Shreekantiah Ramayya Munipalli vs The State Of Bombay

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeals Nos. 89 and 90 of 1954

Decision Date: 22 December 1954

Coram: Vivian Bose, B.K. Mukherjea, B.K. Das, Sudhi Ranjan

In the matter titled Shreekantiah Ramayya Munipalli versus The State of Bombay, the Supreme Court of India delivered its judgment on 22 December 1954. The decision was authored by Justice Vivian Bose, with Justices B K Mukherjea, B K Das and Sudhi Ranjan forming the bench. The case is reported in the 1955 All India Reporter at page 287 and in the 1955 Supreme Court Reporter (First Series) at page 1177. The judgment involved several statutory provisions, namely Section 197 of the Criminal Procedure Code (Act V of 1898), Section 5(2) of the Prevention of Corruption Act, 1947 (Act II of 1947), Section 409 of the Indian Penal Code (Act XLV of 1860), as well as Sections 34, 109 and 120-B of the Penal Code. The central factual issue concerned whether a sanction granted under Section 5(2) of the Prevention of Corruption Act could be extended to cover a prosecution under Section 409 of the Indian Penal Code, and how Section 197 of the Code of Criminal Procedure should be interpreted with respect to that sanction. The headnote recorded that three government servants were jointly charged under Section 5(2) of the Prevention of Corruption Act and also jointly charged with breach of trust in furtherance of a common intention under Section 409 read with Section 34 of the Penal Code. In addition, each accused faced alternative charges of personal commission of criminal breach of trust under Section 409, and alternatively, all three were jointly charged under Section 409 read with Section 109 for abetting each other in that breach of trust.

During the trial, an objection was raised to the multiplicity of charges, leading the trial court to separate the proceeding for the offence under Section 5(2) of the Prevention of Corruption Act from the proceeding under Section 409 of the Penal Code. The charges were subsequently reframed, resulting in the dropping of the charge under Section 5(2) while retaining the other allegations. On 27 October 1949, the Governor-General, exercising the power conferred by Section 197 of the Code of Criminal Procedure, sanctioned the prosecution of the first accused (appellant No 1) for offences under Sections 120-B, 409 and 109, finding that he had conspired with the other two accused to commit criminal breach of trust involving government property and had both aided and personally committed that offence. No similar sanction was issued for the other two accused in respect of those provisions; the sanction was limited solely to the first accused. However, on the same date, the Governor-General also sanctioned the prosecution of the first accused under Section 5(2) of the Prevention of Corruption Act and issued a comparable sanction for the second accused under the same provision. The legal question that arose was whether the sanction granted to the second accused for the Prevention of Corruption offence could be extended to cover his prosecution under Section 409 of the Penal Code, and consequently whether his trial for that charge was valid. The Court answered this question in the negative, holding that under Section 197 of the Code of Criminal Procedure the authority to grant a sanction was the Governor-General, and that the sanction obtained for the Prevention of Corruption charge could not be used to validate a prosecution under Section 409 when the sanctioning authority for the latter was not the same competent authority.

In the matter concerning the Prevention of Corruption Act, 1947, the Court observed that the authority empowered to grant sanction under that statute was the Central Government. The legal framework allowed either a single government authority or two distinct government authorities to be vested with the right and the duty to make a selection, that is, to decide whether sanction should be given. The Court explained that if two separate authorities possessed this right, each one was required to act within its own jurisdiction without infringing on the domain of the other. Consequently, because the Governor-General had not issued a sanction for the prosecution of the second accused, identified as appellant No. 2, and because no other authority possessed the power to do so, the sanction that had been issued under section 5(2) of Act II of 1947 could not be applied to the present trial. The sanction was deemed invalid, as it had been granted by an authority that lacked competence to do so. The Court then considered the alternative scenario in which the two authorities were, in fact, one and the same. In that situation, the choice would have been clearly made, and the sanction under section 5(2) of the Prevention of Corruption Act, 1947, as amended by Act LIX of 1952 and Act XLVI of 1952, would have required the case to be tried in a special court following a special procedure. Because the trial of the second accused was not conducted in that manner, the Court held the trial to be incompetent. It reiterated the settled principle that a defect of this nature was fatal and could not be remedied when section 197 of the Code of Criminal Procedure applied, since sanction was a prerequisite for a valid trial. Accordingly, the proceedings were declared void and were quashed.

