http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: CHAMPAKLAL GANESHMAL

       Vs.

RESPONDENT: THE STATE OF MAHARASHTRA

DATE OF JUDGMENT05/11/1974

BENCH: BHAGWATI, P.N. BENCH: BHAGWATI, P.N. CHANDRACHUD, Y.V.

CITATION:  1975 AIR  160            1975 SCR  (2) 584  1975 SCC  (3) 485

ACT: Bombay Police Act, 1951-S. 124-Scope of-"Stolen property" or "property fraudulently obtained" meaning of.

HEADNOTE: The  appellant  was convicted and sentenced for  an  offence under  s.  124 of the Bombay Police Act, 1951 for  being  in possession   of  20  brand  new  wrist  watches  of   Sandoz manufacture.  The Presidency Magistrate found that the wrist watches were either stolen property or property fraudulently obtained.   On appeal a single Judge of the High Court  held that  the  writ  watches were smuggled  property  and  hence fraudulently  obtained  and  confirmed  the  conviction  and sentences.  On reference, a Division bench held that if  the property  in  the possession of the accused was  capable  of being described as ’stolen property or property fraudulently obtained’  by  whomsoever  it  might  have  been  stolen  or fraudulently  obtained,- that would be sufficient to  comply with  the requirements of the section and that  the  section did  not  speak of the accused obtaining possession  of  the property fraudulently but property "fraudulently obtained." Section 124 of the Bombay Police Act enacts "whoever has  in his possession or conveys in any manner, or offers for  sale or pawn, anything which there is reason to believe is stolen property  or  property fraudulently obtained, shall,  if  he fails  to  account  for such possession or  to  act  to  the satisfaction of the Magistrate" be punishable on conviction. Dismissing the appeal, HELD:(1)  When  anything is imported into  the  country clandestinely in violation of import or customs  regulations it is fraudulently obtained, that is obtained by  committing a  fraud  on the regulations.  Smuggled  goods  are  clearly goods fraudulently obtained. [587F] (2)The  plain  language  of the  section  stops  short  at describing the property as ’stolen property’ orproperty fraudulently  obtained’ and does not go on to add the  words ’by  him.  If the property were stolen or  fraudulently  ob- tained  by  the  accused,  that  would  be  a  distinct  and independent  offence  under the Indian Penal Code  or  other laws  and  it would not be necessary to make it  an  offence over  again under s. 124 of the Bombay Police Act.   If  the property is capable of being ’described as ’stolen property’

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

or  ’property fraudulently obtained’ by whomsoever it  might have  been  stolen or fraudulently obtained. that  would  be sufficient  to comply with the requirements of the  section. It is the possession by the accused of property which  bears the  attribute  or characteristic of  ’stolen  property’  or ’property fraudulently obtained’, that is made penal. [587G- 588C] (3)The   explanation  given  by  the  appellant  for   his possession  of the wrist watches was unsatisfactory and  the High  Court was right in taking the view that the  appellant had  failed to account for the possession of wrist  watches. [588E]

JUDGMENT: CRIMINAL APPELLATE JURISDICTION : Criminal appeal No. 41 of 1971. From the Judgment and Order dated the 15th January, 1971  of the Bombay High Court in Crl.  Appeal No. 278 of 1969. N.   H. Hingorani, for the appellant. S.   B. Wad and M. N. Shroff, for the respondent. 585 The judgment of the Court was delivered by BHAGWATI, I.-This appeal has been referred by the  appellant on  a  certificate of fitness granted by the High  Court  of Bombay  under Article 134(1) (c) of the  Constitution.   The facts  giving rise to the appeal are few and may be  briefly stated as follows. On 4th October 1968 at about 5 p.m. the appellant was  found standing  near  I the crossing of Yusuf Meherally  Road  and Abdul  Rahman  Street adjoining Crawford Market  in  Bombay. The movements of the appellant excited the suspicion of  PSI Bhambre  and Police Constable Vithal Bapu Kamble,  who  were passing along that way to make inquiries in connection  with some  other  matter,  and  they  accordingly  accosted   the appellant  and  asked him why he was  standing  there.   The appellant replied that he was waiting for a friend. But that answer did not satisfy the,officers  and suspecting  that there was something fishy, theythe appellant  in     the presence of panchas. In the course ofthe search two paper packets were found, one in each trouser pocketof     the appellant  and  each packet contained ten brand  new  wrist- watches  of  Sandoz manufacture.  These  wrist-watches  were quite  expensive and their value came to over  Rs.  2,000/-. The appellant was asked as to how he came into possession of these  wristwatches, but he was not in a position to give  a satisfactory explanation.  The Police officers, there. fore, took  the appellant to the police station and later  charged him  with an offence under section 124 of the Bombay  Police Act,  1951 in the Court of the Presidency  Magistrate  V.T., Bombay. The  learned Presidency Magistrate found on the evidence  on record  that  there was reason to believe  that  the  wrist- watches  found  from the possession of  the  appellant  were either  stolen property or property  fraudulently  obtained, and  since  the explanation given by the appellant  for  his possession was inconsistent and unsatisfactory, the  learned Presidency Magistrate held that the appellant was guilty and convicted him of the offence under section 124 and sentenced him to suffer rigorous imprisonment for. three months and to pay  a  fine  of Rs. 100 or in default  to  suffer  rigorous imprisonment for a further period of fifteen days. The  appellant appealed against the order of conviction  and sentence  to the High Court of Bombay.  The appeal  came  up

