Sagarmal Poddar and Others vs Emperor

Das, J.—These are 4 applications in revision which have been heard together, as they raise a common question of law regarding some of the provisions of the Cotton Cloth and Yarn (Control) Order, (hereinafter referred to as the Control Order) made by the Central Government on 17-6-1943 in exercise of the powers conferred by Sub-rule 2 of Rule 81, Defence India of Rules.

In Criminal Revision No. 186 of 1945 the petitioner is Sagarmal Poddar, who has been sentenced to a fine of Rs. 60 only or in default rigorous imprisonment for 15 days, under Rule 81(4), Defence of India Rules for an alleged contravention of the provisions of Clause 14(1)(a) of the Control Order. Toe allegation against him is that on 3-1-1915 he was found in possession of 15 bundles of grey yarn. It was alleged that the yarn had been manufactured before 1-8 1948, and the petitioner had contravened the provisions of Clause 14(1)(a) of the Control Order by being in possession of such yarn after 81-12-1944. The petitioner admitted that he was in possession of the yarn on the date in question, but raised the plea that he could not find a market for the same and was in possession of the undisposed of yarn as a result of circumstances beyond his control.

In criminal Revision No. 187 of 1945 the petitioner is Onkarmal Poddar. He is a licensed dealer in cloth and yarn at Sambalpur. The allegation against him is that on 4-1-1945 he was in possession of 1060 lbs. of coloured yarn, It was alleged that the yarn was manufactured before 1-8-1943, and the petitioner had contravened the provisions of Clause 14 of the Control Order by being in possession of the yarn after 31-12-1944. He has been convicted and sentenced to a fine of Rs. 100 only or in default rigorous imprisonment for one month, under Rule 81(4), Defence of India Rules for having contravened the provisions of Clause 14 of the Control Order. Asin the case of Sagarmal Poddar, it has been directed that the seized yarn shall be forfeited and 20 per cent. of the sale proceeds shall be credited to Government and the balance made over to the petitioners. The defence of Onkarmal Poddar was to the effect that he could not find a market for the yarn. He further alleged that some of the yarn was damaged and he wanted to sell them in the Eastern States for which he had entered into correspondence with the Provincial Government.

In Criminal Revision No. 222 of 1945 the petitioner is Nidhi Prusty, who is a cloth dealer of Puri. On 8-1-1945 his shop was inspected by the Supervisor of Supplies, who found 44 pairs of saris, 25 thans and 10 yards of loose cloth which bore the mark T.C. B which mark had been given more than 6 months before Forty-five pieces of unmarked cloth, which had been manufactured before 1-8-1943, were also recovered from his shop. The prosecution allegation is that in respect of the unmarked cloth the petitioner has contravened the provisions of Clause 14 of the Control Order, and, in respect of the T.C.B., marked cloth the petitioner has contravened the provisions of Clause 15A of the Control Order. He has been sentenced to a fine of Rs. 200 only or in default rigorous imprisonment for 2 months in respect of the alleged contravention of the provisions of Clause 15A; he has also been sentenced to a fine of Rs. 100 only or in default rigorous imprisonment for 15 days in respect of the contravention of Clause 14 of the Control Order. There is also an order directing that the cloth seized shall be forfeited to Government. The defence of the petitioner was that the unmarked pieces of cloth were quite old and useless, and were not, therefore, marketable. In respect of the marked cloth, the defence of the petitioner was that he could not sell them within the time allowed, and that he had been guilty of no offence by being in possession of the same on 8-1-1945,

In Criminal Revision No. 239 of 1945 the petitioner is Kalu Ram. He is a cloth dealer, and he was found in possession of 8 pairs of dhoties on 5-1-1945. The prosecution alleged that the dhoties had been manufactured before 1-8-1943, and, therefore, the petitioner was guilty of contravening the provisions of Clause 14 of the Control Order by being in possession of the said dhoties after 31-12-1944. He has been sentenced to a fine of Rs. 50 only or in default rigorous imprisonment for one month. There is an order of forfeiture of the 8 pairs of dhoties. The defence of the petitioner was that he had committed no offence by being in possession of the dhoties after 31-12-1944.

