The King Emmanuel.
1934Present: Poyser J.
THE KING v. EMMANUEL.
SO—D. C. (Crim.) Jaffna, 3,737.
Administrator—Criminal breach of trust of money belonging to estate—Judi-cial settlement—Penal Code, s. 388.
An administrator may be convicted of criminal breach of trust ofmoney belonging to the estate.
It is not necessary that his accounts should be judicially settledbefore such a charge could be maintained.
PPEAL from a conviction by the District Judge of Jaffna.
Hayley, K.C. (with him Croos DaBrera and Aluvihare), for accused,appellant.
M. W. H. de Silva, Deputy S.-G. (with him E. H. T. Gunasekere, C.C.),for Crown, respondent.
Cur. adv. vult.
>8C. W. B. 50.
POYSER 3—The iting' v. Emmqnuel.
,. _ ;v«r _i
February 9, 1934. Poyser J.—
The accused''has been convicted of criminal breach of trust of a sumof Rs. 2,575 being the proceeds of sales of cloth belonging to the estateadministered in D. C. Jaffna, Testamentary Cases Nos. 5,828 and 5,870.
The accused up to August 1, 1929, was the Secretary of the DistrictCourt of Jaffna. On that date he was transferred to the District Courtof Kurunegala in the same capacity. On August 31, 1926, the accusedwas appointed under section 520 of the Civil Procedure Code administra-tor of the estate of a deceased person called Mathan Lai, and it is inconnection with the administration of this estate that the charge wasbrought against the accused. Mathan Lai and his brother Baboo Laicarried on business in Jaffna. Baboo Lai died on April 10, 1925, andMathan Lai died on May 8, 1925. Their estates were administered in
C. Jaffna, No. 5,828 and 5,870, but the connection between thebrothers’ affairs being close for all practical purposes. D. C. caseNo. 5,828, was absorbed in D. C. case No. 5,870. The accused wasappointed administrator of both estates, but for the purposes of this caseit is only necessary to consider D. C. No. 5,870.
The indictment framed against the accused charged him with criminalbreach of trust in respect of the proceeds of cloth sold between December30, 1928, and January 13, 1929. The indictment, however, was amendedduring the course of the trial by substituting the date November 14 forJanuary 13.
The estate the accused was called upon to administer was a substantialone, in value over Ks. 500,000. It consisted of both movable andimmovable property and included a number of debts due to the estatein connection with which the accused, as administrator, filed a number ofactions.
There were also a considerable number of liabilities and various actionswere brought against the estate.
Among the assets of the estate was a quantity of cloth which wassold by the accused by auction from time to time, and it is in respectof these sales that the charge against the accused of criminal breach oftrust arises.
The accused was originally charged in the Police Court with criminalbreach of trust in respect of the sums of Rs. 341, Rs. 300, and Rs. 790.These offences were alleged to Have been committed in May and June,1929, and he was also charged under sections 189 and 190 of the PenalCode with making a document containing false statements.
The indictment sets out different charges against the accused, butit was conceded, having regard to the case of King v. V allay an Sittam-baram that the Attorney-General could frame a charge in respect ofany offence disclosed in the preliminary inquiry.
It appears from the evidence that the accused did sell cloth on thedates specified in the indictment for the sum of Rs. 5,575 but out ofthat amount only Rs. 3,000 was paid in to the credit of the estate onJanuary 12, 1929.
The learned Judge does not examine in detail the evidence in regardto these sales, as counsel for the accused at the trial admitted that such
1 20 N. L. R. 257.
POYSER J.—The King v. Emmanuel.
sales had in fact taken place. According to the Judge he repeatedlyemphasized that he did not question the fact that the alleged sales tookplace.
However, on appeal counsel for the accused does not admit this pointand argues that the sales have not been proved.
The evidence as to the sale of cloth was as follows:—The witnessMustafa stated that on December 31, 1928, he purchased from the accusedcloth belonging to the estate of Mathan Lai for Rs. 1,060, and on Janu-ary 8, 1929, he similarly purchased cloth for Rs. 500, he produced hisaccount books to corroborate his evidence.
