Gogan Ram vs Emperor

Das, J.—The petitioner Gogan Ram has been found guilty of contravening the pro-visions of Clauses 3 and 9, Bihar Cotton Cloth and Yarn Dealers (Licensing and Control) Order, 1944 (hereinafter called the Provincial Control Order for the sake of brevity), and has been sentenced to rigorous imprisonment for six months on each count under Rule 81(4), Defence of India Rules, by the learned Magistrate exercising first class powers at Bhagalpur, which conviction and sentence have been upheld on appeal by the learned Additional Sessions Judge of Bhagalpur. Several questions of law and fact have been raised on behalf of the petitioner and it is necessary to state the facts of the prosecution case against the petitioner.

The petitioner appears to be the proprietor of a firm, known as Messrs. Gogan Ram Baijnath, dealing in cloth at Bhagalpur. Licenses had been issued to the firm under the Provincial Control Order, and it appears that the firm has two godowns besides a shop. There was a charge against the petitioner that he was keeping a godown at premises other than those mentioned in the license. This charge was found to be not tenable, and does not arise for consideration now. On 4th September 1944, on a certain confidential report received by the District Inspector of Cloth, a raid was made on the shop and godowns of the petitioner. The raiding party consisted of the District Cloth Inspector, other Cloth Inspectors, the Sub-divisional Magistrate and a Sub-Deputy Magistrate. Some of the members of the raiding party went to the shop of the petitioner and others went to the two godowns. Three lists were prepared of the actual stock in the two godowns and at the shop. The petitioner produced four registers as also other papers. As per condition No. 2 of Part I of the license, a register of daily transaction has to be maintained by wholesale and retail dealers; in the form mentioned in condition No. 2, separately for (a) dhotis and saris, (b) cloth normally sold by yardage, (c) other material sold, e.g., chaddars, towels, etc., and (d) yarn by counts in weight. The four registers, which were produced by the petitioner, related to the aforesaid four descriptions of cloth and yarn. The prosecution case is that the stock which was actually found in the shop and the two godowns did not tally with the stock as shown in the four registers mentioned above. Details of the discrepancies have been given in the judgments of the Courts below and I need not repeat those details. It is sufficient to state that except as regards cloth sold by yardage, the actual stock was found much in excess of the stock as shown in the registers in respect of (a) dhotis and saris; (b) towels, chaddars, etc., and (c) yarn. The prosecution case, therefore, is that the petitioner has contravened the provisions of Clause 3, Provincial Control Order, which states that no person shall carry on business as a dealer except under and in accordance with the terms and conditions of a licence in Form B issued by the Licensing Authority under the order. The gravamen of the charge against the petitioner on the first count is that though he carried on business under a licence, he did not comply with the terms and conditions of the licence, inasmuch as he had not correctly maintained a register of daily transactions as required by condition 2 of Part I of the Licence in Form B. The charge on the second count arises in the following way. When the shop and go-downs of the petitioners were raided on 4th September 1944 it was found that the petitioner had failed to exhibit on a notice board a correct account of the respective stocks of (a) cloth and (b) yarn that might be in the shop or place of business concerned, as required by notification No. 12634-Tex-48/44-P.C., dated 23rd May 1944 issued by the Cloth Controller, Bihar. The aforesaid notification appears to have been issued under the provisions of Clause (9), Provincial Control Order. That clause reads as follows:

Every licensee shall submit correctly such figures of stocks or transactions and furnish such information as the Controller may prescribe or demand and shall carry out such directions as the Controller may issue from time to time.

