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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Jawahar Lal Gupta, C.J
  • A.K Basheer, J.
Acts
  • Ss. 55 and 58 of the Abkari Act,
  • S. 55(a) of the Abkari Act.
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Jawahar Lal Gupta, C.J
  • A.K Basheer, J.
Acts
  • Ss. 55 and 58 of the Abkari Act,
  • S. 55(a) of the Abkari Act.
See more information ...
Smart Summary

Structured Summary of the Opinion (Jawahar Lal Gupta, C.J.)

Factual and Procedural Background

The petitioner, a proprietor of a stationery shop, was found on April 26, 1989, in possession of 15 litres of "Arrack" in a plastic container and 27 bottles of "Arrack" each containing 180 ml. He was prosecuted under S. 55(a) of the Abkari Act. The trial court convicted him and sentenced him to simple imprisonment for one year and a fine of Rs. 1,000; in default, a further simple imprisonment of one month. On appeal, the appellate court reduced the period of imprisonment to six months but upheld the conviction under S. 55(a). The petitioner filed this revision petition. The petitioner's counsel argued that the evidence did not prove the charge and, alternatively, that if the prosecution story were accepted the charge would attract only S. 58. No one appeared on behalf of the State to support the conviction. Because of conflicting decisions on the interpretation of Ss. 55 and 58, the matter was referred to a Division Bench.

Legal Issues Presented

  1. Whether the facts proved (possession of arrack in the shop) satisfy the ingredients of S. 55(a) of the Abkari Act.
  2. If S. 55(a) is not attracted, whether the facts satisfy the ingredients of S. 58 of the Abkari Act.
  3. Resolving the conflict in judicial opinion regarding the meaning of "possession" as it relates to Ss. 55 and 58 — specifically, whether mere possession is sufficient for S. 55(a) or whether possession must be in the course of import, export, transport or transit.

Arguments of the Parties

Petitioner's Arguments (as presented to the Court)

  • The evidence on record does not prove the charge under S. 55(a).
  • Even if the prosecution case is accepted, the petitioner could only be punished under S. 58 because the ingredients of S. 55(a) are not satisfied (i.e., there was no import/export/transport/transit).

State's Position

No advocate appeared on behalf of the State; the opinion records that no one appeared to support the conviction.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Rajeevan v. Excise Inspector, 1991 (1) KLT 38 Holds that to be culpable under the provision construed, possession must be in the course of import, export, transport or transit; mere/simple possession does not attract the rigour of S. 55(a). The Court treated the view in Rajeevan as correct and relied on it in concluding that S. 55(a) applies only when possession occurs in the course of import/export/transport/transit.
Purushan v. State of Kerala, 2002 (2) KLT 661 Adopts the same approach as Rajeevan — that simple possession is insufficient for S. 55(a); possession must be connected with import/export/transport/transit. The Court accepted this view (as in Rajeevan) and applied it in determining that the present facts do not fall within S. 55(a).
Meenakshi v. Excise Inspector & Anr., 1995 (1) KLT 738 Interprets S. 58 to be attracted only when possession is coupled with knowledge of unlawful import/transport/manufacture or non-payment of duty; otherwise, the case would fall within the mischief of S. 55A (as stated in that judgment). The Court rejected the result that would follow from this approach (observing it would lead to the perverse consequence that innocent possession attracts a harsher penalty than possession with knowledge of illegality) and thus did not follow Meenakshi's approach.

Court's Reasoning and Analysis

The Court began by comparing the statutory punishments under S. 55 and S. 58 as they stood at the relevant time:

  • S. 55: offences (other than certain clauses) punishable with imprisonment up to two years and fine up to Rs. 5,000; with statutory minimums in the absence of special reasons (six months and Rs. 1,000 for first offence).
  • S. 58: possession of illicit liquor punishable with fine up to Rs. 3,000 or imprisonment up to six months, or both.

The Court observed that the Legislature intended S. 55 offences to be more serious than S. 58 offences (by comparing maximum and minimum punishments). The central interpretive conflict concerned the meaning of "possession" for S. 55(a). The Court examined the conflicting judicial views:

  1. One line of decisions (Rajeevan and Purushan) holds that S. 55(a) requires possession in the course of import/export/transport/transit; mere possession in premises does not attract S. 55(a).
  2. Another decision (Meenakshi) says S. 58 applies only where possession is coupled with knowledge of unlawful import/manufacture/non-payment of duty; otherwise the case falls under S. 55A (as described in that judgment), which the Court found would invert the legislative scheme.

The Court rejected the Meenakshi consequence because it would lead to the anomalous result that innocent possession (without knowledge of illegality) could attract a harsher penalty (S. 55) than possession with knowledge of illegal import/manufacture or non-payment of duty (S. 58). The Court concluded that such an intention could not be attributed to the Legislature.

Relying on the statutory heading ("For illegal import, etc.") and the textual contrast between S. 55 and S. 58, the Court held that S. 55(a) applies when possession occurs in the course of import, export, transport or transit, while S. 58 addresses possession of illicit liquor (i.e., possession with knowledge of unlawful import/transport/manufacture or non-payment of duty).

Applying that conclusion to the facts: the petitioner had liquor lying in his shop (not importing, exporting or in transit), so S. 55(a) did not apply. Although possession was proved, neither the trial court nor the appellate court recorded any finding that the petitioner knew the liquor was illicit — the petitioner's counsel conceded there was no suggestion that the petitioner had such knowledge. Therefore, the ingredients of S. 58 were also not established on the record.

Having noted the long delay (the raid occurred in 1989 and the petitioner had spent 14 years under the threat of the case), the Court exercised its discretion on sentencing and determined that a monetary penalty would meet the ends of justice.

Holding and Implications

Core Ruling: The Court partly allowed the revision petition. It set aside the sentence of imprisonment and imposed a fine of Rs. 3,000 on the petitioner; in default of payment, the petitioner would undergo simple imprisonment for 15 days.

Implications (as stated or directly supported by the opinion):

  • The Court clarified the statutory scope: S. 55(a) applies where possession is in the course of import, export, transport or transit; S. 58 applies to possession of illicit liquor where the possessor knows of unlawful import/transport/manufacture or non-payment of duty.
  • The Court rejected the interpretation that would make "innocent possession" a more serious offence than possession with knowledge of illegality.
  • Direct effect on the parties: conviction under S. 55(a) cannot stand on these facts (liquor in the shop, not in transit/import/export), and there was no finding of knowledge to sustain S. 58; in the exercise of sentencing discretion and having regard to the long delay, the Court imposed only a fine of Rs. 3,000 (default 15 days' simple imprisonment) and set aside the imprisonment sentence previously imposed.

This summary is strictly confined to the content of the opinion provided and does not add facts or inferences beyond the text of that opinion.

Show full summary ...

    Surendran v. Excise Inspector

    Jawahar Lal Gupta, C.J (Oral):— On account of the conflict of decisions regarding the scope and interpretation of Ss. 55 and 58 of the Abkari Act, this revision has been referred to Division Bench. First, the facts.

    2. The petitioner is running a stationery shop. On April 26, 1989 he was found to be in possession of 15 litres of ‘Arrack’ kept in a plastic container and 27 bottles of ‘Arrack’ each containing 180 ml. He was prosecuted for the offence punishable under S. 55(a) of the Abkari Act. The trial court convicted and sentenced the petitioner to undergo simple imprisonment for one year and to pay a fine of Rs. 1000/-. In default, he was to undergo simple imprisonment for a further period of one month. He filed an appeal. The Appellate Court reduced the sentence of imprisonment to six months. However, the conviction under S. 55(a) was upheld, hence, this Revision Petition.

    3. Mr. Kunhikrishnan, learned counsel for the petitioner has made a two-fold submission. Firstly, it has been contended that the evidence on record does not prove the charge. In any event, the counsel submits that even if the prosecution story is believed, the petitioner could be punished only under S. 58. The ingredients of S. 55(a) are not satisfied.

    4. No one has appeared on behalf of the State to support the conviction.

    5. In view of the divergence of judicial opinion as expressed by different Single Benches, we consider it appropriate to notice the provisions of Ss. 55(a) and 58 as these existed at the relevant time. These read as under:

    “55. For illegal import, etc.— Whoever in contravention of this Act or of any rule or order made under this Act or of any licence or permit obtained under this Act.

    (a) imports, exports, transports, transits or possesses liquor or any intoxicating drug; or

    xxxxxxxxx

    shall, on conviction before a Magistrate be punished,—

    (1) for any such offence, other than an offence falling under Cl. (d) or (e), with imprisonment for a term which may extend to two years and with fine which may extend to five thousand rupees:

    Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court.—

    (i) such imprisonment shall not be less than six months and fine shall not be less than one thousand rupees for a first offence; and

    (ii) such imprisonment shall be rigorous and shall not be less than one year and fine shall not be less than two thousand rupees for a subsequent offence;

    (2) for an offence falling under Cl. (d) or Cl. (e), with imprisonment for a term which may extend to one year, or with fine which may extend to two thousand rupees, or with both……”

    “58. For possession of illicit liquor.— Whoever, without lawful authority, has in his possession any quantity of liquor or of any intoxicating drug, knowing the same to have been unlawfully imported, transported or manufactured, or knowing the duty, tax or rental payable under this Act not to have been paid therefor, shall on conviction before a Magistrate, be punished with fine which may extend to three thousand rupees, or with imprisonment for a term which may extend to six months, or with both.”

    6. A perusal of S. 55 shows that any person found guilty under this provision can be awarded sentence of imprisonment for a term which may extend 2 years and with fine upto Rs. 5000/-. Under S. 58, the person found guilty can be “punished with fine which may extend to three thousand rupees, or with imprisonment for a term which may extend to six months, or with both.” Thus, it is clear that according to the Legislature the offence under S. 55(a) is more serious than the one under S. 58.

    7. The conflict of judicial opinion exists in the context of the meaning of “possession”. In the cases of Rajeevan v. Excise Inspector (1991 (1) KLT 38) and Purushan v. State Of Kerala (2002 (2) KLT 661), the view taken appears to be that to be culpable the possession must be in the course of import, export, transport or transit. Simple possession is not enough to attract the rigour of S. 55(a). As against this, the view expressed in Meenakshi v. Excise Inspector & Anr. (1995 (1) KLT 738) (particularly in paragraph 11) is that S. 58 would be attracted only when the possession is coupled with the knowledge that the liquor had been “unlawfully imported, transported or manufactured, or knowing that the duty, tax or rental payable under the Act has not been paid therefor……” Otherwise, the case would fall within the mischief of S. 55A.

    8. If the view as taken in Meenakshi's case is accepted the result would be that when a person is in possession of liquor with the knowledge that it has been unlawfully imported, transported, manufactured or that duty etc. has not been paid, the sentence would be less while in a case where there is mere possession without any knowledge of any other illegality the sentence would be higher. We cannot attribute such an intention to the Legislature. Innocent possession cannot be a more serious offence than possession with the knowledge of illegal import etc. Thus, it appears that the case shall fall within the ambit of S. 55(a) only when a person is found to be in possession of liquor in the course of import, export, transport or transit of the goods. In case the possession is merely with the knowledge of the goods having been illegally imported or manufactured, the case would fall within the mischief of S. 58.

    9. The matter can be looked at from another angle also. Keeping in view the slight similarity in language it is permissible to refer to the heading of the provision. S. 55 is labelled as-“for illegal imports etc.” Thus, the Legislature is providing for penalty in a case where a person illegally imports alcohol. S. 58 makes the “possession of illicit liquor” culpable. Resultantly, it is clear that when a person is in possession of liquor while illegally importing it the case would be covered under S. 55(a). In a case where the possession is of illicit liquor the case would fall within S. 58. In other words, we hold that the view as expressed in Rajeevan v. Excise Inspector and Purushan v. State Of Kerala is correct.

    10. What is the position in the present case? Even according to the prosecution, the petitioner was in possession of 15 litres of ‘arrack’ which had been kept in a plastic container and 27 bottles of ‘arrack’ each containing 180 ml. These goods were lying in the shop. He was not importing the liquor or exporting it. It was not in transit. Therefore, it does not fall within the ambit of S. 55(a). The next question that arises for consideration is-Does the case fall within the ambit of S. 58? It is undoubtedly true that the possession has been proved. However, there is no finding recorded by either the trial court or the lower appellate court that the petitioner was having knowledge that it was illicit liquor. Learned counsel for the petitioner has specifically stated before us that there was not even a suggestion that the petitioner was aware of the fact that it had been illegally imported or manufactured or that duty etc. had not been paid. Thus, it appears that even the ingredients of S. 58. are not satisfied.

    11. In any case, it is the admitted position that the petitioner's premises were raided on April 26, 1989. He has been living under the threat of this case for the last 14 years. Even if it is assumed that he was in possession of illicit liquor, we feel that a punishment of fine of Rs. 3000/- would meet the ends of justice. Thus, the revision is partly allowed. The sentence of imprisonment is set aside. The petitioner is held liable to pay a fine of Rs. 3000/-. In case of default, he will be liable to undergo simple Imprisonment for a period of 15 days.

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    Comments

    Surendran v. Excise Inspector
    (Aug 6, 2003)