Dr. Vimla Vs. Delhi Administration
[1962] INSC 340 (29 November 1962)
SUBBARAO, K.
IMAM, SYED JAFFER AYYANGAR, N. RAJAGOPALA
MUDHOLKAR, J.R.
CITATION: 1963 AIR 1572 1963 SCR Supl. (2)
585
CITATOR INFO :
D 1963 SC1577 (7,9,10) RF 1976 SC2140 (10)
ACT:
Criminal Trial-Meaning of 'dishonestly' and '
fraudulently'-Meaning of 'false document' and 'forgery'-Indian Penal Code, 1860
(Act 45 of 1860), ss. 24, 25, 463, 464, 467, 468.
HEADNOTE:
Dr. Vimla purchased a car in the name of her
minor daughter Nalini aged about 6 months. The price of tile car was paid by
her. The transfer of the car was notified in the name of Nalini to the Motor
Registration Authority. The insurance policy already issued was transferred in
the name of Nalini after the proposal form was signed by Dr. Vimla.
Subsequently, Dr. Vimla filed two claims on
the ground that the car met with accidents. She signed the claim forms as
Nalini. She also signed the receipts acknowledging the payment of compensation
money as Nalini. Dr. Vimla and her husband were prosecuted under sections 120
B, 419, 467 and 468 of the Indian Penal Code. Both the accused were acquitted
by the Sessions Judge. The State went in appeal and the High Court convicted
Dr. Vimla under s. 467 and 468 of the Indian Penal Code. Dr. Vimla came to this
Court by special leave.
Held, that appellant was not guilty of the
offence under s. 467 and 468 of the Indian Penal Code. She was certainly guilty
of deceit because though her name was Vimla, she signed in all the relevant
papers as Nalini and made the Insurance Company believe that her name was
Nalini, but they said deceit did not either secure to her advantage or cause
any noneconomic loss or injury to the Insurance Company.
The charge did not disclose any such
advantage or injury nor was there any evidence to prove the same. The entire
transaction was that of Dr. Vimla and it was only put through in the name of
her minor daughter. Nalini was in fact either a Benamidar for Dr. Vimla or her
name was used for luck or other sentimental considerations. The Insurance
Company would not have acted differently even if the car stood in the name of
Dr. Vimla.
586 The definition of 'false document' is a
part of the definition of forgery' and both must be read together. If so read,
the ingredients of the offence of forgery relevant to the present case are as
follows: (1) fradulently signing a document or a part of a document with an
intention of causing it to be believed that such document or part of a document
was signed by another under his authority ; and (2) making of such a document
with an intention to commit fraud or that fraud may be committed.
The expression 'fraud' involves two elements,
deceit and injury to the person deceived. Injury is something other than
economic loss, that is, deprivation of property, whether movable or immovable
or of money and it will include and any harm whatever caused to any person in
body, mind, reputation or such others. In short, it is a noneconomic or
non-pecuniary loss. A benefit or advantage to the deceiver, will almost always
cause loss or detriment to the deceived. Even in those rare cases where there
is a benefit or advantage to the deceiver, but no corresponding loss to the
deceived, the second condition is satisfied.
Haycraft v. Creasy, 1801) 2 East 92, in re.
London and Globe Finance Corporation Ltd., (1903) 1 Ch. 732 R. v. Welham,
(1960) 1 All. E R. 260, Kotamraju Yenkatrayadu v. Emperor (1905) I. L. R. 28
Mad. 90, Surendra Nath Ghose v. Emperor, (1910) I. L. R. 38 Cal. 75, Sanjiv
Ratnappa v. Emperor, A. I. R. 1932 Bom. 545 and Emperor v. Abdul Hamid, A. 1.
R. 1944 Lah. 380, referred to.
CRIMINAL APPELLATE, JURISDICTION: Criminal
Appeal No. 213 of 1960.