By virtue of the authority given to the Cloth Controller under the aforesaid provisions, the Cloth Controller issued the notification in question directing all wholesale dealers to exhibit on a notice board from day to day at each of their respective shops or places of business a correct account of the respective stocks of (a) cloth, (b) yarn and (c) standard cloth. It is stated by the prosecution that the petitioner failed to comply with the aforesaid direction of the Cloth Controller, and thereby contravened the provisions of Clause (9), Provincial Control Order. The defence of the petitioner will appear from the discussion which follows. The main contention of the petitioner was that the stock which was actually in his shop and godowns did tally with the stock as shown in his registers, if all the registers produced by the petitioner were taken into consideration. It is stated that the petitioner produced a fifth register called the "gant" register which was not taken into account in spite of the application of the petitioner. Secondly, it was contended on behalf of the petitioner that he did exhibit on the notice board a correct account of the stock as required by the direction of the Cloth Controller. The Courts below have concurrently found against the petitioner on both points. It would be convenient if some of the questions of law raised on behalf of the petitioner are disposed of at the outset. The first of such questions is if the conviction of the petitioner is bad for want of sanction by the Provincial Government. This point arises out of certain provisions in the Cotton Cloth and Yarn (Control) Order, 1943, made by the Central Government (hereinafter referred to as the Central Control Order for the sake of brevity and convenience). Clause (28), Central Control Order, states that no prosecution for the contravention of any of the provisions of this order (meaning the Central Control Order) shall be instituted without the previous sanction of the Provincial Government. The position of the Provincial Control Order vis-a-vis the Central Control Order, so far as the question of sanction is concerned, has been considered in two decisions of this Court: Kapildeo Pandey Vs. Emperor, and Manohar Lall Vs. Emperor, . As far as Clause 3, Provincial Control Order, is concerned there is a definite decision in Manohar Lall Vs. Emperor, that no sanction of the Provincial Government is necessary. It has been pointed out therein that the considerations which apply to Clause 8, Provincial Control Order, do not apply to Clause 3. Clause 8, Provincial Control Order, lays down that no licensee shall sell or offer to sell any cloth or yarn at a price in excess of the maximum price fixed for it. The maximum price referred to in Clause 8, Provincial Control Order, has reference to Clauses 10 and 12, Central Control Order. Under Clause 10, Central Control Order, the Textile Commissioner has authority to specify the maximum prices, ex-factory, wholesale and retail, at which any class or specification of cloth or yarn may be sold. Clause 12, Central Control Order, lays down, amongst other things, that no manufacturer or dealer shall sell or offer to sell any cloth or yarn at a price higher than the maximum price specified in this behalf under Clause 10.

Therefore, Clause 8, Provincial Control Order, has to be read as supplemental to Clauses 10 and 12, Central Control Order. As has been observed in Manohar Lall Vs. Emperor, , the ground covered by the Provincial Control Order in respect of the matter mentioned in Clause 8, Provincial Control Order; is also covered by the Central Control Order, though the latter may be a little more comprehensive in the sense that it applies not only to dealers of different kinds but also to manufacturers. This is one of the grounds on which it was held in that case that a contravention of the provisions of Clause 8, Provincial Control Order, would require sanction of the Provincial Government in the same way as a contravention of the provisions of any of the clauses of the Central Control Order.

It has further been pointed out there that the same considerations do not apply to Clause 8, Provincial Control Order. The Provincial Control Order deals mainly with the question of licensing: it lays down how applications for a licence have to be made; how licences have to be issued by the Licensing Authority; it sets up a machinery for the issue of licences and makes certain provisions for the issue of directions etc., by the Cloth Controller for the guidance of the licensees. The Central Control Order, on the contrary, deals mainly with the fixation of prices, etc., by the Textile Commissioner: it sets up a machinery for the checking of stocks, markings of cloth etc., by the Textile Commissioner through the help of a Textile Control Board and other agencies. It was at one time contended before me that a contravention of any of the provisions of the clauses of the Provincial Control Order would require the sanction of the Provincial Government. Such a contention is, however, clearly negatived by the decision in Manohar Lall Vs. Emperor, , which is a Division Bench decision of this Court and is as such binding on me. Learned Counsel If or the petitioner has, however, contended that even if a contravention of Clause 3, Provincial Control Order, does not require sanction, a contravention of the provisions of Clause 9, Provincial Control Order, would require sanction.

