Supreme Court Upholds Conviction for Cheating and Criminal Breach of Trust: Malkeet Singh Gill vs. State of Chhattisgarh (2022)

Introduction

Date of the Judgment: July 05, 2022
Citation: (2022) INSC 622
Judges: Indira Banerjee, J. and J.K. Maheshwari, J.

Can a person be guilty of both cheating and criminal breach of trust for the same actions? The Supreme Court of India recently examined this question in a case involving a company that failed to return deposits to its investors. The court had to determine if the accused, an area manager of the company, could be convicted for both offenses under the Indian Penal Code (IPC). The judgment was delivered by a two-judge bench comprising Justice Indira Banerjee and Justice J.K. Maheshwari, with the opinion authored by Justice J.K. Maheshwari.

Case Background

The case revolves around Revanchal Vitta and Commercial Vikas Limited Company, which collected money from the public through deposits, promising an annual interest of 8 to 10%. The company issued passbooks and receipts to the depositors. When the deposits matured, the company failed to return the money with interest and eventually closed down. A complaint was filed on 12.06.1998 by Ajay Kumar Meenwal, alleging that the company, through its director Ambika Prasad and area manager Malkeet Singh Gill (the appellant), had deceived the public by falsely claiming recognition by the Reserve Bank of India. The depositors were induced with attractive returns, but their deposits were misappropriated. Initially, an offense under Section 420 of the Indian Penal Code (IPC) was registered, which was later expanded to include Sections 467, 468, 471, and 120B read with Section 34 of the IPC.

Timeline

Course of Proceedings

The Trial Court framed charges under Sections 409, 420, 467, 468 read with Section 120B of the IPC. After examining 24 prosecution witnesses, the Trial Court convicted the accused under Sections 409, 420, 409 read with 120B, and 420 read with 120B of the IPC, but acquitted them of charges under Sections 467 and 468 of the IPC. The Additional Sessions Judge, Dhamtari, dismissed the appeal, upholding the Trial Court’s decision. The High Court of Chhattisgarh, in Criminal Revision Nos. 95 of 2005 & 89 of 2006, maintained the conviction, observing that the offense under Section 409 of the IPC was proven due to the appellant’s role in directing the agents. The High Court also upheld the conviction under Section 420 of the IPC, noting the lack of authorization from the Reserve Bank of India and other necessary sanctions. However, the High Court modified the sentence to run concurrently, setting aside the lower courts’ order for consecutive sentences.

Legal Framework

The case primarily involves Sections 409 and 420 of the Indian Penal Code (IPC).

• Section 409 of the IPC: This section deals with criminal breach of trust by a public servant, banker, merchant, or agent. It states that
  “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.”
• Section 420 of the IPC: This section deals with cheating and dishonestly inducing delivery of property. It states that
  “Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”

Arguments

Appellant’s Arguments:

• The appellant argued that the charges under Sections 420 and 409 of the IPC are contradictory and cannot be applied simultaneously.
• It was contended that the prosecution failed to prove the “dishonest intention” required for a conviction under Section 420 of the IPC.
• The appellant claimed to be a mere employee and a scapegoat, alleging selective prosecution.
• The appellant argued that the prosecution failed to prove that the deposited amount was misappropriated for his personal use, which is essential for an offense under Section 409 of the IPC.

Respondent’s Arguments:

• The respondent argued that the concurrent findings of conviction by the lower courts were valid and did not warrant interference by the Supreme Court.
• It was contended that the ingredients for offenses under Sections 409 and 420 of the IPC were rightly proven by the lower courts.
• The respondent pointed out that the argument regarding the antithetical nature of Sections 409 and 420 of the IPC was not raised in the lower courts and should not be considered at this stage.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the primary issue before the Court was whether the appellant could be convicted under both Section 409 and Section 420 of the IPC based on the facts of the case. The sub-issues were:

• Whether the charges under Section 420 and 409 of the IPC are antithetical to each other.
• Whether the prosecution proved the dishonest intention required for a conviction under Section 420 of the IPC.
• Whether the prosecution proved that the appellant misappropriated the deposited amount for his own use, as required for an offense under Section 409 of the IPC.

