Shri Balaji Cereals Mill, Sgnr vs State And Ors
2022 Latest Caselaw 3045 Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 13220/2015

Shri Balaji Cereals Mill, Sgnr.

----Petitioner Versus State And Ors

----Respondent Connected With S.B. Civil Writ Petition No. 13848/2015 M/s Neminath Traders

----Petitioner Versus State And Ors.

----Respondent

For Petitioner(s) : Mr. Manoj Bhandari, Senior Advocate assisted by Mr. Govind Suthar.

Mr. B.S. Sandhu For Respondent(s) : Mr. Dinesh Jain, Dy.G.C.

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

Judgment

25/02/2022

1. In the wake of instant surge in COVID - 19 cases and spread

of its highly infectious Omicron variant, abundant caution is being

maintained, while hearing the matters in the Court, for the safety

of all concerned.

2. These writ petitions have been preferred claiming the

following reliefs:

CW-13220/2015:

"A] By an appropriate writ order or direction, the order dated 28.10.2015 passed by the District Collector, Sriganganagar may kindly be declared illegal and be quashed and set aside.

(2 of 11) [CW-13220/2015]

B] By an appropriate writ order or direction, the respondents may be directed to release the seized stock of the petitioner.

C] By an appropriate writ order or direction, the action taken by the respondents under section 6A & 6B of the Act of 1955 may kindly be declared illegal and the same may kindly be quashed and set aside.

D] By an appropriate writ order or direction, the notice issued to the petitioner under section 6B dated 30.10.2015 may kindly be declared illegal and be quashed and set aside.

E] By an appropriate writ order or direction, any action taken prejudicial to the interest of the petitioner during the pendency of the writ petition may kindly be declared illegal.

CW-13848/2015:

"(i) by an appropriate writ, order or direction, the order passed by the District & Sessions Judge, Pratapgarh in Appeal No.93/2015 dated 24.11.2015 (Annex-12) may kindly be declared illegal and be quashed and set aside.

(ii) by an appropriate writ, order or direction, the order passed by the District Collector dated 04.11.2015 (Annex-8) may kindly be declared illegal and be quashed and set aside.

(iii) by an appropriate writ, order or direction, the notice issued by the District Collector, Pratapgarh dated 30.10.2015 (Annex-5) may kindly be declared illegal and be quashed and set aside.

(iv) by an appropriate writ, order or direction, the respondents be directed not to auction the stock of the petitioner to the extent of 4283.91 Quintals lying in the stock in the government warehouse pursuant

(3 of 11) [CW-13220/2015]

to the order passed by the DSO i.e. District Supply Officer, Pratapgarh dated 27.11.2015 and the order dated 27.11.2015 (Annex-13) may kindly be ordered to be quashed.

(v) by an appropriate writ, order or direction, the respondents be directed to lift the seizure of the petitioner material forthwith so as to dispose of the same as early as possible."

3. For the sake of brevity, the facts and submissions are being

taken from CWP No.13220/2015, while treating the same as a

lead case.

4. Mr. Manoj Bhandari, learned Senior Counsel assisted by Mr.

B.S. Sandhu and Mr. Govind Suthar, appearing on behalf of the

petitioner submits that the State Government, for the purpose of

maintaining the supplies of essential commodities or for securing

equitable distribution, has issued the Rajasthan Trade Articles

(Licensing and Control Order), 1980 (for short, 'Order of 1980'),

and under the same vide notification dated 20.10.2015 has

incorporated the amendments to the said Order of 1980; the said

Order came into effect on 20.10.2015. As per learned Senior

counsel, by way of this order, Part A was inserted wherein the

cereals mentioned therein were added to Schedule I and their

limits of stocking were provided by the notification issued under

the same.

5. Learned Senior counsel for the petitioner further submits

that however, immediately upon issuance of the notification, the

business premises of the petitioner was checked by the District

Supply Officer with his team. Learned Senior Counsel also submits

that at the relevant time, due to cleaning works of the premises in

(4 of 11) [CW-13220/2015]

question, the license and other documents could not be traced,

and hence could not be shown to the inspecting team.

5.1 Learned Senior Counsel further submits that the bill books

were however, available, which clearly show that the sale and

purchase of the cereals was being done by the petitioner; the

stock was checked wherein 275 quintals of cereal was found in the

stock including the processed and semi processed. As per learned

Senior Counsel, other formalities were also complied with.

5.2 Learned Senior Counsel also submits that however, the

respondent No.3 merely on count of the petitioner failing to show

the license at the relevant time, seized its stocks lying in the mill.

5.3 Learned Senior Counsel further submits that the respondent

No.3, despite the petitioner having the license, submitted an

application under Section 6A of the Essential Commodities Act,

1955 (for short, 'Act of 1955') for confiscating the stock of the

petitioner. As per learned Senior Counsel, no separate license of a

producer was given by the respondents under the Order of 1980

and the license of a wholesaler was given. Thus, as per learned

Senior Counsel, the notification only distinguishes the limit of

stock between the wholesaler and the producer, otherwise there is

no difference between the licenses, if at all, the same is issued.

5.4 Learned Senior Counsel also submits that immediately upon

coming to know of submission of the aforementioned application,

the petitioner approached the Office of respondent no.2 and

submitted an application to release the seized stock on surety, in

its favour; but the said application of the petitioner was rejected

stating that the order has already been passed.

(5 of 11) [CW-13220/2015]

6. Learned Senior Counsel for the petitioner also submits that

the application for grant of license under the Order of 1980 does

not prescribe any different column for the manufacturer and it

only prescribes the license for wholesale or retail license. Thus, as

per learned Senior Counsel, the respondents have been issuing

the wholesaler licenses to all the manufacturers as the

manufacturer is also the wholesaler and retailer.

7. Learned Senior Counsel for the petitioner further submits

that despite all the formalities having been completed and the

license having been issued, the respondents, after seizure of the

stock are tampering with the documents; subsequently, a note at

the bottom of the application form was put, which states about the

application of the license and directing issuance of the license of

wholesaler. As per learned Senior Counsel, the said note was an

afterthought and was put merely to falsify the case of the

petitioner under the Act of 1955.

8. Learned Senior Counsel for the petitioner also submits that

upon the application submitted by the District Supply Officer, the

District Collector, without due application of mind and without

considering the fact that the petitioner held a valid license under

the Order of 1980, passed an order dated 28.10.2015, ordering to

auction the seized cereals of the petitioner.

8.1 Learned Senior Counsel further submits that in pursuance of

the same, an order was issued to respondent No.3 on 30.10.2015

to auction the 275 quintals of cereals seized from the factory of

the petitioner.

8.2 Learned Senior Counsel also submits that thereafter,

respondents got certain notices published in the newspapers.

(6 of 11) [CW-13220/2015]

9. Learned Senior Counsel for the petitioner thereafter drew the

attention of this Court towards an order dated 13.01.2016 passed

by this Hon'ble Court in the above-numbered CWP

No.13848/2015, relevant portion of which reads as under:-

" Precisely, the case of the petitioner is that before expiry of period of 15 days, the stock of gram held by it was seized on count of not obtaining the license in terms of notification dated 20.10.15 and that the stock kept by the petitioner at the warehouse was found in excess of limited prescribed. It is submitted that subsequently, the petitioner has already applied for the license in terms of notification dated 20.10.15.

Learned counsel appearing for the respondents submitted that admittedly the stock in possession of the petitioner kept at the warehouse was in excess of limit prescribed and the petitioner had not obtained license in terms of the notification dated 20.10.15 and therefore, the petitioner is not entitled for any indulgence of this Court. However, it is not disputed by the learned counsel that the stock was seized even prior to expiry of 15 days from the date of notification, the period during which the petitioner was entitled to obtain the license.

This Court is of the considered opinion that the matter requires consideration.

Taking into consideration the rival submissions, this Court considers it appropriate to substitute the following directions in place of directions contained in interim order dated 2.2.15:

(I) The petitioner's stock of gram seized by the respondents on 30.10.15 shall not be auctioned.

