VINODKUMAR BAVABHAI v. DEPUTY COLLECTOR GONDAL — 1989 DIGILAW 90 (GUJ)

S. D. SHAH, J. ( 1 ) RULE. Mr. B. M. Mangukia Ld. AGP waives the service of rule for the respondents. Rule to be heard today. 2 In this petition filed u/art. 227 of the Constitution of India the petitioner a partnership firm carrying on business of Crude Oil Kerosene Lubricant and Cement holding licence under the Gujarat Essential Articles (Licensing Control and Stock Declaration Order 1981 hereinafter be referred to as the said order challenges the action of the respondents of confiscating 50% of the stock seized. ( 2 ) THE petitioner is a licence-holder and his notified place of business is at Gundala road Gondal. The premises of the partership firm were visited by Dy. Mamlatdar Civil Supplies and after search of the premises he found that the petitioner had committed certain irregularities/illegalities with respect to the stock of cement kerosene and crude oil and therefore on being satisfied that there was contravention of the provisions of the aforesaid order he seized the said stock in exercise of the powers conferred upon him by Clause 26 of the said order. ( 3 ) THE Deputy Collector was thereafter pleased to issue a show-cause notice dated 11-11-1986 calling upon the petitioner to show cause why the stock of goods seized should not be confiscated for following irregularities: (I) In the whole-sale licence as well as certificate the place of business and storage of essential articles is stated to be shop at Gundala road Gondal. Adjacent to the said shop there were three godowns and stock of cement kerosene and crude oil was found to have been stored in these three godowns. These three godowns were not included in the licence as place of business or place of storage of essential articles nor was any intimation sent to Mamlatdar in that behalf. Accordingly the petitioner-licensee has stored the goods at unauthorised place and has thereby committed breach of the condition No. 2 (b) of the licence granted to the petitioner. (II)ON 4-11-1986 open stock of kerosene was 6 0 litres while sale of kerosene at the time of visit was 4 0 litres. Therefore balance stock of kerosene should be 2 0 litres while in fact 2400 litres kerosene was found in stock. Opening stock of crude oil was 15150 litres. (II)ON 4-11-1986 open stock of kerosene was 6 0 litres while sale of kerosene at the time of visit was 4 0 litres. Therefore balance stock of kerosene should be 2 0 litres while in fact 2400 litres kerosene was found in stock. Opening stock of crude oil was 15150 litres. By giving credit of crude sold upto the time of enquiry 10970 litres crude oil should remain in stock while in fact only 10172 crude oil was found in stock. Therefore crude oil was disposed of without bill and accordingly breach of condition No. 9 of the licence was committed and further breach of Clause No. 23 of the Licensing Order was committed. (III) Kerosene was stored at a place other than the storage place shown in the storage licence. ( 4 ) TO the said show-cause notice the petitioner replied by his reply dated 24-11-1986. The petitioner was also personally heard on 8-12-1986. ( 5 ) THE Deputy Collector Gondal by his order dated 27-2-1987 was pleased to hold that the petitioner has committed breach of Clauses No. 18 and 23 of the said Licensing Order and therefore out of stock seized he ordered 5096 of the stock to be confiscated and the balance stock was ordered to be released. Thus 1200 litres of kerosene 5085 litres of crude oil and 40 bags of cement came to be confiscated. It may be noted that as regards charge of storage of essential articles at unauthorised place he accepted the defence of the petitioner that in the original licence godowns No. 1 2 and 3 were shown as place of storage. ( 6 ) BEING aggrieved by the said order of the Deputy Collector Gondal the petitioner preferred statutory Appeal under Section 6c of Essential Commodities Act 1955 to the State Government and by order dated 2 2/06/1989 the Appellate Authority dismissed the said appeal and confirmed the order of Dy. Collector. ( 7 ) MR. S. M. Shah learned Counsel appearing for the petitioner challenges the aforesaid orders by making following submissions: (A) With respect to the stock of cement which was seized no specific charge was levelled against the petitioner and confiscation thereof was therefore not permissible. (B) The Lower Authorities were not justified in confiscating larger quantity of essential articles than quantity with respect to which breach was alleged to have been committed. (B) The Lower Authorities were not justified in confiscating larger quantity of essential articles than quantity with respect to which breach was alleged to have been committed. Power of confiscation under Section 6 (A) can be exercised only with respect to the commodities with respect to which the Deputy Mamalatdar has reason to believe that contravention of any of the provisions of the order has been or is being committed. In the present case there was alleged breach of the provisions of the Licencing Order in connection with 400 litres of kerosene and 800 litres of crude oil and therefore only half of the said stock should have been confiscated. (C) Looking to the nature of the charges levelled against the petitioner and the explanation tendered by the petitioner there was no deliberate and wilful breach of the Licensing Order