# Manipur Administration v. M. Nila CRIMINAL APPELLATE

- **Citation:** [1964] 5 S.C.R. 574
- **Court:** Supreme Court of India
- **Decided:** 1963-11-29
- **Case number:** Criminal Chandra Singh Appeal No. 143 of 1962
- **Bench:** P.B. Gajendragadkar, K.C. Das Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/manipur-administration-v-m-nila-criminal-appellate-2995
- **Pages:** 9

## Headnote

Manipur Foodgrains Dealers Licensing Order, 1958 els. 2(a),
3(1) & 3(2)-Storage of foodgrains-Dealer-Presumption under
cl. 3(2)-Whether attracts cl. 3(1)-Essential Commodities Act,
1955 (Act 10 of 1955), s. 7.
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 s. 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. 3(2)
of the Order a presumption arose against the respondent, taking
his case under cl. 3(1) of the Order, which in turn attracted the
provisions of cl. 7 of the Order and made the respondent liable
under s. 7 of the Essential Commodities Act. On these findings
the Magistrate convicted the respondent under s. 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. 13(2) 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 on the strength of the said presumption, cl. 3(1) of the Order cannot be attracted. In appeal by special
1eave,
Held:
(i) Under cl. 2(a) 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
mds. 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. 3(2) raises a statutory presumption that the stock of
100 mds. or more of specified goods found with an individual,
had been stored by him for the purpose of sale. After the presumption is raised under cl. 3(2), 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 cl. 3(1) is not covered by the presumption raised
under cl. 3(2).
:...
....
•
5 S.C.R.
SUPREME COURT REPORTS
575
(iii) Cl. 3(2) 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. 3(1)
read with s. 7 of the Essential Commodities Act.
1963
Manipur
Administration
v.
M. Nila
CRIMINAL APPELLATE
JURISDICTION:
Criminal Chandra Singh
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.
B.K. Khanna and R.N. Sachthey, for the appellant.
W.S. Barlingay, and A.G. Ratnaparkhi, for the
respondent.
November 29, 1963. The Judgment of the Court
was delivered by
GAJENDRAGADKAR, J.-The short question of Gajendragadkar
law which arises in this appeal relates to the construeJ.
tion of cl. 3(2) of the Manipur Foodgrains Dealers
Licensing Order, 1958. This question arises in this
way.
The respondent was charged with having committed an offence punishable under s. 7 of the Essential
Commodities Act, 1955 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 godo

