G.D. Sharma and R.N. Tyagi 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: Not extracted

Decision Date: 1 September, 1959

Coram: S. Jafer Imam, J.L. Kapur, A.K. Sarkar, K.N. Wanchoo

In this case the Court noted that two appeals were heard together because the question for consideration was identical in both. The first appeal, Criminal Appeal No. 188 of 1957, was filed by G D Sharma who held the position of Supervisor in the Central Excise Department. The second appeal, Criminal Appeal No. 198 of 1957, was filed by R N Tyagi, who also served as a Supervisor in the same Department. Both appellants were posted at Aliganj in the District of Etah, State of Uttar Pradesh. Each of them was tried in a separate trial, and in each trial a co‑accused named Om Prakash was also charged. Om Prakash was identified as the proprietor of the firm M/s Torhi Lal Om Prakash, which was engaged in the tobacco business at Aliganj. According to the prosecution, tobacco is an article subject to excise duty and licences are issued by the Central Excise Department to certain dealers for the sale of tobacco. The licence permits a dealer to transact only up to the quantity specified in the licence; any sale or transport of a larger quantity requires the issuance of a special transport permit on which the excise duty must be paid. In October 1950 the prosecution discovered that, as a result of a conspiracy between the appellants and Om Prakash, the Government had been defrauded of large sums of money because excise duty was evaded through the issuance of fictitious transport permits by the appellants. The Court then outlined, without entering into exhaustive detail, the method allegedly employed by the appellants and Om Prakash to avoid payment of excise duty. In the case that implicated Sharma, the alleged forged transport permit was identified as Exhibit P‑4 dated 20 August 1950. In the case that implicated Tyagi, the transport permit in question was also Exhibit P‑4 but dated 12 May 1950. The former permit purported that tobacco had been received by Om Prakash from a tobacco dealer named Harbans Lal, and a number of sale notes were recorded in the document. However, Harbans Lal was not a licensed dealer of tobacco, lived with Om Prakash, and could not and did not issue any sale note. In the latter permit Om Prakash was said to have received tobacco from a person named Ram Sarup, with false entries of sale notes recorded. Ram Sarup testified that he had never applied for such a transport permit and had certainly not supplied any tobacco. The Court further observed that on the same dates transport permits were issued to Om Prakash for the sale and transport of his tobacco to other persons, and that in those permits it was mentioned

The Court recorded that excise duty had been paid on two transport permits, namely permit number 670953 dated 20‑8‑1950 issued to Harbans Lal and permit number 670832 dated 12‑5‑1950 issued to Ram Sarup. It held that, because fictitious transport permits had been issued in the names of Harbans Lal and Ram Sarup, Om Prakash was able to move a large quantity of tobacco to various persons without actually paying the excise duty that was required on the tobacco covered by those permits. As a result, the Government had been deprived of the excise duty that ought to have been collected on the tobacco that was transported under the false permits.

The Additional Sessions Judge of Etah convicted the appellant Sharma under Section 467 of the Indian Penal Code, sentencing him to three years of rigorous imprisonment and imposing a fine of rupees two hundred. The judgment further stipulated that, in default of payment of the fine, Sharma would suffer an additional six months of rigorous imprisonment. Om Prakash was likewise convicted under Sections 467 and 471 of the Indian Penal Code, receiving a sentence of three years of rigorous imprisonment together with a fine of rupees five hundred, and the decree provided that failure to pay the fine would result in a further nine months of rigorous imprisonment. The appellant Tyagi was convicted by the same judge under Section 467, being sentenced to three years of rigorous imprisonment and a fine of rupees two hundred, with a default clause ordering an extra six months of rigorous imprisonment. In the case involving Tyagi, Om Prakash was again convicted under Sections 467 and 471, receiving the same punishment of three years of rigorous imprisonment and a fine of rupees five hundred, with the same provision for an additional nine months in default. The judge ordered that the imprisonment sentences awarded to Om Prakash in the two separate cases would run concurrently. All the convicted persons appealed to the High Court of Allahabad, resulting in a total of four criminal appeals: Appeals Nos. 1181 and 1205 of 1952 were filed by Tyagi and Om Prakash, while Appeals Nos. 1206 and 1207 of 1952 were filed by Sharma and Om Prakash. The High Court set aside the convictions and sentences of the appellants and Om Prakash and directed that the matters be retried. In the order for retrial, the High Court directed that an alternative charge under Section 467 together with Section 477A of the Indian Penal Code be framed against Sharma and Tyagi, and that an alternative charge of abetment of offences under Sections 467 and 477A be framed against Om Prakash. The High Court further expressed the view that the acquittal of the accused on the charge under Section 120B of the Indian Penal Code was proper because no proper sanction had been obtained. However, the Court observed that the Additional Sessions Judge had failed to consider the provisions of Section 109 of the Indian Penal Code. The High Court noted that, had the trial court been satisfied that there was concert between the appellants and Om Prakash, a charge for abetment of the offences alleged to have been committed by Sharma and Tyagi should have been framed against Om Prakash.

