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Judgment
E. Padmanabhan, J.—In this writ petition, the petitioners pray for the issue of writ of certiorari to call for the records relating to G.O.Ms.351
(Food and Consumer Protection Department) dated 6.9.1995 issued by the first respondent in partly confirming the proceedings of the second
respondent and quash the same in so far as they are against the petitioners. Heard Ms. P.V. Rajeswari for the petitioners and Mr. M.S.
Palanisamy, Special Government Pleader appearing for the respondents.
The first petitioner is a licenced wholesale dealer under the Tamil Nadu Essential Trade Articles (Regulation of Trade) Order, 1984, hereinafter
called 1984 Order. The second petitioner is the owner of the lorry bearing registration No. TAM 7989. According to the first petitioner, in the
usual course of his business, he had sold under Bill No. 17, dated 28.6.1992, 43 quintals of boiled rice and 77 quintals of raw rice to another
licenced wholesale dealer carrying on business in the name and style of ""P.R. Traders"", who is carrying on business at No. 118-A, Ayyasamy Koil
Street, Coimbatore. The second petitioner''s Lorry was engaged to transport the said consignment of rice bags to Coimbatore. The goods were
accompanied in the lorry by the first petitioner''s clerk, Gunasekaran. The goods were covered by valid vouchers and bills. The bill issued by the
first petitioner was also being carried along with consignment of rice bags. The Goods Vehicle Record would show the name of the consignee as
per the bill. The place of the departure of the goods is Attur and destination being Coimbatore.
3.The Inspector of Police, C.S.C.T.O Salem intercepted the lorry on 29.6.1992 at 6.30 AM and registered a crime for the alleged violation of
clause 4(1) and 19(1) of the 1984 Order read with Section 7(1)(a)(iii) of The Essential Commodities Act. The petitioner came to know about the
seizure despite his clerk showing the goods vehicle Register as well as the bill to the said Police Inspector. The petitioners received a show cause
Notice u/s 6-B of the Essential Commodities Act alleging violation of Clause 4(1) and 19(1) of the 1984 Order and the petitioners submitted their
objection in detail. The second respondent ordered confiscation of the entire rice bags and imposed a penalty of Rs. 5000/- on the lorry owner.
Being aggrieved, the petitioners preferred an appeal before the first respondent, Appellate Authority. The first respondent merely modified the
confiscation proceedings by ordering confiscation of rice to 75% and reducing the fine amount to 75%. Being aggrieved, the present writ petition
has been filed.
On behalf of the respondents, a counter affidavit has been filed contending that no interference is called for. It is further contended that the
contravention committed by the petitioners had been clearly held proved, as it is the duty of the wholesaler to send a valid document along with the
consignment. It is the case of the respondents that the lorry driver was not in position to show the bill at the time of seizure and the lorry driver did
not make correct entries in the Trip sheet and connected records. It is further contended that G.V.R. had no entries regarding the clear address of
the consignor and the consignee. The seizure mahazar was prepared in the presence of the accused. It is further stated that the sale of rice bags by
one wholesaler to another wholesaler or dealer is neither restricted nor prohibited, but the movement should carry relevant purchase or sale bills
and related entries should have been made in the G.V.R of the vehicle concerned. The order of confiscation has been made for violation of the
1984 Order and they are valid. According to the respondents, no interference is called for in this writ petition.
The first and foremost contention of the counsel for the petitioner being that the Appellate Authority had neither adverted to nor considered any
of the contentions, but as a matter of routine confirmed the order of confiscation ordered by the second respondent by slightly modifying the
confiscation to 75% as against confiscation of entire bags by the original authority and this demonstrates the non-application of mind by the first
respondent, the statutory appellate Authority.
The learned counsel is well founded in this respect and it is relevant to extract the very portion of the order passed by the first respondent.
