M"'c!t 18 v. STATE OF MAHARASHTRA

SUBBA RAO J.-These appeals by special leave arise out of two judgments of the High Court of Bombay, one that of Vyas and Kotval JJ., dated March 31, 1958, and the other that of Shah and Shelat JJ., dated November 3, 1958, in what, for convenience of reference, may be described as the Empire Conspiracy Case. Sardul Slnf!h Cav1eshaf •• State of Maf.araJhtra Subba Raa J. At the outset it would be convenient to state briefly the case of the prosecution. One Lala Shankarlal, a political leader and Vice-President of the Forward Bloc and a highly competent commer cial magnate, and his nominees held the controlling block of shares of the Tropical Insurance Company Limited, hereinafter called the "Tropical'', and he was the Chairman and Managing Director of the said company. He had also controlling voice in another company called the Delhi Swadeshi Co operative Stores Ltd. The said Delhi Stores held a large number of shares of the Tropical. In or about the middle of 1948, Sardar Sardul Singh Caveeshar, who was controlling the People's Insurance Co. Ltd. and other concerns in Lahore, and Kaul, a practi sing barrister, came to Delhi. During that year the former was the President of the Forward Bloc and Shankerlal, Shankarlal was its Vice-President. 1969 Sa"lul Singh COl.'6IJIMn y, '!alt"/ MakrOJhJra Sabb. Rao J. 382 SUPREME COURT REPORTS (1964) VOL. Jupiter the said representing so they thought of a Caveeshar and Kaul conceived the idea of purchasing the controlling block of 63,000 shares of the Jupiter Insurance Company Ltd.. hereinafter referred to as the "Jupiter", a prosperous company, in the name of the Tropical from the Khaitan Group which was holding the said Jupiter shares. But the financial position of the Tropical did not permit the qaid fraudulent purchase and device of purchasing shares out of the funds of the Jupiter itself. Under an agreement entered into with the Khaitan Group, the p•ice of the 63,000 shares of the Jupiter was fixed at Rs. 3:l,3!1,000/-, and the purchasers agreed to pay Rs. 5,00,000/- in advance as "black money" and the balance of Rs. 28,:l!J,000/-, actual price on paper, within January 20, 1949, i.e., after the purchasers got control of the Jupiter. After the purchase, Shankarlal Group took charge of the Jupiter as its Directors after following the necessary formalities, sold the securities of the .Jupiter for the required amount, and paid the balance of the pur chase money to the Khaitan Group within prescribed time. In order to cover up this fraud various manipulations were made in the relevant account books of the J upitcr. There would be an audit before the end of the year and there was every likelihood of ·1etection of their fraud, It, therefore, became necessary for them to evolve a scheme which would bring in money to cover perpetuated hy the Directors of the Jupiter in the acquisition of its 63,000 controlling shares. For that purpose, Shankarlal and his group conceived the idea of purchasing the controlling interest in another insurance company so that the funds of that company might be utilized to cover up the Jupiter fraud. With that object. in or about September 1949, Shankarlal and !l of his friends entered into a the Empire conspiracv of India Life Assurance Company Ltd, hereinafter referred to as the "Empire", to cover up the Jupiter funds of the said 1963 Sardul Singh Caveeshar v. Slate of Maharashtra Subba R•o J. 2 s.c.R. SUPREME COURT REPORTS 383 fraud. This they intended to do by purchasing the controlling shares of the Empire, by some of them becoming its Directors and Secretary, and by utiliz ing the funds of the Empire to cover up the defalca · tions made in the Jupiter. The following were the members of the conspiracy : (1) Shankarlal, ( 2) Kaul, (3) Metha, (4) Jhaveri and (5) Doshi-all Directors of the Jupiter-and (6) Guha, the Secretary of the Jupiter, ( 7) Ramsharan, the Secretary of the Tropi· cal, (8) Caveeshar, the Managing Director of the People's Insurance Co., \9) Damodar Swamp, a political worker who was later on appointed as the Managing Director of the Empire. (10) Subhedar, another political worker, (11) Sayana, a business· man of Bombay, and (12) Bhagwan Swarup, the nephew of Shankarlal and a retired Assistant Commissioner of Income-tax of the Patiala State. After forming the conspiracy, the controlling shares of the Empire were purchased in the name of Damo dar Swarup Rs. 43,00,000/·. For that purpose securities of the Jupiter of the value of Rs. 48,75,000/- were with drawn by the Directors of the Jupiter without a re· solution of the Board of Directors to that effect and endorsed in the name of Damodar Swarup again without any resolution of the Board of Directors to that effect. Damodar Swarup deposited the said securities in the Punjab National Bank Ltd., and opened a Cash-credit account in the said Bank in his own name. He aim executed two promissory notes to the said Bank for a sum of Rs. 10,00,000/- and Rs. 43,00,000/· respectively. Having opened the said account, Damodar Swarup drew from the said account by means of 8 cheques a sum of Ks. 43,00,000/· and paid the same towards the purchase of the said Empire shares. Out of the said shares of the Empire, qualifying shares of twenty were transferred in each of the names of Damodar Swarup, Subhedar and Sayana, and by necessary resolutions Damodar Swarup became the Managing approximate 1963 Sadul 'ingh