JASWANTRAI MANILAL AKHANEY versus THE STATE OF BOMBAY.

Citation: [1956] 1 S.C.R. 483 · Decided: 04-05-1956 · Supreme Court of India · Bench: VIVIAN BOSE · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

S.C.R. 
SUPREME COURT REPORTS 
483 
which the State authorities took against the appellants 
in prosecuting them under section 9 of the Act was 
unjustified as the slogans uttered by the appellants 
did not under the circumstances set out above fall 
within the mischief of that section. 
Deprecating as we do the conduct of the appellants 
in uttering these slogans, we cannot help feeling that 
the prosecution has failed to establish that the appel-
lants were guilty of the offence with which they had 
been charged with the result that the appeal of the 
appellants will be allowed, their convictions and sen-
tences passed upon them will be set aside and they 
will be set at liberty forthwith. 
We only hope that 
the observations made by us here will be an eye-
opener to the appellants and they will behave them-
selves better in the future. 
JASWANTRAI MANILAL AKHANEY 
v. 
THE STATE OF BOMBAY. 
[VIVIAN BosE, JAGANNADHADAS and B. P. SINHA JJ.] 
Criminal breach a/trust-Conviction of a banker, Validity a/-
Government Promissory Notes pledged with a bank to cover overdraft 
-No overdraft by the pledgor-Managin(J Director actin(J on behalf 
of all the Directors pledging the Notes to borrow money for the use of 
the bank-Legality-Sale of the Notes by the creditors to realise their 
dues and conseqitent inability of the bank to return them-Mens rea 
-Sanction to prosecute by the Company Judge, if i·equired-Framing 
of charge, if defective-Indian Penal Code (Act XL V of 1860 ), ss. 
409, 79-Indian Contract Act (IX of 1872), s. 179-Indian Com-
panies Act (VII of 1913), s.179-Code of Criminal Procedui·e (Act V 
of 1898), ss. 221, 222, 223. 
The appellant 'Was the Managing Director of a bank and held 
a power of attorney to act on behalf of its Directors and authorising 
him to borrow money on behalf of the bank. Certain Government 
Promissory Notes were pledged with the bank by another bank to 
cover an overdraft account up to a specified amount. There was, 
however, no overdraft by the pledgor. 
The pledgee bank was in a 
precarious financial condition. The appellant pledged the securities 
with a third party to get a loan for the bank's use and on its failure 
63 
1956 
Kartar Singh 
and others 
v. 
The State of 
Punjab 
Bhagwati J. 
1956 
May4 
1956 
Jaswantrai 
Manilal Akhaney 
v. 
The State of 
Bombay 
484 
SUPREME COURT REPORTS 
[1956] 
to repay the same on demand, the creditors sold the securities fo'r 
realising their dues. 
The pJedgee bank was thus no longer in a 
position to return the securities on demand made by the pledger. 
Information was lodged with the police at tha instance of the Official 
Liquidator, appointed to wind up the bank and the appellant was 
put up for trial under s. 409 of the Indian Penal Code. 
Held, that the appellant was guilty of the offence charged and 
the appeal must be dismissed. 
Heldf,.rther, that in the absence of any overdraft by the 
pledger, the pledgee bank acquired no interest in the securities which 
it could deal with and s. 179 of the Contract Act had no application. 
That the delivery of the securities by the pledger :nade the 
pledgee a trustee for him and he remained the owner subject to any 
especial interest created in favour of the pledgee by the agreement 
e.nd in a case, such as the present, where there was no question of 
redeeming the securities by the pledger, there having been no over~ 
draft, or sale by the pledgee in enforcement of any especial interest, 
as none had accrued to it, the pledgee bank had no right to deal 
with the securities. 
That the question whether the temedy of the pledger was by 
way of a suit for damages for breach of contract or by way of a 
criminal prosecution would depend on whether or not there was 
mens rea and other elements constituting the offence. 
That although the offence of criminal breach of trust presup-
poses an entrustment, such entrustment need not conform to all the 
technicalities of the law of truat, and, consequently, in a case such as 
the. present, where the accused had the necessary power and exercised 
dominion over the securities and caused wrongful loss to the pledger 
and wrongful gain to the pledgee by dealing with the securities, he 
was guilty of the offence. 
That the provisions of s. 79 of the Indian Penal Code were of 
no a.va.il to him as it was never pleaded in his written statement nor 
found by the eourts below that be was unaware of the fact that 
there had been no overdraft at all. 
That no sanction u

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