Narayan Lal Agarwal and Others vs State of Bihar

S.B. Sinha, J.—In this application the petitioner prays for quashing a proceeding pending against them u/s 7 of the Essential Commodities Act including an order dated 2.6.1987 passed by Special Judge (E.C. Act), Jamshedpur in C.R. Case No. 1386A/86, whereby and whereunder be refused to discharge the petitioners.

The facts of the case lie in a very narrow compass.

A First Information Report was lodged on 15.8.1986 in relation to an occurrence which took place on 18.7.1986 alleging Inter alia, therein that the petitioners have not displayed the prices and stock of Chilly nor maintained Stock register in relation thereto as required under the Bihar Essential Articles (Display of Prices and Stock) Order, 1977.

Bihar Essential Articles (Display of Prices and Stock) Order, 1977 was originally published in the Bihar Gazette on 10th September, 1977.

However, the validity of the said order was challenged in this Court and is pending decision.

In terms of a notification dated 1.11.1986, the State of Bihar in exercise of its power conferred upon it under the delegating notifications issued by the Central Government in terms of Section 5 of the Essential Commodities Act and with the prior concurrence of the Government of India, the self same order was published in the Bihar Gazette, dated 13th April, 1976 (hereinafter referred as the ''Display Order).

In the Display Order of 1977 Chilies were exempted by a notification being GSR No. 7, dated 6.2.1981. From the schedule appended to the Display order, it appears that the ''Chilly, was deleted from the Schedule thereof in terms of G. S. R. No. 26, dated 27.6.1986.

The learned Special Judge, by reason of his order dated 2.6.1987 accepted the fact that price and stock of Chilly was not required to be displayed in terms of Bihar Trade Articles (Display of ''Price and Stock) Order, 1977 but held that no notification has been produced to show that the said article has been exempted from the purview of the Bihar Trade Articles (Licences Unification) Order, 1984 (hereinafter referred to as ''the said Order'').

Mr. P.D. Agrawal, the learned Counsel appearing on behalf of the petitioners has raised a short question in support of this application. He submitted that in view of the fact that Chilly is not required to be displayed under the said Display Order, there is no requirement to display the stock and price of the said commodity and to maintain the stock register in relation thereto in terms of provision of Bihar Trade Articles (Display of Prices and Stock) Order, 1977.

Bihar Trade Articles (Licences Unification) Order, 1984 came into force with effect from 19th April, 1984.

Trade Article has been defined in Clause 2(d) of the aforementioned order to mean any commodity mentioned in Schedule I or Schedule II thereof.

In terms of Clause 3 of the said order, a dealer is prohibited from carrying on business on purchase, storage for sale etc of any trade articles mentioned in Schedule I except under and in accordance with the terms and conditions of a license issued in this behalf by the licensing authority, under the provisions thereof.

Clause 4 of the aforementioned order provides for the manner in which such a licence is to be applied for and issued.

Part III of the aforementioned order deals with restrictions relating to the prices and stocks etc.

From the facts as indicated hereinbefore, it is evident that Part II of the said order, which deals with licensing of dealers does not cover a case where a person deals in a trade article mentioned in Schedule II appended to the said order.

Clause 31 of the said order reads as follows:

Restrictions relating to prices and stocks etc. the retail price of any trade article displayed in compliance of the provisions of the Bihar Essential Articles (Display of Prices and Stocks) Order, 1977 shall not exceed the retail price, fixed or recommended by the Central Government or State Government or manufacture or distributor from time to time for that trade article.

It must be mentioned that clause 15 as reproduced hereinbefore was replaced by reason of a notification bearing GSR No. 47, dated 17.10.1985.

Clause 16 of the said order prohibits sale of trade articles at a price higher than specified in respect of the said article in the list of prices and stock.

Clause 15 of the said order prohibits a person from storing or having in his possession at any time any trade article mentioned in Schedule I or Schedule II thereof any quantity exceeding the limits fixed by the concerned Government.

It is stated at the bar that no notification has been issued by the State of Bihar fixing the storage limit in respect of ''Chilly'' in terms of clause 18 of the aforementioned order.

The only question, therefore, which requires consideration is as to whether despite exemption of trade articles ''Chilly'' was from the Scheduled appended to Display Order, a dealer in Chilly required to display the prices and stock thereof and to maintain the stock register in terms of the provisions contained in Unification Order or not.

Part 3 of Part 4 of 1984 Order did not require a dealer dealing in any trade article mentioned in Schedule II thereof to maintain any stock register.

Requirement to maintain stock registers is necessitated by reason of condition of license, which as indicated hereinbefore, is required to be obtained only in relation to the commodities mentioned in Schedule I thereof.

Such a requirement was, however, necessary under the provisions of Bihar Trade Article (Display of Prices and Stock) Order, 1977.

Before issuance of the notification bearing G.S.R. No. 47, dated 17.10.1985, every trader in compliance with the provisions of the Bihar Essential Articles (Display of Prices and Stocks) Order, 1977 and various amendments made in this regard by the State Government by notifications issued from time to time was required to display the prices and stocks of articles in which he trades mentioned in Schedules I and II of the aforesaid order written legibly in Hindi in business premises or at such nearest place which may clearly be visible.

As seen hereinbefore, the requirement of display or a prohibition upon the dealer not to charge prices in excess of the prices displayed interne of Display Order was incorporated by reference, by reason of clause 15 of the said order.

In Arjun Singh v. State of Bihar 1985 PLJR Page 898: 1986 East C.C 125 (Pat) this Court has held that by reason of clause 15 of the said order, the display order was not repeated but in fact the same was continued.

In short clause 15 of the said order merely incorporates the display order in the said order by reference.

It is well known that where one statute is incorporated by reference in that statute, the statute so incorporated must carry with it all restrictions or exclusions thereof.

Chilly was excluded from the Display Order by the State of Bihar, in exercise of its power conferred upon it under the delegating notifications issued in this behalf of the Central Government, in the manner as mentioned hereinbefore.

So far as the Chilly is concerned, the same being not required to be displayed in terms of the Order, no requirement to display of the same arises in terms of Clause 15 of the said Order.

It is therefore, clear that if a commodity was not required to be displayed nor was there any requirement to comply with the provision of Display Order in terms thereof, clause 15 of the said Order does not bring within its purview any commodity which is not covered by Display Order.

The petitioner had been charged for commission of an offence for violating the Display Order.

In the State of Bihar Vs. Bhagirath Sharma and Another, , the Supreme Court clearly held that before a person as prosecuted for violation of a Display Order, he must know the requirement thereof in terms of a clear provision of law.

The provision of Essential Commodities Act and for that matter the said order being penal provisions, the same are required to be strictly construed.

In absence of a clear provision in the said order that a dealer dealing in trade articles mentioned in Schedule 11 of the said Order is also required to comply with the provision of 1977 Display Order although there was no requirement to do so under the same in my opinion, the petitioner cannot be said to have committed any offence whatsoever in the First Information Report or in the charge-sheet.

In the result, this application is allowed and proceeding pending against the petitioners including the impugned order dated 2.6.1987 are hereby quashed.