Cm·ttthar •• Stat1 ~J Mnhara1ht1a Subba Rao J. '\ 384 SUPREME COURT REPORTS (1964) VOL. Director and Chairman of the Empire and the othrr and Bhagwan Swarup was two, its Directors, appointed its Secretary. The conspirators having thus taken ccntrol of the Empire through some of them, lifted large amounts of the Empire to the tune of Rs. 62,49,700/- by bo~us sale and loans, and with the said amount they not only recouped the amounts paid out of the .Jupiter for the purchase of its con large amounts paid for trolling shares and also the the purchase of the controlling shares of the Empire. After the conspiracy was discovered, in due course the following ten of the said conspirators, i.e., all the conspirators excluding Shankarlal and another, who died pending the investigation, were brought to the Court of the Sessions Judge for trial before Greater Bombay under s. 120-B of the Indian Penal Code and also each one of them separately under s. 409, read withs. 109, of the said Code: (I) Kaul, (2) Metha, (3) Jhaveri, (4) Guha, (5) Ramsharan, (6) Caveeshar, (7) Damodar Swarup, (8) Subhe {I OJ Bh:igwan Swarup. dar, The gravemen of the chorge against them was that they, along'with Shankarlal and Doshi, both of them deceased, criminal c:onspiracv at Bombay and elsewhere between or about the period from September 20, I !);,o to December 31, 19ii0 to commit or cause to be committed criminal breach of trust in respect of Government securities or proceeds thereof or the funds of the Empire of India Life Assurance Co. Ltd., Bombay, by acquir ing its management and control and dominion over the said property in the wav of business as Directors, Agents or Attorneys of the iaid Company. The details of the other charges need not be given as the accused were acquitted in respect thereof. (!l) Sayana, and entered a Learned Sessions Judge made an elaborate enquiry. consider(d the innumerable documents filed and the oral evidence adduced in the case and came to the conclusion that Accused I, 2, 4, 5, 6 and IO .. 1963 Sardu l ;fngh Caveeshar . v. State· of Mahara.shtra Subb1 RAO/. 2 S.C.R. SUPREME COURT REPORTS 385 were guilty of the offence under s. 120-B, read with s. 409 of the I.ndian Penal Code and sentenced them to variom term of imprisonment. Accused 6, i. e., Cavecshar, was sentenced to suffer rigorous imprr sonment for 5 years, and accused 10, i. e., Bhagwan Swarup, to rigorous imprisonment for a period of 5 years and also to pay a fine of Rs. 2,000/- and in default to suffer rigorous imprisonment for a further period of six months. He acquitted accused 3, 7, 8 and 9. The State preferred an appeal to the High judgment of the Court against that part of the learned Sessions Judge acquitting some of the the convicted accused filed appeals accused; and against their convictions. The appeal filed by Caveeshar, Accused·6, was dismissed in limine by the High Court. The appeals filed by the other convicted accused against their convictions were dismissed and the appeal by the State against the acquittal of some of the accused was allowed by the High Court. Accused- 7 was sentenced to 5 years' rigorous imprisonment, accused-8 to 3 years' rigorous imprisonment and accused 9 to 3 years rigorous imprisonment. Accused 6, 7, 8, 9 and 10 have, by special leave, preferred these appeals against their convictions and sentences. We are not concerned with the other accused as some of them died and others did not choose to file appeals. At the outset it may be stated that none of the learned counsel appearing for the accused questioned the factum of conspiracy; nor did they canvass the correctness of the findings of the Courts below that the funds of the Empire were utilized to cover up the fraud committed in the Jupiter, but on behalf of' each of the appellants a serious attempt was made to exculpate him from the offence. But, as the defal. cations made in the finances of the Jupiter and the • • 386 SUPREME COURt REPORTS [1964] vot. /9b3 Sari11l Sin1h Ca;1ohar v. S1arr nf .\fa/iorOJhlrl mode adopted to lift the funds of the Empire and transfer them to the coffers of the Jupiter will ha vc some impact on the question of the culpability of the appellants, we shall briefly notice the modus operandi of the scheme of conspiracy and the financial adjust ments made pursuant thereto. referred We have already to the fact that Shankarlal Group purchased the controlling shares of the Jupiter from Khaitan Group and that as a consideration for the said purchase the former agreed to pay the latter Rs. ~.00,000/- as "black money" and pay the balance ot about Rs. :l8,39,000/-on or before January 20, 1949. After Shankarlal Group became the Directors of the Jupiter, they paid the said amount from and out of the funds of the .Jupiter. To cover up that fraud, on .January 11, 1949, the Directors passed a resolution granting a loan of Rs. 25,15,000/· to Accused-6, on the basis of an application made by him, on equitable mortgage of his properties in Delhi: (see Ex. Z-22). They passed another resolution sanctioning the purchase of plots of the Delhi Stores, a concern of Shankarlal, for a sum of Rs. 2,60,000/-. Accused-6 had no property in Delhi and that the said plots were not owned by the Delhi Stores. The said loan and the sale price of the plots covered by the said resolutions were really intended for drawing the money of the Jupiter for paying the Khaitan Group before January 20, 1949. But some share holders