Raj Kumar vs Govt.Of Nct Of Delhi & Ors
2013 Latest Caselaw 4074 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Date of decision: 11th September, 2013

+                              RFA No.302/1997
       RAJ KUMAR                                            ..... Appellant
                          Through:      Ms. Neha Gupta, Adv.

                                  Versus

    GOVT.OF NCT OF DELHI & ORS             ..... Respondents

Through: Mr. Amitabh Marwah, Adv. for GNCTD.

CORAM :-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. The appeal impugns the judgment and decree dated 31 st July, 1997 of

the Court of the Addl. District Judge, Delhi of dismissal of Suit

No.201/1996 filed by the appellant/plaintiff for recovery of Rs. 1,28,700/-

from the respondents/defendants Commissioner, Food, Supplies and

Consumers Affairs of the Govt. of NCT of Delhi.

2. The appeal was admitted for hearing. Upon it being reported that the

Trial Court record had been destroyed, the counsel for the appellant/plaintiff

was directed to file copies of the said record. The appeal was on 3 rd

November, 2011 dismissed in default of appearance of the appellant/plaintiff

but on application of the appellant/plaintiff was vide order dated 30th April,

2012 restored to its original position. The appellant/plaintiff neither took

steps for service of the respondents/defendants nor appeared and the appeal

was vide order dated 7th January, 2013 dismissed in default. The

appellant/plaintiff again made an application for restoration and notice

thereof was served on the respondents/defendants. Vide order dated 4 th

September, 2013 it was made clear that the appeal will be restored only

when the counsels are prepared to address on the appeal itself and the matter

posted for the said purpose today. Vide separate order, the appeal has been

restored to its original position and the counsels have been heard.

3. The appellant/plaintiff had instituted the suit from which this appeal

arises pleading:-

(a). that he was the proprietor of M/s. Aggarwal Food Industries

having miller wheat license issued by the

respondents/defendants;

(b). that there was a surprise check in the premises of the

appellant/plaintiff on 20th July, 1992 and the license of the

appellant/plaintiff was in pursuance thereto illegally cancelled;

(c). that the sole ground for carrying out the said surprise inspection

was that the appellant/plaintiff had unauthorized stock of wheat

meant for Public Distribution System (PDS) outlets;

(d). however the respondents/defendants could not find any

evidence to substantiate their allegations and vide order dated

11th January, 1993 the license of the appellant/plaintiff was

restored but his security deposit in the sum of Rs.5,000/-

forfeited on the ground of misbehaving with the inspection

team;

(e). that the appellant/plaintiff preferred further appeal and vide

order dated 17th March, 1994 the order of forfeiture of security

deposit also was set aside and the security deposit refunded to

the appellant/plaintiff;

(f). that the stock of wheat in the premises of the appellant/plaintiff

comprising of 191 bags, which the respondents/defendants

during the raid on 20th July, 1992 had seized ought to have been

disposed of immediately but was not;

(g). that the order for disposing of these 191 bags of wheat was

passed only on 22nd February, 1993 although the said 191 bags

of wheat were taken into custody on 20 th July, 1992;

(h). that the wheat was not disposed of inspite of the order dated

22nd February, 1993 also and another order dated 21 st June,

1993 was passed in this regard;

(i). however still nothing was done and yet another order dated 22 nd

July, 1993 for disposing of the said 191 bags of wheat was

passed and ultimately the wheat was so disposed of on 4 th

November, 1993 for a sum of Rs.13,000/-;

(j). that the above said 191 bags of wheat had been disposed of as

per the provisions of the Essential Commodities Act, 1955 and

the respondents/defendants intentionally and mala fidely

delayed disposing of the wheat of the appellant/plaintiff,

without any reasonable explanation, causing harm financially as

well as mentally to the appellant/plaintiff and the

respondents/defendants were liable to suffer for their negligent

and tortuous act; that the cost of the wheat at that time was

Rs.72,580/- @ Rs.3.80 per kg.;

