Subba Rao, J.
1. These appeals by special leave arise out of two judgments of the HighCourt of Bombay, one that of Vyas and Kotval JJ., dated March 31, 1958, and theother that of Shah and Shelat JJ., dated November 3, 1958, in what, forconvenience of reference, may be described as the Empire Company Case.
2. At the outset it would be convenient to state briefly the case of theprosecution. One Lala Shankarlal, a political leader and Vice-President of theForward Bloc and a highly competent commercial magnate, and his nominees heldthe controlling block of shares of the Tropical Insurance Company Limited,hereinafter called the 'Tropical', and he was the Chairman andManaging Director of the said company. He had also controlling voice in anothercompany called the Delhi Swadeshi Co-operative Stores Ltd. The said DelhiStores held a large number of shares of the Tropical. In or about the middle of1948, Sardar Sardul Singh Caveeshar, who was controlling the People's InsuranceCo. Ltd. and other concerns in Lahore, and Kaul, a practising barrister, cameto Delhi. During that year the former was the President of the Forward Bloc andShankarlal was its Vice-President. Shankarlal, Caveeshar and Kaul conceived theidea of purchasing the controlling block of 63,000 shares of the JupiterInsurance Company Ltd., hereinafter referred to as the 'Jupiter', aprosperous company, in the name of the Tropical from the Khaitan Group whichwas holding the said Jupiter shares. But the financial position of the Tropicaldid not permit the said purchase and so they thought of a fraudulent device ofpurchasing the said Jupiter shares out of the funds of the Jupiter itself.Under an agreement entered into with the Khaitan Group, the price of the 63,000shares of the Jupiter was fixed at Rs. 33,39,000/-, and the purchasers agreedto pay Rs. 5,00,000/- in advance as 'black money' and the balance ofRs. 28,39,000/-, representing the actual price on paper, within January 20,1949, i.e., after the purchasers got control of the Jupiter. After thepurchase, Shankarlal Group took charge of the Jupiter as its Directors afterfollowing the necessary formalities, sold the securities of the Jupiter for therequired amount, and paid the balance of the purchase money to the KhaitanGroup within the prescribed time. In order to cover up this fraud variousmanipulations were made in the relevant account books of the Jupiter. Therewould be an audit before the end of the year and there was every likelihood ofdetection of their fraud. It, therefore, became necessary for them to evolve ascheme which would being in money to cover the said fraud perpetuated by theDirectors of the Jupiter in the acquisition of its 63,000 controlling shares.For that purpose, Shankarlal and his group conceived the idea of purchasing thecontrolling interest in another insurance company so that the funds of thatcompany might be utilized to cover up the Jupiter fraud. With that object, inor about September 1949, Shankarlal and 9 of his friends entered into aconspiracy to lift the funds of the Empire of India Life Assurance CompanyLtd., hereinafter referred to as the 'Empire', to cover up theJupiter fraud. This they intended to do by purchasing the controlling shares ofthe Empire, by some of them becoming its Directors and Secretary, and byutilizing the funds of the Empire to cover up the defalcations made in theJupiter. The following were the members of the conspiracy : (1) Shankarlal, (2)Kaul, (3) Metha, (4) Jhaveri and (5) Doshi - all Directors of the Jupiter - and(6) Guha, the Secretary of the Jupiter, (7) Ramsharan, the Secretary of theTropical, (8) Caveeshar, the Managing Director of the People's Insurance Co.,(9) Damodar Swarup, a political worker who was later on appointed as theManaging Director of the Empire. (10) Subhedar, another political worker, (11)Sayana, a businessman of Bombay, and (12) Bhagwan Swarup, the nephew ofShankarlal and a retired Assistant Commissioner of Income-tax of the PatialaState. after forming the conspiracy, the controlling shares of the Empire werepurchased in the name of Damodar Swarup for an approximate sum of Rs.43,00,000/-. For that purpose securities of the Jupiter of the value of Rs.48,75,000/- were withdrawn by the Directors of the Jupiter without a resolutionof the Board of Directors to that effect and endorsed in the name of DamodarSwarup again without any resolution of the Board of Directors to that effect.Damodar Swarup deposited the said securities in the Punjab National Bank Ltd.,and opened a Cash-credit account in the said Bank in his own name. He alsoexecuted two promissory notes to the said Bank for a sum of Rs. 10,00,000/- andRs. 