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Criminal Revision No. 751 of 1959, decided on 11th July 1960.
, S. 439‑Revisional powers of High Court‑Case of acquittal‑Powers unlimited‑Dis cretion :‑[Anwar and another v. The Crown P L D 1955 F C 185 followed].
S. 409‑Criminal breach of trust‑Written agreement between principal and agent embodying arbitration clause‑Existence of clause does not imply that no criminal liability can ever arise under agreement.
The existence of an arbitration clause in an agreement between principal and agent cannot be used to say that no criminal liability under section 409, P. P. C. can ever arise under the agreement.
S. 409‑Misappropriation with dishonest intention necessary for conviction‑Mere refusal to render accounts or pay the money‑Not enough.
In order to secure a conviction for an offence of criminal breach of trust, it must be shown in all cases that there was dis honest intention on the part of the person to whom the property was entrusted. A mere refusal on the part of an agent to render accounts or to pay the money due is not enough to bring him within the mischief of section 409, P. P. C. In other words the misappro priation of the entrusted property must be shown to be with dis honest intention.
In the present case the relationship of principal and agent was established between the parties in 1950, and it is the complainant's case that for five years the work proceeded smoothly and the trouble arose only when the complainant opened a second agency at Lyallpur and did not accede to the request of the respondent to close down that agency. It was the assertion of the petitioner complainant himself that the respondent got annoyed at the opening of the second agency and refused to render accounts for that reason.
Held, that the reason for the refusal of the respondent to render accounts was not related to any dishonest intention on his part.
Kanhaiya Lal v. Emperor A I R 1937 Oudh 331; O. A. Odayapa Chettyar v. K. R. O. Odayapa Chettyar A I R 1939 Rang. 505 ; In re Ramakhal and others A I R 1938 Mad. 172 ; Rex v. V. Krishnan A I R 1940 Mad. 329 ; Puran and another v. Emperor A I R 1926 All. 298 and Khaliq Hussain v. The Crown P L D 1956 Kar. 212 ref.
S. 105‑Criminal breach of trust‑Principal and agent‑Entrustment, and custody of goods and proceeds, established by principal‑Onus on agent to account for goods and proceeds to the extent of creating reasonable doubt in his favour‑Penal Code (XLV of 1860), S. 409.
S. 105‑Criminal breach of trust- Act of withholding goods or money belonging to principal by agent‑Prima facie dishonest‑Penal Code (XLV of 1860), S. 409.
S. 439‑Revision from acquittal‑Case under section 409, P. P. C.‑Order of acquit tal "grave miscarriage of justice"‑Civil suit in respect of property, the subject or offence, pending‑Case not of public importance -Other Member of Division Bench of opinion that Revision petition be dismissed‑Re‑trial not ordered.
M. Anwar and Hafizur Rehman for Petitioner.
Khurshid Ahmad, M. S. Baqir, Kh. Abdur Rahim, M. Z. Khalil and Wali Muhammad Khan for Respondent.
Dates of hearing: 25th, 27th and 31st May 1960 ;1st and 2nd June 1960.
.‑This is a revision petition against an order dated the 21st of January 1959 passed by Mr. Muhammad Nawaz Cheema, Magistrate of the 1st Class at Montgomery, acquitting the respondent, S. M. Illahi of a charge under section 409 of the Pakistan Penal Code. The petition has‑been' necessitated by the refusal of the District Magistrate to move the Provincial Govern ment for filing an appeal against the acquittal.
