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2002 DIGILAW 39 (AP)

Suveera Traders/rice Mill v. District Collector

2002-01-19

body2002
( 1 ) THIS writ petition is filed praying for the issue of writ of mandamus declaring the impugned proceedings dated 18-4-2002 as illegal, arbitrary, biased, unconstitutional, against the principles of natural justice, violative of the provisions of the Andhra Pradesh Scheduled Commodities Dealers (Landd) Order, 1982; Andhra Pradesh Rice Procurement (Levy) Order, 1984 and also the provisions of the Essential Commodities Act and the Control Order dated 15-2-2002, Department of Consumer Affairs, Government of India, and to pass such other order or orders. ( 2 ) THE Petitioners, who are eight in number, are either Millers and Dealers or Wholesale Dealers in rice. It is stated that all the Petitioners are holding valid licenses under Clause III of the A. P. Scheduled Commodities Dealers (Landd) Order, 1982 (hereinafter referred to the Scheduled Commodities Order ). It is stated that the Revenue authorities inspected the business premises of the Petitioners in the month of November 2001 on suspicion that the Petitioners purchased rice meant for food for Work in Rayalaseema districts, but they did not find any evidence to show that they have purchased such rice. In spite of that, the authorities have booked cases against the Petitioners under Section 6-A of the Essential Commodities Act, 1955 (hereinafter referred to the Act ) and charge sheeted them on the file of the District Collector, West Godavari district at Eluru. During the pendency of the proceedings, the Petitioners were allowed to participate in levy during Khariff season. The Petitioners were given permits by the District Supplies Officer and accordingly the Petitioners delivered levy to the Food Corporation of India (hereinafter referred to the FCI ), which is the nodal agency for collection of the levy rice. It is further stated that the District Collector passed orders in Section 6-A proceedings on 15-4-2002 and ordered confiscation of the entire seized stock or its value to the Government. Thereafter by the impugned proceedings dated 18-4-2002, the Joint Collector, West Godavari directed the District Manager, FCI, Tadepalligudem not to accept the mill levy delivery of rice from the Petitioners along with some other dealers. Thereafter by the impugned proceedings dated 18-4-2002, the Joint Collector, West Godavari directed the District Manager, FCI, Tadepalligudem not to accept the mill levy delivery of rice from the Petitioners along with some other dealers. According to the Petitioners, the said impugned proceedings refers that the said communication was issued by the Joint Collector to the District Manager, FCI informing that the Sec. 6-A cases have been booked against the Petitioners under the Act for violation of the provisions of the Scheduled Commodities Order and Levy Order. All the cases booked against the Petitioners are under trial before the District Collector. Hence, it is directed not to accept the levy rise until further orders. According to the Petitioners, the impugned proceedings issued by the Joint Collector are without jurisdiction, as the Joint Collector is not competent to issue such proceedings, under the Levy Order. It is also contended that insofar as the 6-A proceedings are concerned, the Petitioners have filed appeals before the District Court and they are pending. ( 3 ) IT is contended by the learned counsel that though the 6-A proceedings were initiated in the month of November during the pendency of those proceedings the Petitioners were permitted to participate in the levy during the Khariff season and accepted the levy rice supplied. According to the learned counsel, the license issued by the authorities under the Scheduled Commodities Order is neither suspended nor cancelled. As long as such license is not cancelled, the authorities have no power for not accepting the levy rice as under the terms of the Andhra Pradesh Rice Procurement (Levy) Order, 1984 (hereinafter referred to the Levy Order ), unless the Petitioners supply fifty percent of the rice owned by them under Levy Order, the Dealers are not entitled to receive release Certificate for the other fifty percent of the rice and without such release certificate the dealers are not entitled to move the stocks of rice. Therefore, the action of the Respondent authorities would tantamount to denying the Petitioners to carry on their trade itself. Therefore, the action of the Respondent authorities would tantamount to denying the Petitioners to carry on their trade itself. The learned counsel also contended that the Petitioners were given a communication by the Assistant Grain Purchasing Officer dated 16-3-2002 directing the Petitioners to supply 100 tonnes of rice under levy by 31-3-2002; failing which the names of the traders would be removed from the list of dealers meant for supply of levy rice and also action would be taken under the Levy order as well as the Scheduled Commodities Order. According to the Petitioners, in pursuance of the said communication, the Petitioners have purchased the paddy and milled the same and when they were about to deliver the rice, the impugned proceedings were issued without any notice to the Petitioners and therefore, the impugned order is violative of the principles of natural justice. Hence, the Petitioners sought for quashing of the said impugned order. It is also stated that the Government of India issued orders dated 15-2-2002, as per which the restrictions contained under the Scheduled Commodities Order, 1982 were removed