43,00,000/- respectively. Having opened the said account, Damodar Swarupdrew from the said account by means of 8 cheques a sum of Rs. 43,00,000/- andpaid the same towards the purchase of the said Empire shares. Out of the saidshares of the Empire, qualifying shares of twenty were transferred in each ofthe names of Damodar Swarup, Subhedar and Sayana, and by necessary resolutionsDamodar Swarup became the Managing Director and Chairman of the Empire and theother two, its Directors, and Bhagwan Swarup was appointed its Secretary. Theconspirators having thus taken control of the Empire through some of them,lifted large amounts of the Empire to the tune of Rs. 62,49,700/- by bogus saleand loans, and with the said amount they not only recouped the amounts paid outof the Jupiter for the purchase of its controlling shares and also the largeamounts paid for the purchase of the controlling shares of the Empire. Afterthe conspiracy was discovered, in due course the following ten of the saidconspirators, i.e., all the conspirators excluding Shankarlal and another, whodied pending the investigation, were brought to trial before the Court of theSessions Judge for Greater Bombay under s. 120-B of the Indian Penal Code andalso each one of them separately under s. 409, read with s. 109, of the saidCode : (1) Kaul, (2) Metha, (3) Jhaveri, (4) Guha, (5) Ramsharan, (6)Caveeshar, (7) Damodar Swarup, (8) Subhedar, (9) Sayana and (10) BhagwanSwarup. The government of the charge against them was that they, along withShankarlal and Doshi, both of them deceased, entered into a criminal conspiracyat Bombay and elsewhere between or about the period from September 20, 1950 toDecember 31, 1950 to commit or cause to be committed criminal breach of trustin respect of Government securities or proceeds thereof or the funds of theEmpire of India Life Assurance Co. Ltd., Bombay, by acquiring its managementand control and dominion over the said property in the way of business asDirectors, Agents or Attorneys of the said Company. The details of the othercharges need not be given as the accused were acquitted in respect thereof.
3. Learned Sessions Judge made an elaborate enquiry, considered theinnumerable documents filed and the oral evidence adduced in the case and cameto the conclusion that Accused 1, 2, 4, 5, 6 and 10 were guilty of the offenceunder s. 120-B, read with s. 409 of the Indian Penal Code and sentenced them tovarious term of imprisonment. Accused 6, i.e., Caveeshar, was sentenced tosuffer rigorous imprisonment for 5 years, and accused 10, i.e., Bhagwan Swarup,to rigorous imprisonment for a period of 5 years and also to pay a fine of Rs.2,000/- and in default to suffer rigorous imprisonment for a further period ofsix months. He acquitted accused 3, 7, 8 and 9.
4. The State preferred an appeal to the High Court against that part of thejudgment of the learned Sessions Judge acquitting some of the accused; and theconvicted accused filed appeals against their convictions. The appeal filed byCaveeshar, Accused-6, was dismissed in limine by the High Court. The appealsfiled by the other convicted accused against their convictions were dismissedand the appeal by the State against the acquittal of some of the accused wasallowed by the High Court. Accused-7 was sentenced to 5 years' rigorousimprisonment, accused-8 to 3 years' rigorous imprisonment and accused 9 to 3years rigorous imprisonment.
5. Accused 6, 7, 8, 9 and 10 have, by special leave, preferred these appealsagainst their convictions and sentences. We are not concerned with the otheraccused as some of them died and others did not choose to file appeals.
6. At the outset it may be stated that none of the learned counsel appearingfor the accused questioned the factum of conspiracy; nor did they canvass thecorrectness of the findings of the Courts below that the funds of the Empirewere utilized to cover up the fraud committed in the Jupiter, but on behalf ofeach of the appellants a serious attempt was made to exculpate him from theoffence. But, as the defalcations made in the finances of the Jupiter and themode adopted to lift the funds of the Empire and transfer them to the coffersof the Jupiter will have some impact on the question of the culpability of theappellants, we shall briefly notice the modus operandi of the scheme ofconspiracy and the financial adjustments made pursuant thereto.
