State of Karnataka Vs. Krishna Bhima
Walvakar & ANR [1981] INSC 110 (7 May 1981)
SEN, A.P. (J) SEN, A.P. (J) REDDY, O.
CHINNAPPA (J) ISLAM, BAHARUL (J)
CITATION: 1981 AIR 1468 1981 SCR (3) 829 1981
SCC (3) 301 1981 SCALE (1)913
ACT:
Essential Commodities Act, 1957-Sections 6A,
6B & 6C- Scope of-Consignment moved on a Sunday-Whether exonerates the
consignee from making the requisite declaration before the specified authority.
Interpretation-Power coupled with public
duty-Whether use of word 'may' in an order makes the power discretionary.
HEADNOTE:
Clause 3(2)(a) of the Edible oil, Edible oil
Seeds and oil Cakes (Declaration of Stocks) order, 1976 enjoins that before a
consignment of oil leaves a place a stock holder who transports edible-oils
shall make a declaration in Form II to the specified officer of the place (in
this case the Tehsildar of the) Taluk from where such edible oils are
transported. Clause (b) enjoins that the declaration shall be shown at every
check post on the route immediately after arrival there.
A police officer seized in transit a truck
carrying a large quantity of ground. nut oil on the ground that the requisite
declaration in Form II had not been furnished to the Tehsildar of the place of
despatch of the consignment.
The Deputy Commissioner, after issuing a
notice to the respondent under section 6B of the Essential Commodities Act,
1955, released the truck and the consignment on taking from him an indemnity
bond and a bank guarantee towards the price of oil. The respondent however
produced before the Deputy Commissioner a copy of the invoice issued by the
seller and a declaration in Form 39 prescribed under the Mysore Sales Tax Act,
1957.
The Deputy Commissioner ordered confiscation
of the truck and the oil on the view that the respondent had contravened the
provisions of clause 3(2) (a) and (b) of the order. On appeal the Sessions
Judge affirmed this order.
A single Judge of the High Court in revision
held that there was no contravention of the requirement of the order because
the day on which the goods were despatched being a Sunday, it was impossible
for the respondent to deliver on that day to Tehsildar the declaration in Form
II and that the law would not expect a citizen to do the impossible.
The respondent in the State's appeal to this
Court contended that: (1) the confiscation of the entire consignment was
arbitrary and excessive in that the use of the word "may" in section
6A made exercise of that power discretionary; (2) since there was nothing to
show that the goods had been seized, the power of 830 confiscation under
section 6A had not been properly exercised and (3) the order of confiscation
was a nullity in that the Deputy Commissioner had not issued a proper show
cause notice under section 6B of the Act.
Allowing the State's appeal ^
HELD: 1 (a) The word "may" used in
section 6A does not mean that the Deputy Commissioner could not order
confiscation of the entire consignment of an essential commodity where he found
contravention of any of the orders issued under section 3 of the Act. The power
conferred on the Deputy Commissioner under section 6A is a power coupled with
public duty. [834 H] (b) In directing confiscation of the entire consignment
which was being transported without furnishing the declaration in Form II the
Deputy Commissioner acted in public interest. The whole purpose of the control
order was to maintain control over the stock of essential commodities at a
place with a view to securing their equitable distribution and availability at
fair prices. The requirements of clause 3 (2) (a) and (b) are mandatory. [835
C-D] (c) "Stock holder" as defined in the order includes the
purchaser of oil who is in possession or control thereof. By a legal fiction
the explanation treats the owner to have control over the oil in transit.
Respondent 4 being the purchaser fell within the definition of "stock
holder".
Moreover there was nothing to show that the
consignor had reserved the jus disponendi by the terms of the contract or
appropriation and, therefore, the property in the goods passed to respondent 4
(purchaser) on delivery to a common carrier under section 25 of the Sale of
Goods Act 1930. [836 A-B] (d) The Deputy Commissioner was right in holding that
the declaration in Form II was required to be filed before the specified
officer before the goods left a place and that the declaration should be
produced at every check post in transit as required by law. The respondent
having contravened the provisions of clause 3 (2) (a) and (b) of the order the
truck and the consignment of oil were rightly confiscated. [837 A-C] (e) It is
not correct to say that since the date of despatch of the goods was a Sunday
there was no need to comply with the requirements of clause 3 of the order. If
the consignment had to be dispatched on Sunday nothing prevented the parties
from furnishing the declaration a day earlier. In a transaction of such a
magnitude a duty was cast on the party to comply with the requirements of the
order before the consignment left the place. [834 A-B]
2. The very fact that the seized groundnut
oil was released only after the respondent furnished the requisite Bank
guarantee clearly showed that the consignment had been seized. Therefore power
under section 6A had been correctly exercised. [837 E-F]
3. There was no breach of the requirement of
section 6B. In response to the show cause notice issued by the Deputy
Commissioner respondent 4 appeared before him and filed a copy of the invoice
and declaration in Form 39 of the Mysore Sales Tax Act. The Deputy Commissioner
gave a hearing to the parties. That being so, validity of the confiscation
under section 6C could not be challenged. [837 G-H] 831
CRIMINAL APPELLATE JURISDICTION: Criminal
Appeal No. 669 of 1980.
Appeal by special leave from the judgment and
order dated the 2nd February, 1979 of the Karnataka High Court in Criminal
Revision Petition No. 320 of 1978.
B.R.L. Iyengar and N. Nettar for the
Appellant.
A.L. Wahi and K.C. Dua for Respondent Nos.
1-3.
Ram Jethmalani and Miss Rani Jethmalani for
Respondent No. 4.
The Judgment of the Court was delivered by
SEN, J. In this appeal, by special leave, from the judgment of the Karnataka
High Court, the only issue between the parties is as to the legality and
propriety of the order of confiscation passed by the Deputy Commissioner,
Belgaum, of a consignment of 7,200 kg. of groundnut oil seized for
contravention of sub-cls. (2) (a) and (b) of cl. 3 of the edible oil, edible
oil Seeds and oil Cakes (Declaration of Stocks) order, 1976 hereinafter called
the order).
Briefly stated the facts are these: on 6.6
1977 at about 11.30 a.m., the Sub Inspector of Police, Hukeri, intercepted a
truck bearing registration No. MHL 2675 laden with 40 barrels of groundnut oil
weighing 7,200 kg. which were being transported from Kampli to Nippani, without
furnishing a declaration in Form II to Tahsildar, Hospet, as required under
sub-cls. (2) (a) and (b) of cl. 3 of the order. The Sub Inspector of Police,
after seizing the vehicle and the oil registered a case and thereafter reported
the matter to the Deputy Commissioner, Belgaum. He forwarded the report
together with the seized vehicle and the oil to the Deputy Commissioner,
Belgaum for taking action under s. 6-A of the Essential Commodities Act, 1955
(hereinafter called the Act). The truck was released to the owner on his executing
an indemnity bond, and the groundnut oil released to the Respondent 4, Gopinath
Manikchand Dharia, Proprietor, Messrs Anant Oil Mills, Nippani on his
furnishing a bank guarantee for Rs. 70,000/- towards the price thereof. The
Deputy Commissioner gave notices as required under s. 6-B of the Act to the
parties concerned.
During the enquiry, the respondent No. 4
produced before him a copy of the invoice dated 5.6.1977 issued by Sri
Satyanarayana Oil Mills, Bellary Road, Kampli, show- 832 ing the sale of 7,200
kg. of groundnut oil to Messrs Anant Oil Mills, Nippani. He also produced a
copy of the declaration in Form No. 39 prescribed under the Mysore Sales Tax
Act, 1957. The Deputy Commissioner, after affording the parties an opportunity
of hearing, held that the respondents had contravened the provisions of sub-cl.
(2) (a) and (b) of Cl. 3 of the order and accordingly confiscated 40 barrels of
groundnut Oil and the truck bearing registration No. MHL 2675.
The respondents preferred an appeal under s.
6-C of the Act before the II Additional Sessions Judge, Belgaum, who was the
Appellate Authority. But he, by his well-considered judgment, confirmed the
order of confiscation passed by the Deputy Commissioner under s. 6-A of the
Act. Thereupon, the respondents preferred a revision before the High Court and
a learned Single Judge has, by his judgment, set aside the order of the
Appellate Authority as well as the Deputy Commissioner on the ground that there
was substantial compliance of the requirements under sub-cls. (2) (a) and (b)
of cl. 3 of the order inasmuch as the respondents had sent the prescribed
declaration in Form II to the Tahsildar, Hospet on 7.6.1977. According to the
High Court, no such declaration could be furnished on 5.6.1977 as it was a holiday
being Sunday. Upon that view, the High Court set aside the order of
confiscation passed by the Deputy Commissioner under s. 6-A of the Act and
directed restoration of all the properties to the persons concerned.
