Bimal Roy and Others vs State of West Bengal

Ajit Kumar Sengupta, J.—This revisional application by two accused one of whom is a businessman and other an employee of Eastern Coal Fields Ltd. is directed against the order dated December 5, 1983 passed by Judge, Special Court in taking cognizance of the offence u/s 7(l)(a)(ii) of Essential Commodities Act, 1955 on the basis of the charge sheet filed before the Special Court. The allegations in the First Information Report are that on or about 10th March, 1983 at about 10.15 hours the police held a raid at Pandabeswar, Muchipara and found that the petitioners were selling coal from a coal depot at Muchipara. At the sight of the police the petitioners fled away and the police did not find any stock-cum-rate Board at the place of business. The police, inter alia, seized about 8 M of steam coal. Thus the petitioners have violated the provisions of Section 12E of the Colliery Control Order, 1945 and Section 6 of the West Bengal Declaration of Stock and Price of Essential Commodities Order, 1977.

Thereafter on or about September 7, 1983, the police submitted the impugned charge sheet dated July 28, 1983 in respect of the allegations made in the first information report upon which the learned Judge took cognizance by his order dated December 5, 1983 and directed to supply copy of the charge sheet to the petitioners, which has been impugned in this application.

According to the petitioners, the entire prosecution is misconceived and not tenable in law as the West Bengal Declaration of stock and price of Essential Commodities Order, 1977 cannot be made applicable to coal. It is also the contention that no licence or authority is necessary for carrying on business in coal in terms of the notification issued by the Central Government as well as under the provisions of the Coal Mines Nationalization Act. Section 12E of the Colliery Control Order has ceased to have any effect and the application of the same in instant case amounts to a clear abuse of the process of law.

Our attention has been drawn to two Bench decisions of this Court. The first decision is in the case of Ashok Kumar Jain v. State reported in 87 CWN. 975 where judgment was rendered on July 25, 1983. In that case the police raised the petitioner''s shop and seized a large quantity of steam coke, slack coke and soft coke, which were stacked at the usual place of business. Pursuant to the seizure, a case was started against the petitioner for violation of clauses (3) and (5) of the West Bengal Declaration of Stock and Price of Essential Commodities Order, 1977 and also for the violation of the provisions of the West Bengal Soft Coke Licensing Order, 1965. The question before the Court was whether the petitioners committed any violation of clauses (3) and (5) of the Declaration of Stock and Price of Essential Commodities Order, 1977. There the Division 3ench held as follows:

This order was passed by the West Bengal Government in accordance with a notification issued by the Government of India Ministry of Agriculture, Department of Food, being notification No. GSR 316(E) dated 20/6/72 by virtue of which power was delegated to the State Government u/s 5 Act of 1955 for passing the aforesaid order. On a scrutiny of the notification it appears that the said notification only empowers the State Government to make orders to provide for matters in relation to food stuff. Therefore, the West Bengal Declaration of Stork and Prices of Essential Commodities Order could not be passed in relation to soft coke and other typos of coal which are surely not food stuff. Therefore, the submissions made by Mr. D.P. Chaudhuri appearing on behalf of the petitioner have to be accepted. Mr. Satyabrata Bhattacharyya appearing on behalf of the State has very fairly accepted the position of law as expounded by Mr. Chaudhuri.

In that view of the matter the proceedings initiated against the petitioner was quashed.

The aforesaid Bench decision was considered by another Division Bench in Bimal Kumar Bouri v. State reported in 1989 C. Cr. L.R. (Cal) 155. In that case it appears from the First Information Report dated 29/4/1983 the accused person was selling coal from a coal depot and no stock-cum-Rate Board was found in the place of business. The police also seized five M.T. of coal. As such the accused was alleged to have violated the provision of clause 3 of the West Bengal Declaration of Stock and Price of Essential Commodities Order 1977. Thus the proceedings were initiated prior to the judgment in Ashok Kumar Jain (Supra). The Division Bench observed at follows:

