State by Public Prosecutor vs Guruswamy and Another

Ratnavel Pandian, J.—The State, represented by the Public Prosecutor, has preferred this appeal challenging the correctness and propriety

of the judgment of the learned Sessions Judge, Tirunelveli, made in C.A. Nos. 25 and 28 of 1974, dated 22nd April, 1974, acquitting both the

accused of the offence punishable u/s 3, of the Madras Gift Goods (Unlawful Possession) Act, 1961 (Madras Act 49 of 1961) (hereinafter

referred to as the Act), of which they were convicted and sentenced by the Sub Divisional Judicial Magistrate, Kovilpatti in C.C. 217 of 1973 by

his judgment dated 31st January, 1974.

The crux of the indictment as per the prosecution case is as follows On 15th February, 1973, at about 9-15 p.m. on information the Tahsildar

and Executive II Class Magistrate Kovilpatti (P.W.1), along with the Taluk Supply Officer and party, searched accused-l''s Lorry Booking Office,

Kovilpatti and seized 33 packets of American Soya Bean Salad Oil, each packet containing six tins, in the presence of the first accused. On the

same night, on information furnished by the first accused, he seized 424 packets of Soya Bean Salad Oil at Vinayagar Match Factory and

Sivagami Match Factory, belonging to his (accused-l''s) son and wife respectively. These contrabands (457 packets in all, containing 2742 tins)

were sent by accused-2 of Trivandrum to the first accused at Kovilpatti for disposal and transport. The evidence of P.W. 1 is to the effect that the

1st accused told him that these contrabands were brought by the son-in-law of accused-2 and one Kolappan Pillai through a lorry bearing

Registration No. MDK 1448 at 9 a.m. on 15th February 1973 and were entrusted to him for the purposes of transporting some of them to

Madurai and selling the rest in the nearby villages. P.W. 1 would further testify that accused-1 had no Katchathu (voucher) or any document for

the custody of these contrabands in the above-said premises. These properties were seized under Exs. P-l to P-3 between 11 p.m. on 15th

February 1973 and 1-30 a.m. on 16th February 1973. When questioned by him, according to P.W. 1, accused-1 told him that accused-2

contacted him over phone from Trivandrum at 11 p.m. on 14th February 1973 and informed him that he would be sending American Soya Bean

Salad Oil in a lorry with a certificate from the Commercial Taxes Department as though 70 packets of wheat were being transported, to which

proposal accused-1 had agreed. P.W. 1 recorded a signed statement from accused-1 under Ex. P-4, which was read over to and accepted by

accused-1. The said document Ex. P-4 is also attested by the Special Deputy Tahsildar, the Taluk Supply Officer and an Assistant in the Taluk

Office, who were present there. The goods that were seized by P.W. 1 were gift goods since some of the packets had been affixed with a label

CARE"" whereas the remaining packets were affixed with the rubber stamp impression ""CATHWEL"". Then, he sent a report about the seizure on

16th February 1973 to the District Collector, who thereafter preferred a complaint to the Superintendent of Police. P.W. 5, the then Sub Inspector

of Police, Kovilpatti, on receipt of the complaint Ex P-9 from the Collector of Tirunelveli on 23rd February 1973, registered a case in Crime No.

70 of 1973 u/s 3 of the Act and investigated. He examined P. Ws. 1 to 4 and other witnesses and filed a charge sheet, Thereafter, both the

accused surrendered before the Court of the witnesses examined, P.W.2, Mr. D''Silva is the administrative Assistant Catholic Relief Service,

United States Catholic Conference, New York attached to the Catholic Relief Service, Madras Zonal Office. It is his evidence that generally

consignments of goods of this nature are sent by the United States to the Food Corporation of India, which in turn distributes the same to various

consignees such as convents and other similar institutions, the Corporation of Madras, etc., as per their allocations, and these gift goods are never

consigned to private individuals. While distributing, the consignments of Soya Bean Oil should be distributed in loose condition, but not in bulk, and

the maximum quantity of oil which is distributed to the beneficiary is not more than three lbs. per month. He would say that each tin contains 7.7

lbs.; of Soya Bean Oil. All the material objects except one, according to him, are in the original packing as packed in the United States, as seen

from the iron band over the packet. Then, the witness describes the particulars of the consignments and the manner in which these consignments

are sent through ships. P.W. 3 is the Field Officer attached ''to ""CARE"", Tamil Nadu, situated at the D.P.E. Buildings, Madras. On 9th April

1973, he inspected the goods in question at the warehouse in Kovilpatti. 80 cartons were found to bear the labels ""CARE"" and they are marked as

M. Os. 1 to 80. It is his positive evidence that they received these M. Os. 1 to 80 as gift goods from the United States. The witness further

deposes that the majority of the beneficiaries are the poor section of the School children and the other beneficiaries are pre-school children and

pregnant and lactating mothers and these gift goods should not be sold in India. P. W. 4 is the Deputy Assistant Administrative Officer attached to

CARE"", Tamil Nadu. As per his evidence, M Os. 1 to 76 are ""CARE"" goods which arrived by the ships covered by the Bill of Lading Exs. P - 7

and P-8, and those goods are intended to be distributed to the poor people. M. Os. 77 to 80 bear the ""CARE"" label. But, the shipment numbers

are torn. All the properties seized form various places are marked as M. Os. 1 to 47.

