NCL Industries Limited, a Company v. Union of India
2022-08-02
KONGARA VIJAYA LAKSHMI
body2022
DigiLaw.ai
ORDER : i) WP No.5707 of 2015 – is filed to ‘declare the impugned panchanama dated 14.03.2014 drawn at 11.30 AM/12.10 PM by the 6th respondent, alleging violation/contravention of Section 8 and 25 of Legal Metrology Act, 2009 (for short ‘Act of 2009) by the petitioner while seizing the ‘Roto Packer’ filling machine under Section 15 of the Legal Metrology Act, 2009, as illegal and arbitrary’. ii) WP No.5717 of 2015 – is filed to ‘declare the impugned panchanama dated 14.03.2014 drawn at 12.30 PM by the 6th respondent, alleging violation/contravention of Section 8 and 25 of Legal Metrology Act, 2009 read with provisions of Legal Metrology (General) Rules, 2011 and A.P. Legal Metrology (Enforcement) Rules, 2011 by the petitioner while seizing and lifting away the four spouts Nos.3, 6, 9 and 12 of the ‘Roto Packer’ under Section 15 of the Legal Metrology Act, 2009, as illegal and arbitrary’. iii) WP No.5797 of 2015 – is filed to ‘declare the impugned panchanama dated 14.03.2014 drawn at 11.00 AM by the 6th respondent, alleging violation/contravention of Rule 19, 20 and 21 of the Legal Metrology (Packed Commodities) Rules, 2011 (for short ‘LM (PC) Rules of 2011’) read with Section 18 and 36(2) of the Legal Metrology Act, 2009 by the petitioner while seizing 32 cement bags under Section 15 of the Legal Metrology Act, 2009, as illegal and arbitrary’. 1. As the issues involved in all the three writ petitions are common i.e., about the panchanamas conducted by the 6th respondent on 14.03.2014 at different times on the same day in the premises of the petitioner-Company, with the consent of both the learned senior counsel for the petitioner and the learned Government Pleader, all the three writ petitions are being disposed of by this common order. 2. During the course of inspection on 14.03.2014, the 6th respondent has drawn three independent panchanamas i.e., (i) Panchanama drawn at 11.00 a.m., (ii) Panchanama drawn at 11.30 a.m./12.10 p.m. and (iii) Panchanama drawn at 12.30 p.m., though the said inspection was confined to the ‘Roto Packer’, which is a single transaction. 3.
2. During the course of inspection on 14.03.2014, the 6th respondent has drawn three independent panchanamas i.e., (i) Panchanama drawn at 11.00 a.m., (ii) Panchanama drawn at 11.30 a.m./12.10 p.m. and (iii) Panchanama drawn at 12.30 p.m., though the said inspection was confined to the ‘Roto Packer’, which is a single transaction. 3. As seen from the panchanama dated 14.03.2014 drawn at 11 a.m., which is impugned in WP No.5797 of 2015, the allegation is that two bags of cement out of 32 bags of cement were of ‘more than maximum permissible error’ as specified under Schedule-I of LM (PC) Rules of 2011 and that the petitioner has contravened Rules 19, 20 and 21 of the LM (PC) Rules of 2011 and Section 18 and 36(2) of the Act of 2009 and hence, 32 cement bags were seized under Section 15 of the Act of 2009. 4. The allegation in panchanama dated 14.03.2014 drawn at 11.30 AM/12.10 PM, which is impugned in WP No.5707 of 2015 is that there is variation in the weight of cement bag which is beyond the maximum permissible error and that roto packer machine which is used, is a nonstandard one and using the same is an offence under Sections 8 and 25 of the Act and hence, the roto packer was seized under Section 15 of the Act of 2009 and as it is not detachable, petitioner-company was directed not to use the same. 5. The allegation in third panchanama dated 14.03.2014 drawn at 12.30 PM which is impugned in WP No.5717 of 2015, is that as per verification certificate, the roto packer make is EEL India Limited, having 12 spouts and it is noticed that four spouts were made by ENEXCO Limited Technologies India, which is contrary to the verification certificate, and that the petitioner has changed spouts of EEL and fitted ENEXCO and hence, the said four spouts were seized under Section 15 of the Act and a case was registered against the petitioner. 6.
