Patna High Court
Narendra Kumar vs The State Of Bihar And Ors. on 9 December, 1976
Equivalent citations: 1977CRILJ1755
ORDER
Shambhu Prasad Singh and S.K. Jha, JJ.
1. In this criminal writ application under Articles 226 and 227 of the Constitution of India, Mr. Balbhadra Prasad Singh and Mr. N. K. Agrawal, who has followed him, have raised some interesting questions of law. The application has been filed for quashing of the confiscation proceeding Under Section 6-A of the Essential Commodities Act, 1955 (hereinafter referred to as 'the Act'), in Confiscation Case No. 8 of 1976, pending before the District Magistrate of Gaya, respondent No. 2, who has issued a show cause notice to the petitioner, why sugar weighing 36.26.000 quintals seized in course of a raid conducted on 11th of June, 1976, by respondent No. 3, be not confiscated.
2. It appears that respondent No. 3, after conducting the raid sent a written report (Annex. 1) to the officer-in-charge of Kotwali Police Station. Gaya, on the basis of which a formal F. 1. R. has been drawn up and a case registered Annexure '1' does not contain the complete report of respondent No. 3, and that portion of it which has been left out. has been filed on behalf of the State as An-nexure 'A' to their counter-affidavit. The report read as a whole shows that the petitioner, who is a licensee under the Bihar Sugar Dealers Licensing Order, 1973, was allotted and lifted 134 quintals of sugar, but entered only 124 quintals in his stock register. According to the authorities, the petitioner has sold in black market 10 quintals of sugar, which he has not entered in his stock register and which was also not available in his business premises at the time of the search and seizure. What was seized was the quantity of sugar, which was found in the business premises of the petitioner at the time of the search and which tallied with the balance shown in the stock register.
3. A point has been taken in the petition that in view of the fact that the stock of sugar found in the business premises of the petitioner tallied with the balance of sugar as shown in the stock register, the petitioner had committed no offence. However, in view of the filing of Annexure 'A' by the State this point has not been pressed.
4. It has been contended on behalf of the petitioner in the first instance that confiscation if at all could be ordered only in respect of the 10 quintals of sugar, which was not found entered in the stock register, and as according to the case of the State itself that has already been sold in the black market and not available for seizure, the sugar, which was seized and in respect of which no offence was committed could not he confiscated. According to learned Counsel for the petitioner, it is the offending goods, which can be confiscated and no other goods as a matter of penalty. In order to appreciate this contention, it is necessary to quote Section 6-A of the Act. The section reads as follows:
Where any essential commodity is seized in pursuance of an order made Under Section 3 in relation thereto, it may be produced, without any unreasonable delay, before the Collector of the district or the Presidency town in which such essential commodity is seized and whether or not a prosecution is instituted for the contravention of such order, the Collector, if satisfied that there has been a contravention of the order, may order confiscation of--
(a) the essential commodity so seized ;
(b) any package, covering or receptacle in which such essential commodity is found, and
(c) any animal, vehicle, vessel or other conveyance used in carrying such essential commodity ;
Provided that without prejudice to any action which may be taken under any other provision of this Act, no food grains or edible oilseeds seized in pursuance of an order made Under Section 3 in relation thereto from a producer shall, if the seized foodgrains or edible oilseeds have been produced by him, be confiscated under this section.
A plain reading of the section does not, show that only that part of the essential commodity in respect of which the offence is committed can be confiscated. When any essential commodity is seized and the Collector is satisfied that there has been a contravention of the order i. e. the order made Under Section 3 in relation to the essential commodity, he may order confiscation of the essential commodity so seized. The expression "in relation thereto", in our opinion, means in relation to the essential commodity which is the subject-matter of the order Under Section 3 ; it does not and, cannot mean only that part of the essential commodity in respect of which an offence is committed. If that would have been the intention of the framers of the Act, they would have used the expression "in respect of which an offence is committed" somewhere in the section.
5. Reliance has been placed on behalf of the petitioner on a decision of a learned single Judge of this Court in the case of Krishna Prasad v. State of Bihar 1975 BBCJ 608. In that case certain goods which were not shown as excess in the stock register were ordered to be released on the basis of concession made by learned Counsel appearing for the State. The case, therefore, is not an authority for the proposition that that part of the essential commodity in respect of which an offence is not committed cannot be confiscated. However, our attention was drawn to certain observations made in that judgment, where it was emphasised that contravention of the order concerned had taken place only in respect of such goods which were not entered in the stock register. We are not inclined to accept that observation as correct statement of law. Orders issued Under Section 3 of the Act invariably provide that each dealer should obtain a licence and no holder of a licence issued under the order or his agent or servant or any person acting on his behalf shall contravene any of the terms and conditions of the licence. The forms of licences appended to the order provide that a licensee shall maintain a register of daily accounts 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 ; and that he should complete his accounts for each day on the day to which they relate, unless prevented by reasonable cause the burden of proving which shall be upon him. Thus the licensees are required to maintain correct account in respect of matters referred to above. In the instant case, we are concerned with the Bihar Dealers Licensing Order, 1963, Clause 3 of which provides for licensing of dealers, Clause 7 for contravention of conditions of licence and Form 'B' of the schedule to the Order prescribes the form of the licence with terms and conditions thereof. In our opinion, a licensee who does not maintain correct account of the stocks commits contravention of one of the conditions of the licence and thus also of the order in respect of the entire stock and not only in respect of the quantity, which is not entered in the stock register. He contravenes the order by not maintaining correct account and thus makes himself liable to be punished Under Section 7 of the Act.
