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In Re: N.H.M. Pandian - Court Judgment

LegalCrystal Citation
SubjectProperty;Criminal
CourtChennai High Court
Decided On
Case NumberCriminal Revn. Case No. 102 of 1951 and Criminal Revn. Petn. No. 101 of 1951
Judge
Reported inAIR1953Mad787; (1953)IIMLJ42
ActsTrusts Act, 1882 - Sections 6; Public Debts (Central Government) Act, 1944 - Sections 19; Negotiable Instruments Act, 1881 - Sections 13; Securities Act, 1920 - Sections 5; Indian Penal Code (IPC), 1860 - Sections 405
AppellantIn Re: N.H.M. Pandian
Appellant AdvocateK.S. Jayarama Aiyar and ;C.K. Venkatanarasimham, Advs.
Respondent AdvocatePublic Prosecutor
DispositionRevision allowed
Cases ReferredLanier v. King
Excerpt:
criminal - criminal breach of trust - section 6 of trusts act, 1882, section 19 of public debts (central government) act, 1944, section 13 of negotiable instruments act, 1881, section 5 of securities act, 1920 and section 409 of indian penal code, 1860 - revision petition against conviction - alleged offence was that petitioner pledged promissory notes owned by trust and utilized amount raised by loan for personal purposes - absence of proof that alleged promissory notes had any valid dedication in favour of trust - correspondence between petitioner and government shows that pledged promissory notes were petitioner's personal property - pledged promissory notes were issued in favour of petitioner and he had right to encash them - revision petition allowed. - - the said grandfather of.....basheer ahmed sayeed, j.1. the petitioner in this criminal revision case has been convicted and sentenced to rigorous imprisonment for one year and to pay a fine of rs. 1000/- and in default of payment of the fine to undergo rigorous imprisonment for six months, under section 409 i. p. c. by the learned sessions judge of tirunelveli division, who confirmed the conviction and sentence by the learned district magistrate of tirunelveli.2. the petitioner the present zamuidar of uthumalai estate, is said to be a premier citizen of the district of tirunelveli, the said zamindar is the trustee of navaneetha krishnaswami temple at veerekeralampudur. before him, his father was the trustee for a short time. the latter was shot dead on 18-9-1942. before his death, the grand-father of the present.....
Judgment:

Basheer Ahmed Sayeed, J.

1. The petitioner in this criminal revision case has been convicted and sentenced to rigorous imprisonment for one year and to pay a fine of Rs. 1000/- and in default of payment of the fine to undergo rigorous Imprisonment for six months, under Section 409 I. P. C. by the learned Sessions Judge of Tirunelveli division, who confirmed the conviction and sentence by the learned District Magistrate of Tirunelveli.

2. The petitioner the present Zamuidar of Uthumalai estate, is said to be a premier citizen of the District of Tirunelveli, The said zamindar is the trustee of Navaneetha Krishnaswami temple at Veerekeralampudur. Before him, his father was the trustee for a short time. The latter was shot dead on 18-9-1942. Before his death, the grand-father of the present petitioner, one Sub-biah Thevar, was the zamindar. The said grandfather of the present petitioner died on '1-1-1941. The said Subbiah Thevar was the brother of Rani Meenakshisundara Nachiar, who was the zamindarini for a long time till her death on 4-7-1921. From 1902 upto 1922 the estate as well as the Devasth attain were under the management of the Court of Wards. During this period and immediately on the death of the Zamindarini, there were three claimants who filed O. S. NOs. 1, 2 and 3 of 1922 on the file of the District Court of Tirunelveli. Subbiah Thevar, the paternal grandfather of the present petitioner, filed O. S. No. 3 of 1922. His suit was for a declaration of his title to succeed in preference to the other claimants who had filed O. S. Nos. 1 and 2 of 1922. On 3-1-1929, the District Court decided and decreed the suit brought by the paternal grandfather of the present petitioner and dismissed the other two suits. His title was also upheld by the High Court on 2-4-1935 in appeals preferred by the parties, slightly modifying the decree of the District Court with regard to the personal property of the zamindarini. The matter went up to the Privy Council on appeal from the decrees of the High Court. The Privy Council affirmed the decrees of the High Court on 3-12-1937. The grandfather of the present petitioner had been appointed receiver by the District Court during the pendency of the suits in the District Court to manage the estate and the Devasthanam. The order of appointment was dated 10-11-1930 and his possession as receiver became possession in his own right when the appeal was finally disposed of by the Privy Council.

