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1979 DIGILAW 48 (PAT)

Brijlal Khudania v. State of Bihar

1979-02-23

HARI LAL AGRAWAL, SHIVESHWAR PRASAD SINHA

body1979
Judgment Hari Lal Agrawal, J. The petitioners have obtained a rule from this Court as to why the order passed by the District Magistrate, Purnea dated 21.7.1976, confiscating their seized foodgrains in execution of the powers under section 6A of the Essential Commodities Act, 1955 (hereinafter called ‘the Act’) and the order passed by the respondent Commissioner, dismissing the appeal in limine on 9.11.1976, copies of which have been made Annexures 5 and 6 to the writ application, be not quashed and cancelled. 2. The relevant facts and circumstances leading to the passing of the aforesaid orders are these: Petitioner no. 2 is a firm carrying on business in the name and style of M/S Hanuman Rice and Oil Mills at Araria, petitioner no. 1 being one of its partners. One Shyam Lal, nephew of petitioner No.1, also carried on business in foodgrains in a portion of the same mill compound in the name and style of M/S Hanuman Udyog. Both these firms are licensees under the provisions of the Bihar Foodgrains Dealers Licensing Order 1967. The Black Development Officer, Araria, respondent No. 5, along with some other officers of the Supply Department, inspected the business premises of the above firms and seized certain stocks of rice and paddy, on the ground that there were certain discrepancies in the documents and the actual stock. Thereafter respondent No. 5 made a report to the sub-divisional Officer, Araria, recommending for taking legal action to the matter. It may be mentioned that the seized food grains were allowed to remain in the custody of the firms on their security. In pursuance of the report aforesaid copy of which is Annexure 2, the Sub-divisional Officer issued notices to petitioner No. 1 and the aforesaid Shyam Lal to show cause as to why their licences should not be cancelled and legal action taken against them. Cause was shown by both the firms explaining the alleged discrepancies, but we are not concerned here with this aspect of the matter. A criminal case was also instituted under section 7 or the Act against petitioner no. 1 and others in the court of the Sub-divisional Judicial Magistrate, Araria. Cause was shown by both the firms explaining the alleged discrepancies, but we are not concerned here with this aspect of the matter. A criminal case was also instituted under section 7 or the Act against petitioner no. 1 and others in the court of the Sub-divisional Judicial Magistrate, Araria. The petitioners then made an application in the court of the learned Magistrate for release of the foodgrains and by his order dated 30.4.1976 the learned Magistrate passed the following order: "Let the foodgrains seized be released on furnishing security or Rs.1,00,000/-(one lakh) with one surety of the like amount." At the time when this order was passed, the Additional Public Prosecutor had filed before the learned Magistrate a copy of the report of the A.D.S.O., Araria to the District Magistrate, for taking action for confiscation of the foodgrains in question under section 6A of the Act, but according to his information no action had been Initiated so far in that matter. The petitioners gat the foodgrains released on furnishing security in pursuance of the above release order and admittedly the same were sold out on different dates which I shall indicate hereafter. 3. As it appears from the statements made in the counter affidavit filed on behalf of the respondents and the contentions advanced on their behalf at the time of the hearing, a proceeding under section 6A of the Act was started by the District Magistrate on 29.4.1976. This fact is borne out from the statements of facts mentioned in the impugned order dated 21.7.1976 (Annexure 5) of the District Magistrate that the show cause notice in this proceeding was issued to the petitioner on 29.4.1976 itself. The matter had been reported to the District Magistrate by the Sub-divisional Officer by his letter dated 10.3.1976. It is, therefore, obvious that when the Magistrate passed the order of release on 30.4.1976 the District Magistrate was "seized with the matter". No step, however, wits taken by the State to challenge the order of ralease so much so that no objection was raised before the Sub-divisional Judicial Magistrate to the release of the foodgrains on surety or security as it was a perishable commodity. 4. In the proceeding that was started by the District Magistrate under section 6A of the Act, cause was shown by the petitioners, but the same was rejected. 