04 March 1970
Supreme Court







DATE OF JUDGMENT: 04/03/1970


ACT: Bihar Foodgrains Dealer’s Licensing Order, 1966, Para, 3(2)- Presumption  front storage of foodgrains when to  be  drawn- Exemption for agriculturists. Evidence Act, 1872-Lease-deeds even if not registered can be used  in criminal case for collateral purpose-Oral  evidence not  to be rejected on mere ground that it is  of  next-door neighbours.

HEADNOTE: On  search  of  the appellant’s  premises  foodgrains  above quantities  permitted  under the  Bihar  Foodgrain  Dealer’s Licensing Order 1966 were found.  He was prosecuted under s. 7 of the Essential Commodities Act for violation of cl. 3 of the  Order.   The appellant produced  oral  and  documentary evidence to show that he was an agriculturist and  therefore the  presumption  tinder cl. 3(2) of the order that  he  had stored  the foodgrains for sale could not be  drawn  against him.  The documentary evidence aforesaid consisted of  lease deeds executed by the appellant and his brother in favour of lessees.  The oral evidence showed that he, and his  brother were  in  possession of 80-90 bighas of land  on  which  the foodgrains   found  in  his  possession  were  grown.    The documentary evidence was rejected by the trial magistrate on the  ground that the lease deeds not being  registered  were not admissible in evidence under s.. 49 of the  Registration Act.   The  Sessions Judge in appeal did not  ’rely  on  the lease-deeds  for  the reason that such  documents  could  be brought  into  existence  at  any  time.   Both  the   trial magistrate and the Sessions Judge rejected the oral evidence as unreliable because it was given by persons who were  next door  neighbours and as such interested in  the  appellant.. The appellant’s revision petition before the High Court  was summarily  rejected.  By special leave he appealed  to  this Court. HELD  :  (i) Cl. 3(2) of the Order expressly  excludes  bona fide consumers and agriculturists from the presumption to be drawn  from proof of storage only.  It is obvious  that  the sub-clause  speaks of storage for sale as a dealer  although the  words  ’as a deal&’ are not there because  storage  has reference to business as a dealer and that is the essence of the  order.   The fiction in the second sub-clause  must  be carried to its, logical conclusion. [902 B] ii)  No  doubt the lease-deeds were not registered but in  a criminal case it had to he seen whether they were genuine or not  and whether, an inference of innocence could be  based’ on  them They served the collateral purpose of showing  that the  lands about which the witnesses spoke orally were  held by him for purposes of-cultivation. [902 D]



(iii)  There  is no reason why the evidence of a  next  door neighbour  should  be  rejected unless  there  is  something intrinsically wrong with it. [902 E-F] (iv)The  total  circumstances in the case  showed  that  the appellant  was in fact carrying on agricultural  operations. He  executed a number of lease-deeds, produced receipts  and proved by or a evidence that he 900 was an agriculturist.  In his case therefore the presumption under cl. 3(2) could not be drawn.  If that presumption  was not  drawn, the case against him stood unproved  because  of the exemption which agriculturists enjoy. [902 F-G] The appeal must accordingly be allowed. Manipur  Adminisration  v. M. Nila Chandra Singh,  [1964]  5 S.C.R.574.     referred to and explained.

JUDGMENT: CRIMINAL  APPELLATE JURISDICTION: Criminal Appeal No. 40  of 1968. Appeal  by special leave from the judgment and  order  dated January  23,  1968  of  the Patna  High  Court  in  Criminal Revision No. 91 of 1968. D.   P.  Singh, D. N. Mishra and Govind Das, for the  appel- lant. R. C. Prasad, for the respondent. The Judgment of the Court was delivered by Hidayatullah,  C. J. On May 28, 1966, Bhola  Prasad  Mandal, Supply  Inspector Pathargama with other officers searched  a godown belonging to Nagarmal Tekriwal (appellant) and  found stored therein 45 quintals of rice, 90 quintals of paddy, 5- 50  quintals  of grains, 3 quintals of  wheat,  one  quintal Arhar  and  207 quintals of Khesari together  with  weighing scale and weights and measures.  As Nagarmal did not possess a  licence  under the Bihar  Foodgrains  Dealer’s  Licensing Order, 1966, he was prosecuted under s. 7 of the  Essential- Commodities Act for violation of cl. 3 of the order.  He was convicted   by  the  Munsif  Magistrate,  First  Class   and sentenced  to undergo rigorous imprisonment for six  months. The foodgrains found in his possession were also ordered  to be  forfeited to the State.  He appealed  unsuccessfully  to the Sessions Judge, Santhal Parganas, Dumka and his revision in  the High Court was summarily dismissed.  He now  appeals by special leave granted by this Court. The   defence   of  the  appellant  was  that  he   was   an agriculturist  and that the foodgrains were grown by him  on the  lands he had taken on lease from various  parties.   In support  of  his defence, he produced both  documentary  and Oral  evidence.   The  documentary  evidence  consisted   of certain  lease-deeds  executed by ’him and  his  brother  in favour  of the lessors.  Oral evidence showed that  he  and, his  brother were in possession of 80-90 bighas of  land  on which  Paddy and other foodgrains found in his  pos-session, were grown, 901 The case proceeded against him on the basis of the  presump- tion under para 3 of the Order.  It may be read here               "Licensing of wholesale and retail dealers               (1)   No  person shall carry on business as  a               whole-sale  dealer  or  retail  dealer  except               under  and  in accordance with the  terms  and               conditions of a licence issued in this  behalf               by licensing authority.               (2)   For  the  purpose of  this  clause,  any



