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Jai Hind Oil Mills Co. and anr. Vs. State of Maharashtra and anr. - Court Judgment

LegalCrystal Citation
SubjectCriminal;Commercial
CourtMumbai High Court
Decided On
Case NumberCriminal Application No. 1701 of 1981
Judge
Reported in1982(1)BomCR556
ActsEssential Commodities Act, 1955 - Sections 7 and 8; Maharashtra Hydrogenated Vegetable Oil Dealers Licensing Order, 1970 - Sections 2; Code of Criminal Procedure (CrPC) , 1973 - Sections 482
AppellantJai Hind Oil Mills Co. and anr.
RespondentState of Maharashtra and anr.
Appellant AdvocateN.M. Gursahani and ;A.A. Irani, Advs.
Respondent AdvocateS.B. Patil, P.P.
Excerpt:
.....7 and 8 of essential commodities act, 1955, section 2 of maharashtra hydrogenated vegetable oil dealers licensing order, 1970 and section 482 of criminal procedure code, 1973 - appellant's application for quashing of prosecution commenced by respondent - respondent alleged that appellant committed breach of condition no.2 (b) of licence - in view of earlier prosecution having failed in similar circumstances present prosecution by respondent not justified - producer not 'dealer' within meaning of licensing order of 1970 and applicant is clearly not a 'dealer' - prosecution for contravention of dealer's licence would be illegal - prosecution against appellant liable to be quashed. - - 5. the above notice which was issued to the applicant and replied by him also disclosed that the..........rationing, bombay in respect of the alleged breach of the maharashtra hydrogenated vegetable oil dealers licensing order, 1970.2. it is alleged that the applicant has committed the breach of the condition no. 2(b) of the above order read with sections 7 and 8 of the essential commodities act, 1955. it is further alleged that the applicant is manufacturer of vanaspati oil having factories at bhandup and sewree and both these factories are registered as an industrial undertaking under the provisions of the registration and licensing rules, 1953 and holds a licence from the ministry of commerce and industry, government of india, for the manufacture of vanaspati oil.3. it is said that on november 6, 1978, the second respondent , the controller of rationing, issued a notice to the applicant.....
Judgment:

S.J. Deshpande, J.

1. The applicant is the original accused in Criminal Case No. 109 of 1980 filed in the Court of the learned Metropolitan Magistrate, Mazagaon Bombay. This application is not directed against any particular order, but the relief which is claimed relates to the quashing of prosecution commenced by the second respondent, the Controller of Rationing, Bombay in respect of the alleged breach of the Maharashtra Hydrogenated Vegetable Oil Dealers Licensing Order, 1970.

2. It is alleged that the applicant has committed the breach of the condition No. 2(b) of the above Order read with sections 7 and 8 of the Essential Commodities Act, 1955. It is further alleged that the applicant is manufacturer of Vanaspati oil having factories at Bhandup and Sewree and both these factories are registered as an Industrial Undertaking under the provisions of the Registration and Licensing Rules, 1953 and holds a licence from the Ministry of Commerce and Industry, Government of India, for the manufacture of Vanaspati oil.

3. It is said that on November 6, 1978, the second respondent , the controller of Rationing, issued a notice to the applicant asking to showcase why he should not be prosecuted for breach of conditions of licence, that is for not possessing dealer's licence. The applicant replied to this notice by Exhibit D on December 8, 1980 explaining that as a firm manufacturing Vanaspati oil, he does not require to hold dealers licence. No further actions seem to have been taken after this reply by the applicant.

4. Then, on February 6, 1981 a show cause notice was issued to the firm of the applicant saying that he is contravening the conditions of the Licensing Order and he does not possess the dealers' licence. That notice was also replied by the applicant on March 20, 1981 repeating the same defence which he has stated earlier. It was replied that a firm is not under an obligation to possess or take a dealer's licence.

5. The above notice which was issued to the applicant and replied by him also disclosed that the applicant has further mentioned in this reply that certain prosecutions based on the contravention of the said Order were lodged earlier in the Court of the Metropolitan Magistrate but failed. The applicant relied on certain judgments wherein in similar circumstances the applicant firm in one case and in another case some other firm, who have faced the prosecution in similar situation, were acquitted. These judgments are relied on in this case, which I will refer to them later.

6. It appears that after the reply dated March 20, 1981 was given to show cause notice issued on February 6, 1981 the second respondent herein inspected the Sewree premises belonging to the applicant and confiscated 178 tins of Khajur Vanaspati. This seizure was made on July 21, 1980 at the instance of respondent No. 2. Against this order of seizure, the applicants and his firm Messrs. Jai Hind Oil Mills Co. filed Criminal Application No. 732 of 1981 in the High Court and that application came to be decided on April 28, 1981 by the Division Bench of this Court. It was ordered that 178 tins of Khajur Vanaspati oil in dispute shall be released to the petitioners in that application on their furnishing a bond of Rs. 50,000 with one surety in like amount to the Controller of Rationing. This order was passed by the High Court referring to another order, which was passed in Criminal Application No. 1266 of 1980.