got scent of the alleged fraud and issued notices; and the Directors were also afraid of dete ction of their fraud by the auditors during their inspection at the close of the year 1949. It, therefore, became necessary to show in the accounts of the Jupiter that the loan alleged to have been advanced to Accused-6 was paid off. For this purpose the Directors brought into existence the following four transanctions : ( l) a loan of Rs. 5,00,000/- advanced to Raghavji on November !i, 1 !HH; (2) a loan of It is in evidence 19~3 Sa.rdul Si'n£h ca~etsh~r v. St4le of Md«rt1.fhlra Subia R;o J, 2 $.C.R. SUPREME COURT REPORTS 381 It Shankarlal Rs. 5,30,000/· to Misri Devi on December 12, 1949; (3) a fresh loan of Rs. 5,30,000/- to Caveeshar, Accused-6 on November 5, 1949; and ( 4) a transa ctions of purchase of 54,000 shares of the Tropical for Rs. 14,00,000/- on May 25, 1949 December 20, 1949. These four ficticious transa ction were brought about to show the discharge of the Joan advanced to Caveeshar, Accused-6. Further manipulations were made in the accounts showing that parts of the loans due from Raghavji, Misri the price of the Devi and Caveeshar and also Tropical shares were paid by Cav~eshar. These paper entries did not satisfy the auditors and they is the case further scrutiny. insisted upon of the prosecution and his co-conspirators following their usual pattern concei ved the idea of getting the controlling interest of the Empire, which had a reserve of Rs. 9 crores. Jupiter securities worth Rs. 45,00,000/- were endorsed favour of Accused-7, who in his turn endorsed them in favour of the Punjab National Bank Ltd., for the purpose of opening a cash-credit account therein. On October 5, 1950, under Ex. Z-9, the controlling shares of the Empire were pur chased from Ramsharan Group and the consideration therefor was paid from and out of the money raised on the Jupiter securities. The Directors of the Jupiter had to make good to the Company not only the amounts paid out of the Jupiter funds to purchase the controlling shares of the Jupiter, in regard to which various manipulations were· made Jupiter accounts, but also about Rs. 45,00,000/. the name of worth of securities Damodar Swarup. Having purchased the cont rolling shares of the Empire, Shankarlal and his their nominees, namely, Accused colleagues got 7, 8 and 9 as Directors and Accused-10 as the Secre tary of the Empire. On November 27, 1950, a resolution of the Directors of the Empire sanctioned the purchase of Rs. 20,00,000/- worth of Government . transferred 1963 Sarthd Sinth C...Ullor v. Sto11 of MaM10JhJro SobH Rao J. - 388 SUPREME COURT REPORTS [1964] VOL. to make good totalling Rs. 4~,80,000/- admittedly St:curities alleged to belong to the Jupiter. Though the securities were not delivered, two bearer-chequts dated October 26, I YiiO and October 27, l!J50 for Rs. 15,00,000/- and Rs. 5,00,000i- respectively were made out and cashed anJ the said moneys were utilized to cancel the loan alleged to have been advanced to Raghavji and for the purch~se of the Tropical shares for Rs. l ·t ,00,l!OO/-. But the con spirators had still the securities favour of Accused 7 and other transferred in amounts. The Directors again sanctioned 12 loans, six on November 27, 1950 totalling Rs. 28,20,000/- and the other six on December 18, 1950 fictitious loanees. 12 bearer-cheques for an aggregate of Rs. 71,00,000/- were issued by Accused-10 between December 19 and 23, 19•)0. This amount was uti lized for getting 5 drafts for different amounts in favour of Accused 1 and 2, the Directors of the Jupiter, Accus~d-4, its Secretary, and Accused-5, the Secretary of the Tropical (see Ex. Z-2:{<1). The said drafts were sent to Bombay and one of the said for paying off the loan of Misri drafts was utilized Devi and the other Drafts for Rs. 57 00,000/- were .paid into the Jupiter account in the Punjab National Bank Ltd., Bombay. This amount was utilizrd to cover up the loss incurred by the Jupiter by reason of Its securities worth about Rs. 45,00,000/- assigned in favour of Accused-7 and also by rea1on of the securi ties worth Rs. 20,00,00n/- alleged to have been sold to the Empire on ~ovember 27, l!J50. It is, there fore, manifest, and indeed it is not disputed before us now, that Shankarlal and his co-conspirator>, whoever they may be, had conspired togeth1 r and lifted large amounts of the Empire and put them loss caused into the Jupiter coffers to cover up the to it by their fraud. Therefore in these appeals we proceed on the basis that there was a conspiracy as aforesaid and the only question for consideration is whether all or some of the appellants were parties to it. 2 s.c.R.. StJPREME CbtJR.t REPbR.ts 389 Before dealing with the individual cases, as some argument was made in regard to the nature of the evidence that should be adduced to sustain the case of conspiracy, it will be convenient to make at this stage some observations thereon. Section 120-A of the Iodian Penal Code defines the offence of criminal conspiracy thus : 1963 Sardul Singh CaveeSMr v. SUJte of Maharashtra Subba Rao J. "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." therefore, that there The essence of conspiracy is, should be an agreement between persons to do one or other of the acts described in the section. The said agreement may be proved by direct evidence or may be inferred from acts and conduct of the parties. There is no difference between the mode of proof of the offence of conspiracy and that of any other offence : it can be established by direct evidence or by circumstantial evidence. Buts. 10 of the Evidence Act the doctrine of agency and if the conditions laid down therein are satisfied, the acts done by one are admissible against the co-conspirators. The said section reads : . introduces "Where there is reasonable ground to believe two or more persons have conspired together to commit an offence or an actiona ble wrong, anything said, done or written by any one of such persons in reference to their common intention, after the time when such intention was first entertained by any one of them, is a relevant fact as against each of the persons believed to be so conspiring as well for the purpose of proving the existence of the conspiracy as for the purpose of showing that any such person was a party to it." This section, as the opening words indicate, will come into play only when the Court is satisfied that - 1963 Sar"'1 Si,,1h Cnt11ba, v. $1•11 ef M.Mra/Urt Suih Rao J. •· 390 SUPREME COURT REPORTS [1964] VOL. intention, after to believe that two or there is reasonable ground more persons have conspired together to commit an offence or an actionable wrong, that is to say, there should be a prima f'.1cie evidence that a person was conspiracy before his acts can be a party to the against his co-conspirators. Once snch a reasonable ground exists, anything said, done or written by one of the conspirators in reference to the the said intention was common entertained, is relevant against the others, not only the purpose of proving the existence of the conspiracy but also for proving that the other person was a party to it. The evidentiary value of the said acts is limited by two circumstances, namely, that the acts shall be in reference to their common inten tion and in respect of a period after such intention was entertained by any one of them. The expres sion "in reference to their common intention" is very comprehensive and it appears to have been designedly used to give it a wider scope than the words "in furtherance of" in the English law ; with the resnlt, anything said, done or written by a co conspir,1tor, after the conspiracy was formed, will be evidence against the other before he entered the field of conspiracy or after he left it. Another important limitation implicit in the language is indicated by the expressed scope of its relevancy. Anything so said, done or written is a relevant fact only "as again~t each of the persons believed _to be so ~onspi­ ring as well for the purpose of provmg the existence of the conspiracy as for the purpose of showing that any such person was a party to it". It can only be used for the purpose of proving the existence of tJ:ie conspiracy or that the other person was a party to it. It cannot be nsed in favour of the other party or for the purpose of showing that such a person was not a In short, the section ~an be analysed as follows: (1) There shall be a prinvt. Jacie evidence affording a reasonable ground for a Court to believe that two or more persons are to the conspiracy. ... .. ... 1963 Sardul Sinth Caveeshar v. State of Maharashtra Subba Rao /. 2 S.C.R. SUPREME COURT REPORTS 391 members of a conspiracy ; (2) if the said condition is fulfilled, anything said, done or written by any one of them in reference to their common intention will be evidence against the other; (3) anything said, done or written by him should have been said, done or written by him after the intention was formed by any one of them ; (4) it would also be relevant for the said purpose against another who entered the conspiracy whether it was said, done or written before he entered the conspiracy or after he left it ; and ( 5) it can only be used against a co-conspirator and not in his favour, With this background let us now take the evi. dence against each of the appellants and the conten· tions raised for or against him. But it must be stated that it is not possible to separate each of the accused in the matter of consideration of the evidence, for in a case of conspiracy necessarily there will be common evidence covering the acts of all the accused. We may, therefore, in dealing with some of the accused, consider also the evidence that will be germane against the other accused. We shall first take the case of Accused-6, Caveeshar, who is the appellant in Criminal Appeal No. 82 of 1962. So far as this appellant is concern ed the learned Sessions Judge found that he was a member of the conspiracy and the High Court confirmed the Practice of interfere with concurrent findings of fact even in regular appeals and particularly in appeals under Art. 136 of the Constitution. We would, therefore, approach the appeal of this accused from that perspective. finding. not to Court It Learned counsel for appellant argued before us that the said accused was convicted by the Sessions Judge for being a member of the conspiracy in the ,Jupiter case in respect of his acts pertaining . . . 1963 :'ndul SUiglt. C•r;ttthar v. Stall of Mahara1hJra liil!a illl• J. .. 