State of West Bengal & Ors Vs.
Calcutta Hardware Stores & Ors  INSC 21 (20 February 1986)
SEN, A.P. (J) SEN, A.P. (J) RAY, B.C. (J)
CITATION: 1986 AIR 614 1986 SCR (1) 364 1986
SCC (2) 203 1986 SCALE (1)256
Constitution of India - Article 226 - Ad
interim exparte orders - Grant of - Restraint and circumspection - Necessary.
600 metric tonnes of tin plates worth about
Rs.60 lakhs were seized from the respondent-firm. Prosecution was launched by
the State Government against the respondents under ss.7 and 8 of the Essential
Commodities Act 1955 for violation of paragraph 3(2) of the West Bengal
Declaration of Stocks and Prices of Essential Commodities Order 1977 and under
ss.120B and 420 of the Indian Penal Code 1860. Show cause notices for
confiscation of the seized goods were also issued by the Additional Collector
under s.6A of the Act.
In the Writ Petition under Article 226 before
the High Court the respondents moved an application for release of the seized
goods which was rejected by a Single Judge. In appeal the Division Bench set
aside the interlocutory order of the Single Judge and directed the release of
the seized goods to the respondents on their furnishing of a bank guarantee of
Rs.5 lakhs in the form of fixed deposit recepits and also on furnishing
security of immovable property being 0.71 acre of land situate at Police
Station Titaghur District 24 pargana.
Allowing the appeal of the State to this
HELD: 1. Although the powers of the High
Court under Art.226 are far and wide and the Judges must ever be vigilant to
protect the citizens against arbitrary executive action, nonetheless, the
Judges have a constructive role and therefore, there is always the need to use
such extensive powers with due circumspection. There has to be in the larger
public interest an element of self-ordained restraint. It was distressing that
despite a long line of decisions of Supreme Court deprecating the cursory
manner of passing such interlocutory orders for the mere asking, the High Court
365 should have passed the impugned order in the manner that it did. [370 C-D;
2. The ad interim order of the Division Bench
of the High Court was illegal and invalid. The result of the order was that the
respondents under threat of contempt secured release of valuable seized
material practically furnishing little or no security. The observations of the
Division Bench which had the effect of prejudging the whole issue before the
Single Judge who was seized of the writ petition, as also foreclosing the trial
of the respondents for commission of the alleged offences had also no legality
and propriety. [367 C; 367 G-H; 368 A] Siliguri Municipality & ors. v.
Amalendu Das & Ors.,  2 S.C.C. 436; Assistant Collector of Central
Excise, Chandan Nagar west Bengal v. Dunlop India Pvt. Ltd. & Ors., 
1 S.C.C. 260; State of Rajasthan & Ors. v. M/s.
Swaika Properties & Anr.,  3 S.C.C.
217; Siliguri Municipality, Titaghur Paper Mills Co. Ltd. v. State of Orissa,
 2 S.C.C. 433; Union of India v. Oswal Woollen Mills Ltd.,  2
S.C.C. 646; Union of India v. Jain Shudh Vanaspati Ltd., C.A.No. 11450/83 and
Samarias Trading Co. Pvt. Ltd. v. S. Samuel,  4 S.C.C. 666; relied upon.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 627 of 1986.
From the Judgment and Order dated 11th
December, 1985 of the Calcutta High Court in F.M.A.T. No. 4053 of 1985.
D.N. Mukherjee and H.K. Puri for the
Bhola Nath Sen, Bhasker Sen, B.P. Singh, V.
Sheker, S. Roy and L.P. Agarwala for the Respondents.
The Order of the Court was delivered by SEN,
J. We had allowed the appeal at the conclusion of hearing of January 31, 1986.
We now proceed to give the reasons therefor.
In this appeal by special leave the short
point is as to the legality and propriety of an ad-interim order dated 366
December 11, 1985 passed by a Division Bench of the Calcutta High Court consisting
of R.N. Pyne and Ajit Kumar Sen Gupta, JJ. setting aside an interlocutory order
of Padma Khastgir, J. dated November 6, 1985. By the impugned order, the
learned Judges have directed the release to the respondents of more or less 600
metric tonnes of tin plates which, according to the State Government, are worth
nearly about Rs.60 lakhs, seized from them for alleged contravention of item
24, schedule 1 to the West Bengal Declaration of Stocks and Prices of Essential
Commodities Order, 1997 and which, according to the respondents, are nothing
but waste material, on condition set out by them, namely, on the furnishing of
bank guarantee of Rs.5 lakhs in the form of fixed deposit receipts and also on
furnishing security of immovable property being 0.71 acre of land situate at
Police Station Titaghur, District 24 Pargana.