It is true that in the preamble to the Order of 1977, as it stood till its amendment in 1984, it was stated that in exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955 (Act of 1955) read with the Government of India, Ministry of Agriculture, (Department of Food) Order No. G.S.R. 316(E) dated 20th June 1972, the Governor is pleased he by to make the following order" and it is also true that by and under the said Notification being G.S.R 316(E) of June 1972 issued u/s 5 of the Essential Commodities Act, the State Government was empowered by the Central Government to make order in relation to foodstuff only. And if the matter rested there, we would nave felt no difficulty in appearing and agreeing with the Division Bench decision in Asoke Kumar Jain (supra) that the order, though avowedly professing to apply to coal and various others non-foodstuff in view of Items 18 to 30 of the Schedule I, was ultra vires in respect of non-foodstuff.

But it appears that the attention of the Division Bench was not at all drawn to the fact that at the time when order of 1977 was made by the State of. West Bengal, there was, and still is, another Order issued by the Central Government u/s 5 of the Essential Commodities Art, being Notification dated 20/11/74. Ministry of Industry and Civil Supplies (Department of Civil Supplies and Cooperative) Order No. S.O. 681(E), whereunder the State Government was also authorised to make order in respect of all Essential Commodities other than Foodstuff and Fertilisers. It is true that this Notification of 1974 empowering the State Government to make orders relating to non-foodstuff was not referred to in the Preamble to the Order of 1977 as a source, or another source, of authority till 1984. But the position nevertheless remains that on the date when the Order of 1977 was made by the State of West Bengal, manifestly purporting to govern Coal and various other non-foodstuffs, as obviously demonstrated in clause 2(b) and Schedule 1 of the Order, the State of West Bengal was duly empowered to make that Order vis-a-vis those commodities also.

The closing words of the preamble are "Governor is pleased hereby to make the following order, namely "and then follows the order consisting of 6 clauses and 2 Schedules really constitute the Order and not the Preamble, which proceeds the Order and introduces the same. We can look to the Preamble in order to ascertain the scope of a legislation only when the scope of the enacting provisions may admit of doubts or more interpretations than one. As already noted, looking at the provisions of the legislative Order of 1977 as promulgated in its various clauses and the Schedules, particularly clause 2(b) and Item 18 of the Schedule 1, there is no scope for any doubt or difference that the Order applies to coal and various other non-foodstuff. Such clear and unambiguous manifestation of the legislative intendment can not obviously be counted down by anything or any omission in the Preamble. The Division bench also held that the decision in Ashoke Kumar Jain (supra) was a judgment per incurium as it was rendered in the ignorance of the terms of statute or statutory rule. The Court proceeded to hold as follows:

The Division Bench decision in Asoke Kumar Jain (supra) was rendered in complete ignorance of the Notification of 1974, fully empowering the State Government to make Orders in relation to coal and other non-foodstuff and, therefore, without any consideration of the question as to whether mere non-recital of the said Notification in the Preamble would at all affect the validity the Order relating to non-foodstuff, even though the power to make the Order in respect of non-foodstuff was undisputedly vested in the State Government.

Then the Division Bench proceeded to decide the issue in the manner following:

