R. RAMAKRISHNA, J. ( 1 ) THE important question of law which arises in this appeal relates to the construction of clause 3 of sub-clause (1) of the Karnataka edible oil dealers licensing order, 1977 (shortly 'order' ). ( 2 ) THE appellant is the proprietor of Sri vinayaka traders, no. 1247/a,santhepet, arsikere town, hassan district. He was charged of having committed an offence under section 7 of the essential commodities Act, 1955 (shortly 'the act'), having contravened the provisions of clause 3 of the order. The learned sessions judge having found that the prosecution has proved this contravention, has convicted and sentenced to undergo simple imprisonment for two months and to pay a fine of Rs. 2,000/- in default to pay the fine amount, he shall suffer s. i. for a period of one month. ( 3 ) THE case of the prosecution is that, p. w. 1 a. n. ramegowda, who wasworking as a police sub-inspector, food and civil supplies cell, bangalore, made a surprise visit to the vinayaka traders along with his staff and panch witnesses. On enquiry the appellant has produced a stock book and one cash bill book. The appellant informed that he had already applied for a licence but the same is under issue. On verification of the stock book, it was found that there was only a single entry dated 14-1-1986 showing 28 tins of refined oil, 7 tins of vanaspati, 10 tins of groundnut oil, 20 tins of sunflower oil and 99 bags of groundnut cakes. But on a physical verification of the stock, there was less than what was stated in the stock book. On further verification, the appellant informed that the balance stock was stored in a godown situated in another building. Thereafter, p. w. 1 and his staff members along with the appellant went to that godown and verified the physical stocks available in that place. On verification"the stock of the Articles were found to be more than what is stated in the stock register. P. w. 1 seized All the Articles along with stock book and cash bill book, under a panchanama ex. p. 1. Then he arrested the appellant and took him to the jurisdictions! Police station and handed over the appellant along with a mahazar. There, he lodged a complaint as per ex. p. 2. P. w. 1 seized All the Articles along with stock book and cash bill book, under a panchanama ex. p. 1. Then he arrested the appellant and took him to the jurisdictions! Police station and handed over the appellant along with a mahazar. There, he lodged a complaint as per ex. p. 2. ( 4 ) THE point that requires determination is:"whether the prosecution was able to prove the contravention of clause 3 of sub-clause (1) of the Karnataka edible oil dealers licensing order, 1977?"sri c. h. kamath, learned advocate for the appellant, has submitted that, to prove the contravention of clause 3, the prosecution should prove that the appellant stored edible oils and their by-products for the purpose of carrying on business and in that context, it is necessary to prove that the appellant was performing his function as a dealer. The learned advocate further submits that the prosecution has not proved that the appellant was carrying on business in these Articles except the fact that he was in possession of the articles. ( 5 ) THE term 'dealer' has been defined under section 2 (g) of the order as follows: '"dealer' means the person engaged in the business of purchase, sale or storage for sale of any edible oils whether or not in conjunction with any other business and includes his representatives or agent'' ( 6 ) CLAUSE 3 prohibits carrying on business as a dealer without a licence. Clause 3, sub-clause (1) is relevant and it reads thus:"no person shall after, 6th december, 1977 carry on business as a dealer in edible oils if the stock of edible oils in his possession exceed 5 quintals of All edible oils taken together except under and in accordance with the terms and conditions of the licences issued in this behalf by the licensing authority. "if we read the definition of 'dealer' under section 2 (g) and prohibition to carry on the business under clause 2, conjectively, the logical conclusion is that no dealer shall carry on business in edible oils, the stock of which, exceeding 5 quintals, without a valid licence issued by the licensing authority. It does not prohibit the possession of edible oils and their by-products. It does not prohibit the possession of edible oils and their by-products. ( 7 ) IT is in the evidence that the appellant has applied for grant of licence to the deputy director, food and civil supplies, hassan, which was pending before that authority. On his representation, dated 7-1-1986, the deputy director sent a reply dated 21-1-1986 that, in the connection of issuing a licence, the appellant should inform whether he is able to purchase and produce nsc of the value of Rs. 5,000/ -. Prosecution has not placed any material that the appellant was carrying on the business in edible oil and its by-products. P. w. 1 has stated in his cross-examination that;"i did not verify the ownership of vinayaka traders. The accused did not produce the purchase bills. There was no mention of the name of the seller of the said edible oil to vinayaka traders, in the stock book. There was no sale transaction and no entry was made to that effect in the stock book. I did not make any enquiry with the deputy commissioner whether licence was granted to the accused or not. " ( 8 ) IN manipur administration vm. Nila chandra singh, AIR 1964 SC 1533 , the hon'ble Supreme Court had the occasion to construct clauses 3 (1) and (2) of manipur foodgrains dealers licensing order, 1958. The definition of the dealer under clause 2 (a) is similarly worded as the definition found under section 2 (g) of the order. Clause 3 (1) prohibited to carry on business as a dealer except in accordance with terms and conditions of a licence