TMI Blog1957 (5) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... h Caveeshar and Parmeshwar Nath Kaul, by a majority verdict and appellants in Criminal Appeals Nos. 55 and 56, Vallabhdas Pulchand Mehta and Charucharan Guha, by an unanimous verdict. The verdicts of the jury were accepted by the Sessions Judge who sentenced the appellants as follows : Appellant Sardul Singh Caveeshar to rigorous imprisonment for three years and a fine of ₹ 2,500. Appellant Parmeshwar Nath Kaul to rigorous imprisonment for five years and a fine of ₹ 5,000. Appellant Vallabhdas Phulchand Mehta to rigorous imprisonment for five years and a fine of ₹ 5,000. Appellant Charucharan Guha to rigorous imprisonment for three years and a fine of ₹ 2,500. 2. The charge of conspiracy related to the period from December 1, 1948, to January 31, 1949, and comprised in all eight persons of whom two Lala Shankarlal Hiralal Bansal (hereinafter referred to as Lala Shankarlal) and Saubhagyachand Umedchand Doshi (hereinafter referred to as Doshi) died before commencement of the trial. One Lala Ram Sharandas alias Ramsharan Lala Haricharan Mahajan (hereinafter referred to as Mahajan) was also a party to the conspiracy. But for some reason or other, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his confederates to obtain the control of the Jupiter, which at the time was in a sound financial position, by acquiring the controlling block of shares of the Jupiter and utilising the funds of the Jupiter itself for the acquisition of such shares. 12. By the date of the conspiracy the Jupiter had investments of the face value of Rs. two crores. It had issued 1,24,966 ordinary shares of ₹ 100 each of which ₹ 15 per share was called up. It had also issued cumulative preference shares. Rai Bahadur Girdharilal Bajaj (hereinafter referred to as Bajaj) and Tulsiprasad Khaitan (hereinafter referred to as Khaitan) were at the time, i.e., in 1948, in control of the Jupiter. These persons owned through the New Prahlad Mills Ltd. the controlling block of shares of the Jupiter i.e., about 63,000 shares of the Jupiter, between themselves and their nominees. After negotiations, conducted first through certain persons called Mayadas and Chopra and then, through one Naurangrai, a bargain was settled with Khaitan for the purchase of this controlling block of shares at ₹ 53 per share for a sum of ₹ 33,39,000. Out of this amount a sum of ₹ 5,39,000 was to be paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under the control of Lala Shankarlal and, according to the prosecution, was a defunct organisation at the time. The plan envisaged by these resolutions was that cash was to be taken out from the Jupiter partly by sale of securities and partly by pledge of securities and that money was to be shown as having been a loan to Caveeshar on the security of his Delhi properties and a further amount as having been invested for the purchase of plots of the Delhi Stores. 14. Lala Shankarlal was to receive these amounts on behalf of Caveeshar and the Delhi Stores, and pay over the cash that would thus come into his hands to Bajaj and Khaitan as per the agreement. This appears - according to the prosecution case - to have been actually done in the following way. The safe custody account of the entire holdings of the securities of the Jupiter with the Bank of India was closed by a resolution of the new directors of the Jupiter dated January 11, 1949, and these securities were taken over into the personal custody of Mehta. Thereafter securities of the value of ₹ 30 lacks were offered for sale through a broker who ultimately could sell only shares of the value of ₹ 15 lakhs. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Naurangrai was placed in possession of funds of ₹ 5,39,000 on his executing a pro-note dated December 23, 1948, (Ex. Z-4) for the said amount in favour of the Tropical by two cheques signed by Lala Shankarlal, one for Rs. one lakh on December 22, 1948 (Ex. Z-1) and another for ₹ 4,39,000, dated December 23, 1948, (Ex. Z-3). These amounts were deposited by Naurangrai in his bank account with the Bikanir Bank at Delhi. On December 26, Lala Shankarlal and Naurangrai and Khaitan met at Bombay and further details were discussed on the 26th and 27th. Khaitan insisted on previous payment of ₹ 5,39,000. Lala Shankarlal asked for the list of securities and shares, the valuation report and the balance sheet of the Jupiter. Naurangrai returned back to Delhi, drew ₹ 5 lacks by way of cash from his bank account and paid there from a sum of ₹ 4,85,000 to Bajaj at Ghaziabad. He came back to Bombay and informed Khaitan of the same. Thereupon the agreement, Ex. Z-171, was executed on December 29, 1948. The agreement was to the following effect. 