- (1.) This judgment shall govern the disposal of Criminal Appeals Nos. 99-104 of 1964. These appeals arise from a number of criminal prosecutions started against four persons for cheating. In the original Court there were as many as nine cases filed against them which were tried simultaneously, three of the same kind being tried together, as required by the Code of Criminal Procedure. As a result of the trial the first and the fourth accused were acquitted. Accused Nos. 2 and 3 were convicted. They were sentenced in the aggregate to rigorous imprisonment for two years and were imposed fines totalling Rs. 15,000 each. The convicted accused appealed to the High Court. The State Government also appealed against the acquittal of accused No. 4. The High Court maintained the conviction and sentences of accused Nos. 2 and 3 and further set aside the acquittal of accused No. 4 who on conviction was sentenced to rigorous imprisonment for two years but no fine was imposed on him. The convicted accused have now filed these appeals by special leave.
(2.) The case started on the complaint of one Bansilal who was a partner in a firm Jawarmal Ramkaran of Kalbadevi, Bombay. It had five or six partners. This firm deals as Bankers and Commission Agents. The accused are connected with another firm the name of which is Ramnarayan Rajmal Rathi. The first accused (Laxminarayan Ramchandra) and the second accused (Murlidhar Daga) were partners of this firm and were doing business at Jhaveri Bazar, Bombay. The third accused Motilal, who is the brother of accused No. 2 was working as a Munim in the firm. Accused No. 4 Madan Lal, is a nephew of accused No. 2 and 3 and was working as a clerk. The third firm which is involved in the narration of facts was called Satyanarayan Shymsunder at Tejpur, Assam. Accused No. 4 is a partner of that firm. In the High Court the first firm is shortly described as J. R. firm, the second as R. R. firm and the third as S. S. Firm. We shall adhere to these abbreviations in this judgment.
(3.) It is an admitted fact that the R. R. Firm had dealings with the J. R. Firm for several years and had borrowed in the past large sums of money from the J. R. Firm. In September, 1959, accused No. 3 approached Bansilal representing that the R. R. Firm had to supply cloth to certain constituents in Assam and that the R. R. Firm needed money for this purpose. Accused No. 3 offered to the J. R. Firm a commission of 2 as, on every Rs. 100 and 61/2 per cent interest. It appears that Bansilal wanted that some security should be furnished and accused No. 3 promised that the railway receipts, invoices and the hundies drawn up on the S. S. Firm would be handed over as security. For a time things went on quite regularly and honestly. As many as 110 hundies and railway receipts were tendered and the liability was also met. This involved a sum of no less than Rs. 1,20,000. Later, however, the R. R. Firm began to inflate its invoices and to draw hundies for exaggerated amounts. When these hundies and the invoices reached the S. S. Firm they were returned. The hundies and the railway receipts were then returned and the Bank got back the goods from the railway authorities. The parcels were opened and surveyed. It was found that the goods represented by the invoices were not in the parcels and that cloth very much less in value was actually despatched. In other words, it was apparent that the R. R. Firm was inflating the invoices and drawing up exaggerated hundies although cloth which was being sent was very much less in value. In other words, the drawing of the money on the security of the invoices and hundies from the J. R. Firm was an act of cheating pure and simple because if the J. R. Firm knew that the invoices and hundies were worthless or at any rate not of sufficient worth they would not have advanced such large sums of money to the R. R. Firm. It may be mentioned here that in this way 40 invoices and hundies were found to be inflated and they involved a sum of Rs. 1,10,000 or thereabouts.;