RAYMOND WOOLEN MILLS LTD v. STATE OF WEST BENGAL — 1986 DIGILAW 71 (CAL)

UMESH CHANDRA BANERJEE, J. ( 1 ) THE jurisdiction of the Investigating Agency to investigate ought not to be lightly interfered with and Writ Court would not normally do so unless however it could be established that the initiation of the proceeding by the lodgment of the First Information Report does not disclose an offence or the investigation is continued for purpose other than legal and is continued malafide. ( 2 ) THE law in that regard is now well-settled by the decision of the Supreme Court in the case of State of West Bengal v. Swapan Kumar reported in AIR 1982 SC 949 . In the above-noted decisions the Supreme Court observed :"the position which emerges from this decision ??????????. . is that the condition precedent to the commencement of investigation under Section 157 of the Code is that the F. I. R. must disclose, prima facie, that a cognizable offence has been committed. It is wrong to suppose that the police have an unferrered discretion to commence investigation under Section 157 of the Code. Their right of enquiry this condition by the existence of reason to suspect the commission of a cognizable offence and they cannot reasonably have reason so to suspect unless the F. I. R. , Prima facie disclosed the commission such offence. If that condition is satisfied, the investigation must go on and the Rule in Khwaja Nazir Ahmed will apply. The Court has then no power to stop the investigation, for to do so would be to trench upon the lawful power of the police to investigate into cognizable offence. On the other hand, if the F. I. R. does not disclose the commission of a cognizable offence, the Court would be justified in quashing the investigation on the basis of information as led or received. " ( 3 ) THE Supreme Court further observed :"there is no such thing like unfettered discretion in the realm of powers defined by Statutes and indeed unlimited discretion in that sphere can become a ruthless destroyer of personal freedom. The power to investigate into cognizable offence must, therefore, be exercised strictly on the condition on which it is granted by the Court. The power to investigate into cognizable offence must, therefore, be exercised strictly on the condition on which it is granted by the Court. " ( 4 ) HAVING dealt with the law on the subject, it is now to be seen as to whether the law noted above has its due application in the matter under consideration as is contended by the petitioner. ( 5 ) BEFORE, however, adverting to the rival contentions raised in the matter, one redeeming feature ought to be noticed at this juncture, being the admitted set of facts and for convenience sake the same are tabulated hereinbelow :i)the petitioner No. 1 is a producer of Cement having its factory at Bilashpur, Madhya Pradesh. II)the petitioner No. 1 has two godowns at Calcutta. III)the petitioner has not applied for any licence either under the West Bengal Licensing of Dealers of Cement and Distribution of Levy Cement Order 1982 or the West Bengal Declaration of Stocks and Prices of Essential Commodities Order 1977 before filing of the instant Writ Petition. IV)seizure of cement from the godowns of the petitioner No. 1v)the subject cement is non-levy cement. VI)no reply has been sent to the enquiry of the Petitioner No. 1 in regard to the applicability of any of the Control Orders promulgated by the State of West Bengal or for its compliance. ( 6 ) INCIDENTALLY it is to be noted that prior to 1984, there was not strong facility but the same became necessary by reason of growing demand for cement manufactured by the Petitioner No. 1 in the eastern states and the Calcutta godowns are in operation since April 1984. ( 7 ) ON these state of facts, the Petitioners contended that neither the 1982 nor the 1977 Control Order has any manner of application in the facts under consideration and as such the First Information Report ought to be set aside and quashed. It is at this stage the First Information Report ought to be considered. ( 8 ) THE First Information Report reads as follows :"i, S. I. S. R. Mukherjee of E. B. do hereby lodge complaint against Sl. No. 1 Natesan Iyer son of Sri Panchanathan Iyer, Depot in charge of M/s. Raymond Cement Works having his office at 55, Bip. R. B. B. Road, Calcutta, previously known as Canning Street, Sl. ( 8 ) THE First Information Report reads as follows :"i, S. I. S. R. Mukherjee of E. B. do hereby lodge complaint against Sl. No. 1 Natesan Iyer son of Sri Panchanathan Iyer, Depot in charge of M/s. Raymond Cement Works having his office at 55, Bip. R. B. B. Road, Calcutta, previously known as Canning Street, Sl. No. 2, Gobinda Prosad Goenka s/o Sri Banarashi Lall Goenka, Representative of M/s. Raymond Cement Works of said office, Sl. No. 3 Kamala Sankar Pandey son of Sri Suranath Pandey, Godown Keeper of the said concern and others as mentioned in column 2 of the West Bengal Licensing of Dealers of Cement and Distribution of Levy Cement Order 1982 by storing 21809 bags of cement in their godown at 6, Dilarjang Road, Calcutta 2 and 16783 bags of cement in their another godown at shed no. 15, inside Cossipore Railway Yard, total worth about Rs. 26,46,050/- without having any storing-written authority from the Director of Consumer Goods, Govt. of West Bengal which was detected at about 13. 