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Case Number

Rev. No. 585 of 1924

Advocates

Babu Probodh Chandra Chatterjee for the Petitioner.
Babu Bankim Chandra Mukherjee for the Opposite Party.

Judges

Suhrawardy
Mukerji, JJ.

Acts

provisions contained in Section 177 the last part of Section 181, Sub-section (2)
SECTION 179 CRIMINAL PROCEDURE CODE
provisions contained in Section 181, Sub-section (2), Criminal Procedure Code.
provisions of Section 181 Sub-section (2), Criminal Procedure Code.
provisions of Section 405 of the Indian Penal Code
SECTION 177 CRIMINAL PROCEDURE CODE
Section 405, Indian Penal Code,
Section 181, Sub-section (2)

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Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

The opinion concerns the question whether the Court at Burdwan had jurisdiction to try an accused charged with criminal breach of trust. Procedurally, the trial Court (Magistrate) held it had no jurisdiction and discharged the accused, reasoning that the offence was triable in Calcutta, relying on the decision in Simhachalam v. Emperor. On application against that order, the Sessions Judge set aside the discharge and held that the Court at Burdwan did have jurisdiction, referring to the decision in Abdul Latiff Yusuff v. Abu Mahamad Kassim. The prosecution's factual account (as summarised by the Court) is that the complainant entrusted articles to the accused in Calcutta with directions to sell them and remit proceeds to Madhupur and to adjust accounts at Burdwan on return. The accused sold the articles in Calcutta, remitted part of the proceeds to Madhupur, and later presented a false account and failed to pay the balance; the accused is charged with criminal breach of trust in respect of the balance.

Legal Issues Presented

Whether Section 179 of the Criminal Procedure Code (CrPC) applies to offences of criminal misappropriation or criminal breach of trust, or whether jurisdiction is governed by Section 177 and the special provision in Section 181(2) of the CrPC.
Where an offence of criminal breach of trust is to be considered to have been committed for venue purposes — in particular, whether an offence is triable at the place where the accused received or retained the property, where the offence actually occurred, or at a place where the accused was under a contract to render accounts and failed to do so.
Whether, on the facts presented (receipt and sale in Calcutta; remit to Madhupur; accounting to be done at Burdwan; false account and failure to pay balance), the Magistrate at Burdwan had jurisdiction to inquire into and try the offence.

Arguments of the Parties

Trial Court's Position (as recorded)

The Magistrate took the view, relying on Simhachalam v. Emperor, that the Court at Burdwan had no jurisdiction and that the offence was triable in Calcutta; accordingly, the accused was discharged.

Sessions Judge's Position (as recorded)

The Sessions Judge, on application against the discharge, held that the Court at Burdwan did have jurisdiction, relying on the decision in Abdul Latiff Yusuff v. Abu Mahamad Kassim, and set aside the Magistrate's order of discharge directing further inquiry.

Contentions of Counsel (as recorded)