The Court further turned to the issue of misdirection in the trial of the first accused. It recorded that the Sessions Judge had improperly instructed the jury on the meaning of section 34. The misdirection consisted of telling the jury that a person could be convicted under section 34 even if he was not present at the time the offence was committed and even if he remained “behind the screen,” provided that it was shown the offence was carried out in furtherance of a common intention. The Court held this guidance to be erroneous because the essential requirement of section 34 is that the accused be physically present at the actual commission of the crime. This mistake struck at the heart of the case, as the jury had returned a guilty verdict solely on the basis of section 409 read with section 34, without considering section 109 of the Indian Penal Code. The Court emphasized that in matters raising substantial questions of law and fact, High Courts should not dispose of appeals by way of summary rejection without offering at least some indication of their reasoning on the points raised. In support of its analysis, the Court referred to several authorities, including Mushtak Hussein v. The State of Bombay ([1953] S.C.R. 809), The State v. Gurucharan Singh (A.I.R. [1952] Punjab 89), Gokulchand Dwarkadas v. The King (A.I.R. [1948] P.C. 82), Hori Ram Singh v. The Crown ([1939] F.C.R. 159), Madan Mohan v. The State of Uttar Pradesh (A.I.R. [1954] S.C. 637), Lieutenant Hector Thomas Huntley v. The King-Emperor ([1944] F.C.R. 262), and Barendra Kumar Ghosh v. The King-Emperor ([1924] L.R. 52 I-A. 40).

The Court noted that several authorities were referred to, including Hori Ram Singh v. The Crown ([1939] F.C.R. 159), Madan Mohan v. The State of Uttar Pradesh (A.I.R. [1954] S.C. 637), Lieutenant Hector Thomas Huntley v. The King-Emperor ([1944] F.C.R. 262) and Barendra Kumar Ghosh v. The King-Emperor ([1924] L.R. 52 I-A. 40). The judgment was rendered in the Criminal Appellate Jurisdiction concerning Criminal Appeals Nos. 89 and 90 of 1954. Both appeals were taken by special leave from the High Court of Judicature at Bombay. The first appeal arose from the judgment and order dated 23 November 1953 in Criminal Appeal No. 1213 of 1953, while the second appeal arose from the judgment and order dated 25 August 1953 in Criminal Appeal No. 1121 of 1953. Both of these High Court orders were themselves based on the judgment and decree dated 6 August 1953 of the Court of Sessions in Case No. 36 of 1952. Counsel for the appellant in Criminal Appeal No. 89 of 1954 were S. Narayanaiah and Dr. C. V. L. Narayan. Counsel for the appellant in Criminal Appeal No. 90 of 1954 were C. Sanjeevarow Nayadu and R. Ganapathy Ayyar. For the respondent, the Attorney-General of India, M. C. Setalvad, appeared together with G. N. Joshi and Porus A. Mehta. The judgment was delivered on 22 December 1954 by Justice Bose.

The Court explained that the two appeals derived from the same trial in which the appellants, Shreekantiah—who was the first accused in the trial court and the appellant in Appeal No. 89 of 1954—and Parasuram—who was the second accused and the appellant in Appeal No. 90 of 1954—were tried together with a third accused, Dawson. All three respondents faced several charges centered on section 409 of the Indian Penal Code, which deals with criminal breach of trust by a public servant, and the jury found each of them guilty of an offence under section 409 read with section 34. The convictions led to the following sentences: Shreekantiah received one year of imprisonment, a fine of Rs. 500 and an additional four months in default; Parasuram received two years of imprisonment, a fine of Rs. 500 and an additional six months in default; and Dawson received six months of imprisonment, a fine of Rs. 200 and an additional two months in default. The appeal lodged by Parasuram before the High Court was dismissed summarily on 25 August 1953 with a single word, “dismissed.” In contrast, the appeals filed by Shreekantiah and Dawson were each heard by a different Bench, admitted for consideration, and a reasoned judgment was delivered on 23 November 1953. The Court observed that this divergent treatment of appeals arising from the same trial, addressing the same charge and raising substantially the same points, was anomalous. Consequently, the Court expressed its disapproval of the summary rejection of appeals that raise issues of substance and importance, referring to the observations made in Mushtak Hussein v. The State of Bombay. The Court emphasized that those observations were even more applicable in the present case, where all three accused were government servants.

