PAREED PILLAI v. STATE — 1968 DIGILAW 199 (KER)

Judgment :- 1. These appeals are by accused 1, 2 and 4 in C. C. 1/66 on the file of the Special Judge, Palghat. They were charged along with the 3rd accused who was acquitted, with having been members of a criminal conspiracy with the object of committing illegal acts to defraud the railway and the Federal Bank Limited, Alwaye by securing from the 4th accused, a senior Asst. Goods clerk in the Southern Railway at Alwaye, by false representations, railway receipts for transporting coconut oil to various places in India without actually producing coconut oil for booking and on the basis of such railway receipts, obtained money from the bank and caused wrongful loss to the bank and the railway. Accused 1 to 3 are brothers and they belong to the firm known as "A Pareed Pillai and Brothers, Alwaye" (hereinafter referred to as the Firm). The business of the firm was to export coconut oil by rail to different places in India. The firm had been engaged in this business for over 15 years and according to the prosecution, by the beginning of 1963 the firm had run into debts and was confronted with a financial deadlock. The overdraft and other facilities they had with the bank were all drawn to the brim and the situation in which the firm was placed at the time was so disparaging that they were compelled to resort to the foul means of procuring railway receipts from the 4th accused without actually producing oil for booking. Finding that the 4th accused was amenable to their unwholesome design, all the 4 accused entered into a criminal conspiracy and in pursuance of the conspiracy, accused 1 and 2 presented forwarding notes to the 4th accused without producing coconut oil covered by the forwarding notes, and caused the 4th accused to issue railway receipts based on those forwarding notes to support hundies drawn by the accused on the Federal Bank Limited, Alwaye and monies were thus drawn from the bank. The prosecution related to 13 such bogus railway receipts. Two, out of the 13 RRs. were issued on 2 2 63; the one No. B 956401 in respect of 330 tins of coconut oil to be consigned to the party at Cuttack and the other No. B 956398, also in respect of 330 tins of coconut oil to the party at Cuttack. Two, out of the 13 RRs. were issued on 2 2 63; the one No. B 956401 in respect of 330 tins of coconut oil to be consigned to the party at Cuttack and the other No. B 956398, also in respect of 330 tins of coconut oil to the party at Cuttack. The third RR, is dated 13 2 63, No. B 956437 in respect of 350 tins of coconut oil to the consignee at Raniganj. The 4th RR. dated 25 2 63 No. B 956504 is in respect of 165 tins to Itwari and the 5th RR. of the same date No. B 956505 is in respect of 350 tins to Raniganj. Two other RRs dated 5 3 63 Nos. B 956540 and B 956543 are in respect of 200 and 130 tins respectively to the consignee at Itwari. On the same date two other RRs. were also issued Nos. B 956541 and B 956544 for 200 and 130 tins respectively to Itwari. Three other railway receipts were issued on 24-4-63 Nos. B 956664, B 956667 and B 956670 for 350, 330 and 330 tins respectively to Raniganj, Bilaspur and Itwari. On 24 4 63 RR. No. B 956671 was issued to the party at Bilaspur for 330 tins of coconut oil. 2. The Federal Bank having had to part with money on the false representation in the demand draft produced by the accused that coconut oil had been despatched and the Southern Railway having suffered damage in money having been drawn by the accused on production of the bogus RR, all the accused were charged with the offence of cheating under S.420 IPC. and/or read with S.109 IPC. The 4th accused being a government servant was also charged with S.5(2) read with S.5(1)(d) of the Prevention of Corruption Act, 1947 (shortly stated the Act). He was also charged under S.197 IPC Accused 1 and 2 having abetted the 4th accused in the commission of the aforesaid offence under the Act were charged under the said sections read with S.109 IPC. The charge against the 3rd accused was mainly under S.120B (criminal conspiracy), in that he had transported empty tins to the railway station in furtherance of the conspiracy so that the 4th accused might issue railway receipts thinking that they were filled tins. 3. The charge against the 3rd accused was mainly under S.120B (criminal conspiracy), in that he had transported empty tins to the railway station in furtherance of the conspiracy so that the 4th accused might issue railway receipts thinking that they were filled tins. 3. The accused denying the charge stated that no empty tins were ever transported by them to the railway station. The first accused stated in his 342 examination that the hundies were used to be sent to the bank which the bank used to discount and credit in their overdraft accounts. The RRs in respect of the hundies used to be handed over to the bank, only after the goods were booked. The practice of discounting hundies by the bank even before production of the RRs. was there, since a very long time, and the said practice was approved by all the officers of the bank. After the starting of the prosecution the bank called back all the outstanding bills and debited them in their account without consulting the accused and that is the reason why the overdraft account showed a high debit figure. As a matter of fact, according to the accused, the firm had purchased and paid for more than the quantity of oil booked fr6m the railway station during the relevant period. The learned Special Judge rejecting the defence plea has convicted accused 1, 2 and 4. The first accused has been convicted under S.120B IPC. and sentenced to RI for three years. He has been convicted under S.5(2) of the Act read with S.109 IPC. and sentenced to RI for 3 years and a fine of Rs. 5000/-. He is also convicted under S.420 IPC. and sentenced to R1 for 1 year. The sentences are directed to run concurrently. The 2nd accused is convicted under S.120B IPC. and sentenced to RI for 1 year. He is convicted under S.5(2) of the Act read with S.109 IPC. and sentenced to RI for 1 year; under S.420 IPC. read with S.34 he has been sentenced to RI for 1 year. He is also convicted under S.420 read with S.109 IPC. and sentenced to RI for 1 year. The sentences are directed to run concurrently. The 4th accused is convicted under S.120B IPC. and sentenced to RI for 1 year; under S.420 IPC. read with S.34 he has been sentenced to RI for 1 year. He is also convicted under S.420 read with S.109 IPC. and sentenced to RI for 1 year. The sentences are directed to run concurrently. The 4th accused is convicted under S.120B IPC. and sentenced to RI for 3 years; under S.5(2) read with S.5(1)(d) of the Act he has been sentenced to RI for 3 years. He is also convicted under S.420 read with S.109 IPC. and sentenced to RI for 1 year. The sentences are to run concurrently. The 3rd accused has been acquitted. Criminal Appeal 174/67 is by accused 1 and 2 and 177/67 is by the 4th accused. 