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1991 DIGILAW 264 (PAT)

Balmiki Prasad v. State Of Bihar

1991-07-16

K.B.SINHA

body1991
Judgment K.B.SINHA, J. 1. This application under Articles 226 and 227 oil the Constitution of India has been filed by the petitioners, who are six in number, for quashing the seizure made by respondent No. 3, the Assistant District Supply Officer, as also the proceeding initiated under Section 6-A of the Essential Commodities Act, 1955 (hereinafter referred to as the Act) giving rise to Supply Case No. 58 of 1989 pending before respondent No. 2 the Collector-cum-District Magistrate, East Champaran, Motihari, and the order passed thereunder, by which the seized bags of iodised salt were ordered to be sold and sale-proceeds deposited in the Government Treasury. 2. All the petitioners are residents of different villages situated in the district of East Champaran. Their case, as disclosed in the petition is that they have been carrying on business in iodised salt by making purchase from the local dealer, who, in his turn, has been getting supply from the manufacturers mostly of the State of Rajasthan. One Shri Ram Chandra Prasad is connected with M/s. Prasad Trading Company and Kumar Trading Company, Motihari, who is a local dealer in iodised salt. The said dealer has virtually monopoly in the district of East Champaran for importing iodised salt from outside of this State. The petitioners decided to purchase iodised salt directly from the manufacturers because of the trade differences and monopolistic attitude of the local dealer. Before the petitioners could get delivery of the iodised salt, purchased by them, the instant case was instituted. According to the system prevalent in the district, the dealers, like the petitioners, purchase iodised salt through the broker or commisson agent. They contact the manufacturers in the State of Rajasthan, who send the goods through Railway. The Railway receipts (hereinafter referred to as the R.R.) are either in the name of the manufacturers themselves if the price is not paid or in the name of the broker or commission agent if the payment is made to the manufacturers by such agent or broker. When the payment is made by the dealer, the R.R. is transferred toy the manufacturers in his favour by making endorsement. The practice prevalent in the State of Rajasthan is that under the direction of Salt Commissioner, Government of India, iodised salt is allowed to be loaded at the manufacturing point only after it is duly verified by the Salt inspector regarding its quality. The practice prevalent in the State of Rajasthan is that under the direction of Salt Commissioner, Government of India, iodised salt is allowed to be loaded at the manufacturing point only after it is duly verified by the Salt inspector regarding its quality. However, the consigners, after taking the iodised salt, inform the district authorities of the place, where it has to reach. According to the petitioners, in the instant case, the said procedure was duly followed although there was no statutory obligation to do so. 3. Petitioner No. 1 had purchased 255 bags of iodised salt under R.R in which the consigner has been mentioned as Goel Namak Udyog, a manufacturer in the State of Rajasthan and the consignee is Ghasiram Mangilal a commission agent. The said R.R. was endorsed in favour of petitioner No. 1. Likewise petitioner Nos. 2 to 6 purchased iodised salt under different R.Rs., in which endorsements were made in their favour. The iodised salt purchased by petitioner Nos. 1 and 2 was consigned to Bhelwan Railway Station and that of petitioner Nos. 3 and 4 to Ghorashan Railway Station and of petitioner Nos. 5 and 6 to Adapur Railway Station, situated in the district of East Champaran. The true copies of the said R.Rs. have been filed as Annexure 1 to 1/G to this petition. 4. When the petitioners approached the Railway authority for getting delivery of the consignments, they were told that according to the direction of the District Supply Officer. Motihari (East Champaran), the delivery could not be made unless the R.Rs. were endorsed/countersigned by the District Supply Officer. They filed application separately on 13-10-1989 before the District Supply Officer requesting him to make necessary endorsements on the R.Rs. to enable them to take delivery of the iodised salt. True copies of the applications filed by the petitioners are annexed as Annexures 2 to 2/F to this petition. Subsequently they learnt that the Assistant District Supply Officer, Sikarahna. seized the consignment of iodised salt of petitioner Nos. 1 and 2 on 19-10-1989 at Bhelwan Railway Station and of petitioner Nos. 3 and 4 at Ghorashan Railway Station under the orders of respondent No. 2 the Collector-cum- District Magistrate. East Champaran. The iodised salt purchased by respondent Nos. Subsequently they learnt that the Assistant District Supply Officer, Sikarahna. seized the consignment of iodised salt of petitioner Nos. 1 and 2 on 19-10-1989 at Bhelwan Railway Station and of petitioner Nos. 3 and 4 at Ghorashan Railway Station under the orders of respondent No. 2 the Collector-cum- District Magistrate. East Champaran. The iodised salt purchased by respondent Nos. 5 and 6 had not arrived at Adapur Railway Station by that time The Assistant District Supply Officer directed the Station Master not to deliver the consignment to them without permission of the Collector or the Assistant District Supply Officer. 