MOOT COURT CLINICAL ASSESSMENT, 2019

TABLE OF CONTENTS

TABLE OF CONTENTS .............................................................................................1

INDEX OF AUTHORITIES ........................................................................................2

BOOKS REFFERED ....................................................................................................2

ARTICLES ....................................................................................................................3

E-RESOURCES ............................................................................................................3

CASES ............................................................................................................................3

STATEMENT OF JURISDICTION ...........................................................................4

STATEMENT OF FACTS .............................................................................................5

STATEMENT OF ISSUES ..........................................................................................7

SUMMARY OF ARGUMENTS..................................................................................8

ARGUMENTS ADVANCED ................................................................................. 9-16

PRAYER ......................................................................................................................20

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INDEX OF AUTHORITIES

ABBREVIATIONS
 AIR - All India Reporter
 Art. – Article
 Info-Information
 IT Act - Information Technology Act, 2000
 Para. – Para
 SC - Supreme Court
 SCC - Supreme Court Cases
 SCR - Supreme Court Reports
 Sec- Section

BOOKS REFFERED

➢ M P Jain Indian Constitutional Law (Lexis Nexis 2010)

➢ Durga Das Basu, Commentary on Constitution of India (Lexis Nexis 2013)

➢ Ratanlal & Dhirajlal, The Law of Contract43-58 (Twenty-sixth ed.,

LexisNexis 2015)(1897)

➢ Bare Act ,Indian Penal code

➢ K.D. Gaur, Indian Penal code (2017)

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ARTICLES

 THE CONSTITUTION OF INDIA, 1950

 THE INDIAN PENAL CODE, 1860
 THE INDIAN PARTNERSHIP ACT, 1932
 INDIAN EVIDENCE ACT, 1872
 INDIAN TRUSTS ACT, 1882
 COMPANIES ACT ,2013

E-RESOURCES

 www.manupatra.com

 www.lexisnexis.com

 www.scconline.com

 www.Westlawindia.com

 www.IndianKannon.com

CASES

 Brinckerhoff v. Enbridge Energy Company

 Emperor v. Jagannath Raghunath Das
 Emperor v. Lalloo Ghella
 Supdt. and Remembrancer of Legal Affairs Bengal v. Ludur Chandra Das
 L.K. Advani vs. CBI
 Manilal Vs purshotam das

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STATEMENT OF JURISDICTION

This is an appeal filed in the Hon’ble Supreme Court of India , under The Hon’ble
Supreme Court of India under Article 132 of constitution of India,1950 against the
judgment of acquittal of the 3 accused respondents. Leave has been accordingly granted.

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STATEMENT OF FACTS

1. The material case arises out of claim of Mr. Moti Lal that he suspect that the accuse
persons Hari Prasad, Ram Saran and Hari Anand were misappropriating items and
falsifying entries to derive undue benefit.
Firstly in lower court of Banaras. on the basis of the evidence collected by Nem
Chand, Moti Lal’s brother in law which amounted to criminal breach of trust. The
lower held the accused guilty. The accused then appealed in High court of Uttar
Pradesh. When the High court acquitted all the three accuse of all the charges.
So Moti Lal then Appealed in the Supreme Court of India challenging the High
court decision.

BACKGROUND
2. Respondent Hari Prasad, Ram Saran and Hari Anand and the Appealant Moti Lal ,
entered into a partnership on 15 July 1978. The partnership firm was to be known
as "Moghalsarai Cloth Trading Company".
3. Moti Lal was to contribute Rs. 24,000/- towards the capital and each of the three
appellants was to contribute Rs. 8,000/-. Each of the Respondent was to share in the
profit and loss equally, and the share of Moti Lal in the profit and loss of the business
was to be 7/16.
4. The three Respondent were to manage the business of the firm. The account-books
were to be kept by them or any of them. It was further provided in the deed of
partnership that an account would be taken of all the capital assets and liabilities
and of the profits and losses of the partnership annually, that the Respondent would
explain the accounts to Moti Lal and that then it would be signed by all the partners.
It further provided that such accounts when signed would be binding on each of the
Respondent. Moti Lai was not to take active part in the management of the firm.
5. It was in October, 1948, that he suspected that there was something wrong with the
management. He asked Nem Chand, his brother-in-law and who happened to be the
person to whom any disputes in connection with the partnership were to be referred
for decision under para. 17 of the agreement, to check up the accounts.

