Research › Search › Judgment

Jharkhand High Court · body

2011 DIGILAW 1101 (JHR)

Bajrang Lal Agarwal v. State of Bihar

2011-12-14

P.P.BHATT, R.K.MERATHIA

body2011
ORDER This writ petition has been filed for declaring that no license is required by a producer (oil miller) under the provisions of Bihar Trade Articles (Licenses Unification) Order, 1984 ('Licencing Order' for short) and for quashing the entire criminal prosecution being Gamharia P. S. Case No. 67 of 1992 dated 11.11.1992 (G. R. Case No. 33 of 1992) registered under Section 7 of the Essential Commodities Act, including the order dated 12.08.1994 passed by Special Judge (E. C. Act), Chaibasa rejecting the prayer of the petitioners for their discharge. 2. The facts in short: The petitioner no. 1 and 2 are the partners and petitioner no. 3 is the 'Munim' of the firm M/s. Shree Gopal Oil Mills, which is carrying on business of milling and manufacturing edible oils. The said firm purchases mustard oil seeds for the purposes of processing and sells the product i.e. oil to the wholesellers or though a commission agents or to bulk consumers directly. 3. On 11.1.1992, the factory of the said firm was raided by the Officials of the supply department. An F.I.R. was lodged inter-alia alleging that there was shortage of mustard oil tins vis-a-vis the actual stock/ the stock register/ challans/ cash memo etc; and that the returns were not filed which was violation of Clause 20 of the 'Licencing Order'; and that there was violation of Clause 7 of the Licence; and that there was violation of Clause 3 of the Bihar Essential Articles (Display of Prices and Stocks) Order, 1977 (“the Display Order” for short). However, it was admitted in the F.I.R. that the price and display board was found displayed. The available stock was seized. A charge sheet under Section 7 of the Essential Commodities Act was filed, on which cognizance was taken on 9.2.1993. A discharge petition was filed, interalia on the ground that no licence was required by the firm under the 'Licencing Order', but vide order dated 12.8.1994, it was rejected. 4. The background: This writ petition was admitted on 28.9.1994. After hearing the parties it was dismissed by judgment dated 27th August 1997. A discharge petition was filed, interalia on the ground that no licence was required by the firm under the 'Licencing Order', but vide order dated 12.8.1994, it was rejected. 4. The background: This writ petition was admitted on 28.9.1994. After hearing the parties it was dismissed by judgment dated 27th August 1997. Learned Single Judge inter-alia held as follows: “11.Every producer and manufacturer is definitely a dealer either wholesale or retailer because the manufacturer or producer would definitely sell their products either on wholesale or to bulk consumer through agent or directly, so the producer or manufacturer has got dealership inherent within it. So the producer or manufacturer is definitely a dealer and he deals with the products either as a retailer or whole-seller. Hence the producer or the manufacturer cannot be usted totally from the dealership either wholesale or retail or in other words manufacturer or producer cannot be said to be distinct not connected with dealership at all. This matter was considered in its proper perspective by the State Legislature while putting the definition of the dealer under the Unification Order as per Clause 2 (e). In the definition quoted above, only the manufacturer of Sugar has been excluded from the definition of dealer which directly infers that the manufacturer/producer of other essential commodities are within the purview of the definition of dealer as per Section 2 (e). Only because separate definition has been given about the producer or manufacturer, it does not mean that they are to be debarred as dealer. It has already been stated that every manufacturer or producer is definitely a dealer. The definition of dealer as per U. P. Order as referred to in the judgment of Parsuram Prasad (supra) is different from that of the Unification Order of Bihar. Here the definition of dealer includes the manufacturers also except that of Sugar alone. If the definition of dealer in the Unification Order is read conjunctively with Clause 3 of the Central Order, 1977, regarding edible oil, it is clear that producer/manufacturer is also required to take a licence but whether their licence would be of whole-seller or retailer would depend upon the style of business of individual producer/manufacturer. If the definition of dealer in the Unification Order is read conjunctively with Clause 3 of the Central Order, 1977, regarding edible oil, it is clear that producer/manufacturer is also required to take a licence but whether their licence would be of whole-seller or retailer would depend upon the style of business of individual producer/manufacturer. The State Order must be read harmoniously with the Central Order and if there is any gap or vacuum in the State Order, then Central Order must come into play in the field and the wordings “Notwithstanding....” etc., in the Central Order under Clause 3 eloquently speaks of the same. 13. I have come to the conclusion as discussed above that definition of dealer under the Unification Order includes manufacturer/producer of edible oils/oilseeds also and, as such, as a dealer, the petitioner oil mill has rightly taken a licence as required also under the Central Order as harmonious construction of both the Orders. Thus none of the judgments as referred to above are applicable in the present case.” 5. The petitioners moved the Hon'ble Supreme Court against the said judgment. The Hon'ble Supreme Court disposed of the appeal by