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PETITIONER: SARDUL SINGH CAVEESHAR

       Vs.

RESPONDENT: THE STATE OF BOMBAY(and connected appeals)

DATE OF JUDGMENT: 23/05/1957

BENCH: JAGANNADHADAS, B. BENCH: JAGANNADHADAS, B. SINHA, BHUVNESHWAR P. GAJENDRAGADKAR, P.B.

CITATION:  1957 AIR  747            1958 SCR  161

ACT: Evidence--Conspiracy-Criminal breach of trust-Proof of bogus character  of transactions-Intention of accused-Evidence  of criminal      acts      outside      the      period      of conspiracy-Admissibility-Indian  Evidence Act (I  of  1872), SS. 10, 14.

HEADNOTE: A  conspiracy to commit criminal breach of trust in  respect of the funds of a company by utilising the same to  purchase the  controlling block of shares of the company  itself  for the  benefit  of  the appellants was alleged  to  have  been entered into between December 1, 1948, and January 31, 1949. It  was the prosecution case that the modus operandi was  to screen  the  utilisation of these funds by showing  them  as having been advanced for legitimate purposes and invested on proper  security but in fact utilising the same for  payment to  the appellants.  One of the main issues was whether  the loans  by  way  of advance of the funds of  the  company  on January  20,  I949, were genuine transactions  or  bogus  or makebelieve,  and  the  question was  whether  the  evidence relating  to the further transactions entered  into  outside the period of the conspiracy in 1949 and I950 with a view to the  screening of the original transactions, was  admissible in law. Held:     (1)  In  relation  to  the  main  purpose  of  the prosecution  viz.,  proof  of the  bogus  character  of  the transactions of January, I949, the transactions of I949  and I95o  entered  into outside the period of  conspiracy  must, having   regard  to  the  ramifications,  be  taken  to   be integrally  connected and relevant to make out  their  bogus character, though such evidence may necessitate reference to and  narration  of the acts of the conspirators  beyond  the period of conspiracy. (2)  The conduct of each individual co-conspirator including his  acts, writings and statements irrespective of the  time to  which it relates can be relied on by the prosecution  to show  the  criminality of the intention  of  the  individual accused  with reference to his proved participation  in  the alleged  conspiracy  to rebut a probable  defence  that  the participation,  though proved, was innocent.  Such  evidence

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is admissible under s. 14 Of the Indian Evidence Act. Makin  v. The Attorney  General for New South Wales,  L.  R. (1894) A.C. 57, relied on. 162 Per Jagannadhadas J.-Under s. 10 of the Indian Evidence  Act the  evidence  of  acts, statements or  writings  of  a  co- conspirator  either under trial or not on trial but  outside the period of conspiracy would not be admissible against the other  conspirators  in proof of the specific issue  of  the existence of the conspiracy on the authority of Mirza  Akbar v. The King Emperor, (1940) L.R. 67 I.A. 336.

JUDGMENT: CRIMINAL APPELLATE JURISDICTION: Criminal Appeals Nos. 53 to 56 of 1957. Appeals  by special leave from the judgment and order  dated November  21,  1956, of the Bombay High  Court  in  Criminal Appeals Nos. 861-864 of 1956 arising out of the judgment and order  dated  June 1, 1956, of the Court of  the  Additional Sessions Judge for Greater Bombay at Bombay in Sessions Case No. 27/111 Sessions 1955. A.   S. R. Chari and M. S. K. Sastri, for the appellants. K.J. Khandalawala, Porus A. Mehta and R. H. Dhebar, for  the respondent. 1957.  May 23.  The Judgment of the Court was delivered by JAGANNADHADAS J.-These are appeals by special leave by  four persons,  who  along with one  Ramniklal  Keshavlal  Jhaveri (since  acquitted) were committed for trial in the Court  of the  Sessions  Judge  of  Greater  Bombay,  on  charges   of conspiracy  to commit criminal breach of trust of the  funds of  the  Jupiter  General Insurance  Co.  Ltd.  (hereinafter referred  to  as the Jupiter) and in pursuance of  the  said conspiracy  of  having committed criminal breach  of  trust, some of them being directors and agents of the said company. They  were  alternatively  charged  for  commission  of  the offence  of  criminal  breach of trust by some  of  them  as directors and the others for abetting the commission of  the criminal  breach of trust committed by the  directors.   The trial before the Sessions Judge was with the aid of a  jury. All of them except Jhaveri were found guilty, appellants  in Criminal Appeals Nos. 53 and 54, Sardul Singh Caveeshar  and Parmeshwar  Nath Kaul, by a majority verdict and  appellants in Criminal Appeals 163 Nos.  55 and 56, Vallabhdas Pulchand Mehta  and  Charucharan Guha,  by an unanimous verdict.  The verdicts- of  the  jury were  accepted  by  the Sessions  Judge  who  sentenced  the appellants as follows: Appellant  Sardul Singh Caveeshar to  rigorous  imprisonment for three years and a fine of Rs. 2,500. Appellant Parmeshwar Nath Kaul to rigorous imprisonment  for five years and a fine of Rs. 5,000. Appellant    Vallabhdas   Phulchand   Mehta   to    rigorous imprisonment for five years and a fine of Rs. 5,000. Appellant  Charucharan  Guha to  rigorous  imprisonment  for three years and a fine of Rs. 2,500. The charge of conspiracy related to the period from December 1,  1948, to January 31, 1949, and comprised ’in  all  eight persons   of  whom  two  Lala  Shankarlal   Hiralal   Bansal (hereinafter   referred   to   as   Lala   Shankarlal)   and Saubhagyachand  Umedchand Doshi (hereinafter referred to  as Doshi) died before commencement of the trial.  One Lala  Ram Sharandas  alias Ramsharan Lala Haricharan Mahajan  (herein-

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after  referred  to  as Mahajan) was also  a  party  to  the conspiracy.  But for some reason or other, the trial against him  was  separated.  The persons who were on trial  in  the present case are the following. 1.Parmeshwar  Nath  Kaul,  accused No. 1  and  appellant  in Criminal  Appeal No. 54 of 1957 (hereinafter referred to  as Kaul). 2.Vallabhdas Phulchand Mehta, accused No. 2 and appellant in Criminal  Appeal No. 55 of 1957 (hereinafter referred to  as Mehta). 3.Ramniklal  Keshvlal  Jhaveri,  accused  No.  3  and  since acquitted by the Sessions Judge (hereinafter referred to  as Jhaveri). 4.Charucharan Guha, accused No. 4 and appellant in  Criminal Appeal No. 56 of 1957 (hereinafter referred to as Guha). 5.Sardul  Singh  Caveeshar, accused No. 5 and  appellant  in Criminal  Appeal No. 53 of 1957 (hereinafter referred to  as Caveeshar). Lala  Shankarlal,  who was residing at No. 16,  Bara  Khamba Road, New Delhi, was the managing director 164 of  the Tropical Insurance Co. Ltd., New Delhi  (hereinafter referred to as the Tropical).  He was also a director of the Punjab   Central  Bank.   He  had  also  floated   and   was controlling a company called the Delhi Swadesi  Co-operative Stores  (hereinafter referred to as the Delhi  Stores).   He was also a leader of the Forward Bloc in the year 1948. Accused  No. 1, Kaul, is a barrister and was in Lahore  till the partition of the country.  In December, 1948, he was  in Delhi. Accused  No. 2 Mehta, at all material times was the  manager of the Bombay Office (General) of the Tropical. Mahajan,  at  all material times was the  secretary  of  the Tropical.   He  was also a director-in-charge of  the  Delhi Stores. Accused  No. 3, Jhaveri, was a Bombay solicitor and  at  all material times was carrying on his profession as a solicitor in Bombay. Doshi  was  till his death, a solicitor in  Bombay  and  was carrying on his profession as such. Accused No. 4, Guha, was in December, 1948, an accountant of the Tropical. Accused  No. 5, Caveeshar, was the managing director of  the Peoples  Insurance Co. He was also the managing director  of the  New Hindustan Bank.  He was for some time a  member  of the  All  India Congress Committee.  He was also  a  leading member of the Forward Bloc. The case for the prosecution is that Lala Shankarlal who was the brain behind the conspiracy and who at the time was  the managing director and had the control of the Tropical, which by  then was financially in a tottering  condition,  planned along  with  his confederates to obtain the control  of  the Jupiter,  which  at  the  time  was  in  a  sound  financial position,  by acquiring the controlling block of  shares  of the  Jupiter and utilising the funds of the  Jupiter  itself for the acquisition of such shares. By the date of the conspiracy the Jupiter had investments of the face value of Rs. two crores.  It had 165 issued  1,24,966 ordinary shares of Rs. 100 -each  of  which Rs.  15  per  share  was called  up.   It  had  also  issued cumulative preference shares.  Rai Bahadur Girdharilal Bajaj (hereinafter  referred to as Bajaj) and Tulsiprasad  Khaitan (hereinafter referred to as Khaitan) were at the time, i.e., in  1948,  in control of the Jupiter.  These  persons  owned

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through the New Prahlad Mills Ltd. the controlling block  of shares  of  the  Jupiter i.e., about 63,000  shares  of  the Jupiter,  between  themselves  and  their  nominees.   After negotiations, conducted first through certain persons called Mayadas  and  Chopra  and then, through  one  Naurangrai,  a bargain  was settled with Khaitan for the purchase  of  this controlling block of shares at Rs. 53 per share for a sum of Rs. 33,39,000.  Out of this amount a sum of Rs. 5,39,000 was to  be paid over to Bajaj and Khaitan directly in  cash  and only  Rs.  28,00,000  would be shown as the  price  for  the purchase of the shares.  The arrangement was that on receipt of  the cash of Rs. 5,39,000 the management of  the  Jupiter was  to be handed over to Lala Shankarlal and his group  and that the balance of the money due of Rs. 28 lakhs was to  be paid  over  to Khaitan on or before January  20,  1949.   In default  of  such payment within the prescribed  time,  Lala Shankarlal, representing the Tropical, should pay to Khaitan a sum of Rs. 5 lakhs as damages for breach.  In pursuance of this  agreement Rs. 4,85,000 were paid over to Bajaj  on  or about  December  29,  1948, and  a  formal  agreement  dated December 29, 1948, was entered into, incorporating the above terms.   On  that  very day Bajaj  and  other  directors  of Khaitan  group  held  a meeting and  allotted  1,250  shares straightaway  to  Lala Shankarlal and four of  his  nominees viz.,  Kaul, Mehta, Jhaveri and Doshi, each 250  shares,  as qualifying shares for each.  They confirmed the transfer  of these  shares by a resolution and co-opted Lala  Shankarlal, Kaul,  Mehta, Jhaveri and Doshi as directors and  themselves resigned their respective offices as directors.   Thereafter Khaitan  resignned his position as managing director of  the Jupiter  and  at  the  same  meeting,  Lala  Shankarlal  was appointed  in  his  place as the managing  director  of  the Jupiter. 166 The. transfer of 61,750 shares for the sum of Rs.  28,15,000 to be paid to Bajaj and Khaitan before January 20, 1949, was brought about in the following way.  At the meeting of  some of the new directors of the Jupiter dated January 11,  1949, it was decided to sell the Jupiter’s securities of the  face value  -of Rs. 15 lakhs at the market rate and to obtain  an overdraft  accommodation  for Rs. 14 lakhs with  the  Punjab National Bank on the pledge of the Government securities  of the  Jupiter.  At the same meeting a loan of  Rs.  25,15,000 purported  to  have been granted to Caveeshar by way  of  an equitable  mortgage on an alleged application by  him  dated January  4,  1949, relating to his properties at  Delhi  so- Light  to  be given as security on the basis of  an  alleged valuation report of a firm of surveyors.  There was  another alleged resolution authorising the director for purchase  of plots of Delhi Stores for Rs. 2,60,000.  It may be mentioned that  this  Delhi  Stores  was under  the  control  of  Lala Shankarlal and, according to the prosecution, was a  defunct Organisation  at  the  time.  The plan  envisaged  by  these resolutions  was  that  cash was to be taken  out  from  the Jupiter partly by sale of securities and partly by pledge of securities  and that money was to be shown as having been  a loan  to Caveeshar on the security of his  Delhi  properties and  a  further  amount  as having  been  invested  for  the purchase of plots of the Delhi Stores.  Lala Shankarlal  was to  receive  these amounts on behalf of  Caveeshar  and  the Delhi  Stores,  and pay over the cash that would  thus  come into  his hands to Bajaj and Khaitan as per  the  agreement. This appears-accordina to the prosecution case-to have  been actually  done  in  the following  way.   The  safe  custody account  of  the entire holdings of the  securities  of  the

