BHARATH BOOSHAN AGGARWAL versus STATE OF KERALA on 6 October 2021

BHARATH BOOSHAN AGGARWAL

v.

STATE OF KERALA

(Criminal Appeal No. 834 of 2009)

OCTOBER 06, 2021

[INDIRA BANERJEE AND S. RAVINDRA BHAT, JJ.]

Kerala Forest Act – ss.2(f), 27, 69 – Appellant convicted andsentenced by Trial Court u/s.27 (1) (d), u/r.3(iii) r/w r.23 of the TransitRules – Acquitted by Sessions Court – Acquittal reversed by HighCourt – On appeal, held: Sandalwood oil in question is a forestproduct – However, High Court erred in holding that its seizure ipsofacto meant that the appellant had conscious knowledge about itsillicit nature or origin; or the inability to account for a transit passimplied that it was procured illegally, thus attracting s.27 – Appellantfurnished documents explaining how they had sourced thesandalwood oil – Evidence furnished to the State was not evenproduced in Court – State did not discharge its burden of provingbeyond reasonable doubt that the appellant had knowledge of thefact that the goods were illicit in origin – High Court concludedincorrectly that the result of s.69 is a presumption that places thereverse burden of proof in respect of an offence – Impugnedjudgment set aside – Kerala Forest Produce Transit Rules – rr.3(iii), 23 – Code of Criminal Procedure, 1973 – s.378.

Criminal Law – Mens rea – Held: Generally, there is apresumption that mens rea is an essential ingredient in every offence– That presumption can be displaced either by the phraseology ofthe law creating the offence or by the subject matter with which itdeals; both must be considered – Kerala Forest Act – Income TaxAct, 1961 – s.278E – Essential Commodities Act – s.10E.

Kerala Forest Act – s.69 – Presumption under – When notapplicable – Discussed.

Allowing the appeal, the Court

HELD: 1.1 Rule 3 of the Kerala Forest Produce TransitRules prescribes that no one can import or export timber or otherforest produce or transport it, unless a pass as prescribed by the

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ARules, accompanies its movement. Rule 3 (3) prescribes theprocedure for obtaining such a pass. Rule 23 of the Rules,prescribes that any contravention of the rules would attract apunishment for a term that can extend to six months or fine thatcan extend to rupees five hundred, or both. [Para 16][683-D-E]

B1.2 The impugned judgment, so far as it proceeded on theassumption that sandalwood oil is forest produce, is based on acorrect appreciation of law. In the present case, the appellant didnot dispute ownership of the articles seized. Section 69 of theAct enacts presumption, that when possession of a forest produceis found with someone, that it is deemed to belong to the stateC(or central) government. Now, this presumption is a rebuttableone; several decisions of this court have said that the burden ofproving the foundational facts, which will give rise to thepresumption, is upon the prosecution. In the present case, thereis no contest about the fact that the goods were seized from theDpremises of the appellant, and belonged to him. The goods seizedfrom the airport, were to be shipped to overseas destinations. Inthese circumstances, this court is of the opinion that thefoundational facts, i.e., possession of the forest produce, wereproved by the State. [Paras 20, 21][688-E-H; 689-A]

ENoor Agha v. State of Punjab (2008) 16 SCC 417; BholaSingh v. State of Punjab (2011) 1 SCC 653; Gangadhar@ Gangaram v. State of Madhya Pradesh Decision ofSupreme Court dtd. 05.08.2020 in Cr. A. No. 504/2020– relied on.

F1.3 Sandalwood oil is a forest product. However, Section27 (1) (d)- which enacts the offence- and which has been appliedin this case, points to the offender’s conscious mental state whenit enacts that whoever “knowingly receives or has in possessionany major forest produce illicitly removed from a Reserved Forest”would be subjected to the prescribed punishment. TheGpresumption under Section 69 is with respect to not a consciousmental state, or a direction by the legislature that a certain stateof affairs is deemed to exist, but with respect to ownership of theproperty i.e., that it “belongs to the state, unless the contrary is H

proved.” This is a significant aspect, because unlike somestatutes, the Act in the present case, does not create apresumption about a culpable mental state of the alleged offender.Instead, the nature of the presumption is that it relates to theownership of the forest produce. This important aspect has abearing on the matter. Generally, there is a presumption that mensrea is an essential ingredient in every offence. Yet, thatpresumption can be displaced either by the phraseology of thelaw creating the offence or by the subject matter with which itdeals; both must be considered. 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 eithercase, that the same was within his knowledge. This foundationalfact has to be proved beyond reasonable doubt. Thereafter, theaccused has to establish, a credible or reasonable explanation.[Paras 23-25][689-G-H; 690-A-D; 692-F-G]

Nathulal v. State of Madhya Pradesh AIR 1966 SC 43;Umashanker v. State of Chhattisgarh (2001) 9 SCC 642: [2001] 3 Suppl. SCR 646; Raghunath Singh v. Stateof M.P. 1967 JLJ 234 (SC) – relied on.

