1966 (8) TMI 63 - SC - Indian Laws

Supreme Court Upholds Convictions and Sentences in Fraud Case

SHIVNARAYAN KABRA Versus THE STATE OF MADRAS

The Supreme Court affirmed the High Court's decision, upholding the appellant's convictions and sentences under Section 420 of the Indian Penal Code and ... - Issues Involved:1. Whether the appellant committed the offence of cheating under Section 420 of the Indian Penal Code.2. Whether the appellant violated Sections 21(d) and (e) of the Forward Contracts (Regulation) Act, 1952.3. Whether the forward contracts in question were wagering contracts and thus outside the purview of the Act.4. Whether there was a breach of Section 361 of the Criminal Procedure Code during the trial.5. Whether the combination of multiple instances of alleged cheating into one charge was permissible.Issue-wise Detailed Analysis:1. Offence of Cheating under Section 420, IPC:The appellant was charged with cheating under Section 420, IPC, for inducing P.W. 2 to invest Rs. 12,000 in forward contracts by falsely representing that he could lawfully conduct such business. The court found that the appellant had no right to do forward business as he was not a member of any recognized association. The appellant's representations, including Ex. P-34 and Ex. P-33, were found to be false and misleading. The court held that P.W. 2 would not have parted with the money but for these inducements, thus affirming the conviction under Section 420, IPC.2. Violation of Sections 21(d) and (e) of the Forward Contracts (Regulation) Act, 1952:The appellant was also charged under Sections 21(d) and (e) of the Act for representing that he could conduct forward contracts and advertising for such business without being a member of a recognized association. The court found that the appellant wilfully misrepresented his status and engaged in business activities prohibited under the Act. The penalties under these sections were upheld.3. Wagering Contracts and Purview of the Act:The appellant argued that the forward contracts were wagering contracts and thus outside the Act's purview. The court rejected this argument, stating that the Act was designed to regulate speculative contracts, including those ostensibly for delivery of goods. The court emphasized the legislative intent to curb undesirable speculation and abuse in forward trading, thus bringing such contracts within the Act's scope.4. Breach of Section 361, Criminal Procedure Code:The appellant contended that he did not understand the language of the evidence presented during the trial, violating Section 361(1) of the Criminal Procedure Code. The court found this argument unsubstantiated, noting that the appellant was represented by competent advocates who understood the languages used. The court concluded that any irregularity did not result in prejudice to the appellant and was curable under Section 537, Criminal Procedure Code.5. Combination of Multiple Instances of Cheating into One Charge:The appellant argued that combining six instances of alleged cheating into one charge was illegal. The court dismissed this argument, finding that all instances were part of a single transaction, making a single charge permissible under Section 239, Criminal Procedure Code.Conclusion:The Supreme Court affirmed the High Court's decision, upholding the appellant's convictions and sentences under Section 420, IPC, and Sections 21(d) and (e) of the Forward Contracts (Regulation) Act, 1952. The appeal was dismissed.