Skip to content


A.K. Appanna Setty and Sons and ors. Vs. the State of Mysore, by Its Chief Secretary, Government of Mysore Vidhana Soudha, Vidhana Veedhi, Banglore, I and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKarnataka High Court
Decided On
Case NumberWrit Petn. Nos. 7342 to 7367 and 7528 of 1969 and 468 of 1970
Judge
Reported inAIR1970Kant289; AIR1970Mys289; (1970)1MysLJ512
ActsEssential Commodities Act, 1955 - Sections 3 and 5; Mysore Food grains (Wholesale) Dealers Licencing Order, 1964; Constitution of India - Articles 14, 19, 19(1) and 19(6); Code of Criminal Procedure (CrPC) , 1898 - Sections 102, 103 and 523; Essential Commodities (Second Amendment) Act, 1967 - Sections 6-A
AppellantA.K. Appanna Setty and Sons and ors.
RespondentThe State of Mysore, by Its Chief Secretary, Government of Mysore Vidhana Soudha, Vidhana Veedhi, Ba
Appellant AdvocateK.M. Jagadeesa Sastry, Adv.
Respondent AdvocateD.S. Hulgur, High Court Government Pleader and ;B.S. Keshva Iyengar, Adv.
Excerpt:
- indian electricity act,2003[c.a.no.36/2003] -- section 67(3): [n.k. patil, j] compensation entire sugar can crop grown including coconut trees were burnt on account of electric cables passing over land of petitioner petitioner however, entered into agreement and received compensation in terms thereof held, it is not open for petitioner to seek relief contrary to undertaking given by him. plea raised by petitioner in anxiety to get more compensation that his signatures were obtained forcibly on agreement is not inspiring confidence of court and is not tenable. - 3, 4 and 10 of wholesale as well as retail licences, which require licencee to maintain stock registers of daily accounts and to submit returns and to issue receipts and invoices, impose needless, excessive and unreasonable.....order1. the petitioners are wholesaleand/or retail dealers in food grains in mysore state. in these petitions under article 226 of the constitution, they have assailed the constitutionality of certain provisions of-(i) the mysore food grains (wholesale) dealers licencing order, 1964 (hereinafter referred to as the wholesale licensing order); and (ii) the mysore food grains (retail) dealers licensing order, 1964 (hereinafter referred to as the retail licencing order). 2. these two orders were made by the government of mysore in exercise of the powers conferred by section 3 of the essential commodities act, 1955 (hereinafter referred to as the act), and delegated by the central government to the state government under section 5 of the act.3. before dealing with the contentions of the.....
Judgment:
ORDER

1. The petitioners are wholesaleand/or retail dealers in food grains in Mysore State. In these petitions under Article 226 of the Constitution, they have assailed the constitutionality of certain provisions of-

(i) The Mysore Food grains (Wholesale) Dealers Licencing Order, 1964 (hereinafter referred to as the Wholesale Licensing Order); and

(ii) The Mysore Food grains (Retail) Dealers Licensing Order, 1964 (hereinafter referred to as the Retail Licencing Order).

2. These two Orders were made by the Government of Mysore in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 (hereinafter referred to as the Act), and delegated by the Central Government to the State Government under Section 5 of the Act.

3. Before dealing with the contentions of the petitioners, it is useful to set out the salient features of these two orders.

4. Sub-Clause (e) of Clause 2 of the wholesale Licencing Order defines the term 'Whole- sale dealer' as a person engaged in the business of purchase, sale or storage for sale, of any one of the food grains in quantity of ten quintals or more at any one time or in quantity of twenty-five quintals or more, of all food grains taken together. Persons engaged in the business of sale of food grains to consumers only, the Food Corporation of India and Commission Agents who do not hold stocks, are excluded from this definition of wholesale dealer.

5. Sub-clause (e) of clause 2 of the Retail Licencing Order defines the term 'Retail dealer' as a person engaged in the business of sale of food grains to consumers only and who keeps for such sale at any one time ten quintals or more of any one food grains or twenty-five quintals or more of all food-grains taken together.

