Holding

The entire building bearing a single municipal number constitutes the licensed premises; consequently, the appellant did not carry on business in unlicensed premises and the conviction under Sec. 27(7)(b) is set aside.

Summary

C.D. George, a licensed gold dealer, kept his showroom on the ground floor of a four‑storeyed building but stored gold ornaments on the third floor. He was charged under the Gold (Control) Act, 1968 for failing to maintain accounts (Sec. 55(3)) and for allegedly carrying on business in premises other than those specified in his licence (Sec. 27(7)(b)). The trial court acquitted him on both counts, but the Kerala High Court upheld the acquittal on the accounting charge and convicted him on the premises charge, holding that the third floor was not part of the licensed premises. On appeal, the Supreme Court examined whether the third floor fell within the licensed premises and whether the appellate court could disturb the trial court’s finding when two reasonable views of the evidence existed. Finding that the licence covered the entire building (which had a single municipal number) and that there was no evidence to exclude the third floor, the Court held the trial court’s view reasonable and set aside the conviction. The appeal was allowed, restoring the acquittal.

Issues considered

Whether storing gold ornaments on the third floor of a building where the licence specifies the building address amounts to carrying on business in premises other than those licensed under Sec. 27(7)(b) of the Gold (Control) Act, 1968.
Whether an appellate court may disturb a trial court’s acquittal when the evidence permits two reasonable interpretations.

Legislation cited

Gold (Control) Act, 1968s. 27(7)(b), s. 55(3), s. 85(1)(a)

Subjects

Gold (Control) Actlicensed dealerpremisesSection 27(7)(b)acquittalappellate reviewevidentiary standardscriminal procedure

Judgment

C.D. GEORGE
A
v.
ASSISTANT COMMISSIONER OF CENTRAL
EXCISE, TRICHUR

MARCH 2, 1990
B
[S. RATNAVEL PANDIAN AND K. JAYACHANDRA
RED)')Y, JJ.]

Gold (Control) Act, 1968: Sections 27(7)(b), 55(3) and 85(l)(a)-
Licensed Dealer-Licensed premises consisting of four-storeyed
Building-Showroom on the ground floor-Gold ornaments kept on
third floor-Whether amounts to carrying on business in unlicensed C
premises.

Practice and Procedure: Trial Court's finding-Possibility of two
....-{ views of the evidence on record-Appellate Court should nol disturb
even if it were possible to reach a different conclusion. D

The appellant, a licensed dealer, was charged under Section 55(3)
of the Gold (Control) Act, 1968 for failure to maintain the neces.sary
accounts and under section 27(7)(b) for carrying on business in the
unlicensed premises on the ground that while the show room of the
--;' licensed premises was on the ground floor and appellant bad kepi the E
gold ornaments in the third floor of the building.

- The Trial Court acquitted the appellant and the Appellate Court
confirmed the rmding under section 55(3) but convicted him under
section 27(7)(b) holding that the third floor does not form part of the
licensed premises. F

r the High
.In this it was contended on behalf of the appellant that
'IPpeai
Court misconstrued the provisions of section 27(7)(b); two
(-U)
(i)

views being possible of the evidence on the record the interference with
the order of acquittal by the Appellate Court was uncalled for.
G
Setting aside the conviction and allowing the appeal, Ibis Court,

HELD: I. In the instant case the entire building bears only one
---1.. municipal number and the licence was given for conducting the business
in tlfat building. There is no other evidence in support of the prosecu-
tion case that the third floor of the building does not form part of the H
licensed premises. [796C; 797C)
793
794 SUPREME COURT REPORTS [ 1990] 1 S.C.R.

A 2. If the finding reached by the trial judge cannot be said to be
unreasonable, the Appellate Court should not disturb it even if it were
possible to reach a different conclusion on the basis of the material on
the record. The Appellate Court therefore should be slow in disturbing
the finding of fact of the Trial Court, and if two views are reasonably
possible of the evidence on the record, it is not expected to interfere
B simply because it feels that it would have taken a different view if the
case had been tried by it. [797E-F]

Bhagwati and Ors. v. State of Uttar Pradesh, [1976] 3 SCC 235,
followed.