30 hrs. on 15. 7. 86 punishable u/s. 7 (1) (a) (ii) E. C. Act. These accused persons have also violated the provision of paragraph 3 (1) and paragraph 2 (e) of West Bengal Declaration of Stock of Essential Commodities Order No. 3420/f. S. /f. S. /cal-14-R-8/76 Part III dt. 15. 6. 1977 by not displaying of the stock board in II at their business place i. e. office of M/s. Raymond Cement Works at 55, Bip. R. B. B. Road, although total 38,592 bags of cement were in their possession which have been stored in their godowns at 6, Dilarjang Road, Calcutta-2 and at shed no. 15 inside Cossipore Railway Yard which were detected between 15. 30 hrs. and 18. 00 hrs on 15. 7. 86 punishable under Section 7 (i) (a) (i) E. C. Act. The above mentioned total bags of cement were seized and kept under seal and police guard. " ( 9 ) TURNING on to the second limb of the complaint viz. 15 inside Cossipore Railway Yard which were detected between 15. 30 hrs. and 18. 00 hrs on 15. 7. 86 punishable under Section 7 (i) (a) (i) E. C. Act. The above mentioned total bags of cement were seized and kept under seal and police guard. " ( 9 ) TURNING on to the second limb of the complaint viz. violation of paragraph 3 (1) read with paragraph 2 (e) first, it was submitted that the complaint ought to be set aside on two counts :a)the Control Order of 1977 has no manner of application in so far as the Petitioner No. 1 is concerned, and b)the Control Order of 1977 is an invalid place of Governmental Order as it is repugnant to the Cement Control Order passed by the Central Government. ( 10 ) TO effectively deal with the second limb of the complaint, both the counts to be dealt with together; Repugnancy is said to have occurred in the matter of non-levy cement, since the Central Government is said to have occupied the field of levy cement and has withdrawn all restrictions on non-levy cement. Whereas Article 234 of the Constitution has been taken recourse to by Mr. Ray in support of his contention, the Learned Advocate General while refuting the contentions, submitted that by reason of express language used in the Article by the Constitution makers, there is no scope for extension of its applicability to the Control Orders. ( 11 ) REPUGNANCY in common acceptance means inconsistency. It is, therefore, to be seen first as to whether there is any inconsistency between the Cement Control Order 1967 and the West Bengal Control Order of 1977. ( 12 ) THE preamble to the Cement Control Order 1967 reads:"whereas it appeared to the Central Government that for the purposes of securing the equitable distribution and availability at fair prices of cement, the supply and distribution of trade and commerce in cement should be regulated. " ( 13 ) PARAGRAPH 1a of Order of 1967 expressly provides that the provisions of the Control Order shall only apply to levy cement. ( 14 ) THE obvious intent therefore is to keep the non-levy cement out of the purview of the Control Order of 1967, on and since 1982 since paragraph 1a has been incorporated on 28th February 1982. ( 14 ) THE obvious intent therefore is to keep the non-levy cement out of the purview of the Control Order of 1967, on and since 1982 since paragraph 1a has been incorporated on 28th February 1982. The issue poised thus, whether the State Government still retains the jurisdiction and authority to exercise the control over the supply and distribution of the non-levy cement. ( 15 ) THE preamble to the State Control Order of 1977 reads as follows :"whereas the Governor is of opinion that it is necessary and expedient so to do for maintaining and increasing supplies of essential commodities and for securing their equitable distribution and availability at fair prices. " ( 16 ) ON a plain reading of the preamble to the Cement Order as well as the State Order, it leaves no room for doubt that both the orders have been promulgated for making the cement available to the public in general at a fair price. In this context clause 10 of the Central Control Order ought also to be noticed. Clause 10 provides :"wholesale AND RETAIL PRICES" 1)the maximum price at which cement may be sold by a dealer (whether wholesale or retail) shall be such as may be fixed by the State Government and no dealer (whether wholesale or retail) shall sell cement exceeding such maximum price. 