S. D. SHARMA v. THAKORLAL CHHAGANLAL — 1977 DIGILAW 22 (GUJ)

D. P. DESAI, M. P. THAKKAR, J. ( 1 ) A wholesale and retail merchant in foodgrains having his slop at Village Rankuva in Chikhli Taluka of Bulsar District was served with an order not to sell his goods (rice and paddy) valued at about Rs. 55 0 by an order passed by the Prant Officer of Navsari The merchant concerned was obliged to retain with him stocks of goods to the tune of Rs. 55 0 by virtue of this order which according to him was illegal and ultra vires. He accordingly instituted a suit for damages claiming a sum of Rs. 14526-10 on various counts against the Prant Officer (defendant No. 2) who passed the order. It appears that subsequently defendant No. 2 revoked the said order and passed an order releasing the stocks. This order of release was however counter-manded by the Collector of Bulsar on telephone. The said Collector was therefore impleaded as defendant No. 4 and damages were also claimed from him. Damages were also claimed from the State of Gujarat and the Mamlatdar of Bulsar who were arraigned as defendants Nos. 1 and 3 respectively. The learned Civil Judge (S. D.) at Navsari who tried this suit (Special Civil Suit No. 13 of 1969) came to the conclusion that the plaintiff had established his claim only to the extent of Rs. 1650. 00 against the Prant Officer and the Collector defendants Nos. 2 and 4 respectively and passed a decree against them by his judgment and order dated February 27 1970 Feeling aggrieved by the aforesaid judgment and decree original defend- ants Nos. 2 and 4 have preferred the present First Appeal and have questioned the legality and validity of the decree passed by the trial Court. ( 2 ) THE matter will have to be viewed from the individual standpoint of each of the two appellants for the facts and circumstances pertaining to the orders passed by them and the acts done by them are somewhat different. We propose to deal with the case of appellant No. 1 (Original defendant No. 2) in the first instance. ( 2 ) THE matter will have to be viewed from the individual standpoint of each of the two appellants for the facts and circumstances pertaining to the orders passed by them and the acts done by them are somewhat different. We propose to deal with the case of appellant No. 1 (Original defendant No. 2) in the first instance. On the ground that the plaintiff had committed breach of the provisions of the Gujarat Rice Procurement (Levy) Order 1965 (Levy Order) and of the licence issued under the Gujarat Foodgrains Dealers Licensing Order (Licensing Order) an order was passed against him by the defendant No. 2 on 29th June 1966 freezing his stock of rice (246. 21 quintals) and paddy (48 quintals ). By this order passed by defendant No. 2 in his capacity as Prant Officer the plaintiff was commanded not to sell or dispose of the aforesaid goods valued by the plaintiff at about Rs. 55 0 as the same had been freezed till per mitted by him or by the Collector. This order was challenged in the High Court of Gujarat by way of Special Civil Application No. 1372 of 1966 under Article 226 of the Constitution of India When the matter came up for hearing on 2nd February 1967 the impugned order dated 29th June 1966 was withdrawn According to the plaintiff the impugned order dated 29 June 1966 was illegal ultra vires and without jurisdiction and defendant No. 2 is liable to pay damages to the plaintiff for the loss caused to him by the aforesaid illegal order. ( 3 ) LEARNED counsel for the appellants has urged the following submissions in support of this appeal : (1) That the impugned order was within the competence of the appellants and that under the circumstances the learned trial Judge was in error in holding that it was not passed in good faith and that the appellants were not protected by sec. 15 of the Essential Commodities Act of 1955 on that account. (2) That respondent No. 1 plaintiff had failed to establish that he had suffered damages to the tune of Rs 1650/ awarded to him. ( 4 ) THE learned Assistant Govt. Pleader has argued that the authority for the order can be located in clause 11 (d) of the Licensing Order. (2) That respondent No. 1 plaintiff had failed to establish that he had suffered damages to the tune of Rs 1650/ awarded to him. ( 4 ) THE learned Assistant Govt. Pleader has argued that the authority for the order can be located in clause 11 (d) of the Licensing Order. Now it is evident on a perusal of the aforesaid provision that the competent authority has a power to search the premises of a dealer and to seize and remove the stocks of foodgrains from the premises. He however does not have the power to prohibit the dealer concerned from selling the goods in his shop. It was argued that the expression seize was wide enough in its amplitude and an order of the nature of the prohibitory order could have been lawfully passed under the aforesaid