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CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 39 of 1961.

Appeal by special leave from the judgment and order dated January 30, 1960 of the Andhra Pradesh High Court (in Criminal Appeals Nos. 277 and 278 of 1957 and Criminal Revision Case No. 810 of 1957.

A.S.R. Chari, K. R. Choudhry and P.D. Menon, for the appellant.

Bhimasankaran and R. Thiagarajan for respondent No. 1. R. Mahalingier, for respondent No. 2.

1963. April 23. The judgment of the Court was delivered by MUDHOLKAR J.-The respondent No. I was tried before the Court of Sessions, Visakhapatnam for offences under s. 120-B, Indian Penal Code, s. 409, s. 477-A and s. 471 read with s. 467, I.P.C. while respondent No. 2 was tried for an offence under s. 120-B and for offences under ss. 409 read with s. 109, 477-A and 471 read with s. 467, I.P.C. Each of the respondents was convicted of the first two offences, but the respondent No. I alone was convicted of the other two offences. Various sentences were passed against them by the Additional Sessions judge, Visakhapatnam, who presided over the court. The respondents preferred appeals before the High Court challenging their convictions and sentences. The State on the other hand preferred an application for revision under s. 439, Cr. P.C. for the enhancement of the sentences passed on the respondents. The High Court allowed the two appeals, acquitted the respondents and dismissed the application for revision preferred by the State. The State of Andhra Pradesh has come up before this Court in appeal by obtaining special leave under Art. 136 of the Constitution. The prosecution case in so far as it is material for the decision of this appeal is as follows :

In the year 1929 the Andhra Engineering Co., which was originally a partnership firm formed by one D.L.N. Raju was converted into a private limited, company with its headquarters at Visakhapatnam. (We shall refer to this company throughout as the AECO). It obtained licences from the Government under the Electricity Act for supply of electrical energy to Visakhapatnam, Anakapalli and some other places. As the AECO did not have the necessary capital to undertake the work Raju floated in the year 1933 a public limited company called Visakhapatnam Electric Supply Corporation Ltd., (referred hereafter as VESCO) and another in the year 1936 called the Anakapalli Electric Supply Corporation Ltd. The AECO transferred its licences for the supply of electrical energy to the consumers of Visakhapatnam to VESCO and similarly transferred to AECO the licence to supply electrical energy to consumers at Anakapalli. The AECO was appointed Managing Agent for each of these corporations under separate agreements. Some time later other industrial concerns, the Andhra Cements Ltd., Vi jayawada and the East Coast Ceremics, Rajahmurthy were started apparently by Raju himself- and the AECO was appointed the Managing Agent of each of these concerns. The original managing agency agreement in favour of AECO with respect to VESCO was for a period of 15 years i.e., from 1933 to 1948 and was later renewed for the remaining term of the currency of the licence granted by the Government under the Electricity Act. A mention may be made of the fact that in June, 1952 the VESCO undertaking was acquired by the Government under the provisions of the "'Electricity Undertaking Acquisition Act"

but nothing turns on it.

The VESCO had its own Board of Directors while the AECO had also its own separate Board of Directors. The VESCO had no Managing Director but at each meeting of its Board of Directors one of the Directors used to be elected Chairman. The same practice was followed at the meeting of the general body of the shareholders. The AECO on the other band always had a Managing Director, first of whom was D.L.N. Raju. He died in the year 1939 and was succeeded by R.K.N.G. Raju, an Advocate of Rajahmundry. This person, however, did not shift to Visakhapatnam on his becoming the Managing Director but continued to stay most of the time at Rajahmundry. According to the prosecution both these concerns were running smoothly and efficiently during the lifetime of D.L.N. Raju because he was personally attending to their affairs. His successor, however, apart from the fact that be continued to be staying mostly at Rajahmundry, was also interested in several other ventures, including a sugar factory at Dewas in Central India.

spread over a long period but even so this was a question of propriety which should be left to the discretion of the judge or Magistrate trying the case.

Objection was taken very seriously by Mr. Bhimasankaram to the charge of conspiracy framed in this case. That charge reads thus :

"That both of you along with K.V. Ramana, Ex.- Senior Accountant of the Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam (approver) and others, known or unknown, in or about April 1, 1947, at Visakhapatnam, agreed to do illegal acts, to wit, commit criminal breach of trust in respect of the funds belonging to the Vizagapatam Electric Supply Corporation Ltd., Vizagapatnam; and to screen yourselves from detection of the same, to wilfully, and with intent to defraud, falsify the accounts of the said Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam and that pursuant to the said agreement, you committed criminal breach of trust in respect of funds of the said Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam to the extent of over Rs 3,20,000 and falsified the said accounts between April, 1947 and March, 1952, and also used forged documents as genuine], offences punishable-under Sections 409, Indian Penal Code and 477-A, Indian Penal Code and 471 read with section 467, Indian Penal Code ; and thereby committed an offence of criminal conspiracy punishable under Section 120-B of the Indian Penal Code and within my cognizance."