Skip to content


State of Karnataka Vs. Venkatesh and anr. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtKarnataka High Court
Decided On
Case NumberCriminal Revn. No. 97 of 1983
Judge
Reported inILR1985KAR2272; 1985(2)KarLJ377
ActsCode of Criminal Procedure (CrPC) , 1973 - Sections 397 and 401
AppellantState of Karnataka
RespondentVenkatesh and anr.
Appellant AdvocateS.S. Koti, High Court Govt. Pleader
Respondent AdvocateA.M. Farooq, Adv. for N.S. Hegde
Excerpt:
.....the deputy commissioner to take action under the act and also on the order passed by the learned deputy commissioner itself and argued, as both were proceeded on the basis that the sugar found in the possession of the respondents was for the purpose of preparing illicit toddy the same would not amount to contravention of clause 3(1) of the order. truly clause 3(3) is in the nature of a deeming provision and it is well recognised that courts ought to draw the fiction to the maximum extent permissible under the words of the clause. however, the question for consideration is that if the police as well as the deputy commissioner proceeded on the basis to initiate proceedings against the respondents that the sugar found stored by the respondents was for the purpose of preparing illicit..........read with s. 7 of the act. the police in addition to registering a case, also made a report to the deputy commissioner, gulbarga to confiscate the seized quantity of sugar under s. 6a of the act. the deputy commissioner, on the report submitted by the police initiated proceedings against the respondents, issued show cause notice under s. 6b of the act and after hearing both parties passed an order dated 29-9-1981 directing the confiscation of the sugar seized from the possession of the respondents. 3. the respondents carried the matter in appeal before the sessions judge, gulbarga in criminal appeal no. 104 of 1981. the learned sessions judge after hearing both the parties and perusing the material produced in the case allowed the appeal and set aside the order of confiscation passed by.....
Judgment:
ORDER

1. This Revision under sections 397 and 401 of the Criminal P.C. by the State of Karnataka challenging the correctness and the legality of the judgment and order dated 11th June 1982 passed by the Sessions Judge, Gulbarga in Crime No. 104 of 1981 setting aside the order of confiscation dated 29-9-1981, confiscating 115 bags of sugar seized from the possession of respondents under S. 6A of the Essential Commodities Act, 1955 (for short the 'Act').

2. The matter arises in this way. On 25-3-1981 at about 8.30 p.m., the Probationary Dy. S.P. along with his staff conducted a raid of Laxmi Narasimha and Company, Toddy Depot and found 115 bags of sugar stored for the manufacture of artificial toddy in contravention of clause 3(1) of the Karnataka Sugar Dealers Licensing Order 1962 (for short the order) and seized the same under panchanama in the presence of panch witnesses. Thereafter, a case was registered against the respondents in Crime No. 60 of 1981 for offence under S. 37 of the Karnataka Excise Act, 1965 and under S. 3 read with S. 7 of the Act. The Police in addition to registering a case, also made a report to the Deputy Commissioner, Gulbarga to confiscate the seized quantity of sugar under S. 6A of the Act. The Deputy Commissioner, on the report submitted by the Police initiated proceedings against the respondents, issued show cause notice under S. 6B of the Act and after hearing both parties passed an order dated 29-9-1981 directing the confiscation of the sugar seized from the possession of the respondents.

3. The respondents carried the matter in Appeal before the Sessions Judge, Gulbarga in Criminal Appeal No. 104 of 1981. The learned Sessions Judge after hearing both the parties and perusing the material produced in the case allowed the appeal and set aside the order of confiscation passed by the Deputy Commissioner, Gulbarga by his judgment and order dated 11th June, 1982. It is the correctness of this judgment and order of the learned Sessions Judge that is sought to be assailed by the State in this Revision.