and therefore, even on that ground also the impugned action of the Respondents is illegal and unsustainable. ( 4 ) A counter has been filed on behalf of the Respondents, by the Joint Collector, West Godavari, who is the 2nd Respondent herein. In the counter it is admitted that the Revenue and Civil Supplies authorities inspected the business premises of the Petitioners in the month of November 2001 and booked cases under Section 6-A of the Act on the alleged irregularities, said to have been committed by the traders, by violating the provisions of the Licensing Conditions issued under the Scheduled Commodities Order, 1982, but, not on suspicion of purchase of Food for Work rice by the Petitioners. According to the Respondents, in terms of clause 9 (e) of Form-B license, no trading miller/wholesale dealer shall sell paddy or rice to another trading miller/wholesale dealer, except with the prior permission of the licensing authority and such condition has been violated by the Petitioners. In the counter, it is admitted that 6-A proceedings initiated against the Petitioners along with other dealers ended against the dealers confiscating 100% of the seized stock or its value to the Government. In the counter, it is admitted that 6-A proceedings initiated against the Petitioners along with other dealers ended against the dealers confiscating 100% of the seized stock or its value to the Government. It is also stated that in terms of clause 2 (b) of the Scheduled Commodities Order, the definition of the Collector means, the Collector of the District and includes the Joint Collector. Therefore, the Joint Collector has got the power to issue the impugned proceedings. It is stated that during the Video Conference held on 16-4-2002 on food for Work Programme , the Hon ble Chief Minister of Andhra Pradesh has instructed not to allow erring rice-millers or traders to deliver rice to the FCI. In pursuance to those instructions the District Manager, FCI was informed by proceedings dated 18-04-2002 not to accept rice deliveries under Mill Levy from the Petitioners. The Respondents have also stated that the Petitioners have purchased rice from other dealers violating the licensing conditions 9 (e) of Form-B issued under the Scheduled Commodities Order and also clause 4-A of the Levy Order. In the counter, it is also stated that the Petitioners have failed even to file C-Form returns with the licensing authority. It is further stated that though the licensed millers are under an obligation to deliver levy rice, but it does not mean that they were not in a position to sell their levy free eligibility without any further orders. It is stated that there is no prefixed levy to the Millers/traders and whoever purchases paddy at minimum support price will be issued entitlement certificates based on the purchases made by them giving liberty to the farmers to sell their produce to those millers or traders, who offer minimum support price to them. ( 5 ) THE learned Government Pleader, relying upon the above averments, contended that as the Petitioners have violated the Licensing Conditions as well as the Scheduled Commodities Order and clauses of Levy Order, they are not entitled to give levy rice to the Government. Therefore, the authorities have rightly passed the impugned order directing the FCI, which is a nodal agency, not to accept the levy rice supplied by the Petitioners. Therefore, the authorities have rightly passed the impugned order directing the FCI, which is a nodal agency, not to accept the levy rice supplied by the Petitioners. ( 6 ) IN reply, the learned counsel for the Petitioners contended that the impugned order issued does not contain any of the issues raised in the counter and as per the decision of the Supreme Court in the case of Mohinder Singh Gill v. Chief Election Commissioner when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Therefore, it is contended by the learned counsel that it is not open to the Respondents to supplement additional grounds to sustain the impugned order. ( 7 ) FROM the above rival contentions the issue that falls for consideration is whether the proceedings dated 18-4-2002 issued by the 2nd Respondent directing the District Manager, FCI, Tadepalligudem, not to accept the levy rice from the Petitioners, are valid or not? ( 8 ) IN order to appreciate the rival contentions, it would be proper to extract the relevant portion of the communication issued by the Joint Collector to the District Manager, FCI, Tadepalligudem, which is as under: -"it is to inform that 6a cases have been booked under Essential Commodities Act, 1955 against the following Rice Millers/ Traders for violating the provisions of A. P. Rice Procurement (Levy) Order, 1985 and A. P. Scheduled Commodities Dealers (Landd) Order, 1982. All the cases booked against the above Rice Millers/traders are under Trial before the District Collector. Therefore, the District Manager for Tadepalligudem is requested not to accept mill levy delivery of Rice by the above Rice Millers/traders till further orders are issued in the matter. " ( 9 ) ACCORDING to the Petitioners, the said communication issued by the Joint Collector is contrary to the Levy Order 1984 as well as the Scheduled Commodities Order 1982. Therefore, the relevant clauses of the said Control Orders are extracted hereunder:" The Andhra Pradesh Rice Procurement (Levy) Order, 1984: clause 3. " ( 9 ) ACCORDING to the Petitioners, the said communication issued by the Joint Collector is contrary to the Levy Order 1984 as well as the Scheduled Commodities Order 1982. Therefore, the relevant clauses of the said Control