State v. Zamir Ahmad, Tobacco Dealer — 1966 DIGILAW 343 (ALL)

ORDER J.N. Takru, J. - This is an appeal by the State against the judgment and order of the learned City Magistrate, Rampur, dated 17-2-1964, acquitting the Respondent u/s 9(a) and 9(b) of the Central Excises and Salt Act and Rule 151(e) of the Central Excise Rules, 1944. 2. According to the prosecution, the Respondent was a licensed tobacco dealer. In July 1962 his warehouse was inspected by PW-I M.P. Mathur, a Dy. Superintendent of the Central Excise and Customs, with the following result: (1) Under Entry No. II/1 dated 15-2-1962, the Respondent had a balance of 668 mds. 2 srs. and 12 Ch. (net weight) of stalks, but on full weighment they weighed only 474 mds. 20 srs and 2ch. (2) Under Entry No. II/2 dated 4-3-1962 the Respondent had 105 bags of stalks weighing 157 mds. 21 srs. but at the time of inspection only 71 bags were available in the warehouse. Out of these 71 bags, only 61 bags weighing 91 mds. 27 srs. tallied with the description and weight given in the warehouse register, while the contents of the remaining 10 bags were removed from the warehouse and 15 mds. 24 srs. of local patti choora was substituted in their place. (3) Under Entry Not 1/19 dated 4-3-1962 the recorded balance was 23 bundles and one bag weighing 45 mds. 17 srs. but on weighment the individual packages showed wide variations from their recorded weights and out of them three bundles and the bag were found filled with local patti choora instead of Kampila Ganj and hole leaf and weighed 4 mds. 26 srs. as against their recorded weight of 7 mds. 27 sfs. 3. The case for the prosecution was that the aforesaid goods had been removed from the warehouse otherwise than as provided in the Central Excise Rules and without payment of the duty leviable on them and the Respondent was therefore, guilty for the contravention of the provisions of Section 9(a) and 9(b) of the Central Excise Act-hereinafter called the Act-and Rule 151(c) of the Central Excise Rules-hereinafter called the Rules. 4. The Respondent pleaded not guilty though he admitted that the shortages detected by PW 1, M.P. Mathur were correct. 4. The Respondent pleaded not guilty though he admitted that the shortages detected by PW 1, M.P. Mathur were correct. His defence, shortly stated, was that the work of the warehouse used to be looked after by his servant Aqil Ahmad Khan, who, during the Respondent's absence on Haj from March to June 1962, committed theft of the aforesaid goods and created the shortages found by PW 1, M.P. Mathur. The Respondent there fore pleaded that he was not criminally liable for those shortages. 5. The prosecution produced PW 1, M.P. Mathur and the various registers kept at the Respondent warehouse, to prove its case, while the Respondent examined DW 1, Irshad Husain in his defence. The learned City Magistrate accepted, the evidence of PW 1, M.P. Mathur, but held that as the prosecution has failed to prove that the Respondent was either personally or through his servant liable for those shortages he could not be held guilty Under Rule 151(c) of the Rules or Section 9(a) and 9(b) of the Act and on this finding he ordered his acquittal. Hence this appeal. 6. The learned Govt. Advocate for the State vehemently contended that as on a correct interpretation of Rule 151 the owner of the goods warehoused', was absolutely and unconditionally liable for any breaches thereunder, the learned City Magistrate was in error in ordering the acquittal of the Respondent. After examining the relevant provisions of law and the authoriteis placed before me and hearing the learned Counsel for the parties, I am, however, of the opinion that the aforesaid contention is not sound. I shall, therefore proceed to give my resasons for coming to that conclusion, after quoting the material parts of the Rule in question. Thus quoted the Rule reads as follows: 151. Offences with respect to Warehousing: If any owner of goods Warehoused...by himself or by any person in his employ or with his connivance, commits any of the following offences, namely: (a)............(b)............(c)............or removes goods from, a warehouse other wise than as provided by these rules, or (d)............. he shall be liable to a penalty which may extend to two thousand rupees....' On the admitted facts of the case, the sole question falling for determination is, whether the liability imposed upon the 'owner of the goods warehoused' under the aforesaid Rule is absolute and unconditional or requires proof of mens rea on his part. he shall be liable to a penalty which may extend to two thousand rupees....' On the admitted facts of the case, the sole question falling for determination is, whether the liability imposed upon the 'owner of the goods warehoused' under the aforesaid Rule is absolute and unconditional or requires proof of mens rea on his part. The law relating to mens rea has been the subject matter of numerous decisions, but, as the last word on it has been said by the Supreme Court in Nathulal Vs. State of Madhya Pradesh, AIR 1966 SC 43 it is necessary to refer to them. In Nathoo Lal, the Supreme Court observed thus: "The law on the subject is fairly well settled. It has come under judicial scrutiny of this