4. The case of the prosecution, as seen from the charge, is that all the four accused conspired together to defraud the bank and the railway; by the 4th accused issuing RRs. to accused 1 and 2 without the latter producing coconut oil covered by the RRs. at the railway station for booking. The RRs. are to be issued under the rules, only after the person in charge of it getting himself personally satisfied that the goods for which the RR is sought, are ready at the station platform for despatch. The normal and accepted practice was that accused 1 and 2 would produce their demand drafts (shortly stated the DD) to the Federal Bank at Alwaye along with the RRs and receive the money covered by those documents from the bank, and the bank on their part would send both the DDs and the RRs to the consignee at the other, end, and collect the amount. The consignee on production of the RRs at the concerned railway station will get delivery of the goods when they arrive. The trick alleged to have been played in the present case is that bogus RRs were issued by the 4th accused bogus in the sense that they were issued without the party producing the oil covered by the documents and at the instance of accused 1 and 2 such false RRs were produced at the bank and money received. The trick alleged to have been played in the present case is that bogus RRs were issued by the 4th accused bogus in the sense that they were issued without the party producing the oil covered by the documents and at the instance of accused 1 and 2 such false RRs were produced at the bank and money received. The consignee at the other end on receipt of the documents parted with the money, but found later on, that it was all a trick played on them and so they have been compelled to institute civil suits against the railway for recovery of the loss. 5. The offence is stated to have been brought to light by Pw.1, the Travelling Inspector of Accounts, Southern Railway, Trichur in the course of his inspection of the Alwaye railway station. He started his inspection first on 23-1-63 and it lasted for 3 weeks. In the course of the inspection it came to his notice that there was irregularity in clubbing wagon loads, and delay in the despatch of goods booked by accused 1 and 2. These facts alerted him since it was likely to bring loss to the railway. On 25-5-63 while he was engaged in inspection work at the Ernakulam town station, he made a suprise inspection of the Alwaye station as he had reason to suspect that RRs were being issued from there before the receipt of the consignments. He made a physical verification of the outwards at the station and found that there was shortage with regard to 13 RRs. The goods booked as smalls under these 13 RRs had not been in fact despatched. (Anything, less than a full wagon load is called'smalls'. One wagon load normally is 660. tins. The rate for the smalls will be higher than the rate for full wagon. But when consignments are clubbed together to make it a full wagon-load, the wagon-load-rates can be claimed, by the party and thus avoid payment of a higher rate. If the consignments are of similar articles booked, on the same day from the same station to the same station in the same wagon they are allowed to be clubbed together. It is in the matter of this kind of clubbing that irregularity was noticed by Pw 1). If the consignments are of similar articles booked, on the same day from the same station to the same station in the same wagon they are allowed to be clubbed together. It is in the matter of this kind of clubbing that irregularity was noticed by Pw 1). 3525 tins of coconut oil were in all covered by the 13 RRs; but Pwl found only 43 tins at the station, ready for loading. Along with those 43 tins he saw as many as 2807 empty tins. This glaring circumstance set him thinking and gave him the incentive to probe further into the matter and on such enquiry it was found that these RRs were issued without the oil having been produced, as required by the rules. The facts brought out in the course of Pwl's investigation led him to the conclusion that the 4th accused was in league with accused 1 to 3 and it was in pursuance of the conspiracy that was hatched between them, that the said 13 RRs happend to be issued. "When two or more persons agree to do, or cause to be done, an illegal act, or an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy". The offences consists in the "combining". So long as such a design rests in intention only, it is not indictable. When two agree to carry it into effect, the very plot is an act in itself. The offence is, therefore, complete though no further act is done in pursuance of the agreement or even where the parties do not settle the means to be employed. In respect of the combining, in the present case, there is absolutely no evidence. In order to establish the charge of conspiracy the prosecution has to prove an agreement between the persons charged, to do the illegal act. No doubt, proof of the existence of the conspiracy is generally a matter of inference deduced from certain criminal acts of the accused, done in pursuance of an apparent criminal purpose in common, between them. As observed by a Division Bench of the Patna High Court in State of Bihar v. Kailash Prasad Sinha (AIR. 1961 Pat. No doubt, proof of the existence of the conspiracy is generally a matter of inference deduced from certain criminal acts of the accused, done in pursuance of an apparent criminal purpose in common, between them. As observed by a Division Bench of the Patna High Court in State of Bihar v. Kailash Prasad Sinha (AIR. 1961 Pat. 451): The offence of a conspiracy to commit a crime is a different offence from the crime that is the object of the conspiracy, because the conspiracy precedes the commission of the crime and is complete before the crime is attempted or completed." Under S.120B, IPC. conspiracy 'per se' has been made a substantive offence. For a conviction to be entered on conspiracy'per se' there must be evidence of the combination or agreement as between various members conspiring. Direct evidence might be difficult to prove such agreement; but such a conspiracy may be proved by evidence other than oral; it may be proved by the evidence of surrounding circumstances and the conduct of the accused both before and after the alleged commission of the crime. In Queen v. Nim Chand Mookerjee (20 W. R.