Madras High Court
Public Prosecutor vs P.C. Raju And Ors. on 30 August, 1967
Equivalent citations: (1968)1MLJ274
Author: A. Alagiriswami
Bench: A. Alagiriswami
JUDGMENT A. Alagiriswami, J.
1. The Coimbatore Central co-operative Stores was issued a permit in 1957 by the Joint Chief Controller of Imports and Exports, Madras, for the export of 520 tons of chillies to Ceylon. The purchaser in Ceylon was the co-operative Wholesale Establishment. The Board of Directors of the Coimbatore Central co-operative Stores allotted this quantity of 520 tons as follows:
Pollachi co-operative Sales Society 200 tons
Udamalpet co-operative Sales Society 200 tons
Dharapuram co-operative Sales Society 50 tons
Coimbatore co-operative Marketing Society 20 tons
Gobi co-operative Sales Society 50 tons
_________
520 tons
As against the 400 tons allotted to the Pollachi co-operative Sales Society and Udamalpet co-operative Saies Society, it is found that they exported only 3,581 bags (40 bags are equal to a ton). The Dharapuram co-operative Sales Society is said to have exported 3,628 bags. The Coimbatore co-operative Marketing-Society 5,200 bags, the Gobi co-operative Sales Society 3,210 bags, and the Karamadai Sales Society, to which no allotment was made at all, is said to have supplied 5,702 bags. The contract with the Ceylon co-operative Wholesale Establishment was for supply at the rate of Rs. 115 per cwt. The Various affiliated sales societies were to supply to the Coimbatore Central co-operative Stores at Rs. 98 per cwt. The Coimbatore Central co-operative Stores Was to purchase these chillies only from the Various affiliated co-operative Sales Societies. These societies were themselves to purchase only the chillies produced by their members, who were actually growing the chillies. This is the effect of two circulars issued by the Registrar of co-operative Societies, Madras, marked as Exhibits P-450 and P-451. Clauses 3, 4, 5, 6 and 7 (wrongly numbered as 5 and 6) and Clause 13 at pages 408 and 409 of the printed papers are as follows:
3. The entire quantity for export shall be obtained by the District Marketing Society or the Central Stores from the primary marketing societies and not from individuals or from other co-operative organisations.
4. The District Supply and Marketing Society or the Central Stores should obtain an undertaking from the primary Marketing Societies agreeing to supply only the produce actually grown by the members or the members of affiliated societies.
5. In case the quantity so procured falls short of the quota allotted to them, only such quantity should be supplied for export and the balance be surrendered to the District Marketing Societies or Central Stores. On no account the primary societies should resort to purchase from merchants or non-members or even producers living outside the area of operations of the societies.
If any portion of the allotment is surrendered the District Marketing Society or Central Stores may real lot it to some other primary marketing societies that may require additional allotment.
6. For the purpose of verification of the fact that the produce for export has been procured from the members each primary Marketing Society should maintain a register for each commodity, containing full particulars of the names of members, extent of land cultivated, whether the lands are their own or taken on lease, and the estimated yield. When the produce is actually procured from or delivered by a member, an entry should also be made in the register showing the quantity actually received in the society and the date of receipt....
7. In this business the District Supply and Marketing Societies and Central Stores will act only as agents of the primary Marketing Societies and is eligible for a commission of 5 percent, on the net sale proceeds. The entire sale proceeds iess all "incidental charges and the commission will be passed on to the primary marketing societies which supplied the produce and the primary marketing societies will in their turn, pass on the profits in the export trade to the producers after appropriating a commission of 10 per cent, on the net profits....
13. Any infringement of the conditions indicated above and any misuse of the quota or permits for export by the primary and District Marketing Societies will lead to the cancellation of the allotment of quota or permits issued. Such societies will not be allotted any quota thereafter.
Each Society (both primary marketing and District Marketing Societies) while applying for allotment to quota of export permit should give an undertaking that it will abide by the conditions now stipulated by the Registrar and those that may be imposed from time to time.
The prosecution case was that the market price at about this time was Rs. 80 per bag and that the accused as a result of conspiracy between them made it very difficult for the Pollachi Co-operative Sales Society andUdajnalpet co-operative Sales Society to supply their allotted quotas and this was done by P.W. 1, the approver, who had been appointed as what was called the Selecting Agent or his men by rejecting the produce offered by the Udamalpet co-operative Sales Society and the Pollachi Co-operative Sales Society. The prosecution case also was that P.W. 1 and his men purchased chillies in the open market at Dindigul and accused 3 and his men purchased chillies at Rajapalayam, that in the beginning they used to send it to the various places in Coimbatore district and had it sent from those places to Tuticorin in oruer to make it appear that the chillies came from the respective societies in Coimbatore district, that later finding this rather inconvenient, sent their purchases directly to Tuticorin, that the difference between the market price of Rs. 80 per cwt. and Rs. 98 per cwt. which had to be paid to the societies, was to be divided among the various conspirators and that this arrangement was in contravention of the circular of the Registrar of co-operative Societies and condition No. 7 of the Export Permit issued to the Central co-operative Stores. P.W. 1 and accused 3 are paid to have purchased 6,710 bags and 12,030 bags respectively and these open market purchases by P.W. 1 and accused 3 were sent to Tuticorin and it was made to appear in the account of the respective sales societies and the co-operative Central Stores as though they had been procured by the respective societies from their grower members and had been exported by them.