In this matter the Court explained that the first accused served as the Officer Commanding of the Military Engineering Stores Depot situated at Dehu Road near Poona, and he exercised overall responsibility for the depot’s operations. The second accused functioned directly beneath him as the officer in charge of the Receipts and Issue control section, while the third accused worked under the second as the Assistant Stores Officer. The depot, which is maintained by the Central Government, occupies approximately one hundred and fifty acres of land and contains government stores valued at several lakhs of rupees.

According to the prosecution, on 11-September-1948 iron stores valued at roughly Rs 4,000 were illegally removed from the depot and handed over to Ibrahim Fida Hussain, who acted as an agent for the approver Mohsinbhai (identified as PW 1). The prosecution alleged that the three accused, each entrusted with the custody of these stores in their respective capacities, entered into a conspiracy to defraud the Government of the said property, arranged to sell the iron to the approver for Rs 4,000, received the payment, and then caused the stores to be taken out of the depot without crediting the amount to the Government treasury.

Based on these allegations a first set of charges was framed on 9-July-1953. All three accused were jointly charged with an offence punishable under section 5(2) of the Prevention of Corruption Act, 1947, and were also jointly charged with criminal breach of trust committed in furtherance of a common intention under section 409 of the Indian Penal Code read with section 34. In addition, alternative charges were drafted wherein each accused was separately charged with criminal breach of trust under section 409, and a further alternative charge was framed jointly against all three under section 409 read with section 109 for abetting each other in the commission of that breach.

The defence objected to the formulation of the charges, specifically contending that trying the charge under section 5(2) of the Corruption Act together with the charge under section 409 of the Penal Code would prejudice the accused because jurors might find it difficult to disregard any inculpatory evidence given by the accused on oath. Consequently, the defence prayed that the charges under section 409 and section 5(2) be tried in separate proceedings. The Assistant Public Prosecutor expressed no objection to separating the charges, agreeing that the charge under section 5(2) could be reserved for a different trial. Accordingly, the Court issued an order on 10-July-1953 stating, “Thus, though a joint trial for offence under section 5(2) of the Prevention of Corruption …” thereby indicating its acceptance of the request to separate the trials.

The Court observed that holding a joint trial for the offence punishable under section 5(2) of the Prevention of Corruption Act together with the offences under the Indian Penal Code was legally permissible, but, given the circumstances previously discussed, it would better serve the interests of justice and the accused if the trial for the section 5(2) offence were conducted separately. Accordingly, the Court granted the application to that extent and directed that the charge be amended in line with that order. Following the order, the charges were re-framed on 11 July 1953, the only substantive alteration being the dropping of the charge under section 5(2) while the remaining charges were left unchanged.

The accused were all public servants and the prosecution argued that they had acted in the discharge of official duties, which, under section 197 of the Code of Criminal Procedure, required prior sanction. Sanction had indeed been obtained for the first accused, but the second accused contended that no sanction existed in his case, rendering his trial, conviction and sentence invalid. The Court therefore set out the factual background: on 27 October 1949 the Governor-General, exercising the authority conferred by section 197 of the Criminal Procedure Code, granted sanction for prosecuting the first accused for offences under sections 120-B, 409, 109 and related provisions, alleging that he conspired with the other two accused to commit criminal breach of trust with respect to the property involved and that he both abetted and participated in that offence. Although similar sanction could have been extended to the other two accused, it was not; the sanction was confined solely to the first accused. On the same date, sanction was also issued for prosecuting the first accused under section 5(2) of the Prevention of Corruption Act, and a comparable sanction was granted for the second accused.