7. We have already referred to the fact that Shankarlal Group purchased thecontrolling shares of the Jupiter from Khaitan Group and that as aconsideration for the said purchase the former agreed to pay the latter Rs.5,00,000/- as 'black money' and pay the balance of about Rs. 28,39,000/-on or before January 20, 1949. After Shankarlal Group became the Directors ofthe Jupiter, they paid the said amount from and out of the funds of theJupiter. To cover up that fraud, on January 11, 1949, the Directors passed aresolution granting a loan of Rs. 25,15,000/- to Accused-6, on the basis of anapplication made by him, on equitable mortgage of his properties in Delhi :(see Ex. Z-22). They passed another resolution sanctioning the purchase ofplots of the Delhi Stores, a concern of Shankarlal, for a sum of Rs.2,60,000/-. It is in evidence that Accused-6 had no property in Delhi and thatthe said plots were not owned by the Delhi Stores. The said loan and the saleprice of the plots covered by the said resolutions were really intended for drawingthe money of the Jupiter for paying the Khaitan Group before January 20, 1949.But some shareholders got scent of the alleged fraud and issued notices; andthe Directors were also afraid of detection of their fraud by the auditorsduring their inspection at the close of the year 1949. It, therefore, becamenecessary to show in the accounts of the Jupiter that the loan alleged to havebeen advanced to Accused-6 was paid off. For this purpose the Directors broughtinto existence the following four transactions : (1) a loan of Rs. 5,00,000/-advanced to Raghavji on November 5, 1949; (2) a loan of Rs. 5,30,000/- to MisriDevi on December 12, 1949; (3) a fresh loan of Rs. 5,30,000/- to Caveeshar,Accused-6 on November 5, 1949; and (4) a transactions of purchase of 54,000shares of the Tropical for Rs. 14,00,000/- on May 25, 1949 and December 20,1949. These four ficticious transaction were brought about to show thedischarge of the loan advanced to Caveeshar, Accused-6. Further manipulationswere made in the accounts showing that parts of the loans due from Raghavji,Misri Devi and Caveeshar and also the price of the Tropical shares were paid byCaveeshar. These paper entries did not satisfy the auditors and they insistedupon further scrutiny. It is the case of the prosecution that Shankarlal andhis co-conspirators following their usual pattern conceived the idea of gettingthe controlling interest of the Empire, which had a reserve of Rs. 9 crores.Jupiter securities worth about Rs. 45,00,000/- were endorsed in favour ofAccused-7, who in his turn endorsed them in favour of the Punjab National BankLtd., for the purpose of opening a cash-credit account therein. On October 5,1950, under Ex. Z-9, the controlling shares of the Empire were purchased fromRamsharan Group and the consideration therefore was paid from and out of themoney raised on the Jupiter securities. The Directors of the Jupiter had tomake good to the Company not only the amounts paid out of the Jupiter funds topurchase the controlling shares of the Jupiter, in regard to which variousmanipulations were made in the Jupiter accounts, but also about Rs. 45,00,000/-worth of securities transferred in the name of Damodar Swarup. Having purchasedthe controlling shares of the Empire, Shankarlal and his colleagues got theirnominees, namely, Accused 7, 8 and 9 as Directors and Accused-10 as theSecretary of the Empire. On November 27, 1950, a resolution of the Directors ofthe Empire sanctioned the purchase of Rs. 20,00,000/- worth of Government Securitiesalleged to belong to the Jupiter. Though the securities were not delivered, twobearer-cheques dated October 26, 1950 and October 27, 1950 for Rs. 15,00,000/-and Rs. 5,00,000/- respectively were made out and cashed and the said moneyswere utilized to cancel the loan alleged to have been advanced to Raghavji andfor the purchase of the Tropical shares for Rs. 14,00,000/-. But theconspirators had still to make good the securities transferred in favour ofAccused 7 and other amounts. The Directors again sanctioned 12 loans, the firstsix on November 27, 1950 totalling Rs. 28,20,000/- and the other six onDecember 18, 1950 totalling Rs. 42,80,000/- admittedly to fictitious loanees.12 bearer-cheques for an aggregate of Rs. 71,00,000/- were issued by Accused-10between December 19 and 23, 1950. This amount was utilized for getting 5 draftsfor different amounts in favour of Accused 1 and 2, the Directors of theJupiter, Accused-4, its Secretary, and Accused-5, the Secretary of the Tropical(see Ex. Z-230). The said drafts were sent to Bombay and one of the said draftswas utilized for paying off the loan of Misri Devi and the other Drafts for Rs.57,00,000/- were paid into the Jupiter account in the Punjab National BankLtd., Bombay. This amount was utilized to cover up the loss incurred by theJupiter by reason of its securities worth about Rs. 45,00,000/- assigned infavour of Accused-7 and also by reason of the securities worth Rs. 20,00,000/-alleged to have been sold to the Empire on November 27, 1950. It is, therefore,manifest, and indeed it is not disputed before us now, that Shankarlal and hisco-conspirators, whoever they may be, had conspired together and lifted largeamounts of the Empire and put them into the Jupiter coffers to cover up theloss caused to it by their fraud. Therefore in these appeals we proceed on thebasis that there was a conspiracy as aforesaid and the only question forconsideration is whether all or some of the appellants were parties to it.