Mr. Chatterjee: Argued that overt acts (such as retention, failure to account, rendering a false account) are evidence from which dishonesty may be inferred but are not essential ingredients of the offence; the offence itself may have been complete earlier. The Court records that this contention has force but interprets Section 405 IPC to permit treating a failure to render accounts at a particular place (by reason of criminal act) as dishonest use at that place as well.
Mr. Chaudhuri: Relied on English authorities and on Abdul Latiff Yusuff v. Abu Mahamad Kassim to support the view that venue can be in the place where non-accounting occurred or where the accused was to render accounts.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Simhachalam v. Emperor (1916) 44 Cal 912	Held that jurisdiction for criminal misappropriation or breach of trust is governed by Section 181(2) CrPC and not by Section 179; loss is not an ingredient of the offence and so is not a "consequence" within Section 179.	The trial Court relied on this decision to discharge the accused for lack of jurisdiction. The present Court expressly agrees with its principle that Section 179 has no application to criminal breach of trust and endorses Simhachalam's rule that Section 181(2) (and Section 177) govern jurisdiction.
Abdul Latiff Yusuff v. Abu Mahamad Kassim A.I.R. 1922 Cal. 46	Held that where an accused was employed as agent abroad but was to render accounts at Calcutta, the Calcutta Court had jurisdiction to try criminal breach of trust in respect of monies received abroad; this decision purported to distinguish Simhachalam.	The Sessions Judge relied on this decision to hold jurisdiction at Burdwan. The present Court accepts the principle that where an accused is under a liability to render accounts at a particular place and fails to do so by reason of criminal breach of trust, the offence may be tried at that place under Section 181(2), but the Court expressed disagreement with some of the reasoning given in Abdul Latiff.
Colville v. Kristo Kishore (1899) 26 Cal. 746	Applied to cases of cheating; the decision was treated in Abdul Latiff as authority for venue in the place of accounting.	The present Court notes that Colville relates to an offence of cheating and, as pointed out in Simhachalam, has no application to criminal breach of trust; the Court does not accept reading Colville as laying down general principles applicable to breach of trust.
Louis Edouard Lanier v. The King [1913] L.R.A.C. 221	Illustrates the distinction between innocent mixture of funds and mixture amounting to criminal conduct; cautions judicial care in categorising mixtures as criminal.	The Court quotes this authority to underline that mixing funds may be natural or convenient in some cases and criminal in others, and to stress caution in inferring criminality from mere mixture or retention.
R. v. Milner [1846] 2 Car. and Kir. 310	Common law rule: for crimes by omission, the place where the offence is committed is where the act which is omitted ought to have been done.	The Court cites this to support the proposition that where non-accounting is the only evidence of embezzlement, venue may be laid at the place where the non-accounting occurred (i.e., where accounts ought to have been rendered).
R. v. Davidson Gordon [1865] 7 Cox. C.C. 158	Where there is distinct evidence of misappropriation elsewhere, the offence may be triable in either place.	The Court cites this authority to note that if there is clear evidence of misappropriation in a particular place, that may create concurrent jurisdiction in either place where relevant acts occurred.

Court's Reasoning and Analysis

The Court proceeded by analysing statutory provisions and relevant authorities to determine the correct rule for venue in criminal breach of trust cases.

Statutory framework:
- Section 177 CrPC sets the general rule that offences are ordinarily to be enquired into and tried within the local limits where they were committed.
- Section 179 CrPC provides jurisdiction where an offence is committed by reason of something done and a consequence ensued; the Court held Section 179 is not applicable to criminal breach of trust.
- Section 181(2) CrPC specifically provides that criminal misappropriation or breach of trust may be tried where any part of the property forming the subject was received or retained by the accused or where the offence was committed; the Court treated these three considerations as determinative for venue in breach of trust cases.
Nature of the offence (Section 405 IPC):
- The offence is complete on dishonest misappropriation, conversion, dishonest use or disposal in violation of directions or legal contract, or when the accused wilfully suffers another to do so. Loss as such is not an ingredient.
- The place of commission is where the misappropriation, conversion, user or disposal occurred or where the accused wilfully suffered another to so act.
On the issue of overt acts and venue:
- The Court recognised that in many breach of trust cases the dishonest intention is often revealed only when the accused fails to discharge the trust (e.g., fails to account). Overt acts (retention, failure to account, false account, failure to pay) are important evidence of dishonesty.
- The Court accepted the contention (advanced by counsel) that overt acts may be evidence that the offence was already committed but concluded, reading Section 405 IPC, that where there is a contractual obligation to render accounts at a particular place and the accused fails to do so as a result of criminal act, the offence can legitimately be regarded as committed at that place as well. This allows the court at that place to try the offence under Section 181(2).
Application to authorities:
- The Court agreed with Simhachalam's conclusion that Section 179 is inapplicable to breach of trust and that the special rule in Section 181(2) (together with Section 177) governs jurisdiction.
- The Court accepted the principle in Abdul Latiff that a place where the accused was to render accounts may be a proper venue; however, the Court disapproved of the reasoning in Abdul Latiff insofar as that reasoning attempted to import principles from a cheating case (Colville) into breach of trust jurisprudence.
Applying the principles to the facts:
- Given that the articles were entrusted to the accused in Calcutta, sold there, and that the accused was under an obligation to remit proceeds and to account at Burdwan, and on the prosecution's case the accused later submitted a false account and failed to pay the balance, the Court concluded that the Magistrate was wrong to hold lack of jurisdiction.
- The Court found that a Court at Burdwan could enquire into and try the offence under Section 181(2) because the accused was under a liability to render accounts at Burdwan and failed to do so by reason of the alleged criminal breach of trust.