so as to call for confiscation of such a huge quantity of essential articles. The order of confiscation was very harsh excessive and disproportionate ( 8 ) MR. B. M. Mangukia the learned Asst. G. P. appearing for the respondents defended the action of the respondents by submitting that the various breaches of the Licensing Order committed by the petitioner are not merely technical breaches but they are breaches of very substantial nature Storing the essential articles at a place other than one notified in the licence is a serious breach inasmuch as the Licensing Authority is not in a position to keep control over the storage and distribution of such commodities when it is stored at a place other than the one which is notified in the licence He secondly submits that when the concurrent findings are reached by the two authorities and the discretion is fairly exercised the court should be slow to interfere with such order ( 9 ) RE-SUBMISSION (a): as regards the first submission of Mr. S. M. Shah it is required to be noted that cement was found in three godowns It is specifically stated in the show-cause notice that three godowns were not the notified place for storage in the licence and the petitioner has thereby committed breach of condition No. 2 (b) of the licence Mr. S. M. Shah is therefore not right in submitting that with respect to storage of cement no charge is levelled or no illegality is detected. S. M. Shah is therefore not right in submitting that with respect to storage of cement no charge is levelled or no illegality is detected. It is true that Deputy Collector Gondal vide his order dated has accepted the explanation of the petitioner that in the original licence godowns No. 1 2 and 3 were shown as the place of storage He therefore submits that at least with respect to cement there was no justification for passing the order of confiscation. It is also true that order passed by Deputy Collector Gondal was not taken in appeal by the State and in the appeal preferred by the petitioner the Appellate Authority has reversed the findings reached by Deputy Collector Gondal and has come to the conclusion that in fact the goods were stored at an unauthorised place In fact from the statement of the petitioner namely Ramjibhai Bababhai Patel dated 4-11-1986 it is found that he is possessing explosive petroleum licence for storage and in the storage plan which is submitted along with the licence he has shown shop as place of storage of crude oil. The place of storage of kerosene was not shown because at the time when the licence was given to him he was simply carrying on the business of crude oil Subsequently in 1983 he constructed shop of his ownership and thereafter he started business of kerosene and he has thereafter started storing kerosene and crude oil in the godown. In fact the revised plan of storage was yet to be submitted and the place of storage shown in the licence was yet to be revised. In view of this submission of the petitioner himself Deputy Collector Gondal could not have reached the findings which he has reached and the Appellate Authority has therefore on the admission made by the petitioner found that the petitioner has stored the stock at place other than authorised place Factually therefore there is violation of condition 2 (b) of the Licence though Deputy Collector Gondal has recorded a finding in favour of the petitioner. The said finding being against the statement of the partner of the petitioner is rightly upset by the Appellate Authority the technical plea of the petitioner that in his appeal prefer red against the order of Deputy Collector Gondal findings reached in his favour by the Deputy Collector could not have been upset cannot be accepted because the entire matter is at large before the Appellate Authority and the appellate authority has on the admission of the partners of the petitioner found that there was breach of condition No. 2 (b) of the licence ( 10 ) RE-SUBMISSION No. (b) mr. S. M. Shah submits that under Clause 26 of the said order the power is given to the competent authority to enter and search the premises of the dealer. In the course of search he is also empowered to seize any stock of essential articles in respect of which he has reason to believe that a contravention of any of the provisions of the order has been or is being or is about to be committed. Based on this provision of Clause 26 of the Licensing Order Mr. Shah submits that only that stock of essential articles can be seized in respect of which the contravention of any of the provisions of the order has been committed By referring to charge No. 2 levelled against the petitioner he submits that in fact 400 litres of kerosene was found to be excess while 2000 litres of kerosene was not in excess. In fact as per the stock-book 200 litres of kerosene was reflected as stock in existence and therefore with respect to such stock no contravention was committed and any part of that stock of kerosene cannot be ordered to be confiscated. It is true that power to confiscate under Section 6 (A) if the Essential Commodities Act 1955 is referable to essential commodities which is seized in pursuance of an order made under Section 3 In this case essential commodity is seized pursuant to Clause 26 of the Licensing Order As stated hereinabove the seizure is referable to any stock of essential article in respect of which contravention