Jaikrishnadas Manohardasdesai & ANR
Vs. The State of Bombay  INSC 47 (16 March 1960)
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)
Criminal Breach of Trust--Ingredients
of--Common intention-- Meaning of--Indian Penal Code (XLV of 1860), ss. 409,
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.
320 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 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,  1 S.C.R. 1177, explained and distinguished.
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
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 321 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 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 322 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
323 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 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 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
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
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 42 326 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 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)  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
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)  L.R. 52
I.A. 40, 52.
328 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 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.