Bombay High Court
Sohrab Abdul Khalique Shaikh vs Controller Of Rationing And Director Of ... on 6 June, 2022
Author: N.J.Jamadar
Bench: N.J.Jamadar
Digitally signed by
SWAROOP SWAROOP
SHARAD
12 REVN 405 OF 2016.doc
SHARAD PHADKE
Date: 2022.06.06
PHADKE 17:34:24 +0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL REVISION APPLICATION NO.405 OF 2016
Sohrab Abdul Khalique Shaikh
Aged 62 years, Indian Inhabitant,
Carrying on business in the name
and style of M/s. Azad Lubrico,
situate at Shastri Nagar, Chunabhatti,
Kalina, Santacruz (East),
Mumbai - 400 029 ... Applicant
versus
1. Controlling of Rationing and
Directorate of Civil Supplies,
Having its office at Royal Insurance
Building, 5th Floor, 14, G.A. Tata
Marg, Churchgate, Mumbai - 400 020
2. The State of Maharashtra
(at the instance of C.B.Control,
CID, Mumbai ) ... Respondents
WITH
CRIMINAL REVISION APPLICATION NO.521 OF 2018
The State of Maharashtra,
(through the Controller of Rationing
& Director of Civil Supply, Mumbai - 20. ... Applicant
versus
Sohrab Abdul Khalique Shaikh
Adult, Carrying on Business,
in the Name of M/s. Azad Lubrico,
situate at Chunabhatti, Shastri
Nagar, Kalina, Santacruz (E), Mumbai. ... Respondent
Mr. H.S.Anand, for Applicant in REVN 405 of 2016 and for
Respondent in REVN 521 of 2018.
Ms. Anamika Malhotra, APP, for State.
SSP 1/14
12 REVN 405 OF 2016.doc
CORAM: N.J.JAMADAR, J.
RESERVED ON : 22th APRIL, 2022
PRONOUNCED ON : 6th JUNE, 2022
JUDGMENT :
1. Since the legality, propriety and correctness of the judgment and order dated 26 th April, 2016 passed by the learned Additional Sessions Judge, Greater Mumbai, in Criminal Appeal No.138 of 2013, is assailed in both the Revision Applications, they are taken up for determination by this common order.
2. Mr. Sohrab Abdul Khalique Shaikh deals in the business of purchasing of reclain oil and other oils under the name and style of M/s. Azad Lubrico (hereinafter referred to as 'the Applicant'). The Applicant claims to have possessed requisite and valid license for the said business. On 27 th January, 2011, the Assistant Commissioner of Police, Crime Branch, CID (Sales Tax Division) conducted a raid at the premises of the Applicant situated at Kalina, Santacruz (E), Mumbai and seized the goods, including 52000 liters of black oil and 8000 kg. grease. The Applicant came to be arraigned in C.R.No.37 of 2011 registered with Vakola Police Station for the offences punishable under Sections 3, 7(2) and 8(2) of the Essential Commodities Act, 1955 read with Lubricating Oil and SSP 2/14 12 REVN 405 OF 2016.doc Greases (Processing, Supply and Distribution Regulation) Order, 1987, Sections 3 and 4 of the Maharashtra Solvent Raffinate and Slop (Acquisition, Sale, Storage and Prevention of use in Automobiles) Order, 2000 and Section 420 read with Section 34 of the Indian Penal Code, 1860.
3. The Respondent No.1 - Controller of Rationing and Director of Civil Supplies issued Show Cause Notices dated 2 nd May, 2012 and 16th May, 2012 to the Applicant under Section 6-B of the Essential Commodities Act, 1955. Eventually, on 5 th February, 2013 the Respondent No.1 passed an order directing confiscation of 52000 black oil and 8000 kgs grease, alleged to be adulterated, the sale thereof and credit of the sale proceeds with the State.
4. Being aggrieved, the Applicant preferred an Appeal being Criminal Appeal No.138 of 2013. By the Impugned judgment and order dated 26th April, 2016, the learned Additional Sessions Judge was persuaded to partly allow the Appeal, inter alia, holding that the Applicant had a permit to possess/store only 10000 liters of oil and 2000 kgs of grease and yet the Applicant was found in possession of huge quantity of black oil and grease, far in excess of the permit. Thus, the learned Additional Sessions Judge set aside the order passed by the Competent Authority to the extent of the permit i.e. SSP 3/14 12 REVN 405 OF 2016.doc 10000 liters of lubricating oil and 2000 kgs of grease and affirmed the order to the extent of the excess quantity i.e. 42000 black oil and 6000 kgs of grease. Being further aggrieved, the Applicant is in revision.
5. The principal ground on which the impugned order is assailed is that there is no contravention of any order passed under Section 3 of the Essential Commodities Act, 1955, which is a jurisdictional condition for confiscation of the essential commodity by the Competent Authority by invoking the power under Section 6- A of the Essential Commodities Act, 1955. In fact, the black oil is not an 'essential commodity' within the meaning of Section 2-A of the said Act.
6. The learned Sessions Judge, according to the Applicant, misdirected herself in upholding the order of confiscation on the premise that the storage was in excess of the permit granted by the Municipal Corporation under Section 394 of the Mumbai Municipal Corporation Act, 1888, which in any event would not furnish justification for confiscation under the Essential Commodities Act, 1955.
7. Being aggrieved by the impugned order, the State of Maharashtra has also filed Criminal Revision Application No.521 of SSP 4/14 12 REVN 405 OF 2016.doc 2018, as the learned Additional Sessions Judge recorded a finding that the Applicant was found in possession of the commodity without permit and license. Having recorded such a finding, according to the State, it was not open to the learned Additional Sessions Judge to interfere with the order of confiscation passed by the Competent Authority to the extent the Applicant allegedly had a permit.
8. I have heard Mr. Anand, learned Advocate for the Applicant and Ms. Malhotra, learned APP for the State at some length. With the assistance of the learned Counsel for the parties, I have perused the material on record, including the Orders and Notifications issued under the Essential Commodities Act, 1955.
9. Mr. Anand, learned Advocate for the Applicant strenuously submitted that the learned Additional Sessions Judge has not approached the controversy from a correct perspective. The learned Additional Sessions Judge in exercise of the appellate jurisdiction under the Essential Commodities Act, 1955 was enjoined to test the legality and correctness of the confiscation order passed by the Respondent No.1. In the process, it was necessary to examine whether there was a breach or violation of any order passed under Section 3 of the Essential Commodities Act, 1955 to SSP 5/14 12 REVN 405 OF 2016.doc warrant the exercise of confiscatory power under Section 6-A of the Act. The learned Additional Sessions Judge, according to Mr. Anand, did not delve into the question as to whether the black oil, was at all an essential commodity. Instead the learned Additional Sessions Judge accorded undue importance to the fact that the permit issued by the Municipal Corporation under Section 394 of the Mumbai Municipal Corporation Act, 1888 for storage of lubricating oil and greases, was much less than the commodities which were found in possession of the Applicant. The said infraction, even if taken at par, would not justify an action of confiscation under the Essential Commodities Act, 1955.
10. To lend support to the aforesaid submissions, Mr. Anand took the Court through the Schedule appended to the Essential Commodities Act, 1955, which enumerates the essential commodities, Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987 and the Government Resolution dated 13th September, 2017 issued by the Government of Maharashtra, to constitute the vigilance squads to inspect the petroleum products. Laying emphasis on the fact that the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987, does not find mention in the enactments SSP 6/14 12 REVN 405 OF 2016.doc and orders enumerated in the said Government Resolution, it was submitted that the black oil is not an essential commodity.