1.4 The State no doubt led evidence to show that the goodsseized bore the labels of the appellant’s firm and further that notransport licence was available. However, this per se does notestablish illicit possession of forest produce within his knowledge.It is here, that the presumption under Section 69 cannot apply; itmerely directs a presumption that the forest produce belongs tothe government. The appellant had produced documents (in theform of 45 invoices and receipts) to show the origin of the goods,and where they were purchased from, to say that they wereprocured in 104 transactions. The question, therefore, is whetherby operation of Section 27 (1) (d), the initial presumption wasestablished. The evidence on record showed that the cartonsseized from the airport were bound to destinations in Germany, AB

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AFrance, Spain, etc. The receipts, or primary evidence producedby the appellant, was not exhibited in the court; nor was anyevidence led to show that in fact, such effort to trace the sellersof the oil was made by the State, and that the evidence furnishedby the appellant was unbelievable. The State had not dischargedBits burden of proving beyond any doubt, that the appellant hadknowledge of the fact that the goods were illicit in origin. [Paras 26,27][692-G-H; 693-A, C-F]

1.5 The High Court fell into error, in holding that thepresumption that the seizure of forest produce belonging to theCState, automatically can result in a presumption of culpable mentalstate of the accused- in other words, that seizure of the goodsipso facto meant that the appellant had conscious knowledge abouttheir illicit nature or origin, or that the accused’s inability to accountfor a transit pass, implied that they procured the goods illegally,Dthus attracting Section 27. Such a leap of reasoning is not justified,given that the appellants had furnished a series of documentsexplaining how they had sourced the oil in question. The State’sabsence of diligence in producing those materials (which were inits possession) and proving that they were without credibility,cannot result in a conviction. Nor could the court have concludedEadversely that the appellant’s participation in the auction of theseized goods and their purchase, implicated them. There can beseveral reasons for such a conduct, including their wish to fulfilcontractual obligations. The interference by the High Court withthe acquittal recorded by the Sessions Court, in this case, is notFwarranted. The High Court concluded incorrectly that the resultof Section 69 is a presumption that places the reverse burden ofproof in respect of an offence - no such inference can be drawnfrom the plain text of that provision; and Section 27 (1) (d) requiresconscious knowledge, of the nature of the goods, i.e., their illicitorigin, which compels proof by the prosecution, beyond reasonableGdoubt. The materials on the record show that the evidence in thepossession of the defence and furnished to the State, was noteven produced in court, nor was the primary evidence to H

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substantiate the state’s contentions in that regard, proved.The impugned judgment is in error and set aside. [Paras 28-30][693-F-H; 694-A-E]

Suresh Lohiya v. State of Maharashtra (1996) 10 SCC397: [1996] 5 Suppl. SCR 130 – held inapplicable.

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Forest Range Officer v. P. Mohammed Ali 1993 Supp(3) SCC 627; Standard Essential Oil Industries v. ForestRange Officer (2018) 16 SCC 180 :[2018] 3 SCR 532– relied on.

Ghure Lal v. State of Uttar Pradesh (2008) 10 SCC450 : [2008] 11 SCR 499 – referred to.

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CRIMINAL APPELLATE JURISDICTION: Criminal AppealNo.834 of 2009

From the Judgment and Order dated 19.12.2008 of the High Courtof Kerala at Ernakulam in Criminal Appeal No.556 of 2001.

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Ranjeet Kumar, Sr. Adv., Rajiv K. Garg, Ashish Garg, T. L. Garg,Advs. for the Appellant.

C. K. Sasi, Adv. for the Respondent.

The Judgment of the Court was delivered by F

S. RAVINDRA BHAT, J.

1. This appeal by special leave, questions a judgment of the KeralaHigh Court[1] reversing the judgment of the learned Sessions Judge andconsequently, restoring the conviction and sentence (of 3 years’imprisonment) for the offence punishable under Section 27 of the KeralaForest Act (hereafter “the Act”).

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2. The first appellant is a partner of the appellant’s firm, and claimsto be manufacturer and trader of sandalwood oil. On 4 January 1994, 1 Dated 19-12-2008, in Crl. A No. 556/2001

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3. In the criminal proceedings which ensued after initiation of thecomplaint, the appellant denied criminal responsibility arguing, amongothers, that sandalwood oil was not a forest produce and rather, thatsandalwood was. It was urged, that regardless of this, a valid andsubsisting licence authorized the appellant to manufacture sandalwoodDoil. The prosecution examined four witnesses; the appellant relied on thetestimony of two defense witnesses. After considering the materials onrecord, the Judicial Magistrate Thamarasserry (hereafter “the trial court”)by judgment[2] convicted the appellant as charged and sentenced him topay Rs. 2000 as fine and undergo rigorous imprisonment for three yearsunder Section 27 (1) (d) of the Act and six months, under Rule 3 (iii)Eread with Rule 23 of the Kerala Forest Produce Transit Rules (hereafter“the Rules”).

4. Aggrieved by the conviction recorded and sentence imposedon him, the appellant approached the Court of Session, KozhikodeDivision (hereafter “the Sessions Court”) which by its judgment[3], upsetFthe findings of the trial court. The Sessions Court accepted the appellant’splea and held that in view of the certificate issued by the Central Exciseauthorities, his possession of sandalwood oil in the factory could not betermed as illegal and that a conviction under Section 27 could be recordedonly if it was found that sandalwood oil was removed illegally, or withoutGauthorization from any reserve forest, or area proposed to be constitutedas reserve forest.

