# NAGARMAL TEKRIWAL v. STATE OF BIHAR

- **Citation:** [1970] 3 S.C.R. 899
- **Court:** Supreme Court of India
- **Decided:** 1970-03-04
- **Case number:** Crimital Appeal No. 40 of 1968
- **Bench:** M. Hidayatullah, A. N. Ray, I. D. Dua
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/nagarmal-tekriwal-v-state-of-bihar-4984
- **Pages:** 4

## Headnote

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Bihar Foodgrains Dealer's Licensing Order, 1966, Para, 3(2)-Presumption from storage of foodgrains when to be drawn-Exemption for
agriculturists.
Evidence Act, 1812-Lease-deeds even if not registered can be used
in criminal case for collateral purpose-Oral evidence not lo be rejected
on mere ground that it is of next-door neighbours.
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 s. 7 of the Essential .Commodities
Act for violation of cl'. 3 QI the Order. The appellant produced oral and
documentary evidence to show that he was an agl'iculturist and therefore
the presumption under cl. 3(2) 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 Rlagistrate on the ground that the leasedeeds not being registered were not admissible in evidence under s. 49 of
the Registration Act. The Sessie>ns 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 Couict.
HELD : ( i) Cl. 3 ( 2) of the Or\ler expressly excludes bona fide consumers and agriculturists from the presumption to be drawn from proof
of storage. only. It is obvious that the sub-01ause speaks of storage for
sale as a dealer although the words 'as a deale<' 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-cla~e must be- carried to its
lo~c~ conclusion, [902 Bl
(ii) No doi.ibt the lease-deeds were not registel'ed" but in a criminal"
case it had to be 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 witne8ses
spoke. orally were held by him for purposes of cultiVJltion. [902 DI
(iii) There is no reason why the evidence of a nex\ door neighbour
should be rejected unless there is something intrinsically wrong witll it.
[902 E-FJ
(iv)The tOtal circumstances in the case showed that the appellant
was in fact carrying on agricultural operations. He executed a number
of lease-<leeds, prodl!ced receipts and proved by ocal evidence, that he·
900
SUPllEME COUllT 11.JIP()llTS
[1970] 3 S.C.R.
\i..as an agriculturist.
In his case therefore '8e presumption under cl.
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3(2) could not be drawn. If that presumption was not drawn, the case
;.1gainst him stood unproved
because of the exemption
which
agricul·
turists enjoy. [902 F-G]
The appeal must accordingly be allowed.
Ma11/p11r Adminisratio11 v. M. Nila Ch,.rulra Singh, [1964] 5 S.C.R.
5 74, referred to and explained.

## Text

A.
NAGARMAL TEKRIWAL
v.
STATE OF BIHAR
March 4, 1970
899
B
[M. HIDAYATULLAH, C.J., A. N. RAY AND I. D. DUA, JJ,]
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Bihar Foodgrains Dealer's Licensing Order, 1966, Para, 3(2)-Presumption from storage of foodgrains when to be drawn-Exemption for
agriculturists.
Evidence Act, 1812-Lease-deeds even if not registered can be used
in criminal case for collateral purpose-Oral evidence not lo be rejected
on mere ground that it is of next-door neighbours.
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 s. 7 of the Essential .Commodities
Act for violation of cl'. 3 QI the Order. The appellant produced oral and
documentary evidence to show that he was an agl'iculturist and therefore
the presumption under cl. 3(2) 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 Rlagistrate on the ground that the leasedeeds not being registered were not admissible in evidence under s. 49 of
the Registration Act. The Sessie>ns 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 Couict.
HELD : ( i) Cl. 3 ( 2) of the Or\ler expressly excludes bona fide consumers and agriculturists from the presumption to be drawn from proof
of storage. only. It is obvious that the sub-01ause speaks of storage for
sale as a dealer although the words 'as a deale<' 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-cla~e must be- carried to its
lo~c~ conclusion, [902 Bl
(ii) No doi.ibt the lease-deeds were not registel'ed" but in a criminal"
case it had to be 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 witne8ses
spoke. orally were held by him for purposes of cultiVJltion. [902 DI
(iii) There is no reason why the evidence of a nex\ door neighbour
should be rejected unless there is something intrinsically wrong witll it.
[902 E-FJ
(iv)The tOtal circumstances in the case showed that the appellant
was in fact carrying on agricultural operations. He executed a number
of lease-<leeds, prodl!ced receipts and proved by ocal evidence, that he·
900
SUPllEME COUllT 11.JIP()llTS
[1970] 3 S.C.R.
\i..as an agriculturist.
In his case therefore '8e presumption under cl.
A
.,-·~
3(2) could not be drawn. If that presumption was not drawn, the case
;.1gainst him stood unproved
because of the exemption
which
agricul·
turists enjoy. [902 F-G]
The appeal must accordingly be allowed.
Ma11/p11r Adminisratio11 v. M. Nila Ch,.rulra Singh, [1964] 5 S.C.R.
5 74, referred to and explained.
CRIMINAL APPELLATE JURISDICTION: Crimital 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. Milhra and Gm·ind Das, for the appellant.
R. C. Prasad, for the respondent.
The Judgment of the Court was delivered by
Hidayatullalt, C. J.
On May 28, 1966, Bhola Prasad Manda!,
Supply Inspector Pathargama with other officers searched a
godown belonging to Nagarmal Tekriwal (appellant) and found
stored therein 45 quintals of rice, 90 quinta!s 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 s. 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 imorisonment 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 Hiah 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 fn&dgrains 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 cer!ain lease-deeds executed by
him dnd 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-
~cssiqn. v·~re grown.
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NAGARMAL v. STATE OF B!HAR (Hidayatullah, C.J.)
90 l
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The case proceeded against him on the basis of the presumpB
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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.
(21 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
food grains 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
a~riculturist
stands completely proved in this case.
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The learned Magistrale rejected the documentary evidence on
the ground that the lease-deeds were not registered and were not
admissible in evidence under s. 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 v. M. Nila
C lwndra Singh( 1 ) and contended that, the appellant cannot be
regarded as doing business as a dealer unless a series of transacliom by him of ;ale were proved against him.
The ruling does
sav that the words "carrving on the business" in the context of_
the Act postulate a course of conduct and continuity of transactions. The ruling may not be applic:ible fri certain circumstances.
as for example where even a single transaction can be demonstrntcd 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:
ill [1964] 5 S.C.R. 574.
902
SUPREME COURT REPORTS
(197.0J 3 S.C.R.
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 3 ( 2) 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 ~ogical conclusion. In the
_present case, the appellant produced a number of ]ease-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
.-0ur 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 forward 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 3 ( 2) 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 improperly reached. We allow the appeal and set aside his conviction.
His bail bonds are cancelled.
The· order of forfeiture
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of foodgrains is also set aside.
We are informed that the foodgrains were sold.
If any money has been recovered by sale of
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the foodgrains, it shall be handed over to the appellant.
G.C.
Appeal allowed.
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