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Jupiter with the Bank of India was closed by a resolution of the new directors of the Jupiter dated January 11, 1949, and these  securities were taken over into the personal  custody of  Mehta.   Thereafter securities of the value  of  Rs.  30 lakhs were offered for sale through a broker who  ultimately could  sell only shares of the value of Rs. 15  lakhs.   For the remaining Rs. 15 lakhs an. overdraft was raised with the Punjab 167 National  Bank on the application of Lala Shankarlal and  on the  pledge  of  some of the Government  securities  of  the Jupiter.  The sale of securities realised Rs. 13,99,768  and on  the  pledge of securities a sum of  Its.  14,21,812  was obtained, making up a total of Rs. 28,21,580.  Rs. 28,15,000 out  of it was shown as having been received by the Bank  of India  and  credited in the cash-credit account of  the  New Prahlad  Mills  Ltd.  It is thus that Khaitan  received  the balance of the money due under the agreement of December 29, 1948. To  prove  this  case a  considerable  body  of  prosecution evidence  was  given consisting of quite a large  number  of details.   It is necessary to set out the  salient  features thereof in broad outline as alleged and sought to be  proved by  the  prosecution.  This may be dealt  with  conveniently with  reference to three periods, the first  comprising  the period  of  conspiracy  as mentioned  in  the  charge  i.e., December 1, 1948, to January 31, 1949, the second,  relating to the period from February 1, 1949, to the end of December, 1949, and the third, the period covering the year 1950. First period : December 1, 1948 to January 31, 1949. The  negotiations for the purchase of the controlling  block of shares of the Jupiter were carried on from about December 10,  1948.  From 10th to 20th the negotiations were  through one  Mayadas, introduced to Lala Shankarlal by  one  Chopra. Mayadas  was  given. a letter of authority on  December  15, 1948,  by Lala Shankarlal, as the managing director  of  the Tropical,  authorising  him  to buy  for  the  Tropical  the controlling  block of shares of the Jupiter at  the  maximum rate  of Rs. 49 per share with the promise of  brokerage  of Rs.  40,000 on completion of the transaction.   Chopra  also was  acting  with  Mayadas as broker.   These  persons  were dropped  and the further negotiations from the 20th  onwards were  carried  on  through  one  Naurangrai  known  to  Lala Shankarlal for about 40 years.  Through him the purchase  of the controlling block. of shares numbering 63,000 was agreed to  be  purchased at Rs. 53 per share.  The  total  purchase value  was Rs. 33,39,000. Khaitra asked for advance  payment of Rs. 5,39,000 in 168 cash  and intimated that agreement would be made  mentioning only  Rs.28  lakhs as the purchase  price.   Naurangrai  was placed  in  possession  of  funds of  Rs.  5,39,000  on  his executing a pro-note dated December 23, 1948, (Ex.  Z-4) for the  said  amount in favour of the Tropical by  two  cheques signed by Lala Shankarlal, one for Rs. one lakh on  December 22,  1948  (Ex.  Z-1) and another for  Rs.  4,39,000,  dated December 23, 1948, (Ex.  Z-3).  These amounts were deposited by  Naurangrai in his bank account with the Bikanir Bank  at Delhi.   On December 26, Lala Shankarlal and Naurangrai  and Khaitan met at Bombay and further details were discussed  on the 26th and 27th.  Khaitan insisted on previous payment  of Rs.  5,39,000.   Lala  Shankarlal  asked  for  the  list  of securities and shares, the valuation report and the  balance sheet  of the Jupiter.  Naurangrai returned back  to  Delhi, drew  Rs. 5 lakhs by way of cash from his bank  account  and

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paid therefrom a sum of Rs. 4,85,000 to Bajaj at  Ghaziabad. He  came  back to Bombay and informed Khaitan of  the  same. Thereupon  the  agreement,  Ex.   Z-171,  was  executed   on December  29,  1948.   The agreement was  to  the  following effect.   The  Tropical  was  to  pay  the  balance  of  Rs. 28,54,000 on or before January 20, 1949, and on such payment the  Jupiter’s shares numbering 63,000 were to be  delivered over.   The shareholder directors belonging to  the  Khaitan group  should resign and nominees of the Tropical should  be appointed  as  directors in their place.   If  the  Tropical failed  to  pay within the stipulated time, a sum of  Rs.  5 lakhs by way of damages was to be paid to Khaitan group  and if  the Khaitan group failed to carry out their  obligations damages of Rs. 2 lakhs were to be paid.  Subsequent to  this agreement it was ascertained that Khaitan had agreed to  pay Naurangrai  a  commission of Rs.  39,000.   Lala  Shankarlal undertook  to  pay the same and to that  extent  the  amount payable by January 20, was understood to be reduced.  There- fore,  the  sum payable under the agreement with  the  above adjustment was Rs. 28,15,000.  The agreement was signed both by  Khaitan on behalf of the New prahlad Mills  Ltd.,  which owned the controlling block 169 of  shares of the Jupiter and Lala Shankarlal on  behalf  of the  Tropical.  On the very same date a meeting of the  then Board  of  directors  of the Jupiter was  called.   At  this meeting  1,250 shares were transferred in the names of  Lala Shankarlal,  Kaul, Mehta, Jhaveri and Doshi, 250 shares  for each,  in  order  to qualify them  for  becoming  directors. Transfer of these shares was confirmed by resolution.  It is the  prosecution case that for these transfers no money  was paid  by  the transferees concerned.  At  that  meeting  the various  persons  who  constituted  the  previous  directors tendered  their resignations in successive stages.  At  each stage the resignations were accepted by thE rest of the pre- existing  directors and new directors of  Lala  Shankarlal’s group  were co-opted.  In the net result the entire  Khaitan group  of  directors made way for the  new  Lala  Shankarlal group  of directors and Lala Shankarlal became the  managing director.  Thereafter there was the first meeting of the new directorate of the Jupiter on January 4, 1949.  On that date Kaul  was  appointed director-in-charge.  A  new  Life  sub- committee  consisting  of  Mehta,  Jhaveri  and  Doshi   was appointed as also a new finance sub-committee consisting  of Lala  Shankarlal, Kaul and Mehta, to review  the  investment position  of the company and to invest the company’s  moneys upon  such securities, shares and stocks, in such manner  as the committee thought fit.  A power of attorney was  granted to Lala Shankarlal as the managing director.  Kaul and Mehta were  authorised  individually  to  operate  upon  %%II  the banking  accounts  in the name of the company with  all  the banks.   Three  policyholder directors as also  the  general manager,   Joel,  resigned  and  their   resignations   were accepted.   This was followed by another meeting of the  new directorate on January 11.  At that meeting the Board passed a  number  of  resolutions  about some  of  which  there  is considerable  controversy and with reference to which  there is the evidence of one Subramaniam for the prosecution.  One of  the  undisputed  resolutions  of  that  meeting  was  to withdraw  a letter written by the previous  general-manager, Joel,  dated January 3, 1949.  By that letter  (Ex.   Z-30), Joel had written to the Bank 22 170 of India, Safe Custody Department, instructing the bank that till  further  advice, they should not transfer any  of  the

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securities  held by the bank on behalf of the  company.   On January ll, 1949, a copy of this resolution was sent to  the bank under the signature of Mehta for their information.  By another letter of the same date sent by the sub-manager, one Baxi, (Ex.  Z-32) the bank was instructed to close the  safe custody account and to hand over the entire holdings of  the securities  of  the Jupiter to Mehta.  Accordingly  all  the securities  were brought into the office of the Jupiter  and kept  in a steel cupboard.  Two of the disputed  resolutions of  January II, were resolutions Nos. 7 and 8, one for  sale of  securities  of the Jupiter of the face value of  Rs.  15 lakhs  at  the market rate, and the other for  an  overdraft account  of  Rs. 14 lakhs with the Punjab National  Bank  on pledge  of the Government securities of the Jupiter.   After the  entire  shares and securities were withdrawn  from  the safe  custody  of the bank, Kaul contacted one  Jagirdar,  a sub-broker  working  in  the firm  of  Messrs.   Harkisondas Laxmidas, share brokers, and authorised them by letter  (Ex. Z-36)  dated  January  13, 1949, to  sell  three  per  cent. conversion  loan 1946 of the face value of Rs. 30  lakhs  at the best market rate.  The brokers sold on the 13th and 14th securities  of the face value of Rs. 15 lakhs and told  Kaul that the market was dropping and that further sale of  those securities was not feasible.  The sale of securities of  the face value of Rs. 15 lakhs realised a sum of Rs.  13,99,788. Kaul, on behalf of the Jupiter, opened a current account  on January  13,  in the Punjab National Bank, Bombay.   On  the 15th, Kaul, on behalf of the Jupiter, sent two letters,  one to  the  Punjab  National Bank and another to  the  Bank  of India,   stating  that  they  were  forwarding  per   bearer Government securities of the face value of Rs. 14 lakhs  and Rs.   I  lakh  respectively and instructed  those  banks  to deliver  them  to  Messrs.   Harkisondas  Laxmidas   against payment  and the proceeds to be credited to the  account  of the company.  The above sale proceeds were accordingly  paid into the respective banks and the securities were  delivered over to the respective parties on January 17, 171 It  is the prosecution case that meanwhile  Lala  Shankarlal approached  the Punjab National Bank, Kashmere Gate  Branch, Delhi,  on  January 17, 1949, for the purpose of  raising  a loan  on  Government promissory notes.  He  opened  a  cash- credit account on the pledge of securities of the face value of  Rs. 15 lakhs and passed a promissory note in  favour  of the  bank for the said amount.  A loan of Rs. 14  lakhs  was then  granted and a demand draft dated January 17, for  that amount in favour of the Jupiter on the Punjab National Bank, Currimjee  House  Branch,  Bombay, was issued.   A  list  of securities  pledged with the bank for the purpose  has  been put in evidence.  The demand draft was brought to Bombay and credited  into the account of the Jupiter in  the  Currimjee House  Branch  of  the Punjab National  Bank  at  Bombay  on January 18. Thus by the sale and the pledge of the Jupiter’s own  securities, a sum of Rs. 27,99,768 was raised and  kept available for use.  On January 19, Mehta wrote to the Punjab National Bank, Currimjee House Branch, Bombay, to pay a  sum of Rs. 28,15,000 to the Bank of India where the New  Prahlad Mills  Ltd. (Khaitan) had got 61,394 Jupiter’s shares  lying in cash. credit account and to take delivery of those shares on  behalf of the Tropical and to debit Rs.  28,15,000  from the  Tropical account with them.  On the same  date,  Mehta, wrote  also to the Bank of India, requesting it  to  deliver 61,394  shares of the Jupiter to the Punjab  National  Bank, Currimjee House Branch, Bombay, with relevant transfer  deed against payment of Rs. 28,15,000 with reference to Khaitan’s

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earlier instructions to the Bank by his letter dated January 3, 1949 (Ex. Z-44).  On the 19th, Mehta issued a cheque  for Rs.  75,000  on  the  Indian  Bank,  Tropical  account   and deposited  the same in the Punjab National  Bank,  Currimjee House  Branch,  Bombay, Jupiter account.   This  cheque  was credited  into that account on the 20th.  On the  same  day, i.e.,  19th,  Mehta wrote a letter to  the  Punjab  National Bank, Illaco House Branch, Bombay, in which the Jupiter  had its account to transfer the account into the Punjab National Bank., Currimjee House Branch, where, on the 13th, Kaul 172 opened  a  current account for the Jupiter.  Now  with  this deposit the money to the credit of the Jupiter in the Punjab National  Bank, Currimjee House Branch, was  Rs.  28,74,768. According  to the prosecution it was in reality out of  this amount that Khaitan was ultimately paid on January 20, by  a cheque  for  Rs. 28,15,000 as against the  transfer  of  the stipulated  number  of shares.  It is the  prosecution  case that this payment was camouflaged by certain apparent inter- mediate transactions.  The prosecution case relating to this may now be stated. From January 18 to 20, 1949, five cheques were issued on the Jupiter  account in the Punjab National Bank which were  all deposited  into  the account of the Tropical in  the  Punjab National Bank as follows: 1.A cheque for Rs. 2,55,050, dated January 18, 1949,  signed by  Kaul  on behalf of the Jupiter in favour  of  the  Delhi Stores  and  endorsed  in favour of the  Tropical  by  Guha, purporting  to  be the director of the Delhi  Stores,  which according  to the prosecution, he was not.  This  was  again endorsed by Mehta on behalf of the Tropical in order to  put it into the Tropical account. 2.Two cheques dated January 19, 1949, for Rs. 14,36,000  and Rs. 1,42,450, on the Jupiter account of the Punjab  National Bank in favour of the Tropical or order.  These cheques  are alleged  to be written by Guha and signed by Kaul on  behalf of  the  Jupiter, and endorsed on the reverse  by  Mehta  on behalf  of the Tropical for deposit in the Tropical  account of the Punjab National Bank. 3.Two  cheques dated January 20, 1949, for Rs. 8,96,000  and Rs.  36,000, on the Jupiter account of the  Punjab  National Bank in favour of the Tropical or bearer.  Both the  cheques were  written  by Guha and signed by Kaul on behalf  of  the Jupiter. All  these  five cheques were deposited  into  the  Tropical account  of the Punjab National Bank by a pay-in-slip  dated January  20, 1949, alleged to be in the handwriting of  Guha and  signed by him on the 19th.  The total of these  cheques comes to Rs. 27,65,700.  As a result of 173 the previous instructions given on January 19, by Mehta,  to the  Punjab National Bank, the Bank paid on January,  20,  a sum of Rs. 28,15,000, from the Tropical account to the  Bank of  India and took delivery of 61,394 shares of the  Jupiter from  the  Bank of India and the Punjab National  Bank  then held  those shares for the Tropical in the Tropical  account and Khaitan was paid on the last date stipulated.  It  would appear that including the 1,250 qualifying shares previously transferred, the shares transferred by Khaitan fell short of the 63,000 shares, by 356 shares, but the deficit appears to have been made up very shortly thereafter. Now,  according  to  the prosecution, this  payment  of  the Jupiter’s money for the purchase of the Jupiter’s shares was by  means of ex facie payment from funds of the Tropical  in the  Punjab  National  Bank which were  brought  up  to  the

