Skip to content

Superintendent and Remembrancer of Legal Affairs Vs. D.B. Futnani and anr. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1945Cal402
AppellantSuperintendent and Remembrancer of Legal Affairs
RespondentD.B. Futnani and anr.
Cases ReferredShannon v. Lower Mainland Dairy Products Board
- roxburgh, j.1. this is an appeal by the superintendent and remembrancer of legal affairs, bengal, against an order of the chief presidency magistrate, calcutta, acquitting two persons, d.b. futnani and a.v. joshi of offences under rule 75a (7) and 46(3), defence of india rules. the prosecution case is that d.b. futnani is a partner of the firm of murlimal santram and co., having its head office at lachmidass street, karachi, and a.v. joshi is the calcutta manager or representative of the firm, having his office at 20 muharshi debendra road, calcutta. application for a licence to import 25 tons of barbed wire from america was made by the firm in karachi to the steel controller, calcutta, by ex. 1, signed in the firm name, the writing having been proved by the handwriting expert (p.w. 2) to.....

Roxburgh, J.

1. This is an appeal by the Superintendent and Remembrancer of Legal Affairs, Bengal, against an order of the Chief Presidency Magistrate, Calcutta, acquitting two persons, D.B. Futnani and A.V. Joshi of offences under Rule 75A (7) and 46(3), Defence of India Rules. The prosecution case is that D.B. Futnani is a partner of the firm of Murlimal Santram and Co., having its Head Office at Lachmidass Street, Karachi, and A.V. Joshi is the Calcutta Manager or representative of the Firm, having his office at 20 Muharshi Debendra Road, Calcutta. Application for a licence to import 25 tons of barbed wire from America was made by the firm in Karachi to the Steel Controller, Calcutta, by Ex. 1, signed in the firm name, the writing having been proved by the handwriting expert (P.W. 2) to be the hand of Futnani. Import licence No. 4216 was duly issued by the Deputy Steel Controller on 3rd November, and was received by Major Thomas (P.W. 7), Deputy Controller of Purchase, along with the application With a view to requisitioning the goods he forwarded these papers to the Controller of Supplies by his letter Ex. 2, dated 5th November, asking him to issue the licence and at the same time to take action to freeze the stock On receipt of this letter, Ram Krishna Das (P.W. 1) senior clerk of the office of the Controller of Supplies telephoned to the Calcutta Office of the firm; and about 10th November, Joshi came and interviewed Mr. Shefta, Assistant Controller of Supplies, saying he knew nothing about the matter and could not give the particulars asked for. On 12th November, the Controller of Supplies, Bengal Circle, wrote to the Calcutta Branch a letter (Ex. 4) asking for certain particulars adding that the licence would only be issued on the particulars being furnished. On 14th November, Joshi replied by Ex. 5 signing his own name 'per pro' the firm saying, that he knew nothing about the matter and that the original letter of the Controller had been directed to the Karachi Head Office for early compliance. The particulars were duly supplied in a letter (Ex. 6) dated 21st November, from the Karachi Head Office, signed in the name of the firm, in Futnani's handwriting. There was a request that all enquiries of this nature should be referred to Karachi. On 21st November Joshi wrote a letter (Ex. 7) asking that the licence might be granted. On 24th November the licence was forwarded to Joshi with the letter Ex. 10, issued by the Controller of Supplies, which contained a request that after the goods had been cleared, all the documents, invoice, customs receipt for import, etc., should be brought to the office of the Controller. The letter was received and acknowledged by Joshi on 25th November (EX. 10/1). On the same day a freezing order, signed by Col. Marriott, Controller of Supplies, issued under Rule 83(8a), Defence of India Rules, dated 22nd November, and relating to the consignment of 25 tons was served. The original order Ex. 8/1 was subsequently seized by the police from Joshi's office, and he acknowledged receipt of it by Ex. 9. The order was addressed to 'Murlimal Santram and Co., 20 Maharshi Debendra Road, Darmahatta, Calcutta;' it demanded information as to the stock received by S.S. Frederick Lukes, and directed.

that you or your agent, shall not, except with my permission or under my directions, dispose of the said articles till the expiry of the thirty days from the date of this order.

2. On 27th November Joshi furnished the information required in the freezing order, adding

We are expecting these goods shortly in our godown, and as soon as they come in our godown, we shall not part with them till the time specified by you in your aforesaid order.

On the same day he acknowledged by his letter Ex. 12 the receipt of the import licence, agreed to show the documents as requested in the letter EX. 10 of 24th November, and added

When the goods arrive in our godown, they will be kept reserved for you till we hear further from you.

Delivery of the goods was taken by the firm on 28th November, and they were stored in a godown hired from the Port Commissioners at Sahib Bazar. On the 8th December Joshi came to the office of the Controller of Supplies and interviewed Mr. Shefta; at that time he said he could not give the information required by the Controller's letter of 24th November (Ex. 10). A reminder, mentioning the interview, was sent to him on 12th December, (EX. 18). In reply to this he wrote the letter Ex. 14, dated 13th December, stating that a telegram had been received from his head office informing him that one of the partners was starting on Sunday 14th December for Calcutta, 'that he would handle the matter personally and satisfy the Controller with all the information called for in the letter of 24th November. As the period of the first order was about to expire, a second freezing order was issued on 20th December (Ex. 16) for a further period of 30 days. This was received and acknowledged by Joshi (Exhibit 16/1.)

