Bombay High Court
State vs Gulanchand Swarupchand And Ors. on 13 March, 1961
Equivalent citations: AIR1962BOM78, (1961)63BOMLR609, ILR1962BOM198, AIR 1962 BOMBAY 78, 63 BOM LR 609
ORDER (1) This application arises out of a private complaint lodged by Opponent No. 1 (who will hereinafter be called the complainant) on 29-2-1960 against the four petitioners (who will hereafter be called the accused) under Section 406 read with Section 114, I. P. C. The complainant claims to be the sole trustee of Khudala Jain Deosthan Trust, which according to the complainant, is registered with the Charity Commissioner at Bombay under the Bombay Trusts Act. The office of the trust is situate in Bombay. Accused Nos. 1 and 2 are the Honorary Managers and constructive trustees of the Jain temples belonging to the trust situate at Phalna and Khudala in Rajasthan. Accused Nos. 3 and 4 are the paid clerks of the trust. The complainant alleged that the temples were old and required repairs and renovations and for that purpose, a sum aggregating Rs. 45,000/- and odd was sent to accused Nos. 1 and 2 from time to time as per their demands. The complainant also alleges that on enquiries he found that the accused had spent only a fraction of the amount, i.e., Rs. 15,000/- on the construction work and have committed criminal breach of trust of a sum of Rs. 30,000/- and odd. The second allegation made by the complainant is that accused Nos. 1 and 2 have been authorised to receive donations and offerings at the temples and that they have received a sum of Rs. 20,000/- by way of donations. The complainant alleges that he came to know about these receipts while the accused were rendering accounts in Bombay. The third set of allegations is that the complainant had sent silver bars worth Rs, 8,000/- for the purpose of preparing silver utensils for the deities and silver sheets worth Rs. 30,000/- for the doors of the temples. The complainant alleges that these bars and sheets were sold by the accused in Rajasthan and the accused have misappropriated the sale proceeds thus realised. (2) After the service of the summons, the accused appeared and raised a preliminary objection that the Bombay Court has no jurisdiction to proceed with the complaint, since the offence of criminal misappropriation had taken place outside the limits of the Bombay Court. The trying Magistrate did not accept the preliminary objection and directed to proceed with the complaint. It is against that order that the accused have come up in revision. (3) It would at once be noticed that there are three items which have been mentioned in the complaint and the complainant's case has to be considered separately with regard to each of these items. Taking the simplest case viz., of the sale of silver bars and sheets it is clear from the allegations contained in the complaint that the silver bars and sheets were sold by accused Nos. 1 and 2 at Rajasthan. That means that the offence of misappropriation was complete in Rajasthan and the complainant had come to know about the same. Taking the next allegation relating to the receipt of donations to the tune of Rs. 20,000/- in the first place it is necessary to remember that while stating the offence the complainant has restricted himself only to two items viz., the amount sent from Bombay for the purpose of effecting repairs and renovations and the silver bars and sheets also sent from Bombay for the use of the deities. There is no mention in the final paragraph of the complainant that any criminal misappropriation or breach of trust has been committed in Bombay in regard to the amount of donations collected by accused Nos. 1 and 2. Mr. Kavlekar, for the Opponent No. 1, Contended that in the earlier part of the complaint the complainant has mentioned that the accused have collected donations to the tune of Rs. 20,000/- and have not sent the moneys to him. He argued that this amounts to making out a case of misappropriation or criminal breach of trust. The relevant sentence runs thus: ". . . . . .The accused, while rendering some accounts to me, have mentioned therein that they have received a further sum of Rs. 20,000/- in all, by way of donations, but did not send the said amount to me." In the first place, it is necessary to remember that the accused have rendered some account in respect of these collections and that the complainant came to know amount these collections from the statement of account submitted by the accused. If the accused had any intention of misappropriating the moneys, they would not have rendered account in regard to the same. Nor would they have mentioned the fact that they had collected donations to the tune of Rs. 20,000/-. Finally, the mere statement that the accused have not sent the amount to the complainant does not amount to an averment that criminal breach of trust or criminal misappropriation has been committed with regard to the same. It is possible that the accused had assured the complainant that they would send the amount and that the complainant was satisfied with that assurance. This possibility has to be considered in the context of the failure to mention in the