2)in fixing the maximum price under sub-clause (1) the State Government shall have due regard to: i)the price fixed under clause 8. ii)handling (including charges in respect of packing or container) and transporting charges. iii)godown charges. iv)stockist's margin of profit. v)local taxes, if any. vi)additional road transport charges, where allowed. EXPLANATION in this clause, "state Government" in relation to a Union Territory means the administrator thereof appointed by the President under article 230 of the Constitution. ( 17 ) IT therefore appears that both the Central and the State Control orders operate on the same field with the authorisation of the Central Government to the State Government to fix the wholesale and retail prices. A definite guideline has also been framed by the Central Government for guidance of the State Government to fix such a price or prices. ( 18 ) IT is on this backdrop Mr. Roy's strainous submissions as regards inconsistency would have to be judged before preceding with the matter any further. A definite guideline has also been framed by the Central Government for guidance of the State Government to fix such a price or prices. ( 18 ) IT is on this backdrop Mr. Roy's strainous submissions as regards inconsistency would have to be judged before preceding with the matter any further. ( 19 ) ADMITTEDLY, the promulgation of the State Control Order of 1977 has been effected by reason of the authorisation by way of delegation as contained in Section 5 of the Essential Commodities Act and as such the order of delegation being S. O. 681 (E) dated 30. 11. 1974 ought also to be noticed. Paragraph (a) (iii) of the above-noted order of delegation reads as follows:-" (A) ???????????? (iii) That no order shall be issued in pursuance of the powers hereby delegated if it is inconsistent with any order issued by the Central Govt. under the said Act. " ( 20 ) THE intent of the order of delegation is unequivocal to the extent that the exercise of power by the State Govt. cannot be inconsistent with the orders issued by the Central Government under the Essential Commodities Act and if it is, the same would be, in any view, without jurisdiction or beyond the jurisdiction and the Law Courts would be within their rights to declare it as incompetent and void, and there ought not to be any hesitation in such a declaration. ( 21 ) THE Cement Control Order 1967 as amended in 1982 excludes the non-levy cement from its operation, obviously intending thereby that no restriction can or ought to be imposed in the matter of non-levy cement and the producers, traders and retailers are free to deal with the same without any embargo or restriction. When the Central Government has thought it fit to allow dealing with non-levy cement without any restriction would the State Government be justified in exercise of power delegated to it under the Essential Commodities Act in introducing an embargo as regards distribution and sale of the essential commodity? Incidentally, it is to be noted that this exemption to deal with non-levy cement was brought into existence by an amendment to the cement control order in the year 1982 ????. . Incidentally, it is to be noted that this exemption to deal with non-levy cement was brought into existence by an amendment to the cement control order in the year 1982 ????. . therefore in accordance with the usual rules of construction and interpretation it is to be taken as a deliberate act and a definite intent on the part of the Central Government to exclude non-levy cement from the rigors of law. ( 22 ) THE Learned Advocate-General on this score, however, submitted that by reason of the provisions of section 6 of the Essential Commodities Act, question of there being any inconsistency as between the Cement Control Order of 1967 and the State Control Order of 1977 does not arise; and this is so even assuming that the Control Order of 1977 is inconsistent with the Central Order of 1967, since the latter Order was not promulgated under the Essential Commodities Act but under the Industries (Development Regulation) Act. ( 23 ) BOTH the Cement Control Order 1967 as amended in 1982 as also the State Control Order 1977 have been promulgated under authorization from statutes. Whereas the Cement Control Order of 1967 has been introduced in exercise of power conferred by section 18g and section 25 of the Industries (Development and Regulation) Act of 1951 the State Control Order has been issued under the delegated power as provided under section 5 of the Essential Commodities Act. The source of power being statutory in nature as regards both the control orders, in any view, the provisions of both the control orders ought to be treated for all intents and purposes as statutory and article 254 of the Constitution has its full play in the event of there being any