3. On or about 29th December, the two accused came to the office of the Controller of Supplies and handing the letter Ex. 18, they interviewed Mr. Shefta in the presence of the clerk P.W. 1. Futnani stated the facts as set out in the letter in the presence of Joshi. About the same time Futnani interviewed Col. Fowler, Chief Controller of Purchase in the presence of Major Thomas (P.W. 7), and stated the facts substantially as they appear in the letter Ex. 18. The purport of this letter was that as the freezing order was about to expire, and there had been no requisition, Joshi had wrongly believed that the goods were not required by Government, and as he stood in urgent need of money and there was panic prevailing in the market at the time, and as telegraphic communication between Calcutta and Karachi was not normal

our this representative here, in order to raise money to meet his at hand financial engagements, delivered away this small quantity of 25 tons to the party to whom these were sold by our Head Office in Karachi as long ago as 29th July 1940.

The letter went on:

No doubt this is an act we highly deprecate but this having been done in the circumstances explained to save our existence here, we cannot do more than to warn our representative here to be more careful in future.

The letter also contained an offer to supply the goods by purchasing them from the local market where they were said to be available in abundance, and to bill for them at the price paid without claiming any profit whatsoever. On 31st December Joshi wrote to the Controller of Supplies to confirm the interview Futnani had with Col. Marriot and Col. Fowler, and stating that Futnani had instructed him to purchase the goods from the local market, and to furnish the bill to the Controller, leaving it to him solely to pay the price considered fair, adding

should we not be able to pick up the material from market, we shall carry out your order and meet our liability by buying the goods from other markets, or from the person we had delivered to, and thus deliver the full quantity of 25 tons.

This was acknowledged by the Controller of Supplies' letter dated 20th January (EX. 20) wherein he stated:

Without prejudice to my rights to proceed against the firm for violating the requisition (sic) duly made under the rules framed under the Defence of India Act and to recover the loss caused thereby, I confirm that I have given you liberty to supply the goods which were disposed of wrongfully by you by buying the same from the local market or elsewhere, leaving the question of the price to be paid in respect thereof to me solely according to my discretion on a consideration of all the facts and circumstances --it being understood that the entire quantity of the goods requisitioned will have to be supplied by such purchase whether from the local market or elsewhere and within a reasonable time not exceeding one month from the date hereof.

A reminder to this was sent on 29th January (Ex. 21). Futnani replied, signing the name of the firm by Ex. 22 on 3rd February, resiling from the previous arrangement agreeing to supply the goods only on payment of the firm's cost price, plus a reasonable percentage as remuneration. Thereafter, the present case was started, the goods in question were eventually requisitioned, after they had been found on 16th September 1942 in the Port Commissioner's godown in Sahib Bazar where they had remained all along. On the above facts, a charge was framed against Joshi as manager of the firm for having between 22nd November 1941, and 8th January 1942, contravened the orders Exs. 8 and 16, namely the freezing orders of 22nd November, and 20th December. Futnani was charged as partner of the firm in the alternative with having contravened the orders, or with having abetted the contravention. Futnani was also charged with having between 20th December-31st December made a statement in Ex. 18 having reasonable cause to believe that the act or statement was likely to mislead Major Thomas in the discharge of his lawful functions in connection with the Defence of British India or for securing the public safety, and thereby having committed an offence punishable under Rule 46(3) read with Rule 46(2) (d), Defence of India Rules.

4. Joshi, when examined under Section 342, Criminal P.C., stated that in the third week of December his firm was very hard up for cash. A man of the firm of Dewanchand Nikamal came with a delivery order issued by the head office regarding the 25 tons of barbed wire, and he accepted half the price from him on account, and showed him the goods. The man agreed to pay the balance and take delivery but the goods were never actually delivered. The man came on the afternoon of 20th December before Joshi received the second freezing order (Ex. 16). Though he knew the first order had not expired, he took the money thinking that if the freezing order was renewed he would not give actual delivery. Futnani stated that the delivery order had been issued in Karachi without his knowledge, and during his absence; Joshi told him about having accepted the money. He then told Col. Marriott about what had happened, and that he was prepared to make over 25 tons without profit. In a written statement, he alleged he had nothing to do with the sale of the 25 tons, except the correspondence that took place in Calcutta in December 1941; he left Karachi on 13th December and arrived in Calcutta on 27th December, when Joshi showed him the two freezing orders and told him about the issue of a delivery order by the Karachi office. Futnani told Joshi he had acted wrongly and should have consulted the Karachi office either by telegraph or telephone, but Joshi replied that owing to the war situation he could not get into communication. As a straightforward man he (Futnani) then went and explained the whole situation to Col. Marriott. The rest of his written statement is taken up with an attempt to put a good face on his attempts to get out of the arrangement made with the authorities, and does not much concern us here. In argument before us some reliance is placed by the defence on some documents filed compendiously as Ex. 57, being correspondence and copies of correspondence between Murlimal Santram and Co. in Karachi and Dewanchand Nikamal. The correspondence goes to show that there was an agreement for sale of 100 tons of barbed wire of American manufacture on 30th July 1941, by the former firm to the latter, and that on 20th December 1941, a delivery order for 25 tons lying arrived at Calcutta was made over at Karachi to the buyers, who were to

instruct your friends in Calcutta by telephone to pay for and take delivery of the goods from our Calcutta friends.

This was issued on the same day that Joshi says Dewanchand's man came and paid half the money in Calcutta. On 31st December Murlimal Santram & Co. wrote to Dewanchand Nikamal saying that it was not possible for the Calcutta branch to have the goods released and delivered there in fulfilment of the delivery order issued to them

though they have explained to the Government that our contract with you is positive delivery contract and not a shipment contract and that virtual delivery of the goods has already been given to you by our issuing to you the delivery order for the goods. Lest there may arise any difficulties later on with the Government, we have telephoned our friends in Calcutta to stop delivery of the goods delivered to you technically by issue of the delivery order. Please return us the delivery order.

