Skip to content


In Re: Jivandas Savchand - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtMumbai
Decided On
Case Number Criminal Application for Revision No. 101 of 1930
Judge
Reported inAIR1930Bom490; (1930)32BOMLR1195; 129Ind.Cas.385
AppellantIn Re: Jivandas Savchand
Excerpt:
criminal procedure code (act v of 1898), sections 179, 181 (2) - jurisdiction of court-trial of offence-venue of trial-consequence, meaning of-criminal breach of trust-loss to employer not a necessary consequence of the offence- falsification of accounts-place where the offence was committed-indian penal code(act xlv of 1860), sections 405, 477a.;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 gum. the head office was to be in bombay ; and accused no. 1 was to send to the head office weekly statements of accounts as well.....j.w.f. beaumont, c.j.1 this is an application in revision, which raises an important question of jurisdiction. the accused wen? placed on trial before the additional presidency magistrate in bombay charged with criminal breach of trust under section 406, indian penal code, and falsification of accounts under section 477a. they took a preliminary objection that the magistrate had no jurisdiction to deal with the case, since the offences took place in eangoon. the learned magistrate held that he had jurisdiction, relying on the decision of this court, emperor v. ramratan chunilal ilr (1921) 46 bom. 641. the accused then applied to this court in revision, and on may 15, 1930, the case came before mr. justice mirza and mr. justice broomfield. they considered they were bound by the case of.....
Judgment:

J.W.F. Beaumont, C.J.

1 This is an application in revision, which raises an important question of jurisdiction. The accused wen? placed on trial before the Additional Presidency Magistrate in Bombay charged with criminal breach of trust under Section 406, Indian Penal Code, and falsification of accounts under Section 477A. They took a preliminary objection that the Magistrate had no jurisdiction to deal with the case, since the offences took place in Eangoon. The learned Magistrate held that he had jurisdiction, relying on the decision of this Court, Emperor v. Ramratan Chunilal ILR (1921) 46 Bom. 641. The accused then applied to this Court in revision, and on May 15, 1930, the case came before Mr. Justice Mirza and Mr. Justice Broomfield. They considered they were bound by the case of Emperor v. Ramratan Chunilal, but as other High Courts had come to a conclusion different from that which this Court had taken in the case referred to, they thought it desirable to have the case argued before a full bench.

2. The complaint alleges that the complainant in October 1928 entered into partnership with the accused in the business of merchants and commission agents in rice carried on at Eangoon. Accused No. 1 was to manage and conduct the business at Rangoon according to the instructions that might be issued to him, and was allowed to draw monthly expenses at a certain sum. There were partnership articles between the parties, under which the head office was to be at Bombay, and tinder Clause (12), accused No. 1 was to send weekly statements on account of the partnership as well as business transacted on behalf of the partnership to the head office in Bombay, and by Clause (16) the accounts of the partnership were to be made up once a year, the profit and loss account to be forwarded by accused No. 1 to the head office in Bombay immediately after the accounts were made up, and the distribution of profits and losses were to be entered up thereafter in accordance with the instructions received from the head office. Now, in short, the charge made against the accused is that they misappropriated the firm's moneys in Rangoon and falsified the accounts in Rangoon, and the question is whether they can be tried for those offences in Bombay. We were referred to a very large number of cases, I think to all the cases on the subject. I do not propose to go through them in detail, because no useful purpose will be served by so doing. It is quite clear that they are not reconcilable with each other. Putting it shortly, two rival views have been put forward, one of which has appealed to some of the High Courts and the other to other High Courts. The first view is that a loss to the principal is a normal, if not a necessary, consequence of criminal breach of trust, and that the accused can therefore be tried either where the offence was committed or the loss was incurred, and for that reliance is placed on Section 179 of the Criminal Procedure Code. The alternative view is that loss is not a necessary ingredient of the charge of criminal breach of trust, and that Section 179 of the Code has no application, the case falling only within Section 181, Sub-section (). Putting it quite shortly, I think in three cases the High Court of Allahabad has taken the first of those two views, and that is the view which was taken in Emperor v. Ramratan. The second view has been taken by the High Courts of Madras, Calcutta, Lahore, Patna and Rangoon.

3. In that state of the authorities one has to look at the sections of the Code in order to form an opinion as to the right construction. The first provision, which it is necessary to look at, I think, is Section 405 of the Indian Penal Code, which defines criminal breach of trust. That section provides:-

Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes 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, or wilfully suffers any other person so to do commits 'criminal broach of trust'.