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requisite level by the deposit of five cheques as  specified above  in relation to a scheme of camouflaged payment to  be gathered from certain resolutions of the new directorate  of the  Jupiter  as  they now appear from  its  resolutions  of January  11 and 20, 1949 and later confirmed on January  22. By  resolution  No.  5, as it now appears,  a  loan  of  Rs. 25,15,000 was granted to Caveeshar on his application  dated January  4,  and the valuation report of N.  C.  Kothari  of Messrs.   Master Sathe and Bhuta, surveyors.  This loan  was on  the  equitable  mortgage of  Caveeshar’s  properties  in Delhi,  the conditions being, a marketable title, period  of loan three years, and other usual clauses in mortgage deeds. The resolution authorised Kaul to advance the above loan  on the said terms and get all necessary documents executed  and registered at Delhi during the course of next eleven months. Resolution No. 6 authorised the purchase of certain plots in Delhi  said  to  belong to Delhi Stores for  a  sum  of  Rs. 2,60,000.   On January 20, there was another meeting of  the new  directorate of the Jupiter at which the minutes of  the meeting  of January 11, were read and  adopted.   Resolution No.  10  thereof confirmed the payment of Rs.  25,10,650  to Caveeshar on equitable 174 mortgage  of his properties as per the  previous  resolution No.  5 of January 11.  Resolution No. 11  thereof  confirmed the purchase of plots from the Delhi Stores and the  payment of  Rs. 2,55,050 therefor.  Resolution No. 9  confirmed  the sale of the Jupiter’s securities of the face value of Rs. 15 lakhs’  and  resolution No. 12 confirmed the pledge  of  the Jupiter’s  securities of the face value of Rs. 15 lakhs  for cash credit account with the Punjab National Bank for Rs. 14 lakhs. Now,  on January 22, 1949, there purported to be,  according to the prosecution case, a meeting of the Board of directors of  the Tropical including Lala Shankarlal.  Resolution  No. 11  thereof confirmed the purchase of 63,000 shares  of  the Jupiter  on  behalf  of  the  Tropical  for  Rs.  28,15,000. Resolution  No. 12 thereof confirmed the transfer of  48,399 shares out of the above 63,000 shares to the Delhi Stores as agreed to by then.  By resolution No. 13, sale of the  head- office  building of the Tropical and certain plots  of  land belonging to the Tropical to Caveeshar at Rs. 23,50,000  and Rs. 6,50,000 respectively as per agreement with Caveeshar by the  managing  director, Lala Shankarlal,  on  December  23, 1948,  was confirmed.  By resolution No. 14, plots  of  land and  building in Chandni Chowk, Delhi, sold by the  managing director, Lala Shankarlal, at a cost of Rs. 2,60,000 to  the Delhi  Stores,  was approved and confirmed.  It  is  alleged that  the resolutions of the Jupiter at the  meetings  dated 11th  and 20th above noticed and of the Tropical  dated  the 22nd  disclosed  the scheme of camouflaging which  has  been resorted  to  screen  the  fact that  the  payment  for  the purchase  of  the Jupiter’s shares was directly out  of  the Jupiter’s amount. This,  according to the prosecution, indicates in its  broad outline   the  manipulations  resorted  to  for  the   above purposes.   There is also evidence let in on behalf  of  the prosecution  of  a number of relevant details  such  as  the presence  or absence of the requisite entries and papers  in the  various  books  of account and  other  records  of  the concerned  organisations, the Jupiter, the Tropical and  the Delhi Stores.  Evidence has also been given to show which of the accused was directly a 175 party  to  which of the various steps.  Direct  evidence  of

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some  of the ex-employees of the Jupiter, in  particular  of one  Subramaniam and of another Rege, has, according to  the prosecution,   considerable  bearing  on  the  events   that happened during this period, which would, if accepted, go to indicate  the  devious  and dishonest  basis  of  the  above alleged  manipulations.  In addition to the above  it  would appear that some of the  shareholders who came to know about these  transactions sent notices through solicitors  to  the new  directorate of the Jupiter and to some of  the  accused persons,   in   particular   Lala   Shankarlal   and   Kaul, individually  warning them against the illegal and  improper dealings  with  the  funds of the company.  It  is  also  in evidence that two of the solicitors, Sethia and Joshi, filed a suit against the new directors on January 19, 1949, for an injunction  restraining the directors from disposing of  the Jupiter’s  securities so as to enable the Tropical  to  have the  finances for the purchase of the controlling  block  of the  Jupiter’s shares.  It is the suggestion of the  defence that these notices were followed up by institution of a suit at  the  instance of Khaitan himself,  and  that  ultimately after  the money was paid on the 20th within the time,  they were  dropped.   Evidence  has  also  been  given  for   the prosecution  about  the  financial  condition  and  property holdings  of the Tropical, of the Delhi Stores, as  also  of Caveeshar  to  show  that  none of them  were  in  any  such position as to justify the various transactions put  through in their names.  In particular, evidence has been given that Caveeshar  had no such property as could possibly justify  a loan  of  about Rs. 25 lakhs on his security  and  that  the alleged   valuation  report  was  non-existent   or   bogus. Evidence was also given that the Delhi Stores was a  defunct company  whose  only assets were (1) 39,750  shares  of  the Tropical of the book value of Rs. 10 per share which had  no market  quotation,  (2) other shares of book  value  of  Rs. 16,879,  and (3) cash in the bank of Rs. 133-14-6,  and  (4) book  debts of Rs. 93,40,414.  As against these debts it  is said that the Delhi Stores had liability to sundry creditors to the extent of Rs. 1,40,259-3-8.  The above, 176 in broad outline, is the nature of the evidence-relating  to the first period.      Secondperiod : February 1, 1949, to the end of                       December, 1949. Now,  we  may take up the evidence relating  to  the  second period  commencing  from  February,  1949,  to  the  end  of December,  1949.   The background relating to  this  period, according  to the prosecution is, that Lala  Shankarlal  and his other co-conspirators were fully aware of the  necessity of  showing the transactions of January, 1949, as no  longer outstanding  as  early as possible, so as to  escape  direct scrutiny thereinto by the end of the calendar year and it is said  that  therefore they made some  further  manipulations with a view to show the moneys advanced to Caveeshar and the Delhi  Stores as having been returned before the end of  the year.   The events which led up to this may now be  noticed. On May 25, 1949, there was a meeting of the new  directorate of  the  Jupiter  at  which  Lala  Shankarlal  informed  the directors  that  Caveeshar was repaying his loan of  Rs.  25 lakhs  and odd and out of that amount a sum of Rs. 14  lakhs might  be  invested  in  purchasing  40,000  shares  of  the Tropical and Rs.  II lakhs on the equitable mortgage of  the Tropical’s  headoffice building.  Ultimately, however,  this contemplated  loan  of Rs. 11 lakhs to the Tropical  on  the equitable  mortgage  of  its head-office  building  did  not materialise for one reason or other.  Thereafter,  according

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to the prosecution, there were brought into existence,  five transactions,  from May 25 to December 31, 1949, which  have been referred to in the evidence as follows:                                                  Rs. 1.Raghavji  loan (5-11-1949) which resulted in repayment of                                     4,00,000 2.Fresh   Caveeshar  loan  (5-11-1949)  which resulted in repayment of                         5,30,000 3.Misri Devi loan (20-12-1949) which resulted in repayment  of                                 1,00,000 4. Purchase  of 54,000 Tropical shares (25-5-1949 to 20-12-1949) which resulted in repayment of                        14,00,000 177 5.Transfer of Caveeshar from the Tropical to Jupiter  account of balance (31-12-1949) which resulted in repayment of                     80,650  Total...                                        25,10,650 In  order to appreciate these transactions, it is  necessary to set out a few more details.  Raghavji’s son, Chandrakant, was  a member of the Forward Bloc, of which Lala  Shankarlal was  one  of the leaders.  Chandrakant had  close  political associations with Lala Shankarlal.  Raghavji was a gentleman about  80  years old and a resident of Cutch and had  a  few properties  at  that place.  According to  the  prosecution, Chandrakant was persuaded to permit his father’s name to  be used for the purpose of advancing some moneys on the footing of  an equitable mortgage by deposit of title deeds  of  his father’s  property in Cutch.  At a meeting of the  Jupiter’s directorate  dated November 5, 1949, a loan for Rs. 5  lakhs on  the  equitable  mortgage of  Raghavji’s  properties  was sanctioned subject to valuation report and certain terms and conditions specified therein.  Notwithstanding that the loan was  to  be advanced on proper valuation  report  and  other terms,  it is the prosecution case and evidence,  that  this sum of Rs. 5 lakhs was disbursed as follows: Rs. 3 lakhs  in cash from the Jupiter’s funds and Rs. 2 lakhs as having been received  back  from  Caveeshar and paid  over  in  cash  to Raghavji.   The payment of these Rs. 2 lakhs was  really  by book  adjustment showing Rs. 2 lakhs as having been paid  by the  Tropical  to Caveeshar out of the moneys  of  Caveeshar with  the Tropical and this amount as having been paid  into the Jupiter’s account by Caveeshar and paid again out of  it to  Raghavji.   Out of the other Rs. 3 lakhs taken  in  cash from  the  Jupiter, Rs. 2 lakhs it is said was not  paid  to Chandrakant  but was shown as having been paid by  Caveeshar into  the Jupiter’s account in reduction of the  debt  owing from   him  to  the  Jupiter.   The  net  result  of   these adjustments  was that Rs. 4 lakhs out of the Caveeshar  loan with the Jupiter was shown as reduced.  What 23 178 became  of the other Rs. one lakh is not quite  clear.   The next  transaction  is Caveeshar’s fresh loan.  At  the  same meeting  of  the  Board of directors of  the  Jupiter  dated November  5, 1949, whereat Raghavji’s loan for Rs.  5  lakhs was   sanctioned,  a  further  loan  of  Rs.  5,30,000   was authorised  to  be advanced to Caveeshar against  pledge  of shares  of  the  People’s  Insurance  Co.,  the  period   of repayment  being mentioned as two years.   This  transaction merely meant a book adjustment reducing the loan outstanding against  Caveeshar  and  a fresh loan to that  extent  on  a different  security.  This transaction further  reduced  the original  indebtedness of Caveeshar to the Jupiter  by  this amount.   The  third  item is the Misri  Devi  loan.   At  a

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meeting  of  the  Board of directors of  the  Jupiter  dated December  20, 1949, an application for loan of Rs.  5  lakhs from  Misri Devi shown as the daughter of Lala  Dwaraka  Das (though  she was also the wife of Lala Shankarlal) was  said to  have been considered and a loan in her favour for Rs.  5 lakhs  on  the  security of her property in  New  Delhi  was sanctioned  subject  to marketable title,  period  of  three years,  and other usual clauses.  In anticipation of  having to  advance this loan a sum of Rs. 2 lakhs appears  to  have been sent on November 2 2, 1949, by Kaul, from the Jupiter’s account in the Punjab National Bank, Bombay, to its  account at Delhi.  Again on December 27, 1949, Kaul appears to  have sent a further sum of Rs. 2 lakhs from the Jupiter’s account in  the  Punjab  National Bank, Bombay, to  its  account  at Delhi, by telegraphic transfer.  Towards this loan a  cheque on  the Jupiter’s account with the Punjab National  Bank  at Delhi  for Rs. 4 lakhs payable to self or bearer  was  given and a sum of Rs. one lakh was shown as having been  received by  the Jupiter from Caveeshar through his Tropical  account and shown as paid to Misri Devi.  This reduced the Caveeshar loan  due  to the Jupiter by another Rs. one lakh.   At  the same  meeting  of December 20, a resolution  was  placed  on record  showing that at the instance of Lala  Shankarlal,  a bargain  was arranged on behalf of the Jupiter for  purchase of 54,000 shares of the Tropical instead of 40,000 shares as previously contemplated in the resolution of the 179 directors  dated May 25, 1949, for the sum of Rs.  14  lakhs and purchase on this footing was confirmed.  The payment  of Rs. 14 lakhs by the Jupiter to the Tropical was adjusted  by showing  the  Tropical  as  having  paid  Rs.  14  lakhs  to Caveeshar and Caveeshar as having paid back to the Jupiter a sum of Rs. 14 lakhs out of the original loan of Rs. 25 lakhs and  odd.,,,,  Thus in all, by these four  transactions  the original’  Caveeshar’s loan on the security of  the  alleged properties of Caveeshar was reduced by Rs. 24,30,000 leaving a  balance of Rs. 80,650.  This amount was adjusted by  book entries  on  December  31, showing a transfer  of  the  said amount  from  his  Tropical account towards  credit  of  the Jupiter  account.   Thus, by December 31, 1949,  the  entire amount  of  Rs. 25 lakhs and odd advanced  to  Caveeshar  in January,  1949, on the security of his properties  in  Delhi was  shown  as having been wiped out leaving  a  fresh  loan against  him on November 5, 1949, for a sum of Rs.  5,30,000 on the security of the shares of the Peoples Insurance Co. It  may  be  recalled  here that  for  the  payment  of  Rs. 28,15,000  to  Khaitan  on January 20,  1949,  the  original source  of cash, according to the prosecution case, was  the sum of Rs. 25,15,000 granted by way of loan to Caveeshar and Rs. 2,60,000 paid to the Delhi Stores for purchase of  plots of  the  Delhi Stores.  Out of this the  original  Caveeshar loan  was,  by  the  end  of  1949,  shown  as  having  been completely  wiped  out  as  above stated.   So  far  as  the purchase of plots of the Delhi Stores is concerned, it would appear  that  though in fact the Delhi Stores  had  no  such plots to sell, this transaction was shown as put through  in the following way.  The resolution of the Board of directors of the Tropical dated January 22, 1949, showed certain plots of land and the building ’in Chandni Chowk, Delhi, belonging to the Tropical, as having been sold to the Delhi Stores for the  price of Rs. 2,60,000.  Putting these  two  resolutions together,  it  would  appear that the drawing’  out  of  Rs. 2,60,000 from the Jupiter’s funds by virtue of the  relevant resolution  dated  January 11, 1949, was  substantially  the payment