5. Aggrieved by the appellant’s acquittal and in view of the findingsof the learned Sessions Judge, the State appealed. The High Court, which 2 dated 19.08.1997H3 dated 20.11.2000

considered this appeal reversed the judgment of the Sessions Court ontwo counts. It was held by the impugned judgment that though theappellants held a licence to manufacture sandalwood oil, neverthelessthey failed to account for possession of such a large quantity ofsandalwood oil. When charged with commission of the offence inquestion, the accused concerned or individual was bound to show a properaccount of the raw materials collected and used to manufacturesandalwood oil. Relying upon the testimony of PW-4, who had statedthat the accused failed to furnish the dates and details regardingprocurement of crude sandalwood and crude sandalwood oil (popularlyknown as ‘red oil’), the court held that during the trial too, the appellanthad failed to give any particulars with respect to persons from whompurchase of these raw materials were made. The failure of the defenceto explain this vital aspect rendered the findings of the Sessions Court,vulnerable. Taking note of Section 69 of the Act, which mandated apresumption of culpability in the event possession was found in any givencase, the High Court held that the accused should have given an accountregarding the raw materials collected and used. Noting the state’ssubmission that to manufacture 5430 kilos of sandalwood oil at least5600 kilograms of crude sandalwood oil was required, which in turnneeded to be extracted from at least 200 metric tons of sandalwood, theHigh Court concluded that the reliance on the manufacturing licencealone to explain the possession of sandalwood oil did not in any mannerabsolve the appellant of criminal responsibility.

6. The High Court also relied upon a decision of this court inGhure Lal v. State of Uttar Pradesh[4 ]to say that the appellate courtcan interfere with the order of acquittal only for substantial and compellingreasons. It was held that there were no compelling or substantial reasonsjustifying interference by the Sessions Court of the appellant’s conviction.The High Court thereafter concluded by observing that a purposiveinterpretation of the Act had to be given in view of the underlying objectswhich were for the general public good.

7. It is argued on behalf of the appellant by Mr. Ranjit Kumar,learned senior counsel, that the High Court failed to appreciate that anoffence is said to be committed only when the article in question is “forestproduce”. Relying on the definition of that term in the Act, it was 4 (2008) 10 SCC 450

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Asubmitted that Section 2(f)(i)[5 ]specifically states that sandalwood is onesuch produce. The reference to wood oil cannot, therefore, be said toinclude “sandalwood oil”. The appellants’ counsel relied on the decisionsof this court in Suresh Lohiya v. State of Maharashtra[6]and the recentruling in Standard Essential Oil Industries v. Forest Range Officer[7]to urge that courts cannot expand the scope of a legislation, departingBfrom its text, especially if it entails fastening of criminal liability.

8. It was argued that as the appellant proved that he held a validlicence to manufacture sandalwood oil out of red oil, no offence wasmade out. It was argued that acquisition of raw materials was establishedthrough the documents maintained by the appellant, in accordance withCthe procedure prescribed by the Central Excise Rules, 1944.There couldresultantly have been no inference of illegality committed in the possessionof sandalwood oil. Mr. Ranjit Kumar said that the High Court fell intothe error in not appreciating that the appellants had duly maintained theregister containing information as to where and how raw material requiredDfor manufacture of the sandalwood oil was obtained; and that in theabsence of any evidence to the contrary by the individuals or firms whichhad supplied such raw material, no presumption could be drawn that thefinished product originated from illegally procured sandalwood or red oilextracted from sandalwood. It was pointed out that the appellants had inthe course of their business relied on the licence to manufactureEsandalwood oil and had been exporting it through proper channels forseveral years. This resulted in valuable acquisition of foreign exchangeto the country. Had there been any illegality, such exports would haveceased a long time back.

9. Learned counsel submitted that the High Court failed to considerFthe distinction between Section 27 and Section 69 of the Act. It was 5 Section 2 (f) reads as follows:(f) “forest produce” includes- (i) the following whether found in or brought from aforest or not that is to say.- timber, charcoal, wood-oil, gum, resin, natural varnishbark lac, fibres and roots of sandal wood and rosewood; and (ii) the following whenfound in, or brought from, a forest, that is to say,- (a) trees and leaves, flowers andGfruits, and all other parts or produce not hereinbefore mentioned, of trees; (b) plantsnot being trees (including grass, creepers, reeds and moss) and all parts or produce ofsuch plants; and (c) silk cocoons, honey and wax; (d) peat, surface soil, rock andminerals (including limestone, laterite, minerals oils and all products of mines orquarries);”

6 (1996) 10 SCC 397H7 (2018) 16 SCC 180

emphasised that Section 69 refers to only forest produce whereas Section27 refers to forest produce illegally removed from a reserve forest. TheHigh Court convicted the appellant holding that the presumption underSection 69 applied. The appellant had in fact, discharged the burdenplaced upon them by producing registers maintained regarding details ofindividuals and firms from whom they had purchased the red oil.Therefore, the prosecution was under a duty to prove that such entrieswere false. Having been maintained in the ordinary course of business,the courts, especially the trial court and the High Court, failed to considerthat the prosecution was unable to establish that the source of thesandalwood oil and therefore, the basis for its possession was illegal.

10. Highlighting that Section 27 applied only where the court foundthat when a firm or concern knowingly receives, or has possession ofany forest produce illicitly removed, learned senior counsel urged thatthe prosecution in this case failed to prove either. The prosecution neveralleged that the appellant had knowingly received or were in possessionof any forest produce illicitly removed from the reserve forest. Likewise,it was not its case that any forest produce had been illegally removedfrom the reserve forest and that any proceedings were pending for thatpurpose. Learned counsel submitted that the courts below failed toappreciate that the complaint did not allege illicit removal of forest producefrom the reserve forest. Likewise, the evidence of the four witnessesshowed, that none of them remotely suggested that the forest producefound had been illicitly removed from the reserve forest. Accordingly,the elements making up the offence under Section 27 (1) (d) of the Acthad not been proved.

11. It was urged that Section 69 enacts a presumption that forestproduce is deemed to be a property of the government, where ownershipis disputed. At the same time, Section 27 (1)(d) makes it an offencewhere anyone is in conscious possession of forest produce which isillicitly removed from a reserve forest. In this context, it was argued thatthe appellant’s firm holds a valid L-4 licence issued by Central Exciseauthorities to manufacture sandalwood oil. Registration of the appellant’sfirm under the Kerala General Sales Tax Act, 1963 and Central SalesTax Act, 1956 was established. The firm had no infrastructure tomanufacture sandalwood oil from sandalwood. Therefore, it is apparentthat the department did not lead any evidence to prove that the forestproduce involved was in fact illicitly removed. The firm was entitled topossess and deal with sandalwood oil in its godown and elsewhere. By AB

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Ano stretch of imagination therefore, could it be said that possession ofsandalwood oil in the firm’s godown, as well as in the airport was illegalor unauthorised. Furthermore, the learned senior counsel submitted thatif the appellant had indulged in any illegality with respect to procurementof the raw materials, their exports would not have been permitted.

B12. The State argues that this court should not interfere with thefindings and conviction recorded by the impugned judgment. Its counsel,Mr. C. Sashi, submits that there can be no debate as to whethersandalwood oil is a forest produce. Learned counsel relied upon thejudgment of this court reported as Forest Range Officer v. P.Mohammed Ali[8] and submitted that the decision later rendered inCStandard Essential Oil Industries (supra), in fact, emphatically statesthat “forest produce”, as defined in the Act, includes sandalwood oil.Learned counsel for the State submits that once there is no dispute withrespect to possession of sandalwood oil – as in this case –the onusclearly lay upon the appellant to prove that such possession was lawful,Dthat the forest produce was procured through legitimate sources and notin a manner contrary to law.

13. Learned counsel argued that the mere statement on the partof the appellant that they used to deal in sandalwood oil, processed orproduced from red oil as the raw material (which in turn was extractedEfrom sandalwood), was insufficient to discharge the initial burden placedupon them by law. Counsel highlighted that once their possession of theforest produce was established the appellant relied upon certain entriesin the central excise registers and other records, to explain that the sourceof such articles were legitimate. By themselves, such documents wereinsufficient. The presumption under Section 69 operated firstly after theFState established possession of forest produce. In this case, sandalwoodoil is a forest produce. The seizure of the appellant’s sandalwood oil atthe airport and the subsequent search and seizure of 73.6 kgs ofsandalwood oil from their premises, resulted in the discharge of thefoundational onus that lay upon the State. Therefore, Section 69 and theGpresumption enacted by it were attracted. The burden was then shiftedto the appellant to establish that the forest produce was sourcedlegitimately and that they had a lawful right to the articles. It wasreiterated that this burden could not be simply discharged by stating thatsome traders had supplied varying quantities of red oil. The traders, or some of them should have stepped into the witness box and proved thatthe statements made by the appellant was correct. The appellant onlyrelied on the invoices and the registers, which were inadequate and didnot provide all the details for a proper verification. The trial court observedthat these facts were established by the deposition of the investigatingofficer. In the circumstances it could not be said that the appellant haddischarged the burden of proving that the forest produce was legitimatelysecured or sourced by them and that its possession was legal.

14. Learned counsel relied upon the ruling of this court in GhureLal (supra)to argue that if the appellate court reverses the convictionunreasonably without any compelling reason, and contrary to record,based upon a misappreciation of evidence or the law, the High Courtcan interfere with such findings. On the basis of all these submissions,the state urges that this court should dismiss the appeal and confirm theconviction 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 forestor 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 partsor produce not here-in-before mentioned, of trees.

b) plants not being trees including grass, creepers, reedsand 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 orquarries”.

Section 27 reads as follows:

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“27. (1) Any person who-

(a) does any act prohibited by section 7; or (b) sets fire to a Reserved Forest or kindles or leavesburning any fire in such manner as to endanger the same;or

(c) sets fire to jungles or forests, other than ReservedForests and a land proposed to be constituted a ReservedForest, without taking precautionary measures to preventthe spread of fire into Reserved Forest and land proposedto be constituted a Reserved Forest; or (d) knowingly receives or has in possession any forestproduce illicitly removed from a Reserved Forest; or a landproposed to be constituted a Reserved Forest; or (e) in a Reserved Forest or in a land proposed to beconstituted a Reserved Forest-

(i) cultivates or clears or breaks up any land for cultivationor for any other purpose or puts up any shed or otherstructures 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 treeincluding fallen or felled, or strips off the bark or leavesfrom or otherwise damages the same;

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

(v) quarries stones, burns lime or charcoal or collects orsubject to any manufacturing process or removes any forestproduce; 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 shallnot be less than one year but may extend to five years andwith fine which shall not be less than one thousand rupees but may extend to five thousand rupees in addition to suchcompensation for damage done to the forest as theconvicting court may direct to be paid.”.

