Broomfield, J.:—
The question of jurisdiction which is the only issue in this application for revision is covered by the decision of a Division Bench of this Court in Emperor v. Ramratan Chunilal. It appears to us to be very doubtful whether that case can be satisfactorily distinguished from the present case on the facts. But even if it can be so distinguished, the fact remains that an important question of principle is involved as to which it is obyiously desirable that the High Courts should if possible speak with the same voice. Some of the High Courts have dissented from Emperor v. Ramratan Chunilal and almost all of them have expressed a view of the law which is inconsistent with the view taken in that case. Without expressing any decided opinion we consider that there are serious doubts as to whether the decision of the Division Bench of this Court in that case is correct. That being so we consider it desirable that this case should be heard by a Bench of three Judges which will not be bound, as we are bound, by that decision and which will have the power, if it thinks fit, to overrule it. Under the circumstances, it would be a waste of public time if we were to hear further arguments in the matter and we propose to ask the Chief Justice to place the case for hearing before a Bench of three Judges as soon as conveniently may be.
The case was accordingly heard by a Full Bench composed of Beaumont, C.J, and Madgavkar and Baker, JJ., on July 17 and 18, 1930.
M.P Amin, with Mirza, Mirza & Pathak, for the applicant:—The question arising here for decision is whether, under the circumstances of the case, the Bombay Court has jurisdiction to try the case, or whether it is triable by the Rangoon Court alone. The relevant provisions of the Criminal Procedure Code on the subject are sections 177 et seq. Section 177 is the general section indicating the ordinary place of inquiry or trial. Then follow a series of enabling sections which deal with particular classes of cases. Section 179 is one of these. It refers to the commission of any offence (1) “by reason of anything which has been done,” and (2) “of any consequence which has ensued.” There should not only be the doing of a thing but also the ensuing of a consequence. The consequence referred to is an integral part of the offence, that is it must go to complete the offence. The offence should be constituted by the fulfilment of the two conditions. The mere compliance of one of the conditions is not enough. Section 179 is an enabling section. It stands by itself. It is exhaustive of the class of cases where the offence consists of an act and the consequence resulting from such an act. It does not apply to cases where the offence consists of an act alone or only of consequences resulting from the act. The illustrations appended to the section show that is the scope of the section. Illustration (a) indicates injury in one jurisdiction and death” in another. Illustration (b) deals with injury and disability during a period of twenty days. Illustration (c) shows fear of injury and inducement to part with property. Illustration (d) contemplates injury in an Indian State and death in British India. The Code contains a special provision in section 181(2) for dealing with cases of criminal misappropriation and criminal breach of trust, and enacts that the offence may be tried at the place where the offence is committed or the property is received or retained, and as there is a specific provision in section 181(2) for the trial of breach of trust cases, “esort should be bad to that section alone; and it is not permissible to go to the general section 179.
In the present case the applicant was a partner in the firm and lived at Rangoon. He is alleged to have withdrawn a sum of money from the partnership assets in a bank at Rangoon, and misappropriated the amount there. The offence of criminal breach of trust was complete at Rangoon. He could, therefore, be tried only at Rangoon and nowhere else. The mere fact that he had to send weekly statements of accounts to the head office at Bombay did not give the Bombay Courts jurisdiction to try the case.
The present reference has been made owing to this Court's ruling in Emveror v. Ramratan Chunilal. The Court in that case purports to follow the early Allahabad case, and dissents from the view adopted by the High Courts at Calcutta and Madras. The Bombay view has subsequently been disapproved of by the Lahore High Court.
I submit, first, that the facts in Ramratan's case are distinguishable from those in the present case, and, secondly, that the ratio in Ramratan's case is not sound law.
On the facts it appears that in Ramratan's case, as remarked by Macleod, C.J (p. 643), “as the Complainant would be entitled to get the proceeds of the cotton sent to Bombay paid to him in Ahmednagar, if the proceeds were not paid to him, loss would be incurred at Ahmednagar” and therefore the Court at Ahmednagar would have jurisdiction. Here, however, the offence took place and was completed at Rangoon. Further, the point of jurisdiction was taken at a very late stage in Ramratan's case.