Holding and Implications

Holding: The Court discharged the Rule (i.e., set aside the Magistrate's order of discharge) and held that the Sessions Judge was correct in directing a further inquiry into the matter. The opinion concludes: THE RULE IS ACCORDINGLY DISCHARGED.

Implications:

Direct effect on the parties: The Magistrate's order discharging the accused for want of jurisdiction was set aside; further inquiry and proceedings at Burdwan are authorised. The Sessions Judge's order directing further enquiry is affirmed as proper.
On legal principle: The Court clarified that Section 179 CrPC does not govern jurisdiction in criminal breach of trust cases; Sections 177 and the special provision in Section 181(2) CrPC determine venue — specifically where the accused received or retained any part of the property or where the offence was committed. The Court also held that where the accused was contractually obliged to render accounts at a particular place and fails to do so by reason of criminal breach of trust, the offence can be regarded as committed at that place for venue purposes.
The opinion records agreement with the principle in Abdul Latiff Yusuff but expresses inability to accept all reasoning in that decision; the Court otherwise follows Simhachalam on the inapplicability of Section 179. The decision thus clarifies venue rules for criminal breach of trust but does not purport to create a novel rule beyond applying the statutory provisions and the cited authorities.

Suhrawardy, J. delivered the opinion. A further line indicates "I agree." (indicating concurrence by another judge).

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Gunananda Dhone v. Lala Santi Prokash Nanley Opposite Party.

1. Section 177, Criminal Procedure Code lays down the general law as to the venue of an enquiry or trial: it says that every offence shall ordinarily be enquired into and tried by a Court within the local limits of whose jurisdiction it was committed. Section 179, Criminal Procedure Code lays down that 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 enquired 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. Section 181, Sub-section (2) says that the offence of criminal misappropriation or of criminal breach of trust may be enquired 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.

2. In the case of Simhachalam v. Emperor (1916) 44 Cal 912 it was held by this Court, on a careful review of the decisions of the different High Courts in this country, that the jurisdiction of a Court to try an offence of criminal misappropriation or breach of trust is governed by Section 181, Sub-section (2) and not Section 179 of the Criminal Procedure Code; and that loss, though a normal result, is not an ingredient of the offence of criminal misappropriation or breach of trust and not therefore a consequence within the meaning of Section 179. In a later case, namely that of Abdul Latijff Yusuff v. Abu Mahamad Kassim A.I.R. 1922 Cal. 46, in which a firm carrying on business in Calcutta employed the accused as agent at Singapore and prosecuted him in Calcutta for criminal breach of truss in respect of monies received at Singapore for which he was to render accounts in Calcutta, it was held by this Court that the Court in Calcutta had jurisdiction to deal with the offence. To this later decision one of the Judges in the earlier case referred to above was also a party. This later decision professed to distinguish the case of Simhachalam v. Emperor (1916) 44 Cal 912 in these words:

"But here the further case of the prosecution was that for all monies received the accused was to account at Calcutta. Thus the decision directly in point is that in Colville v. Kristo Kishore ( 1899) 26 Cal. 746. Following that decision we must hold that on the allegations made the Courts in Calcutta have jurisdiction."

3. In the present case the trial Court was of opinion that it had no jurisdiction in view of the decision in the case of Simhachalam v. Emperor (1916) 44 Cal 912, and in that view it discharged the accused on the ground that the offence was triable in Calcutta and not at Burdwan; while the learned Sessions Judge on an application made to him against the said order of discharge held that the Court at Burdwan had jurisdiction as well in view of the decision in the case of Abdul Latiff Yusuff v. Abu Muhamad Kassim A.I.R. 1922 Cal. 46.