When the accused were examined u/s 251-A(2), Code of Criminal Procedure, accused-1 admitted all the facts except the fact that the goods

were kept by him for purposes of sale. He added that he was keeping 457 packets of Soya Bean Salad Oil to be sent to the various places to

which accused-2 might direct him to send. Accused-2 stated that he had purchased these goods from various places and sent the same to

accused-1, so that accused-I could send them to other places as per his direction. But, he would add that he never directed accused-1 to sell the

oil. Once again, after taking the evidence, when these accused were examined u/s 342 Code of Criminal Procedure, with regard to the

incriminating circumstances appearing against them, both the accused reiterated the same statement as given u/s 251-A, Code of Criminal

Procedure Accused-1 would admit recovery of M. Os. 1 to 457 from his lorry shed and from the match factories standing in the names of his wife

and son and would add that these properties were brought by the son-in-law of accused-2 who contacted him through phone on the previous night

on 14 February 1973. He claimed no knowledge about the other facts spoken to by P. Ws. 2 to 5. In addition to his oral statement, he also

submitted a written statement. Accused-2 has stated that he had purchased these goods from various places and sent them to accused-1 for being

transported to the other places according to his direction. In addition to that, he would add that Soya Bean Salad Oil was sold in the open market.

However, he denied that he contacted accused-1 over the phone. No defence witness was examined.

The learned Sub-divisional Judicial Magistrate, after elaborately and meticulously discussing the evidence and meeting out all the points raised by

the defence, found both the accused guilty of the offence with which they stood charged and convicted them thereunder and sentenced accused-1

to undergo rigorous imprisonment for one year and also to pay a fine of Rs. 1000/-, in default to suffer rigorous imprisonment for two months, and

sentenced accused-2 to undergo rigorous imprisonment for two years and to pay a fine of Rs. 2000/-, in default to suffer rigorous imprisonment for

three months. By this judgment, the learned Magistrate ordered M. Os. 1 to 457 to be confiscated to the State, directing that the properties should

be given to the District Educational Officer at Kovilpatti, for being distributed according to the rules after the expiry of the appeal time.

Aggrieved by the said judgment, both the accused preferred C.A. Nos. 25 and 28 of 1974 respectively before the Court of Session, Tirunelveli.

The learned Sessions Judge held (1) that accused-1 had satisfactorily accounted as to how he came to possess the Soya Bean Oil, that there was

nothing to show that the goods were stolen from anywhere as there was no complaint from any quarters that the Soya Bean Oil had been lost or

stolen away and that therefore accused-1 could not be held responsible for possessing any of the Gift Goods, (2) that there is no evidence worthy

of credence to show that the goods were supplied either to any State Government or to the Central Government or to any person on behalf of

such Government and that if anybody in charge of distributing the articles chose to abuse that position and diverted the Gift Goods, the person who

purchased or collected them cannot be saddled with any criminal liability without proof or shown to have received the goods from the suppliers

either on behalf of the State Government or the Central Government; if there is any contravention of the procedure for food distribution by any

agent or ""contact person"" of the Relief Organization, it is a matter between the concerned Relief Organization and its ""contact person"" and a matter

which comes within the mischief of Section 3 of the Act. Relying on the decision in Sheik Abubaker In Re 1968 1 M.L.J. Cri. 760.: 1968 LAV.

Cri. 182 and in Ayyavu Chetty In Re 1965 M.L.J. Cri. 619: 78 L.W.191, he further held that the prosecution had not proved beyond all

reasonable doubt that Soya Bean Salad Oil had been supplied to any State Government or the Central or to any other person on behalf of such

Government and that they could be suspected of having been stolen or unlawfully obtained, Besides he has also taken the view that the fact that the

properties were not straightway produced into Court on their being seized from accused-1, is an infirmity in the prosecution case. In the light of the

above observations, he found both the accused not guilty and acquitted them of the offence with which they stood charged. He ordered the return

of M. Os.l to 457 to the appellant in C.A.28 of 1974 (second accused herein.) Aggrieved by the judgment, the State has preferred this appeal.

The learned Public Prosecutor raises the following contentions: (1) The prosecution has satisfactorily established that all the ingredients

necessary to make out an offence punishable u/s 3, of the Act are present in this case. (2) The prosecution, by letting in satisfactory and clinching

evidence, has proved the ingredients of the first part of Section 3, of the Act and therefore the lower appellate Court ought to have confirmed the

conviction made by the trial Court as there is absolutely no explanation whatsoever on the side of the defence explaining as to how the accused

came into possession of the goods. (3) The lower appellate Court has erred in comparing Section 3, of the Act with Section 65 of the Tamil Nadu

City Police Act, to base its conclusion. (4) The reason of the lower appellate court that there is no complaint of theft of Soya Bean Salad Oil from

any quarters so as to hold the said properties as stolen properties, is erroneous as it is not necessary that there should be a report of theft of the

goods concerned; but at the same time it is sufficient if the facts and circumstances disclose that the property is reasonably suspected of having

been stolen or unlawfully obtained. According to the Public Prosecutor, there is overwhelming and formidable evidence to hold that the properties

concerned viz., M. Os. l to 457 are either proved to bear the character of stolen goods or proved to have been unlawfully obtained. When once

these limbs of Section 3, are established, then the burden shifts to the accused to account satisfactorily as to how they came into possession of the

goods. Finally he would urge that the order of the learned Sessions Judge, directing the return of M. Os.l to 457 to the accused is illegal.

