Preetam Vs. State of Madhya Pradesh - Court Judgment

Excerpt:
- constitution of india. article 12: [s.b.sinha & h.s. bedi, jj] state corporation under state financial corporations act, 1951 is a state.-- state financial corporations act, 1951 [63/1951]. sections 29, 30 & 31; manner of exercise of powers under the sections taking over of plant and machinery theft of some machineries - held, the corporation, no doubt, is entitled to realise its dues, but it has been conferred with a special statutory power in terms of sections 29 and 31 of the act therefor. such a power on the corp[oration was conferred by an act of parliament, inter alia, keeping in view the fact that it being a statutory authority and, thus, being state within the meaning of article 12 of the constitution, will act fairly and reasonably. the entire loan was recalled not only because the appellants were defaulters but also on the allegation that they had purchased second-hand plant and machinery from another financial institution in breach of the contract, which having been found to be wholly incorrect, it must be held that it had acted on extraneous consideration. pradeshiya industrial and investment corporation of u.p. ltd., (picup) was bound to act in terms of provisions of the 1972 act . whether it did so, is a question which should have been gone into by the high court. when the corporation takes over possession of the plant and machinery in exercise of its statutory power, apart from its obligation as a bailee, it also acts, as a trustee. its action otherwise must be fair and reasonable. whereas the corporation has a right to realise its dues, it must act strictly in terms of the statutory and constitutional scheme. while it exercised its enormous statutory power, it is expected to perform its duties also. such a duty is envisaged not only under the law but also under article 14 of the constitution. a person aggrieved by the action of the state must have an effective remedy. the purpose of taking over possession and that too of an ongoing concern, without taking over the management, would be to sell the unit. if the plant and machinery are kept in order and in a working condition they would fetch one price but if the machinery are stolen or allowed to rust, the same would not. for taking recourse to sale of the unit and in a case like the present one where the possession of the plant and machinery of an ongoing concern had been taken, an extra care on the part of the authorities of the corporation was expected. it is not clear whether immediate steps for sale of the properties had been taken or not. it is stated that some advertisements were issued, but why a running concern could not be sold is a matter which requires a deeper scrutiny. it is not clear whether picup invoked personal guarantees of the directors in contravention of the 1972 act. it is also not clear if any step had been taken by the corporation against the officials or the security guards who were found to be responsible therefor or whether a criminal case had been initiated in that behalf. therefore, the high court should consider all aspects of the matter and pass appropriate order(s) as it may deem fit and proper. matter remitted to high court. -- state financial corporations act, 1951. sections 29, 30 & 31; manner of exercise of powers under the sections taking over of plant and machinery theft of some machineries - held, the corporation, no doubt, is entitled to realise its dues, but it has been conferred with a special statutory power in terms of sections 29 and 31 of the act therefor. such a power on the corp[oration was conferred by an act of parliament, inter alia, keeping in view the fact that it being a statutory authority and, thus, being state within the meaning of article 12 of the constitution, will act fairly and reasonably. the entire loan was recalled not only because the appellants were defaulters but also on the allegation that they had purchased second-hand plant and machinery from another financial institution in breach of the contract, which having been found to be wholly incorrect, it must be held that it had acted on extraneous consideration. pradeshiya industrial and investment corporation of u.p. ltd., (picup) was bound to act in terms of provisions of the 1972 act . whether it did so, is a question which should have been gone into by the high court. when the corporation takes over possession of the plant and machinery in exercise of its statutory power, apart from its obligation as a bailee, it also acts, as a trustee. its action otherwise must be fair and reasonable. whereas the corporation has a right to realise its dues, it must act strictly in terms of the statutory and constitutional scheme. while it exercised its enormous statutory power, it is expected to perform its duties also. such a duty is envisaged not only under the law but also under article 14 of the constitution. a person aggrieved by the action of the state must have an effective remedy. the purpose of taking over possession and that too of an ongoing concern, without taking over the management, would be to sell the unit. if the plant and machinery are kept in order and in a working condition they would fetch one price but if the machinery are stolen or allowed to rust, the same would not. for taking recourse to sale of the unit and in a case like the present one where the possession of the plant and machinery of an ongoing concern had been taken, an extra care on the part of the authorities of the corporation was expected. it is not clear whether immediate steps for sale of the properties had been