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180 of  Rs. 2,60,000 by the Jupiter for the alleged purchase  of plots  of land and building in Chandni Chowk which  belonged to  the Tropical.  It does not appear that in  its  ultimate effect this transaction invited serious scrutiny and comment and there is nothing on the record to show that any  further attempt  was made to  camouflage this transaction  by  fresh transactions. Now  in  addition to these transactions during  this  second period  there is the evidence given by the prosecution of  a number  of other details during this period.  Of  these  the most important is that which relates to a notice sent on May 13,  1949, by an ex-employee of the Jupiter,  Rege,  through solicitors  to Lala Shankarlal and Kaul, alleging  fraud  in respect of purchase of 63,000 Jupiter’s shares from Khaitan. This was followed up by him by a misfeasance petition  dated August 10, 1949, in the High Court of Bombay against all the directors  of  the  Jupiter,  and  this  in  its  turn  led, according  to  the  prosecution,  to  certain   intimidating actions  against  Rege  said  to have  been  taken  by  Lala Shankarlal, Kaul and Mehta, as a result of which Rege, it is said, was coerced into withdrawing his petition followed  by the  ultimate  dismissal of that petition  by,  order  dated September  15,  1949.  During this period  there  were  also acute differences between the directors on one side and  the brokers, Chopra and Mayadas, on the other for the  brokerage of  Rs.  40,000  to  which, according  to  them,  they  were entitled  for the original negotiations carried out  through them with the Khaitan group for purchase of the  controlling block of the Jupiter’s shares.  It is also said that  during this  period various ante-dated entries, vouchers and  other documents  were brought into existence in order to  show  an appearance of regularity with reference to the  transactions during  the  period  of conspiracy in  December,  1948,  and January,  1949.   There  are also certain  letters  of  this period  found or seized from the office of the  Tropical  of the dates of August 10, December 21 and 22, 1949, purporting to  have been written, the first by Kaul to Lala  Shankarlal and the second and third by Guha to Lala Shankarlal.   These letters, if true, 181 are  revealing,  but  are of course  evidence  only  against themselves.   It is of some importance for  the  prosecution case  against  Caveeshar to notice that there are  also  two letters  of  this  period alleged to be  from  Caveeshar  to Chopra  dated  March 17 and 30,1949, the  first  authorising Chopra   to  arrange  for  negotiations  to   purchase   the controlling  block  of shares of the Empire  of  India  Life Assurance Co. Ltd. and the second offering to bring about  a settlement  in  connection  with the  claim  by  Chopra  and Mayadas  for  commission  relating to the  purchase  of  the Jupiter’s shares.          Third period: During the year 1950. The events of the third period as alleged by the prosecution and  in respect of which the prosecution has given  evidence may  now  be  stated.  The main argument on  behalf  of  the appellants  before  us relates to the admissibility  of  the evidence  relating to this period.  The background  for  the events  of this period was-according to the  prosecution-the situation  that arose from the strong attitude taken by  the auditors in the course of their audit of the affairs of  the Jupiter  for the year 1949, which was taken up at  the  com- mencement  of 1950.  The transactions of the Jupiter  during the  year 1949 which came under their scrutiny are  said  to have  aroused their concern and this led them to probe  into

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the circumstances relating to the original Caveeshar loan in January, 1949, to the tune of Rs. 25,10,650.  On January  6, 1950,  the auditors sent a letter to the  Jupiter  demanding inspection  of  the documents relating to the said  loan  of Caveeshar.   This was followed up by a further letter  dated February  6, from the auditors requesting for production  of the  copy  of the mortgage deed, valuation  report  and  all other  documents and papers relating to this Caveeshar  loan as also for the inspection of papers and documents  relating to  (1) Raghavji loan, (2) Fresh Caveeshar loan,  (3)  Misri Devi  loan, and (4) purchase of 54,000 Tropical  shares  for Rs.  14 lakhs.  In that letter of February 6,  the  auditors stated as follows: 182 "We  consider the above transactions  mostly  unconscionable and  we  fail to understand how any  responsible  management could sell Government securities and invest the proceeds  in a  huge  lot of shares in Tropical Insurance  Co.  Ltd.  and large  advances  on shares of Peoples  Insurance  Co.  Ltd., loans  on properties in Cutch etc.  We do not see the  basis on  which  nearly Rs. 26 per share of Rs. 10  was  paid  for purchase   of  Tropical  Insurance  Company’s  shares.    We consider the position extremely serious and shall  therefore thank  you to immediately send a copy of this report to  the Superintendent   of   Insurance  and   also   appraise   the shareholders of the contents of this report forthwith." No  reply thereto having been received, the auditors sent  a copy of their letter of February 6, to each of the directors of  the  Jupiter individually with a  forwarding  letter  on February  14,  1950.  The next five months  were  taken  up- according  to  the  prosecution  -in  the  attempt  of   the directors of the Jupiter to put off or to evade the auditors by  involving  them in a good deal of  correspondence,  oral explanation, personal meetings, and so forth but without the production  of  the various documents called  for  excepting only a few.  This resulted in a letter from the auditors  to the  Jupiter  dated  July 24, 1950,  enclosing  their  draft report  to the shareholders setting out their criticisms  of the  transactions  of the directors for the year  1949,  and stating  that  only a cancelled pronote of Caveeshar  and  a receipt by him were shown to them in respect of the mortgage loan of Rs. 25,10,650 to Caveeshar.  This, according to  the prosecution,  was followed up by feverish activities of  the directors to bring about the screening by repayment, of  the transactions from May to December, 1949, viz., (1) Caveeshar fresh  loan, (2) Raghavji loan, (3) Misri Devi loan and  (4) purchase of the Tropical shares. Repayment  of  Caveeshar fresh loan of Rs. 5,30,000  to  the Jupiter,  was done by raising money by sale of the  Tropical securities and paying that money to the Jupiter in discharge of  Caveeshar’s  fresh loan.  It appears that  the  Tropical securities of the face value of 183 Rs. 6 lakhs were pledged with the Grindlays Bank, New Delhi, for  an overdraft account of the Tropical.  It is said  that these  Tropical  securities  were  got  released  from   the Grindlays  Bank  by  substituting  for  them  the  Jupiter’s securities   of  the  face  value  of  Rs.  5,30,000.    The prosecution  case  is  that  Kaul,  lifted  these  Jupiter’s securities  and  gave them to Mehta and that Mehta  flew  to Delhi,  handed over these securities to the  Grindlays  Bank (presumably  as belonging to the Tropical) and got  released the  previously pledged Tropical securities.   The  Tropical securities so released appear to have been sold on September 12,  1950,  and  to have realised  Rs.  5,01,592-1-2.   That

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amount  is  said to have been deposited  in  the  Tropical’s account  with  the Indian Bank.  On September 14,  Mehta  is said  to have drawn a cheque for Rs. 5,30,000 on the  Indian Bank  in favour of the Jupiter and sent it with  a  covering letter  to  the  Jupiter stating that it  was  repayment  by Caveeshar  of his loan of Rs. 5,30,000 which had been  given to him by the Jupiter as per the Jupiter’s resolution  dated November  5, 1949.  The necessary book entries are  said  to have  been made, and a receipt for Rs. 5,30,000 is  said  to have been sent to Caveeshar.  On October 27, 1950, Mehta  is said to have brought a sum of Rs. 17,158-12-0 in cash to the room  of  Kaul in the Jupiter’s office and to have  paid  in cash  to  the accountant of the Jupiter in the  presence  of Kaul and Guha.  This amount was credited on that date in the Jupiter’s  account  as payment of interest due  on  the  two loans  to  the  Jupiter  by  Caveeshar.   Thus  the  further Caveeshar’s  loan was shown to have been  completely  repaid with  interest  by  entries in  the  Jupiter’s  books  dated September 14 and October 27, 1950.  This was followed up  by the inclusion of narration in the report of the Jupiter  for the  year  1949 that the loans advanced  to  Caveeshar  with interest  thereon  were fully paid back to the  Jupiter  and that  all  documents  pertaining  to  the  said  loans  were returned to Caveeshar. The  further adjustments for repayment of Raghavji loan  and Misri  Devi  loan and in respect of the purchase  of  54,000 Tropical  shares by the Jupiter in December, 1949, are  said to be connected with the attempts 184 of the accused to acquire the controlling block of shares of the  Empire  of India Life Assurance Co.  Ltd.  (hereinafter referred to as the Empire of India) in order to utilise  the funds thereof for these adjustments.  The details of how the controlling block of shares of that Company were  negotiated for and acquired are not necessary to be gone into in detail for the purposes of this case and the same may be  mentioned in broad outline. It  is  part of the prosecution case that  anticipating  the trouble  that was likely to arise from the  transactions  of 1948  and 1949 with the auditors, Lala Shankarlal and  other directors  conceived an idea as early as in March  and  May, 1949,  to  purchase the controlling block of shares  of  the Empire  of India from one Ramratan Gupta.  There  appear  to have  been some unfruitful negotiations in this  behalf  for nearly a year.  But finally by October 5, 1950, an agreement was  executed  under which a sum of Rs. 10 lakhs was  to  be paid in advance to Ramratan Gupta and another sum of Rs.  33 lakhs  and  odd  within  thirty  days  thereafter  and   the controlling block of shares of the Empire of India of  2,618 were to be handed over to one Damodar Swarup Seth, a nominee of Lala Shankarlal.  This amount of Rs. 43 lakhs and odd  is said to have been paid up by means of a number of cheques as follows:                                                Rs. 1.On October 5, 1950- (i)  Cheque by Damodar Swarup Seth (Ex.  Z-10) for....                            8,00,000 (ii) Cheque by Bhudev Sanghi in favour of Damodar Swarup Seth (Ex. Z-11) for...       2,00,000      Total of I                               10,00,000 11. On October 16,1950, six chequesby Damodar      Swarup Seth in favour of-                                                 Rs. (i) Reyer Mills Ltd. for....                   10,55,844 (ii) Laxmi Ratan Cotton Mills for....           8,06,895

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    185 (iii) Premkumar Gupta for......        6,71,787 (iv) Stores India Ltd. for....   36,799 (v) Gulabchand Jain for..     97,500 (vi) Biharilal Ramcharan for5,04,072 III. On October 27, 1950- (i)  Cheque by Damodar Swarup Seth (Ex.  Z-13) for                             2,08,650              Total of II & III             33,81,547 The total of the first two cheques is Rs. 10 lakhs which was paid  as advance.  Tee total of the remaining seven  cheques comes to Rs. 33,81,547 which was shown as consideration  for the purchase of 2,618 shares of the Empire of India.   Thus, on  the  payment of Rs. 31,72,897 on October  16,  1950,  by means  of the six cheques above mentioned,  the  controlling block of 2,618 shares of the Empire of India was handed over to  Damodar Swarup Seth.  It is the case of the  prosecution that  Damodar  Swarup Seth was able to  draw  these  various cheques of the total value of over Rs. 43 1/2 lakhs  because certain  securities of the Jupiter set out in Ex.   Z-47  of the  face  value of Rs. 48,75,000 were  withdrawn  from  the Jupiter in pursuance of letters written by Kaul and Guha and lifted away and handed over without due authority to Damodar Swarup Seth who opened a cash credit account with the Punjab National Bank on the strength of those securities. Having  thus secured the controlling block of shares of  the Empire  of  India in October, 1950, it  is  the  prosecution case,  that  hurried  steps were taken  to  show,  that  the Raghavji  loan and Misri Devi loan advanced by  the  Jupiter towards the end of 1949 were paid back with interest to  the Jupiter  in  cash, and that the Tropical shares  Which  were shown  as having been purchased by the Jupiter in 1949  were sold  away  and  realised  the  cash  for  which  they  were purchased.   On  October 17, 1950, the day  next  after  the purchase of the controlling block of shares of the Empire of India,  one  Roshanlal  Kohli, a broker,  is  said  to  have offered to the Empire of India to sell from the 24 186 Jupiter  its securities of the face value of Rs.  20  lakhs. On October 19, 1950, Roshanlal Kohli, purporting to act  for the  Jupiter  wrote  to the Empire of  India  that  for  the purchase  an advance payment of Rs. 20 lakhs is to be  made. This  was  followed  by a reply from  the  Empire  of  India agreeing to the same and an actual payment of the amount  by two  bearer cheques issued by the Empire of India,  one  for Rs. 15 lakhs dated October 26, 1950, and the other for Rs. 5 lakhs dated October 27, 1950.  No entry is said to have been made  in  the Jupiter’s records as to the  receipt  of  this amount  though  an  entry of such payment was  made  in  the records  of the Empire of India.  But it is said  that  this amount  of  Rs.  20 lakhs was  utilised  for  adjusting  the Raghavji loan as well as the purchase of the Tropical shares by the Jupiter.  It is the prosecution evidence that Rs.  14 lakhs out, of Rs. 15 lakhs obtained on the bearer cheque  of October  26 was paid in cash into the Jupiter  account  with the  Punjab  National  Bank, Bombay, on  October  26  itself showing  the  same as the sale proceeds of  54,000  Tropical shares which the auditors had objected to as being an uncon- scionable investment.  The actual payment was made into  the Jupiter account of the Punjab National Bank, Bombay, by  one Bhagwan  Swarup  and another Bhudev Sanghi.   A  letter  was obtained,  signed  by  Bhudev  Sanghi  (a  nephew  of   Lala Shankarlal)   (Ex.   Z-152)  that  54,000  Tropical   shares belonging  to the Jupiter were sold by him as a broker,  and

