Nakirikanti Panduranga Rao, Managing Partner of Sri Vijaya Commercial Corporation, Jaggayyapet v. The State of A. P. . represented by the Special Tahsildar (Land Acquisition) Bandar
1975-09-26
MADHAVA REDDY, MADHUSUDAN RAO
body1975
DigiLaw.ai
Madhava Reddy, J.-These three Criminal Revision Gases and the two writ petitions which are by the licensees under the Andhra Pradesh Foodgrains Dealers Licensing Order, 1964 (hereinafter referred to as the ‘Order’) came up before 11s on a reference by our learned brother P.C. Reddy, J. Confiscation of food-grains belonging to the licensees was ordered under the provisions of the Andhra Pradesh Foodgrains Dealers Licensing Order inter alia on the ground that they carried on business in foodgrains for dealing in which they were not specifically granted licence. In Crl. R.C. No. 510 of 1974 our learned brother, Muktadar, J., by his judgment dated 8th Novembr, 1974 had held that a dealer is entitled to deal only in the foodgrains specified in the licence issued to him and that purchase, sale or storage for sale of foodgrains not speci6cally mentioned in the licence would amount to a contravention of the provisons of Clause 3 of the Order. In referring these cases to a Bench our learndg brother, P.G. Reddy, J., while not expressing any dissent with that view, observed that there is no specific provision in the Order itself wnich enjoins that a separate licence should be taken for each one of the food-grains specified in Schedule I of the Order. “Having regard to the importance of the question involved in the case” he referred these cases to be decided by a Division Bench of this Court. 2. In all these Criminal Revision Cases, the premises of the licensees were inspected and they were found to be dealing in foodgrains other than those for which a licence was granted under the Order. Therefore, the entire stock of foodgrains held by them was seized and confiscated under Clause 11 (1) (b) and (d) of the Order read with section 6-A of the Essential Commodities Act hereinafter referred to as the “Act”. 3. In order to appreciate the several contentions raised which are common to all these Criminal Revision Cases and the Writ Petitions, it is enough at this juncture to notice the facts in Crl. R.C. No. 753 of 1973 and the circumstances which led to the filing of Writ Petitions. 4. The petitioner in Crl. R.C. No. 753 of 1973, who holds a wholesale licence No. 768 and a retail licene No 769 under the Order was carrying on business as a dealer in Foodgrains at Jaggayyapet in Krishna District.
R.C. No. 753 of 1973 and the circumstances which led to the filing of Writ Petitions. 4. The petitioner in Crl. R.C. No. 753 of 1973, who holds a wholesale licence No. 768 and a retail licene No 769 under the Order was carrying on business as a dealer in Foodgrains at Jaggayyapet in Krishna District. In his licence, “Paddy’ and ‘Jowar” were not entered. Year after year, he has been submitting fortnightly returns to the authorities showing the stocks of different foodgrains including paddy and jowar held by him and duly applying for renewal of the licence. However, the licence was not returned to the petitioner after renewal; it was retained by the Licensing Authorities. 5. On 31st March, 1975 the Deputy Tahsildar, Jaggayyapet, visited his godowns and sealed them. Subsequently on 12th April, 1975 the Special Tahsildar (L and Acquisition) Bandar issued an order seizing 451.25 quintals of paddy, 796 quintals of Jowar and 199.92 quintals of broken rice alleging (1) that paddy was not included in the licence issued to the petitioner and his dealing in paddy constitutes a contravention of condition No. 1 of the licence, (2) that accounts were not properly maintained and stocks were found not tallying with the entries which amounts to a contravention of condition No. 3 of the licence and (3) that stocks were found ,stored in an unlicensed premises constituting a contravention of condition No. 2 fa) and (6) of the licence. These being contraventions liable to be dealt with under Clause 3. of the Order and section 7 of the Essential Commodities Act a show cause notice dated 4th May, 1973 was issued to the petitioner by the District Revenue Officer under section 6-A of the Essential Commodities Act.
These being contraventions liable to be dealt with under Clause 3. of the Order and section 7 of the Essential Commodities Act a show cause notice dated 4th May, 1973 was issued to the petitioner by the District Revenue Officer under section 6-A of the Essential Commodities Act. In response to the show cause notice issued to him he submitted an explanation inter alia pleading that he had applied for the grant of licence under the Foodgrains Dealers Licensing Order for dealing in all foodgrains and the petition was not rejected that no separate licence was necessary for carrying on business in each of the foodgiains mentioned in the schedule to that Order that he has been submitting fortnightly returns showing his dealings in ‘paddy’ and ‘jowar’ and the authorities not only accepted those returns but also directed him to supply paddy and jowar to various Fair Price Shops and the Food Corporation of India and issued the necessary permits and that they are therefore estopped from treating his dealings in paddy and jowar as contraventions of conditions of licence or of the Licencing Older and that in any event broken rice could not be seized. In short he pleaded that he did not commit contravention of any condition of the licence or the provision of the Food-grains Dealers Licensing Order. The District Revenue Officer who made the enquiry under section 6-A of the Essential Commodities Act, by his Order dated 5th September, 1973 found that the stock held by the dealer tallied with the accounts and that there was no violation of clause7-A of the Foodgiains Dealers Licensing Order. He, however, held that the petitioner contravened the conditions of the licene in dealing in ‘Paddy’ and “jowar” which was not entered in the licence and in storing the foodgrains in the premises other than the licenced ones. In view of these contraventions he directed confiscation of the entire stock of foodgrains. On appeal the learned Sessions Judge by his judgment dated 7th December, 1973 confirmed that order. Crl. R.C. No. 753 of 1973 is directed aginst the said appellate order and the above proceedings. 6.
In view of these contraventions he directed confiscation of the entire stock of foodgrains. On appeal the learned Sessions Judge by his judgment dated 7th December, 1973 confirmed that order. Crl. R.C. No. 753 of 1973 is directed aginst the said appellate order and the above proceedings. 6. As it was thought that some of the contentions raised in the Criminal Revision Case could be more properly agitated in a writ petition, the petitioner also filed a writ petition No. 6830 of 1974 in which he challenged (1) that the seizure of the Foodgrains from the godown and business premises made by the Special Deputy Tahsildar dated 12th April, 1973 was illegal and without jurisdiction, for, Clause 11 (1) (d) of the order which authorised such seizure and removal of foodgrains by any officer authorised by the Licensing Authority even without there being any reason to believe that any contravention of the provisions of the Order or the conditions of the licence issued thereunder has been or is being or is about to be committed or without even there being any suspicion to that effect, is ultra vires of section 3 and in particular, section 3 (2) (j) of the Essential Commodities Act, (2) that Clause 11 (1) (d) of the order is otherwise ultra vires inasmuch as no guidelines have been laid down therein as to the circumstances in which the power of search and seizure and removal of the stocks could be exercised, (3) that no separate licence is required to be taken for dealing in foodgrains covered by the Order and the Licence already issued to the petitioner entitles him to deal in all foodgrains mentioned in Schedule I of the Order, for the enumeration of the foodgiains in the licence issued to the petitioner is not a condition of the licence, and (4) that the intimation as to the storage in a particular godown was suffiient to entitle the petitioner-licensee to store in the said godown, although the same is not specifically entered in the licence issued to him. 7. In addition to several other questions raised in each of these cases the common questions that arise for consideration in all these cases are: (1) Whether clause 11 (1) (d) of the Andhra Pradesh Foodgrains Dealers Licensing Order is ultra vires of section 3 of the Essesntial Commodities Act?
7. In addition to several other questions raised in each of these cases the common questions that arise for consideration in all these cases are: (1) Whether clause 11 (1) (d) of the Andhra Pradesh Foodgrains Dealers Licensing Order is ultra vires of section 3 of the Essesntial Commodities Act? (2) Whether Clause 11(1) (d) of the Order is in violation of Articles 14 and’. 19 of the Constitution? (3) Whether a dealer who has been granted a licence to deal in some foodgrains is entitled to deal in all the foodgrains mentioned in Schedule I of the Order? (4) Whether under Clause 11 (1) (d) of the Order, foodgrains stored in a premises cannot be searched, seized or confiscated? If the seizure itself is not authorised by law or the provision under which the: seizure is effected is void for any reason, the confiscation of the goods so seized cannot obviously be valid. In Wasir Chand v. The State of Himdchal Pradesh1 the Supreme Court declared that: "Any seizure by the Indian Police of any property of a citizen not sanctioned under the law stated above or under any other law infringes the fundamental rights of the citizen guaranteed under Article 19 and Article 31 of the Constitution of India...." The Supreme Court in Board of Revenue Madras v. U.S. Jhaver2, held that anything recovered from the search of the residential accommodation on the basis of the defective warrant, must be returned and anything confiscated must also be returned. 8. In view of the above, it is necessary to examine at the outset the question whether Clause 11 (1) (d) of the Order is valid. For that purpose, it is necessary to read some of the provisions of the Essential Commodities Act hereinafter referred to as "the Act" and the Andhra Pradesh Foodgrains Dealers Licensing Order. Section 3 of the Act in so far as it is relevant for our present purpose reads as follows: "3.
