TMI Blog1993 (2) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... t the two respondents by a Metropolitan Magistrate at Bombay. After recording the finding that, undoubtedly a substantial amount of Rs. 7,00,000/- has been misappropriated from the funds of M/s. Turner Morrison and Co. Ltd., the learned Trial Magistrate has proceeded to acquit the two accused, the first of whom was a Director and the second an Executive of the Company in June/July, 1969. The record of this case is rather voluminous, the hearings proceeded almost day-to-day for close to three months and the number of authorities cited was sizable. Mr. K. M. Desai, Senior Counsel and one of the veterans on the criminal side, has taken me through the entire record virtually thread bares and in his own imitable style has done an excellent job. It was equally a pleasure to hear Mr. M. A. Rane, Senior Counsel and one of the finest at the Bar who appeared on behalf of respondent No. 1 as also Shri Baadkar, who represented respondent No. 2, and Shri B. R. Patil, the learned A.P.P. on behalf of the State. The judgment was required to be reserved due to the change of assignment after the vacation and it has taken my considerable time to re-examine the entire record and the authorities. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mundhra, who thus obtained full control of Turner Morrison and Co. Ltd. His claim was decreed on 25th January, 1964. Mr. Mundhra did not make the payment and obtained delivery of the 51% shares as per decree whereupon M/s. Hungerford took out master summons praying for directions to implement the decree by paying Rs. 86,60,000/- or in default that the decree should be rescinded. The master summons was dismissed and M/s. Hungerford went in appeal to the Supreme Court. The Supreme Court on 9th March, 1972 (Reported in .) allowed the appeal of Hungerford rescinding the decree with effect from 11th April, 1967 and directed the Receiver to hand over 2295 shares to the Registrar of the Supreme Court who, in turn, was directed to hand them over to Mr. Hoon, Liquidator of Hungerford. After this Judgment at the request of Hungerford, the Company Law Board by notice dated 15th February, 1972 called an Annual General Meeting of the Company on 6th July, 1972. The Annual General Meeting was convened and the elections were held. However, on 4th July, 1972, Mr. Mundhra filed a writ petition in the Calcutta High Court challenging the validity of the notice and obtained an order that the results of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,00,000/-. On the same day, they executed pronotes of Rs. 10,00,000/- with the Maharashtra Bank (Exhibit K). On the same day, they executed continuing security in favour of the Bank of Maharashtra (Exhibit L). On the same day, they executed Hypothecation Deed (Exhibit N) in favour of the Bank. On the same day, accused No. 2 issued a cheque for Rs. 7,00,000/- in favour of Bank of Maharashtra (Exhibit U) and sent it to the Bank and on the same day the Bank of Maharashtra draw an R.B.I. cheque (Exhibit I) for Rs. 7,00,000/- in favour of United Commercial Bank. The abnormal hurry is significant. 6. At this stage, there appears to have been some change of decision as a result of which by letter dated 1st July, 1969, the agent of the Maharashtra Bank requested United Commercial Bank, Fort Branch, to refund the amount per bearer by R.B.I. cheque in their favour. The UCO Bank refunded the amount preparing two vouchers, one for debit and other for offset on 1st July, 1979. On the same day, accused No. 2 issued a cheque (Exhibit V) in favour of Maharashtra Bank instructing the Bank to issue a cheque in favour of Kashiprasad Kedia and Co. by letter (Exhibit T) dated 30th June, 1969. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to Kashiprasad Kedia, who was a supplier of the Company, made its way through different Bank accounts and with the assistance of various family members back to Mr. Mundhra. 8. After the new management took over the Company on 25th September, 1972 and several of the previous dealings were probed, the complainant, Mrs. Wellingkar, states that in or about February, 1973 she came across voucher No. 4755 dated 2nd July, 1969 debiting Rs. 7,00,000/- to the account of Kashiprasad Kedia and Co. and showing it as advance for purchase of raw material. It was clear from the records that no material was supplied against this voucher and Kashiprasad was, therefore, called. He is alleged to have stated that the real transaction was a paper entry and that he had passed on the entire amount on the same day, i.e., 1st July, 1969, to Basant Trading Company. The explanation put forward by him for having been a party to the transaction was that he was to pay interest at 9 per cent per annum to the Company; whereas Basant Trading Company was to be charged interest at 12 per cent per annum leaving him with a profit of 3 per cent. There is a document on record (Exhibit 8) which is a letter dated 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson to person and firm to firm, the entire chain of persons and firms, as of necessity, had to be arraigned