Saturday 8 April 2017

Whether unadulterated essential commodity can confiscated under essential commodities Act?

 The appellate authority has confirmed the order
of confiscation of 3000 liters of H.S.D(high speed diesel)
 as it was
adulterated, but it has set aside the order in respect of
remaining 9000 liters of H.S.D. by observing that it was
not adulterated. This approach is not at all correct. When
the offence is committed, when there is contravention of
the order issued under section 3 or 4 of the Act, such
segregation is not possible. If the tanker can be
confiscated as adulterated essential commodity was being
carried in it, the remaining essential commodity which
was not found to be adulterated, can also be confiscated
as the person who was doing such act tries to use such
tactics. 
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
Criminal Writ Petition No.1449 of 2016
 Deepak S/o Kashinath Aher,

V
 The State of Maharashtra

 CORAM: T.V. NALAWADE, J.

 DATE : 3 FEBRUARY 2017
Citation: 2017 ALLMR(CRI)1247

1) Rule, rule made returnable forthwith. Heard
both sides by consent for final disposal.

2) After advancing arguments on merits of the
matter in length by the learned counsel for the petitioner,
when this Court expressed that the Court will not be
granting any relief to the petitioner, transporter but the
Court is thinking to see that proper orders are made
under the provisions of the Essential Commodities Act,
1955 (hereinafter referred to as "the Act") and for that
purpose, the decisions of the Collector and the Appellate
Authority are corrected, learned counsel for the petitioner
submitted that he would withdraw the proceeding. This
Court can exercise powers not only under the provisions
of Articles 226 and 227 of the Constitution of India but
also under the provision of Section 482 of the Code of
Criminal Procedure, 1973. In the present matter in view of
the provisions of the Act and the Orders issued under the
Act by the Central Government this Court is deciding the
matter on merits and not allowing the petitioner to
withdraw the proceeding.
3) The petitioner is a transporter and is owner of
one truck-tanker bearing No. MH-18-AA-4548. The
petitioner transports H.S.D. (High Speed Diesel) after

lifting it from Manmad Depot of the Indian Oil
Corporation. The incident in question took place on 12-4-
2014. When the tanker entered the campus of Gangakhed
Depot of MSRTC, State Transport Corporation, as per the
procedure, the compartments of the tanker were opened
by the officers of MSRTC in the presence of driver of the
present petitioner. There was invoice in respect of the
H.S.D. filled in the tanker and in accordance with the
procedure, verification of the stock was done. The tanker
was expected to contain 12000 liters of H.S.D. Then, as
per challan the density of H.S.D. from the four
compartments of the tanker was tested in the presence of
the driver. There were four compartments in the tanker
and the density of the diesel from the compartment Nos.
2,3 and 4 was found to be correct but the density of the
diesel from compartment No.1 did not tally with the
expected density shown in the challan. Further, when
some diesel was taken out for examination it appeared to
the officer that it had blue colour, colour of kerosene
which is meant for Public Distribution System. This
incident was then reported to the Tahsildar, a Gazetted
Officer, of Gangakhed.

4) The Gazetted Officer visited the S.T. Depot and
collected samples from this compartment. There was
around 3000 liters of diesel in this compartment and it
was found to be adulterated by using kerosene. Value of
H.S.D. per liter is four times more than the value of such
kerosene sold in Public Distribution System. The officer
of the S.T. Depot gave report on the same day to the
Gangakhed Police and crime came to be registered for
offences punishable under sections 420, 406, 34 of the
Indian Penal Code and Sections 3,7 etc. of the Act. The
report of the sample is received from C.A. office and it
shows that the kerosene was mixed in diesel. It is
specifically mentioned in the report that the kerosene
found in the diesel is meant for Public Distribution System
(P.D.S.).
5) During investigation, police recorded
statements of the persons from the S.T. Depot Gangakhed
and the persons from Manmad Depot of Indian Oil
Corporation. It appears that some correspondence was
made with the Indian Oil Corporation to supply the video
recording of the incident of filling diesel in this tanker. But

the police papers produced before this Court do not show
that such video footage was supplied by the Oil
Corporation.
6) Statements of the employees of the Indian Oil
Corporation are to the effect that as per procedure, H.S.D.
was filled in the tanker and it was locked and the relevant
record like challan etc. was handed over to the driver. It
appears that during investigation the driver contended
that he had mixed the kerosene and the kerosene was
taken by him from the campus of the Indian Oil
Corporation itself. Such possibility is denied by the
employees of the Indian Oil Corporation. Further, there is
no video recording of the incident of filling at present
before this Court.
7) Report was given to the Collector by the
Tahsildar after the seizure of the tanker and the diesel
from all the compartments and the Collector started
proceeding under section 6-A of the Act. Show cause
notice was given to both driver and the owner of the
tanker viz. present petitioner. Copy of the say, which must

