1918 Present : Bertram C.J.

THE KING v. SILVA.

149-D. C. (Crim.) Galle, 14,136,

Cheating-Borrowing money by uncertified insolvent without disclosing the fact of his insolvency-Penal Code, s. 398.

The accused borrowed a sum of money from a money lender without disclosing to him that he was at the time an uncertified insolvent. The certificate had not at that time been refused, but was refused subsequently to the loan.

Held, that the accused was not, in the circumstances of this case, guilty of cheating.

THE facts appear from the judgment.

Bawa, K.C, and J. S. Jayawardene, for accused, appellant.

Obeyesekere, C.C., for the Crown.

Cur. adv. vult.

August 29, 1918. BERTRAM C.J.-

In this case the appellant has been convicted of cheating, on the ground that he borrowed Rs. 500 from the prosecutor, a Chetty, without disclosing to him that at the time he was an uncertificated insolvent. The certificate had not at the time been refused, but was refused subsequently to the loan.

It was contended before the District Judge that the facts did not disclose the offence of cheating, on the ground that there was no legal duty upon the borrower to disclose the fact that he was an insolvent. The District Judge in his judgment said: "I agree that this cannot be the case. The Legislature has not codified such a duty, because I presume it never contemplated that it could be regarded as anything else than fraudulent. Dishonesty is wrongful gain at the expense of, or loss to, another; and this covers borrowing money without intention to repay, and concealing from the other party the impossibility of his recovery. It is not a case of a moneylender taking risk. And, as prosecuting counsel has pointed out, there is no authority for the contention that concealment of facts does not amount to deception unless there is a duty to disclose. Suppressio veri, if misleading, is as dishonest a misrepresentation as a false statement.

What we have to consider, however, is not the moral conduct of the accused, but the question whether he has committed an offence within the meaning of section 398 of the Penal Code, under which

any person who, " by deceiving any person, fraudulently or dis- honestly induces the person so deceived to deliver any property" is declared to be guilty of cheating. The question arises under the explanation appended to the section, which declares that " a dis- honest concealment of facts is a deception within the meaning Of this section, " and illustration (i), which as an illustration of such a " dishonest concealment " cites the case of a man who sells or mortgages to another man an estate which he has already conveyed to a third person without disclosing the fact of such previous conveyance.

I am not prepared to assent to the proposition that any person who in the course of a transaction with another fails to disclose any circumstance which might, if known, have an effect on the conduct of the other party to the transaction is guilty of cheating. Such a rule would be putting a strained and unnatural meaning upon the word " deceives. " and cannot, in my opinion, be intended by the terms of the " explanation. Nor do I think that the question whether such a person " deceives " the other within the meaning of section 398 necessarily depends upon the question whether he has a " legal duty " to disclose the circumstance in question. This is taken as the test of the matter in the Indian case of The Emperor v. Bishan Das [ (1905) I. L. R. 27 All 561.] where the Court said: " I have no hesitation in holding that the dishonest concealment of facts referred to in the explanation to section 415 is a dishonest concealment of facts which it is the duty of the person concealing them to disclose to the person with whom he is dealing. " It appears from the context that by " duty " the learned Judge there means " legal duty, " and not " moral duty. "

It is no doubt clear from the i