Andhra HC (Pre-Telangana)
Britannia Industries Limited, A ... vs The State Of Andhra Pradesh, ... on 23 December, 2015
Author: Challa Kodanda Ram
Bench: Challa Kodanda Ram
HONBLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION No. 20388 of 2009 23-12-2015 Britannia Industries Limited, A Company incorporated under the Companies Act, 1913, having its registered office at 5/1A Hungerford Street, Kolkata-700017, represented by its authorized signatory Mr. Sanjay Handur. Petitioner The State of Andhra Pradesh, represented by Secretary, Department of Consumer Affairs, Food & Civil Supplies, Secretariat, Hyderabad and four others. Respondents... Counsel for the Petitioner : Sri K. Priyadarshan Reddy Counsel for the respondents : Learned Special Government Pleader for Civil Supplies <Gist: >Head Note: ?Cases referred: THE HONBLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION No. 20388 of 2009 ORDER:
This Writ Petition is filed Challenging the order dated 10.09.2009 made by the District Collector, Rangareddy District-2nd respondent, in exercise of the powers under Section 6-A of the Essential Commodities Act, 1955 (in short the Act).
2) (a) The brief facts of the case as set out in the affidavit are that the petitioner is a manufacturer of confectionary products like biscuits, cakes, rusk, bread etc. Petitioner has about 70 Contract Manufacturers and packers apart from a large number of distributors, and petitioner has manufacturing facilities throughout the country. The petitioner consumes a large quantity of wheat, sugar and other agricultural products in the process of manufacturing the confectionary products. Petitioner to achieve the quality and to have standard product, procures large quantities of wheat, sugar and other ingredients of its own by following a strict procedure of procurement. To have a better control over the inventory and to ensure better quality products according to their standards, petitioner buys the raw-material in bulk and storing the same in godowns hired by the petitioner for a period ranging from 3 to 6 months and the petitioner itself supplies the raw-material even to the Contract Manufacturers. In the State of Andhra Pradesh (now in Telangana) for the purpose of storage, both raw- material and finished products, petitioner engages the services of the third parties, who create storage facilities adhering the exacting standards set by the petitioner to cater to its specific needs. The products manufactured by the petitioner meet the standards as set by the Prevention of Food Adulteration Act. Petitioners products are also exported to various countries. In the normal course of business one such storage facility, which the petitioner has been using for a long period is the godown facility created by M/s VNJ Agro Foods Private Limited (in short VNJ) situated in Sy.No.88, Murthazaguda village, Moinabad Mandal, Ranga Reddy District. The said VNJ is registered with the Civil Supplies Department and is licensed to purchase, sale / storage for sale of scheduled commodities and authorized to deal with to purchase, sell or store for sale of rice (husked) and sugar, pulses etc. The said license was issued in favour of VNJ, which was valid upto 31.03.2009 and the same was renewed upto 30.09.2009. Likewise, petitioner was also registered as a dealer with the Civil Supplies Department and was licensed to deal with wheat and wheat products. Necessary licenses were issued to both VNJ as well as to the petitioner under Andhra Pradesh Scheduled Commodities Dealers (Licensing, Storage and Regulation) Order, 2008 (in short the Storage Control Order, 2008). The premises of VNJ was also one of the places for storage of wheat and wheat products by the petitioner.
(b) While things stood thus, on 14.08.2009, the Assistant Supply Officer, Office of District Supply Office, Ranga Reddy District and Tahasildar, Moinabad Mandal along with other officials conducted a surprise check on the premises of VNJ. At the time of check, the authorities found 4840 quintals of sugar valued at Rs.1,21,00,000/- in the premises of VNJ. After conducting panchanama, the sugar was seized. Taking into consideration of the information given by the VNJ that the seized stock belongs to the petitioner, notices under Section 6-B of the Act were given by the District Collector-2nd respondent to the petitioner as well as to the VNJ proposing to conduct an enquiry. Petitioner submitted explanation to the show cause notice and after considering the explanation submitted by the petitioner the impugned order has been passed directing the confiscation of the seized stock to the State for alleged violation of the Storage Control Order, 2008. Questioning the said order the present writ petition is filed principally on the ground that the petitioner is not a dealer as defined under the Storage Control Order, 2008 and there is no restriction with respect to the storage of the commodity sugar, particularly with respect to the persons engaged in manufacturing activity the Storage Control Order, 2008 has no application to the petitioner and thus the impugned order is violative of Article 14, 19 (1) (g) besides Article 300A of the Constitution of India.
3) When the Writ Petition came to be admitted on 22.09.2009, the seized stock is directed to be released on the condition of petitioner furnishing a Bank Guarantee for a sum of Rs.1,25,00,000/- and the petitioner obtained release of the seized goods by furnishing bank guarantee.
4) A detailed counter affidavit has been filed opposing the writ petition.
5) Sri K. Priyadarshan Reddy, learned counsel representing on behalf of the appearing on behalf of the petitioner, while reiterating the contentions raised in the writ petition submitted
a) that Storage Control Order, 2008 does not apply to the petitioner for the reason, petitioner is not engaged in business of purchase, movement, sale, supply, distribution or storage for sale of any of the commodities specified in Schedule-I of the Storage Control Order, 2008;
b) that the petitioner is not a dealer under the Storage Control Order, 2008 and the petitioner does not fall in any category of the dealer, wholesaler, retailer or producer;
c) that the petitioner is a bulk consumer as defined under Section 2(K)(9) of the Storage Control Order, 2008;
d) that the Storage Control Order, 2008 does not place any restriction with regard to the bulk consumers and there is no requirement of bulk consumer obtaining license for storage;
e) that the products manufactured by the petitioner is not a control commodity and is outside the purview of the Storage Control Order, 2008;
f) that the warehouse agent VNJ has a license to store sugar by virtue of the license issued in its favour;
g) At any rate on account of the Notifications issued by the Government of India, particularly Notifications S.O.649 (E), dated 06.03.2009 and S.O.1621 (E), dated 02.07.2009 read with G.O.Ms.No.42, dated 23.07.2009 sugar was not included in the list of Essential Commodities till 08.01.2010. In that view of the matter, the confiscation order passed by the respondent No.2 is unsustainable.
6) Sri A. Sanjeev Kumar, representing the learned Special Government Pleader attached to the Office of the learned Additional Advocate General, opposes the writ petition.
7) Perused the records. The facts are not in dispute. In the present case, to resolve the controversial issue what is required to be looked into is whether the sugar is essential commodity as defined under Storage Control Order, 2008 and whether there is any control and restriction with respect to the storage and stocking of the commodity sugar by a bulk consumer like petitioner. Andhra Pradesh Scheduled Commodities Dealers (Licensing, Storage and Regulation) Order, 2008 was issued vide G.O.Ms.No.30, dated 08.08.2008 for regulating the commodities i.e., pulses, wheat, rice, edible oils and edible oilseeds by licenses and stock limits. In the said Storage Control Order, 2008 as notified on 08.08.2008, the schedule commodities which have been mentioned in Schedule-I of the Storage Control Order, 2008 are edible oils and edible oil seeds, food grains viz., rice (husked), wheat and pulses. Sugar is not one of the commodities. The said Storage Control Order, 2008 was put in operation with respect to the edible oils and edible oil seeds, pulses and paddy upto 30.09.2009. For the first time by G.O.Ms.No.25, dated 11.05.2009 sugar came to be added under the category of food grains as Item No.3 of the Storage Control Order, 2008. Further, bulk consumer who stores more than five quintals of sugar at any one time was also brought within the purview of dealer. By Clause 2(9) defined bulk consumer as meaning of hotel, a restaurant, halwai, an educational institution with hostel facilities, a hospital or a religious or charitable institution, Bakeries, Biscuit manufacturers, Confectionery manufacturing unit. However, with respect to the bulk consumer though the sugar stock limits, which can be stored were specified with respect to the wholesaler and retailer, no restriction as such was placed on bulk consumer. Even by G.O.Ms.No.25, dated 11.05.2009, notwithstanding the fact a bulk consumer is required to obtain license under Storage Control Order, 2008, they can hold the stock without limitation. One of the intervening factor in the whole issue is that the sugar came to be added as an essential commodity to the Storage Control Order, 2008 on account of the notification issued by the Central Government in exercise of the powers under Sections 3 and 5 of the Act read with the provisions of the Removal of (Licensing requirements, Stock limits and Movement Restrictions) on Specified Foodstuffs Amendment Order, 2009 issued vide S.O.No.649(E) dated 09.03.2009. However, immediately thereafter S.O.1621 (E), dated 02.07.2009 came to be issued keeping in abeyance of the Removal of (Licensing, Requirements, Stock Limits and Movement Restrictions) on Specified Foodstuffs Order, 2002 for a period of six months i.e. upto 08.01.2010. By virtue of the same, sugar which came to be included in Storage Control Order, 2008 became effective so far as sugar is concerned only w.e.f. 08.01.2010. However, though G.O.Ms.No.25 issued on 11.05.2009 the sugar came to be added as an essential commodity in the Storage Control Order, 2008. So far as bulk consumers are concerned while mentioning stock limits with wholesalers and retailers there was no stock limit notified with respect to the bulk consumers. However, the procedure for obtaining license with respect to the bulk consumers was also conspicuously absent. In other words, there was no machinery provision in the Storage Control Order, 2008 for obtaining license. In the absence of any mechanism for obtaining license it cannot be said that there is violation on the part of the petitioner in obtaining a license for the commodity sugar.
8) Viewed from any angle, the seizure of the sugar when there is no control order specifying the stocking limits during the relevant period i.e., from 14.08.2009 to 10.09.2009 is totally unsustainable and accordingly the impugned order is liable to be quashed.
9) In the circumstances, the writ petition is allowed setting aside the order dated 10.09.2009 of the 2nd respondent with a direction to the respondents to return the bank guarantee, which was directed to be provided by the petitioner as a condition for release of the seized stocks as an interim measure. There shall be no order as to costs.
Miscellaneous petitions, if any pending in this writ petition, shall stand closed.
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CHALLA KODANDA RAM, J Date:23.12.2015.