Orissa High Court
Shri Laxmi Trading Co. And Anr. vs The Additional District Magistrate ... on 13 January, 1989
Equivalent citations: 1989CRILJ659
Author: G.B. Patnaik
Bench: G.B. Patnaik
JUDGMENT G.B. Patnaik, J.
1. The order of confiscation passed by the Collector (opposite party 1) and the order of the State Government (opposite party 2) affirming the said order in appeal are being impugned in this writ application by the petitioners. Petitioner 1 is admittedly a dealer of foodgrains carrying on its business in Rourkela and petitioner No. 2 is a partner of petitioner 1-firm.
2. The Inspector of Supplies conducted a raid on the business premises of the petitioner 1 on 26-8-1987 and found that the petitioner was in possession of 300.60 quintals of edible oils and 1469.53 quintals of pulses and edible oilseeds. The Assistant Civil Supplies Officer, Rourkela, accordingly submitted a report to the Collector pointing out the fact that the petitioner, having been in possession in excess of the permissible limit of edible oils and edible oilseeds as provided under the Pulses, Edible Oilseeds and Edible Oils (Storage Control) Order, 1977 (hereinafter referred to as the "Central Order"), has contravened the said provisions. A prosecution report was accordingly filed under Section 6A of the Essential Commodities Act and the petitioner was called upon to show cause as to why the seized stocks should not be confiscated. In response to the show cause notice, the petitioner filed its reply stating therein that it was an importer, having imported pulses and edible oils from outside the State of Orissa, as provided under the Orissa Essential Foodstuffs (Prevention of Hoarding and Requisitioning of Stocks) Order, 1974 (hereinafter referred to as the "State Order") and, therefore, the stocks in question recovered from the possession of the petitioner were within the permissible limits for an importer and accordingly, the petitioner had not contravened any of the provisions of any Control Order. The Additional District Magistrate exercising the powers of Collector rejected the petitioner's plea that it was entitled to have 8,000 quintals in possession . as an importer and held that admittedly the petitioner having been found to be in possession of pulses and edible oils in excess of the limits permitted under the Central Order, had contravened the said provisions. Accordingly, he directed confiscation of the stocks in question, the said order of the Additional District Magistrate has been annexed as Annexure-8 to the writ application. The petitioner carried an appeal to the State Government reiterating its stand before the original authority, but the State Government having rejected the appeal by order dt. 27-1-1988, annexed as Annexure-10, the petitioner has filed the present writ application.
3. Two contentions have been raised by Mr. Patnaik, the learned Counsel for the petitioners, in assailing the order of confiscation:
(i) The petitioner being an importer within the meaning of the State Order, for whom the permissible limit of possession is 8,000 quintals, and the said concept of an importer though not specifically provided for in the Central Order, but having been retained in view of Clause-6 of the Central Order, the petitioner was entitled to have in its possession 8,000 quintals of pulses and edible oils and, therefore, there has been no contravention of the Control Order; and
(ii) In any view of the matter, "mens rea" being the essential pre-condition for passing an order of confiscation under Section 6A of the Essential Commodities Act, and the said mens rea having been absent, the order of confiscation is liable to be struck down.
The learned Additional Government Advocate, Shri Patra, on the other hand, contends that the Central Order having been made specifically for the purpose of storage control, with effect from the date of enforcement of the Central Order, the State Order cannot have any application, in view of Article 254 of the Constitution. Since the concept of "importer" is not there in the Central Order, Clause 6 of the Central Order cannot bring in the concept of "importer" and, therefore, the petitioner's contention that it is entitled to have 8,000 quintals in possession being an importer is not sustainable in law. In view of Section 10C of the Essential Commodities Act, mens rea must be presumed and consequently, the said presumption not having been rebutted, the impugned order cannot be said to be infirm in any manner. The rival contentions require careful, examination of the relevant provisions of the Act and the different Control Orders as well as some authorities cited at the Bar.
4. Clause 2 (c) of the State Order defines "dealer" to mean, ...any person carrying on the business of any essential foodstuffs as importer, wholesaler or tetailer and includes an agent of such person, but does not include a producer.
Clause 2(f) defines "importer" to mean, ...any person who brings any essential foodstuffs into the State of Orissa from any place outside the State for the purpose of sale and includes a broker or a commission agent or any other agent having authority to sell such foodstuffs on behalf of such person.
Clause 2 (h) defines "retailer" to mean, ...a person who sells any essential foodstuffs to a consumer not being a dealer or a producer.
Clause 2 (k) defines "wholesaler" to mean, ...a dealer who sells any essential foodstuffs to any other dealer or to a producer and includes a broker, commission agent or any other agent having authority to sell any essential foodstuffs belonging to his principal.
Clause 3 of the State Order puts restriction on possession of foodstuffs. The said provision is extracted hereunder:
3. Restrictions on possession of essential foodstuffs by a dealer exceeding the maximum fixed.-
No dealer of any category, whether he is an importer, wholesaler or retailer shall store or have in his possession at any time any essential foodstuffs in excess of the quantities specified in columns 2, 3 and 4 of the First Schedule except under and in accordance with a permit granted by the Controller or the Collector of the district:
Provided that where a dealer by virtue of the nature of his business falls under more than one category he shall, for the purposes of this clause, be deemed to belong to that category for which the higher or the highest quantity, as the case may be, has been specified in the First Schedule:
Provided further that nothing in this Order shall apply to storage or possession of any essential foodstuffs either singly or in any combination by or on account of or on behalf of or on the authority of the Food Corporation or the State Government or the Central Government.
Schedule-1, referred to in Clause 3, so far as relevant is extracted hereunder:
SCHEDULE-I (See Clause 3) Essential Foodstuffs maximum quantity that may be stored or had in possession by-
Importer Wholesaler Retailer
(1) (2) (3) (4)
1. Pulses, whole or split 8,000 Qls. 400 Qls. 40 Qls.
including gram and
gramdal
xx xx xx
Under the Central Order, CL 2 (f) defines "dealer" to mean.
...a person engaged in the business of purchase, sale or storage for sale of any pulses, edible oilseeds or edible oils, whether or not in conjunction with any other business and includes his representative or agent.
Clause 2 (1) defines "retailer" to mean, ...a dealer in pulses or in edible oilseeds or in edible oils, who is not a wholesaler.
Clause 2 (n) defines "wholesaler" to mean, ...a dealer in pulses or in edible oilseeds or in edible oils who sells such commodities to other dealers or to bulk consumers.
Clause 4 of the Central Order puts restriction on possession. The said provision as it stood on the relevant date so far as the present case is concerned, fixing limits is extracted hereunder:
4. Restriction on possession of pulses, edible oilseeds and edible oils:
(1) No dealer shall, after a period of fifteen days from the coming into force of this clause, either by himself or by any person on his behalf, store or have in his possession at any time any pulses, edible oilseeds or edible oils in excess of the quantities specified below:
Category of cities Stock limits in Remarks.
Qtls in case of
Wholesaler Retailer
(i) Pulses Category 1000 50 All pulses taken together.
A-cities
Category 750 40
B-cities
Category 500 30
C-cities
(ii) Edible Oilseeds in- Category-A 1500 100 1. All edible oil seeds taken
cluding groundnut cities. together.
in shell. Category-B 1000 75 2. For groundnut kernel or oil-
cities seed, 75% of the limits speci-
Category-C 500 50 fied shall apply.
cities.
(iii) Edible oils includ- Category-A 800 25 All edible oils including hydro-
ing hydrogenated cities genated vegetable oils,
vegetable oils. Category-B 600 15
cities.
Category-C 350 10
cities.
Provided that....
xx xx xx
Clause 6 of the Central Order makes certain provisions of the State Order relating to storage of pulses, edible oilseeds and edible oils applicable notwithstanding the promulgation of the Central Order.
5. Admittedly, under the Central Order, the concept of "importer" which was there in the State Order has been obliterated. The question for our consideration is whether the Central Order would prevail over the State Order and even if it prevails, whether because of Clause 6 of the Central Order, the State Order providing for an "Importer" would still remain to be in force or not.
Article 254 of the Constitution makes it abundantly clear that when the Parliament legislates the law on a particular subject, the same must prevail over any State law on the field. The State law so far as it is repugnant to the Central law must be held to be void and the two cannot stand together. Even if there may not be any direct conflict between the Central legislation and the State legislation, but if it is evident that the Parliament intended its legislation to be a complete and exhaustive one relating to the subject, then it shall be taken that the union law has replaced the State legislation relating to the subject. But it must be first decided that the Central Law and the State Law occupy the same field. If, however, they deal with separate and distinct matters though of a cognate and allied character, the question of repugnancy does not arise and in that event Article 254 will have no application. When the two Orders are examined from the aforesaid standpoint, we find that both the Orders have been made in exercise of power conferred under Section 3 of the Essential Commodities Act. The object of both the Orders is to maintain supply and secure equitable distribution at fair price of the foodstuffs in question. Whereas the State Order is in relation to the essential foodstuffs as specified in col. (1) of the First Schedule, but the Central Order is in relation to pulses, edible oilseeds and edible oils. In the premises, as aforesaid, the Central Order providing specifically for edible oils and pulses must prevail over the general order made by the State Government for essential foodstuffs which include also the edible oils and edible oilseeds. The two orders being on the same subject, and in view of what has been stated earlier with regard to Article 254 of the Constitution, in the present case, it is the Central Order that would be operative.
6. Admittedly, the concept of "importer" is not there in the Central Order. Mr. Patnaik, the learned Counsel, however, relying upon Clause 6 of the Central Order contends that the provision of the State Order relating to "importer" still remains in the field since there has been no provision in the Central Order with regard to "importer", but we are unable to accept the said submission of the learned Counsel. The Central Order specifically made for storage of pulses, edible oilseeds and edible oils does not conceive of an "importer". Restrictions on possession of pulses and edible oilseeds as provided in Clause 4 of the Central Order must operate in respect of a "dealer" as defined in Clause 2 (f) of the Central Order. In our opinion, notwithstanding Clause 6 of the Central Order, the petitioner cannot claim to be entitled to possess higher quantities of pulses and edible oils as an importer on the basis of the State Order, since the State Order so far as it relates to edible oilseeds and edible oils must be taken to be repealed in view of the Central Order. The first contention of Mr. Patnaik, the learned Counsel for the petitioners, therefore, is rejected
7. Coming now to the second question as to whether "mens rea" is an essential precondition for passing an order of confiscation under Section 6A of the Essential Commodities Act, Mr. Patnaik, the learned Counsel for the petitioners, contends that confiscation is undoubtedly penal in nature and, therefore, to attract the said provision, it must be established that the violation was intentional and was made with criminal intention. In the case of Madhav Keshav v. State of Maharashtra 1977 Cri LJ 1800, a Bench of the Bombay High Court considered the question of requirement of mens rea under Section 6A of the Essential Commodities Act. It was held by their Lordships:
If this is the law, which is already laid down, so far as Section 7 is concerned, and if the provisions of Section 6A are in pari materia with the provisions of Section 7, we see no reason why the element of mens rea should not form part of the breach of the rules alleged under Section 6A. The act which constitutes the basis of prosecution as well as the basis of an Order, an adjudication and confiscation being the same, it cannot have a different content under Section 6A and Section 7 of the same Act....
In the case of Mewalal Kapildeo Prasad v. State of Bihar 1978 Cri LJ 673, a Bench of the Patna High Court also considered the same question and held ; -
...Therefore, for confiscation as well as for conviction it must be established that the person concerned has contravened any order made under Section 3. It is a well-settled rule of interpretation that a word occurring in the same Act is usually to be given the same meaning unless a different intention is expressed by the provisions of the Act. As such, the word 'contravention' has to be interpreted in Section 6A and in Section 7 to mean that the provision of any order framed under Section 3 of the Act has been contravened intentionally. On the other hand, if it is found that the contravention was unintentional and the person concerned had taken all reasonable care and was carrying on the business in a bona fide manner, then, in my view, even for Section 6A of the Act, it has to be interpreted that in the eye of law there has been no contravention .so as to visit the dealer with . the consequences of confiscating the articles which had been seized....
A learned single Judge of the Allahabad High Court in the case of Ashok Kumar v. State of U.P. 1984 All LJ 876, also considered the question of mens rea vis-a-vis Section 6A of the Essential Commodities Act and held:
In order to attract the operation of Section 6A, Essential Commodities Act, aforesaid, it had to be established that there was commission of offence under Section 3, read with Section 4 of. the said Act and Order. Unless it is found that the accused had mens rea at the time of commission of the said offence, Section 6A of the aforesaid Act could not come into play as was held in Nathulal v. State of Madhya Pradesh ....
A learned single Judge of the Delhi High Court in the case of Delhi Administration v. Munshi Ram Niwas 1985 Cri LJ 1230, also held:
The provisions of Section 6A are in pari materia with the provisions of Section 7. An intentional contravention of an order made under Section 3 of EC. Act has to be established. Mens rea or bona fide of a dealer is a necessary element of the proceedings under Section 6A of EC. Act. The preponderance of judicial opinion is that mens rea is a necessary ingredient in the proceedings for enforcing the penal provision incorporated in Section 6A of E.C. Act which empowers the Collector to order confiscation....
The Madhya Pradesh High Court also took the same view in the case of Khemraj Jugraj v. State of Madhya Pradesh 1981 Cri LJ 1479.
8. In view of the plethora of decisions, referred to supra, it must be held that mens rea is an essential ingredient to attract the provisions of Section 6A of the Essential Commodities Act. The submission of Mr. Patra, the learned Additional Government Advocate, appearing for the State, that Section 10C of the Essential Commodities Act presumes mens rea is not of much significance. No doubt, Section 10C raises a presumption that culpable mental state exists, but it is a rebuttable presumption and it will be open for the accused to prove that he had no such mental state with respect to the act charged. In our opinion, Section 10C itself indicates that mens rea is a necessary element to attract the provisions of the Act, but by virtue of legal fiction, a presumption arises which can be rebutted by an accused. Admittedly, neither the Collector while passing the original order, nor the State Government while disposing of the appeal has considered the question of presence or absence of mens rea of the petitioner and whether in the facts and circumstances of the case, petitioner has been able to rebut the presumption arising out of Section 10C of the Act. On the other hand, the facts of the case reveal that the petitioner has been submitting returns as an "importer" on a bona fide belief that the provision relating to "importer" in the State Order still continues. Besides, Annexure-13 is a letter from the Government of Orissa, Food and Civil Supplies Department, addressed to all Collectors indicating the guidelines to be observed by the implementing agencies in respect of the essential commodities. In the guidelines it has been clearly stated that the principles laid down by the Supreme Court that mens rea is an essential ingredient for an offence, while interpreting section 7(1) of the Essential Commodities Act would also apply to confiscation of essential commodities covered by Section 6A of the said Act. Admittedly, the Collector while passing the original order of confiscation as well as the State Government while disposing of the appeal has not considered this aspect of the case and without a finding on this aspect, the impugned order of confiscation cannot be sustained. We would accordingly quash the order of confiscation as per Annexure-8 as well as the appellate order, annexed as Annexure-10 and remit the matter to the Collector (opposite party 1) for re-consideration and re-disposal bearing in mind the observations made in this judgment and the law relating to the mens rea as discussed earlier, after giving an opportunity of hearing to the petitioners.
9. In the net result, therefore, a writ of certiorari be issued quashing Annexures-8 and 10 and the confiscation proceeding is remitted to the Collector for re-disposal in accordance with law. This writ application is allowed, but in the circumstances, without any order as to costs.
V. Gopalaswamy, J.
10. I agree.