4. Sri S. S. Koti, learned High Court Government Pleader, contended that since the respondents were found in possession of 115 bags of sugar in their Toddy Depot under the name and style 'Laxmi Narasimha and Company' without any valid document for the lawful possession of the said quantity of sugar, law raises a presumption under clause 3(3) of the Order that the sugar stored in the Today Depot by the respondents which was exceeding five quintals was for the purpose of carrying on the business of purchase, or sale, or storage for sale, of sugar thereby contravening sub-clause (1) of clause 3 of the Order. It is his further contention that the decision of the Supreme Court in Manipur Administration v. Nila Chandra Singh, : 1964CriLJ465 relied on by the learned Sessions Judge would not apply to the facts of this case since the provisions contained in clause 3(2) of the Manipur Foodgrains Dealers Licencing Order 1958 which came up for consideration before the Supreme Court in the aforesaid decision is different from the provisions contained in clause 3(3) of the Order respecting the statutory presumption required to be raised. Finally, he argued that the learned Sessions Judge was wrong in accepting the explanation furnished by the respondents for the possession of the sugar seized from them. On these grounds he forcefully argued that the order passed by the learned Sessions Judge is liable to be set aside and that the order passed by the Deputy Commissioner, Gulbarga is required to be restored.

5. Per contra, Sri A. M. Farooq, learned Advocate appearing for the respondents, controverting the contentions urged on behalf of the State, strongly submitted that in the final analysis, the order passed by the learned Sessions Judge does not admit the legal criticism advanced on behalf of the State although he did not dispute the correctness of the contention urged by the learned High Court Government Pleader that the ratio of the decision of the Supreme Court in Manipur Administration case (supra) would not apply to the case, in view of the difference in the provisions contained in clause 3(3) of the Order and that of clause 3(2) of the Manipur Foodgrains Dealers Licencing Order which came up for consideration by the Supreme Court in the aforesaid decision. However, he strongly maintained that the learned Sessions Judge was right in accepting the explanation offered by the respondents in justification of the stock of sugar found in their possession on the basis of the unquestionable material produced, which the Deputy Commissioner did not consider before summarily rejecting the explanation offered by them. In addition he maintained that there was sufficient material on record and if that material had been properly considered by the Deputy Commissioner before issuing the show cause notice, there would have been no occasion for the Deputy Commissioner to initiate proceedings against the respondents for confiscation of the sugar seized from them. In support of this submission, Sri Farooq placed strong reliance on the report submitted by the police to the Deputy Commissioner to take action under the Act and also on the order passed by the learned Deputy Commissioner itself and argued, as both were proceeded on the basis that the sugar found in the possession of the respondents was for the purpose of preparing illicit toddy the same would not amount to contravention of clause 3(1) of the order. Sri Farooq finally contended that this piece of material, at any rate, would help the respondents to rebut the statutory presumption under clause 3(3) in addition to other material produced by them. On these grounds, he contended that the impugned order is unassailable and the revision is liable to be dismissed.

6. It is indisputable that 115 bags of sugar kept in the Toddy Depot belonging to the respondents, were seized by the Police on 25-3-1981. But the crux of the dispute is whether the act of keeping the sugar in the Toddy Depot would attract the penal provision of clause 3(1) of the Order and thus (sugar would be) liable for confiscation under S. 6A of the Act.

7. Dealer as defined under Clause 2(a) of the Order means a person engaged in the business of purchase, sale or storage for sale of sugar in quantities exceeding five quintals at any one time. The material portion of clause 3 relevant of our purpose reads :

'Licensing of Dealers : (1) No person shall carry on business on or after 20th January 1963 as a dealer except under and in accordance with the terms and conditions of a Licence with the terms and conditions of a Licence issued in this behalf by licensing authority.

(3) For the purpose of this clause, any person who stores sugar in any quantity exceeding five quintals at any one time shall, unless the contrary is proved be deemed to store the sugar for the purpose of carrying on the business of purchase, or sale, or storage for sale, of sugar.'

Clause 7 deals with contravention of conditions of licence. It stipulates that no holder of a licence or his agent or servant or any person acting on his behalf shall contravene any of the (terms of) licence and if any of them contravenes any of the said terms or conditions, then without prejudice to any order action that may be taken against him, his licence may be cancelled or suspended by order in writing of the licensing authority and such an action could be taken only upon giving reasonable opportunity to the licensee to state his case against the proposed cancellation or suspension. Clause 7A specifically applies in respect of contravention of any order made under S. 3 of the Act relating to sugar and it provides that notwithstanding anything contained in clause 7, where a licensee has been convicted by a Court of law inrespect of contravention of any order made under S. 3 of the Act, the licensing authority may, by order in writing, cancel his licence and it is provided under the proviso that if his conviction is set aside in appeal or revision the licensing authority may on his application reissue the licence to such person.

