Sudhdeo Jha Utpal vs The State Of Bihar

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

Court: supreme-court

Case Number: Not extracted

Decision Date: 4 December, 1956

Coram: Govinda Menon

The matter before the Supreme Court concerned an appeal by special leave filed by Sudhdeo Jha Utpal against a revisional order of the Patna High Court. The High Court had affirmed the conviction of the appellant under sections 420 and 193 of the Indian Penal Code and had imposed a term of two years’ rigorous imprisonment. The conviction under section 120‑B read with section 420, originally recorded by the trial court, had been altered by the appellate court so that the charge of conspiracy was treated as cheating under section 420. The sentence imposed for the offence under section 193 was also confirmed, but the High Court directed that it should run concurrently with the sentence for the cheating offence. The factual background relevant to the appeal may be summarized as follows. Ramjiwan Himat Singka, who served as Director and Managing Agent of Express Auto Service Ltd., had been tried together with the appellant for an alleged conspiracy punishable under section 120‑B read with section 420 before the First Class Magistrate of Patna. Both accused were found guilty by that magistrate, and the conviction was upheld on appeal by the Third Additional Sessions Judge of Patna. The High Court subsequently entertained a revision petition and acquitted both the appellant and Ramjiwan Himat Singka of the conspiracy charge. Nevertheless, the appellant continued to bear convictions under sections 420 and 193, and the sentence originally imposed for conspiracy was recharacterized as a sentence for cheating.

Express Auto Service Ltd. was a private limited company that owned a large fleet of motor buses and trucks operating between major towns of Bihar, with its registered office located at Dumka. The appellant, identified as the General Manager of the company, was alleged to have joined with the Director and Manager of the firm in a scheme intended to defraud the Government by obtaining petrol coupons during the rationing period of 1947‑1948. The prosecution alleged that the accused submitted applications for petrol coupons that listed a number of buses and trucks which either were not road‑worthy or for which statutory taxes had not been paid, while representing them as operational vehicles. By making these false statements, the defendants purportedly induced the rationing authorities to issue petrol coupons that would not have been granted had the true condition of the vehicles been disclosed. For the purpose of the present appeal, the charge was confined to nine specific vehicles that, according to the evidence, either did not exist or were not road‑worthy at the time the applications identified as Exhibit P‑15 and Exhibit P‑16 were filed by the appellant. The four buses listed in Exhibit P‑15 included B.K.J. 307, B.R.L. 554, B.R.L. 581 and B.R.L. 560, while the five trucks enumerated in Exhibit P‑16 comprised B.R.J. 475, B.R. 3. 476, B.R.L. 535, B.R.L. 547 and B.R.L. 550.

The documents identified as EX. 16 listed the vehicles B. R. J. 475, B. R. 3. 476, B. R. L. 535, B. R. L. 547 and B. R. L. 550 and it was held that each of these vehicles either did not exist or was not in a road‑worthy condition at the time the applications marked EXS. P. 15 and 16 were filed on 5 February 1948 before the petrol‑rationing authority. In column No. 3 of both EXS. 15 and 16 it was stated that the tax due on these vehicles had been paid up to 31 March 1948. On the basis of the certificate contained in the applications, which declared that the contents of the applications were correct and that no other application for ordinary coupons concerning the vehicles listed as State carriages had been made, the petrol‑rationing authority ordered the issue of a specific quantity of petrol units by issuing the requisite coupons. Although there was some dispute about the non‑existence of the nine vehicles mentioned, during the pendency of the appeal before the High Court it was no longer contested that the statements in EXS. 15 and 16 asserting that tax had been paid in respect of these nine vehicles were incorrect and that the implied assertion that three of the vehicles – namely B. R. L. 547, B. R. L. 550 and B. R. J. 554 – were in a road‑worthy condition was also false. The trial court and the court of appeal, which were the ultimate courts of fact, arrived at adverse findings against the appellant on these points, and the High Court did not overturn those findings on revision. Accordingly, it was concluded that the statements in EXS. 15 and 16 that tax had been paid in respect of the vehicles and that at least three of them were road‑worthy constituted false representations. The argument advanced before the High Court was that the appellant, who was the General Manager, had signed EXS. 15 and 16 although he had not actually prepared them or directed their preparation, following the usual practice of relying on office staff who made the necessary entries and then placed the documents before him for signature. It was alleged that the company was a fairly large one, paying about Rs. 40,000 as tax for the vehicles, and that the General Manager could not be expected to know the precise details of what had happened, but had to depend on his staff for the correctness of the statements contained in the applications. In short, the contention presented was that the appellant did not consciously make a false representation but merely signed the documents placed before him by subordinate staff as a routine matter. On that basis, it was argued that no culpability should be attached to the appellant because he had not acted with criminal intent.