The learned Judges while making the impugned
order have unfortunately made certain observations which seek to prejudge the
issues involved in the prosecution launched against the respondents by the
State Government for committing alleged offences punishable under ss.7 and 8 of
the Essential Commodities Act, 1955 for violation of the mandatory provisions
of paragraph 3(2) of the West Bengal Declaration of Stocks and Prices of
Essential Commodities Order, 1977 and of having committed alleged offences
punishable under ss.120B and 420 of the Indian Penal Code, 1860. They have gone
to the extent of observing that the notices for confiscation of the seized
goods were issued by the Additional Collector, 24 Paragana Alipore under s.6A
of the Act without any basis in that they do not answer the description of tin
plates, tin plates waste waste or defective tin free steel sheets and therefore
were not essential commodities within the meaning of s.2(a) of the Act and the
said Order issued thereunder.
Looking to the seriousness of the charges and
the circumstances attendant upon the seizure of the huge quantity of tin
plates, the learned Single Judge had very rightly and properly refused to grant
the application for release of the seized goods. It is rather surprising that
the learned Judges in hearing an appeal from an interlocutory order should have
passed the impugned order directing release of the seized goods without
affording an opportunity to the State Government to file a return to the writ
petition. There is material on 367 record to show that the seized goods are
essential commodities, namely, Notification No.SO.508(E)/ESS/Iron &
Steel-2A dated 1.7.1985 issued by the Government of India, Ministry of Steel,
Mines & Coal, and examination report dated November 13, 1985 by the
Appraiser (Metal Expert).
We are greatly distressed that the learned
Judges despite a long line of decisions of this Court starting from Siliguri
Municipality & Ors. v. Amalendu Das & Ors.  2 S.C.C. 436 to
Assistant Collector of Central Excise, Chandan Nagar West Bengal v. Dunlop
India Ltd. & Ors.  1 S.C.C. 260, down to State of Rajasthan &
Ors. v. M/s Swaika Properties & Anr.  3 S.C.C. 217 deprecating the
cursory manner of passing such interlocutory orders for the mere asking, should
have passed the impugned order in the manner that they did. It seems that the
pronouncements of this Court have had little effect on them. The result of this
has been that the respondents under threat of contempt secured release of such
valuable seized material practically furnishing little or no security. We are
really amazed that the State Government should have been compelled to release
the goods as per the directions of the learned Judges. What makes it worse is
that the respondents are facing prosecutions under s.3 read with ss.7 and 8 of
the Essential Commodities Act as also under ss.120B and 420 of the Indian Penal
Code, and have also been served with a notice by the Additional Collector under
s.6A of the Act to show cause why the seized material should not be confiscated
It is needless to stress that the question
whether the seized goods answer the description of tin plates, tin plates waste
waste or waste material etc. or whether the respondents had committed a
contravention of paragraph 3(2) of the West Bengal Declaration of Stocks and
Prices of Essential Commodities Order issued under s.3(1) of the Act, which is
an offence punishable under ss.7 and 8, are all questions to be gone into and
tried before the learned Special Judge, 24 Paragana, Alipore before whom the
trial is pending. That apart, the observations call in question the validity of
the action of the Additional Collector in serving a notice of confiscation
under s.6A of the Act with respect to the seized goods. We do not see legality
and propriety of making these observations by the learned Judges which have the
effect of prejudging the whole issue before the learned Single Judge who is
seized of the writ petition, as also 368 foreclosing the trial of the
respondents for commission of the alleged offences.
In somewhat similar circumstances, Chinnappa
speaking for the Court in Dunlop India Ltd.'s
case, after referring to the earlier decisions in Siliguri Municipality,
Titaghur Paper Mills Co. Ltd. v. State of Orissa  2 S.C.C. 433 Union of
India v. Oswal Woollen Mills Ltd.  2 S.C.C. 646, Union of India v. Jain
Shudh Vanaspati Ltd.