(k). that the appellant/plaintiff was also entitled to the rent of the

godown at Rs.2,000/- per month w.e.f. 20 th July, 1992 to 4th

November, 1993; and,

(l). that thus the following amount was stated to be due from the

respondents/defendants to the appellant/plaintiff:-

               "a)   Price of the wheat of 191 bags
                     @ Rs.3.80 per kg.                       Rs.72,580/-
               b)    Rent of godown @ Rs.2000/- per month
                     w.e.f. 20.7.92 to 4.11.93               Rs.30,000/-
               c)    Interest @ 18% per annum w.e.f.1.8.92
                     to 15.7.94 on Rs.72,580/-               Rs.25,570/-
               d)    Legal notice charges dated 15.4.94      Rs. 550/-
                     Total                                 Rs.1,28,700/-"

4. The respondents/defendants contested the suit by filing a written

statement on the grounds:-

(i). that the Civil Court had no jurisdiction as appeal under Section

6 C of the Essential Commodities Act lies before the Financial

Commissioner;

(ii). that no notice under Section 80 of the CPC had been served;

(iii). that the suit was filed with the mala fide motive of blackmailing

honest officials of the respondents/defendants;

(iv). that the stock of 191 bags of wheat was legally seized and

disposed of as per the provisions of the Essential Commodities

Act;

(v). denying that the respondents/defendants intentionally or mala

fidely delayed disposing of wheat causing any harm to the

appellant/plaintiff;

(vi). denying that the cost of the wheat was @

Rs.3.80 per kg. or that the appellant/plaintiff was entitled to rent

of the godown;

(vii). that the suit was not maintainable owing to Section 15 of the

Essential Commodities Act protecting the actions taken under

the Act;

(viii). that the premises of the appellant/plaintiff were checked/raided

on 20th July, 1992 on the basis of secret information that wheat

meant for PDS outlets had come directly from the FCI godown

at Narela to the premises of the appellant/plaintiff;

(ix). that the appellant/plaintiff delayed the visiting team to carry out

the inspection and inspection was carried out subsequently by

breaking open the locks of the premises;

(x). that during the inspection 31 bags of wheat with the marking of

fair price shops were found in the premises of the

appellant/plaintiff and the stock of wheat of the

appellant/plaintiff was found short by 12.75 quintals;

(xi). in view of the aforesaid it was felt that the appellant/plaintiff

had contravened the provisions of Delhi Wheat (Licensing &

Control) Order, 1988 and the license of the appellant/plaintiff

was cancelled and 191 bags of wheat were seized and placed

under the superdari of one Shri Ram Kumar; and,

(xii). that the sale proceeds of Rs.13,000/- of the wheat were

deposited with the District Nazir on 4th November, 1993 itself.

5. The appellant/plaintiff filed a replication controverting the contents of

the written statement and reiterating the contents of the plaint.

6. On the pleadings aforesaid of the parties, the following issues were

framed in the suit:-

"1. Whether the plaintiff is entitled to claim the suit amount from the defendant? OPP

2. Whether the plaintiff is entitled to claim interest as alleged in the plaint, if so at what rate and for what period? OPP

3. Whether this court has no jurisdiction to try the suit? OPD

4. Whether the suit is not maintainable in the present form? OPD

5. Whether the suit is bad for mis-joinder and non-

joinder of the necessary parties? OPD"

7. The learned Addl. District Judge in the impugned judgment has

found/observed/held:

(A). that Section 15(1) of the Essential Commodities Act barred a

suit, prosecution or other legal proceedings against any person

for anything done in good faith or intended to be done in

pursuance to any order made under Section 3 of the Act;

similarly Section 15(2) barred any suit or other legal

proceedings against the Government for any damage caused or

likely to be caused by anything which was done in good faith or

intended to be done in pursuance to any order made under

Section 3 of the Act.

(B). the question thus for determination was whether the action of

the officials of the respondents/defendants qua the premises and

goods being wheat of the appellant/plaintiff was in good faith

and in pursuance of an order under Section 3 of the Act.

