# AJAY AGARWAL v. UNION OF INDIA AND ORS

- **Citation:** [1993] 3 S.C.R. 543
- **Court:** Supreme Court of India
- **Decided:** 1993
- **Case number:** Criminal Revision No. 443 of 1990
- **Bench:** K. Ramaswamy, R.M. Sahai
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ajay-agarwal-v-union-of-india-and-ors-11785
- **Pages:** 27

## Headnote

Penal Code, 1860-Sections l 20A, 120B-'Conspiracy'-'Criminal
Conspiracy'-Dejinition-Ingrediems-:-Whether conspiracy p1111ishable as a
substamive offence and whether comin11i11g offence-Offences in pursuant to
conspiracy whether separately punishable.
Code
of Criminal
Procedure
1973-Sectio11
l88-Whe11
applicable-Conspiracy hatched at Chandigarh-Part of c011spiracy at
. Dubai-Overt acts in furtherance of such conspiracy-Sanction not necessary.
.
.
A
B
c
D
Cbde of Crimi11al Procedure 1973-Section 188, ProvisoConstruction-Requirement:S under.
Code of Criminal Procedure 1973-Section 188, read with Section, 4
IPC-Offe11ce by Indian Citizen olllside India-Effect of
Penal Code, 1860-Section 120A, 120B. 468, .471-Charged
under-Conspiracy at Chandigarh-Certain overt acts in furtherance of conspiracy done ar Dubai-Sanction under Section 188, Cr. P.C. not
necessary-Jurisdiction of Chandigarh Court-Scope of.
Penal Code, 1860-Section 120A, 120B, 468, 471-Charged
under-Conspiracy at Chandigarh-Cerrain Overt acts in fi.trtherance of conspiracy done at Dubai /Jy a NRl-Effecr of
E
F
The prosecution case was that the appellant, a non-resident Indian at G
Dubai, hatched a conspiracy along with four others to cheat tlJe Bank at
Chandigarh. In furtheram:e of the conspiracy, the appellant got credit facility
by way of Foreign Letters of Credit and issued proforma invoices of his
concern and addressed to the Bank through the establishments of other
accused. The Manager of the Bank, another accused, in confabulation with
543
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SUPREME COURT REPORTS
[1993] 3 S.C.R.
the appellant and other accused, being in-charge of foreign exchange depart·
ment, issued Foreign Letter of Credit in violation of import policy. The Bills
of Lading were addressed to the Bank. The cable confirmation of the Bank
was sent to appellant's concern at Dubai for confirmation of discrepancy. The
alJpellant confirmed correctness thereof. Placing reliance thereon, authority
letter was issued by the Bankand cables were sent subsequent thereto to remit
the amount.; to the Dubai Bank through one Irving Trust Company, At the
instance of accused Anand, The Dubai Bank informed the Bankat Chandigarh
that the discrepancy in the document adaptable to accused Anand and
claimed to have inspected the goods on board in the \'essel. On receipt of the
information from the appellant's concern at Dubai, full amount is US Dollars
4,39,200 was credited against all the three Letters of Credit on discount basis.
The investigation established that the vessel was a non-existent one and
three Foreign Letters of Credit were fabricated on the basis of false and
forged shipping documents submitted by the appellant to the Dubai Bank.
Thus the Bank at Chandigarh was cheated of an amount of Rs. 40,30,329.
The accused were charge-sheeted under section read with sections 420,
468, and 471, IPC.
The Trial Court discharged all the accused of the offences on the ground
that conspiracy and the acts done in furtherance thereof had taken place
outside India and. as no sanction under section 188, Code of Criminal
Procedure 1973 was produced, the prosecution was not maintainable.
The. High Court. in revision held that the conspiracy fook place at
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Chandigarh and the overt acts committed in pursuance of that conspiracy at
Dubai constituted offences under sections 420, 467 and 471 IPC., and they
were triable at Chandigarh without previous sanction of the Central Govt.
The High Court setting aside the order of discharge of the trial Court,
directed to continue further proceedings in accordance with law. That order
of the High Court was challenged under this appeal under Article 136 of the
G
Constitution.
The appellant contended that he was not a privy to the conspiracy and
the conspiracy did not take place at Chandigarh; and that even assuming that
some of the offences were committed in India, by operation of Section 188 read
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with the proviso thereto with a non-obstanti clause, absence of sanctidn by the
~

## Text

_Characters 0–39,954 of 66,674. This is a partial read: ask again with offset=39954 for what follows._

AJAY AGARWAL
v.
UNION OF INDIA AND ORS
MAYS, 1993
[K. RAMASWAMY & R.M. SAHAI, JJ.]
Penal Code, 1860-Sections l 20A, 120B-'Conspiracy'-'Criminal
Conspiracy'-Dejinition-Ingrediems-:-Whether conspiracy p1111ishable as a
substamive offence and whether comin11i11g offence-Offences in pursuant to
conspiracy whether separately punishable.
Code
of Criminal
Procedure
1973-Sectio11
l88-Whe11
applicable-Conspiracy hatched at Chandigarh-Part of c011spiracy at
. Dubai-Overt acts in furtherance of such conspiracy-Sanction not necessary.