4. Now it seems to me clear from that definition of 'criminal breach of trust' that loss to the principal or anybody else is not a necessary ingredient. Indeed, I can conceive of cases in which no loss would in fact be incurred. If a principal in Bombay entrust; an agent in Rangoon with the collection of moneys with directions to place the moneys in the account of the agent, but not to draw on that account except for the purpose of paying over the) balance to the principal on the first of each month, then in such a case if the agent improperly draws moneys out of the account and places them in the name of a third party at another bank, with the dishonest intention of robbing his principal, and before* the month expires the act is discovered and the agent then restores the money and the whole balance is paid over to the principal on the first day of the next month, I am unable to see that the principal has suffered any loss at all, although, I think it is clear that the agent has committed criminal breach of trust, However, no doubt loss to the principal is the normal con-sequence of a criminal breach of trust, though as I have said, the loss is not, under the definition in Section 405, an essential part of the charge,

5. Now one has to look next at the sections of the Code of Criminal Procedure dealing with the venue of trials. Section 177 provides that, ' every offence shall ordinarily be inquired into and tried by a Court within the local limits of whose jurisdiction it was committed,' That is a provision of general application, and is based on the view of English law that all crime is local, and that jurisdiction to deal with it depends on the place where the crime is committed and not on the nationality of the criminal. Then the next material section is Section 179, which is the section which we have to construe. That provides :

When a person is accused of the commission of any offence by reason of any-thing which has been done, and of any consequence which has ensued, such offence may be inquired into or tried by a Court without the local limits of whose jurisdiction any such thing has been done, or any such consequence has ensued.

Now, I must confess that but for the fact that many eminent Judges have taken a different view, I should have thought that the language of that section was perfectly plain. What it provides is, that when a person is accused of the commission of any offence by reason of two things, by reason first of anything which has been done, and, secondly, of any consequence which has ensued, then jurisdiction is conferred on the Court where the act has been done or the consequence has ensued, But the offence must be charged by reason of those two things, the act done and the consequence which ensued. If that Is so, the consequence is necessarily part of the offence. It does not matter whether you say, as some of the Courts have said, that the consequence must be an integral part of the offence or whether you say, as others of the Courts have said, that it is a necessary ingredient of the offence, the point is that the consequence must be part of the offence charged. The section does not refer to an offence charged by reason of an act done, from which act any consequence has ensued. When you look at the illustrations, they show clearly the meaning of the section. Take the first illustration. A is wounded within the local limits of the jurisdiction of Court X, and dies within the local limits of the jurisdiction of Court Z. The offence of culpable homicide of A may be inquired into or tried by X or Z. In that case the offence charged is culpable homicide. The mere act done of wounding is not by itself enough to constitute a charge of culpable homicide. It may no doubt be ground for another charge, but that is immaterial. It does not constitute a charge of culpable homicide, unless it is followed by the consequence of death. So that taking Section 179 alone, and reading it without the help of any authority, I should have thought it was plain that the consequence referred to is a consequence which forms part of the offence, and a consequence which does not form part of the offence does not attract jurisdiction under Section 179. Then when you come to look at the other material section, viz., Section 181, Sub-section (%), that provides:

The offence of criminal misappropriation or of criminal breach of trust may be inquired into or tried by a Court within the local limits of whose jurisdiction any part of the property which is the subject of the offence was received or retained by the accused person, or the offence was committed.

So that you get there a section dealing with the particular offence of criminal misappropriation or criminal breach of trust, and you are given an option either to take proceedings in the place where the property was misappropriated or in the place where the property was received. When you find a section dealing with a particular form of crime, I think it would require strong words to show that any section of more general application was intended to deal also with that particular crime.

6. Before I leave this part of the case, I should like, out of deference to the learned Judges who decided the case of Emperor v. Ramratan Chunilal ILR (1921) 46 Bom. 641 : 24 Bom. L.R. 46, to refer a little more in detail to that case. The judgment was delivered by Sir Norman Macleod C.J. Apparently the case was not argued for the respondents, although undoubtedly cases on both sides were referred to. The learned Chief Justice sets out Section 179, and he states the facts and he says at page 643 :

Now it seems clear that one of the consequences of criminal breach of trust, if committed by an agent, would be loss to the person to whom the property entrusted to the agent belonged, and therefore, as the complainant would be entitled to get the proceeds of the cotton sent to Bombay paid to him in Ahmednagar, if the proceeds were not paid to him, loss would be incurred at Ahmednagar and therefore the Court at Ahmednagar would have jurisdiction.

