TMI Blog1962 (9) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... h ss. 467 and 468, I.P.C. and also acquitted Moti Lal of the offence under s. 417, I.P.C. It, however, upheld the conviction of all the appellants under s. 120B, I.P.C. as well as the conviction of Tulsi Ram, Beni Gopal and Babu Lal of offences under s. 417 read with s. 420, I.P.C. As regard Lachhimi Narain it maintained the conviction and sentences passed by the Additional Sessions Judge in all respects and dismissed the appeal in toto. The relevant facts are as follows : The appellants, other than Chandrika Singh, are members of a Marwari trading family belonging to Rae Bareli and Chandrika Singh was their employee. The relationship amongst Lachhimi Narain and the first four appellants in Crl. A. 62 of 1958 would be clear from the following genealogical table 2. It is common ground that Lachhimi Narain was the karta of the family and the entire business of the family was done under his directions and supervision. This fact is material in view of the defence taken by the first four appellants in Crl A. 62 of 1958. 3. It is common ground that the family carried on business in the names and style of (1) firm Beni Gopal Mohan Lal with head office at Rae Bareli, (2) fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bareli and Partapgarh districts to various stations in West Bengal, including the city of Calcutta. The person concerned used to execute forwarding notes and obtain railway receipts in respect of such consignments. These receipts were prepared by the railway authorities in triplicate, one being given to the consignor, one sent to the destination station and one kept on the record of the forwarding station. The consignor's foil of the railway receipt was then taken to Rae Bareli and there it was tampered with by altering the number of bags, the weight of the consignment and the freight charges. All this was admittedly done by munims under direction of Lachhimi Narain himself. These forged railway receipts were then endorsed by their consignor in favour of one or other of the firms Beni Gopal Mohan Lal, Tulsi Ram Sohan Lal, Sagarmal Soorajmal or Bhairo Prasad Srinivas and thereafter these firms drew large sums of money commensurate with the huge quantities of goods specified in the forged railway receipts and on the security of these railway receipts drew demand drafts or hundis in favour of various banks and two firms in Kanpur as payees on a firm styled as Murarka Brothers, Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumably because they have been destroyed after the hundis supported by them were honoured and the receipts received from the banks or the firms which were payees under the hundis. It is the prosecution case that the banks and the firms obtained discount charges of one or two annas per cent for the amounts paid by them, although had the family firms obtained these amounts by way of loan they would have been charged interest at 6 to 9 per cent on these amounts. 7. Towards the end of December, 1949, the Kanpur branch of the Bank of Bikaner and the Bank of Bihar received back a number of hundis unhonoured along with corresponding forged railway receipts. The Bank of Bikaner received five hundis for an amount of ₹ 3,52,000/- out of which hundis worth ₹ 1,82,000/- had been negotiated by the bank directly with the firm Bhairo Prasad Srinivas and hundis worth ₹ 1,70,000/- through Nand Kishore Sitaram. Six hundis were received back by the Bank of Bihar, Kanpur, valued at ₹ 1,92,000/-. These were negotiated through Matadin Bhagwandas. The bank adjusted the account by debiting Matadin Bhagwandas with the amount. These unpaid payees instituted inquiries from the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P 1560, which is a letter addressed by Mr. Dave, Under Secretary to the Government of U.P., Home Department to the District Magistrate, Kanpur informing him that the Governor has been pleased to grant sanction to the initiation of proceedings against the persons mentioned in that order. But according to Mr. Mulla, this communication cannot be treated either as a valid sanction or its equivalent . He points out that for a sanction to be valid it must be by a written order signed by the sanctioning authority and that no one can function as a substitute for the sanctioning authority nor can oral consent, even if it was given, be deemed in law to be valid. He further contended that the document on record does not show on its face that the facts of the case were considered by the Governor. His argument is that had the true facts of this case been placed before the Governor, that is, the firm Bhairo Prasad Srinivas never sought its appointment as sole importer of cloth for Rae Bareli district, that the firm was in fact prevailed upon by the Deputy Commissioner to take up the work and help the Government in a critical situation, that though large credits were undoubtedly obtained by maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at Kanpur, A presumption would, therefore, arise that sanction to which reference has been made in the document, had in fact been accorded. Further, since the communication is an official one, a presumption would also arise that the official act to which reference has been made in the document was regularly performed. In our opinion, therefore, the document placed on record prima facie meets the requirements of s. 196A of the Code of Criminal Procedure and, therefore, it is not now open to the appellants to contend that there was no evidence of the grant of valid sanction. We, therefore, overrule the contention raised by learned counsel. 