In Re: S.P. Singh and Brothers and Others

Arun Kumar Dutta, J.—By this Revisional Application under Sections 401/482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as Code), the Petitioners-accused (hereinafter referred to as Petitioners) have prayed for quashing of the relevant Proceedings, being G.R. Case No. 1623 of 1994 pending before the Learned Judge, First Special Court (E.G. Act) Calcutta, arising out of Hastings P.S. Case No. 165 dated 2-7-1994, on the grounds made out therein.

It is contended by the petitioners that the petitioner No. 1 is a partnership firm of which the other Petitioners are partners, and they were granted licence No. AGT/Cal/66 dated 16-2-1989 under the provisions of the West Bengal Kerosene Control Order, 1968 (hereinafter shortened into Order of 1968) to act as an Agent of the Indian Oil Corporation for distribution of kerosene to the Licensed Dealers under the public distribution system. The said Licence is valid, being extended from time to time by the opposite-party No. 2, the Licensing Authority.

The opposite-party No. 2, the Director of Consumer Goods, West Bengal, with various other police officers, had held a raid at the petitioners storage-cum-go down at S-3, St. George Gate, Fort William, Calcutta-700 021 (although it was shown to be at B. 6, Garrison Bazar, Fort William, Calcutta- 700 021) from 23-(30 hours of 1-7-1994 to 1-30 hours of 2-7-1994, and it was allegedly detected that the petitioners were attempting to convert blue kerosene oil to white kerosene oil. Some of the accused persons were found during the said raid to be in the act of adulterating kerosene oil by converting blue kerosene oil to white in order to dispose of the same in open market at higher prices. A number of articles had also been seized during the said raid. The petitioners-accused, along with others, have thus been prosecuted for aiding and abetting each other for running of clandestine business of adulteration of kerosene oil by violating the conditions of licence and the directions laid down in paras 12 and 14 of the Kerosene Control Order of 1968, punishable under Sections 7(1)(a)(ii)/8 of the Essential Commodities Act, 1955 (hereinafter referred to as E.C. Act) on the allegations made in the FIR.

In view of the aforesaid allegations, the licence of the petitioner No. 1 was suspended under Para 9 of the Order of 1968. But the Opposite-party No. 3 had eventually revoked the order of suspension of the petitioners'' Licence by his order dated 10th August, 1994 after giving the Petitioner No. 1 an opportunity of being heard in the matter in terms of the proviso thereto, holding that the charges framed against the petitioner No. 1 were not substantiated since the opposite-party No. 5 had failed to prove the charges prima facie beyond any reasonable doubt. The licence of the petitioner No. 1 was, therefore, allowed to continue pending final order by the Special Court in terms of the said order.

The relevant proceedings before the court below is now sought to be quashed by the petitioners only on the ground that since the order of suspension of licence of the petitioner No. 1 was revoked by the concerned Authority in terms of Paragraph 9 of the aforesaid Order of 1968, the relevant Criminal Proceedings on the same allegations is liable to be quashed as a matter of course. The learned Advocate for the petitioners, Mr. Alok Kumar Sengupta, had referred to the decisions in Bhabnesh Kumar alias Pappu v. Union of India, Crimes XI-1992 (3) 777, S. K. Sinha v. S. K. Singhal Crimes IV-1987 (1) 842, Kishori Lal Bihani Vs. The Addl. Collector and District Magistrate, Kanpur and Others, , Uttam Chand and Others Vs. Income Tax Officer, Central Circle, Amritsar, , and Warren Tea Ltd. v. A.B.K. Bihari Chand 1994 Cri LR (Cal) 7 in support of the aforesaid plea. But the aforesaid decisions would be of little avail to the petitioners for the reasons I shall presently discuss.

Following the observations of the Supreme Court in Uttam Chand''s case than in case the Departmental Authorities on a particular; set of facts come to the conclusion that there is no case it cannot initiate prosecution on the same set of fact stand evidence, and if at all it happens, such proceedings would be a fit case for quashing, the Delhi High Court in the case of Bhabnesh Kumar alias ''Pappu (supra) had held that it is now settled by the pronouncement of that court as well as of the Supreme Court that once Administrative Tribunal or Adjudicating Authority has exonerated the petitioner, then on the same facts and materials Criminal Proceedings cannot continue and have to be ordered to be dropped on the principle that the criminal court should not reappraise the whole. evidence which has already been gone into by the Adjudicating Authority.