392 SUPREME COURT REPORTS (19fl4JVOL. to that conspiracy and therefore he could not be convicted over agaiu in the present case on 1he basis of the facts on which the earlier conviction was founded; in other words, it is said that he was con· victed in the oresent trial for the same offence in respect of which he had already been convicted in the Jupiter case aad such a conviction would infringe his fundamental right under Art. 20 (2) of the Constitution, and in support of this coniention refe rence was made to certain decisions of the Supreme Court of the United States of America. The said Article reads : "Ng person shall be prosecuted and punished for the same offence more than once." The previous case in which this accused was convicted was in regard to a conspiracy to commit criminal breach of trust in respect of the funds of the Jupiter and that case was finally disposed of by this Court in Sardul Singh Caveesliar v. Suite of Bombay (1). Therein it was found that Caveeshar was a party to the conspiracy and also a party to the fraudulent transactions entered into by the Jupiter in his favour. The present case relates to a diffrrent conspiracy altogether. The conspiracy in question was to lift the funds of the Empire, though its object was to in respect of the cover up the fraud committed Jupiter. Therefore, it may be that the defalcations made in Jupiter may afford a motive for the new conspiracy, but the two offences are distinct ones. Some accused may be common to both of them, the Jupiter some of. the facts proved to establish conspiracy may also have to be proved to support the motive for the second conspiracy. The question is whether that in itself would be sufficient to make the two conspiracies the one and the same offence. Leamed counsel suggests that the question raised involves the interpretation of a provisio~ of the Constitution and therefore the appeal of this accused (I) [1958] S. C.R. 161. - - 1963 Sardu/ Singh Caueesh"r v. State of Mali~raslitra Subia Raa J. - - 2 s.c.R. SUPREME COUR t REt>OR ts 393 will have to be referred to a Bench consisting of not less than 5 Judges. Under Art. 145 (3)_ of the C.onsti tution only a case involving a substantial. qu.est10n of law as to the interpretation of the Const1tut10n shall be heard by a Bench comprising not less than 5 in State of Jammu &: Judg~s. This Court held Kashmir v. Thakur Ganga Singh (1 ), that a substan tial question of interpretation of a provision of the law on the Constitution cannot arise when the subject has been finally and effectively decided by this Court. Two decisions of this Court have con strm.d the provisions of Art. 20 (2) of the Constitu tion in the context of the expression "same offence." In Leo Roy Frey v. The Superintendent, District Jail, Amritsar (2 ), proceedings ~re taken against certain persons the first customs authorities under s. 167 (8) of the Sea Customs Act and heavy personal pen a !ties were imposed on them. Thereafter, they were charged for an offence under s. 120-B of the Indian Penal Code. This Court held that an offence under s. 120-B is not the same offence as that under the Sea Customs Act. Das C. J., speaking for the Court, observed : instance before "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, equally the crime attempted or completed does not require the element of conspiracy as one of its ingredients. They are, therefore, quite separate offences." the scope of This Court again considered words "same offence" in The State of Bombay v B. L: A pte ("). There the respondents were both convicted and sentenced by the Magistrate under s. 409 of the Indian Penal Code and s. 105 of the Insurance Act. Dealing with the argument that the (I) (1960j 2 S. C.R. 346. (SJ [1961] 3 S.C R, 107, 114. (2) [1958] S, C.R. 822 827 ' ' 1963 s.,/11/ Siloth C•ctnh•r v. S1<11 •f Mllluraslitra SU6b1R,. /. 394 SUPREME COURT REPORTS [1964] VOL. same, Raj agopala allegations of fact were Ayyangar J., rejecting the contention, observed on beha If of the Court : "To operate as a bar the second prosecution and the consequential punishment thereunder, must be for 'the same offence'. The crucial requirement, therefore, for attracting the Article is that the offences are the same i.e., they should If, however, the two offences are be identical. distinct, then notwithstanding that the allega· tions of fact in the two complaints might be substantially similar, the benefit of the ban It is, therefore, necessary cannot be invoked. to analyse ~nd compare not the allegations in the two complaints but the ingredients of the identity two offences and see whether their is made out." This decision lavs down that the test to ascertain whether two offen'ces are the same is not the identity of the allegations but the identity of the ingredients In view of the said decisions of this of the offences. Court, the American decisions cited at the Bar do not call for consideration. As the question raised has already been decided by this Court, what remains is only the application of the principle laid down to the facts of the present case. We cannot, therefore, hold that the question raised involves a substantial question of law as to the interpretation of the Consti tution within the meaning of Art. 115 (3) of the Constitution. In the present case, appl yin~ t~e test laid down by this Court, the two consp!rac1es are not the same offence : the Jupiter conspiracy came to an its funds were misappropriated. The end when Empire conspiracy w~s ~atched subseq~ently., though intimate conne~t10n with th.e its object had an Jupiter in that the fraud of the Empire was conce1- ycd and executed to cover up the fraud of - - - 1963 Sardul Sioeh Ca111esho.r v. State of Maliararhtra Subbs R .. J. - - - 2 S.C.R. SUPREME