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6. Nem Chand demanded the account books from Ram Saran Bam, one of the
appellants who used to write up the accounts, and got the pakka-rokar, pakkakhata
and some invoices after a few demands. He did not get kachha-rokar and nam-jakars
which are alleged to have been maintained in this firm, though their maintenance is
denied by the accused appellants. He suspected the false entries on the 12th July,
6th August and 12th August, 1948 of account and informed Moti Lal about it.
7. Few days later Moti Lal learnt about the accused's removing the stock of the firm;
he went to the firm and found a truck laden with goods standing in front of the shop.
To him, this confirmed the information
8. Motilal complained to a police constable and later to the Sub-Inspector of police
about the accused's removing the property of the firm but, when required by the
Sub-Inspector to lodge a report in writing, did not make any report in writing.
9. On 29 November 1948 Moti lal filed a case on grounds that he suspected that the
accused persons were misappropriating, that they had knowingly made or caused to
be made wrong entries in the bahikhata with a view to derive undue benefit.
10. On inquiry it was found that the accused persons had already taken away the entire
stock of the shop from before and had misappropriated it.

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STATEMENT OF ISSUES

I. Whether the Respondent Hari Prasad, Ram Saran and Harianand are
liable for criminal breach of trust for misappropriation of stocks and the
wrong entries in account book?
1.1 Whether all required elements of criminal breach of trust was Fulfilled?

1.1. a Fiduciary Relationship

1.1. b Dominion over the property.
1.1. c Dishonest or Misappropriation of property

1.2 Whether Account books were falsified and Respondent are liable Under
Section 477A Of Indian Penal Code?

II. Whether the Account book can be considered as admissible evidence?

2.1 Whether the books maintained by respondent can actually be considered as
account book?
2.2 Account books can be considered as admissible evidence.

2.3 Account books can be considered as Circumstantial evidence

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SUMMARY OF ARGUMENTS

I. Whether the Respondent Hari Prasad, Ram Saran and Harianand are
liable for criminal breach of trust for misappropriation of stocks and the
wrong entries in account book?
The Appellant claims before the Hon’ble Supreme court that That Ram saran and
others are liable for criminal breach of trust by virtue of the facts and
circumstances of the case. They had misappropriated the quantity and nature of
stocks secondly the books of account were falsified .Section 405 says whoever
dishonestly misappropriates or converts to his own use that property, or dishonestly
uses or disposes of that property is liable for criminal breach of trust.

II. Whether the Account book can be considered as admissible evidence?

The Appellant claims before the Hon’ble Court that the Account books can be
considered as a relevant evidence. Section 34 of Indian evidence Acts states that
“Entries in the books of account, including those maintained in an electronic form],
regularly kept in the course of business, are relevant whenever they refer to a matter
into which the court has to inquire There are certain conditions which needs to be
fulfilled and if admitted then Accounts books would be considered as admissible
evidence.

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ARGUMENTS ADVANCED

I. Whether the Respondent Hari Prasad, Ram Saran and Harianand are
liable for criminal breach of trust for misappropriation of stocks and
falsification of account book?
1. It is humbly contended before the Hon’ble Supreme Court that by virtue of the facts
and circumstances of the case that Respondent Hari Prasad, Ram Saran and
Harianand are to be convicted for the allegation of criminal breach of trust. A prima
facie case can be clearly made out in respect of the following offences viz.
misappropriation of stocks and falsification of Account book.
2. Section 405 of Indian Penal Code 1introduces the offence of Criminal breach of trust
which states that “Whoever, being in any manner entrusted with property, or with
any dominion over property, dishonestly misappropriates or converts to his own use
that property, or dishonestly uses or disposes of that property in violation of any
direction of law prescribing the mode in which such trust is to be discharged, or of
any legal contract, express or implied, which he has made touching the discharge of
such trust, or wilfully suffers any other person so to do, commits “criminal breach
of trust”.” This identifies three elements to the offence, all of which need to be
present for the offence to be made out.

1.1 Whether all required elements for criminal breach of trust was fulfilled?

1.1.a Fiduciary Relationship

1.1.b Dominion over the property

1.1.c Dishonest or Misappropriation of property

1
Indian Penal Code,1860 Sec 405

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1.1 Whether all required elements of criminal breach of trust was Fulfilled?

