Yenugula Subba Rao, vs State Of A.P.
2024 Latest Caselaw 4883 AP

Andhra Pradesh High Court - Amravati

Yenugula Subba Rao, vs State Of A.P. on 28 June, 2024

     THE HON'BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA

                    WRIT PETITION No.28439 OF 2018

ORDER:

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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

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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. 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

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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. 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

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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. On receipt of

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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

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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. 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

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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.

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.

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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.

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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 others1, 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. Once their activities do not constitute an offence under law, their preventive detention under the provisions of the 1980 Act cannot be sustained.

2016(2) Andh LD (Criminal) 684

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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

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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. 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.

____________________________________________ JUSTICE VENKATESWARLU NIMMAGADDA Date:28.06.2024 Knr

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HON'BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA

WRIT PETITION No.28439 of 2018 28th June, 2024

knr