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2024 DIGILAW 722 (AP)

Yenugula Subba Rao v. State of A. P.

2024-06-28

VENKATESWARLU NIMMAGADDA

body2024
ORDER : (Venkateswarlu Nimmagadda, J.) : 1. This writ petition is filed claiming the following relief : “…To issue Writ of Certiorari calling for the records from the file of the Court of the Sessions Judge, Krishna Division, Machilipatnam relating to the judgment dated 22.03.2018 made in E.C.Appeal No.157/2017 and quash the same to the extent of confirming the order of the Collector (CS), Krishna, Machilipatnam, the 2nd Respondent herein passed in E.C.P.No.287/2013, dated 07.03.2017 by declaring it as illegal, arbitrary and violative of the provisions of the Essential Commodities Act, 1955 and the orders mader there under and also set aside the order in E.C.P.No.287/2013, dated 07.03.2017 of the 2nd Respondent and to pass such order or orders...” 2. The case of the petitioners is as follows: 3. The 1st petitioner herein was engaged in doing business in rice both wholesale and retail. While so, he got an order from Sri Kalyan Chakravarthi Rice Mill, Ethakota, East Godavari District for supply of 170.00 Qtls of fine variety of raw rice. Accordingly, the 1st petitioner engaged the lorry bearing No. AP 27 W 6288 belongs to the 2nd petitioner to transport 170.00 Qtls of rice and got loaded 340 bags each weighing 50 kgs on 15.10.2013 in the said lorry covered by bill and way bill. While the lorry was proceeding to its destination it was intercepted at Ramavarappadu Village, Vijayawada Rural Mandal by the Regional Vigilance and Enforcement Officials, Vijayawada, Krishna District and the Respondent No.3 herein. Though the driver of the lorry produced the bill and way bill and informed that the rice in the lorry is fine variety of raw rice and the same is being transported to Ethakota village, the inspecting officials did not look into the records produced by the driver and seized the lorry and stock illegally under the cover of Panchanama which was prepared with concocted allegations that the rice in the lorry is PDS rice, that the petitioners and others indulged in clandestine business of purchasing and selling the PDS rice and booked a case U/s.6-A of the Essential Commodities Act, 1955 (for short “the EC Act, 1955”)and submitted a report to the Respondent No.2. 4. Then the petitioners filed petitions before the Respondent No.2 for interim release of the stock as well as the lorry. 4. Then the petitioners filed petitions before the Respondent No.2 for interim release of the stock as well as the lorry. But, the Respondent No.2 ordered to release the lorry on furnishing bank guarantee of Rs.2,00,000/- and directed the Respondent No.3 to sell the seized stock by conducting public auction and remit the sale proceeds under Revenue Deposits. Accordingly, the 2nd petitioner herein furnished the bank guarantee and got the lorry released whereas the stock is concerned the 3rd Respondent conducted public auction and kept the sale proceeds i.e., an amount of Rs.2,93,250/- in Revenue Deposits. Thereafter, the Respondent No.2 issued a notice, dated 26.07.2014, U/s.6-B of the EC Act, 1955. In pursuance of the same, the petitioners submitted their detailed explanation stating that the rice in the lorry is not PDS rice and they have not contravened any of the provisions of Control Orders and particularly clause 17(A) of the A.P. State Public Distribution System (Control) Order, 2008 (for short “the Control Order, 2008”)and that the petitioners have not contravened clause 2 (K) (4), 3 of A.P. Scheduled Commodities Dealers (Licensing, Storage and Regulation) Order, 2008 (for short “the Licensing Order, 2008”) as a licensed dealer. 5. Unfortunately, the Respondent No.2, without there being any evidence seized the PDS rice and without considering the explanation in proper perspective and ignoring the documentary evidence such as the copy of Challan No.20052739, dated 12.02.2013 of Sub-Treasury Office, Narasaraopet evidencing the payment of fees for obtaining the whole sale and retail license and the bill and way bill relating to the transaction, came to a wrong conclusion that the petitioners have interrupted in the smooth functioning of Public Distribution System duly violating clause 17(A) of the Control Order, 2008 and passed the order in E.C.P.No.287/2013, dated 07.03.2017 confiscating 100% value of the seized stocks and levying an amount of Rs.2,00,000/- as penalty on the 2nd petitioner. 6. Aggrieved by the above said order the petitioners filed an E.C. Appeal No.157/2017, U/s.6-C of the EC Act on the file of the Court of the Sessions Judge, Krishna Division, Machilipatnam. 