1952 (11) TMI 10 - SC - Indian Laws

Summary

Issues Involved:

1. Validity of the High Court's reversal of the trial court's acquittal.
2. Evidence of payment of Rs. 9,000 and execution of the promissory note.
3. Whether the mills suffered loss due to stamping of cloth.
4. Entrustment and misappropriation as elements of criminal breach of trust.

Detailed Analysis:

1. Validity of the High Court's Reversal of the Trial Court's Acquittal:

The High Court reversed the trial court's acquittal without properly addressing or displacing the main grounds upon which the trial court's decision rested. The High Court did not give due weight to the trial court's evaluation of witnesses' credibility, the presumption of innocence, and the right of the accused to the benefit of any doubt. The High Court's decision was influenced by suspicious circumstances disclosed at the trial, which were prejudicial to the accused, but the accused was not given an opportunity to explain these when examined under Section 259 of the Cochin Criminal Procedure Code (corresponding to Section 342 of the Indian Code). The High Court's approach did not align with the principles recognized in the administration of criminal justice, leading to the Supreme Court's interference.

2. Evidence of Payment of Rs. 9,000 and Execution of the Promissory Note:

The trial court found the prosecution's evidence regarding the payment of Rs. 9,000 on 24-4-1948 and the execution of the promissory note (Ex. C) to be unreliable. The trial court highlighted discrepancies such as the date on the allotment letter, the entry in the account books, and the circumstances of the promissory note's execution. The High Court, however, did not adequately address these discrepancies and relied on conjectures and surmises. The Supreme Court noted that the accused should have been examined on these points and given an opportunity to explain. The trial court's findings were based on a detailed analysis of evidence, which the High Court failed to properly consider.

3. Whether the Mills Suffered Loss Due to Stamping of Cloth:

The trial court concluded that no loss was suffered by the mills due to the stamping of May cloth with April prices. The order (Ex. A(m)) directed that 25 bales of May cloth be stamped with April seals and 25 bales of April cloth with May seals, resulting in no net loss to the mills. The High Court overlooked this aspect and failed to consider the trial court's findings. The charge framed did not specify any loss due to stamping, and the entire loss alleged by the prosecution was included in the sum of Rs. 23,100, which was the subject matter of the criminal breach of trust.

4. Entrustment and Misappropriation as Elements of Criminal Breach of Trust:

To constitute an offense of criminal breach of trust under Section 385 of the Cochin Penal Code (corresponding to Section 405 of the Indian Penal Code), it must be proven that the accused was entrusted with property or had dominion over it and dishonestly misappropriated or converted it. The Supreme Court found that if the Rs. 23,100 was paid as illegal gratification, there could be no question of entrustment. The money would be received by the accused personally, not on behalf of the mills. The High Court's conclusion that the money was received on behalf of the mills was not supported by the evidence. The letters (Exs. H and J) and the statement (Ex. II) clearly indicated that the money was intended as a reward for showing favor, not as an extra price for the goods sold.

Conclusion:

The Supreme Court allowed the appeal, set aside the High Court's order, and directed the acquittal of the accused. The fine, if paid, was to be refunded. The Supreme Court deemed it improper to order a retrial, as the charge of accepting illegal gratification was abandoned by the prosecution, and the accused had already served the sentence of imprisonment during the appeal's pendency.