order dated 24th August 1998 with the following order : 'Leave granted. Heard the learned counsel for the parties. The appellants who are accused in a case under Section 7 Essential Commodities Act, 1955 filed a writ petition before a learned Judge of the Patna High Court for quashing its proceeding on the ground that a licence was not required by an oil miller under the provisions of the Bihar Trade Articles (Licences Unification) Order 1984, for breach of which they were being prosecution. In support of their contention, they relied upon a judgment of another learned Judge of the Patna High Court in Parsuram Prasad Vs. State of Bihar 1996 (2) PLJR 56 . The learned Single Judge, however, disagreed with the view expressed in Parsuram (supra) and observed as under. “Now coming to the decision of this Court as quoted above regarding, Dall Mill Owner, I am quite aware that as per judicial discipline and decorum, I am bound by that decision. State of Bihar 1996 (2) PLJR 56 . The learned Single Judge, however, disagreed with the view expressed in Parsuram (supra) and observed as under. “Now coming to the decision of this Court as quoted above regarding, Dall Mill Owner, I am quite aware that as per judicial discipline and decorum, I am bound by that decision. But it appears that the disputed points have not been placed in their proper perspective before the learned Single Judge.” Since the learned Single Judge was fully aware that he was bound by that decision, it was desirable, in the fitness of things to refer the matter to a Division Bench to set at rest the points on which the learned Judge had joined issue. On this score alone, we set aside the impugned order and remand the matter to the High Court with a request to the learned Chief Justice to constitute a Bench of not less than two Judges to hear the writ petition filed by the appellants.” The appeal is thus disposed of.' 6. Submissions: Learned counsel appearing for the petitioners submitted that the prosecution of the petitioner is wholly illegal. The firm is not required to take licence under the 'Licencing Order'; being a producer and the 'Display Order' is also not applicable. He referred to the provisions of law. He further submitted that relying on the Division Bench judgment of Allahabad High Court in the case of M/s. Hari Oil and General Mills Vs. State of U. P. reported in 1987 EFR 211, it was held by this Court in the case of Parsuram Prasad (supra) that a pulses miller (producer) is not a “dealer”, and that the judgment of M/s. Hari Oil (supra) was upheld by Hon'ble Supreme Court. He also relied on the judgments reported in AIR 1982 SC 949 State of West Bengal Vs. Swapan Kumar Guha and AIR 1996 SC 538 Dr.(Miss) Aletta Frace Bell Vs. Dr. (Miss) S. Tirkey. 7. Learned counsel appearing for the State, on the other hand submitted that the said firm itself, got a licence under the 'Licencing Order' and kept it renewed for several years and therefore the petitioner's can not contend that the firm it is not a “dealer”. A “producer” is also a “dealer” as he also sells the product. 8. 7. Learned counsel appearing for the State, on the other hand submitted that the said firm itself, got a licence under the 'Licencing Order' and kept it renewed for several years and therefore the petitioner's can not contend that the firm it is not a “dealer”. A “producer” is also a “dealer” as he also sells the product. 8. In reply, learned counsel for the petitioners reiterated his submissions and submitted that the wholesale dealer licence was taken and continued under the threat and fear of prosecution, and it can not be said that the petitioners have accepted their liability and are estopped from raising the legal issues involved in this case. 9. The question: Thus the question is whether a “producer” (manufacturer/miller) under the 'Licencing Order' is required to obtain a “dealer” (wholesale/retail) licence under that Order; and whether the “Display Order” is applicable to such “producer”? 10. The relevant provisions: It will be useful to look into the relevant provisions. 9. The question: Thus the question is whether a “producer” (manufacturer/miller) under the 'Licencing Order' is required to obtain a “dealer” (wholesale/retail) licence under that Order; and whether the “Display Order” is applicable to such “producer”? 10. The relevant provisions: It will be useful to look into the relevant provisions. (A) “Pulses, Edible Oil Seeds and Edible Oils (Storage Control) Order 1977”(“Central Order 1977” for short):- “2 (f)“dealer” means a person engaged in the business ofpurchase, sale or storage for sale of any pulses, edible oil seeds oredible oils, whether or not is conjunction with any other business and includes his representative or agent.” “2 (j)“producer” means a person carrying on the business of milling any of pulses or expelling, extracting, (manufacturing or refining) any edible oil –specified excess oilseeds (i)by buying pulses or edible oilseeds for being processed by himself and selling the finished products to a wholesaler or through a commission agent; or (ii)by doing any of the processes of milling, expelling, extracting, (manufacturing or refining) on behalf of another).” “2 (n)“wholesaler” means a dealer in pulses or in edible oilseeds or in edible oils who sells such commodities to other dealers or to bulk consumers.” “3.Licensing of dealers and producers – Notwithstanding anything contained in any State Order, no person shall carry on business, as a dealer, after the expiration of a period of fifteen days from the coming into force of this clause, or as a producer, after the expiry of a period of fifteen days from the date of coming into force the Pulses, Edible Oilseeds and Edible Oils (Storage Control) Amendment Order, 1987 in pulses or edible oilseeds or in edible oils except under and in accordance with the terms and conditions of a licence granted under a State Order if the stocks of pulses or edible oilseeds or edible oils in his possession exceed the quantities specified below:- ..................................” “4.Restriction on possession of pulses, edible oilseeds and edible oils – (1) No dealer shall, after a period of fifteen days from the coming into force of this clause, either by himself or by any person on his behalf, store or have in his possession at any time pulses, edible oilseeds or edible oil in excess of quantities specified below:- .....................................” “Provided that the stock limits specified for a wholesaler Cat. A citities shall apply to a wholesaler in such primary mandis situated in other category of cities as the State Government may, having regard to the location of such mandis or other relevant factors, from time to time, specify: Provided further that where a dealer is also carrying on business as a producer or commission agent, he shall be entitled to retain the stock limits specified in this sub -clause for each such business and accounts thereof are kept separate and distinct from one another.” ............................................... “Provided also that no producer specified in column (1) of the Table below shall store or have in his possession at any time unmilled pulse (or edible oilseeds) as the case may be, in excess of the quantity specified in the corresponding entry in column (2) of the said Table, and he shall not hold the finished stock in excess of the quantity specified in the corresponding entry in column (2) of the said Table:” ............................................... “Provided also that where any quantity of pulses, edible oil or edible oilseeds is in transit, then, for the purposes of this sub-clause, such quantity shall (during the period when such quantity is in transit, be deemed) to have been included in the stocks of the dealer in whom the property in such quantity is retained during such transit in accordance with the terms of any contract or agreement in pursuance of which the quantity is put in such transit. Provided also that nothing in this clause shall apply to a commission agent who does not retain any consignment of pulses or edible oilseeds received by him for a period exceeding fifteen days from the date of its receipt. Provided also that nothing in this clause shall apply to a commission agent who does not retain any consignment of pulses or edible oilseeds received by him for a period exceeding fifteen days from the date of its receipt. Every dealer referred to in sub-clause (1) shall, immediately on the expiry of the period specified in that sub-clause, give intimation to the Collector regarding the stocks of any pulses, edible oil seeds or edible oil left with him or any other person on his behalf in excess of the stocks prescribed in sub-clause (1) and such stocks shall not be disposed of by the dealer or other person except in accordance with the direction of the Collector.” (B) “Licencing Order”:- “2 (e)“dealer” means a person, a firm, an association of persons or a Co-operative Society other than a National and State-level Co-operative Society, engaged in the business of purchase, sale or storage for sale of any trade article whether or not in conjunction with any other business and includes his representative or agent but does not include- (i) a person who holds or is in possession of agriculture land under any tenure or any capacity and on which the raises or has raised crop of foodgrains, oilseeds or whole pulses; (ii) a manufacturer of sugar; (iii) Hawkers engaged in the purchase and sale of non-controlled cloth.” “2 (n)“producer” means a person carrying on the business of milling any of the pulses or expelling, extracting or manufacturing or refining any edible oil - (i)by buying pulses or oilseeds for being processed by himself and selling the finished products to a wholesaler or through a Commission Agent or to bulk consumers directly; or (ii)by doing any of the processes of milling, extracting or manufacturing or refining on behalf of another.” “2 (p)“retail dealer” means a person engaged in the business of purchase, sale or storage of any article (specified in Schedule) for purpose other than personal consumption within the storage limit fixed by the Government from time to time. “2 (u)“Wholesale dealer” means a person engaged in the business of purchase, sale or storage of any article (specified in Schedule I) for purpose other than personal consumption within the storage limit fixed by the Government from time to time.” (C) “Display Order”:- “2 (c) “Dealer” means a person who deals in the sale or storage for sale either wholesale or retail of any of the articles mentioned in Schedules I and II and includes his agent or representative or Arhatia. 11. Discussions: From the survey of the scheme and the provisions noticed above, it is clear that the producer/manufacturer/miller of three articles, namely the pulses, edible oil seeds and edible oils, is dealt separately and is kept outside the definition of “dealer” under the aforesaid Orders. The definition of “producer” in the “Licencing Order' has been borrowed from the 'Central Order, 1977'. Clause 3 and 4 of 'Central Order, 1977', deals with the “dealer” and “producer” separately. The definition of “dealer” in the 'Central Order, 1977' is confined to purchase and sale of three trade articles namely pulses, edible oil seeds and edible oil, whereas the definition of 'dealer' in the 'Licencing Order' and 'Display Order' applies to purchase and sale of a trade article. By the words 'any other business' occurring in the definition of “dealer” in the 'Central Order, 1977' and the 'Licencing Order'; and by the exclusion of 'manufacturer of sugar' from the definition of “dealer” in the 'Licencing Order' it can not be presumed that the producer of pulses and edible oil is included within the definition of “dealer” in the 'Licencing Order'. If the definition of “dealer” under the 'Licencing Order' was intended to include a “producer”, then there was no need to define and deal the producer of pulses and edible oil separately. Further a “dealer” is a person engaged in the business of purchase and sale, of any trade article, whereas, the “producer” under the 'Licencing Order' is not a person engaged in purchase and sale of the pulses or edible oil seeds or edible oils, as such. 12. As in the case in hand, undisputedly the firm of the petitioners, purchases edible oil seeds and after milling a different trade article – edible oil is sold. Neither the raw material i.e. edible oil seeds is sold nor the finished product i.e. edible oil is purchased. 12. As in the case in hand, undisputedly the firm of the petitioners, purchases edible oil seeds and after milling a different trade article – edible oil is sold. Neither the raw material i.e. edible oil seeds is sold nor the finished product i.e. edible oil is purchased. There is no such allegation that the edible oil seeds purchased is sold, or the edible oil was being purchased and sold. Only because there is an element of sale of finished produce, the firm of the petitioner can not be brought within the definition of “dealer” under the 'Licencing Order' and the 'Display Order'. 13. It is also pertinent to note that the definition of “producer” in the 'Licencing Order' also includes a person, who is doing any process of milling, extracting, manufacturing or refining, on behalf of other. In such case, there is no element of purchase and sale at all, which is essential element for a “dealer”. 'Form A, B & C' and Schedule IV, appended with the “Licencing Order” also indicates that no licence form or fee has been prescribed for a “producer”. The 'Licencing Order' and the 'Display Order' is unworkable for the “producer”. If there is any vacuum, its benefit should go to the petitioners. Paragraph 4 of the judgment of Dr.(Miss) Aletta Frace Bell (supra) supports such submissions of the petitioners. 14. The provisions of the aforesaid Orders are penal in nature, imposing fine and imprisonment. Therefore, they are to be construed strictly and as per the plain meaning of the words used by the legislature. In case of doubt, the construction favourable to the subject should be preferred (please see paragraph 15 of the judgment of State of West Bengal (supra). 15. While considering similar question, in the case of Parsuram Prasad (supra), learned Single Judge of this Court relying on the judgment of Division Bench of Allahabad High Court in the case of M/s. Hari Oil (supra) observed as follows: “12.In view of what has been stated above, it appears that the petitioner was a Daal Mill owner and hence a producer and not dealer within the meaning of the Unification Order, 1984 and Display Order, 1977 and hence no case of contravention of the provisions of the said Orders can be made against him. Moreover, respondent no. Moreover, respondent no. 2 had no authority to raid and seize the bags of pulses and hence the criminal prosecution of the petitioner as also the confiscation proceedings in respect of the articles seized, are not in accordance with law and are abuse of the process of court. Both the writ applications are, therefore, allowed and the criminal prosecution as also the confiscation proceedings are hereby quashed.” In the case of M/s. Hari Oil (supra) it was held as follows: “37.The question for determination is whether a producer is a dealer within the meaning of Clause 2 (g) of the 1966 Order. A producer necessarily purchases oil seeds and sells oil seed products. In one sense, he is a dealer but a producer is not a person engaged in the business of selling oil seeds as oil products or oil. He converts the oil seeds in the oil products and then sells it. Consequently, a 'producer' is distinct from a 'retailer'. A producer is not required to obtain a licence as a 'producer' under the 1966 Order. He is also not required to register himself under the 1966 Order.” The S.L.P. against the judgment of Allahabad High Court was dismissed by the Hon'ble Supreme Court. 16. Conclusion: After hearing the parties at length and on carefully going through the provisions of law, we are satisfied that under the 'Licencing Order', the petitioners' firm being “producer” was not obliged to take dealer's licence, so far as purchase of edible oil seeds and sale of edible oil is concerned. For the same reasons, the 'Display Order' is also not applicable to them. 17. In the result, this writ petition is allowed. It is declared that no licence was/is required by the petitioner's firm, being the “producer”(miller of edible oil), under the provisions of the Bihar Trade Articles (Licences Unification) Order, 1984. The Bihar Essential Articles (Display of Prices and Stocks) Order, 1977 is also not applicable to the firm of the petitioners. 18. Consequently, the entire criminal prosecution being Gamharia P. S. Case No. 67 of 1992 dated 11.11.1992 (G. R. Case No. 33 of 1992) registered under Section 7 of the Essential Commodities Act, is quashed and the order dated 12.08.1994 passed by Special Judge (E. C. Act), Chaibasa rejecting the prayer of the petitioners for their discharge is set aside.