Patna High Court
Surendra Kumar Jhunjhunwala vs State Of Bihar on 21 August, 1990
Equivalent citations: 1991(1)BLJR132
JUDGMENT Satyeshwar Roy, J.
1. The residential premises of the Petitioner and his brother Narendra Jhunjhunwala was inspected on 6.9.1987by the sub-Inspector of Police, Govindpur Police Station when 150 bags of Masoor Dal were found there. No document could be produced by the Watchman who was present there. On the basis of the information of the Sub-Inspector, First Information Report was drawn up in which it was alleged that the petitioner and his brother were carrying on business in essential commodity without license which was punishable under Section 7, of the Essential Commodities Act (the E.G. Act) and there under Section 414 of the Indian Penal Code as it appeared to be stolen article. A case was registered in the Special Court commonly known as Special Judge, E.C. Act as G.R. Case 2450 of 1987. A proceeding under Section 6A of the E.C. Act was also initiated in the court of the Deputy Commissioner, Dhanbad which was registered as Confiscation Case No. 49 of 1987.
2. By order dated 30.11.1987, the Deputy Commissioner accepted the show cause filed by the petitioner and dropped the confiscation proceeding. The Special Judge by order dated 6.1.1989 took cognizance of offence punishable under Section 7 of the E.C. Act. The jurisdiction of the Special Judge taking cognizance has been challenged in this case.
3. The case came up for hearing before a learned Single Judge. Learned Single Judge referred it to Division Bench. It may be noticed that only one of the accused has filed this case.
4. Mr. Prem Shankar Dayal, learned Counsel appearing on behalf of the petitioner submitted that in view of the fact that the Deputy Commissioner held that no case has been made out against the petitioner and his brother and dropped the confiscation proceeding initiated under Section 6A of the E.C. Act, the order of the Special Judge taking cognizance for the same offence under Section 7 of the E.C. Act was an abuse of the process of the Court. According to Mr. Dayal, as the court of competent jurisdiction has held that the petitioner has not violated any of the Orders made under the E.C. Act, the Special Judge had no jurisdiction to proceed in the matter. Reliance was placed by him on Uttam Chand v. I.T.O. ; Lal Chand and Anr. v. The Stale of Bihar 1984 BLJ 518; Ramautar Prasad Kedia and Ors. v. The State of Bihar 1984 BLJ 509; Satya Narayan Kejriwal and Anr. v. The State of Bihar and Ors. 1990 PLJR 308 : 1989 East CrC 604 (Pat); Jhabarmal Kukim v. The State of Bihar and Anr. 1984 PLJR 568, 1984 East CrC 50 (Pat) : Jai Prakash Ram v. State of Bihar 1989 EFR 204 : 1989 East CrC 39 (Pat) and Banwarlal Satyanarain v. State of Bihar 1990 PLJR 107.
5. Learned Advocate General submitted that the proceeding for confiscation of the essential commodities under Section 6-A of the E. C. Act and the criminal proceeding before the Special Judge are two different proceedings having different consequences. The Special Judge was not bound by the findings recorded by the Collector. With reference io Section 6-C (2), he urged that the law provides that in case of acquittal of a person in the criminal case, instituted for contravention of the order in respect of which an order of confiscation has been made under Section 6-A, the essential commodities seized shall be released and if it has been sold, the price thereof shall be paid to the person proceeded against. He submitted that the judgments relied upon by Mr. Dayal by which the proceedings under Section 7 of the E.C. Act were quashed do not lay down the law correctly. The decision of the Supreme Court in Uttam Chand (supra) and of a learned Single Judge of this Court in Banwarilal Satyanarain (supra) have no application to the facts of this case because in those decisions the provision of the Income Tax Act were under consideration. Learned Advocate General relied on P. Jayappan v. S.R. Perumal and Surendra Kumar Yadav v. State of Bihar 1989 PLJR 172 : 1989 East CrC (NOC) 12 (Pat).
6. The confiscation of essential commodities in a proceeding under Section 6-A cannot be said to be a penalty or punishment. This position is clear from Section 6-D of the E. C. Act. Under the E.C. Act, the Collector has no jurisdiction to impose any penalty on a defaulting person. The power to impose penalty has been given to the Special Court constituted under the E.C. Act and the Special Court in this case is the Additional Sessions Judge. Section 6-D provides that the order of any confiscation under the E.C. Act by the Collector shall not prevent the inaction of any punishment to which the person affected thereby is liable under the Act.