5. The learned Chief Presidency Magistrate acquitted the accused on the following grounds: (1) So far as the order of 22nd November required information, this was supplied by Ex. 11. (This is in fact correct and no argument was adduced before us on this point.) (2) The prosecution have not established that the goods were disposed of by the accused. The accused could have saved a great deal of trouble if from the beginning they had told the truth that, although there had been a sale or partial sale to Dewanchand Nikamal, the goods all along remained in the custody of the accused's firm. They decided for reasons best known to themselves not to tell the truth in this respect. Although Futnani in Ex. 18 had stated that the goods were 'delivered away,' there was no actual delivery. These two grounds cover the charges under Rule 75A, and the alternative abetment charge. (3) At first the prosecution case on the charge under Rule 46(2) (d) appeared to be that the accused Futnani misled Major Thomas by saying, the goods had been delivered away, when they were still in his custody. The case was so argued until counsel for the accused had addressed the Court, but after that it was contended that the accused had misled Major Thomas by promising to purchase the goods in the local market, without intending to keep the promise. In any case, the charge failed, (i) because it had not been proved that Major Thomas had any functions whatever in connection with the defence of British India or the securing of the public safety, (ii) because the representations were not made to Major Thomas, but to Col. Fowler and (iii) the letter Ex. 18 was issued to the Controller of Supplies, not to the Controller of Purchase, and the freezing orders were issued by the former. (4) There has been a misjoinder of charges; the accusation that the accused had disposed of the goods is entirely separate from and inconsistent with the charge that the accused had given false information in saying that the goods had been disposed of. The prosecution could not take up the alternative position, the two offences are distinct and irreconcilable.

6. In this Court the matter has clarified, and the learned Magistrate's finding that the goods have not been disposed of is not supported. Some slight attempt was made to urge on behalf of the accused that what they both admitted had happened did not amount to 'disposal' within the terms of the orders, and the terms of Rule 75A, but this was not seriously pressed. Though there was no actual removal of the goods from the godown, the admissions of both the accused amount to admissions of receipt of a delivery order by the purchaser, and payment of money by the purchaser to vendor's agent, the result was certainly a disposal of the goods; disposal does not mean only actual removal or delivery by actual movement of the goods. In our opinion, such actual delivery by removal would also have constituted a disposal of the goods, but the question does not arise here. The actual delivery order is not before the Court. It was contended that the question whether property in the goods passed by handing over of the delivery order or not would depend on the intention of the parties, as to whether the property was to pass before payment of money or not. Mr. Ghose relying on the letter of 31st December, in Ex. 57 referred to above, contended that the disposal was complete with the issue of the delivery order, and that therefore whatever might be the effect as regards the partners of the firm, Joshi by accepting the half price did nothing by way of disposing of the goods. In our opinion even assuming that the intention was that the property in the goods should pass with the delivery order, the subsequent acceptance of the money by Joshi was another act of disposal, as would also have been actual delivery of the goods by him if he had allowed the purchaser to remove the goods. The nature of the act of disposal by him has some bearing on the question of the seriousness of his offence.

7. This then disposes of the second ground for acquittal set forth by the learned Chief Presidency Magistrate. No attempt has been, made before us to suggest that there was any contravention of the freezing orders in so far as they demanded information. Information asked for in the letter of 24th November (Ex. 10) viz., production of the customs and other documents, was not supplied, but no charge was framed in respect of this matter, and presumably no charge could be framed in the absence of a formal order demanding the information. The first ground set out by the learned Magistrate is correct, and the charges would fail if they rested on the failure to supply information. It is not necessary for us to discuss the reasons given by the learned Magistrate set out under 3(i), (ii) and (iii) above. The learned Magistrate finds that Futnani told an untruth but acquits him for what may be called technical reasons; we find that the information given was true; the prosecution has not attempted to urge that any distinction should be made from the use by Futmani in Ex. 18 of the phrase 'delivered away' instead of the more strictly accurate 'delivered.' No doubt the authorities were misled if they thought that the goods were right out of the control of the firm Murlimal Santram in the sense that they could not say where they were. It is not very clear why the authorities did not enquire where the goods were; they had power to demand the information. Apparently they misled themselves into thinking that they were really dealing with a 'straightforward' man, as Futnani describes himself; it was an error on their part.

8. We are concerned with ground (4), for some attempt was made before us to contend that there had been a misjoinder of charges. We think the learned Magistrate in this matter was in part correct, and in part wrong. He was perhaps misled by the double aspect in which the charge under Rule 46(2) (d) was put before him. If the prosecution case was that Futnani misled the authorities by making a promise, which he never meant to keep, in order to get out of the difficulty created by a contravention of the freezing order having been made, then clearly there was a misjoinder of charges. The latter offence was entirely separate from the former, though arising out of it. But it was quite legitimate for the prosecution under Section 236, Criminal P.C., to charge the accused in the alternative either that they had delivered the goods that is to say disposed of them in contravention of the order of 22nd November, or had falsely informed the authorities that they had done so. The prosecution proved the whole series of acts from the time of the application for the license till the time when the accused came to express regret that the goods had been 'delivered away.' What exactly had happened was within the special knowledge of the accused, and the prosecution were entitled to contend, that they had proved commission of one or other offence. Though the charge under Rule 46(2) (d) was not actually framed as alternative to the other charges, this was the intention and effect; they were otherwise in this sense inconsistent in the same way that all alternative charges in this sense must be inconsistent. A man may be charged in the alternative as a thief, receiver or as guilty of breach of trust, but the charges are inconsistent between themselves. We hold then that there was no misjoinder of charges, though it would have been more correct to frame the charges in the alternative. The fact that in argument at a late stage the prosecution sought to meet a defence argument by contending that the evidence proved a different charge in no sense alternative to the charge under Rule 75A. cannot make the proceedings void on the ground of misjoinder. The answer to the argument was simply that that charge had not been tried, and could not be tried in the current trial.

