Full Judgment Text
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PETITIONER:
UNION OF INDIA
Vs.
RESPONDENT:
M/s.CHATURBHAI M. PATEL & CO. AND VICE VERSA
DATE OF JUDGMENT09/12/1975
BENCH:
FAZALALI, SYED MURTAZA
BENCH:
FAZALALI, SYED MURTAZA
MATHEW, KUTTYIL KURIEN
CITATION:
1976 AIR 712 1976 SCR (2) 902
1976 SCC (1) 747
ACT:
Fraud-must be established beyond reasonable doubt-Mere
suspicion- If proof of fraud.
HEADNOTE:
The resondent filed a suit against the Union of India
alleging that due to negligence of the railways a
consignment of tobacco despatched by him to Gaya was
substituted in transit and that in its place inferior
tobacco was delivered at Gaya. The railways on the other
hand alleged fraud and collusion between the respondent and
his father, also a bidi tobacco merchant in Gujarat, because
by deliberate manipulation, the respondent consigned
inferior goods to Gaya and superior goods to Gujarat.
The trial court dismissed the respondent’s suit. The
High Court allowed the suit for damages but refused refund
of excise duty said to have been paid by the respondent.
Dismissing the appeal to this Court,
^
HELD: (1) The appellant had not been able to make out a
case of fraud. The High Court was justified in negativing
the plea of fraud and in decreeing the suit. [904-FG]
(2) Fraud, like any other charge of criminal offence,
whether made in civil or criminal proceedings must be
established beyond reasonable doubt. However suspicious may
be the circumstances, however strange the coincidences and
however grave the doubts, suspicion alone can never take the
place of proof. [904-FG]
A. L. N. Narayanan Chettyar v. Official Assignee, High
Court Rangoon, A.I.R. 1941 P.C. 93, referred to.
In the instant case there is absolutely no evidence to
show any prior meeting of the minds between the respondent
and his father before the consignment was sent either to
Gujarat or Gaya so as to raise an inference that these two
persons had hatched up a conspiracy in order to defraud the
appellant. [904-EF]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 972-
973 of 1968.
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From the Judgment and Decree dated the 1st December
1961, of the Allahabad High Court in First Appeal No. 285 of
1958.
Gobind Das and S. P. Nayar for the appellants in Appeal
972 and for Respondents in C.A. 973/68.
S. M. Jain, J. P. Goyal, S. K. Jain and Shripal Singh
for Respondent in Appeal 972 and for the Appellant in C.A.
973/68.
The Judgment of the Court was delivered by
FAZAL ALI J. This is a defendant’s appeal by
certificate granted by the High Court of Allahabad under
Art. 133(1) of the Constitution of India. The plaintiff
which is a registered partnership firm at Banaras dealing in
Bidi tobacco filed the present suit for damages against the
defendant Union of India on the allegation that it had
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despatched a consignment containing tobacco at Banaras for
Gaya in Bihar for delivery to the firm Chaturbhai M. Patel &
Co. at Gaya. This consignment was booked under Invoice No.
107 Railway Receipt No. 89551 dated July 9, 1954. The
plaintiff’s allegation was that due to negligence of the
Railway the identical goods despatched by the plaintiff did
not reach the consignee at Gaya but the goods containing
inferior type of tobacco reached there which caused serious
loss to the plaintiff. The suit was filed after notice under
s. 80 of the Code of Civil Procedure was given. The
plaintiff also claimed refund of the excise duty which was
paid by the plaintiff. The suit was resisted by the
defendant mainly on the ground that due to fraud and
collusion between the plaintiff in Banaras and his father’s
firm in Gujarat, the consignment at Benaras was interchanged
by manipulation and deliberation so that the inferior goods
were sent to Gaya and the superior goods were sent to
Gujarat which were sold by the firm at Gujarat and huge
profit was earned by the aforesaid firm.
The Trial Court framed a number of issues and accepted
the defence and accordingly dismissed the suit. The
plaintiff then filed an appeal in the High Court of
Allahabad which reversed the judgment and decree of the
Trial Court and decreed the plaintiff’s suit for damages but
refused to pass a decree regarding the amount of the excise
duty said to have been paid by the plaintiff.
Mr. Gobind Das appearing for the appellant submitted
that there were number of suspicious circumstances which
clearly went to show that some amount of fraud had been
played on the defendant by the collusion of the plaintiff
with his father at Gujarat whose firm was known as Mangal
Bhai Prabhu Das. In support of his contention he has relied
on three or four circumstances which have been fully
discussed by the High Court.