Appeal by special leave from the judgment and
order dated March 24, 1960, of the Punjab High Court (Circuit Bench)Delhi in
Criminal Appeal Case No. 41-D of 1958.
H. L. Anand, and K. Baldev Mehta, for the
appellant.
V. D. Mahajan and P. D. Menon, for the
respondent.
1962. November 29. The Judgment of the Court
was delivered by 587 SUBBA RAO J.-This appeal by Special leave raises the
question as to the true meaning of the expression "fraudulently' in s. 464
of the Indian Penal Code.
The facts either admitted or found by the
courts below may be briefly stated. The appellant is the wife of Siri Chand
Kaviraj. On january 20, 1953, she purchased an Austin 10 Horse Power Car with
the registration No. DLA. 4796 from Dewan Ram Swarup in the name of her minor
daughter Nalini aged about six months at that time. The price for the car was
paid by Dr. Vimla. The transfer of the car was notified in the name of Nalini
to the Motor Registration Authority.
The car at that time was insured against a
policy issued by the Bharat Fire & General Insurance Co., Ltd., and the
policy was due to expire sometime in April, 1953. On a request made by Dewan
Ram Swarup, the said policy was transferred in the name of Nalini. In that
connection, Dr. Vimla visited the Insurance Company's Office and signed the
proposal form as Nalini. Subsequently, she also filed two claims on the ground
that the car met with accidents. In connection with these claims, she signed
the claim forms as Nalini and also the receipts acknowledging the payments of
the compensation money as Nalini. On a complaint made by the company alleging
fraud on the part of Dr. Vimla and her husband, the police made investigation
and prosecuted Dr. Vimla and her husband Siri Chand Kaviraj in the Court of
Magistrate 1st Class Delhi. The 'Magistrate committed Dr. Vimla and her husband
to Sessions to take their trial under ss. 120-B, 419, 467 and 468 of the Indian
Penal Code. The learned Sessions judge held that no case had been made out
against the accused under any one of those sections and on that finding,
acquitted both of them. The State preferred an appeal to the High Court of
Punjab and the appeal was disposed of by a Division Bench of that court
comprising Falshaw 588 and Chopra,JJ. The learned judges confirmed the
acquittal of Siri Chand; but in regard to Dr. Vimla, they confirmed her
acquittal under s. 419 of the Indian Penal Code, but set aside her acquittal
under ss. 467 and 468 of the Code and instead, convicted her under the said
sections and sentenced her to imprisonment till the rising of the court and to
the payment of a fine of Rs. 100/or in default to under-, go simple
imprisonment for two weeks. Dr. Vimla has preferred the present appeal by
special leave against her conviction and sentence.
The facts found may be briefly summarised
thus : Dr. Vimla purchased a motor car with her own money in the name of her
minor daughter, had the insurance policy transferred in the name of her minor
daughter by signing her name and she also received compensation for the claims
made by herin regard to the two accidents to the car. The claims were true
claims and she received the moneys by signing in ,he claim forms and also in
the receipts as Nalini. That is to say, Dr. Vim] a in fact and in substance put
through her transactions in connection with the said motor car in the name of her
minor daughter. Nalini was in fact either a benamidar for Dr. Vimla or her name
was used for luck or other sentimental considerations. On the facts found,
neither Dr. Vimla got any advantage either pecuniary or otherwise by signing
the name of Nalini in any of the said documents nor the Insurance Company
incurred any loss, pecuniary or otherwise, by dealing with Dr. Vimla in the
name of Nalini. The Insurance Company would not have acted differently even if
the, car stood in the name of Dr. Vimla and she made the claims and received
the amounts from the insurance company in her name. On the said facts, the
question that arises in this case is whether Dr. vimla was guilty of offences
under ss. 463 and 464 of the Indian Penal Code.
