- (1.) In this appeal from the judgment of the Bombay High Court the question which falls to be considered is whether a partner can be convicted under S. 409, Indian Penal Code on the ground that his failure to account for monies belonging to the firm in which he was a partner amounts to criminal breach of trust.
(2.) The admitted facts are briefly these : The firm, Messrs. Bharat Silp Pramandal, which was formed for carrying on the business of building construction, originally consisted of eight partners and the appellant was its working partner. This firm was constituted in the year 1954. But on February 5, 1957 three of the partners retired and the business was continued by the remaining five partners. Disputes arose amongst them, which were referred to arbitration of Mr. J. T. Desai, a Solicitor. Apparently, in pursuance of his award a fresh agreement (Ex. N) was entered into by the partners on June 4, 1958. By virtue of this agreement the appellant's share in the firm's business was to be of 50 np. in a rupee while the other partners had different shares in the remaining 50 np. Nagindas Jivraj Mehta, who is the complainant in this case had a share to the extent of 6 nP. Under this agreement the parties decided not to undertake new work. The agreement required the appellant to complete all the accounts and prohibited from borrowing money in the name of the firm. It required him "to use his best efforts to realise all pending bills, security deposits, claims, etc. " as well as to dispose of the plant, machinery, etc. The agreement also provided that partners, other than the appellant, would procure, if the need arose, further finance to the maximum limit of Rs. 25,000 but that if a sum in excess of this amount was required, that excess was to be brought in by all the partners including the appellant "individually pro rata in proportion to their shares of profits and losses in the firm". Clause 8 of this agreement permitted the appellant to withdraw on his own account a sum of Rs. 10,000 "no sooner he is able to realise any of the pending claims of bills of the firm or security deposits". We have dealt with this agreement at some length because it will be relevant to consider these matters in the context of the argument of Mr. Rana to the effect that the appellant as working partner was entitled to utilise the realizations made by him for carrying on the work of the firm.
(3.) According to the complainant the appellant committed misappropriation to the tune of Rs. 8,905 consisting of the following six items: Rs. 2,871 3,000 1,100 1,100 750 84 8,905 The trial Court acquitted the appellant with respect to the last two items but convicted him in respect of the first four items.;