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1983 DIGILAW 342 (PAT)

State Of Bihar v. Sarju Prasad

1983-12-22

K.B.SINHA

body1983
Judgment K.B.SINHA, J. 1. This revision petition has been filed on behalf of the State against the order of the Sessions Judge, Bhojpur. Arrah, by which the order of the Chief Judicial Magistrate, Arrah, taking cognizance of an offence punishable under Section 7 of the Essential Commodities Act for violation of the provision of the Bihar Sugar Dealers Licensing Order, 1963 (hereinafter referred to as the Sugar Licensing Order) and Bihar Kerosine Dealers Licensing Order, 1965 (hereinafter referred to as the Kerosine Licensing Order) has been set aside. Although the members of the opposite party bad also challenged their prosecution for violation of the Bihar Essential Commodities other than Foodgrains and Rice and Stock (Display and Control) Order, 1967 (hereinafter referred to as the Display Order), but their prayer was not allowed as a result of which their prosecution for violation of the Display Order is still alive. 2. Briefly stated the prosecution case is that Shri S. A. Khan, Marketing Officer, Bhojpur, Arrah, visited the business premises of the opposite party on 13-2-1981 and in course of inspection a number of irregularities and illegalities, committed by them, were detected. He submitted a report to the higher authorities and thereafter a complaint was filed in the court of the Chief Judicial Magistrate, Bhojpur, Arrah, on 5-3-1981. Besides other allegations made in the complaint petition, it is stated that the opposite party had violated the provisions of the Sugar Licensing Order. It is also alleged that the opposite party had failed to lift the quota of Kerosine oil allotted for distribution amongst the consumer and thereby violated the provision of Kerosine Licensing Order. After receipt of the complaint, the Chief Judicial Magistrate, Bhojpur, Arrah, took cognizance of the offence punishable under Section 7 of the Essential Commodities Act of 1955 and passed order for issuance of process against them. 3. A revision petition was filed by the members of the opposite party in the court of the Sessions Judge, Bhojpur, Arrah, against the order dated 9-3-1981, which was allowed mainly on two grounds. It was urged on behalf of the opposite party in the court below that the Sugar Licensing Order, 1963 should be deemed to have been repealed in view of provision of Clause 17 of the Sugar Control Order, 1966, of the Central Government. It was urged on behalf of the opposite party in the court below that the Sugar Licensing Order, 1963 should be deemed to have been repealed in view of provision of Clause 17 of the Sugar Control Order, 1966, of the Central Government. In support of this argument, reliance was placed on the case of Sitaram Agrawal v. the State of Bihar, 1978 CL3 NOC 77 at page 42, in which it was held by a learned Single Judge of this High Court that the Bihar Sugar Licensing Order must be held to have been repealed after coming into force the Central Sugar Control Order, 1966, On the basis of the law laid down in the said case, the learned Sessions Judge came to the conclusion that the members of the opposite party could not be prosecuted for violation of an order, which was not in existence and consequently set aside the order of cognizance so far as prosecution for contravention of the Sugar Licensing Order was concerned. 4. Mr. Lala Kailash Behari Prasad, learned counsel appearing for the State contended that the case of Sitaram Agrawal was subject matter of consideration by a Division Bench of this Court in Kashi Prasad Hari lalka v. the Joint Secretary, Government of India, Ministry of Agriculture and Irrigation Department and others, 1981 BLJR 189 and after taking into consideration different provisions of the said two Control Orders, it has been held that it was not correct to say that the Sugar Licensing Order of 1963 stood repealed by virtue of Clause 17 (1) of the Sugar Control Order, 1966. So, the principle laid down in Sitaram Agrawalas case is no more a good law. 5. Mr. K. K. Singh, learned counsel appearing for the opposite party fairly conceded that in view of the said Bench decision, he did not want to press this point on the basis of the proposition that Sugar Licensing Order was not in force. But he tried to support the order of the Sessions Judge on a different logic. It was contended that the contravention of the conditions of a licence issued under the Sugar Licensing Order was not contravention of the Order itself and so the prosecution for violation of the terms of the licence was not maintainable. In support of this argument, reliance was placed on the case of M/s East India Commercial Co. It was contended that the contravention of the conditions of a licence issued under the Sugar Licensing Order was not contravention of the Order itself and so the prosecution for violation of the terms of the licence was not maintainable. In support of this argument, reliance was placed on the case of M/s East India Commercial Co. Ltd. Calcutta and another v. Collector of Customs, Calcutta, AIR 1962 SC 1893 ). The argument put forward on behalf of the opposite party cannot be appreciated without setting forth salient facts of that case. The appellant a company had applied for grant of a licence to import some fluoresent tubes and fixtures. In the licence granted to the appellant it was mentioned that the goods were to be used only for consumption as raw material or as accessories in the licensees factory and that no part of the goods should be sold to any person. Having got an information that some goods were sold to various parties by the licensee, the Chief Controller of Imports directed the seizure of goods. A criminal prosecution