4. Before proceeding to examine the facts of the present case it is perhaps desirable to discuss the effect of the said two decisions and to find out the principles on which to proceed in order to ascertain what; is the true rule applicable to a case of criminal breach of trust which the offence charged in the present case amounts to.

5. Criminal breach of trust is not an offence which counts as one of its factors, the loss that is the consequence of the act. It is the act itself, which, in law, amounts to the offence. 1 am therefore in entire accord with the decision in the case of Simhachalum v. Emperor (1916) 44 Cal 912 and am clearly of opinion that Section 179, Criminal Procedure Code has no application to a case of criminal breach of trust. The rule is to be found in Section 177, Criminal Procedure Code which lays down the general law and which again has been repeated in and made a part of the special provisions contained in Section 181, Sub-section (2), Criminal Procedure Code.

6. According to the last mentioned provision of the law, an offence of criminal breach of trust may be enquired into or tried in a Court within the local limits of whose jurisdiction, (a) any part of the property which forms the subject of the offence was received or (b) retained by the accused person or (c) the offence was committed. It will be seen that the last part of the sub-section only repeats Section 177 which is the general law and in view of the provisions contained in Section 177 the last part of Section 181, Sub-section (2) seems to be superfluous. The above three considerations therefore in my opinion determine the forum in respect of an offence of criminal breach of trust; and they in my opinion are the only matters to be considered in this connection.

7. It is clear therefore that if the property which forms the subject-matter of the offence or any part of it was received by the accused at a particular place the Court having local jurisdiction over the place, will have jurisdiction to deal with the offence; so also as to the place where the property or any part of it was retained by the accused. The Court within the local limits of whose jurisdiction the offence was committed will also have jurisdiction.

8. Now, where is an offence of criminal breach of trust committed? To determine this we have to examine the provisions of Section 405 of the Indian Penal Code which defines the offence. The offence is complete when there is dishonest misappropriation or conversion to one's own use or when there is dishonest use or disposal in violation of any direction of law prescribing the mode in which the trust is to be discharged or of any legal contract, express or implied, which the accused has made touching the discharge of the trust, or when the accused wilfully suffers any other person to do so. The place where the offence is committed is where there has been misappropriation or conversion or user or disposal of the property or where the accused wilfully suffers any other person to use or dispose of the property. In some cases, no doubt that, the place where these acts are committed can easily be ascertained; while in by far a large majority of cases the dishonest intention of the accused is only patent on his failure to discharge the trust in accordance with the directions of law or some legal contract, express or implied. It is true that it may sometimes happen that long before the time fixed for the accounting or payment the actual misappropriation has taken place, and the offence was complete at that point of time, but the prosecutor remains ignorant of it until such time as he find that the accused fails to pay or to account. Indeed this must be so in many cases for the offence necessarily involves secrecy and the exact manner, point of time or place, where the misappropriation, conversion, use, disposal of sufferance takes place remains more often than not, a matter within the special knowledge of the accused himself. In this class of cases, the overt act of the accused showing his dishonesty is essentially necessary to be proved to establish the offence, and till the time arrives when that act is done it cannot be said with certainty that the offence was committed. A very common case of this kind is where the accused received the money for the prosecutor and fails to account for it. Mere retention of the money would not necessarily raise a presumption of dishonest intention, but it is only a step in that direction. If there is by law or contract a special place assigned for the keeping of the money, the fact that it was not kept there may be some evidence of its dishonest use. But where no time is fixed for the payment of the money or where no place is assigned for the keeping thereof, the accused cannot be said to have committed the offence of criminal breach of trust for merely mixing the trust money with his own and using the funds promiscuously, for he is not necessarily bound to ear-mark the identical coins or notes. In the case of Louis Edouard Lanier v. The King [1913] L.R.A.C. 221 the Judicial Committee of the Privy Council very clearly pointed out the distinction in these words:

" The mixture of the funds of another with one's own funds may be in many cases natural and proper in other cases convenient but irregular, and in the third both irregular and criminal. The distinctions between these cases require to be treated with the greatest judicial care, so as, while preserving the amplest Civil responsibility, to prevent the third or criminal category from being extended to mistaken though convenient acts."