2. The case for the prosecution was that the respondent, S. M. Illahi, had entered into an agency agreement with the peti tioner‑complainant, Sutlej Cotton Mills, Okara, on the 10th of July 1950. The respondent was to serve as the company's agent at Lyallpur. The written agreement, embodied in document (Exh. P. A.), established a relationship of principal and agent between the parties, and stipulated that the agent would send to the principal daily returns of the sales effected and monthly returns of the stocks held by him. The work proceeded smoothly for about five years, when in September 1955 differences arose between the parties owing to the appointment of another firm, M. A. Hameed & Company, as a second agent of the Sutlej Cotton Mills at Lyallpur. It was alleged that the respondent became annoyed with the petitioner and stopped remitting the monies in hand to the principal after September 1955 and also refus ed to send the stock returns after October 1955. Very lengthy correspondence ensued between the parties, but the petitioner failed to persuade the respondent, S. M. Illahi, either to pay the money due from him or to return the unsold stock of goods. The peti tioner, thereupon, registered a criminal case against the respondent on‑the 5th of January 1957, but as the police did not present a challan in Court, in spite of seizing certain goods from the respon dent, the petitioner then filed a private complaint in the Court of the A. D. M., Montgomery, which was finally disposed of by Mr. Muhammad Nawaz Cheema. The petitioner had also sub sequently filed a civil suit against the respondent.
3. The complainant relied on three statements of accounts, furnished by the respondent's firm to the principal. The first is Exh. P. S., which is a statement of money due from the respon dent to the Sutlej Cotton Mills, on the 30th of September 1955, and the amount stands at Rs. 1,42,997‑4‑6. The second is Exh. P. T. which is a stock report showing the quantity of cloth and yarn lying with the respondent's firm on the 31st of October 1955. The quantities shown are, cloths 3,25,5661 yards, and yarns 1680 bundles. The third statement relied upon is Exh. P. U., which shows a stock of 1134 dozens of under-wears lying with the respon dent on the 30th of September 1955. The value of the goods was assessed by the petitioner as follows :‑
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| |
| Cloth | 2,87,000 |
| Yarn | 25,000 |
| Hosiery(underwears) | 12,000 |
As regards the cash amount due, the petitioner demanded Rs. 1,53,000 as against Rs. 1,42,997‑4‑6 shown in the statement Exh. P. S., on account of some discrepancies in the statement. The total claim set up by the Sutlej Cotton Mills against the respondents was, therefore, Rs. 4,77,000.
4. The respondent pleaded not guilty at the trial and asserted that he had not committed any criminal breach of trust with regard to the property of the Sutlej Cotton Mills. He filed a lengthy written statement, admitting the correspondence which had passed between him and Mr. G. N. Dalmia (P. W. 1) General Manager of the Sutlej Cotton Mills. He did not directly admit the accounts statements (Exhs. P. S., P. T. and P. U.), but he did not deny them either. He claimed, however, that the Sutlej Cotton Mills owed him the following amounts:‑----
|
| |
| (a) Paid in cash to various officials of the Mills, namely, Brij Lai Jajoo, Gajanand Dalmia, Harikishan, Pacheshar, Pandit Jaggan Nath, Mod Lai, Girdari Lai, etc . | 3,12,312 9 6 |
| (b) Deficiency in payment of commission to 40,000 or the respondent | 40,000 or 50,000 0 0
|
| (c) Security deposit of Rs. 25,000 plus interest at the rate of six per cent per annum for four years ... ... ... | --------------------------- |
| (d) Commission on sales conducted in Lyall pur District by the Mills through Unauthorized persons ... ... | 50,000 0 0 |
| (e) Wrong debit against the respondent | 16,745 10 6 |
| The aggregate of these items works out to over | 4,50,000 0 0 |
5. The respondent further stated that the accounts state ments Exhs. P. S., P. T. and P. U., were not exhaustive and there were other accounts between the parties relating to the retail depot, the dealer account and a dasti khata or cash account, which have not been produced by the complainant.
6. After considering the evidence produced by the parties, the learned Magistrate came to the conclusion that up to 1954 the respondent had dealt honestly in goods worth crores of rupees, and that even subsequently he had no dishonest intention of criminally misappropriating the money or the property of the complainant, and that the dispute between the parties was really of a civil nature regarding rendition of accounts. On these findings he acquitted the respondent.
7. Mr. M. Anwar, the learned counsel for the petitioner, has attacked the order of the trial Court mainly on the following grounds :‑
(a) The learned Magistrate has not given a clear finding as to the nature of the relationship that existed between the parties, and the nature of the obligations incurred by the respondent under the agreement Exh. P., A.
(b) That there is no clear finding as to the outstanding dues in terms of money and goods against the respondent, for which he was liable to account to the petitioner.
(c) That once the petitioner complainant had succeeded in showing the existence of outstanding dues, the onus had shifted to the respondent to show as to how he had discharged that liability, but the learned Magistrate has not considered this question at all.
(d) That the stand taken by the respondent is dishonest, and the learned Magistrate should not have accepted the same to base his finding that the matter is merely of one of rendition of accounts.
(e) That even if any payments were Made to any officials of the petitioner company in contravention of the mode of payment stipulated in agreement (Exh. P. A.), such payments cannot bind the complainant and cannot constitute a valid discharge of the respondent's liability.
8. Before I proceed to examine the contentions raised by the learned counsel for the petitioner, it seems necessary to state the considerations which the High Court will bear in mind when ordering retrial in a case of acquittal. This question was exhaus tively considered by their Lordships of the Federal Court in Anwar and another v. The Crown (P L D 1955 F C 185). After discussing at some length the scope of section 439 of the Criminal Procedure Code, the learned Chief Justice concluded as follows:‑---
"Technically, therefore, the power of the High Court toy examine the evidence on which a finding of fact is based is unlimited, though in adopting that course it will naturally pay due regard to the opinion formed by the Judge about the witnesses who gave evidence before him and the corresponding disadvantages from which the High Court itself suffers in not having them before it. No artificial rules can, therefore, be laid down defining the classes of cases in which the High Court should or should not order a retrial. The matter is essentially in the discretion of the High Court and the only limitation on the exercise of that discretion, apart from the legal restriction contained in' subsection (4) of section 439, is that the exercise of such discretion is to be in accordance with the dictates of justice and not arbitrary or fanciful. The trial Court's view of the evidence, the nature of the error committed, the magnitude of apprehended miscarriage or failure of justice, the possibility and extent of prejudice to the accused, the chances of conviction, the expenses of a retrail are all relevant factors to be duly weighed.
Cases which lay dawn that the discretion is not to be exercis ed unless the judgment of acquittal be perverse or based on a view of evidence which no reasonable man can take merely indicate the classes of cases in which interference is necessary and do not lay down that in no other case can the High Court interfere. It is a well settled rule to follow that where the legis lature itself does not define the limits or the grounds for the exercise of a discretion, the Courts should not too readily lay down rules to fetter that discretion, and it seems that the practice while interfering with orders of acquittal of recording strong findings, as for instance, that the judgment of acquittal is per verse or manifestly wrong is to be deprecated, because if these be the only grounds on which an order of acquittal can be interfered with, revisional Courts will in every case be engaged in determining the preliminary issue whether the error committed is gross or palpable and the view taken perverse or foolish and not the real question whether the order of acquittal is wrong, and if allowed to stand, would occasion a failure of justice . . ."
9. I would now examine this case in the light of considera tions just outlined in the matter of ordering a retrail.
10. The contention of Mr. Anwar that there is no finding by the trial Court about the nature of the relationship that existed between the parties is more superficial than real. The judgment makes it clear that it is common ground between the parties that the respondent S. M. Ilahi was appointed as an agent of the Sutlej Cotton Mills by means of agreement (Exh. P. A.). It is correct that the learned Magistrate has nowhere explicitly stated that the respondent was entrusted with domain over the petitioner's pro perty in his capacity as an agent and, therefore, a position of trust had been created between the parties, but his whole judg ment‑proceeds on the basis that the respondent was liable to render accounts but that there was no dishonest intention on his part throughout the transaction. I cannot, therefore, hold that the judgment of the trial Court is vitiated by its failure to appreciate the nature of the fiduciary relationship which existed between the parties.
11. Same is the case with the second contention put forward on behalf of the petitioner. The conclusions of the trial Court with regard to the accounts submitted by the petitioner‑complai nant are contained in para. 6 of the judgment and they are to the effect that the complainant has not presented the true accounts of the dealings between the parties and that there are discrepancies with regard to certain items. The learned Magistrate has further observed that the complainant has deliberately concealed his own accounts of the agency. On account of these reasons the learned Magistrate refused to place reliance on the accounts pro duced at the trial. Whether the conclusion reached by the learned Magistrate is correct or justified on the record, is a different matter from saying that there are no finding at all in respect of the accounts produced by the complainant. I shall have occasion, how ever, to‑refer later in this judgment to the question of outstanding dues.
12. The remaining three contentions raised by the learned counsel can be taken together, as they are interrelated. It has already been stated that the relationship of principal and agent between the parties is admitted. A perusal of agreement (Exh. P. A.) clearly shows that there was entrustment of property to the res pondent. I do not find any force in the argument put forward by Mr. Khurshid Ahmad, the learned counsel for the respondent, that the agency agreement between the parties did not bring about a relationship of trust between them, and that, therefore, the only liability attaching to the respondent would be of a civil nature. Even the existence of an arbitration clause in the agreement cannot be used to say that no criminal liability can ever arise under this agreement. The agreement (Exh. P. A.) makes it clear that the goods remained the property of the Sutlej Cotton Mills and the agent was under an obligation to hand, over the goods to the principal on demand. It seems to me, therefore, that an offence under section 409, Cr. P. C. can certainly be committed by the agent in respect of the property entrusted to him under the agree ment Exh. P. A. and the question for determination is whether the ingredients of that offence are present in this case.
13. It has already been stated that the three account state ments Exhs. P, S., P. T. and P. U. are statements prepared by the respondent's firm and despatched to the petitioner. At the time of arguments before us the genuineness of these statements was conceded on behalf of the respondent. In any case there is the e evidence of the employees of the complainant as well as of the handwriting expert Cyril G. Bhan to show that these statements are signed by S. M. Sharif who was admittedly a partner in busi ness and manager of the respondent's firm and was signing docu ments on his behalf. These three statements would show that a certain amount of cash and goods were held by the respondent in his capacity as an agent. It has to be determined whether by his failure to deliver the cash and the goods to the complainant, the respondent is guilty of the offence of criminal breach of trust.
14. At this stage it will be useful to refer to the terms of section 419 of the Pakistan Penal Code. The section runs as follows :‑----
"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 trans portation for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine."
15. The term Criminal Breach of trust' used in this section is defined as follows in section 405 of the Pakistan Penal Code :‑---
"Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has trade touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust."
16. In Kanhaiya Lal v. Emperor (A I R 1937 Oudh 331), the question of distinc tion between a breach of trust giving rise to civil liability and a criminal breach of trust was considered, and the following observa tions may usefully be reproduced:‑,
"Every breach of trust gives rise to a suit for damages, but it is only when there is evidence of a mental act of fraudulent mis appropriation that the commission of embezzlement of any sum of money becomes a penal offence punishable as criminal breach of trust under sections 408 and 409, I. P. C. It is this mental act of fraudulent misappropriation that clearly demar cates an act of embezzlement which is a civil wrong or tort from the offence of criminal breach of trust punishable under section 408, I. P. C." ,
17. The same question was also considered in O. A. Odayapa Chettyar v. K. R. O. Odayapa Chettyar (A I R 1939 Rang. 505) and it was observed that :‑---
"Where an agent of a firm refuses to render accounts and to allow one of the partners to have access to the account ,books when asked to do so, it cannot be presumed without further facts being proved that there is an intention to defraud and the agent cannot be prosecuted in a Criminal Court. The refusal to render accounts may be a good ground for the complainant 5 for a civil action, but it does not amount in any case to a criminal offence much less to an offence under section 409 of the Penal Code."
18. Again in re Ramakhal and others (A I R 1938 Mad. 172) it was held that before a Court frames a charge of criminal misappropriation, it must satisfy itself that actual conversion or appropriation has taken place, because mere intention to misappropriate or even preparation to that end are not sufficient to constitute the offence.