Secondly, the view of law taken in Ramratan's case cannot be supported. The word “consequence” is there taken as bearing its ordinary grammatical meaning, and not restricted in its meaning to a consequence which is a necessary ingredient of the offence. Reliance is placed on Queen-Empress v. O'Brien. In O'Brien's case it was doubtful where the accused misappropriated the money: “at one time he (the accused) said the goods were on their way to Cawnpore. Another time he said the goods were at Lucknow …. The applicant went to Cawnpore and failed to account …. a loss of the value of those goods ensued to his employers at Cawnpore” (p. 112). There is no discussion in the judgment whether the “consequence” as used in section 179 should be a necessary part of the offence. The above case was followed in Emperor v. Mahadeo,(3) where also “it is impossible to state exactly where the act of embezzlement or the various acts of embezzlement took place” (p. 398). It was further stated that (p. 399) “section 182 of the Code would apply … equally well. But even if there be any such irregularity, section 531 is clearly a bar to the interference by this Court in the matter merely on this ground.” The import of the term. “consequence” was not discussed. In a later case, Ganeshi Lal v. Nand Kishore, the same Court did interprete the term “consequence,” and took it as meaning “a consequence which forms a part and parcel of the offence. It does not mean a consequence which is not such a direct result of the act of the offender as to form no part of the offence” (p. 488). It was there held (p. 489), “the loss to the principal firm at Cawnpore is, therefore, not a consequence of the act of the accused committed at the branch of the firm within the meaning of section 179.” This case was distinguished in Langridge v. Atkins, which followed O'Brien's case and Mahadeo's case.(4) The Court again interpreted “consequence” as (p. 32) “a consequence which completes or modifies the act alleged to be an offence”; but it went on to say: “in criminal breach of trust loss is a necessary consequence and completes the offence.” I submit that this view is not sustainable. In a case of criminal breach of trust, it is not necessary that loss should happen to the master. The servant commits the offence merely by abstracting the money: his subsequent replacing the amount is no answer to the offence. This position appears clearly by reading sections 405 and 24 of the Indian Penal Code together. The offence is complete as soon as any person “being in any manner entrusted with property …. dishonestly misappropriates or converts to his own use that property”; and “dishonestly” means the doing of “anything with the intention of causing wrongful gain to one person or wrongful loss to another person.” It is not at all necessary that actual loss should result to the employer. Taking the Allahabad case, the interpretation of the term “consequence” was not touched in the two early cases: but in the two later cases the term was rightly interpreted.
The Madras High Court has uniformly maintained the view I am submitting. In Re Rambilas it remarked (p. 641): “It is only the indention which is essential. Whether wrongful gain or loss actually results is immaterial; it is a consequence, but no essential part of the offence, and a person is not accused of the offence by reason of it.” The Court commented on the earlier Allahabad cases, and followed Ganeshi Lal v. Nand Kishore. In Krisknamachari v. Shaw, Wallace & Co. the Court went a step further. Assuming one has to consider the question of loss, the first loss occurred at the place where the defalcation took place and not at the place where the money was to be remitted. The Court added (p. 578): “Our conclusion is in fact that the loss ensues immediately on the conversion, because by it the property of the principal entrusted to the agent, is diminished in the latter's hands … The date of the conversion may be uncertain and susceptible of no more definite statement than as prior to the proper date for remittance. That however cannot alter the fact that the firm's funds in Nandyal were diminished. It follows that primarily at least it suffered wrongful loss there.” The same view was taken in a later case, Kaleek, In re.
In Simhachalam v. Emperor(5) the Calcutta High Court followed Ganeshi Lal v. Nand Kishore and Re Rambilas, dissented from Queen-Empress v. O'Brien(6) and Langridge v. Atkins,(7) and remarked (p. 915): “Loss to one person, though a normal result of an act of misappropriation by another, is not an essential ingredient of the offence of criminal misappropriation. The offence is complete if the conversion is done with the intention of causing wrongful gain to the offender irrespective of any loss which may ensue to any other person. The offence does not depend on the consequence which has ensued but only on the act which has been done.”
In an early Bombay case, Sirdar v. Jeihabhai, the Bombay High Court gave a restricted meaning to the term “consequence” in section 179. The injury there, viz., the fracture of a bone, was complete in Baroda territory, and the detention of the Complainant for fifty-seven days in a hospital in British India did not give jurisdiction to the Courts in the latter territory to try the case. The above case was not referred to in Emperor v. Ramratan Chunilal nor was Krishnamachari v. Shaw, Wallace & Co. referred to. It is not correct to say that section 181(2) is controlled by section 179. Further the term “consequence” was given a wide interpretation, following Queen-Empress v. O'Brien, but there is no warrant in the Allahabad case for that view. Again, it “would be extremely difficult to prove at what place he had sold any part of the goods and misappropriated the proceeds” (p. 645). In the present case, however, everything definitely took place at Rangoon.
In Mahtab Din v. Emperor the Lahore High Court did not follow Ramratan's case, and remarked (p. 412): “Loss though a normal result in the case of criminal misappropriation or criminal breach of trust is not an ingredient of those offences and cannot be described as a consequence.” That Court had already taken the same view in an earlier case: Abdul Haq v. Emperor, but Ramratan's case was not referred to. In a still later case, Nadar v. Emperor, the same Court remarked (p. 580): “This section (section 179) applies only to cases in which the offence is completed by reason of a consequence ensuing within the local limits of another jurisdiction, or to cases in which the fact of a consequence ensuing in another jurisdiction is the cause of the offender being accused of the offence.”
The Patna High Court took the same view of section 179 in Gowkaran Lal v. Sarju Saw, and applied section 181(2) to a case of criminal misappropriation. In Ahmed Ebrahim v. Hajee A.A Ganny the Rangoon High Court reached a similar conclusion.
