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2013 DIGILAW 1464 (BOM)

Shree Shakti Enterprises v. Controller of Ration and Director of Civil Supplies

2013-07-30

K.U.CHANDIWAL

body2013
JUDGMENT : The group matters are heard together and decided finally. The petitioners and revision applicants are dealing with the commodities including rice, pulses, spices. They possess requisite licences issued by Food and Supply Department (respondent) under the rules. On 21st July, 2012, the officers of Rationing Department and Civil Supply visited the warehouses in Vashi, New Mumbai. It revealed that the petitioners, as traders had changed the warehouses from the one which was permitted under the licence condition. It was expected under the conditions of Licence in Form C at Clause 2 of the Maharashtra Scheduled Commodities Wholesale Dealers' Licensing Order, 1998, to have communicated such change within 48 hours. However, change in the place of storage/warehouse was not communicated. Hence, prosecution under Section 6 of Essential Commodities Act including confiscation of seized pulses, rice, grains. The order of confiscation was challenged in appeal under Section 6-C of the Essential Commodities Act 1955 before the learned Additional Sessions Judge, Thane. However, the appeal was dismissed and hence, the writ petition. 2. The learned Senior Counsel appearing for petitioners criticised conduct of the respondent/department in raiding the warehouses, discriminating few of other traders by releasing their goods viz. Rice, pulses, food-grains and targeting in prosecuting the petitioners. The other grievance is, first visit was dated 21.7.2012 while before second visit, there was already a communication of change in place of storage (warehouse). In the light of such communication, subsequent order of confiscation would not be maintainable. It was also pointed out that in few cases, the commodities being spices (yellow rai) is not covered under the Essential Commodities. It does not require licence. Yellow Masoor (Pulse) was imported, it does not require licence. 3. It was pointed out that there were no notices in terms of Section 6-A of the Essential Commodities Act as the notice was issued to warehouse owner and not to the petitioners. In the absence of such notice, there could not be directions under Section 6-B of the said Act, of confiscation. 4. By now, it is not in dispute that rice stock of around thirty eight traders has been released while in the matter of twenty nine such traders confiscation order is passed. Twenty five had approached this Court. In the absence of such notice, there could not be directions under Section 6-B of the said Act, of confiscation. 4. By now, it is not in dispute that rice stock of around thirty eight traders has been released while in the matter of twenty nine such traders confiscation order is passed. Twenty five had approached this Court. The learned APP says that the cases of released traders were based on individual merits as they had communicated within a span of 48 hours about change in the godown/warehouse. He has placed reliance to the judgment of this Court reported in "2011(3) Bom.CR (Cri) 205 : [2010 ALL MR (Cri) 3002) (State of Maharashtra Vs. Jayantilal Laxmichand & Sons)". The case before this Court was, storage of pulses, rice were in warehouse, without notification within 48 hours after storing the goods at different places. It was primarily established by State that the procedure under Sections 6-A and 6-B of the Essential Commodities Act was followed before passing order of confiscation. This Court permitted restoration of commodities/ confiscated stock to owners on payment of value. 5. This Court in Criminal Revision Application no.205 of 2013 and 194 of 2011, on July 4, 2013, on the statement made by respective Counsel, allowed release of confiscated goods on the condition that respondents therein pays to the Department Controller of Rationing present market price of the goods seized in wholesale market. 6. On perusal of record and proceedings of the present cases, it is found that notice under Section 6A of the Act as amended in the State of Maharashtra was not issued to the respective petitioners but the notice was issued to the warehouse owners. Section 6A after amendment in Maharashtra State reads as under: "6A: Confiscation of seized commodities. 6. On perusal of record and proceedings of the present cases, it is found that notice under Section 6A of the Act as amended in the State of Maharashtra was not issued to the respective petitioners but the notice was issued to the warehouse owners. Section 6A after amendment in Maharashtra State reads as under: "6A: Confiscation of seized commodities. (I) Where any essential commodity is seized in pursuance of an order made under section 3 in relation thereto, a report to that effect shall, without any unreasonable delay, be sent to the Collector within whose jurisdiction the seizure is made, and the Collector may, if he thinks it expedient so to so, inspect or cause to be inspected such essential commodity, and whether or not a prosecution is instituted for the contravention of such order, the Collector, if satisfied that there has been contravention of the order, may order confiscation of- (a) the essential commodity so sized; (b) any package, covering or receptacle in which such essential commodity is found; and (c) any animal, vehicle, vessel or other conveyance used in carrying such essential commodity; Provided that without prejudice to any action that may be taken under any other provision of this Act, no food-grains or edible oilseeds seized in pursuance of an order made under section 3 in relation thereto from a producer shall, if the seized food-grains or edible oilseeds have been produced by him, be confiscated under this section; Provided further that where any animal, vehicle, vessel or other conveyance is used for the carriage of goods or passengers for hire, the owner of such anima, vehicle, vessel or other conveyance shall be given an option to pay in lieu of its confiscation a fine not exceeding the market price at the date of seizure of the essential commodity sought to be carried. (2) Where the Collector on receiving a report of seizure or on inspection of any essential commodity under sub-section (I) is of the opinion that such essential commodity is subject to speedy and natural decay or that it is otherwise expedient in the public interest so to do, he may order the same to be sold at the controlled price, if any, fixed under any law for the time being in force, or where no such, price is fixed, by auction: Provided that, in the case of food-grains where there is no controlled price, the Controller may order the food-grains seized to be sold through fair price shops at the price fixed by the Central Government or the State Government, as the case may be, for the sale of such food-grains to the public through these shops: Provided further that, whenever it is practicable so to do, having regard to the nature of the essential commodity he shall take and preserve sample of the same before its sale or auction. (3) Where any essential commodity is sold as aforesaid, the sale proceeds thereof, after deduction of the expenses of the sale or auction, as the case may be, shall- (a) where no order of confiscation is ultimately passed by the Collector; or (b) where an order passed on appeal under sub-clause (1) of Section 6-C so requires; or (c) in the case of a prosecution being instituted for the contravention of the order in respect of which an order of confiscation has been made under this section, where the person concerned is acquitted be paid to the owner thereof or the person from whom it is seized: Provided that, in the case of food-grains sold through fair price shops is accordance with the first proviso to sub-section (2), the owner shall be paid for the food-grains so sold the price fixed by the State Government, for retail sale of such food-grains through such shops, less all expenses of sale or auction under subsection (2)." Section 6B deals with issuance of show cause notice before confiscation of food-grains etc, which contemplates as under:- "6B: Issue of show cause notice before confiscation of food-grains, etc:- (1) No order confiscating any essential commodity, package, covering or receptacle, animal, vehicle, vessel or other conveyance shall be made under section 6A unless the owner of such essential commodity, package, covering, receptacle, animal, vehicle, vessel or other conveyance or the person from whom it is seized (a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the essential commodity package, covering or receptacle, animal, vehicle, vessel or other conveyance; (b) is given an opportunity of making a presentation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation; and (c) is given a reasonable opportunity of being heard in the matter. 2. 2. Without prejudice to the provisions of sub-section (1), no order confiscating any animal, vehicle, vessel or other conveyance shall be made under section 6A if the owner of the animal, vehicle, vessel or other conveyance proves to the satisfaction of the Collector that it was used in carrying the essential commodity without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the animal, vehicle, vessel or other conveyance and that each of them had taken all reasonable and necessary precautions against such use. 3. No order confiscating any essential commodity package, covering, receptacle, animal, vehicle, vessel or other conveyance shall be invalid merely by reason of any defect or irregularity in the notice, given under clause (a) of sub-section (1), if, in giving such notice, the provisions of that clause have been substantially complied with." Section 6C provides appeal. 7. Reading the provisions of Sections 6A and 6B, it is imperative in the light of Section 6-B(1)(a) that a notice in writing is to be given informing ground on which it is proposed to confiscate the essential commodity package, covering or receptacle, animal, vehicle, vessel or other conveyance. Section 6B (2) provides prior notice, in respect of conveyance for transportation. Section 6B contemplates reasonable opportunity of being heard to be given before making any order. However, even notice under Section 6B issued, does not refer the reasons for confiscation of food-grains and what made the authorities to have drastic action. 8. The requisitions contemplated under Section 6A are brazenly flouted by the respondent. It is pertinent that the petitioners were regularly filling "Form D", they were furnishing stock statement showing details of stocks which did not inform contravention of the provisions of Maharashtra Scheduled Commodities Wholesale Dealers Licensing Order, 1998. Rationing register issued by Rationing office "F" region was duly maintained. The stock in trade of the petitioners found in different warehouses, was not exceeding the licencing conditions. This is an admitted position. If it was not so, there was no reason for- the Controller, Rationing while passing order dated 1 0.9.2012 to hold that the food-grains were stocked or stored illegally for hoarding and creating scarcity of the goods. Section 6B (a) deals with grounds on which it is proposed to confiscate the essential commodity. However, notice dated 7th August, 2012 does not display such requirement. 9. Section 6B (a) deals with grounds on which it is proposed to confiscate the essential commodity. However, notice dated 7th August, 2012 does not display such requirement. 9. The requirement of 48 hours, if infringed, the Rules provide, before initiating action of confiscation under Section 6A, 68 of the Essential Commodities Act, the appropriate Government can consider the representation and pass order. Thus, it is not imperative in each and every case that as a result of non compliance in the scheduled time of 48 hours, the consequence of confiscation of the goods to follow as a matter of course. This is clearly .spelt out in the scheme of the Rules. The authorities had power to exercise its discretion diligently. The only infraction was not to communicate in 48 hours, again record shows, in few cases before the action of seizure, change of place was communicated. The order of the Controller Rationing apparently suffers for application of proper discretion. The authority is obliged to decide the matter impartially without any fear or favour, but the basic and fundamental rule has been kept in shelves in a haste of passing confiscation order. 10. The revision applicant Mahajan Traders had received two consignments of Basmati Rice through containers by Indian Railway from Rei Six Ten Retail Ltd., New Delhi, which were in the form of 25 kg. Sealed bags with having fix MRP. It was unload at Shree Ganesh Warehouse at Vashi, Navi Mumbai, under appropriate intimation to APMC and intimation was sent to the Rationing Authority on 23.7.2012. On 22.7.2012, it was Sunday. The department has accepted that such intimation was received on 23.7.2012. A show cause notice dated 7.8.2012, basically does not deal with this issue. The grounds of confiscation are not reflected in the show cause notice. Since there were no grounds in the show cause notice for confiscation, the order suffers from legal flaws. 11. The revision applicant had stored 467 quintal rice in godown. Whereas licence was required for more than 300 metric tons. The quantity was less than required in licence. The grounds of confiscation are not reflected in the show cause notice. Since there were no grounds in the show cause notice for confiscation, the order suffers from legal flaws. 11. The revision applicant had stored 467 quintal rice in godown. Whereas licence was required for more than 300 metric tons. The quantity was less than required in licence. The petitioners or the revision applicant even if apparently has committed lapse, however, considering the nature of lapse and omission it is not so serious which would warrant confiscation of the goods particularly when the Director, Rationing has not followed the required procedure under Sections 6A and 6B of the Essential Commodities Act, including Maharashtra Scheduled Commodities Wholesale Dealers Licencing Order, 1998. Since the required procedure is not followed, the action calls for interference. 12. It is pertinent to note, rice or pulses in huge quantity were inspected on 21.7.2012 and on 12.8.2012 the order of confiscation was passed. Virtually one year has lapsed in entire process. The food-grains are perishable, as to their quality. It will diminish its standard and could be infested with insects. It was expected to deal the matter expeditiously at all the levels. 13. It is well settled legal principle that more the power, the more due care and caution is to be exercised in invoking these powers. These principles are not hollow formalities but needs to be put in letter and spirit while encountering such a situation. The order has left a mischievous infirmity as no notice under the law was properly served minimal interest of justice should not be foreclose. Discriminating treatment as seen has the consequence of demoralising the applicants which could have to be averted. The action of confiscation calls for interference and it is set aside. However to safeguard the interest of respondent-department as the prosecution is pending against the petitioners and revision applicant, it will be in the interest of justice to direct them to furnish bond equivalent to prevailing price of the goods. Hence, the order:- The orders of confiscation are set aside. However, the goods seized viz. rice, pulses or commodities be released in favour of respective writ petitioners and revision applicant on their individually furnishing a bond as per then prevailing wholesale market value of the goods, to the satisfaction of the seizing authority/respondents. Order accordingly. Authenticated copy permitted. Ordered accordingly.