8. It is seen from the provisions contained in clause 3(3) that a statutory presumption will arise, though it is a rebuttable presumption, - that any person who stores sugar in quantity exceeding five quintals at any one time shall be deemed to store the sugar for the purpose stated therein unless the contrary is proved. Truly Clause 3(3) is in the nature of a deeming provision and it is well recognised that courts ought to draw the fiction to the maximum extent permissible under the words of the clause. However, it is not permissible for the Court to add any words to the provisions while giving effect to a deeming provision providing for a fiction. On a reading of sub-clause (3) of Clause 3 which is deeming provision providing for a fiction, it is clear that if a person is found of storing sugar in any quantity exceeding five quintals at any one time he shall be deemed to store the sugar for the purpose of carrying on business of purchase, or sale, or storage, for sale of sugar. In other words the sweep of the presumption will draw into its fold the term 'dealer' and as such the penal clause of sub-clause (1) of Clause. 3 would be attracted.

9. In this context, it is necessary to refer to the decision of the Supreme Court in Manipur Administration (1964 (2) Cri LJ 465) case which was relied on by the learned Sessions Judge for holding that notwithstanding the application of the statutory presumption under clause 3(3), the State should further show that storage of the sugar in the possession of the respondents was for the purpose of carrying on business of purchase or sale or storage for sale of sugar and the respondents acted with the necessary mens rea to deal in sugar of which they were found in possession.

10. In the Manipur Administration Case (1964 (2) Cri LJ 465 (SC)), the scope and ambit of clause 3(2) of the Manipur Foodgrains Licencing Order 1958, came up for consideration. Sub-clause (1) of clause 3 of the said order is similar to sub-clause (1) of clause 3 of the Order. Sub-clause (2) of the said order reads :

'For the purpose of this clause any person who stores any foodgrains in quantity of 100 or more maunds at any time shall, unless the contrary is proved be deemed to store the foodgrains for the purpose of the sale.'

Interpreting this clause, the Supreme Court held :

'The statutory presumption raised by Clause 3(2) is a rebuttable presumption and only amounts to this and nothing more, that the stock found with a given individual of 100 or more maunds of the specified foodgrains had been stored by him for the purpose of sale. Having reached this conclusion on the strength of presumption, the prosecution would still have to show that the store of the foodgrains for the purpose of sale thus presumed was made by him for the purpose of carrying on the business of store of the said food grains. The element of business which is essential to attract the provisions of Clause 3(1) is thus not covered by presumption raised under Clause 3(2). That part of the case would still have to be proved by the prosecution by other independent evidence.'

(as summarised in para. (1) of head note (b))

It is clear from the above decision that on the language of clause 3(2) of the Manipur Foodgrains Dealers Licencing Order the presumption arising thereunder was that stock of specified foodgrains found in the possession of a given individual as provided therein had been stored by him for the purpose of the sale and in that situation the Supreme Court held that the prosecution having reached this conclusion on the strength of the presumption, would still have to show that the store of the foodgrains for the purpose of sale was made by him for the purpose of carrying on the business of store of the said foodgrains as the element of business which was essential to attract the provisions of Clause 3(1) was not covered by the presumption raised under Clause 3(2).

11. In the case on hand the situation is entirely different as could be seen from the language of sub-clause (3) of clause 3 whereunder it is provided that if a person is found in possession of sugar in any quantity exceeding five quintals at any one time he shall be deemed to have stored the sugar for the purpose of carrying on business of purchase, or sale, or storage for sale, of sugar, unlike in Clause 3(2) of the Manipur Foodgrains Dealers Licencing Order where the presumption was limited only for the purpose of sale. The learned Sessions Judge obviously fell into an error in applying the ratio of the decision of the Supreme Court in Manipur Administration case, (1964 (2) Cri LJ 465) to the case on hand as he proceeded on the assumption that clause 3(3) of the Order is similar to clause 3(2) of the Manipur Foodgrains Dealers Licensing Order. It was wrong. To this extent the argument advanced by Sri Koti, learned High Court Government Pleader appears to be correct. Sri Farooq, learned Advocate appearing for the respondents also did not dispute this. Thus it follows that presumption under sub-clause (3) of clause 3 of the order would be drawn on the facts of this case.