was launched against the Director of the Company under Section 5 of the Imports and Exports (Control) Act, 1947. The prosecution failed and the High Court, in a revision against the discharge of the accused, held that the section penalised only contravention of an order made or deemed to have been made under the Act, but did not penalise contravention of the conditions of licence issued under the Act. Similarly, another prosecution was also started under Section 420 read with 120-B of the Indian Penal Code with the allegation that the licence was obtained on false and fraudulent representation but this case also failed. While these proceedings were pending, the seized goods were sold and sale-proceeds were kept with the Chief Presidency Magistrate, Calcutta. After the aforesaid proceedings had come to an end, the Collector of Customs served a notice on the appellant to show cause as to why the money lying with the Chief Presidency Magistrate should not be confiscated under Section 167 (g) of the Sea Customs Act read with Section 3 (2) of the Imports and Exports (Control) Act. The ground stated for the proposed confiscation was that the appellant company had sold the goods contrary to the conditions of the licence. The ground stated for the proposed confiscation was that the appellant company had sold the goods contrary to the conditions of the licence. The company challenged this by filing a writ of prohibition, which was dismissed by the High Court and thereafter the order was challenged in the Supreme Court. The Supreme Court, by a majority of two to one judgment held that the infringement of a condition in the licence not to sell the goods imported to any other person was not an infringement of the order and, therefore, the said infringement did not attract Section 167 Clause 8 of the Sea Customs Act. This finding was recorded mainly on the ground that the goods were imported under a valid licence and, therefore, it was not possible to say that the goods imported were those, which were prohibited or restricted within the meaning of Clause 8 of Section 167 of the Sea Customs Act. While dealing with the point raised on behalf of the parties, their Lordships referred to different provisions of Export and Import Act and the Sea Customs Act as also different notifications issued under the latter Act. After surveying the different provision of the law, it was found that the order did not provide for a condition in the licence that subsequent to the import the goods should not be sold to any one. So far the orders issued under the Essential Commodities Act are concerned, a cursory view of the different provision will show that the Licensing authority is vested with the powers to impose condition in the licence. This view has also been taken by other High Court. Reference may be made to the case of S. Kariapa v. State of Mysore, AIR 1971 Mysore 7 and Sarvapalli Kotiratnam v. State, AIR 1974 Andhra Pradesh 207 (FB). 6. Before looking to the relevant provisions of Essential Commodities Act, it is worth while to notice, yet another legal aspect of the said case. Section 19 of the Sea Customs Act says that the Central Government may from time to time, by notification in the Official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across customs frontier as defined by the Central Government. Section 19 of the Sea Customs Act says that the Central Government may from time to time, by notification in the Official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across customs frontier as defined by the Central Government. From the language of this section, it is apparent that the restrictions can be legally imposed only for the purpose of import or export of goods. But the licence was issued to the appellant company with the specific conditions that the goods would be utilised for consumption as raw-material in the factory of the licensee and no part thereof would be sold to other party. It was not disputed in that case that the goods were imported under a valid licence. Undoubtedly, according to the provisions of the Sea Customs Act, it was permissible to put restriction for the purpose of export and import of goods. But any condition with regard to the manner in which the legally imported goods should be dealt with by the licensee obviously falls beyond the scope of the Act. 7. The facts stated above, which form the background for the decision of the Supreme Court, do not have any similarity with the circumstances of the present case. The learned State counsel rightly argued that the licence issued under the Sugar Licensing Order was in the statutory form and it was not an executive Act of the licensing authority. In order to appreciate the correct position, it is relevant to refer to different clauses of Sugar Licencing Order Clause 3 of the said Order says that no person shall carry on business as a dealer except under and in accordance with the terms and conditions of the licence issued in this behalf by the licensing authority. This clause clearly emphasises the importance of a licence and the obligation of a dealer to carry on his business in sugar according to its terms and conditions. Clause 4 says that every application for a licence or renewal thereof shall be made .to the licensing authority in Form A and licence for the said purpose shall be issued in Form B. It is clearly stated that licence shall be subject to the conditions specified therein. Clause 4 says that every application for a licence or renewal thereof shall be made .to the licensing authority in Form A and licence for the said purpose shall be issued in Form B. It is clearly stated that licence shall be subject to the conditions specified therein. Clause 5 prescribes the period of licence and fee chargeable Clause 6 empowers