Holding

The Supreme Court affirmed the conviction but reduced the imprisonment to the time already served, imposed a fine of Rs 2,000 (or one month rigorous imprisonment in default), and allowed the deposited Rs 40,000 to be set off against the loan.

Summary

The appellant, Surrender K.L. Garg, was convicted for cheating the Uttar Pradesh Small Industries Corporation by creating a fictitious firm, Seemak Industrial Corporation, and obtaining a loan of Rs 39,352.50. He was found guilty under IPC sections 120‑B, 419, 420, 468 and 471 and sentenced to rigorous imprisonment for various terms. The appellant appealed, arguing that more than twenty years had elapsed since the offence, the amount was not large, and he had already served part of the sentence; he also deposited Rs 40,000 with the corporation as restitution. The Supreme Court upheld the conviction but, considering the repayment and mitigating circumstances, reduced the sentence to the period already served, imposed a fine of Rs 2,000 (or one month imprisonment in default), and ordered the deposited amount to be adjusted against the loan. The appeal was therefore partly allowed.

Issues considered

Whether the conviction under the IPC sections should be set aside or affirmed
Whether the sentence can be reduced on account of repayment of the loan and other mitigating factors
Whether the amount deposited by the appellant can be adjusted against the loan advanced by the corporation

Legislation cited

Indian Penal Code, 1860s. 120-B, s. 419, s. 420, s. 468, s. 471

Subjects

cheatingfraudloan fraudsentence reductionrestitutionmitigating circumstancesIPC 420IPC 468IPC 471criminal appeal

Judgment

SURENDER K~l\-IAR GARG

v.

STATE OF UTTAR PRADESH

MAY 14, 1993
B [DR. A.S. ANAND AND N.P. SINGH, JJ.]

Indian Penal Code-Sections .+19, 420, .+68 and 471-0.ffence
11nder-Red11ction of sentence upon repayment of amount.

The appellant was charged with cheating the U.P. Industrial Corpora-
c tion of Rs. 39,352.50 by registering a take concern, and taking in its name.
Three courts concurrent!)' found the charges against him established.

On the question of sentence, it was contended that more than 20 )'Cars
had elapsed; the amount im·oh·cd was not excessive and other mitigating
circumstances were placed on the record.
D

Partly allowing the appeal, this Court

HELD : 1. The appellant had deposited Rs. 40,000/- (the loan amount)
as directed. (901-G)
E
2. In the peculiar fact'i and circumstances of the c;;ase, conviction
maintained but sentence of imprisonment reduced to the period alread)'
undergone, and a fine of Rs. 2,000/-, or one month R.I. in lieu thereof.
(902-B)
F
CRTh11NAL APPELLATE JURISDICTION : Criminal Appeal No. 830 ur
1985.

From the Judgment and Order dated 30.7.85 of the Allahabad High Court in
Crl. Revision No. 1937 of 1983.
G
M.S. Gujral. A.K. Srivastava and Serva Mitter for the Appellant.

R.C. Vem1a and A.S. Pundit.for the Respondent.

The Judgment of the Court was delivered by
H '
900
S. KUMAR,.. STA TE OF lJTfAR PRADESH [N.P. SINGH. J) 901

N.P. SINGH . .J. The appellant, was convicted under Sections 120-B, 419, A
420, 468, and 471 of the Penal Code. He was sentenced to undergo rigorous
imprisonments for different periods under the aforesaid Sections. The appeal filed·
on behalf of the appellant was dis.missed by the learned Additional Sessions Judge,
Ghaziabad. The High Court, on revision application being filed on behalf of the
appellant set-aside his conviction under Section 120-B. but the conviction and
sentence under other Sections mentioned above passed by the Trial Court were B
affirmed.

According to the prosecution case, the appellant, established a firm by the
name of Seemak Industrial Corporat)on . at Ghaziabad. The account in the bank
was opened in the name of bne Vijai Kumar and the aforesaid Industrial
Corporation was registered in the Sales Tax Department. The appellant applied for c
loan before the U.P. Small Industries Corporation and got a sum of Rs. 39,352.50,

- in the name of Seemak Industrial Corporation. Later it was discovered that the
aforesaid Seemak Industrial Corporation. was a fake concern and the appellant had
cheated, even the U.P. Small Industries Corporation, in respect of the amount
advanced by them. The Trial Court, the Appellate Court as well as the High Court
D
have gone into details of the materials on record for purpose of holding that the
charges framed against the appellant had been established and as such there was
no occasion to interfere with the conviction and sentence passed against him.

So far the present appeal is concerned, leave was granted as early as in the
year 1985 by this Court, but it has been listed for hearing after about 8 years. The E
learned Counsel, appearing for the appellant, after some arguments on merit
confined his submissions to the question of sentence only. He pointed out that
offences aforesaid had been committed by the appellant, as early as in the year
1973, more than 20 years from nl)W and as such a compassionate view should be
taken of the whole matter especially when the amount in respect of which the

- offences are alleged to have been committed is not excessive. He pointed out that F
the appellant has remained in jail for some time, in pursuance of the order of
conviction and sentence and as such he need not be sent to jail again. An affidavit
detailing the mitigating circumstances has also been filed by the appellant befare
us. Taking all facts and circumstances into consideration, by our Order dated 26th
April, 1993 we directed the appellant to first deposit an amount of Rs. 40,000 (the
G
loan amount) with the U.P. Small Industries Corporation Ltd. Pursuant to that
Order Rs. 40.000 has been deposited with the U.P. Small Industries Corporation
Ltd., on 4-5-1993 and original receipt granted by the Manager of the said
Corporation was produced before us. The zerox copy of the said original receipt
has been kept on record and the original returned to the learned counsel for the
appellant. An aflidavit has also been filed on behalf or the appellant stating about H
902 SUPRE~JE COURT REPORTS (1993) 3 S.C.R.

the aforesaid deposit.
A

In the peculiar facts and circumstances of the case while maintaining the
conviction of the appellant, we reduce the sentence of imprisonment under
different Sections mentioned above to the period already undergone by him. The
appellant. shall hl)Wen:r. pay a fine of Rs. 2,000 and in default of payment thereof,
B he shall undergo rigorous imprisonment for a period of one month. The appeal is
allowed in part. ·

The deposit of Rs. 40,000 made by the appellant with the U.P. Small
Industries Corporation Ltd., shall be adjusted towards the amount advanced by the
said Corporathm to the appellant. The Corporation shall of course he at liberty to
c take steps for realisation of any further sum. which may he due. against the ·------
appellant.

U.R. Appeal partly allowed.

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