C.A.No.11450/83, and Samarias Trading Co.
Pvt. Ltd. v. S. Samuel  4 S.C.C. 666, expressed strong disapproval of the
practice prevailing in the High Court of granting such ad-interim orders which
practically have the effect of the grant of the main relief in the petition
under Art. 226 of the constitution, and observed :
"We have come across cases where the
collection of public revenue has been seriously jeopardised and budgets of
governments and Local Authorities affirmatively prejudiced to the point of
precariousness consequent upon interim orders made by courts. In fact,
instances have come to our knowledge where Governments have been forced to
explore further sources for raising revenue, sources which they would rather
well leave along in the public interest, because of the stays granted by
courts. We have come across cases where an entire Service is left in a stay of
flutter and unrest because of interim orders passed by courts, leaving the work
they are supposed to do in a state of suspended animation. We have come across
cases where buses and lorries are being run under orders of court though they
were either denied permits or their permits had been cancelled or suspended by
Transport Authorities. We have come across cases where liquor shops are being
run under interim orders of court. We have come across cases where the
collection of monthly rentals payable by excise contractors has been stayed
with the result that at the end of the year the contractor has paid nothing but
made his profits from the shop and walked out. We have come across cases where
dealers in food grains and essential commodities have been allowed to take 369
back the stocks seized from them as if to permit them to continue to indulge in
the very practices which were to be prevented by the seizure. We have come
across cases where land reform and important welfare legislations have been
stayed by courts.
Incalculable harm has been done by such
interim orders. All this is not to say that interim orders may never be made
against public authorities.
There are, of course, cases which demand that
interim orders should be made in the interests of justice. Where gross
violations of the law and injustices are perpetrated or are about to be
perpetrated, it is the bounden duty of the court to intervene and give
appropriate interim relief.
In cases where denial of interim relief may
lead to public mischief, grave irreparable private injury or shake a citizen's
faith in the impartiality of public administration, a court may well be
justified in granting interim relief against public authority. But since the law
presumes that public authorities function properly and bona fide with due
regard to the public interest, a court must be circumspect in granting interim
orders of far-reaching dimensions or orders causing administrative, burdonsome
inconvenience or orders preventing collection of public revenue for no better
reason than that the parties have come to the court alleging prejudice,
inconvenience or harm and that a prima facie case has been shown. There can be
and there are no hard and fast rules. But prudence, discretion and
circumspection are called for. There are several other vital considerations
apart from the existence of a prima facie case. There is the question of
balance of convenience. There is the question of irreparable injury. There is
the question of the public interest. There are many such factors worthy of
consideration." Quite recently, this court in Swaika Properties' case
"It is to be deeply regretted that
despite a series of decisions of this Court deprecating the practice 370
prevalent in the High Court of passing such interlocutory orders for the mere
asking, the learned Single Judge should have passed the impugned ad interim
exparte prohibitory order the effect of which, as the learned Attorney-General
rightly complains, was virtually to bring to a standstill a development scheme
of the Urban Improvement Trust, Jaipur viz. Civil Lines Extension Scheme,
irrespective of the fact whether or not the High Court had any territorial
jurisdiction to entertain a petition under Article 226 of the Constitution.
Such arbitrary exercise of power by the High Court at the public expense reacts
against the development and prosperity of the country and is clearly
detrimental to the national interest." Although the power of the High Court
under Art.226 of the Constitution are far and wide and the Judges must ever be
vigilant to protect the citizens against arbitrary executive action,
nonetheless, the Judges have a constructive role and therefore there is always
the need to use such extensive powers with due circumspection. There has to be
in the larger public interest an element of self- ordained restraint. We hope
and trust that the High Court would hereafter use its powers to grant such
ad-interim ex- parte orders with greater circumspection.
The appeal must therefore succeed and is
allowed. The order passed by the Division Bench dated December 11, 1985 is set
aside and that of the learned Single Judge dated November 6, 1985 dismissing
the application for release of the seized goods is restored. We direct that the
High Court shall take immediate steps to recover back the seized property from
the respondents including the two vehicles bearing registration nos. USY 6342
and WBQ 6688 if they have been delivered in pursuance of the orders passed by the
learned Judges to respondents. The respondents shall pay the costs of the
appellants. Costs quantified at Rs.5,000.
A.P.J. Appeal allowed.