.
.
A
B
c
D
Cbde of Crimi11al Procedure 1973-Section 188, ProvisoConstruction-Requirement:S under.
Code of Criminal Procedure 1973-Section 188, read with Section, 4
IPC-Offe11ce by Indian Citizen olllside India-Effect of
Penal Code, 1860-Section 120A, 120B. 468, .471-Charged
under-Conspiracy at Chandigarh-Certain overt acts in furtherance of conspiracy done ar Dubai-Sanction under Section 188, Cr. P.C. not
necessary-Jurisdiction of Chandigarh Court-Scope of.
Penal Code, 1860-Section 120A, 120B, 468, 471-Charged
under-Conspiracy at Chandigarh-Cerrain Overt acts in fi.trtherance of conspiracy done at Dubai /Jy a NRl-Effecr of
E
F
The prosecution case was that the appellant, a non-resident Indian at G
Dubai, hatched a conspiracy along with four others to cheat tlJe Bank at
Chandigarh. In furtheram:e of the conspiracy, the appellant got credit facility
by way of Foreign Letters of Credit and issued proforma invoices of his
concern and addressed to the Bank through the establishments of other
accused. The Manager of the Bank, another accused, in confabulation with
543
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SUPREME COURT REPORTS
[1993] 3 S.C.R.
the appellant and other accused, being in-charge of foreign exchange depart·
ment, issued Foreign Letter of Credit in violation of import policy. The Bills
of Lading were addressed to the Bank. The cable confirmation of the Bank
was sent to appellant's concern at Dubai for confirmation of discrepancy. The
alJpellant confirmed correctness thereof. Placing reliance thereon, authority
letter was issued by the Bankand cables were sent subsequent thereto to remit
the amount.; to the Dubai Bank through one Irving Trust Company, At the
instance of accused Anand, The Dubai Bank informed the Bankat Chandigarh
that the discrepancy in the document adaptable to accused Anand and
claimed to have inspected the goods on board in the \'essel. On receipt of the
information from the appellant's concern at Dubai, full amount is US Dollars
4,39,200 was credited against all the three Letters of Credit on discount basis.
The investigation established that the vessel was a non-existent one and
three Foreign Letters of Credit were fabricated on the basis of false and
forged shipping documents submitted by the appellant to the Dubai Bank.
Thus the Bank at Chandigarh was cheated of an amount of Rs. 40,30,329.
The accused were charge-sheeted under section read with sections 420,
468, and 471, IPC.
The Trial Court discharged all the accused of the offences on the ground
that conspiracy and the acts done in furtherance thereof had taken place
outside India and. as no sanction under section 188, Code of Criminal
Procedure 1973 was produced, the prosecution was not maintainable.
The. High Court. in revision held that the conspiracy fook place at
F
Chandigarh and the overt acts committed in pursuance of that conspiracy at
Dubai constituted offences under sections 420, 467 and 471 IPC., and they
were triable at Chandigarh without previous sanction of the Central Govt.
The High Court setting aside the order of discharge of the trial Court,
directed to continue further proceedings in accordance with law. That order
of the High Court was challenged under this appeal under Article 136 of the
G
Constitution.
The appellant contended that he was not a privy to the conspiracy and
the conspiracy did not take place at Chandigarh; and that even assuming that
some of the offences were committed in India, by operation of Section 188 read
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with the proviso thereto with a non-obstanti clause, absence of sanctidn by the
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AJAY AGARWAL v. UNION OF INDIA
545
Central Govt. barred the jurisdiction of the Courts in India to take cognisance
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of or to enquil'e into or try the accused.
The respondents submitted that the conspiracy to cheat the Bank was
hatched at Chandigarh; that all the accused committed over acts in furtherance of the conspiracy at Chandigarh and therefore, the sanction of the
Central Govt. was not necessary.
Dismissing the appeal, this Court,
HELD: Per K. Ramaswamy,J.
1.01. Judicial power ofa State extends to the punish,ment of all offences
against the municipal laws of the State by whomsoever committed within the
· territory. lt also h~s the power to punish all such offences wherever commitB
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ted .by ibi citizen. The general principle of international law is that every . D
person be it a citizen or foreigner who is found within a foreign State is
"Ubjeued to, and is punishable by, its law. Otherwise the criminal law could
not be administcn'CI according to any civilised system of jurisprudence. (553F) .
1.oz. Conspiracy may be considered to be a march under a banner and
a person may join or drop out in the march without the necessity of the change
in the tf:Xt on the banner. In the comity of International Law, in these days,
committing otTences on international scale is a common feature. The offence
of coft.'>piracy would be a useful weapon and there would exist no contact in
municipal laws and the doctrine of autrefois convict or acquit would extend
to such offences. The comity of nations are duty bound to apprehend the
conspirators as soon as they set their feet on the country territorial limits and
nip the ~ffence in the bud. (564-F-G)
2.01. Section 120-A of the l.P.C. defines 'conspiracy' to mean that whe'n
two or more persons agree to do, or cause to be done an illegal act, or an act
which is not illegal by illegal means, such an agreement is designated as
"criminal conspiracy". No agreement except an agreement to commit an
offence shall amount to a criminal conspiracy, unless some act besides the
agreement is done by one or more parties to such agreement in furtherance
thereof. (557-C)
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SUPREME COURT REPORTS
[1993] ~ S.C.R.
