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Paul De Flondor Vs. Emperor - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtKolkata
Decided On
Reported inAIR1931Cal528
AppellantPaul De Flondor
RespondentEmperor
Cases ReferredR. v. Davison and Gordon.
Excerpt:
- .....to the accused, for and on behalf of the firm, and not otherwise. it was a refund of part of the firm's money which they had paid to the kashmir state in september. the kashmir state were not authorized by the firm to pay this or any sum to the accused, nor had the accused any express authority from the firm to receive it. it was no part of his duty to do so, and in doing so he was acting without the scope of his authority. but having received it he was under an obligation to hold it in trust for the firm to whom it belonged. he had no right to use it or any part of it for any purpose. still less had he any right to hand it over as a perquisite to any official of the kashmir state, for which he-had no authority either express or implied. directly he drew it out of the bank at srinagar.....
Judgment:

Lort-Williams, J.

1. A great deal of time has been wasted on this case, both here and in the Court below. This has been due to the fact that the Chief Presidency Magistrate has disregarded those elementary principles which ought to be observed by every Judge when trying a case. Instead of rivetting his attention on the essential facts proved, he pursued vainly a number of guesses, assumptions and what he called 'insoluble equations,' which had not any connexion with facts disclosed by the evidence. The result is that his long judgment is unintelligible to anyone who was not present at the trial, and he has drifted into most regrettable confusion while trying to apply the law to the facts.

2. When criticising the defence put for-ward by the accused he remarked that 'an ounce of fact is worth considerable quantities of fiction'--a maxim with which, after reading his judgment, we find ourselves in complete agreement. He complained that

the learned Counsel who appeared for the accused took a very inelastic view of the scope of his defence, and with the assistance of the accused trying to ' bluff ' the Court as to the facts, considered the matter from only one point of view.

3. If the Magistrate intended to say that counsel tried to bluff the Court, this was a most improper observation to make and in the present case had no foundation in fact. Quite rightly counsel refused to be drawn into unnecessary discussion of irrelevant hypotheses.

4. It may be however that the Magistrate only intended to suggest that the accused had tried to bluff the Court. Finally he convicted the accused in the alternative of offences under Sections 408 and 420, I. P.C. This result is due to the fact that the Magistrate misunderstood the effect of Section 236, Criminal P.C., which in certain cases sanctions alternative charges. The provisions of this section cannot be applied where the facts are in doubt, but only where the facts being ascertained, it is doubtful which of two or more offences those facts constitute. If the facts are in doubt, or if the ascertained facts are consistent with innocence, the section does not apply. In this case doubt arises because the essential facts have not been ascertained, and the learned advocate who appears for the Crown has not attempted to justify this part of the conviction.

5. But in addition to convicting the accused under Sections 408 and 420 in the alternative, with reference to one portion of the sum alleged to have been embezzled, the Magistrate convicted him under Section 408 alone with regard to another portion. The only point to be decided in this case is whether the Magistrate had jurisdiction to try it.

6. The Kashmir State had contracted to supply the firm of Messrs. E.D. Sassoon and Company with large quantities of a root called 'kuth,' which grows in the forests of Kashmir, is made into a drug and finds a ready sale at high prices. Delivery was to be made in Kashmir. The accused was the firm's representative in Kashmir. It was his duty to take delivery, and arrange and pay for transport to Calcutta. For his expenses he drew upon an account, standing in his own name as representative of the firm, with a branch of the Imperial Bank at Srinagar in Kashmir. For this account sums were remitted from time to time through the head office of the Imperial Bank in Calcutta. He had no express authority, and it was no part of his ordinary duty to receive large sums on account of the firm or to remit such sums to them. These contingencies were not contemplated by the terms of his service. Payment for the kuth was to be made on delivery.

7. On 16th September 1929, the accused wired to the firm that he had arranged for delivery in October of 2260 maunds. It was alleged that the next day he was informed by an official of the Kashmir State that there were only 2,081 maunds in stock. He denied the receipt of this information and proved by cross-examination of Mr. Benjamin who was manager of the firm in Calcutta that there were probably more than 3,000 maunds at that time available for delivery. On the same day the firm sent direct to the Kashmir State a cheque for Rs. 6,48,620 being the contract price for 2,260 maunds. On 1st October the accused wrote to the Accountant-General of Kashmir saying, that as soon as the delivery of kuth had been completed they would know the exact sum due, and that he intended to apply in due course for a refund arising out of excess payment. On 18th October one Biswas, the Deputy Forest Officer of the Kashmir State sent to his Government a statement showing a delivery of 2,040 maunds only, and a refund due of Rs. 53,44.6. On the 20th the accused wrote to the Accountant-General asking for a cheque for this sum. On the 24th this amount, by order of the Kashmir State, was credited to the account of the accused with the Imperial Bank at Srinagar and he gave a receipt as ' Resident Representative of Messrs. E. D. Sassoon and Company at Srinagar.' The next day the accused . drew out Rs. 30,000 and by 20th December only Rs. 38-1-6 remained in the account.

