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M/s. Vinayaka Agro Products v/s Inspector Of Police, VC CSD, Khammam & Another

    Writ Appeal No. 1637 of 1995
    Decided On, 06 May 1996
    At, High Court of Andhra Pradesh
    For the Appellant: V. H. V. R. R. Swamy and Thimmadi Sudhakar Reddy, Advocates. For the Respondent: Govt. Pleader.

Judgment Text

This Writ Appeal is directed against the order passed by the learned single Judge of this Court in W.P. No. 19393 of 1995 dated 14-9-1995. The learned Judge dismissed the writ petition refusing to grant any relief as prayed for.

2. The appellant-writ petitioner is a businessman from Kota, Rajasthan. The 1st respondent herein seized the oil tanker bearing No. TSA 5666 and palmoline oil under a cover of panchanama on 24-8-1995 on the allegation that the petitioner herein contravened Cl. 2(a)(3) of the Pulses, Edible Oilseeds, and Edible Oils (Storage) Control Order, 1977 (hereinafter referred to as the said order), Section 3(2)(a)(d) and Sections 7 and 8 of the Essential Commodities Act, 1955. The tanker carrying palmoline oil was coming from Grace Trading (P) Ltd., No. 9 Madras to the petitioner at Kota Rajasthan under valid Form No. 20, Money receipt and freight receipt. The same was intercepted by the 1st respondent herein at near Khammam town while the tanker was stationed at Warangal cross-roads. It is averred that on interogation the driver of the tanker did not give any satisfactory reply but the 1st respondent-Vigilance Inspector suspected that the oil was likely to be sold in Khammam Town to the oil traders without any valid documents. The driver is alleged to have stated that on instructions of the petitioner, he was to dispose of the said oil at cheaper rate in Andhra Pradesh instead of selling the same at Kota and as such he took a diversion of the road from the National Highway to the State Highway with a mala fide intention and stationed the vehicle by parking it opposite to Sri Srinivasa Auto Service, Warangal X roads, Khammam and started making enquiries for the details of the oil traders and millers of Khammam for selling the same at cheaper rates. The 1st respondent came to prima facie conclusion that the petitioner through the driver was indulging in clandestine business of palmoline oil without any valid documents i.e., way/transit permit etc. The said seizure by the 1st respondent herein is questioned in the instant writ petition on the ground that the respondents have no jurisdiction whatsoever to stop the lorry and at any rate, the respondents are not concerned as to whether the lorry driver had all the necessary documents including transit permit. The action of the seizure is alleged to be high-handed. It is stated that the 1st respondent is not concerned with the travel documents and for that reason, the 1st respondent cannot seize the oil and the tanker. It is the case of the petitioner that the action of the respondents herein is one without jurisdiction.

3. The respondents have filed counter-affidavit stating that the vehicle was seized on suspicion that the palmoline oil was likely to be disposed of at Khammam itself and on that count, the petitioner was indulging in clandestine business of selling the palmoline oil without any authorisation.

4. After an elaborate consideration of the matter, the learned Judge dismissed the writ petition on the ground that no relief could be granted and a direction cannot be issued to release the oil and the tanker in favour of the petitioner pending the proceedings under S. 6-A of the Essential Commodities Act before the 2nd respondent. The learned Judge relied upon a decision of the Division Bench of this Court in W.A. No. 954 of 1995 dated 4-9-1995. Hence the writ appeal.

5. The learned counsel for the appellant writ petitioner Mr. V. H. R. R. Swamy submits that the seizure and all consequential proceedings are absolutely illegal, void ab initio and suffer from inherent lack of jurisdiction. Learned counsel further submits that the petitioner who is a businessman and a dealer was merely transporting oil from Madras to Kota Rajasthan having purchased the same at Madras. The petitioner is stated to be a whole-sale dealer in the State of Rajasthan. The respondents are stated to have exercised their power under Clause 3 of the Pules, Edible Oil Seeds and Edible Oils (Storage Control) Order 1977 and Ss. 3(2)(a)(d) and 7 and 8 of the Essential Commodities Act. Clause (3) of the said Control Order reads as follows :