The Court then addressed whether the sanction obtained for the second accused could be stretched to cover his prosecution under section 409 of the Indian Penal Code. The Court held that it could not. At the time the sanction was issued, the unamended Prevention of Corruption Act II of 1947 was in force, and that Act’s definition of “criminal misconduct” under section 5(1)(c) expressly included criminal breach of trust punishable under section 409 of the Indian Penal Code. Consequently, an offence under section 409 could be tried under the 1947 Act, raising the question of whether it must be tried exclusively under that Act or could also proceed in the ordinary courts. The Punjab High Court, in State v. Gurucharan Sinah, ruled that it could not be tried in the ordinary courts. In response, the legislature amended the 1947 Act in 1952 by Act LIX of 1952, with section 4 of the amendment clarifying that the trial could proceed under either law. However, in the same year the Criminal Law Amendment Act 1952 (Act XLVI of 1952) introduced a further requirement that trials under section 5(2) of the Prevention of Corruption Act be conducted before a Special Court following a special procedure.

The Court observed that the Criminal Law Amendment Act of 1952 required that any trial conducted under section 5(2) of the Prevention of Corruption Act be held before a Special Court and follow a special procedural regime. Consequently, the various statutes created a situation in which a certain authority was empowered to decide whether a particular accused should be tried in a Special Court, thereby attracting the reduced maximum punishment provided in section 5(2), or whether the accused should be tried in the ordinary courts under section 409 of the Indian Penal Code, which carried the possibility of a higher maximum punishment. The Court noted that a citation to The State v. Gurucharan Sinah, (1) A.I.R. 1952 Punjab 89, was relevant to this discussion. The pivotal question, the Court said, was which authority possessed the power to make that election. Under section 197 of the Code of Criminal Procedure, the Governor-General was, at that time, the sanctioning authority, although the phrase “exercising his individual judgment” had been removed. The Prevention of Corruption Act, on the other hand, identified the “Central Government” as the sanctioning authority. The Court acknowledged that, by virtue of section 8(a) of the General Clauses Act, the two designations might refer to the same entity, but that technical point did not affect the immediate analysis. In substance, one or two Government authorities were vested with the right and duty to decide. They could elect either to try a public servant who had committed criminal breach of trust under section 409 of the Indian Penal Code in the ordinary courts, subject to the normal procedure and a maximum sentence of ten years plus an unlimited fine, or to try the same conduct in a Special Court under a different label, applying a special procedure and imposing a maximum sentence of seven years plus an unlimited fine. During the hearing, the Court asked the counsel for the appellants whether they intended to challenge the constitutionality of this scheme under article 14 of the Constitution, because such a challenge would have required referral to a Constitution Bench, beyond the capacity of a three-Judge bench. The Attorney-General objected immediately, asserting that the issue had not been raised at any stage and was absent from the appeal grounds. The appellants’ counsel replied that they did not wish to raise the point. Accordingly, the Court proceeded on the assumption that the 1952 amending Act (Act LIX of 1952) was valid, thereby affirming the position that a choice existed not only of forum but also of procedure and of the maximum penalty applicable. The Court further observed that if two distinct authorities each held the power to make the election and could not intrude upon each other’s domain, then the Governor-General had not sanctioned the present prosecution against the second accused, and consequently no further sanction existed.

If the sanction to prosecute under section 5-2 was issued by an authority other than the one that possesses the power to grant such sanction, then that sanction cannot be applied to the present trial because it originates from an authority that lacks competence to do so. Conversely, if the two authorities are in fact one and the same, then the election of procedure has been made clearly and without ambiguity. In that circumstance the sanction requires that the case proceed in the special courts using the special procedure, and the second accused must not be exposed to the risk of the higher penalty. Accordingly, where the authorities are identical, the trial of the second accused in the present proceedings is incompetent. A defect of this nature is fatal and cannot be cured, a principle that is well established by the Privy Council in Gokulchand Dwarkadas v. The King, the observations of Varadachariar J. in Hori Ram Singh v. The Crown, and the decision of this Court in Madan Mohan v. The State of Uttar Pradesh. The learned Attorney-General, however, contended that no sanction was required because, in his view, the second accused could not be said, even by a stretch of imagination, to have acted or to have purported to act in the discharge of his official duty. His argument was that the offence alleged consists of a breach of trust and its prior abetment, the breach having occurred as soon as the goods were loaded onto Mohsinbhai’s lorries; permitting an unauthorised removal of the goods was not part of the accused’s official duties, and therefore he neither acted nor purported to act while discharging any official duty. The Attorney-General relied upon the decision of the Federal Court in Lieutenant Hector Thomas Huntley v. The King-Emperor, where Zafrullah Khan, J. held that “it must be established that the act complained of was an official act,” and upon the observations of Varadachariar J. in Hori Ram Singh v. The Crown, where, discussing section 409 of the Indian Penal Code, he explained that although the charge refers to the accused’s capacity as a public servant, the official capacity is material only in relation to the “entrustment” and does not necessarily enter into the later act of misappropriation or conversion, which is the act complained of. What the learned Attorney-General’s argument overlooks is the emphasis in the quoted passage on the word “necessarily.” A later passage at page 187 clarifies that the question is substantially one of fact, to be determined with reference to the act complained of and the attendant circumstances.

