R v Savundra
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SALMON |
| Judgment Date | 16 July 1968 |
| Judgment citation (vLex) | [1968] EWCA Crim J0716-1 |
| Court | Court of Appeal (Criminal Division) |
| Docket Number | No. 1615/68 |
| Date | 16 July 1968 |
[1968] EWCA Crim J0716-1
Lord Justice Salmon
Mr. Justice Geoffrey Lane
and
Mr. Justice Fisher
No. 1615/68
No. 1726/68
IN THE COURT OF APPEAL
CRIMINAL DIVISION
Royal Courts of Justice
MR. P. PAIN, Q.C., and MR. D. SHOUT appeared as Counsel for the applicant, Savundranayagan.
MR. R. LYONS, Q.C., and MR. L. J. BROMLEY appeared as Counsel for the applicant, Walker.
MR. H. J. LEONARD and MISS E. A. M. CURNOW appeared as Counsel for the Crown.
On 6th March of this year after a trial lasting some 42 days, Savundra and walker were found guilty of conspiring together to cheat and defraud such persons as had taken out insurance policies with the Fire, Auto and Marine Insurance Company Limited by fraudulently applying for their own benefit the proceeds of premiums paid upon such policies. Savundra was sentenced to 8 years' imprisonment on that count and fined £30,000. Walker was sentenced to 5 years' imprisonment on that count and fined £20,000. Savundra was also convicted of uttering certain forged valuable security with intent to defraud (the security purported to be a certificate for 3 per cent Savings Bonds of upwards of £500,000) knowing the same to be forged. He was sentenced to 8 years' imprisonment on that count and fined £20,000. 'walker was found not guilty on that count. They were both found guilty of, being Directors, making a false entry in the balance sheet of the Fire, Auto and Marine Insurance Company Limited as at 30th April, 1965, which falsely represented that that company was a beneficial owner of British Government securities which had been bought for £540,000. Savundra was sentenced to 6 years' imprisonment on that count and Walker to 4 years' imprisonment. They were both also found guilty of, being Directors of the company to which I have referred, they conspired together with intent to defraud and make a false entry in the balance sheet of that company as at 30th April, 1966, which would falsely represent that the company were the beneficial owners of quoted securities to a total value of over £800,000. Savundra was sentenced to 6 years imprisonment on that count and Walker to 4 years' imprisonment. Finally they were both found guilty with intent to defraud that they uttered certain forged valuable securities purporting to be certificates evidencing titles to certain shares or stocks knowing the same to be forged. Savundra was sentenced to 8 years' imprisonment on that count, Walker to 5 years' imprisonment and fined £10,000. All these sentences of imprisonment were to run concurrently so that Savundra was sentenced to 8 years' imprisonment in all and Walker to 5 years' imprisonment. The learned Judge also imposed a sentence of 12 months' imprisonment in default of the payment of any fine. Those sentences were to be consecutive to each other and consecutive to the other sentences. So if Savundra failed to pay one of the fines his sentence would be 9 years' imprisonment, if he failed to pay both the fines his sentence would be 10 years' imprisonment. Similarly, if Walker failed to pay one of the fines his total sentence would be 6 years' imprisonment, if he failed to pay both it would be 7 years' imprisonment.
Both these men apply to this Court for leave to appeal against both conviction and sentence. This Court gave leave to appeal against conviction and sentence and by consent has treated the hearing of these applications as the hearing of the appeals.
Although the trial of this case lasted 42 days, during which a welter of complicated and complex and hardly relevant detail introduced by the Prosecution was minutely sifted and re-sifted with the greatest care, the salient facts are clear, relatively simple and can be stated quite shortly. At about the end of 1962 it occurred to Savundra that the ordinary family man represented a large sector of the motoring public; a sector, moreover, which presented a considerably smaller risk from the insurance point of view than any other sector, e.g. young driver's or persons employed by the owners of fleets of vehicles. Savundra conceived the idea of forming an insurance company which would insure family drivers at lower premiums and with greater no claim bonuses than those offered by the established insurance companies; and so in February 1963 the Fire, Auto and Marine Insurance Company was born. That company will be referred to as FAMIC during the course of this judgment. The idea as an idea was simple and no doubt excellent. So long as the company was efficiently managed and the rates were not cut below the limit of commercial prudence, the company might have made a great deal of money and provided the motoring public with a valuable service.