6. Aggrieved by the above said order the petitioners filed an E.C. Appeal No.157/2017, U/s.6-C of the EC Act on the file of the Court of the Sessions Judge, Krishna Division, Machilipatnam. Though, the petitioners specifically contended before the learned Sessions Judge that the rice seized is not a PDS rice and there is nothing before the Respondent No.2 to come to a conclusion that it is PDS rice and the same is not liable either for seizure or confiscation, the learned Sessions Judge on an erroneous view of law and facts dismissed the appeal by an order dated 22.03.2018, confirming the order of the Respondent No.2 by reducing the percentage of confiscation from 100% to 50% of the seized stock and imposition of penalty on the 2nd petitioner herein from Rs.2,00,000/- to Rs.1,00,000/-. 7. Learned Government Pleader for Civil Supplies filed counter affidavit on behalf of Respondent No.2/the Collector (CS), NTR District, Vijayawada, wherein it is stated that the Collector (CS), Krishna passed final orders in E.C.P No. 287/2013, dated 07.03.2017 for confiscation 100% value of the seized stock to the Government and similarly Rs.2,00,000/- is levied as penalty on the owner of the vehicle (R5) for allowing his lorry for illegal transportation of rice without valid documents. 8. It is further stated that the petitioner didn't have valid license to do the business under the Licensing Order, 2008 as he himself admitted that he didn't obtained license from the District Supply officer, Guntur and if the person having such license shall not indulge in clandestine business involving in black marketing of PDS Rice meant for public distribution for his pecuniary gains. 9. It is submitted that, the contention of the petitioner not at all correct as the Vigilance and Enforcement official have received a credible information on 16.10.2013 at about 10.00 AM that about 170 Qtls of PDS rice meant for public distribution is diverting in a vehicle bearing No.AP 27W 6288 from Kadapa District to Kakinada via Vijayawada. 9. It is submitted that, the contention of the petitioner not at all correct as the Vigilance and Enforcement official have received a credible information on 16.10.2013 at about 10.00 AM that about 170 Qtls of PDS rice meant for public distribution is diverting in a vehicle bearing No.AP 27W 6288 from Kadapa District to Kakinada via Vijayawada. On receipt of the information, the Spl.Deputy Tahsildar, (PDS), Vijayawada Rural and Vigilance and Enforcement officials have intercepted the vehicle at Ramavarappadu Village and enquired one Sri.Nereddula Narasimha S/o. China Narasimha Rao, aged 25 years, driver, resident of E.Ramapuram Village & Mandal Kadapa District, Sri.Ganta Babu S/o.Nagaiah, aged 29 years, lorry cleaner, resident of Yarrasala village of Porumamilla Mandal Kadapa district in the presence of mediators in which they have revealed that their lorry owner Sri. K,Ramanayya, resident of Kammavaripalem (V) Gangasamudram Mandal used to transport PDS Rice pertaining to Sri. Darsi Sudheer Babu S/o. Subrahmanyam resident of D.No.3-24, Main Bazar, Porumamilla Village and Mandal. Accordingly, on 14.10.2013 at 10.00 pm the said Darsi Sudheer Babu has loaded PDS Rice without any weigh bills and instructed the driver to deliver the same at Kakinada. They have started the lorry from the owner's house situated at Porumamilla Village of YSR Kadapa District and while they were going to Kakinada the inspecting Officials intercepted the vehicle at Ramavarappadu village and seized the stock and lorry as was established that PDS rice was diverting into black market by violating the clause 17 (A) of the Control Order, 2008 and filed 6-A case under E.C. Act before the Joint Collector, Krishna. 10. Learned counsel for the petitioners submits that the Court below committed a grave error accepting the rice claimed by the Respondents without considering the explanation of the petitioner claiming that the subject rice is a fine quality rice but not the PDS rice. He further submits that while confirming the orders of the Respondent No.2 holding that petitioners does not have required License as per the clause 2(K)(4), 3 of the Licensing Order, 2008 is contrary to the evidence submitted by the petitioner regarding Challan paid seeking license under the Licensing Order, 2008 and also contrary to the clause 3(i) of the Licensing Order, 2008. 11. 11. Learned counsel for the petitioners further submits that the Court below ought to have been observed that the Respondents herein being a prosecution shall prove by obtaining lab analysis report or furnishing evidence to prove that subject rice is PDS rice. But, erroneously the Court below shifting the burden upon the petitioner herein / appellant therein is contrary to the settled proposition of law. The Court below also failed to look into the explanation offered by the petitioner even if it held the petitioners purchased PDS rice from the card holders is not an offence under Clause 17(A) of the Control Order, 2008. The impugned orders of the Court below are liable to be set-aside. 