Wasudeo Industries Ginning Factory and another v. State of Maharashtra and others
1981-10-15
D.B.PADHYE, R.D.TULPULE
body1981
DigiLaw.ai
JUDGMENT - Tulpule R.D.J.-Petitioner No. 1 claims to be an owner of a ginning factory at Sindhi in District Wardha. According to him he applied to the Ministry of Industries and the office of the Cement Controller for grant of a permit to purchase cement for purpose of construction of certain buildings, which he wanted to do at the said ginning factory. He applied for 24 M. T. of cement. The said permit was granted to him in accordance with the provisions of Cement Control Order, 1967 and which permit he got in the first week of June 1981. He says that he deposited the amount of Rs. 11,640 which was the price and arranged to take delivery of this cement which was released ex-Chanda factory of Associated Cement Companies. The cement was to be obtained and taken delivery of before 10-6-1981. It is his case that accordingly cement was obtained delivery of on 10-6-1981 by means of two gate passes of 240 bags each. The transport permitted was by road and the cement bags were, therefore, according to petitioner No. I loaded in two trucks Nos. M.H.G. 1880 and M.T.G. 9351. 2. It is the further case of petitioners that since those were rainy days and since the approach road to the ginning factory at Sindhi was full of slush and not negotiable in the rainy season and further since no construction work would be undertaken during the rainy season, he decided to store those 480 bags of cement with his brother-in-law, petitioner No. 2, in his godown at Nagpur. Accordingly the trucks reached Nagpur on the 12th and 13th June 1981 and upon due payment of octroi, the goods were unloaded at the godown of petitioner No. 2 situated at plot No. 7, Laxminagar, Nagpur. 3. It is the case of petitioner No. 1 that since this cement was released to him by the Ministry of Industries, Department of Industrial Development and, therefore, under the orders of Central Government he was responsible to communicate the fact of receipt and storing of this cement to the Inspector of Industries at Wardha. It is contended that petitioner No. 1 had accordingly done so on 16-5-1981 which is disputed on behalf of the respondents.
It is contended that petitioner No. 1 had accordingly done so on 16-5-1981 which is disputed on behalf of the respondents. For the reasons which we shall set out later in our judgment, it is unnecessary for the disposal of this petition for us to go into that question. 4. On 29th June 1981, the officials of the Civil Supplies Department raided the godown of petitioner No. 2. When the godown was opened, according to the respondents 529 bags of cement were found. It is the peti tioner's case that all that was found in the godown was 480 bags of cement received against the permit consisting of 24 M. T. by petitioner No. 1 and 49 bags of sagol, a commodity used for building purposes, in which petitioner No. 2 trades. It is the case of petitioners, that petitioner No. 2 was the person who produced the material before these officers and also told them that the bags were 480 bags of cement belonging to petitioner No. 1 and 49 bags of sagol in which he was entitled to trade and for which no permission was necessary and was not an essential commodity. It is the further case of the petitioners that this explanation and evidence produced before these officers were discarded and the officers proceeded to seize the commodity and handed it over on supratnama to the Maharashtra State Co-operative Market ing Federation, Apna Bhandar, Sitabuldi, Nagpur to which the cement was removed. 5. The next thing which the petitioners say about this cement is that on 14-7-1981, a notice was issued by respondent No. 2 calling upon petitioner No. 2 to show cause as to why the cement should not be confiscated as it was stored in violation of clauses 8, 8A and 15 of the Maharashtra Cement (Licensing and Control) Order, 1973 read with Maharashtra Cement (Licens ing and Control) (Amendment) Order, 1978. Petitioner No. 2 appeared before respondent No. 2, who is the Collector of Nagpur, and petitioner No. 1 came to know of this seizure of the bags, says the petition, on 26-7-1981 and, therefore, also appeared before the Collector, Nagpur in the matter of the notice and both produced evidence. Petitioner No. 1 filed his affidavit, while petitioner No. 2 filed his reply on solemn affirmation. 6.