For that purpose, it is necessary to read some of the provisions of the Essential Commodities Act hereinafter referred to as "the Act" and the Andhra Pradesh Foodgrains Dealers Licensing Order. Section 3 of the Act in so far as it is relevant for our present purpose reads as follows: "3. (1) If the Central Government is of opinion that it is necessay or expedient so to do for maintaining or increasing supplies of any essential commodity, or for securing their equitable distribution and availability at fair prices, for or securing any essential commodity for the defence of India or the efficient conduct of military operations it may by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. 3 (2) (a) to (i) * * * * 3 (2) (j) for any incidental and supplementary matters including in particular the entering and search of premises, vehicles, vessels and aircraft and the seizure by a person authorised to make such search of any articles in respect of which such person his reason to believe that a contravention of the order has been, is being, or is about to be committed and of any books of accounts and documents which in his opinion would be useful for, or relevant to any proceedings under this Act and the return of such books of accounts and documents to the person from whom they were seized after copies there of or extract therefrom as certified by that person in the manner specified in the order have been taker." 9. The Andhra Pradesh Foodgrains Dealers Licencing Order is made by the Governor of Andhra Pradesh in exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955 with the prior concurrence of the Central Government.
The Andhra Pradesh Foodgrains Dealers Licencing Order is made by the Governor of Andhra Pradesh in exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955 with the prior concurrence of the Central Government. Clause 11 of the Order as it was in force on the date when the alleged illegal seizure was effected reads as follows: "Powers of entry, search, seizure etc, (1) The licensing authority or any other Officer authorised by the State Government in this behalf, may, with such assistance, if any, as he thinks fit: (a) require the owner, occupier or of any other person in charge of any place, premises, vehicle, vessel in which he has reason to believe that any contravention of the provisions of this order or the conditions of any licence issued thereunder has been is being, or about to be committed, to produce any books, accounts or other documents showing transactions relating to such contraventions; (5) enter, inspect, break open and search any place or premises, vehicle or vessel in which he has reason to believe that any contravension of the provisions of this Order or of conditions of any licence issued thereunder has been, is being or is about to be committed: (b) take or cause to be taken, extracts from or copies of any documents showing transactions relating to such contraventions which are produced before him; (d) Search, seize and remove stocks: of foodgrains and the animals, vehicle., vessels or other conveyances used in carrying the said foodgrains in contravention of the provisions of this order, or of the conditions of the licences issued thereunder and thereafter take or authorise taking of all measures necessary for securing the production of stocks of foodgrains and the animals, vehicles, or other conveyances so seized in a Court and for their safe custody pending such production.
(2) The provisions of sections 102 and 105 of the Code of Criminal Procedure (V of 1898) ‘relating to search and seizure shall so for as may be, apply to searches and seizures under this clause.“ An amendment was effected to clause 11 (1) (d) of the Foodgrains Dealers Licensing Order on 7th June, 1973 which is as under: ”Clause 11 (1) (d): seize or authorise the seizure of any foodgrains in respect of which he has reason to believe that any of the provisions of this Order or of the conditions of the licence issued thereunder has been, is being or is about to be contravened, along with the packages, coverings or receptacles in which such foodgrains are found or the animals, vehicles, vessels, boats or other conveyances used in carrying such foodgrains; and thereafter take or authorise the taking of all measures necessary for securing the production of the packages, coverings receptacles, animals, vehicles, vessels, boats or other conveyances so seized in a Court or before Collector and for their safe custody pending such production.“ That amendment, however, had not come into force when the contraventions in question were committed by the petitioners herein. This amendment was relied upon by the learned Counsel for the petitioners to emphasise that the provision contained in the unamended Clause 11 (1) (d) vests an arbitrary and unguided power in the authorities to search, seize and remove stocks of foodgrains. According to the learned Counsel for petitioners, while section 3 (2) (j) of the Act lays down that search, seizure and removal of stocks may be effected by an authorised officer only if he has leason to believe that any contravention of the Order has been, or is being or about to be committed, Clause 11 (1) (d) of the Order does not lay down any such precondition. Clause 11 (1) (d) of the Order, in its wording is so wide that even without the existence of any reasonable belief or even suspicion, food-grains of a dealer or the vehicles carrying them may be searched, seized and removed. That provision is therefore ultra vires of section 3 of the Act and also violative of Articles 14 and 19 (1) (f) of the Constitution. 10. Mr.
That provision is therefore ultra vires of section 3 of the Act and also violative of Articles 14 and 19 (1) (f) of the Constitution. 10. Mr. Lakshminarayana, learned Counsel for the petitioner contended that in all the Control Orders issued under the Essential Commodities Act, the search and seizure is authorised to be made only when the officer concerned has reason to believe that a contravention has been or is being or is about to be committed or at least if he has suspicion about the commission of the contravention. None of the Orders except the impugned Clause 11 (1) (d) of the Andhra Pradesh Foodgrains Dealers Licensing Order empowers search or seizure without there being any reason to believe or at least a suspicion about the commission of an offence. A provision vesting such a power is violative of Article 19 of the Constitution. He placed reliance upon a judgment of the Mysore High Court in A.K.A. Setty and Sons v. State1, in which Clause 11 (1) (d) of the Mysore Foodgrains (Wholesale) Dealers Licensing Order (1964) which is in pari materia with the impugned Clause 11 (1) (d) was struck down as violative of Article 19 of the Constitution. In that decision the Bench observed: ”But these safeguards are only in regard to the manner in which search and seizure should be conducted and not in regard to the conditions precedent for exercising the powers of search and seizure. These safeguards do not afford any protection against the licensing authority or any authorised officer searching any premises and seizing stocks of foodgrains without any reasonable cause. Sub-clause (d) of Clause 11 of both the Licensing Orders, which empowers search and seizure even without the safeguard that the Enforcement Officer should have reason to believe or suspect contravention of the provisions of the Licensing Orders or the conditions of licence, cannot (but) be regarded as being arbitrary, unguided and uncontrolled and violative of the fundamental rights of dealers under Article 19 of the Constitution to carry on trade and to hold property. But the power of search under sub-clause (b) of Clause 11, does not suffer from such infirmity, as such power can be exercised only when the Enforcement Officer has reason to believe that there has been any contravention of the provisions of the orders or the conditions of the licence." 11.
But the power of search under sub-clause (b) of Clause 11, does not suffer from such infirmity, as such power can be exercised only when the Enforcement Officer has reason to believe that there has been any contravention of the provisions of the orders or the conditions of the licence." 11. This decision was followed by the same High Court in Manjashetty v. State1, for holding that Clause 12 (d) of the Mysore Vanaspathi Control Order which is similar to Clause 11 (1) (d) of the Andhra Pradesh Foodgrains Dealers Licensing Order, as vesting an arbitrary and unbridled power. These two decisions undoubtedly support the petitioner’s contention. But in our view the meaning of the impugned clause of the Order of the Mysore Foodgrains (Wholesale) Dealers Licensing Order or the Mysore Vanaspathi Control Order should not be read or understood in isolation. Each of those provisions must be read in the context of the Essential Commodities Act and all provisions of the respective Orders and also in particular in the context in which the power of search, seizure and removal of goods is vested in the authorities occurs. In reading these several provisions the object of the enactment in general and that of the search and seizure in particular must also be borne in mind. 12. Section 3 of the Essential Commodities Act, 1955, vests power in the Central Government to issue orders to control production, supply, distribution, regulate and prohibit production of essential commodities and also to take steps for making the same available at fair prices and for equitable distribution of these commodities. 13. Under Clause (j) of section 3 (2) of the Act, the Central Government is vested with the power to make an order specifically for the purpose of entering and searching any premises, vehicles vessels and air crafts and for making search of any articles in respect of which he has reason to believe that a contravention of the Order has been or is being or is about to be committed and also to seize any books of account and documents which in his opinion would be useful for or relevant to any proceeding under the Act.
In exercise of the power vested in it under section 3 (2) (j) provision for search, seizure and removal of stocks of foodgrains by the Central Government by an Order may be made only if the authorised Officer has reason to believe that a contravention has been or is being or about to be committed. Unless he has reason to believe about a contravention, search and seizure cannot be effected. But the authorisation under section 3 (2) (j) is without prejudice to the generality of the powers vested under section 3 (1) of the Act. Therefore, anything contained in section 3 (2) (j) cannot affect the validity of the order if it is ultra vires of section 3 (1) of the Act. Under sub-section (1) thereof, which vests a very wide authority, the Central Government may issue an order when it is of opinion that it is necessary or expedient to do so for one of the purposes mentioned therein. Even if sub-section (1) of section 3 alone were there, the Central Government would have unlimited power to issue Orders for any of the aforesaid purposes. Clause 11 (1) (d) of the Foodgrains Dealers Licensing Order which undoubtedly is one envisaged to achieve the purposes mentioned in section 3 (1) of the Act would be intra vires of the powers of the Centra 1 Government for section 3 (1) itself do is not lay down that the power of search, seizure or removal of stocks of foodgrains, animals, vehicels or vessels or conveyances should be vested in the authorities only if such authority has reason to believe that a contravention of the order has been committed or is being or about to be committed. By the terms of section 3(1) of the Act, vesting of power of search, seizure and removal of stocks of food-grains even without the Authority concerned having any reason to believe that a contravention is or about to be committed, would not be in excess of the power delegated to the Central Government. This subordinate legislation is inlra vires of the terms of section 3 (l) of the Act.
