Bishwanath Agrawala v. State of Bihar — 1975 DIGILAW 125 (PAT)

JUDGMENT Nagendra Prasad Singh, J. This is a writ application on behalf of the two petitioners for quashing an order passed by the Collector, Dhanbad in Confiscation Case no. 24 of 1974 in exercise of the powers conferred on him under section 6A of the Essential Commodities Act, 1955 (hereinafter referred to as the 'Act') A copy of the said order is annexure "7" to the writ application. By the said order, the collector has come to the conclusion that there has been a contravention of the provisions of the Bihar Sugar Dealers' Licensing Order, 1963 (hereinafter referred to as the 'Licensing Order'), as amended by the State Government by Notification. GSR 91, dated the 20th August, 1974, Having so held the respondent Collector directed confiscation of 26 quintals of sugar which had been seized from the business premises of the petitioners on the 27th October, 1974. 2. It appears that the business premises of the petitioners were searched on the 27th October, 1974 and the aforesaid 26 quintals of sugar were seized, as it transpired on inspection of the stock register and cash memos that the petitioners had sold sugar to six persons on different dates in quantity exceeding one quintal without the written permission of the licensing authority. According to the report that was submitted after the seizure, sale of sugar to a particular individual exceeding one quintal in quantity amounted to contravention of the provisions of the Licensing Order, read with the amendment of the State Government referred to above, and, as such the petitioners had committed an offence punishable under section 7 of the Act. After seizure, the seizure list was forwarded to the Collector, and a first information report was also lodged before the Chirkunda Police Station in the district of Dhanbad on the 27th October, 1974. 3. Petitioner no. 2 filed a criminal miscellaneous application before this court, giving rise to Criminal Miscellaneous No. 3446 of 1974, on the 12th November, 1974 for quashing of the prosecution launched against him on the basis of the aforesaid first information report. The said case was placed for orders on the 25th November, 1974 on which date notice was directed to be issued to the State of Bihar. It was further directed that the goods, seized should be released to petitioner no. 2 on furnishing sufficient security to the satisfaction of the Chief Judicial Magistrate, Dhanbad. The said case was placed for orders on the 25th November, 1974 on which date notice was directed to be issued to the State of Bihar. It was further directed that the goods, seized should be released to petitioner no. 2 on furnishing sufficient security to the satisfaction of the Chief Judicial Magistrate, Dhanbad. On the 12th December 1974 the application was admitted and this Court directed issuance of fresh notice... Ultimately, the case was listed for final hearing on the 13th March, 1975, when this Court passed the following order quashing the criminal prosecution instituted against petitioner no. 2 : “Heard. 2. The petitioner is being prosecuted for an offence under section 7 of the Essential Commodities Act. The allegation against the petitioner is that he had sold sugar to six persons in quantity exceeding 1 quintal on different dates which was discovered on an inspection by the Circle Officer, Nirsa on the 28th of October, 1974. That sale in quantity exceeding 1 quintal is an offence has not been sought to be substantiated by production of any Government order or circular in this regard. The very same aspect of the matter was considered in Cr. Miscellaneous No. 3447 of 1974 (Rajendra Prasad Agrawal Vs. State of Bihar) and the petitioner's contention was upheld. As such, submission made on behalf of the petitioner that cognizance taken on an allegation of the above kind is not warranted in law must be upheld. 3. In the result the criminal prosecution is quashed and the application is allowed.” 4. It may be mentioned that, on the 12th November, 1974, the respondent Collector issued notice to the petitioner to appear on the 23rd November, 1974 and to show cause as to why the aforesaid 26 quintals of sugar to be not confiscated in accordance with the provisions of section 6A of the Act. In response to the said notice, the second petitioner appeared and filed show cause making a prayer for dropping of the said proceeding on the ground, inter alia, that this Court had already directed release of the sugar in question on the 25th November, 1974. The respondent Collector however, after hearing the parties, passed the impugned order holding that there had been a contravention of the provisions of the Licensing Order. The respondent Collector however, after hearing the parties, passed the impugned order holding that there had been a contravention of the provisions of the Licensing Order. In respect of the order of release passed by this Court on the 25th November, 1974, the respondent Collector observed in the impugned order that any order passed by the Criminal Court in respect of the article in question would in no way restrict the discretion of the Collector to pass the order for confiscation in exercise of the rowers conferred on him by section 6A of the Act. 5. Learned counsel for the petitioners has submitted that the respondent Collector took an erroneous view when he came to the conclusion that there had been a contravention of the provisions of the Licensing Order, and secondly, that, in view of the order of release passed by this Court on the 25th November, 1974, the respondent Collector could not have confiscated the sugar in question before getting the said order modified. In support of his first contention learned counsel had drawn our attention to the provisions of the Licensing Order. The word, 'dealer' had been originally defined as follows :- “2 (a) 'dealer' means a person engaged in the business of purchase, sale or storage for sale, of sugar in quantity exceeding fifty quintals at anyone time, but does not include an industrial undertaking which is engaged in the manufacture or production of sugar and which is registered or licensed under the Industries (Development and Regulation) Act, 1951 (Act LXV of 1951)”. Clause 3 of the Licensing Order had placed restriction saying that 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. It is the admitted position in this case that the petitioners are licensees in sugar. The contravention alleged is that the petitioners had sold sugar exceeding one quintal in quantity to particular persons which they were not authorized to do under the provisions of the Licensing order, as amended by the aforesaid notification, dated the 20th August, 1974. A copy of the said notification has been annexed to the writ application as annexure “2”. The contravention alleged is that the petitioners had sold sugar exceeding one quintal in quantity to particular persons which they were not authorized to do under the provisions of the Licensing order, as amended by the aforesaid notification, dated the 20th August, 1974. A copy of the said notification has been annexed to the writ application as annexure “2”. By that notification the definition of dealer as appearing in the Licensing Order has been substituted as follows :- “2 (a) 'dealer' means a person or firm engaged in the purchase, sale or storage for sale of sugar but does not include any industrial undertaking which is engaged in the manufacture or production of sugar and which is registered under the Industries (Development and Regulation) Act, 1951 (Act LXV of 1951) : Provided that any person who stores sugar up to one quintal at any time for personal consumption and any firm or hotel or restaurant or halwai who stores sugar up to five quintals for their own consumption shall not come within the purview of above definition. If any person or firm or hotel or restaurant or halwai wants to store sugar in quantity exceeding the limit noted above at anyone time they will have to obtain prior written order of the licensing authority of his area.” A bare reference to the original definition of dealer or the amended definition of dealer, along with the proviso to clause 2 (a), will show that no such restriction about sale of sugar in quantity exceeding one quintal to a particular individual has been placed by the aforesaid amendment. The proviso to the amended clause 2 (a) simply prescribes that any person who stores sugar up to one quintal at any time for personal consumption shall not be deemed to be a 'dealer' within the meaning of the amended definition of the word 'dealer'. It further prescribes that if any person wants to store in quantity exceeding one quintal for his personal consumption he will have to obtain prior written order of the licensing authority of his area. In my opinion, the proviso is not at all attracted in case of a dealer who holds a licence, in respect of sugar in accordance with the provisions of the Licensing Order. In my opinion, the proviso is not at all attracted in case of a dealer who holds a licence, in respect of sugar in accordance with the provisions of the Licensing Order. The respondent Collector had referred to this very notification in support of his finding that there had been a contravention of the provisions of the Licensing Order, which is not borne out by the notification in question. Learned counsel for the State could not point out any other provision in the Licensing Order or in the amended provision in support of his contention that the petitioners had contravened the provisions of the Licensing Order by selling sugar to individuals in quantity exceeding one quintal. In that view of the matter. I am constrained to hold that, accepting all the allegations on their face value, no contravention of any provision of the Licensing Order has been established. An order confiscating an article seized under section 6A of the Act, can be passed only if the Collector is satisfied that there has been a contravention of the provisions of the Licensing Order. If no contravention is shown or proved, there can be no occasion for passing an order in exercise of the powers conferred under section 6A of the Act. Apart from that, I have already pointed out that this Court had directed release of the sugar in question on the 25th November, 1974 and this fact was brought to the notice of the respondent Collector which he has mentioned in the impugned order. A Bench of this Court in Lowa Tanti alias Loba Tanti V,. The State of Bihar 1976 BBCJ 1 has held that, when an order of release is passed by a Criminal Court, including this Court, the order for confiscation of the article in respect of which such order has been passed should not be made unless steps are taken to get the order modified or vacated. Learned counsel for the petitioners has also drawn our attention to the order, dated the 13th March, 1975, passed in the aforesaid Criminal Miscellaneous Case No. 3446 of 1974 at the time of final bearing of the application, quashing the criminal prosecution launched against petitioner no. 2 on the view that the sale of sugar in quantity exceeding one quintal is an offence had not been substantiated by the State. 2 on the view that the sale of sugar in quantity exceeding one quintal is an offence had not been substantiated by the State. When this Court has held that no contravention lad taken place even on the allegation made on behalf of the prosecution, it has to be held that the finding of the respondent Collector that the petitioner had contravened the provisions of the Licensing Order by selling sugar in quantity exceeding one quintal is, erroneous. 6. In the result, the application is allowed and the order of confiscation passed by the respondent Collector dated the 15th/l7th January, 1975 (Annexure "7") is quashed. Sarwar Ali, J.-I agree. Application allowed.