I have already pointed out that loss seems to me to be not a necessary ingredient, and not even a necessary consequence, of breach of trust. Then the learned Chief Justice refers to conflicting cases which had dealt with this point, and to the case of Queen-Empress v. O'Brien ILR (1896) All. 111, which is one of the decisions of the Allahabad High Court in which it was held that Section 179 did apply, and then he says at the bottom of p. 644 :-

In my opinion, the argument of the learned Chief Justice should be preferred to the arguments of the learned Judges in Simhachalam v. Emperor ILR (1816) Cal. 912, and Re Ramabilas ILR (1814) Mad. 639. The decision in Queen-Empress v. O'Brien ILR (1896) All. 111 was followed by the Allahabad High Court in Limgridge v. Atkins ILR (1912) All. 20. The whole question seems to me to depend on whether we must give to the word 'consequence' in Section 179 its ordinary grammatical meaning or whether we are bound to restrict it to meaning a consequence which is a necessary ingredient of the offence. I see no justification for holding that the ordinary meaning should not be given to the word 'consequence' in Section 179 and the argument in Queen-Empress v. O'Brien seems clearly pertinent in reference to this point.

With great deference to the learned Chief Justice, it seems to me that the question is not what is the natural and grammatical . meaning of the word 'consequence' per se, the question is what is the natural and grammatical meaning of the word ' consequence' in the context in which it appears in Section 179, and as I have already pointed out, in my view, having regard to the context there, the consequence is to be part of the offence. Then the learned Chief Justice goes on (p. 645):-

For instance, an agent might he given goods by his employer to sell at various places, and if he performed the trust imposed upon him be would be bound to pay the proceeds of the goods which had been sold to his employer. If he did not, and if his employer charged him with criminal misappropriation, it would be exceedingly difficult to prove at what place ho had sold any part of the goods and misappropriated the proceeds. It seems to me that Section 179 was intended to apply to such cases so as to enable an employer to file his complaint in the Court within whose jurisdiction the loss was alleged to have been incurred.

Well, that is a difficulty which impressed itself upon several learned Judges who held that Section 179 applied to cases of criminal breach of trust, but to my mind the answer to it is provided by Section 181, Sub-section (#). It may be difficult to prove the place at which the misappropriation took place, because misappropriation depends upon the intention of the accused, and it may be difficult to prove at what moment of time and at what place he assumed a dishonest intention, but then you are given the option by Section 181, Sub-section ($), to take proceedings in the Court in which the money was received, and there can be no difficulty in proving where the money was received, or if that fact cannot be proved, then the charge must necessarily fail because you cannot convict a man of misappropriating money unless it is first shown that he received the money. Therefore, it seems to me that the difficulty suggested by Sir Norman Macleod does not really arise. In my view this case of Emperor v. Kamratan Chunilal is based on a wrong view of Section 179, and we ought to overrule it, and this Court should come into line with the High Courts of Calcutta and Madras, and hold that Section 179 has no application to cases of criminal breach of trust.

7. Mr. Velinker then took a second point which is open to him in this case. He says that the accused were bound to render accounts in Bombay, to send their accounts to Bombay, and he says that the misappropriation was not complete until after those accounts were delivered in Bombay which for the first time showed the complainant that he was being robbed, and he says that the delivery of false accounts in Bombay for the first time disclosed a dishonest intention which amounted in itself to a dishonest user of the money in Bombay, a dishonest user that is within the second part of Section 405 of the Indian Penal Code. For that proposition he has referred us to a case of the Calcutta High Court, Gunananda Dhone v. Lala Santi Proltash Nanley 29 C.W.N. 432. In that case the learned Judges held in the first instance that criminal breach of trust fell within Section 181, Sub-section (2), and not within Section 179, and so far of course they are in accord with the view which I have suggested is the right view, but then they go on to discuss the difficulties which may arise in proving when a dishonest intent first arose. They point out that an agent may mix trust moneys with his own money without any intention of dishonesty, and he may then some time afterwards acquire the dishonest intention of using the money of the employer as his own money. After pointing out those difficulties, they say at the bottom of the first column in p. 436 :-

Mr. Chatterjee has contended that these overt acts (i. e. delivery of false accounts) are but evidence of the fact that the offence of criminal breach of trust has already been committed by the accused, and from these acts his dishonesty may very well be inferred; but that these acts are not essential ingredients of the offence itself which must have been complete before the acts are done, 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 in 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, in violation 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.