             person  other than a bona fide consumer or  an               agriculturist,  who stores any  foodgrains  in               any  quantity  shall, unless the  contrary  is               proved, be deemed to store the foodgrains  for               the purpose of sale." It  was  held  that as he had stored  foodgrains  above  the permitted  quantities  for a wholesale dealer, he  would  be regarded  as  a  wholesale dealer  within  the  order.   The defence, before us again is that he is an agriculturist  and is  not  liable to the penalty under the  law,  because  the presumption  in  his  case  cannot be  drawn.   It  is  also submitted that his case that he was an agriculturist  stands completely proved in this case. The learned Magistrate rejected the documentary evidence  on the ground that the lease-deeds were not registered and were not  admissible in evidence under s. 49 of the  Registration Act.  The learned Sessions Judge did not accept this ground; at  least  he did not say anything about it.  He  held  that such  documents could be brought into existence at any  time and  were  thus not reliable.  Both the Magistrate  and  the Sessions Judge did not accept the evidence of the  witnesses on the ground that they were interested in the appellant. Mr. B. P. Singh, in arguing the case has drawn our attention to  a ruling of this Court in Manipur Administration  v.  M. Nila  Chandra  Singh(1)  and contended  that  the  appellant cannot  be regarded as doing business as a dealer  unless  a series  of transactions by him of sale were  proved  against him.   The ruling does say that the words "carrying  on  the business"  in the context of the Act postulate a  course  of conduct and continuity of transactions.   Therulingmaynof-be applicable  in certain circumstances, as for  example  where even  a single transaction can be demonstrated to be in  the course of business.  Carrying on of business may be found in one  instance or more, depending upon the  circumstances  of the case. (1)  [1964] 5 S.C.R. 574. 90 2 However,  in the present matter we need not worry about  the ,carrying  on  of  business, because  in  our  opinion,  the appellant   -has   successfully  proved  that   he   is   an agriculturist  and the presumption under paragraph  3(2)  of the  order  cannot  be drawn against  him.   That  paragraph expressly  excludes bona-fide consumers  and  agriculturists from the presumption to be drawn from proof of storage only. It is obvious that sub-paragraph speaks of storage for  sale as a dealer although the words "as a dealer" are not  there, because  storage has reference to ’business as a dealer  and that is the essence of the Order.  The fiction in the second sub-paragraph must be carried to its logical conclusion.  In the -present case, the appellant produced a number of lease- deeds  in which leases of various parcels of land are  shows to  have been granted to him.  He also produced receipts  of payment of lease money and he cited witnesses who deposed on oath  that  he and his brother cultivated  80-90  bighas  of land.  No doubt, the lease deeds are not registered, but for the  purpose  of  a criminal prosecution,  we  have  to  see whether they are genuine or not and Whether an inference  of innocence  can  be based upon them.  In -our  judgment  they serve the collateral purpose of showing that the lands about which  the  witnesses  spoke orally were  held  by  him  for purposes  of  cultivation.  If that be so, then,  he  is  an agriculturist and it is easy to see that the evidence  which was  ’brought for-ward of witnesses deposing orally was  not concocted  to  set up a false defence.  Indeed  no  adequate reasons were given for rejecting the testimony of witnesses.



The learned Magistrate rejected the testimony of one witness on  the ground that he is the next door neighbour and has  a "soft  corner for him".  We do not know why the evidence  of the  next door neighbour should be rejected; it can only  be rejected if there is something intrinsically wrong with that evidence.  The total circumstances in the case show that the appellant was in fact carrying on agricultural  ,operations. He  executed a number of lease-deeds, produced receipts  and proved  by oral evidence that he was  an-agriculturist.   In his  case, therefore, the presumption under para 3(2)  could ,not  be drawn.  If that presumption is not drawn, then  the case  against him stands unproved because of  the  exemption which agriculturists enjoy. On  the whole, we are satisfied that his conviction was  im- properly  reached.   We allow the appeal and set  aside  his conviction.   His  bail bonds are cancelled.  The  order  of forfeiture of foodgrains is also set aside.  We are informed that  the  foodgrains  were sold.  If  any  money  has  been recovered by sale of the foodgrains, it shall be handed over to the appellant. Appeal allowed. 9 0 3