State of Bombay vs S. L. Apte and Another

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

Court: supreme-court

Case Number: Criminal Appeal No. 63 of 1957

Decision Date: 9 December 1960

Coram: N. Rajagopala Ayyangar, S.K. Das, A.K. Sarkar, J.R. Mudholkar

In this case the Supreme Court of India heard a petition filed by the State of Bombay against S L Apte and another respondent. The judgment was delivered on 9 December 1960. The bench was composed of N Rajagopala Ayyangar, S K Das, A K Sarkar and J R Mudholkar. The case is reported in 1961 AIR 578 and 1961 SCR (3) 107 and has been cited in later reports. The legal issue concerned the rule against double jeopardy under Article 20(2) of the Constitution of India and the corresponding provision in Section 26 of the General Clauses Act, 1897. Article 20(2) provides that no person shall be prosecuted and punished for the same offence more than once, while Section 26 states that when a single act or omission violates two or more statutes, the offender may be prosecuted under either or any of those statutes but may not be punished twice for the same offence. The respondents had been convicted and sentenced by a magistrate on two counts: one under Section 409 of the Indian Penal Code and another under Section 105 of the Insurance Act, 1938. On appeal the Sessions Judge affirmed the conviction and sentence under Section 409 of the Indian Penal Code but set aside the conviction under Section 105 of the Insurance Act because the required sanction under Section 107 of the Insurance Act had not been obtained at that time. After the sanction was subsequently obtained the State filed a fresh complaint under Section 105 of the Insurance Act. In the re‑examined trial the magistrate acquitted the respondents, holding that both Article 20(2) of the Constitution and Section 26 of the General Clauses Act barred a second punishment for the same offence. The State appealed the acquittal to the Bombay High Court, but the high court dismissed the appeal. The State then sought a further appeal before the Supreme Court. The Court held that for Article 20(2) to apply the two offences must be identical in nature. Consequently the Court emphasized that the comparison must be made between the statutory ingredients of the two offences rather than between the factual allegations in the two complaints. Upon such analysis the Court found that although the two offences share certain common elements, the offence created by Section 409 of the Indian Penal Code and the offence created by Section 105 of the Insurance Act differ in their essential ingredients, content and scope and therefore they are not identical. The Court referred to the decisions in Om Prakash Gupta v State of U P (1957) SCR 423 and State of Madhya Pradesh v Veereshwar Rao Agnihotry (1957) SCR 868, noting that this view is consistent with earlier authorities.

The Court noted that the American courts have traditionally interpreted the rule against double jeopardy by focusing on the nature of the offenses rather than merely the factual allegations, as illustrated in Albrecht v. United States (1927) 273 U.S. 1: 71 L.Ed. 505. In the same vein, Section 26 of the General Clauses Act places its emphasis on the essential ingredients of the two offences charged, not on the specific facts alleged in the respective complaints. This approach to construing Article 20(2) of the Constitution together with Section 26 of the General Clauses Act, 1897, aligns precisely with the provision of Section 403(2) of the Code of Criminal Procedure. Accordingly, the Court concluded that, in the present matter, the respondents could not be said to be punished for the same offense for the purpose of invoking either Article 20(2) of the Constitution or Section 26 of the General Clauses Act, 1897. The judgment was delivered in the Criminal Appellate Jurisdiction concerning Criminal Appeal No. 63 of 1957, which arose from the judgment and order dated 2 March 1956 of the Bombay High Court in Criminal Appeal No. 1258 of 1955. Counsel for the appellant were H. R. Khanna and R. H. Dhebar, while N. S. Bindra appeared for the respondents as amicus curiae. The decision was pronounced on 9 December 1960 by Justice Ayyangar, who noted that the appeal, issued on a certificate under Article 134(1) of the Constitution granted by the High Court of Bombay, principally raised the question of the application and scope of Article 20(2) of the Constitution and Section 26 of the General Clauses Act. The material facts essential for understanding the points raised were succinctly summarized. The two respondents, S. L. Apte and Miss Dwarkabai Bhat, served respectively as Managing Director and Managing Director of the Women's Department of The Long Life Insurance Company, headquartered at Poona. In June 1942 the company executed a power of attorney in favour of the first respondent, granting him authority, control and possession of the company’s monies for the purpose of investing them in appropriate securities. Around the same time, the second respondent, also a Managing Director, received a separate power of attorney authorising her to assist the first respondent in maintaining the company’s accounts. While they performed these functions, an audit conducted in 1952 revealed that cash balances exceeding Rs 55,000 were shown as being in the possession of the first respondent. Subsequent inquiries by the directors uncovered that, over time, sums totalling more than Rs 95,000 had been withdrawn from the company by the first respondent with the assistance and sanction of the second respondent, purportedly for company expenses. Among the company’s records was a voucher dated 9 August 1952, evidencing the withdrawal of that amount by the first respondent; the voucher bore his signature as well as the signature of the second respondent, indicating her sanction of the transaction.