inconsistency. Reference to section 6 of the Essential Commodities Act or the two Control Orders being operative on separate and distinct matters as contended by the Learned Advocate-General, in my view, cannot be accepted as the provisions of the Constitution runs supreme. His view finds support from a Bench decision of the Allahabad High Court in the case of Om Prakash Agarwal vs. State of U. P. and Ors. , (Civil Misc. Habeas Corpus Writ Petition No. 11720 of 1985 ). His view finds support from a Bench decision of the Allahabad High Court in the case of Om Prakash Agarwal vs. State of U. P. and Ors. , (Civil Misc. Habeas Corpus Writ Petition No. 11720 of 1985 ). The decision of the Supreme Court in the case of Tikaramji vs. State of U. P. reported in AIR 1956 Supreme Court 676 does not in my view lend any assistance to the Learned Advocate-General and the same is clearly distinguishable. ( 24 ) THE other aspect of the matter ought not also to be lost sight of. The Essential Commodities Act has been engrafted in the statute book in 1955 for the purpose of providing in the interest of general public for the control of production, supply and distribution of and trade and commerce in certain commodities. Section 2a under the Act of 1955 defines essential commodity; it includes cement. ( 25 ) IT is to be noticed that the Act of 1955 does not recognise the differentiation between levy cement and non-levy cement. The Industries (Development and Regulation) Act provides that it is expedient in public interest that the Central Government should take under its control the cement industry as specified in the first schedule to the Act of 1957 and under the authorisation of the Act of 1951 the Central Government has in particular reference to Section 18g read with Section 25 promulgated the Cement Control Order 1967. Even at that stage there was no differentiation between levy and non-levy cement. Subsequently, however, the Cement Control Order recognised such a differentiation and categorically exempted "non-levy" cement by the amendment of 1982 from the purview of the Control Order of 1967. It, therefore, appears that such a differentiation has been deliberately brought in by the law makers in the year 1982 and the strict rigors of the Cement Control Order 1967 have been totally exempted as regards the non-levy cement. The question, therefore, arises as to whether the law makers intended such an exemption only in regard to the Cement Control Order 1967 or from the purview of all other restrictions. In my view, the intent is clear and manifest that no restriction ought to be imposed in regard to the non-levy cement, as otherwise, the exemption granted by the Central Government would be rendered nugatory and otiose. In my view, the intent is clear and manifest that no restriction ought to be imposed in regard to the non-levy cement, as otherwise, the exemption granted by the Central Government would be rendered nugatory and otiose. Both the Essential Commodities Act and Industrial Development Regulation Act are central legislation and more or less operate on the same field as regards cement and the exemptions granted under one enactment cannot be said to have been taken away by the other enactment. The lawmakers do not make concessions in one hand and take away the same through the other this being a well-settled principle of interpretation of statutes. Concessions made is for public benefit and in the ordinary course of trade and commerce. The doctrine of implied repeal though in terms may not apply, but ought not to be lost sight of in the facts and circumstances of the matter under consideration. ( 26 ) CONSIDERING the matter from another aspect, it is to be noted that if a manufacturer proceeds on the basis of the exemption of the Cement Control Order of 1967 as amended in 1982 and thereafter for abandonment caution applies to the authority concerned for ascertainment of the factum of the applicability of the Control Order 1977 and the concerned authority maintains a delightful silence in the matter but proceeds against the concerned manufacturer after about lapse of two years, the action of the authority concerned cannot, in my view, be said to be in consonance with the rule of equity and fair play. There was a duty and the responsibility of the public authority to speak and failure to speak on the requisition of the manufacturer concerned cannot and ought not to be ignored. ( 27 ) CONSIDERING the above, in my view, in any event of the matter, an equity exists in favour of the petitioner. If an act of government or the governmental agency is apparently not in accordance with the rule of equity and fair play, it would be a plain exercise of judicial power to intervene. A manufacturer of non-levy cement applies before the authority concerned and the authority concerned keeps a silence on the