The Delhi High Court relying upon the decision of the Supreme Court in Uttam Chand''s case had also earlier held in S. K. Sinha''s case (supra) that it is not legal to prosecute the Petitioner for a criminal offence on the same set of facts and evidence when he has been exonerated of the offence by the Departmental Authority. The petitioner therein had sought for quashing of a Criminal Proceedings before a Metropolitan Magistrate for an offence punishable u/s 135 of the Customs Act. In that case the Collector of Customs had imposed a fine upon the Petitioner in an Adjudication Proceedings on the same allegations. The fine imposed by the Collector was reduced by the Board by way of appeal. The appeal by the petitioner there against before the Customs, Excise and Gold Control (Appellate) Tribunal, New Delhi, was eventually allowed by the said Appellate Tribunal. The facts and the evidence on which the Petitioner was being prosecuted before the criminal court were in no way different than what was adjudicated upon, by the Departmental Authority. The Learned Judge, in the aforesaid facts and circumstances, had observed that he failed to understand as to how on the same set of facts and evidence, the department can foist criminal liability upon a person about whom it has accepted that on this set of facts and evidence he cannot, even be proceeded against in the adjudication proceedings. In criminal matters the degree of proof required is far more strict. If the departmental authority has no good case, for purposes of adjudication, it cannot claim to have a good case for purposes of criminal prosecution, particularly when the prosecution is also based on the same set of facts and evidence. It will be most unjust to require the petitioner to go through the entire process of prosecution in the circumstances of this case. This might virtually amount to prosecution and in my view this will amount to abuse of the process of the court. I am in complete agreement with the observations so made by the Learned Judge for the reasons stated therein.

Following the decision in Uttam Chand''s case before the Supreme Court and those in Parkash Chand Vs. Income Tax Officer, A-Ward, and in Kanshi Ram Wadhwa Vs. Income Tax Officer, of the Punjab and Haryana High Court, I had also quashed a Criminal Proceedings in Warren Tea Ltd. v. A.B.K. Bihari Chand, Commissioner of Incometax, 1994 Cr LR (Cal) 79 on the penalty imposed by the Authority concerned u/s 271(1)(C) of the Income Tax Act in a penalty proceedings being set aside by the Appellate Authority on the principle that if there was no concealment, the Criminal Proceedings against assessee on the same allegations could not continue, and were liable to be quashed. It was held if there was no case for sustenance of penalty, it equally would not be a case for criminal prosecution.

But the aforesaid decisions referred to by Mr. Sengupta are clearly distinguishable from the case at hand. In the relevant case before us, the suspension of the petitioners licence had been revoked by the Authority concerned under para 9 of the West Bengal Kerosene Control Order, 1968. While revoking an order of suspension of licence there under the Authority concerned (the Director or the District Magistrate concerned) cannot be said to be acting either as an Adjudicating Authority or as an Administrative Tribunal there under.; It is neither open to them to adjudicate any matter, there under. The Authority concerned under the aforesaid Para 9 could only temporarily suspend the licence, cancel a licence, or revoke the order of suspension of the licence in terms thereof upon materials collected and presented before it within the stipulated period of 30 days from the date of suspension of the licence, as specified therein, in terms thereof. The Authority concerned thereunder could thus act in terms thereof only on the basis of the materials collected and presented before him within the aforesaid specified period of 30 days from the date of suspension of the licence, whereas a criminal case on the same allegations may proceed on evidence and materials collected even thereafter. The Criminal Proceedings in such a case might not be based on the same set of facts and evidence on which the Authority concerned acts under paragraph 9 of the aforesaid Order of 1968; but also on other materials/evidence which may be presented before the court at the appropriate stage. The degree and standard of proof in a Criminal Proceedings on similar allegations would be far more strict than those on which the Authority concerned is required to act under para 9 of the aforesaid Order. An order passed by the concerned Authority under paragraph 9 of the aforesaid order could neither be deemed to be an order passed in an Adjudication Proceedings, in the aforesaid circumstances.

It would be pertinent, in this context, to refer to paragraph 9 of the West Bengal Kerosene Control Order, 1968 which reads as follows:-

Cancellation or suspension of licence : "If it appears to the Director or the District Magistrate having jurisdiction that an agent or a dealer has indulged in any malpractice or contravened any provision of this order or any condition of the licence or any direction given under paragraph 12 of this order, he may forthwith temporarily suspend the licence:

Provided that the agent or the dealer whose licence has been so suspended shall be given an opportunity of being heard before cancellation of the licence or revocation of the order of suspension of the licence finally by an order in writing to be made within 30 days from the date of suspension of the licence. The order shall be passed ex parte if the dealer whose licence has been so suspended fails to appear at the hearing."