6. Clause 3 of each of these two Orders, provides that no person shall carry on business as a wholesale or retail dealer respectively except under and in accordance with the terms and conditions of a licence issued in this behalf by the licencing authority.

7. Clause 4 of each these Orders, provides that every application for a licence or renewal thereof, shall be made in the prescribed form i.e., Form-A, and that every licence issued or renewed shall be in the prescribed form i.e. Form-B.

8. Clause 8 of each of these Orders provides that no holder of a licence shall contravene any of the terms or conditions of the licence and that if such holder or his agent or servant or any other person acting on his behalf, contravenes the said terms or conditions, then, without prejudice to any other action that may be taken against him, his licence may be cancelled or suspended by order in writing of the licencing authority.

9. Clause 11 of each of these Orders empowers calling the production of books of accounts and documents, for entry, inspection, search and seizure. We shall set out later that clause.

10. Form-B in Schedule II to each of these two Orders, contains the terms and conditions subject to which a licence is issued under the respective Order and many of these terms and conditions are common in both categories of licences.

11. Though several contentions had been raised in the petitioners' affidavits in support of their petitions, at the stage of hearing of these petitions, Mr. K.N. Jagadisha Sastry, learned counsel for the petitioners, advanced only the following contentions:

(i) Exclusion of dealers whose transactions or stocks are below certain minimum quantity, from the purview of these two Orders, is discriminatory and violative of Article 14 of the Constitution.

(ii) Conditions No. 2 (a) of the Wholesale Licence, imposes an unreasonable restrictionon the freedom of dealers to purchase food-grains;

(iii) Condition No. 7 of both Wholesale and Retail Licences purporting to prohibit transactions in a speculative manner, is vague and uncertain and imposes an unreasonable restriction on the freedom of trade;

(iv) The prohibition under Condition No. 9, of the Wholesale Licence, against sale of food grains to a person other than a retail dealer, imposes unreasonable restriction on the freedom of trade of wholesale dealers;

(v) Conditions Nos. 3, 4 and 10 of Wholesale as well as retail licences, which require licencee to maintain stock registers of daily accounts and to submit returns and to issue receipts and invoices, impose needless, excessive and unreasonable restrictions; and

(vi) Clause 11 of both the Orders, confers unguided, uncontrolled and arbitrary, powers of search and seizure and hence that Clause is unconstitutional.

We shall now deal with these contentions.

12. Mr. Jagadhisa Sastry submitted that dealers who keep for sale, at any one time, less than ten quintals of any one foodgrain and less than twenty-five quintals of all food grains taken together, do not come within the definition of either 'Wholesale Dealer' or 'Retail Dealer', and are totally outside the purview of these two Licencing Orders. Mr. Jagadisha Sastry argued that the classification of dealers, based on the quantity of food grains held by them at any one particular point of time, has no rational relation to the object sought to be achieved by these two Licencing Orders, and hence these two Orders are discriminatory and violative of Article 14 of the Constitution. Elaborating this argument, Mr. Jagadisha Sastry said that it is possible that a dealer who keeps less than ten quintals of any one kind of food grains at any one time, may still have a large turn-over, while a dealer who keeps more than ten quintals at any one time, may have a smaller turnover and that the quantity of stock held by a dealer at any one time, cannot be a measure of the size or volume of business of a dealer.

13. Ordinarily bigger dealers hold bigger stocks and smaller dealers hold smaller stocks. The maximum stocks of food grains held by a dealer at any one time, is a rough and ready index of the size of a dealer. Hence, it cannot be said that the criterion of maximum stock held by a dealer at any one time, is irrelevant to classify dealers as petty dealers and bigger dealers.

14. It is well settled that every law need not have universal applicability to all persons who are not by nature, attainment or circumstances in the same position. Legislation enacted for the achievement of a particular object need not be all embracing; the Legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest.

15. A dealer who keeps at any one time, less than ten quintals of any one foodgrain or less than twenty-five quintals of all food-grains taken together, will generally be a petty dealer in food grains. The dangers of hoarding and creating artificial scarcity of food grains, may be less from them than from bigger dealers. Moreover, it will be difficult for such petty dealers to apply for licences and for their renewal, to maintain accounts, to issue receipts or invoices and to submit returns. Having regard to these factors, it cannot be said to be unreasonable to exempt such petty dealers from applicability of these two Licencing Orders.