provision. The expression seize would empower the competent authority to take possession of the goods. It is an admitted position that the appellants have not taken possession of the goods by following the prescribed procedure. In fact it was conceded before the trial Court that the appellants had at no time seized the goods or taken possession of the goods. Under the circumstances it is not possible to accede to the argument that the impugned order prohibiting the plaintiff from selling or disposing of his goods (freezing his goods) could have been lawfully passed under the authority of clause 11 (d) of the Licensing Order. ( 5 ) THE question yet remains whether the said order can be said to have been passed in good faith within the meaning of sec. 15 of the Essential Commodities Act 1945 which is in the following terms :15 (1) No suit prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of any order made under sec. 3. (2) No suit or other legal proceeding. hall lie against the Government for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of any order made under sec. 3. Now the expression good faiths employed in sec. 15 has to be interpreted in the light of the definition thereof as embodied in sec. hall lie against the Government for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of any order made under sec. 3. Now the expression good faiths employed in sec. 15 has to be interpreted in the light of the definition thereof as embodied in sec. 3 (22) of the General Clauses Act of 1897 which provides that a thing shall be deemed to be done in good faith where it is in fact done honestly whether it is done negligently or notice. In the present case it cannot be gainsaid that defendant No. 2 had acted negligently for if he had but paused to ponder whether an order for freezing could be passed under clause 11 (d) of the Licensing Order he would have immediately realized that he had no such power. But then can it be said that he had not done it honestly 7 There is no evidence of express malice on his part. In resolving the question whether he was acting honestly or otherwise it is not sufficient to say that he acted in a manner which was not authorized by law. The Supreme Court in Municipality of Bhiwandi and Nizampur v. M/s. Kailash Sizing Works A. I. R. 1975 Supreme Court 529 has approved the test formulated in Jones v. Gordon (1877) 2 App. Cas. 616 as is evident from para 12 of the judgment quoted hereinbelow :in Jones v. Gordon (1877) 2 App. Cas. 616 Lord Blackburn pointed out the distinction between the case of a person who was honestly blundering and careless and the case of a person who has acted not honestly. An authority is not acting honestly where an authority has a suspicion that there is something wrong and does not make further enquiries. Being aware of possible harm to others and acting in spite thereof is acting with reckless disregard of consequences. It is worse than neligence. for negligent action is that the consequences of which the law presumes to be present in the mind of the negligent person whether actually it was there or not. This legal presumption is drawn through the well known hypothetical reasonable man. Reckless disregard of consequences and mala fides stand equal. where the actual state of mind of the actor is relevant. This legal presumption is drawn through the well known hypothetical reasonable man. Reckless disregard of consequences and mala fides stand equal. where the actual state of mind of the actor is relevant. This is so in the eye of law even if there might be variations in the degree of moral reproach deserved by recklessness and mala fides this test may now be applied to the act attributed to defendant No. 2. Was his act so shocking and reckless that an inference of having acted otherwise than honestly should be drawn against him ? Or dishonesty must be ascribed to him ? A balance has to be struck on the one hand between the need to ensure that citizens are not harassed by over-zealous official and on the other the need to so interpret the law that the public officials do not become unnecessarily timid shirk to take responsibility for implementing the law and lose initiative. Is it desirable that they suffer from a fear complex and prefer not to act on account of the fear or being dragged to Court by rich tenders and merchants who resent all the curbs imposed by the Legislature for the larger public good and who can afford to drag the officials to a Court of law and claim damages from them personally (regardless of whether they ultimately succeed or not) ? We cannot shut our eyes to the realities of the world and make a pedantic and unpragmatic approach. We have to strike a very very neat balance so that we steer clear of both extremes and the evil consequences ensuing therefrom. We are of the opinion that on making this approach in applying the aforesaid test there is no escape from the