governing paragraph regarding the misappropriation of Rs. 20,000/- although reference has been made to misappropriation in regard to the remaining two amounts. It, therefore, appears clear to me that no offence is disclosed with regard to the collection of Rs. 20,000/-. That being the case, it is not necessary to consider the question as to whether in regard to this item, the Bombay Court has jurisdiction to proceed with the case. All the same, I will refer to this question incidentally while discussing the legal aspect arising out of the two rulings of the Bombay High Court cited before me. (4) Mr. Kavelkar contended that the accused were liable to render accounts with regard to the amounts that were sent to them for the purpose of repairing and renovating the temples and inasmuch as they have not done so in Bombay with regard to the sums spent by them, that would be the first overt act regarding the dishonest intention of the accused and that also would be the only source of knowledge of the complainant, so far as the commission of the offence by the accused is concerned. In this connection he relies upon certain dicta of Mr. Justice Madgavkar in In re Jivandas Savchand, 32 Bom LR 1195: (AIR 1930 Bom 490) (FB), which is a full bench case. The facts of that case were as follows: "The complainant entered into a partnership with the accused in Bombay in the business of merchants and commission agents in rice carried on at Rangoon. Accused No. 1 was to manage and conduct the business at Rangoon in accordance with the instructions issued to him, and was allowed to draw monthly expenses at a certain sum. The head office was to be in Bombay, and accused No. 1 was to sent to the head office weekly statements of accounts as well as business transaction on behalf of the partnership. The accounts of the partnership were to be made up once in a year, the profit and loss account to be forwarded by accused No. 1 to the head office immediately after the accounts were made up, and the distribution of profit and loss was to be entered up thereafter in accordance with the instructions received from the head office. Accused No. 1 went to Rangoon and used to send weekly statements of accounts to the head office in Bombay; but later he misappropriated the firm's moneys and falsified the accounts. A complaint of offence under Ss. 405 and 477A of the Indian Penal Code having been filed against him in Bombay." It was held: "That the Bombay Court had no jurisdiction to try the offence of criminal breach of trust which occurred a the Rangoon inasmuch as S. 181(2) and not S. 179. Cri. P. C. applied to the case." It was also held: "That the offence of criminal breach of trust was completed in Rangoon and that the obligation of accused No. 1 to render accounts in Bombay and to send the accounts to Bombay did not give the Bombay Court jurisdiction to try the offence." The question that was referred to the Full Bench arose because of an earlier decision of the Bombay High Court in Emperor v. Ramratan Chunilal, ILR 46 Bom 641: (AIR 1942 Bom 39). In that case, Sir Norman Macleod, C. J. Held that a case of criminal breach of trust would fall within the ambit of Section 178, Cri. P. C., because the loss suffered by the complainant is the consequence of the commission of the offence of criminal breach of trust. This view was rejected by the full bench on the ground that pecuniary loss is not the essence of the offence of criminal breach of trust. The loss may or may not occur. It was also pointed out that the consequence which is spoken of in Section 179, Cri. P. C. Is the consequence of the offence and not some collateral by-product of the offence. It was, therefore, held that the case of criminal breach of trust would fall within the purview of Section 181(2), Cri. P. C. On this point, there was complete unanimity between the three learned Judges, who were the members of the Full Bench. Beaumont, C. J., who delivered the main judgment of the Court, further pointed out that the question as to whether the accounts were required to be rendered and the question as to how the complainant came to know of the commission of the offence are irrelevant for determining the place of the offence. Reliance was placed on the second part of Section 405, I. P. C., for the proposition, that having regard to the fact that the complainant could not know and had not means of knowing where the criminal breach of trust has actually taken place the place where the accounts were to be rendered would be the place where the offence of criminal breach of trust was completent. The second part of Section 405, I. P. C., runs thus: " . . . . .or dishonestly uses or disposeds of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied which he has made touching the discharge of such trust. . . . ." The case, which was under the consideration of the full bench was a case of an agent, who was liable to render accounts to his principal at the head office, viz., at Bombay. Naturally, therefore, the second clause of Section 405, I. P. C. Was attracted to that case. In the present case, there is no contractual relationship between the complainant