Mr. Venugopal, appearing for the accused, laid emphasis on the definition of the term ""Gift Goods"" as contemplated in Section 2(l) of the Act

and contended that the prosecution has miserably failed to prove that the goods M. Os. 1 to 457 were Gift Goods within the definition of the Act

and that there is no satisfactory evidence to establish that the goods in question are Gift Goods reasonably suspected of having been stolen or

unlawfully obtained. Further, he would submit that the evidence of the witnesses P. Ws. 2 to 4 cannot be taken as conclusive evidence in the light

of their admissions in the cross examination that there are various institutions such as churches, convents and hospitals, through which Soya Bean

Salad Oil is supplied during times of natural calamities like flood etc., and therefore it cannot be safely concluded, in the absence of specific

evidence, that the goods concerned in this case are the goods supplied by way of gift by any Relief Organization to any State Government or to the

Central Government or to any other person on behalf of such Government by any Relief Organization specified in the schedule appended to the

Act. The failure of the prosecution to produce the accounts, showing the receipt and distribution of the goods of the ""Care"" and Catholic Relief

Services, materially affects the prosecution. As no vice is attached to the character of the property, in the absence of specific provision for

confiscation, any order confiscating the properties would be tantamount to an illegality.

The Counsel appearing on behalf of both parties have cited a catena of decisions in support of their respective contentions. All these properties,

M. Os. 1 to 457, were seized from the constructive possession of accused-1, as admitted by him, and it is also admitted that accused-2 is the

owner of the goods who sent them, after having purchased the same from various places, to accused-1, with a request to send them to various

places as per directions to be given by him. Therefore the question that remains for consideration is whether these goods are Gift Goods and

whether they could reasonably be suspected of having been stolen or unlawfully obtained and whether the accused have accounted satisfactorily as

to how they came by the same.

Before entering into a detailed discussion of the oral and documentary evidence, adduced by the prosecution, shall now advert to the relevant

provision of the Act. The preamble of the Act reads thus:

An Act to provide for the punishment of the offence of unlawful possession of gift goods supplied by certain Relief Organization.

Section 3, is the penal provision, which is reproduced hereunder:

Unlawful possession of gift goods: If any person is found, or is proved to have been, in possession of any gift goods reasonably suspected of being

stolen or unlawfully obtained, and cannot account satisfactorily or as he came by the same, he shall be punished with imprisonment for a term

which may extend to two years, or with fine or with both.

It is apparent on a plain reading of the above section, that there are three ingredients which must be satisfied in order to attract the applicability of

the said section and bring home the guilt of the accused. They are:

(1) the accused must be found or proved to have been in possession of the Gift Goods;

(2) the property must be one in respect of which the Court has reason to suspect that it was either stolen or unlawfully obtained; and

(3) the accused must be unable to account satisfactorily for his possession. If these ingredients are well established, then the accused would be

liable to be convicted of the offence under this section. The term ""Gift Goods"" is defined in Section 2(1) of the Act, which, as it stands after the

amendment as per the Madras Act 1 of 1966, reads as follows:

In this Act, unless the context otherwise requires, ''gift goods'' means any of the following goods, when supplied by way of gift, by any Relief

Organization to any State Government or to the Central Government or to any other person on behalf of such Government, namely: (a) cornmeal;

(b) milk powder: (c) vegetable oil; (soya bean oil or sunflower seed oil) (d) any other goods which the State Government may, by notification,

from time to time, specify.

Relief Organizations is defined in Section 2(2) thus:

''relief organization'' specified in the schedule appended to this Act.

The following Relief Organizations are mentioned in the schedule.

United Nations International Children Emergency Fund (UNICEF).

Co-operative for American Relief Everywhere (CARE).

Church World Service.

Lutheran World Relief.

Catholic Relief Service.

It cannot be disputed that in proceedings for imposing penalty u/s 3, the burden of proving that the goods are gift goods is nonetheless on the

prosecution, notwithstanding the burden cast on the accused to account satisfactorily for possession of the goods. This is the fundamental rule

relating to proof in all criminal and quasi-criminal proceedings, in the absence of any satisfactory provision to the contrary. All that it requires is the

establishment of such a degree of probability that a prudent man may on its basis reasonably suspect in the existence of the fact and the

circumstances proved. The spirit Section 3, would show that the prosecution is not required or expected to prove its case with mathematical

precision to a demonstrable degree. It has been observed by the Supreme Court in Collector of Customs, Madras v. Bhoormul 1974 M.L.J. Cri.

489.

Legal proof is not necessarily perfect proof. Often it is nothing more than a prudent man''s estimate as to the probabilities of the

case......................... Since it is exceedingly difficult, if not absolutely impossible, for the prosecution to prove facts which are specifically within the

knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden.

Therefore, if the first two requisite conditions mentioned above, as enumerated in the earlier part of Section 3 of the Act, have been fulfilled by the

prosecution by letting in unimpeachable evidence to the satisfaction of the Court, then it can be held that the possessor is guilty of illegal possession

of the Gift Goods (which finding continues to hold the field), unless the accused satisfactorily accounts for such possession. Thus, it is seen that the

burden of satisfactorily accounting for such possession which Section 3 lays on the accused, will have to be discharged by him only after the

prosecution advances prima facie evidence for sustaining the initial belief regarding the property being stolen or being unlawfully obtained.

The legislature has advisedly used the expression ""account satisfactorily"". The emphasis must be on the word satisfactorily"" and the Legislature

has thus deliberately cast a burden on the accused not only to offer a plausible explanation as to how he came to be in possession of those goods,

but also to satisfy the Court that his explanation is worthy of acceptance. A reading of the latter part of the section unequivocally and

unambiguously shows that it is obligatory on the part of the accused to prove by acceptable and reliable evidence and satisfy the Court as to how

he came by that possession. No doubt, the burden is only undertaken by the accused if the prosecution establishes that in the absence of such

satisfactory account, he would be guilty of the offence charged. Therefore, if the prosecution once establishes its part, and if the accused thereafter

fails to establish a satisfactory account, the charge stands proved.