It would thus appear that the first two cases relate to undisposed of yarn, and the remaining two cases to undisposed of cloth. The relevant provisions of the Control Order with which we are concerned in these cases are Clauses 14, 15 and 15A. As stated above, the Cotton Cloth and Yarn (Control) Order, 1948, was made by the Central Government on 17-6-1943. Thereafter, there have been many amendments of the Control Order, and it has not been easy for us to trace all the amendments which have been made from time to time. There are also various notifications under the Control Order which have a bearing on the questions raised in these cases. The learned Advocate-General who has appeared for the Crown and learned Counsel for the petitioners have placed before us some of the notifications in question. The contraventions complained of in the present cases took place between 3-1-1948 and 8-1-1945. We are, therefore, to determine the questions raised with reference to the relevant provisions of the Control Order as they stood on the dates in question. On 4-11-1944, Clause 14 of the Control Order was completely recast. This will appear from Notification No. T.B. (1) 29/44, dated 4-11-1944. After this amendment, Clause 14 of the Control Order read as follows:

(1) No dealer shall, after 31-12-1944, buy or sell or have in his possession--

(a) any cloth or yarn manufactured in India before 1-8-1943;

(b) any cloth or yarn manufactured in India and packed after 31-7-1943 and before 1-1-1944.

(2) No manufacturer or dealer shall buy or sell or have in his possession any cloth or yarn, whether manufactured in India or elsewhere, other than that referred to in Sub-clause (1), after the expiration of twelve months from the last day of the month marked on the cloth or yarn in accordance with the directions of the Textile Commissioner under Clause 10; and no person shall buy or sell or have in his possession any such cloth or yarn in unopened bales or cases after the expiration of six months from the said date.

(3) For the purposes of this clause--

(i) cloth or yarn shall be deemed to be in the possession of a person when it is held on behalf of that person by another person;

(ii) a bale or case shall be deemed to be unopened if the hoops or other bindings and all outer coverings have not been removed.

(4) Nothing in this clause shall apply to handloom cloth.

In order to appreciate the points raised in these cases it is necessary to refer to Clause 14 of the Control Order as it stood before the aforesaid amendment of 411-1944. This will appear from Notification No. 34 Tex. A (1) 12/43, dated 24-11-1943. Clause 14, before the amendment of 4-11-1944 stood as follows:

(1) No cloth (other than handloom cloth) or yarn manufactured before 1-8-1943 shall, unless expressly authorised by the Textile Commissioner,

(a) be kept by any person in unopened bales or cases after 31-8-1943;

(b) be kept undisposed of by any dealer, or by any person holding on behalf of a dealer, after 31-12-1943.

(2) No cloth or yarn marked with the date of packing under the provisions of this Order shall, unless expressly authorised by the Textile Commissioner--

(a) be kept by any person in unopened bales or oases for more than three months after that date;

(b) be kept undisposed of by any dealer, or by any person holding on behalf of a dealer, for more than six months after that date.

Clause 14 as it stood before the amendment of 4-11-1944, gave authority to the Textile Commissioner to extend the dates by which cloth or yarn manufactured before 1-8-1943, was to be disposed of. Such orders extending the dates had been issued by the Textile Commissioner from time to time. On 4-11-1944, however, Clause 14 of the Control Order was so recast as to leave no authority to the Textile Commissioner to extend the date beyond 31-12-1944, and the clause contained a prohibition against the possession by any dealer of any cloth or yarn manufactured in India before 1-8-1943, beyond the relevant date, viz., 31-12-1944. Clause 15 of the Control Order, however, empowers the Textile Commissioner to exempt, by general or special order, any cloth or yarn, or any class of cloth or yarn, from all or any of the provisions of Clause 14. This clause was in existence from before the amendment of 4.-11-1944, referred to above. Then comes Clause 15-A of the Control Order which was inserted by Notification No. 34 Tex. A (1) 13/43 dated 22-1-1914. This clause reads as follows:

Notwithstanding anything contained in Clauses 14(1)(b), 14(2)(b), cloth or yarn not disposed of within the period specified in those clauses may be kept and sold by a dealer subject to the conditions notified in this behalf by the Textile Commissioner prescribing the special markings to be made on such cloth or yarn, the agency by which the marking shall be made and the fee payable for such marking:

Provided, however, that no such cloth or yarn shall be kept undisposed of by any dealer, or by any person holding on behalf of a dealer, for more than six months after the date of such marking.

