Legal Remembrancer Of Government Of W. B. : State Of W. B. v. Haridas Mundra
1975-12-09
N.L.UNTWALIA, P.K.GOSWAMI, P.N.BHAGWATI
body1975
DigiLaw.ai
JUDGMENT BHAGAWATI, J. :— These three appeals arise out of the same facts and it would, therefore, be convenient to dispose of them by a common judgment. The respondent in all the three appeals is one Haridas Mundra. He was at all material times the managing director of S. B. Industrial Development Co. (Pvt.) Ltd., who were the managing agents of a company called Richardson & Cruddas Ltd. He and his brothers Tulsidas Mundra were also directors of Richaredson & Cruddas Ltd. The Life Insurance Corporation of India, which was the largest shareholder, filed a petition in the High Court of Calcutta being Matter No. 357 of 1957 seeking relief against mismanagement of Richardson and Cruddas Ltd. under Sections 397 and 398 of the Companies Act. 1956. The respondents and other directors were impleaded as party-respondents to the petition. The High Court on the application of the Life Insurance Corporation, made an interim order sometime in December 1957 appointing Sir Dhirendra Mitra as Special Officer to manage the affairs of Richardson& Cruddas Ltd. There was an audit report made by M/s. Gutgutia & Co., Charted Accountants, in regard to the accounts of Richardsan & Cruddas Ltd., but the special Officer was not satisfied with this report and he, therefore, afterobtaining directions from the Company Judge, appointed M/s Ferguson & Co. a reputed firm of Charted Accountants, to examine the accounts of the Company and submittheir report. Ferguson & Co. found, as a result of their investigation, that there were two bills in the records of Company, one of the Rs. 4,12,000/- dated 20th June 1955 and the other for Rs. 6,18,900/- dated 27th June, 1955 purporting to be issued by a firm called Indian Machine Tools Co. having its address at 7. Mission Row, Calcutta, showing purchase of certain machinery by Richardson & Cruddas Ltd. from Indian Machine Tools Co. and on the strength of these two bills, entries were made in the books of account of Richardson & Cruddas Ltd. on 24th June, 1955 in respect of the first bill and on 29th June, 1955 in respect of the second bill, crediting the amounts of the bills to S. B. Industrial Development Co. (Pvt.) Ltd. and debiting to the machinery account. On making inquires, Ferguson & Co. discovered that there was no firm of Indian Machine Tools Co.
(Pvt.) Ltd. and debiting to the machinery account. On making inquires, Ferguson & Co. discovered that there was no firm of Indian Machine Tools Co. in existence at 7, Mission Row, Calcutta and no machinery was in fact purchased or received by Richardson & Cruddas. Ltd. as shown in the two bills supposed to have been made out by Indian Machine Tools Co. The conclusion reached by Ferguson & Co. as a result of this probe was that Richardson & Cruddas Ltd. had been defrauded of an aggregate sum of Rs. 10,60,900/- representing the amount of the two bills and that amount had been siphoned off to S. B. Industrial Development Co. (Pvt.) Ltd. by using and using these two bills, which were forged, as genuine and they made a report to this effect to the Special Officer. The Special Officer, on receipt of the report, made an application to the Company Judge for a direction that he might be authorised to lodge a complaint with the police for further investigation into these facts set out in the report. The Company Judge gave the necessary direction and the Special Officer thereupon moved the police for making further investigation in the matter. The Special Police Establishment started the investigation and ultimately submitted a charge-sheet against the respondent and Tulsidas Mundra in the Court of the Chief Presidency Magistrate. The respondent and Tulsidas Mundra were committed by the Chief Presidency Magistrate to stand their trial before the HIGH Court on charges under Ss. 120B, 409, 471 read with S. 468 and S. 477A against the respondent and Ss. 120B and 409 of the Indian Penal Code against Tulsidas Mundra. When the trial commenced before the High Court, the Public Prosecutor made two applications on 17th April, 1967, one of for amending the charges against the respondent by dropping Sections 120B and 409 and Section 418 of the other for withdrawing the prosecution against Tulsidas Mundra. Both these applications were allowed by the High Court, with the result that the trial proceeded only against the respondent on charges under Secs. 418, 471 read with Section 468, and Section 477A. Mr.