17. The Tropical was to pay the balance of ₹ 28,54,000 on or before January 20, 1949, and on such payment the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... managing director. Kaul and Mehta were authorised individually to operate upon all the banking accounts in the name of the company with all the banks. Three policyholder directors as also the general manager, Joel, resigned and their resignations were accepted. This was followed by another meeting of the new directorate on January 11. At that meeting the Board passed a number of resolutions about some of which there is considerable controversy and with reference to which there is the evidence of one Subramaniam for the prosecution. One of the undisputed resolutions of that meeting was to withdraw a letter written by the previous general-manager, Joel, dated January 3, 1949. By that letter (Ex. Z-30), Joel had written to the Bank of India, Safe Custody Department, instructing the bank that till further advice, they should not transfer any of the securities held by the bank on behalf of the company. On January 11, 1949, a copy of this resolution was sent to the bank under the signature of Mehta for their information. By another letter of the same date sent by the sub-manager, one Baxi, (Ex. Z-32) the bank was instructed to close the safe custody account and to hand over the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued. A list of securities pledged with the bank for the purpose has been put in evidence. The demand draft was brought to Bombay and credited into the account of the Jupiter in the Currimjee House Branch of the Punjab National Bank at Bombay on January 18. Thus by the sale and the pledge of the Jupiter's own securities, a sum of ₹ 27,99,768 was raised and kept available for use. On January 19, Mehta wrote to the Punjab National Bank, Currimjee House Branch, Bombay, to pay a sum of ₹ 28,15,000 to the Bank of India where the New Prahlad Mills Ltd. (Khaitan) had got 61,394 Jupiter's shares lying case-credit account and to take delivery of those shares on behalf of the Tropical and to debit ₹ 28,15,000 from the Tropical account with them. 18. On the same date, Mehta, wrote also to the Bank of India, requesting it to deliver 61,394 shares of the Jupiter to the Punjab National Bank, Currimjee House Branch, Bombay, with relevant transfer deed against payment of ₹ 28,15,000 with reference to Khaitan's earlier instructions to the Bank by his letter dated January 3, 1949 (Ex. Z-44). On the 19th, Mehta issued a cheque for ₹ 75,000 on the India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Bank in favour of the Tropical or bearer. Both the cheques were written by Guha and signed by Kaul on behalf of the Jupiter. All these five cheques were deposited into the Tropical account the Punjab, National Bank by a pay-in-slip dated January 20, 1949, alleged to be in the handwriting of Guha and signed by him on the 19th. The total of these cheques comes to ₹ 27,65,700. As a result of the pervious instructions given on January 19, by Mehta, to the Punjab National Bank, the Bank paid on January 20, a sum of ₹ 28,15,000, from the Tropical account to the Bank of India and took delivery of 61,394 shares of the Jupiter from the Bank of India and the Punjab National Bank then held those shares for the Tropical in the Tropical account Khaitan was paid on the last date stipulated. It would appear that including the 1,250 qualifying shares previously transferred, the shares transferred by Khaitan fell short of the 63,000 shares, by 356 shares, but the deficit appears to have been made up very shortly thereafter. 20. Now, according to the prosecution, this payment of the Jupiter's money for the purchase of the Jupiter's shares was by means of ex facie payment fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the Tropical to Caveeshar at ₹ 23,50,000 and ₹ 6,50,000 respectively as per agreement with Caveeshar by the managing director, Lala Shankarlal, on December 23, 1948, was confirmed. By resolution No. 14, plots of land and building in Chandni Chowk, Delhi, sold by the managing director, Lala Shankarlal, at a cost of ₹ 2,60,000 to the Delhi Stores, was approved and confirmed. It is alleged that the resolutions of the Jupiter at the meetings dated 11th and 20th above noticed and of the Tropical dated the 22nd disclosed the scheme of camouflaging which has been resorted to, to screen the fact that the payment for the purchase of the Jupiter's shares was directly out of the Jupiter's amount. 