as party-defendants because this was a requirement of the Code of Civil Procedure. In criminal law, however, the culpability as far as the criminal offence is concerned could devolve only on the persons who had dominion and control over the Company's funds in the first instance and who were responsible for the act of criminal breach of trust. Whether the remaining persons can be said to have been part of the conspiracy or can be said to have abetted in the offences is a matter of evidence and inference, but it can never be open to an accused to argue that merely because other accused are not in the dock with him that the prosecution should fail. 10. Undoubtedly, in a situation such as this, by leaving out the remaining persons, the prosecution does run the risk of providing an escape of route to an accused who could always contend that it was the others and not he who committed the offence and thereby escape the consequences. However, Shri Desai is right when he points out that if the prosecution can establish the guilt of the accused individually, the fact that their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he received the two cheques in question, but states that he was not aware at the time that these cheques given to him were brought from the account of Hind Products and of Tapuria and Sons. He admits that these cheques were deposited in his account, but this was not done by him personally and he further admits that Exhibit P-3 is the statement of his account with the Central Bank of India, Calcutta. 12. As regards his part of the transaction, he states that it is incorrect to allege that accused No. 2 suggested to Kedia that a loan of Rs. 7,00,000/- would be given to him which he was, in turn, to pace on to Basant Trading Co., that he would get interest at the rate of 12 per cent per annum from Basant Trading Co., that he should pay 9 per cent per annum to Turner Morrison and retain 3 per cent. He denies any knowledge about the alleged voucher No. 4755 dated 2nd July, 1969 showing payment of Rs. 7,00,000/- to PW 4 as advance for purchase of raw materials. He admits that Exhibit P-1 is an entry in the cash book dated 2nd July 1969 to the above effect and Exhibit P-2 is a debit entry in the ledger. He states that he was not aware of these entries nor could he explain why this amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der his signature and also the specimen signature card along with accused No. 1. He admits that he issued a cheque for Rs. 7,00,000/- dated 28th June 1969 (Exhibit U), but states that he did not instruct the Bank to issue a cheque in favour of UCO Bank against this cheque and denies the knowledge with regard to who gave such instructions. He admits to have addressed communications (Exhibits Q, R and S) and also to have signed cheque (Exhibit V) dated 1st July 1969 and to have sent the instruction letter dated 30th June 1969, which is Exhibits T. As regards the voucher (Exhibit X), he states that he cannot say without seeing that voucher as to whether it was signed by Mokashi as Accounts Officer and signed by him in token of approval of payment. He admits the entry in Exhibits P-1 and P-2, but states that they are not made by him. He denies to have made any proposal to PW 4 Kedia with regard to the amount of Rs. 7,00,000/- and denies any knowledge as to how the amount paid to PW 4 was debited by his Bankers. According to him, he knew nothing with regard to the further movements of this money. It is his case that being an Executive of the Company, he issued the cheque (Exhibits U and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r witness for the prosecution before the Trial Court, and quite wrongly. Shri Desai started with the submission that the evidence of Kashiprasad Kedia can be safely relied upon, but at the same time advanced an alternative contention that even if his oral evidence were to be rejected completely, there was enough documentary evidence on record to completely establish the prosecution case. He was critical of the conclusion of the learned Magistrate who, while accepting the position that an amount of Rs. 7,00,000/- had been misappropriated, still held that the present accused cannot be convicted for that offence. In totality, Shri Desai contended that the Judgment was so wrong that this Court ought to set it aside as this case squarely came within the ambit of those proceedings where the verdict of the Trial Court was faulty. Shri Desai categorised the judgment as being legally perverse and, therefore, vulnerable. 17. As against this position, both Shri Rane and Shri Badkar have forcefully contended that the law relating to appeals against acquittals is well-crystallised and that this Court is precluded from interfering with a judgment if the Trial Court has evaluated the evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion could have even done a better job is also equally inconsequential. On the contrary, after hearing this proceeding for several months, I am of the view that under the circumstances, the prosecution has done an admirable job. Where it appears, therefore, that the material on record does establish the charges where it appears that the learned Magistrate has gone wrong at more than one of the crucial stages and where it further appears that in the ultimate result in a serious offence of the present type that a total miscarriage of justice has resulted, this Court is virtually obliged to interfere in the present proceeding. Being conscious of the limitations in my way, I have meticulously evaluated the entire record before concluding that there is valid justification for variation of the Trial Court's order. 