The learned counsel for the appellants has stated that the appellant is a licensed food-grains dealer and that he was transporting the seized rice
from Attur for sale to another dealer in Coimbatore. He has further stated that the rice was being transported with proper bill and trip sheet was
available in the lorry at the time of seizure. He has further stated that the contention of the Additional Collector, Salem is wrong that the lorry was
not having proper bill and the mahazar has not made any mention of the same. The learned Counsel has further stated that there was no mensrea
on the part of the lorry owner. He has further stated that the actual contravention had not been mentioned in the Additional Collector''s orders.
After a careful persual of the records of the case and after hearing the arguments of the Learned Counsel, the order of the Additional Collector,
Salem District first read above is amended by Government to the extent that 75% (seventy five) of the seized rice and 75% (seventy five) of the
fine imposed on the lorry owner may be confiscated by the Government and the rest returned to the respective appellants. The stay imposed in the
proceedings third read above is vacated.
(emphasise supplied)
The above would show that the first respondent had neither applied its mind nor considered any of the contentions advanced by the petitioners
while passing final order on the appeal nor it had confirmed the findings. As the appellate Authority had merely reduced the quantum of
confiscation by 25%, this vitiates the proceedings of the first respondent, appellate Authority. The first respondent, a statutory appellate Authority,
is bound to consider the various contentions advanced at the hearing, advert to the contentions and pass orders either accepting or rejecting. But,
in this case, none of the contentions have been adverted to nor considered nor have been rejected and this vitiates the impugned proceedings of the
first respondent. The learned counsel is well founded in this respect. On this shot ground, this court would be justified in quashing the impugned
proceedings of the first respondent and remitting the matte: back to the first respondent for denova consideration. However, the Essential
Commodities (Special Provisions) Act has been allowed to lapse and the first respondent is no longer the appellate Authority. Therefore no
purpose will be served in remitting the matter to the first respondent,
The learned counsel for the petitioner persuaded this Court to examine the matter on merits and pass orders, according to law. The learned
counsel for the petitioner filed a copy of the First Information Report and seizure mahazar. Even in the seizure mahazar, it has been recorded that
K. Thirumalaisamy, the first writ petitioner, is the consignor and in the same mahazar, the first respondent''s name finds place along with his
Accountant''s name, who accompanied consignment on the lorry. The entire First Information Report was prepared by the Inspector, C.S.C.I.D.,
Salem proceeds as if the writ petitioner had purchased the rice meant for Public Distribution System and the same has been transported to
Coimbatore. The seizure has been effected on the premise that the entire rice bags seized are meant for Public Distribution System. But in the
proceedings passed by the first respondent, there was no such consideration and no such conclusion had even been arrived at nor there is anything
to suggest that the petitioner had purchased the rice meant for Public Distribution System. The second respondent proceeds as if is an illicit
transportation, while seizure was on the premise that the entire bags of rice are meant for Public Distribution System and the petitioner had
purchased the same for lesser price and is moving to Coimbatore District. No such finding has been recorded by the second respondent before
confiscating the rice. But, the order of confiscation has been passed on the sole premise that the Accountant, who accompanied the lorry, had not
produced the receipt or bill or voucher and the G.V.R. is silent in this respect. It is again, in my considered view, is nothing an inference of surmise
without any material. The seizure mahazar prepared by the Inspector of police, C.S. CID. also refers to the first petitioner as a consignor and the
destination of the consignment being Coimbatore. In the seizure mahazar, the very presence of the first petitioner''s Accountant has been noted and
he had also stated that the rice bags belongs to the first petitioner and it is being transported to Coimbatore under a valid voucher. The seizure has
been effected as if the entire rice consignment is meant for Public Distribution System rice and it is not for non-possession of a valid Sale Bill.
The Goods Vehicle. Record would also show that the vehicle is consigned to Coimbatore and it refers to bill. The statement of two witnesses,
who were present at the time of seizure also would show about the presence of the first petitioner''s Accountant and has stated that the first
petitioner, wholesaler is the consignor. Thus, from the seizure mahazar as well as the reports sent by the Investigating Officer, the seizure has been
effected on the premise that this rice is meant for Public Distribution System, while the order of confiscation has been passed for the alleged
violation of the 1984 Order. This would show the non- application of mind on the part of the second respondent as well. If the consignment is
meant for Public Distribution System, then confiscation should have been on that basis and not on the basis that there is a violation of the Trade
Order, 1984.
