CHANDRAKANT THAKORLAL SETH Vs. GOVINDLAL LALLUBHAI DANI

JUDGEMENT

(1.) This is an appeal filed by an accused against his conviction by Mr. M.H. Jadhav, Presidency Magistrate, 25th Court, Mazgoan, Bombay, of the offence of Criminal breach of trust under section 406 of the Indian Penal Code. The short facts, necessary for the purpose of this appeal, are that on the 19th of August, 1971, 168 cases of tea were entrusted by the complainant as Conoor, who carried on business in the name of M/section Kantilal Lallubhai and company, to the Kirti Transport Private Limited company of which the accused is a director, for being transported to Bombay. The goods arrived in Bombay in due course, and the complainants case is that the accused informed him of the same on the telephone, but when the complainant sent his manager, the cases were not delivered to him, though the manager paid the freight in respect of the same. The complainants case is that the accused refused to give delivery of those cases because there was a criminal case pending at a place near Coonoor in respect of some other transaction between the parties in which the accused, the other directors of the Kirti Transport company Private Limited, as well as the company itself, and some others were the accused, and the accused insisted that, that case would first be withdrawn. The plaintiffs case further is that ultimately the accused delivered a hundred and eight cases, but retained 60 cases out of the said consignment until that criminal case was withdrawn; that the said case was withdrawn as settled ; but that accused still refused to deliver that 60 cases that remained with him. The plaintiffs case is that the accused wanted the complainant to pass a letter in certain terms which also was complied with by the complainant, but the accused still failed to deliver those 60 cases, with the result that the complainant had to address a Lawyers notice dated 15th April, 1972 to the Kirti Transport Private Limited Company as well as to the accused, to which there was no reply. The complainant then filed a complaint (No. 67/w of 1972) on the 25th of April, 1972 which was dismissed for defualt on the 28th of March, 1973, and on the 29th of March, 1973 the complainant filed another complaint, out of which the present case arises.

(2.) The first question that arises in a case of criminal breach of trust is, whether the property in question was entrusted to the accused, and in that connection, though at one stage in the course of the arguments before me, Mr. N.V. Vimadalal who appeared for the complainant submitted that the entrustment for the purpose of the present case is not the original entrustment at Coonoor, but the subsequent entrustment of 60 cases to the accused in Bombay pending withdrawal of the criminal case, he ultimately conceded that position was unsustainable. A reference to paragraph 2 of the complaint (Ex .F) itself shows that the entrustment on which the complainant relies is the entrustment to the branch of the said company Kirti Transport Pvt. Ltd. of the accused ad Coonoor, and indeed, that is also the basis of the lawyers notice dated 15th April 1972 addressed on behalf of the complainant. The question that arise therefore is, whether the prosecution has proved that in the present case the cases of tea in question were entrusted by the complainant to the accused at Coonoor. It was sought to be contended by the learned Advocate for the complainant that entrustment to the said cases to the company of the accused amounts to entrustment to the accused himself, since the accused was a director of that company. He has further submitted that, in any event, after the goods arrived in Bombay, the accused as a director had dominion over the goods, and the accused having failed to deliver the said goods, that is sufficient to give rise to an inference of dishonest misappropriation or conversion of the said goods by the accused.

(3.) As far as the first of those contentions of the learned Advocate for the complainant is concerned, as held by me in my judgement (dated 16th January, 1975 in Criminal Appeal No. 952 of 1973), there is no scope in criminal law for invoking the principle of vicarious liability, save in certain exceptional cases with which we are not conceded, and that it is incumbent on the prosecution to prove each of the ingredients of the offences of criminal breach to frust strictly against the accused person himself. As observed by me in my judgement in the said case, the prosecution must, therefore, prove (1) that the entrustment of the goods was to the accused personally, or to his servant or agent to his express knowledge or under his express direction ; and (2) that the dishonest misappropriation was also committed by the accused himself for his own benefit. I pointed out in my said judgement that to take a contrary view would make it extremely hazardous for people to carry on business, particularly if they do so in a big ways and have a large establishment, and that every case in which there may be civil liability in damages for vreach of trust does not necessarily amount to criminal breach of trust. I taking that view in my said judgment, I have approved of the view taken by the Court of the Judicial Commissioner of Tripura in the case of (Gopal Krishan v. State of Tripura) Cri. Appeal No. 952 of 1973 to the same effects. Following my own judgement in said Criminal Appeal No. 952 of 1973, and for the reasons stated therein, I hold that, in the present case also, it was necessary for the prosecution to prove that the cases of tea in question were entrusted by the complainant to the accused personally, or if the same were entrusted to the servants or agents of the accused, they were entrusted to them to the express knowledge or under the express directions of the accused. There is no such evidence in the present case, and indeed, there could be none, for though it is well-settled that a director had the dual capacity of being an agent for the company as well as a trustee of the companys property, there is no question of the servants or agents of the company at coonoor being the agents of the accused personally. There is also nothing on record to show that the entrustment of the goods to the servants or agents of the company at Coonoor, was to the express knowledge or under the express directions of the accused. This limb of Mr. Vimadalals argument must, therefore, be rejected. As far as the second limb of Mr., Vimadalals argument on the question of entrustment is concerned, it is, in my opinion, based on a misreading of the clear terms of section 405 of the Indian Penal Code which defines the offence of criminal breach of trust. One of the basic ingredients of the offence defined by that section is that the accused must be entrusted with property, or with dominion over property. It is clear, on a plain reading of that section, that the dominion over property, to which the said section refers, must be a dominion arising out of the entrustment of that dominion to the accused, and that the mere fact tat in the ordinary course of the transaction the accused may, at some stage, acquire control over the property cannot be sufficient for the purpose of satisfying this ingredient of the offence or criminal breach of trust. Happily, I find that this view, which I have taken and which I conveyed to the learned Advocate for the complainant in the course of the hearing, is supported by the decision of the Supreme Court in the case of (Velji Raghavji v. The State of Maharashtra) A.I.R. 1955 Tri. 35. Decided on 16-1-75, vimadalal J., H.C. Bom. where this precise point is dealt with by that Court. The question which arose in that case was, whether a partner of a firm can be convicted under section 406 of the Indian Penal Code on the ground of his failure to account for moneys belonging to the firm in which he was a partner. In following the appeal and setting aside the conviction of the accused who was the partner concerned, the Supreme Court laid down as follows :