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Showing contexts for: essential commodity act in Satish Maganlal Vora vs Union Of India And Ors. on 10 April, 2001Matching Fragments
3.1 According to the appellant, once again on 30th June, 1999, the District Supply Officer, Valsad seized the goods and raw material and other paraphernalia of the appellant at his factory at Sarigam in Umargam Taluka of Valsad under the impugned Order of 1998 with a direction that the seized goods should not be dealt with in any manner whatsoever or any purpose. The respondent No. 3 Collector, Valsad proceeded with the matter and made an order on 25th October, 1999 confiscating the goods under Section 6-A of the Act. In that order dated 25-10-1999, at Annexure 'L-1' to that petition, it has been recorded that, on a surprise visit of the District Supply Officer, Valsad on 30th June, 1999 to the appellant's factory, it was found that the factory is purchasing and mixing Hydrocarbon, Methanol, Acetone and "XT" and manufacturing a product named 'Patrex' which is used as motor fuel. It was found that in spite of the provisions of clause 3(v) of the impugned Order of 1998, which provided that no person shall sell or agree to sell any petroleum product or its mixture other than Motor Spirit or High Speed Diesel, as specified in Schedule I, in any forms, under any name, brand or nomenclature, which can be and is meant to be used as fuel in Spark Ignition Engines or Compression Ignition Engines, the said factory was manufacturing and selling motor fuels and has violated the provisions of the impugned Order of 1998. A show-cause notice dated 20th July, 1999 was issued to the appellant who was the sole proprietor calling upon him to show cause as to why the goods and raw material should not be seized in accordance with the provisions of Section 6B(1)(a) of the said Act. He was offered a personal hearing on 7th July, 1999. The appellant through his Advocate informed the authority to treat his reply dated 10th July, 1999 as the reply to the show-cause notice. A personal, hearing was sought, and therefore, the matter was fixed on 3rd August, 1999. It was again fixed on 21-9-1999 and 12-10-1999. On 2-10-1999, the appellant had stated that he did not have anything more to state than what was already stated by him in his letters dated 10th July, 1999 and 20th July, 1999. The concerned authority considered in detail the contentions raised in those letters and various litigations that the appellant had preferred in various High Courts as well as the ad-interim order made in Special Civil Application No. 5891 of 1999 on 30-9-1999, It was found that the appellant was purchasing raw material like Hydrocarbon, Methanol and X.T., and after mixing them, he was manufacturing liquid under the brand name of 'Patrex' and selling it as motor fuel. It was recorded that it was never stated by him that he was manufacturing 'Patrex' in accordance with the Indian Standards specifications and requirements mentioned in Schedule I of the impugned Order of 1998. Since 'Patrex' did not meet with the Indian Standards specifications and the requirements laid down in Schedule I, the appellant had violated clauses 2(f), 2(g), 2(v), 3(vii) of [he impugned Order of 1998. It was held that the explanation given by the appellant was not satisfactory and acceptable and that the order of the District Supply Officer dated 30th June. 1999 seizing the goods was proper and valid and all the seized goods were liable to be confiscated. The seized stock was accordingly confiscated under Section 6-A of the said Act. According to the appellant, such an order was not warranted in respect of the petitioner's product 'Patrex', because, the impugned Order of 1998 was ultra vires the powers of the Union of India inasmuch as it had the effect of including in the definition of 'essential commodity' given under the said Act, a product which was not included thereunder. Moreover, the impugned Order of 1998 was ultra vires the powers of the respondent No. 1 Union of India since it defeated the aims and objects of the said Act and was not made for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at fair prices. The impugned Order of 1998, according to the appellant, violated his fundamental rights guaranteed by Art. 19 of the Constitution since it had the effect of restricting or obstructing his business and the business of his dealers. It also violated the Art. 14 of the Constitution by denying the equality to the appellant and his dealers in their trade and business qua other similarly situated persons. It was also the appellant's case that the object underlying the impugned Order of 1998 was only to check malpractices indulged into by dealers of three Oil Companies with regard to the sale and purchase of petroleum products and such provisions cannot apply to the product of the appellant or to the business carried on by the appellant and his dealers in 'Patrex'. According to the appellant, in none of the proceedings that he has filed in various High Courts and Special Courts, till today, the respondents were in a position to satisfy any Court of law to show that 'Patrex' is covered under the provisions of the Essential Commodities Act or that the impugned Order of 1998 can be applied to 'Patrex'.