6. Brief facts in all the three writ petitions are that - i) Petitioner is a Company, engaged in the business of manufacture and sale of cement; at the time of establishment of the cement factory, petitioner placed an order for supply of one Automatic Gravimetric Filling Machine, herein after referred to as ‘Roto Packer’ with 12 spouts but only eight spouts were supplied in the year 2007; as only 8 spouts were supplied, petitioner has placed an order for supply of 4 more spouts and they were supplied in the year 2009 and they were verified and a verification certificate was also issued; the said models of Roto Packers were approved models and certified by the 4th respondent and he has been periodically inspecting the factory and after inspection, is issuing verification certificates. ii) While so, the 6th respondent, in exercise of his powers as ‘Flying Squad’, visited the factory premises on 14.03.2014 claiming to be the ‘District Inspector, Flying Squad’, Hyderabad, of the erstwhile united State of Andhra Pradesh and after bifurcation of the State, petitioner learnt that he has been allotted to the State of Telangana and has been working under the control of the 5th respondent; there is no concept of ‘Flying Squad’ under the Act and hence any action taken by the Flying Squad is without jurisdiction. iii) 32 cement bags of 50 kgs each were seized by the 6th respondent and directed the petitioner not to sell or distribute cement bags of that particular batch until further orders. Roto Packer was also seized but as the same was not detachable, they instructed not to use the same till the disposal of the case. iv) As per the contents of the panchnamas, two cement bags were containing net weight of 49.21 kg and 49.48 kg instead of 50 kgs and the variation in weight is ‘beyond maximum permissible error’ and hence petitioner has contravened Rule 20, 21 of the LM (PC) Rules of 2011 read with Section 18 and 36(2) of the Act of 2009. No show cause notice was issued to the petitioner, even after one year from the date of seizure and no prosecution was initiated. v) The 5th respondent picked up the cement bags contrary to the procedure stipulated under V Schedule of the LM (PC) Rules of 2011.
No show cause notice was issued to the petitioner, even after one year from the date of seizure and no prosecution was initiated. v) The 5th respondent picked up the cement bags contrary to the procedure stipulated under V Schedule of the LM (PC) Rules of 2011. vi) The data sheets in Form-A & Form-B, as prescribed under Schedule VII of the LM (PC) Rules of 2011, should be accompanied by ‘result sheet common to forms A & B’, but the said purported data sheets drawn by the 6th respondent were not admittedly followed by the ‘Result sheet common to Forms A & B’. Hence, the exercise done by the 6th respondent is not in accordance with the statutory/mandatory procedure prescribed under the Rules. vii) In the impugned panchnamas, it was stated that petitioner has violated the Rules 19 and 20 of the LM (PC) Rules of 2011, but the provisions of Rules 19 and 20 are supposed to be followed by the 6th respondent and hence, it cannot be said that the petitioner has violated the said Rules. It is also alleged that Rule 21 of LM (PC) Rules of 2011 was not followed by the petitioner, but the said Rule is applicable only to a wholesale dealer or a retail dealer. viii) Even as per the Data Sheets furnished by the 6th respondent, the purported deficiency of net weight of the bags was within the permissible limits and hence, there is no violation of the said section; 6th the respondent has invoked the powers under section 15 of the Act and seized 32 bags, but the said provision is not attracted, as the petitioner was not indulged or involved in any trade or commerce at the manufacturing unit and as the petitioner was using the filling machine i.e., Roto Packer in its manufacturing process. ix) Admittedly only two cement bags were allegedly found to be below the prescribed net quantity i.e., 50 kgs, which is permissible in terms of the ‘Result Sheet’. Hence, the writ petitions. 7.
ix) Admittedly only two cement bags were allegedly found to be below the prescribed net quantity i.e., 50 kgs, which is permissible in terms of the ‘Result Sheet’. Hence, the writ petitions. 7. Counter-affidavit is filed by the 5th respondent-Controller, Legal Metrology, State of Telangana, denying the contents of the affidavit filed in support of the writ petition, stating inter-alia that the procedure laid down under the Act of 2009 and the Rules of 2011 were followed and as per G.O.Ms.No.971, Industries & Commerce Department, dated 16.11.1976 read with CLM’s Proceedings dated 30.06.1987, the District Inspector, Legal Metrology, Flying Squad is having jurisdiction for the entire State of Andhra Pradesh and that the petitioner has got alternative remedy, for redressal of their grievance. 8. When the three writ petitions came up for admission on 08.07.2015, this Court granted interim direction to consider the representation of the petitioner dated 31.01.2015 keeping in view the provisions of the Legal Metrology Act and the Rules made thereunder and pass appropriate orders with regard to release of the cement bags and roto packer within one week from the date of receipt of a copy of the order. 9. Heard Sri C.R. Sridharan, learned senior counsel, on behalf of the petitioner in all the three writ petitions and the learned Government Pleader for Civil Supplies, appearing for respondents 2 to 4. Perused the record. 10. Though various grounds were raised in the writ petitions and elaborate arguments were advanced by both sides, the grounds which are relevant for the purpose of disposal of these writ petitions are only discussed and other grounds which are raised are left open to be decided in an appropriate case. 11. As seen from the impugned panchanama, the issue in two writ petitions is that the Roto Packer machine is not of standard quality and hence, there is a variation. As seen from the affidavit filed in support of the writ petition, at the time of establishment of the cement unit, petitioner has placed an order for supply of roto packer of 12 spouts of EEL India Limited, but they supplied only 8 spouts on 12.03.2007 and hence, another purchase order was placed on 27.12.2007 for supply of 4 spouts on ETIL and they were supplied on 11.08.2009. 12. The District Inspector, Legal Metrology, after checking all the 12 spouts, issued a certificate of verification on 12.11.2009.