16. Clause (a) of Condition No. 2 of the Wholesale Licence (in Form-B), reads:

2 (a) The licensee shall carry on the aforesaid business at the following places;

17. Mr. Jagadisha Sastry submitted that a wholesale dealer has generally to purchase food grains from growers spread over a large part of the State or from millers who purchase food grains from growers and sell the same after milling, that it would not reasonably be practicable for a wholesale dealer to specify, at the time of applying for licence, all the places at which he may have to buy food grains from growers or such millers, and that if he buys food grains at any place not specified in Condition No. 2 (a) of the licence he will he contravening the conditions of the licence. Mr. Jagadisha Sastry added that it would be practicably impossible for a wholesale dealer to know in advance from which growers he may buy food grains and to specify at the time of applying for renewal thereof, the places at which such purchases may have to be made by him.

18. But the learned Government Pleader submitted that the places of business referred to in Condition No. 2 (a) of the wholesale licence, have been understood by the authorities as referring only to places where a wholesale dealer sells food grains and not to places where he purchases food grains. On the other hand, it was stated by Mr. Jagadisha Sastry that in some places the authorities have found fault with wholesale dealers for purchasing food grains at places not mentioned in Condition No. 2 (a) of their Licences.

19. Whatever may be understanding of the meaning of the term, 'place of business', by the authorities, it is clear that in the case of a wholesale dealer, his activity of purchasing food grains is as much a part of his business as the activity of selling food grains. Without purchasing food grains he cannot sell them. Hence, the term, 'the place of business', refers as much to the place where he purchases, as to the place where he sells.

20. We think Mr. Jagadisha Sastry is right in contending that the restriction that a wholesale dealer should purchase food grains only at the places specified in thelicence for stocking and selling, would make it very difficult for him to secure food-grains required for his business of selling.

21. When a wholesale dealer is required (under Condition No. 3) to show in his stock register, the places from which he purchases food grains and when even a miller has to obtain a permit (under Condition No. 9 (3)) to sell food grains to a wholesale dealer, we are unable to see what necessity there is for the restriction that a wholesale dealer should not buy food grains at places other than those specified in his licence for carrying on business. The State has also not filed any counter-affidavit explaining why such restriction is necessary.

22. It is well settled, a legislation has to strike a proper balance between the freedom guaranteed under Article 19(1)(g) and the social control permitted by Clause (6) of Article 19. A restriction which is arbitrary or of an excessive nature beyond what is required in the interest of the general public, cannot be said to contain the quality of reasonableness and does not come within the protection of Clause (6) of Article 19. Hence, we hold that Condition No. 2 (a) in Form-B of the wholesale licence, is invalid in so far as it prohibits a wholesale dealer from purchasing food grains at places other than those specified in such licence for carrying on business.

23. Clause (i) of Condition No. 7 of both the wholesale and retail licences (in Form-B) reads:

7. The licensee shall not- (i) enter into any transaction Involving purchase, sale or storage for sale of food-grains in a Speculative manner, prejudicial to the maintenance and easy availability of supplies of food grains in the market.

24. Neither the word, 'speculation', nor the word, 'speculative', has been defined in the Act or in either of two Licencing Orders. According to the Shorter Oxford Dictionary, the word, 'speculate' means to engage in buying and selling of commodities or effects in order to profit by rise or fall in market.

25. It is, no doubt, undesirable that dealers should either buy or sell food grains not for the normal purpose of furthering distribution thereof but merely to take advantage of anticipated rise or fall in prices thereof. The aforesaid condition may, no doubt, embody a laudable moral injunction to dealers. But the question is how to find out whether any buying or selling by a dealer, is not in the course of normal trade but merely for the purpose of making profit by anticipated rise or fall in price. Even a bona fide trade transaction carries 'with it an element of risk on account of rise or fall in prices, whether anticipated or not.

26. The learned Government Pleader did not dispute that it is extremely difficult, if not impossible, to find out which transaction of a dealer, is normal and bona fide and which transaction, is speculative. How-ever, he said that the existence of this condition is desirable because it warns a dealer as to what he ought not to do. The learned Government Pleader added that, at any rate, the said condition is harmless.