If it was not possible for us to dispose of the present revision without deciding finally about the legality of the aforesaid Division bench decision then either we would have to dissent therefrom on the ground of its being per incurium or to refer the matter to a larger Bench for final decision. But since we are of the opinion that we should, for reasons stated hereunder, allow the application and quash the impugned proceeding on the basis of this Division Bench Decision, even though we, with respect have not been able to accept to be correct, we need not adopt any such. One thing is obviously apparent from the earlier Division Bench decision of this Court in Asoke Kumar Jain (supra) that even a Division Bench of this Court could rule that the Order of 1977, as it stood till 1984, could not apply to coal or other non-foodstuff. If such a conclusion could be arrived at by a Bench of this Court, then it has got to be accepted that such a view could also be entertained by any dealer of essential commodities, whether on legal advice or otherwise. It is true that the decision in Asoke Kumar Jain (supra) was rendered after the date of occurrence in this case. But, as already stated, if two of our learned Judges sitting in a Division of this Court could think that to be a reasonable view, the dealers whether on the advice of their legal advisers or not, could also claim to have come to such conclusion. As already noted, the absence of recital of the Notification of 1974 in the Preamble led the Division Bench of this Court to conclude that the Order of 1977 could not apply to non-foodstuff. If we in this Court could entertain such a view, any one else can also reasonably claim to have the right to entertain such a view quite honestly, even if erroneously. That being so, once we accept that because of the non-recital of the Notification of 1974 in the Preamble to the Order of 1977, as it stood at the relevant time, a reasonable man could honestly even though erroneously, entertain the view that the said Order would not apply to non-foodstuff, as was in fact held by the earlier Division Bench in Asoke Kumar Jain (supra) we would have to hold that the accused petitioner, even if found to have failed to comply with the Order of 1977, cannot be held to have a guilty mind for such noncompliance. As a result, we. have to hold the accused to be not guilty, even if it is proved at the trial that he, has not complied with the Order of 1977, as in view of the interpretation made by the earlier Division Bench of that Order of 1977, re must be held to have done so without a guilty mind.

It may be noted, however, that in view of the decision in Asoke Kumar Jain (supra) the State of West Bengal has in 1984 amended the Preamble to the Order of 1977 by expressly inserting therein the reference to the Notification of 1974 relating to non-foodstuff and has sought to provide that such insertion, though made in 1984, shall always be deemed to have been inserted. But, if in view of Asoke Kumar Jain (supra) non compliance with the Order of 1977 in respect of non-foodstuff was not an offence till such insertion, it can not be made an offence retroactively by such ex post facto insertion under the law as provided in Article 20 of the Constitution. Such insertion can have only prospective operation since insertion and as a result, the decision in Asoke Kumar Jain (supra) will have no further relevance hereafter even if it could be taken to have been correctly decided.

It appears to us that the Division bench in Bimal Kumar Bauri (supra) held that the Bench decision in Asoke Kumar Jain (supra) is not correct and that it was a judgment per incuriam. A decision ceases to be binding if a statute or statutory rule inconsistent with it is subsequently enacted, or if it is reversed or overruled by a higher court. Similarly a decision per incuriam would not be binding on the Court. It is true that a precedent is not binding if it was rendered in ignorance of a statute or a rule having the force of statute, i.e. delegated legislation but as Salmond on jurisprudence. (12th Edition page 151) has observed that "the mere fact that the earlier court misconstrued a statute, or ignored a rule of construction, is no ground for impugning the authority of the precedent. A precedent on the construction of a statute is as much binding as any other, and the fact that it was mistaken in its reasoning does not destroy its binding force." It cannot be said that the earlier Division bench proceeded in ignorance of the rule having force of statute. Admittedly, there were two notifications issued by the Central Government, one delegating the power for foodstuff and the other with regard to non-foodstuff. The Notification of 1972 related to foodstuff and the Notification of 1974 related to non-foodstuff. Under two separate notifications, the powers in respect of different categories of articles, foodstuff and non-foodstuff have been delegated. The Division Bench in Bimal Kumar Nauri has taken the view that mere non-recital of notification of 1974 would not affect the validity of the order relating to non-foodstuff. This is a question of interpretation. It cannot be taken for granted that the Division Bench in Asoke Kumar Jain woulf have come to the Same conclusion even if the Notification pi 1974 had been placed before the Division Bench. If the power would have been derived from only one source then there would have been no difficulty in accepting the proposition that mere omission to refer to the source of power would not invalidate the order but when by two separate Notifications, powers are delegated in respect of two different categories of articles and one Notification is issued in 1972 and the other in 1974 and the West bengal Order is enforced in 1977 th question might anserine heather the Government intended to include the articles covered by Notification of 1974. The Central Government had delegated the power to the State Government by Notification dated 30th November, 1974 and the power is derived by the State Government from the said delegation. Evert if the source of power is not required to be mentioned, there must be evidence to show that the Government exercised that power under the said Notification in accordance with law. We do not know whether the Notification of 1974 was at all laid before the authority while issuing the Order of 1977. The essential characteristic of a delegated legislation is that it must lay down a policy either creating new rights or liabilities or affecting the existing one. If such a delegation is made by a competent authority and in the manner prescribed, it will certainly have force of law and would be a binding rule of conduct and consequently it would be enforced in any court of law. What must follow is that every order must be clothed with the authority of law. Merely because there is a power under which the order could have been made, it can not be held that the Government exercised the power in accordance with the procedure laid down. The source of power does not affect the character of the order issued. In order to have the validly made order, it has to be satisfied that the powers have been exercised after considering the necessity of making the regulations regarding non-foodstuff as delegated by the Notification, of 1974. In our view, it is not a question of mere omission to include the source of power in the Order of 1977. It is something more.