The next question that arises for consideration is as to what is the nature of proof placed upon the accused person in satisfactorily accounting

for his possession. It is well-established that where the burden in issue lies upon the accused, he is not required to discharge that burden by leading

evidence to prove his case beyond all reasonable doubt. That is, of course, that test prescribed in deciding whether the prosecution has discharged

the onus of proving the guilt of the accused; but the same test cannot be applied to an accused person who seeks to discharge the burden placed

upon him by the latter part of Section 3. It is sufficient if the accused person succeeds in proving a preponderance of probability in favour of his

defence. Therefore, the degree and character of proof which the accused person is expected to furnish in support of his plea, cannot and should

not be equated with those expected from the prosecution. At the same time, it must be noted that any sort of explanation would not and could not

be acceptable. But, the explanation should give a satisfactory account of his possession.

Section 106 of the Indian Evidence Act reads that when any fact is specially within the knowledge of any person, the burden of proving that

fact is upon him. When a fact to be proved ""whether affirmative or negative"" is peculiarly within the know ledge of a party, it is for him to prove it.

Therefore, the liability of proving a fact always lies on the person who has special knowledge of it. In cases of this nature, it is only the person

found to be in possession of goods which are proved to be gift goods, who can explain how he came into possession of those goods.

Possession"", as an element of crime, must relate to conscious possession or actual control or Mens rea or guilty knowledge. These elements must

be proved by the prosecution, when invoking a penal provision of a statute.

Learned Counsel for the accused cited a number of decisions in support of his contention that the onus of proving that articles in question are

gift goods lies on the prosecution and that it does not shift by virtue of Section 106 of the Evidence Act, as that section could not be used to

undermine the well-established rule that the burden is on the prosecution: vide Amba Lai v. Union of India And Others AIR 1961 S.C. 264, Gian

Chand and Others Vs. The State Of Punjab, , In Re 1968 M.LJ. Cri. 760: 1968 L.W. Cri. 182 Ayyavoo Chetty, In Re 1965 M.L.J. Cri. 619: 78

L.W. 191, Collector of Customs, Madras and Ors. v. Bhoormal 1974 M.L.J. Cri. 489 and Mothilal In Re 1975 L.W. Cri. 9. The above

proposition is quite well established, and therefore the above contention of the learned Counsel should be accepted.

Bearing the above principles in mind, now I shall discuss the evidence by the prosecution and see whether the requisite ingredients are proved

in this case. The first question that arises for discussion is whether M. Os. 1 to 457 are Gift Goods. It is the evidence of P. Ws.2 to 4 that Soya

Bean Salad Oil is not meant for sale or exchange. The evidence makes it clear that the Food Corporation of India clears these goods on being

gifted by the U.S.A. under the terms of the Indo-U.S., Agreement renewed in 1958. As spoken to by P.W.3, each Department of the

Government receives and distributes these goods to the beneficiaries through institutions like schools, convents and hospitals. Fundamentally, it is

for the prosecution to establish that Soya Bean Oil which is catalogued in the category (c) of Section 2(l), viz., under the heading ""vegetable oil"",

has been supplied by way of gift by any Relief Organization to any State Government or to the Central Government or any person on behalf of

such Government. The evidence of P.W.2, the Administrative Assistant in Catholic Relief Services, U.S. Catholic Conference, New York,

attached to the Catholic Relief Service, Madras Zonal Office, which is one of the Relief Organisations mentioned in the schedule, is that M. Os. 81

to 188 bore the rubber stamp ""Cathwell India"" with the contract number ""M.P. (FF) 49653"" printed on it. Similarly, M. Os. 189 to 349 also bore

the same rubber stamp ""Cathwell India"" with the contract number ""M.P. (FF) 49608"". Though M.0.350, according to him, contained the stamp

Cathwell India"", the contract number on it had been erased. In M. Os. 351 to 391, there is no stamp mark ""Cathwell India"", but bore the contract

number ""M.P. (FF) 49653"", similar to the one in M. Os. 81 to 188. In M. Os. 392 to 455, there is not the mark ""Cathwell"", but they bore the

contract number ""M.P. (FF) 49608"" similar to the one in M. Os. 189 to 349. In M.O. 456, the mark ""Noon day"" is stamped with the contract

number ""M.P. (FF) 49608"". Exs. P-5 to P-8 are the copies of the Bills of Lading; which are marked subject to proof and of which, Exs. P-7 and

P-8 are the certified copies. Though these documents are marked subject to proof, Mr. Venugopal, appearing on behalf of the accused, has not

seriously challenged the admissibility of these documents in this appeal. Even apart from this, the question of admissibility of these documents is not

going to decide the issue in question. As such, I do not propose to deal with this question at length. These documents are marked only for the

purpose of showing that the material objects bear the rubber stamp marks and the contract numbers found on the respective packets. P.W 2 who

speaks about the identity of the goods M. Os. 81 to 456, would say in the cross-examination that the consignments bearing the same contract

numbers might be distributed to organizations like the Catholic Relief Service, which is one of the Relief Organizations mentioned in the schedule to

the Act besides the CARE, the Church World Service, L.W.R. etc., and these are the four organizations, according to him, which are getting the

Gift Goods from the United States where itself the allotments are made to various organizations, and the organization of P.W.2., viz., the Catholic

