1 Cr.AJ-237.99 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE  CRIMINAL CRIMINAL APPEAL NO.237 OF 1999 Shantilal Mohanlal Solanki, aged 43 years, Occ: Business, resident of village Parali, Tal.Pali, Dist. Raigad .... Appellant - Versus - The State of Maharashtra .... Respondent Shri K.H. Parekh for the Appellant. Ms Geeta Mulekar, Addl. Public Prosecutor, for the State. CORAM: R.C. CHAVAN, J. DATED: SEPTEMBER 14, 2010 ORAL JUDGMENT: 1. This appeal is directed against the judgment and order passed by the learned Special Judge, Essential Commodities Act, 1955, Raigad, in Criminal Case No.5 of 1996. By the said judgment and order, the appellant is convicted for the offence under Section 3, punishable under Section 7 of the Essential Commodities Act, 1955 (hereinafter referred to as the EC Act ) and is sentenced to suffer RI for three months and to pay a fine of Rs.2500. 2 Cr.AJ-237.99 2. The facts which are material for deciding this appeal are as under: On 2-3-1996, on the instructions of superior officers of the police department, a police party raided the appellant s shop known as Geeta Provisions Store . The raid yielded 15,260 kgs. of Gur (Jaggery). The raid also yielded large quantity of ammonium chloride. Eventually, the appellant was prosecuted for storing 15,260 kgs. of Gur without licence and in contravention of the Maharashtra Gur and Khandsari Dealers Licensing Order, 1963 (hereinafter referred to as the said Order ). After framing charge for the offence under Section 3, punishable under Section 7 of the EC Act, as also for the offence punishable under Section 65(f) of the Bombay Prohibition Act, 1949 the learned trial Judge put the appellant to trial since the appellant pleaded not guilty. On conclusion of the trial, the learned trial Judge convicted and sentenced the appellant as stated in para 1 above and acquitted the appellant of the offence punishable under Section 65(f) of the Bombay Prohibition Act, 1949. Aggrieved by his conviction and sentence, the appellant is before this Court. 3 Cr.AJ-237.99 3. I have heard the learned counsel for the appellant and the learned APP for the State and have also gone through the records and proceedings of the case. 4. Clause 3 of the said Order, which is alleged to have been contravened, reads as under: 3.Licensing Dealers.- (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) a separate licence shall be necessary for each place of business. (3) For the purpose of this clause any person who stores gur or khandsari in any quantity exceeding 25 quintals at any one time shall unless the contrary is proved, be deemed to store the gur or khandsari as the case may be, for the purpose of sale. 5. The learned APP submitted that since sub-clause (3) of Clause 3 raises a presumption that any person who stores Gur exceeding 25 quintals at any one time shall be deemed to have stored the Gur or khandsari for the purpose of sale and, therefore, the 4 Cr.AJ-237.99 contravention is complete. The learned counsel for the appellant submitted that this presumption leads us nowhere. Even if it is presumed for a while that because the appellant stored Gur in excess of 25 quintals, he had kept it for the purpose of sale, such sale itself is not banned under the said Order. What the said Order requires is that no person shall carry on business as a dealer except under and in accordance with the terms and conditions of a licence. The term Dealer has been defined in sub-clause (1) of Clause 2 as under: (1) Dealer means a person engaged in the business of purchase, sale or storage for sale of Gur or Khandsari in Quantities exceeding 25 quintals at any one time and includes a commission agent who holds stocks of Gur or Khandsari for sale in the conduct of his business; 6. This clause had come up for consideration by this Court in Criminal Appeal No.775 of 1977 where the accused was found to have stored 15,000 kgs. of Gur, that is, 150 quintals. Relying on a judgment of the Supreme Court in Manipur Administration v. M. Nila Chandra Singh, reported in 1964 (2) Cri.L.J. 465, this Court held that since a dealer is one who sells Gur exceeding 25 quintals at any one 5 Cr.AJ-237.99 time, it had to be shown that the accused had indulged in such sales exceeding 25 quintals at a time. 7. In Manipur Administration s case (supra), on which this Court had placed reliance, the question was of possession of 178 maunds of paddy. The relevant clause of the Order issued under the EC Act provided that a person who stores any foodgrain in the quantity of 100 maunds or more at any one time shall, unless the contrary is proved, be deemed to have stored the foodgrain for the purpose of sale. Thus, the clause is similarly worded to the one the contravention of which is alleged in this case. The definition of dealer which came up for consideration before the Supreme Court was also similar and the Supreme Court held that there has to be a purchase or sale at any one time in excess of 100 maunds. As to the finding of paddy stock with the accused in that case, the Supreme Court observed in para 9 of the judgment as under: (9).... 