In the case, the second respondent signed the voucher dated August 9, 1952 as a token of her sanction for the withdrawal of money by the first respondent. However, the two respondents were unable to produce any proper account showing that the sum withdrawn had been spent on legitimate company expenses. Consequently, both respondents were charged with an offence punishable under section 409 of the Indian Penal Code and with an offence punishable under section 105 of the Indian Insurance Act, the charges being framed in Criminal Case 82 of 1953. The learned magistrate tried the case, found the respondents guilty of both offences, and sentenced them accordingly.

Both respondents appealed the conviction to the Sessions Judge at Poona. The Sessions Judge, by his order dated 3 May 1954, affirmed the conviction and sentence under section 409 of the Indian Penal Code but set aside the conviction under section 105 of the Indian Insurance Act. The judge explained that the prosecution under section 105 required a prior sanction under section 107 of the Indian Insurance Act, and such sanction had not been obtained before the complaint was filed. The conviction and sentence under section 409, which the Sessions Judge confirmed, consequently became final. After the Sessions Judge’s order, the insurance company obtained the necessary sanction from the Advocate‑General of Bombay pursuant to section 107 of the Indian Insurance Act and filed a fresh complaint in the Court of the Judicial Magistrate at Poona on 18 January 1955, again charging each respondent with an offence under section 105 of the Insurance Act. The magistrate entered the case on the court’s roll and ordered that process be issued.

On 22 March 1955, the two respondents applied to the magistrate for dismissal of the fresh complaint, invoking section 403(1) of the Criminal Procedure Code. They contended that the complaint was barred because they had already been convicted by the magistrate for the same offence under the Insurance Act and had been acquitted of that conviction by the Sessions Judge, and they additionally argued that a portion of the sentence imposed by the magistrate had already been served. The learned magistrate rejected the application, holding that the acquittal by the Sessions Judge was not on the merits of the case but was based solely on the lack of sanction required under section 107, which meant the earlier magistrate had no jurisdiction to entertain the complaint. The trial then proceeded, evidence was adduced, and after evaluating the material, the magistrate finally acquitted the respondents. The magistrate’s acquittal was grounded on the view that article 20(2) of the Constitution of India and section 26 of the General Clauses Act barred any conviction and punishment in the circumstances.

The State of Bombay appealed the magistrate’s order to the High Court under section 417 of the Criminal Procedure Code. The High Court dismissed the appeal but, recognizing the significance of the questions raised, granted a certificate of fitness for appeal, on the basis of which the present appeal was preferred.

In the present matter, the Court observed that the prosecution of the respondents under section 105 of the Insurance Act could not proceed because it was barred by the provisions of Article 20(2) of the Constitution and section 26 of the General Clauses Act. Before analysing the meaning and reach of those two provisions, the Court found it useful to set them out in full. Article 20(2) of the Constitution stated: “No person shall be prosecuted and punished for the same offence more than once.” Section 26 of the General Clauses Act provided: “Where an act or omission constitutes an offence under two or more enactments, then the offender shall be liable to be prosecuted and punished under either or any of those enactments, but shall not be liable to be punished twice for the same offence.” The Court noted that the operation of these safeguards depended on whether the offences for which prosecution was sought were identical. Consequently, the Court reproduced the statutory definitions of the two offences that formed the basis of the case. Section 409 of the Indian Penal Code read: “Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.” The Court further explained that the term “criminal breach of trust” was defined in section 405 of the Indian Penal Code as follows: “Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits ‘criminal breach of trust’.” Finally, the Court set out the offence created by the Insurance Act in section 105, which provided: “(1) Any director, managing agent, manager or other officer or employee of an insurer who wrongfully obtains possession of any property of the insurer or having any such property in his possession wrongfully withholds it or wilfully applies it to purposes other than those expressed or authorised by this Act shall, on the complaint of the Controller made after giving the insurer not less than fifteen days’ notice of his intention, or on the complaint of the insurer or any member or any policy‑holder thereof, be punishable with fine which may extend to one thousand rupees and may be ordered by the Court trying the offence to deliver up or refund within a time to be fixed by the Court any such property.”