The witness R. B. Letchiram purchased cloth for Rs. 782.50 onDecember 28, 1928. This sale was admitted.
A. N. Motilal stated that he purchased cloth for Rs. 587.50 from theaccused on December 31, 1928.
Evidence was also given that cloth was purchased by the NadarajahStores from the accused on January 4 and 7, 1929, for Rs. 1,120 andRs. 1,525, respectively. The payments for these purchases were madeby cheques which were produced in evidence.
I do not think there can be any doubt in regard to the purchase byMustafa on January 1, 1929, and the purchases made by the NadarajahStores, Motilal, and Letchiram.
The only purchase that can possibly be questioned is that of Mustafaon December 31, 1928. Mustafa definitely states that he purchasedcloth on this date from the accused for Rs. 1,060 but his books describethe purchase as being through “ A. N. ” These letters refer to the firmof Motilal and it was suggested that the purchase was made from themand not the accused.
There is no corresponding entry in Motilal’s books and it appearsfrom the evidence that there was a joint purchase by Mustafa andMotilal from the accused on December 31, 1928, and it may be thatcloth to the value of Rs. 1,060 was purchased by Motilal on Mustafa’sbehalf and paid for by the latter.
There is however no doubt in my view that Rs. 1,060 was paid to theaccused on that day either by Mustafa or Motilal, but giving the accusedthe benefit of any doubt that may exist, or even conceding that therewas only adequate proof of the misappropriation of a sum of Rs. 1,515the accused is not entitled to an acquital on that account and hiscounsel does not suggest that he is.
The next step in the prosecution case was to prove that the accusedhad misappropriated part of the money he had received from the salesof cloth, and to establish this it was necessary to exapiine not only thepayments into the Kachcheri to the credit of the estate but also theaccounts submitted by the accused.
As previously stated the accused was transferred to Kurunegala onAugust 1, 1929, and the actual administration of the estate by himcame to an end about this time, although his appointment as administra-tor of the estate was not terminated.
POYSER J.—The King v. Emmanuel.
The last deposit to the credit oi the estate by the accused was onJanuary 12, 1929. There was no deposit between then and November 2,1929, when a deposit was made by K. Ratnasingham who succeededthe accused as Secretary of the Jaffna District Court, and was appointedco-administrator in October, 1929.
In regard to the payments into the credit of the estate it has beenproved beyond any question that between December 30, 1928, andJanuary 12, 1929, that the only sums paid into the credit of the estatewere Rs. 3,000 and Rs. 329.50, both payments being made on January12, 1929. The latter amount has been shown to be a payment for rentfrom one R. V. Samuel.
As previously stated, the prosecution during the course of the trialsobtained leave to amend the indictment by substituting the date -Novemeber 14 in place of January 13. The reason for this amendmentwas that it was appreciated that the accused might, as administrator,be entitled to retain monies in his hands. The accused was originallyordered to bring. all monies realized by him into Court, but on Febru-ary 1, 1927, he obtained permission of the Court to retain the income ofthe estate in his hands for the upkeep of properties and other – mattersconnected with the estate.
Consequently it was necessary for the prosecution, as there was somedoubt of the effect of the order of February 1, 1927, not only to provethat the money in question was not deposited in the Kachcheri aboutthe time the sales were made, but also to prove that the accused has notaccounted for the sum. in question in any other way and that he hadin fact misappropriated it.
To prove that the accused did misappropriate this sum of moneythe prosecution made a detailed examination of the accounts submittedby the accused. In this connection it appears that in 1929 inquiriesbegan to be made into the accused’s administration of this estate andhe was called upon to submit a final account for June 25, 1929 (P. 16).
Actually he did not file his final account till November 13, 1929, andit was for that, reason the indictment was amended.
I do not think the amendment of the indictment in any way prejudicedthe accused as he was given an opportunity of having the witnessesrecalled if he so desired. The case of Queen v. B. Sinno Appu1 lays downthat an amendment to the indictment should not be refused by theJudge unless it is likely to do a substantial injustice to the accused.
