Skip to content


Kishenprasad and Co. Ltd. Vs. Rajaram Ramharakh - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number O.C.J. Suit No. 923 of 1921
Judge
Reported inAIR1926Bom13; (1925)27BOMLR1159; 94Ind.Cas.570
AppellantKishenprasad and Co. Ltd.
RespondentRajaram Ramharakh
Excerpt:
.....defendants to recover rs. 40,000 with interest : -;that the defendants were liable to replace the trust money, in. inasmuch as the initial embezzlement was a broach of trust by defendant no. 1, defendant no. '2 aided and abetted the breach of trust, and defendants nos. 3 and 4 were guilty of that breach of trust for with notice of the trust they were afterwards parties to a misapplication of the trust property. - - this was clearly a suspicious story, but at the time the police thought there was insufficient evidence to convict him, and accordingly he was allowed to return to his native country. i am quite satisfied that that was the true source from which these family mortgages were paid off and the hinds purchased. in the present case i am satisfied that what the plaintiffs'..........particular section of what code or under what proposition of law can one recover in a civil suit money stolen by a thief, and how can the members of his joint hindu family be made liable for the theft, if they did not actually participate in it in the plaint the plaintiffs' case is based on conspiracy, viz., that the first defendant in conspiracy with the other defendants intended to misappropriate and did in fact misappropriate the rs. 40,000, and that the second defendant actually took the money from bombay in furtherance of the con-spiracy. that there was a conspiracy between defendants nos. 1 and 2 is clear, but there is not the slightest evidence to show that defendants nos. 3, 4 and 5 were guilty of any conspiracy prior to the actual theft. on the contrary it would seem quite.....
Judgment:

Marten, J.

1. This is a very peculiar suit, The defendants are all members of a joint Hindu family, and in effect the plaintiffs are seeking to make all the members of this family liable for the embezzlement by defendant No. 1 with the aid of defendant No 2 of a sum of Rs.40,000 belonging to his employers, the plaintiffs. Defendants Nos. 1 and 2 have both been prosecuted to conviction for this embezzlement. Defendant No. 2 has since died, and his name was struck out at the trial. As regards defendant No. 5, who is a minor. it is conceded the this only liability is to the extent of the assets received by him from his deceased father, defendant No. 2.

2. The details of the case are lengthy, but shortly stated these are the main outlines. The plaintiffs were foolish enough to entrust the first defendant with the cashing of two cheques of Rs. 30,000 and Rs. 10,000 respectively. I say foolish because the first defendant was only an employee of a few weeks standing on a salary of Rs. 17 per mensem. He had come from Kudanpur in the Allahabad District, and at that time defendant No. 2, the brother of defendant No 1, was also in Bombay. It is common ground that defendant No. 1 cashed the two cheques for Rs. 40,000 at the bank, but never gave the proceeds to his masters as he ought to have done His story was that on his return from the bank he was taken ill in the street, and that while he lay unconscious, he must have been robbed of the money in question. This was clearly a suspicious story, but at the time the police thought there was insufficient evidence to convict him, and accordingly he was allowed to return to his native country.

3. The plaintiffs, however, had a watch kept through the Allahabad police over the defendants' movements, and after some time this led to further discoveries. The defendants were apparently misled into thinking that the whole affair had blown over. At any rate much accession of prosperity appears to have come to the joint family. For instance, heavy mortgages of many thousands of rupees on their family lands were paid off, and other lands purchased. I may say at once that though various tales to the contrary were put forward, there is no satisfactory evidence to show where the money came from, apart from the proceeds of the Rs. 40,000 cheques. I am quite satisfied that that was the true source from which these family mortgages were paid off and the hinds purchased. But what is even more important is that the defendants proceeded to quarrel as to how the balance of the proceeds of the stolen moneys should be dealt with, and they actually summoned their village punchayet to settle their differences on this point. It is clear from the plaintiffs' evidence that at that punchayet meeting it was common ground that the money had been brought by the first defendant from Bombay with the aid of the second defendant, and that the first defendant claimed that he was entitled to a larger share of it than the rest of the family, because he was the person who had secured the money. Naturally one does not accept such a story without closely criticising it. In the present case I am satisfied that what the plaintiffs' witnesses have said about that punchayet is true.

