may be given
only of general reputation and general
disposition, and not of particular acts by
which reputation, or disposition were shown.
It is clear from the said provisions that the evidence of
general reputation and general disposition is relevant in a
criminal proceeding. Under the Indian Evidence Act, unlike
in England, evidence can be given both of general character
and general disposition. Disposition means the inherent
qualities of a person; reputation means the general credit
of the person amongst the public. There is a real distinc-
tion between reputation and disposition. A man may be
reputed to be a good man, but in reality he may have a bad
disposition. The value of evidence as regards disposition
of a person depends not only upon the witness’s perspicacity
but also on his opportunities to observe the person as well
as the said person’s cleverness to hide his real traits.
But a disposition of a man may be made up of many traits,
some good and some bad, and only evidence in regard to a
particular trait with which the witness is familiar would be
of some use.Wigmore puts the proposition in the following
manner :
"Whether, when admitted, it should be given
weight except in a doubtful case, or whether
it may suffice of itself to create a doubt, is
a mere question of the weight of evidence,
with which the rules of admissibility have no
concerned
But, in any case, the character evidence is a very weak
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evidence : it cannot outweigh the positive
399
evidence in regard to the guilt of a person. It may be
useful in doubtful cases to tilt the balance in favour of
the accused or it may also afford a background for
appreciating his reactions in a given situation. It must
give place to acceptable positive evidence. The opinion
expressed by the witnesses does credit to the accused,
but, in our view, in the face of the positive evidence we
have already considered, it cannot turn the scale in his
favour.
Learned counsel strongly relied upon the subsequent conduct
of Accused-7 in support of his innocence. [His Lordship then
proceeded to consider the evidence relating to subsequent
Conduct and Considered as follows]
x x x x x x x x
We, therefore, hold that Accuscd-7 was a party to the
conspiracy and that the High Court has rightly convicted him
under s. 120-B of the Indian Penal Code. As regards the
sentence passed on Accused-7, having regard to the evidence
in this case, we think that this accused must be given a
comparatively less punishment than his co-conspirators, for,
though he took part in the conspiracy, at any rate from the
end of December, 1950, for one reason or other, he took
necessary proceedings to bring to light the fraud. We,
therefore, think that it would meet the ends of justice if
the accused was sentenced to rigorous imprisonment for a
period of two years. We accordingly modify the sentence
passed on him by the High Court and, subject to the
aforesaid modification, we dismiss the appeal preferred by
him.
Next we come to Criminal Appeal No. 136 of 1959 preferred by
Subhedar, Accused-8. The defence of this accused is that he
acted throughout in good faith and under the guidance of
Accused-7, the Managing Director of the Empire, and that he
did not know that any fraud was perpetrated in the Empire.
Before joining the Empire he was an
400
insurance agent and, therefore, it cannot be said that he
was a stranger to the insurance business and he may be
assumed to know how it would be conducted. On October 16,
1950 twenty qualifying shares of the Empire from among the
shares purchased in the name of Accused-7 were transferred
in his favour and thereafter at the meeting held on that day
he was co-opted as a Director. He is also, therefore, one
of the persons brought in by Shankarlal and made a Director
for his own purpose. [His Lordship then proceeded to
consider the evidence]
x x x x x x
We have no doubt that the aforesaid circumstances lead to
only one reasonable conclusion that this accused became a
Director of the Empire as a member of the conspiracy and
helped to put through all the transactions necessary to
transfer funds from one Company to the other. He was
rightly convicted by the High Court. We do not see any
reason to interfere with the sentence passed against him.
In the result Criminal Appeal No. 136 of 1959 is dismissed.
Criminal Appeal No. 172 of 1959 is preferred by Sayana,
Accused-9. He was a building contractor before he was
appointed a Director of the Empire. His defence is also
that he bona fide acted without knowledge of the conspiracy
or the fraud. He was also one of the Directors inducted
into the Company by the transfer of qualifying shares from
and out of the shares purchased in the name of Accused-7.
He was co-opted as a Director on October 17, 1950 under Ex.
