Chandi Prasad Singh vs The State Of Uttar Pradesh

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

Court: Supreme Court of India

Case Number: Criminal Appeal No. 150 of 1954

Decision Date: 7 December 1955

Coram: Venkatarama Ayyar, Vivian Bose

In the matter titled Chandi Prasad Singh versus The State of Uttar Pradesh, decided on 7 December 1955, the Supreme Court recorded the proceedings as authored by Justice Vivian Bose, with the bench also comprising Justices Aiyyar, T. L. Venkatarama, and Justice Bose. The petitioner, Chandi Prasad Singh, faced the respondent, the State of Uttar Pradesh. The citation for this decision appears as 1956 AIR 149 and 1955 SCR (2) 1035. The appellant was tried before a Sessions Judge for an offence punishable under section 409 of the Indian Penal Code, alleging misappropriation of certain sums of money that he had received as the Secretary of a company from three distinct individuals for the purpose of allotting shares, which were never brought into the company after its formation. The trial for this charge proceeded with the assistance of assessors. Additionally, the appellant was charged under section 477-A of the Indian Penal Code for falsifying a minute book, and that trial was conducted with the aid of a jury; the same three persons acted both as assessors in the first charge and as jurors in the second charge. Both the jury and the assessors returned verdicts of not guilty on their respective charges.

The Sessions Judge disagreed with the jury’s verdict on the charge under section 477-A and, invoking section 307 of the Code of Criminal Procedure, referred the matter to the High Court for further consideration. The Judge also rejected the assessors’ opinion on the charge under section 409, finding the appellant guilty and imposing a sentence of four years’ rigorous imprisonment. The appellant appealed the conviction to the High Court, and the reference under section 307 and the appeal were heard together. The High Court affirmed the conviction and sentence for the offence under section 409, while also overturning the jury’s not-guilty finding, holding the appellant guilty of falsifying the minute book under section 477-A and imposing two years’ rigorous imprisonment. The appeal then proceeded to the Supreme Court by special leave, raising questions concerning whether the Sessions Judge had contravened any statutory provision, the appellant’s legal status as a servant or an agent, the distinction between those categories, and the applicability of sections 234, 235, and other provisions of the Code of Criminal Procedure.

In this case the Supreme Court held that the argument put forward by the appellant – that the Sessions Judge, after disagreeing with both the jury’s verdict and the assessors’ opinion, ought to have referred the entire case to the High Court under section 307 of the Code of Criminal Procedure rather than only the portion relating to the charge under section 477-A of the Indian Penal Code – was without force. The Court observed that the Sessions Judge had not contravened any legal provision and had committed no illegality when he decided the part of the case that concerned the charge under section 409 of the Indian Penal Code. It explained that section 307 of the Code of Criminal Procedure is limited in scope to trials conducted by a jury; consequently the Sessions Judge possessed no statutory power under that section to refer matters that were tried with the assistance of assessors for decision by the High Court. The Court further noted that, in the present proceedings, the appeal against the conviction under section 409 of the Indian Penal Code and the reference made under section 307 of the Code of Criminal Procedure concerning the charge under section 477-A were both disposed of by the same High Court judgment, rendering the contention unnecessary.

The Court also rejected the appellant’s claim that his true status was that of a servant rather than an agent and that, consequently, he should have been tried under section 408 of the Indian Penal Code instead of section 409. It held that, given his duties as Secretary of the Society, the appellant functioned as an agent. The Court clarified the distinction: a servant operates under the direct control and supervision of his master and must obey all reasonable orders issued in the course of his work, whereas an agent is bound to exercise authority in accordance with lawful instructions from his principal but is not subject to the principal’s direct control in the performance of that authority. Moreover, the Court found the allegation of a breach of section 234 of the Code of Criminal Procedure – because the appellant faced three charges under section 409 and one under section 477-A – to be untenable. It explained that the case fell under section 235 of the Code of Criminal Procedure, as the multiple offences under section 409 and the offence under section 477-A arose from the same acts and formed a single transaction. In support of this reasoning, the Court referred to the authorities Emperor v. Haria Dhobi (AIR 1937 Patna 662), Pachaimuthu In re (1932 ILR 55 Mad 715), Emperor v. Lachman Gangota (AIR 1934 Patna 424), Emperor v. Kalidas (1898 8 Bom LR 599), Emperor v. Vyankat Sing (1907 9 Bom LR 1057) and Emperor v. Chanbasappa (AIR 1932 Bom 61). The judgment was recorded as Criminal Appeal No. 150 of 1954, an appeal by special leave from the Allahabad High Court order dated 23 March 1954.