19. The learned Trial Magistrate has entered into a rather lengthy debate with regard to the admissibility of the evidence of PW 4 Kashiprasad Kedia. I was not altogether surprised to find from the record that after Kashiprasad Kedia had deposed before the Trial Court prior to framing of the charge that he was not available to the prosecution thereafter. For a crucial wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain enquiries about his where-abouts. If stringent steps were taken with the assistance of the police machinery, he would most certainly have been produced and that consequently, this is a case in which the prosecution has deliberately kept back the witness and, therefore, that the evidence ought to be discarded. 20. I do not need to labour on the main question regarding the admissibility of Kashiprasad's evidence which was earlier agitated before this Court. The learned Magistrate in his judgment has dealt with the provisions of Ss. 32(3) and 33 of the Evidence Act as also the decisions reported in the case of Emperor v. Savlimiya Miyabhai (1944)46BOMLR509 ; Nathu Ram v. The State, and Bakhashish Singh v. The State of Punjab, 1957CriLJ1459 , in support of the proposition that non-availability of the witness at a later stage of the same proceeding will not render the evidence inadmissible since an opportunity to cross-examine was afforded to the defence at the time when the witness was examined. The learned Magistrate has also dealt with the provisions under S. 138 and has considered the decisions reported in the cases of State of Sikkim v. Pemba Sherpa; State v. Baldev Ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een completely handicapped in its right of testing and demolishing his evidence. The Division Bench in that case was dealing with a prosecution under the Customs Act where the situation was entirely different. We are here concerned with a private prosecution where the witness was made available for cross-examination. He was, in fact, cross-examined by one accused and the second accused, who had the opportunity of cross-examining him, declined to do so and further the matter having been carried to the High Court, there is a final decision of this Court in terms holding that the evidence can be looked at and can be used, but that it will have to be treated with caution. In this situation, it would be incorrect to go behind that decision. The earlier approach to this Court whereby the plea that the evidence be disregarded was canvassed but has failed. 23. The oral evidence in this case with the exception of the star witness, Kashiprasad Kedia, consists mainly of formal evidence. As indicated by me earlier, this is basically a case on documents and the fact that the amount of Rs. 7,00,000/- was paid to Kashiprasad Kedia by the Company, that it moved through the various channels and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. on the same day. He was indicated similar transactions with Alcock Ashdoon Co. Ltd. of which Company accused No. 1 was a Director and accused No. 2 Mr. Agarwal was the Commercial Manager. He has been asked about the letter dated 14-9-1970 by which document addressed to accused No. 1 he has requested that the transaction be squared up as he was worried about having to account for the receipt of the amount of Rs. 7,00,000/- which apparently was creating a tax liability to him. He has also deposed about a letter dated 20th October 1972 (Exhibit C), which document is very crucial as I shall presently indicate. 25. The letter dated 14th August 1970 as translated into English, which is addressed by this witness to accused No. 1, reads as follows :- Respected Sir, On 1-7-69, from Turner Morrison Ltd. Seven Lacs of Rupees were given by you through me to Basant Trading Co. and on 18-12-69 from Alcock Ashdown Co. Ltd. Rupees One and Half Lacs were given to Kumar Trading Co. and twenty five thousand rupees to Hind Products Pvt. Ltd. also. These three entries you write off as soon as you can. Otherwise, I find myself unable to keep these entries in my accounts. From your side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar address of the above mentioned Kumar Trading Co. I also enclose herewith letter dated 11th August 1970 from Alcock Ashdown Co. Ltd., and my letter dated 14th August 1970 sent by Regd. Post to Mr. Kashinath Tapuria to adjust these fake entries standing in my books, amounting to Rs. 8,75,000/-. These letters speak for themselves. I may further add that I have supplied lakhs of rupees worth of materials both to Melet Welding Works and Alcock Ashdown Co. Ltd. and every