In 1915, the Chief Court of the Punjab had taken the same view in Emperor v. Raghbir Singh and in 1919 the Judicial Commissioner's Court of Upper Burma did the same in Abdul Salam v. Ramnewal Singh. The Nagpur Judicial Commissioner's Court did not follow Ramratan's case in Banerji v. Potnis.
In Gobindsing v. Emperor the Court of the Judicial Commissioner of Sindh did follow Ramratan's case, but mostly on the ground that the practice of the Courts in Sind was to follow the decisions of the Bombav High Court.
I submit that the word “consequence” in section 179 should have a restricted meaning, and that in a case of criminal breach of trust the consequent loss to the master is not a necessary ingredient of the offence. Ramratan's case should, therefore, be overruled.
Velinker and G.N Thakor, with Haridas & Co., for the Complainant:—The other side has read and argued on section 405 of the Indian Penal Code as if it contained its first part alone, and confined itself to dishonest conversion only. The second part of the section which says “dishonestly uses or disposes of that property, in violation of any legal contract express or implied which he has made touching the discharge of such trust”, has been left out of consideration. This is not a case of conversion only, but also of dishonest user of property in violation of an express legal contract, viz., the partnership agreement. The offence charged is not merely the conversion at Rangoon, but also the dishonest riser of the property by sending false accounts to Bombay. It is only when the accused sent false accounts to Bombay that he committed criminal breach of trust by dishonest user; till then the Complainant in Bombay knew nothing of the dishonest user, and the accused had a locus paenitentice. It was only then that the dishonest user of money took place and the offence of user was completed.
The agreement of partnership was executed in Bombay. The head office of the firm was in Bombay. Accused No. 2 was to remain in Bombay and to attend to the affairs of the Rangoon business. The accounts were to be rendered in Bombay. The ascertainment of profit and loss was to take place in Bombay under the Complainant's directions. The distribution of profit and loss was to be entered up in the Rangoon account books in accordance with the instructions of the head office, after the ascertainment of profit and loss. All disputes between partners were to be settled by arbitration in Bombay. The Complainant resided in Bombay and furnished the whole capital. The share of the Complainant in the profit and loss was payable to him in Bombay; and last but not the least, false accounts were sent to the Complainant in Bombay.
In construing section 179 of the Criminal Procedure Code, a fundamental and well-known rule to be borne in mind is that when the terms of a statute are clear and unambiguous, their plain, natural and grammatical meaning should be given to them. Hence the word “consequence” should be interpreted just as it stands in the section. To adopt the construction urged by other side would mean the reading of the words “which is a necessary part of the offence” after the word “consequence” in the section. To do so would be to contravene this rule. The illustrations to a section cannot control the plain meaning of the section See Koylash Chunder Ghose v. Sonatun Chung Barooie and Satya Priya Ghoshal v. Gobinda Mohun Roy Chotvdhury.
As regards the illustrations to section 179, it will be observed that the first act is one offence, and it is only when it is combined with the consequence that it becomes a different offence. These illustrations are not exhaustive illustrations of the application of the section, but refer only to one aspect of it. The fallacy in the argument founded on these illustrations is that they have been treated as though they illustrate exhaustively the entire effect of the plain terms of that section.
The controlling section of the group of sections dealing with jurisdiction, is section 177 of the Criminal Procedure Code. See Emperor v. Sana Mathur (Accused No. 2). The venue of trial indicated there is the usual and ordinary venue. Then follows a series of enabling sections. And one enabling section [section 181(2)] cannot control another enabling section (section 179). In some of the cases cited by the other side it has been said that section 181(2) alone governs, the question of venue in a charge of criminal breach of trust. This argument overlooks the clear language of that sub-section which states that the offences of criminal breach of trust may be inquired into, etc. If we apply the plain grammatical meaning of section 179 to the facts of this case we have it that the two accused here are charged with the commission of the offence of criminal breach of trust (1) by reason of anything which has been done, i.e, the dishonest conversion of the property at Rangoon, and (2) by any consequence which has ensued, i.e, loss caused to the Complainant in Bombay. “Dishonestly” is defined by section 24 of the Indian Penal Code. The position becomes clear if we transplant the definitions of the word “dishonestly” and of the words “wrongful gain” and “wrongful loss” into section 405 of the Indian Penal Code. The definition of the terms “wrongful gain” and “wrongful loss” will be found defined in section 23. Here wrongful gain was caused to the accused at Rangoon, and wrongful lose was caused to the Complainant at Bombay at the very moment at which there was a dishonest conversion. Wrongful loss, I submit, is not therefore, merely a normal result of the dishonest conversion but a necessary consequence of it. The place where the consequence has occurred is the place where the jurisdiction lies. See Rex v. Oliphant. We have filed two Complainants. The first one is under sections 406 and 109 of the Indian Penal Code; and the second one is under sections 409 and 477a of the code. Rex v. Oliphant clearly applies to the second Complainant.
Coming to decided cases, it is impossible to reconcile the conflict of decisions of the different High Courts.