It should be noted that Clause 15-A was inserted on 22-1-1944--long before 4-11-1944, when Clause 14 was recast. The reference in Clause 15-A to Clauses 14(1)(b) and 14(2)(b) is, therefore, a reference to the old Clause 14 of the Control Order as it stood before the amendment of 4-11-1944. As a matter of fact, there is no such Sub-cause as (2)(b) in Clause 14 after the amendment of 4-11-1944. It appears that though Clause 14 was recast on 4-11-1944, no consequential amendments were made in Clause 15 A, Clause 15-A is an overriding clause which permits the Textile Commissioner to notify conditions subject to which undisposed of cloth or yarn may be kept and sold by a dealer, even though the periods prescribed under Clauses 14(1)(b) and 14(2)(b)--the reference being to old Clause 14--have expired. This authority given to the Textile Commissioner is in addition to the general authority which he has under Clause 15 to exempt any cloth or yarn or any class of cloth or yarn from the provisions of Clause 14. It is common ground that the Textile Commissioner had issued no notification under Clause 15-A prescribing the conditions subject to which undisposed of cloth or yarn might be kept beyond 31-12-1944.

Having explained the relevant provisions of the Control Order which were in force on the dates in question, I now proceed to discuss the questions which have been raised in these cases. The first and the foremost question which has been raised on behalf of the petitioners is that in view of the provisions of Clause 15A, possession of undisposed of cloth or yarn after 31-12-1944, cannot be held to be a contravention of Clause 14, taking into account the meaning of the expression ''contravention'' as explained in Rule 5, Defence of India Rules. It is pointed out that under that rule a non-compliance of the rules or orders made thereunder, without lawful authority or excuse, is a contravention of the said rules or orders, and it is contended that if Clauses 14 and 15A of the Control Order are read together, then the only reasonable inference is that dealers can be in possession of undisposed of cloth or yarn even after 31-12-1944, subject to such conditions as may be notified by the Textile Commissioner. As the Textile Commissioner had notified no such conditions, the dealers did not know what to do with the undisposed of cloth or yarn left over on 31-12-1944. These questions raised before us are similar to those raised in Provincial Government C.P. & Berar v. Shamsherali AIR 1945 Nag. 249 and learned Counsel for the petitioners has placed great reliance on that decision, whereas the learned Advocate General appearing for the Crown has challenged its correctness. The learned Advocate General has contended that Clause 15A is merely an enabling clause, which allows the Textile Commissioner to notify conditions subject to which undisposed of cloth or yarn may be kept and sold by dealers even after the expiry of the periods mentioned in Clause 14. According to him, Clause 15A does not override the provisions of Clause 14, and the non-issue of a notification by the Textile Commissioner under Clause 15A, makes possession of undisposed of cloth or yarn after 31-12-1944, a contravention of the provisions of Clause 14. The learned Advocate General has drawn our attention in this connection to a press-note issued by the Textile Commissioner on 811-1944, which reads as follows:

The Government of India have by a notification in the Gazette of India, dated 4-11-1944, amended Clause 14, Cotton Cloth and Yarn (Control) Order 1943. Under clauses as amended it will be an offence for any dealer to buy or sell or have in his possession after 31-12-1944, any cloth or yarn manufactured and packed before 1-1-1944. The clause further lays down that any cloth or yarn whether manufactured in India or imported must be finally disposed of within twelve months from the last date of the month marked on the goods; no such cloth or yarn shall be kept in unopened bales after six months from that date.

