07 December 1955
Supreme Court


Case number: Appeal (crl.) 150 of 1954






DATE OF JUDGMENT: 07/12/1955


CITATION:  1956 AIR  149            1955 SCR  (2)1035

ACT: Trial before Sessions Judge for an offence under s. 409,  I. P. C. with the aid of assessors for misappropriating certain sums  of  money  from three  different  persons-Received  by appellant as Secretary of a Company-And for an offence under s.  477-A, I.P.C. for falsifying a minute book-With the  aid of Jury-Same persons acting as assessors and  jurors-Verdict of  not guilty in respect of both charges-Disagreement  with verdict  of  jury under s. 477-A and reference to  the  High Court  under s. 307 of the Code of  Criminal  Procedure-Dis- agreement  with  the opinion of assessors under s.  409  and conviction  of accused-Appeal to the High  Court-Appeal  and reference  both  heard  together  and  disposed  of  by  one judgment  by High Court-Sessions Judge  whether  contravened any provision of law or committed illegality in acting as he did-Appellant’s status-Whether that of a servant or that  of an  agent-Servant  and  agent-Distinction  between-Appellant charged with three offences under s. 409, I.P.C. and one of- fence under s. 477-A, I.P.C.-Whether contravention of s. 234 of  the  Code of Criminal Procedure-S. 235 of  the  Code  of Criminal Procedure-Applicability of.

HEADNOTE: The  appellant was tried by the Sessions Judge with the  aid of  assessors  for  an  offence under  s.  409,  I.P.C.  for misappropriating certain sums of money received as  promoter of  a Company from three ,different persons for the  purpose of  allotment of shares and omitted to be brought  into  the Company  after it was formed, and also for an offence  under s. 477-A, I.P.C. by the same Sessions Judge with the aid  of a jury for the offence of falsifying a minute book, the same persons acting both as assessors and jurors.  They  returned a verdict of not guilty in respect of both the charges.  The Sessions  Judge,  disagreeing with the verdict of  the  jury under s. 477-A, referred the matter to the High Court  under s. 307 of the Code of Criminal Procedure.  Disagreeing  also with  the opinion of the assessors in respect of the  charge under  s.  409,  I.P.C. he held  the  appellant  guilty  and sentenced  him to 4 years’ rigorous  imprisonment.   Against this  conviction the appellant appealed to the  High  Court. Both  the  reference under s. 307 of the  Code  of  Criminal Procedure  and  the appeal were heard together by  the  High



Court  which confirmed the appellant’s conviction  under  s. 409  and  the  sentence passed by  the  Sessions  Judge  and disagreeing with the verdict of the jury it held him  guilty under  s.  477-A and sentenced him to  two  years’  rigorous imprisonment.   On  appeal by special leave to  the  Supreme Court:- Held  (i) that the contention that when the  Sessions  Judge disagreed  with the verdict of the jury and the  opinion  of the assessors, 1036 he  should have referred the whole case under s. 307 of  the Code of Criminal Procedure to the High Court and not  merely that part of it which related to the charge under s.  477-A, I.P.C.  was  without force because the  Sessions  Judge  had contravened no provision of law and committed no  illegality in  deciding the case which related to the charge  under  s. 409, I.P.C. That s. 307, Code of Criminal Procedure  applies in terms only to trials by a jury and the Sessions Judge had no  power under that section to refer cases tried  with  the aid of assessors for the decision of the High Court.  In the present case there was the further fact that both the appeal against  the  conviction  under  s.  409,  I.P.C.  and   the reference under s. 307 of the Code of Criminal Procedure  in respect of the charge under s. 477-A were disposed of by the same judgment; (ii)that the contention that the appellant’s true status was that  of  a  servant and not that of an agent  and  that  he should have been tried not under s. 409, I.P.C. but under s. 408,  I.P.C. was also without force inasmuch as  his  status was  that of an agent and not that of a servant in  view  of his  duties  as Secretary of the Society.   The  distinction between  the  two is this a servant acts  under  the  direct control and supervision of the master, and is bound to  con- form to all reasonable orders given to him in the course  of his work. An agent though bound to exercise his authority in accordance  with all lawful instructions which may be  given to him from time to time by his principal, is not subject in its  exercise  to the direct control or supervision  of  the principal; (iii)that the contention that there had been violation of s. 234 of the Code of Criminal Procedure in that the  appellant had  been charged with three offences under s.  409,  I.P.C. and  one under s. 477-A was also without force as  the  case was governed by s. 235 of the Code of Criminal Procedure  as the  several  offences under s. 409, I.P.C.  and  s.  477-A, I.P.C.  arose  out of the same acts and formed part  of  the same transaction. Emperor v. Haria Dhobi, (A.I.R. 1937 Patna 662), Pachaimuthu In  re,  ([1932]  I.L.R. 55 Mad. 715),  Emperor  v.  Lachman Gangota,  (A.I.R.  1934  Patna  424),  Emperor  v.  Kalidas, ([1898] 8 Bom.  L.R. 599), Emperor v. Vyankat Sing ([1907] 9 Bom.   L.R.  1057) and Emperor v. Chanbasappa  (A.I.R.  1932 Bom. 61), referred to.