5. The Assistant District Supply Officer lodged a first information report (in short F.I.R.) on 26-10-1989 alleging therein that the petidoners, without permission of respondent No. 2, unauthorisedly imported iodised salt in the district of East Champaran for the purpose of smuggling to Nepal in contravention of State Governments letter No. 6618 dated 5-7-1986 addressed to the District. Magistrate and, thus, they had made themselves liable for prosecution under Section 7 of the Act. True copy of the F.I.R. is Annexure-4 and the aforesaid letter of the State Government is Annexure-5 to this petition. 6. Upon receipt of a copy of the seizure list and a copy of the F.I.R., a confiscation proceeding bearing Supply Case No. 58 of 1989 was initiated under Section 6 A of the Act by respondent No. 2 on 8-12-1989 in respect of the seized bags of iodised salt. It is stated in the perition that the iodised salt purchased by petitioner Nos. 5 and 6 booked for Adapur Railway Station bad not reached till then and, thus, no seizure was made but notice to show cause n the said confiscation proceeding was also issued to them. A true copy of the said notice is Annexure.-G to this petition. 7. After receiving the notice, the petitioners appeared befort respondent No. 2 and filed their respective show-cause cnallenging to validity of the seizure and denying the allegation made against u.em They further stated in their show-cause that the case was mala fidely instituted at the instance of said Shri Ram Chandra Prasad, who had earlier also got two Police cases instituted in this regard. Even after receipt of their show-cause, respondent No. 2, instead of disposing of the confiscation proceeding, passed order on 6-2-90 and thereby directed to sell the seized stock of iodised salt and deposit the sale proceeds in the State-Treasury. A copy of the said order is Annexure-7 to the writ petition. 8. According to the petitioners, the seizure of the iodised salt and confiscation proceeding with regard to the seized goods is misconceived, mala fide and unwarranted. 9. A counter-affidavit was filed on behalf of respondent No. 3 the Assistant District Supply Officer, Sikarahna (Motihari) stating, inter alia, that respondent No. 2 had received several complaints regarding illegal and irregular trade in iodised salt leading to large scale smuggling of such salt in the territory of Nepal. In order to check the illegal trade on the Indo-Nepal borders, letter No. 2724, dated 18-9-1986 was issued by the District Supply Officer to all the Railway Station Officers in the district of East Champaran to withhold delivery of consignment of iodised salt to the consignee unless the R Rs. were countersigned by the competent officer of the District Supply Department. As the salt in question had been imported unauthorisedly and without the knowledge of the District authority, the District Mogstrate directed the Assistant District Supply Officer, Sikarahana (Motihari) to make enquiry at the relevant Railway Station. In course of enquiry, it transpired that the consignor and the consignee in some, R.R.were the same person. The salt in question had been imported from the manufacturer of Rajasthan and so the same was seized and. thereafter, a first information report was lodged for conducting illegal trade in iodised salt. According to the respondents, the petitioners are the nominated dealers in iodised salt and previously they were supplied salt from the local nominated importer. The nominated dealers and the petitioners were supplied salt after getting the same tested in the district laboratory to ascertain the contents of iodine. It is also stated in the counter-affidavit that the trade in iodised salt is regulated in accordance with the letter of the Government of India bearing No. 05015/4/86, dated the 30th of May, 1986, and the Government of Bihar letter No. 6618, dated 5-7-1986. It is also stated in the counter-affidavit that the trade in iodised salt is regulated in accordance with the letter of the Government of India bearing No. 05015/4/86, dated the 30th of May, 1986, and the Government of Bihar letter No. 6618, dated 5-7-1986. The authorities concerned have imposed condition of obtaining prior permission of the Supply Department for importing iodised salt, with a view to get the correct information about the trade conducted in the district and to prevent smuggling. 10. A reply to the counter-affidavit was filed on behalf of the petitioners seriously challenging the allegation of smuggling of iodised salt made against them. A copy of letter No. 45015/4/86, dated the 30th of May, 1986, issued by the Government of India, has been filed as Annexure-10 to this petition regarding which reference has been made in the counter-affidavit It is further stated therein that prior to the year 1984, iodised salt was manufactured mostly by the Government Companies, namely, Hindustan Salts Limited, Kharaghoda, Gujarat and Sambha Salt Ltd., Sarabhar Salt Ltd., Sambhar Lake, Rajasthan and the same used to be distributed/sold through the nominees of the State Government although this system had no statutory sanction. The Central Government decided, sometime around the year 1984, that the iodised salt should be made easily available in larger quantity and the area was intended to be enlarged in the State of Bihar from then Champaran district to the entire State. The private sectors were encouraged in other States to set up iodisation plants which resulted in excess production. It was under this background that the letter, as contained in Annexure-10, was issued and pursuant to which the State Government abolished the nominee system by Annexure-5. 