matter, cannot and ought not to be overlooked by the writ court as otherwise it would be a clear manifestation of injustice. A manufacturer of non-levy cement applies before the authority concerned and the authority concerned keeps a silence on the matter, cannot and ought not to be overlooked by the writ court as otherwise it would be a clear manifestation of injustice. The writ court would come in aid of a person who seeks justice in such circumstances. ( 28 ) IN that view of the matter, the petitioner's contention as regards the non-applicability of the State Control Order, 1977 succeeds. ( 29 ) IN the view I have taken, question of having any control or restriction as regards the non-levy cement does not and cannot arise and, therefore, consequent violation of the Control Order of 1977 in not displaying the Stock Board does not and cannot arise. Incidentally it is to be also noted that in accordance with the principles of interpretation of statutory provisions, the construction ought to be strict as regards the penal provisions. ( 30 ) LET us now turn on to the first limb of the Complaint vis-?-vis the violation of paragraph 10 (1) of the West Bengal Licensing of Dealers of Cement and Distribution of Levy Cement Order, 1982. ( 31 ) PARAGRAPH 10 (1) of the State Control Order of 1982 postulates that no person other than a bulk distributor, a dealer or a consumer shall have in his possession or under his control any quantity of cement except under and in accordance with an authority granted under the order of 1982 by the Licensing Authority. The issue, therefore, is whether the petitioner No. 1 can be termed to be a bulk distributor or a dealer or a consumer. Admittedly, the petitioner No. 1 cannot be termed to be a bulk distributor within the meaning of paragraph 2 (a) of the Order of 1982. Paragraph 2 (e) defines dealer and means a person who is engaged in any business or undertaking involving sale or purchase for sale or storage for sale, of cement either on his own behalf or on behalf of any other person but does not include a bulk distributor or a producer. The Control Order of 1982 specifically exempts the producer from the ambit of 1982 Order. The Control Order of 1982 specifically exempts the producer from the ambit of 1982 Order. It is to be noticed that the 'producer' shall have the same meaning assigned to it under the Cement Control Order of 1967, which defines 'producer' being any person who manufactures cement (paragraph 2 (m) of the State Control Order of 1982 read with paragraph 2 (c) (iii) (c) of the 1967 Central Order as amended in 1982 ). The charging provision as appears from paragraph 3 of the State Control Order 1982 makes it clear that the same relates to licensing of dealer and the prohibition as against carrying of business as dealer without a license and not against a producer of cement. Upon a proper construction of the Control Order of 1982 the dealer cannot be equated with a producer and such a differentiation exists on a plain reading of the State Control Order. Form 'a' of the State Control Order also lends assistance to such an interpretation. ( 32 ) THE first information report itself described the petitioner as a producer and not a dealer within the meaning of the State Control Order of 1982. To say that a manufacturer or a producer though not admittedly a dealer while he is manufacturing and storing cement, becomes a dealer when the cement is stored elsewhere cannot be termed to be logically sound. The manufacturer or producer of cement because of the location of the place of storage cannot turn out to be dealer - a manufacturer remains a manufacturer for all times and cannot be termed to be a dealer only because of the fact that certain storage facilities have been obtained by him at a far away place. The Learned Advocate General appearing for the respondents submitted that too wide a meaning ought not to be attached to the expression producer and in this context relied on a passage from Maxwell Interpretation of Statutes. I am, however, unable to accept the contention of the Learned Advocate General since the provisions under consideration in this Writ Application is of penal in nature and it is now well-settled that in the event of there being a penal provision, the interpretation which ensures to the benefit of the accused should be adopted by the law courts. Too rigid an interpretation should always be avoided by the law courts when the provision is penal in nature. Too rigid an interpretation should always be avoided by the law courts when the provision is penal in nature. The word 'producer' ought not to be given any extended meaning under the Control Order of 1982 except what is intended by the makers of the Control Orders. ( 33 ) SIGNIFICANTLY however it is observed that during the pendency of the Writ Petition before this Court, an amendment