Dahyabhai Maganbhai Patel vs Collector and Another

C.K. Buch, J.—Revisionist, by preferring the present application, has challenged the legality and validity of the judgment and order dated 9th April, 1999, passed by the learned Additional Sessions Judge, Banaskantha at Palanpur in Criminal Appeal No. 54/1998 in exercise of powers vested in him u/s 6[c] of the Essential Commodities Act, 1955 [hereafter to be referred to as ''the said Act'']. The learned Sessions Judge, by the impugned order confirmed the order of confiscation dated 12th October, 1998 passed by the Collector, Banaskantha at Palanpur in exercise of powers vested in him u/s 6[a] of the said Act.

It is contended that both the orders, namely, order passed by the Collector as well as the order passed by the learned Additional Sessions Judge are illegal and erroneous if the legal provisions are considered. The order passed by the Collector is passed under a notion that the applicant was indulging in some processing activity which can be said to be manufacturing process and, therefore, he can be termed as ''producer'' within the meaning of Section 2[17][ii] of the Gujarat Essential Articles [Licensing, Control and Stock Declaration] Order, 1981 [hereafter to be called as "1981 Order"]. It was consistent stand of the applicant that he is resident of Palanpur, that he is in the profession of roasting peanuts and he is doing simple job work by establishing a system to roast peanuts which is popularly known as ''Bhattha''. He was charging Re.1/- per kg of the material received by him from third parties and he was also doing work for himself. On these facts, according to Mr. Mehul Rathod, learned Counsel for the applicant were placed by the applicant. At the time of inspection on 23rd September, 1998, about 103 gunny bags having 45 kgs of peanut each were lying at his place. Initially, no seizure order was served to him at the time of preparing rojnama of inspection carried out. It has come on record that the place inspected was neither shop nor godown. It was a place where Bhattha is located. Even large stock of salt was also found, because, in most of the cases, peanuts are being roasted after making them salty. For the sake of arguments if it is accepted that some stock was of the ownership of the applicant, even then, he does not fall in the category of "producer" as defined in Clause-[17] of Section 2 of 1981 Order. According to Mr. Rathod, Clause[17] of Section 2 has been misread by the Collector, who has put the applicant in the definition of "producer", because, roasting of peanut cannot be said to be manufacturing activity. It was the say of the applicant that most of the stock was of the ownership of the persons who had asked him to roast their peanuts, their names were also disclosed and bills were also shown to the inspecting team. In response to the notice to show cause issued to the applicant, this documents were again referred to and names of 6 persons having ownership of 17 to 18 gunny bags were also disclosed. Not only that, but all the 6 persons had also approached the Collector to see that their goods seized erroneously are released at the earliest. Keeping in mind the relevant legal provision that each party can keep stock of 30 quintal of oil seeds, the authority ought not to have held that the applicant had kept stock of more than 30 quintals. There is no allegation of marketing and as the applicant was doing job work and there were speaking circumstances to show that the applicant is operating Bhattha and even salt was also lying there in large quantity, no stock was required to be confiscated. Misreading of Clause[17] of Section 2 of 1981 Order only had taken the Collector to the erroneous finding. As such, the Collector ought to have held that as the applicant does not fall in the category of either "producer" or "dealer", provisions of 1981 Order would not be attracted. The Collector had no jurisdiction to exercise powers u/s 6[a] of the said Act.

While appreciating the arguments of Mr. Rathod, it emerges that definition of "producer" in Clause-[17] of Section of the 1981 Order appears to have been misread by the Collector. While putting liability over the shoulders of a person branding him as producer, the Collector was supposed to consider the circumstances and the explanation given by such person and other facts that were available before him. There is no dispute as such that 6 persons as owner of different quantity of material out of the seized material had claimed that their goods may be released stating that the same have been seized erroneously. The Collector ought to have called them. It was also possible for the District Supply Officer to cross-check the genuineness of the bills produced during the inspection. Even the person who sold the material is also named in the proceedings. But the order of Collector appears to be totally silent on all these aspects. It would be beneficial to reproduce Clause [17] of Section 2 of 1981 Order referred by the Collector in his order as also by the learned Sessions Judge while dealing with the appeal preferred by the present applicant.