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2.02. Section 120-B of the I.P.C. prescribes punishment for criminal
conspiracy. It is not necessary that each conspirator must know all the details
of the scheme nor be a participant at every state. It is necessary that the~·
should agree for design or object of the conspir.1cy. Conspir.1cy is conceived
as having three clements: (1) agreement (2) between two or more persons by
whom the agreement is effected; and (3) a criminal object, which may be
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either the ultimate aim of the agreement, or may constitute the means, or one
of the means by which that aim is to be accomplished. It is immaterial whether
this is found in the ultimate objects. (554-E)
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2.03. Conspiracy to commit a crime itselfis punishable as a substanth•e
offence and every indh•idual offence committed pursuant to the conspiracy is
separate and distinct offence to which individual offenders are liable to
punishment, independent of the conspiracy. (556-D)
2.04. The agreement does not come to an end with it-. making, but would
endure till it is accomplished or abandoned or proved aborth·e. Being a
continuing offence, if any acts or omissions which constitute an offence arc
done in India or outside its territory the conspirators continuing to be parties
to the conspiracy and since part of the acts were done in India, they wotdd
obviate the need to obtain sanction of the Central Govt. All of them need not
be present in India nor continue to remain in India. (556-E)
2.05. An agreement between two or more persons to do an illegal act or
legal acts by illegal means is criminal conspiracy. If the agreement is not an
agreement to commit an offence, it does not amount to conspiracy unless it is
followed up by an overt act done by one or more persons in furtherance of the
agreement. The offence is complete as soon as there is meeting of minds and
unity of purpose between the conspirators to do that illegal act or legal act by
illegal means. Conspiracy itselfis a substantive offence and is distinct from the
offence to commit which the conspiracy is entered into. It is undoubted that
the gen~ral conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy. Each act constitutes separate
offence punishable, independent o0he conspiracy. (563-F-G) ·
"Jones' Case, 1832 B & A-D 345; Mulcahy v. Reg., (1868) L.R. 3 H.L. 306;
Quinn v. Learhem, 1901 AC495 at528; B.G. Bars{.[)''" T7ie Stale of Bombay, (1962)
2 SCR 229; Yashpal v. T71e State of Punjab, .(1977] SCR 2433; Mohammed Usman,
Mol1atrmiedH11ssainManivar&Anr. v.Stateof Maharashtra, [1981] 3SCR 68;Noor
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AJAY AGARWAL v. UNION OF INDIA
547
Mohammad Yastif Monin v. State of Maharashtra, [1971) 1 SCR 119; R.K.
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Da/mia & Anr. ''·The Delhi Admi11istratio11, [1963) 1SCR253; Shivanarayan
laxminarayan & Ors. v. State of Maharashtra & Ors. (1980) 2 SCC 465 and
Lennart Schussler & Anr. v. Director of Enforcement & Anr .• [1970) 2 SCR 760,
referred to.
2.06. A conspiracy is a continuing om~nce and continues to subsist and
committed whei'e\'er one of the conspirators does an act or series of acts. So
long as it'> performance continues, it is a continuing offence till it is executed
or rescinded m· frustrated by choice or necessity. A crime is complete as soon
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as the agreement is made, but it is not a thing of the moment. It does not end
with the making of the agreement. It will continue so long as there are two or c
more parties to it intending to carry into effect the design. Its continuance is
a threatto the society against which it was aimed at and would be dealt with
as soon as that jurisdiction can properly claim the power to do so. The
conspiracy designed or agreed abroad will have the same effect as in India, .
when part of the act">, pursuant to the agreement are agreed to be finalised or
done, attempted or even frustrated and vice versa. (564-H, 565-A)
Abdul Kader v.State. AIR 1964Bombay133; U.S. v. Kissal, 218 US 601; Ford
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v. U.S., 273 US 593 at 620 to 622; Director of Public Prosec111io11s ''·Door and
Ors., (1973) Appeal Cases 807 (H.L); Treacy v. Director of Public ProseciJtions,
(1971) Appeal Cases 537 at 563 (Fi.L.) and Board of Trade v. Owen. (1957)
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Appeal Cases 602, referred to.
Prof. Williams, Glanville: "Vanue and the Ambit of Criminal law", [1965)
L.Q.R. 518 at 528; Hals bury' s law of England, third edition Vol. 10. page 327,
Para 602; Archobold: Criminal pleadings. Evidence and Practice, 42nd edition,
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[1985) Chapter 23, In para 28-3~ at page 2281; Writ: Conspiracies and
Agreements, at pages 73-74; Smith: Crimes, at page.239 and Russel: Crime,
. 12th edition, page 613, referred to.
2.07. Sanction under section 188 is not a condition precedent to take G
cognizance of the offence. If need be it could be obtained before trial begins.
