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2010 DIGILAW 173 (GUJ)

Rishi Petrochem Pvt. Ltd. v. Collector

2010-03-30

JAYANT PATEL

body2010
Judgment Jayant Patel, J.—The short facts of the case appears to be that the petitioner was holding licence of various products of solvent, but the licence of the petitioner was ultimately surrendered by him and based on the same, the licence was cancelled. However, as the stock of raw material being naptha and industrial solvent was available with the petitioner, the petitioner applied for grant of permission to sell the stock of raw material. The permission was granted to sell the stock of raw material to 3 parties being Ganesh Chem Tech Pvt. Ltd., Rudraksha Petrochem Pvt. Ltd., and K.G. Thinchem. It is the case of the petitioner the petitioner after converting naptha into solvent, sold some quantity to the aforesaid parties and the said aspect was also verified. The inspection was carried out by the Director, Food and Civil Supply and at that time, it was found that without their being any licence for conversion of naptha into industrial solvent, the product of industrial solvent is being sold by the petitioner and therefore, the seizure had taken place of 93346 ltrs. of naptha. After seizure, show cause notice was issued by the Director, Food & Civil Supply dated 01.07.2002 under Section 6A of the Essential Commodities Act as to why the seized quantity of naptha should not be confiscated. In response to the said notice, the petitioner submitted reply and contended inter alia that the Director who carried out the inspection has also carried out the seizure and therefore, he cannot be a judge of his own cause and therefore, he may not decide the matter for confiscation of the quantity of the stock which is seized. The Director, Food & Civil Supply appears to have referred the matter to the State Government and the State Government in view of the circumstance mentioned in the letter dated 24.10.2002, assigned the matter to the District Collector, Vadodara in view of the peculiar circumstance that the District Collector, Ahmedabad was not available and the post was vacant and the charge was with the Additional Collector and the present being an important matter, the in-charge officer may not be assigned with the work and therefore, the matter was assigned to the District Collector, Vadodara. It appears that thereafter, the District Collector, Vadodara issued show cause notice to the petitioner and the petitioner submitted reply and ultimately, vide order dated 21.12.2002, the final order for confiscation of the stock of naptha is passed. The petitioner carried the matter in appeal before the learned Sessions Judge being Criminal Appeal No. 23/02 and the learned Sessions Judge has ultimately, after hearing both the sides, dismissed the appeal. Under these circumstances, the present revision before this Court. 2. Heard Mr. Prajapati, learned Counsel appearing for the petitioner and Mr. Raval, learned APP for the State. 3. The first contention raised by the learned Counsel for the petitioner is that the permission was granted to sell t he product or the stock which was with the petitioner. He submitted that pursuant to the said permission, the petitioner sold the product of solvent to the parties who were to purchase the same as per the order of the Mamlatdar. He submitted that the permission was granted for the sale of 246899 ltr. of naptha and 7544 ltr. of solvent S-3 and therefore, if the naptha is converted into solvent product and is also sold under the supervision of the officers of the District Collector, who did not object at any point of time, it cannot be said that there was any breach of the control order and on the contrary, if the intention was considered for permitting the sale of the stock of raw material, the same was satisfied. He submitted that under these circumstances, the confiscation was not warranted in law as there was no breach of the control order. 4. The contention appears to be attractive, but upon close scrutiny, it appears that the permission was not granted for sale of solvent S-1 or solvent B-1 being a converted product of naptha after undergoing the process. But the permission was granted for sale of the available quantity of naptha as it was and the available quantity of solvent S-2 as it was. There was absolutely no question of converting the quantity of naptha into the product of solvent or a derived product of solvent and then to sell it. If such process was to be permitted, it is undisputed position that the mandatory requirement was to hold a licence for such purpose. There was absolutely no question of converting the quantity of naptha into the product of solvent or a derived product of solvent and then to sell it. If such process was to be permitted, it is undisputed position that the mandatory requirement was to hold a licence for such purpose. The petitioner was holding licence at the earlier point of time, but the petitioner declared for closure of the activity and surrendered the licence. Once the licence was cancelled, the manufacturing activity or the process of conversion of naptha into solvent was not at all permitted. However, as the stock of raw material of naptha and solvent S-2 was available with the petitioner at the time when the licence was cancelled, the permission was granted for sale of naptha and solvent S-2 product or raw material of naptha and solvent S-2 were to be sold as they were and any conversion from naptha into solvent was not permissible at all without holding a valid licence for such activity. Therefore, if the activity of conversion of naptha into solvent S-1 and solvent B-1, was undertaken by the petitioner, and thereafter the product were sold from the raw material of naptha, such could be said as was expressly prohibited or in any case without holding a valid licence on the part of the petitioner. The attempt to contend that for some time, the conversion was made and was also sold to the aforesaid three parties in presence of the District Collector or officer of the District Collector did not object to such activity can hardly come to the rescue of the petitioner nor can be considered as a valid defence to avoid the confiscation. It is an admitted position that the petitioner was not holding the licence for the activity of conversion of naptha into solvent. Under these circumstances, if any illegality is permitted by any officer of the District Collector or they did not object at the relevant point of time, would hardly be considered as a valid basis for nullifying the requirement of holding licence for the processing and sale of the product of solvent from naptha. Therefore, the said contention can neither be accepted nor holds any substance and therefore, the same is rejected. 5. Therefore, the said contention can neither be accepted nor holds any substance and therefore, the same is rejected. 5. The learned Counsel next contended that there was no black marketing of the product and the product was sold to the parties for which the permission was granted and therefore, it was submitted that as there was no intention of black marketing, the penalty of forfeiture to the fullest extent was not called for. He submitted that it was required for the authority and also the Sessions Court to consider the aspects of proportionality of the punishment and confiscation of the whole stock which was seized could not be said as warranted and he relied upon the decision of this Court in the case Patel Abram Kuberbhai vs. State of Gujarat reported at 1998 (2) GLH 533 , has contended that this Court in that case had exercised the power for reduction of the penalty to the extent of 25% of the stock, and same may be done in the present case. 6. If the activity of processing of naptha into solvent and any product of the solvent, was prohibited without holding a valid licence, the ground of no mala fide intention on the part of the petitioner could hardly be considered as a valid ground for avoiding the confiscation of the product. Any manufacturing activity or processing activity is undertaken without their being any valid licence, it is a breach per se. In the present case, there was a conscious breach on the part of the petitioner inasmuch as the petitioner very well knew that the licence is required and the petitioner was at one point of time holding the licence and had also surrendered the licence. In spite of the termination of the licence and instead of selling the product naptha as it was, petitioner has converted naptha into the solvent product and is sold. Therefore, such being not only a lapse, but ex facie breach of the control order, if the authority has taken decision of forfeiture of the whole quantity, the same cannot be termed as without authority or arbitrary. 7. Therefore, such being not only a lapse, but ex facie breach of the control order, if the authority has taken decision of forfeiture of the whole quantity, the same cannot be termed as without authority or arbitrary. 7. The last contention raised by the learned Counsel for the petitioner on the aspects of power with the District Collector, Vadodara, for forfeiture of the goods seized at Ahmedabad, deserves to be considered to the extent that there is no discussion whatsoever in the order of the learned Sessions Judge. It appears that the petitioner did raise the contention before the District Collector, Vadodara in response to the show cause notice. The District Collector, Vadodard found that as the matter is assigned by the State Government to him through the Director, he has the power to initiate action and pass the order under Section 6A of the Essential Commodities Act. Such contention was also raised before the learned Sessions Act. However, there is no discussion in the reasoning of the order of the learned Sessions Judge on the said aspect. It also appears that initially the notice was issued by the Director, Food and Civil Supply under Section 6A and in the said show cause notice dated 01.07.2002, there is reference to the delegation of power by the District Collector, Ahmedabad, vide order dated 12.02.1999 vide Reference No. SB/6A/Assignment of Power. The said order has not come on record before the learned Sessions Judge, possibly because that contention was not examined by the learned Sessions Judge. It will also be required for the learned Sessions Judge to examine as to whether such powers were validly delegated to the District Collector, Vadodara or not. The aspects of conduct on the part of the petitioner also may be required to be considered inasmuch as when the Director, Food and Civil Supply who was delegated with the power had issued the show cause notice, the same was resisted and thereafter, the matter was referred to the State Government and the State Government authorised the District Collector, Vadodara to exercise the power. No final observation deserves to be made on the said aspects since there is no discussion whatsoever in the order of the learned Sessions Judge. 8. No final observation deserves to be made on the said aspects since there is no discussion whatsoever in the order of the learned Sessions Judge. 8. In view of the above, only on the aspects of exercise of power by the District Collector, Vadodara under Section 6A of the Act in the present case, the matter deserves to be remanded to the learned Sessions Judge as the said aspect goes to the root of the matter. In the proceedings of the appeal, the learned Sessions Judge shall be at the liberty to call for the record and appeal being continuous proceeding, the documents may be appreciated on the aspects of authority of the District Collector, Vadodara and also the conduct of the petitioner and other correspondence related thereto. Thereafter, the learned Sessions Judge may pass the order in accordance with law on the said aspects. 9. In view of the aforesaid, the impugned order passed by the learned Sessions Judge dated 20.01.2003 is set aside only on the aspect as observed hereinabove, with the further direction that the learned Sessions Judge shall hear the appeal on the point as observed hereinabove after giving opportunity of hearing to both the sides and shall pass the order in accordance with law. 10. In view of the above, the Criminal Appeal No. 23/02 shall stand restored to the file of the learned Sessions Judge. The learned Sessions Judge shall pass appropriate orders as early as possible, preferably within a period of 6 months from the receipt of the order of this Court. 11. Rule made absolute accordingly to the aforesaid extent.