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that  the sale proceeds thereof were credited that day  into the  account of the Jupiter in the Punjab National  Bank  at Bombay  and  the  corresponding entries  were  made  in  the investment  register  of  the  Jupiter.   It  is  said  that notwithstanding   this  transaction  the   Tropical   shares remained  in the safe custody account of the Jupiter in  the Bank  of India right up to January 2, 1951, when on  receipt of a letter dated January 2,1951 (Ex.  Z-293) by Kaul to the Bank  of  India,  they  delivered  all  his  shares.   These Tropical  shares  appear to have been delivered  over  to  a clerk of the Jupiter and handed over by him to Guha.  It  is said  that  these shares are now no longer  traceable.   The other 187 bearer  cheque for Rs. 5 lakhs drawn from the funds  of  the Empire  of India, it is said, came into the Jupiter  account as  follows and purported to be repayment of Raghavji  loan. A  sum of Rs. 5,18,388-14-3 was put in cash on  October  27, 1950, into the Comilla Bank purporting to show it as sent by Raghavji in repayment of the mortgage loan taken by him from the  Jupiter  with  interest thereon.  There  is  a  receipt issued by Kaul to Chandrakant, son of Raghavji, showing that Rs.  5,18,388-14-3  was received in full  repayment  of  the mortgage loan.  An entry was also made in the Jupiter’s cash book that interest was paid up-to-date. With regard to the repayment of Misri Devi loan in the books of  the  Jupiter there is an entry dated  October  7,  1950, showing a sum of Rs. 1,25,000 as withdrawn from the Imperial Bank.  On the same date there is another entry showing a sum of Rs. 4,25,000 as withdrawn from the Bank of India, Bombay. On that very day, i.e., October 7, two cheques totalling Rs. 5,50,000  were  deposited  with the  Punjab  National  Bank, Bombay.  Kaul purported to send a letter to Lala  Shankarlal informing him that the amount of Rs. 5,50,000 was being sent for the purchase of land and building belonging to Sir Sobha Singh.  The Punjab National Bank, Bombay, was instructed  to transfer the above mentioned sum to their branch at Tropical Building  at  Delhi  to the credit of  the  account  of  the Jupiter.   All this was done between October 7 and  10.   On October  10,  a memo was received from the  Punjab  National Bank,  Tropical Building, Delhi, informing that the  sum  of Rs. 5,50,000 had been received by them.  The next day, i.e., on  October 11, a cheque for Rs. 5,50,000 was drawn on  that Bank  by Lala Shankarlal in his capacity as the  managing  , director  of the Jupiter.  On the reverse of this cheque  an endorsement  was  made  by  Lala  Shankarlal.   It  is   the suggestion  of the prosecution that cash was obtained on  it and  that  a demand draft for the said amount  was  obtained from  the Grindlays Bank in favour of the Jupiter on  behalf of Misri Devi (wife of Lala Shankarlal) on October 12.  This draft was signed on the reverse by Kaul.  It was 188 received  in  Bombay  and was  deposited  in  the  Jupiter’s account in the Bank of India.  Misri Devi loan was for Rs. 5 lakhs  and  a  sum  of Rs. 18,062-8-0 was  by  then  due  as interest thereupon.  On October 16, entries were made in the cash book of the Jupiter showing that the loan of Misri Devi for  Rs.  5 lakhs with interest was recovered.   The  excess payment of Rs. 31,937-8-0 was shown in the first instance as credited  to suspense account and thereafter as having  been refunded  to Misri Devi on October 18.  Thus the Misri  Devi loan  was shown in the books as having been also  completely repaid. Thus  by  these various adjustments and  manipulations,  the four  transactions,  viz., (1) Caveeshar fresh loan  on  the

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security of the Peoples Insurance Company’s securities,  (2) Raghavji’s loan on the security of his properties in  Cutch, (3) Misri Devi’s loan on the security of her building in New Delhi,  and  (4) purchase of 54,000 Tropical shares  by  the Jupiter, which were all strongly objected to along with  the original Caveeshar loan of Rs. 25 lakhs and odd, were  shown as  realised  back in actual cash by October  27,  1950.   A letter  was  then written by the solicitors of  the  Jupiter under  instructions  of Kaul to the auditors  to  attend  on October 28, 1950, at the office of the Jupiter and to verify the accounts and moneys received from the repayments of  the loans and from the sale of the Tropical shares.  On  October 29,  the  auditors  went to the office of  the  Jupiter  and verified  the same and were satisfied that the  moneys  were received.  The repayment of these various loans and the sale of  the  Tropical shares shown as having  been  realised  in actual  cash  would of course also clear up  the  objections which the auditors raised as regards the original  Caveeshar loan on account of the requisite papers relating thereto not being   forthcoming.    The  auditors,  having   thus   been satisfied,  signed the audit certificate and the  report  of the  Jupiter for the year ending 1949, and appended  a  note that  they had objected to certain loans and  purchases  and that these loans had been recovered and that the shares  had been sold and the moneys received.                             189 On  October  23,  1950,  a.  general  body  meeting  of  the shareholders   of  the  Jupiter  was  held  at  which   Lala Shankarlal,  Kaul, Mehta, Guha and Caveeshar,  were  present and  the final report of the auditors and the reply  of  the directors  to the original objections of the  auditors  were read.  The directors asserted at the meeting that  imaginary mistakes and nervous suspicion was all that the auditors had found  in respect of their management for the year and  that the events of the last 12 months were a complete  refutation of the fear, suspicion and bias of the auditors. It is now necessary to trace the distribution of the lot  of 63,000  shares of the Jupiter which were purchased  by  Lala Shankarlal  and his group from Khaitan.  It may be  recalled that on January 20, 1949, only 61,061 shares which stood  in the  name  of the New Prahlad Mills were handed  over.   The remaining  1,939 shares which stood in the names  of  others (presumably  also  belonging to the group of  Khaitan)  were transferred partly before and partly after, making up 63,000 shares.   Out of these, 250 shares each were transferred  at the  outset  as  qualifying shares, in  the  names  of  Lala Shankarlal, Kaul, Mehta, Jhaveri and Doshi, totalling 1,250. These  transfers  were confirmed by the  resolution  of  the directors  of the Jupiter dated December 29, 1948.   Another 250  shares  were transferred in the name of  Sarat  Chandra Bose  on January 20, 1949, but it would appear that  he  did not  accept the same then and intimated  his  non-acceptance some  time  much later.  On August 31, 1949,  37,949  shares were  transferred  to the name of Delhi  Stores  and  14,601 shares were transferred in the name of the Tropical and  two further lots of 4,475 each were transferred in the names  of Lala  Shankarlal and Caveeshar.  On September 13, 1950,  out of  the  lot of 37,949 shares standing in the  name  of  the Delhi Stores, 4,000 shares were kept standing in the name of the Delhi Stores and the balance of 33,949 were  distributed as follows: 3025 shares in the name of Lala Shankarlal 3025 shares in the name of Caveeshar 50 shares in the name of Kaul 7075 shares in the name of Mehta

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190 7500 shares  in  the name of Chandulal Ratanchand  Shah,  an employee of the Tropical 7500 shares  in the name of Himatlal F. Parikh, an  employee of the Tropical 5774 shares in the name of Himatlal Harilal Shah. Out  of  the lot of 14,601 shares kept in the  name  of  the Tropical  7,500 shares were transferred to the name  of  one Baburam  and  7,101 shares were transferred to the  name  of Kaul.   Out  of  another  lot  of  409  shares  which   were purchased, 339 shares were transferred to the name of  Kaul. Thus  the  position  of the distribution  of  the  purchased Jupiter’s shares as on September 13, 1950, was as follows: 7750 shares in the name of Lala Shankarlal 7740 shares in the name of Kaul 7325 shares in the name of Mehta 7500 shares in the name of Caveeshar 4000 shares in the name of the Delhi Stores 7500 shares in the name of Chandulal Ratanchand 7500 shares in the name of Himatlal F. Parikh 5774 shares in the name of Himatlal Harilal Shah 7500 shares in the name of Baburam 250 shares in the name of Jhaveri 250 shares in the name of Doshi 250 shares in the name of Sarat Chandra Bose 70 shares in the name of the Tropical. 63,409 Total. This makes a total of 63,409 shares comprising 63,000 shares of  the  controlling block which were  originally  purchased from  Khaitan  group and 409 shares  subsequently  purchased which  has nothing to do with the present case.  It  may  be noticed that no shares were transferred in the name of  Guha and that very substantial number of shares were  transferred in  the names of the various other accused.  It may also  be noticed that three persons who are not accused in the  case, viz.,  Chandulal  Ratanchand, Himatlal F.  Parikh,  Himatlal Harilal  Shah,  had also very substantial number  of  shares transferred to them. 191 The case of the prosecution is that for the transfer of  all these  shares in the names of the various accused  no  money was  paid by them and that it was the  distribution  amongst themselves of the major portion of the original  acquisition of  63,000 shares which, according to the prosecution  case, were  in fact purchased by utilising the very funds  of  the Jupiter  over  which  they  obtained  the  control.    This, according  to  the  pro. secution, completes  the  chain  of misappropriation by the various accused. Since  the appeals before the High Court and before  us  are against   the  convictions  and  sentences  based   on   the acceptance  of the verdict of the jury against each  of  the accused, scope for interference on appeal either by the High Court or by this Court is very limited.  Hence Mr. Chari for the  appellant  has  pressed  before  us  only  some   legal contentions.  His main argument relates to the admissibility of   certain  portions  of  the  evidence  given   for   the prosecution.   Mr. Chari has taken strong exception  to  the prosecution having led evidence relating to the  acquisition of  the controlling block of shares of the Empire  of  India followed up by the various steps said to have been taken  by the  several alleged conspirators or by Lala  Shankarlal  in 1950  to screen the transactions of the later part of  1949. Mr.  Chari  contends  that  on  the  substantive  charge  of conspiracy all these steps or actings are not admissible  in law.

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Now  the conspiracy as charged is in substance a  conspiracy to  commit criminal breach of trust in respect of the  funds of  the  Jupiter  by  utilising the  same  to  purchase  the controlling  block of shares of the Jupiter itself for  :the benefit  of  the  Tropical  (or  for  the  benefit  of   the conspirators).   This  conspiracy is alleged  to  have  been entered into between the dates December 1, 1948, and January 31,  1949.   Mr. Chari says that primarily it  is  only  the events  of  that period comprising the  acts,  writings  and statements of the various conspirators of that period  which would be admissible as against each other under s. 10 of the Indian  Evidence  Act, 1872 (I of 1872).  According  to  the prosecution case the modus operandi was to screen 192 the  utilisation  of these funds by showing them  as  having been advanced for legitimate purposes and invested on proper security, but in fact utilising the same for payment to  the owners  of the controlling block of shares of  the  Jupiter. Mr.  Chari  says  that strictly speaking,  though  for  this purpose,  only  the  acts, writings and  statements  of  the conspirators  during the period December, 1948, to  January, 1949,  would  be admissible, he conceded that  the  evidence relating  to  the  steps taken and the  acts,  writings  and statements of the conspirators beyond January 31, 1949,  and during the year 1949, i.e., towards the later part  thereof, by  way  of creating further  transactions  (viz.,  Raghavji loan, Caveeshar fresh loan, Misri Devi loan and purchase  of shares   from   the  Tropical)  in  order  to   screen   the transactions  of January, 1949, may be admissible, as  being directly connected, and that he does not object to the same. But his point is that the transactions of the year 1950  and the  steps taken then are only for the purpose of  screening the second set of transactions of the later part of 1949 and not  the  first set of transactions of  January,  1949.   He contends that evidence relating thereto, which falls  wholly outside the conspiracy period, is not admissible under s. 10 of  the Evidence Act being too remote and having  no  direct bearing  on the original transactions which are the  subject matter  of the conspiracy.  He points out that  the  alleged criminal breach of trust was committed on January 20,  1949, when the Jupiter’s moneys were paid to Khaitan, and that the object of the conspiracy must be taken to have been achieved when the camouflage through the first Caveeshar loan and the advance  said  to  have been made to the  Delhi  Stores  for purchase of plots was effectuated.  He points out that  this is a case with numerous details even as regards the  events, statements  and  actings from December 1, 1948,  to  end  of December,  1949.  He urges that the events of the year  1950 are  equally, if not more, voluminous and have  overburdened the  legitimate material in the case.  This, he  urges,  has operated  to create confusion and prejudice in the minds  of the jury.  We have been told that on account 193 of   this  large  volume  of,  what  is  contended  to   be, inadmissible  evidence  the trial has got  unduly  prolonged extending  over  a year.  It is pointed out  that  the  very narration of the outline of the prosecution case and of  the evidence let in on behalf of the prosecution has taken about 100  pages of typed matter in the charge to the jury by  the learned trial Judge and in the judgment of the High Court on appeal.  There can be no doubt that in a case of this  kind, having regard to the nature thereof and to the ramifications of the various transactions on which the prosecution  relies to  make out its case, and having regard to the,  fact  that this  was a jury trial, every attempt should have been  made