In Shambhu Dayal Agarwala v. State of West Bengal & others reported in 1990 (3) SCC 549., it has been held thus:-
Section 6-A empowers confiscation of the seized essential commodity, the package, covering and receptacle in which the essential commodity
was found and the animal, vehicle or other conveyance in which such essential commodity was carried. The words may order confiscation convey
that the power is discretionary and not obligatory.
In State of Karnataka v. K.B. Walvakar reported in AIR 1981 SC 1468, the Apex Court held thus:-
As to point No. (1), it is axiomatic that the power of confiscation of an essential commodity seized for contravention of an order issued under
S.3 is a discretionary power. The use of the word may, however, does not necessarily mean that the Deputy Commissioner cannot, in the given
circumstances of a particular case, direct the confiscation of the entire consignment of an essential commodity in relation to which there is a
contravention of any of the orders issued under S.3 of the Act. It all depends on the facts and circumstances of each case whether the confiscation
should be of an entire consignment or part of it, depending upon the nature of the contravention. The power conferred on the Deputy
Commissioner under S.6-A of the Act, by the use of the work may, makes the power coupled with a public duty. Sometimes, it may be in the
public interest to direct confiscation of the entire consignment of an essential commodity when there is deliberate contravention of the provisions of
an order issued under S.3.
It is thus clear that confiscation of the seized paddy should be based on the nature of alleged contravention and there must be some material to hold
that there has been a contravention and without any material, there could be no order of confiscation. It is not as if the public interest warrants
confiscation of the paddy bags, that there is deliberate contravention of the provisions of the order by the petitioners who have substantiated that
they are agriculturists and it is their farm produce, which has been stored by them in their respective houses. No material has been placed by the
Police Officer who had seized the bags from the residence of the three petitioners and there cannot be an assumption of violation and on that
score, no confiscation could be ordered at all.
This Court, normally will decline to interfere with the order of confiscation, if there is some material or something to show that there is violation
of the Essential Commodities Act or the Trade Order, 1984 or there is an attempt to violate any other control order. On the other hand, the first
petitioner, wholesaler has established that he is a licenced wholesale dealer and the consignment is covered by the Sale Bill/Voucher issued by him
and the consignment was accompanied by his Accountant. There is no material to show that there has been a violation of the 1984 Order by the
first petitioner. Further, there is no material at all even to sustain the basis of seizure, namely that the consignment is meant for Public Distribution
System, Hence, the order of confiscation as passed by the second respondent, original authority cannot be sustained.
In the foregoing circumstances, the order of confiscation passed by the second respondent as affirmed by the first respondent cannot be
sustained at all. The order passed by the 2nd respondent also suffers with error apparent on the face of the record and the confiscation has been
ordered as a matter of routine without application of mind and without material, which is arbitrary and the order of confiscation is liable to be
quashed in this respect.
The 2nd respondent has no material and no reasonable person would ha\e ordered confiscation merely on the inference made by the Inspector
of Police who had seized the rice from the lorry of the petitioner. In the circumstances, the writ petition is allowed. The impugned proceedings of
the second respondent as modified by the first respondent are quashed and proceedings of both the respondents will stand quashed. It is
represented that the seized rice bags were temporarily released to the first petitioner as per the Government order dated 14.8.1992 on his
executing the bond. In the circumstances, since the order of confiscation passed by the second respondent as modified by the first respondent are
quashed, the bond if any, executed by the first petitioner is directed to be cancelled and released. The fine amount paid by the second respondent
is directed to be refunded to the second petitioner by the second respondent within twelve weeks from the date of receipt of copy of this order.
The parties shall bear their respective costs. Consequently, connected W.M.Ps are closed.