Full Judgment Text
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PETITIONER:
JAIKRISHNADAS MANOHARDASDESAI AND ANOTHER
Vs.
RESPONDENT:
THE STATE OF BOMBAY
DATE OF JUDGMENT:
16/03/1960
BENCH:
GAJENDRAGADKAR, P.B.
BENCH:
GAJENDRAGADKAR, P.B.
WANCHOO, K.N.
CITATION:
1960 AIR 833 1960 SCR (3) 329
CITATOR INFO :
RF 1962 SC 673 (2)
R 1963 SC 495 (5)
C 1963 SC1721 (4,5)
RF 1964 SC 864 (25)
E 1966 SC1253 (6)
R 1970 SC 919 (14,26,28)
RF 1972 SC 343 (22)
R 1980 SC 31 (19,22)
ACT:
Criminal Breach of Trust--Ingredients of--Common intention--
Meaning of--Indian Penal Code (XLV of 1860), ss. 409, 34.
HEADNOTE:
The first appellant was the Managing Director and the second
appellant a Director and technical expert of a cloth dyeing
concern known as Parikh Dyeing and Printing Mills Ltd. The
company entered into a contract with the Textile
Commissioner undertaking to dye a large quantity of cloth
which was supplied to the company for that purpose. In
pursuance of the contract certain quantity of cloth was dyed
and delivered to the Textile Commissioner by the company but
it failed to dye and deliver the balance of cloth which
remained in its possession and was not returned to the
Textile Commissioner in spite of repeated demands.
Ultimately the two appellants were prosecuted for criminal
breach of trust under S. 409 read with S. 34 of the Indian
Penal Code and were convicted for the same in a trial by
jury.
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In appeal the High Court reviewed the evidence on the ground
of misdirection to the jury but found that the two
appellants were liable to account for the cloth over which
they had dominion, and having failed to do so each of them
was guilty of the offence of criminal breach of trust. The
High Court refused to accept the appellants’ plea that the
cloth was old and was eaten up by white ants and moths. On
appeal by the appellants by special leave:
Held, that to establish a charge of criminal breach of
trust, the prosecution was not bound to prove the precise
mode of conversion, misappropriation or misapplication by
the accused of the property entrusted to him or over which
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he had dominion. The principal ingredient of the offence of
criminal breach of trust being dishonest misappropriation
the mere failure of the accused to account for the property
entrusted to him might not be the foundation of his
conviction in all cases but where he was unable to account
and rendered an explanation for his failure which was
untrue, an inference of misappropriation with dishonest
intent might readily be made.
The essence of liability under S. 34 of the Indian Penal
Code is the existence of a common intention animating the
offenders and the participation in a criminal act in
furtherance of the common intention. The physical presence
at the scene of offence of the offender sought to be
rendered liable under S. 34 is not, on the words of the
statute, one of the conditions of its applicability in every
case.
Barendra Kumar Ghose v. The King Emperor, (1929) L.R. 52
I.A. 40, followed.
Shreekantiah Ramayya Munipalli v. The State of Bombay,
[1955] 1 S.C.R. 1177, explained and distinguished.
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 159 of
1957.
Appeal by special leave from the judgment and order dated
February 14, 1956, of the Bombay High Court in Criminal
Appeal No. 1232 of 1955, arising out of the judgment and
order dated October 3, 1955, of the Additional Sessions
Judge for Greater Bombay in Case No. 38 V. Sessions 1955.
Purshottam Tricumdas, B. K. B. Naidu and I. N. Shroff, for
appellant No. 1.
Appellant No. 2 did not appear.
H. J. Umrigar, R. H. Dhebar and T. M. Sen, for the
respondent.
1960. March 16. The Judgment of the Court was delivered by
SHAH, J.--At a trial held with the aid of a common jury in
Case No. 38 of the Vth Session 1955 before the
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Additional Sessions Judge, City Court, Greater Bombay, the
two appellants were convicted of offences under s. 409 read
with s. 34 of the Indian Penal Code. The Additional
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 vitiated on account of a misdirection on a matter of
substantial importance, but held that the conviction of the
two appellants for the offence under s. 409 read with s. 34
of the Indian Penal Code was, on the evidence, not liable to
be set aside. The High Court accordingly confirmed the
conviction 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
conviction and sentence, the appellants have appealed to
this court with special leave.