Conspiracy was initially hatchcit at Chandigarh and though itself is_. a
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completed offence, being continuing offe,nce, even accepting appellant's case
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that he was at Dubai and.part of conspiracy and overt acts in furtherance
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548
SUPREME COURT REPORTS
11993) 3 S.C.R.
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thereof had taken place at Dubai and partly at Chandigarh; and in conse·
quence thereof other otl'ences had been ensued. Since the offences ha\'C been
committed during the continuing course of transaction culminates in cheating
P.N.B. at Chandigarh, the need to obtain sanction for \'arious officer under
proviso to s. 188 i'> obviated. Therefore, there is no need to obtain sanction
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from Central Govt. The case may be different ifthe offences were committed
out side India and arc completed in themselves without conspiracy.
(566-D-E)
K. Sarwant Si11gf1 v. The State of Punjab, (1960) 2 SCR 89; In Re M.L Verghese,.
AIR 1947 Mad. 352; T. Fakflru/la Khan and Ors. v. Emperor, AIR 1935 Mad.
326; Kailash Sharma''· State, 1973 Crl. law Journal 1021, distinguished.
Purshottamdas Dalmia v. State of Benga.f. (1962] 2 SCR 101; LN. M11khe1jee , ..
The State of Madras, [1962] 2 SCR 116; R.K. Dalmia v.' Delhi Administration,
[1963] 1SCR253 at 273; Banwari Lal Jlwnjl11111wala and Ors.,., Union of India
aitd Anr., (1963] Supp. 2 SCR 338, referred to.
Per R.M. Sahai, J. (Concllrring)
1.1. Language of the section 188, Code of Criminal Procedure.is plain
and simple. It operates where an offence is committed by a citizen of India
outside the country. Requirements are, therefore, onc--commission of an
offence; second_.:..b~· an Indian citizen; and third-that it sho~ld ha\•e been
committed outside the country. (567-0)
1.2. Substanti\·e law of extra-territory in respect of criminal offences is
provided for by Section 4 of the IPC and the procedure to inquire and try it
is contained in Section 188 Cr. P.C. Effect of these sections is that an offence
committed by an Indian citizen outside the country is deemed to have been
committed in India. (567-E)
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1.3. Since the pro,·iso to Section 188, Cr .P.C. begins with a non obstinate
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clause its observance is mandatory. But it would come into·play.only ifthe
principal clause is applicable, namely, it is established that an offence.as
defined in clause 'n' ofSe~tion 2ofthe Cr.P.C. bas been committed and it has
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been committed outside the country. (567-G)
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AJAY AGARWAL v. UNION OF INDIA •
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1.4. What has to be examined at this stage is ifthe claim of the appellant
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that the offence under Section 1208 read with Section 420 and section 471 of.
rthe IPC were committed outside the country. An offence is defined in the
Cr .P.C. to mean an Act or omission made punishable by any law for the time
being in force. None of the offences for which the appellant has .been c~~rg~:
has residence as one of its ingredients. (567-H, 568-A)
. ) ,.
1.5. The-jurisdiction to inquire or try .vests under Section 177 in the
Court in whose local jurisdiction the offence is committed. It is thus the
commission of offence and not the residence of the accused which is decisive
of jurisdiction. When two or more person;, agree to do ~r cause to be done an
illegal act or an act which is illegal by illegal means such agreement is
designated a criminal conspiracy under Sectio'n 120A of the IPC. The
ingredients of the offence is agreement and not the residence. Meeting of
minds of more than two persons is the primary ·requirement. Even if it is
assumed that the appellant was at Dubai and he entered into an agreement
with his counterpart sitting in India to do an illegal act in India the offence of
conspiracy came intO being when agreement was reached between the two.
The two minds met when talks oral or ·in writing took place in India.
Therefore, the offence of conspiracy cannot be said to have been committed
outside the country. (568-B-C)
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1.6. If a foreign national is amenable to jurisdiction under Section 179
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of the Cr.P.C. a NRI cannot claim that the offence shall be deemed to hav~
been committed outside the country merely because· he was not physieally
present. (568-F)
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Mobarik Ali Ahmed v. The State of Bombay, AIR 1957 SC 857, referred to.
1. 7. An offence is committed when all the ingredients are satisfied. The
section having used the word 'offence' it cannot be understood as part of the
offence. Section 179 Cr.P.C. empowers a court to try an offence either at a
place where the offence is committed or the consequences ensue. On the
allegations in the complaint the act or omissions were committed in India. In G
any case the consequence of conspiracy, cheating and forging having taken
place at Chandigarh the offence was not committed outside the country
therefore the provisions ofSec.188 Cr. P.C. were not attracted. (569-B)
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CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No: 400 of
1993.
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From the Judgment and order dated 3.6. 1992 of the Punjab and Haryana
High Court in Criminal Revision No. 443 of 1990.
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.. MAY AGARWAL v. UNION OF INDlA ~RAMASWAMY,J.]
