Gauhati High Court
Chittaranjan Baruah vs State Of Assam And Ors. on 21 September, 2006
Equivalent citations: (2007)1GLR773, AIR 2007 (NOC) 299 (GAU.)
Author: I.A. Ansari
Bench: I.A. Ansari
JUDGMENT I.A. Ansari, J.
1. The petitioner carries on business of Petrol and Petroleum products under the name and style of M/s. Baruah Service Station, Ambari Guwahati, as its sole proprietor, having dealership of M/s. Indian Oil Corporation Ltd. (Marketing Division) in respect of its depot at Ambari. On 7.6.1997, Sri Troilukya Nath Hazarika, an Inspector of Food and Civil Supplier accompanied by one Inspector and two Sub-Inspectors of the said Department, visited the said Petrol depot and seized 15,155 litres of Motor Spirit (MS) oil lying in underground tanks, and 660 litres of Motor Spirit kept in three number of drums at the said depot, a Stock Register and one cash memo book, the seizure having been done on the allegation that the quantity of M.S. Oil actually found in the possession of the petitioner, at his said depot, was more than what his records, such as, Stock Register, Cash Memo book, etc., accounted for. Having seized the M.S. Oil, Stock Register and Cash Memo, the said Inspector gave the zimma thereof to the petitioner. Following the seizure, which had so taken place, the petitioner was served with an order, dated 12.6.1997, issued by the respondent No. 2, namely, Collector, Kamrup, Guwahati, directing the petitioner to show cause, within seven days, why action shall nut be taken against him, in accordance with law, for maintaining false and fabricated account in violation of condition No. 3(a) of the licence issued to the petitioner under the Assam Trade Articles (Licensing and Control) Order, 1982 (in short, 'Control Order, 1982'), read with Clause 10 of the Control Order, 1982, and also for violation of Clause 5 of the Motor Spirit and High Speed Diesel (Prevention of Malpractices in Supply and Distribution) Order, 1990. The petitioner submitted, on 17.9.1997, his objection to the said notice of show cause denying and disputing the allegations made against him that he had indulged in malpractice or had maintained any false and/or fabricated account and/or that he was found in possession of M.S. Oil without having been able to account for. Having received the petitioner's reply to the said show cause notice, an order was passed by the Collector, on 1.12.1997, directing sale of the seized M.S. Oil at the Oil company's retail price and deposit of the sale proceeds thereof into the Government Treasury until final disposal of the case. The order, so made, was claimed to have been passed under Section 6A(2)(i) of the Essential Commodities Act, 1955 (in short, 'the E.C. Act'). It is the direction given by the order, dated 1.12.1997, aforementioned, for sale of the M.S. Oil, which the petitioner has impugned, in the present revision, on the ground, inter alia, that the said order is beyond the powers of the Collector, the same is unfair and unjust.
2. The respondents have resisted the writ petition by filing affidavit-in-opposition, wherein it has been contended, inter alia, that the seizure of the said stock of M.S. Oil was in accordance with law, for the petitioner, as reflected from the said notice to show cause and also the impugned order, could not account for the said stock of M.S. Oil and had contravened the provisions of law. It is the further case of the respondents that having felt satisfied that the petitioner had violated the provisions of Clause 5 of the Motor Spirit and High Speed Diesel (Prevention of Malpractices in Supply and Distribution) Order, 1990, as well as the condition No. 3(a) of the licence, issued to the petitioner, under the Assam Trade Articles (Licensing and Control) Order, 1982, necessary sanction for prosecution of the petitioner under Section 7 of the E.C. Act was accorded on 1.12.1997 and as there was scarcity of M.S. Oil and High Speed Diesel Oil, the order for sale, in the greater public interest, was made instead of letting the same lie idle.
3. I have heard Mr. S.S. Sharma, learned senior counsel, appearing on behalf of the petitioner, and Mr. A. Buragohain, learned Additional Advocate General, Assam. I have also heard Mr. J. M. Choudhury, learned senior counsel, and Mr. R. Dubey, learned Counsel, as amicus curiae.
4. Presenting the case on behalf of the petitioner, Mr. Sharma has submitted that the Control Order, 1982, is based on the Government of India's Notification No. GSR 800, dated 9.6.1978. This notification, submits Mr. Sharma, entitles the State government to make orders under Section 3 of the E.C. Act in respect of foodstuffs. This notification, contends Mr. Sharma, does not empower the State government to make any order under Section 3 of the E.C. Act in respect of petroleum and petroleum products. 1. the extent, therefore, contends Mr. Sharma, the Control Order, 1982, relates to petroleum and/or petroleum products, the same is beyond the competence of the State government, this apart, further submits Mr. Sharma, the petitioner has not been indulging in any malpractice, there was no variation in the stock of M.S. Oil maintained by the petitioner and, hence, the petitioner has not violated any of the provisions of the Control Order, 1982. It is further submitted by Mr. Sharma that Section 6A(2)(i) of the E.C. Act can be invoked in the case of only such essential commodities, which are subject to speedy and natural decay, in the case at hand, submits Mr. Sharma, since petroleum and petroleum products are not essential commodities subject to speedy and natural decay, the power, under Section 6A(2)(i), could not have been exercised in the present case. Mr. Sharma contends that when the petitioner had already submitted his reply to the said show cause notice, the impugned order, directing sale of the seized M.S. Oil, ought not have been passed without according the petitioner an opportunity of being heard.
5. Controverting the submissions made on behalf of the petitioner, the learned Additional Advocate General has pointed out that though, while issuing the Control Order, 1982, a reference was made in the Control Order, 1982, to the Government of India's Notification No. GSR 800, dated 9.6.1978 an amendment was subsequently made by publishing a corrigendum, in this regard, in the Assam Gazette, on 26.3.1993, clarifying that the Control Order, 1982, was not only made by virtue of the powers conferred on it, under the Government of India's Notification No. GSR 800, dated 9.6.1978 but also in exercise of the State Governments powers vested on it under the Notifications, bearing Nos. SO 681(E), dated 30.11.1974, and 682(E), dated 30.11.1974, issued by the Government of India, Ministry of Industries and Civil Supplies (Department of Civil Supplies).
6. Drawing attention of this court to the Notifications, bearing Nos. 681(E) and 682(E), dated 30.11.1974, aforementioned, the learned Additional Advocate General has pointed out that in terms of the orders made by the Government of India, the State government is entitled to make such orders, as it has made in the Control Order, 1982, not only in respect of foodstuffs, but also in respect of petroleum and petroleum products.
7. It is also submitted by the learned Additional Advocate General that the Collector was competent, under the law, to pass the impugned order for sale in the interest of the public and, in the facts and circumstances of the present case, the order, so made, cannot be said to be illegal, unfair, or improper.
8. While considering the present application, what needs to be noted is that the E.C. Act has been enacted for the control, production, supply and distribution of, and trade and commerce, in certain commodities, which are described as essential commodities. Section 2(a)(v) clarifies that essential commodities means, inter alia, foodstuff and Section 2(a)(viii) shows that petroleum products are also essential commodities. Thus, not only foodstuff, but also petroleum and petroleum products are essential commodities within the meaning of Section 2(v) and 2(viii) respectively. Section 3 empowers the Central Government to make order containing provisions for regulating or prohibiting the production, supply and distribution of essential commodities, Sub-section (2) of Section 3 lists a number of powers conferred on the Central Government in this regard. Section 5 of the E.C. Act provides that the Central Government may, by notified order, direct that the power to make orders or issue notifications, under Section 3, shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by (a) such officer or authority subordinate to the Central Government; or (b) such State Government or such officer or authority subordinate to a State Government, as may be specified in the direction.
9. A combined reading of Section 3 and Section 5 reveals that if the powers are delegated by the Central Government under Section 5 to a State Government for making orders under Section 3 in respect of an essential commodity, the State government would be empowered to make all such orders, which can be made by the Central government under Section 3. This, in turn, shows that a Notification, issued under Section 5, may or may not be a restricted one. If the notification, made under Section 5, does not put any restriction, the State Government would be entitled to exercise all such powers, which can be exercised by the Central Government under Section 3. If, however, the notifications, made under Section 5 makes the delegated power of the State Government exercisable subject to any condition(s), the State Government would be able to exercise powers subject to such conditions as may be imposed by the notifications made under Section 5.
