Patna High Court
State vs Amrit Lal on 11 November, 1952
Equivalent citations: AIR1954PAT119
JUDGMENT Ahmad, J.
1. This is an appeal by the State against an order of acquittal, dated 10-1-1951, passed in appeal by Mr. S. B. Sengupta, Sessions Judge, Furulia. The trial Court had convicted the respondent Amrit Lal Seth under Section 7 read with Section 17, Essential Supplies (Temporary Powers) Act, 1946, read with Clause 3 of the Bihar Cotton Cloth and Yarn (Control) Order, 1943 and sentenced him to undergo rigorous imprisonment for a period of six months. He had further directed that the mill-made cloth seized from the shop of the respondent by the Supply Inspector be forfeited to the Provincial Government under Clause 11 of the Bihar Cotton Cloth and Yarn (Control) Order, 1948.
2. The prosecution case briefly stated is that on 4-8-1949, one C. U. V. Krishnamurti, an assistant in the purchasing department, Sutur, had purchased 2 1/2 yards of 'chintz' for Rs. 2/13/- at the rate of Rs. 1/2/- per yard against the mill rate of Rs. 0/7/9 per yard from a shop bearing No. 23 in Sukchi market where the respondent was a sales-
man. He reported this fact to the District Supply Officer in writing. That report is Ext. 12 on the record. Then on the order of the District Supply Officer a test purchase was arranged on 5-8-1949. On that day again C. U. V. Krishnamurti purchased 1 1/4 yards of the same 'chintz' though of different colour, at the same rate of Rs. 1/2/- per yard for a total sum of Rs. 1/6/6. On demand for a cash memo a 'chit' in the writing of the respondent, which is Ext. 2, was given to the purchaser. By the time this sale was completed the Supply Inspector along with the other officers also appeared on the scene and verified the factum of the sale of the cloth at the rate stated above. This time as well a report was given in writing to the District Supply Officer by the said purchaser regarding the purchase made by him. The shop was thereon searched and a seizure list prepared, in answer to the questions put to him by the District Supply Officer, the respondent gave statements in his own handwriting which is Ext. 3 on the record. A demand was also made from him then and there by those officers for the production of the cloth licence, stock register, cash memo, counter-foils and other papers, which the respondent failed to produce. On these allegations the respondent was prosecuted for contravening the provisions of Clause 3 of the Bihar cotton Cloth and Yard (Control) Order, 1948 and also for contravening the provisions of Clause 24 (1) of the Cotton Textile (Control) Order, 1948.
3. At the trial the following charges with two heads had been originally framed against the respondent :
"First-That you, on or about the 4th and 5th day of August, 1949 at Sukchi, P. S. Sukchi, carried on business as a dealer in cloth without possessing licence granted by the licensing authority as required under Clause 3 of the Bihar Cotton Cloth and Yarn (Control) Order, 1948 and contravened the provisions of the said clause and thereby committed an offence punishable under Section 7 read with Section 17 of the Essential Supplies (Temporary Powers) Act, 1946 read with Clause 3 of the Order named above and within my cognizance.
Secondly-That you, on or about the 5th day of August, 1949 at Sukchi, P. S. Sukchi, being a dealer of cloth and salesman of the cloth shop (No. 23 Sakchi Market) sold to P. W. 4 (C. U. V. Krishnamurty) 1 1/4 yard (Ext. III) for Rs. 1/6/6 and then realised from him higher price than the maximum price of Re. 0-11-11 1/4 (eleven annas eleven pies and a quarter) for the said piece of cloth ('chintz') as specified under Clause 22 of the Cotten Textile (Control) Order of 1948 read with Notification No. 80 Tex. 1/48 (ii) of the Textile Commissioner of India dated 2-8-48 in contravention of the provisions of Clause 24 (1) of the Cotton Textile (Control) Order, 1948 and thereby committed an offence punishable under Section 7/17 of Essential Supplies (Temporary Powers) Act. 1946 read with Clause 24 (1) of the Cotton Textile Control Order, 1948 and within my cognizance.
And I hereby direct that you be tried by the said Court on the said charge."
4. At the close of the trial, however, as it appears from the judgment of the trial Court, the charge for contravening Clause 24 (1) of the Cotton Textile (Control) Order, 1948 was withdrawn by the learned Magistrate under Section 240, Criminal P. C. In his judgment he has observed :
"With regard to the other charge, viz., for contravening Clause 24 (1) of the Cotton Textiles (Control) Order, 1948, I should say that the accused is very fortunate inasmuch as I find now that proper sanction has not been accorded by the Provincial Government to the accused's prosecution under the said clause as is required under Clause 35 of the said Order,"
5. He has with respect to that charge concluded by saying :
"At this stage I have no option but to withdraw the charge under Section 240, Cr. P. C."