conclusion that the act of defendant No. 2 cannot be said to be one doze in reckless disregard of consequences so as to be branded as mala fide. He was empowered to seize the stocks. He might well have thought that seizure included freezing of the stocks as a step preliminary thereto. We therefore reverse the finding recorded by the trial Court and hold that defendant No 2 is entitled to the protection of sec. 15 of the Act. In this view of the matter the appeal of appellant No. 1 ( Prant Officer ) must succeed and the suit as against him must fail. We therefore reverse the finding recorded by the trial Court and hold that defendant No 2 is entitled to the protection of sec. 15 of the Act. In this view of the matter the appeal of appellant No. 1 ( Prant Officer ) must succeed and the suit as against him must fail. ( 6 ) THE matter may now be examined from the standpoint of appellant No. 2 (original defendant No. 4) who wa. at the material time holding the office of Collector of Bulsar. What emerges from the evidence and what is undisputed is that defendant No. 2 who passed the original order for freezing the stocks on June 29 1966 revoked the said order and released the stock in question by his written order dated 21st November 1966 and directed the plaintiff to sell the stock within eight days. But on the very next day that is to say on 22nd November 1965 at 6-30 P. M. defendant No. 2 (Prant Officer) informed the plaintiff that as per telephonic instructions from defendant No. 4 (Collector) he was ordered to rescind the order of release issued on the previous day and to restore the original freezing order of June 29 1966 In view of this communication status quo ante was restored and the stock was freezed. It is the case of the plaintiff that defendant No 4 (Collector) has no legal power or authority under any provisions of the Act or any other law to telephonically reverse the release order passed by the Prant Officer and to give a mandate to the Prant Officer to re-freeze the stock Now this order of the Collector was challenged by way of Special Civil Application No. 1372 of 1966 under Article 226 of the Constitution of India in the High Court of Gujarat and when the matter came up for hearing the Collector withdrew the order. The version of defendant No. 4 as disclosed in para 11 of the written statement is as under :the plaintiff contended in para 9 of his plaint that the order for releasing the stocks passed by the Prant Officer was without any authority counter- manded on telephone by the Collector-defendant No. 4 on 22nd November 1966 as per the following passage extracted therefrom : Defendant No. 4 has not denied that the order was counter-manded by telephone or stated that he had done it under any authority of law as will be apparent from the following extract from paragraph 12 of the written statement at Ex. 13 B. ( 7 ) IT is therefore clear that : (1) Defendant No. 4 (Collector) counter-manded the order of release and unfreezing of the stock on telephone. (2) He commanded restoration of the order of freezing (which was already revoked by the Prant Officer on the; previous day) on telephone. (3) He is unable to point out any provision of the Act or any other law under which he could have done so on telephone without passing any written order or even by passing a written order. The learned Assistant Govt. Pleader is unable to point out any such provision authorizing the Collector to act in this authoritarian arbitrary and capricious manner. He does not claim to have the power of appeal or revision against the order of Prant Officer. No one had preferred any such appeal or revision. From where did the Collector get the power exercised by him ? And that too on telephone ? Are we living under the rule of law or under some dictatorial regime ? Power exercised by the Collector must be located in the Act or some law. It cannot flow down the barrel of his pen. It is therefore clear that he had acted in a shockingly high. handed manner without regard to the consequences of his action and without regard to the impact thereof on a citizen like the plaintiff. If the expression reckless can be applied to any act it can be applied to the act of the defendant No. 4. It is therefore clear that he had acted in a shockingly high. handed manner without regard to the consequences of his action and without regard to the impact thereof on a citizen like the plaintiff. If the expression reckless can be applied to any act it can be applied to the act of the defendant No. 4. The law laid down in Municipality of Bhiwandi and Nizampur v. M/s. Kailash Sizing Works (A. I. R. 1975 S C 529 wherein the act was considered mala fide and the plea of `good faith was negatived on holding that it cannot be said to be done honestly as interpreted in Jones v. Gordon (Surpa) squarely applies to the facts of the present case. We have therefore no hesitation in holding that so far as appellant No. 2 ( defendant No 4 ) Collector is concerned the finding recorded by the trial Court that protection of sec 15 of the Act is of no avail to defendant No. 4 must be unhesitatingly confirmed. We may also make it plain that the pragmatic approach indicated in the course of the earlier discussion can be of no avail to defendant No. 4 in view of the utterly arbitrary high-handed and reckless order passed by him on telephone. We therefore hold that he has been rightly held liable for damages. ( 8 ) TURNING now to the second contention the trial Judge has awarded a sum of Rs. . 