(ii) On undertaking/affidavit being filed by the petitioner, the respondents shall release the seized stock of gram and handover the same to the petitioner.

(iii) The petitioner shall file an undertaking in the form of an affidavit before the District Supply Officer in terms that the stock of gram shall be disposed of within a period of 15 days of it being released from seizure.

(7 of 11) [CW-13220/2015]

(iv) The amount to be realized on disposal of the stock shall be kept in FDR in nationalized Bank, which shall not be encashed without permission of the Court.

(v) The concerned Collector and District Supply Officer shall be free to oversee the disposal of stock of gram by the petitioner within the period as per the affidavit/undertaking furnished.

(vi) After disposal of stock of the goods, the petitioner shall file an affidavit before this Court regarding compliance of directions issued as aforesaid.

The application preferred under Article 226(3) of the Constitution of India as also the stay petition stand disposed of accordingly.

List the matter for final disposal at the admission stage on 8.2.16, as prayed."

10. Learned Senior Counsel for the petitioner also referred to the

precedent law laid down by the Hon'ble Supreme Court in

Shambhu Dayal Agarwala Vs. State of West Bengal, (1990)

3 SCC 549, relevant portion of which reads as under:

"9. And now to the structural setting and context in which the word release' is used in Section 6E. While debarring courts, tribunals and other authorities from exercising power in relation to the seized commodity, power is conferred on the Collector or the State Government concerned under Section 6C, to make orders with regard to the possession, delivery, disposal, release or distribution of such commodity, etc. This power can be exercised pending confiscation. The power conferred by this section is unqualified. The word 'release' is preceded by the words 'possession, delivery and disposal' and followed by the word 'distribution'. The setting and context in which the word 'release' is used makes it clear that it is not used in the sense of 'return'. In the first place as pointed out earlier it would completely defeat the purpose and object of the Act if the essential commodity seized for suspected contravention of the order made under Section 3 is returned to the owner or person from whom it was seized even before the confiscation proceedings were

(8 of 11) [CW-13220/2015]

completed. Such an intention cannot be ascribed to the legislature. Secondly, it is not possible to believe that the legislature would confer unqualified and unrestricted power to return the essential commodity to the owner or the person from whose possession it was seized before a decision whether or not to confiscate the same is taken.

As the section stands, if the interpretation put by the learned Counsel for the appellant is accepted, it would be permissible to the Collector to return or restore the commodity without imposing any condition, pending confiscation proceedings. We are unable to pursuade ourselves to accept the interpretation placed by Mr. Rao on the word 'release'. The scheme of sections 6A, 6B and 6C makes it clear that after the essential commodity is seized and the same is inspected by the concerned Collector, the latter has to decide, after complying with the procedure set out in Section 6B, whether or not to confiscate the essential commodity. Since the procedure delineated in Section 6B is time consuming, the Collector has been given special power to sell the essential commodity as stated in Sub-section (2) of Section 6A if it is subject to speedy and natural decay or it is expedient in public interest so to do. If the Collector decides not to confiscate the commodity and if no prosecution is launched or contemplated the commodity has to be returned to the owner or person from whom it was seized. If in the meantime it is sold in exercise of power under Sub-section (2) of Section 6A, the price of the commodity has to be paid as provided by Sub-section (3) of Section 6A. If the Collector has ordered confiscation but the order is reversed in appeal under Section 6C and no prosecution is pending, Sub- section (2) of Section 6C enjoins that the essential commodity should be 'returned' and if that is not possible its price together with 'reasonable interest. It is pertinent to note that Sub-section (2) of Section 6C uses the words. 'return the essential commodity seized' and not the word 'release the essential commodity seized'.' It seem to us that having regard to the scheme of the Act, the object and purpose of the statute and the mischief it seeks to

(9 of 11) [CW-13220/2015]

guard against the word 'release' is used in the limited sense of release for sale, etc., so that the same becomes available, to the consumer public. There could be no question of releasing the commodity in the sense of returning it to the owner or person from whom it was seized even before the proceeding, for confiscation stood completed and before the termination of the prosecution in the acquittal of the offender. Such a view would render Clause (b) of Section 7(1) totally nugatory. It seems to us that Section 6E is intended to serve a dual purpose, namely (i) to prevent interference by courts, etc., and (ii) to effectuate the sale of the essential commodity under Sub-section (2) and the return of the animal, vehicle, etc., under the second proviso to Sub-section (1) of Section 6A. In that sense Section 6E is complementary in nature. We are, therefore, of the opinion that the High Court was right in the ultimate conclusion it reached."