The aforesaid paragraph being, what it is, the authority named therein (the Director or the District Magistrate concerned) could act there under "if it appears " to them that an agent or a dealer has indulged in any malpractice or contravened any provision of the order or any condition of the licence or any direction given under paragraph 12 of the Order. The Authority concerned cannot clearly, therefore, enter into the merits of the alleged malpractice or contravention. He has to form a prima-facie opinion as to the alleged malpractice or contravention for action there under only fact the limited purposes of temporarily suspending the licence, canceling the licence, or revoking the order of suspension of the licence within the period of 30 days from the date of the suspension of the licence, as specified therein. He cannot clearly, therefore, consider any other material collected in support of the alleged malpractice/contravention beyond the aforesaid specified period of 30 days, as already indicated above. But a criminal prosecution for any such alleged malpractice or contravention may proceed on the basis of materials/evidence collected and presented before the appropriate court at the appropriate stage even beyond the aforesaid specified period of 30 days.

As against the aforesaid provision of para 9 of the aforesaid order, in a penalty proceedings u/s 271 of the Income Tax Act, 1961 (hereinafter referred to as I.T. Act) the appropriate authority mentioned therein can act there under "if he is satisfied" that any person -

(a)has failed to comply with a notice under Sub section ( l)of Section 142 or Sub-section (2)of Section 143 or fails to comply with a direction issued under Sub-section (2A) of Section 142; or

(b) has concealed the particulars of his income or furnished inaccurate particulars of such income."

Similarly, in a confiscation proceedings u/s 6A of the Essential Commodities Act, 1955, the Collector may order confiscation of the essential commodities in terms thereof "if he is satisfied" that there has been a contravention of the order. So also the adjudicating Authority in an Adjudication Proceedings under the Customs Act. The aforesaid Authorities could act under the relevant provisions of the aforesaid Statutes "If they are satisfied" as to the alleged non-compliance/concealment/contravention/violation etc. of the relevant provisions of the relevant statutes. Such authorities are, therefore, required to go into the merits of the matter and come to a finding and decide whether there has been any non-compliance/concealment/contravention/violation of the relevant provisions of the aforesaid Statues. But the Authorities mentioned in paragraph 9 of the aforesaid order of 1968 could act in terms thereof "if it appears" to them that there has been any malpractice or contravention in terms thereof. The said authorities are not required to be satisfied as to whether there has been any malpractice or contravention, as contemplated in the aforesaid Order. They are neither required to go into the merits of the matter and come to a finding and decide whether there has been any malpractice or contravention in terms thereof. As already noted, the said authorities can act there under if it appears to them on the materials collected and presented before them within the specified period of 30 days from the date of suspension of licence that there has been any malpractice or contravention there under. The malpractice or contravention attracting the provisions of paragraph 9 of the West Bengal Kerosene Control Order, 1968 could not thus be said to have the same legal incidence and consequences and the same nature and character as the contravention punishable by Section 7 of the E.C. Act, 1955. The two provisions, i .e. paragraph 9 of the aforesaid Order of 1968 and Section 7 of the E.C. Act, to, my judgment, could neither be held to be in pari materia. For much the same reasons and logic, the provisions of paragraph 9 of the aforesaid Order of 1968 and, Section 271 of the I.T. Act could neither be held to be in pari materia either.

The following observations of the Supreme Court in P. Jayappan Vs. S.K. Perumal, First Income Tax Officer, Tuticorin, , seem worth-bearing in mind in this context:

"In the criminal case all ingredients of the offence in question have to be established in order to secure the conviction of the accused. The criminal court no doubt has to give due regard to the result of any proceedings under the Act (income tax Act) having a bearing on the question in issue and in an appropriate case if may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result of a proceeding under the Act would be binding on the criminal court. The criminal court has to judge the case independently on the evidence placed before it."