and the accused. There is no suggestion that there is any legal liability to render accounts by any of the accused to the complainant. As a matter of f act the complainant gave notice only to accused Nos. 3 and 4 and called upon them to submit the statements of accounts. It may be that accused Nos. 1 and 2 are liable to pay back the moneys, which they have not spent for the work of repairs and reconstruction. That does not necessarily involve the liability to account. It is not, therefore necessary to consider the applicability of the dicta laid down by Mr. Justice Madgavkar, in detail to the present case. A few observations in that respect will be sufficient for our purpose. (5) Reliance was placed on a decision in Gunananda Dhone v. Santi Prokash Nandy and in particular, on the following observations: ". . . . .There is, in my opinion, considerable force in the contention: but at the same time, looking to the words of Section 405 I. P. C., I am disposed to take the view that if there is a contract that the accused is to render accounts at a particular place and fails to do so as a result of his criminal act in respect of the money, he can without unduly straining the language of the section, be said to dishonestly use the money, at that place as well, inviolation of the express contract which he has made touching the discharge of the trust by which he came by the money, and so commits the offence of criminal breach of trust at that place also". This dicta was expressly dissented from by the learned Chief Justice, who observed at p. 1212 (of Bom LR) :(at p. 494 of AIR): "With very great respect to the learned Judges who decided that case, I am quite unable to follow the line of reasoning. It seems to me to involve a confusion between the place where the offence was committed and the place where the complainant first acquired evidence that the offence had been committed. I can see nothing in S. 405 of the Indian Penal Code, to justify the contention that when a man in Rangoon delivers false accounts in Bombay, he is thereby making a dishonest use in Bombay of money or property which has never left Rangoon. If the principle contended for is sound it might have far-reaching consequences. .. . . . . . I think that general provision is one which is founded on considerations of principle and expediency, and that Courts ought not to be astute in finding reasons for assuming jurisdiction to deal with crime committed outside their jurisdiction. . . ." Mr. Justice Madgavkar, who delivered a separate judgment, agreed with the view taken by the learned Chief Justice with regard to the applicability of Section 181 (2), Cri. P. C., to the case of criminal breach of trust. At the same time, the learned Judge after referring to the Calcutta case observed at p. 1214 (of Bom LR) : (at p. 495 of AIR). "The only doubt in my mind is as regards the class of cases referred to in the concluding portion of the judgment where by reason of the secrecy observed by the accused, doubt exists as to the exact manner, point of time or place where the misappropriation and conversion etc. takes place, all matters within the special knowledge of the accused himself, and not of the complainant, who can only judge from any overt act of the accused showing the dishonesty, which is essentially necessary to be proved. In such cases, if and where the accused is under liability to render accounts at a particular time and fails to do so, such failure may be the first overt dishonest act to the complainant's knowledge and the Court within the local limits, where such failure takes place may have jurisdiction. But, where the offence is completed at one place, the further liability to render accounts at another place and failure in rendering such false accounts at the second place does not confer jurisdiction under S. 179 upon the Magistrate at the latter place since the offence is already completed at the former place. At the same time, as is conceivable, where the offence is not completed as far as the knowledge and belief of the complainant goes in the place where the money was first sent, but the dishonest intent which is a necessary ingredient is only completed not merely as evidence but actually as factum of dishonesty by some act as such, as the rendering of accounts then I am unable to say that even under Section 181, sub-section (2), the Criminal Courts in the latter place are excluded from jurisdiction". Mr. Kavlekar points out that there is no allegation in the complaint as to the place where the amounts sent from Bombay were actually misappropriated. I am unable to understand how the failure to make mention of the place where the moneys were misappropriated helps the Bombay Court for assuming jurisdiction in that respect. As a matter of fact the complainant should have specifically stated that so far as he knows, the misappropriation was completed in Bombay or, at any rate, the dishonest intention was exhibited in Bombay. Had he made any such statement, perhaps, there was some room for Mr. Kavlekar's argument. The trend of the allegation made in the application, on the other hand, shows that the amounts were