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to exclude material which is strictly not admissible in law. Otherwise it would have the effect of confusing the jury and prejudicing  its  mind.   But if  the  evidence  is  clearly admissible  in  law,  the Court would not  be  justified  in declining  to receive it.  All that can be said is  that  it would have to take every care in charging the jury to  place fairly  before it the effect and implications of such  items of evidence in an adequate measure. The  limits of the admissibility of evidence  in  conspiracy cases   under   s.  10  of  the  Evidence  Act   have   been authoritatively  laid  down by the Privy  Council  in  Mirza Akbar v. The King-Emperor (1).  In that case their Lordships of  the  Privy Council held that s. 10 of the  Evidence  Act must be construed in accordance with the principle that  the thing  done,  written,  or spoken,  was  something  done  in carrying out the conspiracy and was receivable as a step  in the  proof  of the conspiracy.  They  notice  that  evidence receivable  under  s. 10 of the Evidence  Act  of  "anything said,  done, or written, by any one of such  persons"  (i.e. conspirators)   must  be  "in  reference  to  their   common intention."  But  their Lordships held that in  the  context (notwithstanding  the  amplitude of the  above  phrase)  the words  therein  are not capable of  being  widely  construed having regard to the well-known principle above  enunciated. It  would  seem to follow that where, as in this  case,  the charge specifies the period (1)  (1940) L.R. 67 I.A. 336. 25 194 of  conspiracy, evidence of acts of co-conspirators  outside the  period  is not receivable in  evidence.   Indeed,  this position  is  fairly conceded by Mr. Khandalawala,  for  the prosecution.   But  his  contention  is  that  the  evidence objected  to,  viz., the acts and events of the  year  1950, would  be relevant under the other sections of the  Evidence Act such as ss. 6, 8, 9, 11 and 14.  This would no doubt  be so.  But it has to be remembered that some of these sections are  widely  worded  and must  receive  a  somewhat  limited construction  as  pointed  out by West J.  in  his  judgment reported in Reg. v. Prabhudas (1) when considering the scope of s. 1 1 of the Evidence Act. Now,  there  can be no doubt that one of the  main  relevant issues  in the case is whether the loan of Rs. 25 lakhs  and odd advanced on January 20, 1949, to Caveeshar, as also  the moneys said to have been paid to the Delhi Stores by way  of advance for purchase of certain plots said to belong to  it, were  genuine  transactions or bogus and  make-believe.   If they were genuine transactions, by virtue of which money did pass  to them on the basis of good security,  showing  these amounts to be genuine business investments, then it would be difficult to make out that there was any criminal breach  of trust.  Hence all evidence which would go to show that these transactions are bogus, is certainly admissible.  That would be  so  notwithstanding that such evidence  may  necessitate reference  to and narration of the acts of the  conspirators beyond  the  period  of  conspiracy  but  within  reasonable limits.  While it may be true that the manipulations by  way of  the four fresh transactions from May to  December,  1949 (apart  from other features of these transactions  of  which evidence  has been given) would be cogent evidence  to  show that  the  original transactions were  bogus,  the  evidence relating  to  the  further  transactions  to  screen   these transactions  of  the second half of 1949 by  utilising  the money  of  the Empire of India after obtaining  the  control thereof,   and   by  wrongfully  utilising   the   Jupiter’s

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securities, would also be relevant to make out and emphasise the bogus character of the (1)(I 874) 1 1 Bom.  H.C.R. 90. 195 original debts.  It cannot be said to be too remote  because it  is  to  be remembered, as has been pointed  out  by  Mr. Khandalawala,  that the urgent necessity for  acquiring  the control of the Empire of India in 1950, and for utilising it for  showing the alleged investments of the second  half  of 1949 as having been realised back in cash in 1950, arose  on account  of the firm attitude of the auditors who  suspected the  bona’ fides of the original Caveeshar loan and  of  the connected transactions of the second half of 1949 when  they scrutinised in 1950 the affairs of the Jupiter for the  year 1949.   The  1950 transactions appear clearly to  have  been brought  about not merely to screen the transactions of  the second  half of 1949, but equally, if not mainly, to  dispel any  suspicion, and to obviate the scrutiny, in  respect  of the earlier transactions of January, 1949, which related  to the  period  of conspiracy.  Thus in relation  to  the  main purpose  of  the  prosecution,  viz.,  proof  of  the  bogus character  of  these  transactions  of  January,  1949,  the transactions of the second half of 1949 and of 1950 must, in the  circumstances  of this case and having  regard  to  the ramifications,  be  taken  to be  integrally  connected  and relevant  to  make  out  their  bogus  character.   We  are, therefore,  unable to agree with the general  objection  put forward  that  the  entire evidence  relating  to  the  1950 transactions was inadmissible in evidence. It  is also reasonably clear that the conduct in general  of each individual co-conspirator including his acts,  writings and statements is evidence against himself.  There can be no doubt that such conduct irrespective of the time to which it relates  can  be relied on by the prosecution  to  show  the criminality of the intention of the individual accused  with reference  to  his  proved  participation  in  the   alleged conspiracy,  that is, to rebut a probable defence which  may normally arise in such a case, viz., that the participation, though proved, was innocent.  It has been pointed out to  us that in this case each one of the accused has put forward in his defence that he was an unconscious tool in the hands  of a   towering  personality  and  a  master-mind   like   Lala Shankarlal about whose criminal intentions he was 196 not  aware.   It was, therefore, quite  legitimate  for  the prosecution to anticipate such defence and to give rebutting evidence.   Such  evidence  would come under s.  14  of  the Evidence  Act.   It  is well settled that  the  evidence  in rebuttal  of  a  very likely and  probable  defence  on  the question of intention can be led by the prosecution as  part of  its  case.  This is laid down by the  Privy  Council  in Makin  v. The Attorney-General for New South  Wales(1).   To anticipate  a  likely  defence in such a case  and  to  give evidence in rebuttal of such defence is in substance nothing more  than the letting in of evidence by the prosecution  of the requisite criminal intention beyond reasonable doubt. Now  Mr.  Khandalawala for the prosecution  urges  that  the entire  evidence  for the prosecution relating to  the  year 1950  falls  within  these  two  categories  of   admissible evidence, viz., (1) evidence to make out the bogus character of  the original transactions of January, 1949, which is  an essential   issue   in  the  case  relating   to   all   the conspirators, and (2) evidence of the criminal intention  of each  of the accused which is admissible as against  himself Mr.  Chari for the appellants contests this  assumption  and

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urges  that the evidence that has been admitted of the  year 1950 is much wider than what is covered by the above two and that  it was in fact and in substance evidence of the  acts, writings  and  statements of individual  conspirators  of  a period  outside  the period of conspiracy,  and  treated  as admissible  against  other co-conspirators, on  the  central issues in the case, viz., whether a conspiracy has been made out and whether the individual accused were participants  in that  conspiracy.  Mr. Chari very strenuously contends  that such  evidence was inadmissible and that its  admission  has seriously  prejudiced  the case of the  appellants  and  has rendered any fair and rational consideration of the case  by the  jury  extremely  difficult,  if  not  impossible.    In particular his strong objection was to the evidence relating to  the acts, writings and statements of Lala Shankarlal  of the year 1950, more particularly because he died before  the trial and was ’not before the Court on (1)  L.R. [1894] A.C. 57,65. 197 trial   as  a  conspirator.   His  contention   raises   for consideration two questions, viz., (1)whether  such  evidence is admissible in proof  of  the conspiracy  and in proof of the participation of  individual accused in the conspiracy, and (2)whether  in  fact  at  the  trial,  such  evidence  was admitted and made use of on these issues. Now  it would be convenient to take up the  latter  question for consideration in the first instance. To substantiate his contention that the evidence of  conduct of  individual  conspirators  of  the  year  1950  has  been admitted and used against the other coconspirators in  proof of  the two main issues, Mr. Chari, in his  argument  before the  High  Court relied on the following paragraphs  of  the learned  trial Judge’s charge to the jury, viz.,  paras  II, 55,  65, 73, 74, 75, 94, 101, 102, 136, 146, 388, 453,  541, 557,  588,  602, 657, 676, 678 and 689.  We  have  carefully gone through these paragraphs.  It appears to us  reasonably clear  that what have been referred to by the learned  trial Judge  in these paragraphs are various items of evidence  in the  prosecution, case whose primary object is to  make  out the  bogus character of the transactions in question  though they   necessarily  bring  in  either  the   deceased   Lala Shankarlal or some other co-conspirator as being a party  to these  various acts.  Such evidence, as already  stated,  is obviously admissible for that purpose as being links in  the chain  of  evidence relating to the bogus character  of  the original  transactions  and  not  as  being  in   themselves relevant  to prove the conspiracy.  That the  learned  trial Judge  was  alive  to this distinction and  would  not  have admitted  such evidence in proof of the issue of  conspiracy is  quite clear from his ruling (interlocutory judgment  No. 6)  dated August 22, 1955, relating to the admissibility  of the  document which was marked as Ex. Z-71 in the  committal court.   The learned Judge in that order  has  categorically ruled  out  the  admissibility of  that  document  with  the following conclusion after a good deal of discussion of  the legal point: "  I come to the conclusion that the statements and  actions of any one of the persons mentioned in the 198 charge  are not admissible beyond the period  of  conspiracy unless they are authorised by any of the accused persons; in that  event  they are really the actions and  statements  of that accused person himself who has authorised the same.  I, therefore,  do  not  admit  the  document  (Ex.   Z-71)   in

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evidence.  " We have not got before us the document (Ex.  Z-71) itself to enable us to see for ourselves what it relates to, since  it was  exhibited only in the committal court and ruled out  at the trial.  But there is no difficulty in appreciating  what the  learned  trial Judge actually held.  That  the  learned trial Judge acted on this view is reasonably clear also from the  fact that in quite a number of places in his charge  to the  jury  he  has  repeatedly  emphasised  that  subsequent conduct  of  a conspirator would not be  admissible  against anybody  else  but himself. (See paras 453, 541,  557,  588, 602,  657,  676, 685 and 689 of the  learned  trial  Judge’s charge  to  the jury).  No doubt in some of  the  paragraphs previously noticed as having been objected to by Mr.  Chari, the  very reference to acts and conduct of  Lala  Shankarlal during  the  year  1950  which  is  beyond  the  period   of conspiracy,  may  conceivably be capable  of  being  wrongly relied on by the jury in respect of issues on which they are not  admissible  and  might be  capable  of  producing  some prejudice.  But this is a possibility inherent in such cases as  has  been  pointed out by the  Privy  Council  in  Walli Muhammad  v. King (1).  Therein their Lordships pointed  out the difficulty in all cases where two persons are accused of a  crime and where the evidence against one is  inadmissible against the other.  Their Lordships recognised that  however carefully  assessors  or  a jury are  directed  and  however firmly  a Judge may steel his mind against being  influenced against  one  by the evidence admissible  only  against  the other,  nevertheless the mind may inadvertently be  affected by  the  disclosures  made  by one of  the  accused  to  the detriment  of the other.  Undoubtedly this  weighty  caution has  to be always kept in mind when Judges and juries.  have to  deal  with such complicated cases.  But that  by  itself without showing that serious (1)  (1948) 53 C.W.N. 318, 321. 199 prejudice  would,  in all likelihood, have occurred  in  the particular  case,  would  not  be  enough  to  vitiate   the convictions.   In this case that there has in fact been  any such  prejudice  has  not been shown  to  our  satisfaction. Indeed  the  fact  that accused No.  3,  Jhaveri,  has  been acquitted  by the unanimous verdict of the jury  appears  to indicate that the jury has shown itself capable of observing the caution given to them and making careful discrimination. In this view probably the larger question raised by  counsel on  both sides as to the admissibility of the conduct  of  a co-conspirator   outside  the  period  of   conspiracy   and especially of deceased co-conspirators like Lala  Shankarlal and  Doshi and a living conspirator like Mahajan who is  not on  trial before the Court, in proof of the two main  issues in  such a case (viz., the existence of the  conspiracy  and the   participation  of  the  individual  accused  in   that conspiracy)  may not require to be dealt with.  But as  will appear  presently the learned Judges of the High Court  have held  such evidence admissible and have over-ruled, on  that ground also, the contention of Mr. Chari as to the prejudice likely  to have been caused because of their view as to  its admissibility.   Hence  it is only fair  that  the  question should be considered and a conclusion arrived at.   Besides, counsel   on  both  sides  have  argued  the   matter   very elaborately  and  have  pressed us to  express  our  opinion thereupon.  It is to be noticed that the learned trial Judge and  the High Court appear to have taken differing views  on this  matter.   The learned Judges of the High  Court  after elaborate discussion have definitely held that such evidence