Hence this appeal by special leave.
The State was not interested in the
confiscation of the truck and, therefore, special leave is confined to the
question of the legality and propriety of the order of confiscation passed by
the Deputy Commissioner under s. 6-A of the Act in respect of the seized
groundnut Oil.
On the admitted facts, there can be no doubt
whatever that there was a contravention of sub-cls. (2) (a) and (b) of cl. 3 of
the order. Sub-cls (2) (a) and (b) of cl. 3 are as follows:
3. (2) A stock holder who transports
Edible-Oils, Edible Oil Seeds and Oil Cakes shall make a declaration in Form II
to the officer specified in Sub-Clause (I) in respect of such Edible Oils,
Edible Oil Seeds and Oil Cakes,- (a) at the place from where such Edible Oils,
Edible Oil Seeds and Oil Cakes are transported, before such 833 Edible Oils,
Edible Oil Seeds and Oil Cakes leave the said place; and (b) at every check
post on the route, immediately after their arrival there:
Provided that the declaration at a check post
shall be made in person by the stock holder or by the person in charge of such
Edible Oils, Edible Oil Seeds and Oil Cakes to such officer, as the Government
may by special or general order specify.
The expression 'stock-holder' has been
defined in the order as meaning "Every person who is in possession or
control of 150 kilograms or more of groundnut oil.. (b) 15 quintals or more of
groundnut oil or cake.. (c) 15 quintals or more of groundnut seeds.. and (d) 20
quintals of groundnut shell. The Explanation thereto provides that edible oil,
edible oil seeds and oil cakes in transit shall be presumed to be under the
control of the owner thereof. D The order passed by the High Court setting
aside the order of r confiscation made by the Deputy Commissioner under s. 6-A
of the Act can hardly be supported. In reaching the conclusion that it did, the
High Court observes that 5.6.1977 being Sunday, the declaration in Form II
could not be delivered to the Tahsildar since the Taluka office was closed. Nor
could it be sent by registered post acknowledgement due as the Post office
could not have been working on that day. It then goes on to observe:
Then, the question is, whether a stock-holder
should not at all transport his stock on a Sunday, though the contractual terms
of his business of such transaction required that it should be done, as the
stock should reach the consignee on a particular date.
It is impossible to conceive that law expects
any citizen to perform what is impossible to be performed in law. Now the fact
that Form II has been received in the office of the Tahsildar on 7.6.1977,
clearly indicates that it must have been sent by registered post on 6.6.1977.
Anyhow, when once it is seen that it was impossible for the stock-holder
(petitioner-4) to submit Form-II on 5.6.1977 before transporting groundnut-oil
in that truck on that day, it cannot at all be said that petitioner-4 has
committed any breach of the provisions of the order.
834 It is difficult to subscribe to the view
expressed by the High Court. When the parties were entering into a transaction
of such magnitude there was a duty cast on them to comply with the requirements
of sub-cls. (2) (a) and (b) of cl. 3 of the order before the consignment left
the place.
If the consignment was to be loaded on
5.6.1977 which was a Sunday, nothing prevented the parties from furnishing a
declaration on 4.6.1977. The High Court appears to be labouring under a belief
that there need be no strict observance of the laws on a Sunday. There is no
warrant for this view.
Faced with the situation that it was rather
difficult, if not impossible, to support the view taken by the High Court, Shri
Ram Jethmalani, learned counsel for the respondent No. 4 made a valiant effort
to avert the order of confiscation passed under s. 6-A of the Act, by advancing
the following three contentions: (1) The power conferred on the Deputy
Commissioner under s. 6-A of the Act, by the use of the word 'may', makes it a
discretionary power which had to be used according to sound judicial
principles. It is urged that Messrs Anant Oil Mills to whom the groundnut oil
belonged had committed no breach of sub-cls. (2) (a) and (b) of cl. 3 of the
order and therefore, the order of confiscation of the entire consignment passed
by the Deputy Commissioner was wholly arbitrary and excessive. (2) The power of
confiscation entrusted to the Deputy Commissioner under s. 6-A of the Act is
exercisable in relation to an essential commodity seized in pursuance of an
order made under s. 3. There was nothing to show that the groundnut oil in
question had been seized or that a report of such seizure had been made without
unreasonable delay to the Deputy Commissioner under the order and, therefore,
the Deputy Commissioner had no power to direct its confiscation under s. 6-A of
the Act. (3) It is not established that the Deputy Commissioner had complied
with the statutory requirements of s. 6-B of the Act, by giving a show cause
notice to the persons concerned against the action proposed to be taken or
afforded them an opportunity of hearing and, therefore, the order of
confiscation passed by him under s. 6-A was a nullity. We are afraid, none of
these contentions can prevail.