Petitioner No. 1 filed his affidavit, while petitioner No. 2 filed his reply on solemn affirmation. 6. Then there is a further mention about what transpired before respon dent No. 2 But it is not necessary for the purposes of this petition to go into it. It was only, petitioners say, that they learnt of an order of confisca tion under section 6B of the Essential Commodities Act, 1955, as having been passed on 31-8-1981. 7. Thinking that a stay of the order is necessary before preferring an appeal to the District Judge, which is permitted under that order, petitioners approached respondent No. 2 for a stay order and having found that he was not there, they approached respondent No. 3. It is then, when they approach- ed-respondent No. 3 on 11-9-1981 that the petitioners say that they learnt that the bags had already been sold and disposed of and the stay was, there fore, useless. This information, according to petitioner No. 2 shocked him and he made further investigations into the matter and as to how the matter was dealt with. 8. He proceeds to set out in his petition that he learnt from the records of the matter maintained in the office of the respondent No.3 that a note was put up on 2-7-1981 by the Assistant Foodgrains Distribution Officer, “AFDO” for short, that the said cement was stored in the Apna Bhandar and a notice under section 6B of the Essential Commodities Act was necessary to be given. The said note further stated that “cement is an essential commodity and is subject to speedy and natural decay”. He, therefore, proposed that it should be disposed of in exercise of the powers under section 6A(2) of the Act. This note passed through the Foodgrains Distribution Officer, who recommended acceptance of the proposal. Petitioners then aver that on 6-7-198 “respon-dent No. 2 merely put his signature below the signature of respondent No. 3.”. 9. It appears that thereafter a doubt was expressed by respondent No. 3 as to whether a notice was necessary to be issued “before taking action under section 6A (2) of the Essential Commodities Act.” That was by his endorsement on the Note sheet dated 9th July 1981.
9. It appears that thereafter a doubt was expressed by respondent No. 3 as to whether a notice was necessary to be issued “before taking action under section 6A (2) of the Essential Commodities Act.” That was by his endorsement on the Note sheet dated 9th July 1981. The Assistant Foodgrains Distribution Officer in his turn stated that it is not necessary to issue a notice as the commodity is “subject to speedy and natural decay.” This was immediately acceded to and the Foodgrains Distribution Officer by his order dated 21st July 1981 directed “further action at once”. Thereafter the cement so seized came to be disposed of in favour of certain persons, of whom one of the beneficiaries was Vidharbha Cricket Association of a quantity of 350 bags. The last of such disposal was, however, made on 28-8-1981. 10. Petitioners contend that the opinion which the Collector has to form under the provisions of section 6A of the Essential Commodities Act is to be formed on the basis of the material placed before him. The order passed by the Collector is a nonspeaking order and does not amount to any order at all by merely putting signature below the signature of the Assistant Food-grains Distribution Officer on 6th July 1981. They contend that there is no order passed by the Collector authorising the sale, and also that such formation of opinion and passing of an order being one which is likely to affect a citizen's rights and to be preceded by a notice, it must be based on reason or material before it, which was not available. Cement is not a commodity which is subject to speedy and natural decay and it is averred that in good condition it can last for a period of one year. “The godown of Apna Bhandar where these bags were stored is a pucca construction where the bags stored could not have been affected by rains”. 11. It is further contended by petitioners that section 6A(2) of the said Act does not contemplate a denial of the principles of natural justice, in as much as the sale is likely to prejudicially affect a person in being deprived of a commodity, which being an essential commodity, it is necessary to have in specie at the market price thereof.
It is further contended by petitioners that section 6A(2) of the said Act does not contemplate a denial of the principles of natural justice, in as much as the sale is likely to prejudicially affect a person in being deprived of a commodity, which being an essential commodity, it is necessary to have in specie at the market price thereof. The power to sell and dispose of such an essential and scarce commodity should be exercised with due care and caution and only in the circumstances mentioned in the section. Petitioners, therefore, pray for quashing of the order passed by the Collector on 31-8-1981 confiscating the bags and also the order of 6/9-7-1981 of disposal of 529 bags of cement. In the alternative petitioners pray that they should be restored the bags of cement and directed to be given those bags pending appeal before the District Judge, Petitioners say that though there is remedy by way of an appeal against the order of confiscation under section 6(c) and that they have prosecuted that remedy, there is no provision for challenging the order of sale and disposal. Therefore, for the purposes of return of the commodity and for quashing the order of a sale, petitioners have no other remedy except to approach this Court under Article 226 of the Constitution of India. That is why the present petition has been filed under Article 226 of the Constitution of India. 12. After the petitioners filed this petition, rule was ordered to issue on 21-9-1981 and we directed specifically that return should be filed on or before 6th October, 1981. Emergent process was ordered while notice on behalf of respondent No. 1, which is the State of Maharashtra, was taken by the learned Assistant Government Pleader. We also directed that the matter should be placed for final hearing on 6th October 1981. However, return was not filed on behalf of any of the respondents till the matter reached hearing today. Today respondents Nos. 2 and 3 who are the principally concerned persons in the present case have filed their return as well. On behalf of respondent No. 1 Mr. Mor, Assistant Government Pleader asked for further time to file a return. We shall deal with that request and prayer for time to file return on behalf of respondent No. 1 at a later stage. 13.