Relief Service, is supplying the Soya Bean Salad Oil to churches, convents and hospitals, whenever there is any natural calamity, as emergency

programme. He would further admit that he does not know whether these churches or CARE supply the goods in large quantities to the public and

he has not seen these material objects before coming to court and without comparing the registers he cannot say what particular cargo was

consigned in a particular ship. According to him, he gives this evidence that these 377 cartons seized at Kovilpatti belong to their concern, only on

seeing a report given by one Danraj of CARE, which was shown to him by the Sub Inspector of Police. Further, he would admit that he could not

say to whom these 377 cartons were sent and he had not received any complaint regarding the said consignment. He, for his part, had not sent any

report to any authority before the properties were seized. However, he would say that there are receipts in his office showing the receipt and

despatch of the Gift Goods as furnished by the Food Corporation of India. But, he had not produced those documents. Relying on the admissions

made by P.W.2 in the cross-examination, Mr. Venugopal has vehemently urged that the evidence adduced on the side of the prosecution in

respect of these 377 cartons (M. Os. 81 to 457) cannot conclusively establish that these goods were sent either to any State Government or to the

Central Government or to any other person on behalf of such Government by any Relief Organization. Though P.W.2 would claim that he is giving

evidence on behalf of the Catholic Relief Service, he would admit, as stated supra, that he cannot say to whom these 377 cartons were sent in

spite of the fact that he has given positive evidence that normally the packets marked ""CATHWELL"" would not be given either to CARE or to any

other organization. Therefore, it stands to reason that when once the prosecution has chosen to examine P.W.2, it ought to have let in evidence that

these properties M. Os. 81 to 457 had been supplied by one of the relief organizations either to any State Government or to the Central

Government or to any other person on behalf of such Government. In the light of the admissions of P.W.2 that in the United States itself, the

allotments are made to various organizations and in the absence of specific evidence that the Catholic Relief Service received the goods on behalf

of either the State Government or the Central Government I am of the view that no safe conclusion could be arrived at on the basis of the bill of

lading alone, that these M. Os. 81 to 457 come within the definition of ""Gift Goods"" in Section 2(1) of the Act.

Then, we are left with the question whether M. Os. 1 to 80 are proved to be gift goods. P.W.3, the Field Officer attached to ""CARE"" would

testify that out of the 457 cartons containing Soya Bean Oil, 80 cartons marked as M. Os. 1 to 80 were found to bear the ""CARE"" label, and they

received these M. Os. 1 to 80 as gift goods from the United States and the Government of India took delivery of those goods and distributed the

same to the different departments and the CARE makes no direct distribution of these goods to the institutions. It may be noted that in respect of

all the goods M. Os. 1 to 457, the defence has not challenged that these goods were not gift goods. of course, the mere failure of a suggestion

cannot be a ground to discard the defence version. But, the failure on the part of the defence to make such kind of suggestion in respect of M. Os.

1 to 80 assumes some importance, because the prosecution has let in specific evidence that these goods were received by the Central Government

as gift goods. P.W.4, giving evidence on behalf of CARE would give a detailed account of the procedure as to how the goods are transshipped

and received in India, and would say that they used to hand over the original bill of lading to the Food Corporation of India, who would clear the

goods as their clearing agents. He also speaks about the identity of M. Os. 1 to 80 as goods belong to CARE. To this witness also, no suggestion

has been made that M. Os. 1 to 80 are not gift goods. Under these circumstances and in the light of the unimpeachable positive evidence of P. Ws.

3 and 4,1 unhesitatingly hold that the goods M. Os. 1 to 80 are gift goods coming within the definition under the Act. As there is no dispute that

these gift goods were found in possession of the first accused, on being sent by accused-2, there is no need to go into the question regarding the

possession of these goods.

Now that these M. Os. 1 to 80 are held to be gift goods, found to be in possession of the accused, I have to consider whether the said goods

could be reasonably suspected of having been stolen. Mr. Venugopal lays stress on the fact that the prosecution has utterly failed to establish that

the goods seized were stolen goods, much less that there are reasons to suspect the properties to have been stolen goods. In support of his

contention, he relies on the admissions of the witnesses P. Ws. 1 to 4 that there was no complaint or report made by any one in respect of theft of

these properties and contends that these goods, therefore, cannot be characterised as stolen goods. The term ""stolen goods"" is not defined in this

Act. Section 410ofthe Indian Penal Code defined ""stolen property"". It reads as follows:

Property, the possession where of has been transferred by theft, or by extortion, or by robbery, and property which has been criminally

misappropriated or in respect of which criminal breach of trust has been committed, is designated as ""stolen property"", whether the transfer has

been made, or the misappropriation or breach of trust has been committed, within or without India. But, if such property subsequently comes into

the possession of a person legally entitled to the possession thereof, it then ceases to be stolen property.

When Section 3 of the Act is read in conjunction with the definition given in Section 410 of the I.P.C., it can be seen that the word ""possession

used in Section 3of the Act in its largest sense implies the custody or Control, whether temporary or permanent, or exclusive of or with the other.

Manual possession is not necessary. For example, if A picks the Pocket of B and finding a valuable watch therein, passes it on to C, who deposits

it with, D, A is the thief. But, C and D are the receivers of stolen property from him, though the watch was not in the manual possession of C,

provided C and D are proved to have knowledge that the watch was a stolen property. Therefore, the property, possession of which has been

transferred by theft or other allied offences, is designated as stolen property. The property acquires the character of stolen property when the

possession of it becomes wrongful by reason of the act or intention which constitutes either of those offences enumerated in Section 410 I.P.C.

Illustration (a) to Section114 of the Indian Evidence Act says that where the accused is found to be in possession of a stolen property, a

presumption could be drawn either of his being a thief or of having received the property knowing it to be stolen unless he accounts for his

possession. In other words, if the evidence against him shows his recent possession of stolen property for which he was not able to give a

satisfactory explanation, the better presumption would be that he is guilty of been a Receiver of the stolen property.