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

for hearing before a Single Judge of the High Court, namely, Kamat,  J. The learned Judge was of the view that there  was reason  to  believe  that the  wrist-watches  found  in  the possession  of  the appellant’ were  smuggled  property  and hence property fraudulently obtained and since there was  no satisfactory explanation forthcoming from the appellant, the order   of  conviction  and  sentence  passed  against   the appellant  was  proper.  But the attention  of  the  learned judge was drawn to a decision of another Single Judge of the High  Court, namely, Vimadalal, J. in Pratap Baburao v.  The State of Maharashtra(1) where a view had been taken that  in order to attract the, applicability of section 124 what  was necessary  was that there should be reason to  believe  that the  property in question was fraudulently obtained  by  the accused.   Now, if this decision were right, then  obviously the appellant would 586 be,  entitled to be acquitted and the order  of  conviction, and sentence passed against him would be bad because on  the material  on  record it would not be possible  to  say  that there  was  reason  to believe that  the  wristwatches  were fraudulently obtained by the appellant.  The learned  Judge, however,  found himself unable to agree with the view  taken by Vimadalal, J., and being of the opinion that on a  proper construction  of section 124, the only matter in respect  of which  the Court was required to have reason to believe  was that   the   property  was  stolen  property   or   property fraudulently obtained and not that the property should  have been  stolen or fraudulently obtained by the  ,accused,  the learned Judge referred the appeal to a Division Bench. The appeal thereafter came up for hearing before a  Division Bench  of  the High Court consisting of Palekar  and  S.  K. Desai, JJ.  The Division Bench disagreed with the view taken by   Vimadalal,   J.,   and  held   that   "The   expression ’fraudulently obtained’ like the other juxtaposed expression ’stolen’  in  that same section is the attribute,  stamp  or character  of  the  ’property’ found in  the  possession  of accused.  If  the property in his possession is  capable  of being   described   as  ,stolen   property’   or   ’property fraudulently  obtained’  by whomsoever it  might  have  been stolen or fraudulently obtained, that would be sufficient to comply with the requirements of the section".  The  Division Bench  pointed out that "the section does not speak  of  the accused  obtaining possession of the  property  fraudulently but  of property ’fraudulently obtained"’.  On the  material on record, the Division Bench held that there was reason  to believe that the wristwatches found in the possession of the appellant   were  smuggled  watches  and  hence  they   were "property fraudulently obtained" within the contemplation of section 124.  The Division Bench then proceeded to  consider the  explanation  given by the appellant in  regard  to  his possession of the wrist-watches and taking the view that the explanation was unsatisfactory and the appellant had  failed to  account satisfactorily for the possession of the  wrist- watches,  confirmed  the order of  conviction  and  sentence passed  against  the appellant.   ’The  appellant  thereupon applied for a certificate for leave to appeal to this  Court under Art. 134(1)(c) of the Constitution and since the  case involved  a  question  relating  to  the  interpretation  of section  124,  the High Court granted  the  certificate  and hence the present appeal. The  main question that was argued before us related to  the true  interpretation of section 124.  That section reads  as follows :               "Whoever  has in his possession or conveys  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