It was not established that the appellant acted fraudulently or dishonestly within the meanings of Sections 24 and 25 of the Penal Code. The High Court judges rejected the contention that the appellant merely signed the documents on the basis of routine office practice. They observed that, with respect to the truck identified as B R L 550 and mentioned in Exhibit 16, the tax token for that vehicle had been surrendered on 1 December 1947. Consequently, when Exhibit 16 was prepared on 5 February 1948, the truck neither possessed a certificate of fitness nor was in a road‑worthy condition, yet the application represented it as such. In a similar vein, regarding the truck B R L 547 (also cited in Exhibit 16) and the bus B R L 554 (cited in Exhibit 15), an intimation from Express Auto Service Ltd. to the Registration Authority conveyed that bus 554 had been dismantled. Furthermore, Exhibit 10, dated 7 February 1948 and signed by the appellant to the South Bihar Transport Department at Patna, stated that the tax token and the insurance certificate of fitness had been inspected by the authority addressed in that letter. From these documents the prosecution sought to infer that the appellant was aware that the statements contained in Exhibits 15 and 16 were false. The Advocate General of Bihar, appearing for the prosecution, drew the Court’s attention to various findings in the judgments of the trial court, the Court of Appeal and the High Court that the appellant willfully made those representations. Those findings were coupled with the conclusion that the appellant and Ramjiwan Himat Singka were parties to a conspiracy, and that most of the documents relied upon by the lower courts were offered to prove that conspiracy. The Court noted that even if the trial court and the Court of Appeal state that the appellant knew of the falsity of the contents of Exhibits 15 and 16, such observations do not aid the prosecution once the conspiracy charge has been found unsubstantiated. The High Court judges also expressed the view that the inclusion of the three vehicles in Exhibits 15 and 16 could not be explained as an oversight. However, the Court found no discussion on the probability of the appellant’s explanation that he signed the exhibits solely on the trust that the regular procedures in his office ensured accuracy. It was also not proven that the appellant derived any benefit from receiving the petrol coupons, nor was there any suggestion that he sold or otherwise exploited them in the black market for profit. In the absence of any evidence on that point, the Court could not infer any such advantage.

It was difficult to reach a conclusion that the appellant deliberately or knowingly made a false statement in exhibits fifteen and sixteen, especially because the alleged conspiracy had not been proven. The Court therefore could not accept that the appellant had willfully represented that taxes on all the vehicles listed in those exhibits had been paid, or that each vehicle was in a condition fit for road use. The Court was also not convinced that any fraudulent representation had been made that might have induced the Petrol Rationing Authority to issue the fuel coupons, which it otherwise would not have done in the circumstances of this case.

The appropriate approach to questions of this nature is the one set out by the Court of Criminal Appeal of England in the case reported as R. v. Isaac Schama and Jacob Abramovitch, (1914) 11 Cr. A. R. 45 (A). In that decision the Lord Chief Justice, speaking for the Court of Criminal Appeal, held that when a person is charged with possession of recently stolen property, the burden of proof never shifts to the accused. He further stated that if the accused provides a reasonable explanation, the jury must consider that explanation, and if the jury thinks the explanation could be true, even without full conviction of its truth, the jury should acquit the accused. This principle has been applied in India, for example in Daud Shaikh v. King‑Emperor, 40 Cal. W. N. 159 (B). Applying those principles to the present matter, the Court sought to determine the exact facts.

The Court found no reason to doubt that the appellant’s explanation for signing exhibits fifteen and sixteen was reasonable. It was acknowledged that Express Auto Service Ltd. is a large enterprise with an extensive fleet of motor buses and trucks, paying substantial taxes each year. The company operates a number of branches throughout the State of Bihar and employs a considerable workforce, likely organized into separate departments for each branch. As General Manager, the appellant could not, by the very nature of his position, be expected to know the minute details of the business conducted at every location. He could not be expected to be aware of the precise condition of each bus or truck, nor could he be expected to be fully conversant with whether taxes on every vehicle had been paid regularly and properly.

Although the learned Sessions Judge’s judgment at one point suggested that the appellant had taken delivery of the petrol coupons, no evidence was produced by counsel on either side to substantiate that conclusion. Given the scale of the company’s operations, it was unreasonable to expect the appellant to personally approach the Petrol Rationing Authority and collect the coupons himself. In the normal course of business, after the appellant signs the applications, the coupons would be dispatched to the appropriate authorities and presented there by clerical staff or other officials whose duty it is to handle such matters.

In the regular course of business, the applications that the appellant signs are normally forwarded to the appropriate authorities by a clerk or other officials whose duty it is to present the documents. The Court observed that if the prosecution had been able to establish a conspiracy, the case against the appellant could have been materially stronger. However, the allegation of conspiracy was not proved, and the remaining evidence was examined to determine whether the appellant could be said to have known that the statements contained in exhibits numbered fifteen and sixteen were false. The appellant offered an explanation for his involvement; although he was unable to demonstrate the explanation conclusively, the Court found the explanation to be reasonable. Considering the ordinary routine of official business in an enterprise where the appellant serves as General Manager, the Court was inclined to conclude that the prosecution had not succeeded in showing that the appellant affixed his signature to exhibits fifteen or sixteen with knowledge of, or a reason to believe in, the falsity of their contents.

The Court emphasized that the prosecution bears the affirmative burden of proving that the appellant knowingly endorsed false representations. In the absence of any circumstances from which such knowledge could be inferred, the Court held that reasonable doubt existed in favour of the appellant. Consequently, if the Court is not satisfied that the appellant signed the documents knowing them to be false, he cannot be said to have committed an offence under Section 420 of the Penal Code, and the benefit of doubt must be granted to him. Moreover, if a conviction under Section 420 cannot be sustained, the certificate affirming the truth of the statements cannot be the basis of a charge under Section 193 of the Penal Code, and the appellant cannot be convicted thereof. Having adopted this view, the Court found it unnecessary to consider the further submissions advanced by counsel for the State. Accordingly, the appeal was allowed, and the appellant’s conviction and sentence were set aside.