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is admissible, as shown by their conclusion on this part  of the case in the following terms: "  In  this manner, all the observations which  the  learned Judge made in paragraphs 11, 73, 74, 75, 94, 101 and 388, to which   Mr.   Chari   has  objected   on   the   ground   of inadmissibility, would be relevant to show that there was  a conspiracy in this case and that Lala Shankarlal was a party to it." That  the  learned  trial Judge appears to  have  taken  the opposite view is reasonably clear from his ruling 200 (interlocutory  judgment  No.  6)  dated  August  22,  1955, already  referred to, relating to the admissibility  of  the document, Ex.  Z-71, in the committal court.  In that  order he sets out the arguments of both sides as follows: " It is common ground that the action of any of the  accused person subsequent to the period of conspiracy is  admissible in  evidence  against that particular accused  person  only. Mr. Khandalawala, therefore, argues that the actions of Lala Shankarlal, of Doshi and of Mahajan subsequent to the period of conspiracy are admissible in evidence to prove that  they were  party  to the conspiracy alleged in the  case  and  to prove  their  guilt  individually  along  with  the  accused persons   He  further  submits  that s.  10  of  the  Indian Evidence Act is permissive and not an exception as contended by  Mr.  Chari  He says that he does not want  to  lead  any evidence  of the statements and actions of  Lala  Shankarlal against  these accused persons, but he wants them  in  order that  he may prove before the jury that Lala Shankarlal  was also  one  of  the conspirators  with  the  accused  persons Chari’s submission is that no evidence in this case could be admitted which is not admissible against the accused persons He submits that the question whether Shankarlal (or Doshi or Mahajan)  was  guilty of the offence of  conspiracy  or  not cannot arise in this trial.  Proof of conspiracy, apart from the  accused persons, is irrelevant.  He submits that  what- ever  Shankarlal  did  during the period  of  conspiracy  is binding  on  these  accused persons and  the  Court  has  to determine  (with reference to that evidence) whether  anyone of  these accused persons was a conspirator with  Shankarlal or with Mahajan or with Doshi.  All the evidence that  could be led in a trial must be against accused persons and no one else.   He,  therefore, submits that the  evidence  that  is sought  to  be  led by the prosecution  is  inadmissible  in evidence." Having thus set out the arguments of both sides, the learned trial Judge stated his conclusion as follows: "I think that the evidence in a criminal trial that could be led must be admissible against the accused (1)  (1948) 53 C.W.N. 318, 321, 201 persons  only  and, therefore, the evidence of  actions  and statements of another person, apart from the question of  it being  of  the  agent of the  accused,  is  not  admissible. Section  10 (of the Evidence Act) as explained by the  Privy Council in Mirza Akbar v. The King-Emperor (1), clearly lays down  that the statements and actions of the  co-conspirator would only be evidence against the accused persons, provided they       are       within       the       period        of conspiracy.....................  I do not think,  therefore, that Lala Shankarlal or Mahajan or Doshi are accused persons before  me and, therefore, the subsequent conduct  of  these persons  beyond the period of conspiracy unconnected by  any authority from the accused persons is not admissible."      It is necessary, therefore, to appreciate clearly  what

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exactly  the  Privy Council in Mirza Akbar’s  case  (1)  has decided  and  whether the learned trial Judge was  right  in coming  to  the conclusion he did on the authority  of  that decision.   In  the said case their Lordships of  the  Privy Council   elucidated  the  principle  of  admissibility   of evidence in cases of conspiracy by reference to the  English leading case of The Queen v. Blake (2 ). That was a case  in which two persons, T. and B., were charged for conspiracy to cause  certain  imported goods to be carried away  from  the port  of London and delivered to the owners without  payment of the full customs duty payable thereon.  T. did not appear and  defend.   B. pleaded not guilty.  At the trial  it  was proved  that T. was agent for the importer of the goods,  B. was a landing waiter at the Custom House.  It was T.’s  duty to  make an entry describing the quantity etc. of goods.   A copy  of such entry was delivered to B. who was  to  compare this  copy  with the goods, and, if  they  corresponded,  to write  ’correct’ on T.’s entry, whereupon T.  would  receive the goods on payment of the duty according to his entry.  It was  proved that T.’s entry was marked ’correct’ by  B.  and corresponded  with  B.’s  copy and  that  payment  was  made according  to  the quantity there described,  and  that  the goods were delivered to T. Evidence was then offered of an (1)  (1940)L.R.671.A.336.  (2) (1844) 6 Q.B. 126;  115  E.R. 49. 26 202 entry  by T. in his day book, of the charge made by  him  on the importer, showing that T. charged as for duty paid on  a larger  quantity than appeared by the entry and copy  before mentioned.    It  was  held  that  all  this  evidence   was admissible  against  B.  But the question arose  as  to  the admissibility of a further item of evidence.  It was  proved that B. received the proceeds of a cheque drawn by T.  after the  goods were passed.  The counterfoil of this cheque  was offered  in evidence, on which an account was written by  T. showing,  as  was suggested, that the cheque was  drawn  for half the aggregate proceeds of several transactions, one  of which corresponded in amount with the difference between the duty  paid and the duty really due on the above  goods.   It was ruled that item was not evidence against B. Referring to this  case  their Lordships of the Privy Council  stated  as follows in Mirza Akbar’s case (1) :        "The  English  rule on this matter (i.e., as  to  the admissibility  of  evidence relating to a  charge  of  cons- piracy)  is, in general, well settled.  It is a  common  law rule  not based on, or limited by, express statutory  words. The  leading  case of R. v. Blake (2)  illustrates  the  two aspects  of  it, because that authority shows both  what  is admissible  and what is inadmissible.  What, in  that  case, was  held to be admissible against the conspirator  was  the evidence of entries made by his fellow conspirator contained in  various  documents actually used for  carrying  out  the fraud.  But a document not created in the course of carrying out  the  transaction, but made by one of  the  conspirators after  the fraud was completed, was held to be  inadmissible against  the  other............ It had nothing  to  do  with carrying the conspiracy into effect." Their Lordships in that case also referred with approval  to two cases of the Indian High Courts, viz., Emperor v.  Abani Bhushan   Chuckerbutty   (3)   and   Emperor   v.   G.    V. Vaishampayana(4).   In the case in Emperor v. Abani  Bhushan Chuckerbutty  (3), one of the documents sought to be put  in evidence is a statement (1)  (1940) L. R. 67 I.A. 336.

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(2)  (1844) 6 Q.B. 126; 115 E.R. 49. (3)  (1910) I.L.R. 38 Cal. 169. (4)  (1931) I.L.R. 55 Bom. 839. 203 of  one of the co-conspirators, Abani, before  a  Magistrate after  he  was arrested.  In that  statement  he  implicated himself  and  a large number of persons in  the  conspiracy. The  question  that arose was how far it could  be  used  as evidence  of the conspiracy and of the fact that the  others were co-conspirators.  Their Lordships held as follows:     "We  have come to the conclusion that the  statement  of Abani  cannot properly be treated as evidence under  section 10  of  the  Evidence Act.  That section, in  our  view,  is intended  to make evidence communications between  different conspirators,  while  the  conspiracy  is  going  on,   with reference to the carrying out of the conspiracy."       It may be added that this statement was merely treated as  a confessional statement failing within the scope of  s. 30  of the Evidence Act and usable only as such against  the co-accused.  The case in Emperor v. G. V. Vaishampayana  (1) was  also a case of conspiracy in which an approver  as  co- conspirator gave evidence.  He gave evidence of  statements, made  to him by another co-conspirator by name Swamirao  who was not an accused before the Court, which had reference  to the  alleged  attack on the Lamington  Road  police  station which  was the object of the conspiracy.   These  statements were  alleged  to  have been made after the  return  of  the attacking party to the approver at his residence.  Objection was taken to the admissibility of such statements made after the completion of the attack as evidence under s. 10 of  the Evidence Act.  This objection was upheld on the ground  that such  statements  made after the completion  of  the  attack could  not be said to have been made "in reference to  their common  intention  ".  It  was pointed  out  that  the  word ’intention’ implies that the act intended is in the  future. It  is  noteworthy that in this case  the  statements  under consideration  were made by a coconspirator who was  not  an accused  at  the  trial and it was not  suggested  that  his evidence  would  be  admissible  on  the  ground  that  such statement  would be admissible against himself to show  that he was a (1)  (1931) I.L.R. 55 Bom. 839. 204 co-conspirator  with the accused on trial and that it  would become relevant on that basis, an argument of the kind which appears to have found favour with the learned Judges of  the High  Court  in this case, as will be  presently  seen.   In Mirza Akbar’s case(1) itself the question at issue was about the admissibility on the charge of conspiracy of a statement made by one of the co-conspirators before a Magistrate after arrest.  That was held to be not admissible.      The point to be noticed in all these cases is that  the statements  which have been ruled out as inadmissible  under section  10 of the Evidence Act were not sought to  be  made admissible under some other section of the Evidence Act.  It is  further  to be noticed that in the leading case  of  The Queen v. Blake (2), the question of admissibility was  dealt with  as  being one under the general law and yet  the  only criterion of admissibility was that which was special to the cases  of  conspiracy.  There was no  suggestion  that  such evidence  could  be brought in under any other  category  of admissibility  of evidence.  It was ruled in that case  that the statement in question was totally inadmissible to  prove conspiracy.  It appears, therefore, that Mirza Akbar’s  case (1)  is a clear authority for the position that in  criminal

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trials,  on a charge of conspiracy evidence  not  admissible under  s. 10 of the Evidence Act as proof of the two  issues to  which it relates, viz., of the existence  of  conspiracy and  of the fact of any particular person being a  party  to that  conspiracy,  is  not admissible at  all.   But  it  is necessary  to appreciate clearly that what is sought  to  be admitted  in  such a case is, something said,  or  done,  or written  by any one of the co-conspirators behind the  backs of the others as being in law attributable to the others and what is sought to be proved by such evidence taken by itself is  the existence of the conspiracy as between  the  alleged conspirators  and  the fact that a particular person  was  a party  to  the  conspiracy.  It is  such  evidence  that  is inadmissible otherwise than under s. 10 of the Evidence Act. Quite  clearly, in the normal class of cases, such  evidence is admissible as against himself and not against others, (1) (1940) L.R. 67 I.A. 336. (2) (1844) 6 Q.B. 126; 115 E.R, 49, 205 excepting   where  there  is  relationship  of   agency   or representative  character or joint interest. (See s.  18  of the Evidence Act).  In civil cases it is well settled that a principal  is bound by the acts of his agent if  the  latter has an express or implied authority from the former and  the acts are within the scope of his authority.  Therefore  acts of  an  agent  are admissible in  evidence  as  against  the principal.  An analogous principle is recognised in criminal matters in so far as it can be brought in under s. 10 of the Evidence   Act.   It  is  recognised  on  well   established authority  that  the principle underlying the  reception  of evidence under s. 10 of the Evidence Act of the  statements, acts and writings of one co-conspirator as against the other is oil the theory of agency.  This is recognised in  Emperor v.  Shafi  Ahmed  (1)  and also in Emperor  v.  G.  V.  Vai- shampayana  (2),  the  case  already  mentioned  above   and referred  to  with approval by the Privy  Council  in  Mirza Akbar’s  case  (3).   In Roscoe’s  Criminal  Evidence  (16th Edition),  at p. 482 bottom, when dealing with the  evidence relating to criminal conspiracy, it is stated as follows:        "  An overt act committed by any one of  the  conspi- rators  is sufficient, on the general principles of  agency, to make it the act of all."       Now  both the English rule as recognised in The  Queen v.  Blake (4) as well as the rule in s. 10 of  the  Evidence Act, confine that principle of agency in criminal matters to the  acts  of the co-conspirator within  the  period  during which  it  can be said that the acts were "in  reference  to their  common  intention " that is to say, as  held  by  the Privy  Council in Mirza Akbar’s case (3) "things said,  done or  written,  while the conspiracy was on foot "  and  "  in carrying   out  the  conspiracy."  The  Privy  Council   has explained the basic principle in the following terms: "  Where  the  evidence  is  admissible  it  is,  in   their Lordships’  judgment, on the principle that the thing  done, written or spoken, was something done in (1)  (1925) 31 Bom.  L.R. 515, 519. (2)  (1931) I.L.R, 55 Bom. 839. (3)  (1940) L.R. 67 I.A. 336. (4) (1844) 6 Q. B. 126; 115 E.R. 49. 206 carrying out the conspiracy, and was receivable as a step in the proof of the conspiracy."         It appears, therefore, that the learned trial  Judge was right in his view that the admissibility of evidence  of the  kind which is now under consideration is ruled  out  on