In this appeal, the Court noted that the matter arose from Criminal Reference Register No 15 of 1953, which was connected with case number 112 of 1953 and stemmed from the judgment and order dated 24 February 1953 in Sessions Trial No 5 of 1952 of the Sessions Court at Lucknow. Counsel for the appellant was B B Tawakley together with K P Gupta and A D Mathur, while counsel for the respondent was S P Sinha assisted by K B Asthana and C P Lal. The judgment was pronounced on 7 December 1955 by Justice Venkatarama Ayyar. The appeal was filed by special leave against the judgment of the Allahabad High Court, which had affirmed the conviction of the appellant by the Sessions Judge, Lucknow, under sections 409 and 477-A of the Indian Penal Code. The appellant had been the chief promoter of the Model Town Co-operative Housing Society, Ltd., which was incorporated on 12 February 1949 under the Co-operative Societies Act II of 1912. The Society’s purpose was to acquire vacant land in Lucknow and allocate the plots to its members for the construction of their own houses. The appellant solicited share money from prospective shareholders. The first general body meeting of the Society was held on 1 March 1949, at which the appellant was elected Honorary Secretary and Sri Munna Lal Tewari was appointed Treasurer. After the resignation of Mr Tewari, S C Varma was appointed as the new Treasurer. At a managing-committee meeting on 22 April 1949, the appellant was directed to hand over the Society’s accounts and funds to the Treasurer. The appellant then presented a list of thirty-eight persons who were members of the Society, produced cheques received from thirteen of them as share money, and acknowledged receipt of a total of Rs 3,500 from the remaining twenty-five members as share contributions. Following this, the Society never became operational. On 16 July 1949, several members wrote to the Registrar of Co-operative Societies, informing him that the Society had remained inactive since its incorporation and requesting that its accounts be examined and, if warranted, that the Society be wound up. In response, two Assistant Registrars investigated the affairs of the Society and submitted reports dated 22 February 1950 and 18 May 1950. Based on those reports, a prosecution was instituted against the appellant under sections 409 and 477-A of the Indian Penal Code. The charge under section 409 alleged that the appellant had received share money comprising Rs 500 from Sri Chaturvedi, Rs 100 from Dr O P Bhanti and Rs 100 from Dr R S Seth in December 1948, and that he had misappropriated those amounts. The charge under section 477-A alleged that on 22 April 1949, while acting as Secretary of the Society, the appellant falsified the minute book known as Exhibit P-18 by omitting the entries showing the share

In this case the appellant argued that the sums received from Sri Chaturvedi, Dr O P Bhanti and Dr R S Seth were not payments for his role as prospective Secretary but were deposits made in his personal capacity for the purpose of buying shares, should the Society ever become operational. The trial on the charge under section 409 of the Indian Penal Code was conducted with the assistance of assessors, while the trial on the charge under section 477-A was conducted with a jury; the same individuals acted both as assessors and as jurors. Both the assessors and the jury returned verdicts of not guilty on each of the two charges. Disagreeing with the jury’s finding on the section 477-A charge, the Sessions Judge referred that portion of the matter to the High Court under section 307 of the Code of Criminal Procedure. The Judge also disagreed with the assessors’ opinion on the section 409 charge, concluded that the appellant was guilty of that offence, and imposed a sentence of four years’ rigorous imprisonment together with a fine of Rs 1,000. The appellant challenged this conviction by filing an appeal to the High Court. The reference under section 307 and the appeal were heard together by the High Court. The High Court accepted the Sessions Judge’s view that the three amounts had been received as share money in the appellant’s capacity as Secretary, and therefore affirmed the conviction under section 409 and the sentence imposed by the Sessions Judge. In addition, the High Court rejected the jury’s acquittal on the section 477-A charge, held the appellant guilty of falsifying the minute book, and sentenced him to two years’ rigorous imprisonment. The present special leave appeal was filed against that judgment of the High Court.

Mr Tawakley, counsel for the appellant, contended that the lower courts erred in concluding that the amounts paid by Sri Chaturvedi, Dr Bhanti and Dr Seth were share money. He relied on a letter dated 3 May 1951 from Dr Seth to the appellant (Exhibit D-5), in which Dr Seth stated that the payment was made on the express understanding that a share would be allotted if the Society succeeded, and that the money would be returned otherwise. He argued that this letter, written after the Registrar had initiated proceedings, should have been given greater weight. The High Court, however, gave little importance to the letter because Dr Seth had also given oral evidence during the trial that undermined the letter’s significance. Exhibit P-10, a receipt presented by Sri Chaturvedi, explicitly recorded that Rs 500 was received as share money for five shares in the Society. Notices had been issued to both Sri Chaturvedi and Dr Bhanti to attend the Society’s general body meeting scheduled for 1 March 1949 for the election of the President and Managing Committee members, and both Dr Seth and Dr Bhanti actually attended that meeting. Moreover, Sri Chaturvedi and Dr Bhanti testified that they had paid the amounts solely as share capital. The courts below accepted this evidence and concluded that the monies were not paid to the appellant in his individual capacity. The present appeal therefore raised primarily the question of whether the procedural handling of the reference under section 307 was proper, but the factual finding that the payments were share money remained unchallenged.