COURT REPORTS 395 a motive offence of afford .Jupiter. The two conspiracies are distinct offences. It cannot even be said that some of the ingredients of both the conspiracies are the same. The facts constituting the Jupiter conspiracy are not ingredients of Empire conspiracy, but latter offence. Motive is not an ingredient of an offence. The proof C'~ motive helps a Court in coming is direct is no direct evidence offence, the absence of proof of motive is not the offences ingredients of both material. The are totally different and they do not form the same offence within the meaning of Art. 20 (2) of the Constitution and, therefore, that Article has no re levance to the pr.::sent case. to a correct conclusion when evidence. vVhere accused for implicating The next question is whether this appellant was a party to the Empire conspiracy. He was a close asso ciate of Shankarlal in the political field, he being the President of the Forward Bloc and Shankarlal being its Vice-President. That is how they were drawn together. There is also evidence that out of the 63,000 shares of the Jupiter that were purchased in August, 1949 by Shankarlal Group, 4476 shares were allotted to this appellant. It is, therefore, clear that Accused-6 though ex f acie he was neither a Director nor an office-bearer in the .Jupiter, had heavy stakes in it. We have already noticed that after the purchase of the said shares from and out of the Jupiter funds, a bogus loan in the name of Accused-6 for a sum of Rs. 2i),l5,000/- was shown in the Jupiter accounts and later on it was substituted by other manipula tions. [His Lordship then proceeded to consider the evidence.] x x x x x x x x Both the Courts on the basis of the aforesaid evidence came to the conclusion that Accused-6 was 396 SUPREME COURt R.tPOR.tS (1964] VOL 1963 Sardul Sirigh Cal!ttsMt •• Stott of Afahoras/dra Subbo Rao J. a member of the conspiracy and we cannot say that there is no evidence on which the Courts could have come to the conclusion to which they did. There are no permissible grounds for upsetting this finding under Art. 136 of the Constitution. As regards the sentence passed against this accused, the Sessions Judge sentenced him to undergo rigorous imprisonment for a period of 5 years, whereas he sentenced Accused 7, 8 and 9 to undergo rigorous impr~onment for a period of 3 years only. We do not see any justification for this distinction between the said accused in the matter of punishment. Accused ti had already been convicted and sentenced in the Jupiter case; and on the evidence it does not appear the Empire that he had taken a major part In conspiracy, though he was certainly it. the circumstances, we think that a sentence of 3 years' rigorous imprisonment would equally suffice in his case. We, the sentence passed on him and sentence him to undergo rigor to the aforesaid modification, the appeal preferred by Caveeshar, Accused-6, is dismissed. for ;3 years. Subject therefore, modify imprisonment period to consider 'Ne shall now proceed the appeal preferred by Damodar Swarup, Accused-7 i.e., Criminal Appeal No. 83 of 1962. Accused-7 was the Managing Director and Chairman of the Empire during conspiracy. On October 1 7, 1950 he was elected the Chairman of the Board of Directors of the Empire and appointed as Managing Director on a salary of Rs. 2,000/ per month for a period of one year. He was re moved from the post of Managing Director at the meeting of held on March 12, 1951. The misappropriation of funds of the Empire, which is the subject-matter of the conspiracy, were committed during the period i. e., between of his the Board of Directors l\fanaging Directorship .... - .. 2 S.C.R. SUPREME COURT REPORTS 397 September 20 and December 31, 1950. The pro secution case is that Accused-7 was a party to the conspiracy, whereas the defence version is that he was a benamidar for Shankarlal, that he took part the proceedings of the Board of Directors bona fide believing that there was nothing wrong, that the resolutions were implemented by Accused-IO the directions of Shankarlal and that the moment he had· a suspicion that there was some fraud, he took immediate and effective steps not only to prevent the rot but also to investigate and find out the real culprits. The question is which version is true. It would be useful to have a correct apprecia /903 Sardul ~ingh Ca1ue_h1r v. Stale of M ahartuhtra Su6ba Rao I. [His Lordship to know the antecedents of proceeded tion of the evidence Accused- 7. consider the evidence.] x x x x x that he was x Learned counsel for Accused- 7 contends that the following two important circumstances in this case established that Accused- 7 was a victim of circum innocent : ( 1) Two stances and country with prominent publicmen whom the accused worked gave evidence he was a man of integrity; and (2) the accused the fraud and to took active steps to unravel guilty person; if he was brin~ to book every a conspirator, the argument proceeds, it was incon ceivable that he would have taken such steps, for it would have certainly recoiled on him. We shall [His Lotdship then consider these two aspects now. proceeded to consider the evidence.] x x The question is what is the evidentiary value of good character of an accused in a criminal case. The relevant provisions are s. 53 and the Explana tion to s. 55 of the evidence Act. They read : x x Section 53. In criminal proceedings the fact 1963 S;rJul Siti£h t..atttJ/JU v. ,•:il1tt nf Aldar1Jhtra Suhbo Rio J. .. • 398 SUPRENfE COURT REPORTS [1964] \rot. that the person accused is of a good character is relevant. 