This subordinate legislation is inlra vires of the terms of section 3 (l) of the Act. Even if section 3 (2) (j) of the Act does not confer such power upon the Central Government, still the Central Government could issue the Foodgrains Dealers Licensing Order and provide, as it did, under Clause 11 (1) (d) for search, seizure and removal of foodgrains for the purpose of the Act. Merely because without prejudice to the generality of the powers under section 3 (1) of the Act, specific power also is given under section 3 (2) (j) this general power vested in the Central Government cannot be deemed to have been curtailed so to render Clause 11(1) (d) of the Licensing Order in excess of the authority. 14. It is, however, contended by the learned Counsel for the petitioners that vesting of such a wide power of search, seizure and removal would amount to vesting an arbitratry and ungraded power and although it may be intra vires of section 3(1) of the Act would be violative of Articles 19 (1)(f) and 14 of the Constitution, for the officers vested with the power under such an Order may, without having any reason to believe that any contravention has been or is being or about to be committed, take away the property of another. This leads us to the question, whether in the absence of any limiting words in section 3 (1) of the Act, clause 11 (1) (d) vests any abolute and unbridled power in the authorities to search, seize and remove stocks Firstly the provisions of the Andhra Pradesh Foodgrains Dealers Licensing Order have to be understood in the context of the provisions of the Essential Commodities Act under which it is issued. Though section 3 (1) of the Act vests the Central Government with a wide discretion to issue orders controlling production, supply and distribution of essential commodities, the Act itself gives a broad indication of the circumstances in which such power may be exercised. 15.
Though section 3 (1) of the Act vests the Central Government with a wide discretion to issue orders controlling production, supply and distribution of essential commodities, the Act itself gives a broad indication of the circumstances in which such power may be exercised. 15. In Harishankar Bagla v. M.P. State1considering the contention that Cotton Textiles (Control of Movement) Order, 1948, issued under the Essential Supplies Temporary Power Act (1946), is violative of fundamental rights guaranteed under Article 19 (1) (J) and (g) of the Constitution and that it vests an arbitrary power in the Textile Commissioner to grant or refuse a permit in regard to the transport of the Cotton Textiles, the Supreme Court held: “The preamble and the body of the sections in the Essential Supplies (Temporary Powers) Act sufficiently formulate the legislative policy and the ambit and character of the Act is such that the details of that policy can only be worked out by delegating them to a subordinate authority within the framework of that policy. Section 3 of the Act, therefore, does not amount to delegation of legislative power outside the permissible limits”. Thus the policy underlying the Act and the Order could always be taken into account to gather the legislative intent and judge the validity of the provisions. 16. The preamble of the Act declares that the Act is intended to provide, in the interests of general public for the control of the production, supply and distribution of trade and commerce in certain commodities. It is not in respect of every commodity that the powers visted under section 3 may be exercised. It is only in respect of essential commodities as defined under section 2 (a) of the Act that power may be exercised That power may be exercised only if it is necessary or expedient for maintaining or increasing supplies of such essential commodities or for securing their equitable distribution and availability at fair prices or for securing essential commodities for the defence of India or for the efficient conduct of military operations and not for any other purposes. For this purpose it may regulate or prohibit the production, supply and distribution thereof and trade and commerce therein. These orders are required to be published by notification in the Gazette.
For this purpose it may regulate or prohibit the production, supply and distribution thereof and trade and commerce therein. These orders are required to be published by notification in the Gazette. Andhra Pradesh Foodgrains Dealers Licensing Order is one such order issued in exercise of the powers conferred by section 3 (1) of the Act and is intended to regulate the foodgrains as are specified in schedule 1 of that Order. Ten items of foodgrains, including paddy, rice, jowar, pulses, maize which are in short supply are specified in Schedule I of that Order. This Order envisages licensing of dealers in foodgrains with a view to effectively control the supply and the distribution of these foodgrains for ensuring their availability at fair prices and for equitable distribution. For a proper check on the foodgrains, the dealers are required to maintain certain records showing the stocks of foodgrains and the sale thereof. They are also required to exhibit price lists and obtain renewal of licences. The authorities are empowered to cancel the licence in case of contravention of the conditions thereof and also to forfeit the stocks of foodgrains. Against such orders appeals are provided under clause 10 of the Licensing Order. Against this background, if the extent of the power of search, seizure and removal of stocks vested under Clause 11(1) (d) in the Licensing authority or any other officer authorised by the Stats Government in this behalf is examined, it would be seen that the conditions for its exercise are clearly indicated by the Essential Commodities Act and the Foodgrains Dealers Licensing Order. Though Clause 11 (1) (d) itself does not in so many words lay down that search, seizure and removal of stocks of foodgrains may be effected only when the licensing authority is satisfied or has reason to believe that there is a contravention of the provisions of the Order or the conditions of the licence, still having regard to the purpose of the Act and the licensing order it may be fairly inferred that the search, seizure and removal of stocks is only to effectuate the purpose of these laws. So viewed Clause 11 (1) (d) cannot be said to invest an arbitrary or unguided power in the officers so as to be held to be violative of Articles 14 and 19 (1) (f) of ‘the Constitution. 17.
So viewed Clause 11 (1) (d) cannot be said to invest an arbitrary or unguided power in the officers so as to be held to be violative of Articles 14 and 19 (1) (f) of ‘the Constitution. 17. Further the context in which Clause 11 (1) (d) appears also cannot be ignored. Clause 11 (1) (a) empowers the officer to enter any premises and require any person or occupier of the premises to produce any book, account or other documents showing transactions if he has reason to believe that any contravention of provisions of the Order or the conditions the of licence issued there under has been committed. Then clause (b) thereof provides that such officer, if he thinks fit, may enter, inspect, break open or search any place in which he has reason to believe that any contravention of the Order or conditions of the licence is being or about to be committed. Even according to the learned Counsel for the peitioners, inasmuch as the conditions for the exercise of the power are indicated in clauses (a) and (b), namely, that such officer must have reason to believe that any contravention of the provisions of the Order or the conditions of the licence is being or about to be committed, these two provisions do not vest any arbitrary power in the licensing authority or the other officer authorised under Clause 11 (1) (d) of the Licensing Order. If that much is conceded, then we are unable to see how the further step; such officer is empowered to take could be termed as arbitrary or unguided. Clauses (c) and [d) provide the further steps which such officer, who had reason to believe that contravention of the Act. Order or conditions of license is being or about to be committed may take. Clause (c) empowers him to take extracts or copies of any documents showing the transactions relating to the contraventions and the impugned clause (d) empowers him to search, seize or remove stocks of foodgrains or animals, vehicles, vessels or other conveyances used in carrying the said foodgrains in contravention of the Order or conditions of licence.
Clause (c) empowers him to take extracts or copies of any documents showing the transactions relating to the contraventions and the impugned clause (d) empowers him to search, seize or remove stocks of foodgrains or animals, vehicles, vessels or other conveyances used in carrying the said foodgrains in contravention of the Order or conditions of licence. The further steps envisaged by clauses (c) and (d) are merely intended to effctuate the purpose for which the licensing authority or other officer had entered the premises upon having reason to believe that a contravention of the Order or the conditions of licence has been or is being or about to be committed. The entry into the premises itself being lawful, the vesting of power of search, seizure and removal of stocks, upon finding a contravention being committed or already committed and was about to be committed cannot be termed as the vesting of an unguided power. When the contravention is noticed the licensing authorities are authorised to cancel the licence and seize the stock and even forfeit the same under section 6-A of the Act. Unless the power of search, seizure and removal of stocks is vested in the authorities noticing the contravention, the power of confiscation unequivocally vested in such authorities cannot be effectively exercised, and the dealer cannot be effectively prevented from contravening the provisions of the Act, Order and the conditions of licence. The exercise of the power of search, seizure or removal of stocks only follows the valid entry of an authority into the premises under clauses (a) and (b). 18. In Board of Revenue, Madras v. R.S. Jhaver1, the validity of sub-sections (2), (3) and (4) of the Madras General Sales Tax Act and the propriety of the search of a residential accommodation of a dealer and seizure of the account books and goods in his possession came up for consideration. The Supreme Court repelled the contention that in these provisions, there is no safeguard against arbitrary and improper search and that the power of search may be exercised by any officer empowered by the Government. The Supreme Court declared that: “The fact that the Act gives power to Government to empower any officer is therefore no reason to strike it down for, as we have said the Government will see that officers of proper status are empowered.
The Supreme Court declared that: “The fact that the Act gives power to Government to empower any officer is therefore no reason to strike it down for, as we have said the Government will see that officers of proper status are empowered. Nor do we think that an Assistant Commercial Tax Officer or an Inspector of Revenue Department or a Sub Inspector of police department is not an officer of proper status to make searches under this provision”. The Court further declared that: “though sub-section (2) itself provides no safeguards and might have been open to objection on that ground, there is a provision in the proviso to sub-section (2) which lays down that all searches under this sub-section shall so far as may be, be made in accordance with the provisions of the Code of Criminal Procedure. Therefore, the provisions of the Code of Criminal Procedure, so far as may be, apply to all searches made under sub-section (2). But when the proviso applies the provisions of the Code of Criminal Procedure to all searches made under this sub-section, as far as may be possible, we see no reason why section 165 should not apply mutatis mutandis to searches made under sub-section (2). We are therefore of opinion that safeguards provided in section 165 also apply to searches made under sub-section (2). These safeguards are-(i) the empowered Officer must have reasonable grounds for believing that anything necessary for the purpose of recovery of tax may be found in any place within his jurisdiction, (ii) he trust be of the opinion that such thing cannot be otherwise got without undue delay, (iii) he must record in writing the grounds of his belief, and (iv) he must specify in such writing so far as possible the thing for which search is to be made. After he has done these things, he can make the search. These safeguards which in our opinion apply to searches under sub-section (2) also clearly show that the power to search under sub-section (2) is not arbitrary.