12. The District Inspector, Legal Metrology, after checking all the 12 spouts, issued a certificate of verification on 12.11.2009. The roto packer manufactured by EEL was an approved model, under approval notification dated 01.06.1998. Similarly, roto packer of ETIL was also approved through notification dated 08.10.2004 by the Ministry of Consumer Affairs, Food and Public Distribution Department of Consumer Affairs, Weights and Measures Unit, New Delhi. This fact is not denied in the counter-affidavit. Copy of the said approvals and the copy of the verification certificate dated 12.01.2009 is also filed along with the writ petition. It is also the case of the petitioner that the District Inspector i.e., the 4th respondent has been periodically visiting, verifying and issuing the verification certificates from time to time and the said fact is not denied in the counter-affidavit. Copies of such verification certificates dated 12.01.2009, 11.11.2010, 10.11.2011, 21.11.2012, 17.11.2013 and 18.12.2014 were also filed along with the writ petition. These certificates were also not disputed in the counter-affidavit. The verification certificate is valid for one year. Hence, the certificate of 17.11.2013 is valid till 17.01.2014. Inspection was on 14.03.2014. If at all there is any issue with regard to the make of four spouts, the respondents ought to have pointed out the same in the year 2009 itself when the same were installed. As seen from the counter-affidavit, no complaint is there prior to the inspection, with regard to the make of the said four spouts and on the other hand, they were issuing verification certificates from time to time after due inspection. Now suddenly, the respondents have pointed out through the impugned panchanama, after a lapse of five years, stating that the said spouts are non standard ones and using the same resulted in variation. 13. Another allegation against the petitioner is that there is variation in the weight of two cement bags which is beyond ‘maximum permissible error’ under the Act and the Rules. As seen from the record, 32 cement bags were checked, which were loaded inside the lorry bearing No. AP 16 TW 5388 by taking the samples from the loaded lorry and found that all 32 cement bags complied with the provision of law. Another sample of 32 bags were drawn but the statistical average of 50 kgs cement bag is 50.31 kgs, that means, the statistical average of 32 cement bags has been satisfied.
Another sample of 32 bags were drawn but the statistical average of 50 kgs cement bag is 50.31 kgs, that means, the statistical average of 32 cement bags has been satisfied. According to the petitioner in cement bag maximum permissible error is 1%. For 50 kg bag it is 500 grams. Out of 32 cement bags, one bag showed 49.21 kg and another bag showed 49.48 kg. According to the petitioner, as the statistical average is satisfied and two bags falling short of maximum permissible error has to be overlooked. Admittedly, sample was not lifted from total 4000 bags by following the procedure. Apart from that in one bag, there is shortage of 290 grams and in another bag 20 gram in excess of maximum permissible error. As seen from the above figures, the discrepancy is negligible. Further, the District Inspector, Legal Metrology, Vijayawada has been periodically visiting the factory premises and issuing verification certificates from time to time with regard to roto packer. 14. It is also alleged that Rule 21 of the LM (PC) Rules, 2011 was not followed by the petitioner. Rule 21 of the Rules, reads as under : “21. Inspection of quantity and error in packages at the premises of the wholesale dealer or retail dealer – (1) Ordinarily, any test in relation to the net quantity contained in a package shall not be carried out at the premises of the retail dealer or the wholesale dealer, unless- (i) A complaint is received by the Director or the Controller or any Legal Metrology Officer to the effect that the package sold or delivered to the complainant does not contain the quantity declared on such package or on the label affixed thereto; (ii) The Director or the Controller or any Legal Metrology Officer has reason to suspect that any package has been tampered with or that there has been any pilferage or leakage of the commodity contained in the packages, (iii) The Director or the Controller or any Legal Metrology Officer and any package, or any label affixed thereto, does not bear thereon all or any of the declarations which are required to be made under these rules.