time I took the genuine payment I signed a voucher in both the Companies. You will not find any vouchers signed by me in respect of these three bogus payments amounting to Rs. 8,75,000/-. I may add here that all the monies given by them to me were deposited in the United Bank of India, Sir P. M. Road, Bombay, in the account of Kashi Prasad Kedia Co., and immediately these monies were withdrawn and cheques given out to the Companies nominated by Mr. K. N. Tapuria, Dr. R. M. Agarwal and other accessories. I am a simple and honest dealer in iron and steel who believed and trusted the word of Mr. Tapuria and Dr. Agarwal and other Directors of Turner Morrison Co. which is supposed to be a large concern who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s own bank account. If accused No. 1 was not the Chief Architect of the scheme and if it was not a clandestine transaction which had nothing to do with the supply of goods, there would have been no question of Kashiprasad requesting him to reverse the entries and relieve him of the possible tax complications. Shri Desai links this letter directly with the voucher No. 4755 and the entry at folio 29 in the suspense account of Kashiprasad Kedia showing an advance of Rs. 7,00,000/- and submits that this material conclusively establishes the culpability of the accused. In addition to this, Shri Desai also placed reliance on Kedia's statement recorded by the Income Tax authorities (Exhibit 14) wherein this witness has, in terms, indicated the entire transactions relating to the receipt by him of Rs. 7,00,000/- from M/s. Turner Morrison Co. and his admission that he virtually provided a book entry to this amount in the hope that he would earn 3% interest by lending his name to the transaction. He has even indicated in this statement that he attempted suicide in the year 1970 when he realised that he was seriously involved in this transaction. 27. As regards the second letter, Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Authorities, he mentions 4%. What is contended by the learned Counsel is that their definition of Kashiprasad Kedia as a man of straw is an understatement and that the letters attributed to him and statements attributed to him cannot support the evidence which is otherwise weak because one set of unreliable evidence cannot be corroborated by another set of equally unreliable evidence principally since the central figure from whom all this material emanates is thoroughly dishonest. As an illustration, the learned Counsel referred to the letter dated 20th October, 1972, namely, the second letter reproduced above and they have pointed out that Kashiprasad Kedia was incapable of using either words such as blatant or the quality of language is to be found in the letters nor did he have the capacity to get such a letter drafted. According to learned Counsel, it is quite obvious that this letter was prepared by Mr. Moon, the new Managing Director, and that Kashiprasad Kedia signed it in order to shift the blame on the accused and foist them from the liabilities that were fastened on him. 29. As indicated by me earlier, the learned Magistrate found it difficult to accept thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a witness and had no intention of keeping him back. A scrutiny of his evidence also shows that no appreciable success was achieved by the defence in the course of cross-examination. The time has come when this Court will have to take judicial notice of the so-called disappearance of witnesses more so when it happens in the course of a trial. Even though there is not the slightest direct evidence on record that the accused who benefit totally out of such a situation had a hand in this, one cannot rule out the possibility. Undoubtedly, the defence is entitled to insist that no adverse inference be drawn unless there is concrete material on record to establish that Kashiprasad Kedia's non-availability was ensured by the accused. It would be absurd to except such evidence, but this Court will not shut its eyes to several unhealthy and criminal practices that have now become rampant in the trial Courts, the most effective of which is the tamper with the prosecution evidence. Hostile witnesses and witnesses who vanish presuppose activity behind the scenes by somebody. Where there are only two parties and the prosecution could never have done it, the answer is inevitable. In this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iprasad Kedia or for that matter by him to the Company and, more importantly, that the amount was never retained by Kashiprasad Kedia, but was passed on to Basant Trading Company immediately in keeping with the instructions given to him. 32. That brings me to the crucial aspect of the matter, namely, the culpability of accused Nos. 1 and 2. It is Kashiprasad Kedia's case in his evidence before the Court that it is accused No. 2 who put forward the proposal to him with regard to the amount of Rs. 7,00,000/-, but in his letter dated 14-8-1970 he squarely involves accused No. 1 alone as the person responsible. In his statement before the Income Tax Authorities, he does not refer to accused No. 2. From these and several other circumstances on record, it is vehemently contended by learned Counsel appearing on behalf of the accused that this is a case in which neither of the accused can be implicated on the basis of this evidence because it is wholly unreliable and unsatisfactory. 