Jaikrishnadas Manohardas Desai … vs The State Of Bombay on 16 March, 1960 – Case Summary

In the case of Jaikrishnadas Manohardas Desai vs The State of Bombay on 16 March, 1960, the Supreme Court of India was tasked with examining a complex case of criminal breach of trust. The case was presided over by a bench comprising of J Shah, K Wanchoo, and J Imam.

Facts of the Case

The case began with a trial held with the aid of a common jury in Case No. 38 of the Vth Session 1955 before the Additional Sessions Judge, City Court, Greater Bombay. The two appellants, Jaikrishnadas Manohardas Desai (first appellant) and an unnamed second appellant, were convicted of offences under s. 409 read with s. 34 of the Indian Penal Code. The first appellant was sentenced to rigorous imprisonment for five years, and the second appellant for four years.

The charges stemmed from a tender for dyeing Pugree Cloth invited by the Textile Commissioner on June 15, 1948. The Parikh Dyeing and Printing Mills Ltd., Bombay, of which the first appellant was the Managing Director and the second appellant was a Director and technical expert, submitted a tender which was accepted on July 27, 1948, subject to certain general and special conditions. The company failed to dye the cloth within the stipulated period, leading to a series of correspondences between the company and the Textile Commissioner. The company requested the Textile Commissioner to cancel the contract and by his letter dated April 3, 1950, the Textile Commissioner complied with the request, and cancelled the contract in respect of 96,128 yards.

Issues

The primary issue was the failure of the company to account for approximately 1,30,000 yards of cloth entrusted to them by the Textile Commissioner for dyeing. The company admitted liability to deliver 1,29,748 yards of cloth, but this cloth was not returned to the Textile Commissioner despite repeated demands. The appellants, as directors of the company, had dominion over that cloth and failed to account for it. They rendered a false explanation for their failure to account, which led to charges of criminal breach of trust.

Court’s Observations and Judgment

The court observed that the appellants had failed to account for the cloth over which they had dominion and had rendered a false explanation for their failure to account. The court found that the appellants were liable to account for the cloth over which they had dominion and they failed to do so, and therefore each had committed the offence of criminal breach of trust. The court dismissed the appeal and upheld the conviction of the appellants for the offence under s. 409 of the Indian Penal Code.

The court also noted that the first appellant, as the Managing Director of the company, had primary dominion over the property entrusted to the company. The second appellant, though a Director, was essentially a technician. Therefore, the court made a distinction between the two appellants in terms of sentencing, with the first appellant receiving a longer sentence.

The case serves as a significant precedent in the interpretation of criminal breach of trust under the Indian Penal Code, particularly in cases involving corporate entities and the responsibilities of their directors.