Shayona Petrochem Ltd vs State Of Gujarat & Anr

Hasmukh D. Suthar, J

By way of the present Criminal Revision Application, the applicant has prayed for the following main reliefs:

“(A) Your Lordship be pleased to call for record of the case No. Supply/ECA/6A/23/03  from  the  office  of  the  respondent  no.2 and after perusing the same be pleased to quash and set aside the order dated 9-11-2004 passed by the respondent no. 2 confiscating stock of 64,631 liters of pit oil amounting to Rs. 4,52,417/- and also judgment and order dated 28-9-2005 passed by the Special Judge (Essential Commodities) Fast Tract Court No. 1, Patan, in Criminal Appeal No. 20 of 2004.

(B)  Your  Lordships  be  pleased  to  direct  the  respondent  no.2  to release entire stocks confiscated by the order dated 9-11-2004 and confirmed in appeal by order dated 28-9-2005 as the products confiscated are dangerous and it may evaporate effectively day by day which may cause damage to either of the parities pending admission and hearing and disposal of this revision application.”

Heard learned advocates for the respective parties.

The  learned  advocate  for  the  applicant  submits  that  the impugned order of confiscation passed by respondent No.2 under Section 6-A of the Essential Commodities Act, 1955, and the order confirming the same passed by the learned Appellate Court are illegal, without jurisdiction and contrary to the provisions of law. It is submitted that under the Solvent, Raffinate and Slop (Acquisition, Sale, Storage and Prevention of  Use  in  Automobiles)  Order,  2000,  the  definition  of  “solvent”was initially very wide; however, considering several representations  received  from  across  the  country,  the  Central Government amended the definition in the year 2001 by restricting  it  to  specific  items  mentioned  in  the  Schedule.  The Central Government had also informed all the States regarding the said amendment.

It is contended that the products seized from the petitioner, namely  pit oil and spray oil, do not fall within the definition of“solvent” as provided in the amended order. Despite this legal position being brought to the notice of respondent No.2, the authority proceeded to confiscate the stock without proper jurisdiction. The learned advocate further submits that the respondent authority acted with undue haste without awaiting the report of the Directorate of Forensic Science Laboratory. It is, therefore,  submitted  that  the  impugned  orders  suffer  from  non- application of mind and deserve to be quashed and set aside.

Mr. Rohan Raval, learned APP appearing for the respondent–State, has supported the impugned orders passed by the competent authority as well as the Appellate Court. It is submitted  that  respondent  No.2  exercised  powers  under  Section 6-A of the Essential Commodities Act, 1955  after conducting due inspection and finding that a large quantity of petroleum hydrocarbon products, namely pit oil and spray oil, was stored by the petitioner. According to the prosecution, the seized products are mixtures of petroleum hydrocarbons and fall within the ambit of “solvent” as contemplated under the  Solvent Control Order, 2000. It is further submitted that the competent authority, after following due procedure and giving an opportunity of hearing to the petitioner, passed the order of confiscation,  which  has  rightly  been  confirmed  by  the  Appellate Court.

Having heard the learned advocates for the respective parties  and  having  gone  through  the  record,  it  appears  that  the petitioner  has  challenged  the  order  dated 10.11.2004  passed  by respondent No.2  whereby the  stock of 64,631 litres  of  pit oil  (a mixture  of  petroleum  hydrocarbon) amounting  to Rs.4,52,417/- was confiscated for the alleged breach of the provisions of the Solvent, Raffinate and Slop Order, 2000, in exercise of powers under  Section  6-A  of  the  Essential  Commodities  Act,  1955.  The said  order  has  been  confirmed  in  appeal  by  the  learned  Special Judge  (Essential  Commodities),  Fast  Track  Court  No.1,  Patan  in Criminal Appeal No.20 of 2004 decided on 28.09.2005 under Sections 397 read with 401 of the Code of Criminal Procedure.