On behalf of respondent No. 1 Mr. Mor, Assistant Government Pleader asked for further time to file a return. We shall deal with that request and prayer for time to file return on behalf of respondent No. 1 at a later stage. 13. We will briefly refer to the return filed by respondents Nos. 2 and 3. As will be seen the petitioners have prayed for reliefs against the order of confiscation on 31-8-1981 as well as orders directing sale and disposal of these bags of cement under section 6A(2) of the Essential Commodities Act on the ground that cement is a commodity which is subject to “speedy and natural decay”. There is undoubtedly power under the Act to confiscate and also to dispose of in case the commodity is subject to speedy and natural decay. The respondents contend that a remedy is provided for challenging the order of confiscation. The petitioners having availed of that remedy cannot file this petition and prosecute both these remedies. We do not think, nor is it at the time of hearing of the petition pressed before us, that the order on 31-8-1981 of confiscation can be quashed by us in this petition, when a proper remedy is availed of, namely that of an appeal before the District Judge. We have, therefore, refrained from either making any observations of dealing with that question which may directly or indirectly concern the question as to the legality of the order of confiscation passed by the Collector. But it is also clear that no remedy as such is provided against the order of disposal under the Act. We, therefore, confine ourselves to the question of legality, validity and correctness of the order of disposal of the seized commodity under section 6A (2) of the Act. 14. As will be seen from the question which arises in the petition, which we have pointed out, the return of respondents Nos. 2 and 3 is really the material return. The stand taken by respondents Nos. 2 and 3 and the contention advanced is, that section 6A does not contemplate any notice nor is there any enquiry visualised in terms of the section.
2 and 3 is really the material return. The stand taken by respondents Nos. 2 and 3 and the contention advanced is, that section 6A does not contemplate any notice nor is there any enquiry visualised in terms of the section. Where the respondent No. 2 Collector forms an opinion that the subject of seizure is subject to speedy and natural decay, then he has a right and authority to dispose of the goods without reference to the person concerned. It is in exercise of that power that respondent No. 2 claims to have passed the order on 6th July 1981 itself and the later disposal was in accordance with those directions, but effected by respondent No. 3. Respondent No. 2 does not seem to say or concern himself with the actual distribution or disposal of the goods which seems to have been done by respondent No. 3. 15. According to the return, the order was passed on 6th July 1981 itself and that was a final order in the nature of directions issued to respondent No. 3. The return further says that the seized property “absolutely vesta in the State” and the Collector is competent to dispose of the essential commodity “if in his opinion the seized commodity is subject to speedy and natural decay.” This contention again is reiterated later in the reply to the grounds, paragraphs I and II. It is then the case of respondents Nos. 2 and 3 that “'it is not necessary to issue a show cause notice to dispose of the seized essential commodities which is subject to speedy and natural decay, because section 6A(2) of the Essential Commodities Act, 1955 does not provide for the same”. 16. The return also refers to a statement signed by petitioner No. 2 and recorded on the same day i. e. 29th June 1981 at the time of raid. We have purposefully not referred to that statement, though considerable emphasis is placed upon that statement in the return and also during the argu ments on behalf of the respondents Nos. 2 and 3 for the simple reason that the matter is pending before the District Judge in appeal against the order of confiscation.
We have purposefully not referred to that statement, though considerable emphasis is placed upon that statement in the return and also during the argu ments on behalf of the respondents Nos. 2 and 3 for the simple reason that the matter is pending before the District Judge in appeal against the order of confiscation. We have addressed ourselves only to the correctness of the contentions or otherwise that no notice or inquiry is contemplated before ordering disposal under section 6A(2) and that upon seizure the property vests absolutely in the state. 17. The short question, therefore, which is raised in this petition before us, shorn of other aspects of the matter which cannot be gone into and which we do not propose to go into, is whether cement is a commodity which is ”subject to speedy and natural decay” and consequently if it is so, whether a notice to the person concerned from whom the goods have been seized is necessary before making an order of its disposal. As we have pointed out the emphatic stand taken by respondents Nos. 2 and 3 is “that section 6A(2) of the Act does not contemplate any notice” that the “seized property vests absolutely in the state” and that there is no necessity of any notice. It is asserted on their behalf that cement is a commodity which is subject to speedy and natural decay. We may mention, however, that in support of this assertive statement made by respondents Nos. 2 and 3, no authoritative extract or citation or any other material is placed before us which would go to show that cement is such a commodity which is subject to speedy and natural decay. 18. Against the background of this question, which is the only short question which arises in this petition, we were of the opinion that respondent No. 1 State could either take a stand consistent with the stand taken by respondents Nos. 2 and 3 or against it. We would have been willing to let the matter stand over to permit respondent No.1 to file its return if it was indicated to us what the stand of respondent No. I was in this behalf. We think, for the reasons which will follow, that if the respondent No. 1 were to take a stand different from its officers, respondents Nos.