12. Learned counsel for the petitioners further submits that the learned Sessions judge failed to consider the 1st proviso to the Clause (3) of the Licensing Order, 2008, even though it was explained by way of explanation by the petitioner herein. He further submits that the impugned order of Court below as well as the Respondent No.2 are liable to be set-aside since they failed to consider the fact that introduction of system of Custom Milling Rice by the Government. The Government is not collecting any levy since 2013-2014. Therefore, the provisions under Clause 7(a)(1) of the A.P. Rice Procurement (Levy) Order, 1984 have no application to the case on hand. He further submits that the order of the Court below as well as Respondent No.2 is contrary to the established principles of law in the absence of any evidence to prove that the petitioner procured the PDS rice from any authorized fair price shop dealer within the State. On the other hand, admitting that the petitioner procured the same from the card holders. Therefore, the Clause 17(A) of the Control Order, 2008 is not at all applicable and it is not an offence. As such, the impugned orders of the Court below as well as Respondent no.2 are liable to be set aside. 13. Learned Government Pleader for Civil Supplies submits that the petitioner did not have any valid license to do the business under the provisions of the Licensing Order, 2008 and the petitioner himself admitted that he did not obtain any license from the District Supply Officer, Guntur. 13. Learned Government Pleader for Civil Supplies submits that the petitioner did not have any valid license to do the business under the provisions of the Licensing Order, 2008 and the petitioner himself admitted that he did not obtain any license from the District Supply Officer, Guntur. He further submits that as per the statement of the lorry driver as well as the cleaner at the time of inspection on 17.10.2013 they categorically admitted that the subject rice is PDS rice purchased from card holders and loaded as per the instructions of the one Sri Darsi Sudheer Babu, R/o. Main Bazar, Porumamilla Village and Mandal, Kadapa district and to deliver the same at Kakinada which conclusively proves that the subject rice is PDS rice which is an offence under Clause 17(A) of the Control Order, 2008. 14. Learned Government Pleader for Civil Supplies further submits that the Court below rightly held after having gone through entire record and statements of the driver and cleaner that the subject rice is PDS rice and petitioner is contravened the Section 17(A) of the Control Order, 2008 and Clause 2 (K) (4) and 3 of the Licensing Order, 2008 and also rightly modified the orders of Respondent No.2. Therefore, the orders of the Court below does not warrants any interference of the Court. 15. Heard the learned counsel for the petitioners, learned Government Pleader for Civil Supplies and perused the material placed on record. 16. Having gone through the order of the Court below dated 22.03.2018 wherein the court below categorically held that the petitioner herein contravened Clause 17(A) of the Control Order, 2008 and Clause 2 (K)(4) and 3 of the Licensing Order, 2008 is contrary to the admitted facts before the Court as per the admission by the Respondents pursuant to the statement of the Driver and Cleaner that the subject rice is PDS rice procured from the card holders but not from the authorized fair price shop dealer. Clause 17 (A) of the Control Order, 2008 is an offence once any person interrupted the supply of PDS rice from FCI to fair price dealer. Any interruption thereafter in respect of PDS rice is not an offence as per the above said Clause. 17. Admittedly, the subject PDS rice is procured from card holders, even as per the counter affidavit of the Respondents filed in the writ petition. Any interruption thereafter in respect of PDS rice is not an offence as per the above said Clause. 