8. Before dealing with the individual cases, as some argument was made inregard to the nature of the evidence that should be adduced to sustain the caseof conspiracy, it will be convenient to make at this stage some observationsthereon. Section 120-A of the Indian Penal Code defines the offence of criminalconspiracy thus :
'When two or more persons agree to do, or cause tobe done an illegal act, or an act which is not illegal by illegal means, suchan agreement is designated a criminal conspiracy.'
9. The essence of conspiracy is, therefore, that there should be anagreement between persons to do one or other of the acts described in thesection. The said agreement may be proved by direct evidence or may be inferredfrom acts and conduct of the parties. There is no difference between the modeof proof of the offence of conspiracy and that of any other offence : it can beestablished by direct evidence or by circumstantial evidence. But s. 10 of theEvidence Act introduces the doctrine of agency and if the conditions laid downtherein are satisfied, the acts done by one are admissible against theco-conspirators. The said section reads :
'Where there is reasonable ground to believe thattwo or more persons have conspired together to commit an offence or anactionable wrong, anything said, done or written by any one of such persons inreference to their common intention, after the time when such intention wasfirst entertained by any one of them, is a relevant fact as against each of thepersons believed to be so conspiring as well for the purpose of proving theexistence of the conspiracy as for the purpose of showing that any such personwas a party to it.'
10. This section, as the opening words indicate, will come into play onlywhen the Court is satisfied that there is reasonable ground to believe that twoor more persons have conspired together to commit an offence or an actionablewrong, that is to say, there should be a prima facie evidence that a person wasa party to the conspiracy before his acts can be used against his co-conspirators.Once such a reasonable ground exists, anything said, done or written by one ofthe conspirators in reference to the common intention, after the said intentionwas entertained, is relevant against the others, not only for the purpose ofproving the existence of the conspiracy but also for proving that the otherperson was a party to it. The evidentiary value of the said acts is limited bytwo circumstances, namely, that the acts shall be in reference to their commonintention and in respect of a period after such intention was entertained byany one of them. The expression 'in reference to their commonintention' is very comprehensive and it appears to have been designedlyused to give it a wider scope than the words 'in furtherance of' inthe English law; with the result, anything said, done or written by aco-conspirator, after the conspiracy was formed, will be evidence against theother before he entered the field of conspiracy or after he left it. Anotherimportant limitation implicit in the language is indicated by the expressedscope of its relevancy. Anything so said, done or written is a relevant factonly 'as against each of the persons believed to be so conspiring as wellfor the purpose of proving the existence of the conspiracy as for the purposeof showing that any such person was a party to it'. It can only be usedfor the purpose of proving the existence of the conspiracy or that the otherperson was a party to it. It cannot be used in favour of the other party or forthe purpose of showing that such a person was not a party to the conspiracy. Inshort, the section can be analysed as follows : (1) There shall be a primafacie evidence affording a reasonable ground for a Court to believe that two ormore persons are members of a conspiracy; (2) if the said condition isfulfilled, anything said, done or written by any one of them in reference totheir common intention will be evidence against the other; (3) anything said,done or written by him should have been said, done or written by him after theintention was formed by any one of them; (4) it would also be relevant for thesaid purpose against another who entered the conspiracy whether it was said,done or written before he entered the conspiracy or after he left it; and (5)it can only be used against a co-conspirator and not in his favour.
11. With this background let us now take the evidence against each of theappellants and the contentions raised for or against him. But it must be statedthat it is not possible to separate each of the accused in the matter ofconsideration of the evidence, for in a case of conspiracy necessarily therewill be common evidence covering the acts of all the accused. We may,therefore, in dealing with some of the accused, consider also the evidence thatwill be germane against the other accused.