But on the first charge, however, the learned Magistrate found the respondent guilty and convicted him as stated above. It may be stated here that the State has not taken any step so far against the order passed by the learned Magistrate withdrawing the second charge.
6. The defence taken by the respondent is that he is neither a dealer nor a licensee nor a salesman and that he was then only acting in the shop in place of his friend, who was absent due to illness, and was merely carrying on the business according to the direction given to him regarding the price. It was further alleged that that shop was a licensed one and the licence was in the name of Dayabhai & Co., of which no doubt the respondent is one of the partners. That licence had been cancelled only a short time back on 11-5-1949, and, therefore, it was pleaded that as the licensee had not been given any specific time for disposing of the old stock so the same was being sold till then. It is admitted by the prosecution that the licensee was not given any specific time to dispose of its stock by the Sub-divisional Officer's office under the provisions of Sub-clause (3) of Clause 5 of the Bihar Cotton Cloth and Yarn (Control) Order, 1948. It is also an undisputed fact that the respondent or the licensee had not applied for time or for permission to dispose of the stock in hand on the date of the cancellation of the licence. Therefore, it was contended that as 4th and 5th August, 1949, from the date of cancellation, namely, 11-5-1949, fell within six months as stipulated by Sub-clause (3) of Clause 5 of the Bihar Cotton Cloth and Yarn (Control) Order, 1948, there was no contravention on the part of the respondent in selling the cloth out of the old stock on that date.
7. In order to fully appreciate the last contention of the defence, I may quote here the relevant clauses of the Bihar Cotton Cloth and Yarn (Control) Order, 1948. Clause 3 of that Order reads "Save as provided in Sub-clause (3) of Clause 5, no person shall, after the commencement of this Order, carry on business as a dealer except under and in accordance with the terms end conditions of a licence granted by the licensing authority in Form B."
Clause 5 is a long one having different sub-clauses. The first sub-clause gives powers to the District Magistrate for reasons to be recorded in writing to suspend or cancel the licence of a retail dealer or a hawker, if he is satisfied that the licensee (sic) has contravened any of the provisions made in, or the directions or conditions of the licence issued under this Order. The Sub-clause (3) of Clause 5 deals with the rights and obligations of the person whose licence has been cancelled and who is no more in possession of a licence. It reads:
"Any licensee whose licence is cancelled under Sub-clause (1) or Sub-clause (2) shall be entitled, up to a date fixed by the officer cancelling the licence being a date not later than six months after the date when his licence is cancelled, to sell or otherwise dispose of in accordance with the provisions of this order any cloth or yarn which was in his possession on the date on which his licence was cancelled. Provided that in construing the provisions of this Order for the purposes of this clause, a reference to the licensee in Clauses 6, 7, 8, 9 and 10 shall be deemed to include a reference to a licensee whose licence has been cancelled under Sub-clause (1) or Sub- Clause (2)."
8. This Sub-clause (3) of Clause 5 contemplates a contingency that when a licence has been cancelled but the person whose licence has been, cancelled still holds some stock in hand then he may dispose of that stock within the period of six months from the date of the cancellation of his licence or within a shorter term if that period has been reduced by the officer cancelling the licence. In this view of the matter, Clause 3 when read with Sub-clause (3) of Clause 5, as contemplated by its opening words, means that even a person whose licence has been cancelled, is after its cancellation a person without licence, though he had a licence in the past, and that he is equally hit by the mischief of Clause 3, unless it is proved that what he is alleged to have done is in accordance with the terms and conditions of Sub-clause (3) of Clause 5. What Mr. Baldeva Sahay appearing for respondent has, however, contended is that Clause 3 is completely independent of Sub-clause (3) of Clause 5 and the case of one whose licence has been cancelled under Clause 5 or under any other clause is not hit by Clause 3. According to him Clause 3 deals with the case of a person who had never a licence and not with that of one who had once a licence but whose licence has been subsequently cancelled. I think this contention is not borne out by the words used in Clause 3. It is clear on the mere reading of the Clause that if a person whose licence has been cancelled, may be even under Clause 5, and if he is disposing of the old stock not in accordance with the terms and conditions of Sub-clause (3) of Clause 5, he is hit by Clause 3. Therefore, if a person stands charged under Clause 3 of the Order, and he proposes to justify his action under the terms of Sub-clause (3) of Clause 5, he has to prove that the sale was in accordance with all the conditions laid down therein. In this case the charge is under Clause 3 and the defence set up by the respondent is that his case is covered by Sub-clause (3) of Clause 5. The onus in that circumstance is on him to prove that his case fulfils all the terms and conditions of Sub-clause (3) of Clause 5.
