minal Appeal No 143 of 1962
Appeal from the judgment and order dated December 2 1961 of the Judicial Commissioner s Court at Manipur in Criminal Revision No 20 of 1961
BK Khanna and RN Sachthey for the appellant
WS Barlingay and AG Ratnaparkhi for the respondent
November 29 1963
The Judgment of the Court was delivered by GAJENDRAGADKAR J
The short question of law which arises in this appeal relates to the construction of cl
32 of the Manipur Foodgrains Dealers Licensing Order 1958
This question arises in this way
The respondent was charged with having committed an offernce punishable under section 7 of the in that on February 9  1960 he was found storing 178 Mds
of paddy in his godown without any licence in violation of cl 3 of the said Order
The case against the respondent was that on February 9 1960 his godown was searched and 178 Mds
of paddy was found stored in it
This fact was not denied by the respondent though he pleaded that the paddy which was found in his godown was meant for the consumption of the members of his family who numbered fifteen
He also pleaded that out of the stock found in his godown 40 Mds
of paddy belonged to Lalito Singh his relation
The learned Sub Divisional Magistrate Bishanpur who tried the case of the respondent did not believe his statement that the stock was meant for the consump 576 tion of the members of his family
He however believed the evidence of Lalito Singh that
40 Mds
out of the stock belonged to him and so he passed an order directing that out of the stock which had been attached 40 Mds
should be released in favour of Lalito Singh
In regard to the rest of the stock conclusion the learned trial Magistrate came to the that as a result of the provisions contained in cl
32 of the Order a presumption arose against the respondent and that presumption took his case under cl
31 of the Order
That in turn attracted the provisions of cl 7 of the Order and made the respondent liable under section 7 of the 
On these findings the learned Magistrate convicted the respondent if the offence charged
He however held that it was not necessary to direct the forfeiture of the paddy and that the ends of Justice would be met if he was fined to Day Rs 500 in default to suffer rigorous imprisonment for three months
Against this Order the respondent preferred an appeal before the learned Sessions Judge at Manipur The learned Sessions Judge substantially agreed the view taken by the learned Magistrate
He believed the witnesses who had referred to the circumstances under which the paddy stored in the godown of the respondent was recovered and he held that the respondent had been properly convicted under section 7 of the 
The order of sentence also was confirmed
The respondent then moved the Judicial Commissioner Manipur by a Revision Application and his Revision Application succeeded
It appears that before the present Revision Application came on for hearing before the learned Judicial Commissioner he had examined the question of law in regard to the construction of clause 32 of the Order in a group of revision applications Nos 7 11 and 13 of 1961 and had pronounced his judgment on June 5 1961
He had held in that judgment that the effect of the presumption which can be legitimately raised under cl
32 is not that the person against whom the said 577 presumption has been drawn is a dealer in respect of the said goods and so merely on the strength of the said presumption clause 31 cannot be attracted following his earlier decision the learned Judicial Commissioner allowed the respondent s Revision Application and set aside the order of conviction and sentence passed against him
It is against this order that the Manipur Administration has come to this Court by special leave and on behalf of the appellant Mr BK Khanna has contended that the view taken by the learned Judicial Commissioner is based on a misconstruction of cl
32 of the Order
That is how the only question which falls for our decision in the present appeal is in regard to the construction of the said clause
At this stage it would be convenient to refer to the relevant provisions of the Order
Clause 2a defines a dealer as meaning a person engaged in the business of purchase sale or storage for sale of any one or more of the foodgrains in quantity of one hundred maunds or more at any one time
Clause 2b defines foodgrains as any one or more of the foodgrains specified in the Order including products of such foodgrains other than husk and bran
It is common ground that paddy is one of the foodgrains specified in Schedule 1
Clause 3 with which we are directly concerned in this appeal reads thus 1 No person shall carry on business as a dealer except under and in accordance with the terms and conditions of a licence issued in this behalf by the licensing authority 2 For the purpose of this clause any person who stores any foodgrains in quantity of one hundred maunds or more at any one time shall unless the contrary is proved be deemed to store the foodgrains for the purpose of sale
 Clause 7 provides that no holder of a licence issued under this Order shall contravene any of the terms and conditions of the licence and if he has been 1 SCI64 37 578 found to have contravened them his licence is liable to be cancelled or suspended
These are the main provisions with which we are concerned in the present appeal
In dealing with the point raised by Mr Khanna before us it is necessary to bear in mind that clause 3 in question ultimately imposes a penalty on the offender and as such it is in the nature of a penal clause
Therefore it is necessary that it must be strictly construed
There is no doubt as Mr Khanna has contended that if cl