22. This according to the prosecution, indicates in its broad outline the manipulations resorted to for the above purposes. There is also evidence let in on behalf of the prosecution of a number of relevant details such as the presence or absence of the requisite entries and papers in the various books of account and other records of the concerned organisation, the Jupiter, the Tropical and the Delhi Stores. Evidence has also been given to show which of the accuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, to the end of December, 1949. 24. Now, we may take up the evidence relating to the second period, commencing from February, 1949, to the end of December, 1949. The background relating to this period, according to the prosecution is, that Lala Shankarlal and his other co-conspirators were fully aware of the necessity of showing the transactions of January, 1949, as no longer outstanding as early as possible, so as to escape direct scrutiny thereinto by the end of the calendar year and it is said that therefore they made some further manipulations with a view to show the moneys advanced to Caveeshar and the Delhi Stores as having been returned before the end of the year. The events which led up to this may now be noticed. On May 25, 1949, there was a meeting of the new directorate of the Jupiter at which Lala Shankarlal informed the directors that Caveeshar was repaying his loan of ₹ 25 lacks and odd and out of that amount a sum of ₹ 14 lacks might be invested in purchasing 40,000 shares of the Tropical and ₹ 11 lacks on the equitable mortgage of the Tropical's head-office building. Ultimately, however, this contemplated loan of ₹ 11 lacks to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the Tropical and this amount as having been paid into the Jupiter's account by Caveeshar and paid again out of it to Raghavji. Out of the other ₹ 3 lacks taken in cash from the Jupiter, ₹ 2 lacks it is said was not paid to Chandrakant but was shown as having been paid by Caveeshar into the Jupiter's account in reduction of the debt owing from him to the Jupiter. The net result of these adjustments was that ₹ 4 lacks out of the Caveeshar loan with the Jupiter was shown as reduced. What became of the other Rs. one lakh is not quite clear. The next transaction is Caveeshar's fresh loan. At the same meeting of the Board of directors of the Jupiter dated November 5, 1949, whereas Raghavji's loan for ₹ 5 lacks was sanctioned, a further loan of ₹ 5,30,000 was authorised to be advanced to Caveeshar against pledge of shares of the People's Insurance Co., the period of repayment being mentioned a two years. This transaction merely meant a book adjustment reducing the loan outstanding against Caveeshar and a fresh loan to that extent on a different security. This transaction further reduced the original indebtedness of Caveeshar to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of ₹ 25 lacks and odd advanced to Caveeshar in January, 1949, on the security of his properties in Delhi was shown as having been wiped out leaving a fresh loan against him on November 5, 1949, for a sum of ₹ 5,30,000 on the security of the shares of the Peoples Insurance Co. 26. It may be recalled here that for the payment of ₹ 28,15,000 to Khaitan on January 20, 1949, the original source of cash, according to the prosecution case, was the sum of ₹ 25,15,000 granted by way of loan to Caveeshar and ₹ 2,60,000 paid to the Delhi Stores for purchase of plots of the Delhi Stores. Out of this the original Caveeshar loan was, by the end of 1949, shown as having been completely wiped out as above stated. So far as the purchase of plots of the Delhi Stores is concerned, it would appear that though in fact the Delhi Stores had no such plots to sell, this transaction was shown as put through in the following way. The resolution of the Board of directors of the Tropical dated January 22, 1949, showed certain plots of land and the building in Chandni Chowk, Delhi, belonging to the Tropical, as having been sold to the Delhi Stores for the price of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Lala Shankarlal. These letter, if true, are revealing, but are of course evidence only against themselves. It is of some importance for the prosecution case against Caveeshar to notice that there are also two letters of this period alleged to be from Caveeshar to Chopra dated March 17 and 30, 1949, the first authorising Chopra to arrange for negotiations to purchase the controlling block of shares of the Empire of India Life Assurance Co. Ltd. and the second offering to bring about a settlement in connection with the claim by Chopra and Mayadas for commission relating to the purchase of the Jupiter's shares. 28. Third period : During the year 1950. 29. The events of the third period as alleged by the prosecution and in respect of which the prosecution has given evidence may now be stated. The main argument on behalf of the appellants before us relates to the admissibility of the evidence relating to this period. The background for the events of this period was - according to the prosecution - the situation that arose from the strong attitude taken by the auditors in the course of their audit of the affairs of the Jupiter for the year 1949, which was taken up at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pronote of Caveeshar and a receipt by him were shown to them in respect of the mortgage loan of ₹ 25,10,650 to Caveeshar. This, according to the prosecution, was followed up by feverish activities of the directors to bring about the screening by repayment, of the transactions from May to December, 1949, viz., (1) Caveeshar fresh loan, (2) Raghavji loan, (3) Misri Devi loan and (4) purchase of the Tropical shares. 31. Repayment of Caveeshar fresh loan of ₹ 5,30,000 to the Jupiter, was done by raising money by sale of the Tropical securities and paying that money to the Jupiter in discharge of Caveeshar's fresh loan. It appears that the Tropical securities of the face value of ₹ 6 lacks were pledged with the Grindlays Bank, New Delhi, for an overdraft account of the Tropical. It is said that these Tropical securities were got released from the Grindlays Bank by substituting for them the Jupiter's securities of the face value of ₹ 5,30,000. The prosecution case is that Kaul, lifted these Jupiter's securities and gave them to Mehta and that Mehta flew of Delhi, handed over these securities to the Grindlays Bank (presumably as belonging to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ala Shankarlal and other directors conceived an idea as early as in March and May, 1949, to purchase the controlling block of shares of the Empire of India from one Ramratan Gupta. There appear to have been some unfruitful negotiations in this behalf for nearly a year. But finally by October 5, 1950, an agreement was executed under which a sum of ₹ 10 lacks was to be paid in advance to Ramratan Gupta and another sum of ₹ 33 lacks and odd within thirty days thereafter and the controlling block of shares of the Empire of India of 2,618 were to be handed over to one Damodar Swarup Seth, a nominee of Lala Shankarlal. This amount of ₹ 43 lacks and odd is said to have been paid up by means of a number of cheques as follows : I.On October 5, 1950 - (i) Cheque by Damodar Swarup Seth (Ex Z-10) for 8,00,000 (ii) Cheque by Bhudev Sanghi in favour of Damodar Swarup Seth (Ex. Z-11) for 2,00,000 Total of I 10,00,000 II. On October 16, 1950, six cheques by Damodar Swarup Seth in favour of - (i) Reyer Mills Ltd. for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India that for the purchase an advance payment of ₹ 20 lacks is to be made. This was followed by a reply from the Empire of India agreeing to the same and an actual payment of the amount by two bearer cheques issued by the Empire of India, one for ₹ 15 lacks dated October 26, 1950, and the other for ₹ 5 lacks dated October 27, 1950. No entry is said to have been made in the Jupiter's records as to the receipt of this amount though an entry of such payment was made in the records of the Empire of India. But it is said that this amount of ₹ 20 lacks was utilised for adjusting the Raghavji loan as well as the purchase of the Tropical shares by the Jupiter. It is the prosecution evidence that ₹ 14 lacks out of ₹ 15 lacks obtained on the bearer cheque of October 26 was paid in cash into the Jupiter account with the Punjab National Bank, Bombay, on October 26 itself showing the same as the sale proceeds of 54,000 Tropical shares which the auditors had objected to as being an unconscionable investment. The actual payment was made into the Jupiter account of the Punjab National Bank, Bombay, by one Bhagwan Swarup and another Bhudev Sanghi. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Punjab National Bank, Tropical Building, Delhi, informing that the sum of ₹ 5,50,000 had been received by them. The next day i.e., on October 11, a cheque for ₹ 5,50,000 was drawn on that Bank by Lala Shankarlal in his capacity as the managing director of the Jupiter. On the reverse of this cheque an endorsement was made by Lala Shankarlal. It is the suggestion of the prosecution that case was obtained on it and that a demand draft for the said amount was obtained from the Grindlays Bank in favour of the Jupiter on behalf of Misri Devi (wife of Lala Shankarlal) on October 12. This draft was signed on the reverse by Kaul. It was received in Bombay and was deposited in the Jupiter's account in the Bank of India. Misri Devi loan was for ₹ 5 lacks and a sum of ₹ 18,062-8-0 was by then due as interest thereupon. On October 16, entries were made in the cash book of the Jupiter showing that the loan of Misri Devi for ₹ 5 lacks with interest was recovered. The excess payment of ₹ 31,937-8-0 was shown in the first instance as credited to suspense account and thereafter as having been refunded to Misri Devi on October 18. Thus the Misri Devi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on January 20, 1949, only 61,061 shares which stood in the name of the New Prahlad Mills were handed over. The remaining 1,939 shares which stood in the names of others (presumably also belonging to the group of Khaitan) were transferred partly before and partly after, making up 63,000 shares. Out of these, 250 shares each were transferred at the outset as qualifying shares, in the names of Lala Shankarlal, Kaul, Mehta, Jhaveri and Doshi, totalling 1,250. These transfers were confirmed by the resolution of the directors of the Jupiter dated December 29, 1948. Another 250 shares we transferred in the name of Sarat Chandra Bose on January 20, 1949, but it would appear that he did not accept the same then and intimated his non-acceptance some time much later. On August 31, 1949, 37,949 shares were transferred to the name of Delhi Stores and 14,601 shares were transferred in the name of the Tropical and two further lost of 4,475 each were transferred in the names of Lala Shankarlal and Caveeshar. On September 13, 1950, out of the lot of 37,949 shares standing in the name of the Delhi Stores, 4,000 shares were kept standing in the name of the Delhi Stores and the balance of 33,949 wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferred in the name of Guha and that very substantial number of shares were transferred in the names of the various other accused. It may also be noticed that three persons who are not accused in the case, viz., Chandulal Ratanchand, Himatlal F. Parikh, Himatlal Harilal Shah, had also very substantial number of shares transferred to them. 42. The case of the prosecution is that for the transfer of all these shares in the names of the various accused no money was paid by them and that it was the distribution amongst themselves of the major portion of the original acquisition of 63,000 shares which, according to the prosecution case, were in fact purchased by utilising the very funds of the Jupiter over which they obtained the control. This, according to the prosecution, completes the chain of misappropriation by the various accused. 43. Since the appeals before the High Court and before us are against the convictions and sentences based on the acceptance of the verdict of the jury against each of the accused, scope for interference on appeal either by the High Court or by this Court is very limited. Hence Mr. Chari for the appellant has pressed before us only some legal con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he later part of 1949 and not the first set of transactions of January, 1949. He contends that evidence relating thereto, which falls wholly outside the conspiracy period, is not admissible under s. 10 of the Evidence Act being too remote and having no direct bearing on the original transactions which are the subject matter of the conspiracy. He points out that the alleged criminal breach of trust was committed on January 20, 1949, when the Jupiter's moneys were paid to Khaitan, and that the object of the conspiracy must be taken to have been achieved when the camouflage through the first Caveeshar loan and the advance said to have been made to the Delhi Stores for purchase of plots was effectuated. He points out that this is a case with numerous details even as regards the events, statements and actings from December 1, 1948, to end of December, 1949. He urges that the events of the year 1950 are equally, if not more, voluminous and have overburdened the legitimate material in the case. This, he urges, has operated to create confusion and prejudice in the minds of the jury. We have been told that on account of this large volume of, what is contended to be, inadmissible e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under the other sections of the Evidence Act such as Sections 6, 8, 9, 11 and 14. This would no doubt be so. But it has to be remembered that some of these sections are widely worded and must receive a somewhat limited construction as pointed out by West J. in his judgment reported in Reg. v. Prabhudas (1874) 11 Bom. H.C.R. 90 when considering the scope of s. 11 of the Evidence Act. 46. Now, there can be no doubt that one of the main relevant issues in the case is whether the loan of ₹ 25 lacks and odd advanced on January 20, 1949, to Caveeshar, as also the moneys said to have been paid to the Delhi Stores by way of advance for purchase of certain plots said to belong to it, were genuine transactions or bogus and make-believe. If they were genuine transactions, by virtue of which money did pass to them on the basis of good security, showing these amounts to be genuine business investments, then it would be difficult to make out that there was any criminal breach of trust. Hence all evidence which would go to show that these transactions are bogus, is certainly admissible. That would be so notwithstanding that such evidence may necessitate reference to and narration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osecution to show the criminality of the intention of the individual accused with reference to his proved participation in the alleged conspiracy, that is, to rebut a probable defence which may normally arise in such a case, viz., that the participation, though proved, was innocent. It has been pointed out to us that in this case each one of the accused has put forward in his defence that he was an unconscious tool in the hands of a towering personality and a master-mind like Lala Shankarlal about whose criminal intentions he was not aware. It was, therefore, quite legitimate for the prosecution to anticipate such defence and to give rebutting evidence. Such evidence would come under s. 14 of the Evidence Act. It is well-settled that the evidence in rebuttal of a very likely and probable defence on the question of intention can be led by the prosecution as part of its case. This is laid down by the Privy Council in Makin v. The Attorney-General for New South Wales L.R. [1894] A.C. 57, 65. To anticipate a likely defence in such a case and to give evidence in rebuttal of such defence is in substance nothing more than the letting in of evidence by the prosecution of the requisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 602, 657, 676, 678 and 689. We have carefully gone through these paragraphs. It appears to us reasonably clear that what have been referred to by the learned trial Judge in these paragraphs are various items of evidence in the prosecution case whose primary object is to make out the bogus character of the transactions in question though they necessarily bring in either the deceased Lala Shankarlal or some other co-conspirator as being a party to these various acts. Such evidence, as already stated, is obviously admissible for that purpose as being links in the chain of evidence relating to the bogus character of the original transactions and not as being in themselves relevant to prove the conspiracy. That the learned trial Judge was alive to this distinction and would not have admitted such evidence in proof of the issue of conspiracy is quite clear from his ruling (interlocutory judgment No. 6) dated August 22, 1955, relating to the admissibility of the document which was marked as Ex. Z-71 in the committal court. The learned Judge in that order has categorically ruled out the admissibility of that document with the following conclusion after a good deal of discussion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, would not be enough to vitiate the convictions. In his case that there has in fact been any such prejudice has not been shown to our satisfaction. Indeed the fact that accused No. 3, Jhaveri, has been acquitted by the unanimous verdict of the jury appears to indicate that the jury has shown itself capable of observing the caution given to them and making careful discrimination. 52. In this view probably the larger question raised by counsel on both sides as to the admissibility of the conduct of a co-conspirator outside the period of conspiracy and especially of deceased co-conspirators like Lala Shankarlal and Doshi and a living conspirator like Mahajan who is not on trial before the Court, in proof of the two main issues in such a case (viz., the existence of the conspiracy and the participation of the individual accuse in that conspiracy) may not require to be dealt with. But as will appear presently the learned Judges of the High Court have held such evidence admissible and have over-ruled, on that ground also, the contention of Mr. Chari as to the prejudice likely to have been caused because of their view as to its admissibility. Hence it is only fair that the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Shankarlal did during the period of conspiracy is binding on these accused persons and the Court has to determine (with reference to that evidence) whether anyone of these accused persons was a conspirator with Shankarlal or with Mahajan or with Doshi. All the evidence that could be led in a trial must be against accused persons and no one else. He, therefore, submits that the evidence that is sought to be led by the prosecution is inadmissible in evidence. 