Chappidi Srinivasa Rao, vs The State Of Andhra Pradesh,
2021 Latest Caselaw 640 AP

Citation : 2021 Latest Caselaw 640 AP
Judgement Date : 5 February, 2021

Andhra Pradesh High Court - Amravati

Chappidi Srinivasa Rao, vs The State Of Andhra Pradesh, on 5 February, 2021

Bench: Kongara Vijaya Lakshmi

           HON'BLE SMT. JUSTICE KONGARA VIJAYA LAKSHMI

                    WRIT PETITION No.1122 of 2021

ORDER:

This writ petition is filed 'to declare the action of the 2nd

respondent in passing orders dated 31.12.2020, contrary to the proviso

to sub-section (1)(c) of Section 6-A of the Essential Commodities Act,

1955 (for short 'the Act, 1955'), as illegal and arbitrary'.

Case of the petitioner is that, he is the owner of the mini lorry

bearing No.AP 21 Y 2694 and doing transport business; on 26.08.2020 the

said lorry was intercepted on the allegation that the lorry is carrying

public distribution rice; Cr.No.393 of 2020 was registered under E.C. Act

of 1955; the driver of the petitioner do not have knowledge about the

nature of the rice; subject vehicle was handed over to the 4th

respondent for safe custody; petitioner filed an application before the

2nd respondent seeking release of the subject vehicle and the 2nd

respondent passed an order dated 31.12.2020 directing the petitioner to

produce bank guarantee for an amount of Rs.7,00,000/- from any

nationalized bank pending finalization of the 6-A proceedings for interim

release of the vehicle; in the said order, it is stated that the market

value of the seized stock from the lorry in the open market is

Rs.61,500/- and the value of the subject vehicle as Rs.5,00,000/- but

the respondent has sought bank guarantee for Rs.7,00,000/- for release

of the vehicle.

Learned counsel for the petitioner submits that as per the second

proviso to sub-section (1)(c) of Section 6-A of the Act, 1955, the value of

the stock has to be taken into account and not the value of the vehicle

for interim release of the vehicle. In support of his contention, he relied

upon a decision in 'G.Subbarama Naidu vs. the Joint Collector, Chittoor1,

wherein, the Division Bench of this Court held that the vehicle should be

released if the owner is prepared to furnish security equivalent to the

value of the seized essential commodity.

Section 6-A of the Act, 1955, deals with confiscation of essential

commodity. Second proviso to 6-A(1) reads as follows:

"Provided further that in the case of any animal, vehicle, vessel or other conveyance used for the carriage of goods or passengers for hire, the owner of such animal, 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 by such animal, vehicle, vessel or other conveyance."

As seen from the above proviso, the owner of the vehicle 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 by such vehicle, which means that in lieu of

confiscation of the vehicle, the owner of the vehicle will be given an

option to pay fine not exceeding the market price of the vehicle at the

date of seizure of the essential commodity. The market price as on the

date of seizure of the essential commodity is that of the vehicle and not

that of seized commodity.

Today, when the matter came up for hearing, learned

Government Pleader for Civil Supplies placed reliance on the subsequent

judgment rendered by the Hon'ble Supreme Court in 'Deputy

Commissioner, Dakshina Kannda District vs. Rudolph Fernandes2',

wherein, the Hon'ble Supreme Court held as follows:

AIR 1986 AP 82

(2003) 3 SCC 306

" The question was whether for releasing the vehicle sought to be confiscated, the second proviso to Section 6-A(1) of the Essential Commodities Act provide for levy of fine on the basis of market value of the confiscated vehicle or on the basis of the market price of the essential commodity sought to be carried by such vehicle. The Karnataka High Court on the analogy of Section 115(2) of the Customs Act held that in such cases, the provision in question provided for levy of fine on the basis of the price of the relevant essential commodity.

Allowing the Government's appeals, the Supreme Court held: In the light of the Preamble and Sections 3, 6-B, 6-C, 6-D and 7 of the Essential Commodities Act, the second proviso to Section 6-A(1) is required to be considered. Although there may be some ambiguity in the section, it cannot be said that the measure of fine is related to the market price of the essential commodity at the date of its seizure. It nowhere provides that fine should not exceed market price of the essential commodity at the date of seizure of the vehicle. What is to be confiscated is the vehicle and, therefore, measure of fine would be relatable to the market price of the vehicle at the date of seizure of the essential commodity sought to be carried by such vehicle. This would also be consistent, with the scheme of Section 7 which provides for levy of penalty. It also empowers forfeiture to the Government any package, covering or receptacle in which the property is found and in addition any animal, vehicle, vessel or other conveyance used in carrying the commodity. Hence, the measure of fine which is required to be levied in lieu of confiscation under second proviso to Section 6-A(1) would be relatable to the market price of the vehicle and not of the seized essential commodity. And, the fine amount in lieu of confiscation is not to exceed the market price of the vehicle on the date of seizure of essential commodity. More over it is within the discretion of the competent authority to fix such reasonable amount considering the facts and circumstances of each case."

As seen from the impugned order, the estimated value of the

subject vehicle is Rs.5,00,000/-, but the petitioner was directed to

furnish bank guarantee for Rs.7,00,000/-. In view of the facts and

circumstances of the case and following the judgment of the Hon'ble

Supreme Court in Rudolph Fernandes' case (2nd supra), as the estimated

value of the subject vehicle is Rs.5,00,000/- even according to the

impugned order, the 2nd respondent is directed to release the subject

lorry bearing No.AP 21 Y 2694 in favour of the petitioner for interim

custody, on petitioner furnishing immovable property security worth

Rs.5,00,000/- (Rupees five lakh only). The petitioner shall also give an

undertaking that he will not alienate or alter the vehicle, create any

third party rights and that the vehicle would be produced as and when