33. At this stage, it would be very necessary to advert to the case made out by the accused in their statements recorded under S. 313 of the Code of Criminal Procedure. Accused No. 1 admits that at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his bank account. He further states that since he had no interest in this transaction that he did not try to find out the origin and sources of these funds. According to him Mr. Mundhra informed him that he had arranged for the amount of Rs. 7,00,000/- for Tapuria Sons and Hind Products, but did not tell him the source thereof. Mr. Mundhra, according to him, arranged for the guarantee by I. K. Daga, brother of his wife, and he directed accused No. 1 to transfer the entire fund, including this amount of Rs. 7,00,000/- to the account of I. K. Daga, which was done by means of Pay Order immediately. 35. According to accused No. 1, he had nothing to do with the funds thereafter, that he has not derived any benefits out of the said transaction and that he has no personal interest whatsoever in it. Specifically, he contends that he had no knowledge of the payment of Rs. 7,00,000/- by M/s. Turner Morrison and Co. to Kashiprasad kedia or by Kashiprasad Kedia to Basant Trading Co. or by Basant Trading Co. to Tapuria and Sons and Hind Products and that he came to know about this movement of the funds only during these proceedings. He concludes by stating that the control of M/s. Turner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chers, etc., and tries to disclaim his responsibility in relation to the present transaction. He, however, admits that he issued the cheque for Rs. 7,00,000/- to Kashiprasad Kedia, but his case all though is that he was acting under instructions. He does not, however, name the person who gave his these instructions. He seeks to justify the payment by stating the Kashiprasad Kedia had supplied a good quantity of raw-material to the tube mill prior to the advance, that he was a dealer in steel and that after the advance was made, Kashiprasad Kedia had supplied some raw-material to M/s. Turner Morrison and Co. According to him, he also corresponded with Kashiprasad Kedia asking him to fulfil the commitment of supplying steel. He states that he had no personal interest of any nature in the transaction nor had he derived any benefit thereof. He has produced a letter dated 2nd April, 1968 whereby accused No. 1 has given him certain instructions and he emphasised the fact that he was working in the Company under one Mr. Bhave. 37. In substance, accused No. 2, who cannot disclaim his connection and knowledge with the transaction relating to Rs. 7,00,000/- nor can be disclaim the positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the money in question, or that they had dominion over it, the onus of establishing that the funds were not diverted for purposes other than that which was legally permissible would shift to the accused. The record in the present case establishes that accused Nos. 1 and 2 were the persons in-charge of the Company's bank account with the Bank of Maharashtra, with which we are concerned. The record also indicates that immediately on the opening of this account with undue haste, the amount of Rs. 7,00,000/- was paid over to Kashiprasad Kedia. That this payment was not in relation to any goods supplied by him is established and what is more important is that there is nothing on record to support the view that the payment was against future supplies. Shri Rane and Shri Badkar were extremely critical of Kashiprasad's trustworthiness and consequent credibility. That Kashiprasad Kedia facilitated the commission of the offence is obvious and one does not have to rely on his honesty while testing his version because the documentary evidence, particularly the relevant bank records, establishes that the money was not paid to him against further supplies. The fact that he passed it o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urprising that accused No. 1 did not sign the cheque himself, but get accused No. 2 to do this. One cannot accept for a moment the ridiculous statement made by accused No. 1 that he was unaware of the source of the funds that came to his own bank account in Calcutta even when his own wife was instrumental in the transfer of one of these amounts. On the other hand, the irresistible conclusion in this case is that accused No. 1 planned and executed the diversion of the funds and it makes no difference whatsoever whether this money was intended to be used by him personally or whether it was to go for other purposes. All that matters is the issue as to whether as custodian of the Company's funds he was at all justified in diverting the amount of Rs. 7,00,000/- through his own bank account to Mundhra or his nominee. 