19. The essential ingredients of the offence of criminal breach of trust' were considered at some length by Panorang Row, J. In Rex v. V. Krishnan (A I R 1940 Mad. 329) and the conclusions were summed up as follows:‑--
"In order to constitute criminal breach of trust there must be an entrustment; there must be misappropriation or conversion to one's own use or use in violation of any legal direction or of any legal contract ; and thirdly the misappropriation or conver sion or disposal must be with, dishonest intention . . . . . .
"If a man is shown to have been given some money or entrust ed with it and he does not account for it, it cannot be said that he must have embezzled or committed breach of trust, in the absence of other evidence unless one proves some kind of con version, i.e., a wrongful diversion to his own purposes or a purpose not consistent with law or with contract . . . . . .
"Even when an agent may have no claim against the principal, even then if he retains it merely and does not pay it, but does not do anything else with it, there is no criminal breach of trust. It is only a civil liability, and of course the principal can at any time if he chooses compel him to pay, send him a notice and file a suit. Mere retention of money entrusted to a person without any misappropriation,, even though he was directed by the person to pay it to so and so, or to deal with the money in a particular way is not a criminal breach of trust ; unless there is some actual user by him which is in violation of law or contract, there is no criminal breach of trust; and even if there is such user there must be a dishonest intention . . . . . . .
"If a man is proved to have had a reasonable claim against another for more than the sum of money belonging to the other in his hands, his retention of it, and even his user of it for his own purpose would not amount to criminal breach of trust because the intention could not have been dishonest, that is to say, to cause wrongful loss or wrongful gain."
20. A similar view was expressed in Puran and another v. Emperor (A I R 1926 All. 298) regarding the retention of money by accused against a debt due from the complainant. It was held that where money is placed in the hands of the accused by the complainant and is retained by the accused against a debt due from the complainant, the accused cannot be said to have acted dishonestly within the meaning of section 406.
21. Finally, mention may be made of Khaliq Hussain v. The Crown (P L D 1956 Kar. 212), where a learned single Judge of this Court followed the view taken in In re Ramakhal and others and Rex v. V. Krishnan and observed that it must be clearly established that "the appellant had misappropriated the money entrusted to him for his own use, and had done that with a dishonest intention."
22. It will be seen from these authorities that the view has been constantly held that in order to secure a conviction for an offence of criminal breach of trust; it must be shown in all cases that there was dishonest intention on the part of the person to whom the property was entrusted. A mere refusal on the part of an agent to render accounts or to pay the money due is not enough to bring him within the mischief of section 409, P. P. C. In other words the misappropriation of the entrusted property must be shown to be with dishonest intention.
23. In the present case the relationship of principal and agent was established between the parties in 1950, and it is the complainant's case that for five years the work proceeded smoothly and the trouble arose only when the complainant opened a second agency at Lyallpur and did not accede to the request of the respondent to close down that agency. It is the assertion of the petitioner‑complainant himself that the respondent got annoyed at the opening of the second agency and refused to render accounts for that reason. It is thus clear that the reason for the refusal of the respondent to render accounts is not related to any dishonest intention on his part. Lengthy correspondence, admitted by the parties, has been placed on the record, which clearly shows that the respondent was annoyed at the petitioner's action in setting up a second agency at Lyallpur, and that he repeatedly demanded from the petitioner the closing down of this second agency, and it was he who asked the petitioner complainant to settle up the accounts at an early date. All these letters were read out to us by Mr. Anwar, and it is not necessary to reproduce them here, at any length. I may only briefly refer to them.
24. For example, in Exh. P. B, which is a letter written by the respondent to Mr. G. N. Dalmia, on 26th November, 1955, it is stated that :‑
"During our lengthy conversation I made an effort to impress upon you the treatment which has been accorded to us and I also tried to make it clear to you that we were not, under the circumstances, willing to continue the Okara Agency work. It was our desire that you may be good enough to make this clear to Mr. Jaju and we have, no doubt, that you must have conveyed to him accordingly and also made the point clear to him that our accounts must be adjusted and finalised. We have already given to you orally our accounts and what is due to us from the Sutlej Cotton Mills, Okara . . . . . . . .