In the provision, any property that was improperly obtained, wrongfully withheld, or wilfully misapplied could lead to imprisonment for a period not exceeding two years. Sub‑section (2) added that the same rule would also apply to a provident society defined in Part III in the same way it applied to an insurer. Before examining the arguments presented by counsel for the appellant State, the Court found it necessary to isolate one point and set it aside. The State’s entire argument before the High Court was that the order of a Criminal Court issued under section 105 of the Indian Insurance Act, which directed the accused to “deliver up or refund… any such property improperly withheld or wilfully misapplied,” did not constitute a “punishment” under either article 20(2) of the Constitution or section 26 of the General Clauses Act. The learned Judges of the High Court rejected that contention. Although counsel for the appellant initially claimed to be contesting the High Court’s conclusion, no argument on that ground was later advanced before this Court. Consequently, the Court did not consider the matter further and proceeded on the premise that the magistrate’s direction to replace the insurer’s money with a term of imprisonment, should the accused fail to comply, was indeed a “punishment” within article 20(2) of the Constitution and section 26 of the General Clauses Act. Turning to the substantive issues raised, the Court noted that it was not contested by counsel for the State, nor by the High Court, that the allegations contained in the original complaint in Criminal Case 82 of 1953—on which the conviction under section 409 of the Indian Penal Code was based—were substantially similar to those set out in the complaint under section 105 of the Insurance Act. However, the Court observed that the statements of fact were not identical in every respect regarding the acts and omissions of the respondents alleged to constitute the two offences, namely section 409 of the Penal Code and section 105 of the Insurance Act. For example, the complaint that gave rise to this appeal singled out paragraphs 12 and 13 as the crucial allegations. Paragraph 12 stated: “The company submits that the accused has thus wrongfully obtained possession of Rs. 95,000 or, having that property in his possession, wrongfully withheld it or wilfully applied it to purposes other than those expressed or authorised by the Insurance Act, 1938, and committed an offence on the 9th August, 1952, under a section of the Insurance Act, 1938.” Paragraph 13 recorded that “the company through their solicitors called upon the accused to explain his conduct within seven days from the receipt of the letter. The accused has failed and neglected to reply to the said letters.”

The Court observed that the allegations set forth in the complaints were insufficient to establish the offence of criminal breach of trust because the statements did not refer to any entrustment of property nor to a dishonest intention, both of which are essential elements of that offence. The Court noted that it would later return to the question of the differing ingredients of the two offences. Even if one were to assume, for the sake of argument, that the factual allegations contained in the two complaints were identical, the Court held that a further issue remained: to invoke the prohibition against double punishment contained in Article 20(2) of the Constitution or Section 26 of the General Clauses Act, it must be determined whether it is enough that the allegations in the two complaints are substantially the same, or whether it is necessary that the statutory ingredients that constitute the two offences be identical. The Court first recited the wording of Article 20(2), which states, “No person shall be prosecuted and punished for the same offence more than once.” The Court explained that, for the constitutional bar to apply, a second prosecution and any subsequent punishment must be for “the same offence.” Consequently, the crucial test is that the offences in question be identical in nature. The Court further explained that if the two offences are distinct, then, despite the possibility that the factual allegations may be substantially similar, the protection of Article 20(2) cannot be claimed. Accordingly, the Court said that the comparison must focus not on the allegations in the complaints but on the legal ingredients of the two statutes to determine whether they are the same. A comparison of Section 105 of the Insurance Act with Section 405 of the Indian Penal Code (noting that Section 409 is merely an aggravated form of the same offence) showed that, although some elements overlap, they differ in two important respects. First, Section 405 requires that the accused be “entrusted” with property or have “dominion” over it, whereas Section 105 does not require entrustment or dominion; it is sufficient that a manager, director or similar officer merely “obtains possession” of the property. Second, the offence under Section 405 is only complete when the misappropriation, conversion or illegal disposition is done with a dishonest intention, while Section 105 makes no reference to intention and punishes the mere withholding of the insurer’s property, regardless of the holder’s motive, and likewise penalises using the property for purposes not authorised by the Act without regard to intent. In these circumstances, the Court concluded that it could not be said that the criminal breach of trust offence under the Indian Penal Code is the