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Section 69 is in the following terms:

“69. When, in any proceedings taken under this Act, orin consequence of anything done under this Act, a questionarises as to whether any forest produce is the property ofthe Central or State Government, such produce shall bepresumed to be the property of the Central or StateGovernment, as the case may be, until the contrary isproved.”

16. Rule 3 of the Rules prescribes that no one can import or exporttimber or other forest produce or transport it, unless a pass as prescribedby the Rules, accompanies its movement. Rule 3 (3) prescribes theprocedure for obtaining such a pass. Rule 23 of the Rules, prescribesthat any contravention of the rules would attract a punishment for aterm that can extend to six months or fine that can extend to rupees fivehundred, or both.

17. In Forest Range Officer v. P. Mohammed Ali (supra) theprovisions 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 submissionthat, sandalwood oil was not “forest produce” and that the expression“wood oil” was referrable to items other than those enumerated (suchas sandalwood, rosewood, roots, etc.) and further that wood oil referredto natural products and not those derived through processing. This courtrepelled such an interpretation and held that:

“6. … It must be noted in this context that there are severaltypes of essential oils in India, the important ones beingsandalwood oil, agar-wood oil, deodar oil and pine oil, apartfrom oleo-resin and wood oil derived from exudation fromliving trees in the forest area. These essential oils are obtainedfrom any forest wood. Sandalwood as observed by the HighCourt is forest produce. Even its roots thereof are also includedas forest produce. They are also timber within the meaning ofSection 2(k) of the Act. The purpose of the Act is to conserveforest wealth which is very dear for preservation to maintain A

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ecology. Forest produce defined under Section 2(f) is aninclusive definition. It is settled law that the word ‘include’ isgenerally used as a word of extension. When used in aninterpretation clause, it seeks to enlarge the meaning of thewords or phrases occurring in the body of the statute. Craieson Statute Law, 7th Edition at p. 64 stated the construction tobe adopted to the meanings of the words and phrases that

“The cardinal rule for the construction of Acts of Parliamentis that they should be construed according to the intentionexpressed in the Acts themselves. If the words of the statuteare themselves precise and unambiguous, then no more canbe necessary than to expound those words in their ordinaryand natural sense. The words themselves alone do in such acase best declare the intention of the law giver”.

At p. 214 it is stated that an interpretation clause whichextends the meaning of a word does not take away its ordinarymeaning. An interpretation clause of the inclusive definitionis not meant to prevent the word receiving its ordinary, popularand natural sense whenever that word would be properlyapplicable, but to enable the word as used in the Act, whenthere is nothing in the context or the subject-matter to thecontrary, to be applied to somethings to which it would notordinarily be applicable…. An interpretation clause shouldbe used for the purpose of interpreting words which areambiguous or equivocal, and not so as to disturb the meaningof such as are plain. At p. 216 it is stated that anotherimportant rule with regard to the effect of an interpretationclause is that an interpretation clause is not to be taken assubstituting one set of words for another, or as strictly definingwhat the meaning of the term must be under all circumstances,but rather as declaring what may be comprehended withinthe term where the circumstances require that it should be soconstrued.

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8. The word include in the definition under Section 2(f) wouldshow that it did not intend to exclude what would ordinarilyand in common parlance be spoken of as wood oil. Theexpression being technical and being part of an inclusive

definition has to be construed in its technical sense but in anAexhaustive manner, it cannot be restricted in such a mannerso as to defeat the principal object and purpose of the Act.The process by which the oil is extracted is not decisive as oilmay be extracted by natural process of exudation or it maybe extracted by subjecting to chemical or mechanical processBand sandalwood (Santalum album) is cut into pieces. Itsheartwood and roots of sandalwood trees removed from theforest are used as a raw material at a factory level that too bymechanised process to extract sandalwood oil. The purposefor which the oil is used is not decisive. Therefore, the wordwood oil used in the Act will require purposive interpretationCdrawing upon the context in which the words are used and itsmeaning will have to be discovered having regard to theintention and object which legislature seeks to subserve. Therestricted meaning sought to put up by the accused wouldfrustrate the object and the literal interpretation would defeatDthe meaning. The legislature does not intend to restrict theword wood oil nor do we find any compelling circumstancesin the Act to give restricted meaning that only oil derived fromDipterocarpus trees to be wood oil as contended for theaccused and which found acceptance by the learned SingleJudge. The purposive interpretation would aid conservationEof sandalwood, a valuable forest wealth, prevent illicit fellingand transportation of them and make the manufacturers ofsandalwood oil accountable for the possession of sandalwoodtrees or chips or roots etc. Incorporation of sandalwood oil exabundenti cautela in Karnataka Act and absence thereof inFsister Acts operating in South India does not detract fromgiving it its due meaning. The expert opinion is only an opinionevidence on either side and does not aid us in interpretation.This Court in Aditya Mills Ltd. v. Union of India [(1988) 4SCC 315] did not adopt the dictionary meaning as it may beto some extent delusive guide to interpret entries in CentralGExcises and Salt Act. In Kishan Lal v. State ofRajasthan [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 H

AKhandsari Sugar was not an agricultural produce. Repellingthat contention, this Court held that the word agriculturalproduce includes all produce whether agricultural,horticultural, animal husbandry or otherwise as specified inthe Schedule. The legislative power to add or include anddefine a word even artificially, apart, the definition which isBnot exhaustive but inclusive neither excludes any item producedin mills or factories nor it confines its width to produce fromsoil. If that be the construction then all items of animalhusbandry shall stand excluded. It further overlooks theexpression “or otherwise as specified in the Schedule”.CAccordingly it was held that Khandsari Sugar is an agriculturalproduce under that Act….”

18. In the other judgment, relied on by both parties, i.e. StandardEssential Oil Industries (supra), the issue was whether sandalwoodoil could be confiscated by virtue of provisions of Section 61A of theDKerala Forest Act.[9] This court held that sandalwood oil, though a forestproduce, could not be the subject matter of Section 61A in view of itsrestrictive wording:

“21. A perusal of the definition of forest produce, as givenby Section 2(f) of the Act, shows that other than timber,Echarcoal, firewood it includes wood oil, gum, resin, naturalvarnish bark, roots of sandalwood, etc. However, the use ofthe 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 providingarmoury under Section 61-A is only with regard to certainF

9 That provision, i.e Section 61A, was inserted in 1975 by the State Assembly, andprescribed inter alia, the procedure to be followed in cases where the state, apart fromseizing the forest produce, also intended to confiscate the property and the articlesused for commission of the offence. The material part of Section 61A reads as follows:

“61A Confiscation by Forest Officers in certain cases.-(1) Notwithstanding anythingcontained in the foregoing provisions of this Chapter, where a forest offence isGbelieved to have been committed in respect of timber, charcoal, firewood or ivorywhich 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, togetherwith all tools, ropes, chains, boats, vehicles and cattle used in committing suchoffence, before an officer authorized by the Government in this behalf by notificationin the Gazette, not being below the rank of an Assistant Conservator of ForestsH(hereinafter referred to as the authorized officer).”

BHARATH BOOSHAN AGGARWAL v. STATE OF KERALA[S. RAVINDRA BHAT, J.]

category specified therein and not for every forest produceas defined under Section 2(f) of the Act. Undoubtedly,-sandalwood oil is a forest produce but Section 61A of theAct is limited only to the categories specified therein and doesnot give power of confiscation of sandalwood oil.

22. Further, we find force in the contention of the appellantsthat Section 69 of the Act is only a rule of evidence whichraises a mandatory presumption that a forest produce, unlessproved otherwise, is a property of the Government in casewhere any proceedings are going on under the Act or anythingis done under the Act. The section operates only as a tool tohelp the Government in proving its title to the property butthe said section cannot be read as to give any power ofconfiscation 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, mahuaflowers, or minerals and, article “produced with the aid of humanlabour” which, according to it, was not included in the definition of“forest produce” under the Act:

“7. The legislature having defined “forest-produce”, it is notpermissible to us to read in the definition something which isnot there. We are conscious of the fact that forest wealth isrequired 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 outcresses; it cannot weave a new texture. If there be any lacunain the definition it is really for the legislature to take care ofthe same.

8. We may also state that according to us the view taken bythe Gujarat High Court in Fatesang’s case is correct, becausethough bamboo as a whole is forest produce, if a product,commercially new and distinct, known to the businesscommunity as totally different is brought into existence byhuman labour, such an article and product would cease to bea forest-produce. The definition of this expression leavesnothing to doubt that it would dot take within its fold an articleor thing which is totally different from, forest-produce, having A

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Aa distinct character. May it be stated that where a word or anexpression is defined by the legislature, courts have to lookto that definition; the general understanding of it cannot bedeterminative. So, what has been stated in Strouds’ JudicialDictionary regarding a “produce” can not be decisive.Therefore, where a product from bamboo is commerciallyBdifferent from it and in common parlance taken as a distinctproduct, the same would not be encompassed within theexpression “forest-produce” as defined in Section 2 (4) ofthe Act, despite it being inclusive in nature. that bamboo matis taken as a product distinct from bamboo in the commercialCworld, has not been disputed before us and rightly.”

20. It is noteworthy that in Suresh Lohiya (supra) this court madeno reference and did not advert to Forest Range Officer v. P.Mohammed Ali (supra). In Suresh Lohiya also, we notice this Courtsought to interpret the interplay between “forest produce”, “timber”Dand “tree” and concluded that articles or products created by humantoil are not per se forest products. This court is of the opinion that thedistinction sought to be made defeats the purpose of the Act, becauseillegally procured forest produce, such as sandalwood, rosewood, or otherrare species, and then worked upon, resulting in a product -predominantlybased on the essential forest produce, would escape the rigors of theEAct. Therefore, Suresh Lohiya cannot be considered a binding authority;its dicta should be understood as confined to the facts of that case. Forthese reasons, it is held that the impugned judgment, so far as it proceededon the assumption that sandalwood oil is forest produce, is based on acorrect appreciation of law.

F21. In the present case, the appellant did not dispute ownership ofthe articles seized. Section 69 of the Act enacts presumption, that whenpossession of a forest produce is found with someone, that it is deemedto belong to the state (or central) government. Now, this presumption isa rebuttable one; several decisions of this court have said that the burdenof proving the foundational facts, which will give rise to the presumption,Gis upon the prosecution.[10 ]In the present case, there is no contest aboutthe 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 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, judgmentHdated 5[th] August, 2020 in Cr. A. No. 504/2020.

shipped to overseas destinations. In these circumstances, this court is ofthe 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 theproduce was procured properly. Their case was twofold: one that asholder of a Central Excise licence to manufacture sandalwood oil, theprosecution had to fail. The appellant had sought to rely on the statutoryregisters which they were bound to keep. It was also submitted that theoil was produced by the appellant from the raw materials, i.e. red oil,which they had purchased from many traders for which some 45 invoiceswere relied upon. According to the statement made to the forestauthorities, at the time of the search and seizure, these raw materialswere obtained in the course of 104 transactions, where smaller quantitiesof red oil were purchased. PW-2, the flying squad officer of the forestdepartment who deposed during the trial, in the course of crossexamination stated that the cartons were kept in the open in the airportand bore the labels of the appellant firm. The witness further stated thatthe goods were seized because it was not known where they originatedfrom, nor where they were bought. He also stated that the goods, i.e.sandalwood oil cartons “were seized for the reason that documents toshow from where they came were not produced.” The appellants hadalleged that the red oil was purchased for processing from several persons,and that particulars had been furnished to the forest authorities. PW-4was silent about verification of these details; he stated in crossexamination, generally, that the addresses of the traders who sold the oilto the appellant were provided, but incomplete. Secondly, it was urgedthat the prosecution did not produce any material to support the plea thatthe appellant’s information was suspect, or lacked credibility. PW-4 hadfurther stated that the appellant purchased the seized goods when theywere auctioned by the state, after the applications for their release (tothe accused/appellants) were dismissed by the court. This witness alsostated that the yield of sandalwood oil is to the extent of 4% fromsandalwood.

23. There can be no dispute that sandalwood oil is a forest product.However, Section 27 (1) (d)- which enacts the offence- and which hasbeen applied in this case, points to the offender’s conscious mental statewhen it enacts that whoever “knowingly receives or has in possessionany major forest produce illicitly removed from a Reserved Forest”would be subjected to the prescribed punishment. The presumption under A

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ASection 69 is with respect to not a conscious mental state, or a directionby the legislature that a certain state of affairs is deemed to exist, butwith respect to ownership of the property i.e. that it “belongs to thestate, unless the contrary is proved.”

24. This is a significant aspect, because unlike some statutes[11],Bthe Act in the present case, does not create a presumption about a culpablemental state of the alleged offender. Instead, the nature of thepresumption is that it relates to the ownership of the forest produce.This important aspect has a bearing on the matter. Whether an offencecan be said to have been committed without the necessary mens reahas often arisen for consideration. Generally, there is a presumption thatCmens rea is an essential ingredient in every offence. Yet, that presumptioncan be displaced either by the phraseology of the law creating the offenceor 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:D“Mens rea is an essential ingredient of a criminal offence.Doubtless a statute may exclude the element of mens rea, butit is a sound rule of construction adopted in England and 11 For example, Income Tax Act, 1961:

“Section 278E. (1) In any prosecution for any offence under this Act which requires aEculpable mental state on the part of the accused, the court shall presume the existence ofsuch mental state but it shall be a defence for the accused to prove the fact that he had nosuch 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 orknowledge 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 courtbelieves it to exist beyond reasonable doubt and not merely when its existence is establishedFby a preponderance of probability.”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 mentalstate on the part of the accused, the court shall presume the existence of such mentalstate but it shall be a defence for the accused to prove the fact that he had no such mentalstate with respect to the act charged as an offence in that prosecution.GExplanation. 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 courtbelieves it to exist beyond reasonable doubt and not merely when its existence is establishedby a preponderance of probability.”

12 Sherras v. De Rutzen (1895) 1 QB 918; State of Maharashtra v. Mayer Hans George1965 (1) SCR 123.H13 AIR 1966 SC 43

BHARATH BOOSHAN AGGARWAL v. STATE OF KERALA[S. RAVINDRA BHAT, J.]

also accepted in India to construe a statutory provisioncreating an offence in conformity with the common law ratherthan against it unless the statute expressly or by necessaryimplication excluded mens rea. The mere fact that the objectof the statute is to promote welfare activities or to eradicate agrave social evil is by itself not decisive of the questionwhether the element of guilty mind is excluded from theingredients of an offence. Mens rea by necessary implicationmay be excluded from a statute only where it is absolutelyclear that the implementation of the object of the statute wouldotherwise be defeated. The nature of the mens rea that wouldbe implied in a statute creating an offence depends on theobject of the Act and the provisions thereof.”

Umashanker v. State of Chhattisgarh[14] underlined the existenceof mens rea, as follows:

“7. Sections 489-A to 489-E deal with various economicoffences in respect of forged or counterfeit currency notes orbanknotes. The object of the legislature in enacting theseprovisions is not only to protect the economy of the countrybut also to provide adequate protection to currency notes andbanknotes. The currency notes are, in spite of growingaccustomedness to the credit card system, still the backboneof the commercial transactions by the multitudes in ourcountry. But these provisions are not meant to punish unwarypossessors or users.

8. A perusal of the provisions, extracted above, shows thatmens rea of offences Under Sections 489-B and 489-C is“knowing or having reason to believe the currency notes orbanknotes are forged or counterfeit”. Without theaforementioned mens rea selling, buying or receiving fromanother person or otherwise trafficking in or using asgenuine forged or counterfeit currency notes or banknotes,is not enough to constitute offence Under Section 489-BIndian Penal Code. So also possessing or even intending touse any forged or counterfeit currency notes or banknotes isnot sufficient to make out a case Under Section 489-C in theabsence of the mens rea, noted above.”

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AIn Raghunath Singh v. State of M.P.[15] this court held that use ofthe word “know” would mean that mens rea of the offender has to beestablished:

“Section 368 speaks of “knowledge” when it says, “Whoeverknowing that any person has been kidnapped or has beenBabducted, wrongfully conceals or confines such person...”The Indian Penal Code uses two different expressions in itsdifferent parts. Sometimes the gist of the offence is dependanton knowledge and the words “knowing” or “knowingly” areused to indicate that knowledge as such must be proved eitherby positive evidence or circumstantially before mens rea canCbe 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 thanthe words “has reason to believe” because they insist on agreater degree of certitude in the mind of the person who isDsaid to know or to do the act knowingly. It is not enough ifthe evidence establishes that the person has reason to suspector even to believe that a particular state of affairs existed.When these words are used, something more than suspicionor reason for belief is required. Before an offence underSection 368 could be brought home it must be establishedEthat accused knew that the person had been kidnapped orabducted.”

25. Therefore, in the present case, the State had to show, that theforest produce was illicitly removed, or was illicitly in the possession ofthe accused, and in either case, that the same was within his knowledge.FThis foundational fact, as previously discussed, has to be proved beyondreasonable doubt. Thereafter, the accused has to establish, a credibleor reasonable explanation.

26. The state no doubt has led evidence to show that the goodsseized bore the labels of the appellant’s firm and further that no transportGlicence was available. However, this per se does not establish illicitpossession of forest produce within his knowledge. For a court to soconclude, the prosecution had to, in addition, prove beyond reasonabledoubt, the foundational fact that the accused had knowingly removedthe forest produce illicitly. It is here, that the presumption under Section 69 cannot apply; it merely directs a presumption that the forest producebelongs to the government.

27. In the opinion of the court, the impugned judgment, by reversingthe decision of the Sessions Court, is in error. The Sessions Court hadclearly recorded that the appellant’s explanation that as L-4 CentralExcise licence holders they were absolved of any responsibility in relationto observance of any other law, was misplaced and wholly inadequate.The appellant could legitimately bring into existence an excisable producebut that did not absolve them of the liability to follow other obligations inregard to procurement of regulated or controlled commodities, or evenother aspects relating to them, such as licensing or permissions to store,transport them, etc. The appellant had produced documents (in the formof 45 invoices and receipts) to show the origin of the goods, and wherethey were purchased from, to say that they were procured in 104transactions. The question, therefore, is whether by operation of Section27 (1) (d), the initial presumption was established. The evidence on recordshowed that the cartons seized from the airport were bound to destinationsin Germany, France, Spain etc. The State’s main argument is that therewas no prior permission, or clearance as required by the rules. Apartfrom stating that the invoices and other documents could not be verified,the State made no effort to establish, independently, in its evidence thatany such effort was made. The receipts, or primary evidence producedby the appellant, was not exhibited in the court; nor was any evidenceled to show that in fact, such effort to trace the sellers of the oil wasmade by the State, and that the evidence furnished by the appellant wasunbelievable. In these circumstances, it could not be said that the Statehad discharged its burden of proving beyond any doubt, that the appellanthad knowledge of the fact that the goods were illicit in origin.

28. The High Court, in our opinion, fell into error, in holding thatthe presumption that the seizure of forest produce belonging to the State,automatically can result in a presumption of culpable mental state ofthe accused- in other words, that seizure of the goods ipso facto meantthat the appellant had conscious knowledge about their illicit nature ororigin, or that the accused’s inability to account for a transit pass, impliedthat they procured the goods illegally, thus attracting Section 27. Such aleap of reasoning is not justified, given that the appellants had furnisheda series of documents explaining how they had sourced the oil in question.The State’s absence of diligence in producing those materials (which AB

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Awere in its possession) and proving that they were without credibility,cannot result in a conviction. Nor could the court have concluded adverselythat the appellant’s participation in the auction of the seized goods andtheir purchase, implicated them. There can be several reasons for sucha conduct, including their wish to fulfil contractual obligations.

B29. This court is of the opinion that the interference by the HighCourt, with the acquittal recorded by the Sessions Court, in this case, isnot warranted. Ghure Lal (supra) no doubt, reviewed the consistentlaw declared that an appellate court should not interfere with the findingsof the trial court merely because it prefers a plausible view, unless thereare compelling reasons for it to do so. It is precisely in such cases,Cwhere appellate interference is unwarranted, that the State is entitled toappeal to the High Court under the Criminal Procedure Code, 1973.[16]However, the facts reveal otherwise: one, the High Court concludedincorrectly that the result of Section 69 is a presumption that places thereverse burden of proof in respect of an offence - no such inference canDbe 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. theirillicit origin, which compels proof by the prosecution, beyond reasonabledoubt. As explained earlier, the materials on the record show that theevidence in the possession of the defence and furnished to the state,was not even produced in court, nor was the primary evidence toEsubstantiate the state’s contentions in that regard, proved.

30. In view of the above discussion, this court is of opinion thatthe impugned judgment is in error. It is accordingly set aside. The appealsucceeds and is allowed, but with no order on costs.

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Divya Pandey

Appeal allowed.

G16 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 Prosecutorto present an appeal to the High Court from an original or appellate order of acquittalpassed by any Court other than a High Court or an order of acquittal passed by theCourt of Session in revision.”

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