7. It is against this background that the Controller of Rationing i.e. respondent No. 2 has commenced the prosecution against the applicant-firm after following the procedure, that is making search of the premises and drawing Panchanama of the stock and it is the said prosecution, which is pending in the Metropolitan Magistrate, 25th Court, Mazagaon, Bombay.

8. It is alleged by the applicant in this application that warrant was issued against him and he was to appear before the Court and date was fixed on September 29, 1981. It is, in these circumstances, that the present application was filed by the applicant on September 29, 1981, itself with a prayer of interim relief therein.

9. This application is directed now against the pendency of the prosecution and the applicant prays that the criminal prosecution started by the second respondent in this case is quite illegal and deserves to be quashed because it is ex facie wrong in law and unwarranted by the special facts and circumstances in this case. It is nothing but harassment of the company and it is likely to face the charge levelled against the applicant. It was also contended that the applicant cannot be prosecuted for not possessing dealers' licence as required by the Licensing Order of 1970.

10. At the outset, it may be pointed out here that there is no specific order passed by the Court below, which is being challenged in this case. The learned Public Prosecutor who appeared for the respondents has raised an objection that in the absence of charge being framed or any order is being passed by the Court below against the applicant, the prayer for quashing of the proceedings is not justified and this Court has no power to grant the same. On the merits of the contention it is said that on two earlier occasions similar prosecutions have failed which were commenced at the instance of the second respondent. It was submitted by the learned Public Prosecutor that the judgments delivered by those Misstatements on those cases are not binding and they are not declaration of law, and therefore, the present prosecution cannot be barred.

11. As far as the point which is apparently preliminary point of absence of any specific order is concerned, I may state that in an application under section 482 of the Code of Criminal Procedure it is not always necessary that the courts should have before it any specific order so that the prosecution may be quashed. The applicant is invoking the powers under section 482 of the Code of Criminal Procedure. The party against whom any relief is asked by invoking the powers under section 482 of the Code may be guilty of abusing process of the Court. It may commit an abuse by even fastening any prosecution which may be ex facie illegal. It may approach the Court over and over again and raise same question which is decided earlier against him. In this case prima facie in view of the orders passed by the Magistrate I am not persuaded to hold that the applicant may be debarred from raising any question on the technical ground that no specific order is being challenged by him. It was contended by the learned Advocate for the applicant, Mr. Gursahani, that in a case being Criminal Case No. 1859/P of 1974 the prosecution was lodged against Daulat Dhaniram Sharma for contravention of the provisions of Clause 3 of the Maharashtra Hydrogenated Vegetable Oil Dealers Licensing Order, 1970 as the said Sharma was found to be in possession of 8850 kg. of Vanaspati oil without licence. He pleaded not guilty to the charge. The learned Magistrate had occasion to deal with the definition of 'dealer' in that case and the defence of the accused in that case was that he was not a dealer within the meaning of the Licensing Order of 1970. The learned Magistrate in that case after referring to the definition of 'dealer' held that the accused in that case was not a person who was selling Vegetable oils and who can be said to be a dealer. It is notable that accused in that case was the representative of M/s. Hyderabad Vanaspati Company at Andheri. The accused was supposed to distribute the stock of the Vanaspati oil as per the orders given by the company. In that case the accused was acquitted of the charges and the articles which were sealed were returned to the accused. This judgment was delivered on September 17, 1974 by Metropolitan Magistrate, 25th Court, Mazagaon, Bombay.

12. Mr. Gursahani, the learned Advocate for the applicant, then invited my attention to another judgment delivered by the Metropolitan Magistrate, 25th Court, Mazagaon, Bombay in Case No. 2571/P of 1975. This was also the prosecution at the instance of the second respondent against five accused, who were Directors and their employees of a concern 'Vegetable Vitamin Foods Company Private Limited'. The said company manufactured product popularly sold in the market under the trade name of Vitagi Vanaspati. The Rationing Department had information that the said company is selling its product without possessing dealers' licence. Accused pleaded not guilty to the charge and they submitted that they are not dealers within the meaning of the said Licensing Order of 1970 and they only are producers. The learned Magistrate while dealing wit the definition of 'dealer' as defined in the Licensing Order of 1970 held that as the producer of the Vanaspati oil, the company was not liable for the prosecution, and therefore, the accused in that case were acquitted. This order was passed on May 7, 1976.

