Nagarmal Tekriwal Vs. State of Bihar
 INSC 49 (4 March 1970)
Bihar Foodgrains Dealer's Licensing Order,
1966, Para, 3(2)Presumption front storage of foodgrains when to be drawnExemption
Evidence Act, 1872-Lease-deeds even if not
registered can be used in criminal case for collateral purpose-Oral evidence
not to be rejected on mere ground that it is of next-door neighbours.
On search of the appellant's premises food grains
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 of the Order. The appellant produced oral and documentary
evidence to show that he was an agriculturist and therefore the presumption
tinder 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 magistrate on the ground that
the lease deeds not being registered were not admissible in evidence under s..
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. 3(2) 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] (iv)The total circumstances in
the case showed that the appellant was in fact carrying on agricultural
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. 3(2) 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
Manipur Adminisration v. M. Nila Chandra
Singh,  5 S.C.R.574. referred to and explained.
CRIMINAL APPELLATE JURISDICTION: Criminal
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
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,
550 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 EssentialCommodities 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 presumption
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 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
Mr. B. P. Singh, in arguing the case has
drawn our attention to a ruling of this Court in Manipur Administration v. M. Nila
Chandra Singh(1) 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. Theruling many of-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)  5 S.C.R. 574.
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 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 logical conclusion. In the -present case, the appellant produced a
number of leasedeeds 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 big has 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
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 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