4. In this civil suit practically all the evidence is taken on commission, and at the trial the suit is undefended. But it so happens that I was the Sessions Judge who tried the criminal charges against defendant No.1 under Section 408 and against defendant No. 2 under Sections 408 and 109 of the Indian Penal Code, which resulted in an unanimous verdict of guilty against No. 1 and by a majority of 7 to 2 against No. 2, and I sentenced each of them to three years rigorous imprisonment and a fine on November 11, 1921. At that trial the plaintiffs' witnesses were closely cross-examined, and in addition I had the benefit of hearing the oral statements of the accused from the dock and the argument of their counsel. I was quite satisfied at that trial that the story of the first and second defendants was a false one, and that in fact defendant No. 1 had embezzled the money with the aid of defendant No 2, he being the person who actually took the money out of Bombay after it had been handed to him by defendant No. 1.

5. But to avoid any misunderstanding I should state that I decide this present civil suit solely on the evidence of the civil suit and not on that of the criminal proceeding, except that lam entitled to know that defendants Nos. 1 and 2 have been prosecuted to conviction for the embezzlement of these moneys. I think I am also entitled to take into consideration that there is nothing in that criminal trial which should give me any hesitation in accepting the plaintiffs' evidence in the present civil suit.

6. So much for the more material facts. I do not propose to go into further details. The real difficulty arises as to the law. In this respect I regret that the case is undefended, and that the difficulties 1 have felt have not been met by counsel, although I gave an express adjournment for the purpose The point is this. Under what particular section of what Code or under what proposition of law can one recover in a civil suit money stolen by a thief, and how can the members of his joint Hindu family be made liable for the theft, if they did not actually participate in it In the plaint the plaintiffs' case is based on conspiracy, viz., that the first defendant in conspiracy with the other defendants intended to misappropriate and did in fact misappropriate the Rs. 40,000, and that the second defendant actually took the money from Bombay in furtherance of the con-spiracy. That there was a conspiracy between defendants Nos. 1 and 2 is clear, but there is not the slightest evidence to show that defendants Nos. 3, 4 and 5 were guilty of any conspiracy prior to the actual theft. On the contrary it would seem quite improbable that defendants Nos. 3 and 4 could anticipate that anybody would be so foolish as to entrust defendant No. 1 with Rs. 40,000 or any other large sum. However that may be, I find as a fact that the alleged antecedent conspiracy so far as regards defendants Nos. 3, 4, and 5 is not proved. Consequently the plaintiffs' case in so far as it depends on any such antecedent conspiracy fails.

7. At the second hearing Mr. B. J. Desai based the plaintiffs' case on another ground. He relied on as. 71, 76 and 108, illustration (a), of the Indian Contract Act. Section 71 provides that a person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee. But in the present case there is no question of any goods being 'found,' nor can it be said that any of the other defendants have 'found' any money. The cheques were given to defendant No. 1 to cash, and he obtained cash, viz., currency notes from the bankers. So I fail to see how Section 71 has any relevance. Next, turning to Sections 76 and 108, these sections appear under the Chapter dealing with the sale of goods. It was said that, having regard to the definition of Section 76, goods would include a cheque or cash. But assuming that to be so, I am far from satisfied that Section 108 affects the question. The plaintiffs are not seeking to recover here any specific goods or the actual currency notes which the Bank handed over to the first defendant. They are merely making a money claim against the defendants; and it was expressly admitted at the trial that the plaintiffs are not seeking to follow the specific moneys in order to obtain any charge on the property which may now represent such moneys. Illustration (a), therefore, which deals with a stolen cow which A had bought from B in good faith, would hardly seem to cover the present case. The true owner might recover the cow, but could he recover damages from A, supposing the cow had died or had been resold As regards Chapter IX, which deals with bailees, even if one assumes that defendant No. 1 was a bailee and accordingly liable to the plaintiffs, the remaining defendants were not bailees, for the plaintiffs had never entrusted them with anything.

8. I next invited counsel to consider whether under the common law of England there was not an appropriate civil remedy against a thief who had stolen property. It would seem contrary to common sense that an action would lie, Ray for breach of contract for payment of a certain sum of money, or in tort for trespass or for injury by negligence to a chattel, and yet that no action would lie for theft. But counsel were unable to refer me to any authority on that proposition either in England or in India, though I suggested that in a case like the present an action would lie for money had and received. But the difficulty here is not so such as regards the actual thief but as regards the alleged liability of the remaining members of his family. I accordingly do not propose to go into the possible remedies which might be open at common law but will consider whether a remedy does not He in equity.

9. I accordingly suggested further to counsel that the plaintiffs' case might be put in this way, viz., that the initial embezzlement was a breach of trust by defendant No 1, that defendant No. 2 aided and abetted that breach of trust, and that defendants Nos. 3 and 4 were also guilty of that breach of trust inasmuch as with notice of the trust they participated in the improper division of the stolen moneys amongst, or for the benefit of, the members of the joint Hindu family. But this point had not been considered by counsel, and accordingly I reserved judgment; for the mere fact that the case was undefended would not entitle the plaintiffs to judgment unless they could satisfy the Court that their claim was sound in law.