32 which is in the nature of a deeming provision provides for a fiction we ought to draw the fiction to the maximum extent legitimately permissible under the words of the clause
Mr Khanna contends that the effect of cl 3 is that as soon as it is shown that the respondent had stored more than 100 mds
of paddy he must be deemed to have stored the said foodgrains for the purpose of sale and his argument is that in drawing a statutory presumption under this clause it is necessary to bear in mind that this presumption is drawn for the purpose of sub clause 1 of cl 3
Therefore it is urged that it would be defeating the purpose of cl
32 if the view taken by the learned Judicial Commissioner is upheld and the presumption raised under cl
32 is not treated as sufficient to prove the charge against the respondent
In dealing with the question as to whether the respondent is guilty under section 7 of the  it is necessary to decide whether he can be said to be a dealer within the meaning of cl 3 of the Order
A dealer has been defined by cl 2a and that definition we have already noticed
The said definition shows that before a person can be said to be a dealer it must be shown that he carries on business of purchase or sale or storage for sale of any of the commodities specified in the Schedule and that the sale must be in quantity of 100 mds
or more at any one time
It would be noticed that the requirement is not that the person should merely sell purchase or store the foodgrains in question 579 but that he must be carrying on the business of such purchase sale or storage and the concept of business in the context must necessarily postulate continuity of transactions
It is not a single casual or solitary transaction of sale purchase or storage that would make a person a dealer
It is only where it is shown that there is a sort of continuity of one or the other of the said transactions that the requirement as to business postulated by the definition would be satisfied
If this element of the definition is ignored it would be rendering the use of the word business  redundant and meaningless
It has been fairly conceded before us by Mr Khanna that the requirement that the transaction must be of 100 mds
or more at any one time governs all classes of dealings with the commodities specified in the definition
Whether it is a purchase or sale or storage at any one time it must be of 100 mds
or more
In other words there is no dispute before us that retail transactions of less than 100 mds
of the prescribed commodities are outside the purview of the definition of a dealer
The forms prescribed by the Order support the same conclusion
The form for making an application for licence shows that one of the cloumns which the applicant has to fill requires him to state how long the applicant has been trading in foodgrains and another column requires him to state the place or places of his business
Similarly Form B which prescribes the licence shows that the licence authorises the licence holder to purchase sell or store for sale the foodgrains specified in the licence and clause 2 of the licence says that the licensee shall carry on the aforesaid business at the place indicated in the licence
Similarly Form C which pertains to stocks shows that the particulars of the godown where stocks are held have to be indicated and the quantity sold and delivered as well as the quantity sold but not delivered have to be separately described
These Forms therefore support the conclusion that a dealer who comes within the definition prescribed by clause 2a should be carrying on the business of purchase 580 sale or storage and that would exclude solitary or single cases of sale purchase or storage
Bearing in mind this necessery implication of the definition of the word dealer
let us proceed to inquire whether the respondent s case falls under cl
Clause 31 prohibits persons from carrying on business as dealers except under and in accordance with the terms of the licence issued to them
In other words whoever wants to carry on the business of a dealer must obtain a licence
There is no doubt that if a person carries on a business as described by cl 2a and does it without obtaining a licence as required by cl
31 he would be guilty under section 7 of the 
In this connection cl
32 raises a statutory presumption
It is no doubt a rebuttable presumption which is raised by this provision
If it is shown by a person with whom a storage of more than 100 mds
of one or the other of the prescribed foodgrains is found that the said storage was referrable to his personal needs or to some other legitimate cause unconnected with and distinct from the purpose of sale the presumption would be rebutted in case of course the expla nation given and proved by the person is accepted by the Court as reasonable and sufficient
What does this presumption amount to It amounts to this and nothing more that the stock found with a given individual of 100 or more maunds of the specified foodgrains had been stored by him for the purpose of sale
Having reached this conclusion on the strength of the presumption the prosecution would still have to show that the store of the foodgrains for the purpose of sale thus presumed was made by him for the purpose of carrying on the business of store of the said foodgrains
The element of business which is essential to attract the provisions of cl
31 is thus not covered by the presumption raised under cl
That part of the case would still have to be proved by the prosecution by other independent evidence
It may be that this part of the case can be proved by the prosecution by showing 581 that store of 100 mds
or more of the foodgrains was found with the said person more than once