             any  manner,  or  offers  for  sale  or  pawn,               anything  which there is reason to believe  is               stolen   property  or  property   fraudulently               obtained,  shall, if he fails to  account  for               such possession or to act to the  satisfaction               of  the Mastrate, on conviction,  be  punished               with imprisonment, for a term which may extend               to three months or with fine which may  extend               to one hundred rupees or with both." It  is  apparent, on a plain reading of this  section,  that there are three ingredients which must be satisfied in order to attract the applicability 587 of  the  section  and bring home  the  offence  against  the accused.   The  first  is that the accused must  be  in  the possession  of the property or be must have conveyed  it  in any  manner or offered it for sale or pawn to the second  is that the property must be one in respect of which the  Court has  reason to believe that it is either stolen property  or property  fraudulently  obtained and the third is  that  the accused must be unable to account for his possession or  act to  the  satisfaction  of the Magistrate.   If  these  three ingredients are satisfied, the accused would be liable to be convicted of the offence under the section. Now, in the present case, twenty brand new wrist-watches  of Sandoz  manufacture  were  found in the  possession  of  the appellant and the first ingredient was satisfied.  The  case of  the prosecution in regard to the second  ingredient  was that  there was reason to believe that  these  wrist-watches were  smuggled  property and  hence  "property  fraudulently obtained"  and  it was this case which was accepted  by  the High  Court.   The  appellant contended  that  even  if  the wristwatches were smuggled goods, they could not be said  to be  fraudulently  obtained  and in any event  there  was  no evidence to show that they were fraudulently obtained by the appellant  and the prosecution case in regard to the  second ingredient was, therefore, not established.  Now, there  can be  no  doubt that there was reason to  believe  that  these wrist-watches were smuggled goods.  The High Court has given cogent  reasons  for taking this view and we are  wholly  in agreement  with  those reasons.  It is significant  to  note that the appellant was not a dealer in wrist-watches and yet he  was  _found  in possession of twenty  brand  new  wrist- watches  of foreign manufacture tucked away in  his  trouser pockets.   When  called upon to explain, he  was  unable  to state  as  to how he came into possession  of  these  wrist- watches.   These  circumstances  are  sufficient  to  create reasonable  belief  that these wrist-watches  were  smuggled property.  The next step logically flowing from this premise would be that these wristwatches were fraudulently obtained. It  can  hardly be disputed that when anything  is  imported into  the  country clandestinely in violation of  import  or customs  regulations, it is fraudulently obtained, that  is, obtained by committing a fraud on the regulations.  Smuggled goods  are  clearly goods fraudulently  obtained.   But  the question   is  whether  in  order  to  satisfy  the   second ingradient these wrist-watches must be fraudulently obtained by  the accused or it is enough that they  are  fraudulently obtained by some one else by smuggling and then have reached the hands of the accused.  If we look ’at the plain Ian  age of  the  section,  it  is  clear  that  it  stops  short  at describing  the  property as "stolen  property  or  property fraudulently  obtained" and does not go on to add the  words "by him".  If the intention of the legislature were that the property  should be stolen or fraudulently obtained  by  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

accused,  then  nothing  would  have  been  easier  for  the legislature  than to use appropriate words, such as  "stolen property or property fraudulently obtained by him".  In fact that  could not be the intention of the legislature  because if the property were stolen or fraudulently obtained by  the accused,  that would be a distinct and  independent  offence under the Indian Penal Code or the Customs Act or the Import and Export Control Act and it would not be necessary to make it  an  offence over again under section 124 of  the  Bombay Police Act.  The words "stolen property or 588 property fraudulently obtained" merely denote the attribute or characteristicof  the  property. If  the  property  is capable  of  being  described  a  A’   stolen  property"  or "property fraudulently obtained" by whomsoever it mighthave  been stolen or fraudulently  obtained,  that would be sufficient tocomply with the requirements of the section.  The section merely speaks of the character of  the property-whether it satisfies the particular description and does  not  say  by  whom  it  should  have  been  stolen  or fraudulently  obtained.   The theft      or  the  fraudulent obtaining  of the property may be by any person.  It is  not the  act of stealing or fraudulent obtaining that is  sought to  be hit by the section.  For that there are  other  laws, such  as  the  Indian Penal Code, the Customs  Act  and  the Import  and Export Control Act.  Here, it is the  possession by  the  accused of property which bears  the  attribute  or characteristic    of   "stolen   property"   or    "property fraudulently obtained" that is made penal.  The Court  while dealing  with  a case under section 124 is,  therefore,  not concerned to inquire whether there is reason to believe that the  property  was  stolen or fradulently  obtained  by  the accused.  The only inquiry which the Court is called upon to make  is whether on the material on .record there is  reason to believe that the property found in the possession ,of the accused can be described as " stolen property"-or  "property fraudulently obtained," whoever may be the person who  stole it  or fradulently obtained it.  There can be no doubt  that in  the  present case on the material on  record  there  was reason  to  believe  that these wristwatches  found  in  the possession  of  the appellant  were  "property  fraudulently obtained" and the second ingredient was, therefore,  clearly satisfied.  So far as the third ingredient is concerned,  it is clear that the explanation given by the appellant for his possession of these wristwatches was unsatisfactory, and the High  Court was right in taking the view that the  appellant had  failed  to account for his possession of  these  wrist- watches to the satisfaction of the Court. We  must, therefore, hold that all the three ingredients  of section  124  were  satisfied in the present  case  and  the appellant  was  rightly convicted under  that  section.   We accordingly dismiss the appeal. IV.P.S. Appeal dismissed. 589