8. Meanwhile the Kashmir State became suspicious and reweighed the kuth already delivered. It totalled 2,143 maunds instead of 2,040 maunds. Thereupon the Kashmir State took back the excess, and told Messrs. Sassoon and Co. about the refund, of which the accused had not given them any information.. The firm wired to the accused for an explanation, and he stated (Ex. 23) that he had paid 75 per cent of the money to the Deputy Forest Officer as his perquisite. Presumably he intended to imply that he kept the rest for himself. He-was recalled to Calcutta but fled abroad via Japan to America and finally to Italy, whence he was extradited and brought to Calcutta for trial.

9. No part of the money refunded ever reached the hands of the firm. Assuming that only 2,010 maunds were delivered the money obviously belonged to the firm, and the accused as obviously misappropriated it. It was paid by the Kashmir State to the accused, for and on behalf of the firm, and not otherwise. It was a refund of part of the firm's money which they had paid to the Kashmir State in September. The Kashmir State were not authorized by the firm to pay this or any sum to the accused, nor had the accused any express authority from the firm to receive it. It was no part of his duty to do so, and in doing so he was acting without the scope of his authority. But having received it he was under an obligation to hold it in trust for the firm to whom it belonged. He had no right to use it or any part of it for any purpose. Still less had he any right to hand it over as a perquisite to any official of the Kashmir State, for which he-had no authority either express or implied. Directly he drew it out of the bank at Srinagar with the intention of. sharing it between the official of the Kashmir State and himself, he committed an offence. Still more so when he shared the money between himself and the official. The offence committed was that of criminal breach of trust under Section 406,. not of criminal breach of trust as a clerk. or servant under Section 438, because in receiving the money ha was not acting: within the scope of his authority.

10. All this rests upon the assumption that-only 2,040 maunds were delivered to the accused. The only evidence of this was the statement sent by Biswas to his government, and the application of the accused for a refund on the basis of this statement. It is belied by the fact that upon reweighment 2,143 maunds were found to have been delivered. This sum was shown on Biswas's books, but it was apparent that the books had been tampered with, probably in an effort to reduce the totals, which may have coincided originally with actual deliveries of 2,260 maunds, to the total of 2,040 maunds which Biswas had stated to his government. The evidence is consistent with one of the theories suggested by the Magistrate, viz. that 2,260 maunds had been delivered and the claim for the refund was a fraud upon the Kashmir State perpetrated by Biswas in collusion with the accused.

11. If these were the true facts, the refund did not belong to the firm at all, and the accused could not be charged with misappropriating it from them. The property in the kuth would have passed, and the Kashmir State would have had no right to seize it. They could not make the accused into a criminal offender against the firm by their own illegal act. Their remedy against the firm would have been a suit for the recovery of the money refunded. But he might be charged with misappropriation or with cheating so far as the Kashmir State was concerned. But with regard to all these suggested offences, the only possible venue would be in Kashmir. '

12. Nevertheless it has been argued that there was evidence that this money belonged to the firm, and that it was the duty of the accused to account for it to the firm in Calcutta, and because he failed to do so he could be tried here. As I have already shown there is no evidence that he had any duty to render any account in Calcutta. But assuming that he had the contention is based upon decisions in the following three cases, W. B. Colville v. Kristo Kishore Bose [1899] 26 Cal. 746; Abdul Latiff Yusuff v. Abu Mahamed Kassim A.I.R. 1922 Cal. 46; Gunanada Dhone v. Santi Prakash Nandy : AIR1925Cal613 , and cases in other High Courts which have followed these decisions. The first decision is not a case of embezzlement at all; it deals with offences under Sections 417 and 418, I. P.C., for cheating by rendering false accounts in Calcutta; obviously it was triable in Calcutta. But it has no application to. the facts of the present case. In the second case which was a case of criminal breach of trust under Section 406 the learned Judges simply followed the decision in the first case saying that it was directly in point, which obviously it was not. They failed to realize that it had no application to a case of criminal breach of trust. In the third case Mukerji, J., points out their error, but nevertheless comes to the conclusion that the place where it is the duty of the accused servant to render an account is an alternative venue, even where there is clear evidence of embezzlement elsewhere.