In view of the above, the moot question that arises for consideration before this Court is whether the alleged confiscated goods, namely pit oil (a mixture of petroleum hydrocarbons), fall within the category of “solvent” under the Solvent Control Order issued under the Essential Commodities Act, and consequently whether any control order or licence is required for its storage or sale. The learned advocate for the applicant has mainly submitted that the FSL report does not contain  any  specific  opinion  stating  that  the  seized  material  is  a solvent  mixture,  and  the  mere  presence  of  hydrocarbons  cannot be a ground to presume that the alleged goods fall under Section 3 of the Essential Commodities Act, 1955. On the other hand, the learned APP has opposed the application contending that under  Section  3  of  the  Essential  Commodities  Act,  the  Ministry of Petroleum and Natural Gas, vide order dated 05.06.2000, defined “solvent” as volatile fractions derived either directly or indirectly from petroleum or coal, which may consist of single hydrocarbon components such as propane, benzene, toluene, xylene, etc., or narrow or wide boiling ranges of hydrocarbons.

The  learned  advocate  for  the  applicant  has  submitted  that the aforesaid definition came to be amended vide notification dated  21st  November,  2001  issued  by  the  Ministry  of  Petroleum and  Natural  Gas,  wherein  “solvent”  has  been  defined  as  volatile fractions derived either directly or indirectly from petroleum or coal. Such solvents may consist of single hydrocarbon components like propane, benzene, toluene, xylene, etc., or narrow or wide boiling ranges of hydrocarbons.

Since the definition of “solvent” has been amended and the alleged confiscated goods do not fall within the category of solvent, respondent No.2 has committed an error in initiating the proceedings.  From  the  very  beginning,  the  petitioner  had  raised a  specific  defence,  in  response  to  the  show-cause  notice,  that  a preliminary  issue  ought  to  have  been  decided  as  to  whether  the alleged mixture, namely pit oil, falls within the definition of solvent or attracts the provisions of Section 3 of the Essential Commodities Act. However, the said issue has neither been decided  by  the  learned  Collector  nor  by  the  appellate  authority. It further appears from the record that respondent No.2 had addressed communication to the Forensic Science Laboratory (FSL)  seeking  clarification  regarding  the  nature  and  composition of  pit  oil  and  the  mixture  from  which  it  was  prepared.  However, no  specific  opinion  has  been  provided  by  the  FSL  in  this  regard. Even  the  Supply  Department  of  the  Government  of  Gujarat  had advised the Collector to take appropriate action after obtaining the  opinion  of  the  FSL.  Despite  this,  in  the  absence  of  any  clear finding or specific opinion from the FSL regarding the applicability  of  the  Essential  Commodities  Act  and  the  nature  of the petroleum hydrocarbons found in the seized material, i.e. pit oil  (a  mixture  of  petroleum  hydrocarbons),  the  impugned  action has been taken without proper determination of the relevant issue.

Considering the aforesaid facts and more particularly the specific defence raised by the petitioner vide submission dated 14th September,  2004  addressed  to  respondent  No.2  (Annexure- L) regarding the applicability of the Essential Commodities Act, it appears that no issue was framed or decided prior to deciding the matter as to whether the provisions of the Essential Commodities Act were applicable. The impugned order is silent on this aspect, and the appellate authority has also remained silent with regard to Annexure-L. More particularly, in light of the opinion of the Forensic Science Laboratory (FSL), the present matter is required to be decided afresh after considering the FSL report and by first determining the preliminary issue regarding the applicability of the Essential Commodities Act, namely whether pit oil falls within the category of solvent or not?

On an overall appreciation of the facts on record, the Revision Application appeal is allowed. The order dated 09.11.2004 passed by respondent No.2 and order dated 28.09.2005 passed by the learned Special Judge (Essential Commodities),  Fast  Track  Court  No.1,  Patan  in  Criminal  Appeal No.20  of  2004,  are  hereby  quashed  and  set  aside.  The  matter  is remitted back to the competent authority-respondent No.2 for deciding the case afresh after giving an opportunity of hearing to both the parties.

The authority shall decide the matter on its own merits, without being influenced by the observations made by this Court,  preferably  within  a  period  of  six  months  from  the  date  of receipt of this order. No order as to costs.