have been filed before the Collector by present petitioner,
is not filed on the record. After giving opportunity to the
petitioner of having say, the Collector made order of
confiscation of diesel. The Collector made order of sale of
the remaining 9000 liters diesel through petrol pumps of
the said Tahsil and credit the amount with the
Government. The Collector directed the R.T.O. to ascertain
the market price of the vehicle and the Collector directed
the petitioner to give bank guarantee of 50% value of the
tanker for getting the custody of the tanker. Submissions
made show that as yet the custody of the tanker is not
taken by the petitioner.
8) Criminal Appeal No.51/2016 was filed under
section 6(C) of the Act by present petitioner in Sessions
Court. The Sessions Court has maintained the order of
confiscation of adulterated diesel but the order of
confiscation of remaining diesel is set aside. A direction is
given to return the diesel of 9000 liters to the present
petitioner. The order of the Collector of giving direction
to give bank guarantee is also set aside and the direction
is given to hand over the tanker after furnishing surety of

the amount of Rs. three lakh. The owner of the tanker,
transporter has challenged the order as he wants even the
adulterated diesel.
9) This Court has carefully gone through the
provisions of the Act. Section 3 and Section 4 show that
orders issued under section 4 are to be treated as the
orders issued under section 3 of the Act. Under section 3
of the Act, (The) Kerosene (Restriction on Use and
Fixation of Ceiling Price) Order, 1993 (hereinafter
referred to as "the Kerosene Order") is issued and under
section 4 of the Act, The Motor Spirit and High Speed
Diesel (Regulation of Supply, Distribution and Prevention
of Malpractices) Order, 2005 (hereinafter referred to as
"the Diesel Order") is issued. Clause 3 of the Kerosene
Order shows that if kerosene is supplied for P.D.S., such
kerosene can be used only for the purpose of cooking and
illumination. The sale of such kerosene by dealer or
transporter is prevented to any person other than the
person to whom the supplies are meant for. Clause 8 of
the Order shows that the kerosene which is to be supplied
through P.D.S. needs to be made distinguishable from the

kerosene to be distributed under the parallel marketing
system. It is not disputed that the kerosene having blue
colour is meant for P.D.S. In the present matter, such
kerosene was found mixed in the diesel and so there is
contravention of the provision of cause 3 of the Kerosene
Order.
10) Clause 3 of the Diesel Order and particularly
sub clause (6) shows that the dealer or distributor shall
not indulge in any manner in any one or more of the
malpractices. The definition of malpractices given in
Clause 2(f) of the Diesel Order, shows that, adulteration,
pilferage, stock variation and unauthorised sale or
unauthorised possession amount to malpractices. Thus,
there is contravention of Clause 3 of the Diesel Order.
11) Learned counsel for the petitioner submitted
that in the show cause notice issued by the Collector there
is no mention of aforesaid Orders and so the show cause
notice itself was illegal. In support of this contention,
learned counsel placed reliance on the observations made
by the Apex Court in the case reported as (2007) 5 SCC

769 (Kailash v. State of Jharkhand). In that case the facts
were totally different. The order issued under section 3 of
the Act was not covering the matter involved. Thus the
facts were altogether different and in view of the facts of
that case the Apex Court laid down that the order of which
contravention is there needs to be mentioned in show
cause notice for taking action under section 6-A of the Act.
There cannot be any dispute over the proposition. In the
present matter orders were there in existence and the
orders covered the present contravention. Further the
provision of Section 6-B (3) of the Act shows that the
defect or irregularity in the notice given under this
provision will not make the confiscation invalid. The
provision runs as under :
"6-B. Issue of show cause notice before
confiscation of essential commodity.-
(1) . . .
(2) . . .
(3) No order confiscating any essential
commodity package, covering, receptacle,
animal, vehicle, vessel or other conveyance shall
be invalid merely by reason of any defect or
irregularity in the notice given under Cause (a)
of sub-section (1), if, in giving such notice, the
provisions of that clause have been substantially
complied with.

Thus, not mentioning the specific Order in the show cause
notice issued under section 3 or 4 of the Act cannot make
the confiscation order itself invalid. It is sufficient for the
Collector to mention that there is contravention of the
provision of section 3 of the Act which is made punishable
under the Act, section 7 provided that order under section
3 or 4 of the Act is already issued. In view of this position
of law, interference is not warranted in the order of
confiscation made by the Collector on the aforesaid
ground raised by petitioner.
12) In the present matter, the Collector directed to
give custody of the transport vehicle after taking bank
guarantee of the amount which would be 50% of the
market value of the vehicle. This Court has carefully gone
through the provision of section 6-A which gives power to
the Collector of confiscation of the vehicle. The relevant
portion is second proviso of section 6-A (Maharashtra
Amendment of Section 6-A) and it runs as under :
"6-A Confiscation of seized commodities:- (1)
Where any essential commodity is seized in pursuance
of an order made under section 3 in relation thereto, a
report to that effect shall, without any unreasonable

delay, be sent to the Collector within whose
jurisdiction the seizure is made, and the Collector may,
if he thinks it expedient so to do, inspect or cause to
be inspected such essential commodity, and whether
or not a prosecution is instituted for the contravention
of such order, the Collector, if satisfied that there has
been contravention of the Order, may order
confiscation of:-
(a) the essential commodity so seized;
(b) any package, covering or receptacle in which such
essential commodity is found; and
(c) any animal, vehicle, vessel or other conveyance
used in carrying such essential commodity;
Provided that, .....
Provided further that where any animal, vehicle,
vessel or other conveyance is used for the carriage of
goods or passengers for hire, the owner of such
animal, vehicle, vessel or other conveyance shall be
given an option to pay in lieu of its confiscation a fine
not exceeding the market price at the date of seizure
of the essential commodity sought to be carried."
This provision shows that the Collector can give an option
to the owner to pay in lieu of the confiscation, fine not
exceeding market price of the vehicle and the market
price is to be ascertained for the date of seizure.
13) The provision of Section 6-A (1) of the Act
shows that the power is vested with the Collector of
confiscation whether or not the prosecution is instituted
for the contravention of the order issued under section 3

of the Act. Further, subjective satisfaction of the Collector
is involved for making the order of confiscation. When
such order can be made even when prosecution is not
launched, it is not open to the Collector to release the
vehicle after taking bank guarantee. Thus, when the
Collector is satisfied that action for confiscation needs to
be taken, then there is no other option before him than to
ask the owner to deposit the market value of the vehicle
for taking the custody of the vehicle or to pass
confiscation order. The provision of section 7 of the Act
shows that when the prosecution is launched and the
Criminal Court comes to the conclusion that there has
been contravention of the order issued under section 3,
the essential commodity and also the vehicle in which it
was being transported can be forfeited to the
Government. Provision of section 6-A (3)(c) shows that
when a person is acquitted in the case, price of the
essential commodity disposed of by the Collector needs to
be paid to the person from whom the commodity is seized.
Due to acquittal, the owner of vehicle does not become
entitled to similar relief. This provision shows that the
power of the Collector is independent to the power of the

Magistrate when he makes order of confiscation of the
vehicle. In such circumstances, the relevant provisions
with regard to the vehicle already quoted need to be
followed strictly. Thus the Collector also committed error
in giving relief to the petitioner of giving bank guarantee
of 50% of the amount of the value of the vehicle.
14) There is other angle also to this point. The
provisions of section 7(1) (b) and 7(1)(c) of the Act run as
under.
"7. Penalties.-- (1) If any person contravenes any
order made under section 3,---
(a) .....
(b) any property in respect of which the order has
been contravened shall be forfeited to the
Government;
(c) any package, covering or receptacle in which
the property is found and any animal, vehicle, vessel
or other conveyance used in carrying the commodity
shall, if the Court so orders, be forfeited to the
Government."
This provision of the Act shows that there is no relation to
this provision with the order if any made by Collector. If
the Magistrate comes to conclusion that there has been
contravention of orders made under section 3 of the Act

and there is some property involved, the Magistrate has
power to forfeit that property to the Government and the
Magistrate has the power to forfeit even the vehicle in
which th property was found to be carried. It can be said
that this power is independent of the power of the
Collector and even if the Collector does not confiscate the
property or the vehicle, the Magistrate has the power of
forfeiture. That does not mean that the Collector is not
expected to use the power of confiscation given under
section 6-A of the Act. If this part of provision of Section 7
is read with provision of section 6-A (Maharashtra
Amendment) to the Act, it becomes clear that, there is no
power with the Magistrate to order release of the vehicle
even after acquittal of the accused if Collector has
confiscated the vehicle and the law as quoted in section 6-
A (3)(c) of the Act will take its own course. In such a case,
when confiscation proceeding is started, there is only one
recourse open to the owner of the vehicle and that is use
of procedure given in section 6-B (2) of the Act. This
provision runs as under :-
"6-B. Issue of show cause notice before
confiscation of essential commodity.--

(1) . . . .
(2) Without prejudice to the provisions of sub-section
(1), no order confiscating any animal, vehicle, vessel
or other conveyance shall be made under section 6-A
if the owner of the animal, vehicle, vessel or other
conveyance proves to the satisfaction of the Collector
that it was used in carrying the essential commodity
without the knowledge or connivance of the owner
himself, his agent, if any, and the person in charge of
the animal, vehicle, vessel or other conveyance and
that each of them had taken all reasonable and
necessary precautions against such use."
15) The order of confiscation can be challenged by
filing appeal as provided in section 6-C of the Act and then
this Court can consider the challenge of the owner to the
orders made in confiscation proceeding.
16) The record shows that the show cause notice
was given not only to the owner, present petitioner but
also to the driver by District Collector. It appears that they
together contested the matter before the Collector and
they contended that the tanker was taken in the same
condition to the depot of the MSRTC after loading of
H.S.D, in the tanker at Manmad depot of the Oil Company.
On the other hand, in the police statement, the driver
contended that he had mixed the kerosene in H.S.D. For

the present purpose, police statement can be considered.
In view of these circumstances, this Court holds that it
cannot be said that the driver of the present petitioner, his
agent, had no knowledge that there was adulteration of
H.S.D and so there is no scope left to use the provision of
Section 6-B(2) of the Act in favour of present petitioner.
Thus, on merits there is no scope to interfere in the
finding for confiscation given by the Collector.
17) In appeal, the appellate authority has not set
aside the finding given by the Collector in respect of the
tanker. Only the option given by the Collector is changed
by the appellate authority. It is already observed that
when the confiscation proceeding, which is independent
proceeding, comes to an end, after making order by
Collector and it can be challenged only as provided in the
Act, it was not open to the appellate authority also to
allow the owner to take the vehicle after furnishing surety.
Thus the order of the appellate authority, Additional
Session Judge Parbhani made in the appeal in this regard
cannot sustain in law.

18) The appellate authority has confirmed the order
of confiscation of 3000 liters of H.S.D(high speed diesel)
 as it was
adulterated, but it has set aside the order in respect of
remaining 9000 liters of H.S.D. by observing that it was
not adulterated. This approach is not at all correct. When
the offence is committed, when there is contravention of
the order issued under section 3 or 4 of the Act, such
segregation is not possible. If the tanker can be
confiscated as adulterated essential commodity was being
carried in it, the remaining essential commodity which
was not found to be adulterated, can also be confiscated
as the person who was doing such act tries to use such
tactics. Fortunately, in this case the oil from all the
compartments was tested for density and malpractice
was detected. MSRTC which had paid for this oil has
rejected the oil due to aforesaid circumstances. Present
petitioner was certainly not the owner of the oil. In view of
this circumstance, the Collector could not have made the
order of release of the H.S.D. in favour of the transporter
and for the same reason the learned Additional Sessions
Judge could not have made order of release of 9000 liters
of H.S.D in favour of the present petitioner, transporter.

In view of the provision of the Act and the aforesaid two
Orders, the transporter cannot possess on his own, such
oil. Thus, the order of the appellate authority, Additional
Sessions Judge by which confiscation of 9000 liters of
H.S.D. is set aside and the order of the Collector directing
to give bank guarantee is set aside cannot sustain in law.
Similarly, the order of the Collector needs to be modified
to make it necessary to recover the amount equal to the
market price of the vehicle if the petitioner wants custody
of that vehicle.
19) In the result, the petition is allowed. The
judgment and order of Criminal Appeal No.51/2016 which
was pending in the Court of the learned Ad-hoc Additional
Sessions Judge Parbhani is hereby set aside to the
aforesaid extent. The order of the learned Collector is also
modified. The Collector is expected to recover the market
price of the tanker if the petitioner wants to get custody of
the vehicle. Similarly, the order of the Collector directing
to distribute 3000 liters of adulterated H.S.D. through
Public Distribution System is set aside in view of the
provisions already quoted. This diesel can be handed over

or sold to the refinery and the sale proceeds of this diesel
need to be credited to the Government. The remaining
part of the order of the Collector, in respect of distribution
of 9000 liters of H.S.D. which was not adulterated is
maintained. In aforesaid terms rule is made absolute.
 Sd/-
 (T.V. NALAWADE, J. )


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