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2001 DIGILAW 58 (KER)

Jinto Traders v. District Collector

2001-01-24

A.LEKSHMIKUTTY, S.SANKARASUBBAN

body2001
Judgment :- S. Sankarasubban, J. Petitioner in the Original Petition and the appellant in the Writ Appeal is one and the same person. The Writ Appeal is filed against the judgment dated 28.1.1999 in O.P. No. 1992 of 1999. The challenge in the Original Petition is against Ext. P11 order passed by the District Collector, Trichur. Ext.Pll is dated 31.3.1999. After the filing of the appeal, the appellant amended the appeal memorandum by incorporating the ground challenging Ext. P11. He also filed the Original Petition challenging the same order. Since the appellant and the petitioner is the same person, it will be described as the petitioner in the case. The facts of the case are as follows: 2. The petitioner is a licensed wholesale dealer under the Kerala Sugar Dealers Licensing Order, 1967. Its license Number is 49/Trichur. The petitioner carries on the business as a wholesale dealer in sugar in the premises in Shop No. 633 of Ward No. 26 of the Trichur Municipality. It is also a wholesale dealer in rice licensed under the Kerala Food Grains Dealers Licensing Order, 1967. The petitioner has been issued a licence under the Kerala Food Grains Dealers Licensing Order for the premises in shop No. 128 (Old 109) of Ward 10 of Trichur Municipality. According to the petitioner, both these rooms are on the opposite of one road, namely, Rice Bazaar Road. 3. In December, 1998, the petitioner purchased 135 bags of free sale sugar weighing 135 quintals from BID Parry, Madras and from Jino and Company. On the consignment being brought to the place of business, the petitioner found that there is no sufficient space in the shop bearing No. 26/633 and hence, as an interim arrangement and on account of paucity of space, the said 135 bags of sugar were kept in the godown situate in Door No. 128. The 135 bags of sugar were entered in the stock register of the petitioner maintained under the provisions of the Kerala Sugar Dealers Licensing Order, 1967. On 4.12.1998, the Taluk Supply Officer, Trichur conducted an enquiry in the premises, Door No. 10/128 (Old 10/109). Since the sugar was kept in that premises, which was noted in the licence issued under the Kerala Sugar Dealers Licensing Order, the Taluk Supply Officer seized the entire 135 bags of sugar. On 4.12.1998, the Taluk Supply Officer, Trichur conducted an enquiry in the premises, Door No. 10/128 (Old 10/109). Since the sugar was kept in that premises, which was noted in the licence issued under the Kerala Sugar Dealers Licensing Order, the Taluk Supply Officer seized the entire 135 bags of sugar. Thereafter, it was entrusted on a kychit to the representatives of the petitioner subject to the condition that the stock will be delivered at the place and at the time required by the Taluk Supply Officer. According to the petitioner, the seizure of the sugar is illegal, since he is the licensee under the Sugar Dealers Licensing Order. He filed a representation to the District Collector seeking the release of the sugar. But since no action was taken, he approached this Court by filing O.P. No. 24961 of 1998 praying for appropriate relief against the seizure of 135 bags of sugar. This Court disposed of the matter directing the District Collector to pass appropriate orders. Thereafter, the District Collector issued notice to the petitioner to appear before him. An argument note was submitted by the learned counsel for the petitioner. Thereafter, the District Collector passed Ext. P6 order. Ext. P6 order, the District Collector ordered confiscation of the sugar. 4. Ext. P6 was challenged in O.P. No. 1992 of 1999. The petitioner raised many grounds against the order of confiscation. The confiscation order was passed under S.6A of the Essential Commodities Act. A learned single judge of this Court found that before passing the order of confiscation under S.6A of the Essential Commodities Act, the District Collector should have issued a notice under S.6B of the Essential Commodities Act. On the ground that no notice was issued, Ext. P6 was quashed and the District Collector was directed to issue notice, if confiscation was to be effected. 5. Challenging the judgment in O.P. No. 1992 of 1999, the petitioner preferred W.A. No. 656 of 1999. After the filing of the Writ Appeal, the petitioner received a notice under S.6B of the Essential Commodities Act and the District Collector heard the petitioner. Thereafter, the petitioner moved C.M.P. No. 1618 of 1999 in W.A. No. 656 of 1999. In the above C.M.P, an order was passed to the effect that if any adverse order is passed against the petitioner, the same will not be implemented until further direction from this Court. Thereafter, the petitioner moved C.M.P. No. 1618 of 1999 in W.A. No. 656 of 1999. In the above C.M.P, an order was passed to the effect that if any adverse order is passed against the petitioner, the same will not be implemented until further direction from this Court. After hearing the petitioner, the District Collector passed Ext. Pll order dated 31.3.1999. As already stated, the Writ Appeal was amended and the Original Petition was filed challenging Ext. P11 order. 