D.D. Seth, J.
1. This reference has been made by the learned Additional District Magistrate (J.) Etawah. The facts of the case are that Sri Maharaj Singh, Marketing Inspector at Auraiya, district Etawah, was informed in the afternoon of 19th December 1966 that the two applicants had sold 25 kntls. and 45 kgs. of pea on 17th December 1966 to M/s. Shyam Lal, Sri Govind, which was a food grain licensee at Auraiya. The Marketing Inspector was further informed that the applicants did not possess a license for dealing in food grains. The applicants are the partners of the firm known as Laxmi Narain Ram Narain. Against both the applicants charges were framed by the learned Magistrate 1st Class, Etawah, on 22nd April 1967 on the statement of Maharaj Singh, Marketing Inspector, Auraiya. The learned Magistrate framed the charges against the applicants for having contravened Clause 3 of the U. P. Food Grains Dealers Licensing Order 1964 and thus were punishable under Section 7 of the Essential Commodities Act. These charges, as already stated above, were framed on 22nd April 1967. Against the order framing the charge against the applicants the applicants preferred a revision which was heard by the learned Additional District Magistrate (Judicial), Etawah who has made the present reference.
2. Sri Maharaj Singh, the Marketing Inspector Auraiya, was examined and during his examination he admitted that Laxmi Narain, one of the partners of the firm Laxmi Narain Ram Narain, held a food grains license for another shop in Mahabirganj. The Marketing Inspector further stated that it was possible that the applicants may have filed an application for the grant of a license in the name of the firm Laxmi Narain Ram Narain on 20th October 1966. He further stated that that application had not been rejected till the date of his statement. He also admitted that a licence for selling the food grains was issued to the firm Laxmi Narain Ram Narain for the year 1967.
3. The question, therefore, is whether, under these circumstances, the applicants being partners of the firm Laxmi Narain Ram Narain, could deal in food grains without holding a license for that firm as such. Clause 5 of U. P. Food Grains Dealers Licensing Order, 1964 deals with period of licence and fees chargeable. The second proviso to Sub-clause (1) of Clause 5 of the Order reads as follows:
Provided further that where an application for a new licence made in accordance with Sub-clause (1) of Clause 4 has not been disposed of within 30 days from the date of receipt of the application by the licensing authority the applicant shall be issued a provisional licence valid for three months and the application shall be disposed of during the validity of the provisional licence.
4. Since the Marketing Inspector stated that the applicants possibly filed an application for the grant of a licence on 20th October 1966 a provisional licence ought to have been issued in favour of the firm much before 19th December 1966. The applicants being the partners of the firm could not possibly be said to have a guilty intention in selling any licenced food grains on 17th December 1966 because the Marketing Inspector admitted that the firm Laxmi Narain, Ram Narain deals in food grains and that on behalf of the firm ready information of its stocks was given to him. The Marketing Inspector further admitted that in the months of November and December 1966 the papers of the firm, Laxmi Narain, Ram Narain, came to his office on various dates and he and other officials of his office used to sign those papers. Thus the evidence of the Marketing Inspector himself shows that an application for the grant of a new licence for selling food grains had been made by the applicants and the conduct of the Marketing Inspector and the other officials of his office reasonably led the applicants to believe that they could deal in food grains. As a matter of fact, as the clause of the U. P. Food Grains Licensing Order. 1964 quoted above shows, it was the duty of the Marketing Inspector to have issued a provisional licence valid for three months within 30 days of the making of the application by the firm Laxmi Narain, Ram Narain, which was admittedly made on 20th October 1966. It was held in Nathulal v. State of M. P. : 1966CriLJ71 as follows:
an offence under Section 7 of the Essential Commodities Act, 10 of 1955, for breach of Section 3 of the Madhya Pradesh Foodgrains Dealers Licensing Order, 1958, necessarily involves a guilty mind as an ingredient of the offence. Considering the scope of the Act it would be legitimate to hold that an offence under Section 7 of the Act is committed by a person if he intentionally contravenes any order made under Section 3 of the Act. The object of the Act will be best served and innocent persons will also be protected from harassment, if Section 7 is so construed.
5. The provisions of the Food Grains Dealers Licensing Orders in U. P. and M. P. are similar. In Nathulal's case the accused was a dealer in food grains and had made an application for licence under the Madhya Pradesh Food Grains Dealers Licensing Order, 1958 and also deposited the requisite license fee. No intimation, however, was given to him whether his application had been rejected. He purchased foodgrains from time to time and submitted returns to the Licensing authority showing the grains purchased by him. The Marketing Inspector checked the godowns of the accused in Nathulal's case and found that the accused had stored food grains without holding any license, in excess of the quantity permitted by Section 3 of the Order. The accused was prosecuted under Section 7 of the Essential Commodities Act, 1955 but was acquitted by the trial Court on the ground that he had no guilty mind but in appeal the High Court of Madhya Pradesh convicted the accused. On appeal by special leave Hon'ble Supreme Court held as follows:
That on the facts of the case the conviction of the accused should be set aside. The accused was under a bona fide impression that the licence in regard to which he had made an application was issued to him though not actually sent to him. It was under this impression that he had stored the grain. The fact that the licensing authority did not communicate to him the rejection of his application confirmed the accused's belief. It was on that belief that he stored the foodgrains and was sending the relevant returns to the concerned authority. It was, therefore, a storage of foodgrains within the prescribed limits under a bona fide belief that he could legally do so. He could not, therefore, be said to have intentionally contravened the provisions of Section 7 of the Act or those of the Order made under Section 3 of the Act.
6. The principles laid down by the Supreme Court in Nathulal'.s case quoted above apply with full force to the facts of the instant case. The applicants on behalf of their firm, on 20th October 1966 had made an application for the grant of the licence and the rejection of that application was never conveyed to them. In fact they were issued a licence in the year 1967. The applicants continued to deal in foodgrains and sent their returns and other papers in the months of November and December to the office of the Marketing Inspector. Thus the applicants held a bona fide belief that they could deal in foodgrains as their application for the grant of licence had not been reiected. In view of the principles of law laid down by the Supreme Court in Nathulal's case no breach of any licensing Order can be said to have been committed by the applicants and they could not be charged for any offence punishable under the Essential Commodities Act.
7. After having heard Sri K.K. Bajpai and Sri M.M. Srivastava in support of the reference and Sri K.C. Dhulia, the learned brief-holder for the State, and for the reasons contained above I accept this reference and quash the charge against the applicants dated 22nd April 1967.