JUDGMENT: CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 150  of 1954. On  appeal  by leave from the judgment and order  dated  the 23rd March 1954 of the Allahabad High Court (Lucknow  Bench) in  Criminal Appeal No. 112 of 1953 connected with  Criminal Reference  Register  No.  15  of 1953  arising  out  of  the judgment and order dated the 24th February 1953 in  Sessions Trial No. 5 of 1952 of the Sessions Court at Lucknow.



1037 B, B. Tawakley, (K.  P. Gupta and A. D. Mathur with him) for the appellant.  S.P. Sinha (K.  B. Asthana and C. P. Lal with him) for  the respondent. 1955.   December 7. The Judgment of the Court was  delivered by VENKATARAMA  AYYAR  J.-This is an appeal  by  special  leave against  the  judgment  of  the  High  Court  of   Allahabad affirming  the conviction of the appellant by  the  Sessions Judge,  Lucknow under sections 409 and 477-A of  the  Indian Penal Code. On 12-2-1949 a Society known as the Model Town  Co-operative Housing  Society, Ltd., was registered under the  provisions of  the Co-operative Societies Act (II of 1912), its  object being to acquire vacant sites in the town of Lucknow and  to allot  them  to its members so as to enable  them  to  build houses  of their own.  The appellant was the chief  promoter thereof, and collected monies from prospective  shareholders by  way of share money.  The first general body  meeting  of the  Society  was held on 1-3-1949.  At  that  meeting,  the appellant  was elected Honorary Secretary and one Sri  Munna Lal Tewari as Treasurer.  The latter having resigned, one S. C.  Varma  was appointed Treasurer in his stead.   On  22-4- 1949,  there  was a meeting of the  Managing  Committee,  at which  the appellant was directed to band over the  accounts of  the  Society and its funds to its  Treasurer.   The  ap- pellant gave a list of 38 persons as members of the Society, delivered cheques issued by 13 of them as their share money, and paid a sum of Rs. 3,500 being the amount stated to  have been  received  by him from the other 25  members  as  share money.  The Society did not function thereafter. On  16-7-1949  some  of the members wrote a  letter  to  the Registrar  of Co-operative Societies pointing out  that  the Society had not functioned ever since its incorporation, and asking  that  steps might be taken for  examination  of  its accounts  and,  if necessary, for its being  wound  up.   On this,  there  was  an investigation of the  affairs  of  the Society by two Assistant 1038 Registrars,  and on the basis of their reports  dated  22-2- 1950  and  18-5-1950  the present  prosecution  was  started against  the appellant charging him under sections  409  and 477-A  of the Indian Penal Code.  The charge  under  section 409  was that he had received a sum of Rs. 500 from one  Sri Chaturvedi,  a  sum  of Rs. 100 from Dr. 0.  P.  Bhanti  and another  sum  of Rs. 100 from Dr. R. S. Seth, all  as  share money in December 1948, and that he had misappropriated  the same.  The charge under section 477-A was that on  22-4-1949 the  appellant  acting  as  the  Secretary  of  the  Society falsified the minute book, Exhibit P-18, by omitting to show therein  the  share money received from  the  three  persons above mentioned.  The defence of the appellant was that  the three amounts aforesaid were paid to him not as  prospective Secretary  for the purpose of allotment of shares, but  were deposited with him in his individual capacity for purchasing shares, in case the Society worked well. The trial of the offence under section 409 was held with the aid  of assessors and that under section 477-A with the  aid of  a  jury, the same persons acting both as  assessors  and jurors,  and  they  returned a verdict of  not  guilty  with reference  to  the  charges under both  the  sections.   The Sessions  Judge,  disagreeing with the verdict of  the  jury under  section 477-A, referred the matter to the High  Court under  section  307 of the Code of Criminal  Procedure.   He



also  disagreed  with  the opinion  of  the  assessors  with reference to the charge under section 409, and held that the appellant  was  guilty  and sentenced  him  to  four  years’ rigorous  imprisonment  and a fine of Rs.  1,000,.   Against this  conviction, the appellant preferred an appeal  to  the High  Court.  Both the reference under section 3O7  and  the appeal  were heard together by the High Court, which  agreed with the Sessions Judge that the appellant had received  the three  amounts  as  share  money  and  in  his  capacity  as Secretary,  and accordingly confirmed his  conviction  under section  409 and the sentence passed by the Sessions  Judge. Disagreeing  with the verdict of the jury, it also held  him guilty under section 477-A and sentenced him to 1039 two  years’  rigorous imprisonment.  The present  appeal  by special leave is directed against this judgment. Mr.  Tawakley  firstly  contended that the  finding  of  the courts  below that the amounts paid by Sri  Chaturvedi,  Dr. Bhanti and Dr. Seth were paid as share money was  erroneous, and in support of this contention relied on a letter written by  one of them, Dr. Seth, to the appellant on 3rd May  1951 (Ex.   D-5) in which it was stated that the amount was  paid on  the  express understanding that if the  Society  ran,  a share would be allotted to him and otherwise the money would be returned.  This letter was written long after proceedings had  been taken by the Registrar, and the courts  below  did not  attach  much importance to it. On the other  hand,  Dr. Seth  himself  gave  evidence  in  these  proceedings  which deprives Exhibit D-5 of very much of its value.  Exhibit  P- 10  is the receipt granted to Sri Chaturvedi.  It  expressly recites  that Rs. 500 was received as share money  for  five shares in the Society.  Notices were also issued to both Sri Chaturvedi and Dr. Bhanti to attend the general body meeting of the Society to be held on 1st March 1949 for electing the President  and  members  of the Managing  Committee  of  the Society,  and Dr. Seth and Dr Bhanti actually  attended  it. Sri Chaturvedi and Dr. Bhanti have also given evidence  that they  paid  the amounts only as share capital.   The  courts below accepted the above evidence, and held that the  moneys were  not paid to the appellant in his individual  capacity. There are no grounds for disturbing that finding in  special appeal. It is now necessary to deal with the several contentions  of law  urged by Mr. Tawakley in support of this  appeal.   His first contention was that when the Sessions Judge  disagreed with  the  verdict of the jury and with the opinion  of  the assessors,  he  should have referred the  whole  case  under section  307  for  the decision of the High  Court  and  not merely  that  part of it which related to the  charge  under section  477-A, and that his failure to do so  vitiated  the conviction.   He argued that when the same facts  constitute two 1040 distinct  offences, one of which is triable with the aid  of jurors  and  the other with assessors, and  the  accused  is charged  with  both, the reference under  section  307  must relate  to  both the charges, if  inconsistent  findings  by different courts with reference to the same matter is to  be avoided.   What would happen, he asked, if, in  the  present case,  the  appellant  did not file an  appeal  against  his conviction under section 409, but the High Court came to the conclusion  in  the  reference under section  307  that  Sri Chaturvedi, Dr. Bhanti and Dr. Seth did not pay the  amounts to  the  appellant as share money, and that no  offence  had been  committed by him under section 477-A?  The  conviction



