Sohrab Abdul Khalique Shaikh vs Controller Of Rationing And ...
2022 Latest Caselaw 5011 Bom

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                                             12 REVN 405 OF 2016.doc
          SHARAD PHADKE
          Date: 2022.06.06
PHADKE    17:34:24 +0530




       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
            CRIMINAL APPELLATE JURISDICTION
      CRIMINAL REVISION APPLICATION NO.405 OF 2016

Sohrab Abdul Khalique Shaikh
Aged 62 years, Indian Inhabitant,
Carrying on business in the name
and style of M/s. Azad Lubrico,
situate at Shastri Nagar, Chunabhatti,
Kalina, Santacruz (East),
Mumbai - 400 029                             ...    Applicant

      versus

1.    Controlling of Rationing and
      Directorate of Civil Supplies,
      Having its office at Royal Insurance
      Building, 5th Floor, 14, G.A. Tata
      Marg, Churchgate, Mumbai - 400 020

2.    The State of Maharashtra
      (at the instance of C.B.Control,
      CID, Mumbai )                     ...    Respondents
                                WITH
       CRIMINAL REVISION APPLICATION NO.521 OF 2018

The State of Maharashtra,
(through the Controller of Rationing
& Director of Civil Supply, Mumbai - 20.     ...    Applicant

      versus

Sohrab Abdul Khalique Shaikh
Adult, Carrying on Business,
in the Name of M/s. Azad Lubrico,
situate at Chunabhatti, Shastri
Nagar, Kalina, Santacruz (E), Mumbai.        ...    Respondent

Mr. H.S.Anand, for Applicant in REVN 405 of 2016 and for
Respondent in REVN 521 of 2018.
Ms. Anamika Malhotra, APP, for State.

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                                                       12 REVN 405 OF 2016.doc



                  CORAM: N.J.JAMADAR, J.

                  RESERVED ON   : 22th APRIL, 2022
                  PRONOUNCED ON : 6th JUNE, 2022

JUDGMENT :

1. Since the legality, propriety and correctness of the

judgment and order dated 26 th April, 2016 passed by the learned

Additional Sessions Judge, Greater Mumbai, in Criminal Appeal

No.138 of 2013, is assailed in both the Revision Applications, they

are taken up for determination by this common order.

2. Mr. Sohrab Abdul Khalique Shaikh deals in the business of

purchasing of reclain oil and other oils under the name and style of

M/s. Azad Lubrico (hereinafter referred to as 'the Applicant'). The

Applicant claims to have possessed requisite and valid license for

the said business. On 27 th January, 2011, the Assistant

Commissioner of Police, Crime Branch, CID (Sales Tax Division)

conducted a raid at the premises of the Applicant situated at Kalina,

Santacruz (E), Mumbai and seized the goods, including 52000 liters

of black oil and 8000 kg. grease. The Applicant came to be

arraigned in C.R.No.37 of 2011 registered with Vakola Police Station

for the offences punishable under Sections 3, 7(2) and 8(2) of the

Essential Commodities Act, 1955 read with Lubricating Oil and

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Greases (Processing, Supply and Distribution Regulation) Order,

1987, Sections 3 and 4 of the Maharashtra Solvent Raffinate and

Slop (Acquisition, Sale, Storage and Prevention of use in

Automobiles) Order, 2000 and Section 420 read with Section 34 of

the Indian Penal Code, 1860.

3. The Respondent No.1 - Controller of Rationing and

Director of Civil Supplies issued Show Cause Notices dated 2 nd May,

2012 and 16th May, 2012 to the Applicant under Section 6-B of the

Essential Commodities Act, 1955. Eventually, on 5 th February, 2013

the Respondent No.1 passed an order directing confiscation of

52000 black oil and 8000 kgs grease, alleged to be adulterated, the

sale thereof and credit of the sale proceeds with the State.

4. Being aggrieved, the Applicant preferred an Appeal being

Criminal Appeal No.138 of 2013. By the Impugned judgment and

order dated 26th April, 2016, the learned Additional Sessions Judge

was persuaded to partly allow the Appeal, inter alia, holding that the

Applicant had a permit to possess/store only 10000 liters of oil and

2000 kgs of grease and yet the Applicant was found in possession of

huge quantity of black oil and grease, far in excess of the permit.