The order recites, no doubt, as follows:

Whereas the Governor is of opinion that it is necessary and expedient so to do for maintaining and increasing supplies of essential commodities and for securing their equitable distribution and availability at fair price and therafter records that in exercise of power conferred in section 3 of the Essential Commodities Act read with Government of India, Ministry of Agriculture (Department of Food) Order No. GSR 316(E) dated the 20th June, 1972 the Governor made the said order.

It appears from the different Control Orders Passed by the Government that the Orders regarding foodstuff had been issued separately. A distinction as been made between foodstuff and non-foodstuff. Accordingly it cannot be said that it is a case of mere omission to refer to the source of power. Had there been only one notification then the principles, laid down by the Supreme Court in the decision cited before the Division Bench in Bimal Kumar Bauri would have been squarely applicable.

In our view if on the interpretation of the preamble it is held that mere non-recital of the notification of 1974 in the preamble would not at all affect the validity of the Order of 1977, then it must be held to be operative since 1977 in respect of foodstuff and non-foodstuff as well. If that be the position then the question of retrospective amendment cannot arise at all. If the decision of Asoke Kumar Jain is not correct, and the Order of 1977 applied to foodstuff as well as to non-foodstuff, the amendment to the said Order of 1st February 1984 cannot be said to be a retrospective amendment. It will be only clarificatory in nature. If it is held that the amendment is prospective in operation, then the amendment which was made on 1st February. 1984 is effective from the said date and accordingly non-foodstuff will come within the purview of West Bengal Declaration of Stocks and Price of Essential Commodities Order, 1977 from that date.

On 1st February, 1984, the following order was made by the Government.

ORDER

No. 538-F.S. dated 1/2/84 in exercise of the Power conferred by Section 3 of the Essential Commodities Act, 1955 (10 of 1955) read with the Government of India, Ministry of Industry and Civil Supplies (Department of Civil Supplies and Corporation) Order No. So. 681(F) dated the 30th November, 1974 published in the Gazettee of India, Extra Ordinary, Part II-=Section 3-Sub-section (ii) dated the 30th November, 1974 the Governor is pleased hereby to make the following amendment to the preamble to the West Bengal Declaration of Stocks and Prices of Essential Commodities Order, 1977 published under No. 342 of S/FS/GG/14R-8/75 (Part III) dated the 15th June, 1977 namely

AMENDMENT

In the second paragraph of the preamble after the words and figures "Government of India, Ministry of Agriculture (Department of Food) Order No. G.S.R. 310 (E), dated the 20th June, 1972" the following words and figures be inserted and shall always be deemed to have been inserted, namely

and Ministry of Industry and Civil Supplies (Department of Civil Supplies and Co-operation) Order No. S.O. 681(E) dated the 30th November 1974."

By order of the Governor, "

A.C. Chattopadhyay Spl. Secy to the Govt, of West Bengal.

