GAJENDRAGADKAR - (1.) , J. : The appellant Dharamdas Hukamatrai Dorwani was charged with having committed an offence under S. 420 of the Indian Penal Code in that on or about 22/03/1953 he cheated chhotubhai Nagarji Desai by dishonestly or fraudulently inducting him to enter into and execute an agreement (Ex. F) on 22/03/1953 and to pay Rs. 2,875 and consent to appropriation towards the payment due under the said agreement earlier payments of Rs. 9,875 made by him on and between 9/03/1952 and 14/07/1952 in respect of Flat No. 15 in the Dorwani Mansion and a shop on the representation that the building, the shop and the land on which they stood were owned by him and were not subject to any mortgage. The learned trial magistrate who heard the case held that the charge had not been proved against the appellant beyond a reasonable doubt. The appellant was accordingly acquitted. The State then preferred an appeal against the said order of acquittal in the High Court at Bombay. The High Court held that the order of acquittal was wholly improper and that the charge against the appellant had been clearly proved beyond a reasonable doubt. That is why the High Court set aside the order of acquittal, convicted the appellant under S. 420 and sentenced him to suffer rigorous imprisonment for a period of six months and to pay a fine of Rs. 1,000, in default to suffer rigorous imprisonment for a further period of two months. The appellant then applied to the High Court for leave to appeal to this Court but his application was dismissed. Then he applied for and obtained special leave from this Court to file the present appeal. On his behalf Mr. Sethi has urged that the High Court was not justified in reversing the order of acquittal in exercise of its appellate powers, and on the merits he contends that the findings recorded by the High Court are wholly inconsistent with the evidence on record.
(2.) THE facts on which the prosecution case is based can be briefly stated at the outset. On 18/12/1951 an agreement of sale was made in favour of the appellant in respect of a piece of land at Tulsi Pipe Road. In pursuance of this agreement the plot was purchased by the appellant on 19/03/1952 for Rs. 4,03,245. THE appellant had inserted an advertisement in a Bombay newspaper in the third week of February 1952 offering certain flats for sale; and the complainant happened to read this advertisement. So the complainant wrote to the appellant and then met him in the third week of March 1952 along with his father-in-law Mr. T. B. Desai. THEy were introduced to the appellant by an advocate named Mr. Madnani. THE appellant told the complainant and Mr. Desai that he had bought plots of land and was constructing flats and shops which he intended to sell on ownership basis. He also represented that he would be able to give possession within four months. On 9/03/1952 the complainant and Mr. Desai again went and talked to the appellant, and, after some discussion, the complainant selected Flat No. 15 on the ground floor of the Dorwani Mansion. Its price was fixed at Rs. 12,750. THE complainant also selected a shop, No. 9, on the ground floor for his dispensary in the adjoining building, and its price was fixed at Rs. 7,000. Upon an enquiry made by the complainant the appellant informed him that the property had not been mortgaged or transferred. THEreupon the complainant signed two agreements Exs. S-1 and S-2. In pursuance of these agreements amounts were paid by Mr. Desai on behalf of the complainant to the appellant from time to time by cheques, the total amount thus paid was Rs. 9,875. On 22/03/1953, the complaint and Mr. Desai again contacted the appellant and complained that since the work of constructing the flat which had to be given to the complainant had not even commenced they wanted the agreement to be cancelled. It appeared that certain alterations which the complainant wanted to be made when he selected Flat No. 15 had not been effected. Then by consent of parties the complainant agreed to take flat No. 13 and asked that the contract for the shop should be cancelled. The appellant insisted that this could be done provided the full amount due for the flat was paid. Thereupon Mr., Desai, for the complainant, issued a cheque for Rs. 2,875 in favour of the appellant. Thus the whole amount due for Flat No. 13 was paid and a fresh agreement was executed. (Ex. F). In June 1953 the appellant gave possession of Flat No. 13 to the complainant, whereupon a cheque for Rs. 400 was drawn by Mr. Desai in favour of the appellant by way of deposit for the payment of taxes and electric charges. He also paid monthly ground-rent of Rs. 14 for the months of June, July and August 1953.
(3.) IT appears that the complainant came to know in about October 1953 that the appellant had mortgaged the property to the vendors on 19/03/1952. The complainant then contacted the appellant and complained but he was assured that the mortgage would be paid and the complainant's title would be cleared up. Then the complainant wrote to the Police Commissioner complaining that the appellant had committed an offence of cheating. On this complaint investigation commenced and ultimately the appellant was charged under S. 420 of the Code. The appellant denied the charge. He admitted that the property had been mortgaged as alleged by the complainant but he urged that the complainant and all other allottees knew about the mortgage at the time of their respective transactions; and so, according to him, since the complainant entered into the transaction with full knowledge of this mortgage there was no question of cheating him. In support of his case the complainant examined himself and his father-in-law Mr. Desai. For the defence Amarlal and Asrani gave evidence. The two lawyers Mulchandanis, father and son, also were examined by the defence. The learned magistrate took the view that the complainant's version was not established beyond a reasonable doubt. He thought that if an enquiry had been made as alleged by the complainant the representation made by the appellant would have been mentioned in the documents which were formally drawn. He also felt impressed by the fact that though the complainant knew about the mortgage in October 1953 he did not give any notice to the appellant alleging misrepresentation by him nor did he complain to the police immediately thereafter. The magistrate observed that Mr. Desai occupied a responsible judicial position and as such his evidence was entitled to weight; but he was impressed by the argument that if Mr. Desai had really made enquiries as stated by him he would have insisted upon including an appropriate recital in the documents that the property was free from any encumbrance. On the whole he was not satisfied that the charge had been proved beyond a reasonable doubt.;