Holding

The owner must prove lack of knowledge; failing that, the property is liable to confiscation, but the court may impose a fine in lieu of confiscation if the magistrate offers the alternative, and here the fine was imposed and the vehicle released.

Summary

The police seized a truck owned by Kailash Chandra that was found carrying foreign liquor. The driver was convicted under Section 34 of the Madhya Pradesh Excise Act, 1915 and the trial court ordered confiscation of the truck under Section 46, holding that the owner had knowledge of the offence. The appellant argued that he had no knowledge and that, alternatively, a fine under Section 47 could be imposed instead of confiscation. The Supreme Court held that, per the proviso to Section 46, the burden of proving lack of knowledge lies on the owner, which the appellant failed to discharge; consequently the vehicle was liable to confiscation. However, since the magistrate had not offered the option of a fine, the Court directed that the truck be released upon payment of a Rs 30,000 fine, effectively substituting the fine for confiscation. The appeal was disposed of with the vehicle released on payment of the fine.

Issues considered

The burden of proof for lack of knowledge under the proviso to Section 46 of the Madhya Pradesh Excise Act, 1915
Whether the owner of the truck established that he had no reason to believe the offence was being committed
Whether a fine under Section 47 can be imposed in lieu of confiscation when the magistrate does not expressly offer that alternative
Whether the amendment introducing Section 47‑A applies to a pending case

Legislation cited

Code of Criminal Procedure, 1973s. 452
Madhya Pradesh Excise Act, 1915s. 34, s. 46, s. 47, s. 47-A

Subjects

Excise lawConfiscationBurden of proofOwner liabilityFine in lieu of confiscationCriminal procedureStatutory amendment

Judgment

I r·

A KAILASH CHANDRA
V.
STATEOFM.P.

NOVEMBER 30, 2007
B
[DR. ARIJIT PASAYAT, TARUN CHATTERJEE AND
LOKESHWARSINGHPANTA,JJ.]

Madhya Pradesh Excise Act, 1915-ss. 46 and 47---0ffence under
c the Act-Committed by means ofa truck-Confiscation ofthe truck-
Courts below finding that owner of truck failed to establish lack of
knowledge of the offence-Propriety of confiscation-Held: Burden
to establish lack of knowledge of offence being on the owner of the
~
property, owner having/ailed to establish the same, property liable to
D be confiscated-However, in the facts ofcase, fine imposed in lieu of
confiscation-Code o/Criminal Procedure, 1973-s. 452.
Police seized truck of the appellant with the stock of foreign
liquor. Trial Court convicted the driver of the truck u/s 34 of the M.P.
Excise Act, 1915. Trial court also passed the order of confiscation
E
of the truck u/s 46 of the Act, holding that the offence was within the
knowledge of the owner. The first appellate court confirmed the
finding of trial court. High Court dismissed the revision petition
upholding the findings of the Courts below.

F In appeal to this Court, appellant contended that factual
position had not been considered correctly by the courts below.
Alternatively it contended that in lieu of confiscation, fine could be
imposed u/s 47.

Disposing of the appeal, the Court
G _,
-HELD: 1. According to the proviso to Section 46 ofM.P. Excise 4

Act, 1915 the burden is on the owner of the property to establish
that he had no reason to believe that such offence was being
committed or was likely to be committed. It provides that no animals,
H 778
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780 SUPREME COURT REPORTS [2007} 12 S.C.R.

r r-·
A with the stock of foreign liquor. Crime No.62/96 was registered at
Kakanwani P.S. under Section 34 of the M.P. Excise Act 1915 (in short
'the Act') and after due investigation, filed the charge-sheet before the
learned Judicial Magistrate First Class against the driver Anokhilal Porwal.
The truck was and is still owned by the appellant-Kailashchandra. The
B Trial Court, after completion of the trial, by judgment dated 19.03.2001
convicted the accused and sentenced him to R.I. for one year and a fine
of Rs.2,000/-, in default of payment of fine, to suffer further R.I. for two
months and also issued show-cause notice to the appellant for confiscation
of the truck as per provision under Section 46 of the Act 1915. The
c appellant submitted the reply, but the trial court was not satisfied therewith
and ordered for confiscation of the truck. Against this order, the appellant
Kailashchandra submitted appeal (Cri. A.No. 25/2001) whereby the
lower Appellate Court remanded the case back by order dated
29.11.2001 on the ground·that Supratdar was not served with the notice
D for confiscation of the truck personally. ~