The facts which gave rise to the charge against the two
appellants are briefly these:
On June 15, 1948, the Textile Commissioner invited tenders
for dyeing Pugree Cloth. The Parikh Dyeing and Printing
Mills Ltd., Bombay-hereinafter to be referred to as the
company-of which the first appellant was the Managing
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Director and the second appellant was a Director and
technical expert, submitted a tender which was accepted on
July 27, 1948, subject to certain general and special
conditions. Pursuant to the contract, 2,51,059-3/4 yards of
cloth were supplied to the company for dyeing. The company
failed to dye the cloth within the stipulated period and
there was correspondence in that behalf between the company
and the Textile Commissioner. Approximately 1,11,000. yards
out of the cloth were dyed and delivered to the Textile
Commissioner. On March 25, 1950, the company requested the
Textile Commissioner to cancel the contract and by his
letter dated April 3, 1950, the Textile Commissioner
complied with the request, and cancelled the contract in
respect of 96,128 yards. On November 20, 1950, the contract
was cancelled by the
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Textile 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 setting out the quantity of cloth
actually delivered for dyeing, the quantity of cloth
returned duly dyed and the balance of cloth, viz., 1,32,160
yards remaining to be delivered. Against the cloth admitted
by the company remaining to be delivered, it claimed a
wastage allowance of 2,412 yards and admitted liability to
deliver 1,29,748 yards lying with it on Government account.
It appears that about this time, the company was in
financial difficulties. In December 1950, the first
appellant left 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 application for
adjudicating the two appellants insolvents was filed in the
Insolvency Court at Ahmedabad. An insolvency notice 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 meantime, 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.
The Textile Commissioner made attempts to recover the cloth
remaining undelivered by the company. A letter was posted
by the Textile Commissioner on April 16, 1952, calling upon
the company to deliver 51,756 yards of cloth lying with it
in bleached condition to the Chief Ordnance Officer,
Ordnance Depot,, Sewri, but the letter was returned
undelivered. It was ultimately served with the help of the
police on the second appellant in October 1952. Thereafter
on November 7, 1952, another letter was addressed to the
company and the same was served on the second appellant on
November 25, 1952. By this letter, the company was reminded
that 1,35,726-3/4 yards of cloth
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were lying with it on account of the government and the same
had to be accounted for, and that the instructions to
deliver 51,756 yards to the Chief Ordnance Officer, Ordnance
Depot, Sewri, had not been attended to. The Textile
Commissioner called upon the company to send its
representatives to " clarify the position " and to account
for the material. After receiving this letter, the second
appellant attended at the office of the’ Textile
Commissioner and on November 27, 1952, wrote a letter
stating that " the main factors involved in not delivering
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the goods in finished state was that the material was very
old ", was " dhobibleached 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 co-operate 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 matter as regards
the final amount with respect to the balance quantity of the
basic material."
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 yards of cloth
belonging to the Government.
There is no dispute that approximately 1,30,000 yards out of
the cloth -entrusted to the company by the Textile
Commissioner for dyeing has not been returned. By its
letter dated December 4, 1950, the company admitted
liability to deliver 1,29,748 yards of cloth, but this cloth
has not been returned to the Textile Commissioner in spite
of repeated demands. That the appellants, as directors of
the company had dominion over that cloth was not questioned
in, the trial court. The plea that there were other
Directors
324
of the company besides the appellants who had dominion over
the cloth has been negatived by the High Court and in our
judgment rightly. Direct evidence to establish
misappropriation of the cloth over which the appellants had
dominion is undoubtedly lacking, but to establish a charge
of criminal breach of trust, the prosecution is not obliged
to prove the precise mode of conversion, misappropriation or
misapplication by the accused of the property entrusted to
him or over which he has dominion. The principal ingredient
of the offence being dishonest misappropriation or
conversion which may not ordinarily be a matter of direct
proof, entrustment of property and failure in breach of an
obligation to account for the property entrusted, if proved,
may in the light of other circumstances, justifiably lead to
-an inference of dishonest misappropriation or conversion.
Conviction 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 explanation for his failure to account which is
untrue, an inference of misappropriation with dishonest
intent may readily be made.
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 information was
given at any time to the Textile Commissioner after December
4, 1950, that the cloth had been eaten up by white-ants and
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moths, and was therefore thrown away or otherwise destroyed.
Nor was any evidence led in support of the plea by the
appellants.