9. Now the terms and conditions which appear to have incorporated in Sub-clause (3) of Clause 5 are, I think, three. Firstly, the date of sale must be within six months from the date of the cancellation of the licence or any shorter term that has been fixed by the officer cancelling the licence within the statutory period of six months. Secondly, that the cloth which is the subject matter of charge must be from the stock which was in his possession on the date on which the licence1 was cancelled. Thirdly, the sale as contemplated by the proviso to Sub-clause (3) of Clause 5 is in accordance with the terms incorporated in Clauses 6, 7, 8, 9 and 10. Learned Standing Counsel for the State has, however, contended that over and above these three conditions such a person should also secure a sanction for the selling of the old stock from the officer cancelling the licence and unless such sanction has been obtained by him he cannot exercise the right given to him for selling the old stock. This implies that the officer cancelling the licence may not only reduce the statutory period of six months for selling the old stock but also that it is in his discretion to allow or not to allow such a person to sell the stock in hand. I think this contention is not supported by the wording of the clause. The right given to the licensee, whose licence has been cancelled, in the matter of selling the stock in hand is, I think, an automatic consequence of the cancellation and does not depend on any consideration or discretion to be exercised by the officer cancelling the licence. All that the officer cancelling the licence can do in this respect is to reduce the statutory period of six months to any shorter period and then that person has to dispose of the old stock only within that shorter period, if any has been in fact fixed. It would further appear from the language of the sub-clause that this right given to the officer cancelling the licence to reduce the statutory period of six months for the exercise of the right given to the person whose licence has been cancelled for the sale of the old stock in hand is to be exercised by the officer when the licence is cancelled. In case, therefore, if the officer cancelling the licence does not choose to exercise this right and does not reduce the statutory period of six months for the sale of the old stock when he is cancelling the licence, the person whose licence has been cancelled does then, I think, get full statutory period of six months to exercise his right of selling the old stock in hand. In this case it is an admitted fact that the statutory period of six months had not been reduced to any shorter term Therefore, so far as the question of time is concerned, the first condition given in Sub-clause (3) of Clause 5 is no doubt complied with as the dates on which the respondent is alleged to have been selling the old stock, namely, 4th and 5th August, 1949, fell, within six months from the date of the cancellation of the licence, that is, 11-5-1949, and the view taken by the learned Sessions Judge in this respect is correct.
10. The second condition to be complied with is that the cloth which is alleged to have been sold in this case should have been from the stock which the respondent was in possession on the date on which the licence was cancelled. On this point the learned Sessions Judge has found :
"It is true that the appellant has not led any evidence to prove that the cloth which he was selling on 4-8-49 and 5-3-49 was out of his old stock. The prosecution has also not led any evidence to show that the cloth which he was selling had been acquired by him after the cancellation of his licence. Prom the circumstances of the case, the defence of the appellant that ho was selling cloth out of his old stock is probably true and the appellant is entitled to benefit of doubt on this point."
This finding of the learned Sessions Judge has not been challenged in appeal before us nor any material has been brought to our notice which can lead to the inference that the finding given by the learned Sessions Judge is wrong. Therefore, I think, what the respondent was selling on the dates alleged was out of the old stock which was in his possession on the date on which the licence was cancelled. Therefore, the second condition given in Sub-clause (3) of Clause 5 is also fulfilled.
11. The third condition as stated above is one given in the proviso attached to that clause. One of the conditions given in the clause is that he shall sell the old stock not only within the statutory period but according to the terms and conditions given under different clauses including Clause 9. Sub-clause (1) of Clause 9 says:
"No licensee shall sell cloth or yarn at a price higher than that fixed by the Controller."
The contention of the learned Standing Counsel on this point is that the respondent has not given any evidence to the effect that he was selling he 'chintz' according to the terms of Sub-clause (1) of Clause 9. On the other hand, according to him, there is sufficient evidence on the record to prove that the rate of Rs. 1/2/- per yard at which the respondent was selling the 'chintz' was beyond the price fixed by the Controller. In this connection he has drawn our attention to the statement of the respondent given in writing, which is ext. 3 on the record. It reads:
"I sold 2 1/2 yards of Printed Chhit No. 0635 Tex No. 3. April 1949 to Mr. C. U. V. Krishnamurty (identified) at the rate of Rs. 1/2/0 per yard the control rate of which, is Rs. 0-7-9 per yard Ex-Mill price.