27. On the other hand, Mr. Jagadisha Sastry argued that such a vague condition in the licence, will subject dealers to needless uncertainty and harassment by the authorities. We think the criticism of Mr. Jagadisha Sastry is well founded. In the absence of specified criteria for determining what transactions are speculative, the Condition No. 7 (i) in the licence must be held to be void on account of vagueness of uncertainty.

28. The relevant part of Condition No. 9 of the Wholesale Licence, reads:

9. The licencee. shall not sell food grains to any person other than a person registered with him as a retail dealer (including himself if he also sells in retail);

Provided that-

(1) The licensee may sell at wholesale rates direct to consumers who purchase in bulk a bag of one quintal or more....

(2) x x x x x x (3) The licensing authority may permit a wholesale dealer to sell food grains to another licensed wholesale dealer in the State. X x x x x x x

29. Thus, a wholesale dealer is prohibited from selling food grains to another wholesale dealer except under a permit issued by the licensing authority.

30. Mr. Jagadisha Sastry argued that the need to obtain a permit on every occasion when a wholesale dealer wants to sell food grains to another wholesale dealer, causes unnecessary delay and trouble and imposes an unreasonable restriction on the freedom to sell food grains. Mr. Jagadisha Sastry also said that a wholesale dealer in rice, very often purchases it from a miller who is also regarded as a wholesale dealer and that every time a miller wants to sell rice to a wholsale dealer who is not a miller, Condition No. 9 (3) requires the former to apply to the licencing authority for a permit.

31. Apart from sales of rice by a miller to a wholesale dealer who is not a miller, ordinarily, there appears to be no necessity for a wholesale dealer selling food grains to another wholesale dealer. When there is shortage of food grains, it is desirable that there should be free and quick flow of food-grains from growers or importers to consumers without passing through too many intermediaries. Sales by one wholesale dealer to another may cause delay in food-grains reaching ultimate consumers and there will also be danger of speculative buying and selling, and concerning (cornering--Ed.) of food grains by some wholesale dealers in anticipation of rise in prices. If in any special circumstances a wholesale dealer finds it necessary to sell food grains to anotherwholesale dealer, he can apply to the licensing authority for a permit for the same, explaining the reason therefor.

32. Even when a miller wants to sell rice to wholesale dealers who are not millers, it should not be difficult for him to obtain permits from the licensing authority. Unless such sales are prohibited except under permits, it will be, difficult for the authorities to keep track of movement of food grains.

33. But Mr. Jagadisha Sastry submitted that every wholesale dealer has to maintain a stock register showing, inter alia, from which he purchases goods and to whom he sells goods and the quantifies of such purchase and sale, and hence there is no need for the authorities prohibiting sales between wholesale dealers. But mere maintenance of stock registers by dealers, may not be sufficient to keep track of movement of food grains from dealers to dealers and to prevent hoarding or cornering of food grains, or sending them outside the State.

34. Having regard to the necessity for preventing hoarding and cornering of food-grains and sending them outside the State, the prohibition against a wholesale dealer selling fond grains to another wholesale dealer in the State except under a permit, cannot' be said to be an unreasonable restriction.

35. Condition No. 3 of the wholesale as well as retail licenses, requires that the licencee shall except when specially exempted by the State Government or by the licensing authority in this behalf, maintain a register of daily accounts for each of the food grains he has been licensed to deal showing correctly-

(a) the opening stock on each day;

(b) the quantities received on each day showing the place from where and the source from which received;

(c) the quantities delivered or otherwise removed on each day showing the places of destination; and

(d) the closing stock on each day.

36. The licensee is also required to complete his stock accounts for each day on the day to which they relate, unless prevented by reasonable cause, the burden of proving which, shall be upon him.

37. Condition No. 4 of both the wholesale and the retail licenses, requires the licensee (except when specially exempted by the State Government or by a duly authorised officer) to submit to the concerned licensing authority a true return, in Form 'C' (contained in Schedule II to each of the Licensing Orders), of the stocks, receipts and deliveries of each of the food grains. Such return shall be fortnightly, in the case of a wholesale dealer and monthly, in the case of a retail dealer. Such return shall be sent within 5 days after the close of the fortnight or within 10 days after the close of the month, as the case may be.