-Cr. 41) the learned judges have observed: "the accused must be connected to have taken part, not only in those steps of the transaction which are innocent, but in some way or other it is absolutely necessary to secure a conviction, to connect him with those steps of the transaction which are criminal." But no evidence of conduct before or after the crime is available in the case from which it could be inferred that they had conspired together to commit the crime. The subsequent conduct as has emerged from the evidence is that they continued to supply oil even after knocking off the money from the bank on the strength of the impugned RRs. This is not the conduct expected of a person who has obtained money by false pretences from an institution like the bank. Normally one would expect such a person to disappear from the scene with the money so obtained. I may have to come again to this aspect of the charge at a later stage. But here I would like to point out that the learned judge ought not have convicted the accused for conspiracy simpliciter when they are already convicted of the criminal acts committed in pursuance of the conspiracy. I may have to come again to this aspect of the charge at a later stage. But here I would like to point out that the learned judge ought not have convicted the accused for conspiracy simpliciter when they are already convicted of the criminal acts committed in pursuance of the conspiracy. In the 1961 Patna case (cited supra) the learned judges would observe: "So far as the charge under S.120B is concerned, it is clear that the matter has gone beyond the stage of mere conspiracy and offences have actually been committed in pursuance thereof. In the circumstances, their conviction also under S.120B of the Indian Penal Code is unnecessary." So also in the present case I should think that the conviction under S.120B is uncalled for. The conviction and sentence on the above count must, therefore, go. 6. Now coming to the substantive offence of cheating, the case of the prosecution is that by producing some empty tins at the station platform and covering it with tarpaulin and straw accused 1 and 2 hoodwinked A4 the goods clerk and made him issue the RRs believing them to be genuine filled tins. In other words, he was made to believe that the oil in respect of which the RR was sought for, was ready for despatch at the railway station and believing that representation the RR. which is a valuable security was parted with by him. Only at a later stage when PW.1 came on a surprise visit and examined the tins that it came to light that A4 was defrauded and what was actually stored there were empty tins. There were in all 2807 empty tins. (A day after when it was counted the number was found to be in excess, i, e., the number was found to be 2900. The filled tins went up from 43 to 45). 7. To constitute cheating, the delivery of the property must relate to the false representation made; that is to say, delivery of property must be traceable directly to the representation; but in the present case some of the impugned RRs. were issued some days before the empty tins had actually arrived at the station. The case put forward is that on the night of Sivarathri, i. e., 23-2-63 the tins were transported to the railway station (either on that day or one day earlier). were issued some days before the empty tins had actually arrived at the station. The case put forward is that on the night of Sivarathri, i. e., 23-2-63 the tins were transported to the railway station (either on that day or one day earlier). But atleast 4 out of the 13 RRs. were issued before that date, (three were issued on 2-2-63 and one on 16-2-63). It is, therefore, difficult to think that the RRs. were issued on the representation that the oil covered by the RRs. was already available at the station platform or in the goods shed. It is, therefore, possible to argue that the inducement upon which the RRs were issued was not the empty tins, but something else. An accused cannot be convicted of obtaining by false pretence, if the person alleged to have been cheated, relied on his own judgment and not on the representation. There is also the fact that money was parted with by the bank not on the RR; but on the demand draft produced by the accused. The accused-firm on the prosecution's own showing had been engaged in the business of transporting coconut oil for over 15 years and they were having regular accounts with the Federal Bank all these 15 years. Pw.20 the Managing Director of the Federal Bank would swear: "The partners of the firm are accused 1 to 3. The firm had shares in the bank. The firm's guarantor to the bank was Kadijakutty Pareed Pillai, wife of Al. The bank had permitted Rs. 50,000 overdraft and 5 lakhs bills discounting facilities to the concern. As security, the firm had produced immovable as well as movable properties." The correct procedure obtaining in the bank for discounting RRs. was that the RRs. alongwith the DDs. and invoice would be delivered to the bank and the bank would purchase the same and credit it in the party's account. It is not permissible to purchase the DDs. unless it is backed by the RR. But in the case of the accused-firm, a concession was extended by the bank by which the DDs. unaccompanied by the RRs used to be cashed at the bank. Later, when the RRs are produced this would be regularised. This fact is spoken to by almost all the bank empolyees examined in the case including PW. 20 the Managing Director. But in the case of the accused-firm, a concession was extended by the bank by which the DDs. unaccompanied by the RRs used to be cashed at the bank. Later, when the RRs are produced this would be regularised. This fact is spoken to by almost all the bank empolyees examined in the case including PW. 20 the Managing Director. PW.11, for instance, is the agent of the Alwaye branch of the Federal Bank. He would swear : "It was not regular to cash the bills without the production of the RR. This practice was being-followed with the knowledge of the managing director Pareed Pillai & Bros was enjoying the privilege of getting credit even before the production of the RR." PW.14 is the Chief Inspector of branches of the Federal Bank. He also would swear to the same practice. PW.10 is another agent of the same branch. He would swean "A period of 30 days from realisation of the demand drafts was allowed as a concession to this party. In the case of others, if payment was not made on demand the bill will be recalled. Sometimes this concession was extended to 45 days in the case of particular bills as directed by the managing director."' Thus it was the usual practice for the accused-firm to get the amounts on production of demand draft alone. It was enough if the railway receipt was produced some 30 to 45 days after the encashment of the demand draft. Money, therefore, was disbursed by the bank in the present case, on the strength of the DD. and not on the RR. but the fraud according to the prosecution was practised by the party to obtain the RR and not the DD. If the RR. had no part to play in the bank disbursing the money, it is difficult to hold that the goods clerk was cheated or defrauded and by that cheating the railway was ultimately put to loss. But the prosecution would try to connect the RRs with the parting of the money in this way. viz , that when the DD was produced, the party had given the promise or assurance to the bank that the RR. would be produced within a short time and it was on that promise that the DD was cashed and money parted with. But to constitute cheating, a future representation is not enough. viz , that when the DD was produced, the party had given the promise or assurance to the bank that the RR. would be produced within a short time and it was on that promise that the DD was cashed and money parted with. But to constitute cheating, a future