6. We heard learned counsel for the petitioner and the learned Government Pleader. 7. A counter affidavit was filed in the Writ Appeal by the Government and it was stated that the same counter may be treated as the counter affidavit in the Original Petition also. The argument of the counsel for the petitioner is that no reason exists for confiscating the sugar. Learned counsel contended that the power to confiscation arises under S.6A of the Essential Commodities Act. S.6A of the Essential Commodities Act says that the power shall be exercised when there has been contravention of the Order. Thus, the Kerala Sugar Dealers Licensing Order, 1967 is an order issued under the Essential Commodities Act. The power of seizure can be exercised only if there is violation of this order. Learned counsel submits that there is no violation of the Kerala Sugar Dealers Licensing Order. If at all there is violation, there is violation of only of the conditions of the licence, which is issued under the Licensing Order. The Licensing Order states, 'a premises in which the foodgrains are to be kept'. But here, contrary to that, the petitioner has stocked the foodgrains in another room due to lack of space. There is no case that the purchase was not entered in the stock register of the petitioner. Hence, according to the petitioner, since there has been no violation of the provisions of the Kerala Sugar Dealers Licensing Order, the confiscation was illegal. Learned Government Pleader on the other hand submitted that here is a case where the licence was issued for storing the sugar, of course in a particular premises. Contrary to that the petitioner stored in another room which gives rise to suspicion. Learned Government Pleader submitted that it is not correct to say that the sugar was stored in another licensed premises of the petitioner. 8. Contrary to that the petitioner stored in another room which gives rise to suspicion. Learned Government Pleader submitted that it is not correct to say that the sugar was stored in another licensed premises of the petitioner. 8. After hearing both sides, we are of the view that, Ext. P11 order cannot stand. In Ext. Pll order, the District Collector states as follows: As per the terms and conditions of the licence, the licensee is bound to store sugar only in the authorised premises. But in the instant case the dealer has kept the stock in an unauthorised building bearing No. X/128 of Thrissur Municipality. Hence, the dealer has violated the provisions of KSDL Order". Hence, it was ordered that the seized stock should be confiscated. Clause 3 of the Sugar Dealers Licensing Order says that "No person shall carry on business as a dealer levy sugar of free sale sugar except under and in accordance with the terms and conditions of a licence issued in this behalf by the licensing authority". Clause 7A of the Sugar Dealers Licensing Order deals with maintenance of accounts. Further clauses 7B to 7F deal with maintenance of accounts. Further clauses 7B to 7 F deal with certain conditions which the licensee will have to comply with. Clause 8 says that "No holder of a licence issued under this Order of his servants or agents or any other persons acting on his behalf shall contravene any of the terms and conditions of the licence or the provisions of his Order and if any such holder or his agent or servant or any other persons acting on his behalf contravene any of the terms and conditions of the license or provisions of this Order or any other order issued by a competent authority under S.3 of the Essential Commodities Act, 1955, which is for the time being enforced, then, without prejudice to any other action that may be taken against him, his licence may be cancelled or suspended by the licensing authority...." Form B of the Licensing Order gives the conditions of the licence. Clause 2 says that the licensee shall carry on the business at the places mentioned there. 9. The question has arisen before this Court as to whether the violation of the conditions of licence amounts to violation of the order itself. Clause 2 says that the licensee shall carry on the business at the places mentioned there. 9. The question has arisen before this Court as to whether the violation of the conditions of licence amounts to violation of the order itself. In Abdulla Koya v. State -1976 KLT 291, a learned Single Judge of this Court had to deal with Clauses 7 and 8 of the Foodgrains Dealers Licensing Order. It was stated as follows: Clause 8 of Order speaks separately about contravention of terms and conditions of licence and contravention of provisions of Order. That itself is an indication that contravention of terms and conditions of licence is different from contravention of provisions of Order". The court further stated that the terms and conditions of a licence unless they are made part of Order itself would not become part of Order by the mere fact of their being contained in licence issued under Order. In arriving at such a conclusion, this Court relied on two decisions of the Supreme Court in Boothalinga Agencies v. V.T.C. Poriaswami Nadar, AIR 1969 Supreme Court 110 and Additional Collector of Customs v, M/s. Best & Co., AIR 1971 Supreme Court 170. In Boothalinga Agencies v. V.T.C. Poriaswami Nadar, AIR 1969 Supreme Court 110, the Supreme Court was considering breach of condition of licence issued under the Imports and Exports (Control) Act. In paragraph 8 of the judgment, it was held as follows: "Notification No. 2-ITC/48 dated March 6, 1948 authorises the licensing officer to impose one or more conditions prescribed by that order and the licensing officer has therefore power to impose conditions in the licence issued by him, but if the licensee contravenes the conditions imposed by the licence it is difficult to hold that it is not merely a contravention of the conditions of a licence but there is contravention of the terms of the notification and so the provisions of S.5 of the Act XVIII of 1947 are attracted. Reference, was made on behalf of the appellant to the amendment made to S.5 of Act XVIII of 1947 by the Amending Act 4 of 1960. By the Amending Act S.5 of Act XVIII of 1947 was amended so as to include contravention of a condition of a licence under S.5 of the Act. Reference, was made on behalf of the appellant to the amendment made to S.5 of Act XVIII of 1947 by the Amending Act 4 of 1960. By the Amending Act S.5 of Act XVIII of 1947 was amended so as to include contravention of a condition of a licence under S.5 of the Act. It is not, however, permissible, in the circumstances of the present case, to construe the language or S.5 of the parent Act with the aid of the Amending Act (Act 4 of 1960). It is not possible for us to accept the contention of Mr. Gokhale that the Amending Act of 1960 is something in the nature of a Parliamentary exposition of the meaning of S.5 as it stood in the parent Act. It follows therefore that on the material date a breach of the condition of a licence was not tantamount to a breach of the statutory order within the meaning of S.5 of the Act XVIII of 1947. The view that we have expressed is borne out by the decision of this Court in East India Commercial Co. Ltd. Calcutta v. Collector of Customs, Calcutta, AIR 1962 Supreme Court 1893". 10. Recently, a Division Bench of this Court had occasion to consider a similar question in Moideen v. State of Kerala, 1999 (1) KLT 824. The Division Bench was dealing with the Foodgrains Licensing Order and it held as follows: "The Licensing Order does not contemplate a demarcation of territorial limit in the matter of the grant of licence under the said Licensing Order. No doubt, it is true that licence is granted to a dealer to carry on the business in accordance with the terms and conditions of the licence. It is also true that business should be carried on only in the place of business as noted in the licence. It is not the case of the respondents in the instant case that the appellant/ petitioner had carried on business, namely, wholesale dealing in rice in a place other than the place of business mentioned in Ext. P1 licence. In fact the ground for confiscation mentioned in Ext. It is not the case of the respondents in the instant case that the appellant/ petitioner had carried on business, namely, wholesale dealing in rice in a place other than the place of business mentioned in Ext. P1 licence. In fact the ground for confiscation mentioned in Ext. P6 show cause notice issued in terms of S.6B of the Act speaks only of storage of rice in the godown of State Warehousing Corporation at Cheruvannur in Kozhikode by a dealer whose licensing authority is District Collector, Idukki, That is to say, the ground for confiscation mentioned is the storage of the goods in a place situate outside the territorial limits of the District concerned. Therefore, it is clear that there is no provision either under the licence or under the Licensing Order or for that matter in the conditions of licence which prohibits storage of the essential commodity in a place outside the place mentioned in the licence." The Court went on to consider the question whether the storage of rice by licenced dealer in a place other than what is mentioned in the normal place of storage in his licence will lead to contravention of the provisions of the Licensing Order. The Court held as follows: "In fact, the Licensing Order does not deal with the places of storage nor does it specify any prohibition regarding storage of the essential commodity in a place other than the place of storage mentioned in the licence. Therefore, storage of the essential commodity in a place other than what is mentioned in the licence cannot by itself resuit in contravention of the provisions of the Licensing Order justifying confiscation in terms of S.6A of the Act. At best, it is a circumstance which can be taken into account either by the licensing authority or the concerned official to issue suitable directions to a dealer to remove the goods from the place outside the district and store it in a place within the district, viz., within the control and jurisdiction of the licensing authority". On going through the Kerala Sugar Dealers Licensing Order, we are not able to find out any provision which makes the conditions of licence as forming part of the Order. In the above view of the matter, we quash Ext. Pll. The sugar seized shall be released to the petitioner immediate. Original Petition and the Writ Appeal are allowed.