38. Condition No. 10 of both the wholesale licence and the retail licence, requiresthe licensee (except when specially exempted by the Government or by a duly authorised officer), to issue to every customer a correct receipt or invoice, as the case may be, giving certain particulars of himself and of the purchaser, the date of the transaction, the price per quintal and the total amount charged. The licensee is required to keep duplicates of such receipt or invoice to be available for inspection by the authorities.

39. Mr. Jagadhisha Sastry contended thatthe aforesaid conditions requiring maintenance of stock register, submission of returns and issue of receipts and invoices, constitute excessive, unnecessary and unreasonable restrictions and that the requirements of those conditions are unworkable and impossible of performance.

40. Mr. Jagadhisha Sastry complained that it would he very difficult for a dealer to complete his stock accounts for each day on that day itself because he might receive goods in lorries just at the close of the day and that it would not be practicable to enter into stock register the particulars of the quantities so received and to close the stock account on that day itself. Mr. Jagadhisha Sastry added that likewise, a dealer may effect a very large number of sales on a day and that it would not be practicable to enter in the stock register all the particulars of the quantities delivered on that day and to close the stock accounts on that day itself.

41. Ordinarily, it should not be difficult for a dealer to enter in his stock register the aforesaid particulars of goods received and goods sold and to strike the balance of stock at the close of each day. Even if his transactions are very numerous, he should see that each day the transactions are closed sometime before the close of his working hours of that day so that he will have sufficient interval of time to make necessary entries in the stock register and to strike the closing balance of stock on that day. If in an unusual situation he is not able to do so, Clause (2) of Condition No. 3 protects him if he establishes that he was prevented by reasonable cause from making such entries and striking the stock balance for that day. Hence, it cannot be said that the requirement of Condition No. 3 is an unreasonable restriction.

42. We are unable to see how the requirement (under Condition No. 10) that dealers should issue receipts or invoices and keep duplicates thereof for inspection, can be said to be an unreasonable restriction. Petty dealers are outside the purview of these Licensing Orders. Even under the provisions of the Sales Tax Act. dealers who have a taxable turnover, have to issue such receipts or invoices.

43. The requirement (under Condition No. 4) that dealers should submit periodical returns to the authorities, also cannot besaid to impose any excessive burden on them (dealers).

44. Unless dealers maintain daily accounts of stocks and strike the closing stock balance each day, issue receipts or invoices and submit periodical returns, proper enforcement of the provisions of the Licensing Orders and conditions of the licences, would not be possible. We have no hesitation in holding that the restrictions imposed by Conditions Nos. 3, 4 and 10, of the wholesale, and retail licences, are not unreasonable restrictions.

45. We shall now deal with Clause 11 of both the Licensing Orders empowering entry, search and seizures.

46. In W. P. No. 3876 of 1968 and connected petitioners, we considered the validity of the corresponding provision i.e., Clause 8, in the Mysore Essential Commodities (other than Foodstuffs) (Maintenance of Accounts, Display of Prices and Stocks) (Second) Order, 1967 (hereinafter referred to as the Non-edible Essential Commodities Control Order). There, we held that the powers of entry and search under Clause 8 of that Order, are valid. But we held that the power of seizure under that clause, is valid only when such seizure is made by an enforcement Officer who is also a Police Officer and not when such seizure is by an Enforcement Officer who is not a Police Officer.