2. On these facts 12 persons were tried by the learned Additional Sessions Judge of Coimbatore. The first accused was the Manager of the Coimbatore Central co-operative Stores; Accused 2 was the Secretary of the Coimbatore Central co-operative Stores; Accused 3 was a merchant dealing in onions and chillies at Mathurai; Accused 4 was the Secretary of the Dharapuram Primary Sales Society; Accused 5 was the Secretary of the Coimbatore Primary Marketing Society at Sulur; Accused 6 was the clerk of the Sulur Society; Accused 7 was the President and Accused 8 was the clerk of the Karamadai Primary Sales Society; Accused 9, 10 and 11 were respectively the Vice-President, Secretary and Clerk of the Gobichettipalayam Primary co-operative Sales Society. Accused 12 was the power-of-attorney agent of K.M. Mohideen & Co., Shipping and Forwarding Agents at Tuticorin. Of the alleged conspirators, P.W. 1 and P.W. 2, who was a clerk of the Central Stores, turned approvers. One Venkatadasari who was the clerk of the Dharapuram Primary Sales Society died before the trial. 61 charges were framed in the case. It is unnecessary to set out at length the various charges against the various accused. Accused 6, 8 and 11 were acquitted by the learned Additional Sessions Judge. The rest were convicted under various charges and they have all preferred appeals to this Court. During the pendency of the appeal, the fourth accused, who is one of the appellants in Criminal Appeal No. 452 of 1963 died. Accused 1 to 5, accused 7, 9, 10 and 12 were found guilty on charge 2 under Section 5 of Import and Export (Control) Act of 1947; accused 1 and 2 were found guilty under charge 5 of offences under Section 477-A, Indian Penal Code. Accused 4, 5, 7, 9, 10 and 12 were found guilty under charge 6 of offences under Sections 467 and 471, Indian Penal Code. Accused 1 and 7 were also found guilty on charges, 12, 14, 16,18, 20,22, 24 and 26, under Sections 467 and 471, Indian Penal Code. The seventh accused was found guilty on charge 59 of an offence under Section 199 read with Section 193, Indian Penal Code. Accused 9 was similarly found guilty on charge 61. There are eight appeals before this Court. The State has also filed revision petition for enhancement of sentences on the Various accused.
3. The most important matter that should be mentioned at the outset is the fact that all the accused have been acquitted of the charge of conspiracy. In view of that fact, it would not be necessary to refer to the evidence regarding conspiracy in this case, though in the discussion relating to the other charges, it would be necessary to refer to some of the evidence, which would be relevant in respect of those charges as well as the charge of conspiracy. It is not even necessary to discuss elaborately the evidence with regard to many of the other charges as I will indicate later.
4. The main charge for consideration would now be charge 2. That charge reads as follows:
That you accused 1 to 12 between 20th March, 1957 and 9th April, 1958, at Coimbatore, Dharapuram, Sulur, Karamadai, Gobichettipalayam, Dindigul, Madurai, Rajapalayam and Tuticorin in pursuance of the aforesaid conspiracy contravened Clause 3 of the Exports (Control) Order, 1954, by exporting 520 tons of dried chillies from Tuticorin to Ceylon, contrary to restrictions imposed by the Madras State Government and the officers under their control and in violation of the condition 7 of the Export Trade licence, dated 22nd April, 1957, granted by the Joint Chief Controller of Exports and Imports, Madras, in favour of the Central co-operative Stores, Coimbatore and thereby committed anioffence punishable under Section 5 of Imports and Exports Control Act, 1947, and within my cognizance.
There is little doubt, as I shall show presently that a large part of the chillies exported to Ceylon was not the produce of the grower members of the various sales societies in Coimbatore district, but were purchased in Dindigul and Rajapalayam by P.W. 1 and accused 3. This part of the case is amply supported by evidence. Though the learned Additional Sessions Judge has discussed this matter elaborately with reference to the oral and documentary evidence in this point, I shall refer to the evidence in brief. In addition to the evidence of P.W. 1 on this point, there is the fact that the Pollachi co-operative Sales Society and Udamalpet co-operative Sales Society which had been allotted 200 tons each found it Very difficult to supply any chillies because of the action of P.W. 1 or his men in rejecting the chillies sought to be supplied by these societies. The matter went to such length that Mr. Mahalingam, M.L.A. had to write a letter Exhibit P-878, dated 12th June, 1957 to the President of the Coimbatore Central co-operative Stores. P.W. 105 enclosing a copy of the petition from Section K. P. Kaliappa Gounder P.W, 138 and another T. Venkatakrishna Naicken in which personal allegations had been made against accused 1, that accused 1 and the selection agent P.W. 1 were putting pressure upon the grower members of their society to accept their terms, that is, to pay them, at Rs. 3-12-0 per maund if the goods supplied by the members.were to be selected and accepted. It is in evidence that in the first instance only about 24 tons were accepted from the Pollachi co-operative Sales Society and after complaints were received from the said society about 61 tons were exported from this Sales Society. That was because the office bearers of those two societies were not willing to go along with P.W. 1 and accused 1 in the arrangement which they proposed. The Udamalpet co-operative Sales Socoity got so much frustrated by P.W. 1 and his men rejecting the goods available with them that they refused to have anything to do with the export of chillies. Exhibit P-868 is the letter from the Udamalpet co-operative Sales Society stating that out of 50 samples of chillies only six were selected by the representative of the forwarding agent as fit for export. In a letter addressed to the Deputy Registrar of co-operative Societies a copy of which is Exhibit P-867, that society had given as the reason that the representative who selects the stuff is himself a merchant and so his selection has been unfair.