1':xplanution to s. ;iii. In sections 52, o:l, 54 am! 55, the word "character" includes both repu tation and disposition; but except as provided h section 54, evidence may be given only of general reputation and general disposition, and not of particular acts by which. reputation, or disposition were shown. It is clear from the said provisions that the evidence of general reputation and general disposition is rele· vant in a criminal proceeding. Under the Indian Evidence Act, unlike in England, evidence can be given both of general character and general disposi tion. Disposition means the inherent qualities of a person; reputation means the general credit of the person amongst the public. There is a real distinc· tion between reputation and disposition. A man may be reputed to be a good man, but in reality he may have a bad disposition. The value of evi dence as regards disposition of a person depends not only upon the witness's perspicacity but also on his opportunities to observe the person as well as the said person's cleverness to hide his real traits. But a disposition of a man may be made up of many traits, some good and some bad, and only evidence in regard to a particular trait with which the witness is familiar would be of some use. Wigmore puts the proposition m following manner: - "Whether, when admitted, it should be given weight except in a doubtful case, or whether it may suffice of itself to create a doubt, is a mere question of the weight of evidence, with rules of admissibility have no which the concern." - But, in any case, the character evidence is a very the positive weak evidence : it cannot outweigh 1963 &1•1 s;.,h Ccmshl1T .. SJate •J Moh.tt:•sh~r. Sub~« R•~ J. 2 $.C.R. SUPREME COURT REPORTS gg6 It may evidence in regard to the guilt of a person. be useful in doubtful cases to tilt the balance in favour of the accused or it may also afford a back reactions in a given ground for appreciating his situation. It must give place to acceptable positive evidence. The opinion expressed by the witnesses does credit to the accused, but, in our view, in the face of the positive evidence we have already considered, it cannot tum the scale in his favour. strongly Learned counsel relied upon the subsequent conduct of Accused-7 in support of consider the evidence relating to subsequent Conduct and Considered as follows] [His Lordship then proceeded innocence. x x x x x x x x We, therefore, hold that Accused- 7 was a party to the conspiracy and that the High Court has rightly convicted him under s. 120-B of the Indian Penal Code. As regards the sentence passed on Accused-7, having regard to the evidence in this case, we think that this accused must be given a comparatively less puni~hment than his co-conspirators, for, though he took part in the conspiracy, at any rate from the end of December, 1950, for one reason or other, he took necessary proceedings to bring to light the fraud. We, therefore, think that it would meet the ends of if the accused was sentenced to rigorous justice imprisonment for a period of two years. We accor dingly modify the sentence passed on him by the High Court and, subject to the aforesaid modifica tion, we dismiss the appeal preferred by him. Next we come to Criminal Appeal No. 136 of 1959 preferred by Subhedar, Accused 8. The defence of this accused is that he acted throughout in good faith and under the guidance of Accused-7, the Managing Director of the Empire, and that he did not know that any fraud was perpetrated in the the Empire he was an Empire. Before joining , 1963 &rdul Singh CtU:111har v. State •f !.{aharaJhtra S•>I. Rao J. ... ~ ..... 400 SUPREME COURT REPORTS (1964] VOL. insurance agent and, therefore, it cannot be said that he was a stranger to the insurance business and he may be assumed to know how it would be conducted. On October 16, 19.'\0 twenti· qualifying shares of the Empire from among the shares purchased in the name of Accused· 7 were transferred in his favour and thereafter at the meeting held on that day he was co-opted as a Director. He is also, therefore, one of the persons brought in by Shankarlal and made a Director for his own purpose. thr.n proceeded to consider the evidenct-] x x x We have no doubt that the aforesaid circum stances lead to only one reasonable conclusion that this accused became a Director of the Empire as a member of the compiracy and helped to put through all the transactions necessary to transfer funds from one Company to the other. He· was rightly convicted by the High Court. We do not see any reason to the sentence passed against him. In interfere with l:rn of !959 is dis the result Criminal Appeal No. missed. [His Lordship x x x Criminal Appeal l\'o. 172 of 1959 is preferred by Sayana. Accused-9. He was a building contractor before he was appointed a Director of the Empire. Hi~ defence is al30 that he bona .fi·le acted without knowledge of the conspiracy or the fraud. He was also one of the Directors inducted into the Company transfer of qualifying shares from and ciut of the shares purchased in the name of Accu sed-7. He was co-opted as a Director on October 17, 1950 under Ex. Z 206C. Though he was not present at the meeting of '.'lovember 27, 1950, he was pre· sent at the meeting of December 18, 1950 and, there fore, with the knowledge that six loans amounting to Rs. 28,80,000/- were advanced without scrutiny the securities, he was a party in sanctioning another six loans totalling to Rs. 42,80,000/-. He was also a party to the resolution of Janudry 30, 195 L ... .. . ' - -.) 