On a perusal of the judgment of the High Court we find
that the case is concluded by findings of fact and normally
the appellant could not have been granted the certificate
for leave to appeal but for the fact that the judgment of
the High Court was one of reversal and the valuation of the
suit was over Rs. 20,000/-. Nevertheless the High Court has
discussed the suspicious circumstances relied upon by the
defendant/appellant and has held that there was no
conclusive or reliable evidence to prove the fraud or
collusion as alleged by the defendant. One of the
circumstances was that on June 9, 1954 a consignment of 191
bags of tobacco was booked by Mangal Bhai Prabhu Das the
father of the plaintiff from Railway Station Vasad in
Gujarat to Indian Zarada Factory, Banaras which was owned by
the plaintiff. This consignment was taken delivery of by one
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Mohanlal an agent of the Indian Zarada Factory at Benaras
and was re-warehoused in the bonded warehouse of the Factory
at Benaras. On the same day the consignment of the plaintiff
was also warehoused at the same place. Thereafter a
forwarding note was presented at Benaras on June 24, 1954 on
behalf of the Indian Zarada Factory for despatch of 174 bags
of tobacco to his father Mangal Bhai Prabhu Das Patel in
Gujarat on the ground that the goods were of an inferior
quality. It is said that the goods of inferior quality were
deliberately despatched to Gaya,
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Whereas the other consignment was sent to Gujarat by
changing the marks on the bags. The High Court, however, has
pointed out that there was absolutely no evidence to show
that such a manipulation or changing the marks was done
either by the plaintiff or his agent at Benaras.
Similarly reliance was placed on the fact that although
the consignment reached Gaya on July 17, 1954 yet the
delivery of the aforesaid consignment was taken by the
plaintiff cousin at Gaya more than a month thereafter i.e.
on August 25, 1954 and that too after the Railway
authorities at Gaya wrote a letter to the consignee on
August 23, 1954. The High Court has pointed out that there
is no evidence to show that the consignee at Gaya knew that
the goods had arrived there on July 17, 1954 and the letter
which was sent to the uncle of the plaintiff at Gaya was
received by him after a long time. There is no doubt that
there was some amount of negligence on the part of the
Railway authorities because they wrote a letter to the
consignee at Gaya more than a month after the goods were
received and if they had sent the letter immediately after
receipt of the consignment, and if in spite of that there
was delay in taking delivery, something could be said for
the plaintiff.
Lastly it was urged by Mr. Gobind Das for the appellant
that the plaintiff who was the owner of the Indian Zarada
Factory at Benaras and his father who was the owner of the
firm in Gujarat appear to have entered into a conspiracy to
defraud the defendant in view of their close relationship.
The High Court has rightly pointed out that the plaintiff is
a separated son and has nothing in common with his father,
except the business in tobacco which is carried on at two
different places. It has also been pointed out by the High
Court that the father has married a second wife and that
shows that there is no close affinity between the plaintiff
and his father. Further more, there is absolutely no
evidence to show any prior meeting of minds between the
plaintiff and his father before the consignment was sent
either to Gujarat or Gaya so as to raise an inference that
these two persons had hatched up a conspiracy in order to
defraud the defendant. This argument, therefore, has no
force and must be overruled.
The High Court has carefully considered the various
circumstances relied upon by the appellant and has held that
they are not at all conclusive to prove the case of fraud.
It is well settled that fraud like any other charge of a
criminal offence whether made in civil or criminal
proceedings, must be established beyond reasonable doubt;
per Lord Atkin in A. L. N. Narayanan Chettyar v. Official
Assignee, High Court Rangoon. However suspicious may be the
circumstances, however strange the coincidences, and however
grave the doubts, suspicion alone can never take the place
of proof. In our normal life we are sometimes faced with
unexplainable phenomenon and strange coincidences, for, as
it is said, truth is stronger than fiction. In these
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circumstances, therefore, after going through the judgment
of the High Court we are satisfied that the appellant has
not been able to make out a case of fraud as found by the
High Court. As such the High Court
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was fully justified in negativing the plea of fraud and
in decreeing the suit of the plaintiff.
Cross objections have been filed by the
plaintiff/respondent for disallowing the amount of excise
duty paid by the plaintiff. After persuing the judgment of
the High Court, we find absolutely no merit in these cross
objections.
The result is that the appeal and the cross objections
are dismissed, but in the circumstances of the case without
any order as to costs.
P.B.R. Appeals dismissed.
906