After he has done these things, he can make the search. These safeguards which in our opinion apply to searches under sub-section (2) also clearly show that the power to search under sub-section (2) is not arbitrary. In view of these safeguards and other safeguards provided in Chapter VII of the Code of Criminal Procedure which also apply so far as may be to searches made under sub-section (2), we can see no leason to hold that the restriction, if any on the right to hold property and to carry on trade, by the search provided in sub-section (2), is not a reasonable restriction keeping in view the object of the search, namely, prevention of evasion of tax”. If a similar safeguard is provided under clause 11 (1)(d) of the Order, it must be held valid. No doubt, all the provisions for search and seizure contained in the Code of Criminal Procedure, are not made applicable to the searches and seizures made under Clause 11 of the Order; only sections 102 and 103 of the Code of Criminal Procedure relating to the search and seizure are made applicable by clause 11 (2) of the Order. Thus section 165 of the Code of Criminal Procedure is excluded from its application to searches under the Order. But what section 165, Criminal Procedure Code, mainly provides is that the Police Officer proceeding to make a search must have reasonable grounds for believing that anything necessay for purpose of investigation into an offence may be found in any place within his jurisdiction. It is only for that purpose that a search may be made. That is said to be a sufficient safeguard against arbitrary exercise of power of search and seizure vested in an authority. That safeguard is provided under the Order in Clause 11 (1) (a) and (5). As the search and removal of stocks under the Order can only follow either a requisition by the officer concerned from the owner or any occupier of any premises as contemplated by Clause 11 (1) (a) or an entry, inspection and search as contemplated by clause 11 (1) (J) of the Order and that may be done only if there is reason for him to believe that any contravention of provisions of the order or the conditions of any licence issued thereunder has been, is being or about to be committed.
Clause 11 (1) (d) cannot be said to vest an arbitrary and unguided power so as to be violative of the provisions of the Act or the fundamental rights guaranteed to a citizen. 19. In view of the above discussion, we are unable to agree with the view expressed in K. Munivelu v. Government of India1, which deals with Clause (5) of the Andhra Pradesh Coarse Grains (Export) Control Order, 1965 in which the power of search and seizure exercisable by a police Officer not below the rank of a Head Constable or any other person authorised in this behalf if he suspects that any provision of the order has been or is being or about to be contravened. In that judgment, the Bench held that the use of the words ‘suspects’ in clause 5(1) (iii) empowering seizure instead of “when the officer has reason to believe” which occurs in section 3 (2) (j) of the Essential Commodities Act and which specifically authorises issuing an order empowering search and seizure, to be ultra vires of that section. A contrary view has been taken in W.P. Nos. 2654 to 2670 of 1971 by another Bench of this Court in its judgment dated 25th October, 1971 one of us (Madhusudan Rao, J.) in Crl. Rcs. Nos. 109 to 113 of 1974, judgment dated 29th November, 1974 following the judgment in W.P No. 2654 of 1971 and batch came to the same conclusion which we have reached above with regard to the validity of clause 11(1) (d) of the Order. 20. A Bench of this High Court in W.P. No. 5122 of 1968 has considered the valicity of Clause 11 (1) (d) and held that the words “has reason to believe” though omitted from sub-clause (d) may be supplied and if so supplied the provision would be valid and not be vesting with the authorities an arbitrary and unguided power so as to be violative of Articles 14 and 19 of the Constitution. 21. In view of the above discussion while we agree with the conclusion reached by the Bench in the above case that Clause 11 (1) (d) is valid we do not think that the omission therein of the words “has reason to believe” would have rendered it invalid and have to be supplied for making it valid.
21. In view of the above discussion while we agree with the conclusion reached by the Bench in the above case that Clause 11 (1) (d) is valid we do not think that the omission therein of the words “has reason to believe” would have rendered it invalid and have to be supplied for making it valid. The context in which sub-clause (d) occurs and the necessity of reading sub-clauses (a) (b) (c) and (d) of Clause 11 (1) together and the purpose of the Act and the Order, regulate the power exercisable under clause 11 (I) (i) and make that sub-clause perfectly valid. In this view this clause cannot be said to be ultra vires of section 3 (1) or even section 3 (2) (j) of the Act. 22. It was next contended that even if Clause 11 (1) (d) is held to be valid the power of search, seizure and removal of goods may be exercised only in respect of such foodgrains as are being transported on animals, vehicles, vessels or other conveyances and not foodgrains stored in any particular premises in contravention of conditions of the licence or the provisions of the Order or the Act. In this behalf reliance is placed upon a judgment of our learned brother, Chinnappa Reddy, J., in W.P.No. 4991 of 1968 dated 15th April, 19702 who took the view that Clause 11 (1) (d) empowers seizure of goods in transit but not in store. A contrary view is expressed by our learned brother Ramachandra Rao, J., in W.P.No. 5621 of 19681 Later a Bench of this Court in Panduraugaiah Chetty v. Deputy Superintendent of Police2, upheld the view expressed in W.P. No. 5621 of 1968 and held: “........that the drafting of the subclause is somewhat unfortunate but the language used however defective it may be in our view, points to the conclusion to which we have reached i.e., that the meaning of the sub-clause is the same as is made expressly clear in the other said similar laws.
That conclusion of ours is strengthened by the surroundings of the sub-clauses,that is to say, the earlier sub-clauses of clause 11, the other provisions of the Order and the terms of the licence and is further fortified by the analogous provisions of similar laws referred to above......We are clear, in our view, that if the language, the contextual arrangement of the subclause its purpose or spirit and the existing, and analogous laws relating to the subject, the social factors giving rise to the legislation and the effect which the interpretation sought to be placed will have, are kept in view, the unmistatable and clear meaning of the sub-clause would be that foodgrains whether stored in an unauthorised place or whether they are being carried in a conveyance contrary to the provisions of the Order or the licence can be seized under Clause 11 (1) (d) of the Order........” We are of the view that however, inartistically drawn, if any other interpretation were placed on the said provision, the very purpose of the enactment would be defeated. The result would be while the foodgrains stored in a particular premises in contravention of the conditions of the licence, the Order and the Act would be immune from search, seizure and removal, only the goods which are in transit may be searched and seized. Once the goods are transported in contravention of the provisions of the Act, Order and the licence and reach the destination and are stored, they would be once again immune from search, seizure and confiscation. Such cannot be the intention of the legislature. The wording of the sub-clause though susceptible of the interpretation that only goods in transit may be seized inasmuch as if so read, the very purpose of vesting the power of seizure and removal of stocks far from being served would be defeated. In our view Clause 11 (1) (d) not only authorises search, seizure, confisation of goods in transit but in storage also. 23. The next point now for consideration is whether a licensee who is granted a licence to deal in specified foodgrains is entitled under that licence to dral in all the foodgrains enumerated in Schedule I of the Order. This necessitated reference. 24.
23. The next point now for consideration is whether a licensee who is granted a licence to deal in specified foodgrains is entitled under that licence to dral in all the foodgrains enumerated in Schedule I of the Order. This necessitated reference. 24. Mr.Lakshminarayana, learned Cousel for the petitioner contends that any dealer who has obtained a licence under the Foodgrains Dealers Licensing Order is entitled to carry on business in all the foodgrains mentioned in Schedule I of the said Order irrespective of the foodgrains particularly mentioned in the licence. 25. A dealer is defined under clause 2 (a) of the Order as follows: “dealer” means a person engaged in the business of purchase, sale or storage for sale of any one of the foodgrains in quantity of ten quintals or more at any one time, or in quantity five quintals or more of all foodgrains taken together, but does not include a person who (i) stores any foodgrains produced by him by personal cultivations; and (ii) does not engage in the business of purchase and sale of foodgrains“. Foodgrains is defined under Clause 2 (b) as follows: " "foodgrains" means any one or more of the foodgrains specified in. Schedule I to this Order including products of such foodgrains other than husk and bran”. Under Schedule I, the foodgrains including paddy (rice with husk), rice (husked) and jowar are included. Broken rice as such is not specifically included in Schedule I. The contention of Mr. Lakshminarayana, the learned Counsel for the petitioner is that ‘broken rice" is not a foodgrain as defined under the Act. Any business carried on in broken rice does not amount to dealing in foodgrains as contemplated by the Order and hence no licence is necessary for carrying on business in broken rice. Therefore, a licensee cannot be deemed to have carried on business in a foodgrain for which he has no licence.
Any business carried on in broken rice does not amount to dealing in foodgrains as contemplated by the Order and hence no licence is necessary for carrying on business in broken rice. Therefore, a licensee cannot be deemed to have carried on business in a foodgrain for which he has no licence. He also contends that if broken rice is also deemed to be a foodgrain for which a licence is necessary, then, inasmuch as he has already obtained a licence under that Order, though "broken rice" is not specifically included in the licence issued to him, he is entitled to carry on business in that commodity as well as paddy and jowar for no separate licence is re quired to be obtained for every foodgrain and their products mentioned in Schedule I. 26. The broad contention that a dealer who has obtained a licence under the Foodgrains Dealers Licensing Order is entitled to carry on business in all the foodgrains mentioned in Schedule I of the Order, irrespective of the particular foodgrain entered in the licence issued to him, in our view cannot be accepted. In view of the definition of 3 "Dealer" under clause 2 (a) of the Order, one need not deal in all the foodgrains mentioned in Schedule to be deemed a "Dealer". Even if he deals in a single foodgrain mentioned therein, in quantites of ten quintals or more he is required to obtain a licence. "Foodgrains" means one or more foodgrains specified in Schedule I. Clause 3 of the Order which prohibits person from carrying 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. Such a licence is issued under Clause 4 on an application made in Form A for a particular period. The licensee is required to pay the fees chargeable for such licence.