7. The Collector is authorised to initiate consfication proceeding under Section 6-A of the E.C. Act. Section 7 of the E.C. Act provides for imposing penalty. It also empowers the court to forfeit any property in respect of which an Order made under the E.C. Act has been contravened Power has been given to to forfeit any package, covering or receptacle in which the property is found and any animal, vehicle, vessel or other conveyance used in carrying the property shall, if the Court so orders, be forfeited to the Government. It will thus be noticed that whereas Section 6-A gives the power to the Collector to confiscate, Section 7 gives the power to the Special Court to forfeit. Order forfeiting the property may be passed only if a person is found guilty of an offence and the order of forfeiture in that context is a penalty. Section 6-A gives power to the Collector to sell essential commodities which is subject to speedy and natural decay or even if it is not so in public interest, he may order the same to be sold. In this case also the Deputy Commissioner had passed order for selling the seized article (Masurdal) as it is used by the public daily Section 6-A provides that if the seized commodities are foodgrains, the Collector may order for selling it through fair price shop. The whole idea is that the article being essential commodity should not be kept in goodwn and the Collector should see that it reaches the public. Essential Commodities seized and subject matter of confiscation proceeding may be such that at the time of proceeding, it is abundantly available in the market. The Collector may not in such a situation decide to confiscate it. In Jhabarmal (supra) it was observed that power under Section 6-A of the E.C. Act is to be exercised for the purpose of controlling supply and distribution of the essential commodities. The very language of Section 6-A gives discretion to the Collector in passing an order of confiscation. That is not the position so far Section 7 is concerned. If a person is found guilty of contravention of any order made under Section 3 of the E. C. Act, the Court has no option but to punish him. The Court in such a situation has no discretion as the Collector has under Section 6-A of the Act.
8. Both Sections 6-A(5)(c) and 6-C(2) provide that in case of acquittal of a person prosecuted under E.C. Act, the commodities confiscated under Section 6-A must be returned to that person and if it is not possible to return that commodity, price thereof shall be paid to that person. It will thus be noticed that notwithstanding the order of the Collector confiscating essential commodities, in the event the person is acquitted, the order of confiscation automatically becomes non-est. No provision has been made in Section 7 of the E.C. Act that if a confiscation proceeding is decided in favour of a person, the prosecution of that person shall be dropped. In other words, whereas the order of acquittal by the Special Court will be binding on the Collector, the latter's order is not binding on the former. All the cases under the E. C. Act which Mr. Dayal referred, were relied on the judgment in Criminal Miscellaneous No. 3611 of 1975 Sita Ram v. State of Bihar, disposed of on 11.3.1978. In Sita Ram (supra) notice was issued to the partnership firm as to why its license should not be cancelled on the ground that at the time of inspection, books of account were not produced by the firm. The Collector accepted the show casue and held that the allegations were not shown to be correct. Criminal prosecution had also been launched. Prayer was made for quashing criminal proceeding in view of the order passed by the Collector. Prayer was allowed and the proceeding was quashed. The first case in point of time which relied upon this judgment is Lal Chand (supra) which was although disposed of on 11.7.1979 was reported in 1984 BLJ 518. In Ramautar Kedia (supra), Sita Ram (supra) and Lal Chand (supra were followed. The learned Judge did not give his own reasoning. In that case, the law laid down by the Supreme Court in Uttam Chand (supra) was also followed. The same learned Single Judge who had decided Romautar Prasad Kedia (supra) reiterated the law in Satya Narayan Kajriwal (supra). Again the learned Single Judge without assigning any reason in Jai Prakash Ram (supra), accepted the law laid down in Ramautar Prasad Kedia, Lal Chand and others.
9. So far Uttam Chand, (supra) was concerned, a partnership firm was registered under the Income Tax Act, 1961 and it was assessed as a registered firm for number of years. For the assessment year 1969-70, the Income Tax Officer cancelled the registration on the ground that the firm was not genuine. The Income Tax Officer initiated prosecution against the partners of the firm under Section 277 of the Income Tax Act for filing false return. Meanwhile the order of the Income Tax Officer cancelling the registration of the firm was challenged before the Tribunal. The Tribunal held that the firm was genuine and the assessee could not be prosecuted for filing false return. In the High Court, prayer was made for quashing the criminal proceeding. It was dismissed. The matter was taken up to the Supreme Court. The Supreme Court held that in view of the finding recorded by the Tribunal that the firm was a genuine firm, the assessee could not be prosecuted for filing false return. It will thus be noticed that the basis for prosecution of the assessee was a finding that the firm was not genuine. The finding was reversed by the Tribunal. If the basis of the prosecution became non est, the assessee could not have been prosecuted. The same has been held in Banwarilal Satyanarain (supra), which is also a case under the Income Tax Act. These two cases are of no assistance to decide case under the E.C. Act because as noticed above, on the basis of the first information report/complaint, both prosecution under Section 7 and confiscation proceeding under Section 6-A of the E.C. Act may be initialed. Since the complaint first information report is to be sent to the Special Court, the Criminal prosecution is bound to follow, but there may not be a confisaction proceeding. It will be noticed that none of the cases arising out of the E.C. Act relied upon by Mr. Dayal, the provisions of the E.C. Act were noticed.
10. In P. Jayappan (supra) where during the pendency of re-assessment proceeding, criminal prosecution, was instituted. The Supreme Court observed as under:
The Criminal Court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that result of a proceeding under the Act would be binding on the Criminal Court. The Criminal Court has to judge the case independently on the evidence placed before it.
In Surendra Kumar Yadav v. The State of Bihar 1989 PLJR 172 : 1989 East CrC (NOC) 12 (Pat) the decision of Sita Ram (supra), was relied upon by the petitioner in that case. The learned Single Judge did not accept the reasonings. Mr. Dayal submitted that when the learned single Judge in Surendra Kumar Yadav (supra), was of the opinion that he did not accept the reasoning of Sita Ram to be correct, the proper procedure for him was to refer the matter to a Division Bench. Mr. Dayal is correct in his submission, but I am not concerned with this aspect of the matter in this case. I, however, find that the learned Single Judge in Surendra Kumar Yadav (supra), gave reasons for not accepting the reasoning in Sita Ram and others case, (supra). In my opinion the reasoning given by the learned Single Judge in Suremra Kumar Yadav (supra), for not accepting the judgment in Sita Ram and others case must be held to be correct. Mr. Dayal further submitted that Section 452 of the Code of Criminal Procedure empowers the Court to confiscate any property regarding which an offence appears to have been committed and as the Deputy Commissioner has released the articles, the same cannot be confiscated by the Special Judge. In the E.C. Act Section 6-A there is provision of cofiscation and under Section 7 there is provision of forfeture. Procedure has been laid down in the E.C. Act itself. Section 452 is not attracted.
The quality of evidence that is recorded to be adduced before the Collector and before the Special Judge will also differ. The whole evidence may not be before the Collector when the confiscation case is disposed of.
11. For the reasons aforesaid merely because a confiscation case has been decided is his favour, the criminal proceeding must be quashed on the ground that allowing it to proceed will amount to abuse of the process of the Court, is not the correct position in law. Decisions in which prosecutions were quashed relying on the fact that confiscation cases had been decided in favour of the accused are overruled.
12. There is no provision in the Code of Criminal Procedure for dropping a criminal case. The Trial Court may not find prima facie case and discharge the accused or it may acquit the accused because of insufficiency of evidence. This Court in exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure may quash a proceeding. Whether in a given case, cognizance should be taken or not or a criminal proceeding should be quashed or not will depend on the facts and circumstances of each case.
13. In the present case, it does not appear from the order-sheet of the Special Court that the petitioner had prayed that he be heard before order taking cognizance of an offence is passed. Consequently, it does not appear from the order-sheet that the petitioner brought to the notice of the Special Court the order of the Collector, the order of Deputy Commissioner has bearing on the question in issue. The petitioner may bring this to the notice of the Special Judge during trial. I am of the opinion that no case has been made out by the petitioner in this case to quash the order taking cognizance.
14. I find no merit in this application and it is dismissed.
Dharmpal Sinha, J.
15. I have gone through the judgment of my learned brother S. Roy, J, and I agree with the conclusion and reasonings given in the judgment. I, however, wish to add respectfully some observations of my own on the point raised in this case.
16. The facts of the case and the decisions relied upon by the learned Counsel for the parties during the hearing of the case have already been noticed in the judgment and it does not seem necessary to mention the same again. The crucial point that has arisen for consideration is whether in view of the finding of the Collector in Confiscation Case No. 49 of 1987, as contained in Annexure-2 of this petition, the cognizance taken of the offence punishable under Section 7 of the E.C. Act by the learned Special Court by the impugned order dated 6.1.1988 passed in G.R. No. 2450 of 1987 and the entire criminal proceedings need to be quashed on the ground that it will be an abuse of the process of the Court to continue the prosecution.
17. The main trust of the argument of Shri P.S. Dayal, learned Counsel appearing on behalf of the petitioner was that since the Collector (referred to in this petition as Deputy Commissioner) has already come to a finding that there was no wrong intention or mens rea on the part of the petitioner in keeping 150 bags of Masoor Dal that was found in his godown on 6.9.1987 and seized by the Police Sub-Inspector of Govindpur who lodged the F.I.R. (Ext. 1) and since the Collector has the competence to decide as to whether there has been contravention of the order passed in pursuance of Section 3 of the Essential Commodities Act, 1955 (referred hereinafter as the E.C. Act), it will be an abuse of the process of the Court to continue the criminal proceeding and the learned Special court should not have taken cognizance of the offence. The contention of Mr. Dayal appears to get support from Single Bench decisions of the cases of Jai Prakash Ram v. State of Bihar 1989 EFR 204 : 1989 East CrC 30 (Pat); Satya Narayan Kejriwal and Anr. v. State of Bihar and Ors. 1989 East CrC 604; Lal Chand and Anr. v. The State of Bihar 1984 BLJ 518 and Ramautar Prasad Kedia and Ors. v. The State of Bihar 1994 BLJ 509. Doubt has been expressed about the correctness the decisions and the observations made in the case of Surendra Kumar Yadav v. The State of Bihar 1989 PLJR 172 : 1989 East CrC (NOC) 12 (Pat) seems to be in conflict with the above referred decisions. The learned Advocate General bad contended that the decision of the last mentioned case seems to lay down the correct law.
18. On careful perusal of the decisions and the relevant provisions of the Act as contained in Sections 6-A, 6-C and 7 of the E.C. Act, I am of the considered opinion that the finding of the Collector in confiscation proceeding cannot be considered to be conclusive or even decisive for the purpose of holding whether or not cognizance should have been taken or prosecution initiated for any contravention of the provisions of any order issued in pursuance of Section 3 of the Act should or should not continue. The jurisdiction given to the Collector for initiating the confiscation proceeding and the finding arrived at by him in this regard have a completely different objective and has nothing to do with the question of finding any person guilty or not guilty for any alleged contravention of the provisions of any order issued in pursuance of Section 3 of the E.C. Act. It may be noticed that confiscation proceeding may be started even without lodging a prosecution. The material on which the Collector has to be satisfied as to whether there is any contravention or not for the purpose of confiscation is different from the materials which are to be considered by the Special Court for the purpose for coming to a finding whether or not any person is guilty of any contravention. The standard of proof required for the Collector in order to satisfy himself regarding contravention for the purpose of confiscation is different from the standard of proof required for finding a person guilty of the offence punishable under Section 7 of the E.C. Act. The Collector has primarily to be concerned with the way in which the seized articles (Essential Commodities) has to be dealt with and that is the focus of his attention while exercising jurisdiction given to him under Section 6-A of the E.C. Act. Ordinarily he has to consider at that stage the report of the seizure, which has to be made without delay to him according to requirement of the provisions of Section 6-A of the E.C. Act and to consider and hear on show cause if filed in pursuance of notice that is given under Section 6-B of the E.C. Act. The result of the investigation in respect of the alleged contravention by any person is not normal available to the Collector at the time he decides the confiscation proceeding and the way as to show the seized articles should be disposed of. All this would indicate that the Collector while exercising his jurisdiction in confiscation proceeding and the Special Court while exercising the jurisdiction of trying any person against whom contravention of any order issued under E.C. Act, is alleged are having different objectives and different materials and they have to act on different standard of proof in exercising their respective jurisdiction. The finding of the Collector in consfication proceeding, therefore, cannot be considered by itself to be a ground for quashing any order of taking congnizance or any criminal proceeding before the Special Court.
19. Indeed, some provisions of the Act clearly go to indicate that the Collector's finding in confiscation proceeding is only tentative and subject to ultimate decision given by the Special Court in cases in which the prosecutions have been launched against any person for contravention of the order issued by the E.C. Act, relating to which the Collector has also initiated a confiscation proceeding under Section 6-A of the E.C. Act. Sub-section (2) of Section 6-C and Sub-section (5) of Section 6-A (Bihar Amendment which corresponds to Sub-section (3) of Section 6-A of the Central Act, inter alia, provides that if a person charged with any contravention is acquitted, the essential commodities which were confiscated after seizure, would be returned, and in case if it had been sold, the price of the same along with 'reasonable interest' shall be paid to the person. Section 7 of the Act provides that in case the person concerned is found guilty of an offence for contravening any order issued in pursuance of Section 3 of the Act, the property shall be forfeited. Thus it appears that whatever order had previously been passed by the Collector in the confiscation proceeding, that is not final, because in case of acquittal of the person concerned, the articles has to be returned or if it has been sold during the course of confiscation proceeding, its price along with reasonable interest has to be paid to the concerned acquitted person, while if he is held guilty, the artile has to be forfeited even if the Collector might have dropped the confiscation proceeding.
20. So in view of what I have stated in the preceding two paragraph, I am of the opinion that the aforesaid decisions relied upon by Mr. Dayal seem to have given undue primacy and conclusiveness to the finding/decision of the Collector in confiscation proceeding and it is observed respectfully that they do not seem to lay down correct law so far as they go to indicate that after and because of a finding of the Collector in a confiscation proceeding in favour of the person against whom prosecution has been lodged in the Special Court for contravention of an order issued in pursuance of the provisions of Section 3 of the E.C. Act, the continuance of the prosecution shall be an abuse of the process of the court.
21. Learned Counsel for the petitioner in course of his argument had cited a decision of the Supreme Court in Uttam Chand v. Income-Tax Officer, Income Tax Report 133, page 909 and his submitted that the decisions relied upon by him referred to above finds support from the observations of the Supreme Court in this case. In my opinion, this decision of the Supreme Court relates to entirely different facts and cannot be pressed into service to support his contention. In the case before the Supreme Court, there was a partnership firm which had been granted registration under the Income Tax Act, but the genuinness of the firm was later doubted because of one of its partners had denied her signature on the partnership-deed and the Income Tax Officer had come to a finding that the firm was not genuine and thereafter he had started a proceeding for prosecution for giving false return on the basis of that finding. The Income Tax Tribunal in exercise of revisional jurisdiction ultimately reversed the finding of the Income Tax Officer and held that the partnership firm was a genuine one. The question then came up for consideration before the Supreme Court as to whether the prosecution launched by the Income Tax Officer on the basis of the finding that the partnership firm was not genuine should be allowed to continue. The Supreme Court quashed the prosecution on the ground that the firm was a genuine firm as held by the Income Tax Tribunal. It is to be noticed here that the Income Tax Tribunal was competent to set aside the finding of the Income Tax Officer in exercise of its revisional jurisdiction and the very reason for prosecution which was based on the finding of the Income Tax Officer that the firm was not genuine had become non est. In the E.C. Act cases, the Collector has no jurisdiction at all to consider the question whether or not any person is guilty of contravention of the provisions of the Act. The Collector while acting under Section 6-A of the Act and has no jurisdiction to give a conclusive finding on this point and only the Special Court can do it. The observation of the Supreme Court in the case of P. Jayappan v. S.K. Perumal AIR 1984 SC 1963, in my opinion it seems to be more applicable to and appropriate on the point under consideration in this case. The observation of the Supreme Court in P. Jayappan (supra) case which supports the conclusions we have arrived at in this case, reads as follows:
In the criminal case all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The Criminal Court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed, under the Act. It does not however, mean that the result of a proceeding under the Act would be binding on the Criminal Court. The Criminal Court has to judge the case independently on the evidence placed before it. Otherwise, there is a danger of a contention being advanced that whenever the assessee or any other person liable under the Act has failed to convince the authorities in the proceedings under the Act that he has not deliberately made any false statement or that he has not fabricated any material evidence, the conviction of such person should invariably follow in the Criminal Court.
22. It may also noticed in this connection that Section 6-D of the E.C. Act, clearly lays down that the award of any confiscation under this Act by the Collector shall not prevent the infliction of any punishment to which the person affected thereby is liable under this Act. It this is so, the converse should also be true that dropping of confiscation proceeding by the Collector cannot ipso facto be ground for quashing the proceeding of prosecution or order of taking cognizance.
23. To be sure in appropriate cases, the finding of the Collector arrived in confiscation proceeding may be an aspect for consideration by the Special Court while proceeding to take cognizance or at any appropriate stage of prosecution proceeding but certainly, it cannot be conclusive or even decisive. The law laid down by the Single Bench in the case of Surendra Kumar Yadav (supra), it is respectfully observed, seems to lay down the correct law in this regard.
24. It is also to be noticed that in this case the Collector in his concluding part of the order as contained in Annexure-2 has stated that information ought to have been given to the police as well as to the authority of the supply department about keeping of 150 bags of Masoor Dal which nobody could keep or store for sale without permit or licence. The finding of the Collector observing that there was no wrong intention and yet his observation that information ought to have been lodged to the police and authorities of the supply department does not seem to be very categorical and the finding by itself cannot be considered as adequate ground for quashing the prosecution.
25. So this petition is dismissed for the reasons stated above.