5. Then there is the fact that Karamadai Sales Society, though no allotment had been made at all to it, supplied 142 tons. There was not even a letter from that society accepting to supply any chillies, even though a copy of the circular Exhibit P-492 was sent to them. Dharapuram Co-operative Sales Society offered to supply only 5 tons (see Exhibit P-496, dated 29th March, 1957). They presented a bill Exhibit P-783 for the value of 61 and a quarter tons and it ultimately came to supply 92 tons. The Sulur Society was allotted only 20 tons. But the second accused sent a letter Exhibit P-810 allotting an additional quota of 65 tons. Gobi co-operative Sales Society exported 80 tons as against the 50 tons which were allotted to it T the report submitted by C.W. 1 Exhibit P-2403 as early as 29th August, 1957, he had pointed out that many irregularities had been committed, that the Coimbatore Central co-operative Stores had employed P.W. 1 and in conspiracy with the various societies 17,700 bags of chillies belonging to P.W. 1, had been managed to be exported to Ceylon, passing them as collected from the societies. The third accused when examined before Sessions Court practically admitted the truth of the prosecution evidence in respect of the purchases and despatches. The Karamadai Sal Society which as already mentioned had not been officially allotted any quota and which did not offer to supply suddenly supplied 4,720 bags in three days in separate despatches. The evidence on record shows that Karamadai Soc' t could not have really despatched so many bags. P.W. 1 gave evidence about purchases in Dindigul and their despatch to Tuticorin. There are the bills Exhibit P-207 to 304. His evidence is supported by P.W. 55, who was attached to the tharagumandy of A. Soudappa Goundar and S.P. Kaliappa Goundar, and by the evidence of P.W. 56 who was attached to A.R.S.M. Somasundaram Pillai Tharag5 Mundy, Dindigul, P.Ws. 62, 64, 65, 70 and 71 speak to the sale transactions covered by bills Exhibits P-247, 248, 256, 262 and 268. P.W. 63, a clerk in the Mundv of Perumal Goundan speaks to the sale of 30 bags under Exhibit P-299 to P.W. 1 P.W. 68 speaks to the transactions covered by the printed bill Exhibits P-201 and 292. The purchases in Rajapalayam by accused 3 are spoken to by P.W. 67 who runs a commission mundy at Rajapalayam, about the sale transaction under Exhibit P-2212 which is the entry found in the name of accused 3 at page 37 of Exhibit P-2213, P.W. 69 who is running a commission mundy at Rajapalayam also gave evidence in regard to this purchase. P.W. 75 a broker at Rajapalayam who was assisting P.W. 118 an employee of accused 3, deposed that P.W. 93 brought P.W. 118 and requested him to introduce him to the mundies dealing in chillies at Rajapalayam and that accordingly, he introduced P.W. 118 to some of the mundies. He also proved the sale transactions as per Exhibit 2245 to 2248 in the mundv of Ramaswamy Raja whose partner was Sankararaja. P.W. 74 another commission mundy merchant of Rajapalayam spoke to the sale covered by the original of Exhibits P-2244 to P.W. 118 for accused 3. In addition, the purchases at Rajapalavam are admitted by accused 3 himself as also his employee P.W. 118 and his son-in-law P.W. 119. In regard to purchases in Dindigul there was also the evidence of P.Ws. 76, 77, 102 and 103, the employees of P.W. 11. There was ample evidence in the form of Exhibits P-131 to 165, 166 and 167, which showed the despatch of these purchases to Tuticorin. There was the fact that Dharapuram Co-operative Sales Society despatched 12 lorry loads on 26th April, 1957 and 27th April IOK7 even before that society had received the circular letter Exhibit P-20. These 12 lorries carried 2,450 bags. According to P.W. 80 out of these 12 lorries, three came from Rajapalayam. Then there was the evidence that as far as Karamadai Sales Society is concerned, that no chillies of the requisite quality is grown there. It is on that basis that no allotment seems to have been made to that society. As already mentioned the circular Exhibit P-498 was not even communicated to the Karamadai Sales Society. P.W. 66, Revenue Inspector gave evidence that registered grower like accused 7 and his brother could not have grown and supplied the chillies indicated against their names in Exhibit P-1313. There was evidence that no chillies were grown in Survey field 137, 151 and 152 thus showing that the entries relating to accused 7 in Exhibit P-1313 are fictitious entries. We have other documents, which are more or less admissions by one or other of the accused. There is Exhibit P-389 to which accused 3 is a party. The statements made by accused 3 support much of the prosecution case. The letters and notices issued by P.W. 1, also broadly support the evidence of P.W. 1. Then there is the note submitted by accused 2 Exhibit P-883, whether it was submitted on 24th June, 1957 as claimed by accused 2 or in 1958 as mentioned by the President of the Coimbatore Central Co-operative Stores, P.W. 105. The tatement found in this note considerably supports the prosecution ce.se with regard to the purchase and despatch of these chillies from Dindigul and Rajapalayam. Thus, the evidence in support of the prosecution case about the purchase and despatch of chillies from Dindigul and Rajapalayam consists of evidence of the purchases at those places and their despatch to Tuticorin, the evidence about the fact that these chillies could not have been grown within the area of the societies, which are supposed to have despatched them, that in some cases, the despatches were made even before societies themselves got the circular letter asking them to supply, that two societies which had been allotted the major part of 520 tons were effectively prevented from exporting large quantities because their office-bearers were not prepared to go along with the accused and the quantity thus saved was purported to have been allotted to the other societies, the office-bearers of which were prepared to go along with the accused and that the society, which has not even been made any allotment and which had not offered to make any export that is, Karamadai Sales Society, is supposed to have exported the largest quantity. I have referred only to some pieces of evidence and not exhaustively on this point. These amply bear out the conclusion of the learned Additional Sessions Judge that the major part of the chillies which were exported to Ceylon, were not the produce of the grower members of the various Sales Societies in Goimbatore district, but were purchased in Dindigul and Rajapalayam by P.W. 1 and accused 3 and exported to Ceylon, as though they were ., the produce of the grower members of the various Sales Societies in Coimbatore district. I am completely satisfied with the conclusions arrived at by the learned Additional Sessions Judge, on this point. There seems to be little doubt that the various accused, taking advantage of their positions have used P.W. 1 and accused 3 for purchases of chillies in Dindigul and Rajapalayam and they have made it appear as though they were the produce of the grower members of the various Sales Societies in Goimbatore district. That they should have made considerable sums of money by this process is also obvious. Their profits would probably have been considerably higher and the fraud perpetrated by them might not have been come to light, but for the fact that the Ceylon co-operative Wholesale Establishment made a cut in the amount to be paid for the chillies exported to Ceylon and this resulted in diminishing the amount available for distribution among the various persons concerned; P.W. 1 being particularly bit hard. But even so, the question remains whether any offence has been committed by the accused which is punishable under law.