The Court observed that paraphrasing the wording of the statutory provision in order to create strict and inflexible tests was neither useful nor desirable, and it affirmed agreement with that observation while emphasizing that every case must be decided on its own factual matrix. It warned that if Section 197 of the Code of Criminal Procedure were construed in an overly narrow way it would become inapplicable, because it is not part of a public servant’s duty to commit an offence and therefore such conduct could never be regarded as a duty. Nevertheless, the Court explained that the focus of the analysis should be the act itself rather than the duty, since an official act may be performed either in the discharge of official responsibilities or in the neglect of those responsibilities. The provision, the Court noted, possesses substantive content and its language must be given meaning; consequently the court read the provision as stating that when any public servant is accused of an offence alleged to have been committed while acting or purporting to act in the discharge of his official duty, the word “offence” must be examined first. The Court further explained that an offence seldom consists of a single act; it is usually composed of several elements and, as a rule, a whole series of acts must be proved before the offence can be established. In the present case the elements alleged against the second accused were identified as follows: first, that there was an “entrustment” and/or “dominion”; second, that such entrustment or dominion was in his capacity as a public servant; third, that a “disposal” occurred; and fourth, that the disposal was “dishonest.”

The Court found it evident that the entrustment and/or dominion in the present circumstances were exercised in an official capacity and that, under the facts, no lawful or unlawful disposal could occur except by an act performed or purported to be performed in an official capacity. Accordingly, the act complained of – namely the disposal – could not have been effected in any other manner. If the disposal had been innocent, it would have been an official act; if it was dishonest, it would have been the dishonest execution of an official act. In either event the act remained official because the second accused could not have disposed of the goods except by officially permitting their disposal, which he indeed did. He actually allowed the release of the goods and purported to do so in an official capacity; moreover, there was no alternative way for him to have acted, since he did not pretend to act privately. Therefore, irrespective of the intention or motive behind the conduct, the physical element of the act remained unchanged – it was official in both the honest and dishonest scenarios – and the only distinction lay in the intention with which it was performed: in one instance it was carried out in the discharge of an official duty, and in the other it was carried out in a purported discharge of that duty. The Court concluded that the alleged act of abetment against the second accused stood on the same footing, for his part in

The Court explained that the alleged abetment consisted of allowing the disposal of the goods through the performance of an official act, thereby “wilfully suffering” another person to use the goods dishonestly, as defined in section 405 of the Indian Penal Code. It was held that, in both circumstances, the offence could not be established unless the official act was proved. Consequently, the Court found that section 197 of the Code of Criminal Procedure was applicable and that a sanction under that provision was a prerequisite for proceeding. Because no such sanction had been obtained, the Court concluded that the trial was vitiated from its inception. Accordingly, the proceedings against the second accused were set aside, and his conviction and sentence were annulled.

Turning to the appeal of the first accused, the Court noted that the appellant had been convicted under section 409 of the Indian Penal Code read with section 34. The central issue identified was a material misdirection of the jury regarding the correct legal interpretation of section 34. The learned Additional Sessions Judge had misunderstood the scope and content of the provision and, as a result, had misdirected the jury on the law. Although paragraphs 15 and 16 of the charge contained some correct illustrations, the Court observed that many statements were erroneous and, if applied, would lead to a miscarriage of justice. The essence of the misdirection lay in the judge’s direction that a person could be convicted under section 34 even if he was not present when the offence was actually committed, or if he remained “behind the screen,” provided that the offence was proved to have been carried out in furtherance of a common intention. The Court rejected this view, holding that the core requirement of section 34 is the physical presence of the accused at the actual commission of the crime. Physical presence does not demand presence inside the same room; for example, a person may stand guard at a gate, warn accomplices of approaching danger, or wait in a vehicle nearby to facilitate their escape, but he must be present at the scene and must actively participate in the offence at the moment it is being committed. The Court contrasted this with the preliminary stages of agreement, preparation, and planning, which fall under section 109. Section 34, by contrast, applies only to the stage when the plan is executed. While preliminary planning may occur long before and may even be conducted away from the crime scene, the Court emphasized that the element of physical presence at the scene, coupled with actual participation—whether passive, such as standing by a door, or otherwise—must be established, and that such participation must be performed with the intention of furthering the common intention of the group and with a readiness to play the assigned part.