551
P.N.B., Chandigarh that the discrepancy in the documeht.adeptable to ~.P. Anand
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and claimed to have inspected the goods on board in vessel, M.V. Atefeh. On
receipt of the information from the Sales International, Dubai, full amount in US
Dollars 4, 39 ,200 was credited against all the three Letters of Credit on discount
basis. During i11vestigation it was found that Vessel M.V. Atefeh was a nonexistent one and three Foreign Letters of Credit were fabricated on the basis of
false and forged shipping documents submitted by the appellant, Ajay Aggarwal
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to the Emirates National Bank, Dubai. Thus the P.N.B. was cheated of an amount
of Rs. 40,30,329. Accordingly charge sheet was laid against the appellant. and
others for offences punishable under sections l 20B read with Sections 420
(Cheating), 468 (Forgery) and 47 l using as genuine (Forged documents), I.P.C.
The Chief Judicial Magistrate, Chandigarh by his order dated January ll, l 990
discharged all. the accused of the offences on the ground that conspiracy and the
acts done in furtherance thereof had taken place outside India and, therMore the
sanction under section 188 Criminal Procedure Code, l 973 for short the 'Code' is
mandatory. Since no such sanction was produced the prosecution is not maintainable. On revision, the High Court of Punjab and Haryana in Criminal Revision No.
443 of l 990 by order dated June 3, l 992 held, that the conspiracy had taken place
at Chandigarh. The overt acts committed in pursuance of that conspiracy at Dubai
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constituted offences under sections 420, 467 and 471, I.P.C., are all triable at
Chandigarh without previous sanction of the Central Govt. The orderof discharge,
therefore, was set aside and the appellant and other accused were directed to be
prese9t through their counsel in person in the Trial Court\)n July 17, 1992 to enable
the court to take further proceedings in accordance with law. This appeal has been
filed by the appellant alone under Art. 136 of the constitution.
Sri Chidambaram, learned Senior counsel contended that the appellant was
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not a privy to the conspiracy. He was an N.I.R. businessman at Dubai. He never
visited Chandigarh. Even assuming for the sake of argument that conspiracy had
taken place and all act committe,d in furtherance thereof were also at Dubai. The
transaction through, bank is only bank to bank transaction. Even assuming that
some of the offences were committed in India since as per the prosecution case
itself that part of the conspiracy and related offences were committed at Dubai, by
operation of Section l 88 read with the proviso thereto with a no11-obstami clause.
absence of sanction by the Central Govt. knocks of the bottom of the jurisdiction
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of the courts in India to take cognisance of or to enquire into or try the accused. He
placed strong reliance on I. Fakltrulla ldlan an<t Ors. v. Emperor AIR 1935 Mad.
326, In reM.L. Verghese AIR 1947 MAD. 352.kailash Sharma v. State[l973 Cr!.
Law Journal 1021 and K. Satwant Singh v. State off'unjab [1960) 2 SCR 89. Sri
Goswami, the learned senior counsel for the respondents contended that the
conspiracy to cheat. PNB was hatched at Chandigarh. All the accused committed
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SUPREME COURT REPORTS
[1993) 3 S.C.R.
overt acts In furtherance. Ali the accused committed overt acts in furtherance on
the conspiracy at Chandigarh and, therefore, the sanction of the Central Govt. is
not necessary. The High Court had rightly recorded those finding~. There is no
need~to obtain sanction under s. 188 of the Code.
1• The diverse contentions give rise to the primary question whether the
sanction of the Central Govt. as required under proviso to s. 188 of the Code is
necessary. Section 188 of the Code reads thus :
}I
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.[
•·offence committed outside India-when an offence is committed
outside India -
(a) by a citizen of India, whether on the high seas or elsewhere; or
(b) by a person, not being such citizen, on any ship or aircraft
registered in India, he may be dealt with in respect of such offence
as if it had been commilled at any place within India at whiFh he may
be found:
Provided that, notwithstanding anything in any of the preceding
sections of this Chapter, no such offence shall be inquired into or
tried in India except. with the previous sanction of the Central
Government"'.
Section 3, IPC prescribes punishment of offences committed beyond, but
which by law may be tried with, India, It provided that any person liable, by any
Indian law, to be tried for an offence committed beyond India shall be dealt with
according to the provisions of this Code for any act committed beyond India in the
s'ai:ne manner as if such act had been committed within India. Section 4 extends its
t~rritorial operation postulating that IPC shall apply to any offence committed by-
( l) any citizen oflndia in any place without any beyond India;
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(2) any person on any ship or aircraft registered in India wherever it may be.
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Exnlanation.:_In this section the word 'offence· includes every act committed outside India which, if committed. in India, would be punishable under thjs
Code.·
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AJAY AGARWALv. UNION OF INDIA IRAMASWAMY.J.)
553
Illustration-A. who is a citizen of India, commits a murder in Uganda. He
can he tried and convicted of murder in any place in India in which he may be
found.
The Code of Criminal Procedure extends to whole of India except the State
of Jammu & Kashmir and except chapters 8, 10 and 11, the other provisions of the
Code shall not apply to the State ofNagaland and to the tribal area. However, the
State Govt. has been empowered, by a notification, to apply all other provisions
of the Code or any of them to the whole or part of the State ofNagaland and such
other tribal areas, with supplemental, incidental or consequential modifications,
as may be specified in the notification. Therefore. the Code also has territorial
operation. The Code is to consolidate and amend the law relating to criminal
procedure. Section 188 was suitably amended pursuant to the recommendation
made by the Law Commission. Chapter VIII deals with jurisdiction of the courts
in inquiries and trials. Section 177 postulates that every offence shall ordinarily be
inquired into and tried by a Court within whose local jurisdiction it was committed
but exceptions have been en grafted in subsequent sections in the Chapter. Section
l 79 provides venue for trial or enquiry at the place where the act is done or
consequences ensued. So inquiry or trial may be had by a Court within whose local
jurisdiction such thing has been done or such.consequence has ensued. Section 188
by fiction dealt offences committed by a citizen oflndiaor a foreigner outside India
or on high seas or elsewhere or on any ship or aircraft registered in India. Such
person was directed to be dealt with. in respect of such offences, as if be had
committed at any place within India at which he may be found. But the proviso
thereto puts and embargo that notwithstanding anything in any of the preceding
sections of this Chapter have been done such offences shall not be inquired into
or tried in India except with the previous sanction of the Central Govt.
Judicial power of a.State extends to the punishment of all offences against
the municipal laws of the State by whomsoever committed within the territory. It
also has the power to punish all such offences wherever committed by its citizen.
The general principle uf international law is that every person be it a citizen or
foreigner who is found within a foreign State is subjected to, and is punishable by,
its law. Otherwise the criminal law could not be administered according to any
civilised system of jurisprudence. Sections 177 to 186 deal with the venue or the
place of the enquiry or trial of crimes. Section 177 reiterates the well-established
common law rule that the properand ordinary situs for the trial ofa crime is the area
of jurisdiction in which the acts occurred and are alleged to consti!ute the crime.
But this rule is subject to several well-recognised exceptions and some of those
exceptions have been en grafted in subsequent sections in the chapter of the Code.·
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Therefore, Uie provisions in Chapter VIII are elastic and not peremptory. In
consequence there- with Sections 218 to 223 of the code would also deal with
exceptions engrafted in the Code. Therefore, they do permit enquiry or trial of a
particular offence along with other offences at a common trial in one court so that
the court having jurisdiction to try an offence gets jurisdiction to try other offence
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conunitted or consequences thereof ha<; ensued. The procedure is hand maid to
substantive justice, namely, to bring the offenders to justice to meet out punishment under IPC or special law as the case may be, in accordance with the procedure
prescribed under the Code or special procedure under that Act constituting the
offence.
The question is whether prior sanction of the Central Govt. Is necessary for
the offence of conspiracy under proviso to s. 188 of the Code to take cognizance
of an offence punishable under s. 120-B etc. I.P.C. or to proceed with trial. In
Chapter VA, conspiracy was brought on statute by the Amendment Act, 1913 (8
of 1913). Section 120-A of the 1.P.C. defines ·conspiracy' to mean that when two
or more persons ag2"ee to do, or cause to be done an illegal act, or an act which is
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not illegal by illegal means such an agreement is designated as "criminal
conspiracy". No agreement except an agreement to commit an offence shall
amount to a criminal conspiracy, unles's some act besides the agreement is done
by one or more parties to such agreement in furtherance thereof. Section 120-B of
the l.P.C. prescribes punishment for criminal conspiracy. It is not necessary that
each conspirator must know all the details or the scheme nor be a participant at
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every stage. It is necessary that they should agree for design or object of the
conspiracy. Conspiracy is conceived as having three elements: (1) agreement (2)
between two or more persons by whom the agreement is effected; and (3) a
criminal object, which may be either the ultimate aim of the agreement, or may
constitute the means, or one of the means by which that aim is to be accomplished.
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It is immaterial whether this is found in the ultimate objects. The common law
definition of ·criminal conspiracy· was stated first by Lord Denman in Jones· case
( 1832 B & A D 345) that an indictment for conspiracy must '"-charge a conspiracy
to do an unlawful act by unlawful means" and was elaborated by Willies, J. on
behalf of the Judges while referring the question to the House of Lords in M11lcahy
· v. Reg {1868) L.R. 3 H.L. 306 and the House of Lords in unanimous decision
reiterated in Q11i1111 v. leatlzem (1901AC495 at 528) as under:
"A conspiracy consists not merely in the intention of two or more,
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'but in the agreement. of two or more to do an unlawful act, or to do
a lawful act by u_nlawful means. So long as such a design rest~ in
intention only it is not indictable. When two agree to carry it into
A.TAY AGARWAL v. UNION OF INDIA [RAMASWAMY.J.)
555
effect, the very plot is an act in itself, and the act of each of the A
parties, promise against promise, actus comra ac111111, capable of
being enforced, if lawful, punishable of for a cri~nal object or for
the use of criminal means".
This Court in B.G. Bars~· v. The State of Bombay [1962] 2 SCR at 229, held
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"The gist of the offence is an agreement to break the law. The parties
to such an agreement will be guilty of criminal conspiracy, though
the illegal act agreed to be done has not been done. So too, it is an
ingredient of the offence that all the parties should agree to do a C
single illegal act. It may comprise the commission of a number of
act~. Under section 43 of the Indian Penal Code, an act would be
illegal if fi~ is an offence or if it is prohibited by law".
In Yashpal v.State of Punjab [1977] SCR 2433 the rule was laid as follows
.. The very agreement, concert or league is the ingredient of the
offence. It is not necessary that all the conspirators must know each
and every detail of the conspiracy as long as they are co-participaD
tors in the main object of the conspiracy. There may be so many
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devices and techniques adopted to achieve the common goal of the
conspiracy and there may be division of performances in the chain
of actions with one object to achieve the real end of which every
collaborator must be aware and in which each one of them must be
interested. There must be unity of object or purpose but there may
be plurality of means sometimes even unknown to one another,
amongst the conspirators. In achieving the goal several offences
may be committed by some of the conspirators even unknown to the
others. The on! y relevant factor is that all means adopted and illegal
acts done must be and purported to be in furtherance of the object
of the conspiracy even tl1ough there may be sometimes misfire or
over-shooting~by some of the conspirators''.
In Mohammed Usman. Mohammad Hussain Manivar & Anr. v. State of
Maharashtra [ 198 ~] 3 SCR 68, it was held that for an offence under section 120B IPC, the prosecution need not necessarily prove that.the conspirators expressly
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SUPREME COURT REPORTS.
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agreed to do or cause to be done the illegal act. the agreement may be proved by
necessary implication. In Noor Mohammed Y11s11f Momin v. State of Maliaraslura
[ 1971) I SCR I I 9, it was held thats. 120-B IPC makes the criminal conspiracy as
a substantive offence which offence postulates an agreement between two or more
persons to do or cause to be done an act by illegal means. If the offence itself is to
commit an offence, no further steps are needed to be proved to carry the agreement
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into effect. In R.K. Dalmia & Anr. v. The Delhi Administration [ 1963 J I SCR 253,
it was further held that it is not necessary that each member of a conspiracy must
know all the details of the conspiracy. In Shivanarayan Laxmi11araya11 & Ors. v.
State of Maharashtra & Ors. rI980] 2 SCC 465. this court emphasized that a
conspiracy is always hatched in secrecy and it is impossible to adduce direct
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evidence of the same. The offence can be only proved largely from the inferences
drawn from acts (>r illegal omission committed by the conspirators in pursuance
of a common design.
The question then is whether conspiracy is a continuing offence. Conspiracy
to commit a crime itself is punishable as a substantive offence and every individual
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offence committed pursuant.to the conspiracy is separate and distinct offence to
which individual offenders are liable to punishment, independent of the conspiracy. Yet, in our considered view, the agreement does not come to an end with
its making, but would endure till it is accomplished or abandoned or proved
abortive. Being a continuing offence, if any acts oromissions which constitutes.an
offence, are done in India or outside its territory the conspirators continuing to be
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parties to the conspiracy and since part of the acts were done in India, they would
obviate the need to obtain sanction of the Central Govt. all of them need not he
present in India nor continue to remain in India. In le1111art Sclz11ssler & Anr. v.
Director of Et{forcemem & Anr. [1970) 2 SCR 760, a Constitution Bench of this
Court was to consider the question or conspiracy in the setting of the facts, stated
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thus:
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.. A. 2 was the Managing Director of the Rayala Corporation Ltd.
Which manufactures Balda Typewriters. A. I was an Export Manager of ASSAB. A. I and A.2 conspired that A.2 would purchase
material on behalf of his Company from ASSAB instead of
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Atvidabergs, which provides raw material. A.2 was to over-invoice
the value of the goods by 40 per cent of true value and that he should
be paid the difference of 40 per cent on account of the a(oresaid
over-invoicing by crediting it to A.2' s personal account at Stockholm
in a Swedish Bank and requested A. I to help him in opening the
account in Swenska Handles Banken, Swedcn·and to have further
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AJAY AGARWALv. UNION OF INDIA (RAMASWAMY.J.I
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deposits to his personal account from ASSAB. A. I agreed to act as
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requested by A.2 and A.2 made arrangements with ASSAB to
intimate to A. I the various amounts credited to A.2's account and
asked A. I to keep a watch over the correctness of the account and·
to further intimate to f\im the account position from time to time
through unofficial channels and whenever A. l come to India. A. I
agreed to comply with this request. This agreement was entered into
between the parties in the year 1963 at Stockholm and again in
Madras in the year I 965. The question was whether Sec. 120-B of
the Indian Penal Code was attracted to these facts".
Per majority, Jaganmohan Reddy, J. held that the gist of the offence defined
ins. 120-A IPC, which is itself punishable as a substantive offence is the very
agreement between two or more persons to do or cause to be done an illegal act or
legal act by illegal means, subject, however, to the proviso that where the
agreement is not an agreement to commit an offence, the agreement does not
amount to a conspiracy unless it is followed up by an overt act done by one or more
persons in pursuance of such an agreement. There must be a meeting of minds in
the doing of the illegal act or the doing of a legal act by illegal means. If, in
furtherance of the conspiracy, certain persons are induced to do an unlawful act
without the knowledge of the conspiracy or the plot they cannot be held to be
conspirators, though they may be guilty of an offence pertaining to the specific
unlawful act. The offence of conspiracy is complete when two or more conspirators have agreed to do or cause to be done an act which is itself an offence, in which
case no overt act need be established. lt was contended in that regard that several
acts which constitute to make an offence under s. 120-B may be split up in parts
and the criminal liability of A. I must only be judged with regard to the part played
by him. He merely agreed to help A.2 to open an account in the Swedish Bank,
having the amounts lying to the credit of A.2 with Atvidaberg to that account and
to help A.2 by keeping a watch over the account. Therefore, it does not amount to
a criminal conspiracy. While negating the argument, this court held thus:
"It appears to us that this is not a justifiable contention, because
what has to be seen is whether the agreement between A. I arfd A.2
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is a conspiracy to do or continue to do something which is illegal
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and, if it is, it is immaterial whether the agreement to do any of the
acts in furtherance of the commission of the offence do not strictly
amount to an offence. the entire agreement must be viewed as a
whole and it has to be ascertained as to what in fact the conspirators
intended to cto or the object they wanted to achieve··.
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SUPREME COURT REPORTS
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Thus, this court, though not in the context ofjurisdictional issue, held that the
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agreement not illegal at its inception would become illegal by subsequent conduct
and an agreement to do an illegal act or to do a legal ac! by illegal means, must be
viewed as a whole and not in isolation. It was aiso implied that the agreement shall
continuing till the object is achieved. The agreement does not get terminated by
merely entering into an agreement but it continues to subsist till the object is either
achieved or terminated or abandoned.
In Abdul Kader v. State AIR 1964 Bombay 133, a conspiracy was formed in
South Africa by appellants to cheat persons by dishonestly inducing them to
deliver money in the Indian currency by using forged documents and the acts of
cheating were committed in India. When the accused were charged with the
offence of conspiracy, it was contended that the conspiracy was entered into and
was completed in South Africa and, therefore, the Indian Courts had no jurisdiction to try the accused for the offence of conspiracy. The Division Bench held that
though the conspiracy was entered in a foreign country and was completed as soon
as the agreement was made, yet it was treated to be a continuous offence and the
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persons continued to be parties to the conspiracy when they committed acts in
India. Accordingly, it was held that the Indian Courts had jurisdiction to try the
offence of conspiracy. In U.S. v. Kissal 218 US ·601, Holmes, J. held that
conspiracy is a continuous offence and stated "is a perversion of natural thought
and of natural language to call such continuous co-operation of a cinematographic
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series of distinct conspiracies rather than to call it a single one ... a conspiracy is
a pllftnership in criminal purposes. That a5 slfch it may have continuation in time·
is shown by the rule that overt act by one partner may be the act of all without any
newagreementspecificallydirectedto that act". In Fordv. U.S. 273 US593 at620
to 622. Tuft, CJ. held that conspiracy is a continuing offence.
In Director of Public Prosecutions v. Doot and Ors. 1973 Appeal Cases 807
(H.L.), the five respondents hatched a plan abroad, i.e. Belgium and Morocco and
worked out the details to import cannabis into the United States via England, In
pursuance thereof two vans with cannabis concealed in them were shipped from
Morocco to Southampton; the other van was traced at Liverspool, from where the
vans were to have been shipped to America and the cannabis in it was found. They
were charged among other offences with conspiracy to import dangerous drugs.
At the trial, the respondents contended that the Courts in England had no
jurisdiction to try them on the count of conspiracy since the conspiracy had been
entered into abroad. While rejecting the contention, Lord Wilberforce held (at
page 817):
·'The present case involves international elements the accused are
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AJAY AGARWAL v. UNION OF INDIA [RAMASWAMY,J.]
559
aliens and the conspiracy was initiated abroad but there can be no
quescion here of any breach of any rules of international law if they
ar'e prosecuted in this country. Under the objective territorial
principle (I use the terminology of the Harward Research in International Law) or the principle of University (For the prevention of
the trade in narcotics falls within this description) or both, the courts
of this country have a clear right, if not a duty, to prosecute in
accordance with our municipal law. The position as it is under the
international law it not; however, determinative of the question
whether, under our municipal law, the acts committed amount to a
crime. That has to be decided on different principles. If conspiracy
to import drugs were a statutory offence, the question whether
foreign conspiracies were included would be decided upon the
terms of the statute. Since it is (if at all) a common law offence, this
question must be decided upon principle and authority- In my
opinion, the key to a decision for or against the offence charged· can
be found in an answer to the question why the common law treats
certain actions as crimes. And one answer must certainly be because
the actions in question are a·threat to the Queen's peace or as we
. would now perhaps say, to society. Judged by this test, there is every
reason for, and none that I can see against, the prosecution. Conspiracies are intended to be carried into effect, and one reason why,
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in addition to individua! prosecution of each Pai:ticipant, conspiracy
charges are brought is because criminal action organised and
executed, in concert is ~ore dangerous than an individual breach of
law.