4. In the proceeding that was started by the District Magistrate under section 6A of the Act, cause was shown by the petitioners, but the same was rejected. The District Magistrate was also informed by the petitioners, of the release order passed by the Sub-divisional Judicial Magistrate on 30.4.1976. Notwithstanding the said fact, the District Magistrate ordered for the confiscation of the entire seized stock of paddy and rice and petitioner No, 1 was "directed to deliver the seized stock of paddy and rice to the Sub-divisional Officer, Araria or an agent authorised by him within a fortnight". He further directed for depositing the price of the confiscated articles in the Government Treasury, calculated at the rate payable for levy of paddy and rice for the khariff year 1975-76, pending disposal of the criminal case against petitioner No.1. With respect to the order of release of the criminal court, namely, the S.D.J.M., the learned Collector observed that in as much as the said order was passed without having regard to the provisions or section 6A of the Act "as amended by Bihar Ordinance No. 123/76" that did not "affect the proceeding U/S 6A of the B.C. Act" and the entire seized stocks or food grains were liable to confiscation under the law. As already said earlier, the petitioner no. 1 then filed an appeal before the appellate authority, namely, the Commissioner or Kosi Division, respondent No. 2, under section 6C of the Act, but the same was dismissed in limine by his order, Annexure 6. It may, however, be mentioned that the appeal filed by Shyam Lal was remanded by respondent No.2 as there were discrepancies between the report of the Block Development Officer and the Marketing Officer. 5. Be that as it may, in view or the anomaly created by the two orders mentioned above, the petitioners filed the present writ application on 15.11.1976 and one of the grounds taken by the petitioners was that as they had already sold the foodgrains in question in pursuance of the release order there could be no order or confiscation. 5. Be that as it may, in view or the anomaly created by the two orders mentioned above, the petitioners filed the present writ application on 15.11.1976 and one of the grounds taken by the petitioners was that as they had already sold the foodgrains in question in pursuance of the release order there could be no order or confiscation. This Court by its order dated 17.11.1976 had directed the petitioners to give the particulars of the disposal of the seized goods and accordingly a supplementary affidavit was filed by the petitioners on 1.12.1976 stating that a part of the stock of paddy in question was converted into rice and was sold on 6.7.76 along with other stock of paddy. With respect to the case of rice, they said that it was sold on 10.5.1976 and 29.6.1976. In other words, the petitioners' case is that the entire stock of seized foodgrains, namely the paddy and rice had already been disposed of before the order of confiscation was passed by the District Magistrate on 21.7.1976. 6. Learned counsel appearing for the petitioners impugned the order of confiscation on the ground that the foodgrains in question having already been released by the criminal court respondent no. 2 had no jurisdiction to pass any order in that regard, and in support of this contention he placed reliance upon a Bench decision of this Court in the case of Lowa Tanti @ Loba Tanti Vs. The State of Bihar. In this case the Collector of Dhanbad, after more than three months of the passing of the order of the criminal court with respect to the disposal of the foodgrains in question, had started a confiscation proceeding and had passed an order of confiscation on taking a view that the order passed by the criminal court which was then pending in a criminal miscellaneous application before this Court was no bar to the exercise of his power under section 6A of the Act. That order was challenged and it was held by this Court that although under the scheme of section 6A itself there was no bar to the exercise of power under section 6A, once the criminal court had passed the order of release of the goods, the Collector, before starling the confiscation proceeding should get the, order of the criminal court modified or vacated, bringing to the notice of the court that a confiscation proceeding had already been initiated. Learned Counsel for the petitioners also placed reliance upon two unreported Bench decisions of this Court in Cr. W.J.C. No. 40 of 1975 (M/S Ram Kumar Ashok Kumar V. State of Bihar and others) and Cr. W.J.C. No. 147 of 1975 (Tarachand Sharma V. The State of Bihar and others), disposed of on 9.11.1976 and 20.11.75 respectively. In both these cases also the District Magistrate had issued show cause notices in the confiscation proceeding much after the order of release had been passed by the Criminal Courts. In Cr. W.J.C. 40 of 1975 the order of release was passed in respect of part of the foodgrains by the Judicial Magistrate, Darbhanga on 18.11.1974 and the notice under section 6A was issued on 3.12.1974. The issuance of the notice was challenged in this Court in the above calc. The petitioners of that case has also moved this Court by a criminal miscellaneous application for release of the remaining