issued by the licensing authority. Clause 3 (2) raised a presumption that if any person found storing foodgrains in quantity of more than 100 mounds or more at any one time shall deemed to have stored for the purpose of sale unless the contrary is proved. ( 9 ) THE respondent was found in possession of 178 mds. Of paddy in his godown, in excess of 100 mds. The respondent, however, took a contention that 40 mds. Of paddy which he was keeping was on behalf of bis relatives and balance was kept for the personal consumption of his family members. The learned magistrate ordered for release of 40 mds. To the relative and for the balance be has ordered the forfeiture of the paddy and further fined Rs. 500/ -. Of paddy which he was keeping was on behalf of bis relatives and balance was kept for the personal consumption of his family members. The learned magistrate ordered for release of 40 mds. To the relative and for the balance be has ordered the forfeiture of the paddy and further fined Rs. 500/ -. Against the said order, the sessions judge of manipur was approached and he has confirmed the order of the learned magistrate. When the respondent approached the judicial commissioner, manipur, by a revision application, the said application was allowed and the order of the courts below were set aside. The state questioned the order before the supreme court. In the course of the order at para 7, the Supreme Court held:"in dealing with the question as to whether the respondent is guilty under section 7 of the essential commodities Act, it is necessary to decide whether he can be said to be a dealer within the meaning of clause 3 of the order. A dealer has been defined by clause 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 mds, 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, but that he must be carrying on the business of such purchase, sale or storage; and the concept of business in the context must necessarily postulate continuity of transactions. It is not a single casual or solitary transaction of sale, purchase or storage that would make a person a dealer. It is only where it is shown that there is a sort of continuity of one or the other of the said transactions that the requirements as to business postulated by the definition would be satisfied. If this element of the definition is ignored, it would be rendering the use of the word "business" redundant and meaningless. " ( 10 ) LN shrivallabh v State of mysore, 1966 (2) mys. lj. If this element of the definition is ignored, it would be rendering the use of the word "business" redundant and meaningless. " ( 10 ) LN shrivallabh v State of mysore, 1966 (2) mys. lj. 79, a learned single judge of this court while dealing clause 5 of fertiliser control order, 1957, has held:"reading the definition of dealer in clause 2 (c) and clause 5 of the fertiliser control order, no person can carry on business of selling fertilisers without a licence. The restriction is a restriction on trade and has to be construed strictly. In a prosecution for contravention of clause 5 it is obligatory on the prosecution to establish by independent evidence that the accused was carrying on business in fertilisers. In the absence of such evidence the prosecution cannot succeed by relying on section 14 of the essential commodities act" ( 11 ) IN mohammad yakoob v State of mysore and union of India, 1969 (2) mys. Lj. 73, a learned single judge of this court, while dealing with the term"business of sale by a retail dealer" under clauses 2 (a) and (3) of mysore foodgrains (retail) dealers licensing order, 1964, held: "in order to show that a person has engaged himself in the business of retail sale of foodgrains to customers, it must be established that there was continuity of transactions. That the accused had sold rice on two occasions, does not prove continuity of transactions. " ( 12 ) IN deokaran das agarwala and others v the State of bihar, 1969 (1) scwr 155, the question before the Supreme Court was, whether the storage of edible oil bonafide during pendency of application for renewal of licence under Bihar edible oil wholesale dealers' licensing order (1966) and the storage thereon amounts to constitute of an offence as a dealer? It was held:"if a party who is liable to obtain a licence has made an application for licence but the licence has not actually been issued - storage of goods if he bonafide believes that he is entitled to store them - such a person cannot be punishable because a guilty mind or an intention to commit a breach of the provisions of the order cannot be attributed to him. Once it was proved that making of an application and payment of the necessary charges was in the bonafide belief of the appellants sufficient compliance with the requirements and an actual issue of a licence was not necessary, prima facie no offence could be deemed to have been committed. " ( 13 ) HAVING regard to the law being well settled on this point and since the appellant after applying for wholesale dealer licence in edible oils, was found storing some stocks, this does not constitute an offence falling under clause 3 (1) of the order. To constitute an offence, the prosecution should prove that the storage of Articles is with a view to carry on business as a dealer as defined under section 2 (g) of the order. ( 14 ) SINCE the prosecution has failed to prove the offence levelled against the appellant, the order of conviction and sentence passed by the learned sessions judge, is legally unsustainable. In the result, this criminal appeal is allowed. The order of conviction and sentence passed by the sessions judge in b. c. no. 13 of 1986 on 16-1-1990 is hereby set aside. The appellant is hereby acquitted and his bail bonds stand cancelled. If the appellant had paid any fine amount, the same shall be refunded to him. --- *** --- .