The decisions of the Bombay High Court are in my favour. In Emperor v. Jamnadas Vasanji the Court at Dhulia had jurisdiction, for the consequence of the deceit took place at Dhulia. No money would have been paid if the Dhulia man had known that the ground-nut oil was mixed with kerosene oil. The Court took a similar view of the law in Emperor v. Ramratan Chunilal, which was followed in Emperor v. Gafur Karimbax.
In Queen-Empress v. O'Brien, as well as in Emperor v. Mahadeo, the consequence actually occurred at Cawnpore and Mirzapur respectively, and the Courts at those places had jurisdiction, which result is arrived at if the word “consequence” is given its plain grammatical meaning.
As to the dishonest user in Bombay where false accounts were submitted constituting criminal breach of trust, I rely on Gunananda Dhone v. Lala Santi Prokash Nanley, which says that where the accused is under liability to render accounts at a particular place and fails to do so or renders false accounts and thereby commits the offence of criminal breach of trust which is alleged against him, the Court within the local limits of whose jurisdiction the place where false accounts are rendered is situate may inquire into and try the offence. The above case was followed in Yacoob Ahmed v. V.M Abdul Ganny. The same view is taken in Sind: Gobindram Jashanmal v. Emperor and Govindsing v. Emperor.(8)
In a case of criminal breach of trust the offence is in the majority of cases complete when there is a dishonest misappropriation in violation of a trust. In some cases, however, the dishonest intention of the accused is patent only when he fails to account or renders false accounts. The dishonest intention is manifested when he sends up false accounts, and the dishonest user is complete when the account is received, as here, in Bombay. Till the account reaches the Complainant in Bombay the dishonest user is not committed, for it is open to the accused to wire to the Complainant while the accounts are in the course of transit by post that there is some mistake in them and that they require to be corrected.
The cases against me can be distinguished. In Sirdar v. Jethabhai the offence, viz., grievous hurt by the fracture of a bone, was complete at Baroda, and there was no consequence in Bombay. In Simhachalam v. Emperor the jurisdiction of a Court to try the offence of criminal breach of trust was held to be governed by section 181(2) and not section 179 of the Criminal Procedure Code. This is erroneous, as I have already argued that one enabling section cannot control another enabling section of the code. In Krishnamachari v. Shaw, Wallace & Co. section 181(2) is treated as alternative to section 179; and the two sections are not taken as controlling each other.
I submit that wrongful loss is a necessary ingredient of the offence of criminal breach of trust, and not merely a normal result. The moment a person dishonestly converts the property of another to his own use there is a “wrongful loss” to the latter within the definition of that expression in the Indian Penal Code, and it does not matter at all in law whether the misappropriation was merely temporary and the property is afterwards restored. See explanation to section 403, Indian Penal Code. I further submit that the term “consequence” is not restricted in its meaning as the other side is contending.
In any view, the Bombay Court would still have jurisdiction to try the case, for the accused abetted in Bombay the falsification of accounts, which is an offence under section 477a of the indian penal Code.
Amin, in reply:—Under the partnership agreement in this case no part of the business was to be conducted in Bombay. The profit and loss account was to be made at Rangoon and on receipt of the statements of accounts in Bombay havalas were to be made at Rangoon. It is not correct to say that the accused had to render accounts in Rangoon. The embezzlement took place at Rangoon. The Rangoon Court alone has jurisdiction to try the case.
The case of Gunananda Dhone v. Lala Santi Prokash Nanley is distinguishable.
Beaumont, C.J:— This is an Application in Revision, which raises an important question of jurisdiction. The accused were placed on trial before the Additional Presidency Magistrate in Bombay charged with criminal breach of trust under section 406, Indian Penal Code, and falsification of accounts under section 477A. They took a preliminary objection that the Magistrate had no jurisdiction to deal with the case, since the offences took place in Rangoon. The learned Magistrate held that he had jurisdiction relying on the decision of this Court, Emperor v. Ramratan Chunilal, The accused then applied to this Court in revision, and on May 15, 1930, the case came before Mr. Justice Mirza and Mr. Justice Broomfield. They considered they were bound by the case of Emperor v. Ramratan Clmnilal, but as other High Courts had come to a conclusion different from that which this Court had taken in the case referred to, they thought it desirable to have the case argued before a Full Bench.