"We only request that our accounts may be settled at the earliest."
Mr. Dalmia's reply to this letter is Exh. P. C. dated the 1st December, 1955, wherein he advised the respondent not to give up the agency work and added that the differences can very well be ironed out and straightened up. In Exh. P. B. the respondent had set up his claim on various items, to which Mr. Dalmia replied that all these matters had to be checked with reference to the records. Then we have another letter Exh. P. E. dated 14th of May 1956, written by the respondent to Mr. Dalmia, again pointing out the advisability of an early settle ment. This is a lengthy letter containing references to the claim already set up by the respondent against the complainant. The next letter on the record is Ex. P. F. dated 23rd of May 1956, which is by Mr. G. N. Dalmia to the respondent, and it is in this letter that for the first time it is hinted that the respondent may be liable for breach of trust.
The respondent's reply is contained in Exh. P. G. dated the 12th of June 1956, and more ox less the same demands are repeated and it is added that anyhow the accounts should be gone into and cleared on both sides and balances on either side adjusted. Then comes Exh. P. H. dated 23rd of June 1956, written by Mr. Dalmia, wherein he refutes the payments alleged to have been made to him and other officials of the Sutlej Cotton Mills, and accuses the respondent not only of breach of trust but also of ingratitude. The respondent again wrote a lengthy letter Exh. P. J. dated 29th of June 1956, stating that his accounts were kept by Mr. Muhammad Sharif, who was away to Rawalpindi and the details of payments would be furnished on his return. This letter was replied to by Mr. Dalmia vide Exh. P. K. dated the 5th of July 1936, and the main point to be noted is that Mr. Dalmia insisted that the account should be settled at Okara and not at Lyallpur as proposed by the respondent.
Next comes Exh. P. L. dated 13th July 1956, by the respondent to Mr. Dalmia stating that all the account matters should be settled at Lyallpur as the goods were lying there. This request was not accepted by Mr: Dalmia vide his letter Exh. P. M. dated 29th July 1956. I may next mention Exh. P. O. which is a letter dated 25th August 1956, by Mr. Dalmia to the respon dent, insisting that the accounts should be settled and cleared at Okara in accordance with the terms of the agreement. The respondent then sent letter Exh. P. P. on 29th August 1956, again insisting that the accounts should be settled at Lyallpur, as there were some accounts which he would not like to send to Okara. Then, in letter Exh. P. R. dated 18th September 1956, the respondent stated that he had handed over certain details of cash payments to Mr. Dalmia and that he was not prepared to furnish more details but these accounts could be seen at Lyallpur. After this the correspondence between the parties seems to have ceased and resort was had to the Courts of law.
25. Now, on behalf of the petitioner the contention put forward is that the respondent has evaded the settlement of accounts for one reason or the other and has set up a completely false claim of cash payments to Dalmia and Jaju and other officials of the Sutlej Cotton Mills, with a view to dishonestly misappropriating the money and property which had been entrusted to him by the complainant. It was argued by Mr. Anwar that the respondent has been shifting his stand as to the persons to whom cash payments had been made by him, first he named Mr. Jaju who is the General Secretary of the Sutlej Cotton Mills, then he also included Mr. G. N. Dalmia who is the General Manager of the Mills and finally has enlarged the list of recipients by naming other minor officials as well. It was further pointed out that no evidence was placed on the record to prove these alleged payments. Finally, Mr. Anwar argued that the other claims set up by the respondent regarding the short payment of commission were also unfounded and clearly showed his dishonest intention.