We think, for the reasons which will follow, that if the respondent No. 1 were to take a stand different from its officers, respondents Nos. 2 and 3, it would have taken immediate action against respondents Nos. 2 and 3. If its stand is consistent with that of respondents Nos. 2 and 3, then no useful purpose would be served by giving a further time to file its return. It is in that light and in this view that we rejected the request of Shri Mor, for time to file a return on behalf of respondent No. 1. It seems to us, as we have stated above, and we reiterate, that the question before us is a question of construction of section 6A(2) of the Essential Commodities Act and whether it is susceptible to an interpretation placed by respondents Nos. 2 and 3. The further question is whether cement can be described as a commodity subject to speedy and natural decay. 19. Before we proceed to consider and examine the provisions of Essen tial Commodities Act and the law in that behalf, it would be proper to deal with the second aspect of the matter, namely whether cement is a commodity which is subject to speedy and natural decay. The two words “speedy” and ”natural” that refer to decay are material and important. We think, and it is plain, that there must be a combination of both these factors before a commodity can be said to be amenable to the exercise of powers under section 6A(2) of the Act by the Collector or the concerned officer. 20. It would appear to one as a strange proposition to say that cement is a commodity which is subject to “speedy and natural” decay. It can be so said if words used in the enactment are construed not in their normal natural meaning or context. The word 'speedy' presents no difficulty. Though all matter in the universe is liable to destruction, the process of destruction in the normal course is as distinct from 'speedy', a process that takes time. The word 'natural', however, has etymological and grammatical meaning. It is only if cement can be said to be liable to natural decay that the question whether that decay is speedy or otherwise can be considered at all.
The word 'natural', however, has etymological and grammatical meaning. It is only if cement can be said to be liable to natural decay that the question whether that decay is speedy or otherwise can be considered at all. The word 'natural' is an adjective and is defined to mean, in Chambers Twentieth Century Dictionery, as 'pertinent to produced by, or according to nature'. A single word which would felicitously describe what is meant by natural is inborn' which is also one of the meanings given of the word 'natural'. The word 'natural' which is an adjective is formed from the noun 'nature1 and 'natural' would be in the circumstances pertaining to nature or in accordance with its nature. In other words, the commodity to be subject to natural decay and would be subject to natural decay, if the elements of its decay are inborn in it, or in the normal state of affairs and circumstances in which the commodity is preserved or kept, it is subject to decay. If that is so, then it can be said that the item is one which is subject to natural decay. Cement turns into stone when it comes into contact with water. Water is not a commodity which is natural in cement. Cement is so manufactured as to withstand the ordinary humidity of atmospheric conditions so that in the ordinary course of circumstances and nature, cement does not get solidified. It is only when there is an external application of water that the prospect of cement becoming solidified arises. But it can hardly be said to be a natural circumstance. If the commodity is not liable to natural decay, then no further question arises and one does not have to go to the question whether the decay is speedy or otherwise. 21. The decaying of cement whether natural or otherwise would also depend upon several other external factors and is also relative. For example if the bagging in which it is supplied is Jute, then it may be exposed to greater danger of atmospheric humidity affecting it. That cement which comes in paper or polythene backed paper or simply polythene bags would be resistant to such moisture and retain its manufactured quality for cement. Cement is also used for various applications. The requirements of its strength and quality also vary with the applications.