representation is not enough. "The essential ingredients of the misdemeanour of obtaining goods by false pretences are four: there must be a false pretence made by the defendant to some other person of a matter of fact; there must be knowledge on the part of the defendant that the pretence was false; there must been obtaining of money, or a chattel, or a valuable security, by means of such false pretence, and there must be an intent to defraud. The false pretence must be of a fact that exists or has existed. A representation as to future intention is insufficient unless it can be shown that the maker had no such intention at the time of making the representation." (vide Halsbury's Laws of England 3rd Edn., vol. 10, p. 824). "A purely promissory pretence or a representation relating solely to intention or future conduct will not suffice, e. g., a pretence by the person that he is 'going to pay his rent', or 'going to get married and intends to buy furniture' or 'going to do certain work'". (vide Harris's Criminal Law, 20th Edn. P. 321.) Learned counsel argued that Indian law in this regard is different and that the breach of a future condition is sufficient to constitute cheating under the Indian law. But even under the Indian law the prosecution must establish that at the time the promise was made the accused, had not the intention whatever to fulfil it. Regarding the difference noticeable in English law the following passage appearing in Mayne's Criminal Law of India, 4th Edn, p. 693 would repay perusal and will I hope be helpful in the present case: "In one respect the code avowedly renders criminal a class of cases which are not so by English law, viz., where a party induces another to enter into a contract by a false statement as to his own intention to carry out its terms (see illustrations 0) and (g) of S.415). A man may be liable for making a representation of an existing fact which is untrue to his knowledge, but it is quite another thing when he is sought to be made liable for promising to do something in the future. Criminal liability will arise only when it is established that at the moment of promise he had no intention whatever to fulfil the same, not if he had taken an extravagant or too sanguine view of his own capacity and resources. Whenever a contract is entered into, each party leads the other to believe that he intends to perform his own part. If he subsequently fails, there will be nothing to prevent an irdictment being laid under this section, and the only question will be whither at the time of making the contract he intended to carry it out. In my opinion, the only safe rule to lay down will be, that mere breach of contract is not even prima facie of an original fraudulent intention. It will lie upon the prosecution to establish this intention affirmatively, as, for instance by showing in the case of a borrower, that he was hopelessly insolvent when he contracted the loan, and had no expectation of being able to repay it; in the case of a buyer that he had no intention whatever of paying the price; in the case of a contract to deliver. goods, that the person never had the means to deliver them, and never took any steps to procure them." It is thus clear that it is the intention at the moment the promise was made that is relevant and that is not inferrable from the fact that subsequently the promise was broken. The fraudulent intention is also not inferrable from the fact that the accused was in embarrassed circumstances at the time he entered into the promise or agreed to supply the goods. The question whether there was intention to deceive must be answered as at the date when the contract was made; (vide Fateali v. Emperor AIR. 1932 Bom. 273). So also from the fact that the hundi was returned unpaid or reversed, fraud or cheating cannot be inferred. "The fact that the hundi was not actually paid when it was presented for payment would not by itself make the accused guilty of cheating. 1932 Bom. 273). So also from the fact that the hundi was returned unpaid or reversed, fraud or cheating cannot be inferred. "The fact that the hundi was not actually paid when it was presented for payment would not by itself make the accused guilty of cheating. The accused can be held guilty of cheating only if on the circumstances proved by the prosecution the court could draw a clear inference, and the only inference, that the intention of the accused at the time when he passed the hundi to a certain firm was to cheat the firm, not otherwise." (vide Ajodhya Prasad v. Chiranjilal-AIR. 1957 All. 246). In the present case no such difficulty arises, because it has clearly come out from the records produced by the prosecution itself, that considerable number of tins of oil was despatched from the Alwaye railway station during the impugned period. Ex. P 35 is a list showing the booking and despatch of coconut oil by the accused-firm, from the Alwaye railway station from 1960 and extending to the period in question. The RRs. in respect of which the prosecution was launched, would cover the period from 2-2-1963 to 24-4-1963. During this period we see from Ex.P 35(b), that a good number of bookings were made and the oil was actually despatched also. The report shows that on 2 21963 there were two bookings to Cuttack of 330 tins each. On 6-2-1963, 330 tins to Itwari; on 7-2-1963 another 330 tins to Itwari; on 9-2-1963, 350 tins to Raniganj; on 12-2-1963 and 13-2-1963, 350 tins each to Raniganj. Then on 25-2-1963 there were two bookings of 165 tins to Itwari and 350 tins to Raniganj. On 5-3-1963 there were four bookings to Itwari of 200,-200,130 and 130 tins. 24-4-1963, i. e., the date covered by the last RR, there were four bookings to Raniganj of 350 tins, another to Bilaspur of 330 tins, third one of 330 tins to Itwari and the 4th one of 330 tins to Bilaspur. The total number of tins covered by the period is thus 4885; but the total number covered by the 13 RRs. would come only to 3525 tins. Thus the number actually booked has gone in excess of the number covered by the RRs. The total number of tins covered by the period is thus 4885; but the total number covered by the 13 RRs. would come only to 3525 tins. Thus the number actually booked has gone in excess of the number covered by the RRs. In the face of this glaring circumstance it is difficult to pin the accused with a criminal intention to cheat the railway. This is certainly not the conduct of a person whose intention is to cheat and walk off with the money. The point argued for the prosecution is that on the respective dates when the RRs. were issued, the oil covered by the particular RR. was not ready at the station for booking. Even if that is the case, no inference of guilt under S.420 I.P C., can be drawn, because the practice that was followed in the matter of booking, whether with the knowledge of the railway authorities or not, was to issue the RRs. in advance and get the oil-booked on subsequent dates as and when the goods arrived. It is possible in such circumstances that the goods in respect of the particular RR. say the one issued