Treatment of the Issue by the Court

Authorities

The Supreme Court referred to the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Manju Ram Kalita vs State of Assam – (2009) 13 SCC 330: The Court followed this authority to emphasize that the higher court should not interfere with concurrent findings of fact unless they are perverse.
• Sunil Kumar @ Sudhir Kumar & Anr v. The State of Uttar Pradesh (Crl. Appeal 526 of 2021): The Court relied on this judgment to reiterate that the court has the discretion to order sentences to run concurrently.
• O.M. Cherian alias Thankachan v.State of Kerala & Ors. – (2015) 2 SCC 501: The Court cited this authority to clarify that Section 31 of CrPC grants full discretion to the court to order sentences to run concurrently.
• Section 31 of the Criminal Procedure Code (CrPC): The Court used this provision to highlight the court’s discretion in ordering concurrent sentences.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the concurrent findings of the lower courts. The Court emphasized that it is not its role to re-appreciate evidence unless there is a clear error of law or perversity in the findings. The Court also highlighted the importance of maintaining consistency in the application of legal principles and respecting the discretion of the lower courts in matters of sentencing.

Fact:Law Ratio

The Court’s decision was more influenced by the factual findings of the lower courts (60%) than the legal interpretations (40%), emphasizing the importance of the factual matrix in the case.

Logical Reasoning

Reasoning

The Supreme Court’s reasoning was based on the principle that a revisional court should not interfere with the concurrent findings of the lower courts unless there is a clear error of law or perversity in the findings. The Court observed that the High Court, in its revisional jurisdiction, had rightly upheld the conviction while correcting the sentencing to run concurrently. The Court relied on the judgment in Manju Ram Kalita vs State of Assam to emphasize that the higher court does not sit as a regular court of appeal and should not re-appreciate evidence unless the findings are perverse.

The Court also referred to O.M. Cherian alias Thankachan v.State of Kerala & Ors. and Sunil Kumar @ Sudhir Kumar & Anr v. The State of Uttar Pradesh to reiterate that Section 31 of the Criminal Procedure Code (CrPC) grants full discretion to the court to order sentences to run concurrently. The Court found no reason to interfere with the High Court’s decision to make the sentences concurrent, stating that it was in consonance with the provisions of Section 31 of CrPC.

The Court observed:

“The High Court in criminal revision against conviction is not supposed to exercise the jurisdiction alike to the appellate Court and the scope of interference in revision is extremely narrow.”

The Court further stated:

“Section 31 CrPC leaves full discretion with the court to order sentences for two or more offences at one trial to run concurrently, having regard to the nature of offences and attendant aggravating or mitigating circumstances.”

The Court concluded:

“In our considered opinion, there is no infirmity in the order passed by the High Court. Accordingly, the appeal is dismissed.”

Key Takeaways

• The Supreme Court upheld the concurrent findings of the lower courts, emphasizing that revisional courts should not interfere with factual findings unless there is a clear error of law.
• The Court reiterated that Section 31 of the CrPC grants full discretion to the court to order sentences to run concurrently.
• The judgment underscores the importance of respecting the discretion of the lower courts in matters of sentencing.
• The case highlights the potential for individuals to be convicted under both Section 409 and Section 420 of the IPC, depending on the facts of the case.

Directions

The Supreme Court did not provide any specific directions, but upheld the High Court’s decision to make the sentences run concurrently.

Specific Amendments Analysis

There is no discussion of any specific amendments in this judgment.

Development of Law

The ratio decidendi of this case is that the Supreme Court will not interfere with the concurrent findings of fact by the lower courts unless there is a clear error of law or perversity in the findings. The Court also reiterated that Section 31 of the CrPC grants full discretion to the court to order sentences to run concurrently. This judgment reinforces the existing legal position regarding the scope of revisional jurisdiction and the discretion of courts in sentencing.

Conclusion

The Supreme Court dismissed the appeal, upholding the conviction of the appellant under Sections 409 and 420 of the IPC. The Court emphasized that it is not its role to re-appreciate evidence unless there is a clear error of law or perversity in the findings. The Court also reiterated that Section 31 of the CrPC grants full discretion to the court to order sentences to run concurrently. The judgment reinforces the existing legal position regarding the scope of revisional jurisdiction and the discretion of courts in sentencing.