47-48. The circumstances which inclined us to the view that such seizure by an Enforcement Officer other than a Police Officer, is invalid, were briefly as follows:--

Clause 8 is silent as to what an Enforcement Officer is required to do after seizing the articles mentioned in that Clause. It is not provided therein that he should produce such articles before a Magistrate or any higher authority within any particular time or return them to persons from whom they are seized. Nor is there any provision regulating the custody of such articles. But where seizure is made by a Police Officer who has been appointed as Enforcement Officer, provisions of Section 523 of the Code of Criminal Procedure are attracted. If he seizes any articles under Clause 8, be has to report the same to a Magistrate under that section and such property will be regulated by judicial orders of such Magistrate. The owner of such property can approach the Magistrate for their return if there is any unreasonable delay in placing a charge-sheet for any offence in connection with the alleged commission of which they were seized. But the provisions of Section 523, Criminal Procedure Code, are not attracted where such seizure is made by an Enforcement Officer who is not a Police Officer. If after such seizure he takes no further steps, the owner of those articles will be deprived of the use thereof, they will be exposed to deterioration, decay or loss of value. Such owner has no remedy under the Act or the Non-edible Essential Commodities Control Order. Such was our view in the aforesaid petitions.

49. When we rendered our decision in W. P. No. 3876 of 1968 and connected petitions, we had over-looked the amendment of Section 6-A of the Act by the Essential Commodities (Second Amendment) Act, 1967 (hereinafter referred to as the Second Amendment Act). Section 6-A, as it stood before such amendment, provided that where any food grains, edible oil seeds or edible oils are seized in pursuance of an order made under Section 3 in relation thereto, they may be produced without unreasonable delay before the Collector of the District or the Presidency Town in which the food grains, edible oilseeds or edible oils are seized and whether or not a prosecution is instituted for the contravention of that order, may order confiscation of food grains, edible oil seeds or edible oils. By the Second Amendment Act, the words 'food grains, edible oilseeds or edible oils', occurring in Section 6-A, have been substituted by the words, 'essential commodity'. It is not necessary here to say what our decision in W. P. No. 3876 of 1968 and connected petitions, would have been if the amendment had been brought to our notice and we had considered the effect thereof.

50. Though Clause 11 of the Wholesale Licensing Order and the Retail Licensing Order as well as Clause 8 of the Non-edible Essential Commodities Control Order, provide, for entry, search and seizure there is material difference in the language of said Clause 11 and that of said Clause 8. We have set out both these Clauses hereunder:

Clause 11 of Wholesale and RetailLicensing Order.

Clause 8 of the Non-edible EssentialCommodities Control Order.

11.

Powers of entry, search and seizure,etc.-

8.

Power of entry, search and seizure.-

(1)

The licensing authority or any other officer authorised by the State Government in thisbehalf, may with such assistance, if any as he thinks fit,-

(1)

The Enforcement Officer may with a view to securingcompliance with this Order, or to satisfy himself that the provisions ofthis Order have not been contravened -

(a)

require the owner, occupier or any other person in charge of any place, premises, vehicles,or vessels in which he has reason to believe that any contravention of theprovisions of this Order or of the Conditions ofany licence Issued there under has been, is being, or is about to becommitted to produce any book, accounts, or other documents showingtransactions relating to such contraventions;

(a)

enter into or search any premises, vehicles,vessels, or other conveyances in which he hasreason to believe that contravention of this Order has been, is being, or is about to be committed;

(b)

seize the stock of essential commodities along withthe packages, coverings or receptacles in which such essential commodity isfound and the animals, vehicles, vessels or other conveyances used in carrying such essentialcommodity in respect of which the officer has reason to believe that acontravention of this Order has been, is being, or isabout to be committed.

(c)

take or cause to be taken, extracts from or copies,of any documents showing transactions relatingto such contraventions which are produced beforehim;

(d)

search, seize and remove stocks of food grains andthe animals, vehicles, or other conveyances used in,carrying the said food grains in contravention of the provisions of this Order, or of the conditions of the licences issuedthere under and thereafter take or authorise the taking of allmeasuresnecessary for securing the production of stocks of food-grains and theanimals, vehicles, vessels or other conveyances so seized, in aCourt and for their safe custody pending such production.

(2)

The provisions of Sections 102 and 103 of the Code of CriminalProcedure, 1898 (Central Act 5 of 1898) relating to search andseizure shall, so far as may be, applyto searches and seizures under this clause.

(2)

The provisions of Sections 102 and 103 of the Code of CriminalProcedure, 1898 (Central Act 5 of 1898) relating to search andseizure shall so far as may be, applyto searches and seizures under this clause.