26. Mr. Anwar is right in saying that the respondent has not produced payee's receipts or other documents which would establish the factum of these payments in a positive manner. But it is not possible for me to‑ agree with the contention of the learned counsel that the, respondent's case regarding these cash payments is altogether false. Along with his written state ment at the trial the respondent produced in Court the various registers of accounts maintained by his firm. Although these registers were not proved in a formal manner we looked into them, as we were anxious to go to the root of the matter. The registers are of two kinds, namely, the daily cash books and the Khatas. In these registers several items of payments to various officials of the Mills are shown. The details of these payments were tabulated by the learned counsel for the petitioner and they amounted to a total of Rs. 3,12,312‑9‑6. It was contended by Mr. Anwar that these entries in the registers produced by the respondent were of a fictitious nature. I am not persuaded that this is so. In some of the registers produced before us, there are the signatures of income‑tax officials which would show that these were genuine registers produced by the respondent before the Income‑tax Authorities for the purpose of the assessment of his income. It is correct that some of the ‑pages bearing the entries relating to the cash payments to‑the officials of the Mills were not so signed by the Income‑tax Authorities, but that fact by itself would not show that those pages had been written up subsequently so as to set up a false claim against the com plainant. Taking into account the assertions made by the respondent right from the beginning, namely, in his letter Exh. P. B. dated 26th November 1955, and the entries in the account registers maintained by him in the normal course of business, I consider that it is difficult to give a finding that the claim set up by the respondent on account of these cash payments is unfounded or false. It is certainly a matter which would be further examined by a competent Civil Court which will have to go into these accounts more fully than we have been able to do during the hearing of this revision petition. One thing, however, stands out and that is that I am not prepared to give the finding that the claim set up on account of these items is false or fictitious, although the nature of these payments has not been clearly explained by or on behalf of the respondent.
27. Whether these payments to the officials of the Mills, if proved, would amount to a valid discharge of the respondents' liability, is another matter altogether, and I am of the view that this question is more directly relevant to civil pro ceedings for rendition of accounts. For our present purposes, we are only engaged in discovering whether the respondent has set up these alleged cash payments falsely with the dishonest inten tion of misappropriating the property entrusted to him as an agent. It is true that he has enlarged the list of recipients during the course of his correspondence with Mr. G. N. Dalmia, but the total amount alleged has remained constant and he has subsequently only given a complete break‑down of the payments alleged to have been made by him.
28. One defence witness was also produced, namely, Muhammad Ayub (D. W. 3) who is a cloth dealer of Lyallpur and who asserted that he brought Rs. 15,000 from Muhammad Sharif to the respondent's firm and paid it to Jagan Nath, Accountant of the Sutlej Cotton Mills in May, 1954, but did not obtain any receipt. I am not prepared to say that Muhammad Ayub is a false witness.
29. The learned counsel for the petitioner also argued at some length that the claims put forward by the respondent regarding the short payment of commission could not be accepted, as the commission was calculated in accordance with the pres cribed formula and the respondent himself had deducted a certain amount in this behalf as being due to him in the statement of accounts furnished by him. It is clear from this argument that the matter is one of controversy between the parties and does not necessarily give rise to a presumption of dishonesty on the part of the respondent.
30. To sum up, after an exhaustive review of the evidence placed before us, I have come to the conclusion that by virtue of agreement Exh. P. A. a relationship of trust was created between the petitioner and the respondent, that certain amounts of money and goods belonging to the petitioner were outstand ing in the hands of the respondent when differences arose between them due to the opening of a second agency at Lyallpur, and that the respondent has since then not rendered the necessary accounts to the petitioner, nor has he delivered the money and the goods, as required in terms of the agreement. The prosecution evidence, however, does not establish that the refusal of the respondent to render accounts or to deliver the money and the goods due from him springs from any dishonest intention on his part to misappropriate the property of the petitioner. It is the petitioner's own case that the refusal is directly related to the respondent's annoyance with the management of the Sutlej Cotton Mills for setting up a rival agency at Lyallpur. The respondent has in fact been insisting on an early settlement of accounts, but has simultaneously set up a substantial counter claim. It is correct that the respondent has not established, by means of positive evidence, the alleged cash payments to the officials of the Mills, but th: assertions contained in his letters read with the cash registers produced by