3. During her management as a limited owner of the Uthumalai zamin, the Zamindarini, Rani Meenakshisundara Nichiar, had alienated seven villages of the estate in favour of the Navaneetha Krishnaswami temple, with the permission of the then Collector of Tinmelveli. This was under a deed dated 15-6-1921, and during the period the Court of Wards was in management, these villages were formally got transferred in the name of the said temple and an inam title was issued by the Government to the temple of the villages. Accumulations of income during the receivership of the grandfather of the present petitioner and also the surplus income derived during the management of the Devastanam by the Court of Wards, had all been invested by the District Court in Government securities and these amounted to a sum of Rs. 6,12,100. The securities of the face value of the said amount stood in the name of the District Judge. There was also a balance of Rs. 30,882-0-4 which remained in cash.

4. The grandfather of the present petitioner, after he ceased to be the receiver, filed an application before the District Court (Ex. P-89) on 3-3-1939 in which, after setting out the facts, he had prayed to the District Court to tax and ascertain from the accounts and registers maintained in the District Court in O. S. Nos. 1 to 3 of 1922, the amounts invested in Government securities and cash in deposit in the Imperial Bank at Tinmelveli belonging to the Devasthanams appertaining to the Uthumalai Estate, to deliver the said Government securities to the petitioner therein (the grandfather of the present petitioner) or his advocate Sri A.S. Narayanaswami Iyer or to assign them to the petitioner, to order the payment of the cash balance amount belonging to the Devasthanams of the Utthumalai estate by cheque on the Imperial Bank of India, Tirunelveli in the name of his advocate Sri A.S. Narayanaswami Aiyar and to make or pass such other orders as the District Court might seem fit and proper. After this application had gone through various stages, the District Court addressed the Reserve Bank of India, Madras, for assignment of the bonds of the face value of Bs. 78,300 bearing interest at 4 per cent, Bs. 5300 bearing interest at 41/2 Per cent and Bs. 5000 bearing interest at 5 per cent, and the bonds were actually endorsed and delivered over to the advocate for the petitioner (subhiah Thevar) on 19-1-1940. The advocate received the said Government bonds for the value of Bs. 88,600 and filed a stamped receipt to that effect on the 27th January 1940. On the death of the said Subbiah Thevar, his son, the father of the present petisioner, put in an application in the District Court, Tinmelveli, in O. S. No. 3 of 1922, as may be seen from Ex. P. 90 (a) praying to the Court that the endorsements made by the District Judge on the three Government securities should be amended as pointed out in the petition, Ex. P. 90. The amendment prayed for was ordered by the District Judge on 5-9-1941.

5. Subsequently, the present petitioner took out a petition, O. P. No. 1 of 1944, in order to obviate the difficulties raised by the Reserve Bank, for the issue of a Succession Certificate. This was ordered by consent subject to the terms endorsed by the petitioner and the respondents on the back of the petition. Ex. P. 92 is the Succession Certificate actually issued in favour of the petitioner. The point to be noted in that Succession Certificate is that it directed the petitioner to deposit the amount in Court after collection. As the succession certificate issued was limited in its scope and as the Reserve Bank raised difficulties again, the present petitioner filed a petition for extension of the certificate and obtained on 18-2-4947 the extended certificate, Ex. P. 93, in respect of both the principal and Interest covered by the promissory notes. Thereafter the present petitioner corresponded with the Reserve Bank and the Government of India and, as a final result of such correspondence, fresh bonds were issued in favour of the present petitioner by the Reserve Bank of India for the sums of Rs. 78,300 and Rs. 5,300 respectively. These bonds covered by Exs. P. 80 and 94. The third promissory note which stood originally for Rs. 5000 bearing 5 per cent interest is not now in question as the amount thereof was collected by the petitioner on its maturity and credited in the Devasthanam's accounts.