foodgrains, which were ordered to be released by this Court on 6.2.1970. Relying upon the observations mane in Cr. W.J.C. 147 of 1975, which had already been disposed of in the meantime, it was held that the confiscation proceeding can be started only regarding the essential commodity which is the subject matter of certain proceeding pending before a Court and as the entire foodgrains bad been released in favour of the petitioner on furnishing security and the petitioner sold them in the market there is no alternative but to quash the notice." In the other case, namely, Cr. W.J.C. 147 of 1975, the foodgrains were ordered to be released by this Court on furnishing security to the satisfaction of the trying Magistrate by order dated 26.11.1974. The bonds having been furnished the Sub-divisional Judicial Magistrate ordered for release of the foodgrains on 13.12.1974. In the meantime a proceeding under section 6A of the Act was started. W.J.C. 147 of 1975, the foodgrains were ordered to be released by this Court on furnishing security to the satisfaction of the trying Magistrate by order dated 26.11.1974. The bonds having been furnished the Sub-divisional Judicial Magistrate ordered for release of the foodgrains on 13.12.1974. In the meantime a proceeding under section 6A of the Act was started. The District Magistrate, however, ordered confiscation, although he was informed that the High Court had directed the release of the foodgrains. Meanwhile, the criminal proceedings were also quashed by this Court. In these circumstances, the confiscation proceeding was quashed. An observation was made in this case that the Collector had no jurisdiction to confiscate the foodgrains once he was informed of the order of the High Court that the goods have been released and "the proper course for him was to drop the confiscation proceeding". On the above authorities counsel for the petitioners raised two contentions. The first contention, as already noticed, being that after the order of release passed by the criminal court the District Magistrate had no Jurisdiction to pass an order of confiscation; and secondly, that the foodgrains having already been sold, the District Magistrate should have dropped the proceeding. 7. It ill not possible to accept the first contention. All the three decisions of this Court were given on the basis of section 6A as it stands in the Central Act, according to which the Collector of the district bas been empowered to order confiscation of the essential commodities seized "whether or not a prosecution is instituted for the contravention of such order". The Control Order in question, namely, the Bihar Foodgrains Dealers' Licensing Order, 1967, empowers various authorities to make search and of the business premises of the licensee and seize the commodity if any contravention of the provisions of the Control Order are suspected by the inspecting authority. The seizure in the first instance, therefore, is by the authority under the Control Order who is also entitled to institute a prosecution under section 7 of the Act. The seized commodity, therefore, is amenable, to the jurisdiction of the Criminal Court and section 451 of the Code of Criminal Procedure authorises that court to pass a suitable order for the custody and disposal of the property pending the trial. The seized commodity, therefore, is amenable, to the jurisdiction of the Criminal Court and section 451 of the Code of Criminal Procedure authorises that court to pass a suitable order for the custody and disposal of the property pending the trial. There is nothing in section 6A of the Central Act to impinge upon the said authority of the criminal court. Therefore, in order to reconcile the parallel Jurisdictions of the Criminal Court and the Collector and obviate any conflict of authority in Lowa Tanti's case this Court ruled for the Collector to get the order of the Criminal Court modified or vacated. This difficulty appears to have been realised and accordingly section 6A was substituted by Bihar Ordinance No. 123 of 1976 which was published in the Bihar Gazette on 22.4.1976. Adding various sub-sections by this amending Jaw, and the provisions have been made more comprehensive. Sub-Section (6) of the new section made as follows:- "(6) Notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (Act No. II of 1974) when Collector or the appellate authority is seized with the matter under this section no court shall entertain any application in respect of essential commodities any package, covering, receptacle, any animal, vehicle or other conveyance used in carrying such commodities as far as its release, distribution, etc. is concerned and the jurisdiction of Collector or the appellate authority with regard to the disposal of the same shall be exclusive." The above provision has a non-obstante clause, there by firmly ousting the jurisdiction of all other courts to entertain any application in respect of any essential commodities