9. The result is that we must hold that the reasons given by the learned Chief Presidency Magistrate for acquitting the accused on charges under Rule 75A. Defence of India Rules, cannot be supported. The following additional points were however urged before us: (1) Contravention of an order made under Rule 75A is not punishable at all where the contravention took place in December 1941, and a prosecution was started in respect of it in September 1942; (2) that a valid order cannot be passed against a firm under Rule 75A; (3) that there is no provision for service of an order made under the rules against firm (or for that matter or company); (4) that the Defence of India Act, 1939, is ultra vires the Indian Legislature. We proceed to discuss these points seriatim.

(1) The first point though argued at some length was eventually abandoned; it is worthwhile discussing it briefly as the fallacy on which it was based has given trouble in previous cases on the Defence of India Rules, and has not, we think, been noticed as yet in this Court. It was pointed out in Dan Mall v. Emperor ('44) 31 A.I.R. 1944 Pat. 1. Rule 5, Defence of Indian Rules, as originally framed was as follows:

If any person to whom any provision of these Rules relates, or to whom any order made in pursuance of these Rules is addressed or relates, or who is in occupation, possession or control of any land, building, vehicle or other thing to which such provisions relate, or in respect of which such order is made--(a) fails without lawful authority or excuse, himself or in respect of any land, building, vessel or other thing of which he is in occupation, possession or control, to comply, or to secure compliance, with such provisions or order, or (b) evades or attempts to evade, by any means such provision or order,--he shall be deemed to have contravened such provisions of these rules, or as the case may be, such provisions of these rules as authorise the making of such order; and in these rules the expression 'contravention' with its grammatical variations includes any such failure, evasion or attempt to evade.

The penalty clauses relating to some of the rules merely provided a penalty for breaches of the rules. It was consequently urged successfully, overlooking the provisions of Rule 5, that breaches of some orders had not been made punishable. Rule 5 was amended by Notification No. 1020-OR/41, dated 10th January 1942, and for the words 'such provision of these rules, or, as the case may be, such provisions of these rules as authorise the making of such order' the words 'such provision or order' were substituted. This rendered it necessary consequentially to amend other rules where necessary provision for punishment for a breach of an order made under them had not been made.

10. Rule 75A was such a rule. In the original rules requisition of immovable property was dealt with in Rule 75, requisition of land in Rule 79 and requisition of moveable property in Rule 83. Rules 76 and 83 contained provision for punishment for contravention of an order made under them, Rule 79 did not. The rules were amalgamated into Rule 75A by Notification No. 1336-OR/42, dated 25th April, (after the amendment of Rule 5), but contained provision only for punishment of a breach of the rule itself. The omission was not corrected until the issue of Notification No. 1500-OB/42, dated 18th July 1942, when orders made under the rule were made punishable. Orders made, and action taken in relation to Rules 76, 79, 83 were by Sub-rule (6) of the new rule to be deemed to have been made or taken under or in relation to Rule 75A and to be as valid as if the rule had then been in force.

11. The relevant period in the present case is December 1941. By Rule 3, Defence of India Rules, the General Clauses Act, 1887, applies to the interpretation of these rules as it applies to the interpretation of a Central Act. Consequently, the provisions of Section 6(d) and (e) of that Act are applicable to the present case and the accused are punishable in the present proceedings if at all, under the rules as they stood in December 1941. The freezing order of 22nd November (Ex. 8/1) was of course issued under Rule 83(3a) then in force, and the accused are punishable if at all, under Sub-rule (4) as it then stood; this made punishable a contravention of any order made in pursuance of the rule. It is not even necessary to call in the provisions of Rule 5 as it then stood for the purpose of making punishable such contravention. The amendment of Rule 5 on 10th January 1942 cannot affect the matter. The repeal of Rule 83, and substitution of Rule 75A on 25th April 1942, would affect the question of contraventions taking place after that date, and till the subsequent correction on 10th July 1942, but not the matter of any contraventions that had taken place prior to that date. All that need be said is that the charges in the present case are slightly defective in mentioning Rule 75A at all. The accused are being tried now for a contravention in December 1941, of an order made under Rule 83(3a) then in force, and punishable under Rule 83(4) as it then stood. The defect in the charges has in no way prejudiced either of the accused. The terms of Rule 75A (5) relating to freezing orders are identical with those of Rule 83(3a), with the exception of an amendment relating to buildings of no importance in the present case. The arguments proceeded with reference always to Rule 75A, following the charges and the judgment of the learned Chief Presidency Magistrate and have been set out accordingly above; strictly the reference throughout should be to Rule 83(3a) and (4).

(2) There is no substance in the contention that an order under Rule 83(3a) cannot be issued on a firm. In this case the owner or person in possession of the 25 tons of barbed wire was clearly the firm of Murlimal Santram and Co. 'Person' under Section 3(39), General Clauses Act, is defined to include (unless there is anything repugnant in the subject or context) 'any company or association or body of individuals whether incorporated or not.' The firm applied for the import licence (over the signature in the writing of Futnani) and all documents are in the firm name. The firm no doubt is not an entity, it is a partnership registered under the Partnership Act, as stated by Futnani in his written statement. Under Section 4 of that Act 'persons who have entered into partnership with one another are called individually 'partners', and collectively a firm. . . . .' the firm means the partners collectively, and orders under Rule 83(3a) can certainly be issued on such a body of persons collectively. The order Ex. 8/1 was a valid order directed to the partners collectively of the firm of Murlimal Santram and Co., forbidding them or their agent from disposing of the barbed wire received by S.S. Frederick Lykes.