of  the appellant under section 409 based on the finding  of the  Sessions  Judge that those amounts were paid  as  share money would stand, notwithstanding that it would be  against the  decision  of  the High Court.  This  anomaly  could  be avoided,  it is argued, by holding that the reference  under section 307 must be of the whole case. Reliance  is  placed in support of this  contention  on  the observations in Emperor v. Haria Dhobi(1).  We are unable to agree with this contention.  If the procedure adopted by the Sessions  Judge is to be held to be illegal, it can only  be on  the  ground that he contravened some  provision  of  law which  requires  him  to refer the whole case  to  the  High Court.   It  is  conceded that the  only  provision  of  law dealing  with this matter is section 307.  But that  section applies  in  terms only to trials with the aid  of  a  jury. There  is therefore no power in the Sessions Court to  refer cases  tried with the aid of assessors for decision  of  the High  Court under that section.  That was the view taken  in Pachaimuthu  In re(2), where it was held that the  Assistant Sessions  Judge had no jurisdiction to refer  under  section 307 the whole case to the High Court, that he should himself dispose  of the charges which were triable with the  aid  of assessors,  and  that  the reference  in  respect  of  those charges  was bad.  This decision was followed in Emperor  v. Lachman (1)  A.I.R. 1937 Patna 66 (2)  [1932] I.L R. 55 Mad 715. 1041 Gangota(1).   The same view has also been taken by the  High Court  of  Bombay  in a number of  cases:  Vide  Emperor  v. Kalidas(2),  Emperor  v.  Vyankat  Sing(3)  and  Emperor  v. Chanbasappa(4).   We  are accordingly of  opinion  that  the Sessions Judge had contravened no provision of law, and  had committed  no illegality in deciding the case, in so far  as it related to the charge under section 409, himself In  this case there is the further fact that the appellant  preferred an  appeal against his conviction under section 409  by  the Sessions  Judge,  and that appeal was heard along  with  the reference  under section 307 in respect of the charge  under section  477-A, and that they were both of them disposed  of by the same judgment. It was next contended that the true status of the  appellant was  that  of  a servant and not of an agent,  and  that  he should  have  been charged not under section 409  but  under section  408.   The  substance of  the  charge  against  the appellant  is that as the promoter of a Society he  lawfully received the amounts paid by Sri Chaturvedi, Dr. Bhanti  and Dr.  Seth, but that after its incorporation, when he  failed on 22-4-1949 to hand over those amounts to the Treasurer and to include their names as shareholders in the minutes  book, he  committed offences under sections 409 and  477-A.   Now, what  is  the status of the appellant as  Secretary  of  the Society in which capacity he committed the offences, servant or agent?  The distinction between the two is thus stated in Halsbury’s Laws of England, Volume 22, page 113, para 192- "A, servant acts under the direct control and supervision of the master, and is bound to conform to all reasonable orders given him in the course of his work........ An agent  though bound  to  exercise  his authority in  accordance  with  all lawful  instructions which may be given to him from time  to time by his principal, is not subject in its exercise to the direct control or supervision of the principal". Having  regard to the nature of the duties of the  appellant as the Secretary of the Society, we are clearly (1)  A.I.R. 1934 Patna 424.



(3)  [1907] 9 Bom.  L.R. 1057. (2)  [1898] 8 Bom.  L.R. 599. (4)  A.I.R. 1932 Bom. 61. 1042 of  opinion that his status was that of an agent and  not  a servant.  Moreover, whether the appellant should be  charged under section 408 or section 409 is of no importance in  the present  case, as the sentence imposed on him under  section 409,  viz.,  four  years’  rigorous  imprisonment  could  be maintained  even  under section 408.  It was argued  by  the appellant that an offence under section 408 was triable with the  aid  of  a jury, whereas that  under  section  409  was triable  with  the aid of assessors, and that  he  had  been prejudiced  in  that be bad lost the benefit of a  trial  by jury.  But this objection was not taken in the trial  court, and  is  not  now open.  Vide section 536  of  the  Code  of Criminal Procedure. It  is  next contended that there has been  a  violation  of section  234 of the Code of Criminal Procedure in  that  the appellant had been charged with three offences under section 409  and one under section 477-A.  But the case is  governed by  section 235, as the several offences under sections  409 and  477-A arise out of the same acts and form part  of  the same  transaction.  Moreover, the appellant. has  failed  to show  any  prejudice  as  required  by  section  537.   This objection must accordingly be overruled. It  was  finally  contended that there had  been  no  proper examination  of  the appellant under section 342,  and  that therefore  the conviction was illegal.  This  objection  was not  raised in the Courts below, and is sought to be  raised in  this  Court by a supplemental proceeding.   We  find  no substance in this objection. In the result, this appeal fails and is dismissed. 1043