1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 834 OF 2009

BHARATH BOOSHAN AGGARWAL ...APPELLANT(S)

VERSUS

STATE OF KERALA ...RESPONDENT(S)

J U D G M E N T

S. RAVINDRA BHAT, J.

1. This appeal by special leave, questions a judgment of the Kerala High

Court

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reversing the judgment of the learned Sessions Judge and consequently,

restoring the conviction and sentence (of 3 years’ imprisonment) for the offence

punishable under Section 27 of the Kerala Forest Act (hereafter “the Act”).

2. The first appellant is a partner of the appellant’s firm, and claims to be

manufacturer and trader of sandalwood oil. On 4 January 1994, upon receipt of

information, officials of the Kerala Forest Department seized 37 cartons

containing 460 kgs of sandalwood oil at Karipur airport, belonging to the

appellants. Later a criminal complaint was filed by the State, wherein it was

alleged that the appellants’ premises were searched in the course of

investigation, which in turn yielded in seizure of another 73.6 kgs of

sandalwood oil. The appellant resisted the charges of illegal possession of forest

produce, and its movement, stating that they processed and manufactured

sandalwood oil, which was then exported to four different countries. The

1

Dated 19-12-2008, in Crl. A No. 556/2001

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complaint filed by the Kerala Forest Department, alleged that sandalwood oil

was a forest produce and without a transit licence, its movement too was illegal.

3. In the criminal proceedings which ensued after initiation of the

complaint, the appellant denied criminal responsibility arguing, among others,

that sandalwood oil was not a forest produce and rather, that sandalwood was. It

was urged, that regardless of this, a valid and subsisting licence authorized the

appellant to manufacture sandalwood oil. The prosecution examined four

witnesses; the appellant relied on the testimony of two defense witnesses. After

considering the materials on record, the Judicial Magistrate Thamarasserry

(hereafter “the trial court”) by judgment

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convicted the appellant as charged and

sentenced him to pay Rs. 2000 as fine and undergo rigorous imprisonment for

three years under Section 27 (1) (d) of the Act and six months, under Rule 3 (iii)

read with Rule 23 of the Kerala Forest Produce Transit Rules (hereafter “the

Rules”).

4. Aggrieved by the conviction recorded and sentence imposed on him, the

appellant approached the Court of Session, Kozhikode Division (hereafter “the

Sessions Court”) which by its judgment

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, upset the findings of the trial court.

The Sessions Court accepted the appellant’s plea and held that in view of the

certificate issued by the Central Excise authorities, his possession of

sandalwood oil in the factory could not be termed as illegal and that a

conviction under Section 27 could be recorded only if it was found that

sandalwood oil was removed illegally, or without authorization from any

reserve forest, or area proposed to be constituted as reserve forest.

5. Aggrieved by the appellant’s acquittal and in view of the findings of the

learned Sessions Judge, the State appealed. The High Court, which considered

this appeal reversed the judgment of the Sessions Court on two counts. It was

2

dated 19.08.1997

3

dated 20.11.2000

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held by the impugned judgment that though the appellants held a licence to

manufacture sandalwood oil, nevertheless they failed to account for possession

of such a large quantity of sandalwood oil. When charged with commission of

the offence in question, the accused concerned or individual was bound to show

a proper account of the raw materials collected and used to manufacture

sandalwood oil. Relying upon the testimony of PW-4, who had stated that the

accused failed to furnish the dates and details regarding procurement of crude

sandalwood and crude sandalwood oil (popularly known as ‘red oil’), the court

held that during the trial too, the appellant had failed to give any particulars with

respect to persons from whom purchase of these raw materials were made. The

failure of the defence to explain this vital aspect rendered the findings of the

Sessions Court, vulnerable. Taking note of Section 69 of the Act, which

mandated a presumption of culpability in the event possession was found in any

given case, the High Court held that the accused should have given an account

regarding the raw materials collected and used. Noting the state’s submission

that to manufacture 5430 kilos of sandalwood oil at least 5600 kilograms of

crude sandalwood oil was required, which in turn needed to be extracted from at

least 200 metric tons of sandalwood, the High Court concluded that the reliance

on the manufacturing licence alone to explain the possession of sandalwood oil

did not in any manner absolve the appellant of criminal responsibility.

6. The High Court also relied upon a decision of this court in Ghure Lal v.

State of Uttar Pradesh

4

to say that the appellate court can interfere with the order

of acquittal only for substantial and compelling reasons. It was held that there

were no compelling or substantial reasons justifying interference by the

Sessions Court of the appellant’s conviction. The High Court thereafter

concluded by observing that a purposive interpretation of the Act had to be

given in view of the underlying objects which were for the general public good.

4

(2008) 10 SCC 450

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7. It is argued on behalf of the appellant by Mr. Ranjit Kumar, learned

senior counsel, that the High Court failed to appreciate that an offence is said to

be committed only when the article in question is “forest produce”. Relying on

the definition of that term in the Act, it was submitted that Section 2(f)(i)

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specifically states that sandalwood is one such produce. The reference to wood

oil cannot, therefore, be said to include “sandalwood oil”. The appellants’

counsel relied on the decisions of this court in Suresh Lohiya v. State of

Maharashtra

6

and the recent ruling in Standard Essential Oil Industries v.

Forest Range Officer

7

to urge that courts cannot expand the scope of a

legislation, departing from its text, especially if it entails fastening of criminal

liability.

8. It was argued that as the appellant proved that he held a valid licence to

manufacture sandalwood oil out of red oil, no offence was made out. It was

argued that acquisition of raw materials was established through the documents

maintained by the appellant, in accordance with the procedure prescribed by the

Central Excise Rules, 1944.There could resultantly have been no inference of

illegality committed in the possession of sandalwood oil. Mr. Ranjit Kumar said

that the High Court fell into the error in not appreciating that the appellants had

duly maintained the register containing information as to where and how raw

material required for manufacture of the sandalwood oil was obtained; and that

in the absence of any evidence to the contrary by the individuals or firms which

had supplied such raw material, no presumption could be drawn that the

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Section 2 (f) reads as follows:

(f) "forest produce" includes- (i) the following whether found in or brought from a forest or not that is to say.-

timber, charcoal, wood-oil, gum, resin, natural varnish bark lac, fibres and roots of sandal wood and rosewood;

and (ii) the following when found in, or brought from, a forest, that is to say,- (a) trees and leaves, flowers and

fruits, and all other parts or produce not hereinbefore mentioned, of trees; (b) plants not being trees (including

grass, creepers, reeds and moss) and all parts or produce of such plants; and (c) silk cocoons, honey and wax;

(d) peat, surface soil, rock and minerals (including limestone, laterite, minerals oils and all products of mines or

quarries);”

6

(1996) 10 SCC 397

7

(2018) 16 SCC 180

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finished product originated from illegally procured sandalwood or red oil

extracted from sandalwood. It was pointed out that the appellants had in the

course of their business relied on the licence to manufacture sandalwood oil and

had been exporting it through proper channels for several years. This resulted in

valuable acquisition of foreign exchange to the country. Had there been any

illegality, such exports would have ceased a long time back.

9. Learned counsel submitted that the High Court failed to consider the

distinction between Section 27 and Section 69 of the Act. It was emphasised

that Section 69 refers to only forest produce whereas Section 27 refers to forest

produce illegally removed from a reserve forest. The High Court convicted the

appellant holding that the presumption under Section 69 applied. The appellant

had in fact, discharged the burden placed upon them by producing registers

maintained regarding details of individuals and firms from whom they had

purchased the red oil. Therefore, the prosecution was under a duty to prove that

such entries were false. Having been maintained in the ordinary course of

business, the courts, especially the trial court and the High Court, failed to

consider that the prosecution was unable to establish that the source of the

sandalwood oil and therefore, the basis for its possession was illegal.

10. Highlighting that Section 27 applied only where the court found that

when a firm or concern knowingly receives, or has possession of any forest

produce illicitly removed, learned senior counsel urged that the prosecution in

this case failed to prove either. The prosecution never alleged that the appellant

had knowingly received or were in possession of any forest produce illicitly

removed from the reserve forest. Likewise, it was not its case that any forest

produce had been illegally removed from the reserve forest and that any

proceedings were pending for that purpose. Learned counsel submitted that the

courts below failed to appreciate that the complaint did not allege illicit removal

of forest produce from the reserve forest. Likewise, the evidence of the four

witnesses showed, that none of them remotely suggested that the forest produce

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found had been illicitly removed from the reserve forest. Accordingly, the

elements making up the offence under Section 27 (1) (d) of the Act had not been

proved.

11. It was urged that Section 69 enacts a presumption that forest produce is

deemed to be a property of the government, where ownership is disputed. At the

same time, Section 27 (1)(d) makes it an offence where anyone is in conscious

possession of forest produce which is illicitly removed from a reserve forest. In

this context, it was argued that the appellant’s firm holds a valid L-4 licence

issued by Central Excise authorities to manufacture sandalwood oil.

Registration of the appellant’s firm under the Kerala General Sales Tax Act,

1963 and Central Sales Tax Act, 1956 was established. The firm had no

infrastructure to manufacture sandalwood oil from sandalwood. Therefore, it is

apparent that the department did not lead any evidence to prove that the forest

produce involved was in fact illicitly removed. The firm was entitled to possess

and deal with sandalwood oil in its godown and elsewhere. By no stretch of

imagination therefore, could it be said that possession of sandalwood oil in the

firm’s godown, as well as in the airport was illegal or unauthorised.

Furthermore, the learned senior counsel submitted that if the appellant had

indulged in any illegality with respect to procurement of the raw materials, their

exports would not have been permitted.

12. The State argues that this court should not interfere with the findings and

conviction recorded by the impugned judgment. Its counsel, Mr. C. Sashi,

submits that there can be no debate as to whether sandalwood oil is a forest

produce. Learned counsel relied upon the judgment of this court reported as

Forest Range Officer v. P. Mohammed Ali

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and submitted that the decision later

rendered in Standard Essential Oil Industries (supra), in fact, emphatically

states that “forest produce”, as defined in the Act, includes sandalwood oil.

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1993 Supp (3) SCC 627

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Learned counsel for the State submits that once there is no dispute with respect

to possession of sandalwood oil – as in this case –the onus clearly lay upon the

appellant to prove that such possession was lawful, that the forest produce was

procured through legitimate sources and not in a manner contrary to law.

13. Learned counsel argued that the mere statement on the part of the

appellant that they used to deal in sandalwood oil, processed or produced from

red oil as the raw material (which in turn was extracted from sandalwood), was

insufficient to discharge the initial burden placed upon them by law. Counsel

highlighted that once their possession of the forest produce was established the

appellant relied upon certain entries in the central excise registers and other

records, to explain that the source of such articles were legitimate. By

themselves, such documents were insufficient. The presumption under Section

69 operated firstly after the State established possession of forest produce. In

this case, sandalwood oil is a forest produce. The seizure of the appellant’s

sandalwood oil at the airport and the subsequent search and seizure of 73.6 kgs

of sandalwood oil from their premises, resulted in the discharge of the

foundational onus that lay upon the State. Therefore, Section 69 and the

presumption enacted by it were attracted. The burden was then shifted to the

appellant to establish that the forest produce was sourced legitimately and that

they had a lawful right to the articles. It was reiterated that this burden could not

be simply discharged by stating that some traders had supplied varying

quantities of red oil. The traders, or some of them should have stepped into the

witness box and proved that the statements made by the appellant was correct.

The appellant only relied on the invoices and the registers, which were

inadequate and did not provide all the details for a proper verification. The trial

court observed that these facts were established by the deposition of the

investigating officer. In the circumstances it could not be said that the appellant

had discharged the burden of proving that the forest produce was legitimately

secured or sourced by them and that its possession was legal.

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14. Learned counsel relied upon the ruling of this court in Ghure Lal

(supra)to argue that if the appellate court reverses the conviction unreasonably

without any compelling reason, and contrary to record, based upon a

misappreciation of evidence or the law, the High Court can interfere with such

findings. On the basis of all these submissions, the state urges that this court

should dismiss the appeal and confirm the conviction recorded by the trial court.

Relevant provisions of the Act

15. Section 2 (f) defines “forest” and states:

“2. ….(f) “forest” includes:

(i)the following whether found in or brought from, a forest or not that is,

to say-

timber, charcoal, wood-oil, gum, resin, natural varnish, bark, lac, fibres

and roots of sandalwood and rosewood; and

(ii) the following when found in or brought from a forest, that is to say-

a) trees and leaves, flowers and fruits and all other parts or produce not

here-in-before mentioned, of trees.

b) plants not being trees including grass, creepers, reeds and moss and all

parts or produce of such plants;

c) silk cocoons, honey and wax, and

d) peat, surface soil, rock and minerals (including lime- stone, laterite),

mineral oils and all products of mines or quarries".

Section 27 reads as follows:

“27. (1) Any person who-

(a) does any act prohibited by section 7; or

(b) sets fire to a Reserved Forest or kindles or leaves burning any fire in

such manner as to endanger the same; or

(c) sets fire to jungles or forests, other than Reserved Forests and a land

proposed to be constituted a Reserved Forest, without taking

precautionary measures to prevent the spread of fire into Reserved Forest

and land proposed to be constituted a Reserved Forest; or

(d) knowingly receives or has in possession any forest produce illicitly

removed from a Reserved Forest; or a land proposed to be constituted a

Reserved Forest; or

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(e) in a Reserved Forest or in a land proposed to be constituted a

Reserved Forest-

(i) cultivates or clears or breaks up any land for cultivation or for any

other purpose or puts up any shed or other structures or plant trees; or

(ii) damages, alters or removes any wall, ditch embankment, fence hedge

or railing; or

(iii) cuts of fells any trees or girdles, marks, lops, taps, uproots burns,

saws, converts or removes any tree including fallen or felled, or strips off

the bark or leaves from or otherwise damages the same;

(iv) trespasses or pastures cattle or permits or causes cattle to trespass; or

(v) quarries stones, burns lime or charcoal or collects or subject to any

manufacturing process or removes any forest produce; or

(vi) causes any damage by negligence in felling any tree, reed or cutting

or dragging any timber,

shall be punished with imprisonment for a team which shall not be less

than one year but may extend to five years and with fine which shall not be

less than one thousand rupees but may extend to five thousand rupees in

addition to such compensation for damage done to the forest as the

convicting court may direct to be paid.".

***************** **********

Section 69 is in the following terms:

“69. When, in any proceedings taken under this Act, or in consequence of

anything done under this Act, a question arises as to whether any forest

produce is the property of the Central or State Government, such produce

shall be presumed to be the property of the Central or State Government,

as the case may be, until the contrary is proved.”

16. Rule 3 of the Rules prescribes that no one can import or export timber or

other forest produce or transport it, unless a pass as prescribed by the Rules,

accompanies its movement. Rule 3 (3) prescribes the procedure for obtaining

such a pass. Rule 23 of the Rules, prescribes that any contravention of the rules

would attract a punishment for a term that can extend to six months or fine that

can extend to rupees five hundred, or both.

17. In Forest Range Officer v. P. Mohammed Ali (supra) the provisions of the

Act, which this court is concerned with in this case, i.e. the Kerala Forest Act,

were interpreted in the context of a submission that, sandalwood oil was not

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“forest produce” and that the expression “wood oil” was referrable to items

other than those enumerated (such as sandalwood, rosewood, roots, etc.) and

further that wood oil referred to natural products and not those derived through

processing. This court repelled such an interpretation and held that:

“6. … It must be noted in this context that there are several types of

essential oils in India, the important ones being sandalwood oil, agar-

wood oil, deodar oil and pine oil, apart from oleo-resin and wood oil

derived from exudation from living trees in the forest area. These essential

oils are obtained from any forest wood. Sandalwood as observed by the

High Court is forest produce. Even its roots thereof are also included as

forest produce. They are also timber within the meaning of Section 2(k) of

the Act. The purpose of the Act is to conserve forest wealth which is very

dear for preservation to maintain ecology. Forest produce defined under

Section 2(f) is an inclusive definition. It is settled law that the word

‘include’ is generally used as a word of extension. When used in an

interpretation clause, it seeks to enlarge the meaning of the words or

phrases occurring in the body of the statute. Craies on Statute Law, 7th

Edition at p. 64 stated the construction to be adopted to the meanings of

the words and phrases that

“The cardinal rule for the construction of Acts of Parliament is that they

should be construed according to the intention expressed in the Acts

themselves. If the words of the statute are themselves precise and

unambiguous, then no more can be necessary than to expound those words

in their ordinary and natural sense. The words themselves alone do in

such a case best declare the intention of the law giver”.

At p. 214 it is stated that an interpretation clause which extends the

meaning of a word does not take away its ordinary meaning. An

interpretation clause of the inclusive definition is not meant to prevent the

word receiving its ordinary, popular and natural sense whenever that

word would be properly applicable, but to enable the word as used in the

Act, when there is nothing in the context or the subject-matter to the

contrary, to be applied to somethings to which it would not ordinarily be

applicable…. An interpretation clause should be used for the purpose of

interpreting words which are ambiguous or equivocal, and not so as to

disturb the meaning of such as are plain. At p. 216 it is stated that another

important rule with regard to the effect of an interpretation clause is that

an interpretation clause is not to be taken as substituting one set of words

for another, or as strictly defining what the meaning of the term must be

under all circumstances, but rather as declaring what may be

comprehended within the term where the circumstances require that it

should be so construed.

****************** **************

8. The word include in the definition under Section 2(f) would show

that it did not intend to exclude what would ordinarily and in common

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parlance be spoken of as wood oil. The expression being technical and

being part of an inclusive definition has to be construed in its technical

sense but in an exhaustive manner, it cannot be restricted in such a

manner so as to defeat the principal object and purpose of the Act. The

process by which the oil is extracted is not decisive as oil may be extracted

by natural process of exudation or it may be extracted by subjecting to

chemical or mechanical process and sandalwood (Santalum album) is cut

into pieces. Its heartwood and roots of sandalwood trees removed from the

forest are used as a raw material at a factory level that too by mechanised

process to extract sandalwood oil. The purpose for which the oil is used is

not decisive. Therefore, the word wood oil used in the Act will require

purposive interpretation drawing upon the context in which the words are

used and its meaning will have to be discovered having regard to the

intention and object which legislature seeks to subserve. The restricted

meaning sought to put up by the accused would frustrate the object and

the literal interpretation would defeat the meaning. The legislature does

not intend to restrict the word wood oil nor do we find any compelling

circumstances in the Act to give restricted meaning that only oil derived

from Dipterocarpus trees to be wood oil as contended for the accused and

which found acceptance by the learned Single Judge. The purposive

interpretation would aid conservation of sandalwood, a valuable forest

wealth, prevent illicit felling and transportation of them and make the

manufacturers of sandalwood oil accountable for the possession of

sandalwood trees or chips or roots etc. Incorporation of sandalwood

oil ex abundenti cautela in Karnataka Act and absence thereof in sister

Acts operating in South India does not detract from giving it its due

meaning. The expert opinion is only an opinion evidence on either side

and does not aid us in interpretation. This Court in Aditya Mills

Ltd. v. Union of India [(1988) 4 SCC 315] did not adopt the dictionary

meaning as it may be to some extent delusive guide to interpret entries in

Central Excises and Salt Act. In Kishan Lal v. State of Rajasthan [1990

Supp SCC 742] of which one of us, Sahai, J. was a Member, this Court

was to consider the word ‘sugar’ whether under Rajasthan Agricultural

Produce Marketing Act, 1961 an agricultural produce. It was contended

that the Khandsari Sugar was not an agricultural produce. Repelling that

contention, this Court held that the word agricultural produce includes all

produce whether agricultural, horticultural, animal husbandry or

otherwise as specified in the Schedule. The legislative power to add or

include and define a word even artificially, apart, the definition which is

not exhaustive but inclusive neither excludes any item produced in mills or

factories nor it confines its width to produce from soil. If that be the

construction then all items of animal husbandry shall stand excluded. It

further overlooks the expression “or otherwise as specified in the

Schedule”. Accordingly it was held that Khandsari Sugar is an

agricultural produce under that Act….”

18. In the other judgment, relied on by both parties, i.e. Standard Essential

Oil Industries (supra), the issue was whether sandalwood oil could be

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confiscated by virtue of provisions of Section 61A of the Kerala Forest Act.

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This court held that sandalwood oil, though a forest produce, could not be the

subject matter of Section 61A in view of its restrictive wording:

“21. A perusal of the definition of forest produce, as given by Section 2(f)

of the Act, shows that other than timber, charcoal, firewood it includes

wood oil, gum, resin, natural varnish bark, roots of sandalwood, etc.

However, the use of the specific words “timber, charcoal, firewood and

ivory” under Section 61-A instead of “any forest produce or ivory” makes

it clear that the intention of the legislature in providing armoury under

Section 61-A is only with regard to certain category specified therein and

not for every forest produce as defined under Section 2(f) of the Act.

Undoubtedly, sandalwood oil is a forest produce but Section 61-A of the

Act is limited only to the categories specified therein and does not give

power of confiscation of sandalwood oil.

22. Further, we find force in the contention of the appellants that Section

69 of the Act is only a rule of evidence which raises a mandatory

presumption that a forest produce, unless proved otherwise, is a property

of the Government in case where any proceedings are going on under the

Act or anything is done under the Act. The section operates only as a tool

to help the Government in proving its title to the property but the said

section cannot be read as to give any power of confiscation of the

property.” (emphasis supplied)

19. In Suresh Lohiya (supra), this court struck a discordant note, drawing a

distinction between “nature’s gifts” such as charcoal, mahua flowers, or

minerals and, article “produced with the aid of human labour” which,

according to it, was not included in the definition of “forest produce” under the

Act:

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That provision, i.e Section 61A, was inserted in 1975 by the State Assembly, and prescribed inter alia, the

procedure to be followed in cases where the state, apart from seizing the forest produce, also intended to

confiscate the property and the articles used for commission of the offence. The material part of Section 61A

reads as follows:

“61A. Confiscation by Forest Officers in certain cases.-(1) Notwithstanding anything contained in the

foregoing provisions of this Chapter, where a forest offence is believed to have been committed in

respect of timber, charcoal, firewood or ivory which is the property of the Government, the officer

seizing the property under sub-section (1) of section 52 shall, without any unreasonable delay, produce

it, together with all tools, ropes, chains, boats, vehicles and cattle used in committing such offence,

before an officer authorized by the Government in this behalf by notification in the Gazette, not being

below the rank of an Assistant Conservator of Forests (hereinafter referred to as the authorized

officer).”

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“7. The legislature having defined "forest-produce", it is not permissible

to us to read in the definition something which is not there. We are

conscious of the fact that forest wealth is required to be preserved; but, it

is not open to us to legislate, as what a court can do in a matter like at

hand is to iron out cresses; it cannot weave a new texture. If there be any

lacuna in the definition it is really for the legislature to take care of the

same.

8. We may also state that according to us the view taken by the Gujarat

High Court in Fatesang's case is correct, because though bamboo as a

whole is forest produce, if a product, commercially new and distinct,

known to the business community as totally different is brought into

existence by human labour, such an article and product would cease to be

a forest-produce. The definition of this expression leaves nothing to doubt

that it would dot take within its fold an article or thing which is totally

different from, forest-produce, having a distinct character. May it be

stated that where a word or an expression is defined by the legislature,

courts have to look to that definition; the general understanding of it

cannot be determinative. So, what has been stated in Strouds' Judicial

Dictionary regarding a "produce" can not be decisive. Therefore, where a

product from bamboo is commercially different from it and in common

parlance taken as a distinct product, the same would not be encompassed

within the expression "forest-produce" as defined in Section 2 (4) of the

Act, despite it being inclusive in nature. that bamboo mat is taken as a

product distinct from bamboo in the commercial world, has not been

disputed before us and rightly.”

20. It is noteworthy that in Suresh Lohiya (supra) this court made no

reference and did not advert to Forest Range Officer v. P. Mohammed Ali

(supra). In Suresh Lohiya also, we notice this Court sought to interpret the

interplay between “forest produce”, “timber” and “tree” and concluded that

articles or products created by human toil are not per se forest products. This

court is of the opinion that the distinction sought to be made defeats the purpose

of the Act, because illegally procured forest produce, such as sandalwood,

rosewood, or other rare species, and then worked upon, resulting in a product -

predominantly based on the essential forest produce, would escape the rigors of

the Act. Therefore, Suresh Lohiya cannot be considered a binding authority; its

dicta should be understood as confined to the facts of that case. For these

reasons, it is held that the impugned judgment, so far as it proceeded on the

assumption that sandalwood oil is forest produce, is based on a correct

appreciation of law.

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21. In the present case, the appellant did not dispute ownership of the articles

seized. Section 69 of the Act enacts presumption, that when possession of a

forest produce is found with someone, that it is deemed to belong to the state (or

central) government. Now, this presumption is a rebuttable one; several

decisions of this court have said that the burden of proving the foundational

facts, which will give rise to the presumption, is upon the prosecution.

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In the

present case, there is no contest about the fact that the goods were seized from

the premises of the appellant, and belonged to him. The goods seized from the

airport, were to be shipped to overseas destinations. In these circumstances, this

court is of the opinion that the foundational facts, i.e. possession of the forest

produce, were proved by the State.

22. The next question is whether the appellant proved that the produce was

procured properly. Their case was twofold: one that as holder of a Central

Excise licence to manufacture sandalwood oil, the prosecution had to fail. The

appellant had sought to rely on the statutory registers which they were bound to

keep. It was also submitted that the oil was produced by the appellant from the

raw materials, i.e. red oil, which they had purchased from many traders for

which some 45 invoices were relied upon. According to the statement made to

the forest authorities, at the time of the search and seizure, these raw materials

were obtained in the course of 104 transactions, where smaller quantities of red

oil were purchased. PW-2, the flying squad officer of the forest department who

deposed during the trial, in the course of cross examination stated that the

cartons were kept in the open in the airport and bore the labels of the appellant

firm. The witness further stated that the goods were seized because it was not

known where they originated from, nor where they were bought. He also stated

that the goods, i.e. sandalwood oil cartons “were seized for the reason that

documents to show from where they came were not produced.” The appellants

10

Noor Agha v. State of Punjab (2008) 16 SCC 417; Bhola Singh v. State of Punjab (2011) 1 SCC 653 and

Gangadhar @ Gangaram v. State of Madhya Pradesh, judgment dated 5

th

August, 2020 in Cr. A. No. 504/2020.

15

had alleged that the red oil was purchased for processing from several persons,

and that particulars had been furnished to the forest authorities. PW-4 was silent

about verification of these details; he stated in cross examination, generally, that

the addresses of the traders who sold the oil to the appellant were provided, but

incomplete. Secondly, it was urged that the prosecution did not produce any

material to support the plea that the appellant’s information was suspect, or

lacked credibility. PW-4 had further stated that the appellant purchased the

seized goods when they were auctioned by the state, after the applications for

their release (to the accused/appellants) were dismissed by the court. This

witness also stated that the yield of sandalwood oil is to the extent of 4% from

sandalwood.

23. There can be no dispute that sandalwood oil is a forest product. However,

Section 27 (1) (d)- which enacts the offence- and which has been applied in this

case, points to the offender’s conscious mental state when it enacts that whoever

“knowingly receives or has in possession any major forest produce illicitly

removed from a Reserved Forest” would be subjected to the prescribed

punishment. The presumption under Section 69 is with respect to not a

conscious mental state, or a direction by the legislature that a certain state of

affairs is deemed to exist, but with respect to ownership of the property i.e. that

it “belongs to the state, unless the contrary is proved.”

24. This is a significant aspect, because unlike some statutes

11

, the Act in the

present case, does not create a presumption about a culpable mental state of the

11

For example, Income Tax Act, 1961:

“Section 278E. (1) In any prosecution for any offence under this Act which requires a culpable mental state on

the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for

the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in

that prosecution.

Explanation - In this sub-section, 'culpable mental state' includes intention, motive or knowledge of a fact or

belief in, or reason to believe, a fact.

(2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond

reasonable doubt and not merely when its existence is established by a preponderance of probability."

16

alleged offender. Instead, the nature of the presumption is that it relates to the

ownership of the forest produce. This important aspect has a bearing on the

matter. Whether an offence can be said to have been committed without the

necessary mens rea has often arisen for consideration. Generally, there is a

presumption that mens rea is an essential ingredient in every offence. Yet, that

presumption can be displaced either by the phraseology of the law creating the

offence or by the subject matter with which it deals; both must be considered.

12

This court, in Nathulal v. State of Madhya Pradesh

13

, in that context, observed

as follows:

“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.”

Umashanker v. State of Chhattisgarh

14

underlined the existence of mens

rea, as follows:

Section 10E of the Essential Commodities Act is as follows:

“10E. Presumption of culpable mental state.―(1) In any prosecution for any offence under this Act which

requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental

state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to

the act charged as an offence in that prosecution.

Explanation.―In this section, “culpable mental state” includes intention, motive, knowledge of a fact and the

belief in, or reason to believe, a fact.

(2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond

reasonable doubt and not merely when its existence is established by a preponderance of probability.”

12

Sherras v. De Rutzen (1895) 1 QB 918; State of Maharashtra v. Mayer Hans George1965 (1) SCR 123.

13

AIR 1966 SC 43

14

(2001) 9 SCC 642

17

“7. Sections 489-A to 489-E deal with various economic offences in

respect of forged or counterfeit currency notes or banknotes. The object of

the legislature in enacting these provisions is not only to protect the

economy of the country but also to provide adequate protection to

currency notes and banknotes. The currency notes are, in spite of growing

accustomedness to the credit card system, still the backbone of the

commercial transactions by the multitudes in our country. But these

provisions are not meant to punish unwary possessors or users.

8. A perusal of the provisions, extracted above, shows that mens rea of

offences Under Sections 489-B and 489-C is "knowing or having reason to

believe the currency notes or banknotes are forged or counterfeit".

Without the aforementioned mens rea selling, buying or receiving from

another person or otherwise trafficking in or using as genuine forged or

counterfeit currency notes or banknotes, is not enough to constitute

offence Under Section 489-B Indian Penal Code. So also possessing or

even intending to use any forged or counterfeit currency notes or

banknotes is not sufficient to make out a case Under Section 489-C in the

absence of the mens rea, noted above.”

In Raghunath Singh v. State of M.P.

15

this court held that use of the word

“know” would mean that mens rea of the offender has to be established:

“Section 368 speaks of "knowledge" when it says, "Whoever knowing that

any person has been kidnapped or has been abducted, wrongfully

conceals or confines such person..." The Indian Penal Code uses two

different expressions in its different parts. Sometimes the gist of the

offence is dependant on knowledge and the words "knowing" or

"knowingly" are used to indicate that knowledge as such must be proved

either by positive evidence or circumstantially before mens rea can be

established. Sometimes (see for example Sections 212, 411, etc), the

expression "has reason to believe" is used. The words "knowing" or

"knowingly" are obviously more forceful than the words "has reason to

believe" because they insist on a greater degree of certitude in the mind of

the person who is said to know or to do the act knowingly. It is not enough

if the evidence establishes that the person has reason to suspect or even to

believe that a particular state of affairs existed. When these words are

used, something more than suspicion or reason for belief is required.

Before an offence under Section 368 could be brought home it must be

established that accused knew that the person had been kidnapped or

abducted.”

25. Therefore, in the present case, the State had to show, that the forest

produce was illicitly removed, or was illicitly in the possession of the accused,

and in either case, that the same was within his knowledge. This foundational

15

1967 JLJ 234 (SC)

18

fact, as previously discussed, has to be proved beyond reasonable doubt.

Thereafter, the accused has to establish, a credible or reasonable explanation.

26. The state no doubt has led evidence to show that the goods seized bore

the labels of the appellant’s firm and further that no transport licence was

available. However, this per se does not establish illicit possession of forest

produce within his knowledge. For a court to so conclude, the prosecution had

to, in addition, prove beyond reasonable doubt, the foundational fact that the

accused had knowingly removed the forest produce illicitly. It is here, that the

presumption under Section 69 cannot apply; it merely directs a presumption that

the forest produce belongs to the government.

27. In the opinion of the court, the impugned judgment, by reversing the

decision of the Sessions Court, is in error. The Sessions Court had clearly

recorded that the appellant’s explanation that as L-4 Central Excise licence

holders they were absolved of any responsibility in relation to observance of

any other law, was misplaced and wholly inadequate. The appellant could

legitimately bring into existence an excisable produce but that did not absolve

them of the liability to follow other obligations in regard to procurement of

regulated or controlled commodities, or even other aspects relating to them,

such as licensing or permissions to store, transport them, etc. The appellant had

produced documents (in the form of 45 invoices and receipts) to show the origin

of the goods, and where they were purchased from, to say that they were

procured in 104 transactions. The question, therefore, is whether by operation of

Section 27 (1) (d), the initial presumption was established. The evidence on

record showed that the cartons seized from the airport were bound to

destinations in Germany, France, Spain etc. The State’s main argument is that

there was no prior permission, or clearance as required by the rules. Apart from

stating that the invoices and other documents could not be verified, the State

made no effort to establish, independently, in its evidence that any such effort

19

was made. The receipts, or primary evidence produced by the appellant, was not

exhibited in the court; nor was any evidence led to show that in fact, such effort

to trace the sellers of the oil was made by the State, and that the evidence

furnished by the appellant was unbelievable. In these circumstances, it could not

be said that the State had discharged its burden of proving beyond any doubt,

that the appellant had knowledge of the fact that the goods were illicit in origin.

28. The High Court, in our opinion, fell into error, in holding that the

presumption that the seizure of forest produce belonging to the State,

automatically can result in a presumption of culpable mental state of the

accused- in other words, that seizure of the goods ipso facto meant that the

appellant had conscious knowledge about their illicit nature or origin, or that the

accused’s inability to account for a transit pass, implied that they procured the

goods illegally, thus attracting Section 27. Such a leap of reasoning is not

justified, given that the appellants had furnished a series of documents

explaining how they had sourced the oil in question. The State’s absence of

diligence in producing those materials (which were in its possession) and

proving that they were without credibility, cannot result in a conviction. Nor

could the court have concluded adversely that the appellant’s participation in the

auction of the seized goods and their purchase, implicated them. There can be

several reasons for such a conduct, including their wish to fulfil contractual

obligations.

29. This court is of the opinion that the interference by the High Court, with

the acquittal recorded by the Sessions Court, in this case, is not warranted.

Ghure Lal (supra) no doubt, reviewed the consistent law declared that an

appellate court should not interfere with the findings of the trial court merely

because it prefers a plausible view, unless there are compelling reasons for it to

do so. It is precisely in such cases, where appellate interference is unwarranted,

that the State is entitled to appeal to the High Court under the Criminal

20

Procedure Code, 1973.

16

However, the facts reveal otherwise: one, the High

Court concluded incorrectly that the result of Section 69 is a presumption that

places the reverse burden of proof in respect of an offence - no such inference

can be drawn from the plain text of that provision; and two, Section 27 (1) (d)

requires conscious knowledge, of the nature of the goods, i.e. their illicit origin,

which compels proof by the prosecution, beyond reasonable doubt. As

explained earlier, the materials on the record show that the evidence in the

possession of the defence and furnished to the state, was not even produced in

court, nor was the primary evidence to substantiate the state’s contentions in

that regard, proved.

30. In view of the above discussion, this court is of opinion that the impugned

judgment is in error. It is accordingly set aside. The appeal succeeds and is

allowed, but with no order on costs.

................................................J.

[INDIRA BANERJEE]

................................................J.

[S. RAVINDRA BHAT]

NEW DELHI

OCTOBER 06, 2021

16

The relevant provision is as follows:

“378. Appeal in case of acquittal.

(1) Save as otherwise provided in sub- section (2) and subject to the provisions of sub- sections (3) and (5), the

State Government may, in any case, direct the Public Prosecutor to present an appeal to the High Court from an

original or appellate order of acquittal passed by any Court other than a High Court

or an order of acquittal

passed by the Court of Session in revision.”