(3) Rule 119, Defence of Indian Rules, is the relevant rule as regards service. The form in which it stood on the relevant date in November 1941, was as follows:

(1) Save as otherwise expressly provided in these Rules every authority, officer or person who makes any order in pursuance of any of these Rules shall, in the case of an order of a general nature or affecting a class of persons publish notice of such order in such manner, as may, in the opinion of such authority, officer or person, be best adapted for informing persons whom the order concerns and in the case of an order affecting an individual person serve or cause the order to be served on that person in such manner as such authority, officer or person thinks fit.'

It is contended that there is a lacuna in the rule, which was removed by subsequent amendment, and that there is no provision in it for service on a firm or company. The context prevents the definition of 'person' in the General Clauses Act from being applicable to an 'individual person'. In our opinion, the provision in respect of a firm and company is for publication to them as a 'class of persons'. Service is publication to the individual or individuals served. The Defence of India Rules, instead of providing fairly detailed rules for the method of informing those concerned of the existence of orders affecting them in the manner in which provision is made for giving information as regards suits, for example, in the Code of Civil Procedure, have left to the authorities empowered to pass orders under the Defence of India Rules, a wide discretion as to the manner of giving such information. Under the Code there is provision for publication in certain instances where the ordinary rule of personal service cannot be carried out, e.g., under Order 1, Rule 8 where individual service on a large number of persons is not reasonably practicable, or substituted service under Order 5, Rule 20 where service cannot be effected in the ordinary way. The fact that by a subsequent amendment of Rule 119 provision has been made for service on companies as under Order 29, Rule 2, and on firms as under Order 30, Rule 3, does not show that there was no provision previously under Rule 119 for informing such associations of individuals of orders affecting them. The method adopted in the present case was to send the order to the Calcutta manager of the firm after he (Joshi) had interviewed the authorities and had corresponded with them signing 'per pro' the firm (Ex. 5) saying he was consulting his head office. It would have been better if 'publication' had also been made direct to the firm in Karachi, but in view of the possible delay it was also essential that the order should be also served on the Calcutta agent who was actually handling the matter and taking delivery of the goods from the ship. He was clearly in communication with his head office, and in the circumstances there was nothing unreasonable in the issuing authority holding the opinion that the method used was that best adapted for informing the partners collectively, whom the order concerned and their agent in Calcutta, whom it also concerned. In our opinion Rule 119 as it stood in November 1941, provided a method for informing a firm of an order affecting it, and the firm was properly informed in this case in accordance with the provisions of the rule. We have already held that the goods in question were disposed of in contravention of the order, both by the issue of the delivery order to Dewanchand Nikamal in Karachi, and also by the acceptance of half the purchase money from their agent in Calcutta by Joshi. Joshi certainly had actual knowledge of the order and he clearly failed to comply or secure compliance with it; he therefore contravened the order, and is liable to the punishment provided in Rule 83(4).

12. As regards Futnani he attempts to throw the blame on Joshi in Calcutta, and some unnamed person in Karachi who made over the delivery order. He alleges he was absent from Karachi, on his way to Calcutta via Delhi, at the time when the order was made over on 20th December, and when Joshi accepted the money in Calcutta. He was one of the persons (partners) to whom the order related and to whom it was addressed; he was informed of the order as required by the rules and he failed to secure compliance with it. The only question is whether he had any lawful excuse for such failure. The onus is on him to prove such lawful excuse, and he has made no real attempt to do so. We do not accept his statement that he had nothing to do with the sale of the goods till he came to Calcutta in December and corresponded. He signed the application for the import licence Ex. 1, he signed the letter Ex. 6 dated 18th. November supplying the information asked for in the Controller of Supplies' letter Ex. 4 of 12th November. In that letter he explicitly stated that the reels had already been sold, that as owing to shortage of stocks these goods were much in demand, 'we have therefore sold, almost all of them prior to their arrival'. When further information was asked for, in particular production of the documents, Joshi came to the office of the Controller on the 8th, and then wrote on 13th December, stating that a partner was starting on Sunday the 14th, who would handle the matter personally, and that partner was Futnani, who duly arrived and in fact handled the matter, and continued to do so for some months. There can be no doubt that Futnani in fact knew all about the sale, and the freezing order. If the delivery order was not in fact handed over in Karachi under his instructions he certainly failed to secure compliance with the freezing order and, as we have said, has offered no excuse for his failure beyond his plea of ignorance which we cannot accept. We may note here the inconsistency between the excuse offered for Joshi, namely, that he was unable to consult Karachi on the 20th owing to difficulty of telegraphic communication, and the story that the delivery order was handed over in Karachi on the 20th, and Dewanchand Nikamal were told to instruct their Calcutta friends by phone to take delivery in Calcutta, which they did in part by visiting Joshi inspecting the goods and paying part of the price. According to Joshi the post operated with phenomenal rapidity, for Dewanchand's man in Calcutta had the actual delivery order that day.