Learned Counsel for the petitioner has developed his argument on this point in the following way. He has drawn attention to Clause 19, Central Control Order, and he contends that the provisions of Clause 19, Central Control Order, are more or less the same as the provisions of Clause 9, Provincial Control Order. He contends that as these two clauses cover the same ground, sanction of the Provincial Government would be necessary for a contravention of Clause 9, Provincial Control Order, on the basis of the reasoning adopted in Manohar Lall Vs. Emperor, . In my opinion, this argument which may appear plausible at first sight is really unsound. There is one important distinction between the provisions of Clause 19, Central Control Order, and Clause 9, Provincial Control Order. Clause 19, Central Control Order, does not authorize the Textile Commissioner to give directions from time to time to licensees. As a matter of fact, the Central Control Order does not deal with licensing at all. Clause 19, Central Control Order, merely authorizes the Textile Commissioner to require any person to give information to enter and search any premises and inspect or cause to be inspected any books or other documents, etc. Clause 9, Provincial Control Order, while giving those powers to the Cloth Controller in respect of licensees, gives a further authority to the Cloth Controller to issue directions to licensees.

It Cannot, therefore, be said that Clause 19, Central Control Order, covers the same ground as Clause 9, Provincial Control Order. Then again the two control orders deal with two different authorities--the Textile Commissioner in the case of the Central Control Order and the Cloth Controller in the case of the Provincial Control Order. I do not think it can be said that because a violation of the order of the Textile Commissioner may require a sanction of the Provincial Government for instituting a case on that violation, a violation of the order of the Cloth Controller will require similar sanction, even though the Provincial Control Order does not provide for any such sanction. In my view, the considerations which apply to Clause 8, Provincial Control Order, do not apply to Clause 9, of the said order, Clause 9, Provincial Control Order, refers to orders and directions of a different kind and authority from the orders mentioned in Clause 19, Central Control Order. In this view, no sanction of the Provincial Government is necessary for a contravention of the provisions of Clause 9, Provincial Control Order. The conviction of the petitioner is not, therefore, bad for want of such a sanction.

The next question of law which has been agitated before me is about the application of Rule 119, Defence of India Rules. The provincial Control Order was previously published in the Bihar Gazette under Notification No. 652 P.C., dated 14th January 1944, The said Control Order was re-published in an extraordinary issue of the Bihar Gazette on 23rd June 1945, with a notice that the Governor of Bihar was of opinion that publication of notice of the said order in the Bihar Gazette was the manner of publication best adapted for informing persons whom the said order concerned of the terms thereof. But for the recent Full Bench decision in Mahadeo Prasad Jayaswal Vs. Emperor, decided on 11th October 1945, it might have been contended with success that the Provincial Control Order was not effective before it was republished on 23rd June 1945, with the notice mentioned above. In view, however, of the recent Full Bench decision mentioned above, it is clear that the contention is no longer available to the petitioners, and the learned Counsel for the petitioner has not, contended before me that the Provincial Control Order did not become effective before 23rd June 1945. It obviously became effective in January 1944, when it was first published in the Bihar Gazette. This was before the alleged offence in the present case was committed.

Learned Counsel for the petitioner has, however, contended before me that as respects the charge on the second count, the direction of the Cloth Controller in Notification No. 12634-Tex-48/44.P.C., dated 23rd May 1944, is hit by Rule 119, Defence of India Rules, and as there is no evidence to show in what manner the Cloth Controller had decided that this direction should be communicated to the persons concerned, the direction itself has no legal validity. I am of the view, however, that Rule 119, Defence of India Rules, does not at all apply to such a direction of the Cloth Controller. Rule 119 itself makes it clear that it applies to an order in writing made by every authority, officer or person in pursuance of any of these rules. The expression "these rules" obviously means the Defence of India Rules. Now, the order or direction made by the Cloth Controller is not an order made in pursuance of the Defence of India Rules: it is really an order made by virtue of the authority given to him by the Provincial Control Order. The Provincial Control Order is undoubtedly an order under Rule 81(2), Defence of India Rules, and Rule 119, Defence of India Rules, applies to the Provincial Control Order. The Cloth Controller has made no order under any of the Defence of India Rules: he has made an order by virtue of the authority given to him by an order made by the Provincial Government under the Defence of India Eules. The order of the Provincial Government made under the Defence of India Rules is hit by Rule 119, Defence of India Rules, but not the order made by the Cloth Controller. No case has been cited before me in which it has been held that such an order is hit by Rule 119, Defence of India Rules. For example, in the two cases in Kapildeo Pandey Vs. Emperor, and Manohar Lall Vs. Emperor, or in the Full Bench decision Mahadeo Prasad Jayaswal Vs. Emperor, no argument was raised that the order of the Textile Commissioner was also hit by Rule 119, Defence of India Rules.

Then, there is another aspect of this matter. It has been contended before me that apart from Rule 119, Defence of India Rules, it was the duty of the prosecution to prove that the direction of the Cloth Controller was brought to the knowledge of the petitioner, and the petitioner cannot be found guilty unless he knew of the direction. Learned Counsel for the Crown has referred to the written statement filed on behalf of the petitioner in which the petitioner had stated that he had complied with the direction of the Cloth Controller by exhibiting on a notice board a correct account of his stock (Ex. A).

In view of this plea in the written statement, it is hardly open to the petitioner to say at this stage that he did not know of the direction of the Cloth Controller. It appears that a notice (Ex. A) was found on the notice board by one of the Cloth Inspectors on 6th September 1944, that is, two days after the raid. There is good evidence in the record (which has been referred to by the Courts below) which shows that no such notice was found either at the shop or at the godowns of the petitioner on 4th September 1944. That evidence has been placed before me, and I see no reason to differ from the finding arrived at by the Courts below. Some argument was made before me as to whether a notice of the correct account of the stock was required to be put at the godowns also of the petitioner. The direction contained in Notification No. 1634-Tex/48/44-P.C., dated 23rd May 1944, requires a correct account to be exhibited at each of the respective shops and places of business. Whether a godown is a shop or a place of business may be open to some controversy. It is, however, clear from the evidence that a correct account of the stocks was exhibited neither at the shop nor at the godowns.

It, therefore, does not matter very much whether the direction of the Cloth Controller refers only to the shop or to the godowns. In any view of the matter, the petitioner had failed to comply with the direction of the Cloth Controller. I am further of the opinion that in view of the plea taken by the petitioner in his written statement, it cannot be said that he did not know of the direction of the Cloth Controller. It has been contended by learned Counsel for the petitioner that his client might not know of the direction of the Cloth Controller before 4th September 1944, and when the raiding party did not see a notice of the stock, the petitioner might then have known of the direction of the Cloth Controller. The case of the petitioner, however, was that he had put up a notice of the correct account of the stock on 4th September 1944. This case of the petitioner has been disbelieved. This is inconsistent with the present plea of the petitioner that he did not know of the direction of the Cloth Controller. Even if Rule 119 applies to the order of the Cloth Controller, I would not be prepared to interfere in revision if it is shown that the petitioner knew of the direction of the Cloth Controller and failed to comply with such direction. As stated above, I am, however, of the view that Rule 119 does not apply to the order of the Cloth Controller.

It has been argued before me that it was not legal for the Cloth Controller to give such a direction inasmuch as such an order could not have been made even by the Provincial Government under the provisions of Rule 81(2), Defence of India Rules. Clause (a) of Rule 81(2), Defence of India Rules, allows the Provincial Government to make orders so as to provide for, among other things, regulating the production, treatment, keeping, storage, movement, transport, distribution, disposal, acquisition, use or consumption of articles or things of any description. The terms of Clause (a) of Sub-rule (2) of Rule 81 are wide enough to cover directions of the nature given in this case. Clause (f) of Sub-rule (2) of Rule 81 allows the Provincial Government to provide for any incidental and supplementary matters.

