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TMI Blog1966 (7) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... s were made knowing them to be false or omitted to state material facts knowing them to be material. The specific instance pointed out was that in the balance-sheet the value of plant and machinery of Rs. 1,51,492 was shown as fixed asset as on 31st March, 1962, while in fact the machinery of the oil refinery section of the Kozhippara mill belonging to the company was already solo! by the accused for Rs. 1,65,000 to M/s. Sri Ranga Engineering Works '47, Park Road, Erode. The agreement with the Sri Ranga Engineering Works for the sale of the machinery was entered into by the accused on 1st February, 1963, and an advance of Rs. 10,000 was received. The balance of purchase money was also received later and the sale was effected on 13th February, 1963. The items of machinery were delivered in pursuance of the sale to the purchaser between 16th February, 1963, and 13th March, 1963. The transaction was thus completed ; but in the balance-sheet exhibit P-2, published by them on 2nd September, 1963, the machinery in question was shown as an item of asset belonging to the company and its value was shown as Rs. 1,51,492. They have also omitted to mention material facts in the balance-sheet k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition it is difficult to treat the transaction as a completed sale. The company on the date of the sale was in possession of the plant and machinery not in its own right but only on behalf of the Corporation. The case of the accused is that they had no intention to transfer the property in the machinery and the plant to the vendee until the sanction was obtained from the Corporation. Under section 19 of the Indian Sale of Goods Act, where there is a contract for sale of the specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. The intention of the parties as expressed in the contract or inferred from their contract and other circum stances of the case has to be considered. In the present case it was the intention of the parties to convey the property in the plant and machinery only on getting the concurrence of the Corporation. The buyer was also fully alive to this fact as is evident from the two letters exhibit D-15 and exhibit D-16 addressed by him to the company after the date of the alleged sale. In exhibit D-15 the purchaser would state as follows: "We have received the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the directors of the company under such circumstances. The agreement of sale entered into with the Sri Ranga Engineering Works has also been referred to in the balance-sheet. In the directors' report (page 1 of exhibit P-2) they have stated: "The company has agreed to dispose of the oil refinery section of the Kozhippara mill and it is now awaiting sanction of the Kerala Financial Corporation." Thus it is impossible to find the accused guilty of any material omission also. The learned counsel for the appellant stated that after having-delivered the article and after the receipt of the sale consideration, there is no point in saying that the sale was not complete. In the case of sale of movable property the transaction is complete the moment the sale consideration is received and goods are delivered. Nothing else remains to be done for the completion of the sale. I fail to see any force in this contention. We are here confronted with the proposed sale of the machinery subject to the approval of the person who is in legal possession. Only after that person's approval is obtained, the transaction could be said to be complete. The fact that the machinery in question was in the lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter-preted according to the facts of each case. It has been described as not being a term of art, but a legal expression to be fitted to the circumstances being considered by the court." This decision had subsequently come up for consideration before another Division Bench of the same High Court in Pulin Chandra Daw v. Emperor [1948] 18 Comp. Cas. 121 , 125, 126 and their Lordships have practically dissented from the above view. Before the learned judges it was argued on behalf of the Crown that " all that section (section 282) of the Companies Act required was that there must be a statement in a balance-sheet, that it must be known to be false, that it must be made wilfully in the sense that it must be intended to be made, and it must relate to some material particular. Given these elements, Mr. Deb proceeded to contend, it was altogether irrelevant whether the person responsible for making the statement had any criminal intention at all or intended to deceive or succeed in deceiving anybody", and it was in support of this contention that Superintendent and Legal Remembrancer, Bengal v. A. B. Guha [1936] 6 Comp. Cas. 646, 470 was relied on. The learned judges, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. 43 wherein their Lordships have observed: Mens rea is an essential ingredient of a criminal offence. A statute may exclude the element of mens rea ; it is, however, a sound rule of construction which is adopted in England and also accepted in India, to construe a provision which creates an offence in conformity with-the common law rather than against it, except where the statute expressly or by necessary implication excludes mens rea. Of the question whether the element of guilty mind is excluded from the ingredients of an offence the mere fact that the object of the statute is to promote welfare activities or to eradicate a grave social evil is not by itself decisive. Only where it is absolutely clear that implementation of the object of the statute would otherwise be defeated that mens rea may, by necessary implication, be excluded from a statute. The nature of the' mens rea that would be implied in a statute creating an offence depends on the object of the Act and the provisions thereof." The learned judges would observe that even if the legislation in question is one to eradicate the social evil, the foundation of penal responsibility attaching itself to the cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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