The Complainant alleges that the Complainant in October 1928 entered into partnership with the accused in the business of merchants and commission agents in rice carried on at Rangoon. Accused No. 1 was to manage and conduct the business at Rangoon according to the instructions that might be issued to him, and was allowed to draw monthly expenses at a certain sum. There were partnership articles between the parties, under which the Head Office was to be at Bombay, and under clause (12) accused No. 1 was to send weekly statements on account of the partnership as well as business transacted on behalf of the partnership to the Head Office in Bombay, and by clause (16) the accounts of the partnership were to be made up once a year, the profit and loss account to be forwarded by accused No. 1 to the Head Office in Bombay immediately after the accounts were made up, and the distribution of profits and losses were to be entered up thereafter in accordance with the instructions received from the Head Office. Now, in short, the charge made against the accused is that they misappropriated the firm's moneys in Rangoon and falsified the accounts in Rangoon, and the question is whether they can be tried for those offences in Bombay. We were referred to a very large number of cases, I think to all the cases on the subject. I do not propose to go through them in detail, because no useful purpose will be served by so doing. It is quite clear that they are not reconcilable with each other. Putting it shortly, two rival views have been put forward, one of which has appealed to some of the High Courts and the other to other High Courts. The first view is that a loss to the principal is a normal, if not a necessary, consequence of criminal breach of trust, and that the accused can therefore be tried either where the offence was committed or where the loss was incurred, and for that reliance is placed on section, 179 of the Criminal Procedure Code. The alternative view is that loss is not a necessary ingredient of the charge of criminal breach of trust, and that section 179 of the Code has no application, the case falling only within section 181, sub-section (2). Putting it quite shortly, I think in three cases the High Court of Allahabad has taken the first of those two views, and that is the view which was taken in Emperor v. Ramratan Chunilal. The second view has been taken by the High Courts of Madras, Calcutta, Lahore, Patna and Rangoon.
In that state of the authorities one has to look at the sections of the Code in order to form an opinion as to the right construction. The first provision which it is necessary to look at, I think, is section 405 of the Indian Penal Code, which defines criminal breach of trust. That section provides,
“Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescrihing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits ‘criminal beach of trust’.”
Now it seems to me clear from that definition of “criminal breach of trust” that loss to the principal or anybody else is not a necessary ingredient. Indeed, I can conceive of cases in which no loss would in fact be incurred. Suppose that a principal in Bombay entrusts an agent in Rangoon with the collection of moneys with directions, to place the moneys in the account of the agent, but not to draw on that account except for the purpose of paying over the balance to the principal on the first of each month, then in such a case if the agent improperly draws moneys out of the account and places them in the name of a third party at another bank, with the dishonest intention of robbing his principal, and before the month expires the act is discovered and the agent then restores the money and the whole balance is paid over to the principal on the 1st day of the next month, I am unable to see that the principal has suffered any loss at all, although, I think it clear that the agent has committed criminal breach of trust. However, no doubt loss to the principal is the normal consequence of a criminal breach of trust, though as I have said the loss is not under the definition in section 405 an essential part of the charge.
Now one has to look next at the sections of the Code of Criminal Procedure dealing with the venue of trials Section 177 provides that, “every offence shall ordinarily be inquired into and tried by a Court within the local limits of whose jurisdiction it was committed.” That is a provision of general application, and is based on the view of English law that all crime is local, and that jurisdiction to deal with it depends on the place where the crime is committed and not on the nationality of the criminal. Then the next material section is section 179, which is the section which we have to construe. That provides:
“When a person is accused of the commission of any offence by reason of anything which has been done, and of any consequence which has ensued, such offence may be inquired into or tried by a Court within the local limits of whose jurisdiction any such thing has been done, or any such consequence has ensued.”
Now I must confess that but for the fact that many eminent Judges have taken a different view, I should have thought that the language of that section was perfectly plain. What it provides is, that when a person is accused of the commission of, any offence by reason of two things, by reason first of anything which has been done, and, secondly, of any consequence which has ensued, then jurisdiction is conferred on the Court where the act has been done or the consequence has ensued. But the offence must be charged by reason of those two things, the act done and the consequence which ensued. If that is so, the consequence is necessarily part of the offence. It does not matter whether you say, as some of the Courts have said, that the consequence must be an integral part of the offence or whether you say, as others of the Courts have said, that it is a necessary ingredient of the offence, the point is that the consequence must be part of the offence charged. The section does not refer to an offence charged by reason of an act done, from which act any consequence has ensued. When you look at the illustrations, they show clearly the meaning of the section. Take the first illustration. A is wounded within the local limits of the jurisdiction of Court X, and dies within the local limits of the jurisdiction of Court Z. The offence of culpable homicide of A may be inquired into or tried by X or Z. In that case the offence charged is culpable homicide. The mere act done of wounding is not by itself enough to constitute a charge of culpable homicide. It may no doubt be ground for another charge, but that is immaterial. It does not constitute a charge of culpable homicide, unless it is followed by the consequence of death. So that taking section 179 alone, and reading it without the help of any authority, I should have thought it was plain that the consequence referred to is a consequence which forms part of the offence, and a consequence which does not form part of the offence does not attract jurisdiction under section 179. Then when you come to look at the other material section, viz. section 181, sub-section (2), that provides:—
“The offence of criminal misappropriation or of criminal breach of trust may be inquired into or tried by a Court within the local limits of whose jurisdiction any part of the property which is the subject of the offence was received or retained by the accused person, or the offence was committed.”
So that you get there a section dealing with the particular offence of criminal misappropriation or criminal breach of trust, and yon are given an option either to take proceedings in the place where the property was misappropriated or in the place where the property was received. When you find a section dealing with a particular form of crime, I think it would require strong words to show that any section of more general application was intended to deal also with that particular crime.
