# DESAI AND ANOTHER v. THE STATE OF BOMBAY

- **Citation:** [1960] 3 S.C.R. 319
- **Court:** Supreme Court of India
- **Decided:** 1960
- **Case number:** Civil Appeal No. 686 of 1957
- **Bench:** Jafer Imam, K. N. Wanchoo, J. 0. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/desai-and-another-v-the-state-of-bombay-1599
- **Pages:** 10

## Headnote

Criminal Breach of Trust-Ingredients of-(:ommon inte~tion
Meaning of-Indian Penal Code (XLV ojI86o), ss. 409, 34.
The first appellant was the Managing Director and the second
appellant a Director and technical expert of a cloth dyeing
concern known as Parikh Dyeing and Printing Mills Ltd. The
company entered into a contract with the Textile Commissioner
undertaking to dye a large quantity of cloth which was supplied
to the company for'i:hat purpose. In pursuance of the contract
certain quantity of cloth was dyed and delivered to the Textile
Commissioner by the company but it failed to dye and deliver the
balance of cloth which remained in its possession and was not
returned to the Textile Commissioner in spite of repeated
demands. Ultimately the two appellants were prosecuted for
criminal breach of trust under s. 409 read with s. 34 of the Indian
Penal Code and were convicted for the same in a trial by jury.
z960
March z6.
320
SUPREME COURT REPORTS
[1960]
I960
In appeal the High Court reviewed the evidence on the gronnd of
misdirection to the jury but found that the two appellants were
Jaikrishnadas
liable to account for the cloth over which they had dominion, and
M anohardas Desai having failed to do so each of them was guilty of the offence of
v.
criminal breach of trust. The High Court refused to accept the
State of Bombay appellants' plea that the cloth was old and was eaten up by
white ants and moths. On appeal by the appellants by special
leave:
Shah f·
Held, that to establish a charge of criminal breach of trust,
the prosecution was not bound to prove the precise mode of conversion, misappropriation or misapplication by the accused of the
property entrusted to him or over which he had dominion. The
principal ingredient of the offence of criminal breach of trust
being dishonest misappropriation the mere failure of the accused
to account for the property entrusted to him might not be the
foundation of his conviction in all cases but where he was unable
to account and rendered an explanation for his failure which was
untrue, an inference of misappropriation with dishonest intent
might readily be made.
The essence of liability under s. 34 of the Indian Penal Code
is the existence of a common intention animating the offenders
and the participation in a criminal act in furtherance of the
common intention. The physical presence at the scene of offence
of the offender sought to be rendered liable under s. 34 is not, on
the words of the statute, one of the conditions of its applicability
in every case.
Barendra Kumar Chose v. The King Emperor, (r929) L.R. 52
I.A. 40, followed.
Shreekantiah Ramayya Munipalli v. The State of Bombay,
[r955] I S.C.R. n77, explained and distinguished.
CRIMINAL
APPELLATE
JURISDICTION:
Criminal
Appeal No. 159 of 1!!57.
Appeal by special leave from the judgment and
order dated February 14, 1956, of the Bombay High
Court in Criminal Appeal No. 1232 of 1955, arising out _
of the judgment and order dated October 3, 1955, of
the Additional Sessions Judge for Greater Bombay in
Case No. 38 V. Sessions 1955.
Purshottam Tricumdas, B. K. B. Naidu and I. N.
Shroff, for appellant No. 1.
Appellant No. 2 did not appear.
H. J. Umrigar, R. H. Dhebar and T. M. Sen, for the
respondent.
1960. March 16.
The Judgment of the Court was
delivered by
SHAH, J.-At a trial held with the aid of a common
jury in Case No. 38 of the Vth Session 1955 before the
-
..
3 S.C.R. SUPREME COURT REPORTS
321
Additional Sessions Judge, City Court, Greater Bornr960
bay, the two appellant!> were convicted of offences
..
under s. 409 read with s .. 34 of the Indian Penal Code.· Jaikmhnadas .
. •
•
Manohardas Desai
The Add1t10nal Sess.ions Judge sentenced the first
v.
appellant to suffer rigorous imprisonment for five years state of Bombay
and the second appellant to suffer rigorous imprisonment for four years. In appeal, the High Court of
Shah .f.
Bombay reviewed the evidence, because in the view
of the Court, the verdict of the jury was vitiate

## Text

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3 S.C.R. SUPRE.l.VIE COURT REPORTS
319
delivery of possession of the jagir, or a writ directing
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commutation otherwise than under the provisions of
Sarwarlal ,
the Commutation Regulation. It may also be observed
v.
that the Parliament has, by the Constitution (1st State of Hyderabad
Amendment) Act, included the Abolition and the _ -· -· ·
-
Commutation Regulations in the ninth schedule, and
Shah].
by virtue of Art. 3l(B), the two Regulations are
exempt from challenge on the ground that they are
inconsistent with or take away or abridge any of the
fundamental rights conferred by Part III of the
Constitution.
The appeal therefore fails and is dismissed with
costs.
Civil Appeal No. 686 of 1957.
This appeal raises the same question which has been
decided in the companion Appeal No. 392of1956 and
for reasons set out therein, this appeal must fail and
is dismissed with costs.
Appeals dismissed.
JAIKRISHNADAS MANOHARDAS
DESAI AND ANOTHER
v.
THE STATE OF BOMBAY
(JAFER IMAM, K. N. WANCHOO and J. 0. SHAH, JJ.)
Criminal Breach of Trust-Ingredients of-(:ommon inte~tion
Meaning of-Indian Penal Code (XLV ojI86o), ss. 409, 34.
The first appellant was the Managing Director and the second
appellant a Director and technical expert of a cloth dyeing
concern known as Parikh Dyeing and Printing Mills Ltd. The
company entered into a contract with the Textile Commissioner
undertaking to dye a large quantity of cloth which was supplied
to the company for'i:hat purpose. In pursuance of the contract
certain quantity of cloth was dyed and delivered to the Textile
Commissioner by the company but it failed to dye and deliver the
balance of cloth which remained in its possession and was not
returned to the Textile Commissioner in spite of repeated
demands. Ultimately the two appellants were prosecuted for
criminal breach of trust under s. 409 read with s. 34 of the Indian
Penal Code and were convicted for the same in a trial by jury.
z960
March z6.
320
SUPREME COURT REPORTS
[1960]
I960
In appeal the High Court reviewed the evidence on the gronnd of
misdirection to the jury but found that the two appellants were
Jaikrishnadas
liable to account for the cloth over which they had dominion, and
M anohardas Desai having failed to do so each of them was guilty of the offence of
v.
criminal breach of trust. The High Court refused to accept the
State of Bombay appellants' plea that the cloth was old and was eaten up by
white ants and moths. On appeal by the appellants by special
leave:
Shah f·
Held, that to establish a charge of criminal breach of trust,
the prosecution was not bound to prove the precise mode of conversion, misappropriation or misapplication by the accused of the
property entrusted to him or over which he had dominion. The
principal ingredient of the offence of criminal breach of trust
being dishonest misappropriation the mere failure of the accused
to account for the property entrusted to him might not be the
foundation of his conviction in all cases but where he was unable
to account and rendered an explanation for his failure which was
untrue, an inference of misappropriation with dishonest intent
might readily be made.
The essence of liability under s. 34 of the Indian Penal Code
is the existence of a common intention animating the offenders
and the participation in a criminal act in furtherance of the
common intention. The physical presence at the scene of offence
of the offender sought to be rendered liable under s. 34 is not, on
the words of the statute, one of the conditions of its applicability
in every case.
Barendra Kumar Chose v. The King Emperor, (r929) L.R. 52
I.A. 40, followed.
Shreekantiah Ramayya Munipalli v. The State of Bombay,
[r955] I S.C.R. n77, explained and distinguished.
CRIMINAL
APPELLATE
JURISDICTION:
Criminal
Appeal No. 159 of 1!!57.
Appeal by special leave from the judgment and
order dated February 14, 1956, of the Bombay High
Court in Criminal Appeal No. 1232 of 1955, arising out _
of the judgment and order dated October 3, 1955, of
the Additional Sessions Judge for Greater Bombay in
Case No. 38 V. Sessions 1955.
Purshottam Tricumdas, B. K. B. Naidu and I. N.
Shroff, for appellant No. 1.
Appellant No. 2 did not appear.
H. J. Umrigar, R. H. Dhebar and T. M. Sen, for the
respondent.
1960. March 16.
The Judgment of the Court was
delivered by
SHAH, J.-At a trial held with the aid of a common
jury in Case No. 38 of the Vth Session 1955 before the
-
..
3 S.C.R. SUPREME COURT REPORTS
321
Additional Sessions Judge, City Court, Greater Bornr960
bay, the two appellant!> were convicted of offences
..
under s. 409 read with s .. 34 of the Indian Penal Code.· Jaikmhnadas .
. •
•
Manohardas Desai
The Add1t10nal Sess.ions Judge sentenced the first
v.
appellant to suffer rigorous imprisonment for five years state of Bombay
and the second appellant to suffer rigorous imprisonment for four years. In appeal, the High Court of
Shah .f.
Bombay reviewed the evidence, because in the view
of the Court, the verdict of the jury was vitiated on
account of a misdirection on a matter of substantial
importance, but held tha,t the conviction of the two
appellants for the offence under s. 409 read withs. 34
of the Indian Penal Code was, on the evidence, not
liable to be set aside. The High Court accordingly
confirmed the conviction of the two appellants but
reduced the sentence pa.ssed upon the first appellant
to rigorous imprisonm€mt for three years and the
sentence against the second appellant to rigorous
imprisonment for one year. Against the order of
conviction and sentence, the appellants have appealed
to this court with special leave.
The facts which gave rise to the charge against the
two appellants are briefly these:
On June 15, 1948, the Textile Commissioner invited
tenders for dyeing Pugree Cloth. The Parikh Dyeing
and Printing Mills Ltd., Bombay-hereinafter to be
referred to as the company-of which the first appellant was the Managing Director and the second appellant was a Director and technical expert, submitted a
tender which was accepted on July 27, 1948, subject
to certain general and special conditions. Pursuant to
the contract, 2,51,059! yards of cloth were supplied to
the company for dyeing. The company failed to dye
the cloth within the stipulated period and there was
correspondence in that behalf between the company
and the Textile CommisHioner. Approximately 1,11,000
yards out of the cloth were dyed and delivered to the
Textile Commissioner. On March 25, 1950, the company requested the Textile Commissioner to cancel
the contract and by his I~tter dated April 3, 1950, the
Textile Commissioner corop.iied with the request, and
cancelled the contract in respect of 96,128 yards. On
November 20, 1950, the contract was cancelled by the
322
SUPREME COURT REPORTS
[l9ti0]
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Textile Commissioner in respect of the balance of cloth
J
.k . h
d
and the company was called upon to give an account
ainsnaas
.
f
h
di
d.
Manohardas Desai· without any urt er e ay of the balance un ehvered
v.
and it was informed that it would be held responsible
State of Bombay for "material spoiled or not accounted for". On
December 4, 1950, the company sent a statement of
Shah f.
account setting out the quantity of cloth actually
delivered for dyeing, the quantity of cloth returned
duly dyed and the balance of cloth, viz., 1,32,160 yards
remaining to be delivered. Against the cloth admitted
by the company remaining to be delivered, it claimed
a wastage allowance of 2,412 yards and admitted
liability to deliver 1,29,748 yards lying with it on
Government account.
It appears that about this time, the company was
in financial difficulties. In December 1950, the first
appellant left Bombay to take up the management of
a factory in Ahmedabad and the affairs of the company were managed by one R. K. Patel. In June
1952, an application for adjudicating the two appellants insolvents was filed in the Insolvency Court at
Ahmedabad. An insolvency notice was also taken out
against the two appellants at the instance of another
creditor in the High Court at Bombay. Proceedings
for winding up the company were commenced in the
High Court at Bombay. In the meantime, the mortgagee of the machinery and factory of the company
had entered into possession under a covenant reserved
in that behalf, of the premises of the factory of the
company.
The. Textile Commissioner made attempts to recover
the cloth remaining undelivered by the company. A
letter was posted by the Textile Commissioner on
April 16, 1952, calling upon the company to deliver
51,756 yards of cloth lying with it in bleached condition to the Chief Ordnance Officer, Ordnance Depot,
Sewri, but the letter was returned undelivered. It
was ultimately· served with the help of the police on
the second appellant in October 1952. Thereafter on
November 7, 1952, another letter was addressed to
the company and the same was served on the second
appellant on November 25, 1952. By this letter, the
company was reminded that 1,35,726! yards of cloth
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3 S.C.R. SUPREME COURT REPORTS
323
were lying with it on account· of the government ai1d
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the same had to be accounted for, and that the
1
.k . h
d
instructions to deliver 51,756 yards to the Chief Man~h;;~a~"n~:ai
Ordnance Officer, Ordnance Depot, Sewri, had not been
v.
attended to. The Textile Commissioner called upon State of Bombay
the company to send its representatives to "clarify
the position" and to account for the material.
After
Shah 1 ·
receiving this letter, the second appellant attended at
the office of the Textile Commissioner and on November 27, 1952, wrote a letter stating that "the main
factors involved in not delivering the goods in finished
state was that the material was very old ",was " dhobihleached in different lots", was "bleached under
different conditions and therefore unsuitable for vat
colour dyeing in heavy shades'', that it varied in
length, weight, and finiBh and had " lost affinity for
.vat colour dyeing". It was also stated that the company had in dyeing the basic material, suffered "huge
losses" estimated at Rs .. 40,000. It was then stated:
"We are, therefore, however prepared to.co-operate
with the Government and are willing to make good
the government's bare cost. Please let us know the
detail and the actual amount to be deposited so that
we may do so at an early date. We shall thank you
if we are given an appointment to discuss the rnatter
as regards the final amount with respect to the balance
qm1.ntity of the basic material."
On December 29, 1952,, the premises of the company
and the place of residence of the appellants were raided,
but no trace of the cloth was found. A complaint was
then filed with the police charging the two appellants
with criminal breach of trust in respect of 1,32,404!
yards of cloth belonging to the Government.
There is no dispute that approximately 1,30,000
yards out of the cloth entrusted to the company by
the Textile Commissioner for dyeing has not been
returned. Bv its letter dated December 4, 1950, the
company admitted liability to deliver 1,29,748 yards
of cloth, but this cloth has not been returned to the
.Textile Commissioner in spite of repeated demands.
That the appellants, as directors of the company ha.d
dominion over that cloth was not questioned :in the
. trial.court. ·The plea that there wer(f.Qthe,r: Dif.eqtqrs
324
SUPREME COURT REPORTS
[1960)
x96o
of the company besides the appellants who had
1
.k . h
d
dominion over the cloth has been negatived by the
Ma":•h;;:i,,';'v::.i High Court and in our judgment rightly. Direct
v.
evidence to establish misappropriation of the cloth
State of Bombay over which the appellants had dominion is undoubtedly lacking, but to establish a charge of criminal
Shah J.
breach of trust, the prosecution is not obliged to
prove the precise mode of conversion, misappropriation or misapplication by the accused of the property
entrusted to him or over which he has dominion.
The principal ingredient of the offence being dishonest
misappropriation or conversion which may not ordinarily be a matter of direct proof, entrustment of
property and failure in breach of an obligation to
account for the property entrusted, if proved, may in
the light of other circumstances, justifiably lead to an
inference of dishonest misappropriation or conversion.
Conviction of a person for the offence of criminal
breach of trust may not, in all cases, be founded
merely on his failure to account for the property
entrusted to him, or over which he has dominion,
even when a duty to account is imposed upon him,
but where he is unable to account or renders an explanation for his failure to account which is untrue, an
inference of misappropriation with dishonest intent
may readily be made.
In this case, on a search of the factory on December 29, 1952, the cloth remaining to be delivered by
the company was not found. At the trial, the appellants sought to explain the disappearance of the cloth
from the factory premises where it was stored, on the
plea that it was old and was eaten up by white-ants
and moths, and had been thrown away as rubbish.
This plea of the appellants was not accepted by the
High Court and we think rightly. No information
was given at any time to the Textile Commissioner
after December 4, 1950, that the cloth had been eaten
up by white-ants and moths, and was therefore
thrown away or otherwise destroyed. Nor was any
evidence led in support of the plea by the appellants.
In this court, counsel for the first appellant con~
tended that failure to return the cloth may give rise
to a civil liability to make good the loss occasioned
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3 S.C.R. SUPREME COUR'f REPORTS
325
thereby, but in the circumstances of the case, the first
r960
appellant cannot be found guilty of the offence of 1
.k •
11
d
criminal breach of trust. Counsel submitted that the Man:~a~~a:aD:m
first appellant had left Bombay in 1950 and had
v.
settled down in Ahmedabad and was attending to a State of Bombay
factory in that town, that thereafter the first appellant was involved in insolvency p:r_oceedings and was
unable to attend to the affairs of the company in
Bombay, and if, on account of the pre"occupation of
the first appellant at Ahmedabad, he was unable to
visit Bombay and the goods were lost, no criminal
misappropriation can be attributed to him. But the
case pleaded by the appellant negatives this submission. The first appellant in his statement before the
trial court admitted that he often went to Bombay
even after he had migrated to Ahmedabad and that
he visited the mill premises and got the same opened
by the Gurkha watchman itnd he found that the heap·
of cloth lying in the mill was getting smaller every
time he visited the mill and on inquiry, he was told
by the watchman that e'~ery day one basketful of
sweepings was thrown away. He also stated that he
was shown several placeB in the compound of the
factory where pits had been filled up with these sweepings, and that he found a Bmall heap lying by the side
of the "Tulsipipe gutter" and also in the warehouses
in the mill premises. It is clear from this statement
and other evidence on the record that even after he
migrated to Ahmedabad, the first appellant was
frequently visiting the factory at Bombay. The evidence also discloses that meetings of Directors were
held from time to time, but the minutes of the Directors' meetings have not been produced. The books of
account of the company evidencing disbursements to
the Directors of remuneration for attending the
meetings and the expensea for the alleged collection
and throwing away of the sweepings have not been
pr9duced. It is admitted by the first appellant that
the letter dated November 27, 1952, was written by
the second appellant under his instructions. In his
statement at the· trial, the first appellant stated that
he was informed of the letter dated November 26,
1952, .from the Textile Commissioner and that he
Shah].
326
SUPREME COURT REPORTS
[1960]
'960
could not attend the office of that· officer because he
Jaikrishnadas
was busy attending to the insolvency proceedings and
Manohardas Desai that he deputed the second appellant to attend the
v.
office and to explain and discuss the position. He
State of Bombay then stated, "We had informed the Commissioner
Shah ].
that the company was prepared to pay for the cloth
remaining after deducting the amount claimed as
damages". The letter dated November 27, 1952, was
evidently written under the direction of the first
appellant and by that letter, liability to pay for the
cloth after certain adjustments for losses alleged to be
suffered by the company in carrying out the contract
was admitted. By the letter dated December 4, 1950,
liability to deliver the cloth was admitted and by the
letter dated November 27, 1952, liability to pay
compensation for the loss occasioned to the Government was· affirmed.
The appellants who were liable
·to account for the cloth over which they had
dominion have failed to do so, and they have rendered a false explanation for their failure to account.
The High Court was of the opinion that this false
defence viewed in the light of failure to produce the
books of account, the stock register and the complete
absence of reference in the correspondence with the
Textile Commissioner about the cause of disappearance established misappropriation with criminal
intent.
Counsel for the first appellant contended that
probably the goods passed into the possession of the
mortgagees of the assets of the company, but on this
part of the submission, no evidence was led in the
trial court. Counsel for the first appellant, relying
upon the observations in Shreekantiah RamayyaMunipalli v. The State of Bombay (1), also contended that,
in any event, a charge under s. 409 read with s. 34 of
the Indian Penal Code cannot be established against
the first appellant unless it is shown that at the time
of misappropriation of the goods, the first appellant
was physicalty present.
But the essence of liability
under s. 34 is to be found in the existence of a common intention animating the offenders leading to
the doing of a criminal act in furtherance of the
(l) [1955] 1 s.c R. 1177.
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3 S.C.R. SUPREME. COURT REPORTS
327
common intention and presence of the offender sought
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to be rendered liable under s. 34 is not, on the words
1
.k . h
d
of the statute, one of the conditions of its applic- Man~h;;~an:'D:~ai
ability. As explained by Lord Sumner in Barendra
v.
Kumar Ghose v .The King Emperor(1) the leading feature State of Bombay
of s. 34 of the Indian Penal Code is ' participation ' in
action. To establish joint responsibility for an offence,
it must of course be established that a criminal act was
done by several persons; the participation must be in
doing the act, not merely in its planning. A common
intention-a meeting of minds-to commit an offence
and participation in the commission of the offence in
_furtherance of that ,common intention invite the
application of s. 34. But this participation need not
in all cases be by physical presence. In offences involving physical violence, normally presence at the scene
of offence of the offenders sought to be rendered liable
on the principle of joint liability may be necessary,
·but such is not the case in respect of other offences
where the offence consists of diverse acts which may
be done at different times and places.
In Shree
Kantiah's case (supra), misappropriation was committed by removing goods from a Government depot and
on the occasion of t,he removal of the goods, the first
accused was not present. It was therefore doubtful
whether he had participated in the commission of the
offence, and this court in those circumstances held
that participation by the :first accused was not established.
The observations in Shree Kantiah's case
(supra) in so far as they deal with s. 34 of the Indian
Penal Code must, in our judgment, be read in the ligh~
of the facts established and are not intended to lay ~
down a principle of universal application.
The High Court has found that the two appellants
were liable to account for the cloth over which they
had dominion and they failed to account for the same
and therefore each had committed the offence of
criminal breach of trust. The High Court observed:
"Iri such a case, if accused Nos. 1 and 2 (Appellants ·
1 & 2) alone were concerned with the receipt of the
goods, if they were dealing with the goods all the time,
if they were receiving communications from the
Textile Commissioner's office and sending replies to
(1) [1924) L.R. 52 I.A, 40, 52,
Shah].
328
SUPREME COURT_ REPORTS
[1960]
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them, and if the part played by each of them is appal
.k . h d
rent from the manner in which they are shown to have
ai "' na as
d It
· h h"
t
t h
"t ·
ft
Manohardas Desai
ea wit t lB con rac , t en I IS a case o wo persons
v.
entrusted with the goods and a breach of trust
Slate of Bombay obviously being committed by both of them".
It was submitted that the High Court erred in
Shah f.
finding the appellants guilty of offences 'under s. 409
of the Indian Penal Code when the charge framed
against them was one under s. 409 read with s. 34 of
the Indian Penal Code. A charge framed against the
accused person, referring to s. 34 is but a convenient
form of giving notice to him that the principle of joint
liability is sought to be invoked.. Section 34 does not
create an offence ; it merely enunciates a principle
of joint liability for criminal acts done in furtherance
of the common intention of the offenders. Conviction
of an accused - person recorded, relying upon the
principle of joint liability, is therefore for the offence
committed in furtherance of the -common intention
and if the reasons for conviction establish that the
accused was convicted for an offence committed in
furtherance of the common _intention of himself and
others, a reference in the order recording conviction to
s. 34 of the Indian Penal Code may appear to be a
surplusage. The order of the High Court recording
the conviction of the appellants for the offence under
s. 409 of the Indian Penal Code is therefore not illegal.
It was submitted for the first appellant that the
sentence passed against him was unduly severe, and
that, in any event, no distinction should have been
made between him and the second appellant in the
' matter of sentence. It is evident on the findinge
accepted by us that property of considerable value
has been misappropriated by the first appellant. He
-was the Managing Director of the company and primarily, he had dominicm over the property entrusted
to the company. The second appellant was, though a
Director, essentially a technician. Having regard to
these circumstances, if the High Court has made a
distinction between the two appellants, we ought not
to interfere with the sentence, which by itself cannot
be said to be excessive.
.
The appeal fails and is dismissed.
Appeal dismissed.
..
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•