Sardar Sardul Singh Caveeshar Vs.
State of Maharashtra [1963] INSC 61 (18 March 1963)
18/03/1963
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 proceeded
on the basis as it was manifest and indeed not disputed 379 that there was a
conspiracy and the only question for consideration 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 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 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.
380 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
favour.
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 the balance of the purchase money to the Khaitan Groupwithin 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 resolution 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 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 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 transaction 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 Secretary 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/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 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 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.
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 conceived 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 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 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 Accused10 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 inconceivable 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 distinction 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 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. 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 Accused10. 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 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.
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