- (1.) At a trial held with the aid of a common jury in case No. 38 of the Vth Session 1955 before the Additional Sessions Judge, City Court Greater Bombay, the two appellants were convicted of offences under S. 409 read with S. 34 of the Indian Penal Code. The Additional Sessions Judge sentenced the first appellant to suffer rigorous imprisonment for five years and the second appellant to suffer rigorous imprisonment for four years. In appeal, the High Court of Bombay reviewed the evidence, because in the view of the Court, the verdict of the jury was vitiated on account of a misdirection on a matter of substantial importance, but held that the conviction of the two appellants for the offence under S. 409 read with S. 34 of the Indian Penal Code was, on the evidence, not liable to be set aside. The High Court accordingly confirmed the conviction of the two appellants but reduced the sentence passed upon the first appellant to rigorous imprisonment for three years and the sentence against the second appellant to rigorous imprisonment for one year. Against the order of conviction and sentence, the appellants have appealed to this court with special leave.
(2.) The facts which gave rise to the charge against the two appellants are briefly these :
(3.) On June 15, 1948, the Textile Commissioner invited tenders for dyeing Pugree Cloth. The Parikh Dyeing and Printing Mills Ltd., Bombay - hereinafter to be referred to as the company - of which the first appellant was the Managing Director and second appellant was a Director and technical expert, submitted a tender which was accepted on July 27, 1948, subject to certain general and special conditions. Pursuant to the contract, 2,51,059 3/4 yds. of cloth were supplied to the company for dyeing. The company failed to dye the cloth within the stipulated period and there was correspondence in that behalf between the company and the Textile Commissioner. Approximately 1,11,000 yards out of the cloth were dyed and delivered to the Textile Commissioner. On March 25, 1950, the company requested the Textile Commissioner to cancel the contract and by his letter dated April 3, 1950, the Textile Commissioner complied with the request, and cancelled the contract in respect of 96,128 yards. On November 20, 1950, the contract was cancelled by the Textile Commissioner in respect of the balance of cloth and the company was called upon to give an account without any further delay of the balance undelivered and it was informed that it would be held responsible for "material spoiled or not accounted for". On December 4, 1950, the company sent a statement of account setting out the quantity of cloth actually delivered for dyeing, the quantity of cloth returned duly dyed and the balance of cloth viz., 1,32,160 yards remaining to be delivered. Against the cloth admitted by the company remaining to be delivered, it claimed a wastage allowance of 2,412 yards and admitted liability to deliver 1,29,748 yards lying with it on Government account. It appears that about this time, the company was in financial difficulties. In December 1950, the first appellant left Bombay to take up the management of a factory in Ahmedabad and the affairs of the company were managed by one R. K. Patel. In June 1952, an application for adjudicating the two appellants insolvents was filed in the Insolvency Court at Ahmedabad. An insolvency notice was also taken out against the two appellants at the instance of another creditor in the High Court at Bombay. Proceedings for winding up the company were commenced in the High Court at Bombay. In the meantime, the mortgagee of the machinery and factory of the company had entered into possession under a covenant reserved in that behalf, of the premises of the factory of the company. The Textile Commissioner made attempts to recover the cloth remaining undelivered by the company. A letter was posted by the Textile Commissioner on April 16, 1952, calling upon the company to deliver 51,756 yards of cloth lying with it in bleached condition to the Chief Ordinance Officer, Ordnance Depot, Sewri, but the letter was returned undelivered. It was ultimately served with the help of the police on the second appellant in October 1952. Thereafter on November 7, 1952, another letter was addressed to the company and the same was served on the second appellant on November 25, 1952. By this letter, the company was reminded that 1,35,726 3/4 yards of cloth were lying with it on account of the Government and the same had to be accounted for, and that the instructions to deliver 51,756 yards to the Chief Ordinance Officer, Ordnance Depot, Sewri, had not been attended to. The Textile Commissioner called upon the company to send its representatives to "clarify the position" and to account for the material. After receiving this letter, the second appellant attended at the office of the Textile Commissioner and on November 27, 1952, wrote a letter stating that "the main factors involved in not delivering the goods in finished state was that the material was very old", was "dhobi-bleached in different lots", was "bleached under different conditions and therefore unsuitable for vat colour dyeing in heavy shades", that it varied in length, weight, and finish and had "lost affinity for vat colour dyeing". It was also stated that the company had in dyeing the basic material, suffered "huge losses" estimate at Rs. 40,000/-. It was then stated: "We are, therefore, however prepared to co-operate with the Government and are willing to make good the Government's bare cost. Please let us know the detail and the actual amount to be deposited so that we may do so at an early date. We shall thank you if we are given an appointment to discuss the matter as regards the final amount with respect to the balance quantity of the basic material.". On December 29, 1952, the premises of the company and the place of residence of the appellants were raided, but no trace of the cloth was found. A complain was then filed with the police charging the two appellants with criminal breach of trust in respect of 1,32,404 1/2 yards of cloth belonging to the Government.;