on 2-2-1963, had been despatched to meet a prior demand in respect of an RR already issued. This contention of the accused seems to have weighed with the learned judge also. I am extracting below the discussion of the learned judge on this aspect of the case and his finding thereon. The learned judge would observe: "So the tins supplied on 2-2-1963 may have been despatched for a prior RR. It was also pointed out that after 2-2-1963 upto 25-4-1963, 5360 tins were despatched and the tins produced for the 13 RRs. may have been among the tins so despatched. Booking between 2-2-1963 and 24-4-1963 was only 4885 tins. It was also pointed out that Ex.P35 series show that there was delay in the despatch of coconut oil upto 75 days, during the latter part of 1962. This argument necessarily leads to the inference that there were prior bookings without the production of coconut oil tins and the tins produced for the 13 RRs. in dispute were despatched in lieu of them. According to the railway rules, goods have to be despatched in the order of priority of booking. This argument necessarily leads to the inference that there were prior bookings without the production of coconut oil tins and the tins produced for the 13 RRs. in dispute were despatched in lieu of them. According to the railway rules, goods have to be despatched in the order of priority of booking. There were various bookings by accused 1 and 2 and it has to be presumed that the goods were supplied in the order of booking and despatched. So the RRs. for which goods had to be supplied will be the 13 RRs. in dispute. Ex.P35 series, show that the delay in despatching goods was negligible in 1960 and 1961, but subsequently the delay became longer. The mal-practice of obtaining RRs. without goods may have been resorted to before 2-2-1963 and goods supplied may have been despatched according to the order of priority. The 4th accused might have been keeping the through-invoices with him to be sent when goods were supplied for that particular RR." (The underling is mine) The learned judge has thus given credence to the practice of malpractice, as he puts it, of issuing RRs. without actually seeing the goods covered by the RRs. on the railway platform. The accused would have it that this practice was in vogue in the department atleast from 1959. (This claim was not controverted by the prosecution). Whatever that might be, the fact cannot be denied that the practice was in existence prior to 2-2-1963 and if the accused had taken advantage of the practice even after 2-2-1963 they cannot be mulcted with penal consequences of cheating, because the criminal intention which is so essential an ingredient of the offence of cheating, is lacking. The matter then will only be one of adjustment and the liability arising, if at all, can only assume the nature of a civil liability. The RRs. continued to be issued and the goods also continued to be supplied and this chain of arrangement was going on, as is seen from the evidence, between the accused-firm and the railway, and to pick up a few instances from a particular date of failure to supply the goods and to argue from that circumstance that the accused in conspiracy with the goods clerk hart planned the cheating of the railway department by obtaining RRs. without the production of the goods, would be unfair. without the production of the goods, would be unfair. According to the accused, the RRs. used to be issued only on production of the goods and that could be seen from fact that along with the DD. they were not able to produce the RR. The DDs. were produced in advance and even according to the prosecution, monies were being obtained from the bank on the DDs. alone on the undertaking that the RR. would be produced later on, and as a matter of fact the RRs. continued to be so produced also, after an interval. If, in fact, the accused were all in league, and the 4th accused in pursuance of the conspiracy was ever ready and willing to oblige the accused-firm he could easily have issued RRs. even on the date of the demand drafts themselves and the firm could in the circumstances have been enabled to produce the RR. along with the DD. From the fact that the RRs. were produced subsequently it is inferable that they were obtained only on subsequent dates and that too after the production of the goods at the station. The through invoices used to be sent by the clerk to the destination station, only after the goods were actually received and this would also bespeak the defence case that the RRs. were issued and made available to the accused only on their producing the goods. 8. The fact stands proved that during the impugned period, oil used to be purchased by the accused from various mill owners, for booking. The statement dated 25th May 1967 is in the nature of a list showing purchase of coconut oil by accused 1 to 3 from millers without sale bills and towards the price, cash cheques had been issued by the first accused which were cashed in the Federal Bank. These are purchases over and above those collected by the investigating officer from millers. These purchases will not easily be manifest because the idea behind was to outwit the sales tax department. The list was filed before the lower court but was not marked. The truth of the statement having not been challenged by the prosecution and no objection having been taken, I would rely on it for reference. The statement shows that from 28-1-1963 till 24-4-1963 as many as 5411 tins of oil were purchased in that manner, i. e., by cash cheques. The truth of the statement having not been challenged by the prosecution and no objection having been taken, I would rely on it for reference. The statement shows that from 28-1-1963 till 24-4-1963 as many as 5411 tins of oil were purchased in that manner, i. e., by cash cheques. This is a relevant circumstance very much helpful to assess the penal responsibility of the accused in the case. But the fact could not be substantiated on account of the attitude taken by the learned judge regarding the witness list filed by the accused in that behalf. Petition after petition were filed by the accused praying for permission to cite the mill owners from whom cash purchases were made by him. But the learned judge was not prepared to grant the accused's prayer. Cr. M. Ps. 4 and 6 of 1967 are particularly note worthy in this connection. In Cr. M.P. 4/67 the accused had prayed for the issue of summons to witnesses mentioned in the list. The Court observed that since the accused had already examined some mill owners no further evidence on those lines was necessary. According to the learned judge, some mill owners were already examined and their evidence having been found to be of no help it is unnecessary to waste the time of the court by examining a few more. The court observed: "It is stated that this court has allowed the examination of some of the mill owners. Such examination has revealed that their evidence is not of any help in deciding the points at issue. The examination of some defence witnesses has also shown that the first accused is