8. With very great respect to the learned Judges who decided that ease, 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 Section 405 of the Indian Penal Code to justify the contention that when a man in Eangoon 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. A banker or a factor in Bombay may have in his hands moneys belonging to thousands of customers or clients, and he may deliver false accounts to these customers or clients in a hundred different towns in India, and it seems to me that if the view of the Calcutta Court is right, he could be sued for criminal breach of trust in any one of the hundred towns in which he has delivered false accounts. That would be a very serious inroad upon the general provision of Section 177, which requires offences to be tried by a Court within the local limits of whose jurisdiction they were committed. 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 crimes committed outside their jurisdiction. I am not prepared to follow the view expressed by the Calcutta High Court in the latter part of their judgment.

9. Then Mr. Velinker takes a third point. He says that even if he is not entitled to charge the accused in Bombay with criminal breach of trust, he can charge them with falsification of accounts. Now the accounts were really falsified by the accused in Rangoon, but Mr. Velinker says that the false accounts were sent from Rangoon to the head office in Bombay with the intention that they would be, and the effect that they were, written into the accounts at the head office, and therefore the falsification of the accounts in Rangoon and the sending of them to Bombay with the intention that they should be used to falsify the accounts in Bombay amounts itself to a falsification of accounts in Bombay, and for that proposition he relies on the English case, Rex v. Oliphant [1905] 2 K.B. 67. That was a case which turned on the construction of an English Act, and can be no authority on the construction of the Criminal Procedure Code, but apart from that I do not find in the complaint any allegation that accounts were falsified in Rangoon for the purpose of procuring a falsification of the accounts in Bombay, i.e. that the accounts in Bombay were falsified. That being so, I think that that point also is not open to the complainant. In my judgment, therefore, this application succeeds and we must hold that the learned Magistrate had no jurisdiction to deal with this case.

Madgavkar, J.

10. The question in this application is whether Section 179 applies, as held in Emperor v. Bamratan Chunilal ILR (1922) 46 Bom. 641 : 24 Bom. L.R. 46, and whether the Bombay Courts have jurisdiction. On the first point I agree with the conclusion formulated by my Lord the Chief Justice. On the three arguments for the complainant, in the definition of Section 405 of the Indian Penal Code, whether the conversion is to his own use or contrary to any legal agreement, the element of dishonesty is equally necessary. That dishonest intent is complete when the intention of causing wrongful gain or wrongful loss occurs under Section 24, and not necessarily when the wrongful loss or gain itself results. Therefore even though such a loss may be a normal and usual result, Section 179 of the Code of Criminal Procedure does not, in my opinion, apply, because from the initial words it can only apply when a person is accused of the commission of any offence by reason of anything which has been done, and of any consequence which has ensued, whereas criminal misappropriation is complete with the conversion plus the dishonest intent and quite apart from any loss. Thus the loss, whether a consequence or otherwise, is not an ingredient of that offence, and therefore Section 179 has no application, but rather Section 177, and Section 181, Sub-section (S).

11. In regard to the cases on this point, in the three decisions of the Allahabad High Court, Queen-Empress v. O'Brien ILR (1896) All. 111, followed in Emperor v. Mahadeo ILR (1910) All. 397 and Langridge v. Atkins ILR (1912) All. 29, where it was held that the loss entailed by the criminal breach of trust was a consequence that completed the offence, it is to be noted that they were all three cases in which it was doubtful where the misappropriation really took place. For the reasons . stated above I agree rather with the view in Ganeshi Lal v. Nand Kishore ILR (1912) All. 487, that unless the consequence such as the loss is an ingredient of the offence charged, Section 179 has no application. The Madras cases, Re Rambilas ILR (1914) Mad. 639 and Krishnamachari v. Messrs. Shaw, Wallace & Co. ILR (1915) Mad. 576, are to the same effect. At the same time it can hardly be said that Section 179 is controlled by Section 181. On that point I agree with the contention for the complainant that Section 177 is the general section, and the particular sections which follow, extend jurisdiction and venue, so that where Section 179 has application under the initial words,, Section 181 does not necessarily come in the way.