6. Section 5 of the Imports and Exports (Control) Act, 1947, reads as follows:
5. Penalty. - If any person contravenes, or attempts to contravene, or abets a contravention of, any order made or deemed to have been made under this Act or any condition of a licence granted under any such order, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provisions of the Sea Customs Act, 1878 (VIII of 1878) as applied by Sub-section (3) be punishable with imprisonment for a term which may extend to one year, or with fine, or with both. Frovided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, such imprisonment shall not be for less than six months.
The words "or any condition of a licence granted under any such order" were inserted in the section by an amendment, which was not in force when the offence under consideration in this case are said to have been committed. If the accused were otherwise punishable, the fact that the words above mentioned were not part of Section 5, at the time the offences under consideration are said to have been committed, would not make any diffrence and the accused would still be punishable. That is the effect of the decision in Banarsi Das v. Cane Commissioner, U.P. , which approved of the view of the Bombay High Court in the decision in State v. Abdul Aziz A.I.R. 1962 Bom. 2431, in preference to the view of the Calcutta High Court in G.T.A. Pillai v. H.P. Lohia , Section 3 of the Act is the section, which gave power to the Central Government to prohibit, restrict or otherwise control the import and the export of goods of any specified description into or from India. In pursuance of the powers under conferred by Section 3 of the Act, the Export (Control) Order has been promulgated. Clause 5 of the Exports (Control) Order reads thus:
5(1). A licence granted under this Order may contain such conditions not inconsistent with the Act or this Order, as the licensing authority may deem fit.
(2) It shall be deemed to be a condition of every licence-
(a) that the licensee shall not, except with the permission in writing of the licensing authority or any person authorised by it in this behalf, transfer the licence;
(b) that the goods for the export of which the licence is granted shall be the property of the licensee at the time of the export.
(3) The licensee shall comply with all conditions imposed or deemed to be imposed under this clause.
The licence granted in this case marked as Exhibit P-14, contains among other clauses; the following two clauses;
7. This licence does not exempt the exporter from any restrictions imposed by State Government or any of the officers under their control.
8. (Any special conditions.).
Clause 3 of the Export (Control) Order, 1962 reads as follows:
3. Restriction on export of certain goods.--Save as otherwise provided in this Order, no person shall export any goods of the description specified...except under and in accordance with a licence granted by the Central Government or by any officer specified in Schedule II.
In this case the export is under a licence granted by an officer specified in Schedule II. So, the further question is, whether the export is in accordance with the licence so granted. The prosecution case is that the conditions in the Circular of the Registrar of co-operative Societies already referred to and marked as Exhibits P.-450 and P.-451 are restrictions imposed by an officer under the control of the State Government under Clause 7, or Clause 8 of the conditions of the licence. Clause 8 is really intended to cover special conditions, which may be inserted in the licence itself and as no special condition has been inserted in the licence itself, Clause 8 may be left out of account. Nor does the licence contain any conditions of the kind the Registrar sought to impose. So, the question is whether the condition No. 7 enables the Registrar of co-operative Societies to issue instructions of the kind contained in Exhibits P.-450 and P.-451 and those instructions have the force of law and can be deemed to be conditions imposed by the licence itself, so that it could be said that the accused in this case, by contravening the instructions issued by the Registrar of co-operative Societies, would be deemed to have contravened Clause 3 of the Exports (Control) Order, 1962. Now Clause 7 of the licence does not say that the licence will also be subject to such conditions as may be imposed by the State Governments or any of the officers under their control. Neither the Imports and Exports (Control) Act, 1947, nor the Exports (Control) Order, 1962, enables the State Governments or any of the officers under their control to impose any restrictions. Restrictions of the kind which the Registrar of co-operative Societies has purported to impose cannot be brought in by means of a condition contained in the licence even, if the licence contained a specific provision enabling the State Governments or any of the officers under their control to impose such restrictions. If it is intended to confer on the Registrar of co-operative Societies, powers to issue the instructions which he had issued, and to make such instructions have the force of law, it would be necessary that the Act itself or at least the Export (Control; Order should confer such power. On the other hand, even if the Imports and Exports (Control) Act or the Export (Control) Order were to confer such power, it should confer the power either on the State Government or any officers specified by the State Government. It should also specify the powers which the State Government or the officers under their control might exercise. If the contention on behalf of the prosecution is to be accepted, it means that the State Government can impose any restrictions they please. The power cannot be conferred on an unspecified class of officers of the State Government, nor could it be conferred in respect of matters not specified so as to make them of the widest amplitude. That would be akin to conferring an unrestricted legislative power, on the State Governments or the Officers under their control. Even powers of delegated legislation under statutes should be restricted to specified matters or enable rules to be made only to carry out the purposes of the Act. Under condition 7 of the licence, as contended for by the prosecution, the State Governments or any of the officers under their control can exercise any power and impose any restrictions they choose. The officers of the State Governments so exercising the powers need not necessarily be officers specified by the State Government or authorised by them nor need the powers be confined to the purposes of the Imports and Exports (Control) Act. The purpose of the Imports and Exports (Control) Act, as far as export is concerned, would only be either to permit or prohibit the export of certain specified goods. That those goods should be the product of the co-operative Societies or the produce of the grower members of the co-operative Societies is outside the scope of the Import and Export (Control) Act. Therefore, the restrictions of the kind, which the Registrar of co-operative Societies sought to impose, cannot be imposed even by the licensing authority under the Export (Control) Order; much less can it be done by the Registrar of Cooperative Societies. The intention behind the policy of the Government of India to make the profits arising out of export available only to actual producers may be a good one. It might probably be effected by giving export permit to the producers themselves. But if it is sought to achieve that object, by conferring powers on all and sundry officers or in respect of all conceivable matters, that would be a delegation, of naked arbitrary powers, which would not be valid in law. A power of delegation to be valid, should be to the State Government or any of the officers authorised by them, either by an order in writing or by a notification in the Gazette to exercise powers specifically mentioned in the delegation. This would be necessary to prevent any public servant, who so chooses from arrogating to himself any power he pleases. It would, thus, Le obvious that condition 7 of the licence does not enable either the State Government or the Registrar of co-operative Societies to impose any conditions purported to be imposed under Exhibits P-450 and P-451. The prosecution was not able to show me any other law under which the Registrar of co-operative Societies, could exercise the powers which he has purported to exercise under Exhibit P-450 or Exhibit P-451.