It would also be pertinent to refer to the decision of the Patna High Court in Lal Bahu Tewari v. State of Bihar, 1990 Cr LJ 1997, holding that the dropping of confiscation proceedings by the Collector u/s 6A of the Essential Commodities Act has no effect on the Criminal proceedings. I completely concur with the said view. The Collector under the aforesaid provision can make an order of confiscation in terms thereof "if he is satisfied" that there has been the alleged contravention. He is an Adjudicating Authority there under for that limited purpose.. But, as already indicated above, an order passed by the Authority concerned under para 9 of the order of 1968 cannot be held to be an order passed in an Adjudication proceeding in that sense. As noted, such an authority can pass an order there under if it appears to him" (without being satisfied) that there has been the alleged contravention. The authority concerned, under para 9 of the aforesaid order could neither be held to be an Adjudicating Authority for passing an order there under. An order passed by him there under clearly, therefore, stands on a lesser and weaker footing than an order passed by the Collector in a confiscation proceeding u/s 6A of the E.C. Act. In the aforesaid circumstances and for much the same reasons stated by the learned Judge in the aforesaid decision, the revocation of an order of suspension of licence under paragraph 9 of the aforesaid Order of 1968 (on the basis of materials available within the specified period of 30 days) could have no effect on the relevant Criminal Proceedings on similar allegations, which may be based on other materials/evidence as well which may be presented before the appropriate court at the appropriate stage. An order passed under para 9 of the aforesaid Order of 1968 is quite independent of an unconnected with the relevant Criminal Proceedings for the contravention alleged therein. So if an order of suspension of the licence is revoked under para 9 of the aforesaid order it could have no effect on the Criminal proceedings on similar allegations. If the authority concerned acting under para 9 of the aforesaid order is a statutory Authority, so is the Special Judge dealing with the relevant case u/s 7 of the E.C. Act, 1955. They both being, statutory; authorities, the finding of the authority concerned under para 9 of the aforesaid order, in the absence of any law, cannot be said to be binding on the special Judge exercising his judicial discretion while dealing with a case for an offence under the provisions of Section 7 of the E.C. Act, 1955. The special Judge, being a judicial authority, has to exercise his judicial discretion in dealing with/trying an offender under the provisions of Section 7 of the aforesaid Act on the basis of materials placed before him in the course of the trial. The law never contemplates that a judicial Authority should surrender its discretion in the matter to the statutory authority exercising power under paragraph 9 of the aforesaid Order of 1968; and is obliged under the law to blindly follow the prima facie finding of the latter (statutory authority) in connection therewith. The two jurisdictions are entirely different. As already noted, the authority concerned under para 9 of the aforesaid order of 1968 may only temporarily suspend the licence, cancel the licence, or revoke the order of suspension of the licence in terms thereof in the manner indicated therein. He cannot convict a person for contravention of the Order and sentence him to imprisonment or impose any penalty prescribed for the alleged offence. u/s 7 of the E.G. Act the competent court can convict a person, and sentence him to imprisonment or impose any penalty prescribed there under. Merely because the authority concerned has chosen not to cancel the licence under para 9 of the aforesaid Order of 1968 (on the materials before it), it does not mean that the Special Judge cannot convict a person u/s 7 of the aforesaid Act for contravention of paragraph 14 of the aforesaid order (on the evidence presented before him). There could be no denying that the power exercisable under paragraph 9 of the aforesaid Order of 1968 is summary in nature in the sense that it is to be exercised only for the limited purposes of temporary suspension of the licence, cancellation of the licence, or revocation of the order of suspension of the licence. Paragraph 9 of the aforesaid order does not envisage a regular trial, and it has nothing to do with the merits of the criminal case even though temporary suspension of the licence or cancellation of the licence may have penal consequences.

In view of the discussions above, I am unable to persuade myself and to accept the submissions of Mr. Sengupta, the learned advocate for the petitioners, that the relevant Criminal Proceedings are liable to be quashed merely because the Director concerned by his order dated 10th August, 1994 had revoked the order of suspension of the licence of the petitioner No. 1 for the reasons recorded therein under para 9 of the West Bengal Kerosene Control Order, 1968. The First Information Report in the relevant Criminal Proceedings, as it is, seems prima facie, to make out the alleged offence. This Court, in this proceedings, could not be called upon to consider the Chemical Examination report, enter into the merits of the matter, and decide whether there has been any contravention, as alleged in the FIR, or not, which are matters to be considered by the court below upon materials/evidence to be presented by the prosecution before it at the appropriate stage.

In view of the discussions above, the Revisional Application should clearly fail, as it must. The Revisional Application accordingly fails and be thus rejected. Interim stay granted in the matter by order dated 30-8-94 stands vacated. Since the relevant proceedings stood stayed during the pendency of the Revisional Application, the investigating Agency and the court below shall seek to expedite the same. The application filed by the petitioners for recalling and/or modification of the order dated 3-2-1995 also stands accordingly disposed of.