11. Mr. Navaniti Singh, learned counsel appearing on behalf of the petitioners, strenuously argued that they had not violated any Order made under Section 3 of the Act. It was urged that the allegation against the petitioners of smuggling iodised salt to Nepal was absolutely baseless. According to the petitioners Nepal was getting supply of iodised directly through the State Trading Corporation, an Undertaking of the Government of India and it was available there at a cheaper rate than in India. 12. Mr. Sadanand Rai. It was urged that the allegation against the petitioners of smuggling iodised salt to Nepal was absolutely baseless. According to the petitioners Nepal was getting supply of iodised directly through the State Trading Corporation, an Undertaking of the Government of India and it was available there at a cheaper rate than in India. 12. Mr. Sadanand Rai. learned counsel for the State, on the other hand, contended that having got information regarding smuggling of iodised salt from the district of East Champaran to Nepal on a large scale respondent No. 2 imposed restriction in order to prevent such illegal trade. It was argued that respondent No. 2 was competent to impose restrictions on import of iodised salt in the district of East Campaign from other States and, accordingly, direction was issued to the dealers to obtain prior permission. 13. In view of the contentions raised on behalf to the parties, the first question, which falls for consideration, is as to whether there is any Order made under the Act, which empowers the Collector of a district to impose restriction on import of iodised salt ? 14. In order to appreciate the contentions advanced on behalf of the parties, it would be relevant to notice some statutory provisions of the Act. According to Section 3 of the Act, if the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing, supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, it may, by order provided for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. Sub-section (2) thereof enumerates the purposes for which such an order can be made. The power contained in Section 3 is quite wide and can be legitimately used for imposing restrictions contained in the Control Order with a view to promote the purpose of such an order. Section 5 of the Act lays down that the Central Government may, by notified order, direct that the power to make orders or issue notifications under Section 3 shall in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercised also by officer or authority subordinate to the Central Government or such officer or authority subordinate to a State Government, as may be specified in the direction. Therefore, under the provision of Section 5 of the Act, the Central Government can make delegation in favour of the State Government or an officer or authorrity subordinate to the State Government. 15. When this case was taken up for hearing, learned counsel for the State was asked to produce any such Order made under the Act but no such Order was produced till the conclusion of the arguments of the parties. Therefore, even if there is any such Order empowering the Collector to lay down condition on import of iodised salt from outside the State, it has not been brought to the notice of the Court. 16. It was stated on behalf of the petitioners that in exercise of the power conferred under Section 5 of the Act, the Central Government) by notification No. S.R.O. 1242/Ess Com. (5), New Delhi, dated the 8th of June, 1955, delegated its powers, in relation to matters specified in sub-section (2) of Section 3 with regard to salt, to the State Government with the condition that before making any order relating to any matters specified in Clauses (a), (c), (d) and (f) of sub-section (2) of Section 3, the State Government shall obtain the concurrence of the Central Government. It further provided that no order made in exercise of the powers delegated to the. State Government, would have the effect so as to prohibit or restrict the export or sale from any place in the State to any place outside in India. A copy of the said notification has been filed as Annexure-8 to this petition. Learned counsel for the petitioners also referred to notification No. TSC/S/36-07/65-19728 S.C., dated the 28th of November, 1963 of the State Government issued pursuant to the power delegated by the Central Government to the State Government by Annexure-8. A copy of the notification of the State Government has been filed as Annexure-9 to this petition. Learned counsel for the petitioners also referred to notification No. TSC/S/36-07/65-19728 S.C., dated the 28th of November, 1963 of the State Government issued pursuant to the power delegated by the Central Government to the State Government by Annexure-8. A copy of the notification of the State Government has been filed as Annexure-9 to this petition. The relevant portion of Annexure 9 is quoted here below : "........The Governor of Bihar is pleased, with the prior concurrence of the Central Government, to order that no person shall carry, cause to be carried or offer for carriage by rail, road, river or otherwise any quantity of salt except iodised salt, to any place in the district of Champaran from any place in the district of Champaran from any place outside it except under and in accordance with the written permission of the Central Government, or the State Government or any authority of the Central Government or the State Givernment duly authorised in this behalf." (Emphasis italicised) 17. On a plain reading of Annexure-9, it is manifest that the iodised salt was exempted and no restriction was imposed by the State Government on import of such salt in the district of Champaran. It may be mentioned here that after bifurcation of the old district of Champaran, a new District has been carved out which is known as East Champaran. 