12. The next point urged by Mr. Mulla is that the charge as framed jumbles up several offences and, therefore, has led to miscarriage of justice. This also is not a point which had been taken up in the courts below. That apart, we do not think that there is any substance in this point. The objection is with respect to the first charge which reads as follows : That between the months of May 1949 and December 1949 both months inclusive, in the district of Rae Bareli, Pratabgarh and Kanpur, Sri Niwas, Lachhimi Narain, Tulsi Ram, Beni Gopal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc. A person can be said to have done a thing dishonestly if he does so with the intention of causing wrongful gain to one person or wrongful loss to another person. Wrongful loss is the loss by unlawful means of property to which a person is entitled while wrongful gain to a person means a gain to him by unlawful means of property to which the person gaining is not legally entitled. Learned counsel contended that there has been no wrongful loss whatsoever to the banks and the two firms which discounted the hundis drawn by one or the other of the firms owned by the family. The High Court has held that these firms did sustain a wrongful loss inasmuch as they got very meagre amounts for discounting the hundis whereas had the true facts been known to them they would not have discounted the hundis though they may have advance loans and charge interest at between 6 and 9% on the amounts advance. It was because of the fraudulent misrepresentation made to the banks and the firms that they lost what they could have otherwise been able to obtain and thus wrongful loss has been caused to them. We have been taken through a large number of documents on the record and it is clear from these doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the documents to show the date of presentation. Therefore, these documents do not help the State at all. Apart from that we may mention that it was for the Bank to take care to see that there was no delay in the presentation of hundis and if they themselves delayed they had to take the consequences. Further, we may point out that if the Bank was not able to earn interest or earn only very little interest in these transactions for as long as ten days that would have been so in all the transactions, that is, not merely transactions which were supported by forged railway receipts but also transactions which were supported by genuine railway receipts. There is, therefore, no substance in the contention of Mr. Mathur. 15. Mr. Mathur then contends that the fact that the banks stood the risk of losing their moneys because the railway receipts which supported the bills were forged documents, wrongful loss must by deemed to have been caused to the banks by the action of the firms. There is considerable force in this argument but we do not wish to express any final opinion thereon, because in our opinion the firms of the appellant have undoubtedly made and unlawful gain. 16. No doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the real basis of discounting bills was not merely the credit of the appellant or the security afforded by these bills. This evidence is in consonance with the normal banking practice of discounting hundis only when they are supported by railway receipts of consignments despatched by the drawer to outside parties. No doubt, bills or hundis are themselves securities and taking into consideration the credit of the drawer of a hundi a bank may conceivable discount such hundis but where the hundis are themselves supported by railway receipts it would be futile to say that the railway receipts were not intended by the parties to be regarded as further security for discounting the bills. Where a consignor of goods draws a hundi for the price of the consignment on some bank or firm and supports that hundi with the railway receipt obtained by him in respect of the consignment, the party in fact pledges they consignment to the bank discounting the hundi and, therefore, in such a transaction the railway receipt cannot be regarded as anything else than a security for that transaction. If that security turns out to be worthless or practically worthless because the value of the consignme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of s. 463 what the learned Judge has observed is understandable and may be right. Here, however, we are concerned with the offence under s. 420, I.P.C. which speaks of dishonest inducement as a necessary ingredient. A Baker, J., has rightly pointed out : As dishonesty involves a wrongful gain or wrongful loss, obviously it does not apply to the present case where no pecuniary question arises. 