That cement which comes in paper or polythene backed paper or simply polythene bags would be resistant to such moisture and retain its manufactured quality for cement. Cement is also used for various applications. The requirements of its strength and quality also vary with the applications. Fresh cement would be preferred for strength requiring constructions while an older stock could do for other works like plastering or flooring. 22. In the present case, cement has been disposed of, as we stated above, after the order was passed on 6th/9th July 1981, from 17th July 1981 to 28th August, 1981. That cement has been given for purposes of building construction works and until that time atleast it must not have become a decayed commodity, otherwise it could not have been so awarded to the persons. It is also not stated that the place where the cement was stored was such that it exposed the commodity to rain water or any other external water so that there was danger, and imminent danger, of that commodity solidifying. Indeed, as we shall presently point out, the provisions of section 6A of the Act have not at all been considered and contemplated, nor their application visualised before the order in this case was passed. It is no doubt contended on behalf of the petitioners that the order passed was mala fide and that the distribution of cement appears to be not fair. As we have pointed out above, we do not propose to go into these questions. We think that such proper authorities and the respondent No. 1 would go into that question at the appropriate stage. 23. Since cement in our opinion cannot be treated as commodity which is subject to “speedy and natural” decay, it would follow that the provisions of section 6A (2) of the Act are not at all attracted. We think that cement becomes solidified and, therefore, destroyed only if there is external applica tion of water and not in the ordinary and normal circumstances speedily. 24. Assuming, however, that cement is a commodity which is subject to speedy and natural decay, the next question is whether the provisions of section 6A of the Act contemplate any notice to the person concerned, whose commodity is seized.
24. Assuming, however, that cement is a commodity which is subject to speedy and natural decay, the next question is whether the provisions of section 6A of the Act contemplate any notice to the person concerned, whose commodity is seized. It was urged on behalf of the respondents, relying upon the wording of section 6A (2) and (3), that the section does not contemplate any notice to the person concerned. All that is requisite is that the commo dity must be of a particular kind, namely one subject to speedy and natural decay and secondly that commodity is subject to such speedy and natural decay must be in accordance with the opinion formed by the Collector. It was not suggested that the Collector has the right to form that opinion and that such formation of his opinion is absolute. It seems to us that though the Collector has to form an opinion, he has to form that opinion honestly and in a reasonable manner. He is also to form that opinion on the existence of objective facts, namely the commodity being one subject to speedy and natural decay. We think that in every case, where an officer is charged with the formation of an opinion or belief, to empower him to take any action in respect of a person or property, such formation of opinion or belief is justiciable. What is contended before us in this case is that it is not justiciable at all and it is not necessary to issue a notice. We think that if the opinion or belief is a justiciable opinion or belief, it postulates a notice to the person concerned so as to afford him an opportunity of satisfying the concerned authority, or assisting it in the formation of its opinion. The person concerned can show either that objective circumstances did not exist, or they did not satisfy the qualitative character contemplated by the enactment. In either of these circumstances there would be no material for the formation of the opinion. It is, however, contended that once the Collector forms an opinion and the right to form an opinion is absolute, there is no question of giving any notice. It is also urged before us that before forming the opinion, there is also no requirement under the statute to give a notice to the person concerned.
It is, however, contended that once the Collector forms an opinion and the right to form an opinion is absolute, there is no question of giving any notice. It is also urged before us that before forming the opinion, there is also no requirement under the statute to give a notice to the person concerned. As we shall presently point out, this contention is wholly untenable both in principle as well as on the basis of construction of the section and the interpretation. 25. The power to sell can be exercised by the collector under sub-sec tion (2) of section 6-A in two circumstances. The first is the one which we have pointed out above and the other is in cases where it is considered ”otherwise expedient in public interest so to do”. In the present case, the action is taken under the first clause. But it seems to us that the provision to empower the Collector to make a sale of property seized whenever he con siders it otherwise expedient in public interest, essentially postulates an enquiry. It is difficult to conceive that on the very basis of the section no enquiry is contemplated. Public interest as well as expediency are both justiciable matters and capable of being demonstrated as either not existing or not expedient. Both would require to be defended where they are called in question. It is, therefore, prima facie in our opinion, even according to the terms of sub-section (2) upon which heavy reliance was placed that an enquiry is necessarily contemplated. 26. We are further fortified in our conclusion upon an examination of the scheme of section 6A. Respondent No. 2 though seems to have con fined his attention to the opening words of sub-section (2) he seems to have overlooked sub-section (1) which is specifically mentioned even in those open ing parts of sub-section (2). Sub-section (2) says that where a report of seizure is received or an inspection of an essential commodity under subsec tion (1) is made or got made and the collector forms an opinion, he can pro ceed to order the sale of the property. We have, therefore, to consider and see what sub-section (1) of section 6A says. That sub-section so far as is material is as follows: “6A CONFISCATION OF SEIZED COMMODITIES.