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
325
thereby, but in the circumstances of the case, the first
appellant cannot be found guilty of the offence of criminal
breach of trust. Counsel submitted that the first appellant
had left Bombay in 1950 and had settled down in Ahmedabad
and was attending to a factory in that town, that thereafter
the first appellant was involved in insolvency proceedings
and was unable to attend to the affairs of the company in
Bombay, and if, on account of the pre-occupation of the
first appellant at Ahmedabad, he was unable to visit Bombay
and the goods were lost, no criminal misappropriation can be
attributed to him. But the case pleaded by the appellant
negatives this submission. The first appellant in his
statement before the trial court admitted that he often went
to Bombay even after 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 getting smaller every time he visited the mill
and on inquiry, he was told by the watchman that every day
one basketful 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 after he migrated to
Ahmedabad, the first appellant was frequently visiting the
factory at Bombay. The evidence also discloses that
meetings of Directors were held from time 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 remuneration for attending the meetings
and the expenses for the alleged collection and throwing
away of the sweepings have not been produced. It is
admitted by the first appellant that the letter dated
November 27, 1952, was written by the second appellant under
his instructions. In his statement at the trial, the first
appellant stated that he was informed of the letter dated
November 26, 1952, from the Textile Commissioner and that he
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could not attend the office of that officer because he was
busy attending to the insolvency proceedings and that he
deputed the second appellant to attend the office and to
explain and discuss the position. Be 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 November 27, 1952,
was evidently written under the direction of the first
appellant and by that letter, liability to pay for the cloth
after certain adjustments for losses alleged to be suffered
by the company in carrying out the contract was admitted.
By the letter dated December 4, 1950, liability to deliver
the cloth was admitted and by the letter dated November 27,
1952, liability to pay compensation 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
explanation for their failure to account. The High Court
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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 Textile Commissioner about the cause
of disappearance established misappropriation with criminal
intent.
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 observations in
Shreekantiah Ramayya Munipalli v. The State of Bombay (1),
also contended that, in any event, a charge under s. 409
read with s. 34 of the Indian Penal Code cannot be
established against the first appellant unless it is shown
that at the time of misappropriation of the goods, the first
appellant was physically present . But the essence of
liability under s.34 is to be found in the existence of a
common intention animating the offenders leading to the
doing of a criminal act in furtherance of the
(1) [1955] 1 S.C R. 1177.
327
common intention and presence of the offender sought to be
rendered liable under s. 34 is not, on the words of the
statute, one of the conditions of its applicability. As
explained by Lord Sumner in Barendra Kumar Ghose v. The King
Emperor(’) the leading feature of s. 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 participation must be in doing the act, not merely in
its planning. A common intention--a meeting of minds--to
commit an offence and participation in the commission of the
offence in furtherance of that common intention invite the
application of s. 34. But this participation 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
times and places. In Shree Kantiah’s case (supra),
misappropriation was committed 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
doubtful whether he had participated in the commission of
the offence, and this court in those circumstances held that
participation by the first accused was not established. The
observations in Shree Kantiah’s case (supra) in so far as
they deal with s. 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
application.
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
committed the offence of criminal breach of trust. The High
Court observed: " In such a case, if accused Nos. 1 and 2
(Appellants 1 & 2) alone were concerned with the receipt of
the goods, if they were dealing with the goods all the time,
if they were receiving communications from the Textile
Commissioner’s office and sending replies, to
(1) [1924] L.R. 52 I.A. 40, 52.
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them, and if the part played by each of them is apparent
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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
committed by both of them’.
It was submitted that the High Court erred in finding the
appellants guilty of offences under s. 409 of the Indian
Penal Code when the charge framed against them was one under
s. 409 read with s. 34 of the Indian Penal Code. A charge
framed against the accused person, referring to s. 34 is but
a convenient form of giving notice to him that the principle
of joint liability is sought to be invoked. Section 34 does
not create an offence; it merely enunciates a principle of
joint liability for criminal acts done in furtherance of the
common intention of the offenders. Conviction of an accused
person recorded, relying upon the principle of joint
liability, is therefore for the offence committed in
furtherance of the common intention and if the reasons for
conviction establish that the accused was convicted for an
offence committed in furtherance of the common intention of
himself and others, a reference in the order recording
conviction to s. 34 of the Indian Penal Code may appear to
be asurplusage. The order of the High Court recording the
conviction of the appellants for the offence under s. 409
of the Indian Penal Code is therefore not illegal.
It was submitted for the first appellant that the sentence
passed against him was unduly severe, and that, in any
event, no distinction should have been made between him and
the second appellant in the matter 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 an&
primarily, he had dominion over the property entrusted to
the company. The second appellant was, though a Director,
essentially a technician. Having regard to these
circumstances, if the High Court has made a distinction
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.
Appeal dismissed.
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