As to point No. (1), it is axiomatic that the
power of confiscation of an essential commodity seized for contravention of an
order issued under cl. 3, is a discretionary power. The use of the word 'may',
however, does not necessarily mean that the Deputy Com missioner cannot, in the
given circumstances of a particular case, direct the confiscation of the entire
consignment of an essential commodity in relation to which there is a
contravention of any of the orders issued under s. 3 of the Act. It all depends
on the facts 835 and circumstances of each case whether the confiscation should
be of an entire consignment or part of it, depending upon the nature of the
contravention. The power conferred on the Deputy Commissioner under s. 6-A of
the Act, by the use of the word 'may', makes the power coupled with a public
duty. Sometimes it may be in the public interest to direct confiscation of the
entire consignment of an essential commodity when there is deliberate
contravention of the provisions of an order issued under s. 3 of the Act.
In the facts and circumstances of the present
case, it cannot be doubted for a moment that the Deputy Commissioner acted in
the public interest to direct confiscation of the entire consignment of the
groundnut oil, as it was being transported from one place to. another without
furnishing the requisite declaration in Form II. All systems of control, supply
and distribution of essential commodities would fail unless the various control
orders issued by the Central Government under s. 3 of the Act in relation
thereto are strictly observed. These control orders are issued under s. 3 when
the Central Government is of opinion that it is necessary or expedient so to do
for maintaining or increasing supplies of essential commodities or for securing
equitable distribution and availability at fair prices etc.
Sub-cls. (2) (a) and (b) of cl. 3 of the
order enjoin that the stock-holder shall make a declaration in From II in
relation to movement of edible oil, edible oil seeds and oil cakes, to the
Tahsildar in-charge of the taluka of the place from where such edible oil,
edible oil seeds and oil cakes are transported before such edible oil, edible
oil seeds or oil cakes, leave the place. The whole purpose is to maintain a
control over the stock of such essential commodities at a place with a view to
secure their equitable distribution and availability at fair prices. The requirements
of sub-cls.
(2) (a) and (b) of cl. 3 of the order are
clearly mandatory.
We fail to comprehend the contention that
there was only a technical breach. Under sub-cls. (2)(a) and (b) of cl. 3 of
the order, a stock-holder is required to furnish a declaration in Form II in
relation to movement of edible oil, edible oil seeds and cakes, to the
Tahsildar in-charge of the taluka at the place from where such commodity is
sought to be transported before such commodity leaves the place. The definition
of 'stock-holder' certainly means the consignor who holds such stock of edible
oil, oil seeds and cakes and also may include a purchaser of such oil, seeds
and cakes who is in possession or control thereof.
Explanation to the definition of 836
'stock-holder', by a legal fiction, treats the owner to have control over the
edible oil, edible oil seeds and cakes, in transit. The respondent No. 4, being
the purchaser, also comes within the definition of 'stock-holder' by reason of
the said Explanation. There is nothing to show that the consignor had reserved
the jus disponendi by the terms of the contract or appropriation and,
therefore, the property in the goods passed to the respondent No. 4 on their
delivery to a common carrier under s. 25 of the Sale of Goods Act, 1930.
The allegation in the complaint is that 40
barrels of groundnut oil weighing 7,200 kg. were being transported by the truck
bearing No. MHL 2675 without furnishing the requisite declaration in Form II
and it was intercepted at the Hukeri check-post by the sub-Inspector of Police.
In response to a notice issued by the Deputy Commissioner under s. 6-B of the Act,
the respondent No. 4 produced before him the documents of title in relation to
the goods. From these documents, it is clear that the consignor was Sri
Satyanarayana Oil Mills, Kampli and the consignee was Messrs Anant Oil Mills,
Nippani and that the truck was laden with the consignment. These facts were
also borne out by the particulars furnished in the declaration in Form 39 under
the Mysore Sales Tax Act, 1957.
