Mohan Baghel vs State of Madhya Pradesh

P.C. Pathak, J.

This judgment shall also govern the disposal of Criminal Appeals Nos. 544/87, 532/87, 108/89, 109/89, 373/89, 378/89, Cr. R. Nos. 421/89, 415/89 and Misc. Cr. Case No. 3966/88.

Appellant Mohan in this appeal was convicted u/s 7 read with section 3 of the Essential Commodities Act, 1955 (X of 1955) (hereinafter called ''the Act'') for breach of Paragraphs 5 and 6 of the M. P. (Khadya Padarth) Sarvajanik Nagrik Purti Vitaran Scheme, 1981 |M.P. (Foodstuffs) Civil Supply - Distribution Scheme, 1981) (hereinafter called ''the Scheme'') and sentenced to R.I. for three months and a fine of Rs. 1000/- in default R.I. for one month.

In all the abovementioned appeals and cases a common question of law is involved, viz. whether the breach of the ''Scheme'', is punishable u/s 7 of the Act. Section 7 of the Act provides for penalty to a person, who contravenes any ''Order'' made u/s 3. Section 3(1) empowers the Central Government, by Order, to provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce thereof. Section 3(2)(d) provides that an Order made under sub-section (1) may provide for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity. In exercise of powers u/s 5 the Central Government has delegated its powers to the State Government u/s 3, by notification No. G.S.R. 1088, dated 15th November, 1958. In exercise of delegated power, the State of M. P. made M. P. Foodstuffs (Distribution Control) Order, 1960 (hereinafter called ''the Order''), published in M. P. Rajpatra, Part I, dated 5-11-1960, at page 1396. Clause 2(d) defines "Government Scheme" to mean a scheme for distribution of foodstuffs to consumers through fair price shops set up by Government in this behalf. By amendments dated 30th October, 1980, Clause 2(bb) was added in the definition of Fair Price Shop to mean a shop set up by the Government under the Scheme.

By Notification No. 2228-1905-XXIX, dated 20th March, 1981, the State Government published Scheme under clause 2(d) of the 1960 Order. Clause 3(1) of the Scheme provides for setting up of Fair Price Shop by the Collectors in each district. Clause 4 deals with appointment of agents for running Fair Price Shops. The agent appointed has to enter into an agreement with the State Government as required by clause 5 for running the Fair Price Shop and has to deposit certain amount as security. Clause 7 regulates the size of Fair Price Shops and the time when they are to remain open. Clause 8 provides for payment of commission and other expenses at the rate fixed by the Government. Clause 9 requires the agent to maintain register as may be directed by the Government. Clause 10 provides for displaying a board of a shop specifying the price of foodstuffs, their quantity etc. Clause 11 requires the agents to send quarterly return to the Collector. Clause 12 provides that the agents shall follow the directions issued from time to time by the State Government and Authorities. Clause 13 deals with penalty. If an agent is found to have, contravened any condition of the agreement, his appointment can be suspended or cancelled. Clause 14 provides for an appeal to authorised officer.

It may be mentioned here that the earlier Notification No. G.S.R. 1088, dated 15th November, 1958 was replaced by a fresh Notification No. G.S.R. 800, dated 9th June, 1978, issued by the Central Government delegating its power u/s 3(1) of the Act to the State Government to make orders in respect of matters specified in various sub-clauses of section 3(2) in relation to foodstuffs subject to certain conditions specified therein. The Notification runs as under: - -

"GSR 800 - In exercise of the powers conferred by section 5 of the Essential Commodities Act, 1955 (10 of 1955), and in supersession of the order of the Government of India in the late Ministry of Agriculture (Department of Food) No. GSR 315(E) dated the 20th June, 1972, the Central Government hereby directs that the powers conferred on it by sub-section (1) of section 3 of the said Act to make orders to provide for the matters "specified in clauses (a), (b), (c), (d), (e), (f), (h), (i) and (j) of sub-section 2 thereof shall, in relation to foodstuffs be exercisable also by a State Government subject to the conditions:

1) that such powers shall be exercised by a State Government subject to such directions, if any, as may be issued by the Central Government in this behalf;

2) that before making an order relating to any matter specified in the said clause (a), (c) or (f) or in regard to distribution or disposal of foodstuffs, to places outside the State or in regard to regulation of transport of any foodstuffs, under the said clause (d), the State Government shall also obtain the prior concurrence of the Central Government; and

3) that in making an order relating to any of the matters specified in the said clause (j), the State Government shall authorise only an officer of the Government."

It is well settled that there can be no conviction u/s 7 of the Essential Commodities Act unless the prosecution is able to show that there is an ''Order'' u/s 3 of the Act which has been contravened. See Bara Singh v. State of Punjab, 1984 (I) Crimes 402 (P and H) and Superintendent and Remembrancer of Legal Affairs, West Bengal Vs. Prohlad Agarwalla, . Therefore, it has to be examined whether the ''Scheme'' is an ''Order'' within the meaning of section 3 of the Act,

A perusal of the Notification dated 20th March, 1981 shows that ''the Scheme'' was made by the State Government is exercise of its powers under clause 2(d) of the ''Order''. Clause 2(d) is reproduced below:

"Clause 2(d). - "Government Scheme" means the Scheme for distribution of foodstuffs to consumers through fair price shops set up by the Government in this behalf."

On behalf of the State, it was contended that the Scheme was framed in exercise of the powers delegated to the State Government u/s 5 of the Act read with clause 2(d) of the ''Order''. The submission cannot be accepted. The validity of the ''Scheme'' was considered in Madhya Pradesh Ration Vikreta Sangh, Jabalpur and Ors. v. State of Madhya Pradesh and Anr. 1981 MPLJ 528 AIR 1981 M.P. 205, it was held that the scheme was not made in exercise of any power conferred by the ''Order''. Clause 2(d) of the ''Order'' only defines the expression of "Government Scheme" and it does not confer any power to make Scheme. The definition itself postulates the ''Scheme'' is one which is made in exercise of its executive power. The executive power of a State as provided in Article 162 of the Constitution extends to the matters with respect to which the Legislature of the State has power to make laws. The topic of distribution of foodstuffs is covered by Entry 33 in List III of the Seventh Schedule and so the executive power of the State extends to this topic. The Division Bench held that the Scheme was not made in exercise of the powers conferred by section 3 read with section 5 of the Act and was made only in exercise of the executive power of the State. The decision of this Court was affirmed by the Supreme Court in Madhya Pradesh Ration Vikreta Sangh Society and Ors. v. State of Madhya Pradesh AIM 1981 SC 2001. The Supreme Court also held that the ''Scheme'' was designed by the State by executive action under Article 162 of the Constitution with a view to ensuring equitable distribution of foodstuffs at fair prices. Thus, there is no manner of doubt that the ''Scheme'' is not an ''Order'' u/s 3 of the Essential Commodities Act. That being so, for breach of any clause of the ''Scheme'', the State could not launch prosecution u/s 7 of the Act. The convictions of the appellants so also the prosecution of applicants u/s 7 of the Act for the breach of any provision of the ''Scheme'' cannot be sustained and must be held illegal, null and void. The conviction for abatement u/s 8 also cannot be sustained.

The appeals are allowed. The convictions of the appellants and/or prosecution u/s 7 of the Act for breach of clauses of the ''Scheme'' so also the sentences passed thereunder are hereby set aside and/or quashed. Fine, if paid, be refunded to the appellants.