"3. Licensing dealers (and producers) :-

Notwithstanding anything contained in and State order, no person shall carry on busiess, as a dealer, after the expiration of a period of fifteen days from the coming into force of this clause, or as a producer, after the expiry of a period of fifteen days from the date of coming into force of the Pulses, Edible Oil seeds and Edible Oils (Storage Control) Amendment Order, 1987, in pulses or in edible oil-seeds or in edible oils except under and in accordance with the terms and conditions of a licence granted under a State order if the stocks of pulses or edible oil seeds or edible oils in his possession exceeds the quantities specified below :

i) Pulses 10 quintals for all pulses taken together

ii) Edible oils including 5 quintals of all edible hydrogenated vegetable oils including hydrogenated oils vegetable oils taken together

iii) Edible oilseeds 30 quintals of all edible including hydrogenated oilseeds." vegetable oils.

Section 3(2)(a)(d) of the Essential Commodities Act reads thus :-

"Sec. 3. Powers to control production, supply, distribution etc., of essential commodities :

(1) xx xx xx xx xx

(2) Without prejudice to the generality of the powers conferred by sub-sec. (1), an order made thereunder may provide -

(a) for regulating by licences, permits or otherwise the production or manufacture of any essential commodity;

(b) to (c) xx xx xx xx

(d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition; use or consumption of, any essential commodity;

(e) to (f) xx xx xx xx

to the Central Government or a State Government or to an officer or assent of such Government or to a corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order."

The control order merely prohibits and commands that no person shall carry on business as a dealer in Pulses and Edible oils or in edible oil seeds except under and in accordance with the terms and conditions of a licence granted under a State control order and also shall not possess in excess of the quantities specified thereunder. Admittedly, the petitioner is not a dealer within the meaning of the said control orders. There is no evidence whatsoever that the petitioner was actually selling or dealing in palmoline oil, admittedly a controlled commodity, in this State. At the time of seizure, tanker was merely stationed near Khammam Town and it is rather difficult to appreciate as to how the respondents came to the conclusion that the petitioner herein was selling the palmoline oil without licence or otherwise. By no stretch of imagination, the petitioner could be said to be a dealer within the meaning of the control Order within the State of Andhra Pradesh. Such an unnecessary restriction of movements of the vehicular traffic and seizure of the vehicles would convey wrong signals not only to the businessmen but to the citizens residing outside the State of Andhra Pradesh. The State and its officers are required to exercise utmost restraint and act strictly in accordance with law. It should not appear as if no vehicle with essential commodities can pass through the territory of Andhra Pradesh. Such an impression to the businessmen of the other States would not be conducive to the growth and economic development of the State itself. We are thoroughly convinced that the action of the respondents herein is absolutely illegal, void and without jurisdiction. In fact, the learned Advocate General appearing for and on behalf of the respondents could not support the action of the respondents. It is conceded that the side Control Order has no application whatsoever, to the facts of the instant case and the respondents herein could not have acted and exercised their power under the provisions of the Essential Commodities Act, 1955. But for the concession, we would have expressed our opinion in very strong terms indicating our disapproval of the action on the part of the respondents. There cannot be any doubt that the appellant-petitioner was not only put to loss and inconvenience, but also harassed.

It is evident that the tanker in question with 4.490 mts., of Palmoline oil was seized by the 1st respondent herein under a panchanama on 24-8-1995. W.P. No. 19393 of 1995 questioning the said seizure has been filed in this Court on 27-8-1995. The respondents herein filed their counter-affidavit on 14-9-1995 and the writ petition was heard by the learned single Judge and the same was dismissed on 14-9-1995 without going into the merits of the case as the proceedings under S. 6-A of the Essential Commodities Act, 1955 were pending before the 2nd respondent. Immediately after the dismissal of the writ petition on 30-9-1995, the palmoline oil that was seized was sold pursuant to the orders passed by the Joint Collector purporting it to be under S. 6-A(2) of the Act and the oil tanker was kept for safe custody. A show cause notice was issued on 26-9-1995 to the petitioner once again exercising the power under S. 6-B of the Act asking him to show cause as to why the seized stocks should not be confiscated and the petitioner submitted his explanation on 6-10-1995. As is evident that the present writ appeal preferred against the order dated 14-9-1995 in W.P. No. 19393 of 1995 was filed on 29-11-1995. Even while the writ appeal was pending, the Joint Collector, Khammam passed final orders directing confiscation of 30% of the seized stocks of palmoline oil and imposed a fine of Rs. 10,000/- in lieu of the confiscation of the oil tanker. It is stated that on 14-12-1995, the owner of the vehicle remitted Rs. 10,000/- and obtained delivery of the tanker.