It appears from these documents that Sri
Satyanarayana Oil Mills, after despatching the consignment, purported to
furnish the declaration in Form II to the Tahsildar, Hospet, which was received
by him on 7.6.1977, requesting for the release of the groundnut oil in
question. The respondent No. 4 contended before the Deputy Commissioner that
there was substantial compliance of the requirements of sub-cls.
(2)(a) and (b) of cl. 3 of the order and,
therefore, the seized groundnut oil be released, but he rejected the contention
on the ground that the declaration in Form II was required to be filed before
the specified officer before the goods left the place. The Deputy Commissioner
requisitioned the form produced before the Tahsildar, but i t did not bear any
date. He was of the view that the declaration was not sent by registered post
on 6.6.1977 as asserted, but had apparently been handed over in the Taluka
office and acknowledgment obtained for the same. The Deputy Commissioner
observed that the requirement of law was that the declaration in Form II had to
be produced at every check-post during transit, and this was not done. The
driver of the truck did not have a copy of the declaration in Form II, but only
the declaration in Form 39 which could not be taken to be in compliance of law.
Obviously, the stock- holder, Sri Satyanarayana Oil Mills, after despatching
the 837 consignment of groundnut oil, purported to furnish the declaration in
Form II. This was in complete breach of the requirements of sub-cls. (2) (a)
and (b) of cl. 3 of the order. The Deputy Commissioner, therefore, held that
the respondents having contravened the provisions of sub-cls. (2) (a) and (b)
of cl. 3 of the order, the seized truck alongwith the entire consignment of the
groundnut oil was liable to be confiscated under s. 6-A of the Act. The learned
Sessions Judge, in our opinion, rightly confirmed the order of confiscation
passed by the Deputy Commissioner under s. 6-A of the Act as it was
unassailable. At no point of time was there a contention raised that the Deputy
Commissioner had failed to exercise his discretion as to the quantity of the
groundnut oil liable to be seized. It is now too late in the day to urge the
point before this Court. C As to point No. (2), there is no warrant for the
submission that there was nothing to show that the groundnut oil had been
seized and, therefore, the power of confiscation was not exercisable by the
Deputy Commissioner under s. 6-A of the Act, It is manifest from the order of
the Deputy Commissioner that there was a contravention of sub-cls. (2) (a) and
(b) of cl. 3 of the order and that the Sub Inspector of Police seized both the
truck and the consignment of groundnut oil, and forwarded the same to him along
with his report for taking action under s. 6-A of the Act. The contention of
the Public Prosecutor before the Deputy Commissioner was that the seized truck
and the groundnut oil were liable to be confiscated. The very fact that the
seized groundnut oil was released to the respondent No. 4 on his furnishing a
bank guarantee for Rs. 70,000 for the price of the consignment of the groundnut
oil clearly shows that it had been seized. It is, therefore, idle to contend
that the power of confiscation under s. 6-A of the Act was not exercisable for
want of seizure.
As to point No. (3), from the narration of
facts above, it is amply clear that there was no breach of the requirements of
s. 6-B of the Act on the part of the Deputy Commissioner. The record shows that
the Deputy Commissioner, on receipt of the report of the Sub Inspector of
Police mentioning the fact of contravention of sub-cls. G (2) (a) and (b) of
cl. 3 of the order and forwarding the seized truck and the consignment of
groundnut oil, issued notice to the parties concerned under s. 6-B of the Act
to show cause against their confiscation. In response to the notice, the
respondent No. 4 appeared before the Deputy Commissioner and filed a copy of
the invoice together with a copy of the declaration in Form 39 under the Mysore
838 Sales Tax Act, 1957. The Deputy Commissioner sent for the declaration in
Form II as furnished to the Tahsildar which did not bear a date. He also gave a
hearing to the parties.
That being so, the validity of the order of
confiscation under s. 6-C cannot be challenged on the ground that the
requirements of s. 6-B had not been fulfilled.
The result, therefore, is that the appeal
succeeds and is allowed. The judgment of the High Court is set aside and that
of the II Additional Sessions Judge, Belgaum, upholding the order of
confiscation passed by the Deputy Commissioner, Belgaum, is restored, insofar
as it relates to the confiscation of the consignment of groundnut oil weighing
7,200 kg. under s. 6-A of the Essential Commodities Act, 1955.
P.B.R. Appeal allowed.
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