7. In fact, the condition 7 of the licence seems to contemplate not the conferment of any power either on the State Government or the officers under their control; It seems to contemplate a power, which the State Government or the officers under their control might exercise under any other law. For instance, it may be possible for the State Government or the officers under their control in exercise of the relevant powers under the Essential Commodities Act to prohibit the export of chillies from Coimbatore district. Condition 7 of the licence means that if such a restriction is imposed, the fact that the licence has been granted does not mean that the licenced holder can contravene those restrictions. It means that if he does so, he would be liable to be punished under the Essential Commodities Act and that he will not be exempted from the provisions of that Act. It follows that the restrictions imposed by the Registrar of co-operative Societies had no legal sanction behind it and therefore any contravention of those restrictions would not be an offence punishable under either the Imports and Exports (Control) Act, 1947 or any other law. It may be that as the Registrar himself pointed out in his circular such a contravention might entail cancellation of the licence and the licensee society may also not be allowed any quota thereafter. It may be that the Registrar may have power to take departmental action against the co-operative Societies or the office bearers thereof under the co-operative Societies Act or any other Act. Suffice it for the purpose of this case to say that the contravention of the instructions issued in Exhibits P-450 and P-451 would not be a contravention of any law which would make the person so contravening liable to be punished either under Imports and Exports (Control) Act, 1947 or any other law. It follows, therefore, that the conviction of the appellants on charge 2 under the Imports and Exports (Control) Act, 1947 cannot be sustained and their appeal will have to be allowed in respect of that charge.
8. We shall now deal with charges 5 and 6. Charge 5 is against accused 1 and 2 under Section 177-A, Indian Penal Code, for falsification of accounts. Charge 6 is against accused 3 to 12 under Section 477-A read with 100, Indian Penal Code, for abetment of falsification of accounts, charge 5 reflects to the falsification of accounts of the Coimbatore Central co-operative Stores. Charge 7 is against accused 4 for falsification of accounts of Dharapuram co-operative Sales Society. Charge 8 is against accused 5 for the falsification of accounts of the Coimbatore Marketing Society at Sulur. Charge 9 is against accused 7 and 9 for falsification of accounts of the Karamadai Sales Society and charge 10 is against accused 9, 10 and 11 for falsification of accounts of the Gobi. co-operative Sales Society. All the accused were acquitted of the charges 7, 8, 9 and 10. So we are left only with the charge 5 which relates to the falsification of accounts of the Coimbatore Central co-operative Stores and charge 6 against the various office bearers of the four primary societies mentioned above for abetment of the falsification of the accounts of the Coimbatore Central co-operative Stores. The main evidence is that of P.W. 2, who himself is an approver. He says that he falsified the accounts at the instance and on the insistence of accused 1 after his return from Tuticorin on the 20th May, 1957. He also gives evidence that he told accused 1 that since the goods had been supplied from Dindigul and Rajapalayam also, he could not write in the accounts, as though they were supplied from the different primary societies, that he told the same thing to accused 2 and that accused 2 informed him, that since he had passed the vouchers of the receipts and expenditure. P.W. 2 had simply to enter them in the accounts and there was nothing wrong about that and that he, P.W. 2, wrote falsified accounts in order to safeguard his post in that Coimbatore Central Co-cperative Stores, though he was aware that he was writing false accounts. The falsification of accounts consisted of various entries. To take a concrete instance, Exhibit P. 826 contains the entries relating to 9th May, 1957, at page 13 of the day book. Exhibit P-827 is the bill from the Karamadai Sales Society claiming a sum of Rs. 9,137.25 towards the Value of 186 bags of chillies and other incidental charges signed by accused 7. A credit entry has been made to the account of Karamadai Sales Society for this sum of Rs. 9,137.25 as claimed in Exhibit P-827. There are number of similar credit entries in respect of Supplies made by this society as Well as to the various other societies and there are also debit entries as against these societies for payments made to them towards the bills presented by them and the credit entries made in their favour. It is these entries that are said to be false. I have already held that in respect of some of the chillies sent to Tuticorin, they could not have been the produce of the grower members of the primary societies and that they should have been purchased by P.W. 1 and accused, 3, from Dindigul and Rajapalayam and sent to Tuticorin. The learned Additional Sessions Judge has come to the conclusion that these entries are false entries because accused 1 and 2 knew that in the case of most of these bills presented by the primary societies, they do not represent the claim for chillies supplied by the societies themselves; but only for the chillies which had been sent to Tuticorin by P.W. 1 and accused 3 and that this amounts to falsification of accounts. Now, at least as regards the payments made to the various societies, there can be no question of false entries because payments have actually been made. As regards the credit entries in their favour, it is not, as though credit entries were made in their favour while no chillies were supplied at all. Chillies were exported to Ceylon, as though they were exported by the Coimbatore Central co-operative Stores. Of course, the various primary societies were to have sent the chillies to Tuticorin on behalf of and on account of the Coimbatore Central co-operative Stores. But by the arrangement between the various office bearers of the societies and accused 1 and 2, as well as P.W. 1 and accused 3 chillies had been sent to Tuticorin to the account of the various primary societies. The bills presented by the various primary societies to the Coimbalore Central co-operative Stoers and the credit entries in their favour in the account of the Coimbatore Central co-operative Stores cannot be said to be false in the sense that no chillies were sent to Tuticorin, but claims were made as though chillies had been supplied. It is true, of course, that those societies did not, in a number of cases send chillies from their respective places; nor were they the produce of their grower members. But chillies