(2) Where any test is carried out in pursuance of the provisions of sub-rule (1), the Director, Controller or any Legal Metrology Officer shall verify whether the quantity contained in the package corresponds to the quantity declared on such packages or any label affixed thereto and where quantity contained in package is less than the declared quantity, whether the deficiency is more than the maximum permissible error in relation to that commodity. (3) Where the Director, Controller or any Legal Metrology Officer finds on a test carried out under this rule that the error in deficiency in any package kept or stored for sale, distribution or delivery at the premises of the retail or wholesale dealer is more than the maximum permissible error in relation to that commodity, he shall seize such package and take appropriate action against the retail dealer or the wholesale dealer, as the case may be, in accordance with the provisions of the Act: Provided that where the package bears the legend 'when packed', no punitive action shall be taken against the retail dealer or wholesale dealer if the Director, Controller or any Legal Metrology Officer is satisfied after necessary test that the deficiency in the net quantity contained in package is due to environmental conditions. (4) Where as a result of any test made under this rule, it is found that the net quantity contained in the package conforms to the declared quantity or where there is a deficiency, such deficiency is not more than the maximum permissible error, the retail dealer shall be at liberty to sell or deliver or distribute such commodity at the price determined on the basis of the quantity found on such tests. (5) Where, as a result of any test made under this rule, it is found that any package, or any label affixed thereto, does not bear thereon all or any of the declarations required to be made under these rules, it shall be lawful for the Director, Controller or any Legal Metrology Officer to make such enquiries as to the source from which such package was received by the e whole sale dealer or the retail dealer as the case may be, as he may think fit.” 15. As seen from the above rule, it applies to the wholesale dealer or retail dealer and it does not apply to the petitioner-company. 16.
As seen from the above rule, it applies to the wholesale dealer or retail dealer and it does not apply to the petitioner-company. 16. Learned senior counsel took a plea that the Act of 2009 does not apply to the case of the petitioner at all and that the said Act of 2009 is enacted only to regulate trade and commerce in weights and measures. 17. The object of the Act of 2009, reads as follows: “An Act to establish and enforce standards of weights and measures, regulate trade and commerce in weights, measures and other goods which are sold or distributed by weight, measure or number and for matters connected therewith or incidental thereto.” 18. As seen from the said object and the provisions of the Act, it also regulates trade and commerce of other goods which are sold or distributed by weight, measure or number and the matters connected thereto. Hence, it cannot be said that the Act is only to regulate trade and commerce in weights and measures. 19. Section 15 of the Act deals with the power of inspection, seizure etc. According to Section 15(1), The Director, Controller or any legal metrology officer may, if he has any reason to believe, whether from any information given to him by any person and taken down in writing or from personal knowledge or otherwise, that any weight or measure or other goods in relation to which any trade and commerce has taken place or is intended to take place and in respect of which an offence punishable under this Act appears to have been, or is likely to be, committed are either kept or concealed in any premises or are in the course of transportation, enter at any reasonable time into any such premises and search for and inspect any weight, measure or other goods in relation to which trade and commerce has taken place. 20. But the counter-affidavit does not show that the Officer had reason to conduct inspection and seizure. 21. One of the allegation against the petitioner is that he has violated section 25 of the Act.
20. But the counter-affidavit does not show that the Officer had reason to conduct inspection and seizure. 21. One of the allegation against the petitioner is that he has violated section 25 of the Act. As seen from the said section, if any person uses or keeps for use any weight or measure or makes use of any numeration otherwise than in accordance with the standards of weight or measure or the standard of numeration, as the case may be, specified by or under this Act, shall be punished with fine which may extend to twenty-five thousand rupees and for the second or subsequent offence, with imprisonment for a term which may extend to six months and also with fine. It is not alleged that it is second offence. As seen from the pleadings, prosecution is not initiated against the petitioner and complaints which were filed were also returned long back. 22. When WP No.5797 of 2015 came up for admission on 08.07.2015, learned Government Pleader based on the written instructions submitted that notice was issued to the petitioner on 18.03.2014, stating that the offences were compoundable and if the petitioner wants to compound the same, fees may be paid through demand drafts within five days. 23. In view of the said notice, the 4th respondent was directed to consider the representation of the petitioner keeping in view of the provisions of the Act and the Rules and to pass appropriate orders to release the cement bags within one week. 24. Rule 19 of the LM (PC) Rules 2011, deals with the inspection of quantity and error in packages at the premises of the manufacture or packer. According to the said rule, samples have to be drawn from lot of packages, in such manner and in such number as are specified in the V Schedule. V schedule to the Rules deals with the manner of selection of sample packages. According to the said schedule, the sample has to be selected at random in accordance with the manner specified in paragraphs 3 and 4. Paragraphs 3 and 4 of the V Schedule reads as follows: “3.