The Textile Commissioner desires it to be known that no extensions will be given in the time for disposal now laid down unless for the most compelling reasons, when the holder of the goods can show that they could not be sold due to causes entirely beyond his control.

Handloom cloth is exempted from the above provisions.

On the basis of this press-note, it is contended that the dealers knew that the Textile Commissioner would not give any further extension, and it was the duty of the dealers to dispose of all cloth or yarn before the relevant date. The learned Advocate General has further contended that the expression ''lawful authority or excuse'' in Rule 5, Defence of India Rules means an excuse which is tenable in law, and not an excuse which may be good in fact though not tenable in law. I must say that the points made by the learned Advocate General are not without plausibility, and I was at the beginning impressed by them. After more mature consideration, however, I am of the opinion that Clause 15A should not be given the restricted meaning which the learned Advocate General desires us to give. The opening words of the clause are "Notwithstanding anything contained in Clauses 14(1)(b) and 14(2)(b) etc." I have already pointed out that the reference to Sub-clauses (1)(b) and (2)(b) is to the old Clause 14. Unless the reference is so read, Clause 15A becomes meaningless. If the reference is so read, then it is clear to me that Clause 15A overrides the provisions of Clause 14, and allows a dealer to remain in possession of undisposed of cloth or yarn, such possession being subject to such conditions as may be notified by the Textile Commissioner. In this view of Clause 15A, it was the duty of the Textile Commissioner to notify the conditions subject to which undisposed of cloth or yarn could be possessed after the relevant date. The dealers cannot be penalised for a contravention of Clause 14, because the Textile Commissioner did not think fit to notify the conditions subject to which undisposed of cloth or yarn should be possessed. I find it very difficult to accept the view that the framers of the Control Order meant to legislate so unreasonably as to penalise dealers who for reasons beyond their control were not able to dispose of the cloth or yarn before 81.12-1944.

Even the press note to which the learned Advocate General has drawn our attention makes an exception in the case of compelling reasons, when the holder of the goods can show that they could not be sold due to causes entirely beyond his control. In the cases under our consideration, all the petitioners had said that they were not able to dispose of the cloth or yarn by the relevant date; some of them had said that the cloth or yarn was damaged and was not marketable. There is evidence in the record that part of the cloth or yarn was in such a damaged condition that they could not be sold. The Courts below have not rejected this plea of the petitioners. They have proceeded on the view that any possession of undisposed of cloth or yarn beyond 31-12-1944 is a contravention of Clause 14. In my opinion, that view of Clause 14 is not correct. Clause 14 should be read with Clause 15A. It is well-known that a penal clause has to be construed strictly. If Clause 14 of the Control Order were construed in the way desired by the learned Advocate General, it would result in an absurd position causing genuine hardship to people for no fault of their own. There is no provision in the Control Order for surrendering or taking over the undisposed of stock after 81-12-1944. As has been observed in the Nagpur decision referred to above, the sale of cloth or yarn depends on a large number of factors, some of which are beyond the control of the dealer concerned. There may be reasons beyond the control of the dealer which prevent a complete disposal of the stock of cloth or yarn manufactured before a certain date by a particular date. If possession after that date were a penal offence, then a large number of persons would be committing such an offence for reasons which were entirely beyond their control. Such an intention should not be inferred unless one is forced to do so by the words used in the different provisions of the Control Order. As I have stated above, the intention of the framers of the Control Order is made clear if Clauses 14 and 15A are read together.'' Clause 14 prohibits the buying, selling or having in possession of any cloth or yarn manufactured in India before 1-8-1948 beyond a particular date; Clause 15A states that notwithstanding what has been stated in Clause 14, such cloth or yarn may be kept and sold by a dealer subject to the conditions notified in that behalf by the Textile Commissioner. In my opinion, the only reasonable interpretation is that Clause 15A overrides Clause 14, and allows a dealer to remain in possession of undisposed of cloth or yarn after 81-12-1944, such possession being subject to the conditions notified by the Textile Commissioner. I am not prepared to accept the contention that such possession will be illegal unless and until the Textile Commissioner notifies the conditions which should govern such possession. To accept that view will be tantamount to holding that the Textile Commissioner can at his sweet will make the provisions of Clause 15A completely nugatory.