10. In the case at hand, there is no dispute that GSR 800, dated 6.9.1978 empowers the State Governments to make all such orders as can be made by the Central Government in exercise or its powers under Clause (a), (b), (c), (d), (e), (f), (g), (h), (i), (ii) and (j) of Sub-section (2) of Section 3 in relation to foodstuffs. This shows that so far as foodstuffs are concerned, the State government has been given unqualified and unrestricted powers to make order in respect of all such matters, which fall under Sub-section (7) of Section 3. In contrast to GSR 800, dated 9.6.1978, S.O. 681(E), dated 30.11.1974, and S.O. No. 682 (E), dated 30.11.1974, have not given all the powers, which are available to the Central Government under Sub-section (2) of Section 3. This can be gathered from a careful reading of S.O. 681(E) and S.O. 682 (E). For a better application of this aspect of matter, the relevant portion of the Government of India's notifications aforementioned are quoted herein below:
S.C. 681(E) : In exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 (10 of 1955), the Central Government hereby directs:
(a) that the powers conferred on it by Sub-section (1) of Section 3 of the said Act to make orders to provide for the matters specified in Clauses (d), (e), (f), (g), (h), (i) (ii), and (j) of Sub-section (2) thereof shall, in relation to all essential commodities other than foodstuffs and fertilizers (whether inorganic, organic or mixed), be exercisable also by a State Government or in relation to a Union territory, by the Administrator thereof, subject to the following conditions, namely:
(i) that the delegation of powers under Clause (d) shall not extend to inter-State transport or distribution and the powers under that clause shall not be excluded so as to prejudicially affect such transport or distribution in pursuance of any order issued by the Central Government;
(ii) that all orders under Clause (f) shall require the prior concurrence of the Central Government;
(iii) that no order shall be issued in pursuance of the powers hereby delegated if it is inconsistent with any order issued by the Central Government under the said Act;
(iv) that in making an order relating to any of the matters specified in Clause (j), the State Government or, as the case may be, the administrator of a Union territory shall authorize only an officer of government;
(b) that the order of the Government of India in the Ministry of Commerce S.O. No. 1844 dated the 18th June, 1966 issued under Section 5 of the said Act shall stand rescinded.
S.O.682(E) : In exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 (10 of 1955), the Central Government hereby directs:
(a) that the powers conferred on it by Sub-section (i) of Section 3 of the said Act to make orders to provide for the matters specified in Clause (c) of Sub-section (2) thereof shall in relation to all essential commodities other than foodstuffs and fertilizers (whether inorganic, organic or mixed), be exercisable also by a State Government or, in relation to a Union territory, by the administrator thereof subject to the following conditions, namely:
(i) that where the price at which any essential commodity may be bought or sold is controlled by or under any other law for the time being in force, no order shall be made in pursuance of the powers hereby delegated;
(ii) that where the price is not as controlled, no Order shall be made in pursuance of the powers hereby delegated to respect of any essential commodity, (A) if the wholesale prices or retail prices or both of such commodity have been fixed by the manufacturers or producers thereof with the approval of Central Government, except on the basis of such prices;
(B) in any other case, except with the prior concurrence of the Central Government;
(iii) that no order shall be issued in pursuance of the powers hereby delegated if it is inconsistent with any order issued by the Central Government under the said Act.
(b) that the Order of the Government of India in the Ministry of Commerce, No. S.O. 2314, dated the 30th July, 1966 issued under Section 5 of the said Act shall stand rescinded.
11. From a careful reading of S.O. 681(E), it becomes clear that, the State government has not been given the power to make any order in respect of the subject-matters, which are governed by Clauses (a), (b), and (c) of Sub-section (2) of Section 3. What, however, important to note is that while Section 3(2)(a) provides for regulating, by licences, permits or otherwise, the production or manufacture of any essential commodity, Clause 3(2)(h)(ii) provides for the grant or issue of licences, permits or other documents, the charging of fees therefor, the deposit of such sum, if any, as may be specified in the order, as security for the due performance of the conditions of any such licence, permit or other document, the forfeiture of the sum so deposited or any part thereof for contravention of any such conditions, find the adjudication of such forfeiture by such authority as may be specified in the order. This clearly shows that while the Central Government as well as the State Government can make orders in respect of petroleum and petroleum products, it is the Central Government, which has the exclusive power to make orders for regulating, by licences, permits, or otherwise, the production or manufacture of petroleum or petroleum products and so far as the State Governments are concerned, they can make order as regards any other licence, which may be granted in conformity with the provisions of Sub-clause (ii) of Clause (h) of Sub-section (2) of Section 3. Viewed, thus, it is clear that as long as the Control Order of 1982, in respect of petroleum and petroleum products, falls within Clauses (d) to (j) of Sub-section (2) of Section 3, the order cannot be said to be ultra vires, for, the State Government does not, in such a case, exceed the powers delegated to it by the Central Government.
12. In view of the fact that the petitioner has not been able to show that the Control Order of 1982, does not fall, in respect of petroleum products, within Clauses (d) to (h) of Sub-section (2) of Section 3, this court has no option, but to hold, and I do hold, that the provisions of the Control Order of 1982 apply not only to foodstuffs, but also to petroleum and petroleum products.
13. Bearing in mind what has been indicated above, when I proceed further, what attracts the eyes is that Section 6A, which provides for confiscation of essential commodities if there has been contravention of the provisions of any order, made by the State government, in exercise of its powers delegated by the Central Government under Section 5. Section 6B makes it mandatory for the Collector to give not only a notice, in writing, to the person against whom the order of confiscation is sought to be made, but also to inform such a person of the grounds on which it is proposed to confiscate the essential commodity. That apart, Section 6B further requires that such a person must also be given an opportunity of being heard in the matter. Thus, an order of confiscation under Section 6B cannot be made without giving an opportunity of show cause against the ground on which the order of confiscation is proposed to be made and, without giving such a person having an opportunity of being heard. The question, now, is as to whether the Collector has the power to direct sale of a seized essential commodity pending such confiscation proceeding and, if so, is it necessary that such an order for sale can be made only in respect of those essential commodities, which are subject to speedy and natural decay ? In order to clarify what the law, in this regard, is, Sub-section (2) of Section 6A is quoted hereunder:
6(2). Where the Collector, on receiving a report of seizure or on inspection of any essential commodity under Sub-section (1), is of the opinion that the essential commodity is subject to speedy and natural decay or it is otherwise expedient in the public interest so to do, he may
(i) order the same to be sold at the controlled price, if any, fixed for essential commodity under this Act or under any other law for the time being in force; or
(ii) where no such price is fixed, order the same to be sold by public auction.
14. From a microscopic reading of the provisions of Sub-section (2) of Section 6A, what clearly transpires is that the directions for sale can be given not only in respect of those essential commodities, which are subject to speedy and natural decay, but also in respect of other essential commodities except for the fact that while in respect of essential commodities, which are subject to speedy and natural decay, the mere fact that the essential commodity is subject to speedy and natural decay empowers the Collector to direct sale of the seized essential commodity whereas an order for sale in respect of essential commodities, which are not subject to speedy and natural decay, cannot be made except when it is found to be in public interest. To put it differently, in respect of an essential commodity, such as, petroleum and petroleum products, the order for sale cannot be made unless such an order is in public interest.
15. Bearing in mind what have been indicated above, when I turn to the impugned order, dated 1.12.1997 what attracts the eyes, most prominently, is that the order is completely silent, that the direction for sale has been given in the interest of the public. Thus, the impugned order is completely vague inasmuch as it does not assign any reason whatsoever for the order passed by the Collector for sale of the seized commodities. The existence of reasons for passing such an order ought to have been proved by the respondents. The respondents have produced no material to show that the Collector ordered the sale of the seized commodity in the interest of the general public. Any reason, assigned subsequent to the passing of the impugned order, can be of no avail to the respondents. The respondents affidavit-in-opposition reflects that it was because of scarcity of M.S. oil and high speed diesel oil that the order for sale was passed by the Collector in interest of the general public. No such reason has, however, been assigned in the impugned order nor has any material been produced before this court to show that such an order existed, either at the time of, or before passing of, the impugned order, dated 1.12.1997.
16. What needs to be pointed out is that Sub-section (2) of Section 6A makes it clear that the order for sale of a seized essential commodity can be made by the Collector pending confiscation proceeding. It is, therefore, not necessary that since the petitioner had submitted its reply to the said show cause notice, the direction for sale could not have been made without giving him an opportunity of hearing. In fact, the very purpose of giving the power of sale to the Collector under Sub-section (2) of Section 6A may get defeated, in a given case, if the situation demands of passing of an immediate order of sale of a seized essential commodity. It cannot, therefore, be said that without opportunity of hearing being given to a person from whom an essential commodity is seized, no direction for sale of the seized article can be given under Section 6A(2).
17. Situated thus, it is clear that the direction for sale given under the impugned order was not in conformity with the provisions of Sub-section (2) of Section 6A. Such an order shall, if allowed to survive, cause serious miscarriage of justice.
18. What crystallizes from the above discussion is that the impugned order, date 1.12.1997, cannot survive inasmuch as the same is not in conformity with the provisions of Sub-section (2) of Section 6A. Such an order is, in fact, not only illegal, but also arbitrary inasmuch as the order assigns no reason whatsoever for making the order. This apart, as already indicated hereinabove, nothing has been produced, on behalf of the respondents, to show that the order made on 1.12.1997, was in the interest of the general public as is sought to be made in the present writ proceeding.
19. In the result, and for the foregoing reasons, this writ petition partly succeeds. The impugned order, dated 1.12.1997, is hereby set aside and quashed. The respondents are, however, given the liberty to resort to, if required, the power given by Sub-section (2) of Section 6A of the E.C. Act, in accordance with law, in respect of the seized commodity.