Thus, the learned Additional Sessions Judge set aside the order

passed by the Competent Authority to the extent of the permit i.e.

SSP 3/14 12 REVN 405 OF 2016.doc

10000 liters of lubricating oil and 2000 kgs of grease and affirmed

the order to the extent of the excess quantity i.e. 42000 black oil

and 6000 kgs of grease. Being further aggrieved, the Applicant is

in revision.

5. The principal ground on which the impugned order is

assailed is that there is no contravention of any order passed under

Section 3 of the Essential Commodities Act, 1955, which is a

jurisdictional condition for confiscation of the essential commodity

by the Competent Authority by invoking the power under Section 6-

A of the Essential Commodities Act, 1955. In fact, the black oil is

not an 'essential commodity' within the meaning of Section 2-A of

the said Act.

6. The learned Sessions Judge, according to the Applicant,

misdirected herself in upholding the order of confiscation on the

premise that the storage was in excess of the permit granted by the

Municipal Corporation under Section 394 of the Mumbai Municipal

Corporation Act, 1888, which in any event would not furnish

justification for confiscation under the Essential Commodities Act,

1955.

7. Being aggrieved by the impugned order, the State of

Maharashtra has also filed Criminal Revision Application No.521 of

SSP 4/14 12 REVN 405 OF 2016.doc

2018, as the learned Additional Sessions Judge recorded a finding

that the Applicant was found in possession of the commodity

without permit and license. Having recorded such a finding,

according to the State, it was not open to the learned Additional

Sessions Judge to interfere with the order of confiscation passed by

the Competent Authority to the extent the Applicant allegedly had a

permit.

8. I have heard Mr. Anand, learned Advocate for the

Applicant and Ms. Malhotra, learned APP for the State at some

length. With the assistance of the learned Counsel for the parties, I

have perused the material on record, including the Orders and

Notifications issued under the Essential Commodities Act, 1955.

9. Mr. Anand, learned Advocate for the Applicant

strenuously submitted that the learned Additional Sessions Judge

has not approached the controversy from a correct perspective. The

learned Additional Sessions Judge in exercise of the appellate

jurisdiction under the Essential Commodities Act, 1955 was enjoined

to test the legality and correctness of the confiscation order passed

by the Respondent No.1. In the process, it was necessary to

examine whether there was a breach or violation of any order

passed under Section 3 of the Essential Commodities Act, 1955 to

SSP 5/14 12 REVN 405 OF 2016.doc

warrant the exercise of confiscatory power under Section 6-A of the

Act. The learned Additional Sessions Judge, according to Mr. Anand,

did not delve into the question as to whether the black oil, was at all

an essential commodity. Instead the learned Additional Sessions

Judge accorded undue importance to the fact that the permit issued

by the Municipal Corporation under Section 394 of the Mumbai

Municipal Corporation Act, 1888 for storage of lubricating oil and

greases, was much less than the commodities which were found in

possession of the Applicant. The said infraction, even if taken at par,

would not justify an action of confiscation under the Essential

Commodities Act, 1955.

10. To lend support to the aforesaid submissions, Mr. Anand

took the Court through the Schedule appended to the Essential

Commodities Act, 1955, which enumerates the essential

commodities, Lubricating Oil and Greases (Processing, Supply and

Distribution Regulation) Order, 1987 and the Government Resolution

dated 13th September, 2017 issued by the Government of

Maharashtra, to constitute the vigilance squads to inspect the

petroleum products. Laying emphasis on the fact that the

Lubricating Oil and Greases (Processing, Supply and Distribution

Regulation) Order, 1987, does not find mention in the enactments

SSP 6/14 12 REVN 405 OF 2016.doc

and orders enumerated in the said Government Resolution, it was

submitted that the black oil is not an essential commodity.

11. Mr. Anand placed reliance on a judgment in the case of

Lubricating Oil Dealers' Association and Anr. V/s. Union of India and

Ors.1 to bolster up the submission that the lubricating oil is not a

petroleum product. Thus, the provisions of the Essential

Commodities Act, 1955 are not at all attracted, submitted Mr.

Anand.