Both these applications were allowed by the High Court, with the result that the trial proceeded only against the respondent on charges under Secs. 418, 471 read with Section 468, and Section 477A. Mr. Justice Bagchi, before whom the trial proceeded, felt that the he had no jurisdiction to proceed with the trial in view of Section 195 (1) (c) of Code of Criminal Procedure 1898 and he, therefore, requested the Public Prosecutor as well as the counsel for the respondent to argue the point as to the applicability of that section. The learned Judge, after hearing the arguments advanced before him on both sides, delivered an elaborate judgment holding that by reason of Section 195 (1)(c) of the Code of Criminal Procedure, 1898, which applied in the present case, he had no jurisdiction to proceed further with the trial of the respondent and he accordingly discharged the respondent by an order dated 27th April, 1967. 2. The State being aggrieved by this judgment and order passed by Mr. Justice Bugchi in the exercise of original criminal jurisdiction, preferred a revision application against the same on the appellate side of the High Court. The respondentraised a preliminary objection against the maintainability of the revision application on the ground that it was not competent to the High Court to exercise revisional jurisdiction against an order made by a Judge of the High Court in a Session trial Since this preliminary objection raised a question of some importance, it was referred to a Full Bench and by a judgment dated 16th June,1970 the Full Bench upheld the preliminary objection and held that the High Court had no jurisdiction in revision to interfere with any judgment, or order or sentence passed by a Judge of the High Court in the exercise or its original criminal jurisdiction and accordingly rejected the revision application. 3. It appears that the State had in the meantime filed in the High Court for leave to appeal to this Court against the judgment and order of Mr. Justice Bagchi. This application was rejected by the learned Judge by an order dated 28th January, 1971 on the ground that it was not a judgment or a final order or a sentence falling within Art. 134(1)(c) of the Constitution. The State thereupon preferred two petitions in thisCourt for Special leave to appeal, one against the judgment and order of Mr.
This application was rejected by the learned Judge by an order dated 28th January, 1971 on the ground that it was not a judgment or a final order or a sentence falling within Art. 134(1)(c) of the Constitution. The State thereupon preferred two petitions in thisCourt for Special leave to appeal, one against the judgment and order of Mr. Justice Bagchi discharging the respondent and the other against the judgment and order of the same learned Judge rejecting the application of theState for leave to appeal to this Court. This Court allowed both the petitions andgranted special leave and hence we have Criminal Appeal No. 256 of 1971 directed against the judgment and order of Mr. Justice Bagchi discharging the respondent and Criminal AppealNo. 257 of 1971 against the judgment order of that learned Judge refusing leave to appeal to the State. The State also preferred an application in the High Court for leave to appeal to this Court against the judgment and order ofthe Full Bench rejecting the revision application of the State and on this application leave was granted by the High Court under Art. 134 (1)(c) of the Constitution and that is how Criminal Appeal No. 115 of 1971 is before us. 4. We will first deal with Criminal Appeal No. 256 of1971.If that criminal appeal is allowed and it is held that Section 195 (1)(c) has no applicability in the present case it would become unnecessary to consider the other two criminal appeals. Now, Section 195 (1)(c) provides that no Court shall take cognisance of an offence described in Section 463 or punishable under Sections 471, 475 and 476 of the Indian Penal Code where such offence is alleged to have been committed by a party to any proceeding in any Court in respect of any document produced or given in evidence in such proceeding, except on the complaint in writing of such Court or of some other Court to which such Court is subordinate. Obiviously on its plain language, the inhibition in Section 195 (1)(c) applies only where a person is being tried for an offence described in Section 463 or punishable under Section 471, 475 or Section 476. Here, the respondent was being tried for three distinct offences under Sections 418, and 477A. So far as the offences under Ss.