In this Order, unless the context otherwise requires,--

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[17] ''producer'' means a person carrying on the business of milling, expelling, extracting, refining or manufacturing of any essential article--

[i] by buying goods for being processed by himself and selling the finished products to a wholesaler or through a commission agent, or

[ii] by doing any of the processes of milling, expelling, extracting, refining and manufacturing on behalf of another;

Explanation.-- For the purpose of this clause an agriculturist producing the agricultural produce in his own land shall not be construed as a producer.

True it is that agriculturist has been kept out of purview of "producer". There is no definition of "manufacturer" as far as oil seeds are concerned. So, the above Clause [17] requires to be read as it is and only dictionary meaning ought to have been considered by the Collector. Sub-clause [i] of Clause [17] is not found attracted even by the Collector, because, the applicant had not purchased material so that after processing or finishing the product, he can sell it to the wholesaler or can sell through commission agent. There is no dispute that the applicant was doing job work mostly for the others and the stock which was there of the ownership of the applicant was less than 30 quintals if the figures are considered closely emerging from the notice to show cause, panchnama drawn as well as the facts considered by the Collector himself while passing the order u/s 6[a]. The Collector has observed that the applicant would fall in the category of sub-clause [ii] of Clause [17] of Section 2. Running of Bhattha cannot be said to be processing of milling, expelling, extracting, refining and manufacturing on behalf of others. Process of roasting peanuts can be undertaken by a person doing job work. Even the person preparing sweets from peanuts may also purchase large stock of such material and so, grinded peanuts can also be used in preparing sweets and such sweet sellers cannot be termed as producer within the meaning of Clause[17] of Section 2. It appears that neither Collector nor learned Additional Sessions Judge applied mind in this direction and that has resulted into two successive erroneous orders.

[i] There is some resistance from Ms. D.S. Pandit, learned APP and it is submitted by her that the order of confiscation is passed on account of one clear established fact that the applicant was in custody of peanuts which were exceeding 30 quintals. Therefore, the Collector, using his discretion decided to confiscate only excess stock of 11 quintals and 20 kg and the learned Additional Sessions Judge has reduced the said quantity to 25% of the stock ordered to be confiscated by the Collector. This Court may not interfere with this finding.

[ii] It is not possible for the Court to agree with the submission made by Ms. Pandit, because, the order passed by the Collector lacks jurisdiction if Clause[17] is read in its strict terms. It would not be proper for the Court to read anything in between the lines. This is not only a proceural error but a material infirmity and obviously would go to the root of the matter. It is very likely that the Collector, after scrutiny may have decided to return the stock of 6 persons who had simply handed over their stock at Bhattha of the applicant so that they can get their stock baked in the form of roasted salty peanuts. No evidence is also found to have been gathered from these persons. Strength in the explanation given by the applicant also makes the order bad and unsustainable. The Court is also surprised that how and why Additional Sessions Judge reduced the quantity. No good sound reasons are found in the order. On the contrary, reasons assigned while ordering reduction in goods confiscated help the applicant in getting the order quashed. The Collector, if has observed that stock beyond 30 quintals need to be confiscated as the same was in excess to the stock that one can hold as per law, then, confiscation of less quantity would automatically violate the statutory limit as the applicant was not authorized to keep that released material. The confiscation of only 25% of the said stock would impliedly permit the applicant to hold more than actually authorized to hold. While ordering reduction, it appears that the learned Additional Sessions Judge has not applied mind and what will be impact and ultimate effect of the order if the same is executed strictly needs consideration. True it is that actually, stock was not there and only some amount was lying with the Collector, but while passing judicial orders, all possibilities and probabilities need to be considered and the Court is of the view that none of these two orders; i.e one passed by the Collector and another by learned Additional Sessions Judge under challenged in this revision application is sustainable in the eye of law.

Revision Application, is therefore, allowed. The order dated 12.10.1998 passed by the Collector, Banaskantha at Palanpur as well as the order dated 9.4.1999 passed by the learned Additional Sessions Judge, Banaskantha at Palanpur in Criminal Appeal No. 54/98 are hereby quashed and set aside. The amount equal to value of 11 quintals and 20 kg, i.e. Rs. 28,840/- realized by the office of the Collector by selling confiscated material be paid to the applicant at the earliest, and preferably within 4 [four] weeks from the date of receipt of writ from this Court, failing which, the applicant will be entitled to claim interest for which officer negligent for non-payment of amount shall be responsible for loss of interest that the State may incur.

For the reasons aforesaid, the revision application is allowed and the office of the District Collector, Banaskantha at Palanpur is directed accordingly in terms of the above observations and directions.