Walker was enlisted by Savundra to help him run FAMIC. There were other Directors but it would appear that either they were exceptionally stupid or knew little more about the affairs of the company than its postal address. Savundra was undoubtedly the moving spirit. Walker was his lieutenant and during Savundra's frequent absences abroad took executive day-to-day control of the company. The rates offered by FAMIC proved a great attraction to the public and soon money started to roll into its coffers and kept rolling in until about the summer of 1966 when the company's premium income was running at the rate of about £4,000,000 a year. The staff in the company had grown in numbers to nearly 600 persons and the company occupied a large modern office block equipped with computers and all the paraphernalia of an efficient, modern office. Financial disaster, however, overtook the company and its policy holders in 1966. The company was quite unable to pay the claims made under the policies it had issued. It was accordingly wound up on 25th July, 1966, with a deficiency well in excess of £2,000,000.
According to the case for the Crown, the large sums of money that were rolling in as premiums at the end of 1963 and the beginning of 1964 excited Savundra's and Walker's cupidity. It would have been too crude for them to have put their hands in the company's till and extracted the money for their own purposes. Besides this could not have escaped speedy detection by the auditors and the Board of Trade. According to the case for the Prosecution other means of obtaining the money were devised, Early in 1964 a bank account in the name of Merchants and Finance Trust Company (Bankers) was opened by Savundra and Walker with the National Provincial Bank in London at its Oxford Street branch. The FAMIC's trading year ended on 30th April. By 30th April, 1965, well over £400,000 out of the monies received as premiums had been paid into this banking account and most of it had been paid out to walker or Savundra or their nominees and used for their own purposes. By 30th April, 1966, a further sum of more than £200,000 had been paid into and out of the account in exactly the same way. Thus Savundra and Walker obtained well over £400,000 in cash and, as will presently be seen, shares in FAMIC to the nominal value of £200,000. The £400,000 had been paid by FAMIC's policy holders as premiums and should have been available to satisfy the claims made under the FAMIC policies. It was not available because it had been taken by Savundra and Walker. This was the money which was the subject matter of the conspiracy to defraud count on which both men were found guilty.
The facts stated so far appear from bank accounts and agreements, receipts and other documents signed by the appellants themselves. I do not include amongst these documents the statement made by Walker to the Official Receiver's Examiner, to which I will later refer. It would appear from these facts that there was clearly no defence to the conspiracy to defraud count, nor, in the opinion of this Court, was there in reality any defence or any possibility that any jury could have acquitted either Savundra or Walker on this count. The case which they put forward to cover up their defalcations was obviously a sham incapable of deceiving anyone. It was as follows: MFT was a genuine merchant bank carrying on business in Liechtenstein and Switzerland. The sums paid into the National Provincial banking account represented deposits by FAMIC with MFT bearing interest at the rate of 4 per cent. The sums withdrawn by Savundra and Walker from the National Provincial banking account were loans to them by MFT unsecured, unreceipted and bearing interest at the rate of 3 per cent and not repayable for 20 years. That was the story.
The evidence showed clearly that MFT was registered as a company in Liechtenstein and had been acquired for a few hundred pounds by Savundra. It had no business premises. It did not appear in any telephone directory in Liechtenstein or Switzerland. It was a mere shadow with an impressive name. Neither Walker nor Savundra had ever met any of its officers or Directors nor had they ever seen or enquired about its balance sheets or trading accounts -obviously because none of these existed. A letter from a Swiss lawyer called Haganbach, to whom reference will later be made, was produced. This letter purported to appoint Walker, who had no banking experience of any kind, as MFT's London Manager. There is no shortage of banking facilities in the city of London. Neither Savundra nor "walker was able to suggest any sensible reason why they were prepared to deposit well over £600,000 of FAMIC's money with MFT, of which they knew absolutely nothing, rather than with one of the many highly reputable and substantial banking houses in London. The true answer obviusly is that it would have been quite impossible to find any merchant bank anywhere that would have contemplated letting...
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