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 6 Cr.AJ-237.99 on the strength of 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.3(1) is thus not covered by the presumption raised under cl.3(2). That part of the case would still have to be proved by the prosecution by other independent evidence. .... The Supreme Court further held that the presumption would in itself lead to nothing, and unless it is shown that a person is a dealer, as defined in the preceding clause of the said Order, he would not attract the charge of breach of provisions of the Order issued under the EC Act. 8. The learned APP submitted that in that case the Court had found that the accused had a big family and, therefore, had provided justification for possession of paddy in excess of the prescribed quantity. She submitted that in the case at hand, far from providing any justification, the possession of Gur along with ammonium chloride clearly points to the purpose for which it was stored and, therefore, the appellant may derive no help from the judgment 7 Cr.AJ-237.99 of the Supreme Court. The learned APP points out that far from furnishing any explanation for the possession of Gur the appellant, in his statement under Section 313 of the Criminal Procedure Code, had disowned everything. This denial does not put the case of the prosecution on a higher pedestal. The learned APP submitted that the prosecution had proved that the shop belongs to the appellant. Even so, as the discussion to follow would show that mere ownership of establishment or possession of Gur in excess of 25 quintals in the shop would not lead to an inference of contravention of the orders issued under the EC Act. 9. The learned APP also submitted that recently in Holani Auto Links Private Limited v. State of Madhya Pradesh, reported in (2008) 13 SCC 185, the Supreme Court had an occasion to consider similar definition of the term dealer and similar restriction imposed under the M.P. Essential Commodities (Exhibition of Price and Price Control) Order, 1977. In that case, a dealer was defined as a person dealing in engine oil at any time in more than five kilolitres. After analysing this definition, the Supreme Court observed in para 21 of the judgment as under: 8 Cr.AJ-237.99 21. Therefore, considering the fact that more than 5 kilolitres of engine oil was found in the premises of the appellant Company and reading the agreement as a whole, in particular, the clauses quoted hereinabove, we have no doubt in our mind that the appellant Company squarely falls within the main part of the definition of dealer . In this view of the matter, we affirm the findings of the High Court that the appellant Company is covered by the main part of the definition of dealer . The learned APP, therefore, submitted that these observations of the Supreme Court would show that mere possession of quantity of the controlled article in excess of that prescribed would bring the person concerned within the definition of dealer and if such a person had not registered himself, an offence would be complete. 10. As rightly pointed out by the learned counsel for the appellant, the observations came in an altogether different context of requirement of the person concerned to register as a dealer and not in the context of an offence. Secondly, whether the person required to register himself as a dealer or to obtain appropriate licence has to be distinguished 9 Cr.AJ-237.99 from the question as to whether the person had dealt with the commodity in excess of the quantity prescribed without obtaining a licence. Contravention of the clause, which is an offence under Section 3, punishable under Section 7 of the EC Act, is of carrying on business as a dealer except and in accordance with the licence. Since these ingredients of carrying on business is not established by the prosecution and the prosecution has merely shown that the appellant was in possession of Gur, the presumption under sub-clause (3) of Clause 3 of the said Order leads the prosecution nowhere. 11. The learned APP also submitted that while deciding the case in Manipur Administration, the Supreme Court had not considered Section 10-C of the EC Act which raises a presumption about the culpable mental state. Now this presumption also would not lead to an inference that there was any transaction or dealing without obtaining a licence. At the cost of repetition, it has to be pointed out that what is prohibited is dealing with Gur in excess of 25 quintals at a time without obtaining a licence, and dealing does not include storage. The possession would lead to a 10 Cr.AJ-237.99 presumption that it could be for the purpose of sale but that presumption does not extend to sale in excess of the quantity of 25 quintals. It could be for sale of smaller quantities and since by the definition a dealer is one who deals with Gur at any one transaction in excess of 25 quintals, a licence is not required. Therefore, the conviction and sentence of the appellant, as stated in para 1 above, cannot be sustained. 12. The appeal is, therefore, allowed. The appellant s conviction for the offence under Section 3, punishable under Section 7 of the Essential Commodities Act, 1955 and sentence of RI for three months and fine of Rs.2500/- are set aside. Fine, if paid, be refunded. The bail bond stands cancelled. (R.C. CHAVAN, J.)