11. Mr. Anand placed reliance on a judgment in the case of Lubricating Oil Dealers' Association and Anr. V/s. Union of India and Ors.1 to bolster up the submission that the lubricating oil is not a petroleum product. Thus, the provisions of the Essential Commodities Act, 1955 are not at all attracted, submitted Mr. Anand.
12. In contrast to this, the learned APP invited the attention of the Court to the copies of the licenses placed on record by the Appellant himself. The license was issued to the Applicant to carry on the business of processors only (for the activity of sale) under the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987. Ms. Malhotra laid stress on the fact that the license was issued for trading activity (without storage). Since the Applicant was found in possession of huge quantity of the lubricating oil and grease, much beyond the permit granted by the Municipal Corporation, there was a clear breach of the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987, submitted Ms. Malhotra. Once it was found that the 1 AIR 2017 Cal. 201 SSP 7/14 12 REVN 405 OF 2016.doc storage of the essential commodity was in breach of the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987, the learned Additional Sessions Judge could not have interfered with the order of confiscation, even to the extent of the permit, urged Ms. Malhotra.
13. In order to appreciate the aforesaid rival submissions in the correct perspective, it is imperative to note that as to what weighed with the learned Additional Sessions Judge in interfering with the order of confiscation passed by the Competent Authority. The observations in paragraph 13 spell out the reasons which weighed with the learned Additional Sessions Judge. They read as under :
"13. Though certain defence has been taken by the appellant in his written notes of submissions about applicability of orders and the power of Rationing Officer to seize the property. However, there is nothing on record to show that Rationing Officer has no power to seize property which is without permit. The action taken on the part of the respondent is as per law and it is apparent that the storage made in excess is illegal and obviously such unauthorized stock of oils and greases without license is liable to be seized, since the offence is registered for breach of license and provisions of Essential Commodities Act, the seizure of property was legal and proper. The appellant is having a permit only to possess 10,000 litres of oil and 2000 kilogram of greases. He is entitled only to have possession of that SSP 8/14 12 REVN 405 OF 2016.doc much quantity for which appellant has been granted permit. His possession for excessive property is without license and thus, it is violative of the applicable laws. Appellant is not entitled for return of unauthorized stock for the business but he is entitled of having authorized stock to the extent of quantity as referred in the license. In view of the matter action taken and the order passed dated 5/02/2013 passed by the respondent No.1 in proceeding under Essential Commodities Act, bearing No.fuf'k@vaey@6&v@iz]dz]28@2012@tk]112 confiscating 52000 litres of black oil and 8000 K.G. grease, and directing to sale the property and to deposit its amount to the Government is liable to be partly confirmed excluding the property which is permitted in the license i.e. 10,000 litres of lubricating oils and 200 kilogram of greases, which were already return as per order dated 2/7/2011. In the result, point No.1 is answered partly in affirmative and I proceed to pass the following order."
14. Evidently, the learned Additional Sessions Judge has proceeded primarily on the premise that the storage of the lubricating oil and grease, was in excess of the permit, and thus constituted violation of the provisions contained in the Essential Commodities Act, 1955 and the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987. It seems, the learned Additional Sessions Judge, did not appreciate the true nature of the confiscation order.
SSP 9/14
12 REVN 405 OF 2016.doc
15. The Competent Authority was of the view that the Applicant had stored the lubricating oil and grease, of inferior quality, with an animus to sell the same, as of superior quality, by adulterating the same. Various adulterants were also alleged to have been found and seized. The Competent Authority further found that the permit granted by the Municipal Corporation to store the lubricants and greases, was in respect of the different premises and not the premises where the commodity was allegedly found and seized during the raid. Thus, the Competent Authority ordered confiscation and sale of the seized commodities.
16. In the aforesaid backdrop, the Appellate authority ought to have considered whether the commodity seized was an essential commodity susceptible for confiscation under Section 6-A of the Act in the light of the alleged contravention of order under Section 3 of the Essential Commodities Act, 1955.
