Sikander Lal Jain vs State
2008 Latest Caselaw 1349 Del

IN THE HIGH COURT OF DELHI AT NEW DELHI

                                    Reserved on: July 11, 2008
                                    Date of decision: August 14, 2008


                 CRIMINAL APPEAL No. 334 of 1980


STATE through CBI                              ... Appellant
               Through: Mr. R.M. Tiwari, Advocate.

                           versus


SIKANDAR LAL JAIN & ORS.                 .... Respondents
             Through : Mr. D.C. Mathur, Senior Advocate
             with Mr. Vikram S. Panwar and Ms. Amita
             Abraham, Advocates.


         CORAM:
         HON'BLE DR. JUSTICE S. MURALIDHAR

1.      Whether Reporters of local papers may be
        allowed to see the judgment?                        No

2.      To be referred to the Reporter or not?              Yes

3.      Whether the judgment should be reported             Yes
        in Digest?

                           JUDGMENT

DR. S. MURALIDHAR

1. This appeal is directed against a judgment dated 16 th May 1980

passed by the learned Additional Sessions Judge („ASJ‟) Delhi in

Criminal Appeal No. 2 of 1980 acquitting the respondents of the offences

under Sections 120-B read with Sections 420, 467, 468 and 471 IPC, and

reversing the judgment dated 24th January 1980 passed by the learned

Metropolitan Magistrate („MM‟) convicting the respondents for the said

offences.

2. For the offence under Section 420 IPC each of the respondents was

sentenced by the learned MM to undergo rigorous imprisonment (RI) for

one year with a fine of Rs.2,000 each and in default of the payment of fine

to undergo RI for one year. For the offences under Sections 467, 468, 471

and 120-B IPC, the learned MM sentenced each of them separately to RI

for 2 years for each of the offences with varying fine amounts. The

sentences were directed to run concurrently.

3. The case of the prosecution is that six accused persons i.e. Sikandar

Lal Jain, Madan Lal Jain, Tek Chand Jain, Ram Nath Chopra, Janeshwar

Kumar Jain and B.D. Gupta entered into a criminal conspiracy at Delhi

and other places in the years 1963-1965 to cheat M/s. S.P. Motors for

obtaining 5 TMB chassis in the names of Joginder Kumar, Govind Singh,

Tarsem Lal, Subhash Chander and Sushil Kumar on the basis of forged

documents. It is stated that in terms of the Commercial Vehicles

(Distribution and Sale) Control Order, 1963 („Control Order‟) which was

then in force persons desirous of purchasing commercial vehicles had to

give details in a form set out in Schedule 2 to the Control Order signed by

the applicant. The form was to be submitted to the dealer who was in turn

required to maintain a register containing the details.

4. Sikandar Lal Jain (respondent no.1 herein) has been described by

the prosecution as the brain behind the conspiracy. Madan Lal Jain and

Janeshwar Kumar Jain (Respondents 2 and 3 herein respectively), who

were the partners of M/s. Jain Finance Company, have been described as

the "master minds behind the scheme." It is stated that on 17th and 30th

December 1963 Madan Lal Jain applied to the Central Bank of India,

Chandni Chowk Branch, Delhi for issuance of five Bank Guarantees for

Rs.2,000 each in favour of M/s. S.P. Motors, Hubli for the purchase of

five TMB chassis in the names of the aforementioned five fictitious

persons showing their addresses as that of Madhavpur, Hubli where

Sikandar Lal Jain was actually residing. It is alleged that Sikander Lal

Jain wrote out the booking application on behalf of the aforementioned

fictitious persons and also signed as one of them in one booking

application. He also purchased non-judicial stamp papers for arranging

five powers of attorney (POA). He also signed one of the POAs as Govind

Singh. Delivery of the vehicles/chassis was obtained by Sikander Lal Jain.

The vehicles/chassis were registered with the RTO, Dharwad in the names

of the fictitious persons and later sold in the market to various persons at a

higher price in violation of the Control Order.

5. An FIR was registered on 7th July 1970. By this time the Control

Order had been repealed. The Central Bureau of Investigation (CBI),

which was entrusted with the investigation, filed a chargesheet on 17 th

February 1972. One of the accused B.D Gupta was discharged by an order

dated 21st May 1976 of the learned MM. Two other, Tek Chand Jain and

Ram Nath, died before the trial commenced. The trial proceeded against

the remaining three accused (the respondents 1 to 3 herein). The CBI

examined 39 witnesses. The defence examined five witnesses. By the

judgment dated 24th January 1980, the learned MM convicted the three

respondents in the manner hereinbefore indicated. The said conviction and

sentence were reversed by the learned ASJ by the impugned judgment

dated 16th May 1980. Hence this appeal by the State through the CBI.

Leave to appeal was granted by this Court on 10th November 1980. The

appeal was listed for final hearing thereafter only on 23rd August 2004. It

was dismissed for default twice on 24th February 2005 and 10th September

2007 and then restored on the application of the CBI.

