Holding

The High Court was justified in its conclusion of guilt; the conviction is upheld and the appellant is entitled to probation under Section 360 CrPC.

Summary

N.M. Parthasarathy, a former Inspector of Industries, and another Inspector were charged with criminal conspiracy to obtain a Small Scale Industries Registration Certificate, Essentiality Certificate and import licences by making false representations. The trial court acquitted them, but the Madras High Court, after re‑appraising the evidence, found the prosecution had proved the conspiracy and cheating beyond reasonable doubt and convicted them under IPC sections 120‑B and 420, as well as sections 5(1)(b) and 5(2) of the Prevention of Corruption Act. The Supreme Court held that the High Court was justified in overturning the acquittal, upheld the conviction, and, noting the appellant’s subsequent industrial achievements, ordered that he be released on probation under Section 360 of the CrPC. The appeal was therefore disposed of, with the conviction affirmed and probation granted.

Issues considered

Whether the High Court was correct in reversing the trial court's acquittal and convicting the appellant under sections 120‑B, 420 IPC and the Prevention of Corruption Act.
Whether the appellant is entitled to the benefit of probation under Section 360 of the Code of Criminal Procedure, 1973.

Legislation cited

Code of Criminal Procedure, 1973s. 360
Indian Penal Code, 1860s. 120-B, s. 420
Prevention of Corruption Act, 1947s. 5(1)(b), s. 5(2)

Subjects

criminal conspiracycheatingfalse representationprobationappealconviction reversalIPCPrevention of Corruption ActCrPC 360

Judgment

N.M.PARTHASARATHY A
v.
STATE BY S.P.E.

JANUARY 21, 1992

[KULDIP SINGH AND R.M. SAHA!, JJ.) B
Indian Penal Code, 1860: Section 420, I 20-B and I 09.

Criminal conspiracy---Small Scafe Industries Registration Certifi-
cate, Essentiality Cert/ficate and Import Licence obtained by false
representations-Prosecution-Conviction by Trial Court-High Court re- C
•~ appreciating evidence and finding that the only conclusion possible was
guilt of the accused which was proved beyond reasonable doubt-Reversal
of acquittal and conviction of accused by High court-Held High Court
was juStified in its conclusion.

Code of Criminal Procedure, 1973-Section 360--Probation. D
Accused -Conviction under sections 420 and 120-B, !PC-Several
achievements in the industrial .field made by accused-Held in the cir-
cumstances benefit ofprobation should be extended.

The appellant, (first accused), a former Inspector of Indus-
tries, alongwith an Inspector of Industries, (second accused), was E
prosecuted under section 120-B read with section 420 IPC, sections
5(1) (b) and 5(2) of the Prevention of Corruption Act, 1947 on the
ground that both the accused entered into a criminal conspiracy
and acting in concert, the first accused obtained the Small Scale
Industries Registration Certificate for additional lines of manufac-
ture, Essentiality Certificate and Import Licences on false represen- F
tations while the second accused enabled him to obtain the same by
his false recommendations. The Trial Court acquitted both of them
on all the charges. The State filed an appeal before the High Court
which on re-appreciation of evidence held that the prosecution has
established conspiracy beyond doubt and that only one conclusion
was possible on the evidence that the accused are guilty of all the G
charges. Accordingly it set aside the acquittal and convicted both ·
the accused on all the counts and sentenced the appellant to impris-
onment fe~ two years under section 120-B, and for two years under
section. 420 JPC.
In appeal to th is Court it was contended on behalf of the H

249
250 Sl}PREME COURT REPORTS [I 992] I S.C.R.

A appellant-accused that: (i) the High Court erred in reversing the
judgment of acquittal passed by the High Court; and (ii) the benefit
of probation under section 360 of the Code of Criminal Procedure
should be extended to the appellant.

Disposing the appeal, this Court,
B
HELD: The High Court was right in coming to ilte conclusion
that the guilt against the appellant was established beyond doubt.
Accordingly, the conviction and the sentence awarded by the High
Court is upheld. [251 G 253 BJ

c The occurrence relateSi.to .the period between February, 1967
and February, 1969. The' Trial Court acquitted the appellant while
High Courtrl!Verse4 the acquittal· and convicted them. This Court
granted bail to the appellant in 1980. Since then the' appellant h;u
several achievements to his credit in the industrial field. Therefore,
this 'is a fit case where benefit of probation under section 360 of the
D Code of Criminal Procedure, 1973 should ·be extended to the appel-
lant. [253 C-E] ·
\

CRIMINAL AP PELLATE JURISDIC't,ION: Criminal. Appeal No.
330 of 1980.

E From the Judgmenrand Order dated 3.4.1980 of the Madras High
Court in Crl. Appeal No. 360of1974.

Hardev Singh and Ms. Madhu Moolchandani for the Appellants.

V.C. Mahajan, B. Parthasartbi and Ms. A. Subhashini for the Re-
F spondents.

The Judgment of the Court was delivered by

KULDIP SINGH, J. The appellant N.M. Parthasarathy is the sole
proprietor of a finn called "Elector-technik". He was formerly working as
G Inspector of hidustries. He.along with an Inspector of Industries, was
prosecuted on the allegations that between February, 1967 and February,
1969 they entered into a criminal conspiracy to obtain Small Scale Indus-
tries Registration Certificate for additional lines of manufacture, Essenti-
ality Certificate and import licences on false representations made to the
Director of Industries, Assistant Director of Industries, Joint Chief Con-
H troller of Imports/Exports and the Iron and Steel Controller. The first
PARTHASARATHY v. STATE [KULDIP SINGH, J.] 251

charge framed against both of them wrui for an offence of conspiracy A
punishable under section 120-B read with section 420 !PC and section
5(1) (b) read with section 5(2) of the Prevention of Corruption Act, 1947.
Charges 2, 4 and 6 framed against him were for offence of cheating
punishabfo under section 420 !PC. Charges 3, 5 and 7 were framed against
the second accused for abetment of cheating punishable under section 420
read with section 109 !PC. The 8th charge was also against the second B
accused under section 5 (I) (b) re:ld with section 5 (2) of the Preveniion of
Corruption Act, 1947. The. trial coilrt acquitted both· of them on all the
charges. The State went in appeal against the judgment of acquittal and
the High Court on re-appreciation of evidence set aside the acquittal and
convicted both of them on all the counts. The appellant was sentenced to
undergo rigorous imprisonment for two years under section 120-B !PC C
and rigorous imprisonment for two ye·ars for each of the three counts of
cheating under section 420 !PC. The sentences were to run concurrently.

We have heard Mr. Hardev Singh•. learned counsel for the. ap-
pellant and Mr. V.C. Mithajan, Senior Advocate for the respondents. Mr.
Hardev Singh has taken us through .the judgments of the trial court and D
that of the High Court. Mr. Hardev Singh has-primarily argued that the
High Court has grossly erred in reversing the judgment o( acquittal ren-
dered by the trial court. According to him even if two views were possible
the High Court was not justified in taking a different view than the trial
court and reversing the acquittal. This precise argument was raised before
the High Court on behalf of the appellant. The High Court rejected the E
same as under:-

"In the circumstances, I am of the opinion that this is not a
case where, on the evidence available on record, two conclu-
sions are possible and therefore this Court could not interfere
with the acquittal of the accused by the learned Special Judge. F
I am of the opinion that only one conclusion is possible on the
evidence on record and that it is that the accused are guilty of
all the charges framed against them and that interference with
the acquittal of the accused by the learned Special Judge is
called for in this case."
G
We are of the view that the High Court was justified in reaching the
above conclusion. The High Co\VI examined the evidence on the record in
detail and rightly came to the conclusion that the guilt. against the appel-
lant was established beyond reasonable doubt.

The High Court on re-appreciatioi1 of the evidence. independently
H
reached the following findings:-
252 SUPREME COURT REPORTS [1992] 1 S.C.R.