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Z 206C. Though he was not present at the meeting of
November 27, 1950, he was present at the meeting of December
18, 1950 and, therefore, with the knowledge that six loans
amounting to Rs. 28,80,000/- were advanced without scrutiny
of the securities, he was a party in sanctioning another six
loans totalling to Rs. 42,80,000/-. He as also a party to
the resolution of January 30, 1951
401
sanctioning a bogus loan to the chief of Bagarian. He was a
party to the resolution dated February 9, 1951 when the said
loan was confirmed and to the resolution authorizing
Accused-9 to operate singly the accounts of the Company.
Evidence considered [omitted]
x x x x
It is, therefore, clear that he was a creature of
Shankarlal, that he was a party to the diversion of the
funds of the Empire to the Jupiter and that when Accused-7,
for his own reasons, was taking steps to stop the rot, he,
along with Accused-8, obstructed him from doing so and
wholly supported Accused- 10. The only reasonable
hypothesis on the evidence is that he was a party to the
conspiracy. It is said by learned counsel appearing for
this accused that his subsequent conduct would not indicate
any obstructive attitude on his part but would indicate only
his desire to maintain the status quo till the matters
improved. This is a lame explanation, for he, along with
the other Directors, opposed every attempt of the scrutiny
of the Company’s affairs and this can only be because they
were conscious of their part in the fraud.
In this context another argument of learned counsel for
Accused 8 and 9 may be noticed. It is said that the High
Court treated the Directors as trustees and proceeded to
approach the case from that standpoint inferring criminality
from their inaction. Even assuming that they were not
trustees in the technical sense of the term, they certainly
stood in a fiduciary relationship with the shareholders.
The High Court’s finding is not based upon any technical
relationship between the parties, but on the facts found.
On the facts, including those relating to the conduct of the
accused, the High Court drew a reasonable inference of guilt
of the accused. There is sufficient evidence on which the
High Court
402
could have reasonably convicted Accused 8 and 9 and in the
circumstances, we do not see any case had been made out in
an appeal under Art. 136 of the Constitution to merit our
interference.
In the result Criminal Appeal No. 172 of 1959 is dismissed.
Finally we come to Criminal Appeal No. 67 of 1959 preferred
by Bhagwan Swarup, Accused-10. The defence of this accused
is that he acted throughout on the directions of Accused 7,
8 and 9, and that as Secretary of the Company, he was bound
to follow their directions. This accused is the nephew of
Shankarlal. He is an M. A., LL. B. He held the office of
Assistant Commissioner of Income-tax in Patiala State. He
is the person who carried out the resolutions of the Board
of Directors of the Empire through intricate channels to
enable the large amounts misappropriated to reach the
Jupiter Company. It is suggested that he was not well
disposed of towards Shankarlal and therefore he could not
have any knowledge of Shankarlal’s fraudulent motives behind
the purchase of the controlling shares of the Empire. If
Shankarlal did not like him lie would not have put him in
the key position in the Empire. Indeed, the will of
Shankarlal shows that this accused got the best legacy under
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it. He was the connecting thread passing through the web of
conspiracy from beginning to end. Evidence Considered
[omitted]
x x x x x x x x
Learned counsel appearing for this accused Could only argue
that the accused was a subordinate of the Directors and that
he had followed only loyally the directions given by the
Managing Director without any knowledge of the conspiracy.
This argument is an oversimplification of the part taken by
Accused-10 in this huge fraud. Both the Courts below have
403
held, on the aforesaid circumstances and other evidence;
that Accused-10 was an active participant in the conspiracy.
In our view, there is ample material to justify it. In the
result Criminal Appeal No. 67 of 1959 is dismissed.
Cr. A. No. 82 of 1962 dismissed. Sentence modified.
Cr. A. No. 83 of 1962 dismissed. Sentence modified.
Cr. A. No. 136 of 1959 dismissed.
Cr. A. No. 172 of 1959 dismissed.
Cr. A. No. 67 of 1959 dismissed.