12. We shall first take the case of Accused-6, Caveeshar, who is theappellant in Criminal Appeal No. 82 of 1962. So far as this appellant isconcerned the learned Sessions Judge found that he was a member of the conspiracyand the High Court confirmed that finding. It is the Practice of this Court notto interfere with concurrent findings of fact even in regular appeals andparticularly so in appeals under Art. 136 of the Constitution. We would,therefore, approach the appeal of this accused from that perspective.
13. Learned counsel for this appellant argued before us that the saidaccused was convicted by the Sessions Judge for being a member of theconspiracy in the Jupiter case in respect of his acts pertaining to thatconspiracy and therefore he could not be convicted over again in the presentcase on the basis of the facts on which the earlier conviction was founded; inother words, it is said that he was convicted in the present trial for the sameoffence in respect of which he had already been convicted in the Jupiter caseand such a conviction would infringe his fundamental right under Art. 20(2) ofthe Constitution, and in support of this contention reference was made tocertain decisions of the Supreme Court of the United States of America. Thesaid Article reads :
'No person shall be prosecuted and punished for thesame offence more than once.'
14. The previous case in which this accused was convicted was in regard to aconspiracy to commit criminal breach of trust in respect of the funds of theJupiter and that case was finally disposed of by this Court in Sardul Singh Caveeshar v. State of Bombay : 1957CriLJ1325 . Therein it was found thatCaveeshar was a party to the conspiracy and also a party to the fraudulenttransactions entered into by the Jupiter in his favour. The present caserelates to a different conspiracy altogether. The conspiracy in question was tolift the funds of the Empire, though its object was to cover up the fraudcommitted in respect of the Jupiter. Therefore, it may be that the defalcationsmade in Jupiter may afford a motive for the new conspiracy, but the two offencesare distinct ones. Some accused may be common to both of them, some of thefacts proved to establish the Jupiter conspiracy may also have to be proved tosupport the motive for the second conspiracy. The question is whether that initself would be sufficient to make the two conspiracies the one and the sameoffence. Learned counsel suggests that the question raised involves theinterpretation of a provision of the Constitution and therefore the appeal ofthis accused will have to be referred to a Bench consisting of not less than 5Judges. Under Art. 145(3) of the Constitution only a case involving asubstantial question of law as to the interpretation of the Constitution shallbe heard by a Bench comprising not less than 5 Judges. This Court held in Stateof Jammu & Kashmir v. Thakur Ganga Singh : 2SCR346 , that asubstantial question of interpretation of a provision of the Constitutioncannot arise when the law on the subject has been finally and effectivelydecided by this Court. Two decisions of this Court have construed theprovisions of Art. 20(2) of the Constitution in the context of the expression'same offence.' In Leo Roy Frey v. The Superintendent, District Jail,Amritsar : 1958CriLJ260 , proceedings were taken against certainpersons in the first instance before the customs authorities under s. 167(8) ofthe Sea Customs Act and heavy personal penalties were imposed on them.Thereafter, they were charged for an offence under s. 120-B of the Indian PenalCode. This Court held that an offence under s. 120-B is not the same offence asthat under the Sea Customs Act. Das C.J., speaking for the Court, observed :
'The offence of a conspiracy to commit a crime is adifferent offence from the crime that is the object of the conspiracy becausethe conspiracy precedes the commission of the crime and is complete before thecrime is attempted or completed, equally the crime attempted or completed doesnot require the element of conspiracy as one of its ingredients. They are,therefore, quite separate offences.'
15. This Court again considered the scope of the words 'sameoffence' in The State of Bombay v. S. L. Apte : 1961CriLJ725 .There the respondents were both convicted and sentenced by the Magistrate unders. 409 of the Indian Penal Code and s. 105 of the Insurance Act. Dealing withthe argument that the allegations of fact were the same, Rajagopala AyyangarJ., rejecting the contention, observed on behalf of the Court :
'To operate as a bar the second prosecution and theconsequential punishment thereunder, must be for 'the same offence'. Thecrucial requirement, therefore, for attracting the Article is that the offencesare the same i.e., they should be identical. If, however, the two offences aredistinct, then notwithstanding that the allegations of fact in the twocomplaints might be substantially similar, the benefit of the ban cannot beinvoked. It is, therefore, necessary to analyse and compare not the allegationsin the two complaints but the ingredients of the two offences and see whethertheir identity is made out.'