13. The soundness of this decision has been doubted by Rankin, C. J., in the case of G. N. Pascal v. Raj Kishore Mathur : AIR1931Cal521 , and has been dissented from recently by a Full Bench of the Bombay High Court in In re Jivandas v. Savchand A.I.R. 1930 Bom. 490. It seems to be based upon a somewhat curious mistake. The learned Judge in the course of a careful review of the law points out that it is sometimes difficult to prove exactly where misappropriation takes place, because misappropriation depends upon intention, and. it is not always clear where the intention to misappropriate was formed. In some oases the only evidence of intention to misappropriate is the failure of the accused to render an account and make payment at a particular place according to the terms of his contract of service. In such cases the venue may be laid at the place where the account ought to have been rendered. This was decided in B. v. Davidson and Gordon [1855] 7 Cox.C.C. 158, where Baron Alderson said:

Where there is no evidence of fraudulent embezzlement, except the nonaccounting, the venue may be laid in the place where the non-accounting occurred, because the jury may presume that there the fraudulent misappropriation was made, but this cannot apply where there is distinct evidence of the misappropriation elsewhere.

15. Mukerji, J., quotes this passage in his judgment but adds the following phrase 'for then the offence is triable in either place' and seems to be under the impression that these words were uttered by-Baron Alderson, because he quotes them as such. But these words are not in the report and are the direct antithesis of what Baron Alderson said. A reference to Halsbury's Laws of England, Vol. 9, para. 583, will show that they have bean taken from note (r) to that para. and have been added by the authors of that work. This is ' an example of the danger of quoting from decisions second-.hand instead of consulting the original report. The note is most misleading.

16. Embezzlement according to English common law is committed, and can be tried in the place where the accused misappropriated the money, or if there is no evidence of embezzlement except the non-accounting, then in the places where he ought to have accounted and failed to do so, or accounted falsely, or refused to account, or denied the receipt of the money : B. v. Davidson and Gordon, R. v. Murdock [1851] 5 Cox. C.C. 360, R. v. Hobson [1803] R. & R. 56, B. v. Taylor [1803] R. & Rule 63, R. v. Rogers [1877] 3 Q.B.D. 28; and R. v. Tredgold [1878] 14 Cox. C.C. 220. And by statute it has been provided that the accused may be tried in any place where he has the property in his possession, or where he receives it, or where he was apprehended, or is in custody, or has appeared in answer to a summons; Larceny Act 1916, Section 39 (2) and (3). Criminal Justice Act 1925. Section 11 (1). Therefore the decision of Mukerji, J., is founded partly on this erroneous impression and partly on Abdul Latif's case which, 'as I have already shown is, itself founded upon error.

17. But whatever be the effect of the English decisions and statutes they are not in point. So far as India is concerned the Code of Criminal Procedure in Sections 177 --189 provides the appropriate venue. It has been settled law for many years that S.179 does not apply to charges of misappropriation, Simhachalam v. Emperor [1917] 44 Cal. 912 Section 181(2) is the appropriate section. It runs thus:

The offence of criminal misappropriation or of criminal breach of trust may be enquired 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.

18. It is clear that the money in the present case was not either received or retained by the accused in Calcutta. So far as we know he had never been in Calcutta between the time when he drew the money from the Bank at Srinagar and the date upon which he was brought to Calcutta for trial.

19. There is therefore no authority either in the English or the Indian decisions or in the language of the Code itself for the proposition suggested by Mukerji, J., and I am unable to agree with the decision. Nor do I agree with his suggestion that the provision that the accused may be tried where the offence is committed is superfluous. If omitted, the section would have been read as meaning that the places where the property was received or retained were the only venues. If there is evidence apart from the fact of nonaccounting to show where the misappropriation was committed, the venue must be laid either in that place or in the place where the property was received or retained. If there is no evidence to show where the misappropriation was committed other than the fact of nonaccounting, then the venue may be laid in the place where the accused failed to account, because that is where the offence was committed within the meaning of Section 181(2): R. v. Davison and Gordon.

20. In the present case, assuming that it has been proved that the accused is guilty of embezzlement, which in our opinion is open to considerable doubt, the evidence is that he embezzled the money at Srinagar. Consequently the Magistrate had no jurisdiction to try him in Calcutta. Therefore the conviction and sentence must be set aside and the accused discharged from his bail bonds.

S.K. Ghose, J.

21. I agree.


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