capital. The courts below examined the evidence and concluded that the monies had not been paid to the appellant personally. They therefore held that the payments were not made in his individual capacity. The special appeal does not disclose any basis for overturning that finding. The Court must now consider the several legal contentions raised by counsel for the appellant. The first contention presented by counsel was that when the Sessions Judge disagreed with the jury’s verdict and with the assessors’ opinion, he ought to have referred the entire case to the High Court under section 307, rather than referring only the portion dealing with the charge under section 477-A. Counsel argued that the failure to make that full reference rendered the conviction invalid. He further contended that when the same set of facts gives rise to two distinct offences—one triable by a jury and the other triable by assessors—and the accused is charged with both, the reference under section 307 must encompass both charges in order to avoid inconsistent findings by different courts on the same matter. Counsel posed a hypothetical scenario: if, in the present case, the appellant had not appealed his conviction under section 409, and the High Court, hearing the reference under section 307, concluded that Sri Chaturvedi, Dr Bhanti and Dr Seth had not paid the amounts to the appellant as share money and that no offence under section 477-A had been committed, then the conviction under section 409, which rested on the Sessions Judge’s finding that the amounts were paid as share money, would nevertheless remain in force, even though it would contradict the High Court’s decision. He suggested that this apparent anomaly could be avoided by holding that the reference under section 307 must relate to the whole case. Counsel relied on the observations made in Emperor v. Haria Dhobi for support. The Court is unable to accept this contention. If the Sessions Judge’s procedure were to be deemed illegal, it could only be on the ground that he contravened a statutory provision that obliges him to refer the entire case to the High Court. It is conceded that the only provision governing such referrals is section 307, which, however, applies solely to trials conducted with a jury. Consequently, the Sessions Court possesses no authority to refer matters tried before assessors to the High Court under that provision. This view was adopted in Pachaimuthu In re, where it was held that an Assistant Sessions Judge had no jurisdiction to refer the whole case to the High Court under section 307, that he must himself dispose of the charges triable by assessors, and that any reference concerning those charges was invalid. The same principle was subsequently followed in Emperor v. Lachman.

In considering the arguments, the judgment referred to earlier authorities such as A.I.R. 1937 Patna 66 and [1932] I.L.R. 55 Mad 715, as well as the case Gangota. The same principle had been adopted by the High Court of Bombay in several decisions, namely Emperor v. Kalidas, Emperor v. Vyankat Sing and Emperor v. Chanbasappa. Accordingly, the judgment concluded that the Sessions Judge had not violated any statutory provision and had not acted illegally in dealing with the charge brought under section 409. The record further showed that the appellant had filed an appeal against the conviction under section 409, and that the same appellate proceeding also considered a reference made under section 307 in respect of a separate charge under section 477-A; both matters were finally decided by a single judgment.

The appellant contended that his legal character was that of a servant rather than an agent, and therefore argued that the proper charge should have been under section 408 instead of section 409. The substantive allegation against the appellant was that, as the promoter of a society, he had lawfully received sums paid by Sri Chaturvedi, Dr Bhanti and Dr Seth. After the society’s incorporation, on 22-4-1949 he allegedly failed to deliver those sums to the treasurer and failed to record the payers’ names as shareholders in the minutes book, thereby committing offences under sections 409 and 477-A. The question then arose as to whether, in his capacity as secretary of the society, the appellant should be characterised as a servant or as an agent. The judgment quoted the definition of the two categories from Halsbury’s Laws of England, Volume 22, page 113, paragraph 192, which explains that a servant works under the direct control and supervision of the master and must obey reasonable orders, whereas an agent acts on lawful instructions from the principal but is not subject to direct supervision.

Considering the nature of the duties performed by the appellant in his role as secretary, the judgment, relying on authorities such as A.I.R. 1934 Patna 424, [1907] 9 Bom. L.R. 1057, [1898] 8 Bom. L.R. 599 and A.I.R. 1932 Bom. 61, held that the appellant’s status was that of an agent rather than a servant. The judgment further observed that the distinction between charging under section 408 or section 409 was immaterial for the present disposal, because the sentence imposed for the conviction under section 409—four years of rigorous imprisonment—could equally have been imposed under section 408. The appellant argued that an offence under section 408 is triable by a jury, while an offence under section 409 is tried by assessors, and that he was consequently prejudiced by losing the benefit of a jury trial. The judgment noted that this objection had not been raised before the trial court and therefore could not be reopened, and that he had been prejudiced in that be bad lost the benefit of

The appellant claimed that the trial court should have allowed a jury trial, which he asserted was his statutory entitlement. However, the objection concerning the absence of a jury trial was not raised before the trial court and therefore could not be reopened at this stage. Section 536 of the Code of Criminal Procedure was cited to support the view that the objection is no longer maintainable. The appellant further contended that the trial violated section 234 of the Code of Criminal Procedure because he had been charged with three offences under section 409 and one offence under section 477-A. The Court observed that the appropriate provision was section 235, since the offences under sections 409 and 477-A arose from the same acts and formed part of a single transaction. In addition, the appellant was unable to demonstrate any prejudice resulting from the alleged procedural irregularity, as required by section 537 of the Code of Criminal Procedure. Consequently, the Court overruled the objection that the trial should have been conducted with a jury and also rejected the claim of violation of section 234. The appellant lastly argued that he had not been examined properly under section 342, and that this deficiency rendered his conviction illegal. This ground was not raised before the lower courts and was raised here through a supplemental proceeding, which the Court found to be without merit. Having considered all the submissions, the Court concluded that the appeal lacked any substantive basis and therefore dismissed it in its entirety.