51. In the said Clause 8, the words, with a view to securing compliance with this order, or to satisfying himself that the provisions of this order have not been contravened, occur in the opening part of that Clause and hence govern Sub-clauses (a) and (b) of that clause. Thus, the power of entry, search and seizure can be exercised by an Enforcement Officer only for the aforesaid purpose and such power is not an unguided, unregulated, unconditional or unqualified one.

52. But, in Clause 11 of the Wholesale and Retail Licensing Order, the words, 'has reason to believe that any contravention of the provisions of this Order or of the conditions of any licence issued there under has been, is being, or is about to be committed do not occur in the opening part of that Clause, but occur only in Sub-clauses (a) and (b) and not in Sub-clause (d) which provides for search and seizure. In Sub-clause (d) the words 'in contravention of the provisions of this Order, or of the conditions of the licence issued there under' relate only to the words, 'animals, vehicles or vessels or other conveyances used in carrying of the said food grains', but not the words, 'stock of food grains' which also may be seized.

53. The resultant position is that the power to search any premises in which food-grains may be stored, and the power to seize and remove stocks of food grains, are not regulated by any guiding principle and are not controlled by any conditions like the Enforcement Officer having reason to believe that any contravention of the provisions of the respective licence has been, is being or is about to be committed. Thus, the power, of search, seizure and removal in regard to stocks, of food grains is unguided, uncontrolled and unqualified. There is no check on the exercise of such power by an Enforcement Officer. Thus, the powers conferred by Clause 11 are so wide as to enable the Enforcement Officer to seize stocks of food-grains, even without the least suspicion of there being any contravention of any of the provisions of the Orders or the licence.

54. No doubt, Sub-clause (2) of Clause 11 provides that the provisions of Sections 102 and 103 of the Code of Criminal Procedure relating to search and seizure shall, so far as may be, apply to searches and seizures under Clause 11 also. The only safeguards available under Sections 102 and 103, Criminal Procedure Code are:

(i) The search shall be made in the presence of two or more respective (respectable -- Ed.) inhabitants of the locality in which the place to besearched is situate;

(ii) A list of all things seized in the course of such search and the places in which they are respectively found, shall be prepared and signed by the said witnesses; and

(iii) A copy of list of things taken possession of, shall be delivered to the person searched or the occupant of the place searched.

55. But these safeguards are only in regard to the manner in which search and seizure should be conducted and not in regard to the conditions precedent for exercising the powers of search and seizure. These safeguards do not afford any protection against I the licensing authority or an authorised officer searching any premises and seizing stocks of food grains without any reasonable cause. Sub-Clause (d) of Clause 11 of both the Licensing Orders, which empowers search and seizure even without the safeguard that the Enforcement Officer should have reason to believe or suspect contravention of the provisions of the Licensing Orders or the conditions of licence, cannot (but--Ed.) be regarded as being arbitrary, unguided and uncontrolled and violative of the fundamental rights of dealers under Article 19 of the Constitution to carry on trade and to hold property. But the power of search under Sub-clause (b) of Clause 11, does not suffer from such infirmity, as such power can be exercised only when the Enforcement Officer has reason to believe that there has been any contravention of the provisions of the Orders or the conditions of the licence.

56. To sum, up we hold that;

(i) Condition No. 2 (a) of the Wholesale Licence, is invalid in so far as it operates to prohibit a licensee from purchasing food grains at places other than those specified in the licence as places of his business;

(ii) Condition No. 7 (i) of the Wholesale and the Retail Licence, is invalid;

(iii) Sub-Clause (d) of Clause 11 of both the Wholesale Licensing Order and and the Retail Licensing Order, is invalid to the extent it empowers search of premises and seizure of stocks of food grains; and

(iv) The power of search under Sub-clause (b) of Clause 11 of both these Orders, is valid.

57. Clause 11 of the Wholesale Licensing Order and Clause 11 of the Retail Licensing Order, and Conditions Nos. 2 (a) of the Wholesale Licence and 7 (i) of the Wholesale Licence and the Retail License, are quashed only to the extent stated above.

58. As the petitioners have succeeded only partially, we direct parties to bear their own costs.

59. Order accordingly.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //