Andhra HC (Pre-Telangana)
K. Madhusudhan vs District Magistrate And Collector, ... on 29 October, 1986
Author: K. Jayachandra Reddy
Bench: K. Jayachandra Reddy
JUDGMENT Jayachandra Reddy, J.
1. This is an application seeking a writ of Habeas Corpus filed on behalf of the detenu Kotrike Padmanabhaiah Setty of Gooty. The detenu is the Managing Partner of Sri Srinivasa Oil Trading Company, Gooty, Ananthapur district, which is a wholesale dealer in ground-nut oil and holds valid licence issued under the A.P. Scheduled Commodities Order, 1982. The trading company is the manufacturer and whole-saler in groundnut oil. The Inspector, Vigilance Cell, Civil Supplies Department, Mahaboobnagar, on some information, checked the vehicle passing through Balgera Border Civil Supplies Checkpost situate on Kurnool-Raichur road on the intervening night of 29/30-6-1986. On 30-6-1986 at 6.10 a.m. they intercepted lorry No. AAA 3377 carrying 50 barrels of ground-nut oil with a way-bill dated 28-6-1986 which showed that the 50 barrels of groundnut oil were loaded from the firm of A. Pandurangam Chetty, Madras for Nagpur with a covering letter containing the stamps and seals of Commercial Tax Department check posts of Tada in Nellore District, Nagari and Renigunta of Chittoor District and Agricultural Market Committee check posts of Gooty in Ananthapur District an Alampur in Mahaboobnagar district. On enquiry M. Jaleel driver of the lorry AAA 3377, Bojji cleaner of lorry AAA 3377 and Nittoor Rahasekhar clerk of M/s. Srinivasa Oil Trading Company, Gooty revealed that the 50 barrels of groundnut oil were loaded at Srinivasa Oil Trading Company, Gooty on 29-6-1986 evening and that the fake way-bill and the covering letter containing the stamps of check posts mentioned above were handed over to Nittoor Rajasekhar by the detenu on 29-6 1986 and they left the oil mill along with the lorry AAA 3377 with 50 barrels of groundnut oil loaded at the mill and these three persons also state that they did not touch Gooty check post while leaving Gooty. From the cabin of the lorry a bill dated 28-6-1986 with the way-bill No. 34 dated 28-6-1986 of M/s. Pushpanjali Trading Corporation, Hyderabad was found, according to which, coal was loaded in the lorry AAA 3377 on 28-6-1986 at Hyderabad and in the return journey the 50 barrels of groundnut oil were loaded from the factory of the detenu. The case was investigated and accounts were also scrutinised and the material was placed before the Detaining Authority, viz. the Government of Andhra Pradesh and exercising powers under Section 3(2)(a) read with Section 3(1) of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act VII of 1980 (hereinafter referred to as the Act), the Government passed the order of detention on 28-8-1986 and the grounds were also served on the same day. Subsequently the Advisory Board confirmed the detention and the representation made by the detenu was rejected. Questioning the said detention order, the present writ petition is filed.
2. In the detention order it is mentioned that they are being satisfied that to prevent the detenu from further acting in any manner prejudicial to the maintenance of supplies of commodities essential to the country, it is necessary to make an order that the detenu should be detained. In the body of the letter it is mentioned that the detenu indulged in clandestine business in edible oil by transporting groundnut oil on the strength of fake documents in a speculative manner to other States contravening the Conditions 3(1) and 7(1) of the licence issued under Clause 3 of the A.P. Scheduled Commodities Dealers (Licencing and Distribution) Order, 1982 read with Section 7 of Essential Commodities Act, 1955. In the grounds the details which are already mentioned are incorporated. It is mentioned that the statements of M. Jaleel and Nittoor Rajasekhar revealed that the oil was being transported to Nagpur under a fake way bill. It is also mentioned in the grounds that the oil was transported from A. Pandurangam Chetty as mentioned in the way bill. The operative portion of the grounds reads thus :
"In the light of the evidence collected during investigation of Cr. No. 31/VC/MBNR/86, it is clear that you have not maintained true and correct accounts of your business in violation of Conditions 3(1) and 7(1) of the licence and indulged in clandestine business in edible oils by transporting groundnut oil on the strength of fake documents in a speculative manner which is prejudicial to the maintenance and easy availability of supplies of commodities essential to the community namely groundnut oil."
3. The learned counsel for the Petitioner submits that there is no material to show that the accounts were not maintained correctly and that even otherwise there is no prohibition of transporting groundnut oil nor there is any Control Order fixing the price of the groundnut oil and therefore the charge that thee detenu indulged in clandestine business in a speculative manner is unfounded and therefore the said ground is irrelevant and non-existing and if even one ground is to be struck-down, the whole order becomes illegal.
4. As per clause (3) of the Andhra Pradesh Scheduled Commodities (Licensing and Distribution) Order, 1982 no person shall carry on business as a dealer except under and in accordance with the terms and conditions of a licence issued in this behalf by the licensing authority in respect of the Scheduled Commodities and Scheduled Commodities are those commodities mentioned in the Schedule and they are (1) Edible oil seeds and edible oils, (2) Foodgrains and (3) Sugar. With regard to Foodgrains and sugar there are other control orders restraining movement as well as fixing the price. So far the edible oil seeds and edible oils are concerned, there is no other Control Order. So far this Control order is concerned, the only restriction is on possession of the Scheduled Commodities including that of edible oil seeds and edible oils. Clause 11(iv) provides the restriction on possession of this oil-seeds. As already mentioned the dealer can carry on business under a licence and in accordance with the terms and conditions mentioned therein. We have seen that it is mentioned in the grounds that the detenu acted in violation of conditions 3(1) and 7(1) of the licence. Condition No. 3 (1) of the Andhra Pradesh Scheduled Commodities Dealers (Licensing and Distribution) Order, 1982 lays down that the licensee shall, except when specifically exempted by the State Government or by the licensing authority in this behalf, maintain a register of daily accounts for each mentioned in condition, I, showing correctly the opening stock on each day, the quantities received on each day showing the place from where and the source from which received, the quantities delivered or otherwise removed on each day showing the places of destination and the closing stock on each day. These particulars have to be entered in the register. Condition no. 7(1) of the A.P. Scheduled Commodities Dealers (Licensing and Distribution) Order, 1982 lays down that the licensee shall not enter into any transaction involving purchase, sale or storage for sale all or any of the scheduled commodities in a speculative manner prejudicial to the maintenance and easy available of supplies of scheduled commodities in the market. According to the detaining authority the detenu violated these two conditions. This inference is arrived at on the above stated facts viz. when the lorry was intercepted it was found that 50 barrels of groundnut oil were being transported under fake way-bills that it was being transported from a dealer in Madras whereas the oil was in fact being transported from the factory of the detenu. In the grounds it is not enumerated as to how the detenu has not maintained true and correct account. However inferencially the authority concluded that the 50 barrels of groundnut oil were shown to have been transported from a dealer in Madras whereas in fact they were transported from the premises of the detenu and to that extent the accounts are not correctly maintained. To that extent perhaps it can be said that there is violation of Condition No. 3(1) of the licence.
5. The next important aspect is : Whether there was violation of Condition No. 7(1) of the licence ? As already mentioned except some restrictions and Condition No. 11 regarding possession of the oil-seeds, there is no other Order controlling the movement or the supply or the price of the groundnut oil. That being so we are unable to see as to how it can be inferred in a case a transport of groundnut oil that the concerned person entered into any transaction in a speculative manner prejudicial to the maintenance and easy availability of supplies of commodities essential to the community. In the counter-affidavit there is a reference to some Memos, issued by the government i.e., Memo. No. 52220.CS.IV/84 dated 21-6-1985 and extended in memo. No. 51012/CS.IV-2/85-3, dated 6-12-1985 wherein certain directions were issued regarding the movement of groundnut and groundnut oil. These directions were issued under clause 12 of the A.P. Scheduled Commodities Order, 1982. It is submitted by the learned counsel for the petitioner that these Memos were struck down by this court in W.P. No. 11050 of 85 and batch dated 18-10-1986 and therefore it may be proceeded that on the footing that there were no restrictions on the movement of groundnut oil. It may not be necessary to go into this question in detail, inasmuch as there is no reference to these Memos at all in the grounds. The learned Advocate-General however submits that making false entries is only to facilitate to indulge in clandestine business by transporting groundnut oil on the strength of fake-way-bill and therefore the inference is they acted in a speculative manner which is prejudicial to the maintenance of supplies of commodities essential to the community. Having given our earnest consideration we are unable to agree with the learned Advocate-General. If it is found that there is violation of condition 3, the licence can be cancelled. We are unable to see as to how it can be said that one entered into a transaction and carry on speculative business when there is neither restriction on transport nor there is any control Order fixing price. It is admitted that a person can transport groundnut seeds or groundnut oil to any place in India and that there is also no price fixed for the same. When that is the situation, it cannot be said that the detenu has indulged in speculative business.
6. So far Condition No. 3 of the licence is concerned, it only lays down that the licensee should enter certain particulars in the registers including the quantity delivered or otherwise removed on each day showing the places of destination. May be that there is a violation of this condition. But by transporting the groundnut oil when there are no restrictions what-so-ever it cannot be held that he entered into any speculative business. The only restriction laid down in the control Order is regarding possession. There are no other restrictions regarding groundnut oil or groundnut seeds. Therefore the ground that there was a violation of clause No. 7 of the licence is non-existing.
7. The learned Advocate-General relied on a judgment of the Supreme Court (Allahabad High Court ?) reported in Madan Gopal v. State of U.P., 1984 Cri LJ 844. That was a case where a person was ordered to be detained because he was found transporting Kerosene oil without a licence. A perusal of that judgment shows that there was a Control Order restraining the sale or storing kerosene without licence. The Judges observed that the kerosene was being carried by the accused with a view to dispose of the same subsequently and such disposal of kerosene oil would certainly have directly or indirectly intended to defeat the provisions contained in the Essential Commodities Act, and therefore the detention was justified. It can be seen that the case is distinguishable. The detenu was carrying on that what was prohibited under the Control Order. Therefore there was a clear violation which act would be prejudicial to maintenance of supplies of commodities essential to the community. Jagdish Prasad v. State of Bihar, is again a case where the detenu was found illicitly transporting foodgrains in secrecy contrary to the conditions of licence. Reliance is also placed on the decision reported in Kamla Prasad v. Dist. Magistrate, . That was a case where the detenu was found hoarding certain essential commodities like match boxes and soaps etc. Relying on this decision the learned Advocate- General submits that there is no control order restricting the hoarding, but yet their Lordships of the Supreme Court held that such a hoarding by the dealer was prejudicial to the maintenance of supplies and services essential to the community. But in paragraph No. 6 of the judgment it is clearly indicated that the petitioner was bound under clause 4 of the Order to display in his business premises the stock of match boxes and soaps held by him, but he failed to display the stock of match boxes and soaps in his business premises. The only possible conclusion was that the petitioner was hoarding the stock for the purpose of sale in black market and thus make undue profit. It can therefore be seen that there was a clear violation of conditions of Control Order from which an inference can be drawn that the petitioner was hoarding those articles with a view to sell for higher prices. Reliance is also placed on the decision reported in Dinanath v. Collector & D.M., Keonjhar, . That was a case where a manager of fleet owner company was detained for purchasing certain large number of tyres for his own use but was found selling in black market. Relying on the facts and circumstances of the case, the learned Advocate-General submits that there is no control Order regarding sale of tyres and yet the detention was upheld. In the course of the judgment it is observed :
"If the petitioner's case was that all the 149 tyres had been actually used in this period on the ten trucks, as he would like to make out, he was in the best position to prove this fact. He could not take shelter behind the plea that the detaining authorities did not ask the manufacturers to give the numbers of tyres sold by them to the United Commercial Company when the petitioner, called upon to explain what had happened to the 149 tyres could not himself give their numbers or show that he had them all fitted on to his trucks, or that he had to discard so many tyres in this period. No stock of discarded tyres was evidently shown by the petitioner to the Magistrate who came to his premises to inquire into actual facts. However, such questions of sufficiency of evidence are not for this Court at all to determine. We mention them only as an attempt was made to raise them before us."
Relying on this passage the learned Advocate-General submits that in the instant case an inference has to be drawn that the transport of the groundnut oil by the detenu after violation of Condition No. 3 of the Licence is only with a view to carry on speculative business and to arrive at such an inference it is not necessary that there should be any specific restriction on transport or regarding the price. We see no force in this submission. In the case before the Supreme Court there was a Control Order viz. The Orissa Automobile Tyres and Tubes Control Order, 1973, and it prescribed that no person shall obtain, attempt to obtain, or store for sale or distribution or offer for sale or sell automobile tyres and tubes except under and in accordance with the terms and conditions of a licence issued in this behalf by the Licencing Authority. The detenu in that case having purchased the tyres for his own use, was found selling them in black-market contrary to the provisions of Control Order. Therefore there is a clear violation which was prejudicial to the maintenance of supplies of commodities essential to the community and therefore the detention was justified. Therefore it can be seen that the facts are distinguishable. In the instant case in the absence of any such restrictions regarding transport or any order fixing price, it cannot be held that the detenu entered into any transaction indulging in clandestine business by transporting groundnut oil in a speculative manner. Therefore the ground that there is a violation of Condition No. 7(1) of the licence is non-existing. Consequently the order of detention is liable to be quashed.
8. In the result the writ petition is allowed and the detention order is quashed. The detenu shall be released forthwith. No costs.
Petition allowed.