-

3 S.C.R. SUPRE.l.VIE COURT REPORTS 319

delivery

of possession of the jagir, or a writ directing

z96°

commutation otherwise than under the provisions of

Sarwarlal ,

the Commutation Regulation. It may also be observed v.

that the Parliament has, by the Constitution (1st State of Hyderabad

Amendment) Act, included the Abolition and the _ -· -· · -

Commutation Regulations in the ninth schedule, and Shah].

by virtue of Art. 3l(B), the two Regulations are

exempt from challenge on the ground that they are

inconsistent with or take away or abridge any of the

fundamental rights conferred by Part III of the

Constitution.

The appeal therefore fails and is dismissed with

costs.

Civil Appeal No. 686 of 1957.

This appeal raises the same question which has been

decided in

the companion Appeal No. 392of1956 and

for reasons set out therein, this appeal must fail and

is dismissed with costs.

Appeals dismissed.

JAIKRISHNADAS MANOHARDAS

DESAI AND ANOTHER

v.

THE STATE OF BOMBAY

(JAFER IMAM, K. N. WANCHOO and J. 0. SHAH, JJ.)

Criminal Breach of Trust-Ingredients of-(:ommon inte~tion­

Meaning of-Indian Penal Code (XLV ojI86o), ss. 409, 34.

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'i:hat 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.

z960

March z6.

320 SUPREME COURT REPORTS [1960]

I960 In appeal the High Court reviewed the evidence on the gronnd of

misdirection to the

jury but found that the two appellants were

Jaikrishnadas liable to account for the cloth over which they had dominion, and

M anohardas Desai having failed to do so each of them was guilty of the offence of

v. criminal breach of trust. The High

Court refused to accept the

State of Bombay appellants' plea that the cloth was old and was eaten up by

white ants and moths. On appeal by the appellants by special

leave:

Shah f·

Held, that to establish a charge of criminal breach of trust,

the prosecution was not bound to prove the precise mode of con­

version, 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 Chose v. The King Emperor, (r929) L.R. 52

I.A. 40, followed.

Shreekantiah Ramayya Munipalli v. The State of Bombay,

[r955] I S.C.R. n77, explained and distinguished.

CRIMINAL APPELLATE JURISDICTION: Criminal

Appeal No. 159

of

1!!57.

Appeal by special leave from the judgment and

order dated February 14, 1956, of the Bombay High

Court in Criminal Appeal No. 1232 of 1955, arising out _

of the judgment and order dated October 3, 1955, of

the Additional Sessions Judge for Greater Bombay in

Case No. 38 V. Sessions 1955.

Purshottam Tricumdas, B. K. B. Naidu and I. N.

Shroff, for appellant No. 1.

Appellant No. 2 did not appear.

H. J. Umrigar, R. H. Dhebar and T. M. Sen, for the

respondent.

1960. March 16. The Judgment of the Court was

delivered

by

SHAH, J.-At a trial held with the aid of a common

jury

in

Case No. 38 of the Vth Session 1955 before the

-

..

3 S.C.R. SUPREME COURT REPORTS 321

Additional Sessions Judge, City Court, Greater Born- r960

bay, the two appellant!> were convicted of offences ..

under s. 409 read with s .. 34 of the Indian Penal Code.· Jaikmhnadas .

. • • Manohardas Desai

The Add1t10nal Sess.ions Judge sentenced the first v.

appellant to suffer rigorous imprisonment for five years state of Bombay

and the second appellant to suffer rigorous imprison-

ment for four years. In appeal, the High Court of Shah .f.

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

tha,t the conviction of the two

appellants for

the

offence under s. 409 read withs. 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 pa.ssed upon the first appellant

to rigorous

imprisonm€mt 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

appel­

lant was the Managing Director and the second appel­

lant 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! 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

CommisHioner. Approximately 1,11,000

yards out of the cloth were dyed and delivered to the

Textile Commissioner. On March 25, 1950, the com­

pany requested the Textile Commissioner to cancel

the contract and by his I~tter dated April 3, 1950, the

Textile Commissioner corop.iied with the request, and

cancelled the contract in respect of 96,128 yards. On

November 20, 1950, the contract was cancelled by the

322 SUPREME COURT REPORTS [l9ti0]

i96o Textile Commissioner in respect of the balance of cloth

J

.k . h d and the company was called upon to give an account

ainsnaas . f h di d.

Manohardas Desai· without any urt er e ay of the balance un ehvered

v. and it was informed that it would be held responsible

State of Bombay for "material spoiled or not accounted for". On

December 4, 1950, the company sent a statement of

Shah f. 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 com­

pany were managed by one R. K. Patel. In June

1952, an application for adjudicating the two appel­

lants 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 mort­

gagee 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

condi­

tion 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! yards of cloth

!< •

3 S.C.R. SUPREME COURT REPORTS 323

were lying with it on account· of the government ai1d z960

the same had to be accounted for, and that the

1

.k . h d

instructions to deliver 51,756 yards to the Chief Man~h;;~a~"n~:ai

Ordnance Officer, Ordnance Depot, Sewri, had not been v.

attended to. The Textile Commissioner called upon State of Bombay

the company to send its representatives to "clarify

the position" and to account for the material. After Shah 1 ·

receiving this letter, the second appellant attended at

the office of the Textile Commissioner and on Novem-

ber 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-

hleached

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

finiBh and had " lost affinity for

.vat colour dyeing". It was also stated that the com-

pany 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 rnatter

as regards

the final amount with respect to the balance

qm1.ntity 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 1,32,404!

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.

Bv 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 ha.d

dominion over that cloth was not questioned :in the

. trial.court. ·The plea that there wer(f.Qthe,r: Dif.eqtqrs

324 SUPREME COURT REPORTS [1960)

x96o of the company besides the appellants who had

1

.k . h d dominion over the cloth has been negatived by the

Ma":•h;;:i,,';'v::.i High Court and in our judgment rightly. Direct

v. evidence to establish misappropriation of the cloth

State of Bombay over which the appellants had dominion is undoubted­

ly lacking, but to establish a charge of criminal

Shah J. breach of trust, the prosecution is not obliged to

prove the precise mode of conversion, misappropria­

tion 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 ordi­

narily 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

expla­

nation for his failure to account which is untrue, an

inference of misappropriation with dishonest intent

may readily be made.

In this case, on a search of the factory on Decem­

ber 29, 1952, the cloth remaining to be delivered by

the company was not found. At the trial, the appel­

lants 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 con~

tended that failure to return the cloth may give rise

to a civil liability to make good the loss occasioned

-

•

3 S.C.R. SUPREME COUR'f REPORTS 325

thereby, but in the circumstances of the case, the first r960

appellant cannot be found guilty of the offence of

1

.k •

11

d

criminal breach of trust. Counsel submitted that the Man:~a~~a:aD:m

first appellant had left Bombay in 1950 and had v.

settled down in Ahmedabad and was attending to a State of Bombay

factory in that town, that thereafter the first appel­

lant was involved in insolvency p:r_oceedings 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 submis-

sion. 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

itnd 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 e'~ery day one basketful of

sweepings was thrown away. He also stated that he

was shown several

placeB in the compound of the

factory where pits had been filled up with these sweep-

ings,

and that he found a

Bmall 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 evid-

ence also discloses

that meetings of Directors were

held from time

to time, but the minutes of the Direc-

tors'

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

expensea for the alleged collection

and throwing away of the sweepings have not been

pr9duced.

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

Shah].

326 SUPREME COURT REPORTS [1960]

'9

60

could not attend the office of that· officer because he

Jaikrishnadas was busy attending to the insolvency proceedings and

Manohardas Desai that he deputed the second appellant to attend the

v. office and to explain and discuss the position. He

State of Bombay then stated, "We had informed the Commissioner

Shah ].

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 Govern­

ment 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 render­

ed 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

disap­

pearance 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 RamayyaMuni­

palli 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 physicalty present. But the essence of liability

under s. 34 is to be found in the existence of a com­

mon intention animating the offenders leading to

the doing of a criminal act in furtherance of the

(l) [1955] 1 s.c R. 1177.

-

3 S.C.R. SUPREME. COURT REPORTS 327

common intention and presence of the offender sought z96o

to be rendered liable under s. 34 is not, on the words

1

.k . h d

of the statute, one of the conditions of its applic-Man~h;;~an:'D:~ai

ability. As explained by Lord Sumner in Barendra v.

Kumar Ghose v .The King Emperor(

1

)

the leading feature State of Bombay

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 involv-

ing 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 commit-

ted by removing goods from a Government depot and

on the occasion of t,he 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 estab-

lished.

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 ligh~

of the facts established and are not intended to lay ~

down a principle of universal application.

The High Court has found that the two appellants

were liable to account for the cloth over which

they

had dominion and they failed to account for the same

and

therefore each had committed the offence of

criminal breach of trust. The High Court observed:

"Iri such a case, if accused Nos. 1 and 2 (Appellants ·

1 & 2) alone were concerned with the receipt of the

goods, if they were dealing with the goods all the time,

if they were receiving communications from the

Textile Commissioner's office and sending replies to

(1) [1924) L.R. 52 I.A, 40, 52,

Shah].

328 SUPREME COURT_ REPORTS [1960]

z960 them, and if the part played by each of them is appa-

l

.k . h d rent from the manner in which they are shown to have

ai "' na as d It · h h" t t h "t · ft

Manohardas Desai ea wit t lB con rac , t en I IS a case o wo persons

v. entrusted with the goods and a breach of trust

Slate of Bombay obviously being committed by both of them".

It was submitted that the High Court erred in

Shah f. 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 a

surplusage.

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 findinge

accepted by us that property of considerable value

has been misappropriated by the first appellant. He

-was the Managing Director of the company and pri­

marily, he had dominicm over the property entrusted

to the company. The second appellant was, though a

Director, essentially a technician. Having regard to

these circumstances, if the High Court has made a

distinction between the two appellants, we ought not

to interfere with the sentence, which by itself cannot

be said to be excessive. .

The appeal fails and is dismissed.

Appeal dismissed.

..

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•