V schedule to the Rules deals with the manner of selection of sample packages. According to the said schedule, the sample has to be selected at random in accordance with the manner specified in paragraphs 3 and 4. Paragraphs 3 and 4 of the V Schedule reads as follows: “3. Where, for the determination of the net quantity of any commodity contained in a package it is necessary to take samples of packages stored by the manufacture or packer in a ware house, go-down or at any other place, the sample shall be selected at random, from ever lot of packages and shall be picked out from the top, bottom, center, right, left, front and rear of the stocks so that the samples may adequately represent the packages in the lot. 4. Where, for the determination of the net quantity of any commodity contained in a package it is necessary to take samples form the place where the package is being filled such samples shall be selected from among the package which have already been filled, or in the alternatively, the requisite number of empty containers may be taken over and each of them shall be adequately marked for proper identification and the tare weight of each container shall be accurately noted and thereafter the marked containers shall be introduced at random in the packing process so that, after the packages are filled in may be possible to determine the net quantity.” 25. Admittedly, samples were not drawn in accordance with the said procedure and the panchanama does not say that the samples were drawn in accordance with the said procedure. 26. According to the panchanama, there is an error in deficiency exceeding maximum permissible limit, but in the panchanama, it is no where stated as to, what is the maximum permissible limit. The wastage is also not taken into consideration. 27. Schedule VII of LM (PC) Rules deals with Forms A and B and result sheet common to Form A and B, which needs to be filled up by the checking officer, but the data sheets drawn by the 6th respondent were not admittedly followed by “result sheet common to Forms A and B”, which shows that mandatory procedure contemplated under law was not followed. 28. It is alleged in the panchanama that Rules 19 and 20 of LM (PC) Rules of 2011 were violated by the petitioner.
28. It is alleged in the panchanama that Rules 19 and 20 of LM (PC) Rules of 2011 were violated by the petitioner. Rule 19 of the said Rules deals with the procedure that has to be followed at the time of inspection. Title of the said rules is “Inspection of quantity and error in packages at the premises of the manufacturer or packer”. 29. Rule 20 of LM (PC) Rules of 2011 deals with action to be taken on completion of inspection of packages at the premises of the manufacturer or the packer, which shows that the said rules deal with the procedure that has to be followed by the inspection officers and hence, it cannot be said that the petitioner has violated Rules 19 and 20 of LC (PC) Rules of 2011. 30. Even though it is alleged that A.P. Legal Metrology l(Enforcement) Rules, 2011 and Legal Metrology (General) Rules, 2011 were violated, it is not specifically stated as to which rule is violated. 31. Rule 22 of the LM (PC) Rules, 2011, deals with the procedure for establishment of maximum permissible error on package. 32. As seen from the said Rule, while establishing the maximum permissible error in relation to the net quantity of commodities contained in packages, due account shall be taken of the following causes which may lead to variation in quantity, namely, (a) Variations caused by unavoidable deviation in weighing, measuring or counting the contents of individual packages that may occur in good packaging practice; (b) variations caused by the ordinary and customary exposure to conditions, such as, climate, transport, storage or the like that normally occur in good distribution practice after the commodity is introduced in trade or commerce; and (c) Variations due to the nature of packaging material or container. But the panchanama does not show that the rule has been violated. 33. But deficiency/short fall on account of the above reasons was not taken into consideration at all, even according to the panchanama. If the manner of doing a particular act is prescribed by any statute, the act must be done in that manner or not at all. The said principle is traceable to the decision in ‘Taylor v. Taylor, (1875) 1 Ch D 426. The same was subsequently followed by Lord Roche in ‘Nazir Ahmad v. King Emperor, (1936) 63 IA 372’.
If the manner of doing a particular act is prescribed by any statute, the act must be done in that manner or not at all. The said principle is traceable to the decision in ‘Taylor v. Taylor, (1875) 1 Ch D 426. The same was subsequently followed by Lord Roche in ‘Nazir Ahmad v. King Emperor, (1936) 63 IA 372’. In the present case, the procedure prescribed is not followed at all. 34. In view of the facts and circumstances and in the light of the above discussion, the three impugned panchanamas dated 14.03.2014 drawn at 11.30 AM/12.10 PM, at 12.30 PM and 11.00 AM are set aside and the writ petitions are, accordingly, allowed. No order as to costs. Miscellaneous petitions if any pending in these writ petitions shall stand closed.