6. After obtaining the said fresh bonds, namely, those covered by Exs. P. 80 and P. 94, for the total sum of Rs. 83,600, the petitioner in this criminal revision case, pledged them with the Punjab National Bank Ltd, at Mathurai Branch, on 4-3-1948, for raising a loan thereon in the sums of Bs. 75,000 and Rs. 4770. The sums so raised were utilised by him for his own purposes. As the petitioner was unable to discharge the loan, he obtained from the Punjab National Bank on the security of the said bonds, the Punjab National Bank sold the said promissory notes to realise the debts due to them.

7. On 12-7-1949, the Registered Accountant and Auditor who audited the accounts for faslis 1355 and 1356 of the Sri Navaneetha krishnaswami temple brought to the notice of the President of the Hindu Religious Endowments Board that the Devastanam's securities to the extent of Rs. 83,600 which were shown in the monthly current account, were not found in the treasury and that, on confidential enquiry, he came to know that the zamindar had encashed the bonds in 1948 himself ana appropriated the amount. On this report, the President of the Board directed the Accountant to go at once and verify the Government promissory notes. This is evident from Ex. P. 6. On 14-7-1949, the petitioner was addressed by P.W. 1, the Assistant Commissioner of the Hindu Religious Endowments Board, East Tanjore, by Ex. P. 7, whereby the petitioner was requested to arrange to produce the two bonds detailed in the said letter, of the face value of Rs. 78,300 and Rs. 5,300 respectively, and in default steps would be taken against him.

8. On 27-7-1949, by Ex. P. 9, the petitioner explained his position vis-a-vis the wo promissory notes and stated that as there was urgent need for money for payment of peishcush and cess and other unavoidable expenses of the estate, the two promissory notes were pledged by him and a loan was obtained and that, contrary to his expectations, the conditions then prevailing made it difficult for him to redeem the bonds and hand them back to the Devasthanam. Along with this letter, the petitioner also enclosed a promissory note executed by him for the face value of the bonds and subsequent interest, agreeing to pay interest at 6 per cent on the aggregate amount. He also undertook to make efforts to raise a loan to repay the debt to the Devasthanam. He further requested the Assistant Commissioner of the H. R. E. Board, Tinmelveli, to accept the note for the present and promised that, in any event, he would repay the debt from out of the compensation amount payable by the Government under the Zamin Abolition Act. In the meanwhile, the Zamin Abolition Act had come into operation and the Zamin had been abolished by the Government and the Zamindar, the petitioner, became entitled to the payment of compensation by the Government. The promissory note executed by the said zamindar. Ex. P. 10, is in favour of the hereditary trustee of Sri Navaneethakrishnaswami temple, for the total sum of Rs. 83,600 with interest at six per cent per annum.

8a. On 3-5-1949, as could be seen from the enclosure Ex. P. 87 the President of the H. R. E Board made a report to the Government of Madras sending the entire file of papers including the promissory note executed by the petitioner and requesting the Government to direct such action as they might deem fit in the circumstances set out in his letter By Ex. P. 87 (a), a complaint was sent to the Inspector General of Police, for investigation into the alleged criminal breach of trust or misappropriation by the petitioner. Thereupon, a complaint was lodged against the petitioner in C. C. No. 94 of 1950 before the District Magistrate, Tirunelveli, under Section 409 I, P. C. The charge was framed against the petitioner on 13-5-1950 and it was to the following effect:

'That the petitioner, on or about the 4th March 1948 and 3rd June 1948, at Mathurai, being the hereditary, trustee in management of Nevaneetha Krishnaswami temple at Veera-Keralampudur and in such capacity entrusted with G. P. note' M. S. No. 016900 for Rs. 78300 (Ex P 80) and G. P. Note M. S. No. 003281 for Bs 5300 (Ex. P. 94) and retained at Uthumalai, committed breach of trust with such property by pledging them in the Punjab National Bank Limited, branch at Mathurai, and thereby committed an offence punishable under Section 409 I. P. C. and within the cognizance of the Court of the District Magistrate'.

The prosecution examined fifteen witnesses and let in a large volume of documentary evidence in support of the charge. The defence examined two witnesses and filed a large number of exhibits. On a consideration of the entire evidence, both oral and documentary, the District Magistrate came to the conclusion that the offence with which the petitioner had been charged was proved and he convicted and sentenced him to rigorous imprisonment for one year and a fine of Rs. 1000 & in default to rigorous imprisonment for 6 months as stated above. The petitioner thereupon filed an appeal against the said conviction and sentence. The learned Sessions Judge, who heard the appeal, agreed with the learned District Magistrate and confirmed the conviction as well as the sentence. This revision case is filed against the order of the learned Sessions Judge of Tirunelveli division.

9. Mr. K. S. Jayarama Aiyar, appearing for the petitioner, has in the first instance, contended that the amount of Rs. 78,300 and Rs. 5,300 involved in the case and said to have been misappropriated by the petitioner did not belong to the Devasthanam, that the said amount covered by the promissory notes in question had not been dedicated as a public trust in favour of the Navaneetha Krishnaswami temple at Veerakeralampudur, that there has been no declaration of the Trust in favour of the temple, that therefore the amount cannot be said to be trust property and that, on the other hand, the property belonged to the Zamindar and, therefore, in the absence of proof that there has been any valid dedication in favour of the temple of the property in question ' the petitioner cannot be said to have committed any criminal breach of trust or misappropriation of the property belonging to the temple. Mr. Jayarama Aiyar's argument is that the original dedication of the seven villages to the Navanee-thakrishnaswami temple by the limited owner of the zamin. Rani Meenakshisundara Nachiar, could enure only till the lifetime of the said Rani and, on her death in 1931, the seven villages should be deemed to have ceased to be the property of the temple, under the operation of Section 4 of the Impartible Estates Act. Therefore, both the villages as well as the accumulations became the properties of the estate on the death of the zamindarini and the handling of such properties by the petitioner could not amount to any criminal breach of trust or misappropriation.

There can be no question that any dedication in favour of any temple of any property by any . limited owner would enure only till the lifetime of that limited owner and thereafter the properties dedicated by the limited owner will revert to the original estate. That appears to be the policy underlying the provisions of the Impartible Estates Act. That was the position taken up by the grandfather of the petitioner in the proceedings before the District Judge in the suits filed against him appears from Ex. D. 87 which is the written statement of subbiah Thevar. Therefore, in our opinion, there appears, to be much force in the contention of the learned counsel for the petitioner that there was no dedication of the seven villages beyond the lifetime of the said Rani Meenakshisundara Nachiar. But the position taken up by the prosecution and which is accepted by the Courts below is that as evidenced by Ex. P. 1 and Ex. P. 2 wherein Subbiah Thevar the grandfather of the present petitioner, has signed as a hereditary trustee acknowledging the properties in question; and the subsequent conduct of the said Subbiah Thevar as disclosed in Ex. P. 89 followed by the conduct of the father of the present petitioner in Ex. P. 90 (a) and also that of the present petitioner in Ex. P. 91 and Ex. P. 13 sliows that the property in question must be considered to be the property dedicated for the benefit of the Navaneethakrishnaswami temple and any misappropriation thereof must be held to be a criminal breach of trust by the trustee.

Mr. Jayaram Iyer for the petitioner urges that the admissions of Subbiah Thevar in Ex. p. 89 cannot be considered to amount to a dedication of public trust. He also urges that any admissions by the grandfather, Subbiah Thevar, will not find the present petitioner, who is not a re-presentative-in-interest of the previous holder. At the most, any admission by the present petitioner, according to him, could' only be a piece of evidence and will not amount to a dedication of trust. He invited our attention in support of his contention to the decisions in -- 'Kasi Ramarao v. venkataratnam', AIR 1947 P C 88 (A) and --'Vasudevarao v. Rangai Gounder', : AIR1952Mad650 (B), which deal with the requirements of dedication of a property to a charitable trust.