41. Shri Desai relied on the decision of the Supreme Court in the case of Deonandan Mishra v. State of Bihar, 1955CriLJ1647 , wherein the standard of proof in relation to a conviction based on circumstantial evidence has been laid down. The Supreme Court has observed that the circumstances must be individually and collectively established and that they should not leav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reason that criminal jurisprudence uses the term reasonable because blemishes are inevitable in every prosecution and minor deficiencies are only to be expected, but all these are required to be of sufficient substance as to seriously undermine the edifice of the prosecution case. Applying those tests, to my mind, the prosecution has established the charge vis-a-vis the accused No. 1 only. 43. Shri Desai relied on another decision of the Supreme Court in the case of Kishore Chand v. State of Himachal Pradesh, 1990CriLJ2289 . K. Ramaswamy, J., while restating the law relating to convictions based on circumstantial evidence, has summarized the principle that the guilt of the accused must be fully and cogently established and the proved circumstances must bring home the offence to the accused beyond all reasonable doubt. The Court was dealing with the question as to what constitutes reasonable doubt and the manner in which the same can be established had observed as follows :- In assessing the evidence imaginary possibilities have no role to play. What is to be considered are ordinary human probabilities. It is not necessary that each circumstance by itself be conclusive bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oration is sought wherever possible and the maxim that the accused should be given the benefit of doubt becomes pivotal in the prosecution of offenders, which, in other words, means that the prosecution must prove its case against an accused beyond reasonable doubt by a sufficiency of credible evidence. The benefit of doubt to which the accused is entitled is reasonable doubt, the doubt which rational thinking men will reasonably, honestly and conscientiously entertain and not the doubt of a timid mind which fights shy - though unwillingly it may be - or is afraid of the logical consequences, if that benefit was not given. Or as one great Judge said it is not the doubt of a vacillating mind that has not the moral courage to decide but shelters itself in a vain and idle scepticism. It does not mean that the evidence must be so strong as to exclude even a remote possibility that the accused could not have committed the offence. If that were so the law would fail to protect society as in no case such a possibility can be excluded. It will give room for fanciful conjectures or untenable doubts and will results in deflecting the course of justice if not thwarting it altogether. What in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ensure that these funds are used for nothing other than the Company's legitimate activities. Where the funds are diverted for a collateral purpose, the offence of criminal breach of trust is complete because wrongful loss is caused to the Company and the ingredients of the offence are satisfied. It was incorrect on the part of the learned Magistrate to have rejected Kashiprasad Kedia's evidence on the ground that it suffers from certain infirmities. That Kashiprasad Kedia was a pliable person, there could be no two opinions about, but it was precisely a person of this type who had to be used by accused No. 1 for the execution of his scheme. One cannot expect a paragon of virtue to be chosen as a medium for siphoning off corporate funds. The unique factor about this case is that Kashiprasad Kedia's oral evidence is quite secondary and, in fact, incidental to the proof of the charges which rest entirely on documents and it is only to a very limited extent that his evidence is required to fill in the gaps. One needs to test it on the touchstone of the documents on record and if the evidence satisfied that test as it does, it is clear that he has related the correct fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the transaction is recorded by the Company. This also explains why Kashiprasad Kedia does not involve accused No. 2 at some stage. It is also certain that at the stage of the payment to Kashiprasad Kedia, he must have been told that Basant Trading Company with which concern accused No. 1 was connected required certain money, that Kashiprasad Kedia should advance the amount in question as a loan for which he would be paid interest and that the corpus for this loan would be given to him by the Company. To my mind, there was nothing that could have made Kashiprasad Kedia suspect of any illegality or underhand business in a transaction of this type because the payment to him was made by cheque from the Company which very amount was advanced through a recorded transaction to Basant Trading Company which concern, in turn, was not a stranger, but one with which accused No. 1 himself was connected. There is some ambiguity with regard to the question as to whether this proposal was put across to Kashiprasad Kedia by accused No. 1 or by accused No. 2. This