The Court observed that the respondents had been prosecuted for “the same offence” on the complaint of the company, even though the charge was brought under section 105 of the Insurance Act. This issue, which concerned the distinction between the two offences in their elements, content and scope, was not put before the learned Judges of the High Court, perhaps because the decisions of this Court interpreting Article 20(2) of the Constitution were decided only later. The Court then referred to the earlier decision in Om Prakash Gupta v. State of U.P. (1) [1957] S.C.R. 423, where the accused, a municipal clerk, had been convicted under section 409 of the Indian Penal Code for misappropriating money received in his official capacity. That conviction was affirmed by the Sessions Judge and by the High Court on revision. When the matter reached this Court on appeal with special leave, the accused contended that section 409 of the Indian Penal Code had been repealed by implication by the enactment of sub‑sections (1)(c) and (2) of section 5 of the Prevention of Corruption Act, arguing that the latter provision created an offence of essentially the same type. The Court rejected that contention, analysing the essential ingredients of the two offences and pointing out that the crucial elements differed. Consequently, the Court held that no implied repeal of section 409 of the Indian Penal Code had occurred by the creation of a new offence under the Prevention of Corruption Act. The Court noted that the reasoning and ratio in that case, applied to the question of Article 20(2) of the Constitution, were relevant to the present appeal.

The Court then explained how the principle articulated in Om Prakash Gupta was applied in the case of State of Madhya Pradesh v. Veereshwar Rao Agnihotry (1). In that case the respondent, who was a tax‑collector employed by a municipality, faced prosecution for offences under both section 409 of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act for misappropriating sums entrusted to him in his official role. Pursuant to section 7 of the Criminal Law Amendment Act, XLVI of 1952, the matter was transferred to a Special Judge appointed by the State Government after the prosecution had originally commenced before a Magistrate. The Special Judge found the accused guilty of the offence under section 409 of the Indian Penal Code and sentenced him to three years of rigorous imprisonment. However, the Special Judge acquitted the accused of the charge under section 5(2) of the Prevention of Corruption Act, holding that certain procedural requirements prescribed by that enactment for investigation had not been complied with. The respondent then appealed to the High Court against the conviction and sentence under section 409 of the Indian Penal Code, arguing that because he had been acquitted of the offence under section 5(2) of the Prevention of Corruption Act, his conviction under section 409 could not be sustained, the two convictions being barred by Article 20(2) of the Constitution. The High Court accepted this argument and allowed the appeal, a decision that was subsequently challenged by the State before this Court.

The respondent argued that his acquittal under section 5(2) of the Prevention of Corruption Act meant that his conviction under section 409 of the Indian Penal Code could not be maintained, asserting that such a conviction would be barred by Article 20(2) of the Constitution. The High Court of Madhya Bharat accepted this argument and allowed the appeal. The State subsequently challenged the correctness of that decision by filing an appeal before this Court. In allowing the State’s appeal, Justice Govinda Menon, delivering the judgment of the Court, observed that a recent decision of this Court in Om Prakash Gupta v. The State of U.P. had held that the offence of criminal misconduct punishable under section 5(2) of the Prevention of Corruption Act, 1947, is not identical in essence, import, or content with an offence under section 409 of the Indian Penal Code. Relying on that pronouncement, Justice Menon stated that the view taken by the learned Judge of the High Court – that the two offences were one and the same – was erroneous. Consequently, there could be no objection to a trial and conviction under section 409 of the Indian Penal Code even though the respondent had been acquitted of an offence under section 5(2) of the Prevention of Corruption Act, 1947. The High Court had also relied on Article 20 of the Constitution to sustain the order of acquittal, but Justice Menon explained that the article could not apply because the respondent was not prosecuted after having already been tried and acquitted for the same offence in an earlier trial. Therefore, the well‑known maxim “Nemo debet bis vexari, si constat curiae quod sit pro una et eadem causa” (No man shall be twice punished, if it appears to the court that it is for one and the same cause) embodied in Article 20 could not be invoked.