The Trial Court registered Misc. Criminal Case No.34/2000 and
again issued show-cause notice to the Supratdar/appellant The appellant
submitted his reply and also got himself examined as well as wit:nes.5 Onkar.
Trial Court, again passed the order of confiscation of the truck on
E 07.03.2000. This order was again challenged by the appellant in Crl.
A.No.24/03 by judgment dated 12.09.2003. Against this judgment/order,
the appellant Kailashchandra filed Cri.Rev.No. 773/03 before the High
Court and the High Court again remanded the case back to the lower
Appellate Court on the ground that the lower Appellate Court had not
F mentioned under which provision oflaw (whether new or old) the appeal
was filed and to decide afresh and also issued direction to the Trial Court
• .
to see whether the accused Anokhilal filed any appeal and if any filed,
what was the fate of that appeal. The lower Appellate Court, in view of
the aforesaid direction issued by the High Court, heard both the parties
G in detail and decided all the issues.
According to the Trial Court, a Criminal case was registered by the '
police against accused Anokhilal with regard to illegal transportation of
foreign liquor in the truck on 26.04.1996. Therefore, the provision of
confiscation of Section 46 of the Act, will apply and the amended provision
H
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KAILASHCHANDRA v. STATE[PASAYAT,J.] 781
., r
of Section 47 and 47-A substituted by M.P. Excise Act (Act No. XXII A
of2000) which came into force from 04.08.2000, will not apply and final
disposal of the criminal case alongwith Section 46 of the Act read with
Section 452ofthe Code of Criminal Procedure, 1973 (in short 'Cr.P.C.')
will apply. The lower Appellate Court did not accept the arguments
~
advanced by the Public Prosecutor that the amended provision of the Act, B
Section 47-A and B shall apply because the judgment was passed after
enforcement of the Amended Act of 2000. The Lower Appellate Court,
according to the High Court, had rightly decided this issue because
confiscation is a penal provision and, therefore, in a pending matter, prior
to amendment, the amended provision will not apply and there is no such c
specific provision in the Amended Act of 2000, for application of new
provision for confiscation of the conveyance and other articles, involved
in the offence in a pending case.
4. Before the High Court the stand of the appellant was that he was
1
only the owner of the truck and was not present in the truck at the time D
of seizure along with illicit liquor. The driver Anokhilal Porwal without his
consent and permission took the truck and, therefore, the owner could
not be penalized.
5. The High Court noted that the Trial Court and the First Appellate E
Court had considered this aspect at length and recorded concurrent
findings of the fact that without knowledge of the owner of the truck, such
a huge quantity of foreign liquor and that too going towards Gujarat, where
liquor business is prohibited was not possible. Accordingly, the revision
petition was dismissed
t F
6. In support of the appeal, learned counsel for the appellant
submitted that the Courts below have not appreciated the factual position
correctly. Alternatively it was submitted that under Section 47, as it stood
before amendment, was applicable to the facts of the case and in lieu of
confiscation fine can be imposed. G
- / 7. Learned counsel for the respondent, on the other hand, submitted
that factual findings have been recorded to conclude that the plea taken
by the owner-appellant about his lack of knowledge is clearly untenable.
So far as the alternative submission is concerned, it is submitted that the
H
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782 SUPREME COURT REPORTS [2007] 12 S.C.R.

A provisions empower the Magistrate of two alternatives. One is to direct
,.
confiscation or in the alternative to give the owner of the thing liable to
be confiscated option to pay such fine in lieu of confiscation as Magistrate
thinks fit. This alternative was not suggested and also the appellant had
taken the stand that the order of confiscation was improper.
B 8. Sections 46 and 47 (before amendment) read as follows:
"46. Liability of certain things to confiscation:
( l) Whenever an offence has been committed which is punishable
under this Act, the intoxicant matetials, still, utensil, implement
c or apparatus in respect of by means of which such offence
has been committed shall be liable to confiscation.
(2) Any intoxicant lawfully imported, transported, manufactured,
held in possession or sold along with or in addition to any
D intoxiLant liable to confiscation under sub-section (1 ), and the
receptacles, packages and coverings in which any such
intoxicant materials, still, utensil, implements or apparatus as
aforesaid is or are found, and the other contents if any, of the
receptacles or packages in which the same is or are found,
and the animals, carts, vessels, rafts or other conveyance used
E
in carrying the same, shall likewise be liable to confiscation.
Provided that no animal, carts, vessels, rafts and other conveyance
shall be liable to confiscation ifit is proved that they are not the
property of the offender and if the owner thereof establishes that
F he had no reason to believe that such offence was being or was
likely to be committed."
47. Order of confiscation - (I) Where in any case tried by him
the Magistrate decides that anything is liable to confiscation under
Section 46, he rnay either order confiscation or may give the owner
G of the thing liable to be confiscated, an option to pay, in lieu of
confiscation, such fine as the Magistrate think fit."
9. According to the proviso to Section 46, the burden is on the
owner of the property to establish that he had no reason to believe that
H such offence was being committed or was likely to be committed. It
(

~ KAILASHCHANDRA v. STATE[PASAYAT,J.]
I
783

provides that no animals, carts, vessels, rafts and other conveyance shall A
be liable to confiscation, if it is proved that they are not the property of
the offender and if the owner establishes that he has no reason to believe
that such offence was being or was likely to be committed. As noted
above, the owner has to establish the aforesaid facts.
B
10. The 'frial Court, first Appellate Court and the High Court have
concluded that the appellant has not established his lack of knowledge.
11. Coming to the alternative submission relating to payment of fine
in lieu of confiscation we find that the Magistrate had not indicated the
alternative to the appellant. C
12. On the facts of the case, we direct that the vehicle shall be
released to the appellant on payment of a sum ofRs.30,000/- as fine.
The amount is to be deposited within a period of four months from today.
If the deposit is not made within the aforesaid time, this order shall not
operate and appeal shall be treated to have been dismissed. D
K.K.T. Appeal disposed of.