Bombay High Court
The State Of Maharashtra vs M/S. Jayantilal Laxmichand & Sons on 16 August, 2010
Author: J.H.Bhatia
Bench: J.H.Bhatia
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
srk
CRIMINAL REVISION APPLICATION NO. 365 OF 2010
The State of Maharashtra,
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020.
ig ..Applicant.
(Orig. Complainant)
Versus
M/s. Jayantilal Laxmichand & Sons,
Duly represented by its Partner,
Viz. Mr. Shah Vinesh Jayantilal,
Aged 49 years, Indian, Occ.Business,
Address: D-9, APMC Market -1,
Phase-2, Dana Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
WITH
CRIMINAL REVISION APPLICATION NO. 366 OF 2010
The State of Maharashtra
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
Versus
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M/s. Radha Kishan Trading Co.,
Duly represented by its Partner,
Viz. Mr. Bhupendra A. Shah,
Aged 46 years, Indian, Occ.Business,
Address: B-8, APMC Market -1,
Phase-2, Mudi Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
WITH
CRIMINAL REVISION APPLICATION NO. 367 OF 2010
The State of Maharashtra
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
Versus
M/s. Arpit International
A registered Partnership firm,
Duly represented by its Partner,
viz. Mr. Kamlesh K. Thakkar,
Aged years, Indian, Occ.Business,
Address: J-21, APMC Market-II,
Phase-2, Dana Bunder, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
WITH
CRIMINAL REVISION APPLICATION NO. 368 OF 2010
The State of Maharashtra
(At the instance of Controller of
Rationing and Director of
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Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
versus
M/s. N.P. Traders
A registered Partnership Firm,
Duly represented by its Partner,
viz. Mr. Paresh J. Raimangya,
Aged 38 years, Indian, Occ.Business,
Address: E-26, APMC Market -II,
Phase-2, Dana Bazar, Sec-19C,
Maharashtra.
Vashi, Navi Mumbai - 400 703,
.Respondent.
(Orig. Appellant)
WITH
CRIMINAL REVISION APPLICATION NO. 369 OF 2010
The State of Maharashtra
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
Versus
M/s. Pravinchandra Natwarlal & Co.
A partnership firm,
Duly represented by its Partner,
Viz. Mr. Manish B. Vora,
Aged 40 years, Indian, Occ.Business,
Address: D-30, APMC Market -I,
Phase-2, Mudi Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
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WITH
CRIMINAL REVISION APPLICATION NO. 370 OF 2010
The State of Maharashtra
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
Versus
M/s. Ramniklal Brothers,
A partnership concern,
Duly represented by its Partner,
viz. Mr. Jayesh J. Kenia,
Aged 40 years, Indian, Occ.Business,
Address: E-15, APMC Market -2,
Phase-2, Dana Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
WITH
CRIMINAL REVISION APPLICATION NO. 371 OF 2010
The State of Maharashtra
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
versus
M/s. Naval Trading Co.
A registered partnership firm,
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Duly represented by its Partner,
Viz. Mr. Ravji Balchandra Vador,
Aged 44 years, Indian, Occ.Business,
Address: M-13, APMC Market -2,
Phase-2, Dana Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
WITH
CRIMINAL REVISION APPLICATION NO. 372 OF 2010
The State of Maharashtra,
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
versus
M/s. Labdhi International Foods,
Duly represented by its Proprietrix,
viz. Mrs. Tinas Manish Gala,
Aged 35 years, Indian, Occ.Business,
Through her Constituted Attorney,
Mr. Manish Thakarshi Gala,
Aged 37 years, Indian, Occ.Business,
Address: D-2, APMC Market -2,
Phase-2, Dana Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
WITH
CRIMINAL REVISION APPLICATION NO. 373 OF 2010
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The State of Maharashtra
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
versus
M/s. Bhomiya Corporations,
Duly represented by its Partner,
Viz. Mr. Chunilal Velji Gosar,
Aged 52 years, Indian, Occ.Business,
Address: G-6, APMC Market -2,
Phase-2, Dana Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
WITH
CRIMINAL REVISION APPLICATION NO. 374 OF 2010
The State of Maharashtra,
(At the instance of Controller of
Rationing and Director of
Civil Supplies, 5th Floor,
Royal Insurance Building,
14, G.A., TATA Marg,
Churchgate, Mumbai - 400 020. ..Applicant.
(Orig. Complainant)
versus
M/s. Pravinchand Thakarsi & Co.,
Duly represented by its Partner,
viz. Mr. Pravinchand Thakarshi Shah,
Aged 55 years, Indian, Occ.Business,
Address: F-6, APMC Market -2,
Phase-2, Dana Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
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WITH
CRIMINAL REVISION APPLICATION NO. 375 OF 2010
The State of Maharashtra
(At the instance of Controller of
Rationing 'F' Region,
1st floor, Arambaugh Estate,
Opp. Khawaiya Hotel,
Thane. ..Applicant.
(Orig. Complainant)
versus
M/s. Kirana Ghar,
A Partnership Concern,
Duly represented by its Partner,
viz. Mr. Walji Momaya Shah,
Aged 38 years, Indian, Occ.Business,
Address: A-3, APMC Market -2,
Phase-2, Dana Bazar, Sec-19C,
Vashi, Navi Mumbai - 400 703,
Maharashtra. .Respondent.