12. Ganeshi Lal v. Nand Kishore is followed, and the other Allahabad cases, Queen-Empress v. O'Brien and Langridge v. Atkins, dissented from in Simhachalam v. Emperor ILR (1916) Cal. 912. The decision which appeals to me most is the judgment of Mukerji J. in Gunananda Dhone v. Lala Santi Prolcash Nanley 29 C.W.N. 432, followed in Yacoob Ahmed v. F.M. Abdul Ganny ILR (1928) Ran. 380. I agree entirely with the view of the learned Judge that criminal breach of trust is not an offence which counts as one of its factors the loss, which is the usual consequence of the act, and that it is the act itself which in law amounts to the offence, apart from any such consequence; and therefore the jurisdiction to try an offence of criminal misappropriation or criminal breach of trust is governed by Section 181, Sub-section (2), and not by Section 179. 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 places 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 Section 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 such as the rendering of accounts, then I am unable to say that even under Section 181, Sub-section ($), the criminal Courts in the latter place are excluded from jurisdiction. In my opinion the matter entirely depends upon where the act of criminal misappropriation including the dishonest intent is completed as far as the knowledge and belief of the complainant according to the complaint go. In such a case I agree with Mukorji J. that the Courts in the place where the act is completed may have jurisdiction even though they may be different from the place where the money has been originally sent by the complainant.

13. Coming to the Bombay decisions, the decisions on cheating, such as Emperor v. Jamnadas Vasanji : (1915)17BOMLR389 , have no bearing on the present question. Emperor v. J.tamratan Chunilal ILR (1921) 46 Bom. 641 : 24 Bom. L.R. 46 has been followed in Emperor v. Gafur Karimbax (1830) 32 Bom. L.R. 785, in which Re Rambilas ILR (1914) Mad. 639 is distinguished. Without adding to the reasons of my Lord the Chief Justice, it appears to me that the question of grammatical meaning of the word 'consequence' does not arise at all. By reason of the initial words and sentence of Section 179, unless the offence of which the person is accused is an offence not only by reason of something which he has done, but also of some consequence which has ensued, Section 179 has no application, and it is not necessary to distinguish the grammatical and the other meaning of the word 'consequence', nor to distinguish between consequence direct and indirect, immediate and remote. As I have already stated above, criminal misappropriation is not an offence in which the ingredient of loss enters Section 179 is, therefore, excluded, in my opinion, and I agree that in this view we must overrule the view and the decision in Em>p&vor; v. Ramratan Chunilal and Emperor v. Gafur Karimbax, in so far as it is based on the former case.

14. Applying the law as stated above to the facts of the present case, after reading the agreement and the complaint as it is now formulated, I am of opinion on the complaint itself the criminal . breach of trust appears to have been completed in Rangoon, As regards the falsification of the accounts, the falsification alleged in the complaint is the falsification of the accounts in Rangoon. There is no explicit averment of abetment or of falsification of accounts in Bombay. The case of Rex v. Oliphant [1906] 2 K.B. 67 was different, depending on the construction of the Falsification of Accounts Act, and it is therefore of no avail. On the complaint as it stands and in the view of the law which I have ventured to formulate above, I agree that the Presidency Magistrate in Bombay had no jurisdiction, as he held, relying on Kmperor v. Ramratan Chunilal. Aa we are overruling the view of the law formulated in that case, it follows necessarily that on the complaint as at present filed, the Court of Bombay has no jurisdiction. I agree with the order proposed by my Lord the Chief Justice.

Baker, J.

15. I agree with the view taken by the learned Chief Justice and the conclusion at which he and my learned brother have arrived. I will add only a very few words to what has already been said. The definition of 'dishonestly' in Section 24 of the Indian Penal Code shows that all that is necessary is the intention to cause wrongful gain or wrongful loss. It is not necessary that such wrongful gain or wrongful loss should, as a matter of fact ensue, and therefore it is not necessary that the offence of criminal breach of trust should actually involve wrongful gain or wrongful loss, although as a matter of fact in almost every case or in the majority of cases it does so. If I may say so with respect, the variance between the views taken by different High Courts on the question of the jurisdiction in cases of criminal breach of trust appears in some cases to be due to the theory that knowledge of loss is the same as loss. Now the offence of criminal breach of trust is an offence which is complete at the moment when the agent disposes of the property in violation of his trust, and the loss occurs at that moment. The Calcutta High Court has taken the same view in one of the cases quoted, that at that moment the owner loses the money in the hands of his agent, and the question of when that loss comes to his knowledge seems to me to be perfectly immaterial for purposes of jurisdiction. So far as regards Section 179 of the Criminal Procedure Code, it seems to me clear on the wording of the section as it stands that the consequence is part of the offence. In a case of the present character the consequence of the offence is loss to the owner. That loss takes place at the place where the criminal breach of trust is committed, and not at the place where knowledge of that loss comes to the owner, which may be anywhere else. I, therefore, agree with the view that has been taken that the Magistrate in this case had no jurisdiction.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //