Judgment

SUBBA RAO, J.:

These appeals by special leave arise out of two judgments of the High Court of Bombay, one that of Vyas and Kotval, JJ., dated March 31, 1958, and the other that of Shah and Shelat, JJ., dated November 3, 1958, in what, for convenience of reference, may be described as the Empire Conspiracy Case.

2. At the outset it would be convenient to state briefly the case of the prosecution. One Lala Shankarlal, a political leader and Vice-President of the Forward Bloc and a highly competent commercial magnate, and his nominees held the controlling block of shares of the Tropical Insurance Company Limited, hereinafter called the "Tropical", and he was the Chairman and Managing Director of the said company. He had also controlling voice in another company called the Delhi Swadeshi Co-operative Stores Ltd. The said Delhi Stores held a large number of shares of the Tropical. In or about the middle of 1948, Sardar Sardul Singh Caveeshar, who was controlling the People s Insurance Co. Ltd. and other concerns in Lahore, and Kaul, a practising barrister, came to Delhi. During that year, the former was the President of the Forward Bloc and Shankarlal was its Vice President. Shankarlal, Caveeshar and Kaul conceived the idea of purchasing the controlling block of 63,000 shares of the Jupiter Insurance Company Ltd., hereinafter referred to as the "Jupiter", a prosperous company, in the name of the Tropical from the Khaitan Group which was holding the said Jupiter shares. But the financial position of the Tropical did not permit the said purchase and so they thought of a fraudulent device of purchasing the said Jupiter shares out of the funds of the Jupiter itself. Under an agreement entered into with the Khaitan Group, the price of the 63,000 shares of the Jupiter was fixed at Rs. 33,39,000 / -, and the purchasers agreed to pay Rs. 5,00,000/- in advance as "black money" and the balance of Rs. 28,39,000 /-, representing the actual price on paper, within January 20, 1949, i.e., after the purchasers got control of the Jupiter. After the purchase, Shankarlal Group took charge of the Jupiter as its Directors after following the necessary formalities, sold the securities of the Jupiter for the required amount, and paid the balance of the purchase money to the Khaitan Group within the prescribed time. In order to cover up this fraud various manipulations were made in the relevant account books of the Jupiter. There would be an audit before the end of the year and there was every likelihood of detection of their fraud. It, therefore, became necessary for them to evolve a scheme which would bring in money to cover the said fraud perpetuated by the Directors of the Jupiter in the acquisition of its 63,000 controlling shares. For that purpose, Shankarlal and his group conceived the idea of purchasing the controlling interest in another insurance company so that the funds of that company might be utilised to cover up the Jupiter fraud. With that object, in or about September 1949, Shankarlal and 9 of his friends entered into a conspiracy to lift the funds of the Empire of India Life Assurance Company Ltd., hereinafter referred to as the "Empire", to cover up the Jupiter fraud. This they intended to do by purchasing the controlling shares of the Empire, by some of them becoming its Directors and Secretary, and by utilising the funds of the Empire to cover up the defalcations made in the Jupiter. The following were the members of the conspiracy: (1) Shankarlal, (2) Kaul, (3) Mehta, (4) Jhaveri and (5) Doshi - all Directors of the Jupiter - and (6)Guha, the Secretary of the Jupiter, (7) Ramsharan, the Secretary of Tropical, (8) Caveeshar, the Managing Director of the People s Insurance Co., (9) Damodar Swarup, a political worker who was later on appointed as the Managing Director of the Empire, (10) Subhedar, another political worker,, (11) Sayana, a businessman of Bombay, and (12) Bhagwan Swarup, the nephew of Shankarlal and a retired Assist