Such a licence is issued under Clause 4 on an application made in Form A for a particular period. The licensee is required to pay the fees chargeable for such licence. The licence is issued as provided in Form B. Among other particulars which an applicant has to give in an application for the grant of a licence is, the place of his business, the period during which he has been dealing in foodgrains the quantities of each of the foodgrains handled by him annually during the preceding three years and the quantities of foodgrains he is likely to handle during the ensuing year, He has also to mention the quantity of various foodgrains in his possession on the date of the application and the place where such quantity is held. The particulars called for in the application are not without any purpose. All these particulars are evidently intended to guide the licensing authority in the matter of granting or refusing a licence and if he decides to grant a licence, the particular foedgrains in which he would permit the dealer to carry on the business having regard to his dealings in the past three years, the present stock held by him and the business which he is likely to handle in the ensuing year and the quantity of the particular foodgrain available during that period. These particulars are required to be furnished even when applying for renewal of the licence. Upon these particulars being furnished, the licence is issued in Form B which prescribes certain terms and conditions. The licence is issued subject to the terms and conditions, mentioned therein. None of these terms and conditions can be deleted from the licence. It is to be issued in the statutory Form. The contention that what a .1 is contained in form "B" do not constitute terms and conditions of the licence cannot be accepted. Apart from there conditions, the licence is subject to the provisions of the Andhra Pradesh Foodgrains Dealers Licensing Order. The very first condition specified in the licence is that the licensee is authorised to purchase, sell or store for sale the foodgrains mentioned therein. The licensing authority is empowered to specify the particular foodgrains for which the licence is issued.
Apart from there conditions, the licence is subject to the provisions of the Andhra Pradesh Foodgrains Dealers Licensing Order. The very first condition specified in the licence is that the licensee is authorised to purchase, sell or store for sale the foodgrains mentioned therein. The licensing authority is empowered to specify the particular foodgrains for which the licence is issued. The Licensing Order doe.-, not declare that every applicant is entitled to carry on business in all the foodgrains; nor does it declare that when a person applies for dealing in all the foodgrains mentioned therein, the licensing authority should necessarily grant him a licence for all the foodgrains applied for by him. On the other hand the express provision contained in Clause 4 viz., that the application for grant of a licence shall be made in Form A and that the licence shall be issued in Form B indicates that notwithstanding the application, the Licensing Authority may, having regard to the previous business dealings of the applicant and having regard to the availability of stocks of foodgrains and the number of licensees already carrying on business in a particular area in various foodgrains, may either grant or refuse the licence in respect of any of the foodgrains applied for. Thus while the applicant is not given any right to the grant of a licence for all the foodgrains specified in Schedule I, and applied for, the licensing authority is given a discretion, which discretion, of course, cannot be exercised arbitrarily, to grant a licence. Having regard to several factors he may grant a licence for dealing in all the foodgrains or may grant only in respect of some of the foodgrains mentioned in Schedule I. Section 7-A of the Order, which requires a licensee to maintain a register of daily accounts of foodgrains declares that these accounts shall be maintained “for each of the foodgrains in respect of which he is licensed to deal”. That provision also gives a clear indication that the licensee may deal only in the foodgrains which are entered in his license and not all the foodgrains mentioned in Schedule I of the order. No doubt, as contended by Mr.
That provision also gives a clear indication that the licensee may deal only in the foodgrains which are entered in his license and not all the foodgrains mentioned in Schedule I of the order. No doubt, as contended by Mr. Lakshminarayana, the learned counsel for the petitioners, reparate licence is not required to be obtained for each of the foodgrains mentioned in Schedule I; nor is any additional fee payable, if more than one foodgrain is entered in the licence issued to a dealer. The fee chargeable for the licence issued under the Order remains the same a respective of the number of foodgrains a dealer is permitted to deal in. But that, to our, mind is not determinative of the right of a dealer to deal even in the foodgrains not entered in the licence. The right of the dealer being circumscribed by the terms and conditions imposed under the licence issued to him, the dealer cannot deal in foodgrains in contravention of those terms and conditions. Dealing in foodgrains other than those specified in the licence, therefore constitutes a contravention of the terms and conditions of the licence, as well as the provisions of the Licensing Order, and any dealer contravening these provisions is liable under section 6-A of the Essential Commodities Act. 27. The contention of Mr. Lakshmi Narayana that the licence in form No. B in so far as it stipulates that licence is granted with respect to certain foodgrain and not to all the foodgrains mentioned is Schedule I is ultra vires of the Act to our mind is unacceptable. As already discussed above, there is no provision in the Act which declares that every peron who makes an application is entitled to the grant of a licence with respect to all the foodgrains mentioned therein. The Order itself declares that the licence should be granted in form B which specifically authorises the grant of a licence in respect of all or any of the foodgrains. The condition prescribed by form B cannot be deemed to be void for it is not in contravention of any specific provision of the Act or of the Order. In view of the above discussion, the contention of the petitioner that his dealings in paddy and jowar do not constitute contravention of a condition of the licence must be rejected. 28.
In view of the above discussion, the contention of the petitioner that his dealings in paddy and jowar do not constitute contravention of a condition of the licence must be rejected. 28. With regard to the confiscation on "broken rice", Mr. Lakshminarayana contends that "broken rice" is not a foodgrain described in Schedule I of the order, no licence is required to deal in that commodity and that it cannot be confiscated. So far as the petitioner’s liability under section 6-A of the Act is concerned this contention has relevance to the question as to what foodgrains may be confiscated if a contravention of the provisions of the Order or the licence is established. No doubt "broken rice" as such is not mentioned in the Schedule I of the Order and if the commodities mentioned therein alone are foodgrains and not others, as understood in common parlance, then the petitioner’s contention would have to be upheld, The definition of "food-grains" however includes not only the foodgains specified in Schedule I, but also the products of such foodgrains other than husk and bran. Product includes not only what is manufactured with a particular commodity but also by-product thereof. According to Shorter Oxford English Dictionary "Product" means not "a thing produced by nature or a natural process" but also "that which is produced by any action, operation or work; a production; the result: That the by-product of the commodity specified Schedule I is also included in the term “food grains” is clear from the fact that in defining “food grains” the Legislature has taken care to exclude “husk and bran” from the products of the foodgrains specified in Schedule I; evidently being of the view that if it is not so excluded even husk and bran being a product of rice and paddy, which are expressly excluded from the definition of foodgrains and in Schedule I would fall within the ambit of the definition of “Food grain”. Husk and bran are definitely by-products of paddy that is milled into rice. Broken rice is also one such by-product of rice. In fact, it is a part of rice. It is rice though not whole lice.
Husk and bran are definitely by-products of paddy that is milled into rice. Broken rice is also one such by-product of rice. In fact, it is a part of rice. It is rice though not whole lice. Hence if the licensee deals in broken rice, that being a product of the foodgrains specified in Schedule I viz., rice, it would be deemed to be a foodgrain within the meaning of the Order and any person dealing in broken rice must possess a licence under that Order. The learned Counsel for the petitioner, however contended that if broken rice is a by-product of rice inasmuch as the petitioner has a licence for dealing in rice he should be deemed to be holding a licence for dealing in broken rice, as well, for broken rice as such is not expressly mentioned in Schedule I. We are inclined to accept this contention. When a particular product of foodgrain is not specifically mentioned in Schedule I and only deemed to have been included on account of the definition contained in clause 2 (b) the non-mention of the product of the foodgrain specifically mentioned in the licence does not disentitle the licensee from dealing in that foodgrain for, the mention of a particular foodgrain includes its products also. There is no provision to include specifically all products of foodgrains also in the licence. Mr. Lakshminarayana, learned Counsel for the petitioner relied upon a decision rendered by one of us (Madhava Reddy, J.) in K. Narasimhulu Setty & Co. v. State of Andhra Pradesh1, to contend that broken rice cannot be confiscated as it is not rice and therefore not a “foodgrain”. That was a case arising under the Andhra Pradesh Rice Procurement (Levy) and Restriction on Sale Order, 1967 . The entire quantity of rice and broken rice contained in the bags and being transported as broken rice was ordered to be confiscated on the ground that it was rice and that it constituted a violation of Clause 4 of the Andhra Pradesh Rice Procurement (Levy) and Restriction on Sale Order, 1967.