Court on many occasions. It does not call for a detailed discussion. It is enough to restate the principles. Mens rea is an essential ingredient of a criminal offence. Doubtless a statute may exclude the element of mens rea, but it is a sound rule of construction adopted in England and also accepted in India to construe a statutory provision creating an offence in conformity with the common law rather than against it unless the statute expressly or by necessary implication excluded mens rea. The mere fact that the object of the statute is to promote welfare activities or to eradicate a grave social evil is by itself not decisive of the question whether the element of guilty mind is excluded from the ingredients of an offence. Mens rea by necessary implication may be excluded from a statute only where it is absolutely clear that the implementation of the object of the statute would otherwise be defeated. The nature of the mens rea that would be implied in a statute creating an offence depends on the object of the Act and the provisions thereof. 7. Mens rea by necessary implication may be excluded from a statute only where it is absolutely clear that the implementation of the object of the statute would otherwise be defeated. The nature of the mens rea that would be implied in a statute creating an offence depends on the object of the Act and the provisions thereof. 7. Thus according to the decision cited above mens rea must be held to be an essential ingredient of the offence Under Rule 151, unless the language of that Rule expressly or by necessary implication excluded it further that exclusion by necessary implication was to be inferred only if it was "absolutely clear that the implementation of the object of the statute would otherwise be defeated." A plain reading of the Rule shows that it does not expressly exclude the element of mens rea and consequently, the next question which has to be seen is whether it does so by necessary implication. The answer to that question depends upon (1) the language of that Rule and (2) whether the object of the statute i.e. the Act and the Rules made thereunder, would be defeated unless the requirement of mens rea was excluded from it. I shall take up the latter point first. Now so far as the Act is concerned it does not state what its object is but as it is a fiscal statute, its object clearly could be nothing else than that of raising revenue for the State. Can it be said that that object would be frustrated unless the element of mens rea is excluded from Rule 151? In my opinion such an apprehension is baseless for so long as the shortage is known there can be no evasion of the duty which is payable by the 'owner of the goods warehoused'. Thus the object of the Act does not justify the exclusion of mens rea in the construction of Rule 151. We are, therefore, left with the plain language of the Rule for the decision of that question-a task to which I shall now proceed to address myself. 8. Now, the Rule in question, in so far as it is material for our present purposes, has been quoted earlier. We are, therefore, left with the plain language of the Rule for the decision of that question-a task to which I shall now proceed to address myself. 8. Now, the Rule in question, in so far as it is material for our present purposes, has been quoted earlier. The said rule besides specifying the offences for which the 'owner of the goods warehoused' is personally liable, also contains the kinds of acts for which he is held vicariously liable. Those acts fall under three categories, viz. (1) acts committed by himself, (2) acts which he gets committed by a person in his employment and (3) acts committed by a person with his connivance. If the act is committed by a person falling under any one of these categories, the liability for it is laid at the door of "the owner of the goods warehoused". The learned Govt. Advocate contended that as the acts in question resulting in the shortages referred to above, were admittedly committed by a servant of the Respondent he was vicariously liable for them. In my opinion this contention is not borne out by the syntax of the Rule and the use of the words 'with his connivance' therein. So far as the former is concerned it is to be noted that the Rule clearly states that if the 'owner of the goods warehoused 'by himself or by any person in his employ- leaving aside the question of with his connivance' for the moment-commits any of the offences enumerated in that Rule he would be held responsible for the same. In my opinion the use of the words "by himself or by any person in his employ" clearly show, that if the impugned act is not performed by "the owner of the goods warehoused" himself, but is committed by 'a person in his employ' then the former can be made liable for it, only if the prosecution is able to prove, that it was done either at his asking or to his knowledge or with his connivance. I am fortified in this view as on any other construction the words "by himself" preceding the words "by any person in his employ" and the word "commits" following them become meaningless, not to say otiose. The division of the offending acts in two categories viz. I am fortified in this view as on any other construction the words "by