only fishing for evidence by asking for the production of a large number of documents." The learned judge also said that the accused was motivated by a desire to delay the proceedings. On these grounds the petition was dismissed. Then another petition Cr. M. P. 6/67, was filed by the accused. In the previous petition the learned judge had observed: "But if the 1st accused wants the luxury of examining then he has to meet the expenses for summoning them." He was, therefore, asked to pay the batta. The accused said he was financially in an unsound position to pay batta and wanted the court to issue summons at State expense. In the previous petition the learned judge had observed: "But if the 1st accused wants the luxury of examining then he has to meet the expenses for summoning them." He was, therefore, asked to pay the batta. The accused said he was financially in an unsound position to pay batta and wanted the court to issue summons at State expense. But when the court was not inclined to issue summons at State expense, the accused expressed his willingness to pay batta and in the face of that he requested for re-consideration, but still the court was not prepared to grant the prayer. The learned judge observed (in Cr. M. P. 6/67): "Even though it was found that the witnessess are unnecessary, the 1st accused had been given opportunities for summoning them. He could have complied with the order dated 18-1-67 allowing the summoning of the witnesses on deposit of batta. He did not do so. Even now the petition expressing his willingness to pay the batta was filed only on 14-2-67. These facts only fortify the conclusion reached in Cr. M. P. 4/67 that the attempt of the 1st accused is only to prolong the trial of the case." With these observations he dismissed that petition also. I find it extremely difficult to appreciate the stand taken by the learned Judge. The accused's purpose in citing the mill owners was twofold; firstly to prove to the court that during the relevant period he had purchased oil on cash cheques and secondly in the matter of the empty tins, to satisfy the court that empty tins were not purchased from the mill owners as was sworn to by some of the witnesses cited by the prosecution. By the rejection of the witness schedule the accused was totally deprived of this opportunity. The reasons stated by the learned judge are far from convincing. I should normally have ordered a retrial in these circumstances; but I do not think such a course is called for, since the facts sought to be proved by the accused have otherwise emerged from the evidence. 9. Now coming to the empty tins found at the railway station, all that I wish to observe is that they were in fact unnecessary for the commission of the fraud, if at all any fraud was committed. 9. Now coming to the empty tins found at the railway station, all that I wish to observe is that they were in fact unnecessary for the commission of the fraud, if at all any fraud was committed. The case of the prosecution is that these empty tins were transported to the railway station by accused 1 to 3 through their coolies (in the conspiracy this part of the job was assigned to the 3rd accused; but the third accused has been acquitted by the learned Judge). The empty tins are stated to have been carried to the railway station on the night of Sivarathri, i. e., 23-2-63. The case is that as many as 2807/2900 empty tins were heaped up, surrounded by another 43/45 filled tins, all covered with tarpaulin (those inside the goods shed were covered with straw and those on the platform with tarpaulin). pws. 5 to 8 are the witnesses examined in support of this part of the prosecution case. Pw.5 is a lorry driver originally attached to the lorry owned by the accused-firm. He was in their service for 21/2 years and left in July 1963. He had filed a complaint against the first accused before the Asst. Labour Officer, Alwaye complaining of his dismissal from service. How far a dismissed servant's evidence against the master could be accepted, is itself problematic. According to the learned Judge, Pw.5 need not have harboured any ill will towards the accused for his dismissal, because it was not a dismissal, but only a retrenchment. I fail to appreciate the reasoning of the learned Judge. Moreover, on scanning the evidence of pw. 5, I fail to see any statement made by him to the effect that the empty tins were transported under orders of the first accused or for that matter the second accused. About the second accused all that he says is that he was seen ordering the empty tins to be taken to the 'north'. What he means by 'north' he has not clarified. From his evidence it would appear that the arrangement was supervised by the 3rd accused only, and he having been acquitted I do not think that the evidence of Pw.5 is sufficient to implicate accused 1 and 2 in the matter of transporting the empty tins. What he means by 'north' he has not clarified. From his evidence it would appear that the arrangement was supervised by the 3rd accused only, and he having been acquitted I do not think that the evidence of Pw.5 is sufficient to implicate accused 1 and 2 in the matter of transporting the empty tins. Pw.6 is a coolie who is stated to have been engaged in the work of transporting empty tins. He does not say that the tins were carried as desired by the first accused, but by a clever device he would implicate the 2nd accused by saying that he had asked the 2nd accused as to where they were being taken and the 2nd accused told him that they were being taken to the'mills in the 'north'. The empty tins according to the witnesses were taken from the mills and whether they were so taken as advised by the accused has not clearly been brought out by these witnesses. Pw.7 the next witness is stated to be related to the first accused on his mother's side. According to him the 3rd accused deputed him and the other coolies, to unload empty tins at the railway station. pw. 5 brought the tins in the lorry. So the whole thing was engineered by the 3rd accused and unless the conspiracy is proved the other accused cannot be roped into the affair, of transporting the empty tins and from the discussion already had, it is difficult to find a conspiracy bringing together the various accused. These witnesses have made also another interesting statement, and that is, that when the empty tins were placed horizontally one Kochunny intervened and asked them to place them vertically. The statement is too artificial to be accepted. Pw-8 is the other witness coming in the series. He says that he was taken along with the other labourers to the Alwaye Palace and told by the police that a case would be charged against him at Madras if he did not depose as desired by them. He was also made to understand that his karnavans had come at the gate and were actually crying from there. His evidence, therefore, is of no help. The learned judge also has not placed much reliance on him. But he has believed pws. 5 to 7. He was also made to understand that his karnavans had come at the gate and were actually crying