Were as a matter of fact sent to Tuticorin on their behalf by accused 3 and P.W. 1. It has already been held that there was nothing illegal in this. Therefore though the various documents might have been got up to show that the chillies were sent by the primary societies from their respective places and also to show that they were the produce of their members that seems to have been due to the feeling on the part of the accused that they were doirg something illegal. In this case even if the Coimbatore Central co-operative Stores had purchased 520 tons of chillies from the open market and exported, it would not have been contravening any law, nor would it have been contravening any of the conditions of the licence. Similarly, even if the various primary societies had purchased chillies to the open market in order to supply the quotas, which were allotted to them, those Societies would not have been guilty of any breach of any law. Therefore, the fact that under the wrong impression that in doing what they did, that is arranging for puchase of chillies in the open market through P.W. 1 and accused 3 and despatching them to Tuticorin, they were guilty of the breach of some law they were trying to create evidence to show that they were despatching the chillies which were produced by the grower members, from their respective places, they were not guilty of any offence. Therefore, when the respective societies presented bills to the Coimbatore Central co-operative Stores for payment to them for chillies, which in fact had been pu.rch0.sed by P.W. 1 and accused 3 in the open market at Dindigul and Rajapalayam and despatched to Tuticorin on behalf of the various primary societies, the claims of the various primary societies could not be said to be false claims and the entries with regard to them in the accounts of the Coimbatore Central co-operative Stores could not be said to be false entries. The bills presented by the Various societies would be false claims, only if in fact, no chillies had been supplied on their behalf, but payment had been claimed. But in this case, the claim was made only for chillies which were actually supplied though they may not be the chillies which the various primary societies procured from their members and despatched from their respective places. I do not think, therefore, that there is any question of falsification of accounts of the Coimbatore Central co-operative Stores. It follows, therefore, that accused 1 and 2 are not guilty of the offences with which they are charged under charge 5 and consequently, the other accused are not guilty of abetting those offences. The whole of the prosecution case rests upon the basis that there has been a contravention of the Imports and Exports (Control) Act, 1947, and the Exports (Control) Order as well as the conditions of the licence. That the various accused have brought into existence various documents, in order to show that the chillies which were exported, were the produce of the members of the primary societies and teat they were exported from the respective headquarters of the primary societies is, the whole of the charge in respect of falsification of accounts as well as the preparation of the other documents. Once it is held that there has been no contravention of the provisions of either Imports and Exports (Control) Act, 1947, or the Exports (Control) Order or any of the conditions of the licence, the accused could not be held to be guilty of charges of falsification of accounts.
9. What I have said immediately above applies also to charges 59 and 61. I am dealing with them even at this stage because the observations which I have made, apply to these charges also. Charge 59 is against accused 7 under Section 199 read with 193, Indian Penal Code, and charge 61 is against accused 9 under the same sections of the Indian Penal Code. Sections 199 reads as follows.
199. Whoever, in any declaration made or subscribed by him, which declaration any Court of Justice, or any public servant or other person, is bound or authorised by law to receive as evidence of any fact, makes any statement which is false, and which he either knows or believes to be false or does rot believe to be true, touching any point material to the object for which the declaration is made or used, shall be punished in the same manner as if he gave false evidence.
10. And Section 193 reads as follows:
193. Whoever intentionally gives false evidence in any stage of a judicial proceeding, or fabricates false evidence for the purpose of being used in any stage of a judicial proceeding, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
11. Section 193 cannot obviously apply because there is no case of fabrication of false evidence for the purpose of being used in any stage of a judicial proceeding. Section 199 cannot also apply here because these are not declarations which any Court of Justice or any public servant or other person is bound or authorised by law to receive as evidence of any fact. Charge 59 is in respect of Exhibit P-87. This is signed by accused 7 in his capacity as President of Karamadai Sales Society. It reads as follows:
We hereby declare that the quantity of 62 tons and 6 cwts. of dried red chillies supplied to Coimbatore Central co-operative Stores, Limited, by us for export is the produce of our members grown in their fields as detailed below.
The details of supply by eight members includes supply by accused 7 and his two brothers. The evidence in this case, which, in the view that I take of the law it is not necessary elaborately to go into, establishes that the alleged procurement from eight members as detailed in Exhibit P-87, could not be true. But specifically P.W. 66's evidence establishes that survey numbers 137, 151 and 152 could not have been cultivated with chillies in Faslis 1365 and 1366, as shown by the adangals. Therefore, at least in respect of the alleged supply by accused 7 of 960 Dags, the entry in the export book Exhibit P-1313 could not be true. Therefore, we can take it as established that accused 7 made the declaration knowing it to be false declaration.
12. The declaration involved in charge 61 is Exhibit P-1234 signed by accused 9 in respect of supply of 418 mounds of chillies from the self-cultivation in survey field 91-A and 92-B in the village of Veerapandi. P.W. 73 has given evidence with reference to the entries in the adangals that these survey fields had been acquired in 1950 for extension of town and during the period under consideration houses were in existence on those fields. The corresponding entry in the export books Exhibit P-2047 had been marked as Exhibit P-1312. The only explanation accused 9 could give was that he had given those survey numbers from memory, but that in fact he had supplied chillies grown by him in his own lands. Even so, his declaration that the chillies were raised in survey fields 91-A and 92-B is false.
