SUDAN GOVERNMENT  vs. HIRACHAND JERAJ SHAH

 (AC/CP/112/ 1957)

Principles

·  Criminal law - — cheating — - distinction between cheating and mere breach of contract sec. 362 of the Penal Code.

The accused was negotiating to sell salt to the complainant, a merchant in Mombasa. He accepted an offer from the complainant, stating that he would ship the salt in a ship leaving Port Sudan on July I st. 1956. However, the accused knew Some weeks or more before the ship arrived that there would be no space in it for the salt, and in fact the accused never at any time had the salt available for shipment. Despite this he wired the complainant asking for a remittance in respect of the price of the salt. The remittance arrived about the 29th. June and on 2nd. July, i.e. after the ship had left Port Sudan. the accused paid the remittance into his bank account.
 Held: the accused was guilty of cheating under sec. 362 of the Penal Code.

Reference for Confirmation

The accused was an Indian trader of Port Sudan. The complainant was a merchant in Mombasa, East Africa. On 12th. June 1956 the complainant wrote from Mombasa to the accused informing him that he wished to buy some crushed Sudan salt, and enquiring about the price, the quantity and the name of the ship by which it would be despatched. The accused replied by telegram offering to sell 100 to 300 tons of salt at 155 shillings c.i.f. Mombasa, consignment to be effected on the 26th. June. Further telegrams were exchanged, and eventually a contract was made by telegrams dated 23rd. and 2 June whereby the salt was to be consigned on the S.S. President Cattier which was expected to arrive in Port Sudan on 26th. June. At least seven days before the arrival of the ship the accused was informed by the shipping agent that there was   no space for the 300 tons of salt in the S.S. President Cattier. Despite this the accused, in his wire of the 2 asked the complainant for an immediate remittance of the price of the salt. The remittance was sent by cheque by air mail, and was in the accused’s hands on or before the 2gth. June. The S.S. President Cattier arrived in Port Sudan on the 2 June and left on the 1st. July, without the salt. On the 2nd. July the accused took the cheque to the Ottoman Bank, where it was credited to his account. Meanwhile on the 1st. July the accused wired the complainant that all the space in the S.S. President Cattier was allocated and promised to consign the salt to

 Mombasa on the next ship, but the complainant replied canceling the sale. At no material time did the accused have any salt, or attempt to buy any salt for shipment to the complainant, nor did he offer to return the complainant’s money to him.

M.A. Abu Rannat C.]. The accused in this case was convicted by a Major Court sitting at Port Sudan of the offence of cheating under sec. 362 of the Penal Code. In order to prove the offence of cheating there must be a deception which must precede and induce under the first part of sec. 357 of the Penal Code — the delivery or retention of the money. As to what is sufficient to constitute deception, this depends on the facts of each particular case.

It is proved beyond reasonable doubt that unless there was space in the S.S. President Cattier no salt could have been shipped toMombasa at the time fixed by the accused. The evidence of Mr. Ress the shipping agent, shows that at least seven days before the arrival of this ship he informed the accused that there was no space for the 300 tons of salt. The ship arrived in Port Sudan on the 2 June 1959. The accused knew on th&Q2nd. June that there was no space for the salt, and that it was impossible to consign it to the complainant at the time fixed, yet on the 24th. June he sent a wire to the complainant saying that the salt would be consigned and asking for a remittance of m/ms. Acting on these assurances the complainant remitted by air the sum requested.

The learned advocate for the appellant contends that the case is a mere breach of contract, and relies on illustration (g) to sec. 357 of the Penal Code. In such cases much depends on the intention of the accused at the time of the inducement, which may be judged by his subsequent actions, but of which the subsequent actions are not the sole criterion. (Gour, The Penal Law of India, Vol. II p. i As to the subsequent acts the accused himself admits that he made false statements. I need not go into all the details of these false statements, but I may refer to his letter of the 29th.June 1956. That letter was Written by the accused after the arrival of the ship S.S. President Cattier. He said

“In accordance with your instructions we have kept the goods ready duly marked, but regret to inform you that the goods will not be shipped by this steamer. In spite of our good influence we have been failed.”

As the learned President of the Major Court stated, the accused knew that no salt was bought or marked, or was ready for shipment. In the same letter the accused attempted to induce the complainant to buy from him something between 500 and 2000 tons of salt, with a view to inducing him to deliver more money.

The learned advocate fur the defence referred to the evidence of Mr. Rees on cross-examination where Mr. Rees uses the word “might”. I do not think, in the face of the evidence of Mr. Rees and the subsequent actions of the accused himself, that there is any doubt that the accused, who had had previous dealings in shipping salt to Mombasa, could have been under any mistake about the necessity of finding space in a ship before a consignment is accepted.

The learned advocate also relies on sec. 1 (3) of the Sale of Goods Act, 1893. I do not think that this is relevant since it is clear that there was a definite contract from the wire of the complainant canceling the deal on 2nd. July 1957. An honest person in the position of the accused would have disclosed the facts to the complainant, and would not have drawn the money from the Bank, or if he had done so, would have returned it after the deal was cancelled. The distinction between a case of a mere breach of contract and a case of cheating is well marked, though it is not always easy to apply. The fact that the accused approached the shipping agent and the salt suppliers, could easily be explained as part of a well prepared design by the accused to show that he was in fact willing to purchase the salt for the complainant. The accused retained the money from the 2 June 1956 until 26th.January 1957, the date on which the information was lodged. Indeed, the accused did not pay even then, and has still not paid, and the evidence revealed that he is insolvent, and has execution debts against him.

I confirm the finding of guilty under sec. 362 of the Penal Code, but I am prepared to reduce the sentence to two years’ imprisonment. All other sentences and orders are confirmed.

Conviction affirmed.