misappropriated at the place where they were sent. In any case, it was clear that the offence of misappropriation was completed so far as the amount sent from Bombay is concerned. Further more, as pointed out above, there is no allegation, whatsoever, that there was an agreement that account should be rendered in Bombay with regard to the amounts that were sent by the complainant, to the accused from Bombay. Actually the question of rendering accounts, so far as the moneys sent from Bombay is concerned, does not arise. The amounts were to by utilised for doing the work of repairs and reconstruction in Rajasthan. If any money is left over, that will have to be paid back to the complainant. But, that does not necessarily raise the question of any liability of rendering accounts in Bombay. But apart from this, the complainant does not say that he is in doubt, about the fact of misappropriation has undoubtedly taken place. The place where the accounts are to be rendered has no relevance so far as the actual offence is concerned. Even Mr. Justice Madgavkar has made a distinction between the circumstance that the offence is completed at one place and the circumstance that accounts are to be rendered at another place and pointed out that failure of rendering accounts at the second place does not confer jurisdiction upon the Magistrate at the latter place, since the offence is already completed at the former place. The observations made by Mr. Justice Madgavkar are not in accord with the observations of the majority of the learned Judges viz., Beaumont, C. J., and Baker, J.
(6) Reference was then made by Mr. Kavlekar to be subsequent decision of this Court in Anthony D'Mello v. Joseph Mathew Pereira . In that case, the accused was employed as a travelling salesman and canvasser and in that capacity was entrusted with certain articles. He left Bombay for that purpose to tour in Gujarat and Karachi and on his return was asked to render his accounts. He returned all the goods entrusted to him except goods sold by him at place outside Bombay of the value of Rs. 198-8-0. On his failure to account for the money for these goods he was prosecuted in Bombay for criminal breach of trust in respect of this amount. The trying Magistrate, without going into the merits, discharged the accused on the ground that the Court had no jurisdiction to try the case as the offence with which the accused was charged was committed in respect of moneys received by him outside Bombay. The division bench held:
"In the absence of any evidence showing that there was no misappropriation or conversion or wrongful disposal of the amount in question in Bombay, the finding of the Magistrate that he had no jurisdiction was premature."
It was further held:
"Though criminal breach of trust was alleged to have been committed in respect of moneys received by the accused outside Bombay, it did not follow from that, that the misappropriation also took place outside Bombay."
I am unable to understand how this decision helps Mr. Kavlekar in the argument, which he is advancing. It is necessary to remember that the prosecution case was that the accused had brought the moneys or some of them to Bombay. It is also necessary to remember that the complainant's case was that he had to hand over the money in Bombay. That is why the learned Judges held that there was no question of misappropriation until the accused was called upon to hand over the money and he failed to do so and that the breach of trust consisted to the dishonest retention of the money or some of it, in Bombay. It is on these grounds that the learned Judges felt that the decision taken by the Magistrate was premature. In the present case, it is contended by Mr. Kavlekar that it is possible for the complainant to lead evidence to show that the accused were under an obligation to render accounts for these moneys in Bombay and therefore, it is premature, at this stage to say that the Bombay Court has to jurisdiction. In my view, this argument is without any substance. As pointed out above, in D'Mello's case the goods were entrusted to the accused in Bombay and that the accused was to return the goods that remained unsold and the sale proceeds of the goods, which were sold, in Bombay. It is, therefore, clear that the accused was under the clear obligation either to return the goods or to pay back the moneys realised by him in Bombay. It is doubtful in that case, as to whether the accused had brought the sale proceeds or a part thereof in Bombay. It was not, therefore, possible to dogmatise at that stage that the moneys were actually misappropriated by the accused before he came to Bombay. The act of misappropriation, therefore was not completed. Considering the question from any point of view I feel no hesitation in holding that the allegations in the complaint do not disclose that any offence of criminal breach of trust has taken place within the limits of Bombay.
(7) The result is that the application succeeds and the rule is made absolute. The order of the trying Magistrate is set aside and the complaint is directed to be dismissed.
(8) KE/VBB.
(9) Application allowed.