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the  authority of Mirza Akbar’s case(1).  The argument that such  evidence  even if it is of the conduct of  a  deceased conspirator, is admissible under s. 8 of the Evidence Act as being evidence of conduct on a relevant issue, would  appear to  be untenable on the very terms of s. 8, apart  from  the authority  of  Mirza Akbar’s case (1).  Section 8  in  terms says as follows:      " The conduct of any person, an offence against whom is the subject of any proceeding, is relevant, if such  conduct influences or is influenced by any fact in issue or relevant fact.  "    This  appears  clearly to rule out the  conduct  of  Lala Shankarlal,  Doshi, and Mahajan behind the backs of  others, as  inadmissible.  Such conduct would be admissible only  to the  extent  that  it  is permissible under  s.  10  of  the Evidence  Act,  if  it is the conduct  of  a  co-conspirator whether he is alive or dead and whether on trial before  the court  or  not.  Mr. Khandalawala in his  arguments  against this view has suggested some hypothetical cases to show  the difficulties  that  may arise on such a view.  But  a  close consideration of these suggested hypothetical cases does not show  that  they  raise any  serious  difficulties.   It  is unnecessary to notice them at any length.      The  learned Judges of the High Court (in  reliance  on certain English decisions which, with respect, do not appear to have any direct bearing on the question at issue) were of the  opinion  that since a person’s  conduct  is  admissible against  himself  without the limitations of s.  10  of  the Evidence  Act,  the  conduct of  Lala  Shankarlal  would  be admissible  to show that there was a conspiracy and that  he was  a  conspirator in it. it appears, with  great  respect, that  this reasoning is fallacious.  The admission  of  such evidence, in proof of conspiracy or of the fact that he  was a co-conspirator, is, in its essence, (1)  (1940) L.R. 67 I.A. 336. 207 admission  not as against himself but as against the  others who  are on trial.  To the extent that such an issue,  i.e., of  there  being  a  conspiracy  and  of  his  being  a  co- conspirator,  is  relevant at the trial, it must  be  proved only  by evidence under s. 10 of the Evidence Act, which  is an  exceptional  section  limited  in  its  application   to conspiracies to commit an offence or to commit an actionable wrong.   The learned Judges have also failed to notice  that the  evidence  of  conduct  admissible under  s.  8  of  the Evidence Act is of conduct of a person who is a party to the action.  It is thus reasonably clear that evidence of  acts, statements  or  writings of a  co-conspirator  either  under trial or not on trial but outside the period of  conspiracy, would  not be admissible in proof of the specific  issue  of the  existence  of the conspiracy.  It is necessary  to  add that my learned brothers prefer to reserve their opinion  on this legal question on the ground that it does not call  for decision in this case.       In  any  case and as already explained above,  in  the earlier  portion  of  this  judgment,  it  may  happen  with reference  to the facts of a particular case, that  evidence would  be admissible of various facts outside the period  of conspiracy, if they are relevant on any substantial issue in the case, as for instance (in this case) the bogus character of  the loans and the criminal intention of each  individual accused.  In respect of such issues, the statement, act  and writing  of an individual co-conspirator outside the  period of  conspiracy may be nothing more than a link in the  chain of  evidence  relating  to  such  matters  or  prefatory  or

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explanatory matter within reasonable limits.  It would  then be admissible in that context but not as affecting the other co-conspirators  by  its  being  treated  as  their  act  or statement  on  the  theory of agency  (though  behind  their back).  It has also been seen above that in the present case evidence,  if any, of the acts, statements and  writings  of Lala  Shankarlal and other co-conspirators was  admitted  by the learned trial Judge only on that footing.  Therefore the contention of Mr. Chari for the appellants that a good  deal of  inadmissible  evidence  has  been  let  in,  cannot   be sustained. 208 The  next point that is urged is that a number of  documents put  in evidence which are said to be in the handwriting  of one  or  other  of the accused were sent  to  a  handwriting expert for his opinion and that the expert was not called as a  witness  on  the prosecution side,  nor  was  his  report exhibited,   but   the  jury  was  asked  to   compare   the handwritings  in  the disputed documents with  the  admitted handwritings and to form their own conclusions.  It is urged that this was not fair and that the prosecution was bound to examine  the handwriting expert and exhibit his report.   It is  well  settled, however, that the Court  cannot  normally compel  the prosecution to examine a witness which  it  does not chose to and that the duty of a fair prosecutor  extends only to examine such of the witnesses who are necessary  for the  purpose  of  unfolding the  prosecution  story  in  its essentials.  (See Habeeb Mohamed v. The State  of  Hyderabad (1) ). Mr. Khandalawala appearing for the prosecution states that  the examination of the handwriting expert was  not  in any   sense  necessary  in  this  case  for  unfolding   the prosecution  case  and we are inclined to  agree  with  him. Even  if a different view is to be taken as to the  duty  of the Prosecution, to examine such a witness, all that can  be said normally in such a case is that the defence is entitled to  comment upon it and to ask the jury to draw  an  adverse inference  in respect of that portion of the case  to  which the  evidence  of  the  handwriting  expert  relates.    Mr. Khandalawala  for  the prosecution points out that  in  fact this has been done by Mr. Chari when addressing the jury for the defence.  He states also that he himself in his  address told  the  jury  that it was open to them  to  do  so.   Mr. Chari’s  grievance  however  is that the Court  has  not  in terms, directed the jury to this effect in its charge to the jury.   That no doubt appears to be so.  But in a case  like this  dealing  with so many details-, we see  no  reason  to think  that  this omission of the learned trial  Judge,  was likely in this case, to have caused any serious prejudice in the circumstances above stated. (1)  (1954) S.C.R. 475, 489, 490. 209 There  is  next  a similar point sought to be  made  out  in respect  of  the  non-examination of  three  persons,  viz., Chandulal Ratanchand Shah, Himatlal F. Parikh, and  Himatlal Harilal   Shah.   It  is  pointed  out  that   shares   were distributed  to  these  three persons also  along  with  the distribution  of shares to the various conspirators.  It  is suggested that if they were examined as witnesses they would have  been  able  to show the  circumstances  in  which  the distribution of the shares had been made and this would have enabled the accused to show that such distribution was inno- cent   and  not  by  way  of  dishonest  gain.    The   same considerations  as with reference to the non-examination  of the handwriting expert apply also to the non-examination  of these  three  persons.  It has also been pointed out  to  us

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that  these transfers of shares to these three persons  took place  before the amendment of s. 6A of the  Insurance  Act, 1938  (IV  of  1938),  and  that  consequently  their   non- examination   would  not  have  resulted  in   any   serious prejudice.   However that may be, we are unable to find  any adequate  reason  to  think that the trial  is  in  any  way vitiated by the non-examination of these witnesses or of the handwriting expert.      The  next  argument  advanced  by  Mr.  Chari  for  the appellants  is that the prosecution was enabled to  ask  the jury   to  convict  the  accused  on  a   consideration   of prosecution  evidence tending to prove alternative  sets  of facts  in relation to one of the important questions in  the case and that this is not permissible in law.  This argument has  a  bearing  both on the general case  against  all  the accused  and also on the case against  appellant  Caveeshar. It has reference to the following portion of the prosecution case.  It is to be recalled that the original loan of Rs. 25 lakhs and odd from the funds of the Jupiter to Caveeshar  on the  alleged  security of his supposed properties  in  Delhi was,  according  to  the  prosecution  case,  sought  to  be supported by the conspirators by certain appearances,  viz., an application for such a loan, a valuation statement of the alleged  properties and other necessary papers and  also  by certain resolutions Nos. 5, 6, 7 and 8 of the 27 210 directorate of the Jupiter at its meeting dated January  11, 1949,  sanctioning  such loan on the basis of  such  papers. The  prosecution  case appears to be that as  a  fact  these papers  were non-existent and the resolutions Nos. 5,  6,  7 and  8 were not in fact passed, on the date when,  according to  the present appearances in the minutes book, the  matter was taken up for consideration by the Board of directors  at its meeting of January 11, 1949.  For this purpose they rely amongst other things on the evidence of one Subramaniam, the secretary  of the directorate, whose duty generally  was  to attend all meetings and to keep a note of the minutes of the business  done  at each meeting.  The  prosecution  evidence appears also to be that the necessary papers and resolutions were  brought into existence on a later date and  ante-dated and  interpolated.  With reference to this case of the  pro- secution the learned trial Judge in para. 545 of his  charge to the jury stated as follows:      " The question whether the resolutions Nos. 5, 6, 7 and 8  were passed or not (on January 11, 1949) is an  important question  to  consider  so far  as  the  criminal  intention alleged  on the part of the accused Nos. 1, 2, 3 and  4  are concerned.   In  this  case what you  have  to  consider  is whether  you  are  prepared  to  believe  the  evidence   of Subramaniam  or not that no such resolutions were passed  at the  said meeting.  If you disbelieve his evidence  on  this point, then consider whether apart from his evidence,  there is  sufficient  evidence  on  record  to  lead  you  to  the conclusion  that  no such resolutions were passed.   If  you come  to  the conclusion that there is no  other  convincing evidence to show that the resolutions were not passed,  then you will come to the conclusion that they were passed in the said  meeting  as it was in the minutes.  In that  case  the resolutions having been passed, you have to consider whether the accused bona fide believed that they were authorized  to deal  with  the funds of the company and pay the  amount  of Tropical Insurance Co. on behalf of Caveeshar."      We do not see anything in this portion of the charge to the jury to justify the contention that the prosecution

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211 was permitted to rely on alternative sets of facts.  It  was certainly  open  to the prosecution to rely in a  matter  of this  kind,  both on direct evidence and  on  circumstantial evidence and to maintain that even if the direct evidence of Subramaniam  is not acceptable, the circumstantial  evidence is  enough for the proof of its version.   The  alternatives which  the learned trial Judge in his charge to the jury  as extracted  above  referred to were, in the  first  instance, alternatives which arose on the reliance of the  prosecution both  on the direct and on the circumstantial evidence,  and then  the  alternatives  which arose  for  consideration  in favour of the accused if both the direct and  circumstantial evidence   of  the  prosecution  in  this  behalf  are   not acceptable.  The alternatives presented for the  prosecution are  not in any sense the presentation of  any  inconsistent cases.   Doubtless tile prosecution cannot be  permitted  to lead evidence relating to inconsistent cases.  But so far as we  have  been able to apprehend that is not what  has  been done  in  this case.  We are, therefore, unable to  see  any substance  in  this contention.  It may be noticed  in  this context  that  none  of the documents  connected  with  this Caveeshar  transaction are now available.  Indeed  that  was the position also even by the time when the-auditors  wanted to  see those documents in the year 1950 the explanation  of the  directors  at the time being that since  that  loan  to Caveeshar was discharged by him by complete payment all  the relevant documents had been returned to him.  Of course, the case of Caveeshar himself is that he was not a party to  the alleged loan and that he was not aware of any such documents and that the manipulations, if any, were behind his back.     Mr. Chari next complains about what he says is a serious mis-direction  to  the jury inasmuch as  the  learned  Judge asked  the  jury  to ignore the fact that by  the  time  the complaint  was filed in 1951, the money allegedly taken  out of the Jupiter by means of the two impugned transactions  of January  20,  1949, had been put back in cash and  that  the auditors  themselves were ultimately satisfied about it  and that the shareholders at their general meeting in 1950  also accepted 212 Lala Shankarlal’s explanation in respect thereof.  But we do not  think  that,  in view of the  evidence  given  for  the prosecution  in the case to the effect that  this  situation was  hurriedly brought about in the month of October,  1950, by  utilizing  the  securities of  the  Jupiter  itself  for purchasing the controlling block of shares of the Empire  of India  and by getting money out of the Empire of  India,  it would  have been fair to the prosecution to direct the  jury to  take  the  apparent return back of  the  moneys  of  the Jupiter shown as given on the various investments, as a true indication  of  the  alleged  misappropriation  having  been proved  to  be  merely an  unwarranted  suspicion.   In  the circumstances, the learned Judge appears to have been  right in  directing  the jury to ignore that portion of  the  case either for or against the accused.     The  next argument which requires notice is  about  what are   said  to  be  certain  irrational  features   of   the prosecution  case.   It would appear that in  the  arguments addressed  by the defence counsel to the jury in  the  trial court  a  number of circumstances relating  to  the  various alleged  manipulations have been pointed out which,  on  the assumption  that the accused were parties to the  conspiracy as  charged,  could  only  be  characterised  as  irrational conduct   of  the  various  accused  concerned   and   which

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circumstances,  it was urged, must therefore be taken to  be prima  facie  in their favour as supporting  their  defence, viz.,  that they had no knowledge of the criminality of  the transactions  which  might have actuated the  mind  of  Lala Shankarlal,  but  that so far as they  were  concerned  they acted in perfect good faith.  The complaint of Mr. Chari for the  defence,  both in the High Court and here is  that  the learned  trial Judge has not adequately dealt with  them  in his  charge  to the jury and that the appellants  have  been prejudiced thereby.  The learned trial Judge has dealt  with this  aspect  of the case in para 556 of his charge  to  the jury and the learned Judges of the High Court have  somewhat more  elaborately dealt with this at pp. 159 to 162  of  the typed paper-book containing the judgment of the High  Court. Mr. Khandalawala appearing for the prosecution points out to us that these 213 alleged  irrational  features have been dealt  with  by  the learned trial Judge in his charge to the jury then and there with  reference to each particular item of evidence when  it had  to  be  referred  to in  the  context  of  the  general narrative  or  the  narrative  as  against  each  individual accused.   All  that can be said is that the  learned  trial Judge has not once again repeated the same when drawing  the attention  of  the  jury to this specific  argument  of  Mr. Chari, who appears to have stressed them in a general  sweep by  clubbing  these  together  as  being  thirty  irrational features.   We  agree with the High Court that there  is  no reason  to think that the somewhat summary way in which  the learned  trial  Judge  dealt with this in para  556  of  his charge  to  the  jury  can be  taken  exception  to  in  the circumstances  of  the  case  as  being  any  material  non- direction.       A special argument has been advanced on behalf of  the appellant  Caveeshar  that  he was not  a  director  of  the Jupiter  and was not present at any of the meetings  of  the conspirators  as  directors  of the  Jupiter  and  that  the evidence against him was more or less on the same footing as that against Jhaveri, accused 3, who has been acquitted,  at least  in so far as it relates to the period  of  conspiracy and  that his case has been affected by the prejudice  which may  have  been engendered in the minds of the jury  by  the evidence relating to the acts of Lala Shankarlal beyond  the period of conspiracy.  On behalf of the prosecution we  have been  shown by Mr. Khandalawala enough  admissible  evidence against  him  which,  if the jury choose  to  accept,  could reasonably be the basis for conviction. Having  given  our best consideration to all  the  arguments addressed on both the sides, we have come to the  conclusion that  there  is  no sufficient reason  for  interference  in special leave with the convictions, based on the  acceptance by  the  trial Judge of the verdict of the  jury.   All  the appeals are accordingly dismissed. Appeals dismissed. 214