In the Nagpur decision Provincial Government C.P. & Berar v. Shamsherali AIR 1945 Nag. 249 referred to above, the same view has been expressed. The learned Advocate General has drawn our attention to some points of difference between the cases which were the subject-matter of the Nagpur decision and the cases under our present consideration. In the former cases the dealers, it appears, sorted out the cloth regarding which the time limit was about to expire. It appears further that some of the dealers, had approached the Civil Supplies Inspector in order to find out what should be done about the cloth which could not be disposed of by the relevant date. These circumstances are not present in the cases under our consideration. I do not, however, think that these circumstances make any difference to the position. The dealers in the present cases also had taken the plea that they were not able to sell the cloth or yarn by the relevant date for reasons beyond their control. That plea has not been negatived by the Courts below, which have proceeded on the assumption that even if that plea were correct, the petitioners would be guilty of a contravention of Clause 14 of the Control Order. Clause 15A as printed in the Civil Supplies Manual, of which a copy has been given to us by the learned Advocate-General, refers to Clauses 14(1)(b) and 14(2)(b). This reference is to the old Clause 14. Clause 14 after the amendment of 4-11-1944 does not contain any Sub-clause (2)(b). Sub-clause (1)(b) of new Clause 14 refers to cloth or yarn manufactured in India and packed after 81-7-1943 and before 1-1-1944. If Clause 15A refers to new Clause 14(1)(b), then it would have no bearing on the possession of cloth or yarn manufactured in India before 1-8-1948. This is an aspect of the matter which, it is submitted by the learned Advocate-General, Provincial Government C.P. & Berar v. Shamsherali AIR 1945 Nag. 249 has not been considered in the Nagpur decision. I have considered this aspect, and it is clear to me that the reference to Sub-clauses 14(1)(b) and 14(2)(b) in Clause 15A is to the old Clause 14. Clause 15A is meaningless unless the reference is construed in that sense, Surely, the Crown cannot take advantage of the mistake in omitting to make consequential amendments in Clause 15A after the recasting of Clause 14 of 4th November 1944.

For the reasons given above, I hold that the conviction of the petitioners for the alleged contravention of Clause 14 of the Control Order is bad in law. One of the petitioners has also been convicted of a contravention of Clause 15A in respect of T.C.B. marked cloth. That conviction is also not sustainable. It is difficult to understand how there can be a contravention of Clause 15A when the Textile Commissioner has not notified the conditions governing the possession of undisposed of cloth or yarn beyond 81st December 1944. There is one notification of the Textile Commissioner No. T.C. (6) 2/44 dated 27th January 1944 in which certain conditions had been laid down by the Textile Commissioner under Clause 15A, one of the conditions being that the marking shall be of a particular description, namely, T.C.B. The evidence of Raghunath Rath (P.W. 1) was to the effect that the marking was either in January or June, 1944. The witness was not, however, sure of it. In this state of the evidence, I find it difficult to hold that there has been a contravention of Clause 15A in respect of T.C.B. marked cloth in Criminal Revision No. 222 of 1945. The prosecution has not stated clearly what is the particular condition imposed by the Textile Commissioner which has been violated by the petitioner. The proviso to Clause 15A which fixes a period of six months will apply, only if the date of the marking is satisfactorily proved. I have already referred to the evidence of the witness examined on behalf of the prosecution with regard to T.C.B. marked cloth, and that evidence does not show clearly when the marking had been made.

The result, therefore, is that all the four applications are allowed and the conviction and sentences passed against the petitioners are set aside. The fines, if they have been paid by the petitioners, should be refunded to them. The order of forfeiture is also set aside: the entire sale proceeds of the goods, if they have been sold, should be made over to the petitioners; otherwise the goods seized should be restored to their respective owners, the petitioners.

Sinha, J.

I agree.