589 Learned Counsel for the appellant
contends that on the facts found, the appellant would not be guilty of forgery
as she did not "fraudulently" sign the requisite forms and the
receipts in the name of Nalini, as. by so signing, she did not intend to cause
injury to the insurance company. In other words, the contention was that a
person does not act fraudulently within the meaning of s. 464 unless he is not
only guilty of deceit but also he intends to cause injury to the person or
persons deceived, and as in the present case the appellant had never had the
intention to cause injury to the insurance company and as on the facts found no
injury had been caused at all to the company, the appellant could not be found
guilty under the said sections.
Before we consider the decisions cited at the
Bar it would be convenient to look at the relevant provisions of the Indian
Penal Code.
Section 463 : Whoever makes any false
document or part of a document with intent to cause damage or injury, to the
public or to any person, or to support any claim or title, or to cause any
person to part with property or to enter into any express or implied contract,
or with intent to commit fraud or that fraud may be committed, commits forgery.
Section 464 : A person is said to make a
false document First--Which dishonestly or fraudulently makes, signs, seals or
executes a document or part of a document, or makes any mark denoting the
execution of a document, with the intention of causing it to be believed that
such document/or part of a document was made, signed, sealed or executed by or
by the authority of a person by whom or by whose authority he knows that it was
not made, signed, sealed or executed, or at a time 590 at which he knows that
it was not made, signed, scaled or executed; or The definition of "false
document" is a part of the definition of "forgery". Both must be
read together. If so read, the ingredients of the offence of forgery relevant
to the present enquiry are as follows , (1) fraudulently signing a document or
a part of a document with an intention of causing it to be believed that such
document or part of a document was signed by another or under his authority ;
(2) making of such a document with an intention to commit fraud or that fraud
may be committed. In the two definitions, both mensrea described in s.464 i.
e., "fradulently" and the intention to commit fraud in s. 463 have
the same meaning. This redundancy has perhaps become necessary as the element
of fraud is not the ingredient of other intentions mentioned in s. 463. The
idea of deceit is a necessary ingredient of fraud, but it does not exhaust it;
an additional element is implicit in the
expression. The scope of that something more is the subject of may decisions.
We shall consider that question at a later stage in the light of the decisions
bearing on the subject. The second thing to be noticed is that in s. 464 two
adverbs, "dishonestly" and "fraudulently" are used
alternatively indicating thereby that one excludes the other. That means they
are not tautological and must be given different meanings. Section 24 of the
Penal Code defines "dishonestly" thus :
"Whoever does anything with the
intention of causing wrongful gain to one person or wrongful loss to another
person, is said to do that thing dishonestly".
"Fraudulently" is defined in s. 25
thus:
" A person is said to do a thing
fraudulently if he does that thing with intent to 591 defrand but not
otherwise".
The word "defraud" includes an
element of deceit. Deceit is not an ingredient of the definition of the word
"dishonestly" while it is an important ingredient of the definition
of the word "fraudulently". The former involves a pecuniary or
economic gain or loss while the latter by construction excludes that element.
Further) the juxtaposition of the two expressions "'dishonestly" and
"fraudulently" used in the various sections of the Code indicates
their close affinity and therefore the definition of one may give colour to the
other. To illustrate, in the definition of "dishonestly", wrongful
gain or wrongful loss is the necessary enough. So too, if the expresssion
"fraudulently' were to be held to involve the element of injury to the
person or persons deceived, it would be reasonable to assume that the injury
should be something other than pecuniary or economic loss. Though almost always
an advantage to one causes loss to another and vice versa, it need not
necessarily be so. Should we hold that the concept of fraud" would include
not only deceit but also some injury to the person deceived, it would be
appropriate to hold by analogy drawn from the definition of
"dishonestly" that to satisfy the definition of
"'fraudulently" it would be enough if there was a noneconomic
advantage to the deceiver or a non-economic loss to the deceived. Both need not
co-exist.
Let us now consider some of the leading text
book writers and, decisions to ascertain the meaning of the word
"fraudulently".
The classic definition of the word
"fraudulently" is found in Steplien's History of the Criminal law of
England, Vol.