Before I leave this part of the case, I should like, out of deference to the learned Judges who decided the case of Emperor v. Ramratan Chunilal, to refer a little more in detail to that case. The judgment was delivered by Sir Norman Macleod, C.J Apparently the case was not argued for the respondents, although undoubtedly cases on both sides were referred to. The learned Chief Justice sets out section 179, and he states the facts and he says at page 643:—
“Now it seems clear that one of the consequences of criminal breach of trust, if committed by an agent, would be loss to the person to whom the property entrusted to the agent belonged, and therefore, as the Complainant would be entitled to get the proceeds of the cotton sent to Bombay paid to him in Ahmednagar, if the proceeds were not paid to him, loss would be incurred at Ahmednagar and therefore the Court at Ahmednagar would have jurisdiction.”
I have already pointed out that loss seems to me to be not a necessary ingredient, and not even a necessary consequence, of breach of trust. Then the learned Chief Justice refers to conflicting cases which had dealt with this point, and to the case of Queen-Empress v. O'Brien, which is one of the decisions of the Allahabad High Court, in which it was held that section 179 did apply, and then he says at the bottom of page 644:—
“In my opinion, the argument of the learned Chief Justice should be preferred to the arguments of the learned Judges in Simhachalam v. Emperor and Re Rambilas. The decision in Queen-Empress v. O'Brien was followed by the Allahabad High Court in Langridge v. Atkins. The whole question seems to me to depend on whether we must give to the word ‘consequence’ in section 179 its ordinary grammatical meaning or whether we are bound to restrict it to meaning a consequence which is a necessary ingredient of the offence. I see no justification for holding that the ordinary meaning should not be given to the word ‘consequence’ in section 179 and the argument in Queen-Empress v. O'Brien seems clearly pertinent in reference to this point.”
With great deference to the learned Chief Justice, it seems to me that the question is not what is the natural and grammatical meaning of the word. “consequence” per se, the question is what is the natural and grammatical meaning of the word “consequence” in the context in which it appears in section 179, and as I have already pointed out, in my view, having regard to the context there, the consequence is to be part of the offence. Then the learned Chief Justice goes on (p. 645):—
“For instance, an agent might be given goods by his employer to sell at various places, and if he performed the trust imposed upon him he would be bound to pay tho proceeds of the goods which had been sold to his employer. If he did not, and if his employer charged him with criminal misappropriation, it would be exceedingly difficult to prove at what place he had sold any part of tho goods and misappropriated the proceeds. It seems to me that section 179 was intended to apply to such cases so as to enable an employer to file his Complainant in the Court within whose jurisdiction the loss was alleged to have been incurred.”
Well, that is a difficulty which impressed itself upon several learned Judges who held that section 179 applied to cases of criminal breach of trust, but to my mind the answer to it is provided by section 181, sub-section (2). It may be difficult to prove the place at which the misappropriation took place, because misappropriation depends upon the intention of the accused, and it may be difficult to prove at what moment of time and at what place he assumed a dishonest intention, but then you are given the option by section 181 r sub-section (2), to take proceedings in the Court in which the money was received, and there can be no difficulty in proving where the money was received, or if that fact cannot be proved, then the charge must necessarily fail because you cannot convict a man of misappropriating money unless it is first shown that he received the money. Therefore it seems to me that the difficulty suggested by Sir Norman Macleod does not really arise. In my view this case of Emperor v. Ramratan Chunilal is based on a wrong view of section 179, and we ought to overrule it, and this Court should come into line with the High Courts of Calcutta and Madras, and hold that section 179 has no application to cases of criminal breach of trust.
Mr. Velinker then took a second point which is open to him in this case. He says that the accused were bound to render accounts in Bombay, to send their accounts to Bombay, and he says that the misappropriation was not complete until after those accounts were delivered in Bombay which for the first time showed the Complainant that he was being robbed, and he says that the delivery of false accounts in Bombay for the first time disclosed a dishonest intention which amounted in itself to a dishonest user of the money in Bombay, a dishonest user that is within the second part of section 405 of the Indian Penal Code. For that proposition he has referred us to a case of the Calcutta High Court, Gunananda Dhone v. Lala Santi Prokash Nanley. In that case the learned Judges held in the first instance that criminal breach of trust fell within section 181, sub-section (2), and not within section 179, and so far, of course they are in accord with the view which I have suggested is the right view, but then they go on to discuss the difficulties which may arise in proving when a dishonest intent first arose. They point out that an agent may mix trust moneys with his own money without any intention of dishonesty, and he may then some time afterwards acquire the dishonest intention of using the money of the employer as his own money. After pointing out those difficulties, they say at the bottom of the first column in page 436:—
“Mr. Chatterjee has contended that these overt acts (i.e delivery of false accounts) are but evidence of the fact that the offence of criminal breach of trust has already been committed by the accused, and from these acts his dishonesty may very well be inferred; but that these acts are not essential ingredients of the offence itself which must have been complete before the acts are done. There is, in my opinion, considerable force in the contention; but at the same time, looking to the words of section 405, Indian Penal Code, I am disposed to take the view that if there is a contract that the accused is to render accounts at a particular place and fails to do so as a result of his criminal act in respect of the money, he can, without unduly straining the language of the section, be said to dishonestly use the money, at that place as well, in violation of the express contract which he has made touching the discharge of the trust by which he came by the money, and so commits the offence of criminal breach of trust at that place also.”