16. This decision lays down that the test to ascertain whether two offencesare the same is not the identity of the allegations but the identity of theingredients of the offences. In view of the said decisions of this Court, theAmerican decisions cited at the Bar do not call for consideration. As thequestion raised has already been decided by this Court, what remains is onlythe application of the principle laid down to the facts of the present case. Wecannot, therefore, hold that the question raised involves a substantialquestion of law as to the interpretation of the Constitution within the meaningof Art. 145(3) of the Constitution.
17. In the present case, applying the test laid down by this Court, the twoconspiracies are not the same offence : the Jupiter conspiracy came to an endwhen its funds were misappropriated. The Empire conspiracy was hatchedsubsequently, though its object had an intimate connection with the Jupiter inthat the fraud of the Empire was conceived and executed to cover up the fraudof the Jupiter. The two conspiracies are distinct offences. It cannot even besaid that some of the ingredients of both the conspiracies are the same. Thefacts constituting the Jupiter conspiracy are not the ingredients of theoffence of the Empire conspiracy, but only afford a motive for the latteroffence. Motive is not an ingredient of an offence. The proof of motive helps aCourt in coming to a correct conclusion when there is no direct evidence. Wherethere is direct evidence for implicating an accused in an offence, the absenceof proof of motive is not material. The ingredients of both the offences aretotally different and they do not form the same offence within the meaning ofArt. 20(2) of the Constitution and, therefore, that Article has no relevance tothe present case.
18. The next question is whether this appellant was a party to the Empireconspiracy. He was a close associate of Shankarlal in the political field, hebeing the President of the Forward Bloc and Shankarlal being itsVice-President. That is how they were drawn together. There is also evidencethat out of the 63,000 shares of the Jupiter that were purchased in August,1949 by Shankarlal Group, 4475 shares were allotted to this appellant. It is,therefore, clear that Accused-6 though ex facie he was neither a Director noran office-bearer in the Jupiter, had heavy stakes in it. We have alreadynoticed that after the purchase of the said shares from and out of the Jupiter funds,a bogus loan in the name of Accused-6 for a sum of Rs. 25,15,000/- was shown inthe Jupiter accounts and later on it was substituted by other manipulations.[His Lordship then proceeded to consider the evidence.]
x x x x x x
Both the Courts on the basis of the aforesaid evidence came to theconclusion that Accused-6 was a member of the conspiracy and we cannot say thatthere is no evidence on which the Courts could have come to the conclusion towhich they did. There are no permissible grounds for upsetting this findingunder Art. 136 of the Constitution.
19. As regards the sentence passed against this accused, the Sessions Judgesentenced him to undergo rigorous imprisonment for a period of 5 years, whereashe sentenced Accused 7, 8 and 9 to undergo rigorous imprisonment for a periodof 3 years only. We do not see any justification for this distinction betweenthe said accused in the matter of punishment. Accused-6 had already beenconvicted and sentenced in the Jupiter case; and on the evidence it does notappear that he had taken a major part in the Empire conspiracy, though he wascertainly in it. In the circumstances, we think that a sentence of 3 years'rigorous imprisonment would equally suffice in his case. We, therefore, modifythe sentence passed on him and sentence him to undergo rigorous imprisonmentfor 3 years. Subject to the aforesaid modification, the appeal preferred byCaveeshar, Accused-6, is dismissed.
20. We shall now proceed to consider the appeal preferred by Damodar Swarup.Accused-7 i.e., Criminal Appeal No. 83 of 1962. Accused-7 was the ManagingDirector and Chairman of the Empire during the period of the conspiracy. OnOctober 17, 1950 he was elected the Chairman of the Board of Directors of theEmpire and appointed as Managing Director on a salary of Rs. 2,000/- per monthfor a period of one year. He was removed from the post of Managing Director atthe meeting of the Board of Directors held on March 12, 1951. Themisappropriation of the funds of the Empire, which is the subject-matter of theconspiracy, were committed during the period of his Managing Directorship i.e.,between September 20 and December 31, 1950. The prosecution case is thatAccused-7 was a party to the conspiracy, whereas the defence version is that hewas a benamidar for Shankarlal, that he took part in the proceedings of theBoard of Directors bona fide believing that there was nothing wrong, that theresolutions were implemented by Accused-10 under the directions of Shankarlaland that the moment he had a suspicion that there was some fraud, he tookimmediate and effective steps not only to prevent the rot but also toinvestigate and find out the real culprits. The question is which version istrue.