has been effected on the State Control Order of 1982, to include the Producers as special category dealers. The introduction of this amendment, however, is to be examined with care and caution. The amendment was incorporated during the pendency of the Writ Application and is not having any retrospective effect. The requirement of having a licence has thus only been introduced on and from 22nd September 1986 and as such the producer as on the date of complaint and seizure were not required to obtain any licence under the Control Order of 1982. ( 34 ) IN the view I have expressed as noticed above the petitioner No. 1 cannot be termed to be a 'dealer' within the meaning of State Control Order of 1982. ( 35 ) THE only other issue left outstanding is in regard to the discussion between the officers of the petitioner no. 1 and the respondent no. 1's authority in the year 1984 prior to opening of storage facility in and around Calcutta. Admittedly, such a discussion had taken place and there was a total silence on the part of the respondent authority in regard to obtaining of licence under the Control Order of 1982 by the petitioner. There existed a duty to speak and the Respondent Authority has failed in discharging its obligation. Failure to speak when law enjoins such a state of affairs ought not to be ignored by the Law Courts in deciding as to whether the prosecution can be termed to be harassive prosecution. ( 36 ) BEFORE I conclude, judicial conscience dictates me to observe that faith and belief in the law enforcing agencies ought to be the key note in a country like ours and contra belief would lead to a social catastrophy. ( 36 ) BEFORE I conclude, judicial conscience dictates me to observe that faith and belief in the law enforcing agencies ought to be the key note in a country like ours and contra belief would lead to a social catastrophy. The attitude and conduct of the investigating agency ought not to be harassive in nature, and the Law Courts exist to put an end to such an harassment, in the event of there being any and it would be a plain exercise of judicial power to do so. In this context this observation of this Supreme Court in the case of State of Karnataka v. L. Muniswamy, reported in A. I. R. 1977 S. C. 1489 is very opposite. The Supreme Court observed:"in the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the court or that the ends of justice require that the proceeding ought to be quashed. The saving of the High Court's inherent powers, both in civil and criminal matters is designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or prosecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice. The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the legislature. " ( 37 ) IN that view of the matter the case under consideration falls squarely and evenly within the excepting as laid down by the Supreme Court in this case State of West Bengal v. Swapan Guha noted above. ( 38 ) IN the premises, the Writ petition succeeds. The First Information Report being No. 597 dated 15th July, 1986 and the proceedings issued thereunder are set aside and quashed. The respondent authority is directed to return the seized material, if any, still lying in respondent's custody. The petitioner would be at liberty to withdraw the amount of deposit made in terms of earlier order of this court. The First Information Report being No. 597 dated 15th July, 1986 and the proceedings issued thereunder are set aside and quashed. The respondent authority is directed to return the seized material, if any, still lying in respondent's custody. The petitioner would be at liberty to withdraw the amount of deposit made in terms of earlier order of this court. There shall also be an order of Permanent Injunction restraining the respondent authority from interfering with storage of non-levy cement in the godowns of the petitioner or taking any further step in terms of the Control Order of 1982. Since I have not expressed any opinion as to the validity of the amendment effected on 22nd September, 1986, it is hereby ordered that this order would not, in any way, prevent the respondent authority to take step or steps under the amended Control Order as of 22nd September 1986 in accordance with law and if there be any occasion therefore. There shall, however, be no order as to costs. ( 39 ) MR. K. P. Bagaria, Receiver appointed in terms of the earlier order of this Court is directed to hand over the entire money after withdrawing the same from the Bank including all benefits accrued thereunder, if any. Sale proceeds in the hands of the respondent-authority shall also be made over to the writ petitioner No. 1 with utmost expedition preferably within a period of two weeks. Prayer for stay is made but refused. Certified copy applied for will be given with utmost expedition. Application allowed. .