etc. for their release, distribution etc., once the Collector or the appellate authority becomes "seized with the matter under" section 6A- I may also observe that the crucial time to oust the jurisdiction of the criminal court or, for that matter, any other court, is the date when the Collector or the appellate authority becomes seized with the matter. for their release, distribution etc., once the Collector or the appellate authority becomes "seized with the matter under" section 6A- I may also observe that the crucial time to oust the jurisdiction of the criminal court or, for that matter, any other court, is the date when the Collector or the appellate authority becomes seized with the matter. Initiation of the confiscation proceeding or issue of a notice to show cause under section 6-B of the Act, which may still take some time after the authority may be seized with the matter, will not, during this interval, authorise any other court to entertain any application regarding the disposal of any essential commodity etc., as the right of disposal has been conferred exclusively to the Collector or the appellate authority. Any order passed in contravention of this restriction would render the order itself ultra vires and without jurisdiction. 8. From the facts that have been stated above, it is clear that the matter was reported to the Collector by the Sub-divisional Officer much before the order of release" as passed, so much so that a show cause notice that was issued in the confiscation proceeding, was dated 29.4.1976. Its service, no doubt was made after the order of release, i.e., on 4.5.1976, but, as already observed earlier, service on a subsequent date would not have any bearing on the question, Some argument was advanced by Mr. Bharuka that unless notice was served the proceeding would not be deemed to be initiated. This argument as made on the basis of some stray observations made in the aforesaid two unreported decisions of this Court, which is entirely erroneous and must be rejected, as neither the provision of sub-section (6) contemplates initiation of a proceeding for ouster of the jurisdiction of the criminal court, nor the decisions contemplates initiation of a proceeding. Mr. Bharuka also sought aid from the decision of my learned Brother S.P. Sinha, sitting singly, in the case of Shambhu Prasad Sah V. The State of Bihar. In that case the question was of release of a truck which had been seized by the Jamtara police for carrying rice in an unauthorised manner on 11.5.1976 and was lying in the police station. In that case the question was of release of a truck which had been seized by the Jamtara police for carrying rice in an unauthorised manner on 11.5.1976 and was lying in the police station. Report of the seizure of the foodgrains and the truck was made to the Collector who instituted a case under section 6A of the Act, being Confiscation Case No. 31 of 1976 on 12.5.1976. Notice to show cause was issued to the truck owner against confiscation of the truck. The truck owner, however, filed an application in this Court for release of the truck and this prayer was resisted on behalf of the State on the basis of section 6A (6) on the ground that the matter having already been reported to the Collector, the jurisdiction of the Collector became excusive. This Court ordered release of the truck on furnishing security on the ground that one of the essential ingredients to hold the authority to be seized with the matter was still lacking in that case, in as much as the Collector had not taken any step to take the truck in his own custody and, therefore, the Collector was not yet seized with the matter under section 6A of the Act. In paragraph 7 of the Judgment, it was observed that the following preconditions were necessary to be fulfilled before it could be held that the authority was "seized with the matter" under this section; "(i) of receiving the report relating to contravention. (ii) of being satisfied about there being a contravention; (iii) of inspecting and taking charge of the article or articles, that Is, seizing it; and (iv) of proceeding to confiscate." 9. With due deference, I find myself unable to agree with the above view of my learned Brother so far as the third ingredient enumerated by him is concerned. (ii) of being satisfied about there being a contravention; (iii) of inspecting and taking charge of the article or articles, that Is, seizing it; and (iv) of proceeding to confiscate." 