12. In contrast to this, the learned APP invited the attention

of the Court to the copies of the licenses placed on record by the

Appellant himself. The license was issued to the Applicant to carry

on the business of processors only (for the activity of sale) under

the Lubricating Oil and Greases (Processing, Supply and Distribution

Regulation) Order, 1987. Ms. Malhotra laid stress on the fact that

the license was issued for trading activity (without storage). Since

the Applicant was found in possession of huge quantity of the

lubricating oil and grease, much beyond the permit granted by the

Municipal Corporation, there was a clear breach of the Lubricating

Oil and Greases (Processing, Supply and Distribution Regulation)

Order, 1987, submitted Ms. Malhotra. Once it was found that the

1 AIR 2017 Cal. 201

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storage of the essential commodity was in breach of the Lubricating

Oil and Greases (Processing, Supply and Distribution Regulation)

Order, 1987, the learned Additional Sessions Judge could not have

interfered with the order of confiscation, even to the extent of the

permit, urged Ms. Malhotra.

13. In order to appreciate the aforesaid rival submissions in

the correct perspective, it is imperative to note that as to what

weighed with the learned Additional Sessions Judge in interfering

with the order of confiscation passed by the Competent Authority.

The observations in paragraph 13 spell out the reasons which

weighed with the learned Additional Sessions Judge. They read as

under :

"13. Though certain defence has been taken by the appellant in his written notes of submissions about applicability of orders and the power of Rationing Officer to seize the property. However, there is nothing on record to show that Rationing Officer has no power to seize property which is without permit. The action taken on the part of the respondent is as per law and it is apparent that the storage made in excess is illegal and obviously such unauthorized stock of oils and greases without license is liable to be seized, since the offence is registered for breach of license and provisions of Essential Commodities Act, the seizure of property was legal and proper. The appellant is having a permit only to possess 10,000 litres of oil and 2000 kilogram of greases. He is entitled only to have possession of that

SSP 8/14 12 REVN 405 OF 2016.doc

much quantity for which appellant has been granted permit. His possession for excessive property is without license and thus, it is violative of the applicable laws. Appellant is not entitled for return of unauthorized stock for the business but he is entitled of having authorized stock to the extent of quantity as referred in the license. In view of the matter action taken and the order passed dated 5/02/2013 passed by the respondent No.1 in proceeding under Essential Commodities Act, bearing No.fuf'[email protected]@6&[email protected]]dz][email protected]@tk]112 confiscating 52000 litres of black oil and 8000 K.G. grease, and directing to sale the property and to deposit its amount to the Government is liable to be partly confirmed excluding the property which is permitted in the license i.e. 10,000 litres of lubricating oils and 200 kilogram of greases, which were already return as per order dated 2/7/2011. In the result, point No.1 is answered partly in affirmative and I proceed to pass the following order."

14. Evidently, the learned Additional Sessions Judge has

proceeded primarily on the premise that the storage of the

lubricating oil and grease, was in excess of the permit, and thus

constituted violation of the provisions contained in the Essential

Commodities Act, 1955 and the Lubricating Oil and Greases

(Processing, Supply and Distribution Regulation) Order, 1987. It

seems, the learned Additional Sessions Judge, did not appreciate the

true nature of the confiscation order.

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                                                    12 REVN 405 OF 2016.doc

15. The Competent Authority was of the view that the

Applicant had stored the lubricating oil and grease, of inferior

quality, with an animus to sell the same, as of superior quality, by

adulterating the same. Various adulterants were also alleged to

have been found and seized. The Competent Authority further

found that the permit granted by the Municipal Corporation to store

the lubricants and greases, was in respect of the different premises

and not the premises where the commodity was allegedly found and

seized during the raid. Thus, the Competent Authority ordered

confiscation and sale of the seized commodities.

16. In the aforesaid backdrop, the Appellate authority ought

to have considered whether the commodity seized was an essential

commodity susceptible for confiscation under Section 6-A of the Act

in the light of the alleged contravention of order under Section 3 of

the Essential Commodities Act, 1955.

17. It is true that the question as to whether the lubricating

oil or for that matter the black oil allegedly seized from the

possession of the Applicant, falls within the ambit of Entry (5) -

'petroleum and petroleum products' under the Schedule appended

to the Essential Commodities Act, 1955, was not at all addressed.