of the order is committed. It may be noted that the words in respect of even if given under meaning cannot possibly include the goods with respect to which no contravention of the licensing order is committed Mr. It may be noted that the words in respect of even if given under meaning cannot possibly include the goods with respect to which no contravention of the licensing order is committed Mr. S. M. Shah is therefore right in submitting that with respect to 2000 litres of kerosene which was duly reflected in the stock register there was no breach of Clause 23 of the Licensing Order However while making this submission he fails to notice that the main charge of storing the commodity at place other than the notified storage place remains. Therefore even with respect to 2000 litres of kerosene which was duly reflected in the stock register there was breach of condition No. 2 (b) of the Licence and therefore there was contravention of the provisions of the Licensing Order I therefore do not accept this submission also ( 11 ) RE-SUBMISSION No. (c) mr. S. M. Shah submits that the stock of the essential articles were stored in three godowns and the Deputy Collector Gondal has found that in the original licence three godowns are mentioned as place of storage He therefore submits that though Appellate Authority has found that in the storage licence revision of place of storage is not made the breach is at the most technical breach and for which the petitioner should not be visited with the harsh order of confiscation of 50 of the commodities seized While dealing with this submission of Mr. Shah I shall have to keep in mind the fact that the provisions of confiscation is enacted to curb these offences of hoarding and black-marketing and in fact the Law Commission of India has in its 47th Report recommended principles of strict liability to be applied. These offences affecting as they do the health and wealth of the entire community are required to be put down with a heavy hand at a time when the country has embarked upon the gigantic process of social and economic planning With its vastness in size its magnitude of problem and long history of poverty and subjugation our Welfare State needs weapons of attack on poverty ill-nourishment and exploitation that are sharp and effective in contrast with the weapons intended to repress other evils. The legislative armoury for fighting socio-economic crime therefore should be furnished with weapons which may not be needed for fighting ordinary crimes. The legislative armoury for fighting socio-economic crime therefore should be furnished with weapons which may not be needed for fighting ordinary crimes. The damage caused by socio-economic offence to a developing society should be treated on a level diffenent from ordinary crimes. In a sense anti-social activities in the nature of deliberate and persistent violence of economic laws could be described as extra-hazardous activity and it is in this light that the submission of Mr. Shah is required to be appreciated. ( 12 ) IT is undoubtedly true that number of factors should enter consideration while exercising discretion under Section 6 (A) the following factors are germane and relevant: (A) It is a technical breach meaning thereby is it only a formal contravention ? (B) The contravention complained of has any bearing on the stream of supply of the commodity in the market of is it merely an incidental breach? (C) Is the dealer actuated by motives of hoarding and thereby to reap illegitimate profits ? (D) Is the dealer found to have been indulging in such activity of hoarding and/or black-marketing in past ? (E) Whether the contravention complained of is likely to create an artificial situation of shortage either in the town itself or in the entire market of the commodity in question ? ( 13 ) KEEPING the said factors in mind which are by no means exhaustive and also keeping in mind the fact that at least the Deputy Collector Gondal has accepted that intimation for change in the storing place was already notified I am of the opinion that the ends of justice would be met if the order of confiscation is modified by releasing 40 bags of cement and 400 litres of keresene. With respect to crude oil there is direct allegation of black-marketing inasmuch as 800 litres of crude oil is found to have been sold without bill and I do not think there is any justification for interfering with the confiscation of 5085 litres of crude oil. ( 14 ) IN the result the petition partly succeeds. The order of confiscation of 40 bags of cement is hereby quashed and set aside and order of confiscation of 1200 litres of kerosene is modified to confiscation of 800 litres of kerosene. The order of confiscation of 5085 litres of crude oil is confirmed. ( 14 ) IN the result the petition partly succeeds. The order of confiscation of 40 bags of cement is hereby quashed and set aside and order of confiscation of 1200 litres of kerosene is modified to confiscation of 800 litres of kerosene. The order of confiscation of 5085 litres of crude oil is confirmed. If the stock of cement and kerosene seized is already disposed of the sale price of 40 bags of cement and 400 litres of kerosene shall be refunded to the petitioner. ( 15 ) THE petition is partly allowed and the Rule is made absolute to the aforesaid extent. There shall be no order as to costs. (ISS) order accordingly. .