How many times it should be necessary to prove the discovery of such a store with the said person is a matter which we need not decide in the present case
All that is necessary to be said in connection with the presumption under cl
32 in this case is that after the presumption is raised under it some evidence must be led which would justify the conclusion that the store which was made for the purpose of sale was made by the person for the purpose of carrying on the business
Mr Khanna contends that in construing the effect of cl
32 we must remember that this clause makes direct reference to cl
31 and that no doubt is true but the fact that cl
32 directly refers to cl
31 does not help to widen the scope of the presumption which is allowed to be raised by it
The presumption would still be that the store is made for the purpose of sale and that presumption would be drawn for the purpose of cl
That is the only effect of the relevant words in cl
32 on which Mr Khanna relies
Mr Khanna then urges that if the Legislature had intended that after drawing the presumption about the storage for the purpose of sale the prosecution should still have to cover some further ground and lead additional evidence to prove that the said store had been made for the purpose of business of storage then the statutory presumption would really serve no useful purpose
There may be some force in this contention
But on the other hand in construing cl
32 it would not be open to the Court to add any words to the said provision and in fact as we have already indicated the words reasonably construed cannot justify the raising of a presumption would take in the requirement as to business which is one ingredient of the definition of a dealer
Therefore we do not think that the argument urged by Mr Khanna about the general policy underlying cl
32 can assist his contention in view of the plain words used by cl 32 itself
582 It appears that cl
32 may have been deliberately worded so as to raise a limited presumption in order to exclude cases of cultivators who may on occasions be in possession of more than 100 mds
of foodgrains grown in their fields
If a cultivator produces more than 100 mds
in his fields or otherwise comes into possession of such quantity of foodgrains once in a year and casually sells them or stores them the Order apparently did not want to make such possession sale or storage liable to be punished under cl
31 read with section 7 of the 
However that may be having regard to the words used in cl
32 we are unable to hold that the Judicial Commissioner was wrong in coming to the conclusion that cl
32 by itself would not sustain the prosecution case that the respondent is a dealer under cl
31 and that inevitably means that the charge under section 7 of the is not proved against him
That being so we must hold that the order of acquittal passed by the Judicial Commissioner is right
The appeal accordingly fails and is dismissed
Appeal dismissed


Summary:
The respondent was found storing over 100 mds
of paddy in his godown without any licence in violation of cl 3 of the Manipur Foodgrains Dealers Licensing Order
He was charged with having committed an offence under section 7 of the Essential Commodities Act
The respondent s main defence was that the paddy was meant for the consumption of the members of his family which was disbelieved by the Trial Magistrate
The Trial Magistrate held that as a result of the provisions contained in cl
32 of the Order a presumption arose against the respondent taking his case under cl
31 of the Order which in turn attracted the provisions of cl 7 of the Order and made the respondent liable under section 7 of the Essential Commodities Act
On these findings the Magistrate convicted the respondent under section 7 of the Act
An appeal by the respondent to the Sessions Judge was dismissed
The respondent then filed a Revision Application to the Judicial Commissioner which succeeded
The Judicial Commissioner held that the effect of the presumption which can be legitimately raised under cl
132 of the Order is not that the person against whom the said presumption has been drawn is a dealer in respect of the said goods and so merely oil the strength of the said presumption cl
31 of the Order cannot be attracted
In appeal by special leave Held i Under cl 2a of the Order before a person can be said to be a dealer it must be shown that he carries on business of purchase or sale or storage for sale of any of the commodities specified in the Schedule and that sale must be in quantity of 100 minds
or more at any one time the concept of business in the context must necessarily postulate continuity of transactions
A single casual or solitary transaction of sale
purchase or storage would not make a person a dealer
ii Cl
32 raises a statutory presumption that the stock of 100 mds
or more of specified goods found with ail individual had been stored by him for the purpose of sale
After the presumption is raised under cl
32 some evidence must be led which would justify the conclusion that the store which was made for the purpose of sale was made by the person for the purpose of carrying on the business
The element of business which is essential to attract the provisions of el
31 is not covered by the presumption raised under cl
575 iiiCl
32 may have been deliberately worded so as to raise a limited presumption in order to exclude cultivators who may on occasions be in possession of more than 100 mds
of foodgrains grown in their fields the Order apparently did
not want to make such possession sale or storage liable to be punished under cl
31 read with section 7 of the Essential Commodities Act