Today again I have sold 1 1/4 yard of Printed Chhit to Mr. C. U. V. Krishnamurty in presence of his friend Mr. K. S. Murty at the rate of Rs. 1/2/0 per yard against the control rate of Rs. 0-7-9 per yard Ex-mill."
The defence contention on the other hand in this connection is that there is no evidence on the record to prove that the rate of Rs. 0-7-9 per yard ex-mill was the price fixed by the Controller as defined by Sub-clause (2) of Clause 2 of the Order. If, however, it is proved that the rate of Rs. 0-7-9 per yard ex-mill price for this stuff was the price fix-ed by the Controller then the sale of the old stock by the respondent, even if it is proved to be within the period given to him under Sub-clause (3) of Clause 5, is not consistent with the terms of the proviso attached to that clause. Therefore, it was contended by the learned Standing Counsil that in this view of the case the order of acquittal passed by the learned Sessions Judge is wrong in law. No doubt the onus is on the respondent to prove that this third condition was as well complied with, i.e. the sale made by him was in accordance with the terms of different clauses including Clause 3 given in Sub-clause (3) of Clause 5 as he in his defence is justifying an act alleged against him which is an offence according to the terms of Clause 3. This is more so because of the provisions contained in Section 15, Essential Supplies (Temporary Powers) Act, 1946. It says:
"Where any person is prosecuted for contravening any order made under Section 3 which prohibits him from doing an act or being in possession of a thing without lawful authority or without a permit, licence or other document, the burden of proving that he has such authority, permit, licence or other documents, shall be on him."
12. In this respect, I think, the respondent has completely failed and he has not proved that the 'chintz' which he was selling, though within the statutory period given under Sub-clause (3) of Clause 5, was in accordance with the terms of Clause 9. Therefore, his plea of justification on the ground that what he is alleged to have done is permissible under the terms of Sub-clause (3) of Clause 5 has not been established fully, at least with regard to the terms given in the proviso attached to Sub-clause (3) of Clause 5. This aspect of the case has not been considered by the Courts below nor any finding has been given by the appellate Court to the effect that the sale of cloth by the respondent was not only within the statutory period under Sub-clause (3) of Clause 5 but also that that selling was in conformity with the provisions of Clause 9. In this view of the case. I think, it has been rightly contended by the learned Standing Counsel that the order of acquittal passed by the learned Sessions Judge is not legal. But as the Courts below have failed to take into consideration this aspect of the case and the respondent as well did not think it necessary, though wrongly, to concentrate on that point, I do not think it would be fair to the respondent to dispose of the case finally at this stage without giving a chance to him to prove that not only he was selling the cloth from his old stock within the statutory period as contemplated by Sub-clause (3) of Clause 5 but also that he was doing that in accordance with the terms of Clause 9 as well, and therefore, he could not be convicted on the charge framed under Clause 3 of the Order, For the reasons stated above, the proper course left open to us in the interest of justice is to remand the case back for a retrial.
13. Mr. Baldeva Sahay submits that in the circumstances stated above the order of retrial is not justified. I think this argument has got no substance. The order of retrial in a case like this is fully supported by the principle laid down by their Lordships of the Privy Council in the case of -- 'Sheo Swarup v. King Emperor', 1934 PC 227 (2) (A). Therein their Lordships have observed:
"There is in their opinion no foundation for the view, apparently supported by the judgments of some Courts in India, that the High Court, has no power or jurisdiction to reverse an order of acquittal on a matter of fact, except in cases in which the lower Court has 'obstinately blundered,' or has 'through incompetence, stupidity or perversity' reached such 'distorted conclusions as to produce a positive miscarriage of justice,' or has in some other way so conducted itself as to produce a glaring miscarriage of justice, or has been tricked by the defence so as to produce a similar result.
Sections 417, 418 and 433 of the Code give to the High Court full power to review at large the evidence upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be reversed."
14. The appeal is accordingly allowed and the case remanded for a retrial.
Narayan, J.
15. I agree. The Courts below do not seem to have appreciated the import of the saving clause in Clause 3 and the proviso to Sub-clause (3) of Clause 5 and the case has to be retried and disposed of according to law with due regard to these provisions.