54. Having thus set out the arguments of both sides, the learned trial Judge stated his conclusion as follows : I think that the evidence in a criminal trial that could be led must be admissible against the accused persons only and, therefore, the evidence of actions an statements of another person, apart from the question of it being of the agent of accused, is not admissible. Section 10 (of the Evidence Act) as explained by the Privy Council in Mirza Akbar v. The King-Emperor (1940) L.R. 67 I.A. 336, clearly lays down that the statements and actions of the co-conspirator would only be evidence against the accused persons, provided they are within the period of conspiracy ............. I do not think, therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the duty paid and the duty really due on the above goods. It was ruled that that item was not evidence against B. Referring to this case their Lordships of the Privy Council stated as follows in Mirza Akbar's case (1940) L.R. 67 I.A. 336 : The English rule on this matter (i.e., as to the admissibility of evidence relating to a charge of conspiracy) is, in general, well settled. It is a common law rule not based on, or limited by, express statutory words. The leading case of R. v. Blake (1844) 6 Q.B. 126; 115 E.R. 49 illustrates the two aspects of it, because that authority shows both what is admissible and what is inadmissible. What, in that case, was held to be admissible against the conspirator was the evidence of entries made by his fellow conspirator contained in various documents actually used from carrying out the fraud. But a document not created in the course of carrying out the transaction, but made by one of the conspirators after the fraud was completed, was held to be inadmissible against the other ......... It had noting to do with carrying the conspiracy into effect. 56. Their Lordships in that case also referred with approval to two cases of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspirator with the accused on trial and that it would become relevant on that basis, an argument of the kind which appears to have found favour with the learned Judges of the High Court in this case, as will be presently seen. In Mirza Akbar's case (1940) L.R. 67 I.A. 336 itself the question at issue was about the admissibility on the charge of conspiracy of a statement made by one of the co-conspirators before a Magistrate after arrest. That was held to be not admissible. 58. The point to be noticed in all these cases is that the statements which have been ruled out as inadmissible under section 10 of the Evidence Act were not sought to be made admissible under some other section of the Evidence Act. It is further to be noticed that in the leading case of The Queen v. Blake (1844) 6 Q.B. 126; 115 E.R. 49, the question of admissibility was dealt with as being one under the general law and yet the only criterion of admissibility was that which was special to the cases of conspiracy. There was no suggestion that such evidence could be brought in under any other category of admissibility of evidence. It was ruled in that case that the statement in question was totally ina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ples of agency, to make it the act of all. 59. Now both the English rule as recognised in The Queen v. Blake (1844) 6 Q.B. 126; 115 E.R. 49 as well as the rule in s. 10 of the Evidence Act, confine that principle of agency in criminal matters to the acts of the co-conspirator within the period during which it can be said that the acts were in reference to their common intention that is to say, as held by the Privy Council in Mirza Akbar's case (1940) L.R. 67 I.A. 336 things said, done or written, while the conspiracy was on foot and in carrying out the conspiracy. The Privy Council has explained the basic principle in the following terms : Where the evidence is admissible it is, in their Lordships' judgment, on the principle that the thing done, written or spoken, was something done in carrying out the conspiracy, and was receivable as a step in the proof of the conspiracy. 