21. It would be useful to have a correct appreciation of the evidence toknow the antecedents of Accused-7. [His Lordship then proceeded to consider theevidence.]
x x x x x x
Learned counsel for Accused-7 contends that the following two importantcircumstances in this case established that Accused-7 was a victim ofcircumstances and that he was innocent : (1) Two prominent publicmen of thiscountry with whom the accused worked gave evidence that he was a man ofintegrity; and (2) the accused took active steps to unravel the fraud and tobring to book every guilty person; if he was a conspirator, the argumentproceeds, it was inconceivable that he would have taken such steps, for itwould have certainly recoiled on him. We shall consider these two aspects now.[His Lordship then proceeded to consider the evidence.]
x x x x x x
The question is what is the evidentiary value of good character of anaccused in a criminal case. The relevant provisions are s. 53 and theExplanation to s. 55 of the evidence Act. They read :
Section 53. In criminal proceedings the fact that theperson accused is of a good character is relevant.
Explanation to s. 55. In sections 52, 53, 54 and 55, the word'character' includes both reputation and disposition; but except asprovided in section 54, evidence may be given only of general reputation andgeneral disposition, and not of particular acts by which reputation, ordisposition were shown.
22. It is clear from the said provisions that the evidence of generalreputation and general disposition is relevant in a criminal proceeding. Underthe Indian Evidence Act, unlike in England, evidence can be given both ofgeneral character and general disposition. Disposition means the inherentqualities of a person; reputation means the general credit of the personamongst the public. There is a real distinction between reputation anddisposition. A man may be reputed to be a good man, but in reality he may havea bad disposition. The value of evidence as regards disposition of a persondepends not only upon the witness's perspicacity but also on his opportunitiesto observe the person as well as the said person's cleverness to hide his realtraits. But a disposition of a man may be made up of many traits, some good andsome bad, and only evidence in regard to a particular trait with which thewitness is familiar would be of some use. Wigmore puts the proposition in thefollowing manner :
'Whether, when admitted, it should be given weightexcept in a doubtful case, or whether it may suffice of itself to create adoubt, is a mere question of the weight of evidence, with which the rules ofadmissibility have no concern.'
23. But, in any case, the character evidence is a very weak evidence : itcannot outweigh the positive evidence in regard to the guilt of a person. Itmay be useful in doubtful cases to tilt the balance in favour of the accused orit may also afford a background for appreciating his reactions in a givensituation. It must give place to acceptable positive evidence. The opinionexpressed by the witnesses does credit to the accused, but, in our view, in theface of the positive evidence we have already considered, it cannot turn thescale in his favour.
24. Learned counsel strongly relied upon the subsequent conduct of Accused-7in support of his innocence. [His Lordship then proceeded to consider theevidence relating to subsequent Conduct and Considered as follows]
x x x x x
We, therefore, hold that Accused-7 was a party to the conspiracy and thatthe High Court has rightly convicted him under s. 120-B of the Indian PenalCode. As regards the sentence passed on Accused-7, having regard to theevidence in this case, we think that this accused must be given a comparativelyless punishment than his co-conspirators, for, though he took part in theconspiracy, at any rate from the end of December, 1950, for one reason orother, he took necessary proceedings to bring to light the fraud. We,therefore, think that it would meet the ends of justice if the accused wassentenced to rigorous imprisonment for a period of two years. We accordinglymodify the sentence passed on him by the High Court and, subject to theaforesaid modification, we dismiss the appeal preferred by him.
25. Next we come to Criminal Appeal No. 136 of 1959 preferred by Subhedar,Accused-8. The defence of this accused is that he acted throughout in goodfaith and under the guidance of Accused-7, the Managing Director of the Empire,and that he did not know that any fraud was perpetrated in the Empire. Beforejoining the Empire he was an insurance agent and, therefore, it cannot be saidthat he was a stranger to the insurance business and he may be assumed to knowhow it would be conducted. On October 16, 1950 twenty qualifying shares of theEmpire from among the shares purchased in the name of Accused-7 weretransferred in his favour and thereafter at the meeting held on that day he wasco-opted as a Director. He is also, therefore, one of the persons brought in byShankarlal and made a Director for his own purpose. [His Lordship thenproceeded to consider the evidence]
x x x x x
We have no doubt that the aforesaid circumstances lead to only onereasonable conclusion that this accused became a Director of the Empire as amember of the conspiracy and helped to put through all the transactionsnecessary to transfer funds from one Company to the other. He was rightlyconvicted by the High Court. We do not see any reason to interfere with thesentence passed against him. In the result Criminal Appeal No. 136 of 1959 isdismissed.