5.1 It is contended by Mr. R.M. Tiwari, learned Senior standing

counsel appearing for the CBI that the learned ASJ erred in concluding

that no prosecution could be initiated for violation of the Control Order

after its repeal in 1967. Relying on the judgment dated 23rd July 1980 of

this Court in Criminal Appeal No. 165 of 1973 [State (Delhi

Administration) v. Mangat Singh] it is submitted that the liability for the

contravention of the Control Order continued even after it was rescinded.

The prosecution was valid as long as the act complained of took place

during the pendency of the Control Order. Next, he submits that the

learned ASJ erred in holding that separate charges were required to be

framed against each of the accused. According to him the charges were

read out in detail to each of the accused at the time of recording their pleas

and in any event this was at best an irregularity that did not vitiate the

trial.

5.2 Mr.Tiwari submits that the learned ASJ erred in holding that the

Priority Booking Register had not been proved by the prosecution when in

fact it was produced and marked as Ex.1 during the trial. As regards the

prosecution having to prove wrongful gain or wrongful loss, he submits

that the accused wrongfully gained by selling the chassis in the open

market at a higher price. Correspondingly, there was a wrongful loss

caused to the five persons in the waiting list instead of whom the five

fictitious persons were allotted the chassis.

5.3 It is submitted that the evidence of PW 22, the expert on questioned

documents, proves that the handwriting on the form is that of S.L.Jain and

that the evidence of PW 30, the stamp vendor, confirms that the stamp

papers were purchased by him. Reference is made to the answers given

by S.L.Jain to the questions put to him under Section 313 CrPC to contend

that he did not deny his handwriting on the incriminating documents.

Reliance is also placed on the decision of the Supreme Court in G.S.

Bansal v. The Delhi Administration AIR 1963 SC 1577.

6.1 On behalf of the respondents it is submitted by Shri D.C. Mathur,

learned Senior counsel that the FIR was itself registered three years after

the Control Order was rescinded and seven years after the alleged events

took place. This delay in launching prosecution was not sufficiently

explained. Relying on State v. Jagamander Das AIR 1954 SC 683,

Madan Lal Batra v. State 1982 (11) FAC 155 and S. Krishnan v. State of

Madras AIR 1951 SC 301 it is submitted that the proceedings under the

Control Order could not be initiated after it was rescinded.

6.2 It was further submitted that the offence was really of the violation

of the Industries (Development and Regulation) Act 1951 (ID&R Act)

under which the Control Order was issued. The penal provision is Section

24 which prescribes a maximum punishment of 6 months. This would

attract the limitation period under Section 468 CrPC. Further, the

corresponding offence of criminal conspiracy would be under Section 120

B (2) IPC which required previous sanction of the Sate Government.

Inasmuch as there was no such sanction, the prosecution for the offence

under Section 120 B was bad in law.

6.3 Next it is submitted that the acquittal of the respondents by the

learned ASJ was continuing for a period of 28 years. It was 45 years since

the alleged offences were committed. The respondent accused are now

senior citizens and little purpose would be served if the acquittal were to

be reversed at this stage. Reliance is placed on the decision of this Court

in State v. Devinder Kumar 2008 (2) JCC 1164.

6.4 On merits, Mr.Mathur submits that there is no material to connect

Respondents 2 and 3 with the offences. They have been roped in only as

partners of a finance firm which itself has not been arraigned as accused.

Reliance is placed on the judgment of this Court in Ashok Sikka v. State

2008 (1) JCC 577. Further, although the respondents No. 2 and 3 were

charged only under Section 120 B IPC read with Sections 420/467/468

and 471 IPC, yet they were convicted and sentenced separately by the

learned MM for the substantive offences as well.

6.5 The case of the prosecution that purchase of the vehicles had been

made in the name of the fictitious persons was belied by the fact that three

of them, viz., Sushil Kumar, Joginder Kumar and Gobind Singh appeared

as defence witnesses and stated in their testimonies that they had

authorized Sikandar Lal Jain to apply on their behalf for purchasing

chassis. Further, unless the criminal intent of the maker of the forged

documents is established no charge of forgery can be sustained. Reliance

is placed on the decision of the Supreme Court in Vimla v. Delhi

Administration AIR 1963 SC 1572. The testimony of the defence

witnesses prove that the element of dishonest intention which is a sine qua

non for the offence under Sections 468 and 471 IPC was absent in the

present case. It is submitted that the case of the prosecution that M/s. S.P.

Motors suffered monetary loss is disproved by the evidence of PW-2

Antony Fernandes and PW-36 Dadi Damwala, the partner. There was no

complaint by M/s. S.P. Motors, Hubli against the respondents herein

alleging any act of cheating.

7. This Court has carefully examined the records of the case and

considered the submissions of the learned counsel for the parties.

8. The pleas of the defence can be broadly classified as being on

technical grounds and on merits. The first of the technical grounds is that

the prosecution could not been initiated after the Control Order was

rescinded. The learned ASJ has accepted the plea by relying on the

decisions in State v. Jagamander Das (supra) and S. Krishnan v. State of

Madras (supra). In the said cases the Act under which the offences were

defined was itself repealed and in those circumstances the Supreme Court

held that the prosecution could not have been initiated thereafter.