We have, therefore, to consider and see what sub-section (1) of section 6A says. That sub-section so far as is material is as follows: “6A CONFISCATION OF SEIZED COMMODITIES. (1) Where any essential commodity is seized in pursuance of an order, made under Section 3 in relation thereto, a report to that effect shall, without any unreasonable delay, be sent to the Collector within whose jurisdiction the seizure is made, and the Collector may, if he thinks it expedient so to do, inspect or cause to be inspected such essential commodity, and whether or not a prosecution is instituted for the contravention of such order, the Collector, if satisfied that there has been contravention of the order, may order confiscation of- (a) the essential commodity so seized (b) any package, covering or receptacle in which such essential commodity is found and (c) any animal, vehicle, vessel or other conveyance used in carrying such essential commodity”. The latter part of that sub-section also further empowers the Collector, upon satisfaction of contravention of the order, confiscation not only of the essential commodity, but even containers, receptacles, animals, vehicles used in carrying such essential commodity. The power, therefore, conferred under section 6A is quite sweeping but is conditioned. The condition is that there must be satisfaction that there is contravention of the order. It is a moot point whether such satisfaction has to be only prima facie or final so far as that officer is concerned. But in any event it has to be prima facie. Before any such power, therefore, is exercised it is reasonable to think that the person conferred with that power would be circumspect and reasonable in exercising that power. 27. Sub-section (1) of section 6A as we have reproduced above contem plates, upon receipt of the report, application of mind by the Collector, which unfortunately in the present case, on the material which is placed before us was, we are unable to think, the Collector has done. Sub-section (1) says that 'the Collector may, if he thinks it expedient so to do, inspect or cause to be inspected such essential commodity'. We think that it is extremely difficult that without inspection, particularly in the case of a commodity like cement, which was stored in a particular godown, for any person to come to a con clusion that it was subject to speedy and natural decay.
We think that it is extremely difficult that without inspection, particularly in the case of a commodity like cement, which was stored in a particular godown, for any person to come to a con clusion that it was subject to speedy and natural decay. As we have pointed out above, if the godown where the cement was kept was Apna Bhandar and was weather proof, we do not see how the said cement could be said to be subject to speedy and natural decay. There is absolutely no report whatso ever. Nor is it suggested in the return or anywhere, that the godown where the cement was stored was not air or water tight. If it was one which was air and water tight, we fail to see how the commodity without inspection could be found to be one subject to speedy and natural decay. As we pointed out, there is no such report. But the authority seems to have proceeded on a spacious thinking that cement is one such commodity. 28. Sub-section (2) of section 6-A further has two provisos, which, also indicate the care and responsibility with which any action of sale has to be preceded. The second proviso is material. It says : “provided further that, whenever it is practicable so to do, having regard to the nature of the essential commodity, he shall take and preserve sample of the same before its sale or auction”. We do not think that this proviso would have been incorporated in the section, if as is urged and contended be fore us there is an absolute right to formation of an opinion, and the property vested absolutely upon its seizure in the Government. The object of taking samples and preserving those samples is obviously for the purpose of meeting questions of identity and question of commodity being one ''subject to speedy and natural decay.” If a sample is, therefore, to be taken, and we do not see nor is it suggested, that it is not practicable to take samples in the case of cement, a notice to the person, of whose seized commodity samples are to be taken is elementary The necessity to take samples is implicit in the present case, inasmuch as it is at least contended by the petitioners that out of 529 bags which were seized, 49 bags were not cement at all.
The question whether they were cement or otherwise, as is contended by the petitioners, could have been amply and easily demonstrated by the Collector if care had been taken to take samples. 29. We also think that the reliance placed by the learned Assistant Government Pleader on the wording of sub-section (3) to support his conten tion that no notice is contemplated or principles of natural justice are involved, is misconceived. The opening words of sub-section (3) say “Where any essential commodity is sold as aforesaid”. The words “as aforesaid” in our opinion clearly bring in all the provisions of sub-section (1) and (2). The sale must, therefore, be as contemplated and in terms of sub-section (I) and (2). Then only sub-section (3) can be invoked and not otherwise. Besides the provisions of that sub-section make it quite clear that the owner ship of the goods does not pass on to the state and the property does not ”Vest absolutely” in the state on its mere seizure, as is contended. Sub section (3) contemplates payment of the sale proceeds to the person from whom the property is seized. 30. We think, in the circumstance, that the owner is entitled to the sale proceeds, he is also entitled to question the amount of sale proceeds received and establish either that the sale proceeds should have been more or the commodity described and sold was really not the commodity which was seized from him. It would involve, therefore, a question both of identification of the commodity as well as its quality and its state when the commodity was sold, apart from the question of market price or controlled price. If at that stage also the question could be raised and is obviously justiciable, we think that it is in built and contemplated in the very provisions, of a hearing to the parties and his association in the matter of the action which is proposed or taken. The fact that the commodity was not the commodity, or the quality which has fetched the price was not the quality of the goods which were seized would involve establishment thereof. It is from this point of view that we think that the provision for taking samples is provided by way of caution, in the scheme of the section. 31.