(C). that it was not in dispute that the raid conducted at the premises

of the appellant/plaintiff on 20th July, 1992 was to see if the

provisions of Delhi Wheat (Licensing & Control) Order, 1988

issued under Section 3 of the Act was violated or not;

(D). that bags of wheat with the marking of fair price shop were

indeed found in the premises of the appellant/plaintiff and the

stock of wheat of the appellant/plaintiff was also found to be

short by 12.75 quintals;

(E). that it could not be said that any official of the

respondents/defendants had not acted in good faith;

(F). that the very fact that the license of the appellant/plaintiff was

restored and his security deposit also refunded showed that

everything was done in good faith and without mala fide

intention;

(G). that even with respect to disposal of wheat it could not be said

that the officials of the respondents/defendants did not act in

good faith;

(H). that it was in evidence that the appellant/plaintiff was present at

the time of auction also; and,

(I). that the suit was therefore barred by Section 15 of the Act;

(J). that the issues No.4&5 were not pressed by the

respondents/defendants.

8. The counsel for the appellant/plaintiff has drawn attention to Section

6A of the Act titled Confiscation of Essential Commodity, particularly to

sub-Section (2) thereof which provides for sale, at the controlled price if any

fixed for such essential commodity or where no such price is fixed by public

auction or through fair price shop, of seized essential commodities which in

the opinion of the Collector is subject to speedy and natural decay and has

contended that there was a long delay from 20 th July, 1992 when the wheat

of the appellant/plaintiff was seized by the respondents/defendants till 4 th

November, 1993 when the same was finally sold and the appellant/plaintiff

has suffered on account of such delay on the part of the

respondents/defendants and is liable to be compensated therefor. On enquiry

it is argued that the price of the wheat on the date of seizure i.e. 20 th July,

1992 was Rs.3.80 per kg. but was much lower when the wheat was

ultimately sold on 4th November, 1993. On further enquiry as to on what

basis the godown rent has been claimed it is contended that the respondents

had in seizure sealed the godown of the appellant/plaintiff where the wheat

was stored and thus the appellant/plaintiff was deprived of use also of the

said godown and is entitled to rent thereof;

9. I have enquired from the appellant/plaintiff whether wheat can be said

to be subject to speedy and natural decay, for it to be said that the

respondents/defendants should have sold it immediately after 20 th July, 1992

and if so when and how soon.

10. No answer has been forthcoming.

11. I have yet further enquired from the counsel for the appellant/plaintiff

as to what were the rules for such sale, how much time it should have

ordinarily taken and whether there was any control price of the wheat at the

relevant time in as much as if it was so, the sale could be at such controlled

price only and the market price claimed of Rs.3.80 per kg. would have no

relevance.

12. The counsel for the appellant/plaintiff save for stating that the

controlled price would be much higher again has no answer.

13. It has also been enquired from the counsel for the appellant/plaintiff

as to what is the evidence of the rate of wheat on 20th July, 1992 and on 4th

November, 1993.

14. I am informed that there is no evidence.

15. It has also been enquired as to what the shelf life of wheat is, whether

it can be stored for a year or two years.

16. Again nothing is informed.

17. The counsel for the appellant/plaintiff relies on S.D. Sharma Vs.

Thakorlal Chhaganlal (1978) XIX Gujarat Law Reporter 332 and on The

State of Gujarat Vs. M/s. Janta Pauva Factory AIR 1983 Gujarat 64.

18. Per contra, the counsel for the respondents/defendants has contended

that the respondents/defendants in their written statement have explained the

facts and circumstances in which the premises of the appellant/plaintiff were

raided and from which it cannot be said that the actions of the

respondents/defendants in seizing the goods were not bona fide. Attention is

next invited to the order dated 22 nd June, 1993 in the appeal filed by the

appellant/plaintiff for refund of security deposit recording that the

appellant/plaintiff had not been appearing in the appeal for the past three

hearings and thus did not appear to be interested in the matter. Attention is

next invited to Section 3(22) of the General Clauses Act, 1897 defining a

thing to be deemed to have been done in good faith where it is done

honestly, whether it is done negligently or not and it is contended that the

delay if any in disposal of the wheat can at best be as a result of negligence

but no case of the same being not honest or being malicious is made out.