Obiviously on its plain language, the inhibition in Section 195 (1)(c) applies only where a person is being tried for an offence described in Section 463 or punishable under Section 471, 475 or Section 476. Here, the respondent was being tried for three distinct offences under Sections 418, and 477A. So far as the offences under Ss. 418 and 477A are concerned, they were plainly not covered by section 195 (1)(c) and even if Section 195 (1)(c) were otherwise applicable, it is difficult to see how the trial of the respondent for these two offences could be said to be vitiated on the ground that no complaint in writing was made by the Company Judge. The High Court had, therefore, clearly and indubitably jurisdiction to proceed with the trial against the respondent in respect of the offences under Sections 418 and 477A. The question of lack of jurisdiction in the High Court to proceed with the trial could arise only in regard to the offence under Section 471 which is one of the offences specified in Sec. 195 (1) (c). But in regard to this offence also, we do not see how, on the facts of the present case, the applicability of Section 195 (1)(c) could be invoked on behalf of the respondent. The offence under S. 471 which was charged against the respondent was that he had used the two forged bills of Indian Machine Tools Co. as genuine on 24th and 29th June. 1955 by making, on strength of these two bills, false entries in the books of account of Richardson & Cruddas Ltd. crediting the aggregate sum of Rs. 10,60.900/- in the account ofS. B. Industrial Development Co. (Pvt.) Ltd. and debiting it in the machinery account. The offence was alleged to have been committed by the respondent on 24th and 29th June, 1955 long before the proceeding in Matter No. 357 of 1957 commenced and he became a party to that proceeding and it was not committed by him in his capacity as such party, that is, after having become a party to the proceeding. Now, at one time there was sharp cleavage of opinion amongst various High Courts in regard to the true interpretation of Sec. 195 (1) (c).
Now, at one time there was sharp cleavage of opinion amongst various High Courts in regard to the true interpretation of Sec. 195 (1) (c). Some High Court held that to attract the prohibition contained in Section 195 (1)(c), the offence should be alleged to have been committed by the party to the proceeding in his charter as such party, which means, after having become a party to the proceeding, while some others took the view that it was sufficient to attract the applicability of Sec. 195 (1)(c) even if the alleged offence was committed by the party to the proceeding prior to his becoming such party, provided that the document in question was produced or given in evidence in such proceeding. This diverges of opinion amongst different High Courts was set at rest by this Court by its decision in Patel Lalibhai Somabhai v. State of Gujrat, (1971) Supp SCR 834 where this court accepted the former view in preference to the latter. This Court pointed out that the words of Sec. 195 (1) (c) clearly meant that the offence should be alleged to have been committed by the party to the proceeding in his character as such party, that is, after having become a party to the proceeding. Sections 195 (1) (c) 476 and 476A read together indicated beyond doubt that the legislature could not have intended to extend the prohibition contained in Section 195 (1)(c) to the offences mentioned therein when committed by a party to proceeding prior to his becoming such party. The scope and ambit ofSection 195 (1) (c) was thus restricted by this court to cases where the offence was alleged to have been committed by a party to a proceeding after he became such party and not before. This view as to the interpretation ofSec. 195 (1) (c) was reaffirmed by this Court in Raghunath v. State of U. P., AIR 1973 SC 1100 and Mohan Lal v. The State of Rajastan, AIR 1974 SC 299 . It must inevitability follow, on this view, that since the offence charged against the respondent was one of the alleged to have been committed by him before he became a party to the proceeding in Matter No. 357 of 1957. Section 195 (1) (c) had no application. It may also be noted that neither of the two forged bills of Indian Machine Tools Co.
Section 195 (1) (c) had no application. It may also be noted that neither of the two forged bills of Indian Machine Tools Co. was produced or given in evidence in the proceeding in Matter No. 357 of 1957. Both these forged bills formed part of the record of Richardson & Cruddas Ltd. and they were taken possession of by Special Officer along with the other record of the Company and nobody produce them or tendered them in evidence before the Company judgein the proceeding in Matter No. 357 of 1957. The requirement of Section 195 (1)(c) that the document in question should be produced or given in evidence in the proceeding was, therefore, clearly not satisfied and on this ground also. Section 195 (1) (c) was not attracted in the present case. We must, therefore, hold that the High Court was entitled to proceed with the trial of the respondent in respect of the offence under Sec. 471 without any complaint in writing from the Company Judge before whom the proceeding in Matter No. 357 of 1957 was pending. 5. We accordingly, allow Criminal Appeal No. 256 of 1971, set aside the judgment of Mr. Justice Bagchi discharging the respondent and remand the case to the city Session Court, to which the original criminal jurisdiction in Sessions cases has now been transferred, for disposal according to law. Since the case is a very old one, we would direct the City Sessions Court to take up for hearing at an early date. On the view taken by us in Criminal Appeal No. 256 of 1971, Criminal Appeals Nos. 115 and 257 of 1971 do not survive for consideration and we accordingly dismiss them. Appeal allowed. For Citation : AIR 1976 SC 2225