Overt acts that are necessary to be proved in such cases may be of various kinds: e.g. retention for such a length of time as would justify the inference that the accused did not intend to pay at all, failure to credit the receipts in the books, rendering a false account, failure to account, failure to pay in the money in accordance with the terms of the contract, and so on. Mr. Chatterjee has contended that these overt acts 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 ants 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 this 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. Mr. Chaudhuri has drawn our attention to the English law on the subject and has also relied upon the decision in the case of Abdul Latiff Yusuff v. Abu Mahammad Kassim A.I.R. 1922 Cal. 46 referred to above. The common law rule is that the proper venue for the trial of a crime is the area of jurisdiction in which the place where a crime was committed. If the crime is an act of omission the place is where the crime is committed is the place where the act which is omitted ought to have been done: R. v. Milner [1846] 2 Car. and Kir. 310. So in the case of an act of commission, such an embezzlement when there is no evidence of embezzlement except non-accounting, the venue may be laid in the place where the non-accounting occurred; but this does not apply where there is distinct evidence of misappropriation elsewhere, for then the offence is triable in either place and R. v. Davidson Gordon [1865] 7 Cox. C.C. 158 per Alderson B. at page 162. It is interesting to note that the conclusion derived from a consideration of the Indian statutes as discussed above, goes the same way. As for the decision in the case of Abdul Latijf Yusuff v. Abu Mohamad Kassim A.I.R. 1922 Cal. 46, it would be apparent from what has been stated above that I agree in the principle which that decision purports to lay down. I desire, however, to say with all deference to the learned Judges who decided that case that I am unable to agree in the reasons they have given for their decision, The decision purports to follow the case of Colville v. Kristo Kishore ( 1899) 26 Cal. 746 which, so specifically pointed out in the case of Simhachalam v. Emperor ( 1916) 44 Cal 912, has no application to a case of criminal breach of trust, as the case related to one of cheating. Mr. Chaudhuri had referred to a passage at page 747 of the report as laying down certain general principles. 1 am unable to read that passage as applying to any but an offence of cheating and to read into it a meaning that would apply to an offence of criminal breach of trust.

9. My conclusion therefore is that where the accused is under a liability to render accounts at a particular place and fails to do so by reason of having committed an offence of criminal breach of trust which is alleged against him, the Court within the local limits of whose jurisdiction that place is situate, may enquire into and try the offence under the provisions of Section 181 Sub-section (2), Criminal Procedure Code.

10. In the present case, leaving out of account the variations which appear in the petition of complaint, the examination of the complaint on oath and the evidence adduced in the case, which may, if at all, affect the merits of the case and not the question of jurisdiction, the prosecution story seems to be that the complainant entrusted the articles to the accused in Calcutta, giving him instructions to sell them if he obtained fair price for them and to remit the amount to Madhupur where the complainant had gone, and also to adjust the account at Burdwan on complainant's return to that place, that the accused sold the articles in Calcutta, remitted a part of the sale proceeds to Madhupur, and when the time came for adjusting the accounts submitted a false account instead of paying in the balance of the sale proceeds. The charge against the accused is that he committed criminal breach of trust in respect of the balance of the sale proceeds.

11. Applying the principles laid down above to the facts of the present case, I am of opinion that the learned Magistrate was wrong in holding that he had no jurisdiction and in discharging the accused on that ground, and that the order of the learned Sessions Judge setting aside the said order of discharge and directing a further enquiry into the matter is a proper one.

12. The Rule is accordingly discharged.

Suhrawardy, J.

13. I agree.

Gunananda Dhone v. Lala Santi Prokash Nanley Opposite Party.

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Trial Court's Position (as recorded)

Sessions Judge's Position (as recorded)

Contentions of Counsel (as recorded)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Gunananda Dhone v. Lala Santi Prokash Nanley Opposite Party.

Comments