18. It was stated on behalf of the petitioners that no order/notification was issued either by the State. Government or the Central Government in regard to the distribution, control or movement control of iodised salt.. The Central Government, in exercise of the power conferred on it under Section 3 (i) of the Act had issued and enforced the Salt (Price Control). Order, 1977, but the same was rescinded by notification dated 4-1-1983. According to the petitioners, there is no order issued under the Act for the contravention of which, the iodised salt purchased by them was seized by respondent No. 3, the Assistant District Supply Officer and as such the seizure itself was illegal which is the foundation of the confiscation proceeding under Section 6-A of the Act. 19. In paragraph 10 of the counter affidavit, there is reference of two notifications ; one issued by the Central* Government and the other by the State Government but the copy of none was produced in the Court. 19. In paragraph 10 of the counter affidavit, there is reference of two notifications ; one issued by the Central* Government and the other by the State Government but the copy of none was produced in the Court. So, the relevant portion of paragraph 10 of the counter-affidavit is quoted herebelow : "........It is stated that in exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 (hereinafter referred to as the Act), the Central Government vide notification No. S.R.O. 1242/Ess-Com (5) New Delhi, dated 8th June, 1955, directed that the powers conferred on it by sub-section (i) of Section 3 of the said Act to provide for the matter specified in sub-section (2) thereof, shall in relation to salt, which are item of food-stuff under sub-clause (5) of Clause (a) of Section 2 be exercisable also by any State Government. The Government of Bihar, vide notification No. 155/9/10/07/63-1978 E. C, dated 20th November. 1963. with the prior concurrence of the Central Government was pleased to order that no person shall carry cause to be carried, or offer for carriage bv rail, road, river or otherwise, any quantity of salt, except iodised salt, in any place of the district of Champaran from any place outside it, except under the written permission of the Central Government or its any authority authorised in this behalf However, this order was not made applicable to Military Credit Note or carriage of any salt not exceeding one Kilogram by a bona fide traveller as part of his personal luggage."(Emphasis on italicised) 20. The petitioners have filed the copy of notification No. TSC/S/ 36-07/63-19728 S, C. dated the 28th of November, 1963 (Annexure-9) There appears to be some difference with resard to the number and date of the notification as quoted in paragraph 10 of the counter-affidavit and Annexure-9 filed by the petitioner. On perusal of Annexure-9 and paragraph 10 of the counter-affidavit, it is manifest that some restrictions have been imposed by the State of Bihar under the said notification on the movement of salt to any place in the district of Champaran from any place outside the district without the written permission of the authority mentioned therein, but the iodised salt has been exempted from any such restriction. 21. 21. I have not been able to appreciate as to how the notification, as mentioned in paragraph 10 of the counter-affidavit, helps the respondents as it exempts iodised salt from any restriction and on the basis of the said notification it cannot be inferred that it conferred any power on the District Magistrate or any authority of the State Government to impose restriction upon the import of iodised salt in the district of East Champaran. 22. From the contents of the F.I.R. (Annexure-4), it appears that the prosecution has been launched against the petitioners for contravention of the conditions laid down by the State Government in letter No. 6618, dated the 5th of July, 1966 (Annexure-5). It was argued by learned counsel for the State that the said letter (Annexure-5) was issued in pursuance of letter No. 05015/4/86 Salt dated the 30th of May, 1986 Annexure-5, the restrictions were imposed with a view to regulate the (Annexure-10) issued by the Central Government. It was urged that by Annexure-5, the restrictions were imposed with a view to regulate the trade and prohibit the smuggling of iodised salt to Nepal. The conditions laid down therein were not arbitrary. As the petitioners imported iodised salt without obtaining prior permission of the authorities, so they were not entitled to any relief. 23. On perusal of Annexure-5, it is evident that, in fact, it refers to letter No. 05015/4/86. dated the 30th of May, 1986, issued by the Central Government, a copy of which has been filed as Annexure-10 by the petitioners. This letter (Annexure-5 was issued by the Department of Food Supply and Commerce of the State of Bihar. It is stated therein that having taken into consideration the existing situation with regard to supply of iodised salt, the State Government took decision that it should be imported through normal trade channel. In other words, it would be open to any person or institution to conduct trade in iodised salt so as to make it available to the consumers on proper price. But according to Annexure-5, the trade in iodised salt has been made subject to the conn ditions mentioned hereinbelow : (a) The iodised salt should be imported from a reputed and reliable plant. (b) As far as possible, spray-salt should be imported. (c) Any officer of the Supply Department will be competent to take sample of the salt received by the trader. (b) As far as possible, spray-salt should be imported. (c) Any officer of the Supply Department will be competent to take sample of the salt received by the trader. (d) The sample taken should be tested in the nearest Laboratory to ascertain the requisite percentage of iodine. (e) The Salt Commissioner shall allot the wagons on the reconn mendation of the District Officer and the latter will give information to the State Government. In the Border area, like Champaran, Purnea etc., wherefrom such salt is likely to go out, strict vigilance should be kept. (f) The price of the iodised salt will be fixed by the District Officer. 24. One gets an apparent impression from Annexure-5 that the conditions laid down therein by the State Government are in accordance with the decision of the Central Government as contained in Annexure-10. But on perusal of Anhexure-10, it is evident that it conveys something else. It is a letter communicating the policy decision of the Government of India with regard to iodised salt. It is mentioned therein that in order to make available sufficient quantity of iodised salt in the goitre endemic areas in the States, the existing nominee system for procurement of iodised salt should be dispensed with and free trade should be allowed. This would enable the consumers to have, wide choice to purchase his requirement of iodised salt from any manufacturer, either from the private sector or public sector, depending upon its quality and price. Thus, Annexure-10 clearly suggests liberalisation of policy and encourage free trade in iodised salt, whereas, Annexure-5 imposes some restrictions on the Salt Commissioner in allotment of wagons for transportation of the said commodity. In any view of the matter, Annexure-5 does not confer any power on the Collector of the district to impose any restrictions on movement of iodised salt. 25. I have already referred to Sections 3 and 5 of the Act. The Central Government has been conferred power under Section 3 of the Act to issue order to achieve the object mentioned therein, which essentially includes regulation, movement, transport, sale and distribution of essential commodities and other such matters. 25. I have already referred to Sections 3 and 5 of the Act. The Central Government has been conferred power under Section 3 of the Act to issue order to achieve the object mentioned therein, which essentially includes regulation, movement, transport, sale and distribution of essential commodities and other such matters. Section 5 empowers the Central Government to delegate its power to the State Government or the authority subordinate to it as may be specified in the Order in relation to such matters and subject to such conditions as it may specify in the order. While delegating such powers, the Central Government may further put restriction and condition for the exercise of the delegated power. Any order issued under Section 3 of the Act is legislative in nature and required to be notified in the Official Gazette under Section 3 (5) of the Act It is not the case of the respondents that any order or notification, as provided under Section 3 of the Act was made under which the Collector of East Champaran (respondent No. 2) was empowered place restriction on import of iodised salt. Thus, it has to be held that the order communicated to the concerned Railway Station Masters not to release the consignments of iodised salt to the petitioners has no statutory force and it is only executive instruction. 26. According to Section 6-A of the Act, where any essential commodity is seized in pursuance of an order made under Section 3 in relation thereto, a report of such seizure shall be made to the Collector of the district without reasonable delay and if he is satisfied that there has been a contravention of the Order, he may initiate a proceeding for confiscation of such goods. There cannot be any occasion for the Collector of the district to pass an order in exercise of the power conferred under Section 6-A of the Act unless there is contravention of the order made under the Act. The expression occurring in Section 6-A "if he is satisfied" obviously means that the Collector must have reason to believe that there has been contravention of the Control Order. Thus, violation of any order made under the Act is a condition precedent for starting a proceeding under Section 6-A of the Act. The expression occurring in Section 6-A "if he is satisfied" obviously means that the Collector must have reason to believe that there has been contravention of the Control Order. Thus, violation of any order made under the Act is a condition precedent for starting a proceeding under Section 6-A of the Act. If the seizure is valid, the Collector gets jurisdiction to go into the question whether there has been any contravention of the Control Order in respect of the seized essential commodities. The Collector cannot proceed with the enquiry under Section 6-A of the Act when the seizure itself is illegal. It has already been held that the petitioners were restrained from taking delivery of the iodised salt from the Railway Stations on the basis of the executive instruction issued by respondent No. 2. It, therefore follows that the seizure of the iodised salt in question made by respondent No. 3 was not valid in the eye of law and consequently the Collector (respondent No. 2) had no jurisdiction to initiate a proceeding for confiscation under the provision of Section 6-A of the Act. 27. In the result, this application is allowed. The confiscation proceeding initiated under Section 6-A of the Act giving rise to Supply Case No. 58 of 1989 pendng before respondent No. 2 the Collector-cum-District Magistrate, East Champaran, Motihari, is quashed and the respondents are directed to release the seized iodised salt to the respective petitioners forthwith.