The entire quantity of rice and broken rice contained in the bags and being transported as broken rice was ordered to be confiscated on the ground that it was rice and that it constituted a violation of Clause 4 of the Andhra Pradesh Rice Procurement (Levy) and Restriction on Sale Order, 1967. In that case it was held that only ‘rice’ as such and not ‘broken rice’ may be seized and confiscated and accordingly, broken rice was directed to be released on the ground that only goods which require permit under that Older are liable to be confiscated and for transporting "broken rice" no permit was required. That decision was rendered having regard to the definition of ‘rice’ contained in that Order which is as as follows: " "Rice" means any variety of rice and includes rice equivalent of paddy held in stock.” Under that order foodgrains and their products as such are not included. It pertains only to rice and the definition of rice does not include products and byproducts of paddy and rice (as in the Andhra Pradesh Foodgrains; Dealers Licensing Order); but only includes rice equivalent of paddy held in stock. Thus “broken rice” was clearly excluded from that Order. That decision therefore cannot be of any assistance to the petitioner herein who is found to have contravened Clause 3 of the Andhra Pradesh Foodgrains Dealers Licensing Order. We therefore hold that dealing in ‘‘broken rice, without a licence at least in “rice” constitutes a contravention and for the contravention of the conditions of the licence broken rice may also be confiscated. 29. The storage of foodgrains in the premises other than the one mentioned in the licence, is also one of the contraventions alleged against the petitioner. Mr. Lakshminarayana, learned Counsel for petitioner contends that although the licence mentions a particular place where the dealer may store foodgrains, the dealer is not precluded from storing them at other places provided he gives intimation of the actual occupation of the godown within 48 hours thereof and submits the licence for necessary entry therein as laid down in the note appended to condition No. 2 of the licence. This contention proceeds upon the assumption that on the relevant date viz., 31st March, 1973 when the premises of the petitioner was inspected this note was in existence.
This contention proceeds upon the assumption that on the relevant date viz., 31st March, 1973 when the premises of the petitioner was inspected this note was in existence. Condition No. 2 in so far as it is relevant for our present purpose together with the note reads as follows: "2. (a) The licensee shall carry on the aforesaid business at the following place: ... ... .... .... (b) Foodgrains in which the aforesaid business is to be carried on shall not be stored at any place other than any of the godowns mentioned below: Note: If the licensee intends storing his foodgrains in places other than those specified above, he shall give intimation thereof within 48 (forty eight) hours of the actual occupation of the godowns and shall produce the licence for requisite changes by the licensing authority. (c). . . . . . . . . . . . . . . . It would be seen from the aforesaid condition that while it authorised a licensee to cany on business at a particular place, it prohibits; the storage of such foodgrains at any place other than any of the godowns mentioned in the licence. The note however authorises him to store at other places provided he intimates the occupation of the godown within 48 hours thereof. This Note was omitted from conditions of the licence under G.O. Ms.No.1561, Food and Agriculture (C.S.I.) dated 2nd November, 1972. It was again restored on 8th May, 1975. In the result, on the relevant date i.e., 31st March, 1973 the date when the contravention is alleged to have been committed, the note was not in existence and consequently the licensee was not authorised to store foodgrains at any place other than the place mentioned in the licence and was not given the facility of storing at other places by intimating within 48 hours thereafter and obtaining the necessary endorsement on the licence. Further, on the facts of these cases it does not appear that the intimation was given within 48 hours of the storage of foodgrains by the petitioner to the authorities concerned as contemplated by the note. 30. The only other contention which remains to be considered is whether the petitioner had no guilty mind or evil intention in committing any of the contraventions alleged against him.
30. The only other contention which remains to be considered is whether the petitioner had no guilty mind or evil intention in committing any of the contraventions alleged against him. To this aspect of the matter which is common to all the petitioners we will address ourselves after referring to the contraventions alleged to have been committed by the accused in the other petitions. 31. The petitioner in Crl. R.C.754 of 1973 is a dealer in foodgrains holding a licence under the Foodgrains Dealers Licensing Order. His business premises was inspected on 3rd April, 1973 and he was found to be in possession of 864-29 quintals of cholam, which according to the inspecting authority was a contravention of clause 3 of the Foodgrains Dealers Licensing Order, i.e., carrying on business without a licence. He is also alleged to have failed to deliver 216.1 quintals of jowar and thus committed a contravention of clause 3 of the Andhra Pradesh Coarse Grains Procurement (Levy) Order, 1973. The grain was seized on 8th April, 1973 and a show cause notice dated 15th August, 1973 was issued to him calling upon him to submit explanation as to why confiscation of the entire stock should not be ordered. The petitioner submitted that he possesses a licence under the Foodgrains Dealers Licensing Order specifically to deal in paddy, rice and pulses. He had also applied to the licensing authority on 31st July, 1969, for inclusion of cholam also specifically in the licence. The licensing authority having received his application did not return the licence. From time to time, the petitioner had been submitting the returns every fortnight showing the stock of jowar held by him. The concerned authorities also gave transport permits and made periodical inspection of the stock of cholam and did not take any objection, to his dealings in cholam. The petitioner was entitled to carry on business in cholam under the licence and in any event carried on the same bona fide under the licence. He also contended that during the relevant period he had only purchased cholam but had not sold it and therefore he was not a dealer in cholam as contemplated by the Food_ grains Dealers Licensing Order.
He also contended that during the relevant period he had only purchased cholam but had not sold it and therefore he was not a dealer in cholam as contemplated by the Food_ grains Dealers Licensing Order. The District Revenue Officer by his order dated 10th September, 1973, held that the petitioner had contravened the conditions of the licence in dealing in jowar and directed confiscation of the entire stock. The appeal preferred by him was dismissed by the learned Sessions Judge. Cr. Rc. No. 754 of 1973 is directed against those orders. W.P. No. 6831 of 1974 is filed questioning the vires of clause 11 (1) (d) of the Order and also other contentions as are raised in W.P. No. 6830 of 1974. In addition to some of the contentions raised in Crl.Rc.No.753 of 1973 and W.P.No.6830 of 1974, he also raised the contention that the Coarse Grains Procurement (Levy) Order was enforced on 31st January, 1973 and was rescinded under G.O.Ms. No. 830, Food and Agriculture, dated 14th August, 1973. Between 31st January, 1973 and 3rd April, 1973 the petitioner had only purchased but not sold cholam. Therefore, he cannot be deemed to be a dealer as contemplated by the Andhra Pradesh Foodgrains Dealers Licensing Order. According to the learned Counsel for the petitioner Mr. Padmanabha Reddy, a person who has merely purchased but has not sold foodgrains is not a dealer. But to cur mind the definition of “dealer” contained in Clause 2 (a) of the Order does not support this contention. Even if one is engaged only in the business of purchase or only in the business of sale or merely in the business of storage for sale of any of the foodgrains in excess of the quantities mentioned therein, he would be a dealer within the meaning of the Order. One need not engage himself in all the operations of purchase, storage and sale. Engaging oneself in one of these operations with respect to “cholam”, a foedgrain mentioned in Schedule I thereof, brings him within the definition of a dealer under that Order. 32.
One need not engage himself in all the operations of purchase, storage and sale. Engaging oneself in one of these operations with respect to “cholam”, a foedgrain mentioned in Schedule I thereof, brings him within the definition of a dealer under that Order. 32. He further contended that in view of clauses 7 and 8 of the Andhra Pradesh Coarse Grains Procurement (Levy) Order, cholam may be seized only if the concerned officer believes that any dealer liable to sell and deliver the coarse grains has refused or failed to sell and deliver the same as required under the Order but not otherwise. There is no proof that the petitioner has refused or failed to sell or deliver coarse grains. Mere possession of cholam is not a contravention of clauses 7 and 8 of the Andhra Pradesh Coarse Grains Procurement (Levy) Order. That contention in our view must be upheld so far as it relates to the contravention of the provisions of the Andhra Pradesh Coarse Grains Procurement (Levy) Order. But that order refers to a dealer who is licensed to carry on business of purchase, sale or storage of coarse grains having a valid licence under the Andhra Pradesh Foodgrains Dealers Licensing Order, 1964. If the petitioner had no valid licence to deal in cholam under the licence granted to him, his act of purchase of cholam though not a contravention of the Andhra Pradesh Coarse Grains Procurement (Levy) Order would certainly constitute a contravention of the provisions of the Foodgrains Dealers Licensing Order. Seizure of such foodgrains cannot therefore be said to be illegal or without jurisdiction. It must however be held that no contravention of the provisions of the Andhra Pradesh Coarse Grains Procurement (Levy) Order was committed. 33. It was next contended that the Andhra Pradesh Coarse Grains Procurement (Levy) Order in a temporary statute and no prosecution could be launched for the contravention of any of the provision thereof after the temporary statute has lapsed or is rescinded. No doubt the Andhra Pradesh Coarse Grains Procurement (Levy) Order, 1973 was in force only between 31st March, 1973, and 14th August, 1973. But when that order was enforced it was not envisaged to be in operation for any fixed period or for a short duration.
No doubt the Andhra Pradesh Coarse Grains Procurement (Levy) Order, 1973 was in force only between 31st March, 1973, and 14th August, 1973. But when that order was enforced it was not envisaged to be in operation for any fixed period or for a short duration. That order as enforced does not fix any time limit, after the expiry of which it would cease to be in operation. Unless rescinded, it would have continued for an unlimited period. The mere fact that it was rescinded on 14th August, 1973, does not render that enactment a temporary statute. A temporary statute is one which is envisaged to be in operation for a temporary period even at the time when it is enforced. If the provisions of the Andhra Pradesh Coarse Grains Procurement (levy) Order are deemed to be provisions of a temporary statute undoubtedly as held in Union of India v. V. Sitaramanjaneyulu1, unless it contains some provision (to the contrary) after the expiry of that period, it ceases to have any further effect. Thereafter neither any proceedings can be continued; nor any fresh proceedings initiated thereunder. There is nothing in the Andhra Pradesh Coarse Grains Procurement (Levy) Order which continues the proceedings or authorises taking of any proceedings with respect to any contravention committed during the period when it was in force. But inasmuch as the order is held to be not a temporary statute but a statute which has been repealed, the principles enunciated in Union of India v. T. Sitaramanjaneyulu1, have no application to the facts of this case. That apart the contravention alleged against the petitioner is not of the Andhra Pradesh Coarse Grains Procurement (Levy) Order only, it includes contravention of the provisions of the Andhra Pradesh Food-grains Dealers’ Licensing Order which was undoubtedly in force on the date of the contravention and continues to be in force till today. This contention of the petitioner is, therefore rejected. 34. It is also pleaded that even if all other contentions are rejected, the circumstances in which the trivial contravention was committed, the entire stock of foodgrains could not and ought not to be confiscated. The petitioner had no mens rea or evil intention when he purchased cholam. As already stated this contention is common to all the petitioners and the same would be dealt with along with the case of the other petitioners. 35.
The petitioner had no mens rea or evil intention when he purchased cholam. As already stated this contention is common to all the petitioners and the same would be dealt with along with the case of the other petitioners. 35. The petitioner in Crl.R.C. No. 521 of 1974 who is a rice-miller as well as a “dealer” in. foodgrains is allegedly found to have contravened the provisions of the Andhra Pradesh Foodgrains Dealers Licensing Order when his mill premises were inspected on 23rd March, 1973 by the Grain. Purchase-Cum-Eniorcement Officer. Rice Procurement. It is alleged that he failed to deliver 47 quintals of levy rice, that he did not maintain proper accounts, that he stored foodgrains in unauthorised godown No. 3/32-A and that he carried on dealings in jowar, a food-grain not entered in his licence. The petitioner denied the allegations and submitted his explanation. The District Revenue Officer, however, held that all the violations alleged against him were proved. On appeal by the accused-petitioner, the learned Sessions Judge held that the variations in stocks and the allegation of proper accounts, were trivial except as regards 150 quintals of paddy milled on 6th and 7th of February, 1973 and not entered in the register. He also held that the dealer did not deliver 47 quintals of levy rice, that he stored foodgrains in an unauthorised godown and that he dealt in jowar for which he did not hold a licence. In that view he upheld the order of confiscation of the entire stock as directed by the District Revenue Officer. So far as stoiage of the foodgrains in godown No. 3/3/2-A is concerned, we find no reason to disagree with the finding of the learned Sessions Judge that it is not an authorised godown and the petitioner was not entitled to store therein. No doubt, it appeals that the petitioner was storing in the said godown since 1970 and pledged the stocks therein with the Andhra Bank to the knowledge of all the authorities concerned. Godown No.3/312, may be as contended by Mr. Babulu Reddy, the learned counsel for the petitioner, a part of the mill bearing number 312. But nonetheless the mill and the godown are given two separate house numbers and seem to have been recognised as two different premises.
Godown No.3/312, may be as contended by Mr. Babulu Reddy, the learned counsel for the petitioner, a part of the mill bearing number 312. But nonetheless the mill and the godown are given two separate house numbers and seem to have been recognised as two different premises. In fact while in the original application the petitioner had not applied for inclusion of this godown in the licence as a place of storage of foodgrains, he mentioned that specifically in his application for renewal of the licence. That request was neither allowed nor rejected and the licence was retained with the licensing authority without intimating the petitioner one way or the other. While these facts may weigh with the Court in the matter of deciding the quantum of foodgrains to be confiscated, but on that score the Court cannot hold that the petitioner had not stored in a place other than the one mentioned in the licence. Storage in godown No. 3/312-A, technically constitutes a contravention of the conditions of the licence. 36. So too, for the reasons already stated, the petitioner’s dealings in "jowar" which is a foodgrain not entered in his licence constitutes a contravention of the provisions of the Andhra Pradesh Foodgrains Dealers Licensing Order and the conditions of licence. The only two other allegations of contravention which remain to be considered are whether the petitioner is guilty of not delivering 47 quintals of levy rice and guilty of not maintaining proper accounts with regard to 150 quintals of paddy milled on 6th and 7th of February. It is the petitioner’s case that he produced 489 quintals of rice including the paddy milled on 24th May, 1973, i.e., including the 150 quintals of paddy milled on 6th and 7th February and consequently was bound to deliver 75 per cent of the said rice which comes to 366.75 quintals of rice. He had delivered the entire quantity except 47 quintals of rice. Out of that, by the date of the inspection he had delivered 46 quintals and only one quintal remained to be delivered.
He had delivered the entire quantity except 47 quintals of rice. Out of that, by the date of the inspection he had delivered 46 quintals and only one quintal remained to be delivered. It is contended that quantity which remained undelivered is so trivival that it could not be deemed to be contravention at all and even if it is held otherwise under Clause 8 of the Andhra Pradesh Rice Procurement (Levy) and Restriction on Sale Order, 1967, the Enforcement Officer is authorised to order seizure of only that quantity of rice or paddy from the stock held by the petitioner and not the entire quantity that was in stock on that day. 37. Under ‘clauses 9 (1) (d) of the Andhra Pradesh Rice Procurement (Levy) and Restriction on Sale Order the concerned Officer may: "Upon information and after such inquiry as he thinks necessary has reason to believe that any miller or dealer who has to deliver rice under this order is attempting to evade or has evaded delivery of rice, may after recording in writing the grounds of his belief and with a view to securing compliance with this order or to satisfying himself that this order has been complied with.................... (a) to (c) * * * (d) search and, so far as may be necessary for that purpose, seize any paddy or rice found in possession of any such person in respect of which he has reason to believe that a contravention of any of the provisions of this order has been, or is being or is about to be committed and thereafter take or authorise the taking of all measures necessary for the production of the stocks so seized...." 38. This provision is intended to secure the compliance on the part of the miller and the dealer of his obligation to deliver the resquisite quantity of paddy or rice due from the miller or dealer as the case may be. The power under hat provision is not intended to be exercised for any other purpose. The word "any miller or dealer who has to deliver rice under this order is attempting to evade or has evaded delivery" indicate that this power may be exercised only when the miller or dealer has not delivered or is attempting to evade delivery of rice due from him. The further words in.
The word "any miller or dealer who has to deliver rice under this order is attempting to evade or has evaded delivery" indicate that this power may be exercised only when the miller or dealer has not delivered or is attempting to evade delivery of rice due from him. The further words in. clause 9 (1) that "with a view to securing compliance with this order or to satisfying himself that this order has been complied with" show that he may exercise that power for ensuring the delivery of rice due from the miller or the dealer. For this purpose he may search and seize the rice as laid down in Clause 9 (1) (d) in which the words “so far as may be necessary for that purpose" emphasise that the search or seizure is for securing the rice due from the miller or dealer and not for any other purpose. If the object of vesting power under Clause 9(1) is to procure rice due from any miller and dealer, the power to confiscate the rice for that contravention cannot be exercised so as to confiscate the entire stock. It could only be exercised to realise so much of the quantity of rice as is short delivered. Even according to the petitioner he had failed to deliver only one quintal of rice; to that extent there is admittedly a contravention. That contravention cannot be wholly overlooked. Though only a small quantity of rice is; still due from him and that may weigh with the Court in the matter of ordering confiscation of a lesser quantity of foodgrains, it is not such that no prosecution should at all have been launched. 39. As regards the contention that from the paddy of 150 quintals milled on 6th and 7th February only broken rice were recovered all that we can say in this revision petition against the concurring findings of the Courts below is that it is not perverse and wholly unsupported by evidence on record calling for interference by the High Court. The submissions made in this behalf are therefore rejected. 40.
The submissions made in this behalf are therefore rejected. 40. Just as in the other petitions, the petitioner herein contends that he has made an application for renewal requesting for inclusion of jowar in the licence and that to the knowledge of the licensing authorities, he has been carrying on business in jowar submitting his returns every fortnight, therefore, he cannot be imputed with any mens rea so as to hold him guilty of any offence. We may now turn to this common contention raised in all these three revision petitions. 41. It is contended by the petitioners that having regard to the facts and circumstances of each of these cases there cannot be any question of hoarding, or black-marketing or clandestine transactions or any deliberate effort on the part of the petitioners to contravene any of the provisions of the Essential Commodities Act or the Licensing order or the terms and conditions of the licence. There is no guilty mind or evil intention and therefore they cannot be guilty of the contravention of any provision of the Act, the Order or the conditions of the licence and no order of confiscation could be made, in support of that contention reliance is placed on a judgment of the Supreme Court in Nathulal v. State of Madhya Pradesh1, Subba Rao J. (as he then was) dealing with a case under section 7 of the Essential Commodities Act, in which the allegation was that the appellant therein had contravened section 3 (2) of the Madhya Pradesh Foodgrains Dealers’ Licensing Order, 1958. The dealer had applied for a licence and in anticipation of its grant had engaged himself in purchase and sale of foodgrains. In allowing the appeal, the learned Judge held that the accused stored goods under a bona fide impression that the licence in regard to which he made an application was issued to him, though not actually sent to him. The fact that the licensing authority did not communicate to him the rejection of his application confirmed the accused’s plea. On that belief he proceeded to store the foodgrains by sending the relevant returns to the authorities concerned. It was therefore, a storage of foodgrains within the prescribed limit under a bona fide belief that he could legally do so.