2, at p. 121 and it reads "I shall not
attempt to construct a definition which will meet every case which might 592 be
suggested, but there is little danger in saving that whenever the words
"fraud" or intent to defraud" or "fraudulently" occur
in the definition of a crime two elements at least are essential to the
commission of the crime : namely, first, deceit or an intention to deceive or
in some cases mere secrecy ; and secondly, either actual injury or possible
injury or to a risk of possible 'injury by means of that deceit or
secrecy............. This intent is very seldom the only, or the principal,
intention entertained by the fraudulent person, whose principal object in
nearly every case is his own advantage................. A practically
conclusive test of the fraudulent character of a deception for criminal
purposes is this : Did the author of the deceit derive any advantage from it
which could not have been had if the truth had been known ? If so it is hardly
possible that the advantage should not have had an equivalent in loss or risk
of loss to someone else, and if so, there was fraud." It would be seen
from this passage that "'fraud" is made up of two ingredients, deceit
and injury. The learned author also realizes that the principal object of every
fraudulent person in nearly every case is to derive some advantage though such
advantage has a corresponding loss or risk of loss to another. Though the
author has not visualized the extremely rare situation of an advantage secured
by one without a corresponding loss to another, this idea is persued in later
decisions.
As regards the nature of this injury, in
Kenny's Outline of Criminal Law, 15th Edn., at p. 333, it is stated that
pecuniary detriment is unnecessary.
In Haycraft v. Creasy (1) LeBlanc, observed
(1) (1801) 2 East 92.
593 "by fraud is meant an intention to
deceive; whether it be from any expectation of advantage to the party himself
or from the ill-will towards the other is immaterial." This passage for
the first time brings out the distinction between an advantage derived by the
person who deceives in contrast to the loss incurred by the person deceived.
Buckley. J., in Re London & Clobe Finance
Corporation Ltd.
(1) brings out the ingredients of fraud thus
:
"To deceive is, I apprehend, to induce a
man to believe that a thing is true which is false, and which the person
practising the deceit knows or believes to be false. To.
defraud is to deprive by deceit: it is by
deceit to induce a man to act to his injury' More tersely it may be put, that
to deceive is by falsehood to induce a state of mind; to defraud is by deceit
to induce a course of action." The English decisions have been elaborately
considered by the Court of Criminal Appeal in R. v. Welhant (2). In that case,
hire-purchase finance companies advanced money on a hire-purchase form and
agreement and on credit-sale agreements witnessed by the accused. The form and
agreements were forgeries the accused was charged with offences of Uttering
forged documents with intent to defraud. It was not proved that he had intended
to cause any loss of once to the finance companies. His intention had been by
deceit to induce any person who was charged with the duty of seeing that the
credit restrictions then current were observed to act in a way in which lie would
not act if he had known the true facts, namely, not to prevent the advancing of
large sums of money exceeding the limits allowed by law It, the time. The Court
held that the said intention amounted to intend to defraud.
(1) (1903) 1 ch.. 732.
(2) (1960) 1 All. E. R. 260, 264, 266.
594 Hilbery, J., speaking for the court,
pointed out the distinction between deceit and defraud and came to the
conclusion that ,to defraud" is to deprive by deceit." Adverting to
the argument that the deprivation must be something of value, i. e. economic
loss, the learned judge observed "We have, however, come to the conclusion
that this is too narrow at view. While, no doubt, in most cases of an intention
to defraud the intention is to cause an economic loss' there is no reason to
introduce any such limitation.
Provided that the intention is to cause the
person deceived to act to his real detriment, it matters not that lie suffers
no economic loss. It is sufficient if the intention is to deprive him of a
right or to induce him to do something contrary to what it would have been his
duty to do, had lie not been deceived." On the basis of the said principle
it was held that the accused by deceit induced the finance companies to advance
moneys contrary to the credit restrictions and that he was guilty of the
offence of forgery. This decision is therefore a clear authority for the
position that the loss or, the injury caused to the person deceived need not be
economic loss. Even a deprivation of a right without any economic consequences
would be enough. This decision has not expressed any definite opinion on the
question whether a benefit to the accused without a corresponding loss to the
person deceived would amount to fraud. But it has incidentally touched upon
that aspect. The learned judge again observed.
