RAMASWAMY NADAR Vs. THE STATE OF MADRAS

JUDGEMENT

(1.) THIS appeal by special leave is directed against the judgment and order of a Single Judge of the Madras High Court, dated April 3, 1957, setting aside the order of acquittal passed by the fourth Presidency Magistrate at Madras, dated February 10, 1956, on a charge under s. 420, Indian Penal Code. The Government of Madras appealed against the order of acquittal and the appeal was heard by a Single Judge of that Court. The learned Judge allowed the appeal, but did not convict the appellant under s. 420, Indian Penal Code, which was the original charge against him in the trial court, but under s. 403, Indian Penal Code, for misappropriation, and sentenced him to the maximum period of two years' rigorous imprisonment. Hence, this appeal.

(2.) THE appellant used to carry on prize -competitions as the proprietor of the 'Lotus Cross Words'. Certain persons who had paid moneys in connection with the prize -competition No. 92, complained that they had not received their prize money though it had been announced that they had competed for the prizes offered. The police, after investigation, submitted a charge -sheet against the accused to the effect that he had, between May 20, 1955, and June 10, 1955, in his capacity as the proprietor of the 'Lotus Cross Words', dishonestly induced P.Ws. 1 to 3 to compete in his "bumper competition" No. 92, by paying entry fees to the tune of Rs. 2,640 on the representation that the prize winners will get a sum of Rs. 3,10,000, and that on that representation, he had collected one lac and fifteen thousand odd rupees from the public, out of which he had spent about nineteen thousand rupees towards expenses of advertising and holding the competition. Though P.Ws. 1 to 3 and others had been declared as the first prize winners, the accused had not distributed even the amount actually collected minus the expenses aforesaid, that is to say Rs. 96,000 odd, the amount of the net collections. The prosecution examined a number of witnesses to prove that the appellant had been holding crossword competitions and a large number of persons had paid moneys by way of entry fees; that the competition in question, namely, competition No. 92, had been advertised with a guaranteed sum of Rs. 3,10,000 by way of prizes; that as a matter of fact a much smaller sum had been collected by way of entry fees; that the three prosecution witnesses aforesaid and others had been, in due course, declared to be the first prize winners, but that none of them had been paid any money. It is also in evidence that a large number of other 'bumper competitions', namely, Nos. 80, 84 and 88, had similarly been held and large sums were advertised to have been guaranteed as prize moneys. None of those 'bumper competitions' yielded the sums so guaranteed. The gravamen of the charge against the accused was that in spite of his recent experience that none of those 'bumper competitions' attracted a sufficiently large number of competitors to yield the guaranteed prize money, the accused had advertised the competition No. 92 with a guaranteed prize money of Rs. 3,10,000 and that in spite of his having collected about one lac and fifteen thousand odd rupees by way of entry fees, none of the prizes declared to have been won by prosecution witnesses 1 to 3 and others, had actually been paid. It was, therefore, suggested by the prosecution that the recent history of the prize competitions conducted by the appellant, would show that he was actuated by a dishonest intention when he collected one lac and fifteen thousand odd rupees by way of entry fees, and did not utilize any part of the collected amount towards payment of the prizes offered. A large volume of documentary evidence furnished by the appellant's registers and account books, was adduced in support of the prosecution case.

(3.) THE learned magistrate, on an elaborate examination of the evidence led before him by the parties, observed in his judgment that the accused had not denied the truth of the allegations of fact made by the prosecution, but had only challenged the insinuations against him that he was actuated by a dishonest intention in carrying on the competitions, particularly, No. 92. He found that none of the statements made in the advertisements had been shown to be untrue; that it was a fact that at the time, the competition No. 92 had been announced in the papers, the accused owed a total debt of prize moneys amounting to about four lacs of rupees in respect of the previous competitions; that the accused had other debts to the tune of a lac and fifty seven thousand odd rupees and that recent competitions had not even yielded sufficient amounts, collected by way of entry fees, to cover the guaranteed prize moneys. But he also found that the accused had applied his own funds amounting to about a lac and a half rupees to the payment of prize moneys. He found that the prosecution had failed to substantiate its allegations that ninety six thousand odd rupees, out of the entry fees collected for the competition No. 92, had been utilized by him for his own purposes and not for carrying on the competitions. He observed that there was no evidence that the accused had used any part of the entry fees collected in any of the competitions, for his own use, or that he took any financial benefit out of the moneys collected in the recent competitions including No. 92. In other words, the court found that in order to meet the heavy demands of the prize winners in respect of the previous competitions, the accused had spent not only the amounts collected by him but also about one and a half lacs of rupees of his own capital. Thus, instead of making any gain for himself, the accused had incurred a total loss of about a lac and a half of rupees, and still he had to meet other prize winners' demands, including those of the three prosecution witnesses aforesaid. On those considerations, his finding was that the accused may have been "absolutely foolish and reckless and far too optimistic" in expecting large sums of money by way of collections of entry fees, but that he had not been guilty of any fraudulent or dishonest conduct. Ultimately, he came to the following conclusion :