13. It was urged that to convict Futnani we would be going against the fundamental common law applicable as regards criminal cases, and that we were throwing the onus on him to prove his innocence. The doctrine obviously has no application to statutory offences of the type created by Rule 5 read with many of the other rules framed under the Defence of India Rules. In the case of any company or other body corporate there is under Rule 122 express provision throwing the whole onus on every director, manager, secretary or other officer or agent to prove, where the 'person' contravening the provisions of a rule or order thereunder is Such company, that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention, otherwise, he 'shall... be deemed to be guilty of such contravention.' There is a similar specific provision for example in relation to lighting restriction orders under Rule 52(4). We therefore find that the accused Futnani is also guilty of contravention of the freezing order Ex. 8/1 and liable to punishment under Rule 83(4). As regards punishment we take the view of the facts most favourable to the accused, namely that the contravention by Futnani was not deliberate, but was a mere failure to secure compliance with the order; and that as regards Joshi he, by accepting the money, merely carried the contravention a stage beyond that reached by the issue of the delivery order in Karachi. We consider the appropriate punishment for Futnani to be a fine of Rs. 1000 in default one month's rigorous imprisonment.

(4) It remains to dispose of the last point raised by the defence, namely that the Defence of India Act is ultra vires the Central Legislature. In support of this contention reliance is placed on the ease in Emperor v. Benoari Lall Sarma . A similar contention was put forward in this Court recently in Keshabdeo Harlalka v. Emperor Reported in : AIR1944Cal317 and rejected. There is no discussion, however, in the judgment in that case of Emperor v. Benoari Lall Sarma which is relied on in the argument before us; we entirely agree with the view taken in that ease, and proceed to deal with the arguments before us. Emperor v. Benoari Lall Sarma deals with Ordinance 2 of 1942 made and promulgated by the Governor-General early in 1942 under powers given under Section 72, Government of India Act, 1915, kept in force by the provisions of Section 317, Government of India Act, 1935, and included in Schedule 9 of that Act, and further amended by the provisions of the India and Burma (Emergency Provisions) Act, 1940, passed by the Imperial Parliament. Section 3 of the latter Act extended the period of six months fixed under Section 72 of the Act of 1915 to a period lasting from the date of the Act and ending on such date as His Majesty might by Order in Council declare to be the end of the emergency which was the occasion of the passing of the Act of 1940. The functions were to be exercised by the Governor-General in his discretion (Section 1(4)), and without prejudice to the provisions of Section 314, Government of India Act, 1935 (providing for control by the Secretary of State), the powers exercisable under the new Act were not to be exercised except on the direction of the Secretary of State, subject to a proviso covering cases where reference to the Secretary of State might cause undue delay (Section 4).

14. The majority judgment in Emperor v. Benoari Lall Sarma analysed the provisions of Ordinance 2 of 1942, in particular Sections 5, 10 and 16, and concluded that it was only the order of the executive authority passed under those sections which in fact operated to repeal the provisions of the Criminal Procedure Code and there was nothing in the Ordinance to limit the discretion given to the executive, or laying down the policy, conditions or criteria by reference to which the power was to be exercised. It held that it is impossible to deny that the ordinance-making authority has wholly evaded the responsibility of laying down any rules or conditions or even enunciating the policy with reference to which cases are to be assigned to the ordinary criminal Courts and to the Special Courts respectively and left the whole matter to the unguided and uncontrolled action of the executive authorities. The Federal Court discussed the cases in Queen v. Burah ('80)4 Cal. 172, Hodge v. The Queen (1883) 9 A.C. 117, Powell v. Apollo Candle Co. (1885) 10 A.C. 282 and Shannon v. Lower Mainland Dairy Products Board ('39) 26 A.I.R. 1939 P.C. 36, concluding that

A careful examination of these pronouncements of their Lordships does not support the contention that in their view every kind of delegation by the Legislature is unquestionable. On the other hand, they have taken care to limit their pronouncements by reference to the nature and terms of the particular enactments impugned before them and by reference to what has prevailed as a matter of long legislative usage.

15. On the question of powers of delegation American authorities are discussed, and a test put forward by the Advocate-General of India was accepted and applied. The following quotation from the judgment of Dixon J. in Victorian Stevedoring etc., Co. v. Dignan (1931) 46 C.L.R. 73 at p. 81 is quoted as noteworthy:

This does not mean that a law confiding authority to the executive will be valid however extensive or vague the subject matter may be, if it does not fall outside the boundaries of federal power. There may be such a width or such an uncertainty of the subject-matter to be handed over that the enactment attempting it is not a law with respect to any particular head or heads of legislative power. Nor does it mean that the distribution of powers can supply no considerations of weight affecting the validity of an Act creating a legislative authority' (page 63).

16. The judgment proceeds (page 64):

The circumstance that the matter has in the present case been dealt with by an Ordinance and not by a legislative enactment of the ordinary kind raises a further question under this head. The decisions in Queen v. Burah ('80)4 Cal. 172 and the cases following it rest on the ground that within the limits of the subject-matter assigned to them by the Constitution Act, the Indian and Dominion Legislatures have and were intended to have 'plenary powers of legislation as large and of the same nature as those of Parliament itself. The following points of difference between legislation by Ordinance and ordinary legislation are then set out:

(1) By the terms of Section 72 in Schedule 9 to the Constitution Act, the operation of the Ordinance is limited to six months, and even now is only temporary though the particular limit has been removed.

(2) It is avowedly the exercise of a special power intended to meet an emergency.

(3) 'These two circumstances differentiating legislation by Ordinance from normal legislation afford ground for doubting the applicability of the principle of Queen v. Burah ('80)4 Cal. 172 to Ordinances.'

(4) It is only consistent with this kind of lawmaking that the responsibility for it should have been laid on the Governor-General. The conception underlying the ordinance-making power so connects it with the personal judgment and discretion of the Governor-General that the objection against delegation to subordinate executive authorities of any matter of principle is even more serious in this case.

