The State of Punjab vs Vidya Sagar and another

Gurdev Singh, J.—The short question of law which arises in this appeal relates to the construction of clause 3 (3) of the Punjab Khandsari and Gur Dealers Licensing Order, 1963. This question arises in this manner.

The two respondents were convicted u/s 7 of the Essential Commodities Act and sentenced to a fine of Rs. 1000/- each or in default thereof rigorous imprisonment for six months by the order of the Judicial Magistrate 1st Class, Batala. Along with them their father Hari Chand was also brought to trial on identical charges. The trial Court accorded him the benefit of the doubt and acquitted him. Aggrieved by the order of conviction, the respondents preferred an appeal before the Court of Session at Gurdaspur and the learned Additional Session Judge by his order dated the 8th May, 1968, accepted the same. This appeal by the State of Punjab is directed against the above-said order of acquittal.

The facts are hardly in dispute. On receipt of information that some businessmen of the town of Batala were carrying on business in commodities like wheat, gur shakkar and rice without the requisite licence, the first information report was recorded by Sub-Inspector Harpal Singh on the 18th July, 1966, at the City Police Station Batala. A raid party was organised and Kartar Chand and Munshi Ram P.Ws were associated with the same. The premises of Shiv Shakti Rice Mills, Batala, were searched and Vidya Sagar respondent was found present there. During the raid. 1247 bigs containing 450 quintals and 150 kilograms of gur were duly taken into possession and attested by the public witnesses as well. The two respondents who admittedly are the partners of the said Mills could not produce any licence under the provisions of the Punjab Khandsari and Gur Dealer''s Licensing Order, 1963, and further failed to produce any account books containing entries about the purchase or sale of the above-said commodity.

The prosecution relied on 4 witnesses. P.W. 1 Kartar Chand was only tendered whilst P.W. 2 Assistant Sub-Inspector Pritam Singh and P.W. 3 Sub-Inspector Harpal Singh fully supported the prosecution version of the raid and the recovery of the commodities from the possession of the respondents. Amar Nath P.W. 4 District Food and Supplies Officer, Gurdaspur, categorically deposed that the two respondents neither in their individual capacity nor the firm in which they were partners held any licence under the Punjab Khandsari and Gur Dealer''s Licencing Order, 1963. The respondents in their statements u/s 342, Code of Criminal Procedure, admitted that they were partners of Messrs Hari Chand and Sons and also of Messrs Shiv Shakti Rice Mills, Batala. The factum of the recovery of the goods from their godown by the police was also admitted. It was further admitted that they did not hold the necessary licence under the provisions of the statute but it was stated that an application for securing the licence was made, but they were informed that the commission agents were not required to take any such licence. A further plea was taken that the commodity was held by them as commission agents on behalf of the various customers outside the state of Punjab. In defence, only two witnesses were produced. D.W. 1 Sowaram Chand, Clerk, Civil Supplies Office, Gurdaspur, merely stated that he could not depose as to how many firms at Batala had got licences under the Punjab Khandsari and Gur Licencing Order. In cross-examination he stated that Messrs Hari Chand and Sons applied for a licence on 23rd July, 1967. D.W. 2 Balak Ram, President of Pacca Arhti Association, Batala, deposed about the old age of Hari Chand, one of the partners of Messrs Hari Chand and Sons and the facts that he was not taking any active interest in the conduct of the family business. It deserves notice that after the framing of the charge on the 28th February, 1967, Vidya Sagar respondent had pleaded guilty to the charge though Parshotam Lal respondent did not do so. The learned trial Court has, however, in its judgment noticed and observed as follows:

The accused then closed their defence without producing any evidence. Vidya Sagar and Parshotam Lal threw themselves at the mercy of the court and confessed their guilt.

The learned Additional Sessions Judge on hearing the appeal repelled the other contentions raised in support of the appeal. The sole ground for the acquittal of the two respondents was based on the decision of the Supreme Court in Manipur Administration Vs. M. Nila Chandra Singh, . Their Lordships in that case were construing the provisions of clause 3 (2) of the Manipur Foodgrains Dealers Licencing Order 1958. The facts were that the respondent had stored 178 maunds of paddy in his godown without any licence in violation of clause 3 of the said Order. This commodity was detected upon a search and this fact was not denied by the respondent who took up a plea that the paddy which was found in his godowns was meant for the consumption of the members of his family who numbered fifteen. He further pleaded that 40 maunds of paddy in his godown belonged to one of his relations. The respondent was convicted by the trial Magistrate and the said conviction was also upheld on appeal by the Sessions Judge of Manipur. However on a revision being preferred, the Judicial Commissioner of Manipur acquitted the respondent and the Manipur Administration had appealed against the said acquittal. Their Lordships in construing the relevant provisions whilst upholding the acquittal observed as follows:

It would be noticed that the requirement is not that the person should merely sell, purchase or store the foodgrains in question, but that he must be carrying on the business of such purchase, sale, or storage; and the concept of business in the context must necessarily postulate continuity of transactions, It is not a single casual or solitary transaction of sale, purchase or storage that would make a person a dealer. It is only where it is shown that there is a sort of continuity of one or the other of the said transactions that the requirements as to business postulated by the definition would be satisfied.