With very great respect to the learned Judges who decided that case, I am quite unable to follow the line of reasoning. It seems to me to involve a confusion between the place where the offence was committed and the place where the Complainant first acquired evidence that the offence had been committed. I can see nothing in section 405 of the Indian Penal Code to justify the contention that when a man in Rangoon delivers false accounts in Bombay, he is thereby making a dishonest use in Bombay of money or property which has never left Rangoon. If the principle contended for is sound, it might have far-reaching consequences. A banker or a factor in Bombay may have in his hands moneys belonging to thousands of customers or clients, and he may deliver false accounts to these customers or clients in a hundred different towns in India, and it seems to me that if the view of the Calcutta Court is right, he could be sued for criminal breach of trust in any one of the hundred towns in which he has delivered false accounts. That would be a very serious inroad upon the general provision of section 177, which requires offences to be tried by a Court within the local limits of whose jurisdiction they were committed. I think that general provision is one which is founded on considerations of principle and expediency, and that Courts ought not to be astute in finding reasons for assuming jurisdiction to deal with crimes committed outside their jurisdiction. I am not prepared to follow the view expressed by the Calcutta High Court in the latter part of their judgment.
Then Mr. Velinker takes a third point. He says that even if he is not entitled to charge the accused in Bombay with criminal breach of trust, he can charge them with falsification of accounts. Now the accounts were really falsified by the accused in Rangoon, but Mr. Velinker says that the false accounts were sent from Rangoon to the Head Office in Bombay with the intention that they would be, and with the effect that they were, written into the accounts at the Head Office, and therefore the falsification of the accounts in Rangoon and the sending of them to Bombay with the intention that they should be used to falsify the accounts in Bombay amounts itself to a falsification of accounts in Bombay, and for that proposition he relies on the English case, Rex v. Oliphant. That was a case which turned on the construction of an English Act, and can be no authority on the construction of the Criminal Procedure Code, but apart from that I do not find in the Complainant any allegation that accounts were falsified in Rangoon for the purpose of procuring a falsification of the accounts in Bombay, i.e, that the accounts in Bombay were falsified. That being so, I think that point also is not open to the Complainant.
In my judgment, therefore, this application succeeds and we must hold that the learned Magistrate had no jurisdiction to deal with this case.
Madgavkar, J.:—The question in this application is whether section 179 applies, as held in Emperor v. Ramratan Chunilal, and whether the Bombay Courts have jurisdiction. On the first point I agree with the conclusion formulated by my Lord the Chief Justice. On the three arguments for the Complainant, in the definition of section 405 of the Indian Penal Code, whether the conversion is to his own use or contrary to any legal agreement, the element of dishonesty is equally necessary. That dishonest intent is complete when the intention of causing wrongful gain or wrongful loss occurs under section 24, and not necessarily when the wrongful loss or gain itself results. Therefore even though such a loss may be a normal and usual result, section 179 of the Code of Criminal Procedure does not, in my opinion, apply, because from the initial words it can only apply when a person is accused of the commission of any offence by reason of anything which has been done, and of any consequence which has ensued, whereas criminal misappropriation is complete with the conversion plus the dishonest intent and quite apart from any loss. Thus the loss, whether a consequence or otherwise, is not an ingredient of that offence, and therefore section 179 has no application, but rather section 177, and section 181, sub-section (2).
In regard to the cases on this point, in the three decisions of the Allahabad High Court, Queen-Empress v. O'Brien, followed in Emperor v. Mahadeo and Langridge v. Atkins, where it was held that the loss entailed by the criminal breach of trust was a consequence that completed the offence, it is to be noted that they were all three cases in which it was doubtful where the misappropriation really took place. For the reasons stated above I agree rather with the view in Ganeshi Lal v. Nand Kishore, that unless the consequence (Such as the loss is an ingredient of the offence charged, section 179 has no application. The Madras cases, Re Rambilas and Krishnamachari v. Shaw, Wallace & Co., are to the same effect. At the same time it can hardly be said that section 179 is controlled by section 181. On that point I agree with the contention for the Complainant that section 177 is the general section, and the particular sections which follow extend jurisdiction and venue, so that where section 179 has application under the initial words, section 181 does not necessarily come in the way.