If the prosecution fails to establish reasons for suspecting that the gift goods are stolen properties, what the section requires alternatively is that

it must be proved that the gift goods in question were unlawfully obtained by the accused. The expression ""reasonably suspected of being stolen"",

like the other juxtaposed expression ""unlawfully obtained"" in the same section, is the attribute, stamp or character of the ""property"" found or

proved to have been in possession of the accused. If the said property is capable of being described as stolen property or property unlawfully

obtained by whomsoever it might have been stolen or unlawfully obtained, that would be sufficient to comply with the requirement of Section 3 of

this Act. If we look at the plain language of the section, it is clear that it is not the intent of the legislature that the accused must be reasonably

suspected to have stolen or unlawfully obtained the goods. If the intention of the legislature were that the property should be stolen or unlawfully

obtained by the accused, then nothing would have been easier for the legislature than to use appropriate words such as ""reasonably suspected of

being stolen or unlawfully obtained by him"". Thus, it can be seen that this section merely speaks of the character of the property. The theft or the

illegally obtaining of the property may be by any person. It is not the act of stealing or illegally obtaining that is sought to be hit by this section. The

only enquiry which the court is called upon to make while dealing with the offences under this section is whether on the material on record, there is

reason to believe that the property found in possession of the accused can be described as a stolen property or property illegally obtained,

whoever may be the person who stole it or illegally obtained it: Vide Champaklal Ganeshmal Vs. The State of Maharashtra, .

Now, I shall come to the point raised by Mr. Venugopal that there was no complaint or report in respect of any theft of these goods. Both the

parties have not cited any decided authority relating to Section 3 of the Act. Therefore, it will be advisable to refer to the cases decided on other

enactments analogous to the provisions of this Act. Section 3 of the Railway Stores (Unlawful Possession) Act of 1955, which Act has now been

repealed by the Railway Property (Unlawful Possession) Act, 1966, read as follows:

If any person is found, or is proved to have been in possession of any article of railway stores reasonably suspected of being stolen or unlawfully

obtained, and cannot account satisfactorily, how he came by the same, he shall be punishable with imprisonment for a term which may extend to

five years or with fine or with both.

It may be noted that except for the words ""any article of railway stores"" and the quantum of punishment provided, both Section 3 of the Railway

Stores (Unlawful Possession) Act and Section 3 of the Gift Goods Act are very, similar. Section 3 of the Railway property (Unlawful Possession)

Act, 1966, which is in force now, reads as follows:

Whoever is found or is proved to have been in possession of any railway property reasonably suspected of having been stolen or unlawfully

obtained, shall, unless he proves that the railway property came into his possession lawfully, be punishable....

A reading of this section also shows that no substantial change has been effected except for some verbal changes. Therefore, the authorities dealing

with these sections can be usefully considered.

In The Public Prosecutor Vs. Shaik Galib and Others, the Andhra Pradesh High Court while dealing with an offence u/s 3 of the Railway

Property (Unlawful Possession) Act of 1966, has held as follows:

It is not necessary that there should be a report of the theft of the railway property. It is sufficient if the facts and circumstances disclose that the

property is reasonably suspected of having been stolen.

The property once proved to be stolen retains that character so long as it remains out of the possession of the person lawfully entitled to it. A

complaint or report in respect of the theft, extortion, robbery etc., in respect of a property, is only intended to be made to the authorities to set the

law in motion. Its secondary, though equally important, object is to obtain early information of an alleged criminal activity to record the

circumstances before there is time for such circumstances to be forgotten or embellished. Though ordinarily the law is set in motion on information

received by authorities, the receipt of information is not a condition precedent for investigation or enquiry. Supposing that there is no complaint

made in respect of the theft of a property, can it be said that there was no theft, or can it be understood that the property does not carry the

character of stolen goods? The failure to make a complaint may be due to various reasons personal to the owner of the goods. In short, whether

there is a theft or not is a question of fact, which arises before the complaint is given. In other words, the existence of a theft does not depend on

the fact of a complaint. The complaint only arises subsequent to the theft, and the giving of such a complaint is solely at the discretion of the owner

of the goods so stolen. The non-reporting of the theft will not in any way deface the vice attached to the character of the property so stolen. The

above opinion of mine is fortified by the observation of the Privy Council in AIR 1945 18 (Privy Council) which reads as follows:

But, in any case, the receipt and recording of an information report is not a condition precedent to the setting in motion of Criminal investigation.

No doubt, in the great majority of cases, criminal prosecutions are undertaken as a result of information received and recorded in the way, but their

Lordships see no reason why the police, if in possession through their own knowledge or by means of credible though informal intelligence which

genuinely leads them to the belief that a cognizable offence has been committed should not of their own motion undertake an investigation into the

truth of the matter alleged.

Now, let me go into the question as to whether there are reasonable grounds to suspect that the goods were unlawfully obtained. The word

unlawful"" is not defined either in the Indian Penal Code or in this Act. But, it may be taken to correspond with the word ""illegal"" defined in Section

43 of the Indian Penal Code. The word ""illegal"" appearing in Section 43, I.P.C. is applicable to everything which is an offence or which is

prohibited by law or which furnishes a ground for a civil action. Mr. Venugopal cited some decisions in support of this proposition. In Mewa Lai v.

The Emperor AIR 1925 Pat, 535 it has been held, while dealing with Section 122 of the Indian Railways Act, that the word ""unlawful"" means

contrary to the law laid down in the statute"". In another decision reported in Chandai Vs. Emperor, a Divison Bench of the Allahabad High Court,

while discussing Section 122 of the Railways Act, has observed that the word ""unlawful"" has practically the same meaning as ""illegal"" which can be

interpreted as including ""actionable"". In R.V. Chapman 1958 3 A.E.R. 143, the word ""unlawful"" has been defined as one forbidden by law.