taken or not. it is stated that some advertisements were issued, but why a running concern could not be sold is a matter which requires a deeper scrutiny. it is not clear whether picup invoked personal guarantees of the directors in contravention of the 1972 act. it is also not clear if any step had been taken by the corporation against the officials or the security guards who were found to be responsible therefor or whether a criminal case had been initiated in that behalf. therefore, the high court should consider all aspects of the matter and pass appropriate order(s) as it may deem fit and proper. matter remitted to high court indian contract act,1872[c.a.no.9/1872]-- sections 148, 151 & 161: [s.b. sinha & h.s. bedi, jj] bailment held, state financial corporation taking over possession of plants and machinery of industrial concern in exercise of its power under section 29 of the state financial corporations act, 1951, apart from its obligation as bailee, also acts as a trustee. - we must hold that the high court was not at all justified in entertaining the confession as a piece of evidence, much less, a reliable one. even if we proceed on the assumption that the evidence led by the prosecution in this behalf is reliable, still, considering its nature, we are unable to hold that it can made the sole basis conviction even for the offence under section 404 i.1. preetam the appellant herein and his brother ishwar lal were placed trial before the sessions judge, mornea for committing the murder of one chhita on june 15, 1973 and removing ornaments from his person. the trial ended in an acquittal and aggrieved thereby the respondent-state preferred an appeal. the high court dismissed the appeal so far as it related to ishwar lai but set aside the acquittal of the appellant and convicted and sentenced him under sections 302 and 404 of the indian penal code. the above order of reversal is under challenge in this appeal.2. to prove its case the prosecution relied upon three eye witnesses, the doctor who held the autopsy, a judicial confession of the appellant and some recoveries made pursuant to his statement. while accepting the evidence of the prosecution so far as it sought to prove that chhita met with a homicidal death, the trial court rejected the entire evidence adduced by the prosecution to prove that the appellant was the author of the crimes. the high court concurred with the finding of the trial court that the three eye witnesses could not be relied upon but found the confession voluntary and true and as, according to it, the evidence relating to recovery corroborated the confession reversed the order of acquittal relying upon the same.3. since the reasons given by the learned courts below for disbelieving the eye-witnesses are cogent and convincing we must leave their evidence out of our consideration. we, therefore, proceed to consider whether the high court was justified in making the confession the basis for conviction of the appellant.4. it appears from the record that the appellant was arrested on june 17, 1973 and on his production before the magistrate on the following day was directed to be sent to police custody, as prayed for by the investigating officer. he remained in such custody till june 22, 1973 when he was sent to judicial custody under orders of the magistrate. thereafter he was produced before the magistrate on june 25, 1973 for recording his confession. on his production, the magistrate gave him two hours' time to reflect and then recorded the confession. from the confessional statement (exhibit p. 11) we find that the magistrate (p.w. 8) first disclosed his identity and told him that he was not bound to make any confession and if he did so, it might be used as evidence against him. after administering the above caution the magistrate recorded the confession and then made the memorandum required under sub-section (4) of section 164 cr. p.c. in our considered view, the confession so recorded is in utter disregard of the statutory provisions of sub-section (2) of section 164 cr. p.c. under the above sub-section the magistrate is first required to explain to the accused that he was not bound to make a confession and that if he did so it might be used against him. though this requirement has been complied with in the instant case, the other requirement which obligates the magistrate to put questions to the accused to satisfy himself that the confession was voluntary so as to enable him to give the requisite certificate under sub-section (4). has not been fulfilled for, the learned magistrate did not ask any question, whatsoever to ascertain whether the appellant was making the confession voluntarily. in view of such flagrant omission to comply with the mandatory requirement of section 164(2) cr. p.c. we must hold that the high court was not at all justified in entertaining the confession as a piece of evidence, much less, a reliable one. once the confession is left out of consideration - as it has got to be - the only other piece of evidence to connect the appellant with the alleged offences are the recoveries allegedly made pursuant to his statement. even if we proceed on the assumption that the evidence led by the prosecution in this behalf is reliable, still, considering its nature, we are unable to hold that it can made the sole basis conviction even for the offence under section 404 i.p.c.5. on the conclusions above, we allow this appeal, set aside the impugned order of the high court and acquit the appellant of the charges leveled against him. the appellant who is on bail is discharged from his bail bonds.