9. With due deference, I find myself unable to agree with the above view of my learned Brother so far as the third ingredient enumerated by him is concerned. The Collector has been empowered under sub-section (1) of section 6A to inspect or cause to be inspected the essential commodity, In my opinion, for altogether different purposes, as becomes evident from reading the provisions of sub-section (2) of section 6A, i.e. to form an opinion as to whether the essential commodity is or is not subject to speedy and natural decay or as to whether it would be expedient in the public interest to sell the same, and not as a step towards making him competent to be seized with the matter. In this connection I may also point out the amendment that was made in. section 6A by Act 92 of 1976. Before that amendment the provision required the production of "the commodity without any unreasonable delay" before the Collector of the district, but ere amendment made a change and thereby a report of seizure without any unreasonable delay is only to be made to the Collector and not the production of the commodity itself. This position has already been noticed by me in yet another unreported decision in Cr. W.J.C. No. 17 of 1976 (R) (M/S Mukharjee and Brother, and another V. The Deputy Commissioner, Hazaribagh and another) disposed of on 23.12.1976, sitting with Mr. Justice P.S. Sahay. In my considered opinion, after the amendment the Collector will be deemed to be seized with the matter the moment he receives the report of the seizure of any essential commodity for the alleged contravention of the provisions of any Control Order and on receiving the same he prima facie feels satisfied that there has been a contravention which requires an action for confiscation. The moment this stage is reached he and be alone is clothed with the authority to pass any order regarding the custody of the property and the jurisdiction of the criminal court is ousted. Similar is the position now of the Central Act after insertion of section 6E. The moment this stage is reached he and be alone is clothed with the authority to pass any order regarding the custody of the property and the jurisdiction of the criminal court is ousted. Similar is the position now of the Central Act after insertion of section 6E. The Criminal Court can pass any order in this regard only during this intervening period, if available to it. The contention of Mr. Bharuka therefore, that the District Magistrate was bound to seize the articles before passing the order of confiscation, must be rejected. 10. Now remains for consideration the second contention raised by Mr. Bharuka that the foodgrains having already been disposed of in pursuance of the order of release before, the order of confiscation could not be passed and the petitioners "directed to deliver the seized stock of paddy and rice". The word "confiscation", according to the dictionary meaning means "to appropriate to the State as a penalty specific goods". In a sense confiscation is forfeiture of specific goods. The existence of the goods therefore, is a precondition for carrying out the order of confiscation. It is for that purpose that seizure has to be reported at once, and exclusive jurisdiction has been conferred upon the Collector of the district to pass an order of confiscation so that the order may be effective and the commodity can be confiscated to the State; of course, subject to the ultimate result of a criminal trial. On passing of the order of release by the Magistrate, the petitioners have already disposed of the commodities as stated earlier, although under an illegal order. The State did not challenge the order of release, rather the Additional Public Prosecutor conceded to the release of the properties on adequate security being furnished. Rightly or wrongly, the order of release passed by the criminal court has taken its full effect and on the date when the order of confiscation was passed the essential commodities which were the subject matter of the alleged contravention were not in existence. Therefore, in point of fact nothing remained which could be confiscated. The District Magistrate, therefore, could not have directed the petitioners to deliver the seized stock of paddy and rice to the Sub-divisional Officer. Therefore, in point of fact nothing remained which could be confiscated. The District Magistrate, therefore, could not have directed the petitioners to deliver the seized stock of paddy and rice to the Sub-divisional Officer. It is obvious that on passing the order of release of the commodities by the criminal court, their seizure by the inspecting authorities became nonest, resulting in making the confiscation proceeding infructuous. In the circumstances, the District Magistrate on being apprised of the order of release should have dropped the proceeding unless he or, for that matter, the State of Bihar decided to take steps for getting the order of release vacated or set aside. I must observe that tae petitioners are succeeding on the basis of an illegal order In their favour, since at this stage there is no way out much less any remedy to redress the illegality. 