12. The next question for consideration is whether the respondents have rebutted the statutory presumption raised under clause 3(3) of the Order. The learned Sessions Judge has held that the explanations offered by the respondents were probable and reasonable and element of business was absent. However, Sri Koti, learned High Court Government Pleader contended that the respondents could rebut the statutory presumption arising under clause 3(3) only on the material produced by them and they cannot use any document or material produced by the State for discharging the burden placed on them under clause 3(3). Sri Farooq for the respondents, on the other hand, contended that law does not provide any such straight-cut division in making use of the evidence tendered by the parties to a case and it is open to an accused in a Criminal case to rely upon not only the material produced by him but also upon the material produced by the prosecution to sustain his contention and discharge the burden cast upon him to prove his innocence. He further contended that since Rule 3(1) is a penal nature as the consequences resulting therefrom would deprive the respondents of their property by confiscation which is in the nature of a punishment, the principle of loss applicable to Criminal prosecution would equally be applicable to the proceedings of this nature. On this basis, he proceeded to argue that the respondents could, not only rely upon the material produced by them but also upon the material produced by the State in rebutting the statutory presumption drawn under Rule 3(3).

It is seen from the records that the Police who submitted the report to the Deputy Commissioner and the Deputy Commissioner who proceeded to initiate proceedings against the respondents upon the report submitted by the Police, both proceeded on the ground that the respondents were found storing 115 bags of sugar in their Toddy Depot for the purpose of preparing illicit toddy. Thus it is obvious from their own assertion that the sugar stored in the Toddy Depot was not for the purpose of carrying on business of purchase, or sale, or storage for sale, of sugar but it was for preparing illicit toddy. That was how the Police have registered a case against the respondents in Crime No. 60 of 1981 for an offence punishable under S. 37 of the Karnataka Excise Act, 1965. It is true that the Police have also registered a case for the offence under S. 3 and S. 7 of the Act upon the same grounds. However, the question for consideration is that if the Police as well as the Deputy Commissioner proceeded on the basis to initiate proceedings against the respondents that the sugar found stored by the respondents was for the purpose of preparing illicit toddy, was it open for the Deputy Commissioner to initiate proceedings for the alleged contravention of clause 3(1) of the Order on the ground that the respondents have stored the sugar for the purpose of carrying on the business as a dealer in sugar. It seems to me the Deputy Commissioner could not and he should not have proceeded against the respondents to initiate proceedings for the confiscation of the sugar on the alleged ground that the respondents have contravened clause 3(1) of the Order by issuing a show cause notice under S. 6B of the Act. Thus, I hold that the show cause notice issued to the respondents has no legal sanction.

Now coming to the second leg of argument it is seen from the records that the case pleaded by the respondents in reply to the show cause notice was that sugar in question was being transported in the lorry bearing No. MED 4420 on 24-3-1981 to be delivered to Venkateshgiri Bawagi at Kirana Bazar who had sugar dealers licence No. 92 of 1978 as per Way Bill No. 44 issued by M/s. Jai Hanuman Khandasari Sugar Mills, Lingampeth, Yellareddy Taluk, Nizamabad District and as the vehicle developed engine trouble and could not be repaired immediately without unloading the sugar bags, the sugar was temporarily stored in the premises of the premises of the respondents from where the same was seized. In support of this plea, the respondents have produced all the relevant documents. The learned Session Judge dealing with this aspect of the case was observed :

'The appellants have produced Way Bill, temporary permit issued by R.T.O. Gulbarga and receipt for payment of money of Rs. 53/- paid towards sales tax showing that the commodity was to be delivered to Venkateshgiri Bawagi of Kirana Bazar who had dealers licence for dealing in sugar. The explanation offered by the appellants being probable and reasonable and further the element of 'carrying on business' being absent, it cannot be said that the order of confiscation passed by the Deputy Commissioner is justifiable.'

On the other hand, the learned Deputy Commissioner, having noticed the plea taken by the respondents and also the documents produced by them, and without applying his mind and considering them, arbitrarily proceeded to pass the order confiscating the sugar in question. The learned Sessions Judge, in my opinion, was right in accepting the plea taken by the respondents being reasonable and probable and setting aside the order of confiscation.

In the result, for the reasons stated above, the Revision fails and it is dismissed.

13. Revision dismissed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //