Case Number

Criminal Appeal No. 159 of 1957.

Equivalent Citation

(1960) 3 SCR 319 : AIR 1960 SC 889 : 1960 Cri LJ 1250 


S.J Imam, K.N Wanchoo and J.C Shah, J.J

Decided on

16th March 1960.

Relevant Act/ Section 

  1. S.409 of the Indian Penal Code of 1860 – Criminal breach of trust by public servant, or by banker, merchant, or agent.
  2. S. 34 of the Indian Penal Code of 1860 – Acts done by several persons in furtherance of common intention. 

Brief Facts and Procedural History

In the present case, the two accused appellants were the Director and the technician of a Textile Dyeing Company, respectively. They had submitted to a tender and was accepted in accordance with general conditions. Based on the contract, almost 2,51,060 yards of cloth were supplied to the Company for dyeing. The Company however only successfully dyed 1,10,000 yards of cloth and after some correspondence, the company decided to cancel the contract with the Textile Commissioner. The Commissioner then asked the company to account for the balance amount of cloth as soon as possible which the Company again failed to do so. The Company was also entering into financial difficulties around that point of time and had creditors suing them for insolvencies. Numerous letters and notices were served towards the two appellants and almost all of them were unattended except one time where the First Appellant wrote back a letter which stated that the cloth had numerous problems to go forward with delivery. The appellants, however said that they would account for it but they again failed to do so. The respondent commissioner along with the police raided the cloth factory wherein the cloth was nowhere to be found. When taken to the Trial Court, the court immediately dismissed the present appellants plea of not having dominion over the cloth. The High Court also ruled in favor of the respondent cloth commissioner and sentenced the appellants guilty under Sections 409 r/w 34 of the Indian Penal Code. Aggrieved, the appellants brought the present case to the Supreme Court of India. 

Issues before the Court

  1. Whether the appellants should be acquitted and not tried for criminal breach of trust?

Ratio of the Case

The ratio decidendi of the present case was that even if dishonest  misappropriation may not, in ordinary circumstances, be direct proof, but if it is found by the court that the property is entrusted to an individual or if the individual had some kind of dominion over it, and the individual has given a false excuse or explanation for his failure to account for it, then an inference of misappropriation with dishonest intent may readily be made.

Decision of the Case

The Supreme Court, in this case, decided against the appellant-accused’s reasoning of it not being a criminal breach of trust under Section 409 of the Indian Penal Code. The court further stated that the High Court has not erred in charging the appellants under S.409 read with S.34 of the Code, because S.34 in itself does not create an offence. The Apex Court also stated that the sentences of 3 and 1 passed by the High Court was also correct as both of the accused were people in high positions dishonestly misappropriating a product of considerable value. The second appellant should get a lesser sentence as even though he was considered a Director, he was essentially a technician and acted on the orders of the first appellant. 

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