11. The inevitable result that follows from the above discussions, is that this application must succeed and the order of confiscation (Annexure 5) and the appellate order (Annexure 6) are accordingly quashed and cancelled. In the circumstance, however, I shall make no order as to costs. S.P. Sinha, J. I agree that the application has to be allowed and annexures 5 and 6 have to be quashed. Now with regard to the first contention that on the order of release having been passed by a criminal court, the Collector lost Jurisdiction to pass an order of confiscation of the same commodity, the argument is indeed not acceptable. The provisions, relating to confiscation as contained in section 6A of the Essential Commodities Act have undergone drastic changes by the subsequent Ordinance passed by the State Government. My learned brother has already quoted sub-section (6) of the Bihar Ordinance No. 123 of 1976 published in the Bihar Gazette on 22nd April, 1976. By virtue of the addition of this provision in relation to confiscation, it becomes clear that once steps for confiscation have been taking by the Collector, no court has the jurisdiction to entertain any application in respect of the essential commodity, so far as it concerns their release, distribution etc. It is only the Collector or the appellate authority, who has the jurisdiction in regard to the disposal of such essential commodity. This Court while deciding the case of Lowa Tanti @ Loba Tanti Vs. It is only the Collector or the appellate authority, who has the jurisdiction in regard to the disposal of such essential commodity. This Court while deciding the case of Lowa Tanti @ Loba Tanti Vs. The State of Bihar had made observations to reconcile the conflict of Jurisdiction in relation to essential commodity between a criminal Court, who may have seized the said essential commodity and the Collector who would like to confiscate the same, by saying that in case the criminal court has passed an order of release of the foodgrains seized, the Collector before starting the confiscation proceeding should get the order of the criminal Court modified or vacated, bringing to the notice of the Court that a confiscation proceeding has been initiated. By virtue of the introduction of subsection (6) to section 6A of the Essential Commodities Act by the aforesaid Ordinance. the change In the position is now like this, that after the commodity is seized and the Collector initiates confiscation proceeding, the question relating to release or distribution of the essential commodity seized are now to be decided only by the Collector and not by any other Court. In other words, immediately as the Collector comes to know of the seizure of an essential commodity and initiates confiscation proceeding, the commodity cannot be released by a criminal Court. This position in law is, however, obtaining only when a confiscation proceeding has been initiated before an order of release has been passed. If an order of release has been passed even after the initiation of the confiscation proceeding, the release of the confiscated goods would be wholly illegal. This is the position now obtaining after the introduction of subsection (6) to section 6A by the said Ordinance. In the instant case, the facts indicate that the proceeding for confiscation had been initiated by the notice under section 6A on the 29th April, 1976. The Collector had taken a definite step towards confiscation of the goods on this date and, therefore, the proceeding under section 6A of the Act bad been initiated. The criminal courts order releasing the goods was passed on the 30th April, 1976, but oven before the goods could be released, the notice issued under section 6A of the Act had been served on the petitioner on the 4th of May, 1976. The criminal courts order releasing the goods was passed on the 30th April, 1976, but oven before the goods could be released, the notice issued under section 6A of the Act had been served on the petitioner on the 4th of May, 1976. It may be stated that the goods had been released to the petitioner on the 6th of May, 1976. It is clear, therefore, that the release of the goods under the order of the criminal Court, after due initiation of the proceeding for confiscation, were, therefore, illegal. The first submission made on behalf of the petitioner is therefore, wholly against the legal provisions and the facts obtaining in the case, The Collector was fully competent to initiate the proceeding for confiscation. 13. The next put of the submission, that even if the proceeding for confiscation was validly initiated, since the goods in question had been sold out the purpose behind the initiation of the proceeding to confiscate failed, is correct. Confiscation "presupposes the existence of something which is to be confiscated. If that something has gone out from the per-view of "confiscation" there can be no confiscation and necessarily, therefore, the proceedings towards confiscation must fail. It may be that the person responsible for the failure of the proceeding, might involve himself for other penalties in accordance with law, but definitely, so far as the proceedings for confiscation of the goods is concerned, that would come to an end. Application allowed.