In my opinion, the Provincial Government could authorize the Cloth Controller to give such directions to licensees as might be necessary for the purpose of the Provincial Control Order. The direction given by the Cloth Controller cannot be held to be illegal. I now come to the charge on the first count. It has been contended before me that the finding of the Courts below that the actual stock did not tally with the stock as shown in four registers is an incorrect finding. Firstly, it is pointed out that a fifth register was seized from the petitioner called the "gant" register, and in spite of the application of the petitioner dated 14th July 1945, this register was not taken in evidence. The order of the learned Magistrate, dated 14th July 1945, read as follows:

Another petition has been filed on behalf of accused Guggon Ram that the stock register of cloth may be taken into evidence. This register has been sent to this Court from the cloth office. Defence will point out the relevancy of the register on the date fixed when the question of its admissibility would be determined.

Thereafter, nothing more appears to have been done to get the entries in the "gant" register brought into evidence. The Court of appeal below has stated that it has looked into the "gant" register, but could not find anything to help the appellant. The question is if the finding of fact arrived at by the Courts below on the question of the discrepancy between the actual stock and the stock as shown in the registers has been vitiated because of the failure to take the "gant" register into account. I have very carefully considered the arguments raised, on behalf of the petitioner on this point, and I am unable to agree with the contention that the failure to take into account the "gant" register has vitiated the finding of the Courts below. Under condition 2 of part I of the Licence, a register of daily transactions has to be kept for four kinds of cloth and yarn. The form in which the register has to be kept is given in the condition itself.

If, therefore, any cloth or yarn has been received and brought into the actual stock, it ought to be shown in one of the four registers mentioned in condition 2 of Part I of the Licence. If, however, 3ome cloth or yarn has been received in a bale which has not been opened, the cloth or yarn so received has not actually gone into the stock. The unopened bale so received might have been shown in the "gant" register. It would not, however, make any difference to the actual stock, which should tally with the stock as shown in the four registers mentioned in condition 2. It is obvious that cloth or yarn received in a bale can only be taken into the actual stock when the bale has been opened, and the articles received have been counted: once it is taken into the actual stock, it should be entered in the relevant register as per condition 2 of the part I of the Licence.

I am, therefore, of the view that the "gant" register cannot make any difference. If the goods received had been brought into stock, they ought to be entered in one of the four registers mentioned in condition 2. Therefore, the actual stock, except goods in unopened bales which have not been brought into the stock, should in all cases agree with the stock as shown in the four registers mentioned in condition aforesaid. Moreover, the Courts below have pointed out that the stock as shown in Ex. A, which was hung on 6th September 1944 does not tally with the actual stock found.

Secondly, it has been contended before me that the four registers merely showed the transactions up to the end of 3rd September 1944; transactions of the fourth could only be entered at the end of the day. The raiding party seized the registers before the transactions of the fourth could be completely entered, and this accounts for the discrepancies. This line of argument sounds plausible at first sight. But on careful consideration it appears to me that it is not worthy of acceptance. I have stated above that except with regard to one item, the actual stock was much in excess of the stock as shown by the registers. Such excess cannot be accounted for by sale, transaction of the fourth, because sales would reduce the stock and not increase it. Increase of stock can only be explained by receipt of fresh goods. If fresh goods had been received on the fourth and brought into the actual stock, there were no reasons why such receipt should not be entered in the registers. The form in which the register of daily transactions has to be kept contains on the left hand side a column showing receipts, and on the right hand side a column showing sales. If fresh goods had been received on the fourth which had been brought into the stock, the receipt ought to have been shown in the register. The position would be different, as I have observed above, if the goods had remained in unopened bales and had not been brought into the stock.