18. But, in an offence under s. 420 I.P.C. a pecuniary question necessarily arises. The first part of s. 464, I.P.C. provides that a person is said to make a false document who dishonestly or fraudulently makes, signs etc., a document with a particular intention and covers case both of acts which are dishonest and acts which are fraudulent. Where no pecuniary question arises the element of dishonesty need not be established and it would be sufficient to establish that the act was fraudulent and, therefore, it may be, as the learned Judge has held, that where as act is fraudulent the intention to cause injury to the person defrauded must be established. But where the allegation is that a person has dishonestly induced another to part with property something different has to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs that the learned Additional Sessions Judge convicted both these appellants for an offence under s. 417/420, I.P.C. The learned Additional Sessions Judge has also held that the appellants, Babu Lal and Moti Lal, were likewise guilty of offences under s. 417/420, I.P.C. The conviction and sentence passed on Moti Lal was set aside by the High Court. In our opinion the prosecution has failed to establish that Babu Lal had either drawn or negotiated hundis supported by forged railway receipts. The material upon which the learned Additional Sessions Judge has relied and, apparently, on which the High Court has relied, does not tough these matters at all. Whatever other part Babu Lal might have played in these transactions his actions do not bring home to him the charge under s. 420, I.P.C. For this reason his conviction and sentence for the offence of cheating must be set aside and we accordingly do so. 20. The High Court has affirmed the conviction of Tulsi Ram and Beni Gopal for offences under s. 417/420, I.P.C. As already indicated there is evidence to show that both these persons had taken part either in the drawing or in the negotiation of hundis which were supported by forge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... banks. By presenting a cheque to the Bank of Bikaner Kanpur, and by cashing another cheque, Baby Lal had operated on the bank account to which the proceeds of certain hundis supported by forged railway receipts had been credited. These facts, taken in conjunction with the acts of payment of hundis accompanied by forged railway receipts would be sufficient to establish his connection with the conspiracy. In addition to this circumstance, he also signed or endorsed 32 indemnity bonds on the strength of which delivery of a large number of consignments, railway receipts in respect of which had been forged, was ultimately taken. 23. Similarly as regards Moti Lal the following acts have been established : (1) signing of 23 forwarding notes in connection with consignments, the railway receipts of which were tampered but which supported certain hundis drawn by the firm; (2) he signed or endorsed 52 indemnity bonds on the strength of which delivery was taken of the consignments, The railway receipts in respect of which were tampered with and yet were offered as security to banks or firms which discounted hundis for the value of these consignments. These circumstances are sufficient to ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remaining there reasons would merely indicate that Chandrika Singh had paid the hundis which it was his duty to do. It may be that along with those hundis forged railway receipts were also submitted to him but from this one circumstance it would not be legitimate to infer that he had any hand in the conspiracy. At worst what could be said is that his suspicion could have been aroused but nothing more. Therefore, in our opinion, none of the reasons given by the High Court supports the conclusion that Chandrika Singh was a party to the conspiracy. Our attention was, however, drawn to a further reason given by the learned Additional Sessions Judge. That reason is as follows :- Chandrika Singh was asked to explain as to what he did with the forged R/Rs. and why he did not take delivery on them at Calcutta when they were endorse in favour of Murarka Brothers. To this he replied that he gave the R/Rs. of Calcutta to Calcutta Commission agents, and he sent other R/Rs. to Raj Bahadur Singh munim of Bhairo Prasad Sri Niwas. But we find (sic) is that delivery in all these cases have (sic) been taken by the Calcutta merchants and the merchants of other West Bengal stations on indemnity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age when these transactions were commenced and today he is 65 years of age. If we affirm the sentence of imprisonment for a period of 7 years it will mean that he will be in jail till he is 72 years of age and perhaps in failing health. No actual loss has resulted to anyone by reason of the fraud practised by him and by the family. He and other members of the family have suffered a great deal monetarily during all these years and have also suffered in their reputation. We, therefore, think that it would be sufficient if we sentence him to imprisonment for three years and raise the fine imposed upon him by the learned Additional Sessions Judge from ₹ 5,000/- to ₹ 10,000/- or in default to undergo rigorous imprisonment for one year. We modify the sentences passed on him accordingly. We would make it clear that these sentences are in respect of all the various offences of which Lachhimi Narain has been convicted and that we are not imposing separate sentence or sentences in respect of each offence for which he has been convicted. 26. In so far as the remaining four appellants are concerned we think that no useful purpose would be served by sending them to jail at this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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