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and further

The element of business which is essential to attract the provisions of clause 3(1) is thus not covered by the presumption raised under clause 3(2). That part of the case would still have to be proved by the prosecution by other independent evidence.

The relevent provisions of the Manipur Foodgrains Dealers Licencing Order, 1958 are in pari materia with the provisions of the Punjab Khandsari and Gur Dealers Licensing Order, 1963, as it existed prior to its amendment in 1965. The relevent unamened provisions which deserve reference may be conveniently set down here and are in the following terms:

2 (a) ''Dealer'' means a person engaged in the business of purchase, sale or storage for sale, of Khandsari or Gur or both in quantities exceeding 50 quintals at any one time, but does not include an industrial undertaking which is engaged in the manufacture or production of Khandsari or Gur and which is registered or licensed under the Industries (Development and Regulation) Act 1951.

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Licensing of Dealers. (1) After fifteen days of this order in the official gazette, no person shall carry on business as a dealer, except under and in accordance with the terms and conditions of a licence issued in this behalf by the licensing authority.

(2) A separate licence shall be necessary for each place of business:

Provided that a separate licence shall not be required by a Licensee when purchases or sales are effected through another licensee holding a licence under this order for the place where the transaction takes place.

(3) For the purpose of this clause, any person who stores Khandsari or gur or both in any quantity exceeding 50 quintals at any one time shall, unless the contrary is proved, be deemed to store khandsari or gur or both as the ease may be, for the purpose of sale.

Applying the construction placed by their Lordships of the Supreme Court on the similar provisions of the Manipur Foodgrains Dealers Licencing Order, the learned Additional Sessions Judge therefore, found that goods were found in possession of the respondents in a quantity larger than 50 quintals only once they could not be termed as "dealers" within the meaning of the Punjab Khandsari and Gur Dealers Licensing Order. 1963. He, therefore, allowed the appeal and acquitted the respondents.

The crucial fact, however, is that it was not brought to the notice of the Additional Sessions Judge that the relevant provision of the Licensing Order, namely, sub-clause (5) of clause 3 had been amended in 1965 and it appears that the Public Prosecutor was also equally unaware of the said amendment. This amendment had been introduced by the Punjab Khandsari and Gur Dealers Licensing (Third Amendment) Order, 1965 by which sub-clause (3) of clause 3 of the original Order was substituted by the following provision:

For the purpose of this clause, any person who stores khandsari or gur or both in any quantity exceeding 50 quintals at any one time shall unless the contrary is proved, be deemed to store khandsari or, gur or, both, as the case may be, for the purpose of carrying on the business of purchase or sale storage for sale, of khandsari or gur or both.

The plain language of this provision is explicit. It appears to us (though we have been unable to trace the objects and reasons for the amendment) that the 1965 amendment was explicitly introduced in view of the judgment of their Lordships in the above-said case and to extend the scope of the presumption contained in the earlier provision. The amended provision makes it amply clear that any person found in possession of any quantity of gur or khandsari exceeding 50 quintals shall be deemed (unless contrary is proved) to carry on the business of purchase or sale or storage for the sale of said commodity Mr. M.K. Mahajan, the learned counsel for the respondents, has fairly conceded that the provision applicable was the amended provision of 1965 and had apparently been not noticed by the learned Additional Sessions Judge owing to inadvertence. Once this statutory presumption is applicable the person so found in possession of the quantity exceeding 50 quintals would forthwith fall within the ambit of the definition of a dealer. The provisions further makes it clear that no person can carry on the business as a dealer except under and in accordance with the terms and the conditions of a licence lawfully issued to him. In view of these provisions it is clear that the respondents would certainly fall within the ambit of the penal clauses of the Essential Commodities Act read with the Punjab Khandsari and Gur Dealers Licensing Order. In the present case once that statutory presumption is raised, there is no sufficient material whatsoever either in the prosecution or in the defence evidence to rebut the said presumption.

In view of the above this appeal by the State must succeed and is allowed. The judgment of acquittal of the two respondents it set aside and restoring the order of the trial Court we would convict both the respondents u/s 7 of the Essential Commodities Act 1955 and impose a fine of Rs. 1000/- each or in default of payment of fine further simple imprisonment for a period of six months.