10. Shortly thereafter I came across a short paragraph in an English newspaper referring to a somewhat similar case which Mr. Justice Bailhache had tried, and which he was reported to have described as being ' the most puzzling he had experienced in forty years study of the law.' I accordingly waited for the case to be reported, and subsequently when I was home on leave I wrote to the learned Judge, who was kind enough to inform me that the case was only reported in the Justice of the Peace, Vol. 87, p. 817, dated December 1, 1923, and that the report was a very imperfect one, Shortly stated, in that case four defendants had broken into a jeweller's shop, and articles were stolen to the value of 443. Articles to the value of 188 were recovered, and the subject of the action was a claim by the jeweller for damages in respect of the un-recovered property against the four thieves who were then serving terms of imprisonment in respect of the robbery. The learned Judge held that the wrong against the State must first be vindicated which had been done by a criminal conviction. Next as regards the injury done to the plaintiff in his private capacity, if there had been only one individual concerned in the theft, there would be no difficulty in vindicating the plaintiff so far as trespass was concerned. But the action was complicated as there were four defendants. Further the stolen property was not traced to one individual, and the unrecovered goods could not be traced to any of the defendants. The learned Judge, however, held that he was entitled to presume that the missing articles were stolen by the four defendants, and that the fact that the property could not be traced made no difference. He accordingly held that if two or three people combined to commit a wrongful act and damage was done, judgment could be given against them. Accordingly the same principle applied as if there was only one defendant; and judgment was given against every one of the defendants as regards the stolen property which bad not been restored. It was not essential whether the damage could be divided or not, as each of the defendants were liable. It will, however, be seen that in that case the defendants were the actual trespassers and thieves, or at any rate were all engaged in the conspiracy to trespass and steal. Here, as I have already held, there is no evidence to show that defendants Nos 3 and 4 entered into any antecedent conspiracy in connection with the suit theft. Nor was it a case of trespass on the plaintiffs' promises

11. I subsequently waited to see whether the case was to be reported fully as the judgment of the late Mr. Justice Bailhache on this branch of the law, of which he was a complete master, would have been particularly valuable to me. But no further report is forthcoming, and accordingly, as I have already intimated, I do not propose to consider the possible remedies open to the plaintiffs at common law, but will consider the above equitable remedy for breach of trust which I have already referred to.

12. In this connection I should state that in my opinion the pleadings are sufficient to cover the point, although the precise words ' breach of trust' are not mentioned. The facts pleaded clearly show the fiduciary relationship between the plaintiffs and the first defendant. The allegation of a conspiracy to misappropriate the moneys after they had been stolen is I think a sufficient allegation of a wilful participation in the breach of trust. In this connection it must be borne in mind that the breach of trust was not necessarily concluded when defendant No. 1 handed the money to defendant No. 2, nor when defendant No. 2 took it away out of Bombay. It at any rate extended up to the time when the trust property was actually applied in paying off' the mortgages and in buying property.

13. Now, in the first place, it is abundantly clear that there was a breach of trust by the first defendant in which defendant No. 2 was an abettor. That indeed is what they were convicted of, viz., criminal breach of trust. The only question, therefore, is whether defendants Nos. 3 and 4 having notice of the trust were afterwards parties to a misapplication of the trust property in breach of the trust. In my judgment, on the evidence before me, it is clear that that question should be answered in the affirmative. Accordingly in my judgment defendants Nos. 1, 2, 3 and 4 were all liable to replace these trust moneys. It follows then that in the view which I take the plaintiffs' case can and does succeed on that ground. I say nothing further as to whether it could also be based on some other ground.

14. Counsel informs me that the plaintiffs have recovered Rs. 1,500 found on defendant No 1, but have received nothing of the fines imposed by me. There will, accordingly, be judgment against defendants Nos. 1 3, 4 and 5 for Rs. 38,500 (being the balance of the Rs. 40 000) and interest at nine per cent, per annum from July 5,1918, to judgment. Costs and interest on judgment at six per cent. But so far as regards defendant No. 5 his liability is to be limited to the extent of the assets received by him from his father defendant No. 2 since deceased. The attachment before judgment will continue pending the further orders of the Court, and there will be general liberty to apply.

15. As the Justice of the Peace newspaper is not, I think, in the local law libraries, a print containing the above brief report of the case before the late Mr. Justice Bailhache can be annexed to this judgment for convenience of reference.


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