TMI Blog1979 (10) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... icient ground for reducing the sentence The theoretical explanation may sound plausible but in the facts and circumstances obtaining in the Laxmi Bank, it seems to us clear that after knowing these two features it is difficult to accept accused No. 24's statement that he continued to believe that the heavy cash balances as disclosed by the cash books were real. The bail of appellants 2, 3, 4 & 24 are cancelled and they will now surrender and serve out the remaining portion of the sentence. - CRL. A. 179 OF 1972 - - - Dated:- 10-10-1979 - S. Murtaza Fazal Ali and A. Sen, JJ. JUDGMENT 1. These appeals by special leave are directed against the judgment of the Bombay High Court by which the conviction and sentence of the appellants under Sections 120B, 477A and 409 of the Indian Penal Code were upheld or modified to some extent. So far as appellant No. 1 is concerned, who was also accused No. 1 at the trial, his appeal is limited to the question of sentence as also the nature of the offence. The special leave granted to A. 24 is open. Since all these appeals were decided by the High Court by one judgment we also propose to dispose of the appeals by one common judgment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substitution of one chose in action for another will not amount to a breach of trust or conversion to his own use by the accused. In R. K. Dalmia v. Delhi Administration Court while relying on authorities of the Lahore Court and other courts has clearly found that a director is not only an agent but is in the position of trustee. This has been held in People Bank v. Harlkishan Lal AIR 1936 Lah. 408 at p. 409 which was approved by this Court. In this connection this Court observed as follows: Both Dalmia and Chokhani therefore had dominion over the funds of the Insurance Company. 6. In People Bank v. Harikishan Lal (supra) it was stated: 'Lal Harikishan Lal as Chairman is a trustee of all the moneys of the Bank'. 7. In Palmer's Company Law, 20th Edn. It is stated at p. 517. Directors are not only agents but, they are in some sense and to some ex tent trustees or in the position of trustees. 8. Similarly this Court pointed out that in case of G.E. R. Co. v. Turner (1872) 8 Ch A 149 at p. 152 Lord Selborne observed: The directors are the mere trustees or agents of the Company, trustees of the company money and property-agents in the transaction, which they enter into o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant as managing director had sufficient dominion and control over the property and through the conspiracy hatched by him with his conspirators he was able to misappropriate a sum of Rs. 43.95 lakhs and thus deprived most of the depositors of the bank of the moneys which they had deposited with Laxmi Bank. It is manifest that a conspiracy is always hatched in secrecy and it is impossible to adduce direct evidence of the same. The offence can be only proved largely from the inferences drawn from acts or illegal omission committed by the Conspirators in pursuance of a common design which has been amply proved by the prosecution as found as a fact by the High Court 15. In the instant case, the conspiracy to misappropriate was executed with such ingenuity, dexterity and adroitness that even the inspectors of the Reserve Bank could not detect the irregularities and false entries at first inspection of the accounts which was later found out by a thorough examination of the false entries made in the Akola Branch and other branches of the Bank in the Mofussil. The High Court has dealt with these aspects at great length and we agues with the findings arrived at by the High Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its. In these circumstances, therefore, we do not see any reason to reduce the sentences of any of these appellants. If these appellants are not keeping good health the Jail Superintendent would naturally take care of them and get them properly treated in the Jail Hospital and if any specialist is needed his service may also be requisitioned. For these reasons we, therefore, dismiss the appeal of appellants 2 to 4 without any modification in the sentence. 18. Lastly, we come to the case of appellant No. 24. The learned Counsel, appearing for him submitted that there was no legal evidence on the record to show that this appellant had any know ledge about the conspiracy but it was contended that he had, in fact, tried to improve the affairs of the Bank. This aspect of the matter has been fully considered by the High Court at p. 153 of the paper book and after considering number of circumstances the High Court found as follows: In fact, the material discussed above squarely brings home knowledge of these two things to accused No. 24. It is equally clear that after having acquired such knowledge within the first few months of his taking over as the General Manager, he has allowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank for the purpose of its daily requirement he could easily realise that these heavy cash balances must be un real and in fact there were shortages of cash. Cash books disclosing large or heavy cash balances and continuous borrowing by Laxmi Bank for its daily requirements these two features could have no other meaning but that heavy cash balances were not real and included shortages.... The theoretical explanation may sound plausible but in the facts and circumstances obtaining in the Laxmi Bank, it seems to us clear that after knowing these two features it is difficult to accept accused No. 24's statement that he continued to believe that the heavy cash balances as disclosed by the cash books were real. 22. In view of the detailed discussions of all the evidence and circum stances by the two courts below, we are unable to find any grave error of law so as to vitiate the findings of the High Court and call for our interference. For all these reasons, therefore, all the appeals are dismissed with the modification in case of appellant No. 1 as indicated above, The bail of appellants 2, 3, 4 24 are cancelled and they will now surrender and serve out the remaining portion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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