from there. His evidence, therefore, is of no help. The learned judge also has not placed much reliance on him. But he has believed pws. 5 to 7. On a critical analysis of their evidence lam not satisfied that they are speaking the truth. Even if transporting of the tins was a fact, as already stated, there is nothing to connect the empty tins with the fraud alleged to have been committed. In other words, the empty tins had no part to play in the completion of the act which constituted the crime. Even without the help of the empty tins, money had been parted with and the whole project had materialised. It is possible that when the irregularity committed by the 4th accused, viz., the issuing of the RRs. without the production of the goods, was about to be detected these empty tins somehow were brought there to throw dust into the eyes of the inspecting officers and thus save him out of the trouble. We have already seen that early in January, Pw-1 was attracted to the place and from the delay in the bookings and irregularity in the matter of clubbing of goods his suspicion was roused and he had gone back with that suspicion. That fact was known to the 4th accused and he must have been on the alert every time and anxious to cover up the irregularity already committed by him. If it was to cover up the fraud, even granting that any fraud was committed, that the empty tins were transported to the railway station and kept there, the accused cannot be hauled up for cheating, because the act of cheating was already over before the empty tins were brought and even after the arrival of the empty tins we have seen that the parting of the money by the bank was uninfluenced by the issue of the RR. The 4th accused's function was only to issue the RR. and he had nothing to do with the disbursement of the money by the bank on the authority of the demand draft. The 4th accused's function was only to issue the RR. and he had nothing to do with the disbursement of the money by the bank on the authority of the demand draft. In my view, therefore, the empty tins, even granting that accused 1 and 2 were instrumental in transporting them, must be considered as an innocuous act so far as the commission of the fraud is concerned, i. e., in the bank parting with the money on the representation. There is also the patent circumstance that the collection of the empty tins would really run counter to the case of conspiracy; because in the face of the conspiracy in which the 4th accused was also an active participant there was no need for empty tins being brought there. The very object of the conspiracy was that the 4th accused should issue RRs without seeing the oil. Then wherefore was the camouflet of a labyrinth of empty tins?; and that to defraud whom? 10. The learned Special Prosecutor pointed out that in case it is found that money was not actually parted with on the strength of the representation, the accused have still committed an offence under S.417 I.P.C. Most of the RRs. were reversed by the consignee at the other end and returned unpaid. In those instances money having not been parted with, it cannot be argued that the alleged act of cheating was followed by wrongful gain or wrongful loss. But the learned Special Prosecutor would maintain that even in such cases there is simple cheating committed even though not followed by delivery of property or delivery of any valuable security. I do not think the contention is tenable. Without the necessary criminal intention to cheat or defraud, no action can be sustained against the accused and we have already seen, particularly from the subsequent conduct of the accused, that they never had the intention to cheat when they obtained the money from the bank. Moreover, the offence contemplated in S.417 I.P.C. is non-cognizable and without the aggrieved party making a complaint no prosecution is permissible; in the present case, none of the aggrieved consignees had come forward to initiate criminal proceedings against the accused. When the amount covered by a particular RR is not collected within the time allowed, it is reversed and the amount is debited in the party's account. When the amount covered by a particular RR is not collected within the time allowed, it is reversed and the amount is debited in the party's account. Thus the amounts covered by all the unpaid RRs. were debited by the bank against the accused and they have taken steps against the security furnished by the accused at the bank, for the realisation of those amounts. In the case of some of the consignees the goods had arrived at the destination after the stipulated period; but in some instances there was long delay. The case of the prosecution is that even though wagons were available, the accused did not despatch the goods as undertaken, and that would show that they had not the intention to fulfil their promise. From mere delay in the despatch it is not possible to infer any malafides on the part of the accused. There have been delays on prior occasions also, i. e., prior to 2-2-1963. Even in 1960 delay had occurred sometimes, and from 1961 the delay in the despatch was a regular feature. Neither from the delay in the matter of despatch, nor from the irregularities committed in the matter of clubbing could a criminal intention be inferred against the accused. What we are concerned with in the case, is whether any false report was made by accused 1 and 2 to the 4th accused and the latter believing the report had parted with any valuable security (in the present case the RRs.) and whether accused 1 and 2 had gained any financial advantage on the strength of the RRs. Even though money was obtained by them from the bank on the strength of the DD, it would be incorrect to say that the RR. did not bring any financial gain or advantage to them. But the question is whether the 4th accused, or for that matter anybody else has been cheated or defrauded by accused 1 and 2 by their representation. In view of the practice already prevalent at the Alwaye railway station that the RRs. used to be issued in advance,it was unnecessary for accused 1 or 2 to make any representation to the 4th accused that the goods were ready at the railway station for despatch. It was enough for them to represent to him that the goods would be" made available within a specified time. used to be issued in advance,it was unnecessary for accused 1 or 2 to make any representation to the 4th accused that the goods were ready at the railway station for despatch. It was enough for them to represent to him that the goods would be" made available within a specified time. In the circumstances it is difficult to find accused 1 and 2 guilty of cheating. 