1.1. a Fiduciary Relationship

3. The Cambridge dictionary defines Fiduciary duty as an obligation that one party
has in relationship with another one to act entirely on the other party’s behalf and
best interest. It is considered to be the standard of the highest care.” It is submitted
that Limited Partnership comes within the definition of fiduciary relation.
According to Section 9 of Indian Partnership Act 2 Partners are bound to carry on
the business of the firm to the greatest common advantage, to be just and faithful
to each other, and to render true accounts and full information of all things
affecting the firm .In limited partnerships, limited partners usually provide capital
resources and are not involved in managing the business, leaving operational
duties to the general partners instead. Non-managing limited partners typically do
not owe fiduciary duties to the limited partnership. However, limited partners who
participate in directing or operating a limited partnership could end up treated as
general partners by a court with the associated fiduciary duties.

4. In Brinckerhoff v. Enbridge Energy Company3, the Delaware Supreme Court

determined that the Limited Partnership in this case provides a contractual
fiduciary duty. Such contractual standards can still subject the general partner to
paying monetary damages if the trial court determines that the provisions of the
Limited Partnership were breached. According to Para 4 of the facts Moti Lal was
not to take active part in the management of the firm but contributed 24000/-
towards the capital and operated and directed the firm as stated in Para 3 of the
facts. In the instant case, the circumstances indicate that the respondent had a
fiduciary duty towards the appellant.

2
Indian Partnership Act ,1932 Sec 9
3
Del. Supr., No. 273, 2016 (Mar. 20, 2017; revised Mar. 28, 2017)

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1.1.b Dominion over the property.

5. Section 405 4applies in terms to any person who is "in any manner entrusted with
property, or with any dominion over property". It is humbly submitted that a
partner, being one of the co-owners of partnership property, can be entrusted with
that property of with dominion over it. According to certain provision of the Indian
Trusts Act5, which provide or assume that a partner in possession of partnership
property is in the position of a constructive trustee. Sections 80 to 96 of the Indian
Trusts Act deal with constructive trusts, and Section 94 6provides as follows:

6. "In any case not coming within the scope of any of the preceding sections, where
there is no trust, but the person having possession of the property has not the whole
beneficial interest therein, he holds the property for the benefit of the persons
having such interest, or the residue there-of (as the case may be), to the extent
necessary to satisfy their just demands."

7. It seems obvious that when a partner is in possession of property belonging to the

partnership he "had not the whole beneficial interest therein", and therefore Section
94 casts upon him the duty of holding the property of the residue thereof for the
benefit of the other partners to the extent necessary to satisfy the just demands of
those other partners. This section is to be read with Section 80, which provides that
an obligation in the nature of a trust is created in cases covered by "the following
sections" including Section 94. A reference may also be made to Section 887, which
provides:

"Where a trustee, executor, partner, agent, director of a company, legal adviser, or

together person bound in a fiduciary character to protect the interests of another
person by availing himself of his character, gains for himself any pecuniary
advantage or where any person bound enters into any dealings under circumstances

4
Supra note 1
5
Indian Trust Act,1882
6
Supra 5 sec 94
7
Supra 5 Sec 88

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in which his own interests are, or may be, adverse to those of such other person and
there by gains for himself a pecuniary advantage, he must hold for the benefit of
such other person the advantage so gained."

9. This section, although it does not apply directly to partnership assets in the
possession of a partner, but it does indicate that a partner is "bound in a fiduciary
character to protect the interests of another person and become a constructive trustee
for the benefit of partnership."

10. On the question whether a partner can be held to be guilty of criminal breach of
trust in respect of a partnership asset, we have direct authority of this Court in
Emperor v. Jagannath Raghunath Das,8 In that case a Division Bench came to the
conclusion that the words of Section 4059 is wide enough to cover the case of
partner. It was held that where on partner is given authority by the other partners
to collect moneys or property of the firm, he is entrusted with dominion over that
property; and if he dishonestly misappropriates it, he comes within Section 405 of
the Indian Penal Code.

11.Therefore, In respect to facts of the case respondent were constructive trustee as

they were responsible for management of the company and maintenance of account
book as stated in Para 6 of the facts and thus had dominion over propety It follows,
therefore, that they should be convicted for offence under Section 405, of Indian
penal code,1860.