In the accounts filed by the accused on November 13, 1929 (P. 23),there appears Schedule “ L ” which is a statement of the deposits madeto the credit of the estate up to September, 1929.
Schedule “ L ” shows that an amount of Rs. 130,780.41 was depositedto the credit of the estate. This amount was in fact deposited at theKachcheri. In this schedule a number of items are set out as receiptsfrom the sale of stock which have been conclusively proved to have beenreceipts from other sources, e.g., item 39, Rs. 662.50 is described as theproceeds of sale of stock, but it appears the amount was received fromthe Police Magistrate, Jaffna (P 14), item 64 sets out a sum of
» 7 s. c. C. 51.
POYSER J.—The King v. Emmanuel.
Rs. 11,325.98 as being received from the sale of stock but it is provedby the evidence of Ratnasingham that this amount did not include anysum arising from the sale of stock but was derived from other sources.
In this schedule no dates were assigned to the various items, and theJudge has found not only that the account was false but that it waswithout doubt proved that the sum of Rs. 2,575 received from the saleof cloth had not been accounted for but had been dishonestly retainedby the accused.
The evidence amply supports this finding, a most careful and detailedexamination of the accounts was made at the trial and I agree with theJudge that the omission to include this sum in the accounts could nothave been due to an oversight.
In fact it was not argued at the trial that this amount was omittedby an oversight—the argument was that the accused.was entitled toretain this sum in his hands.
There is however a further point in connection with P 23. An amountof Rs. 5,200 is shown as money in hand derived from the sale of cloth.It was necessary for the prosecution to also establish that the sum ofRs. 2,575 was not included in this amount.
The Judge deals with this point in detail and finds that the sum ofRs. 2,575 could not possibly be included in the amount of Rs. 5,200.In regard to this point I think it is only necessary to refer to the accused’sown statement on January 10, 1930 (when his accounts were beinginquired into in the District Court), he then stated that this sum ofRs. 5,200 represented the value of a sale which took place as he wasabout to leave Jaffna, viz., in August, 1929, and as the Judge points outthere is no reason why his own statement in regard to the Rs. 5,200should not be accepted.
A number of points were taken in appeal on behalf of the appellant.It was argued that the accused did not have a fair trial and that it wasunjust and improper to investigate the accounts of the estate in a criminaltrial and that the trial in fact resulted in a general investigation of theaccused’s accounts.
There no doubt was a general investigation not only of the accountsproduced by the accused but also of all other accounts and documentsconnected with the administration of the estate, but this investigationwas I consider necessary not only to prove the case for the Crown butalso necessary in fairness to the accused.
Further, the action of the prosecution as regards this investigation issupported by authority. In the case of King v. V allay an Sittambaram(supra), the following passage occurs in the judgment of Bertram C.J.at page 262 : —
“ It often happens in charges of criminal breach of trust or otherforms of fraud that an inquiry instituted into a specifi charge naturallyand properly travels beyond the actual facts charged. It may benecessary to go into other items than those under consideration, andinto the whole system and course of business out of which the chargeoriginates ”.
POYSER J.—The King v. Emmanuel.
In the case it was not sufficient to prove that the sum of Rs. 2,575had not been paid to the credit of the estate, it was also essential toprove that the sum was not accounted for in any other way, and had infact been dishonestly retained by the accused, and that could only bedone ‘by a detailed examination of the whole administration of theestate.
Various passages in the judgment were criticised, in particular, apassage where the learned Judge points out that whatever basis is takeninto calculation, the accused has not accounted for more thanRs. 34,642.45 as the value of doth sold by him and according to theaccused himself he realized something over Rs. 60,000.
It was suggested that the prosecution had set out to prove offencesother than those charged and that sections 14 and 15 of the EvidenceOrdinance did not justify such proof.
I agree that these sections would not permit of the proof of offencesother than those charged, but as I previously pointed out a detailedexamination of the whole administration of the estate was necessaryto prove the offence with which the accused was charged, and if suchexamination did prove that a greater sum had been misappropriatedthan was set out in the indictment, it is no ground for the holding thatthe evidence necessary for such examination was wrongfully admitted.