him raise a reasonable doubt in my mind that there may be substance in the counter claim put up by him. Whether the payments alleged by him would con stitute a valid discharge of his liability under the agreement Exh. P. A. is a question more appropriately to be determined in the course of civil proceedings, and is not directly relevant for determining the criminal liability of the respondent. There appears force in the contention put forward on behalf of the respondent that the statements of accounts contained in docu ments Exh. P. S., P. T. and P. U. are not exhaustive and that there are other items which have to be taken into account. I also notice that even in November, 1955, the respondent deposited a sum of Rs. 55,000 into the bank account of the petitioner. Considering all these facts and circumstances I am of the view that the prosecution evidence only establishes a case of mere refusal to render accounts or to deliver the money and the goods due. There is no evidence regarding misappropriation by the respondent, much less of a dishonest intention on his part. This being the case, it is clear that the essential ingredients of an offence punishable under section 409 of the Pakistan Penal Code are not present, I cannot, therefore, hold that the order of acquittal passed by the learned trial Magistrate is illegal or erroneous or has resulted in any failure of justice, nor am I persuaded that there are any reasonable chances of conviction if a retrial is ordered, I am inclined to agree with the learned trial Magistrate that no dishonest intention having been proved on the part of the respondent, the dispute between the parties was in the nature of rendition of accounts. I would, there fore, refuse to interfere and would dismiss the present petition, leaving the parties to seek their remedy in a Civil Court.
31. As earlier stated, the Sutlej Cotton Mills have already filed a suit for rendition of accounts, I wish to make it clear that any observations made by me in this order regarding the facts of the case, are without prejudice to the case of both the parties in the Civil Court.
‑After debating the question for rather long in my mind, I have decided not to send this case to a third Judge even though I am not agreeing with my learned brother on the merits. It appears clear to my mind that there has been a grave miscarriage of justice in this case. If the respondent had been convicted by the learned Magistrate, I do not see what could possibly have been urged in his favour. In cases like the present where a principal complains of criminal breach of trust by his agent in respect of the goods entrusted to the agent for sale and the proceeds thereof, if the principal proves the fact that on a particular date the agent had custody of goods or of pro ceeds, onus lies on the agent to account for the goods and the proceeds. Of course, the effect of onus on an accused is only that he has to create a reasonable doubt, but it is for the accused to show circumstances which create reasonable doubt. As regards dishonest intention prima facie the act of withholding the goods or money which belongs to a principal is dishonest and it is for the accused to rebut this presumption. In the present case, it is proved by the accounts produced by the respondent himself that he had in his custody in September or October 1955, goods as well as money belonging to the principal. It is not even his case that the whole of this money or these goods were delivered to the principal. He has put forward a case that already, even before the goods or the sale proceeds were in his custody, he had made some payments to some em ployees of the Mills and that he is entitled to credit from the Mills for these payments. He never explained in the lower Court as to how he was entitled, if his statement as to having made these payments was true, to an adjustment from the Mills. After having been questioned for half an hour in this Court his counsel stated that this money which is alleged to have been paid to the employees of the Mills was the black‑market surplus which the respondent had realized. According to the statement made by the counsel in Court and in the presence of the respondent himself, while official rate stated by the Mills was lower, some employees of the Mills had given some direction to the respondent to sell at a higher rate, although there was a control on the price of cloth. This surplus, according to the respondent, was paid to the employees of the Mills and he claims that he is entitled to its benefits. It is impossible for me to understand how some black‑market surplus, even if it was in fact paid to the employees of the Mills, is something of which an adjustment can be claimed by the respondent. I do not even accept that the respondent, if he sells at a black‑market price, will be handing over the whole of the surplus to the employees, although he is himself running a great risk. On the record, there is not much proof even of payments, but truly such payments to employees of the Mills were irrelevant.
2. There is a civil suit proceeding between the parties. In the civil suit, the onus of proving positively that the goods and the amounts in the custody of the respondent were delivered to the Mills would be on the respondent, although, in the criminal case, the onus on him is only of creating a doubt. The case is not one of public importance and, in view of the civil suit and the fact that my learned brother wants to dismiss this revision petition, I concur in the dismissal of the petition.
A. H. Petition dismissed.
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