Justice Menon further observed that a similar interpretation of the double‑jeopardy rule has been consistently adopted by courts in the United States. He quoted the wording of the Fifth Amendment to the American Constitution, which provides: “Nor shall any person be subject, for the same offence, to be twice put in jeopardy of life or limb.” He noted that, as in the Indian context, the prohibition is limited to a second prosecution and punishment for the same offence. Citing the American authority of Willoughby, Justice Menon explained that Willoughby, after referring to the Fifth Amendment, observed that cases may arise in which the same act may render the actor guilty of two distinct offences; in such situations the accused cannot invoke the trial and acquittal, or the conviction and punishment for one offence, as a bar to a conviction for the other. He then referred to the decision in Albrecht v. United States, citing the United States Reports, Volume II, page 1158, where Justice Brandeis, speaking for a unanimous Court, described a claim of violation of the Fifth Amendment based on the imposition of double punishment. The Court’s analysis began with the factual premise that, of the nine counts in the information, four …

In the case before the Court, the respondents were charged with three offences: illegal possession of liquor, illegal sale of liquor, and maintaining a common nuisance. The defence argued that the punishment imposed amounted to double punishment because the liquor for which the respondents were convicted of selling was the same liquor for which they were convicted of possessing. The Court observed that possession and sale are separate offences. It is possible for a person to possess liquor without selling it, and it is also possible for a person to sell liquor that he never possessed, or to possess liquor and later sell it, as occurred in the present case. The mere fact that the respondent sold the liquor he possessed does not convert the two statutory provisions into a single offence. The Constitution does not forbid the Parliament from punishing each step of a prohibited transaction separately, nor does it prevent the Parliament from punishing the completed transaction itself.

Consequently, because the two offences are distinct, the rule against double jeopardy embodied in Article 20(2) of the Constitution does not apply. The Court then turned to the scope of section 26 of the General Clauses Act. Although the opening words of that section refer to “the act or omission constituting an offence under two or more enactments,” the emphasis is placed on the elements that constitute each offence for which a person is charged, not on the factual overlap of the two complaints. This interpretation is reinforced by the concluding part of the section, which states that a person “shall not be liable to be punished twice for the same offence.” If the offences are not the same but are formed of different ingredients, the prohibition in that provision cannot be invoked.

Applying this principle, the Court held that the respondents were not being punished twice for the same offence; rather, they faced two distinct offences that are composed of different statutory elements. Therefore, the bar created by section 26 of the General Clauses Act is inapplicable. The Court noted that this construction of Article 20(2) and section 26 aligns with section 403(2) of the Criminal Procedure Code, which permits a person who has been acquitted or convicted of one offence to be tried subsequently for a distinct offence for which a separate charge could have been made in the earlier trial.

It was also observed that the respondents had originally been charged before the Magistrate in Criminal Case 82 of 1953 with offences under section 409 of the Indian Penal Code and section 105 of the Indian Insurance Act. Because the respondents did not appear before this Court, the appeal was heard ex parte. To assist the Court, Mr N S Bindra was invited to appear as amicus curiae.

The Court appointed an amicus curiae to assist it during the hearing of the appeal and then recorded its appreciation for the assistance rendered by that friend of the court. After the arguments and evidence were considered, the Court determined that the appeal was maintainable and that the relief sought by the appellants should be granted. Accordingly, the Court set aside both the judgment and the order that had been issued by the High Court in the earlier proceedings. By vacating those operative directions, the Court removed the prior determination and restored the matter to its pre‑appellate status. The case was then directed to be returned to the Judicial Magistrate of the Fourth Court at Poona so that the trial could be conducted anew and in strict compliance with the applicable legal provisions. The remand order required the magistrate to proceed with the case in accordance with the law, ensuring that any procedural defects identified by this Court would be corrected and that the substantive issues would be tried afresh. In sum, the appeal was allowed, the High Court’s judgment and order were set aside, and the entire proceeding was remanded to the lower magistrate for further action consistent with statutory requirements. This disposition fully satisfied the Court’s determination that the proper course was to restart the trial before the appropriate magistrate.