The Supreme Court in Income Tax Officer, Alleppey Vs. M.C. Ponnoose and Others, was considering a notification issued by the Government in August, 1983 empowering certain Revenue Officers to exercise powers of Tax Recovery Officer. The concluding portion of the Notification ran:

The notification shall be deemed to have come into force on the 1st day of April, 1962". There the Supreme Court held as follows:

Parliament can delegate its legislative power within the recognised limits. Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the legislature it may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority'' concerned to make a rule or regulation with retrospective effect. But where no such language is to be found it has been held by the courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye-law which can operate with retrospective effect.

If it is held that there cannot be retrospective amendment to the preamble as held by the Division Bench in Bimal Kumar Bouri, the liability in respect of non-foodstuff will arise if default is committed on or after 1st February, 1984. But as the Division Bench in Bimal Kumar Bouri has held that the Order of 1977 applied both to the food and non-foodstuff in that case any contravention made after 1977 can de dealt with in accordance with the provisions of the Essential Commodities Act, 1955. In view of decision of the Division Bench in Bimal Kumar Bouri regarding applicability of the Order of 1977 to non-foodstuff, the amendment of 1st February, 1984 merely declaratory of the law as it always was since 1977. Accordingly the contravention after 1977 and prior to 1984 cannot be dealt differently. If that be the position, it is rather difficult to reconcile the observation of the Division Bench that in view of Ashok Kumar Jain non-compliance with the order of 1977 in respect of non-foodstuff was not an offence till the insertion of the reference to the notification of 1974 to non-foodstuff.

We may usefully refer to the decision of the Supreme Court in State of Bihar Vs. Gulab Chand Prasad, . In that case the State of Bihar had issued an order described as Bihar Essential Articles (Display of Prices and Stocks) Order, 1977 (hereinafter referred to as the Order). It as published in the Bihar Government Gazette Extraordinary dated 10th September 1977. It came to force from the date of publication, as provided in Sub Clause (3) of Clause (1) Sub Clause (a) of Clause (2) of the Order defines "article" to mean any essential commodity mentioned in Schs. I and II appended to the Order and further confers powers on the State Government to include any other articles if found necessary. Clause (3) casts an obligation on the dealer to display at a conspicuous place near the entrance of his business premises a list of prices and stocks of all the articles mentioned in Schedule 1 in which he deals. Schedule 1 platinum 24 sets out "soda ash (for washing purposes)" as one of the articles covered by the Order. This order is issued in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 (hereinafter referred to as the Act). As a corollary the breach of its provisions would be punishable u/s 7 of the Act.

There the prosecution case was that the respondent is a dealer in soda ash. Upon an inspection of his premises on April 13, 1979 The visiting officer found an unaccounted stock of 13 bags of soda ash, in relation to which according to the complainant, the respondent could not produce the necessary papers. Subsequently, the respondent submitted some cash memos and also pointed out that he had sold soda ash to various parties. May be, that would be for him to establish. The fact remains that there was unaccounted soda ash as complained of In the possession of the respondent and the complaint alleged that this would be violative of the Order. A complaint was filed alleging the aforementioned fact, though of course not mentioning the Order, provision of which was violated simultaneously stating that the respondent has committed an offence punishable u/s 7 of the Act. It may be mentioned that further allegations in the complaint were that the respondent has committed offences u/s 420 and 471 of I.P.C.

The Supreme Court found that the learned Counsel appearing on behalf of the State Government did not point out the order relied upon before the Supreme Court having been issued under the Act or any other order if there be one under the Defence of India Rules. The High Court was constrained to observe that not only the compliant is frivolous it was absolutely mala fide because if there was no order imposing any obligation on the dealer of a commodity to display the price list or to declare the stock, there will be no question of a dealer not accounting the stock of any such article and if there was no such order, absence of explanation in respect of such a commodity or otherwise may not, according to the High Court, entail any liability in law.