(5) In England Parliament has control over emergency legislation by Order in Council. Under the Indian Constitution the Legislature has no share in or control over the making of an Ordinance or the exercise of powers thereunder.

(6) In England Parliament will pass the usual Indemnity Act, in India the indemnity can be provided by Ordinance. The only safeguard in the Indian Constitution is that the matter rests entirely on the responsibility of the Governor-General.

(7) When large and undefined powers are entrusted to Provincial Government and their executive officers, the constitutional limitations, conventions and etiquette implied in the theory of provincial autonomy make it difficult even for the authority promulgating the Ordinance to interfere to check the improper use of such powers.

17. Certain considerations and safeguards as regards delegation of legislative authority are discussed, and it is remarked

the considerations and safeguards suggested in the foregoing passages may be no more than considerations of policy or expediency under the English Constitution. But under Constitutions like the Indian and American, where the constitutionality of legislation is examinable in a Court of law, these considerations are, in our opinion, an integral and essential part of the limitation on the extent of delegation of responsibility by the Legislature to the executive

and then follows the passage already quoted above holding that the ordinance-making authority had wholly evaded his proper responsibility in the case of ordinance 2. The earlier passage, coming between the discussion of the special differences as regards exercise of the ordinance-making power, and the final conclusion as regards the Ordinance under discussion, is general in its terms, but is presumably not intended to overrule the principle of Queen v. Burah ('80)4 Cal. 172 and subsequent cases in its application to ordinary legislation by the Legislature.

18. The Defence of India Act, 1939, came into force on 29th September 1939. On the declaration of war the Governor. General in Notification No. 22-M of 3rd September issued a Proclamation of Emergency in pursuance of the power conferred by Section 102(1), Government of India Act, and promulgated the Defence of India Ordinance, 5 of 1939, under the powers conferred under Section 72. At the same time the Defence of India Rules, made under the Ordinance were published in Notification No. 221/1 O.R. The terms of the Ordinance are substantially the same as those of the subsequent Defence of India Act, which was passed shortly afterwards by the Indian Legislature and the bulk of the present rules in force were made under the Ordinance. Section 21 of the Act repealed the Ordinance and enacted that any rules made, anything done and any action taken in exercise of any power conferred by or under the Ordinance was to be deemed to have been made, done or taken in exercise of powers conferred by or under the Act as if the Act had commenced on 3rd September 1939. It should be added that on 1st September, the Imperial Parliament had passed the Government of India (Amendment Act), 1939, introducing a new Section 126A extending the executive authority of the Federation, and the power of the Federal Legislature to make laws conferring powers and imposing duties on officers of the Federation, notwithstanding that the matter was one with respect to which the Provincial Legislature also had power to make laws. The new section was given retrospective effect.

19. The effect of the Proclamation of Emergency under Section 102, Government of India Act, was that wider powers were given to the Federal Legislature, namely, powers to make laws for a Province or any part thereof with respect to any of the matters in the Provincial Legislative List. In other words, no question of distribution of powers could arise in examining any enactment made by the Federal Legislature while the proclamation was in force (under Section 316 of the Act, references to the Federal Legislature are to be taken as references to the Indian Legislature). Control of Parliament was retained by the provision in Section 102 that the proclamation was to cease to operate at the expiration of six months, unless before the expiration of that period it had been approved by resolutions of both Houses of Parliament. Laws so made are to cease to have effect on the expiration of a period of six months after the Proclamation has ceased to operate.

20. Of the seven reasons discussed in Emperor v. Benoari Lall Sarma as distinguishing an Ordinance from a legislative enactment of an ordinary kind some seem to apply also to the Defence of India Act. It is an enactment by the ordinary Legislature, but it has a temporary validity (cf. (1) above); it is avowedly the exercise of a special power to meet an emergency (cf. (2)). On the other hand, (cf. (7)) the constitutional limitations, conventions and etiquette implied in the theory of provincial autonomy have not the same application apparently as discussed by the Federal Court. Special power to give directions to Provinces are given in the amended Section 126A, Government of India Act, and the whole field of legislation is open to the Federal Legislature. As to the control of Parliament, the continuance of the Proclamation of Emergency itself is made subject to Parliament's control by Section 102 itself. Under Section 314 of the Act, the Governor General is under the general control of and must comply with the directions of the Secretary of State. In these circumstances we cannot think that there can be any doubt that as regards the Defence of India Act, the principle of Queen v. Burah ('80)4 Cal. 172 and the later cases must apply. Section 102, Government of India Act, so far from showing any intention to restrict the legislative powers for the emergency of war deliberately widens them. The considerations applicable in the present case are different from those which weighed with the majority of the Federal Court in Emperor v. Benoari Lall Sarma .

21. We may now examine the Defence of India Act to consider whether the Indian Legislature has exceeded the limits of its powers as laid down by the Judicial Committee. In Section 2(1) the Central Government is given power to

'make such rules as appear to it to be necessary or expedient for securing the defence of British India, the public safety, the maintenance of public order, or the efficient prosecution of war, or for maintaining supplies and services essential to the community.'