would not make much difference for the reason that if accused No. 1 did it on his own, as is more likely, it is a highly incriminating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hest of accused No. 1. Where, however, it is demonstrated that accused No. 1 executed his plan by giving it the garb and veneer of a legitimate transaction, it would be unsafe to impute guilty knowledge to accused No. 2. Apart from all this, the fact that stares one in the face is that there is nothing on record from which it can be inferred that accused No. 2 was to derive any benefit at all from the transaction. On the contrary, the evidence indicates that he got nothing except the torture of being prosecuted before a criminal Court at a later point of time. This does not mean that a responsible Executive of a Company would be justified in executing whatever dishonest schemes his Directors ask him to implement. For from it, the only reason why accused No. 2 would be entitled to an acquittal is because the complexion of the scheme would not have indicated to accused No. 2 that it was an illegal transaction. It is in these circumstances that the acquittal of accused No. 2 is confirmed. 48. For the reasons indicated above, the order of the learned Magistrate is required to be modified to the extent that the order of acquittal passed in favour of accused No. 1 in respect of the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable to be convicted under Section 409 of the Indian Penal Code. I have pointed out to Shri Thakore, however, that the charge in this case was not framed under section 409 of the Indian Penal Code, but that the same was under Section 408 of the Indian Penal Code read with Sections 109 and 120-B of the Indian Penal Code. Shri Thakore pointed out to me that the complaint clearly mentioned Section 409 of the Indian Penal Code and that this was only a typographical error which can be corrected and, if necessary, a fresh plea obtained from the Accused. To my mind, this procedure is not advisable at this point of time because the trial and the hearing of the appeal having been concluded, if the Accused were to contend that such alteration is to prejudice him, it would involve an unnecessary reopening of the proceedings, which is not permissible. Moreover, I have recorded a conviction against the Accused under Section 406 of the Indian Penal Code, which is a lesser offence to the one with which he was charged. 51. Shri Thakore pointed out to me that the Accused was a Director of a limited Company and that he committed criminal breach of trust in respect of a huge amount of Rs. 7,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointed out to me that Accused No. 1 is 56 years old, that he has several health problems and further that he has recently undergone surgery. 53. In the first instance, it is essential that the inconsistencies in the record should be sorted out. I have carefully perused the original complaint which does make out a charge under Section 409 of the Indian Penal Code. The charge, however, framed by the Court was under Section 408 of the Indian Penal Code, which Section prescribes a lesser punishment for Criminal Breach of Trust than Section 409 of the Indian Penal Code. It would, however, be legally incorrect to convict the Accused under Section 408 of the Indian Penal Code because that Section concerns a clerk or a servant. The Accused was a Director of the Company and he was certainly not a clerk. It would be debatable as to whether he was a servant of the Company because the relationship of Master and servant in law would normally be one where the Accused is an employee. There is nothing on record to indicate that the Accused was an employee in that sense and the record does suggest that he was nominated as a Director in which case a conviction under Section 408 of the Indian Pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that this transaction had so frightened him that he had attempted suicide. Kedia was a broker and a client of the Company and that accused No. 1 had used him and his bank account as a cover for the commission of the offence is established. Kedia was subsequently not available and there is nothing to indicate as to what happened to him. The reference to this aspect is for the purpose of recording that the offence was carefully planned and that it was executed in a manner whereby on detection, the blame would normally have rubbed off on the other two persons and accused No. 1 would have gone scot-free. Serious cognizance will, therefore, have to be taken of these aspects. 56. It is a principle of law that unjust enrichment is not permissible. The argument canvassed on behalf of accused No. 1 is that he has not retained the money with him nor has he used it and, therefore, it cannot be concluded that wrongful gain has accrued to him. To my mind, this last aspect of the matter irrelevant, but I am not prepared to hold that wrongful gain has not accrued to the accused. It has been demonstrated that there were in existence a number of firms and companies, all of which accu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