13. The Principal contention raised by the learned Advocate for the applicant, Mr. Gursahani, is that in view of these prosecutions having failed on similar charges and in similar conditions of contravention, that is non-possessing of dealers' licence, the commencement of the prosecution against the applicant by respondent No. 2 herein was not justified, when the second respondent himself has raised that question in earlier cases and the question was decided by the Competent Courts against him. It was contended that the proceedings which are started by the second respondent are not bona fide and they are of oppressive nature. It was contended by the learned Advocate for the applicant that in order to prevent the abuse of process of Court and to secure ends of justice, it would be fit and proper that the applicant should be saved from the harassment from such prosecutions which are ex facie held by the Competent Courts as being without any legal basis. The learned advocate further contended that in view of the definition of the words 'producer' and 'dealer' even in the Licensing Order of 1970; the producer is not required to hold dealer's licence at all.

14. In this case, the prosecution relies on the search of the premises made on July, 24, 1980. This search was made at Sewree factory of the applicant, which is the place of sale or store of the goods belonging to the applicant. It is undisputed that the licence for this place was refused to the applicant, as it is clear from the order passed by the Deputy Controller of Rationing Department on April 24,1981. As answer to this objection, it was contended by the learned Advocate for the applicant that as far as the grant of licence to Sewree place was concerned it was rejected by the authority on April 24, 1981. Under the Licensing Order of 1970 what is required is that the applicant must inform the authorities in regard to the stock which he has stored at different places, if he does not actually hold a licence for the place. The learned advocate for the applicant invited my attention to the statement made at page 27 of the paper book while submitting the answers to the queries made by the Deputy Controller by the applicant's letter dated December 8, 1980. It was stated as under :

'You may kindly observe that even though there was no dealer's licence for Sewree premises, no were regularly submitting to you the stock position of Vanaspati. Even on the day of raid i.e. on 24-7-1980, we has submitted the stock position.'

In view of this explanation, I do not attach much importance to the fact that the applicant did not possess dealers' licence on the material date.

15. As I have shown above the real question which is to be determined in this case is whether the applicant can take benefit of the judgments delivered by the Competent Courts, which are referred to by me earlier. It is true that in one case a representative of the company and in another case the Directors and their employees were prosecuted. In both these judgments, the definition of 'dealer' came for consideration before the courts and courts have held that the producer is not included in the term 'dealer' as defined by the Licensing Order of 1970.

16. Before I proceed to determine the question whether producer is covered by the definition of dealer as defined in the Licensing Order of 1970, I will dispose of the submissions of the applicant that in view of these judgments the prosecution commenced against him is unwarranted. It is well settled that if a Court on certain facts has adjudicated in an earlier litigation and given a finding, such a finding remains finding on all those who desire to displace that finding at the subsequent stage. In Criminal Law it is known as principal issue of estoppel. Similar facts which are disclosed from the judgments of the Magistrates were that the parties were prosecuted for contravention of not possessing dealers' licence. Identical situation is available in this case also. A litigant is entitled to the benefit of adjudication of a Competent Court in similar situation. Therefore, in my opinion, the applicant is entitled to rely on those judgments and benefit of those judgments cannot be denied to the applicant because the facts and circumstances in quite similar to the one, which were present in the earlier cases and which were the subject matter of determination by Competent Courts. On the short point this application is liable to be granted. Therefore, I uphold the contention of the learned advocate for the applicant that the prosecution which is commenced by the second respondent in this case is unwarranted and should not be allowed to continue.

17. Then I turn to the further situation as it appears that the Rationing Department is likely to take further steps. To prosecute the people in similar circumstances, it is desirable that the position of law should be clarified. I, therefore, proposed to determine whether under the Licensing Order of 1970 a separate licence will be required for the producer or not. In this connection it is desirable to refer to the definition of 'dealer' as mentioned in the Maharashtra Hydrogenated Vegetable Oil Dealers Licensing Order, 1970. The definition is given in section 2(b), which is as follows :

''dealer' means a person who, whether for commission, remuneration or otherwise, carries on the business of purchase, sale or storage for sale, of any hydrogenated vegetable oil or oils in quantities exceeding 150 kilograms at any time.'

The definition of 'producer' also is relevant in this connection. The word 'producer' is defined in section 2(c) of the Licensing Order, 1970, which reads as under :

''producer' means a person who is engaged in the business of transformation or production of hydrogenated vegetables oils.'