The Supreme Court then proceeded to hold :

We are not disposed to make any observation at this stage on any part of the controversy between the parties because a statutory Order covering soda ash is in existence and in force. Mr. Bhagat, learned counsel for the appellant-State, assured us that it is in force. If it is in force, a declare in any of the commodities mentioned in Schedule I will have to comply with Clauses 3 and 4 of the Order. Whether there is any violation of the statutory provisions enacted in Clauses 3 and 4 of the Order is a matter to be adjudicated. But it would be difficult to subscribe in the face of the Order published in the Gazette the copy of the Gazette having been submitted to us to ignore the existence of the Order. The whole basis of the approach of the learned Judge of the High Court gets knocked out once the Order is shown to be existing and in force. May be, the High Court would have acted as we propose to do if the Order was shown to the learned Judge hearing the matter. Undoubtedly, Mr. Gobordhan told us that nearly two years have elapsed since the prosecution was launched. That is a fact. However, it would be unwise to ignore the existence of a subsisting order and to dispose of a proceeding as if no such order is there.

In our view the decision in Ashok Kumar Jain was on the interpretation of the Order of 1977 as it then stood. It was not the case of the State that without insertion of the notification of 1974 relating to the non-foodstuff violation in regard to such articles could be dealt with under the Essential Commodities Act by the said Order of 1977.

The insertion to the notification of 1974 dealing with the not-foodstuff in the order of 1977 with effect from 1st February 1984 cannot have retrospective operation and cannot affect the rights and obligations already accrued and it must be held to be prospective and any contravention with regard to non-foodstuff is liable to be proceeded with under the Essential Commodities Act from 1st Februarys 1984.

Although the judgment of the Division Bench in Ashok Kumar Jain was rendered after the alleged contravention in this case, even then until the amendment of 1st February, 1984 in the order of 1977, the benefit of interpretation of Order of 1977 in Ashok Kumar Jain must be made available to all who were similarly situated. The question of mens rea would not be relevant unless the Order of 1977 is made applicable to the cases where proceedings were initiated before 1st February, 1984. The question of mens rea is material at the time of trial and not when the proceedings are initiated. The intention is a question of fact which has to be found on evidence. If the Order of 1977 is not applicable until 1st February, 1984 the question of mens rea is irrelevant because in that case no proceedings can be initiated for non-compliance with regard to non-foodstuff at all.

If, however, the Order of 1977 is applicable to the facts of the case before the Division Bench in Bimal Kumar Bouri, in that event, whether the violation is intentional or not cannot be gone into at that stage and it has to be adjudicated upon.

To sum up, in our view, Ashok Kumar Jain (supra) decided on July 25, 1983 was on the interpretation of the Order of 1977 as it stood then. It must be held to have held the field until 1st February, 1984 when the amendment to the Order of 1977 was effected.

The Order of 1977 would apply to both the categories of articles, foodstuff and non-foodstuff, with effect from 1st February 1984, as the said amendment cannot have any retrospective effect.

The Division Bench in Bimal Kumar Bouri has dissented from the reasonings of the Division Bench in Ashok Kumar Jain but agreed with the conclusions. The Division Bench in Bimal Kumar Bouri could not and did not overrule the decision in Ashok Kumar Jain, although the decision in Ashok Kumar Jain was held to be incorrect. We are concerned with the conclusions and not with the reasoning in disposing of the instant case.

If the violation of the Order is admitted, the proceedings at this stage cannot be quashed unless the proceedings are wholly without jurisdiction or the allegations in the FIR do not disclose any offence at all. But the proceedings otherwise initiated validly cannot be set aside solely on the ground that the accused had no mens rea, which has to be adjudicated on the evidence at the trial.

The facts before the Division Bench in Ashoke Kumar Jain and Bimal Kumar Bouri are identical with the facts in the instant case and the conclusions of the said two Bench decisions are also identical although the reasons are different. The effect of the said decisions is that the proceeding initiated prior to 1st February 1984 for non-compliance of Order of 1977 in respect of non-foodstuff was not valid. We are also in agreement with such conclusion. If a different view is taken on the same facts, it would only add confusion and may also cause discrimination on the same set of facts between two accused charged for identical violation. Such a situation has to be avoided.

For the reasons aforesaid, this application is allowed. This rule is made absolute. The proceedings are set aside and quashed. Let the records be sent down as expeditiously as possible.

J.N. Hore, J.

I agree.