In Section 2(2) are set out 35 matters specifically for which rules may be made. These necessarily cover a very wide field, and if there were any necessity for examining the Act with reference to the distribution of legislative powers then it might be found that there was

such a width or such an uncertainty of the subject-matter to be handed over that the enactment attempting it is not a law with respect to any particular head or heads of legislation'

in the words of Dixon J. in Victorian Stevedoring etc., Co. v. Dignan (1931) 46 C.L.R. 73, already quoted above. The purpose and intent of the Act are, however, quite clear, the width of the subject-matter arises out of the nature of the emergency, viz., war. Martin C.J. dealt with an objection on the ground of excessive delegation of powers in the Natural Products Marketing (B.C.) Act--4 D. L. R. 298, where it was contended

'that the Legislature had passed only the skeleton of an Act and left it to the sole discretion of the Governor-General to clothe it with flesh and blood, thereby in effect abdicating its functions,

by pointing out that the 'purpose and intent' was laid down in the Act and was not vague and uncertain, but definite and concrete, to control and regulate within the Province marketing of its natural products by establishing 'schemes.' He pointed out that the schemes were defined, and the powers to be given to the Boards were specifically set out in eleven sub-sections of Section 5 of the Act. He, therefore, held that 'after reading the whole statute it does not support the argument' that it was a mere skeleton. He then referred to the authority of Hodge v. The Queen (1883) 9 A.C. 117 to show that the Legislature had the power to establish such schemes, quoting the passage in the judgment in that case in which it is laid down that the authority conferred on the Provincial Legislature is

as plenary and as ample within the limits prescribed by Section 92 (of the British North America Act) as the Imperial Parliament or the Parliament of the Dominion would have had under like circumstances to confide to a municipal institution or body of its own creation authority to make by-laws or resolutions as to subjects specified in the enactment, and with the object of carrying the enactment into operation and effect.

It is obvious that such an authority is ancillary to legislation, and without it an attempt to provide for varying details and machinery to carry them out might become oppressive or absolutely fail....

It was argued at the bar that a

'Legislature committing important regulations to agent or delegates effaces itself. That is not so. It retains its powers intact, and can, whenever it pleases, destroy the agency it has created and set up another, or take the matter directly into its own hands. How far it shall seek the aid of subordinate agencies, and how long it shall continue them, are matters for each Legislature, and not for Courts of law, to decide.'

On appeal in Shannon v. Lower Mainland Dairy Products Board ('39) 26 A.I.R. 1939 P.C. 36 Lord Atkin observed that the objection that the impugned Act delegated legislative power to the Lieutenant-Governor was

subversive of the rights which the Provincial Legislature enjoys while dealing with matters falling within the classes of subjects in relation to which the constitution has granted legislative powers. Within its appointed sphere the Provincial Legislature is as supreme as any other Parliament; and it is unnecessary to try to enumerate the innumerable occasions on which Legislatures, Provincial, Dominion and Imperial, have entrusted various persons and bodies with similar powers to those contained in this Act. Martin C.J. appears to have disposed of this objection very satisfactorily in his judgment on the reference, and their Lordships find no occasion to add to what he there said.

22. In view of the emphatic confirmation of the judgment of Martin C.J. contained in the above passage, we may refer also to his discussion of the question of abdication of powers. On this subject Martin C.J. had quoted passages from judgments in In re Gray; Re Habeas Corpus (1918) 42 D.L.R. 1 where it had been held that

when the nation is in peril then that emergency justifies the National Government in invading by an extraordinary exercise of its 'Peace, Order and Good Government' powers (Section 91 B.N.A. Act) the ordinary powers of the Provinces over 'Property and Civil Eights in the Province' (Section 92(13)) during the existence of an emergency.'

He then cites with approval the following passage from the judgment of Anglin J. in that case:

A complete abdication by Parliament of its legislative functions is something so inconceivable that the constitutionality of an attempt to do anything of the kind need not be considered. Short of such an abdication, any limited delegation would seem to be within the ambit of a legislative jurisdiction certainly as wide as that of which it has been said by incontrovertible authority that it is as plenary and as ample. . . .as the Imperial Parliament in the plentitude of its powers possessed and could bestow.'

23. A further passage quoted from the same judgment is of special interest when war legislation like the Defence of India Act is under consideration:

Again it is contended that should Section 6, War Measure Act, be construed as urged by the counsel for the Crown, the powers conferred by it are so wide that they involve serious danger to our parliamentary institutions. With such a matter of policy we are not concerned. The exercise of legislative functions such as those here in question by the Governor-in-Council rather than by Parliament is no doubt something to be avoided as far as possible. But we are living in extraordinary times which necessitate the taking of extraordinary measures. At all events all we, as a Court of justice, are concerned with is to satisfy ourselves what powers Parliament intended to confer and that it possessed the legislative jurisdiction requisite to confer them.

24. The views of Duff J. in the same judgment are also quoted and are apt in the present connexion:

There is no attempt to substitute the executive for Parliament in the sense of disturbing the existing balance of constitutional authority by aggrandizing the prerogative at the expense of the Legislature. The powers granted could at any time be revoked and anything done under them nullified by Parliament which Parliament did not, and for that matter could not, abandon any of its own legislative jurisdiction. The true view of the effect of this type of legislation is that the subordinate body in which the law-making authority is vested by it is intended to act as the agent or organ of the Legislature and that the acts of the agent take effect by virtue of the antecedent legislative declaration' (express or implied) that they shall have the force of law.

25. We are of opinion therefore that the Defence of India Act in no way transgresses the limits laid down and indicated in the above passages which received the full approval of their Lordships of the Judicial Committee on appeal. The fourth objection raised in this appeal thus fails. We therefore allow the appeal and convict the accused Futnani and Joshi of contravention of the freezing order of 22nd November, an offence punishable under Rule 83(4), Defence of India Rules, as they stood at the time of the contravention. We sentence Futnani to pay a fine of rupees 1000 in default to suffer three months' simple imprisonment, and Joshi to pay a fine of Rs. 100 in default to suffer one month's simple imprisonment. Certificate under Section 205, Government of India Act, is granted.

Edgley, J.

26. I agree.

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