The fact that the commodity was not the commodity, or the quality which has fetched the price was not the quality of the goods which were seized would involve establishment thereof. It is from this point of view that we think that the provision for taking samples is provided by way of caution, in the scheme of the section. 31. We think, therefore, taking into account the totality of the circums tances and the provisions of section 6-A, the contention that there is no notice contemplated before exercise of power under sub-section (2) and formation of opinion by the collector is absolute and communication thereof to the person concerned from whom the commodity is seized is unnecessary, is futile and not borne out. 32. We think that even otherwise on principles, this contention to be wholly unsound. We will firstly refer to the decision in (Keshav Mills Corporation v. Union of India)1. In that case, an investigation Committee was appointed under section 15 of the Industries (Development and Regulation) Act, 1951 to go into the question of the reasons of sickness of Keshav Mills Co. Ltd. which had closed down, and also other circumstances. This was a prelude to the taking over of the industry under section 18-A of the said Act. When the investigation committee was appointed, the shareholders who formed the majority and controlled the company and were also directors, had notice and were associated with the investigation. However, when the report was ultimately made by the investigation committee to the Government subsequent to which the action of taking over under section 18-A was issued, no notice was given, nor were the owners heard. They challenged the order of taking over in the Delhi High Court and the question was in the circumstances whether the proprietors and owners were entitled to a second notice. On the facts of that case it was held that the giving of a second notice to them and 'insistence on a formal hearing in such circumstances is nothing but insistence on an empty formality'. 33. What, however, was laid down in connection with the observations of the principles of natural justice and their attraction even to an adminis trative decision is illuminating and well worth reproducing in the present case In our opinion, it aptly applies to the present case. Taking over of an industry was fraught undoubtedly with far reaching consequences.
33. What, however, was laid down in connection with the observations of the principles of natural justice and their attraction even to an adminis trative decision is illuminating and well worth reproducing in the present case In our opinion, it aptly applies to the present case. Taking over of an industry was fraught undoubtedly with far reaching consequences. But that any action which results in consequences, pre-supposes and postulates a hearing is also, in our opinion, clearly laid down in a series of decisions. The second question which was formed by the Supreme Court for its consideration was what were the rules of natural justice and it observed that these rules cannot be laid down in a straight-jacket formula. It held that “We do not think it either feasible or even desirable to lay down any fixed or rigorous yard stock in this matter. The concept of natural justice cannot be put into a straight jacket. It is futile, therefore, to look for definitions or standards of natural justice from various decisions and then try to apply them to the facts of any given case. The only essential point that has to be kept in mind in all cases is that the person concerned should have a reasonable opportunity of presenting his case and that the administrative authority concerned should act fairly, impartially and reasonably. Where administrative officers are concerned the duty is not so much to act judicially as to act fairly.” (Emphasis supplied). 34. The requirement of an administrative officer to act fairly is a pro position well laid down right for the decision in (Ridge v. Baldwin)'1, which was followed in India (in that behalf) and also laid down again by the Supreme Court in Keshav Mills' case {supra) in these terms: “In India also the decisions of this Court have extended the horizons of the rules of natural justice and their application”. As to what must be the extent of hearing and the nature of the hearing which must be given before administrative officer can be said to have acted fairly will depend upon the facts of each case and as stated above, and in the words of the Supreme Court “that cannot be put into a straight jacket formula”.
As to what must be the extent of hearing and the nature of the hearing which must be given before administrative officer can be said to have acted fairly will depend upon the facts of each case and as stated above, and in the words of the Supreme Court “that cannot be put into a straight jacket formula”. The answer to the question whether the principles of natural justice have been followed, or whether the administrative authority concerned with the decision making had acted fairly and reasonably, must always “depend on the actual facts and circumstances of a case”. 35. The decision came to be referred to later in (Swadeshi Cotton Mills v. Union of India)3. There the order was passed on the basis of a certain report received by the Government of India and secondly the Annual Report of the company for the year ending March 31, 1977. No notice was given before under section I8-AA of the said Act. One of the contentions which was raised on behalf of the Union of India was that there was no point in issuing a notice and even a short notice, as the action, it was contended, was directed by considerations of immediacy and exigency, and that the persons concerned were aware of these circumstances. That was the state of affairs of the company as reflected in its Annual Report for the year ending 31st March 1977. In substance, it was, therefore, contended that there would have been no useful purpose in serving or giving a notice before the take over. 36. On the other hand on behalf of petitioners it was contended that even immediacy does not exclude the liability to act fairly and reasonably. Even if immediate action was contemplated or was necessary, situational modifications could be made to meet the requirement of fairness by reducing the period of notice. The form and manner of such notice could be deter mined by taking into account the nature of the exigency and urgency. A notice of 24 hours could be, in the circumstances, enough. The idea is that no consequence should result to a person even before he is heard and a modi cum of hearing is afforded. The respondents have contended that there was no time for hearing petitioners.