"....................................
This the appellant was doing in order that he might benefit by getting further
loans." This may indicate that a benefit derived by the 595 person
deceiving another may amount to an act to defraud that other.
A full Bench of the Madras High Court , in
Kotamraju Venkatrayadu v. Emperor (1) had to consider the case of a person
obtaining admission to the matriculation examination of the Madras University
as a private candidate producing to the Registrar a certificate purporting to
have been signed by the headmaster of it recognized High School that he was of
good character land had attained his 20th year. It was found in that case that
the candidate had fabricated the signature of the headmaster. The court held
that the accused was guilty of forgery. White, C.J., observed :
"Intending to defraud means, of course,
something more than deceiving." He illustrated this by the following
example:
"A tells B a lie and B believes him. B
is deceived but it does not follow that A intended to defraud B. But, as it
seems to me, if A tells B a lie intending that B should do something which A
conceives to be to his own benefit or advantage, 'and which, if done, would be
to the loss or detriment of B, A intends to defraud B." The learned Chief
justice indicated his line of thought, which has some bearing on the question
now raised, by the following observations :
"I may observe, however, in this
connection that by s. 24 of the Code a person does a thing dishonestly who'
does it with the intention of causing wrongful gain or wrongful loss. It is not
necessary that there should be an intention to cause both. On the analogy of
this definition, it might be said that either an intention (1) (1905) I.L.R. 28
Mad. 99,96,97.
596 to secure a benefit or advantage on the
one hand, or to cause loss or detriment on the other, by means of deceit, is intent
to defraud." But, he found in that case that both the elements were
present. Benson J., pointed out at p. 114 :
"I am of opinion that the act was
fraudulent not merely by reason of the advantage which the accused intended to
secure for himself' by means of his' deceit, but also by reason of the injury
which must necessarily result to the University and, through it to the public
from such acts if unrepressed.
The University is injured, if through the
evasion of its byelaws, it is induced to declare that certain persons have
fulfilled the conditions prescribed for Matriculation and are entitled to the
benefits of Matriculation, when in fact, they have not fulfilled those
conditions, for the value of its examinations is, depreciated in the eyes of
the public if it is found that the certificate of the University that they have
passed its examinations is no longer a guarantee that they have in truth
fulfilled the conditions on which alone the University professes to certify
them as passed, and to admit them to the benefis of Matriculation."
Boddam, J., agreed with the learned Chief justice and Benson, J. This decision
accepts the principle laid down by Stephen, namely, that the intention to
defraud is made up of two elements, first an intention to deceive and second,
the intention to expose some person either to actual injury or risk of possible
injury but the learned judges were also inclined to hold on the analogy of the
definition of "dishonestly" in s. 24 of the Code that intention to
secure a or advantage to the deceiver satisfies the second condition 597 The
Calcutta High Court dealt with this question in Surendra Nath Ghose v. Emperor
(1) There, the accused affixed his signature to a kabuliat which was not
required by law to be attested by witnesses, after its execution and
registration, below the names of the attestings witnesses but without putting a
date or alleging actual presence at the time of its execution. The court held
that such an act was not fraud within the first clause of s. 464. of the Penal
Code inasmuch as it was not done dishonestly or fraudulently within the meaning
of ss. 24 and 25 thereof.
Mookerjee, J., defined the words
"intention to defraud" thus:
"The expression, "intent to
defraud" implies conduct coupled with intention to deceive and thereby to
injury in other words, "defraud" involves two conceptions, namely,
deceit and injury to the person deceived, that is, infringement of some legal
right possessed by him, but not necessarily deprivation of property." This
view is in accord with the English decisions and that expressed by the Full
Bench of the Madras High Court. This decision does not throw any light on the
other question whether advantage to the deceiver without a corresponding loss
to the deceived would satisfy the second ingredient of the expression
"intent to defraud".