17. It is true that the question as to whether the lubricating oil or for that matter the black oil allegedly seized from the possession of the Applicant, falls within the ambit of Entry (5) - 'petroleum and petroleum products' under the Schedule appended to the Essential Commodities Act, 1955, was not at all addressed. However, the Applicant cannot draw much mileage from the said SSP 10/14 12 REVN 405 OF 2016.doc fact for from the own showing of the Appellant that the license was granted to the Appellant to carry on the business of processors only, (for the activity of sale), subject to the provisions of the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987. Indeed the material on record does not equip the court to ascertain as to whether there was any limit on the storage of the quantity of lubricating oil and greases under the said license or the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987. Yet the said aspect does not appear to be of decisive significance as the license itself clarified that it was granted for trading activity without storage.
18. In that backdrop, the question that wrenches to the fore is whether the storage of the lubricating oil and greases would constitute breach of the license and/or the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987.
19. Mr. Anand was justified in canvassing a submission that the mere fact that while granting permission under Section 394 of the Mumbai Municipal Corporation Act, 1888, the Corporation has prescribed a limit of 10000 liters and 2000 kgs for storage of lubricating oil and greases, by itself, may not justify an action under SSP 11/14 12 REVN 405 OF 2016.doc Section 6-A of the Act. Breach of the conditions thereof, may entail penal consequences under Section 471 of the Mumbai Municipal Corporation Act, 1888.
20. The learned Additional Sessions Judge, it seems, was swayed by the fact that the storage of the commodity was in excess of the permit under Section 394 of the MMC Act, and missed the crux of the matter, which would justify an order of confiscation under Section 6-A of the Act.
21. There is another facet which is of material significance. The license was granted to the Applicant subject to the provisions of the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987. Clause 4 of the said Order reads as under :
"4. Prohibition of business of lubricating oil or grease - No person shall carry on the business of manufacturing, blending, packaging, re-refining, selling or transporting for sale any lubricating oil or grease which has been adulterated."
22. As indicated above, the Competent Authority recorded, inter alia, a finding that the Applicant was selling adulterated lubricating oil and greases as the standard quality lubricating oil and greases. If this finding of the Competent Authority is found justifiable, then inference with the order of confiscation even to the SSP 12/14 12 REVN 405 OF 2016.doc extent of 10000 liters of lubricating oil and 2000 kgs. Of grease may become unsustainable.
23. The issues as indicated above, however, have not been adverted to by the Appellate Authority. These issues are, in a sense, rooted in facts. I am, therefore, persuaded to remit the matter back to the Appellate authority to decide the legality, propriety and correctness of the confiscation order passed by the Competent Authority in the light of the challenges raised by the Applicant and the observations hereinabove. It is further made clear that the Appellate Authority shall decide the Appeal on its own merits without being influenced by the observations made hereinabove, which were primarily for the purpose of highlighting the aspects that were not adequately considered by the Appellate Authority. Hence, the order :
ORDER
(i) The Revision Application Nos.405 of 2016 and 521 of 2018 stand partly allowed.
(ii) The impugned Judgment and Order dated 26th April, 2016 passed by the learned Additional Sessions Judge stands quashed and set aside.
(iii) The Criminal Appeal No.138 of 2013 stands remitted back to SSP 13/14 12 REVN 405 OF 2016.doc the Court of Session for decision afresh.
(iv) Interim Orders shall continue to operate till decision in Criminal Appeal No.138 of 2013.
(v) The Appellate Authority shall decide the Appeal after providing an effective opportunity of hearing to the Applicant and the State, as expeditiously as possible and preferably within a period of six months from the date of communication of this order.
(vi) All contentions of all the parties are kept open for consideration by the Appellate Authority, including the question as to whether the provisions of the Essential Commodities Act, 1955 are attracted in the case at hand.
(vii) Revisions Applications are accordingly disposed.
(viii) All concerned to act on an authenticated copy of this order.
( N.J.JAMADAR, J. ) SSP 14/14