6. In the said decision of Krishna Prasad v. State of Bihar 1975 BBCJ 608 reference was made to a decision of the Supreme Court in the case of Motibhai Fulabhai Patel and Co. v. R. Prasad AIR 1970 SC 829. Learned Judges of the Supreme Court in that case were considering Rule 40 of the Central Excise Rules, which provides confiscation of goods in respect of which duty is not paid. Obviously, under that rule goods in respect of which duty is paid cannot be confiscated and, therefore, that decision of the Supreme Court cannot be an authority for the proposition that Under Section 6-A of the Act only such goods can be confiscated which are not entered in the stock register as observed in the said case of Krishna Prasad v. State of Bihar, by the learned single Judge of this Court.
7, Section 3 of the Act, inter alia, lays down that orders under that section may provide for search and seizure of any article in respect of which the person conducting the search or making the seizure has reason to believe that contravention of the order has been or is being or is about to be committed. Clause 9 of the order provides for search and seizure. It has been pointed out by learned Counsel appearing on behalf of the petitioner that there is nothing on the record to indicate that the officer conducting the search and seizure had reason to believe that there was any contravention of the provisions of this order or of the conditions of any licence issued thereunder. True it is that the officer conducting the search and making the seizure has not recorded that he had reasons for such a belief : but on the facts of the instant case when we find that the allegation that correct accounts were not maintained by the petitioner, cannot be said to be entirely baseless, the search and seizure cannot be held to be illegal on the ground that the authority concerned has not put in writing that he had reasons for such a belief.
8. In the instant case the confiscation proceeding is only in respect of the essential commodities seized and on a reading of the plain language of Section 6-A of the Act, for the reasons stated earlier, in our opinion, there can be no doubt that the proceeding is not without jurisdiction and not liable to be quashed on that account. If the contention of learned Counsel that a proceeding for confiscation can be started only in respect of such part of the goods in respect of which an offence is committed is to be accepted, then in case of black marketing by a licensee there can be no confiscation proceeding, for the goods in respect of which the offence is committed will not be available with him for seizure or confiscation. Acceptance of such a contention will lead to absurd results, and such a contention, therefore, cannot be accepted.
9. It was further argued on behalf of the petitioner that as the seized goods were not produced before the Collector the proceeding for confiscation was without jurisdiction. Section 6-A of the Act merely lays down that the goods seized 'may be produced. It does not lay down that 'it must be produced before a proceeding for confiscation is started. We do not think, therefore, that the proceeding is vitiated, for it has been started before the production of the goods. In this connection our attention has been drawn to another decision of a learned single Judge of this Court in the case of Shambhu rasad Sah v. The State of Bihar 1976 BBCJ 444. That decision deals with the question when the Collector can be held to be "seized with the matter" so as to bar the jurisdiction of the court under the Essential Commodities (Bihar Third Amendment) Ordinance No. 123 of 1976 to entertain an application for release of the goods. It enumerates various stages of the proceedings as envisaged Under Section 6-A of the Act. According to us, merely because it states that production of the seized goods is also one of the stages of the proceeding, it does not lay down that the proceeding will be without jurisdiction, if it is started unless the seized goods are produced.
10. Learned Counsel appearing on behalf of the petitioner has also contended that entire confiscation proceeding is without jurisdiction as sugar is not an essential commodity. In support of this contention he has placed reliance on the definition of "essential commodity" in Section 2(a) of the Act and that of 'Sugar' in Section 2(e) of the Act. According to learned Counsel since "essential commodity" and "sugar" are defined separately, sugar is not an essential commodity. We do not find it possible to accept this contention. According to definition "essential commodity" includes foodstuffs and sugar is undoubtedly a foodstuff. Simply because sugar is denned separately in the Act, it does not follow that it is not an essential commodity.
11. Lastly, it has been urged by learned Counsel for the petitioner that at any rate the goods should be released on the petitioner's furnishing security to the satisfaction of the Collector and they should remain so released till the final decision in the criminal case pending against the petitioner. Passing of such an order, will vitiate the entire purpose for which Section 6-A has been enacted. It will lead to the confiscation proceeding remaining dormant until the decision of the criminal case. If the petitioner is acquitted of the criminal charge, then certainly he will be entitled to the return of sugar or its price. On the facts and in the circumstances of the case we do not think that the seized goods should be released to the petitioner on furnishing security.
12. In the result, the application fails and is dismissed.