Relying on the above decisions, Mr. Venugopal would contend that the accused cannot be said to have in"" any way obtained the goods unlawfully,

as the prosecution has failed to prove that there is statutory prohibition against the holding of these goods. As discussed supra, it is not necessary

that the prosecution must prove that the accused unlawfully obtained the goods. But, what the section requires is that the goods in question should

have been reasonably suspected of having been unlawfully obtained by whomsoever. Hence, this contention of the learned Counsel is not

acceptable and the decisions cited by him are not helpful to his case.

There is ample evidence on the side of the prosecution that these goods are not available in the open market for sale and that they are never

consigned to profit individuals. According to P.W.2, these goods are not intended to be sold or exchanged and there is a condition imposed by the

Food and Agriculture Department of the United States and their organizations in India that these goods are not to be sold or exchanged. It is not

the case of either of the accused that these goods are freely available in the open market. But, the second accused would say that he purchased the

goods from various places and sent them to accused-1. He also says in his Section 342 statement that he purchased the goods from some other

markets and the goods are freely available in the open market.

But, it is pertinent to note here that the accused have completely failed to satisfactorily account for their possession of the goods, with which I shall

deal a little later. No witness has been examined on the side of the defence nor has any document been produced, to show that the goods were

purchased from the open market. Under these circumstances, I have no other option but to hold that the accused should have come into

possession of the goods from persons who had unlawfully obtained them, if not by theft.

Then, an argument was advanced on the side of the accused that some of the institutions to which the gift goods in question should have been

supplied might have violated the Rules prohibiting them from selling, and thus might have sold them to others from whom these accused should

have purchased, and in such circumstances, the accused, who received the goods, cannot be made punishable. As I have mentioned above, the

meaning of the term ""stolen property"" is not confined to ""property transferred by theft, extortion or robbery"", but would also include ""property

criminally misappropriated or in respect of which a criminal breach of trust has been committed"". In the absence of any acceptable explanation

from the accused as to how they came to be in possession of the properties, it is not open to the accused to raise such a contention. In the absence

of any such explanation, a presumption can be drawn that they are receivers of stolen goods or goods unlawfully obtained within the meaning of

Section 3 of the Act. Therefore, in cases of this nature, it is sufficient if the facts and circumstances disclose that there are reasonable grounds to

suspect that the properties in question have been lost due to any of the offences like theft, robbery, extortion, criminal misappropriation or criminal

breach of trust, whether committed within or without India, or have been unlawfully obtained. Unlike Section 411, I.P.C., which deals with

punishment for dishonest receipt of stolen property, the present Section 3 of the Act does not require the element of dishonesty on the part of the

accused, nor does it involve the necessity of showing that the accused who received the goods had knowledge or had reason to believe that the

goods were stolen or unlawfully obtained.

Finally, we have to see whether the accused have accounted satisfactorily for their possession of these gift goods. I have already discussed the

meaning of the expression ""account satisfactorily"". The learned Public Prosecutor brought to my notice the decision in C.S.D. Swami v. State1

where the Supreme Court, while discussing the scope and effect of Section 5(3) of the Prevention of Corruption Act (Act II of 1947), has

observed that Section 5(3) does not create a new offence but only lays down a rule of evidence, enabling the court to raise a presumption of guilt

in certain circumstances-a rule which is a complete departure from the established principle of criminal jurisprudence that the burden always lies on

the prosecution to prove all the ingredients of the offences charged, and that the burden never shifts on to the accused to disprove the charge

framed against him, that the Legislature has deliberately cast a burden on the accused not only to offer a plausible explanation as to how he came

by his large wealth, but also to satisfy the court that his explanation was worthy of acceptance, and that the words ""satisfactorily account"" used by

the statute are peremptory and the burden must lie all the time on the accused to prove the contrary. It further observed that as soon as the

requirements of Section 5 have been fulfilled, the court will not only be justified in making, but is called upon to make, the presumption that the

accused person is guilty of criminal misconduct within the meaning of Section 5(l)(d) and conviction can be had on the basis of the presumption.

Apart from the decisions, even on a mere reading of Section 3 of the Act, it will be clear that the accused has to account satisfactorily for

possession of the gift goods. Accused-1 has not denied the fact of recovery of the material objects from possession. But, his explanation is that he

was keeping all these materials to be sent to various places to which accused-2 might direct him to send. It is the case of accused-2 that he

purchased these goods from various places and sent them to accused-1 so that the goods would be sent to various places as per his directions.

Accused-1, in his statement under Ex. P-4, has stated that on 15th February 1973 at 9 a.m., accused 2''s son-in law and one Kolappa Pillai

brought these material objects in a lorry bearing registration No. MDK 1448 and handed over the same to him stating that some of the properties

might be transported to Madurai and the rest could be sold in the neighbouring villages. He would further admit that on 14th February 1973 at

about 11 p.m., accused-2 himself phoned up to him, intimating that he was having American Soya Bean Salad Oil and that he would send the same

in a lorry with a certificate from the Commercial Taxes Department as though 70 bags of wheat were being transported. Mr. Venugopal contends

that this document Ex. P-4 cannot be made use of against the accused as this statement was made in the presence of the police officials. In support

of his contention, he would rely on the admission of P.W. 1, wherein he has admitted that the police were present till the material objects were

produced in the warehouse. But, from the reading of the evidence of P.W. 1, I find that there is no specific evidence that the accused was in the

custody of the police at the time when he made Ex. P-4. When accused-I was questioned with reference to the statement Ex, P-4, he would only

say that the statement was not read over to him, but he was asked to sign and so he signed. Learned Counsel for the accused relies on two

decisions viz., Raghavan v. State of Kerala 1964 M.L.J. Cri. 29 and Nika Ram Vs. State of Himachal Pradesh, In former, it has been held that

once an accused is arrested by a Police Officer and is in his custody and is temporarily left in charge of a private individual, that does not terminate

the police custody and the accused shall still be deemed to be in police custody. In the latter decision the accused appeared before the Second