11. The case of the 4th accused has to be viewed from a different angle altogether. He has been charged, in addition, under S.5(2) read with S.5(1)(d) of the Act. On a careful consideration of the part played by him in the transaction, I am satisfied that he is guilty of criminal misconduct under S.5 of the Act. The offence would fall squarely under S.5(1)(d) which reads: "(1) A public servant is said to commit the offence of criminal misconduct in the discharge of his duty (d) if he, by corrupt, or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage." It was argued on behalf of the 4th accused that S.5(1)(d) is not attracted since the 4th accused did not obtain anything for himself. Considerable stress was laid on the word 'obtains' so as to make it appear that it would take-in only cases of direct benefit obtained by the public servant concerned, for himself or for any other person from a third party, in the manner described therein and does not cover a case of wrongful loss caused to the government by abuse of his power. In the present case it has clearly come in the evidence that RRs. were issued by the 4th accused in advance, i. e., without the goods having been produced for transport at the railway station. That in doing so he has abused his power as a public servant is also beyond dispute, (all railway servants after the amendment of the Indian Railways Act Act 17/55 are public servants not only for certain limited purposes, but generally under the Act). In the present instance we are confronted with the case of a public servant who by the abuse of his power has benefited a third party and thereby caused loss to government. In the present instance we are confronted with the case of a public servant who by the abuse of his power has benefited a third party and thereby caused loss to government. Whether he himself was benefited under the arrangement is not quite relevant for assessing his penal responsibility under the Act. This question had come up for consideration before the Supreme Court in Narayanan Nambiar v. State of Kerala (AIR 1963 SC 1116). There the case against the accused was that he in his capacity as a Revenue Inspector abused his position as a public servant and managed to get assigned in favour of his brother-in-law, 4 acres and 80 cents of government land without revealing the fact that the assignee was his brother-in-law, by making false entries in the relevant records regarding the extent of the land etc,. It was argued in that case that clause (d) of S.5(1) had no application. That clause would take-in only cases of direct benefit having been obtained by a public servant for himself or for any other person from a third party and does not cover a case of a wrongful loss caused to government by abuse of his power. The court held: "The Act also creates a new offence of criminal misconduct by public servants though to some extent it overlaps on the pre-existing offences and enacts a rebuttable presumption contrary to the well known principles of Criminal Jurisprudence. As it is a socially useful measure conceived iff public interest, it should be liberally construed so as to bring about the desired object, i. e., to prevent corruption among public servants and to prevent harassment of the honest among,them. As we will presently show the case of the appellant on the facts found, clearly falls not only within the words of clause (d) but also within its spirit First, talcing the phraseology used in the clause, the case of a public servant causing wrongful loss to the government by benefiting a third party squarely falls within it The phraseology is very comprehensive. It covers acts done 'otherwise' than by corrupt or illegal means by an officer abusing his position. The gist of the offence under this clause is, that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. It covers acts done 'otherwise' than by corrupt or illegal means by an officer abusing his position. The gist of the offence under this clause is, that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. "Abuse" means mis-use, i. e., using his position for something for which it is not intended Whether be abused his position or not, depends upon the facts of each case, nor can the word'obtains' be sought in aid to limit the express words f the section. 'Obtain' means acquire or get 'Obtains' in clauses (a) and (b) in the context of those provisions may mean taking a bribe from third party, but there is no reason why the same meaning shall be given to that word used in a different context when that word is comprehensive enough to fit in the scheme of that provision. There is no reason why when a comprehensive statute was passed to prevent corruption, this particular category of corruption should have been excluded therefrom because the consequences of such acts are equally harmful to the public as acts of bribery. On a plain reading of the express words used in the clause, we have no doubt that every benefit obtained by a public servant for himself or for any other person by abusing his position as a public servant falls within the mischief of the said clause." 12. On the above principles, it must be stated that the 4th accused abused his position as goods clerk and acted in clear violation of the rules of the department by issuing RRs. 'without getting himself satisfied that the goods covered by the RRs. were ready at the railway station for despatch. Thereby an advantage was conferred on accused 1 and 2 in that they were enabled to forward the same to the consignee in advance and make them believe that the goods had been despatched. Even though the money was obtained by them from the bank without the RR, at the final stage the RR. was necessary for them to complete the transaction. By getting the RR. in advance they stood to gain, by gaining time for producing the goods and that was an advantage which they could not have got if the RRs. were not so issued. was necessary for them to complete the transaction. By getting the RR. in advance they stood to gain, by gaining time for producing the goods and that was an advantage which they could not have got if the RRs. were not so issued. The prosecution need not show in such circumstances that the 4th accused was individually benefited. It is enough if it is made out that by abusing his official position an advantage was conferred on the other party and that ultimately led to a loss to the government. The 4th accused is, therefore, guilty under S.5(1)(d) of the Act. The other accused have also been charged under the said section as abettors but in the background of the offence already adverted to, it is difficult to find them guilty of abetment. They were only deriving the benefit from and irregular act committed by the 4th accused and they were enjoying the benefit even long before the crucial date, viz.., 2-2-63. In the absence of a clear indication of abetment, no conviction can be entered against the other accused under the Act. 13. In the result, Criminal Appeal 174/67 is allowed, conviction and sentence passed on accused 1 and 2 are set aside on all the counts and they are acquitted. Fine if realised, will be refunded. Conviction and sentence passed on the 4th accused are set aside on all the counts, except under the Prevention of Corruption Act. The conviction entered on him under that Act (S.5(2) read with S.5(1)(d)) and the sentence passed thereunder rigorous imprisonment for three years is confirmed. Criminal Appeal 177/67 will stand disposed of as above.