iminal 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 section 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 section 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 vs M Nila Chandra Singh1 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  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 32 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 32 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


Summary:
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 section 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
32 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 section 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
32 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 ivThe 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
32 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 vs M Nila Chandra Singh 1964 5 SCR574
referred to and explained