Now, licence can be issued by the authorities to both producer as well as the dealer. I see no impediment in the way of the producer to obtain a licence of dealer and in this case as far as the place at Bhandup is concerned there is no record licence issued to the petitioner. Whether this licence is issued and taken by the applicant is not very material. The question which is to be determined is whether any licence is required to the producer at all. In my opinion, having regard to the purpose for which the licence is issued to the applicant it is not possible to say that a dealers' licence is a must for the producer, as I see the words used in the definition of 'dealer' as that the dealer is a person who carries on the business of purchase, sale or storage for sale. In this connection it is important to remember that the expression 'carries the business' has to be understood in very different context. To carry on business would mean that main activity of the dealer must relate to the act of purchase, act of storage for sale or act of sale. Unless the person concerned to the acts referred to above, it is not possible to say that he is carrying on business of that type. Here the business relates to purchase, storage and sale. As far as the purchase is concerned the producer is out because he is not purchasing at all. As far as the sale is concerned to certain extent to may sell the product but the product which is sold by him is either through the dealer or through whole-sale and when he sells through the dealers, it is difficult to say that he is himself a dealer for the purpose of this order. Now, the words 'carrying on business' connotes some rule and substantial organised system or conduct for the said purpose in the definition on the purchase and then on the sale and storage. That means the said purpose of dealer is primary only to sell and only to store. If that is a purpose of carrying on business the producer cannot said to be a dealer within the meaning of definition of section 2(b) of the said Licensing Order, the carrying on business can only exist where there is a joint relation of a person for the common purpose and the purpose of a producer cannot said to be storing or selling, in the sense in which that expression is used in the definition of dealer having regard to the object and purpose of the Licensing Order of 1970. The producer has nothing to do with the sale or storage. I do not think that the purchaser can be included with the definition of dealer.

18. The definition of producer is relevant in this connection. The producer is a person who is engaged in the business of transformation or production of hydrogenated vegetable oils. The production is a very wide term. The produce means to bring forth of create and to bring into existence any production and which was brought into existence is impliedly to the store because the storage in the process of production will have relationship with the production of the product. It is inseparable from the process of production as the product is automatically stored. Therefore, the storing of product is link with the production of separate product. Merely because the product is stored or purchased, the producer, cannot convert himself into a dealer. The emphasis of the word 'produce' must be understood in the context of the definition used in the Licensing Order of 1970. In this connection it is material to refer to a judgment of the Supreme Court, where in the word 'produced' came for consideration. In the said case before the Supreme Court this word arose in similar conditions. Kindly see The Deputy Commissioner v. M/s. Palamnadam Plantation Ltd., : [1969]3SCR674 where the word 'produced' was interpreted by the Supreme Court. The word 'produced' means to bring forth, bring into being or existence from its raw materials or elements. Therefore, a producer who is producing the goods in this case if he is engaged in the business of transformation or production of oil cannot be said to be a dealer at the same time. There is another reason, why I am led to this conclusion. Both the words have been defined in the Licensing Order of 1970, the producer as well as the dealer. If the intention of the Legislature was that a producer would have been dealer then the dealer would have been included the producer and there was no need to give separate definition of these two words itself. It was easy for the Legislation to say either way by enlarging the scope either forms to include producer or the dealer in the same definition. In view of this legal position, I do not think that the applicant can be said to be a dealer as defined by the Licensing Order of 1970. I also agree with the views, which are expressed by the courts below in their judgments, and unless a person is said to be dealer there is no question of his possessing any licence for dealer. Therefore, the contention of the applicant that he was not required to take licence appears to be quite correct.

9. In this case, with same repetition I desire to point out that the prosecution was commenced by the second respondent in very unusual circumstances. The second respondent was aware that the applicant had moved the High Court earlier for anticipatory bail. The applicant had also moved this Court when his stocks were seized and they were ordered return to him by the Division Bench of this Court. The second respondent also was aware because I believe the statement made to the authorities by the applicant that position of the stock was submitted to them and if they has so chosen and if they had got charitable view of the matter, it was open for the Rationing Department to give dealers' licence to the applicant before prosecuting him in the Court of law. The only reason which is given by the second respondent is that in his own opinion, the definition of dealer may also cover the producer because he is also storing the stock and also selling the product and thus the authority thinks that the producer is necessarily dealing with the product which he produces. And therefore, the producer is necessary to have dealers' licence. But this fact of conversation is not true. The Deputy Controller of Rationing Department also has referred that there may be decisions of the High Court which may support his view. I am surprised that the Deputy Controller should have rested only on that but should not have made search to find out whether any judgment are existed or not. However, I am not impressed by the reasoning given by the Deputy Controller because the main reason which was before him appears to be that the prosecution was pending against the applicant when he asked for licence. In my opinion, as I have held above, in view of the earlier prosecutions having failed in similar circumstances, it cannot be said that the present prosecution commenced by the second respondent is not justified in law. For the reasons which I have given for coming to the conclusion that the producer will not be a dealer within the meaning of Licensing Order of 1970, I think that any prosecution for contravention of dealers' licence would be illegal. In this view of the matter, the application will have to be allowed.

20. In the result, the rule is made absolute. I discharge the accused-applicant, quashing the prosecution commenced by the second respondent on the basis of police report, which is pending before the Metropolitan Magistrate, 25th Court Mazogaon, Bombay in Criminal Case No. 109 of 1980, now numbered as Criminal Case No. 993 of 1981.


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