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In Re: P.A. Raju Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1946Mad254; (1946)1MLJ145
AppellantIn Re: P.A. Raju Chettiar and ors.
Excerpt:
- byers, j.1. the four appellants are partners in a business in madras, three of them being absentee partners living in coimbatore and the fourth being in actual charge of the business. they have been convicted of four offences punishable under section 6(1) read with section 13(1) of the hoarding and profiteering prevention ordinance in respect of sales of soda ash at prices which showed a profit of between 210 per cent and 216 per cent, instead of the statutory 20 per cent, above the landed cost. the absentee partners have been sentenced to pay fines totalling rs. 300 each and the managing partner at madras has been sentenced to pay fines of rs. 2,000 on each of the four counts. the fines have all been paid.2. on the facts mr. k.s.jayarama aiyar raises no contest and he confines himself to.....
Judgment:

Byers, J.

1. The four appellants are partners in a business in Madras, three of them being absentee partners living in Coimbatore and the fourth being in actual charge of the business. They have been convicted of four offences punishable under Section 6(1) read with Section 13(1) of the Hoarding and Profiteering Prevention Ordinance in respect of sales of soda ash at prices which showed a profit of between 210 per cent and 216 per cent, instead of the statutory 20 per cent, above the landed cost. The absentee partners have been sentenced to pay fines totalling Rs. 300 each and the managing partner at Madras has been sentenced to pay fines of Rs. 2,000 on each of the four counts. The fines have all been paid.

2. On the facts Mr. K.S.Jayarama Aiyar raises no contest and he confines himself to two arguments; the first is that the definition of a dealer or producer contained in the Ordinance does not include the absentee partners at Coimbatore and the second is that the fines are in any event excessive.

3. According to Section 2 (b) of the Ordinance a dealer is defined to be

a person carrying on the business of selling any article, whether wholesale or retail.

and Mr. Jayarama Aiyar's contention is that the absentee partners cannot be. brought within the scope of this definition because the General Clauses Act does not apply to an ordinance framed by the Governor-General. Under Section 3(39) of the General Clauses Act a ' person ' is defined in this way:

A person shall include any company or association or body of individuals, whether incorporated or not.

and Mr. Jayarama Aiyar argues that although the General Clauses Act applies to the Defence of India Act and the rules framed thereunder so as to impose liability on absentee partners and proprietors, the absentee partners at Coimbatore cannot be made liable in these cases because the Hoarding and Profiteering Prevention Ordinance is not a Central Act. This argument is readily disposed of by a reference to Section 30 of the General Clauses Act where a Central Act is by a later amendment, thus defined:

In this Act the expression 'Central Act' wherever it occurs... shall be deemed to include an ordinance made and promulgated by the Governor-General under... Section 72 of the Government of India Act, 1915....

The preamble to the Hoarding and Profiteering Prevention Ordinance is in these words:

Now, therefore, in exercise of the powers conferred by Section 72 of the Government of India Act, as set out in the Ninth Schedule to the Government of India Act, 1935, (26 Geo., 5, C. 2), the Governor General is pleased to make and promulgate the following Ordinance.

Section 317 of the Government of India Act read with the Ninth Schedule makes it clear that Section 72 of the Government of India Act, 1915, continues to have effect notwithstanding the repeal of that Act by the tenth Schedule of the Act of 1935. Thus there is no difficulty in finding that an Ordinance framed under Section 72 of the Act of 1915, read with Section 317 of the Act of 1935 is a Central Act for the purposes of the General Glauses Act. Consequently all members of the partnership to which the appellants belong are dealers.

4. Apart from this aspect of the matter Mr. Jayarama Aiyar contends that a dealer or producer within the meaning of the Ordinance can mean only the person actually effecting the sale and in support of this argument he refers to an amendment made in December 1944 to Section 6 of the Ordinance. It is in these words:

To the said Section 6 the following sub-section shall be added namely ' where any article is sold, offered for a sale or otherwise disposed of in contravention of Sub-section (1) by a dealer or producer through any person employed by him or acting on his behalf, such person and also, unless they prove that they exercised due diligence to prevent such contravention, a dealer or producer as the case may be and any person having charge on behalf of the dealer or producer of the place where the contravention occurred shall be liable to punishment provided by Sub-section (1) of Section 13,whether or not they were present when the contravention occurred.

Mr. Jayarama Aiyar contends that this section imposed upon absentee dealers or producers for the first time the liability which ordinarily attached only to salesmen or other employees in a shop; but it seems clear from the wording of the amendment that its effect is rather the reverse, namely, to extend to salesmen and other employees a liability which under the unamended section attached only to the dealer or producer. In addition, the liability of a dealer or producer under Section 6 can under the amendment be avoided by snowing that due diligence to prevent the contravention has been exercised. The amendment refers to the liability of a dealer or producer, but this liability already existed in absolute terms under the section prior to its amendment. Consequently I am unable to agree with Mr. Jayarama Aiyar that the absentee partners can escape liability merely by proof of non-residence in the place where the business was transacted. The fact that they were absentee partners and had nothing directly to do with the sales forming the subject-matter of the charges has been recognised by the learned Magistrate in imposing small fines on each of the four charges.

5. Turning to the fines imposed on the fourth appellant there is no doubt that a penalty of Rs. 8,000 is extremely severe. I have asked the learned Crown Prosecutor whether he is in a position to satisfy the Court that these are not isolated offences but are parts of an organised system of black-market transactions. No such information is available nor is he in a position to state that the firm is of such a size that any penalty less than that imposed would be ineffective. Under these circumstances I consider that fines of Rs. 1,000 on each count will be sufficiently severe. The range of profits taken by these illicit transactions exceeded 200 per cent, so that severe sentences are necessary.

6. In the result the convictions are upheld but the sentences on the fourth appellant are reduced to Rs. 1,000 on each of the four counts. In other respects the appeals are dismissed.

7. Mr. Jayarama Aiyar asks for a certificate under Section 205(1) of the Government of India Act on the ground that this case involves a substantial question of law regarding the interpretation of Section 317 of the Act. In my opinion the question raised in these appeals turns upon a plain reading of the unambiguous words of the sections involved and I do not consider that any substantial question of law is involved. The certificate is refused.


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