17. Admittedly, the subject PDS rice is procured from card holders, even as per the counter affidavit of the Respondents filed in the writ petition. Therefore, the procurement of PDS rice from card holder is not an offence as per clause 17(A) of the Control Order, 2008 as held by the Division bench of the Telangana and Andhra Pradesh High Court in Maimuna Begum vs. the State of Telangana and others, 2016(2) Andh LD (Criminal) 684, wherein it is held as under: 11. A careful reading of the above re-produced Clause shows that the same is attracted if a fair price shop dealer or cardholder or any person causes interruption or interferes with the smooth distribution of scheduled commodities under the public distribution system or other Government schemes at any level right from the Food Corporation of India godown to the fair price shop point, till the scheduled commodity reaches the intended beneficiary. From the unequivocal plain language of this provision, it is clear that it gets attracted when there is interruption of food grains from the stage of FCI godown till it reaches the end beneficiary i.e., cardholders. The provision does not comprehend any activity relating to any commodity falling under the Control Order, 2008 once it reaches the cardholder. There is no whisper either in the detention order or in the grounds of detention that any of the detenus is interrupting the smooth functioning of the scheduled commodities from the FCI godown point till it reaches intended beneficiary. On the contrary, the whole allegation against the detenus is that they have been purchasing the PDS rice from the cardholders. Therefore, this activity of the detenus completely falls outside Clause 17(A) of the Control Order, 2008. Once there is no prohibition on such activity either under the 1995 Act or under the Control Order, 2008 which undisputedly is the only Order that governs distribution and control of rice meant for public distribution system, the detenus cannot be accused of committing any offence. As the respondents failed to show that the detenus have contravened the provisions of any other Control Order framed under Section 3 of the 1995 Act, the alleged activities of the detenus are not liable for any penal action. As the respondents failed to show that the detenus have contravened the provisions of any other Control Order framed under Section 3 of the 1995 Act, the alleged activities of the detenus are not liable for any penal action. Once their activities do not constitute an offence under law, their preventive detention under the provisions of the 1980 Act cannot be sustained. 18. The Court below rightly held and confirming the orders of Respondent No.2 in respect of contravention of Clause 2(K)(4) and 3 of the Licensing Order, 2008, since the petitioner not furnished any evidence to show that he obtained grains license as required. It is further observed he filed a Challan dated 12.02.2013 said to have been paid for obtaining wholesale and retail license as contemplated under Clause 2 (K)(4) and 3 of the Licensing Order, 2008 was not found on his explanation submitted before the Court below. But, the same was pleaded and filed in the writ petition only. 19. Therefore, the contention of the petitioner obtained license as required under Clause 2 (K)(4) and 3 of the Licensing Order, 2008 is not substantiated by way of conclusive evidence except Challan dated 12.02.2013. On the other hand, the Respondents categorically stated that at the time of inspection, the petitioner did not obtain any food grain license as required under the Control Order, 2008. 20. The other contention of the learned counsel for the petitioner is that in view of non-application of Clause 7(a)(1) of the A.P. Rice Procurement (Levy) Order, 1984, the confiscation of subject rice as PDS rice under Section 6(A) of the EC Act, 1955 is contrary to the law and liable to be released is not valid, for the reason, the petitioner does not have valid license to deal with the business of the subject rice whether it is a PDS rice or a fine qualified rice as claimed by the petitioner. Therefore, dealing with the subject rice by the petitioner is contrary to the Clause 2 (K)(4) and 3 of the Licensing Order, 2008. 21. In view of the foregoing discussion, the order of the Court below as well as Respondent No.2 are in violation of provisions of the E.C Act, 1955 and in view of the judgment rendered by the Telangana and Andhra Pradesh High Court as stated supra. 22. 21. In view of the foregoing discussion, the order of the Court below as well as Respondent No.2 are in violation of provisions of the E.C Act, 1955 and in view of the judgment rendered by the Telangana and Andhra Pradesh High Court as stated supra. 22. Accordingly, the writ petition is allowed-in-part confirming the imposition of penalty against the petitioner and directing the Respondents to return the entire amount deposited in Revenue account out of sale of the seized stock in favour of the petitioner within a reasonable time much less than a period of three months from the date of receipt of a copy of this order. There shall be no order as to costs. 23. Consequently, Miscellaneous Petitions, if any, pending in the writ petition shall also stand closed.