Class Magistrate who sent for police who arrested him, and then the Magistrate recorded a statement and handed over to the Police. On those

facts, it was held that the statement recorded by the Magistrate was inadmissible. In the instant case, the accused were not arrested and they were

not in the police custody. On the other hand, both surrendered before the Court. It cannot be said in this case that the first accused came into the

hands of the Police Officer or had been under some form of Police surveillance or restriction of his movements by the Police. In fact, there is

nothing to infer that the Police Officer was present at the time when he made Ex. P-4, or that he was coerced or influenced by anybody. Further

even if Ex. P-4, is eschewed, there is the unassailable evidence of P.W. 1 that when he questioned accused-1, he made a confession before him as

mentioned in Ex. P-4. Therefore, de hors Ex. P-4, there is ample-evidence to show that the first accused was well aware of the fact that the goods

have been brought to Kovilpatti and handed over to him in a clandestine manner. Coming to the explanation of accused 2, bereft of the general

statement that he purchased them in the open market, there is not even an iota of evidence or receipt or voucher to substantiate the same. Thus, it

can be seen that no plausible explanation acceptable to the Court, as to how both of them came into possession of the goods, has been given. In

view of this, I hold that the finding of the lower appellate Court (sic) that the accused had satisfactorily accounted as to how he came into

possession of the properties, is not correct. For the rea sons mentioned above, I hold that the necessary ingredients to make out an offence u/s 3

of the Act are satisfactorily proved by the prosecution.

Then, a faint argument was put forth that there is a misjoinder of persons in this case, relying on the observations of Krishnan, J., taking a

contrary view from the one expressed by Sen, J., sitting in the same Bench, in Lachman Nanda, In Re: Lachman Nanda, . In that case, Krishnan,

J., observed that the expression ""misjoinder of charges"" in Section 537(b) means ""misjoinder either of the offences or of the persons alleged to

have committed the offences, while Sen, J., was of the view that misjoinder of charges cannot mean joinder of accused persons charged for an

offence, but it can only mean different charges joined together against the provisions of law, that is, the charges which are of different kinds and

which cannot be joined together in the procedure prescribed in the old Code, Sections 234 to 239. But, in this case, there are ample materials to

hold that the offence in question has been committed during the course of the same transaction though accused-1 is at Kovilpatti and accused-2 is

at Trivandrum. Therefore, I am of the view that in any event there is no misjoinder of charges in this case.

Before concluding the judgment, I may point out that the lower appellate court has misdirected itself by applying the principles laid down in

Public Prosecutor, Andhra Pradesh v. Mr. H. P. Sundar 1972 M.L.J. Cri. 790. The facts of the said case are totally different from the facts of the

present case. In view of my above finding the principles laid down in that case will not be applicable to the facts of the present case. Further, the

finding of the lower appellate Court that the prosecution has not proved that the Soya Bean Salad Oil had not been supplied to any one of the

persons mentioned in Section 2 , is also not correct in view of my finding, that there is ample evidence in respect of M. Os. 1 to 80. The other

reason that the properties have not been sent to the court straightway and as such there is an infirmity on the side of the prosecution, is also totally

unjustified (sic) as the evidence showing that the goods marked in this case as M. Os. 1 to 457 were the same goods as seized by P.W.7, stands

unchallenged.

For the above compelling and substantial reasons, I set aside the order of acquittal passed by the lower appellate court and convict both the

accused of the offences with which they stood charged, so far as M. Os. 1 to 80 are concerned.

Before going to the question of sentence, I shall now deal with the confiscation of the properties. It is very strange to note that the lower

appellate court has straightway directed all the properties to be returned to the accused even without waiting for the expiry of the period within

which the State could take recourse to the filing of an appeal against this judgment. Now that I have found that M. Os. 1 to 80 alone are proved to

be gift goods, the accused are entitled to the return of M. Os. 81 to 457, and therefore, the order of the lower appellate court directing return of

those material objects (M. Os. 81 to 457) will hold good. But, so far as M. Os. 1 to 80 are concerned, in the absence of specific provision in this

Act for confiscation, Section 517, Code of Criminal Procedure, which empowers and authorizes the court to confiscate the properties, can be

invoked and the court can direct such confiscation or dispose of the properties as provided thereunder. But, as M. Os. 1 to 80, which have been

returned to the accused, may not be now available with them, I direct the trial court to fix the value of the said properties, after taking further

evidence on this aspect, by giving opportunity to both sides, so that the State can recover the said value.

Coming to the question of sentence, as the offences are said to have been committed in February, 1973, i.e., nearly three years before, and as

the prosecution has established the case beyond all reasonable doubt only in respect of M. Os. 1 to 80, I feel that a deterrent sentence is not called

for in this case, though normally the offences of this nature should be dealt with severely. Accordingly, I sentence accused-1 to pay a fine of Rs.

1,000/- in default to suffer rigorous imprisonment for two months, and accused-2 to pay a fine of Rs. 2,000/-, in default to suffer rigorous

imprisonment for four months. Time for payment of fine, for each of the accused, two months from the date of receipt of this order by the lower

court. The appeal is allowed.