8
(AIR 1932 Bom 57).
9
Supra 1

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1.1.c Dishonest or Misappropriation of property

THE TESTIMONY IS A RELEVANT PIECE OF EVIDENCE

12. The Appellant humbly submits that the testimony of Nem Chand, his brother in
law is admissible as well as reliable enough to convict the accused. Nem Chand is
Appellant brother-in-law and who happened to be the person to whom any
disputes in connection with the partnership were to be referred for decision under
para. 17 of the agreement, to check up the accounts. According to Para 6 of the
facts when Nem Chand demanded the account books from Ram Saran Bam, one
of the respondent who used to write up the accounts, and got the pakka-rokar,
pakkakhata and some invoices after a few demands. He did not get kachha-rokar
and nam-jakars which are alleged to have been maintained in this firm. He
suspected the false entries on the 12th July, 6th August and 12th August, 1948. In
respect of which the accuse were charged of false entries on, and that these entries
were made on the direction of the accused at a time when the accused was
managing the affairs of the firm and was acting as a servant or officer of the firm.

13. According to Para 7 of the facts Moti Lal learnt about the accused's removing
the stock of the firm; he went to the firm and found a truck laden with goods
standing in front of the shop. The accuse were misappropriating stock and were
falsifying entries On the evidence, we can conclude that aacuse had dishonest
intention to cheat.

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1.2 Whether Account books were falsified and Respondent are liable Under
Section 477A Of Indian Penal Code?

14. Appellant has alleged that the respondent are liable under section 477A . The
section 477A of Indian penal code,10states

“Falsification of accounts.—Whoever, being a clerk, officer or servant, or

employed or acting in the capacity of a clerk, officer or servant, wilfully, and with
intent to defraud, destroys, alters, mutilates or falsifies any [book, electronic
record, paper, writing] valuable security or account which belongs to or is in the
possession of his employer, or has been received by him for or on behalf of his, or
wilfully, and with intent to defraud, makes or abets the making of any false entry
in, or omits or alters or abets the omission or alteration of any material particular
from or in. any such [book, electronic record, paper, writing] valuable security or
account, shall be punished with imprisonment of either description for a term
which may extend to seven years, or with fine, or with both.”

15. On the question whether a partner can be guilty of an offence under Section
477A, In Emperor v. Lalloo Ghella11, it was held that where a partner in a firm or
to write its accounts, he is liable to be punished under Section 477A of the Indian
Penal Code. In the present case, the accuse Ram Saran Bam was a working
partner. He along with other respondent was appointed as a partner to manage the
business of the firm in “Moghalsarai Cloth Trading Company”. As a working
partner and a manager of the firm it was the duty of the accused to maintain the
accounts of the firm. It is stated in Para 6 of the facts that Ram Saran Bam
under Section 342, Criminal Procedure Code12, that he used to write pakkakhata
accounts, and that pakka rokar accounts. The terms of Section 477A, I.P.C, apply
not only to a clerk, officer or servant, but also to a person "acting in the capacity
of a clerk, officer or servant." of a servant of the partnership and is liable to be
punished for the false entries caused to be made by him.

10
Supra note 1 sec 477A
11
Bom LR 553
12
Criminal Procedure Code 1972, sec 342

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Same was held by the Calcutta High Court in Supdt. and Remembrancer of Legal
Affairs Bengal v. Ludur Chandra Das, 13

Therefore, holding that Ram Saran Ram appellant who wrote the account-books can
be held guilty under section 477 A of Indian penal code,1860.

13
AIR 1932 Cal 465.

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II. Whether the Account book can be considered as admissible evidence?

16. Section 34 of Indian Evidence Act 14 talks about whether Account books constitute
as valid evidence in the court of law. Under the Section, it has been stated that
“Entries in the books of account, including those maintained in an electronic form],
regularly kept in the course of business, are relevant whenever they refer to a matter
into which the court has to inquire but such statements shall not alone be sufficient
evidence to charge any person with liability.” Thus it is evident from this section
that accounts books can be used as valid evidence in court of law but there are
certain conditions which needs to be fulfilled which was established by Judiciary
in several cases. To establish the above given statement certain facts need to be
clarified such as:

2.1 Whether the books maintained by respondent can actually be considered

as account book?
2.2 Account books can be considered as admissible evidence.
2.3 Account books can be considered Circumstantial evidence

2.1 Whether the books maintained can actually be considered as account book?
17. It will be noticed that sanctity is attached in the law of evidence to books of
account if the books are indeed "account books”. According to section 209 of
Companies Act 15“Books of account” is defined in clause (13) of section 2 as
“Records maintained in respect of:

a. all sums of money received and expended by a company and matters in relation
to which the receipts and expenditure take place;
b. all sales and purchases of goods and services by the company;
c. the assets and liabilities of the company;
d. the items of cost as may be prescribed under section 148 in the case of a
company”.