The fact that the learned Judge described P 23 as a false documentwas also criticised. There is no doubt that it was a false docume^.I agree with counsel for the appellant that the fact that the accusedhad made entries in this account under the wrong headings is notnecessarily proof of dishonesty, but the point is whether the sum ofRs. 2,575 was in fact ever paid to the credit of the estate whether under aright or wrong heading, the prosecution has proved that it was not.
A further point taken on behalf of the accused was that until theestate accounts are judicially settled under section 725 of the CivilProcedure Code no criminal liability will attach to the accused. I do notagree with this contention, the accused did present a petition for judicialsettlement after he had filed his accounts in November, 1929, but nofinal action appears to have been taken on this petition.
On the other hand there were various inquiries into the administrationof the estate and the accounts during 1930 and the accused was orderedto bring into Court a sum of over Rs. 40,000 and this order was upheldby the Supreme Court on appeal. This fact was brought out at thetrial by counsel for the defence to establish the fact that there had beenno judicial settlement of the accused’s accounts.
This pomt was raised at the trial and the Judge held that it was notnecessary for the Crown, assuming there had been no judicial settlement,to wait until that stage had been reached before it could prosecute theaccused for the offence of criminal breach of trust if he had committedthat offence, and I entirely agree with the trial Judge’s finding on thispoint.
It was also argued on behalf of the accused that he could not beconvicted of criminal breach of trust as he was not entrusted with thedominion over property but had the sole control of the property of thedeceased, and therefore could not be said to have been entrusted with it.
POYSER J.—The King v. Emmanuel.
There do not appear to be any reported cases of criminal breach oftrust by an executor, or administrator. Other cases of criminal breachof trust were cited, of which I think it is only necessary to refer to thefollowing: Nurul Hassan v. Emperor *. In this case the accused wasemployed as agent by the complainant to collect on his behalf the taxesof the Union Committee. He was to receive as remuneration 10 per cent,of the collections and was to hand over the collections less his remunera-tion to his master or pay the money into the Treasury. It was allegedthat while he was in charge of the collections he failed to account forcertain sums of money collected by him. It was held that in such casesthe nature of the trust should be established and that as the accusedwas entitled to deduct his remuneration from the collections, and as noperiod was fixed for payment into the Treasury, a charge of criminalbreach of trust could only be maintained after an adjustment of accounts,the mere fact that he retained the sums collected not being conclusiveproof of criminal breach of trust.
This case is distinguishable, a period was fixed for the payment of thesums the accused had received and an account was filed after the accusedhad ceased to act as administrator.
I think there is no doubt that if the prosecution had been institutedbefore there had been any examination of the accounts the accusedwould have been entitled to an acquittal, but it is only after the accusedhad ceased to take any part in the administration of the estate and hisaccounts had been examined that proceedings were taken.
The case of Buchanan v. Conrad* iays down that the mere failureto pay over sums received by a clerk or servant for the employer does notin itself constitute the offence of criminal breach of trust under thePenal Code. It is not sufficient to prove a general deficiency in accountsbut there must be evidence of some specific sums having been mis-appropriated or converted to the defendant’s use.
In this case there was evidence of the misappropriation of a specificsum, and the fact that the evidence proving the misappropriation of thespecific sum also was evidence to the effect that there was a generaldeficiency is no ground for holding the accused to have been wrongfullyconvicted of the misappropriation of a specific sum.
The question of whether an administrator can be convicted of criminalbreach of trust in respect of monies coming into his hands is, in myopinion, conclusively decided by the Penal Code itself.
The first illustration to section 388 is : —
“A, being executor to the will of a deceased person, dishonestlydisobeys the law, which directs him to divide the effects, accordingto the will, and appropriates them to his own use. A has committedcriminal breach of trust.”
In this case, in my opinion, it has been proved beyond all reasonabledoubt that the accused did dishonestly disobey the law and appropriateto his own use money belonging to the estate.
The appeal is dismissed.
1 56 Indian Cases 669.
2 2. Cey Law Rep. 135.
THE KING v. EMMANUEL