13. Now in spite of the fact that these two declarations are false, I do not think that accused 7 and 9 could be held to be guilty of offence under Section 199, Indian Penal Code, because the declarations made by them were not declarations which any Court of Justice, or any public servant or other person is bound or authorised by law to revise as evidence of any fact. It is true that P.W. 2 had given evidence that on a particular date, he had been told by the Customs Officer that he had received complaints that the chillies that were exported under the licence Exhibit P-14 were not the produce of the grower members of the various primary societies; but had been brought elsewhere and that he bad explained the matter to him and that therefore, subsequently the various declaration forms were got up in respect M the arrivals in Tuticorin on 7th, 8th and 9th May, 1957. But his evidence also is that none of these declaration forms were actually produced before any officer. That apart the Customs Authorities are not concerned with the question, whether the chillies that were exported were chillies grown by the grower members of the various primary societies. They are only concerned with the question, whether there was an export licence permitting the export of chillies. They are not concerned as to who produces those chillies. It cannot be said even that they were interested in finding out that the chillies that were exported were actually the property of the licencee as provided for under Clause 5(b) of the Export (Control) Order. That is really a matter for the authorities, who had issued the licence and even for deciding whether the chillies were the property of the Coimbatore Central Co-operative Stores which was the licensee and which was exporting the chillies, it was not necessary to have declaration forms like Exhibit P-87 and P-1234; nor was any public servant or other person bound or authorised by law to receive these declaration forms as evidence of any fact. As I have already held that the instructions issued by the Registrar of co-operative Societies under Exhibits P-450 and P-451 had no legal sanction, there is no question of any public servant or other person being authorised by law to receive these declarations as evidence of any fact. It follows, therefore, that the charges 59 and 61 cannot be sustained and accused 7 and 9 are entitled to be acquitted under these charges.
14. The next set of charges are charges 11, 13, 15, 17, 19, 21, 23 and 25 against accused 1, 7 and 12 for forgery of a Valuable security under Section 467, Indian Penal Code and charges 12, 14, 16, 18, 20, 22, 24, and 26 under Sections 467 and 471, Indian Penal Code, against accused 1, 2, 7 and 12 for using forged documents as genuine. In respect of these charges accused 1 and 7 alone have been found guilty and accused 2 as well as accused 12 have been acquitted. All these charges are related in the despatches from the Karamadai Sales Society. Charges, is in respect of P-59. Charge 13 is in respect of Exhibit P-83, Charge 15 is in respect of Exhibit P-81. Charge 17 is in respect of Exhibit P-61. Charge 19 is in respect of Exhibit P-63. Charge 21 is in respect of Exhibit P-79. Charge 23 is in respect of Exhibit P-67. Charge 25 is in respect of Exhibit P-45. With regard to the charge 17, it is established that MDY. 966, by which 217 bags of chillies are supposed to have been sent on 7th May, 1957 is a Fiat Car and not a lorry. In respect of the charge 11, which is in respect of Exhibit P-59, it has been found that MDF 1397 by which 250 bags of chillies are alleged to have been sent on 7th May, 1957 is really a Fargo passenger bus. There is in addition the fact that the white katchat Exhibit P-140 in relation to this charge mentions the number as MDU 1394-The substituted voucher Exhibit P-186 shows the number as MDU 13.94 and only the voucher which is said to have been forged shows the number as MDF 1397. In view of this confusion charge 11 may be left out of account as also charge 17. Though there is a confusion about the charges 11 and 17 on the ground that they refer to a Fargo passenger bus and a Fiat Car respectively, there is no doubt that the bags of chillies which were alleged to have beep sent by these motor vehicles did reach Tuticorin,
15. It is not now possible to say how exactly this confusion arose. We may, therefore confine ourselves to the other 6 charges, namely, charges 13, 15, 19, 21, 23 and 25 Charge 13 is in respect of Exhibit P -83. The white katchat in respect of it is Exhibit P-68 and the substituted vouchers is Exhibit P-197. I shall explain what the White1 katchat and the substituted vouchers are a little later. Charge 15 is in respect of Exhibit P-81 and the white katchat and the substituted vouchers in relation thereto are Exhibits P-135 and P-190 respectively charge 19 is in resoect of Exhibit -63 and the white katchat and the substituted vouchers are Exhibit P-192 and P-136. Charge 21 is in respect of Exhtbit P-79 and the white katchat and substituted voucher are Exhibits P-169 and P-189 respectively. The white katchat and the substituted vouchers in respect of charge 23, are Exhibits P-174 and P-194 respectively. The white katchat and the substituted Vouchers in respect of charge 25, are Exhibits P-172 and P-199 respectively. How these documents came into existence are spoken to by P.W. 2, P.W. 4 and P.W. 7. The chillies that arrived in Tuticorin on 7th, 8th and 9th Mays 1957, were accompanied by mere white katchat which were brought by the various lorry drivers mentioning the number of Dags sent by that lorry and the amount of lorry hire that had to be paid. As already mentioned, P.W. 2 had to give explanation to the Customs Authorities for the rumours which they had heard that the chillies that were exported were not the produce of the grower members of the various primary societies in Coimbatore district, but had been purchased elsewhere. He, therefore, felt the need for some lorry advice letters. Therefore, he made use of the letter paper with the heading of the Coimbatore Central Co-opeative Stores which were with him and brought into existence what are called the substituted vouchers. These are the substituted vouchers which I have already referred to. The white katchats brought by the lorry drivers. I have already referred to as white katchat and they are so referred to in the judgment of the learned Additional Sessions Judge. The charge of forgery is in respect of the acquittance found on the referse of Exhibits P-59, P-83, P-81, P-61, P-63, P-79, P-67 and P-45 respectively under charges 11, 13, 15, 17, 19, 21, 23 and 25. The charge of foregery in which necessarily the element of payment of money is involved, is sought to be made out by reference to the amounts mentioned in these documents. Whereas the white katchats and substituted Vouchers referred to a smaller amount, the documents which were prepared in Coimbatore on the 10th May, 1957 refer to a higher figure. Under charge 11 both the white katchat as well as the substituted vouchers mention a sum of Rs. 100 whereas the documents prepared in Coimbatore on 10th May, 1957 shows a sum of Rs. 156-25. Under charge 13 the figures are Rs. 81-04, Rs. 81-04 and Rs. 140 