In this case, the Court explained that Section 34 of the Indian Penal Code stresses the word “done,” meaning that a criminal act must actually be performed by several persons together. The provision requires the participants to join in the actual execution of the act, not merely to plan its commission. The Court referred to the extensive exposition of this principle by Lord Sumner in Barendra Kumar Ghosh v. The King-Emperor. At page 52 of that judgment, Lord Sumner identified “participation in action” as the chief feature of Section 34. The following page, page 53, dealt with Section 114 of the Code and observed that because participation may sometimes be obscure, the law presumes that actual presence together with prior abetment inevitably amounts to participation, and that the presumption created by Section 114 therefore brings the matter within the scope of Section 34. On page 55, Lord Sumner further clarified that participation and joint action in the actual commission of a crime are, in essence, opposite to the concepts of abetment or attempt. The Court noted that this distinction was crucial because the jury had returned a verdict of guilt under Section 409 read with Section 34 alone, and had not considered the charge of Section 409 read with Section 109. The first accused argued that he was not present when the goods were loaded nor when they were permitted to leave the gate, that is, he was not present at the moment the offence was committed. Although there was some evidence suggesting he was present when the lorries departed, the Court observed that the discrepancy was slight and there was no indication that the jury accepted that evidence. Consequently, if the first accused was indeed absent at the time of the act, he could not be convicted under Section 34. He could only have been convicted for abetment, provided the jury had found him guilty on that charge, because the evidence of abetment was legally sufficient. However, the jury disregarded the abetment component of the charge, and there was no way to determine whether the jury gave any weight to that portion of the evidence. Moreover, the Court identified a failure to give proper direction on a critical point, which might have resulted in a miscarriage of justice. The prosecution’s case asserted that the accused had disposed of the goods to Mohsin bhai for a sum of Rs 4,000, which was paid to the second accused on the tenth day. The trial judge instructed the jury that the prosecution’s evidence regarding the payment of Rs 4,000 was “utterly useless,” and he supplied several reasons for that conclusion. Yet he omitted to tell the jury that if they rejected that segment of the prosecution’s case, the strongest part of the case against the accused would collapse.

In the Court’s view, if the jury had been invited to consider the matter, the most persuasive portion of the prosecution’s case would have collapsed because the officers who were in a position to commit such illegal acts would not expose themselves to prosecution and possible disgrace unless they were driven by a strong motive, usually self-interest. Although a conviction may sometimes be sustained on evidence that does not disclose a motive when the proved facts justify such a conclusion, the Court held that it would ordinarily be unsafe to convict in the present case because there was no proof indicating an adequate reason for criminal conduct on the part of the accused. The Court concluded that, had the jury been given this direction, as was required, it was possible that they would not have returned a verdict of guilt. Consequently, the Court found no alternative but to set aside, that is, to quash, the conviction against the second accused.

The Court then examined whether a retrial should be ordered. It observed that the present trial could not continue against the second accused and that all the accused were alleged to have acted in concert, each performing an appointed part of a common plan. Despite the normal practice of directing a retrial when a jury trial is set aside on grounds of misdirection or non-direction, the Court decided that ordering a retrial would not be appropriate in these circumstances. Accordingly, the Court discharged, without acquitting, both appellants and left it to the Government to decide either to abandon the entire proceeding or to continue it in a manner it deemed advisable. This decision was taken because the accused had expressly requested that the charge under the Prevention of Corruption Act be dealt with in a separate trial.

As a result, the Court quashed both convictions and the sentences that had been imposed. It was noted that the first accused had already completed the term of his sentence, and therefore any fine that had been paid would be refunded. Finally, the Court ordered the cancellation of the bail bond granted to the second accused.