14
Indian Evidence Act 1872 Sec 34
15
Companies Act, 2013 Sec 209

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18. Thus it can be contemplated from the aforesaid clause and from the Para 4 of the
facts which provides that in the deed of partnership it was stated that “an account
would be taken of all the capital assets and liabilities and of the profits and losses
of the partnership annually, that the respondent would explain the accounts to
Moti Lal.” Therefore we can conclude that the books maintained can be
considered as account books.

19. Reference can be made to the section 43 of the Evidence Act of 1855 16which
states that “Books proved to have been regularly kept in the course of business,
shall be admissible as corroborative but not as independent proof of the facts
stated there”. The availability of the account books for rechecking when
demanded by Appealant brother in law Nem chand justifies the fact that books
were maintained regularly.

20. In L.K. Advani vs. CBI17 , the section came under elaborate scrutiny. In the case,
the Supreme Court, on appeal, observed that spiral pads and spiral note books is a
book of account but not loose sheets of papers contained in a file. The court
observed that it was not necessary that the entry should be made at or about the
time the related transaction took place so as to pass the test of having been
‘regularly kept’.

It follows, therefore, books maintained can be considered as Account books.

2.2 Account books can be considered as admissible evidence.

21. Further it is settled principle of law in Section 3418which states that:

“Entries in the books of account, including those maintained in an electronic form],

regularly kept in the course of business, are relevant whenever they refer to a matter
into which the court has to inquire but such statements shall not alone be sufficient
evidence to charge any person with liability.”

16
Indian Evidence Act, 1855 Sec 43
17
(1997) Crl LJ 2559
18
Supra 14

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22.The finishing words of the Section 34 shall not alone be sufficient evidence to
charge any person with liability" certainly indicate that the evidence of the entries
in books of account, is a relevant evidence, The evidentiary value of the entries in
the account book must therefore be corroborative, supportive or confirmatory in
nature. This Section evidently makes an exemption to the doctrine that "a man
cannot make evidence for himself". Account books shows a recognition of the two
traditional features of hearsay exceptions in general, namely, the Necessity
Principle and the Circumstantial Guarantee of Trustworthiness." To attract this
section, it has to be proved that the accounts are written in a book and that book
must be a book of account and that account must be one regularly kept in the course
of business.

23.As to what amounts to independent evidence sufficient to corroborate any such

document falling under Section 34 of the Evidence Act, depends upon the facts and
circumstances of each case. What has to be considered is whether there is any
other evidence, except the entries in the books of accounts being relied on, to justify
the claim made by the person concerned in order to show that the entry is true and
correct.

24.In Manilal19 Vs purshotam das, it was held that the oral testimony of the person
concerned and his witnesses, who support the document, is relevant
under Section 34 of the Evidence Act and the same can be taken as corroborative
piece of evidence. The Division Bench of this Court has accepted the entries
under Section 34 of the Evidence Act. In this particular case, the testimony Of Nem
chand is a corroborative evidence which supports Account books. Therefore we can
conclude that Account books can be considered as admissible evidence.

19
AIR 1992

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2.3 Account books can be considered Circumstantial evidence

25. It the present case, Account book can be considered as circumstantial evidence
as there is lack of availability of evidences. Courts have often regarded circumstantial
evidence important for the cases. “The purpose of evidence is to establish the
probability of the facts upon which the success of a party‟s case depends in law”. It
is submitted that the Account books in question plays a very pertinent role in
implicating the accused. The Account books made available by the circumstantial
chain of events clarifies the role of the accused in misappropriation of stocks and
falsification of account book in entire case. Hence, it is most humbly contended that
Account books proves the criminal activities of the accused inter alia in a
circumstantial manner.

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PRAYER

Wherefore in the light of the issues raised, arguments advanced and authorities cited,
it is humbly requested that this Honourable Court may be pleased to adjudge and
declare:

1. To held Respondent Hari Prasad, Ram Saran and Harianand liable for criminal
breach of trust for misappropriation of stocks and the wrong entries in account
book.

2. To declare the Account book as admissible evidence.

And pass any such order, writ or direction as the Honourable Court deems fit and
proper, for this the Appellants shall duty bound pray.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

COUNSEL FOR THE APPELLANTS

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