However, in the present case neither the IPC, for offences under which the

prosecution was launched, nor the ID&R Act under which the Control

Order was issued, were repealed. Therefore, the ratio of the decision of

this Court in Mangat Singh appears to apply in the instant case and the

prosecution cannot be said to be bad in law only because it was initiated

after the Control Order was rescinded. To this extent there is merit in the

contention of the appellant.

9. As regards the plea that without prior sanction under Section 196

(2) CrPC, the prosecution under Section 120 B (2) IPC is bad in law, it

may be mentioned that the offence is not exclusively under Section 24

ID&R Act as contended by the accused but under Section 120 B IPC read

with Sections 420, 467, 468 and 471 IPC. Moreover, in Bhanwar Singh v.

State of Rajasthan AIR 1968 SC 709 it was held that the mere absence of

prior sanction would not vitiate the trial. The error if any in not framing

charges separately against the accused for each substantive offence for

which they were convicted is an irregularity which, in terms of Sections

464 and 465 CrPC, need not vitiate the trial itself.

10. While the prosecution may not fail only because the Control Order

stands rescinded, the accused are justified in their contention that the

prosecution has not been able to satisfactorily explain the delay of seven

years in registering the FIR and a further delay of two years in filing the

charge sheet. Also, the court cannot be unmindful of the fact that the

acquittal of the respondents has subsisted for more than 28 years and that

more than 45 years have gone by since the commission of the alleged

offences. It is nobody‟s case that the accused have in any manner delayed

either the trial or the appeal. Nevertheless, this Court has also examined

the evidence to ascertain if there are sufficient grounds on merits to

sustain a conviction.

11. This Court first takes up the case against respondents 2 and 3. The

learned Senior counsel for the respondents is right in the contention that

no specific role has been attributed to either of them to connect them with

the offences in question. They appear to have been roped in because they

happened to be the partners of Jain Finance Company which financed the

purchases of the chassis. However, the said firm has itself not been

arraigned as an accused. In Maksud Saiyed v. State of Gujarat 2007 (1)

SCALE 318 the Supreme Court was considering the question whether a

vicarious liability could attach to the director of a company, where the

company is a principal accused. Holding that the concept of vicarious

liability of directors is alien to the IPC, the Supreme Court explained that

in the absence of specific allegations against the directors individually,

they could not be prosecuted for an IPC offence. This would equally apply

in the present case where in the absence of the firm being made an

accused, its individual partners cannot be charged with IPC offences.

There is no evidence to show that respondents 2 and 3 were themselves

individually involved in the commission of the offences or the offence of

conspiracy. The prosecution has attributed all the substantive acts to

accused No.1 Sikander Lal Jain. Therefore, the conclusion of the learned

ASJ in the impugned order acquitting respondents 2 and 3 cannot be

faulted with. No case is therefore made out for interfering with the

acquittal of the respondents No.2 and 3.

12. Turning to the first respondent, it needs to be recalled that one of

the key elements of Section 420 IPC as well as Sections 468 and 471 IPC

is dishonest intention. The major limb of the prosecution story is that the

five persons in whose names the chassis were purchased were all

fictitious. This is totally belied by the evidence of three of them who

appeared at the trial as defence witnesses. They have deposed that they

authorized accused No.1 S.L.Jain to act on their behalf for obtaining the

chassis. This, to a considerable extent, takes away the very basis of the

prosecution story. In the light of this evidence, it would be unsafe to draw

an inference of dishonest intention of the accused only on the basis of the

evidence of PWs 22 and 30. In this context the learned ASJ was right in

placing reliance on the decision in Dr.Vimla v. Delhi Admn (supra).

13. As far as Section 420 IPC is concerned the prosecution must show

that wrongful loss had been caused to the victim and that the accused had

wrongfully gained. The evidence brought on record in the form of PW-2

Antony Fernandes and PW-36 Dadi Damwala indicates that no wrongful

loss was caused to M/s. S.P. Motors by the actions of respondents 1 to 3.

As regards any loss to those in the waiting list, the learned ASJ has rightly

observed that no such waiting list has been shown to exist. Further,

although it contends that the chassis were sold in the market at a higher

price, the prosecution has not been able to produce evidence to show that

there was any wrongful gain to respondent No.1 himself. Therefore, the

decision in G.S.Bansal is distinguishable on facts.

14. On an overall consideration of the evidence on record it is required

to be seen if the prosecution has been able to bring home the guilt of the

accused beyond reasonable doubt or whether there is material to give

benefit of doubt to the accused. From the evidence produced by the

prosecution in the present case, and in light of the unexplained delay in

even registering the case against him, the accused Sikandar Lal Jain would

be entitled to the benefit of doubt. The charges against him cannot be said

to have been proved beyond reasonable doubt.

15. For the aforementioned reasons, the acquittal of the respondents by

the impugned judgment of the learned ASJ is hereby upheld. The appeal

is accordingly dismissed with no order as to costs.

S. MURALIDHAR, J.

AUGUST 14, 2008 rk/dn