Ganeshi Lal v. Nand Kishore is followed, and the other Allahabad cases, Queen-Empress v. O'Brien and Langridge v. Atkins, dissented from in Simhachalam v. Emperor The decision which appeals to me most is the judgment of Mukerji, J. in Gunananda Dhone v. Lala Santi Prokash Nanley, followed in Yacoob Ahmed v. V.M Abdul Ganny. I agree entirely with the view of the learned Judge that criminal breach of trust is not an offence which counts as one of its factors the loss, which is the usual consequence of the act, and that it is the act itself which in law amounts to the offence, apart from any such consequence; and therefore the jurisdiction to try an offence of criminal misappropriation or criminal breach of trust is governed by section 181, sub-section (2), and not by section 179. The only doubt in my mind is as regards the class of cases referred to in the concluding portion of the judgment, where by reason of the secrecy observed by the accused doubt exists as to the exact manner, point of time or place where the misappropriation and conversion, etc., takes place, all matters within the special knowledge of the accused himself, and not of the Complainant, who can only judge from any overt act of the accused showing the dishonesty, which is essentially necessary to be proved. In such cases, if and where the accused is under liability to render accounts at a particular time and fails to do so, Such failure may be the first overt dishonest act to the Complainant's knowledge and the Court within the local limits where such failure takes place may have jurisdiction. But where the offence is completed at one place, the further liability to render accounts at another place and failure in rendering such false accounts at the second place does not confer jurisdiction under section 179 upon the Magistrate at the latter place since the offence is already completed at the former place. At the same time, as is conceivable, where the offence is not completed as far as the knowledge and belief of the Complainant goes in the place where the money was first sent, but the dishonest intent which is a necessary ingredient is only completed not merely as evidence but actually as factum of dishonesty by some act such as the rendering of accounts, then I am unable to say that even under section 181, sub-section (2), the Criminal Courts in the latter ulace are excluded from jurisdiction. In my opinion the matter entirely depends upon where the act of criminal misappropriation including the dishonest intent is completed as far as the knowledge and belief of the Complainant according to the Complainant go. In such a case I agree with Mukerji J. that the Courts in the place where the act is completed may have jurisdiction even though they may be different from the place where the money has been originally sent by the Complainant.
Coming to the Bombay decisions, the decisions on cheating, such as Emperor v. Jamnadas Vasanji, have no bearing on the present question. Emperor v. Ramratan Chunilal has been followed in Emperor v. Gafur Karimbax, in which Re Ranibilas is distinguished. Without adding to the reasons of my Lord the Chief Justice, it appears to me that the question of grammatical meaning of the word “consequence” does not arise at all. By reason of the initial words and sentence of section 179, unless the offence of which the person is accused is an offence not only by reason of something which he has done, but also of some consequence which has ensued, section 179 has no application, and it is not necessary to distinguish the grammatical and the other meaning of the word “consequence”, nor to distinguish between consequence direct and indirect, immediate and remote. As I have already stated above, criminal misappropriation is not an offence in which the ingredient of loss enters. Section 179 is, therefore, excluded in my opinion, and I agree that in this view we must overrule the view and the decision in Emperor v. Gafur Daud Bohra…Accused., in so far as it is based on the former case.
Applying the law as stated above to the facts of the present case, after reading the agreement and the Complainant as it is now formulated, I am of opinion on the. Complainant itself the criminal breach of trust appears to have been completed in Rangoon. As regards the falsification of the accounts, the falsification alleged in the Complainant is the falsification of the accounts in Rangoon. There is no explicit averment of abetment or of falsification of accounts in Bombay. The case of Rex v. Oliphant was different, depending on the construction of the Falsification of Accounts Act, and it is therefore of no avail. On the Complainant as it stands and in the view of the law which I have ventured to formulate above, I agree that the Presidency Magistrate in Bombay had no jurisdiction, as he held, relying on Emperor v. Ramratan Chunilal. As we are overruling the view of the law formulated in that case, it follows necessarily that on the Complainant as at present filed, the Court of Bombay has no jurisdiction. I agree with the order proposed by my Lord the Chief Justice.
Baker, J.:— I agree with the view taken by the learned Chief Justice and the conclusion at which he and my learned brother have arrived. I will add only a very few words to what has already been said. The definition of ‘dishonestly’ in section 24 of the Indian Penal Code shows that all that is necessary is the intention to cause wrongful gain or wrongful loss. It is not necessary that such wrongful gain or wrongful loss should, as a matter of fact ensue, and therefore it is not necessary that the offence of criminal breach of trust should actually involve wrongful gain or wrongful loss, although as a matter of fact in almost every case or in the majority of cases it does so. If I may say so with respect, the variance between the views taken by different High Courts on the question of the jurisdiction in cases of criminal breach of trust appears in some cases to be due to the theory that knowledge of loss is the same as loss. Now the offence of criminal breach of trust is an offence which is complete at the moment when the agent disposes of the property in violation of his trust, and the loss occurs at that moment. The Calcutta High Court has taken the same view in one of the cases quoted, that at that moment the owner loses the money in the hands of his agent, and the question of when that loss comes to his knowledge seems to me to be perfectly immaterial for purposes of jurisdiction. So far as regards section 179 of the Criminal Procedure Code, it seems to me clear on the wording of the section as it stands that the consequence is part of the offence. In a case of the present character the consequence of the offence is loss to the owner. That loss takes place at the place where the criminal breach of trust is committed, and not at the place where knowledge of that loss comes to the owner, which may be anywhere else. I therefore agree with the view that has been taken that the Magistrate in this case had no jurisdiction.
Rule made absolute.
B.G.R
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