3. The view taken by the trial court is quite reasonable and there ;"
C were no gronnds for the High Court to interfere with the findings of the
trial court acquitting the accused. [797G]

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal ~
No. 453 of 1989.
D
From the Judgment and Order dated 8.1.1988 of the Kerala High
Court in Crl. A. No. 382 of 1986.

G. Ramaswamy, Ashok K. Sen, G. Viswanatha Iyer and 'r--
R. Satish for the Appellant.
E
V.C. Mahajan, A. Sobba Rao, P. Parmeshwaran and Mrs.
Sushma Suri for the Respondent. -

The Judgment of the Court was delivered by '>

F REDDY, J. The Gold (Control) Act ws enacted in the year 1968 . -y · -
with the object of control of the production, supply, use and posses·
sion of and business in gold ornaments and articles of gold in the
interest of economic and financial interests of the community. Section
27 of the Act lays down that no person shall commence, or carry on,
business as a dealer unless he holds a valid licence issued under the
G provisions of the Act and the said licence should be in the prescribed
form. Section 27(7)(b) lays down that a licensed dealer shall not carry
on the business as such dealer in any premises other than the premises ~
specified in his licence. Section 4(h) defines 'dealer' as one who carries
on the business of making, preparing, polishing, buying, selling,
supplying, processing or converting gold, whether for cash or for
H deferred payment or for commission, remuneration or other consi·
deration.
C.D. GEORGE v. ASST. COMMR. CENTRAL EXCISE [REDDY, J.I 795

The appellant before us was one such licensed dealer having a
\ A
shop in a building, which is four-storeyed, bearing Municipal No. 25/
r A/1479 on the Municipal Road, Trichur (Kerala). The showroom
where the actual day-to-day business is conducted is in the ground
floor. On 23.9.81 Superintendent of Central Excise, examined as P.W.
1, raided the shop of the appellant and conducted a search. Books of

..,, accounts maintained by the appellant were verified and it was found
that there was a stock of 1372 pieces of gold ornaments. The search
party found 169 pieces of new gold ornaments in the third floor of the
B

building weighing 667.850 grams kept in a card-board box. They were
seized. On further investigation conducted by the officer it was also
revealed that the appellant's brother, his business associate, had
--. purchased some items of jewellery from another dealer and had also
kept the same in the said licensed premises. A complaint was preferred c
against the appellant alleging that he has unaccounted jewellery and
that he was carrying on the business in the third floor which is not a
--<. licensed premises.

The trial court framed charges under Section 27 (7)(b) read with D
Section 85(1)(a) and Section 55(3) of The Gold (Control) Act and
necessary evidence was adduced. Failure to maintain the necessary
accounts as a dealer is punishable under Section 55(3) and carrying on
business in a premises other than the premises specified in the licence
------.:
is punishable under Section 27(7)(b). The appellant inter alia took the
plea that he is carrying on the business of gold only in the ground floor E
and the items therein have been accounted for including the items that
were found in the third floor. He also took the plea that he sold these
"" items to a customer and separated them and kept them in the third
........ floor for the purpose of delivering the same to the purchaser and that
the third floor also formed part of the licensed premises .
. r-· The trial court on an appreciation of the evidence, acquitted the
F

accused holding that the prosecution has failed to prove that the
accused had unaccounted jewellery and that he was carrying on busi-
ness in an unlicensed premises.An appeal against acquittal was filed in
the High Court of Keiala and the learned Judge confirmed the finding
..
_.J__
of the trial court in respect of charge under Section 55(b). He,
however, held that the third floor does not form part of the licensed
premises. Therefore an offence punishable under Section 27(7)(b) is
G

proved and accordingly convicted and sentenced the appellant to three
months' simple imprisonment.and to pay a fine of Rs.5,000 in default
to suffer a further period of two months. Questioning the same, the
present appeal by way of special leave has been filed. H
796 SUPREME COURT REPORTS [1990] 1 S.C.R.

The learned counsel for the appellant submits that the High
A Court has misconstrued the provisions of Section 27(7){b) and at any
rate in the instant case the High Court erred in interfering in an appeal
against acquittal. It is also submitted that even if the prosecution case
is to be accepted in this context what at the most can be said is that two
views are possible and in such an event the interference in an order of
B acquittal is uncalled for.

It is not in dispute that the appellant obtained a licence for carry-
ing on the business. In the licence that was granted in the year 1975
and which was also renewed in the subsequent years upto 1977, the
address of the premises is mentioed as No. 25/A/1479. The Inspector
in his cross-examination admitted that the entire building bears only
C one municipal number and the licence was given for conducting the
business in that building. The prosecution has not led any other
evidence fo show that the third floor does not forro part of the licensed
premises. That apart admittedly on each storey there is only a small
room and the entire building is bearing only one municipal number
D and that is the premises bearing that number which is mentioned in the
licence. The question is whether the mere fact that the showroom is in
the ground floor does necessarily lead to an inference that the gold
ornaments which are accounted for cannot be stored in any other room
in that building? Section 27 reads as under:

E "27{1) Save as otherwise provided in this Act, no person
shall commence, or carry on, business as a dealer unless he
holds a valid licence issued in this behalf by the Adminis-
trator.

(2) A licence issued under this section-
F
{a) shall be in such forro as may be prescribed.

{b) shall be valid for such period as may be specified
therein.

G {c) may be renewed, from time to time, and

{d) shall be subject to such conditions and restrictions
as may be prescribed.

xx xx xx
H
xx xx xx
C.D. GEORGE v. ASST. COMMR. CENTRAL EXCISE {REDDY, J.] 797

(7)(a) The Administrator shall specify, in each licence
A
granted to a dealer, the premises in which such dealer shall
carry on business and no other person shall carry on busi-
ness as a dealer in the said premises.

(b) A licensed dealer shall not carry on business as such
dealer in any premises other than the premises specified in B
his licence.''

The above principal question has to be examined in the light of
this provision and see whether the appellant was carrying on business
in any premises other than the premises specified in the licence. As
already mentioned, the entire building is given one municipal number
and there is no other evidence in support of the prosecution case that
c
the third floor of the building does not form part of the licensed pre-
mises. In any event under the facts and circumstances of the case one
can at the most go the extent of saying that two views are possible. In
Bhagwati and Others v. The State of Uttar Pradesh, (1976] 3 SCC 23'i it
is held: D

"Thus if the finding reached by the trial Judge can not be
said to be unreasonable, the appellate Court should not
disturb it even if it were possible to reach a different con-
clusion on the basis of the material on the record. This has
been held to be so because the trial Judge has the E
advantage of seeing and hearing the witnesses and the
initial presumption of innocence in favour of the accused is
not weakened by his acquittal. The appellate Court there-
fore should be slow in disturbing the finding of fact of the
trial Court, and if two views are reasonably possible of th~
evidence on the record, it is not expected to interfere F
simply because it feels that it would have taken a different
view if the case had been tried by it."

We are convinced that the view taken by the trial court is quite reason-
able. Therefore, viewed from any angle, we are firmly of the view that
there were no grounds for the High Court to interfere with the findings G
of the trial court acquitting the accused.

The counsel for the State, however, pointed out that the High
Court has observed at one place in the judgment that the counsel for
the accused has not raised any contention that the room in the third
floor also formed part of the licensed premises. Except making this H
798 SUPREME COURT REPORTS [1990] I S.C.R.

A bare observation, the High Court has not considered the plea taken by
the accused and the finding of the trial court in this regard. In the same
paragraph, the learned Judge has, however, mentioned that the
accused raised a contention in the trial court that the room in the third
floor also formed part of the licensed premises and this plea found
B favour with the trial court. That apart the case of the accused has
throughout been that room in the third floor formed part of the
licensed premises. Therefore this observation of the appellate court
that the counsel did not contend that the third floor formed part of the
licensed premises does not appear to be correct. At any rate, there is
no such admission by the accused and nor can it be said that there was
such a concession by the counsel for the accused. For all the aforesaid
C reasons, the conviction and sentence awarded by the High Court are
set aside. Accordingly the appeal is allowed.

T.N.A. Appeal allowed.

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