EMPEROR Vs. JAGANNATH RAGHUNATHDAS

JUDGEMENT

(1.) This is an appeal by the accused from a con-vicbion before the Chief Presidency Magistrate under Section 406 of the Indian Penal Code. The charge is that the accused on or about September 14, 1929, at Bombay did bring various sums of money aggregating to Rs 51,228-5-0 from several constituents of the firm of Rai Saheb Ramdayal Ghasiram for the use of the said firm and did dishonestly misappropriate the said sum to his own use and thereby committed an offence punishable under Section 406. He was sentenced to six months rigorous imprisonment and a fine of Rs. 1,000, in default six months rigorous imprisonment.

(2.) The history of the matter so far as is material is this: There was an old firm in which one Gopilal, whose Munim Ganpatlal Jankidas is the complainant in this case (though I will hereafter refer to Gopilal as the complainant), was a partner, and the accused and a man named Motiram were also partners. That firm was wound up in July 1928, a settlement was then arrived at and a deed of retirement executed. The firm was to be taken as having been wound up from October 26, 1927, and Motiram retired. The deed of settlement shows that Motiram was indebted to the firm in a sum of Rs. 48,000 odd and the accused was indebted in a sum of Rs. 42,000 odd. For that sum the accused gave a promissory note to the complainant and it is said, and I will assume, that thereby the accused's liability to the firm was discharged. Very shortly prior to this settlement in July 1928, the complainant had written some letters to the accused pointing out that the accused was indebted to the firm and that until that debt was paid off the accused was not entitled to draw a single pie out of the firm and the accused seems to have acquiesced in that position. Those letters were strongly relied upon by the learned Magistrate as showing that the withdrawals--the subject-matter of the charge, could not possibly have been justified. But it is, I think, a fair criticism that those letters were written prior to the settlement of July 2, and I will assume for the purposes of my judgment that the arrangement embodied in those letters did not continue after July 2. Motiram having retired, there is no question but that the complainant and the accused continued in partenership. There is a question as to the relative shares which they had in the partnership business and profits, but I will assume for the purposes of my judgment that the accused was entitled (as he claims) to a half share in the profits. It is in evidence that the accused brought no capital into the business. That statement was elicited in the cross-examination of the complainant's Munim. Now, on September 14, 1929, the accused admittedly collected outstandings of the firm amounting to the sum mentioned in the charge, that is to say Rs. 51,000 odd, and he applied those moneys for his own purposes: that is to say, he did not put them into the firm, he debited himself in the accounts with the firm as having had those moneys but he put the moneys in fact into his own pocket. The question is whether in those circumstances he can be charged with criminal breach of trust under ss. 405 and 406 of the Indian Penal Code. Section 405 is in these terms:-- Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law proscribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits criminal breach of trust.

(3.) Now Mr. Thakor's first point is that that section does not apply to the case of a partner dealing with partnership property. He points out that all the illustrations are illustrations of a person entrusted absolutely with property of another and do not relate to property which is in part in the ownership of the accused. But, in my opinion, the words of the section are quite wide enough to cover the case of a partner. Where one partner is given authority by the other partners to collect moneys or property of the firm I think that he is entrusted with dominion over that property, and if ho dishonestly misappropriates it, then I think he comes within the section. That is the view which prevailed in a full bench case of the Calcutta High Court as long ago as 1874--the case of Queen V/s. Okhoy Goomar Shaw (1874) 13 Beng. L.R. 307, F.B., and the view was adopted by this Court apparently with approval in Emperor V/s. Lalloo (1904) 6 Bom. L.R. 553, and in my opinion that is the right view. Then Mr. Thakor says that assuming the section applies, the burden is upon the prosecution to prove a case under it, and one of the essential ingredients which has to be proved is that there was a dishonest intent, and Mr. Thakor says that we cannot uphold this conviction unless the prosecution have proved such a position that a dishonest intent must necessarily be inferred. Well I agree with that, I think that the prosecution must prove facts from which the only possible inference which can reasonably be drawn is that there was a dishonest intent. Here the accused brought no capital to this firm. I ought perhaps to have mentioned in my statement of the relevant facts that when the old firm was wound up in 1929 some of the property was retained by the three former partners jointly and the accused says that that property may be of value. But I think that property must be left out of account entirely in dealing with this charge. I think that it is really essential for the accused's case to say that a new firm started in July 1928 because otherwise he would still be saddled with the liability of Rs. 42,000. Therefore, I leave out of account the property in the joint names which formerly formed part of the old partnership assets, and I repeat that the accused brought no capital into the new firm. The accused says that he had reasonable grounds for thinking that at the time when he received this Rs. 51,000 and applied it to his own use his share in the partnership was at least equal to that sum. Now, can we accept that view ? The accused had no interest in the capital of the firm, the firm had only been in existence for two years and there is some evidence that a certain amount of profit had been made. But no accounts had been taken. This is clear from the evidence. Therefore it was impossible to say what the profits were. The complainant in a plaint which he filed against the accused in a civil action admitted that the profits for 1928 were Rs. 30,000. On the other hand, the witness Dagroolal Shivnarayan says that he thinks that in 1929 there will be a loss of Rs. 50,000. However that may be there is not a particle of evidence that the profits of the new rirm will amount to anything like Rs. 1,00,000, and unless it does, clearly the accused was not entitled to withdraw Rs. 51,000, Nor can I see any evidence from which the accused could bare supposed that the profit reached that figure. It seems to me that on the facts as proved by the prosecution we must necessarily infer that when the accused received collectively Rs. 51,000 odd and put them into his own pocket he did it dishonestly, We have got his account with the firm and it appears that at no time during 1928 and 1929 did he withdraw a sum exceeding at any one time Rs. 300. Most of his withdrawals are quite small. There is one item of just over Rs 4,000, but that according to an entry in the book was a havala entry because the accused had settled a claim for Rs. 4,000 and the firm accepted that settlement and credited him with the amount. But so far as ordinary drawings are concerned he had only withdrawn small sums below Rs. 300 and then suddenly for no particular reason he collects Rs. 51,000 and puts the whole amount into his pocket at once.