10. Mr. Jayaram Aiyar next argued that by the mere allocation of moneys by the District Court, it cannot be inferred that there has been dedication or the amount allotted in favour of temple. In this case, the District Judge does not appear to have applied his mind in the matter on the office note that was placed ' before him when the petition was filed by Subbiah Thevar, the grandfather of the present petitioner, for taxing and ascertaining from the accounts and registers maintained by that Court, the amounts invested in Government securities belonging to the Devastanam pertaining to the Uthumalai estate. We see some force in this contention of the learned counsel for the petitioner. The mere fact that the property has been treated by the District Court as a trust property cannot amount to dedication in favour of the trust. It has been held by our Courts that mere entries in the account books by themselves cannot also amount to dedication. Even so, the admissions made in Ex. p. 91 based on a mistake of fact or law and which are said to have also been made on information by the petitioner, will not be of any avail to make the property dedicated in favour of the temple. aS already observed, any admission valid in law could lie proved to be not binding, if it is based on a mistake of fact and law. In support of this contention ho relied; upon the decision in --' 'Dolatsingji v. Khachar Mansur and -- 'King v. Alston1, (1849) 18 L. J. Q. B. 59 (D), which ' are to the effect that wrong admissions made in ignorance of legal rights have no force and that it is permissible to prove that the admissions by parties have been based upon mistake of fact.

11. we have been taken through the entire contents of Exs. P. 89 and also 91 and Exs. P. 1 to P. 4 and P. 13. On a consideration of all these exhibits, as also the oral evidence which has been relied upon by the prosecution, we do not think that it has been proved in any satisfactory manner that there has been a dedication of the property in question in favour of the temple. However, we do not think it is necessary for us, lor the purpose of this revision petition to determine the question as to whether there has been or has not been a dedication of the amount which is said to be the subject matter of the alleged criminal breach of trust. In our opinion, that will be a matter which will have to be properly determined in appropriate civil proceedings and we do not want to prejudice the rights of either party by any opinion of ours in this judgment on that point.

12. Mr. K. S. Jayaram Aiyar has, in the next instance, contended that the promissory notes which are said to have been pledged with the Punjab National Bank, Mathurai branch, by the petitioner became the personal property of the petitioner as evidenced by the correspondence between the petitioner and the Union Government prior to the issue of the said promissory notes in the name of the present petitioner. The history of the issue of these promissory notes in the name of the petitioner has already been traced and it is not necessary to refer to it once again. The admission on the part of the petitioner or his predecessors that the promissory, notes belonged to the Devastanam, if really they did not belong to it, will not alter the position. If they are not trust properties validly dedicated to the temple they' could not, by, virtue of the mere admission, become the trust properties. What is not a valid trust could not become one such by these mere admissions. Section 13, of the Negotiable Instruments Act, makes these Government promissory notes issued in the name of the present petitioner negotiable instruments and there can be no doubt about this. The Negotiable instruments Act applies to Government promissory notes except in regard to certain incidents relating to them. They are not transferable as chose in action but transfers have to conform to certain requirements prescribed by the rules governing such transfers. Such transfers are subject to the Indian Securities Act, (Act, 10 of 1920) and similar other special provisions made in regard to the transfer of such Government Promissory notes. When once these promotes have been issued in favour of the present petitioner in lieu of the old pronotes which were held by his grandfather, they are instruments which are capable of being encashed, and the law gives the holder of these negotiable instruments the right to encash them. In law, therefore, the petitioner became entitled to endorse these negotiable instruments through any bank. It is, therefore, the contention of the learned counsel for the petitioner that what the petitioner has done in the present case is simply to negotiate the promissory notes which stood in his name and which he was entitled, in law, to do, so long as the instruments stood in his name. Mr. Jayarama Aiyar relies on Section 79, I. P. C., which says that nothing is an offence that is justified by law, and when the law allows the petitioner to negotiate as a holder of the said Government promissory notes, he cannot be deemed to have committed an offence when he has negotiated them. Section 8, Negotiable Instruments Act, defines who an holder is and Section 15 defines the term endorser. The section 15 is to some extent modified by Section 5, Securities Act which says that the endorsements must be only on the back of the note itself. Section 15, Negotiable Instruments Act, allows the scope for even creating a trust by means of endorsements.