the Licensing authority to refuse a licence. Then Clause 7 says that no holder of a licence issued under this Order or his Agent or servant or any person acting on his behalf shall contravene any of the terms or conditions of the licence and if any one contravenes any of the said terms or conditions, then without prejudice to any other action that may be taken against him, his licence may be cancelled or suspended. An appeal is also provided under Clause 8 against an order passed by the licensing authority. In Clause 9, a provision has been made to facilitate the entry, search or seizure of the business premises by a public servant authorised for this purpose and it has been made obligatory on the licensee to produce Book of Accounts or any other document showing transaction relating to such contravention. So the importance of licence and obligation of the dealer to do his business according to its terms and conditions are incorporated in the order itself. Therefore, it is quite clear that a person is prohibited from dealing in this commodity in any manner, except in accordance with the condition of the licence granted by the licensing authority. So, in my view, the licence is an integral and essential part of the order and contravention of any term thereof is as much penal as contravention of the order itself. 8. It is relevant to refer to some material provisions of the Essential Commodities Act, 1955 (hereinafter called as the Act) which lead to the same conclusion and furnish a complete answer to the point, which weighed with the learned Sessions Judge for setting aside the order of cognizance for contravention of the Kerosine Licensing Order. The preamble of the Essential Commodities Act, 1955, itself indicates that this law has been promulgated "in the interest of general public for the control of production, supply and distribution etc., of the essential commodities and to issue orders for these purposes. The preamble of the Essential Commodities Act, 1955, itself indicates that this law has been promulgated "in the interest of general public for the control of production, supply and distribution etc., of the essential commodities and to issue orders for these purposes. While enacting sub-section (2) of Section 3, it appears that the legislature has provided guideline for securing the twin objects for maintaining or increasing supply of essential commodities and for securing their equitable distribution and availability at their fair price. The matters enumerated in sub-section (2) of Section 3 are only illustrative and the enumeration is without prejudice to the generality of the power conferred by sub-section (2). One of the dominent objects is to secure equitable distribution of essential commodities in the interest of general public. The interest of general public means the interest of the consumers and not the interest of the dealers. Section 3 (i) of the Act confers power to control production, supply, distribution etc., of essential commodities and to issue orders for these purposes. Sub-section (2) gives a guideline in accordance with which such orders have to be made. In Clause (a) of sub-section (2), provision has been made for regulation by licence permits or otherwise the production or manufacture of any essential commodity. Similarly, Clause (d) of the said sub-section speaks of regulating by licence permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity. So, it is abundantly clear from what has been mentioned above that licence with all the terms and conditions form part and parcel of the order and contraventions thereof are made punishable under the said Order. 9. So, keeping in view the different provisions of this Act, it has to be held that any action of the licensing authority cannot be said to be illegal and unreasonable if it is done with a view to regulate the distribution of essential commodities to make the same available to the consumers. I have already held that the licence issued under the Sugar Licensing Order in a statutory form, forms Part of the Act. I have already held that the licence issued under the Sugar Licensing Order in a statutory form, forms Part of the Act. A specific condition has been provided in the statutory form of the licence to be issued to the wholesale dealers under the Kerosine Licensigg Order that the licensee shall comply with any general or special direction issued by the State Government or licensing authority, from time to time in regard to the storage and disposal of any stock of kerosine held by him or in regard to the maintenance of any other record or return as required by the State Government or licensing authority. So it is not possible to accept the contention of the opposite party that there is no provision in the Kerosine Licensing Order under which a licensee could be directed to lift quota allotted to him for the purpose of distribution amongst the consumers. Then it was urged that the opposite party might have failed to receive the quota because of shortage or requisite fund at their disposal. The very purpose of framing of the Essential Commodities Act is likely to be frustrated if a licensee fails in his duty to make the essential goods available to the consumers. Whether requisite fund was available or not with the members of the opposite party at the relevant time is a matter to be seen at the trial stage. So, it is not possible to maintain the order of the learned Sessions Judge, by which he quashed the order of cognizance for violation of the Kerosine Licensing Order and Sugar Licensng Order. 10. In the result, this revision application is allowed and the order dated 25-3-1981 passed by the sessions Judge is set aside. 11. Let the record of the case be sent forthwith to avoid further delay in disposal of the trial.