60. It appears, therefore, that the learned trial Judge was right in his view that the admissibility of evidence of the kind which is now under consideration is rule out on the authority of Mirza Akbar's case (1940) L.R. 67 I.A. 336. The argument that such evidence even if it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonably clear that evidence of acts, statements or writings of a co-conspirator either under trial or not on trial but outside the period of conspiracy, would not be admissible in proof of the specific issue of the existence of the conspiracy. It is necessary to add that my learned brothers prefer to reserve their opinion on this legal question on the ground that it does not call for decision in this case. 63. In any case and as already explained above, in the earlier portion of this judgment, it may happen with reference to the facts of a particular case, that evidence would be admissible of various facts outside the period of conspiracy, if they are relevant on any substantial issue in the case, as for instance (in this case) the bogus character of the loans and the criminal intention of each individual accused. In respect of such issues, the statement, act and writing of an individual co-conspirator outside the period of conspiracy may be nothing more than a link in the chain of evidence relating to such matters or prefatory or explanatory matter within reasonable limits. It would then be admissible in that context but not as affecting the other co-conspirators by its bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails, we see no reason to think that this omission of the learned trial Judge, was likely in this case, to have caused any serious prejudice in the circumstances above stated. 65. There is next a similar point sought to be made out in respect of the non-examination of three persons, viz., Chandulal Ratanchand Shah, Himatlal F. Parikh, and Himatlal Harilal Shah. It is pointed out that shares were distributed to these three persons also along with the distribution of shares to the various conspirators. It is suggested that if they were examined as witnesses they would have been able to show the circumstances in which the distribution of the shares had been made and this would have enabled the accused to show that such distribution was innocent and not by way of dishonest gain. The same considerations as with reference to the non-examination of the handwriting expert apply also to the non-examination of these three persons. It has also been pointed out to us that these transfers of shares to these three persons took place before the amendment of s. 6A of the Insurance Act, 1938 (IV of 1938), and that consequently their non-examination would not have resulted in any serious prej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t you have to consider is whether you are prepared to believe the evidence of Subramaniam or not that no such resolutions were passed at the said meeting. If you disbelieve his evidence on this point, then consider whether apart from his evidence, there is sufficient evidence on record to lead you to the conclusion that no such resolutions were passed. If you come to the conclusion that there is no other convincing evidence to show that the resolutions were not passed, then you will come to the conclusion that they were passed in the said meeting as it was in the minutes. In that case the resolutions having been passed, you have to consider whether the accused bona fide believed that they were authorised to deal with the funds of the company and pay the amount of Tropical Insurance Co. on behalf of Caveeshar. 67. We do not see anything in this portion of the charge to the jury to justify the contention that the prosecution was permitted to rely on alternative sets of facts. It was certainly open to the prosecution to rely in a matter of this kind, both on direct evidence and on circumstantial evidence and to maintain that even if the direct evidence of Subramaniam is not accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the prosecution to direct the jury to take the apparent return back of the moneys of the Jupiter shown as given on the various investments, as a true indication of the alleged misappropriation having been proved to be merely an unwarranted suspicion. In the circumstances, the learned Judge appears to have been right in directing the jury to ignore that portion of the case either for or a against the accused. 69. The next argument which requires notice is about what are said to be certain irrational features of the prosecution case. It would appear that in the arguments addressed by the defence counsel to the jury in the trial court a number of circumstances relating to the various alleged manipulations have been pointed out which, on the assumption that the accused were parties to the conspiracy as charged, could only be characterised as irrational conduct of the various accused concerned and which circumstances, it was urged, must therefore be taken to be prima facie in their favour as supporting their defence, viz., that they had no knowledge of the criminality of the transactions which might have actuated the mind of Lala Shankarlal, but that so far as they were concerned t ..... 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