A "Thus it is established by Exhibit D-36 as well as the
evidence of P.Ws 3 and 6 that the first accused had only a
single-phase domestic supply of electricity at his premises in
Katpadi Extension even in August, 1969, that he could not
have used that supply of electricity validly for any non-domes-
tic purposes and that it would not have.been possible to pro-
B duce any industrial machinery with that single phase power."
"The evidence of P.W.s 6, 13, 15 and 19 shows that the ma-
chinery found in the premises of Electro-technic during their
inspections were worth only about Rs. 9,200 or Rs. 10,000 and
not of the value of Rs. 94,000 as represented by the first ac-
cused in the list submitted by him along with his application,
c Exhibit P-18."
"It has already been found that with the 230-volts domestic
supply he could not have produced any of the new end-
products. The additional machinery required for producing
these new end-products had not been installed in the first ac-
D cused's factory. It is hardly likely that all the alleged addi-
tional machinery could have been installed in the factory whose
dimensions are only 18 feet by 12 feet".
"It is made clear by the 'evidence that the second accused had
made false statements in Exhibit P-96 about the alleged instal-
E lation of the additional items of machinery in the first ac-
cused's factory. For the reasons stated above I find that the
prosecution has proved charges 2 and 3 satisfactorily, beyond
all reasonable doulit."
"The first accused has succeeded in obtaining the Essentiality
Certificate, Exhibit P.5, by making these false representations
F and t4e 2nd accused has induced P.W.5 to recommend in Ex-
hibit P.24 the issue of the Essentiality Certificate and P.W.12
to issue the Essentiality Certificate and Exhibit P-14 by mak-
ing the false representations Exhibit P-22 and P-23, as in Ex-
hibit P-19, which have been found to be false in the earlier
part of this judgment. Therefore, I find that the prosecution
G has proved these two charges 4 and 5 against the accused
satisfactorily and beyond all reasonable doubt."
"In the present case both the accused have acted in concert in
the first accused obtaining the S.S.!. registration certificate,
.Exhibit P-20 as amended by Exhibit P-21, the Essentiality
H Certificate, Exhibit P-5 and the import licenses, Exhibits P-6
and P-7, and the second accused enabling him to obtain the
.. PARTHASARATHYv. STATE[KULDIP SINGH, J.] 253

same by his recommendations, Exhibits P-19, P-22 and P-23 A
which contain false particulars. This would show that both the'
accused have acted in concert for committing these offences
and that they would not have done so if there had been no
conspiracy. In these circumstances I find that the prosecution
has established the charge of conspiracy framed against both
the accused satisfactorily and beyond reasonable doubt" B
We agree with the above quoted reasoning and the conclusions reached
by the High Court. We, therefore, uphold the conviction and sentence
awarded by the High Court,

While upholding the judgment of the High Court, we are inclined to
agree with the learned counsel for the appellant that this is fit case where
c
benefit of section 360, Criminal Procedure Code be extended to the appel-
lant, The occurrence in this case relates ·to the period between February,
1967 and February, 1969, The Special Judge, Madras by his judgment
dated July 23, 1973 acquitted the appellant. The High Court on April 3,
1980 reversed the trial court and convicted the appellant This Court D
granted bail to the appellant on April 29, 1980, Mr, Hardev Singh has
placed before us documents showing several achievements of the appel-
lant in the il)dustrial field since then, The appellant's industry has manu-
. factured the largest Hot-Air Kiln in India for Ministry of Railways, largest
Degreasing plant fot Nuclear Fuel complex, Sintering Furnace for anti-
tank missiles and various other items for the Ministry of Defence and
E
other Departments of the Government of India, The appellant claims that
he has set up I 00 per cent export unit with Rs, 75 crores export per
annumcfor all these reasons we are of the view that it is expedient that
the appellant be released on probation, We, therefore, direct that. he be
released on his entering into a bond to the satisfaction of the Special
Court, Madras, The Special Court shall pass an order in terms of Section F
360, Criminal Procedure Code, 1973 to its satisfaction, A copy of this
order be sent to the Special Court, Madras immediately, The appellant is
directed t() appear before the Special Court, Madras within two months
from today to enable the Special Court, Madras to pass an order as di-
rected by us, In the event of appellant's failure to present himself before
the .Special Court as directed he shall undergo the original sentence G
awarded by the High Court.

The appeal is disposed of in the above terms.

T,N,A. Appeal disposed of
,..,_ .... _..(