The fact that the licensing authority did not communicate to him the rejection of his application confirmed the accused’s plea. On that belief he proceeded to store the foodgrains by sending the relevant returns to the authorities concerned. It was therefore, a storage of foodgrains within the prescribed limit under a bona fide belief that he could legally do so. He did not, therefore, intentionally contravene the provisions of section 7 of the Essential Commodities Act or of the Order made under section 3 of the Act. Shah, J., in a concurrent judgment declared: “I have no doubt that an offence under section 7 of the Essential Commodities Act, X of 1955 for breach of section 3 of the Madhya Pradesh Foodgrains Dealers Licensing Order, 1958 necessarily involves a guilty mind as an ingredient of the offence...For the contravention of such a prohibition to be an offence, mens rea is necessary condition.” But even in that judgment it is recognised that ‘doubtless, a statute may exclude the element of nuns rea, but it is a sound rule of construction adopted in England and also accepted in India to construe a statutory provision creating an offence in conformity with the common law rather than against it unless the statute expressly or by necessary implication excluded mens red. Mens rea by necessary implication may be excluded from a statute only where it is absolutely clear that the implementation of the object of the statute would otherwise be defeated. The nature of the mens rea that would be implied in a statute creating an offence depends on the object of the Act and the provisions there of . In Deokaran Das Agarwala and others v. State of Bihar2, the making of an application for a licence and payment of necessary charges and storage of goods made thereafter in bona fide belief that he is entitled to store them even before the licence was actually issued were held to be sufficient circumstances (under the law as it stood then) even to hold prima facie that no offence was committed under section 7 of the Essential Commodities Act, and the accused was ordered to be discharged. These decisions were rendered before the amendment of section 7 of the Essential Commodities Act, 1955 by Act XXXVI of 1967.
These decisions were rendered before the amendment of section 7 of the Essential Commodities Act, 1955 by Act XXXVI of 1967. By the Amending Act in section 7, which declared: “(1) If any person contravenes any order made under section 3 (a) he shall be punished......” the words “whether knowingly or otherwise” were added. As the Act stood without these amending words, the Supreme Court held that the object of the Act would not be defeated if mens rea is read as an essential ingredient of the offence. Evidently, having regard to this judgment of the Supreme Court the amendment was introduced and as a result of this amendment,the intention of the legislature is made abundantly clear, namely any contravention of the proviisions of the Act, Order or the conditions |of licence is per se punishable i.e., even if it is not done knowingly or intentionally. It is not necessary to establish the guilty mind of the person contravening the provisions of the Act or the Order. If the contravention is proved, punishment must follow. The contravention alleged against all these petitioners is after the amendment in section 7 of the Essential Commodities Act. Therefore, the contention that the petitioners were not having a guilty mind or intention, when they committed the alleged contraventions and therefore no confiscation should be ordered, cannot be upheld. However, if the contravention was not committed knowingly or intentionally that factor Would certainly weigh with the Court in determining the penalty that may be imposed for such a contravention. The absence of mens rea would not however entitle them to escape the penalty altogether. 42. The petitioner in Criminal Revision Case No. 753 of 1973 was granted a licence to deal in rice, wheat products and pulses. He was not expressly granted licence for dealing in paddy and Jonnalu. But in all his returns he was showing that he was dealing in Jonnalu (cholam). No objection was taken to his dealing in the said commodity. He was registered as a ‘dealer’ under the Andhra Pradesh General Sales Tax Act to deal in all these food-grains. The foodgrains stock register required to be maintained by him as a “dealer” showed the opening and closing balances in Jonnalu and paddy also. The licence which was submitted by him for renewal was not returned after renewal to the petitioner.
The foodgrains stock register required to be maintained by him as a “dealer” showed the opening and closing balances in Jonnalu and paddy also. The licence which was submitted by him for renewal was not returned after renewal to the petitioner. Such applications for renewal were made year after year in March, 1971, March, 1972 and March, 1973. In the renewal applicaion the petitioner stated that he was dealing in cholam and paddy and also submitted the quantities of cholam and paddy held by him on the date of the application. He also disclosed in the applicalion that he is likely to deal in 1000 quintals of cholam and 1000 quintals of paddy. He was not intimated that his application for renewal of the licence was rejected or that he is refused permission to deal in cholam and paddy for which the licence was not originally granted. In those circumstances, the action of the petitioner in dealing in those commodities must be deemed to be bona fide. Even with regard to the places of storage, it is seen that he had applied to the District Supply Officer on 16th March,1973 stating that he was in occupation of godown bearing door No. 2/61 and door No. 5/196-2 and he requested that those two godowns may also be included in the said licence for the pur pose of storage. This request also was not turned down. In fact in the licence issued in his favour there is a note to the effect if the licence intends to store his foodgrains in places other than those specified in the licence, he shall give intimation thereof within ferry-eight hour of the actual occupation of the godown and shall produce the licence for requisite entries there in by the licencing authority. Accordingly, when he came into possession of these two godowns on 16th March, 1973, he sent intimation to the licensing authority on 19th March, 1973. Though that intimation may not have been given within 48 hours of the occupation of the godown, in strict conformity with the note refened to above, still it excludes any inference of clandestine storage of foodgrains by the licence In the above circumstances, we think that directions to confiscate the entire stock is excessively harsh. 43.
Though that intimation may not have been given within 48 hours of the occupation of the godown, in strict conformity with the note refened to above, still it excludes any inference of clandestine storage of foodgrains by the licence In the above circumstances, we think that directions to confiscate the entire stock is excessively harsh. 43. In Criminal Revision Case No. 754 of 1973, also the petitioner had applied on 31st July, 1969, to include cholam along with paddy, rice and pulses in the licence. The original licence was submitted to the licensing authorities for the purpose of renewal with the above request. In the application, the petitioner mentioned the stocks of jowar held by him and successively submitted every fortnight the stocks of cholam received. The authorities concerned made periodical inspection of the stocks held by the petitioner find issued transport permits. Neither the original licence was returned after renewal nor his request for inclusion of cholam in the licence was rejected or intimated to the petitioner. In these circumstances, if the petitioner acted as a dealer in cholam bona fide believing that the authorities had accepted his request and had permitted him to carry on business in cholam also under the aforesaid licence, though in the absence of the actual inclusion of that item in the licence, the act of the petitioner constitutes a contravention, that contravention does not call for confiscation of the entire stock. 44. The case of the petitioner in Criminal Revision Case No.521 of 1974 also deserves to be viewed similarly. One of the contraventions alleged is that he dealt in jowar without the same being included in his licence. The reasoning of the other case applies to the case of the petitioner herein also. The other contravention alleged is the non-delivery of one quintal of levy rice. He had delivered the entire quantity of 366.75 quintals of rice and the quantity of rice that remained to be delivered is so meagre that that by itself does not call for the confiscation of the entire stock of other foodgrains. The storage of foodgrains in the godown of the mill and not in the mill itself, which is entered in the licence, is only a technical contravention. The godown happened to be given a separate door number and as such should have been specifically included.
The storage of foodgrains in the godown of the mill and not in the mill itself, which is entered in the licence, is only a technical contravention. The godown happened to be given a separate door number and as such should have been specifically included. That the storage in other godown was to the knowledge of the authorities, is clear from the fact that it is adjacent to the mill. It was also for some time openly pledged with the Andhra Bank. It was not a clandestine storage of the foodgrains. The petitioner never attempted to conceal the stocks stored therein. They were shown in the returns submitted by him. The confiscation of the entire stock in those circumstances is not called for. In Gaganoba Yaswant Jadav v. The Collector of Central Excise, Hyderabad1, a Bench of this Court dealing with a case under the Customs Act, 1962, observed: “The statute gives wide discretion to the tribunal to determine penalty. It can scarcely be doubted that the power to levy penalty must be exercised according to cannons of judicial discretion. It is not an arbitrary power that vested in the Collector of Customs. It is incumbent on him to take into consideration all aspects of the case before penalty is determined.” Dealing with section 112 of the Customs Act, the Court held: “....The Legislature has conferred on the person making adjudication under section 112, a judicial discretion in the levy of the penalty. The naked and irrational exercise of the power cannot be uphled. The primary purpose of levying the penalty is to make the levy a deterrent and not to treat the punishment as retributive. The principle undoubtedly underlying the levy of the penalty is to make it a deterrent factor so that the offence may not be repeated. The past conduct of the persons concerned is certainly a relevant factor determining what amount of penalty would be appropriate.” 45. Section 6(a) of the Essential Commodities Act does not make it obligatory upon the authorities finding a person guilty of contravention of the Act, Order or conditions of licence to confiscate the entire stock. It vests a wide discretion in the authorities concerned. The authority may order confiscation of the entire stock or may not order confiscation of any stock a tall.
It vests a wide discretion in the authorities concerned. The authority may order confiscation of the entire stock or may not order confiscation of any stock a tall. The Order of confiscation is a judicial order which is subject to an appeal before the appellate authority and revision to this Court. The facts and circumstances such as are referred to above, are certainly matters which should be taken into account by a Court in determining the penalty to be imposed. If every trivial contravention is visited with the confiscation of the entire stock, then there will be no difference between unintended contraventions and deliberate acts of hoarding, black marketing and clandestine transactions. In the circumstances of each of these cases, the confiscation of one fifth of the stock seized would, in our opinion, serve the ends of justice. We order accordingly. 46. In the result, the writ petitions are dismissed, but without costs. The Criminal Revision Cases are allowed to the extent indicated above and the orders of confiscation are modified accordingly. Advocate’s fee Rs. 100/- in each. K.G.S. ----- Writ petitions dismissed; Revisions allowed in part; order of confiscation modified.