himself" preceding the words "by any person in his employ" and the word "commits" following them become meaningless, not to say otiose. The division of the offending acts in two categories viz. (1) those committed by 'the owner of the goods warehoused,' and (2) those committed by a person in his employ was clearly unnecessary, if the former was to be held liable for them in any event. Besides in that case the framers of the Rules could have expressed their intention much more appropriately by framing the Rules, so as to say, that if the owner of the goods warehoused, or any person in his employ or with his connivance, commits any of the offences etc. etc., the former shall be liable to a penalty of etc. etc. The fact that the Rule was not framed as stated above, seems to me to leave no room for doubt that 'the owner of the goods warehoused was intended to be held liable for the acts of a person in his employ only if he-the owner-was responsible forgetting them done, or if they were done to his knowledge or with his connivance. Thus on a plain reading of the Rule it cannot be held to exclude mens res on the part of "the owner of the goods warehoused" for the acts of a person in his employ and as, in the present case, the prosecution has failed to establish mens rea on the part of the Respondent he was rightly held not guilty by the learned City Magistrate. 9. The learned Government advocate cited a number of decisions before me in support of his contention that the aforesaid rule made "the owner of the goods warehoused" absolutely liable for the acts of a person in his employ. * * * * (His Lordship then examined the decisions in L. Gillumal Vs. Emperor, AIR 1946 All 393 ; Govind Prasad Sharma Vs. Board of Revenue and Others, AIR 1965 MP 66 and Tharoo Lal and Another Vs. State, (1962) CriLJ 126 and having come to the conclusion that none of them has any application to the present case, proceeded on as follows:) 10. On behalf of the State, Rule 225 of the Rules was pressed into aid for construing Rule 151. That Rule reads as follows: 225. State, (1962) CriLJ 126 and having come to the conclusion that none of them has any application to the present case, proceeded on as follows:) 10. On behalf of the State, Rule 225 of the Rules was pressed into aid for construing Rule 151. That Rule reads as follows: 225. Producer or manufacturer liable for removal of goods by any person-If any excisable goods are, in contravention of any condition prescribed in these Rules, removed by any person from the place where they are produced, manufactured or warehoused, the producer or manufacturer or the licensee or keeper of the warehouse shall be held responsible for such removal and shall be liable to be dealt with according to the provisions of the Act or the Rules as if he had removed the goods himself. In my opinion, however, this Rule cannot be taken into consideration for interpreting Rule 151, for the simple reason that if that is done it would have the effect of making the words "only the person in his employ or with his connivance" redundant toot to say meaningless. It is a well settled rule of construction of statutes that an interpretation which has the aforesaid effect is not permissible. Hence Rule 225 which appears in the Chapter headed "Miscellaneous" and is preceded by Rule 224, which lays down conditions for the removal of excisable goods, must be held to be confined in its scope to the removals which are done in violation of the restraints and conditions laid down in that Rule (Rule 224). Those restraints and conditions are quite different from those mentioned in Rule 151. There is thus nothing either in the Act or the Rules or the authorities which were brought to my notice, which militate against the view expressed by me above. The Respondent was, therefore, rightly held not guilty for the contravention of Rule 151 of the Rules and Section 9(a) of the Act. 11. This brings me to the consideration of the only other question involved in this appeal, namely whether the Respondent can be held guilty for evasion of payment of duty on the shortages u/s 9(b) of the Act. 11. This brings me to the consideration of the only other question involved in this appeal, namely whether the Respondent can be held guilty for evasion of payment of duty on the shortages u/s 9(b) of the Act. In ray view on the finding recorded by me above, to wit, that the Respondent is not liable for the breach of Rule 151, he, clearly, cannot be held guilty for evading the payment of duty on the goods removed by his servant without his knowledge or connivance, obviously because, before he is held responsible for evading the payment of duty, it must be held that he was responsible for the removal of the goods on which the duty was payable or was at least aware of the said removal-neither of which is proved in this case. It follows, therefore, that whatever the liability of the Respondent in regard to the payment of duty on the shortages in question in a civil action might be, he is criminally not liable for the same. The acquittal of the Respondent u/s 9(b) of the Act was also, therefore, correct. The result therefore is that the order of acquittal under all the counts must be upheld. The appeal accordingly fails and is dismissed.