13. Apart from these contentions, Mr. Jayarama Aiyar has invited our attention to Ss. 18 and 19, Public Debts Act, which came into force on 1st May 1946. The learned counsel lays great stress on the latter part of Section 19 of the said Public Debts Act (Act 18 of 1944). That section is to the following effect:

'No recognition by the Bank of a person as the holder of a Government security, and no order made by the Bank under this Act, shall be called in question by any Court so far as such recognition or order affects the relations of the Union Government or the Bank with the person recognised by the Bank as the holder of a Government security or with any person claiming an interest in such security and any such recognition by the Bank of any person or any order by the bank vesting a Government security in any person shall operate to confer on that person a title to the security subject only to a personal liability to the rightful owner of the security for money had and received on his accounts.'

In this case, the Reserve Bank of India has recognised and vested the Government securities in the petitioner and according to Section 19, such vesting and recognition shall operate to confer on that person a title to the security and, when such title is conferred on the person who holds the said security, it is made subject only to a personal liability to the rightful owner of the security for money had and received on his account. The rightful owner in the present case would be. even if it were according to the prosecution the temple trust, under Section, 19, entitled only to enforce the claim against the holder of the security for money had and received on its account. Therefore, what the section aims at appears to be that when once a bank has recognised, or has conferred, or has vested a Government security, in any person, the rightful owner of the security shall have only a civil claim which is enforceable against the holder of the security as for money had and received on account of the rightful owner by the holder of the security. This section, Mr. Jayarama Aiyar claims, rules out all possibilities of there being any criminal liability on the part of the holder of the security, if he begins to negotiate or otherwise deal with the security. Therefore, in so far as the present petitioner, as holder of 'the Government promissory notes in question has dealt with the said promissory notes, by way of raising a loan on their security, the rightful owner, if it is a temple trust, will have to proceed against the petitioner, only in a court of law to enforce Its claim for money had and received on account of the temple, and not proceed in a criminal court to prosecute the petitioner, for any offence of alleged criminal breach of trust or misappropriation.

14. We think that the interpretation that the learned counsel for the petitioner has urged upon us of this latter part of Section 19 seems to be tenable and we are inclined to agree with him. When the Government promissory notes in question could not be transferred as a chose in action but could be transferred only under the rules and provisions of law governing Government securities and when the Public Debts Act has made the holder of such securities liable only in a civil Court as if for moneys had & received the section (Section 19) it must be construed, is seeding to limit the scope of the right of the rightful owner to enforce his claim in respect of the said securities. Mr. Jayarama Aiyar has invited our attention to the Full Bench decision in -- 'Municipal Council, Dindigul v.-Bombay Co., Ld, AIR 1929 Mad 409 (E), as to the scope of the principle of personal liability for moneys had and received, and also to certain passages in -- 'Sinclair v. Brougham', (1914) A. C. 398, (F), for the enforcement of such personal liability, which arises in respect of moneys had and received. Even so, the relevant article of the Limitation Act will be 62 and this has been elaborately considered in the decision In -- AIR 1929 Mad 409 (E).