A division Bench of the Bombay High Court in
Sanjiv Ratnappa v. Emperor (2) had also occasion to consider the scope of the
expression "fraudulently" in s. 464 of the Penal Code.
The court held that for an act to be
fraudulent there must be some advantage on the one side with a corresponding
loss on the other. Adverting to the argument that an advantage secured by the
deceiver would constitute fraud Broomfield, J., observed thus "I think in
view of the Bombay decisions to which I have referred we must hold that that
(1) (1910) I.T..R. 38 Cal. 75, 89-90. (2) A.I.R. 1932 Bom.
545, 550.
598 is an essential ingredient in the
definition of forgery. In the great majority of cases, the point is not very
material............... But there many occasionally be a case in which the
element of loss or injury is absent and I think the present is such a
case." This decision therefore does not accept the view of White C. J., of
the Madras High Court.
A Division Bench of the Lahore High Court,,
in Emperor v. Abdul had also expressed its view on the meaning of the word
"fraudulently." The learned Judges accepted Stephen's definition but
proceeded to observe as follows "It may be noted in this connection that
the word "'injury" as defined in s. 44, Penal Code, is very wide as
denoting "any harm whatever, illegally caused to any person, in body,
mind, reputation or property." The learned judges were willing to assume
that in almost every case an advantage to one would result in an injury to the
other in the widest sense indicated by s. 44 of the Penal Code.
The other decided case cited at the Bar
accept the necessity for the combination of a deceit by one and injury to other
constitute an act to defraud and therefore, it is not necessary to multiply
citations. No other decision cited-at the Bar throws any light on the further
question, namely, whether an advantage secured to the deceiver without a
corresponding loss to the deceived would satisfy the second condition laid down
by the decisions.
To summarize : the expression
"'defraud" insoles two elements, namely, deceit and injury to the person
deceived.
injury is something other than (1) A.I.R.
1944 Lah. 380,382.
599 economic loss that is', deprivation of
property, whether movable or immovable, or of money, and it will include any
harm whatever caused to any person in body, mind, reputation or such others. In
short, it is a non economic or non pecuniary loss. A benefit or advantage to
the deceiver will almost always cause loss or detriment to the deceived. Even
in those rare cases where there is a benefit or advantage to the deceiver, but
no corresponding loss to the deceived, the second condition is satisfied.
Now let us apply the said principles to the
facts of the present case. Certainly, Dr. Vimla was guilty of deceit, for
though her name was Vimla, she signed in all the relevant papers as Nalini and
made the insurance company believe that her name was Nalini, but they said ,
deceit did not either secure to her advantage or cause any non-economic loss or
injury to the insurance company. The charge does not disclose any such
advantage or injury, nor is there any evidence to prove the same. The fact that
Dr. Vimla said that the owner of the car who sold it to her suggested that the
taking of the sale of the car in the name of Nalini would be useful for
income-tax purposes is not of any relevance in the present case, for one
reason, they said owner did not say so in his evidence and for the other, it
was not indicated in the charge or in the evidence. In the charge framed, she
was alleged to have defrauded the insurance company and the only evidence given
was that if it was disclosed that Nalini was a minor, the insurance company
might not have paid the money. But as we have pointed out earlier, the entire
transaction was that of Dr. Vimla and it was only put through in the name of
her made minor daughter for reasons best known to herself. On the evidence as
disclosed, neither was she benefited nor the insurance company incurred loss in
any sense of the term.
In the result, we allow the appeal and hold
that the appellant was not guilty of the offence under 600 ss. 467 and 468 of
the Indian Penal Code. The conviction and sentence passed on her are set aside.
Fine, if paid, is directed to be refunded to the appellant, Appeal allowed.
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