6. As we have taken the view that initiation of the proceedings are vitiated as the respondents herein had no such power or jurisdiction to intercept the oil tanker and seize the same, all the consequential proceedings thereof are liable to be declared as non est and illegal. The enquiry under S. 6-A, the confiscation order passed by the Joint Collector confiscating 30% of the seized palmoline oil is declared as illegal and void. The order directing the owner of the vehicle to pay a fine of Rs. 10,000/- in lieu of confiscation of the oil tanker is also declared as illegal. The seizure, sale and the consequential confiscation of the palmoline oil and imposition of fine of Rs. 10,000/- on the owner of the oil tanker is accordingly declared as illegal as the same not supported by any authority of law. We hope and trust that the State and its over-zealous officers would not indulge and commit such illegalities hereafter.

7. It is not as if the State and its officers entrusted with the statutory powers and duties can behave like bull in a china shop. Seizure or confiscation of property of the citizens is always fraught with serious consequences. Illegal seizure and search would undoubtedly affect the guaranteed fundamental rights of the citizens and their right to carry on business in trade apart from their right to equality and equal protection of laws guaranteed by Art. 14 of the Constitution of India. The 'seizure' is nothing but taking possession by an officer authorised in pursuance of legal process and same should always be clearly supported by the authority of law. The principle would apply even with regard to the power exercised for seizure with reference to any statute including the Essential Commodities Act (Act 10 of 1955). The apex Court in N. Nagendra Rao & Co. v. State of A.P. AIR 1994 SC 2663 summarised the law on the subject (para 24) :

"No civilised system can permit an executive to play with the people of its country and claim that it is entitled to act in any manner as it is sovereign. The concept of public interest has changed with structural change in the society. No legal or political system today can place the State above law as it is unjust and unfair for a citizen to be deprived of his property illegally by negligent act of officers of the State without any remedy. From sincerity, efficiency and dignity of State as a juristic person, propounded in Nineteenth Century as sound sociological basis for State immunity the circle has gone round and the emphasis now is more on liberty, equality and the rule of law. The modern social thinking of progressive societies and the judicial approach is to do away with archaic State protection and place the State the Government at par with any other juristic legal entity. Any water-tight compartmentalisation of the functions of the State as 'sovereign and non-sovereign" or "governmental and non-governmental" is not sound. It is contrary to modern jurisprudential thinking. The need of the State to have extraordinary powers cannot be doubted. But with the conceptual change of statutory power being statutory duty for sake of society and the people the claim of a common man or because it was done by an officer of the State even though it was against law and negligently. Needs of the State, duty of its officials and right of the citizens are required to be reconciled so that the rule of law in a wel

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fare State is not shaken." and further held : "Any power for regulating and controlling the essential commodities and the delegation of power to authorised officers to inspect, search and seize the property for carrying out the object of the State cannot be a power for negligent exercise of which the State can claim immunity. No constitutional system can, either on State necessity or public policy, condone negligent functioning of the State or its Officers." But for the concession and assurance given by the learned Advocate General, we would have taken a very serious view of the matter and passed appropriate orders. 8. For all these reasons, the order of the learned Judge is set aside and the writ petition is allowed directing the respondents herein to return the entire money already realised by them by selling the seized palmoline oil pursuant to the orders of the Joint Collector dated 30-9-1995 and the order of confiscation of 30% of the palmoline oil is also set aside. We further direct the respondents to return the amount of Rs. 10,000/- collected by them as fine from the petitioner in lieu of confiscation of the tanker. The petitioner is entitled to all that the money together with interest @ 18% per annum from the date of seizure viz., 24-8-1995. The appellant shall have his costs and hearing fee quantified at Rs. 5,000/- (Rupees five thousands only). With the directions as above, the writ appeal is allowed. Appeal allowed.