(Orig. Appellant)
Mr. P.A.Pol, P.P., Smt. V.R.Bhosale, A.P.P. and Ms.M.H.Mhatre, A.P.P.
for the Applicant/State.
Mr. Munir Ahmed a/w Ms. Sushma Mishra and Mr. Sanjay Gade
for the Respondents.
....
CORAM : J.H.BHATIA, J.
DATE : 16TH AUGUST, 2010.
COMMON JUDGMENT:
1 All these Revision Applications may be disposed of by common judgment as the facts and the legal position involved in all the matters are almost similar, though the Respondents are different.
::: Downloaded on - 09/06/2013 16:18:01 :::8 1 revn 365.10 ors.doc 2 Heard the learned counsel for the parties.
3 Respondents in all these Revision Applications are the wholesale dealers in food articles. Except the Respondent in Revision Application No. 365 of 2010, the Respondents in all other Revision Applications were holding necessary licence for carrying out the business in the concerned food articles as wholesale dealers. The Respondent in Revision Application No.365 of 2010 also holds a wholesale dealer's licence but not in respect of Til or sesame oil seeds. The Respondents in other matters were holding licence as wholesale dealers and had given particular addresses of their shops and godowns where the said commodities were to be sold and stored.
4 On 20th January, 2010, on certain information or suspicion, M/s Savla food and Cold Storage Pvt. Ltd. situated at M.I.D.C. Turbhe, Navi Mumbai was inspected. During that inspection 22.95 quintals of Grams belonging to M/s Radha Kishan Trading Company, Respondent in Revision Application No. 366 of 2010, 75 quintals of Gram and 100 quintals of Math or Mathki belonging to M/s Arpit International, Respondent in Revision Application No. ::: Downloaded on - 09/06/2013 16:18:01 ::: 9 1 revn 365.10 ors.doc 367 of 2010, 80.70 quintals of Wal belonging to M/s Bhomiya Corporations, Respondent in Revision Application No. 373 of 2010 and 23.50 quintals of Chawli or Lobis or Lobiya belonging to M/s Kirana Ghar, Respondent in Revision Application No.375 of 2010 were found stored in the godown of M/s Savla food & Cold Storage Pvt. Ltd. M/s Savla food & Cold Storage Pvt. Ltd. who were naturally not holding licence for storage of these articles, informed about the real owners. Therefore, at that time these commodities were seized by the Deputy Controller of Rationing, Thane, within whose jurisdiction Navi Mumbai also falls.
5 On 25.01.2010, the premises of M/s Sanfood & Cold Storage Pvt. Ltd. situated at A-79, T.T.C., M.I.D.C. Industrial Area, Navi Mumbai were inspected. It was revealed that 62.80 quintals of Til or sesame oil seeds belonging to M/s Jayantilal Laxmichand & Sons Respondent in Revision Application No.365 of 2010, 151 quintals of Groundnut belonging to M/s N.P. Traders Respondent in Revision Application No. 368 of 2010, 158.90 quintals of Til or sesame oil seeds belonging to M/s Pravinchandra Natwarlal & Co.
Respondent in Revision Application No.369 of 2010, 36 quintals of Math or Mathki belonging to M/s Ramaniklal Brothers ::: Downloaded on - 09/06/2013 16:18:01 ::: 10 1 revn 365.10 ors.doc Respondent in Revision Application No. 370 of 2010, 99 quintals of Gram belonging to M/s Naval Trading Co. Respondent in Revision Application No. 371 of 2010, 105 quintals of Math or Mathki belonging to M/s Labdhi International Foods who is Respondent in Revision Application No. 372 of 2010 and 11.50 quintals of Gram and 313.50 quintals of Chawli or Lobis or Lobiya belonging to M/s Pravinchand Thakarsi & Co. Respondent in Revision Application No. 374 of 2010 were stored in the godowns of M/s Sanfood & Cold Storage Pvt. Ltd. These commodities also were seized by the Deputy Controller of Rationing for that area.
6 Show cause notices were issued to the Respondents as to why these commodities, which were found illegally stored in the said M/s Savla food & Cold Storage Pvt. Ltd. and M/s Sanfood & Cold Storage Pvt. Ltd. be not confiscated to the State. The Respondents appeared and after hearing them the Controller of Rationing at Mumbai passed the orders and confiscated all these goods. It was held that M/s Jayantilal Laxmichand & Sons was not holding licence and in violation of the provisions of the Maharashtra Scheduled Commodities Wholesale Dealers' Licensing Order, 1998 issued by virtue of powers under section 3 ::: Downloaded on - 09/06/2013 16:18:01 ::: 11 1 revn 365.10 ors.doc of the Essential Commodities Act, he was found in possession of 62.8 quintals Til or sesame oil seeds. In respect of the other Respondents it was held that they had the wholesale dealers licence in respect of the respective commodities but they had stored the said goods not at the address given by them in the licence but at a difference place and they had also not notified within 48 hours after storing the said goods at a different place to the concerned licensing authority and that they had violated the terms and conditions of the licence and therefore, all these goods were liable to be confiscated.
7 The Respondents challenged the said orders passed under section 6-A of the Essential Commodities Act, 1955 before the Sessions Court by way of an Appeal under section 6-C of the said Act. The Sessions Court allowed the Appeals of all the Respondents, holding that the breach of the licence was too technical and it did not deserve confiscation of the goods. Being aggrieved by the order the State has preferred present Revision Applications.
8 Under section 2 of the Essential Commodities Act, 1955 'essential commodity' has been defined and it includes foods ::: Downloaded on - 09/06/2013 16:18:01 ::: 12 1 revn 365.10 ors.doc including edible oil seeds and oils. Under Sub section 1 of Section 3 of the said Act, if the Central Government is of the opinion that it is necessary or expedite so to do for maintaining or increasing the supply of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. Sub section 2 of the Section 3 provides that without prejudice to the generality of the powers conferred by sub section (1), an order made thereunder may provide, among other things, under clause (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity, under clause (e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale; and under clause (j) for any incidental and supplementary matters, including, in particular, the entry, search or examination of premises, aircraft, vessels, vehicles or other conveyance and animals, and seizure by a person authorized to make such entry, search or examination, of any articles in respect ::: Downloaded on - 09/06/2013 16:18:01 ::: 13 1 revn 365.10 ors.doc of which such person has reason to believe that a contravention of the order has been, is being or is about to be, committed and any packages, coverings receptacles in which such articles are found.
9 Section 5 empowers the Central Government to delegate its powers under section 3 to a State Government or such officer or authority subordinate to the State Government. By virtue of delegation of powers under section 5, the State Government is empowered to exercise all the powers of the Central Government under section 3 of the Essential Commodities Act and to issue appropriate orders for the purposes mentioned in the section 3.
There is no dispute that by virtue of the said powers the Government of Maharashtra has issued the Maharashtra Scheduled Commodities Wholesale Dealers' Licensing Order, 1998 (hereinafter referred to as 'Licensing Order').
10 Under section 2(a) of the said Licensing Order, 'Collector' in Mumbai Rationing Area means the Controller of Rationing and includes any Deputy or Assistant Controller of Rationing and elsewhere means the Collector of district and includes the Additional Collector, the District Supply Officer, an Assistant ::: Downloaded on - 09/06/2013 16:18:01 ::: 14 1 revn 365.10 ors.doc District Supply Officer, the Tahsildar and such other Officer or Officers as may be authorised by the Collector in this behalf within their respective jurisdiction. There is no dispute that Navi Mumbai and part of Thane district and Mumbai city and Mumbai Sub-Urban District are under the Controller of Rationing for Mumbai.
Under Section 2 (p) the 'Licensing Authority' in relation to any area forming part of the Mumbai Rationing Area, means any officer not below the rank of Assistant Controller of Rationing who may be appointed to be a licensing authority for that area by the Controller of Rationing and in relation to any other area means the Tahsildar having jurisdiction over that area or any other officer not below the rank of Tahsildar who may be appointed either by the Collector or the Government to be a licensing authority for that area;
Section 2 (i) of Licensing Order defines 'Foodgrain' as any one or more of the foodgrains specified in the schedule to the Licensing Order including products of such foodgrains other than husk and bran and also including seeds of such foodgrains.
::: Downloaded on - 09/06/2013 16:18:02 :::15 1 revn 365.10 ors.doc 11 Section 2 clause (x) defines 'Schedule Commodity' as any of the commodities specified in Schedule, appended to the Licensing Order. The Schedule of the commodity prescribes different foodgrains Sugar, gur and Khandsari, different oil seeds, oil, pulses and hydrogenated vegetable oil as the foodgrains.
12 At the outset it may be pointed out that Math or Mathki and Wal are not shown as pulses in the schedule as essential commodities. Mr.Satyanarayan Bajaj, the Deputy Controller of Rationing (Enforcement) for Mumbai Region, including the New Mumbai, is present before the Court. After taking instructions from him, learned Public Prosecutor Mr. Pol makes a statement that there has been no amendment to the schedule to the Licensing Order nor any separate Licensing Order in respect of Math or Mathki and Wal has been issued. In view of this, it is conceded that the seizure of Math or Mathki and Wal, which are not notified as the essential commodities in the schedule, could not be justified and therefore, the Revision Applications to that extent are liable to be rejected. As a result of this, the Revision Application Nos. 370 of 2010, 372 of 2010, 373 of 2010 are liable to be rejected. As far as the Revision Application No. 367 of 2010 ::: Downloaded on - 09/06/2013 16:18:02 ::: 16 1 revn 365.10 ors.doc is concerned there was seizure of Gram and Math or Mathki. To the extent of seizure of Math or Mathki the Revision Application has to be rejected.
13 Gram and Chawli, which is also known as Lobis or Lobiya, are shown as pulses in the schedule and thus they are notified as the essential commodities in the said schedule. Similarly, Till or sesame and groundnut, which are oil seeds, and their oil are also shown as the essential commodities in the said schedule.
14 In Revision Application No. 365 of 2010, the Respondent was found in possession and to have stored 62.80 quintals of Til or sesame oil seeds in the godowns of M/s Sanfood and Cold Storage Pvt. Ltd. and this stock was seized on 25.01.2010. The contention of the Respondent was that the said Til or sesame oil seeds was a Black Til and is not useful for extracting oil for human consumption but it is only used for the purpose of Puja and therefore, the said Till or sesame oil seeds are known as Puja Til and are sold during festival period when the people purchase the same for the purpose of performing certain Pujas. Learned counsel for the Respondent in that case contends that in these ::: Downloaded on - 09/06/2013 16:18:02 ::: 17 1 revn 365.10 ors.doc circumstances, the stock of Til or sesame oil seeds seized from the Respondent could not be treated as essential commodities and therefore it was not necessary to obtain any licence under Licensing Order.
15 The Respondent has produced two reports about analysis of Til. One report appears to have been issued on 28.05.2010 by Anazeal Analyticals and Research Pvt. Ltd., which is a private laboratory but approved by the Government as Test House. As per that report the sample produced by the Respondent analysed on 26.05.2010 revealed that the sample of Black Til or Black Sesame Seeds had 25.19% oil. Another report dated 02.07.2010 appears to have been obtained from Public Health Laboratory, Konkan Bhavan, on the basis of sample of black sesame oil seeds sent by the Respondents. That report only indicates that by appearance the sample was black, burnt sesame oil seeds and it was received in loose polythene bag and it contained 0.6% extraneous matter. It reveals that the above sample is unfit for human consumption.
Both these reports were submitted before this court on 10.08.2010 in support of the contentions of the Respondent that ::: Downloaded on - 09/06/2013 16:18:02 ::: 18 1 revn 365.10 ors.doc the Til or sesame oil seeds seized from the Respondent were not fit for human consumption and therefore, they cannot be treated as the essential commodities or edible oil seeds. However, neither the Respondent had requested the Controller of Rationing to send the sample of the seeds, which were seized, to Public Analyst or Chemical Analyst to find out as to whether the said seeds are fit for human consumption or not. Admittedly, the Respondent had not obtained any sample of the said seized goods. These two reports were not produced either before the Controller of the Rationing or before the Sessions Court. They are produced for the first time before this Court. It is also material to note that both the reports appear to have been secured on the basis of the samples sent by the Respondents in the loose bags after the seized goods were confiscated by the Controller of Rationing. In view of these facts, it is clear that these two reports do not pertain to the Til or sesame oil seeds, seized from the possession of the Respondent stored with M/s Sanfood and Cold Storage Pvt. Ltd. on 25.01.2010 and therefore, these two reports are totally irrelevant for decision of this matter. In view of this, these reports do not help the Respondent.
::: Downloaded on - 09/06/2013 16:18:02 :::19 1 revn 365.10 ors.doc 16 It may also be useful to note that as per clause 2 (f) of the Licensing Order, 'Edible Oils' means any oils used for cooking for human consumption and includes hydrogenated vegetable oils and under clause 2 (g) of the Licensing Order, 'Edible Oil-seeds' means seeds from which edible oils are prepared, therefore, it is clear that edible oil seeds means the seeds from which edible oils used for cooking for human consumption are prepared.
Incidentally, in the report received from Anazeal Analyticals & Research Pvt. Ltd., it is revealed that the seeds contained 25.19% oil. It indicates that the seeds which were sent as sample could be used for the purpose of extracting oil and that report does not show that the said oil would be unfit for human consumption.
17 Clause 3 of the Licensing Order provides that no person shall carry on business as a wholesale dealer in any one or more of the scheduled commodities except in accordance with the terms and conditions of the licence under the Licensing Order. Clause 4 (2) of Licensing Order provides that every licence shall be issued in form 'C' and shall be subject to the conditions specified therein.
In para 2 (a) of the Licence as per form 'C' the complete address of the place where the licensee shall carry on the business has to ::: Downloaded on - 09/06/2013 16:18:02 ::: 20 1 revn 365.10 ors.doc be mentioned. In Sub para (b) of para 2, it is specifically mentioned that the licensee shall not store the commodities at any place other than the godowns the complete address of which is shown in the licence. In the note below Sub para 2 (b) it is provided that if the licensee intends to store the commodities in godowns other than those specified above, the licensee shall give intimation of the actual occupation of any such godowns within 48 hours (working hours) of the actual occupation thereof, and shall produce the licence for making change therein to the licensing authority. Thus, it appears that para 2 of the licence provides for two different addresses. In sub para (a) the address of the place where the business is to be carried on is to be given while in sub para (b) the address of the godown where the scheduled commodities are to be stored is to be given. It specifically prohibits the storage of goods at any place other than the stores of which the addresses are given in para 2 (b) of the licence. However, as per the note, if the licensee intends to store such commodities at any godown other than the one of which the address is given in the licence, he shall give intimation to the licensing authority within 48 hours of the actual occupation thereof. If the intimation of storage of essential commodities in ::: Downloaded on - 09/06/2013 16:18:02 ::: 21 1 revn 365.10 ors.doc godowns other than the one mentioned in para 2 (b) is given within 48 hours it will be as per the provisions of the licence.
However, if such intimation is not given within 48 hours of the actual occupation, that amounts to contravention of the condition contained in para 2 (b) of the licence. There are several other conditions in the licence, like maintenance of daily stock register and submission of returns within five days on expiry of each month and that the licensee shall not withhold from sale, supplies of the commodities in the local market.
18 Para 11 of Licence requires that the licensee shall take adequate measures to ensure that the commodities stored by him are maintained in good condition and that damage to them due to ground moisture, rain, insects, rodent, birds, fire and like causes is avoided, for that purpose necessary steps have to be taken by the licensee.
19 The Licensing Order makes three different provisions for proper compliance of the conditions of the licence. Clause 11 provides that no licensee or his agent or servant or any other person acting on behalf of the licensee shall contravene any terms ::: Downloaded on - 09/06/2013 16:18:02 ::: 22 1 revn 365.10 ors.doc and conditions of the licence and if the licensing authority is satisfied that any of the terms or conditions of the licence have been contravened the licence may be cancelled or suspended by passing an order in writing. Under clause 12 where the cancellation of the licence is ordered, the order of cancellation shall also be accompanied by an order forfeiting the entire security deposit. Clause 15 provides that with the view to securing compliance of the Licensing Order or satisfying himself that the licensing Order has been complied with, any police officer not below the rank of Sub-Inspector or any officer of the Government in food and Civil Supplies Department or a Rationing Inspector in the Mumbai Rationing Area and else where, the Supply lnspector, within their respective jurisdiction, may enter, search or examine any place, stop and search any person or any boat, vessel, motor or other vehicle or any receptacles used or intended to be used by licensee and seize, any stock of scheduled commodities in respect of which he has reasons to believe that a contravention of any provisions of this Order has been, is being, or is about to be committed. Thus, this is a third power under the Licensing Order, by virtue of which inspection or search and seizure can be undertaken in respect of scheduled essential commodities in ::: Downloaded on - 09/06/2013 16:18:02 ::: 23 1 revn 365.10 ors.doc respect of which any contravention has been, is being, or is about to be committed.
20 Under section 6-A of the Essential Commodities Act, where any essential commodity is seized in pursuance of an order made under section 3 in relation thereto, a report to that effect shall be sent to the Collector within whose jurisdiction the seizure is made and the Collector may, if he thinks it expedient so to do, inspect or cause to be inspected such essential commodities and whether or not the prosecution is instituted for the contravention of such order, the Collector, if satisfied that there has been contravention of the order, may order confiscation of the essential commodity so seized.
Section 6-B of the Essential Commodities Act provides that before any order of confiscation is passed a show-cause notice shall be issued to the concerned person. Admittedly, in the present case, the show cause notice was issued to all the Respondents and after hearing them the confiscation orders came to be passed by the Controller of the Rationing, who is the Collector within the meaning of section 2(a) of the Essential Commodities Act.
::: Downloaded on - 09/06/2013 16:18:02 :::24 1 revn 365.10 ors.doc 21 The learned Public Prosecutor for the State contended that the purpose of issuance of Licensing Order by virtue of the powers under section 3 of the Essential Commodities Act is to regulate the supply, distribution, trade and commerce in the essential commodities mentioned in the schedule and for that purpose the provisions are also made in the Licensing Order for licences, permits, storage, transportation, distribution, disposal, acquisition, use and consumption of the essential commodities and for effective regulation the powers are given for entry, search and seizure. There is no doubt that Licensing Order, 1998 has been issued under the powers under section 3 of the Essential Commodities Act, 1955.
The learned Public Prosecutor contended that wholesale dealers' licence is issued with clear condition that the licensee shall not contravene any of the conditions of the licence and the conditions of the licence require that the licensee shall carry out the business in the schedule essential commodities and store them at the godowns of which the addresses are given in the licence and not at any other place. In Revision Application Nos.366 of 2010 to 375 of 2010 the Respondents had obtained licences in ::: Downloaded on - 09/06/2013 16:18:02 ::: 25 1 revn 365.10 ors.doc respect of certain schedule commodities and the licences bear addresses of business and the addresses of the storage. However, it was found that they had stored the goods either with M/s Savla food and Cold Storage Pvt. Ltd. or M/s. Sanfoods & Cold Storage Pvt. Ltd. without any intimation to the licensing authority. As pointed out earlier as per the note below clause 2 (b) of the licence, the intimation of storage at any place other than their godown of which address is given, could be given within 48 hours after the actual occupation. However, in the present cases, it was never the case of the Respondents that they had given any intimation within 48 hours and therefore, the conditions of the licence have been contravened by them.
22 The learned Public Prosecutor for the State also contends that the strict compliance of these conditions is essential for the purpose of regulating the supply and distribution of the essential commodities and if these conditions are not strictly complied, there is every possibility that with impunity certain dealers may store the essential commodities at the place which is not authorised and about which no intimation is given and such commodities are held-up from supply as a result of which, the ::: Downloaded on - 09/06/2013 16:18:02 ::: 26 1 revn 365.10 ors.doc prices in the market may shoot up. During the period of last about one year or more, there has been shortage of supplies in the market resulting in high price rise in the food grains and other essential commodities. This has caused great hardship to the common people and therefore, the storage of such essential commodities at any place other than the place for which the address is given in the licence, cannot be condoned and cannot be taken as too technical and therefore, stern action of seizure and confiscation of such essential commodities is necessary.
23 On the other hand, the learned counsel for the Respondents vehemently contended that the contravention of the order under section 3 of the Essential Commodities Act, may result in seizure and confiscation but mere contravention of certain conditions of the licence cannot be sufficient for seizure and confiscation of the essential commodities. The learned counsel contends that for the purpose of confiscation of the essential commodities under section 6-A of the Essential Commodities Act, there has to be seizure of the essential commodities in pursuance of an order made under section 3 of the Essential Commodities Act and not under the provisions of Licensing Order. According to him, in the present ::: Downloaded on - 09/06/2013 16:18:02 ::: 27 1 revn 365.10 ors.doc cases, the seizure was made for contravention of the conditions of the licence as per the Licensing Order and not as per any order passed under section 3 of the Essential Commodities Act.
24 The learned counsel relied upon Mithanlal Siyaram Vs. State of Madhya Pradesh, 1987 CR.L.R. 13 (M.P.). The journal in which the judgment is reported is not produced before the court. For this purpose the learned counsel relied upon the commentary on the Essential Commodities Act, by Sarjoo Prasad's, 8th Edition, page 254, it reads thus:
"4. Order of confiscation. - For exercising powers under Sec. 6-A of the Act, the contravention must be of the Order and not of the condition of the licence issued under the Order. Breach of the condition of the licence cannot mean breach of the Order. Thus the correct and settled position is that the powers under Section 6-A(1) of the Act can be exercised by the Collector only when there is a contravention of the provisions of the Control Order or any other Order passed by the State Government in exercise of the powers conferred upon it by Section 3 of the Act."::: Downloaded on - 09/06/2013 16:18:02 :::
28 1 revn 365.10 ors.doc As the judgment reported in the Journal is not available, it is difficult to say whether the above referred para is correctly quoted in this book. If it is so, I will respectfully defer from the same.
25 Infact, there cannot be any specific order of seizure and confiscation under section 3 of the Essential Commodities Act.
Under section 3 of the Essential Commodities Act, the Central Government is empowered to issue certain orders and as noted earlier, that power can be delegated to State Government under section 5 of the Essential Commodities Act and by virtue of that delegation, the State Government had issued Licensing Order, 1998. Section 6-A speaks about contravention of that order which is issued as per the powers under section 3 and not about any individual order of seizure or confiscation under the Essential Commodities Act. The powers of the seizure are conferred on the concerned authorities as per Licensing Order issued under section 3 of the Essential Commodities Act. The licence is issued as per the said Licensing Order and as per the provisions of the said Licensing Order, it is mandatory to comply with the conditions of the licence and any contravention of such conditions of the licence ::: Downloaded on - 09/06/2013 16:18:02 ::: 29 1 revn 365.10 ors.doc would amount to contravention of provisions of the Order which would empower the concerned authorities to search and seize the essential commodities in respect of which the contravention has been, is being, or is about to be made, and if there is such contravention, the commodities can be seized under the provisions of the said order and if the seizure of such commodities is reported, by virtue of the powers of the section 6-A of the Essential Commodities Act, the Collector may pass the order of confiscation, after following the procedure laid down in section 6-A and 6-B of the Essential Commodities Act. There is no contention about non-compliance of the procedure laid down in section 6-A and 6-B of the Essential Commodities Act. In view of the legal position, the contentions of the learned counsel for the Respondents that the order of confiscation could not have been made in absence of an order of seizure under section 3 of the Essential Commodities Act, cannot be accepted.
26 The learned counsel further contended that an Act of the confiscation is too harsh and though the Collector has power of confiscation, it is not mandatory that he should confiscate because section 6-A of the Essential Commodities Act provides that ::: Downloaded on - 09/06/2013 16:18:02 ::: 30 1 revn 365.10 ors.doc Collector may confiscate and does not proved that the Collector shall confiscate. According to him, as per the provisions of the paragraph 11 of the licence, the licensee has to take adequate measure to ensure that the commodities stored by him are maintained in good condition and damage to the same is avoided.
The learned counsel contended that for the proper compliance of this condition, the Respondents had stored these essential commodities in the Cold Storage and therefore, it should not be treated as serious contravention of the conditions of the licence or of Licensing Order. I am not impressed with this argument. It is true that it is the responsibility of the licensee to see that the commodities are kept in good condition and any damage to the same due to ground-moister, rain, insects, rodent, birds, fire etc. is to be avoided and for that purpose certain steps are expected to be taken but the steps could be taken by following the conditions of the licence. One of the important conditions of the licence was that licensee shall not carry on the business at any place other than the place of which the address is given in paragraph 2(a) and shall not store any commodities at any place except the one of which the address is given in paragraph 2 (b). However, if he intends to store the goods at any other place, liberty is given to ::: Downloaded on - 09/06/2013 16:18:02 ::: 31 1 revn 365.10 ors.doc him subject to condition that he shall report this fact to the Rationing Authority within 48 hours. If it is reported, the storage would be as per the terms and conditions of the licence and address of such godown can also be taken note of on the licence.
This condition is one of the most important conditions in the licence for the purpose of regulating the sufficient supplies and distribution so that the prices of such commodities remain at a reasonable level and that the dealer does not take undue advantage of the situation in the market by hoarding or holding the stocks and not releasing the same in the market. If such commodities are stored at godown of which the address is mentioned in the licence or of which the intimation is given within 48 hours, the dealer cannot misuse the said stocks for the purpose of hoarding and holding the stocks from the market. Such contravention of this condition cannot be treated as mere technical contravention.
27 In respect of seizure of 75 quintal Grams belonging to M/s Arpit Internationals which is subject matter of Revision Application No. 367 of 2010, the learned counsel for the Respondents contended that necessary intimation was given to the ::: Downloaded on - 09/06/2013 16:18:02 ::: 32 1 revn 365.10 ors.doc Deputy Controller of Rationing and that intimation was received in that office. It appears that this plea was taken before the Controller also during the proceedings for confiscation. However, the Controller of Rationing in his order has noted that there was no endorsement, signature or stamp to indicate that the said letter dated 21.07.2009 was actually received in the office of the Deputy Controller. He also noted that he had verified this subject from the office of the Deputy Controller, who had by his letter dated 30.04.2010 informed that no such letter dated 21.07.2009 was received. The learned counsel at this stage, produced carbon copy of one letter dated 21.07.2009 from the Respondents to the Deputy Controller of Rationing. It purports to bear the stamp showing that the clerk in the office of Rationing office 41-F, Vashi had received the said letter dated 21.07.2009. The learned Public Prosecutor pointed out that the Rationing office No.41-F is the office of the Inspector of Rationing at Vashi and not the office of the Rationing Authority to which the intimation should have been given. For a moment even if it is believed that due to bonafide mistake this letter was submitted in the office of the Inspector not in the office of the Deputy Controller who is Rationing Authority, still on perusal of the contents of this letter, I find that it does not ::: Downloaded on - 09/06/2013 16:18:02 ::: 33 1 revn 365.10 ors.doc help the Respondent in any way. This letter indicates that due to shortage of space in its godown the Respondent intended to keep certain goods in three different places for a period of 30 days, one of such places was M/s Savla Cold Storage Pvt. Ltd. However, the period of 30 days would expire on 21.08.2009. Therefore, even if that intimation was valid it was for the period of 30 days from 21.07.2009. In the present case, the goods were seized on 20th January, 2010 for which there was no intimation. Therefore, the seizure and confiscation of Gram was justified.
28 The learned counsel for the Respondents relied upon several authorities in support of his contention that in the present cases the commodities should not have been confiscated. In Syed Zakir Ali and etc. vs. State of Maharashtra and Anr., MANU/MH/0973/2005, Equivalent Citation: 2005 CR.L.J. 4085, a truck was seized on the ground that Kerosene was being used as a fuel instead of diesel. Two samples of the fuel were taken one sample was sent to C.A. and as per the C.A. report the sample was diesel. After a long time, a letter was received from C.A. that the said report was sent by mistake as it pertained to some other sample and second report was sent showing that the ::: Downloaded on - 09/06/2013 16:18:02 ::: 34 1 revn 365.10 ors.doc sample contained kerosene. Inspite of the order, second sample was never sent to the C.A. for analysis. The Collector passed an order of confiscation of the truck. In the given circumstances, the Division Bench of this court held that the said order needed to be reconsidered. One of the reasons was that the provisions of section 6-B of the Essential Commodities Act, which mandates giving of reasonable opportunity of being heard, were not followed. As a result of this, confiscation of truck was set aside with liberty to conduct confiscation proceedings afresh and decide the same after giving full opportunity of hearing to the petitioners therein. In my considered opinion, this judgment does not come to help of the present Respondents.
29 In D. Batch Moideen vs. State of Kerala and Ors. reported in MANU/KE/0519/1999, (Equivalent Citation: AIR 1999 Kerala 282) the Petitioner had a licence of carrying on business in boiled rice at Idukki. He purchased certain quantity of boiled rice from Andhra Pradesh and it was transported from Bhimavaram in Andhra Pradesh to Kozhikode by rail, because there was no direct rail connection for Idukki. When the goods reached at Kozhikode, due to certain reasons transport facility was not available and ::: Downloaded on - 09/06/2013 16:18:02 ::: 35 1 revn 365.10 ors.doc therefore, temporarily the Petitioner was required to store the said bags of boiled rice in a godown at Kozhikode, of which immediate intimation was given to the licensing authority. The Collector of Kozhikode seized and confiscated the said goods. The Division Bench of Kerala High Court quashed and set aside that order holding that the Petitioner had to temporarily store the goods in Kozhikode on account of absence of sufficient transportation facility and therefore, the temporary storage was bonafide and he had infact given intimation to the licensing authority. In my considered opinion, this judgment is also not relevant for the purpose of present matters because in the present cases there was no such difficulty and the Respondents had stored the essential commodities at the place of which the address was not given in their licences and they had not reported this fact to the licensing authority as required under the conditions of the licence.
30 In Subhash Mothichand Sheth vs. The State of Karnataka, MANU/KA/0116/1977 (Equivalent Citation: 1978 CriLJ 736), a dealer in sugar had taken delivery of 90 bags of sugar from a Sugar Factory in District Belguam. He was expected to take all the stocks to his godown at Jamkhandi. However, on ::: Downloaded on - 09/06/2013 16:18:02 ::: 36 1 revn 365.10 ors.doc the way he had sold away 57 bags of sugar and only 33 bags of sugar were taken to the licensed godown. The Deputy Commissioner of the District confiscated the said 33 bags of sugar.
That order was set aside by the Karnataka High Court holding that the seizure could be against the commodities in respect of which there was a contravention of the order and not in respect of which there was no contravention. It was held that there was no contravention of any condition in licence in respect of 33 bags which were actually stored in the godown of which the address was given in the licence and therefore, those 33 bags could not be confiscated.
31 The learned counsel also relied upon Kailash Prasad Yadav and Anr. Vs. State of Jharkhand and Anr., MANU/SC/ 7602/2007 (Equivalent Citation: 2007 Cri.LJ.3722). In that case, the Appellants were the owners of a truck, which was hired for transportation of foodgrains by one Kailash Chand Sahu. The truck was carrying wheat belonging to Food Corporation of India.
An order of confiscation of the truck was passed by the Deputy Commissioner. That order was maintained by the Additional Sessions Judge as well as Jharkhand High Court. The Supreme ::: Downloaded on - 09/06/2013 16:18:02 ::: 37 1 revn 365.10 ors.doc Court noted that the Order issued in 2001 under section 3 of the Essential Commodities Act did not deal with the wheat and transportation thereof and thus by transportation of wheat by the truck there could not be violation of that order and therefore, the seizure itself would not be correct. It was held that a valid seizure is sine qua non for passing an order of confiscation of the property.
In view of the facts of the present cases, these authorities are not applicable.
32 In the present cases, it is clearly established that the Respondents had violated the conditions of the licence, which amounts to contravention of Licensing Order issued under section 3 of the Essential Commodities Act and therefore, the seizure of the goods under clause 15 of the Licensing Order was justified. As that seizure was reported for contravention of the order issued under section 3 of the Essential Commodities Act, the Collector was within his powers to pass the order of confiscation under section 6-A of the Essential Commodities Act, after following the procedure under sections 6-A and 6-B of the Essential Commodities Act, which has been duly followed.
::: Downloaded on - 09/06/2013 16:18:02 :::38 1 revn 365.10 ors.doc 33 It may be noted that even the Sessions Court while allowing the Appeals of the Respondents had noted that the procedure in respect of the seizure was properly followed and from the facts it is clear that procedure under section 6-A and 6-B of the Essential Commodities Act was also followed before passing order of confiscation. Taking into consideration facts and circumstances, I am unable to agree with the Appellate Court that contravention was technical and there should not have been confiscation. In fact, taking into consideration facts and circumstances, confiscation of these goods was just and reasonable. In view of this, the Revision Applications deserve to be allowed.
34 For the aforesaid reasons, the Revision Application Nos.365 of 2010, 366 of 2010, 368 of 2010, 369 of 2010, 371 of 2010, 374 of 2010 and 375 of 2010 are allowed. The impugned orders passed by the Additional Sessions Judge are set aside and the order of confiscation passed by the Controller of Rationing in respect of the essential commodities in these matters is restored.
35 The Revision Application Nos. 370 of 2010, 372 of 2010 and 373 of 2010 are dismissed subject to payment of costs of ::: Downloaded on - 09/06/2013 16:18:02 ::: 39 1 revn 365.10 ors.doc Rs.5,000/- to each of the Respondents by the State Government.
The Controller of Rationing is directed to release the said goods, being Math or Mathki and Wal, in favour of the Respondents forthwith.
36 The Revision Application No. 367 of 2010 is partly allowed and the impugned order in respect of confiscation of Grams is hereby set aside and the confiscation order passed by the Controller is restored. However, the Revision Application to extent of the confiscation of Math or Mathki is hereby rejected.
37 The Controller had given the option to the concerned Respondents to pay the market price of the confiscated goods. The learned counsel for the Respondents points out that the price of the commodities have substantially fell down due to new arrivals in the market and therefore, the concerned Respondents may be permitted to pay the present wholesale market price in respect of the old stock, to redeem the stocks. The learned Public Prosecutor has no objection. Therefore, the concerned Respondents shall be permitted to take back the confiscated stocks on payment of the present wholesale market price in respect of the old stocks of that ::: Downloaded on - 09/06/2013 16:18:02 ::: 40 1 revn 365.10 ors.doc period. The current prices may be ascertained from Agricultural Produce Market Committee (APMC), Vashi and the value of the goods be calculated accordingly.
[ J.H.BHATIA, J. ] ::: Downloaded on - 09/06/2013 16:18:02 :::