6. The learned single Judge, in the impugned judgment and order dated 1-9-2000 given in Special Civil Application No. 5981 of 1999 and Special Civil Application No. 1365 of 2000, after considering all the relevant aspects of the matter, held that there was no illegality in the seizure and confiscation orders issued by the competent authority which were according to the provisions of the said Act and the impugned Order of 1998. It was held that the ban as provided in sub-clauses (iv) and (v) of clause 3 of the impugned Order of 1998 was in the interest of general public, because, it ensured equitable distribution of the essential commodity. It was held that Section 3 of the Essential Commodities Act clothes the Central Government with powers to control production, supply, distribution etc. of essential commodities and the impugned Order of 1998 was issued in lawful exercise of the powers of the Central Government under the said Act. The learned single Judge negatived the challenge against the sub-clauses (iv) and (v) of clause 3 of the impugned Order of 1998, incorporating by reference the reasons that were given by him in detail for holding (hat Patrex was a petroleum product in the other judgment delivered on the same day in Special Civil Application No. 9076 of 2000. In His Lordship's judgment dated 1st September, 2000 in Special Civil Application No. 9076 of 2000, the learned single Judge held that, looking to the definition of the word 'petroleum' contained in Section 2(a) of the Petroleum Act, 1934, it cannot be said by any stretch of imagination that 'Patrex' was not covered under the term 'petroleum'.
7. The learned Counsel appearing for the appellant in these two appeals contended before us that neither Entry No. 33 of the Concurrent List (relating to trade and commerce in, and the production, supply and distribution of the items mentioned therein), nor the Essential Commodities Act empowers the Central Government to ban or prohibit any product on the ground that it does not meet with any standards laid down by any Government or authority. He contended that the impugned Order of 1998 purports to punish the malpractices which were not envisaged in Entry No. 33 of the Concurrent List or Section 3(2) of the said Act. He further argued that clause 3(v) of the impugned Order of 1998, was ultra vires, because, prohibition of any product was not contemplated and that the order was therefore beyond the scope of Section 3(1) of the said Act. According to him, clause 3(v) of the impugned Order of 1998 seeks to safeguard or to have a check on the dealings of motor spirit and high speed dicsel to ensure prevention of malpractice in supply and transportation and purity of the product from the supply point to the receiver's point. He submitted that this clause will apply only when "motor spirit" or "high speed diesel" of the standard quality was adulterated by any oilier petroleum product or mixture thereof. He submitted that this clause cannot apply to any new product which was not a motor spirit. The learned Counsel argued that the product of the appellant 'Patrex' was an invention of high order and since it was an invented product, it could not be covered under the head 'petroleum product'. He submitted that the said product was not a motor spirit or high speed diesel which were required to be of the standards specified as required by Schedule I to the impugned Order of 1998. The product of the appellant, according to him, cannot be called petroleum or a petroleum product, because, it was not straightaway made from crude oil. Moreover, according to him, since it contained alcohol along with hydrocarbons and some secret additives were added with a view to homogenize them and to raise the octane, the product acquired a different identity than the known petroleum products. Illustrating his contention, the learned Counsel contended that Naphtha, a hydrocarbon was derived from crude oil while alcohol was not, and their mixture was a different product which was not straightaway derived from crude oil i.e., petroleum. He also argued that the Indian Standards specifications cannot be applied to a newly invented product like this and even if the product did not match the required Indian Standards, it will not cease to be an invention and since it was an invention of a different product, there was no question of any malpractice involved in respect of "motor spirit" or "high speed diesel" which were required to be of the standards as laid down in Schedule I to the impugned Order of 1998. The learned Counsel also argued that the Essential Commodities Act was enacted for preventing blackmarketing and hoarding. He submitted that the impugned Order of 1998 had the effect of monopolizing the trade and dealing in fuels used for ignition engines in the hands of the Oil Companies and its agents only and such a course was not contemplated by Section 3 of the said Act. He submitted that clauses 3, 4 and 5 of the impugned Order 1998, therefore, violate the fundamental rights of the appellant and his dealers guaranteed by Art. 14 and Art. 19(1)(g) of the Constitution and were not saved by Art. 19(6), because, the restrictions imposed were unreasonable.
17. The attempted combination of the word 'petroleum' as defined in clause (h) and the word 'product' as defined in clause (j) for reading the words 'petroleum product' in sub-clause (v) of clause 3 of the impugned Order of 1998 on behalf of the appellant was simply an exercise in desperation. The word 'product' as defined in clause 2(j) is used for denoting only 'motor spirit' and 'high speed diesel' as defined in sub-clauses (f) and (d) of clause 2. Reading the word 'product' in sub-clause (v) of clause 3 out of its context, it was contended by the learned Counsel that only when motor spirit or high speed diesel were adulterated with any other petroleum product, sub-clause (v) of clause 3 would get attracted so as to prevent adulterated motor spirit or high speed diesel from being sold and that such interpretation alone should be given since clause 3, read as a whole emphasised on the purity of motor spirit and high speed diesel from the supply point to the receiver's point. Such interpretation by giving a truncated meaning to the word 'product' in the expression 'petroleum product' occurring in sub-clause (v) of clause 3 would distort and nullify that provision. The words 'petroleum product or its mixture' are used in sub-clause (v) of clause 3 in contradistinction with 'motor spirit' or 'high speed diesel' of the standards specified in Schedule I, and, are necessarily 'petroleum product or its mixture' which can be or are meant for use as fuel in ignition engines, but are not motor spirit or high speed diesel of the required standards as specified in Schedule I of the impugned Order of 1998. The provision is intended to ensure that nothing short of the requisite quality of motor spirit or high speed diesel as is specified in Schedule I is sold for such ignition engines. There is a complete embargo on any one selling any petroleum product or its mixture, be it 'Patrex' of the appellant or under any other name, brand or nomenclature, for use as fuel in spark ignition engines or compression ignition engines. The fuel must necessarily conform to the motor spirit or high speed diesel as defined, which means it should be of the Indian Standards specifications and should satisfy the requirements tabulated in Schedule I for motor gasoline and diesel fuels. Section 3(1) of the Essential Commodities Act (which Act is at Entry No. 126 of the Ninth Schedule), inter alia, empowers the Central Government, by order to provide for "regulating or prohibiting the production, supply and distribution" of any essential commodity. The immunity enjoyed by the parent Act cannot proprio vigors be extended to an offspring of the Act like the impugned Order of 1998 and it was open to the appellant to invoke the writ jurisdiction for determining whether the provisions of the impugned Order violate Art. 14 or 19(1)(g) of the Constitution. The power conferred on the Central Government by Section 3(1) of the said Act is of very wide amplitude. The power to regulate ihe production of an essential commodity will include the power to regulate the quality or quantity of the essential commodity. The Central Government can direct how certain essential commodities should be produced or supplied and in what quantity. Section 3(1) of the said Act authorises the central government to regulate the qualitative as well as quantitative production of essential commodity as held by the Supreme Court in Hamdard Dawakhana (Wakf) v. Union of India, reported in AIR 1965 SC 1167. The pith and substance of the relevant provisions of the impugned Order is to regulate the qualitative supply of motor spirit and high speed diesel, and without clause 3(v) which prohibits sale of any petroleum product or its mixture other than of the quality specified for use as fuel in ignition engines, it would not be possible to attain the said objective. This provision shows that the Central Government by virtue of its powers under Section 3(1) of the Act thought it necessary to require that a particular quality of petroleum product, namely, motor spirit and high speed diesel which satisfies the requirements laid down in Schedule I should alone be sold as fuel for ignition engines and no other petroleum product or its mixture should be supplied for such purpose. This object plainly falls within the purview of Section 3(1) of the said Act and so, the contention that the impugned Order of 1998 is invalid inasmuch as it purports to tackle petroleum products, other than motor spirit and high speed diesel, that may be invented for use as fuel, cannot be accepted.