It has been stated in ground No. 4 of the present application in revision that the Cloth Inspector counted the stock of the cloth which was lying in the shop and in open bales in the godowns. It is clear that unopened bales which had not been brought into the stock were not counted in the actual stock, nor could such unopened bales be shown in the registers maintained under condition 2 aforesaid. Unopened bales therefore would not be entered either in the four registers mentioned above or counted in the actual stock. That being the position, it cannot be contended that some goods were received on 4th September 1944, which went into the stock, but were not entered in any of the four registers. The very purpose of the registers would be frustrated if goods are allowed to go into the actual stock without those being entered in any of the four registers. I have also looked into the registers, and I find that in some of them there are entries dated 4th September 1944. It cannot, therefore, be said that the books were written up to 3rd September 1944 only, and that further transactions of the 4th were not entered in the register. Furthermore, this appears to be a new point which was not raised at any earlier stage.

Lastly, it has been pointed out that the three original lists which were prepared on 4th September 1944, have been lost and a consolidated list which was subsequently prepared is the only list on the basis of which the actual stock on 4th September 1944, has been found. It has been contended before me that the consolidated list was not really admissible in evidence. This consolidated list was embodied in the report of the District Cloth Inspector dated 5th September 1944 (Ex. 5). The loss of the three original lists has been proved by P.W. 7 who says that the lists were stolen away from his possession. It appears that these original lists were verified and found to be correct by a Sub-deputy Magistrate (P.W. 6) and they were made over to P.W. 7 for the sale of the articles after they had been seized. The sale continued for sometime, and in the course of those sales, the three original lists appear to have been stolen or lost. The question is whether the consolidated list as given in Ex, 5 is admissible in evidence and is correct. The consolidated list is given in the report of 5th September 1944, the day after the raid. Learned Counsel for the petitioner drew my attention to Sections 63 and 65, Evidence Act, and he has contended that the consolidated list cannot be said to be secondary evidence of the three original lists, and was not, therefore, admissible in evidence. In my opinion, this contention is incorrect. The consolidated list as embodied in Ex. 5 is itself an original document which was prepared to show the sum total of the articles of the three lists. The District Cloth Inspector examined the three lists, and gave the total number of articles in his report (Ex.5). The stock as shown by the registers has been correctly entered in Ex. 5, and there are no reasons to think that the actual stock as found by counting was not correctly entered in the document. The consolidated list as embodied in Ex. 5 is not really secondary evidence as contemplated in Section 63, Evidence Act, inasmuch as it is not a copy of the three lists. It is an original document which gives the total of the three lists. If the three lists were available, the totals given in Ex. 5 could no doubt be checked with the original lists. But I have no reasons to think that the prosecution is either falsely alleging that the three lists have been stolen or that the totals mentioned in Ex. 5 were not correctly mentioned.

My attention was drawn to a small defect in the charge on the first count. The charge mentioned that the petitioner contravened the provisions of Clause 3, Provincial Control Order, by not maintaining the registers of daily transactions. The petitioner maintained registers of daily transactions but he did not maintain them correctly in accordance with the conditions of the licence. The defect in the charge is of a very minor nature, and has not in any way caused prejudice to the petitioner. The petitioner knew full well what was the case he had to meet, namely, that the registers of daily transactions were incorrectly prepared so that stock in hand was much in excess of the stock actually shown in the registers.

For the reason given above, I hold that the petitioner has been rightly convicted of contravening the provisions of Clauses 3 and 9, Provincial Control Order, and as such, he has made himself liable to punishment under Rule 81(4), Defence of India Rules. The only other question that remains for consideration is the question of sentence, and learned Counsel for the petitioner has contended that there is no evidence that the petitioner had done any black-marketing in respect of the goods in question. The offence, however, is nonetheless serious, inasmuch as incorrect entries in the registers of daily transactions would undoubtedly afford opportunity for profiteering or black-marketing, and it is for the purpose of preventing such evils that the necessity of making correct entries in the registers of daily transaction arises. Considering all the facts and circumstances, I do not think that there are any grounds for interference with the sentence passed in this case.

The result, therefore, is that the application fails, and it is dismissed.