2 S.C.R. SUPREME COURT REPORTS 401 loan to the chief of Bagarian. sanctioning a bogus He was a party to the resolution dated February 9, 1951 when the said loan was confirmed and to the resolution authorizing Accused-9 to operate singly the accounts of the Company. 1963 !,•rdul Singh Coveeshar v. Stall of Maharashtra Subba Rao J. Evidence considered [omitted] x It is, x x x therefore, clear that he was a creature of Shankarlal, that he was a party to the diversion of the funds of the Empire to the Jupiter and that when Accused-7, for his own reasons, was taking steps to stop the rot, he, along with Accused·S, obstructed him from doing so and wholly supported Accused-10. The only reasonable hypothesis on the evidence is It is said by that he was a party to the conspiracy. learned counsel appearing for this accused that his subsequent conduct would not indicate any obstruc tive attitude on his part but would indicate only his desire to maintain the status q·no till the matters improved. This is a lame explanation, for he, along with the other Directors, opposed every attempt of the scrutiny of the Company's affairs and this can only be because they were conscious of their part in the fraud. In this context another argument of learned counsel for Accused 8 and 9 may be noticed. It is the High Court treated the Directors as trustees and proceeded to approach the case from that standpoint inferring criminality from their inaction. Even assuming that they were not trustees in the technical sense of the term, they certainly stood in a fiduciary relationship with the shareholders. The High Court's finding is not based upon any technical relationship between the parties, but on the facts found. On the facts, including those relating to the conduct of the accused, the High Court drew a reasonable inference of guilt of the accused. There s11fficient evidence on which the High Court • 402 _SUPREME COURT REPORTS (1964JVOL. 190 Snrdul Sinth c, ... t"~' v. State ef JlaJu1raiitrff could have reasonably convicted Accused I and !l and in the circumstances, we do not see anv case had been made m1t in an appeal under Art.' 1:JG of the Constitution to merit our interference. Si.bja Rao J. In the result Criminal Appeal :'lo. 172 of HIW is dismissed. ' Finally we come to Criminal Appeal Ko. 67 of J!li)\l preferred by Bhagwan Swanip, Arcuscd. JO. The defence of this accused is that he acted through out on the directions of Accused i, 8 and \I, and that as Secretary of rhe Company, he was bound to follow "I his accused their directions. is the nephew of Shankarlal. He is an lvI. A., LL. B. He held the office of Assistant Commissioner of Income-tax in Patiala State. He is the person who carried out tile resolutions of the Board of Directors of the Em pire through intricate channels to enable the large amounts misappropriated the Jupiter It is suggested that he was not well <li~­ Company. poscd of towards Shankarlal and therefore he could not have any knowledge of Shankarlal's fraudulent motives behind the purchase of the controlling shares If Shankarlal did not like him he of the Empire. would not ha1·c put him in the key position Empire. Indeed, the will of Sh~nkarlal shows that this acrnsecl got the best legacy under it. He wa~ the connO<:ting thread passing through the web of conspiracy from beginning to end. Evidence Cnnsi clerccl [omitteclJ x x x x x x x x Learned counsel appearing for thi:; accused cou'cl only argue that the accused was a subordinate of the Directors and that he had followed only loyally the directions given by the Managing Director without any knowledge of the conspiracy. This ar~um~nt is an O\"ersimplification of the part takm by Acwsed. J 0 this huge fraud. Both the Courts below have • • ... 2 S.C.R. SUPREME COURT REPORTS 403 held, on the aforesaid circumstances and other evi dence; that Accused-IO was an active participant in the conspiracy. In our view, there is ample material to justify it. In the result Criminal Appeal No. 67 of 1959 is dismissed. 1963 Sardul Singh C1ve1shar •• State of MaharoshtrtA Subb• Rao J. Or. A. No. 82 of 1962 dismissed. Sentence modified. Or. A. No. 83 of 1962 dismissed. Sentence modified. Or. A. No. 136 of 1959 dismissed. Or. A. No. 172 of 1959 dismissed. Or. A. No. 67 oj 1959 dismissed . MIRZA RAJA SHRI PUSHAVATHI VIZIARAM GAJAPATHI RAJ MANNE SULTAN BAHADUR & ORS. 1963 March 19 v. SHRI PUSHAVATHI VISWESWAR GAJAPATHI RAJ & ORS. (P. B. GAJENDRAGADKAH, M. HIDAYATULLAH and J. c. SHAH JJ.) Hindu Law-Joint family-Partition-Impartible estate Jncidenls of-Rule of incorporation-If applicable both to immov ~ble and moi·able property-Family custom of impartihilily of movablu~Alienation, power of holder-Statute abolishing estate, J1uildings incorpnrat-d in impartible estate, if become partible J{adms Impartible Estates Acts, (.lllad. II of J.902), (Marl. II of 1903) and (Jlad. 1I of 1904)-Madras Estates (Abolition and clYllversiOn into Ryot1mri) Act, 1948 (Mad. €6 of J.948), s. 18 (4). The Vizianai:ram family was a joint Hindu family. It owne<). a very large estate which was impartible and devolved by the holder of the est<1\e primogeniture. At various