## Text

1963
November 29
574
SUPREME COlJRT REPORTS
[1964]
MANIPUR ADMINISTRATION
]I.
M. NILA CHANDRA SINGH
(P.B. GAJENDRAGADKAR AND K.C. DAS GUPTA JJ.)
Manipur Foodgrains Dealers Licensing Order, 1958 els. 2(a),
3(1) & 3(2)-Storage of foodgrains-Dealer-Presumption under
cl. 3(2)-Whether attracts cl. 3(1)-Essential Commodities Act,
1955 (Act 10 of 1955), s. 7.
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 s. 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. 3(2)
of the Order a presumption arose against the respondent, taking
his case under cl. 3(1) of the Order, which in turn attracted the
provisions of cl. 7 of the Order and made the respondent liable
under s. 7 of the Essential Commodities Act. On these findings
the Magistrate convicted the respondent under s. 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. 13(2) 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 on the strength of the said presumption, cl. 3(1) of the Order cannot be attracted. In appeal by special
1eave,
Held:
(i) Under cl. 2(a) 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
mds. 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. 3(2) raises a statutory presumption that the stock of
100 mds. or more of specified goods found with an individual,
had been stored by him for the purpose of sale. After the presumption is raised under cl. 3(2), 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 cl. 3(1) is not covered by the presumption raised
under cl. 3(2).
:...
....
•
5 S.C.R.
SUPREME COURT REPORTS
575
(iii) Cl. 3(2) 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. 3(1)
read with s. 7 of the Essential Commodities Act.
1963
Manipur
Administration
v.
M. Nila
CRIMINAL APPELLATE
JURISDICTION:
Criminal Chandra Singh
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.
B.K. Khanna and R.N. Sachthey, for the appellant.
W.S. Barlingay, and A.G. Ratnaparkhi, for the
respondent.
November 29, 1963. The Judgment of the Court
was delivered by
GAJENDRAGADKAR, J.-The short question of Gajendragadkar
law which arises in this appeal relates to the construeJ.
tion of cl. 3(2) of the Manipur Foodgrains Dealers
Licensing Order, 1958. This question arises in this
way.
The respondent was charged with having committed an offence punishable under s. 7 of the Essential
Commodities Act, 1955 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 be 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
le~rned Sub Divisional Magistrate, Bishanpur, who
tned the case of the respondent did not believe his
statement that the stock was meant for the consump-
576
SUPREME COURT REPORTS
[1964]
1963
tion of the members of his family. He, however,
believed the evidence of Lalito Singh that 40 Mds.
Manipur
out of the stock belonged to him, and so he passed
Administration an order directing that out of the stock which had
v.
been attached 40 Mds. should be released in favour
M. Nila
of Lalito Singh. In regard to the rest of the stock,
Chandra Singh the learned trial Magistrate came to the conclusion
--
that as a result of the provisions contained in cl. 3(2)
Gajendragadkar of the Order a presumption arose against the responJ.
dent and that presumption took his case under cl. 3(1)
of the Order. That in turn attracted the provisions of
cl. 7 of the Order and made the respondent liable under
s. 7 of the Essential Commodities Act. On these
findings the learned Magistrate convicted the respondent of 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 pay 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 with
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 s. 7 of
the Essential Commodities Act. The order of sentence
also was confirmed.
The respondent then moved the Judicial Commissioner, Manipur, by a Revision Application aod 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 3(2) 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. 3(2) is not that the person against whom the said
..
5 S.C.R.
SUPREME COURT REPORTS
577
'...,__ -
·presumption has been drawn is a dealer in respect
1963
of the said goods; and so, merely_ on' the strength
of the said
p~esumption, . clause., .3(1) cannot be
Manipur
attracted; followmg his earlier dec1s1on the learned Administration
Judicial Commissioner allowed the respondent's Rev.
vision Application and set aside the order of convicM. Nila
tion and -sentence passed against him. It is against Chandra Singh
this order that the · Manipur Administration has
--
come to this Court by special leave, and on behalf Gajendragadkar
of the appellant Mr. B.K. Khanna has contended
J.
that the view taken by the learned Judicial Commissioner is based on a misconstruction of cl. 3(2) 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 -2(a)
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 mi1;unds or more at any -one _time;~ Clause
2(b) 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 I. Clause 3_ with which we -
are directly concerned in this appeal reads thus:
"(I) No person shall carry on business as a
dealer except under and in accordance witll
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
I SCl/64-37
578
SUPREME COURT REPORTS
[1964]
found to have contravened them his licence is liable
to be cancelled or suspended. These are the main
Manipur
provisions with which we are concerned in the present
Administration
al
1963
.appe . ·
.M vNila
· · In dealing with the point raised by Mr. Khanna
Chandra Singh before . us? it is pecessa!'Y to bear in mind that
-. _
' clause · 3 m question ultimately imposes a· penalty
Gajendragadkar on the offender and as such, it is in the nature of a
J. . _
penal clause. .Therefore, it is necessary that it must
·
be strictly construed. There is no doubt, as Mr.
Khanna has contended, that if cl. 3(2) 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. rods. 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 (l) of cl. 3.