In this matter, the Court observed that the High Court, at an earlier stage, had held that the fictitious permits that were the subject of the prosecution did not fall within the meaning of a false document as defined in Section 464 of the Indian Penal Code. Subsequently, the learned Judge of the High Court expressed an opposite view, stating in his own words: “.......... and I have not been able to make up my mind whether the forged permit in this case can be described a false document or not. In my opinion the fictitious entries made by Tyagi, if proved, will amount to falsification of accounts within the meaning of Section 477A, I. P. C. I am, however, not confident about my opinion. I could have referred the matter to a Divisional Bench of this Court, but as I have to remand the case of Om Prakash, I am sending back the case of Tyagi also. It would have been not desirable to split up the two cases. No doubt I could have utilized the provisions of Sections 236 and 237 of the Code of Criminal Procedure to alter the conviction of Tyagi, if on a consideration of the evidence I had been satisfied that his guilt is proved. In such a case Tyagi would not have been prejudiced because only the label of the offence would have changed and there was no question of giving prominence to a different set of facts.” Although the Judge did not use these exact words in a separate order concerning Criminal Appeals Nos. 1206 and 1207 filed by Sharma and Om Prakash, the Court inferred that the Judge intended the same approach because he expressly noted that the factual matrix of those appeals was identical to that of Criminal Appeals Nos. 1181 and 1205 of 1952.

The appellants, by way of special leave, contended before this Court that the High Court erred in directing a fresh trial. They argued that the learned Judge had been unable to decide whether any offence under Sections 467 and 477A of the Indian Penal Code had been committed, and therefore the convictions of the appellants should have been set aside for lack of proof. The counsel for the appellants further pointed out that the incidents giving rise to the prosecution occurred in May and August 1950, while the complaint was only lodged in 1951. During the intervening period the appellants were suspended from service, and the proceedings involved lengthy hearings before the Magistrate, followed by commitment and trial in the Court of Sessions. The appellants submitted that they had already endured sufficient hardship and that there was no justification for subjecting them to another trial.

In support of their submission, the appellants highlighted the earlier observation of the High Court Judge that “No doubt I could have utilized the provisions of Sections 236 and 237 of the Code of Criminal Procedure to alter the conviction of Tyagi, if, on a consideration of the evidence, I had been satisfied that his guilt is proved.” The appellants interpreted this statement to show that the Judge was not convinced of the guilt of the accused with respect to the offences alleged, and consequently they argued that a retrial would be unwarranted.

It was held that the appellants had been proved to the satisfaction of the learned Judge to be guilty of the offences punishable under Section 467 and Section 477A of the Indian Penal Code. Regarding the final submission of the State, it was pointed out that the learned Judge had repeatedly stated in his judgment that he was not expressing any opinion on the merits of the evidence. The language used by him indicated that, had he examined the evidence and been satisfied that the accused were guilty, he could have invoked the provisions of Sections 236 and 237 of the Code of Criminal Procedure. The reason he did not resort to those provisions was that the case of the appellants could not be separated from the case of Om Prakash. In the view of this Court, the State’s contention was correct and it could not be said that the learned Judge held, on the basis of the evidence, that the guilt of the appellants had not been established.

Concerning the learned Judge’s doubts about whether the permits in question were false documents and his lack of confidence that the fictitious entries made by the appellants amounted to falsification of accounts within the meaning of Section 477A, this Court is of the opinion that the Judge did not intend to convey that no offence under Section 477A had been committed. A careful reading of his judgment clearly shows that he intended the appellants to be retried in order to determine whether that offence had been committed. Even if there were doubts as to whether the permits amounted to falsification of accounts, the text of Section 477A also provides that any person who wilfully, with intent to defraud, makes or abets the making of any false entry, or omits or alters any material particular in any book, paper, writing, valuable security or account, shall be liable to imprisonment for a term which may extend to seven years, or to a fine, or to both. The charge framed under Section 467 at the trial described the making of false or imaginary sale notes and other false entries in the transport permits with the intention of defrauding the Government of its revenues. It appears that, even if some uncertainty existed about whether the permits constituted falsification of accounts, there remained a viable case to be tried on the question of whether the entries were false, thereby contravening the latter part of Section 477A.

The Court also noted that the incidents giving rise to the prosecution occurred as early as May and August 1950, and while the passage of time was considerable, the seriousness of the alleged offences required that a court of law determine the guilt of the appellants on the merits.

The Court observed that it was a matter deserving serious comment that a criminal proceeding against any accused person had remained pending for such an extended period. However, the Court held that it would not be appropriate to intervene only on the basis of this delay. The offences alleged to have been committed by the appellants and by Om Prakash were described as serious in nature, and the Court stressed that a court of law must determine whether they were guilty of those offences. The Court further expressed the view that, rather than directing a fresh trial, the High Court should have disposed of the appeals itself. It noted, as the learned judge had pointed out, that there was no necessity to give prominence to a different set of facts. The Court explained that the provisions of Sections 236 and 237 were sufficiently clear to allow a court to convict an accused of an offence even when that particular offence had not been expressly charged, provided the court was of the opinion that the conditions of Section 236 were satisfied. In other words, if a single act or a series of acts were of such a nature that it was uncertain which of several offences the proved facts would constitute, the accused could be charged with all or any of those offences, and any number of such charges could be tried together; alternatively, the accused could be charged in the alternative with having committed one of the said offences. By virtue of Section 237, even if the accused had been charged with one offence, the Court could find from the evidence that he had committed a different offence that fell within the ambit of Section 236 and could convict him of that offence although he had not been formally charged with it. In the Court’s opinion, therefore, the High Court erred in ordering a retrial of the appellants and should instead have decided, based on the evidence before it, whether any offence had been committed by them. Consequently, the Court allowed the appeals, set aside the High Court’s orders directing a retrial of the appellants, and remanded the matter to the High Court for rehearing of the appellants’ appeals. The Court further directed that the High Court dispose of those appeals as early as possible and that any undue delay in their disposal be avoided.