11. On the other hand, learned counsel for the respondents

submits that against the aforementioned order dated 28.10.2015,

the petitioner has already preferred a revision petition before the

learned Sessions Judge, Sriganganagar on 06.11.2015 being

Criminal Revision No.274/2015, which fact has been concealed by

the petitioner while filing the present petition.

11.1 Learned counsel further submits that after an interim order

came to be passed in favour of the petitioner by this Hon'ble Court

on 06.11.2015, the aforementioned revision petition was

dismissed as not pressed. Learned counsel also submits that at

the time of not pressing the aforementioned revision petition, the

factum of filing the present petition and passing of the interim

order was concealed by the petitioner from the Court of learned

Sessions Judge.

12. Learned counsel for the respondents further submits that

whenever any essential commodity is seized in pursuance of any

(10 of 11) [CW-13220/2015]

order made under Section 3, pending consideration under Section

6-A, any court, tribunal, or other authority shall not have

jurisdiction to make orders with regard to possession, delivery,

disposal, release or distribution of such essential commodity.

13. Learned counsel for the respondents also submits that after

issuance of the notification dated 20.10.2015, an inspection was

conducted in the business premises of the petitioner, and during

such inspection, the petitioner failed to produce the license and

other relevant records of the transactions of his business,

whereupon the seizure in question was made.

13.1 Learned counsel further submits that the District Collector,

on count of apprehension of the seized pulses getting useless,

while issuing notice to the petitioner, ordered the auction of seized

cereal vide order dated 28.10.2015.

14. Learned counsel for the respondents also submits that

though the petitioner had made an application for release of the

stock in its favour on surety, but the said application was filed

belatedly, and by that time, respondent No.2 had already passed

the necessary orders.

15. Learned counsel for the respondents further submits that

adequate opportunity to make the necessary submissions before

the District Collector was given to the petitioner before passing of

the impugned order.

16. Learned counsel for the respondents also submits that since

the petitioner was found guilty of violating the provisions of law,

therefore, the seizure in question was rightly made by the

authorities concerned; thus, the impugned order has rightly been

passed by the respondents authorities.

(11 of 11) [CW-13220/2015]

17. After hearing learned counsel for the parties as well as

perusing the record of the case, alongwith the judgment/order

cited above, this Court finds that on 21.10.2015 i.e. immediately

after issuance of the notification dated 20.10.2015, the inspection

was conducted by the respondents, whereupon the stock in

question was seized. The said factual aspect of the matter makes

it clear that even prior to expiry of the period of 15 days from the

date of the notification dated 20.10.2015, the inspection was

conducted and the stock of the petitioner was seized. Indisputably,

during the said period of 15 days, the petitioner was entitled to

obtain and produce the necessary license. It is also noted by this

Court that the aforementioned notification dated 20.10.2015 in its

proviso to clause (4), contained a stipulation that "Provided also

that dealer and producer of pulses shall obtain a license within

fifteen days of commencement of this order."

18. With the aforesaid observations, the present petitions are

allowed, and accordingly the impugned order dated 28.10.2015 &

impugned notice dated 30.10.2015 - (CWP No.13220/2015) -

and impugned order dated 04.11.2015, impugned notice dated

30.10.2015 & impugned order dated 27.11.2015 - CWP

No.13848/2015 - are quashed and set aside. Accordingly, the

stock in question are directed to be released in favour of the

petitioners. All pending applications stand disposed of.

(DR.PUSHPENDRA SINGH BHATI),J.

118-119-SKant/-

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