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IN THE HIGH COURT OF ALLAHABAD
Desai and Sahai, JJ.
BANWARILAL - Appellant
Versus
STATE - Respondents
Criminal Appeal 938 Of 1952
Decided On : 11/25/1955
CRIMINAL LAW - CHEATING - SECTION 420, I.P.C. - DISHONEST CONCEALMENT OF FACT - INTENTION TO DECEIVE - THEFT - SECTION 379, I.P.C. - PROOF OF THEFT - CIRCUMSTANTIAL EVIDENCE - CONVICTION - SENTENCE.
Fact of the Case:
The appellants borrowed money from the complainant firm by pledging tins of ghee in the godowns of the firm. The appellants had already pledged the same tins with another bank and did not disclose this fact to the complainant firm. The appellants also claimed to be the exclusive owners of the tins and did not inform the firm that they had been pledged with the bank. The complainant firm advanced money to the appellants on the security of the tins, believing that they were free from encumbrances. Subsequently, it was discovered that the tins contained not pure ghee but mixtures of cement, sand, sawdust, etc. The appellants were charged with cheating under Section 420, I.P.C. and theft under Section 379, I.P.C.
Finding of the Court:
The court held that the appellants were guilty of cheating under Section 420, I.P.C. The court found that the appellants had dishonestly concealed from the complainant firm the fact that the tins had been pledged with the bank. The court also found that the appellants had the intention to deceive the complainant firm and induce it to advance money to them. The court, however, acquitted the appellants of the charge of theft under Section 379, I.P.C. The court found that there was no direct evidence that the appellants had stolen the ghee from the tins. The court also found that the circumstantial evidence against the appellants was not sufficient to prove beyond reasonable doubt that they had committed the theft.
Issues: 1. Whether the appellants were guilty of cheating under Section 420, I.P.C.? 2. Whether the appellants were guilty of theft under Section 379, I.P.C.?
Ratio Decidendi: 1. The court held that the appellants were guilty of cheating under Section 420, I.P.C. The court found that the appellants had dishonestly concealed from the complainant firm the fact that the tins had been pledged with the bank. The court also found that the appellants had the intention to deceive the complainant firm and induce it to advance money to them. 2. The court acquitted the appellants of the charge of theft under Section 379, I.P.C. The court found that there was no direct evidence that the appellants had stolen the ghee from the tins. The court also found that the circumstantial evidence against the appellants was not sufficient to prove beyond reasonable doubt that they had committed the theft.
Final Decision: The court maintained the appellants' conviction and sentence under Section 420 read with Section 34, I.P.C., but quashed their conviction and sentence under Section 379, I.P.C. and acquitted them of the offence of Section 379.
( 1 ) THIS is an appeal by Banwari Lal and Mahendra Nath, who are brothers, from a Judgment of the Additional Sessions Judge of Agra convicting them under Section 420/34 and 379/34 I. P. O. For the offence under Section 420/34 I. P. C. each of them has been sentenced to two years rigorous imprisonment and a fine of Rs. 25,000/- (in default of payment of fine to undergo one years K. I.) and for the offence under Section 379/34 each of them has been sentenced to two years B. I. and a fine of Rs. 25,000/- (in default of payment of fine to undergo nine months R. I.)The sentences for the two offences are to run concurrently.
( 2 ) THE appellants are residents of Khurja where they carry on Ghee business in the name of ghamandilal Banwarilal. In 1946-1947 they carried on the business of Ghee grading under the name of Mahendra Nath and Co. , in a building taken on rent from Mustajab Khan in Raja Ki mandi in Agra. They had a Ghee grading centre and godowns in the ground-floor of ,the building and lived in the upper floor. They used to borrow money by pledging tins of Ghee with creditors. In the period 14-9-1945 to 20-11-46 they borrowed about a lakh of rupees by pledging tins of ghee in the godowns which are numbered 20, 24 and 48 from the Bharat Bank Ltd. There were 745 tins in godown No. 20,394 tins in godown No. 24 and 591 tins in godown No. 48; all the godowns being in the groundfloor of the Mustajab building.
( 3 ) IN November 1946, the appellants approached the complainant firm Makhanlal Radheylal, which was owned by Raghunath Prasad, in Agra. Raghunath Prasad was studying in 1946 and the business was carried on by his brother, Amar Nath. The appellants borrowed money from Makhanlal Radheylal in November 1946 and they repaid it on 6-11-46 leaving a negligible balance of Rs. 29/ -. On 13-12-46 they approached Amarnath and borrowed from him Rs. 22,000 /- on the security of 394 tins in godown No. 24 which had already been pledged with Bharat Bank Ltd. ,) after executing a document Ex. P. 6. It was agreed between the appellants and the firm that tins containing pure Ghee would be pledged as security that 75 per cent of the price of the tins would be advanced on the security and that the money would be repaid within twenty four hours of the demand.
( 4 ) THE tins pledged previously in November 1946 were kept in the go-down of the firm in jamuna Kinara Mohalla of Agra, but on 13-12-1946 the appellants persuaded the firm to agree to the tins pledged on that day and in future being kept in the appellants own godowns in the mustajab building. It was agreed that the firms locks would be put on the godowns but the appellants would remain responsible for their safety and custody. The appellants mentioned in the document Ex. P. 6 that the 394 tins contained pure Ghee. They did not inform the firm that the tins have been pledged with the Bharat Bank already; on the other hand, they claimed that they were the exclusive owners of the tins ("tanha Malik" ). It appears that Amar Nath did not ask whether, and they did not say that, the tins had been pledged with any one previously.
( 5 ) ON 21-12-46 the appellants borrowed Rs. 42,000/- more from the complainant-firm on the security of 776 tins contained in godown No. 20 after executing a document Ex. P. 8, in which they mentioned that the tins contained 350 maunds of pure Ghee. This advance was made on the same terms as that of 13-12-46. On this occasion also the appellants did not inform the complainant firm that the tins had been pledged previously with the Bharat Bank; on the other hand, they claimed to be the exclusive owners. On 6-1-1947 they borrowed Rs. 34,000/- again from the complainant firm on the security of 576 tins kept in godown No. 48. The same were the conditions of this transaction also. The appellants executed a document Ex. P. 9 mentioning that the tins contained 256 maunds of pure ghee. Not only they did not inform Amar Nath that the tins had been pledged with Bharat B
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