Therefore, it is urged that
it. would be defeating the purpose of cl. 3(2) -if the
view taken by the learned Judicial Commissioner
is upheld, and the presumption raised under cl. 3(2)
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 s. 7 of the Essential Commodities Act, it is necessary to decide whether he can
be said to be a dealer within the meaning of cl. 3
ofthe Order. A dealer has been defined by cl. 2(a)
- 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 rods.
- 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,
, 5 S.C.R.
SUPREME COURT REPORTS
579
' but that he must be carrying on the business of such
1963
purchase, sale, or storage, and the concept of business
.
in the context must necessarily postulate continuity of
M_ai:ipur.
transactions. It is not a single, casual or. solitary Adm1mstrat10n
transaction of sale, purchase or storage that would
v.·
make a person a dealer. , It is only where it is shown
M. Nila
that there is· a sort of continuity of one or the other Chandra Singh
of the said transactions that the requirement as to
business postulated by the definition would be satisfied. Gajendragadkar
If this ele!Ilent of the definition is ignored, it would be
J. ·
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 rods. 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 p.o dispute before
...
us that retail transactions of less than 100 rods. 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. Similady, 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
2(a) should be carrying on the business of purchase,
580 .
SUPREME COURT REPORTS
[1964]
1963
Manipur
Administration
sale or storage, and .that would exclude solitary or
single cases of sale, purchase or storage. · .
.
'
-.
-
,
Bearing in mind, this necessery implication of the
v. .
. definition of the word "dealer'', let us proceed to
M. Nil~
inquire whether the respondent's .case falls under cl.
Chandra Smgh.J(l). Clause 3(1) prohibits persons from carrying
. -
· on business as dealers except under and in accordance
Ga1endragadkar with the terms of the · licence issued to them. In
J.
· other words, whoever wants t9 carry on the business ·
of a dealer must obtain a licence. There is no doubt
· that if a pf?rson carries on a business as described
by cl. 2ta) and does it without obtaining a lice~ce as
required by cl. 3(1), he would be guilty· under s. 7
of the Essential Commodities Act. : In this connection, . cl.
3(2)
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 explanation 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 food-
. grains for the purpose of sale thus presumed was
made by him for the purpose of carrying on the busilness of store of the said foodgrains. The element
·.of business which is essential to attract the provisions
... l?f 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. It. may be that this part of
the case can be proved by' the prosecution by showing
'
5 S.C.R.
SUPREME COURT REPORTS
581
that store of 100 mds. or more of the foodgrains
1963
was found with the said person more than once.
How many times it should be necessary to prove the
M_a~ipur.
discovery of such a store with the said person, is a Admm1strat1on
matter which we need not decide in the present case.
v ..
All that is necessary to be said in connection with
M. Nila
the presumption under cl. 3(2) in this case is that Chandra Singh
after the presumption is raised under it, some evidence
must be led which would justify the conclusion that Gajendragadkar
the store which was made for the purpose of sale
J.
was made by the person for the purpose of carrying
on the business.
Mr. Khanna contends that in construing the
effect of cl. 3(2) we must remember that this clause
makes direct reference to cl. 3(1), and that no doubt
is true; but the fact that cl. 3(2) directly refers to
cl. 3(1) 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. 3(1). That is the only effect of the
relevant words in cl. 3(2) 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. 3(2), 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 3(2) can assist his contention in view of the plain
words used by cJ. 3(2) itself.
/
582
SUPREME COURT REPORTS
[1964]
1963
It appears that cl. 3(2) may have been deliberately
worded so as to raise a limited presumption in order to
Manipur
exclude cases of cultivators who may on occasions
Administration be in possession of more than 100 mds. of foodgrains
v.
grown in their fields. If a cultivator produces more
M. Nila
than 100 mds. in his fields or otherwise comes into
Chandra Singh possession of such quantity of foodgrains once in a
year and casually sells them or stores them, the Order
Gajendragadkar apparently did not want to make such possession,
J. ·
sale or storage liable to be punished under cl. 3(1)
read with s. 7 of the Essenti!J,l Commodities Act.
However that may be, having regard to the words
used in cl. 3(2), we are unable to hold that the Judicial
Commissioner was wrong in coming to the conclusion
that cl. 3(2) by itself would not sustain the prosecution
case that the respondent is a dealer under cl. 3(1);
and that inevitably means that the charge under s. 7
of the Essential Commodities Act is not proved against
him. That being so, we must hold that the order of
acquittal passed by the Judicial Commissioner is
right.
1963
November 29
The appeal accordingly fails and is dismissed.
Appeal dismissed.
DR. YASH PAL SAHi
v.
DELHI ADMINISTRATION
(P.B. GAJENDRAGADKAR AND K.C. DAS GUPTA, JJ.)
The Drugs and Magic Remedies (Objectionable Advertisement)
Act, 1954 ss. 2(d), 3, 7, l4(l)(c)-"Taking any part in the publication
of any advertisement"-Meaning of-If includes sending within
the territory of India-Burden of proof-Conditions to be satisfied
to fall under s. 14(l)(c).
·
The appellant is the proprietor of a Homoeopathic hospital
in New Delhi. He runs a journal called the "Homoeopathic Doctor'.'.
-
t
-