15. In this case, it has been further brought to our notice by the learned counsel for the petitioner that, after receiving the pronote from the petitioner in respect of his liability to pay the temple the sum of Rs. 88,000 and odd, the Hindu Religious Endowments Board proceeded against him to enforce, the said claim under the promissory note and obtained a decree & has since attached the amount payable to the petitioner, under the Zamin Abolition Act, by way of compensation. If such be the case, the learned counsel for the petitioner argues, that the H. R. E. Board must be taken to have brought into operation the latter part of Section 19 of the public Debts Act and that, when once they have proceeded in the matter to enforce the claim against the petitioner as if for money had and received, as contemplated by Section 19 of the said Public Debts Act, the basis, for the criminal prosecution must be deemed to have been knocked out and the prosecution cannot therefore stand. Though we are not inclined to agree with the learned counsel for the petitioner to the full length to which he wants us to agree with him, still we are of the opinion that, in the circumstances that have transpired, in regard to the admission of the petitioner of his liability to repay the said sum of Rs. 88000 and odd, his execution of the pronote and its acceptance by the H. R. E. Board,' the enforcement of the pronote by way of a suit, and further attachment of the amount payable to the petitioner by way of compensation by the Government under the Zamin Abolition Act, the H. R. E. Board was not well advised in having launched this prosecution against the petitioner. If the H. R. E. Board had been properly advised in the matter, we think that the enormous public time and money that were involved in the launching of the prosecution and its final conclusion could have been saved. Even otherwise, the Hindu Religious Endowments Board should have realised that there was reasonable scope for the petitioner to contend that he had acted under a bona fide claim of right In respect of the promissory notes when he negotiated them, according to him, for the purpose of meeting the demands like the payment of peishkush and other expenses necessary for the administration of the trust.

16. While on this point, it is worthwhile to mention the further contention of the learned Counsel for the petitioner that the charge in the case has not been properly framed. As it is, the charge merely states that the petitioner pledged the Government Bonds with the Punjab National Bank Ltd, Mathurai branch, and thereby committed breach of trust punishable under Section 409, I. P. C. According to the learned counsel for the petitioner, the charge does not mention that there has been any criminal breach of trust, much less does it state that there has been any dishonest intention on the part of the petitioner with a view to cause wrongful loss to the Trust and wrongful gain to himself. No doubt, the charge, as it is, does not mention that the petitioner committed any criminal breach of trust and from the mere pledge of the securities which stand in the name of the petitioner, and in respect of which the Trust could have taken steps to enforce the personal liability as if for moneys had and received, it cannot be stated that the petitioner has committed any breach of trust. Notwithstanding the fact that the beneficial ownership in respect of the pronotes vested in the Trust, it cannot be said that by the action of the petitioner in having pledged the Government securities and taken a loan which was in due course credited to his current account, upon which the petitioner is said to have operated, the beneficial ownership of the Trust is in any way affected. The trust will always be entitled to trace the money which belongs to it if it were able to establish such a right wherever it might have gone and whatever shape it might have taken, Mr. Jayarama Aiyar has invited our attention to the decision in -- 'Ramaswami Reddi v. Emperor : AIR1931Mad235 , where Pandalai J. has held that, where the accused by virtue of an arrangement, took a promissory note in his own name subject to the obligation to pay off that amount to another person before or after realisation, he could not be held to be guilty of breach of trust when he repudiates his obligation or commits other breach of contract in respect of them. We do not think that it is necessary for us to go into any further discussion of the point raised by the learned Counsel for the petitioner, for, in the view we have taken, we think that Section 19 of the Public Debts Act of 1944 saves the petitioner from any criminal action in respect of the pronotes which have been issued in his name and which he has negotiated with the Punjab National Bank, Mathurai.

17. Mr. Jayarama Aiyar has also relied upon the observations of Lord Shaw and Lord Dunedin occurring at page 225 and page 228 in -- 'Lanier v. King, (1914) A. C. 221, (H), with regard to the distinctions between civil responsibility and constructive criminal responsibility in cases where there has been a mixture of public and private funds. For criminal responsibility, there should be a guilty mind which should be proved by evidence. In this case, no guilty mind has been proved. If the petitioner did not have in his mind, at the time he was negotiating with the promissory notes, that they belonged to the trust but was acting as if they were his own properties, then it cannot be said, that the prosecution has shown that he had acted with a guilty mind, or with any dishonest intention.

We are, therefore, of the opinion that in so far as the petitioner could be deemed to be the holder of the notes subject only to the personal liability that is envisaged under the latter part of Section 19 of the Public Debts Act, the prosecution cannot stand and the petitioner could not be convictedand sentenced for any such offence for which hehas been indicted. We, therefore, set aside theconviction and sentence by the learned sessionsJudge of Tirunelveli division and direct that thepetitioner be set at large. The fine if already paidwill be refunded.


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