165 to the plaintiff by way of damages on the footing that his capital to the extent of Rs. 55 0 was blocked up by reason of the prohibitory order and that the plaintiff could have earned a profit by rotating the stock if he bad not been served with a prohibitory order. The learned Assistant Govt. Pleader is right in his submission that in fact it had been admitted by respondent No. 1 plaintiff himself that the goods in question had been sold and had been replaced by purchasing fresh goods from time to time. This is what he says in paragraph 8 of his evidence :i had no occasion of paying interest to any party during the period of freeze of goods. During the freezing period I had occasion of changing goods to avoid deterioration. We were substituting bags of old goods with bags of newly milled goods to avoid deterioration. This is what he says in paragraph 8 of his evidence :i had no occasion of paying interest to any party during the period of freeze of goods. During the freezing period I had occasion of changing goods to avoid deterioration. We were substituting bags of old goods with bags of newly milled goods to avoid deterioration. It is therefore clear that the plaintiff has been rotating the goods and his capital was not blocked up at all. Besides the goods in question formed the stork-in-trade of the plaintiff and when he has been rotating the stock-in-trade it cannot be said that he has suffered any damages at all. The learned trial Judge was therefore not justified in awarding the sum of Rs. 1650. 00by way of damages. ( 9 ) LEARNED counsel for respondent No. 1 plaintiff is however right in his submission that inasmuch as the plaintiff has had to suffer on account of the illegal order which was served on him the plaintiff is entitled to token damages in any case. Now the evidence shows that appellant No. 2 (original defendant No. 4) who was at the material time holding the office of the Collector of the District of Bulsar had given directions to the Prant Officer at Navsari to revoke the earlier instructions for releasing the stocks and to direct the plaintiff not to sell the goods. The Collector could not have issued such a direction on telephone under any provision of law and by virtue of his order the plaintiff was obliged to institute a writ petition in the High Court which was registered as Special Civil Application No. 1372 of 1966. When the said writ petition came up for hearing on 2-2-67 the appellants conceded that the order was not sustainable and the impugned order was therefore quashed. It thus appears that the original order passed by appellant No. 1 in his capacity as Prant Officer and the subsequent order passed by the Collector both were without any authority of law and the plaintiff was put to great inconvenience and hardship. It appears that the appellant No. 2 has acted somewhat in a high-handed manner without exhibiting any anxiety to ascertain whether or not the orders passed by him against citizens which affected their right to carry on their business were lawful orders. The plaintiff must therefore be awarded token damages. It appears that the appellant No. 2 has acted somewhat in a high-handed manner without exhibiting any anxiety to ascertain whether or not the orders passed by him against citizens which affected their right to carry on their business were lawful orders. The plaintiff must therefore be awarded token damages. The learned counsel for the plaintiff has stated that he has not instituted the suit giving rise to the present appeal in order to recover monetary compensation but has done so only in order to vindicate his legitimate grievance in view of the harassment caused to him. Taking into account the circumstances of the case we are of the opinion that ends of justice will be served if appellant No. 2 (original defendant No. 4) the then Collector of Bulsar is dire- cted to pay Rs. 100. 00 as and by way of token damages to respondent No. 1 plaintiff. ( 10 ) THE appeal is therefore partly allowed. The decree passed against appellant No. 1 original defendant No. 2 Prant Officer is set aside. So far as appellant No. 2 (Defendant No 4) the then Collector of Bulsar is concerned in place of decree for Rs. 1650. 00 there will be a decree for Rs. 100. 00 against him. There will be no order regarding costs throughout. .