However, the Applicant cannot draw much mileage from the said

SSP 10/14 12 REVN 405 OF 2016.doc

fact for from the own showing of the Appellant that the license was

granted to the Appellant to carry on the business of processors only,

(for the activity of sale), subject to the provisions of the Lubricating

Oil and Greases (Processing, Supply and Distribution Regulation)

Order, 1987. Indeed the material on record does not equip the

court to ascertain as to whether there was any limit on the storage

of the quantity of lubricating oil and greases under the said license

or the Lubricating Oil and Greases (Processing, Supply and

Distribution Regulation) Order, 1987. Yet the said aspect does not

appear to be of decisive significance as the license itself clarified

that it was granted for trading activity without storage.

18. In that backdrop, the question that wrenches to the fore

is whether the storage of the lubricating oil and greases would

constitute breach of the license and/or the Lubricating Oil and

Greases (Processing, Supply and Distribution Regulation) Order,

1987.

19. Mr. Anand was justified in canvassing a submission that

the mere fact that while granting permission under Section 394 of

the Mumbai Municipal Corporation Act, 1888, the Corporation has

prescribed a limit of 10000 liters and 2000 kgs for storage of

lubricating oil and greases, by itself, may not justify an action under

SSP 11/14 12 REVN 405 OF 2016.doc

Section 6-A of the Act. Breach of the conditions thereof, may entail

penal consequences under Section 471 of the Mumbai Municipal

Corporation Act, 1888.

20. The learned Additional Sessions Judge, it seems, was

swayed by the fact that the storage of the commodity was in excess

of the permit under Section 394 of the MMC Act, and missed the

crux of the matter, which would justify an order of confiscation

under Section 6-A of the Act.

21. There is another facet which is of material significance.

The license was granted to the Applicant subject to the provisions of

the Lubricating Oil and Greases (Processing, Supply and Distribution

Regulation) Order, 1987. Clause 4 of the said Order reads as under :

"4. Prohibition of business of lubricating oil or grease - No person shall carry on the business of manufacturing, blending, packaging, re-refining, selling or transporting for sale any lubricating oil or grease which has been adulterated."

22. As indicated above, the Competent Authority recorded,

inter alia, a finding that the Applicant was selling adulterated

lubricating oil and greases as the standard quality lubricating oil and

greases. If this finding of the Competent Authority is found

justifiable, then inference with the order of confiscation even to the

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extent of 10000 liters of lubricating oil and 2000 kgs. Of grease may

become unsustainable.

23. The issues as indicated above, however, have not been

adverted to by the Appellate Authority. These issues are, in a sense,

rooted in facts. I am, therefore, persuaded to remit the matter back

to the Appellate authority to decide the legality, propriety and

correctness of the confiscation order passed by the Competent

Authority in the light of the challenges raised by the Applicant and

the observations hereinabove. It is further made clear that the

Appellate Authority shall decide the Appeal on its own merits

without being influenced by the observations made hereinabove,

which were primarily for the purpose of highlighting the aspects that

were not adequately considered by the Appellate Authority. Hence,

the order :

ORDER

(i) The Revision Application Nos.405 of 2016 and 521 of 2018

stand partly allowed.

(ii) The impugned Judgment and Order dated 26th April, 2016

passed by the learned Additional Sessions Judge stands quashed

and set aside.

(iii) The Criminal Appeal No.138 of 2013 stands remitted back to

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the Court of Session for decision afresh.

(iv) Interim Orders shall continue to operate till decision in Criminal

Appeal No.138 of 2013.

(v) The Appellate Authority shall decide the Appeal after providing

an effective opportunity of hearing to the Applicant and the State,

as expeditiously as possible and preferably within a period of six

months from the date of communication of this order.

(vi) All contentions of all the parties are kept open for

consideration by the Appellate Authority, including the question as

to whether the provisions of the Essential Commodities Act, 1955

are attracted in the case at hand.

(vii) Revisions Applications are accordingly disposed.

(viii) All concerned to act on an authenticated copy of this order.

                                                 ( N.J.JAMADAR, J. )




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