respectively; under charge 15 Rs. 80, Rs. 80 and Rs. 125 respectively; under charge 19 they are Rs. 80, Rs. 80 and Rs. 136 respectively. Under charge 23 Rs. 81-04, Rs. 81-04 and Rs. 125 respectively ; under charge 25 Rs. 81-04, Rs. 81-04 and Rs. 130 respectively. The evidence in regard to the preparation of the documents at Coimbatore is that of P.W. 1, P.W. 7 and of course, P.W. 1 himself. The prosecution case is that the lorry hire that was actually paid to the various lorry drivers are mentioned in the white katchat and the substituted vouchers, but that in the documents prepared at Coimbatore on 10th May, 1957, the higher figure was mentioned that it was intended that K.M. Mohideen Company was to pay the amounts mentioned in the white katchat, but to claim a higher figure from the Coimbatore co-operative Central Stores and that the difference was to go to accused 1. Exhibit P-775 which has been prepared by P.W. 2 shows the difference between the amount actually paid to the various lorry drivers as lorry hire by the K.M. Mohideen & Co., and what was actually claimed from the Coimbatore Central co-operative Stores as about Rs. 800. This Exhibit P-775 also contains the lorry numbers to which reference has been made already. Though these letters which were prepared in Coimbatore on 10th May, 1957 contained the signatures of accused 7, and on the reverse acquittances by various persons, who are supposed to have received the amounts mentioned therein, evidence has been let in of witnesses who were connected with those lorries to the effect that the persons who have signed on the reverse of these documents are either persons not known to them, or the signatures are not those of their lorry drivers or cleaners. It is on this basis that the charge of forgery rests. But apart from the other discrepancies, as to whether these documents could have been prepared in Goimbatore on 10th May, 1957 as for instance as to how the substitued vouchers and the katchats sent by P.W. 2 through P.W. 5 would have found their way into the hands of P.W. 1 and the discrepancy in the evidence of P.W. 4 which the learned Additional Sessions Judge has referred to, there is no direct evidence as to who exactly forged the signatures in the acquittances on the reverse of these documents. Nobody has given evidence as to who signed them. It has not been sent to the handwriting expert to show that accused 7 could have signed them. Indeed the learned Additional Sessions Judge only proceeds on the basis that either accused 1 or accused 7 should have signed them. (See paragraph 165, page 105 of the learned Additional Judge's Judgment). All that he says is that though there is no direct evidence implicating either accused 1 or accused 7 as the persons who made the fictitious stamped acquittance the circumstantial evidence is so clinching and so pointing that the only and irresistible conclusion possible is that it was accused 1 and accused 7, who were responsible for this false document. In the absence of any satisfactory evidence whether accused 1 or 7 was responsible for making the fictitious stamped acquittance, both of them could not certainly be convicted. I fail to understand how the learned Sessions Judge having rightly referred to the decision in re Rhasat Ali (1881) I.L.R. 7 Cal. 353 at 356, that 'making' means signing found both accused 1 and 7 guilty without deciding who among them signed the acquittance on the reverse of these documents.
16. This apart, there is no evidence to show that this enhanced sum mentioned in these documents was actually paid by the Goimbatore Central Co-operative Stores. In the bill submitted by the K.M. Mohideen & Co., Exhibit P-1470, there is a reference to the lorry hire paid by K.M. Mohideen & Co., for the various arrivals from Karamadai co-operative Marketing Society. The debit entries relating to the arrivals of 7th and 8th May, 1957 mentioned the higher figures which are found in the documents which are said to have been prepared in Goimbatore on the 10th May, 1957. This, of course, shows that K.M. Mohideen & Co., have claimed the higher figure whereas they should have paid as shown by the white katchat and the substituted vouchers only the lower figures. But there is no evidence to show that this higher figure was actually paid. Exhibit P-1474 contains a sum of Rs. 3,717-25P which includes the higher figures found in the documents said to have been prepared in Coimbatore on 10th May, 1957. But including this sum of Rs. 3,771-25p the total comes to Rs. 70,429.65, a sum of Rs. 35,000 has been paid and the balance due is shown as Rs. 35,427.65. There is no evidence that the whole of this sum' of Rs. 35,427 65 was actually paid to K.M. Mohideen & Co. If there is such evidence, it could be said that it has been proved that Exhibits P 83, P-81, P-63, P-79, P-67 and P-45 which are said to have been prepared at Coimbatore on 10th May, 1957 were used for the purpose of getting a higher amount than what was actually paid. But there is no clinching evidence on this point. The accused concerned with these charges, that is accused 1 and 7 are therefore, entitled to the benefit of doubt on the question of the making of the documents being the valuable securities. The result is all the appellants are entitled to be acquitted of all the charges on which they have been convicted. It follows therefore, that the revision filed by the State has to be dismissed.
17. These appeals are therefore allowed, the convictions of the appellants are set aside and they are acquitted. Their bonds will be cancelled.
18. The evidence in this case is very voluminous. As many as 158 persons were examined by the prosecution. Two witnesses were examined as Court witnesses, 2,515 exhibits were marked on the side of the Prosecution and 231 exhibits on behalf of the accused and two exhibits by the Court. This voluminous evidence has been very carefully analysed by the learned Additional Sessions Judge. His conclusions on the facts have been sound. Where he has gone wrong is only, as regards the legal consequences that flow from the proved facts. In view of my conclusions on the questions of law that arise in this case, I have not considered it necessary to go in greater detail into the evidence both oral and documentary in this case, except in so far as they are necessary to illustrate the conclusions. But otherwise, I generally agree with the conclusions on the facts arrived at by the learned Additional Sessions Judge. I have refrained from referring to the evidence oral and documentary in greater detail only because, I do not want to load the judgment with unnecessary material. On the proved facts themselves, the accused cannot be said to be guilty of any of the offences with which they are charged.
19. Before parting with these cases, I would like to mention that much time, labour and money would have been saved, if only someone had applied his mind seriously to the legal consequences that flow from the facts of these cases. As I have held, even on the facts proved, no offence has been committed. If this had been considered even at the beginning, much of the time, expenses and labour could have been saved. I have only to say that nobody need waste any sympathy on the accused.