26. Criminal Appeal No. 172 of 1959 is preferred by Sayana, Accused-9. Hewas a building contractor before he was appointed a Director of the Empire. Hisdefence is also that he bona fide acted without knowledge of the conspiracy orthe fraud. He was also one of the Directors inducted into the Company by thetransfer of qualifying shares from and out of the shares purchased in the nameof Accused-7. He was co-opted as a Director on October 17, 1950 under Ex. Z206C. Though he was not present at the meeting of November 27, 1950, he waspresent at the meeting of December 18, 1950 and, therefore, with the knowledgethat six loans amounting to Rs. 28,80,000/- were advanced without scrutiny ofthe securities, he was a party in sanctioning another six loans totalling toRs. 42,80,000/-. He was also a party to the resolution of January 30, 1951sanctioning a bogus loan to the chief of Bagarian. He was a party to theresolution dated February 9, 1951 when the said loan was confirmed and to theresolution authorizing Accused-9 to operate singly the accounts of the Company.
Evidence considered [omitted]
x x x x
It is, therefore, clear that he was a creature of Shankarlal, that he was aparty to the diversion of the funds of the Empire to the Jupiter and that whenAccused-7, for his own reasons, was taking steps to stop the rot, he, alongwith Accused-8, obstructed him from doing so and wholly supported Accused-10.The only reasonable hypothesis on the evidence is that he was a party to theconspiracy. It is said by learned counsel appearing for this accused that hissubsequent conduct would not indicate any obstructive attitude on his part butwould indicate only his desire to maintain the status quo till the mattersimproved. This is a lame explanation, for he, along with the other Directors,opposed every attempt of the scrutiny of the Company's affairs and this canonly be because they were conscious of their part in their fraud.
27. In this context another argument of learned counsel for Accused 8 and 9may be noticed. It is said that the High Court treated the Directors astrustees and proceeded to approach the case from that standpoint inferringcriminality from their inaction. Even assuming that they were not trustees inthe technical sense of the term, they certainly stood in a fiduciaryrelationship with the shareholders. The High Court's finding is not based uponany technical relationship between the parties, but on the facts found. On thefacts, including those relating to the conduct of the accused, the High Courtdrew a reasonable inference of guilt of the accused. There is sufficientevidence on which the High Court could have reasonably convicted Accused 8 and9 and in the circumstances, we do not see any case had been made out in anappeal under Art. 136 of the Constitution to merit our interference.
28. In the result Criminal Appeal No. 172 of 1959 is dismissed.
29. Finally we come to Criminal Appeal No. 67 of 1959 preferred by BhagwanSwarup, Accused-10. The defence of this accused is that he acted throughout onthe directions of Accused 7, 8 and 9, and that as Secretary of the Company, he wasbound to follow their directions. This accused is the nephew of Shankarlal. Heis an M.A., LL. B. He had the office of Assistant Commissioner of Income-tax inPatiala State. He is the person who carried out the resolutions of the Board ofDirectors of the Empire through intricate channels to enable the large amountsmisappropriated to reach the Jupiter Company. It is suggested that he was notwell disposed to towards Shankarlal and therefore he could not have anyknowledge of Shankarlal's fraudulent motives behind the purchase of thecontrolling shares of the Empire. If Shankarlal did not like him he would nothave put him in the key position in the Empire. Indeed, the will of Shankarlalshows that this accused got the best legacy under it. He was the connectingthread passing through the web of conspiracy from beginning to end. EvidenceConsidered [omitted]
x x x x x x x
Learned counsel appearing for this accused could only argue that the accusedwas a subordinate of the Directors and that he had followed only loyally thedirections given by the Managing Director without any knowledge of theconspiracy. This argument is an oversimplification of the part taken byAccused-10 in this huge fraud. Both the Courts below have held, on theaforesaid circumstances and other evidence; that Accused-10 was an activeparticipant in the conspiracy. In our view, there is ample material to justifyit. In the result Criminal Appeal No. 67 of 1959 is dismissed.
Cr. A. No. 82 of 1962 dismissed.
Cr. A. No. 83 of 1962 dismissed.
Cr. A. No. 136 of 1959 dismissed.
Cr. A. No. 172 of 1959 dismissed.
Cr. A. No. 67 of 1959 dismissed.