Reference without citing is made to (1977) 9 Lawyer 74 (Delhi), S.D.

Sharma supra and to (1992) 1 Raj LR 625 in the AIR Manual 6th Edition

Volume 22 page 148.

19. The counsel for the appellant/defendant in rejoinder has reiterated her

case.

20. The order dated 22 nd February, 1993 supra of disposal of the said

goods records that since the finalization of confiscation proceedings required

detailed examination, pending the same, wheat which was essential

commodity and perishable in nature be disposed of through PDS and the sale

proceeds be deposited in the Government treasury. The subsequent order

dated 21st June, 1993 supra records that on inspection, 52 to 55 out of 191

bags were found to be not fit for human consumption and reiterates for

immediate steps for disposal of the remaining bags through the PDS.

21. A perusal of the examination-in-chief of the appellant/plaintiff shows

that the appellant/plaintiff, except for deposing that the price of wheat on

20th July, 1992 was Rs.3.80 per quintal and that he had paid rent of the

godown @ Rs.2,000/- per month to the owner thereof till the month of

November, 1993, did not even depose at to what was the rate of wheat on the

date of the sale and did not furnish any proof of having paid the rent of the

godown to anyone. The officer of the respondents/defendants appearing as a

witness deposed that the appellant/plaintiff had not preferred any appeal

against the order dated 22 nd February, 1993 of sale of wheat through PDS

and the wheat bags were auctioned for a sum of Rs.13,000/-.

22. The order dated 22nd July, 1993 supra records that wheat was not

lifted by the FPS holders of the area on the ground that the same could not

be sold through PDS and that due to heavy rains and leakage in the roof, the

whole stock of wheat degraded and water had filled in the godown and

accordingly directed sale thereof by auction.

23. The record also contains a letter dated 1st March, 1993 of the

appellant/plaintiff for return of the seized wheat to him. The same does not

contain reference to any earlier letter which may have been written by the

appellant/plaintiff in this regard.

24. Neither the pleadings nor the material on record shows any case of

dishonesty on the part of the respondents/defendants or any of their officials

in seizure of the wheat or not taking steps for disposal thereof. Mention in

this context may be made of Shambhu Dayal Agarwala Vs. State of West

Bengal (1990) 3 SCC 549 laying down that the seized goods cannot during

the pendency of the proceedings under Section 6A and Section 6E of the Act

be released to the owner thereof and can only be sold. It thus appears that

during pendency till 11th January, 1993 of the challenge by the

appellant/plaintiff to the seizure order, there was no question of any sale or

disposal thereof. The appellant/plaintiff is also not found to have made any

request for the same. The appellant/plaintiff also thereafter did not seek

release thereof. In the normal course, the appellant/plaintiff, upon the order

dated 11th January, 1993 of restoration of his license being made, ought to

have applied for release of the goods to him. The outcome of the

confiscation proceedings under Section 6A is not disclosed. Till the

outcome of the confiscation proceedings is known, the entitlement of the

appellant/plaintiff to the sale proceeds also cannot be known and without

which entitlement being established the question of the appellant/plaintiff

suffering any loss from the delay even if any in sale is not made out.

25. Section 6A(2) as aforesaid permits disposal of the seized goods either

by sale at controlled price or by public auction or by sale through fair price

shop at the price fixed by the Central or the State Government. When the

respondents/defendants are entitled to sell the goods through the fair price

shops, the question of the appellant/plaintiff being entitled to compensation

even if any on the basis of the market rate of rent as is claimed, does not

arise.

26. Thus whichever way one looks at, there is no merit in the appeal. The

same is resultantly dismissed; however in the facts no costs.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J SEPTEMBER 11, 2013 pp..