A notice of 24 hours could be, in the circumstances, enough. The idea is that no consequence should result to a person even before he is heard and a modi cum of hearing is afforded. The respondents have contended that there was no time for hearing petitioners. As we have pointed out above, respondent have taken more than a month and a half ultimately to dispose of this commodity, which they claim was subject to speedy and natural decay. Actually disposal started from 17th July while respondent No. 2 claimed that he passed the final order on 6th July itself. If that was so, we do not think that this is a case where situational requirements dictated that there should be no notice at all to petitioners, whose name were disclosed as persons claiming title to the goods. But the stand does not seem to be that there was no time to give notice, but a dogmatic assertion that the person con cerned has no right to a notice at all. We think that it is too late in the day, after the law in that behalf has been laid down by a series of decisions of the Supreme Court from the case of (State of Orissa v. Dr. Bina Pan! Devi)4 and Ridge v. Baldwin. We may add a host of such cases to these two, but in our opinion it is needless to say, as the law is so well settled that we think the claim propounded by respondents Nos. 2 and 3 in the present case of no right to notice, to say the least is extremely difficult to accept. If such a plea and claim were to be accepted, it is clear that the same would lend a tyrannous tool in the hands of the concerned officer if he were merely to form an opinion and proceed to dispose of the property, and that opinion was not justiciable and was not susceptible to a change on hearing the parties. It is easy enough to be abused. 37.
It is easy enough to be abused. 37. It seems to us to be fairly well laid down in the case of Swadeshi Cotton Mills v. Union of India, that- “Irrespective of whether the power conferred on a statutory body or tribunal is administrative or quasi-judicial, a duty to act fairly, that is, in consonance with the fundamental principles of substantive justice is generally implied, because the presumption is that in a democratic polity ¦wedded to the rule of law, the state or the Legislature does not intend that in the exercise of their statutory powers its functionaries should act unfairly or unjustly”. (Emphasis added) We are sorry to find that in spite of this well laid down law, two of the functionaries of the respondent State have even today claimed that right before us. 38. We think also that it cannot be disputed that a sale of property apart from confiscation thereof which is a further consequence and a subject of a different proceeding visits a person with civil consequences. The civil consequence is that which produces infraction of a person's right to property or his personal rights. Where a property is compulsorily sold, he is deprived of the dominion and his right to possession or enjoyment. Though ultimately it may be found that the property was not liable to confiscation and though it may be ultimately discovered that it was not subject to speedy and natural decay, if the right to sell the property merely on the formation of an opinion by the Collector that it is subject to speedy and natural decay, is not subject to any scrutiny or even pursuation, to hold otherwise would deprive that person a right to possess and enjoy and use that property in any manner he liked. It would not, therefore, be correct to say that since a substitute of that property, where the confiscation order was not legitimately passed, in the form of realised sale proceeds was given to him, no civil consequence would ensue. We are unable to think that civil consequence can be looked at and viewed in such a limited perspective. It is common place that where an action, whether administrative or quasi-judicial, results in civil conse quences, as we have demonstrated above, the principles of natural justice are called into play.
We are unable to think that civil consequence can be looked at and viewed in such a limited perspective. It is common place that where an action, whether administrative or quasi-judicial, results in civil conse quences, as we have demonstrated above, the principles of natural justice are called into play. It was admitted and was fairly conceded before us, that no notice was given, and if the principles of natural justice were involved, there was an infraction in the instant case. In that view of the matter, we do not think that the order passed of sale, which is now contended to have been passed on 6th July 1981, could be supported or allowed to stand. He therefore, quash the order passed by respondent No. 2 directing sale and disposal of the commodity seized on 29th June 1981 from the custody of petitioner No. 2. In the circumstances, as an appeal is pending on the order of confiscation, we can only direct that the property which was seized on 29th June 1981 from the custody of petitioner No. 2 the respondents will make available the said property to the petitioners on the final orders, which may be passed in that appeal. Rule made absolute accordingly. In the circum stances of the case and in fairness, petitioners will be entitled to costs from respondents Nos. 2 and 3. Rule absolute.