Orders are extracted hereunder:" The Andhra Pradesh Rice Procurement (Levy) Order, 1984: clause 3. Levy on licensed millers: - Every licensed miller shall sell to the Food Corporation/state Corporation at the procurement price fifty percentage of the total quantity of, - (a) each variety of rice confirming to specification owned by him which is held in stock on the date of commencement of this order; (b) each variety of rice confirming to specification milled by him every day out of stocks of paddy owned by him; and (c) each variety of rice conforming to specifications purchased or otherwise acquired by him for the purpose of sale from persons other than a licensed miller or a licensed dealer. Levy on licensed dealers: - Every licensed dealer shall sell to the Food Corporation/ State Corporations at the procurement price fifty percentage of the total quantity of - (a) each variety of rice conforming to specifications owned by him, which is held in stock on the date of commencement of this order; (b) each variety of rice conforming to specification got milled by him every day out of his stocks of paddy; and (c) each variety of rice conforming to specification purchased or otherwise acquired by him for the purpose of sale from persons other than a licensed miller or a licensed dealer. No miller or dealer who delivers levy to Government under provisions of Clauses 3 and 4 by purchasing paddy form a producer or an agriculturist shall purchase paddy conforming to specification at a price lower than the notified price for that variety of paddy notified in Schedule-II. Restrictions on sale and movement of rice:- (a) (1) No licensed miller/licensed dealer shall sell or agree to sell or otherwise dispose of the rice recovered by milling other than the quantity specified in Clause 3 or Clause 4 as the case may be, except in accordance with a Release Certificate issued by the Collector or any officer authorised by the Government in this behalf. Release Certificate: - (1) After delivery of levy rice, every licensed miller and licensed dealer may make an application in the Form set out in Schedule VI to the Collector or an officer authorised in this behalf by the Government for issue of a Release Certificate for disposal of levy free rice. (2 ). The Andhra Pradesh Scheduled Commodities Dealers (Licensing and Distribution) Order, 1982: form-B. License for purchase, sale/storage for sale of Scheduled Commodities: - (e) No trading mill wholesaler shall sell paddy or rice to another trading mill wholesaler except with the prior permission of the licensing authority. " ( 10 ) A perusal of the above shows that under Clause 3 of the Levy Order, the Millers and the Licensed Dealers are under obligation to sell to the Food Corporation/state Corporation at the procurement price fifty percentage of the total quantity of each variety of rice conforming to specification owned by him every day out of stocks of paddy milled by him and each variety of rice conforming to the specifications purchased or otherwise acquired by him for the purpose of sale from persons other than a licensed miller or a licensed dealer. Clause 4 A stipulates that a miller or dealer, who delivers levy to the Government under clauses 3 and 4 by purchasing paddy from a producer or an agriculturist have to purchase paddy conforming to the specification at a price not lower than the notified price for that variety of paddy in the Schedule-II. Similarly, under Clause 7, there is a restriction on the sale and movement of rice. According to the said clause no licensed miller or dealer shall sell or agree to sell or otherwise dispose of the rice recovered by milling other than the quantity specified in Clause 3 or Clause 4, except in accordance with a Release Certificate issued by the Collector or authorised officer. Under Clause 8, a release certificate would be issued to a licensed miller or a licensed dealer, on an application to the Collector or authorised officer for the sale of the levy free rice. Under Clause 8, a release certificate would be issued to a licensed miller or a licensed dealer, on an application to the Collector or authorised officer for the sale of the levy free rice. Therefore, it is the contention of the Petitioners that unless levy is accepted by the authorities under the Levy Order and issues a release certificate with reference to the balance fifty percent, the Petitioners, who are Millers and Dealers, are not in a position to sell or dispose of the balance levy free rice. By the action of the 2nd Respondent in issuing the impugned order, the entire business of the Petitioners have come to a stand still, as the Petitioners levy rice was not accepted and unless such levy rice is accepted, the Petitioners are not entitled for the release certificate for the disposal of the balance rice. ( 11 ) HOWEVER, the contention of the Revenue is that the Petitioners purchased rice in contravention of Condition 9 (e) of the License issued under the Scheduled Commodities Order, 1982. A reference to the above conditions extracted shows that there are restrictions for the sale of rice by the wholesalers to another wholesaler, which requires prior permission of the licensing authority. The contention of the department is that the Petitioners have purchased rice from other wholesaler/dealer without prior permission. Therefore, such sales are in contravention of the conditions of the license referred to above. But the contention of the learned counsel for the Petitioners is that the said conditions referred to are restrictions for the seller, who is a wholesaler, and not to the purchaser. In the present case even according ot the Respondents, the Petitioners are the purchasers from other wholesaler/dealer. Even if such sale inf avour of the Petitioners is in contravention of the Conditions of the license, that contravention has been committed by the seller and not by the Petitioners, who are the purchasers. Therefore, the said clause would not apply to the Petitioners. ( 12 ) APART from that, the learned counsel also relied upon a judgment of the Apex Court in the case of Mohinder Singh Gill (1 supra), which was rendered while considering the validity of an order of the statutory functionary. Therefore, the said clause would not apply to the Petitioners. ( 12 ) APART from that, the learned counsel also relied upon a judgment of the Apex Court in the case of Mohinder Singh Gill (1 supra), which was rendered while considering the validity of an order of the statutory functionary. The Apex Court held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out. In the light of the above decision, it is not open to the Respondent authorities to justify the impugned order by referring certain alleged contraventions by the Petitioners. A perusal of the impugned order shows that as according to the 2nd Respondent 6-A cases were booked against the Petitioners in view of the violation of the provisions or Levy Order and Scheduled Commodities Order and all the cases booked against the traders are under Trial before the District Collector. Therefore, the District Manager, FCI, Tadepalligudem was requested not to accept the mill levy rice from the rice-millers/ traders till further orders. In fact, the Petitioners have stated in the affidavit that after the cases under Sec. 6-A were booked, the levy rice was accepted for Khariff season, which is also clear form the communication dated 16-3-2002 issued by the Assistant Grains Purchasing Officer, who has stated that the Petitioners have already supplied levy rice of 93 tonnes, but they were further asked to supply 100 tonnes more; failing which action would be taken against them not only by removing them from the traders list for the supply of levy but also under the Levy Order as well as the Scheduled Commodities Order. It is the case of the Petitioners that in pursuance of such communications they have purchased rice and milled and were about to deliver the levy rice to the District Manager, FCI and at that stage the impugned order was issued. It is also a fact that the license of the Petitioners/ dealers was neither suspended nor cancelled for any of the contraventions alleged to have been committed by them. It is also a fact that the license of the Petitioners/ dealers was neither suspended nor cancelled for any of the contraventions alleged to have been committed by them. As long as their licenses were not cancelled, the pendency of 6-A proceedings may not be a ground for issuing the impugned order. Even by the date of communication, dated 16-03-2002 6-A proceedings were booked and they were pending. In fact, 6-A proceedings were disposed of by the District Collector before the impugned proceedings were issued by the Joint Collector, as per which the seized commodity or its value was confiscated to the government and such proceedings were assailed in appeals before the competent Court and they are pending and therefore, that is a separate issue altogether. In the light of the restrictions contained in the Levy Order, the action of the Respondents clearly amounts to denying and depriving the Petitioners from carrying on the business without canceling or suspending their licenses. Further, the impugned proceedings were also issued without any notice to the Petitioners. Hence, for all the above reasons the impugned proceedings are illegal and unsustainable and therefore, the impugned order is liable to be quashed. ( 13 ) YET, there is one more issue to be considered in this writ petition. In the affidavit filed by the Petitioners they have stated that the Government of India has issued the Control Order dated 15-2-2002 and by virtue of the said Control Order the restrictions contained both in the Levy order, 1984 as well as the Scheduled Commodities Control Order 1982 would not survive. As neither side has advanced any argument on this issue, the matter was re-posted and was heard. For the sake of convenience, the said Control Order dated 15-2-2002 is extracted hereunder: -"removal of (Licensing Requirements, Stock Limits and Movement Restrictions) on Special Foodstuffs Order, 2002 g. S. R. 104 (E ).-- Whereas the Central Government is of the opinion that it is necessary and expedient to do so for securing the availability of commodities specified in the Order at fair prices throughout the country. Now, therefore, in exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955 (10 of 1955), the Central Government hereby makes the following Order : - 1. Short Title. Now, therefore, in exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955 (10 of 1955), the Central Government hereby makes the following Order : - 1. Short Title. Extent and Commencement (a) This Order may be called the Removal of (Licensing requirements, Stock limits and Movement Restrictions) on Specified Foodstuffs Order, 2002. (b) It extends to all the States and Union Territories of India. (c) It shall come into force after thirty days from the date of publication in the Official Gazette. 2. Definitions (i) "dealer" means any person engaged in the business of purchase, movement, sale, supply, distribution or storage for sale of any of the commodities specified in clause 3 of this Order, directly or otherwise, whether as a wholesaler or retailer and whether or not in conjunction with any other business and his representative or agent, (ii) "state Government" includes Administration of a Union territory. 3. With the coming into effect of this Order any dealer may freely buy, stock, sell, transport, distribute, dispose, acquire, use or consume any quantity of wheat, paddy/rice, coarse grains, sugar, edible oilseeds and edible oils and shall not require a permit or license therefor under any order issued under the Essential Commodities Act, 1955. 4. The provisions of this Order shall take effect notwithstanding anything to the contrary in any Order made by a State Government before the commencement of this Order except as respects anything done, or omitted to be done, thereunder before such commencement. 5. Issue of any order by the State Governments under powers delegated in GSR 452 (E) dated the 25th October, 1972 issued by the Government of India in the then Ministry of Agriculture (Department of Food) and GSR 800 dated the 91" June, 1978 issued by the Government of India in the then Ministry of Agriculture and Irrigation (Department of Food) for regulating by licenses, permit or otherwise, the storage, transport, distribution, disposal, acquisition, use or consumption of any of the commodities specified in clause 3 shall require the prior concurrence of the Central Government. 6. Nothing contained in this Order shall affect the operation of the Public Distribution System (Control) Order, 2001 issued by the Central Government and orders of the State Governments issued in pursuance thereof. 6. Nothing contained in this Order shall affect the operation of the Public Distribution System (Control) Order, 2001 issued by the Central Government and orders of the State Governments issued in pursuance thereof. " ( 14 ) THE learned counsel for the Petitioners, however, stated that though by the said control order dated 15-2-2002 the restriction contained in the Scheduled Commodities Control Order have done away but insofar as the restrictions contained in the Levy Order would continue and therefore, the matter has to be considered on merits. In fact, the proceedings issued by the State Government in pursuance of the said Control Order dated 15-2-2002 by way of Memo No. 961/cs-1 (2)/2002, dated 27-03-2002 is placed before this Court. ( 15 ) A perusal of the Control Order dated 15-2-2002, which is called, "removal of (Licensing Requirements, Stock Limits and Movement Restrictions) on Special Foodstuffs Order, 2002" shows that with the coming into effect of this Order any dealer may freely buy, stock, sell, transport, distribute, dispose, acquire, use or consume any quantity of wheat, paddy/rice, coarse grains, sugar, edible oil seeds and edible oils and shall not require a permit or license therefore under any order issued under the Essential Commodities Act, 1955. The provisions of this Control Order shall take effect notwithstanding anything to the contrary in any Order made by a State Government before the commencement of this Order, except as respects anything done, or omitted to be done, thereunder before such commencement. Only the Public Distribution System (Control) Order, 2001 issued by the Central Government and orders of the State Governments issued in pursuance thereof alone are saved. Therefore, by virtue of the said Control Order 2002, dated 15-2-2002, there is no restriction as to the license as well as to the purchase and sale or movement of the goods referred to therein. Here we are concerned with the rice. No such restriction as was contained in the Levy Order would continue to be in operation after the issue of new Control Order 2002. Here we are concerned with the rice. No such restriction as was contained in the Levy Order would continue to be in operation after the issue of new Control Order 2002. Therefore, the contention of the Petitioners that the Levy Order 1984 would continue to be operative in spite of the Control Order 2002 is devoid of merit and all the Petitioners are free to sell any quantity of rice to anybody without any permit and such rice can also be moved without any permits, which were hitherto required under the Levy Control Order. ( 16 ) IN that view of the matter, though the Petitioners sought for a direction to the Respondents to accept the Levy Rice, such direction could not be issued in the light of the Control Order dated 15-2-2002, as all the restrictions were done away by this Control Order. The clarification by way of Memo issued by the State Government dated 27-3-2002 also shows that the restriction contained in the Scheduled Commodities Order 1982 applies only to pulses, which are not referred to in the Control Order 2002. As this Control Order was issued much before the direction given by the Assistant Grain Purchasing Officer on 16-3-2002, which is in contravention of the above said Control Order, 2002 and in view of the same, the dealers are not under obligation and they are at liberty to sell to any person, who is willing to purchase the same without any permission whatsoever required from any of the authorities. In that view of the matter, the Petitioners are not entitled to any direction to the Respondents to accept the levy rice. It is also not the case of the Petitioners that there are no purchases of rice but was complaining only about restrictions of the Levy Order, 1984. Hence, there is also no need to quash the impugned order, dated 18-04-2002 as the Petitioners are under no legal obligation to supply levy rice. Under the above circumstances, the writ petition is disposed of clarifying the position in view of the Control Order 2002. No costs.