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Suraj Bhan Sarad Kumar Vs. Delhi Administration, Delhi - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtDelhi High Court
Decided On
Case NumberCriminal Revision Appeal No. 104 of 1980
Judge
Reported inILR1980Delhi1198
ActsDelhi Sugar Dealers Licensing Order, 1963 - Sections 2; Essential Commodities Act, 1955 - Sections 6C; Code of Criminal Procedure (CrPC) , 1973 - Sections 397; Constitution of India - Article 227
AppellantSuraj Bhan Sarad Kumar
RespondentDelhi Administration, Delhi
Advocates: S.N. Marwah,; A.K. Marwaha,; K.L. Arora and;
Cases ReferredShyam Lal v. State of Uttar Pradesh (supra) and
Excerpt:
delhi sugar dealers licensing order (1963) (as amended up-to-date) - section 2(f)--whether khandsari is to be treated as mill-made sugar--clause 9(1)(d)--'reason to believe'--essential commodities act, section 6c--code of criminal procedure, sections 397/401 read with section 482--constitution of india, article 227.; in the instant case, the food and supplies and police officials of the delhi administration visited the petitioner's premises and seized quantities of mill-made and khandsari sugar. the petitioner's firm held a license under the delhi sugar dealers licensing order, 1963 and was permitted to stock up to 1000 quintals of sugar. according to the petitioner it was not obligatory for a dealer in khandsari to obtain a license after 1969 and there was no restriction on the.....m.s. joshi, j. (1) the officials of the food and supplies and police departments of delhi administration visited the premises of messrs suraj bhan sarad kumar, kashmiri lal puran mal, prabhu dayal rama nand, lakhi ram om prakash and babu ram panna lal on 14-2-1980 and seized there from the following quantities of mill-made and khandsari sugar : (1) suraj bhan sarad kumar 1,617 quintals (2) kashmiri lal puran mal 1,261 (3) prabhu dayal rama nand 1,393 (4) lakhi ram om prakash 1,821 (5) babu ram panna lal 1,952 all the aforesaid five firms held licenses under the delhi sugar dealers licensing order, 1963 an were permitted by those licenses, read with the lt. governor's orders on the subject, to stock sugar to the tune of 1,000 quintals except messrs babu ram panna lal due to the expiry of.....
Judgment:

M.S. Joshi, J.

(1) The officials of the Food and Supplies and Police Departments of Delhi Administration visited the premises of Messrs Suraj Bhan Sarad Kumar, Kashmiri Lal Puran Mal, Prabhu Dayal Rama Nand, Lakhi Ram Om Prakash and Babu Ram Panna Lal on 14-2-1980 and seized there from the following quantities of mill-made and Khandsari Sugar :

(1) Suraj Bhan Sarad Kumar 1,617 Quintals (2) Kashmiri Lal Puran Mal 1,261 (3) Prabhu Dayal Rama Nand 1,393 (4) Lakhi Ram Om Prakash 1,821 (5) Babu Ram Panna Lal 1,952

All the aforesaid five Firms held licenses under the Delhi Sugar Dealers Licensing Order, 1963 an were permitted by those licenses, read with the Lt. Governor's orders on the subject, to stock sugar to the tune of 1,000 quintals except Messrs Babu Ram Panna Lal due to the expiry of whose license they could stock sugar not more than ten quintals.

(2) According to the dealers Khandsari sugar was not 'sugar' for the purposes of the aforesaid Licensing Order, which Order they submilted was concerned with mill-made sugar only and Khandsari had never been treated as 'sugar' for regulation of supply. Under the Delhi Khandsari and Gur Dealers Licensing Order, 1963 it was obligatory even for a dealer in Khandsari to obtain a license but that Order was repealed in 1969 and since then there had been no restrictions on the purchase stock and sale of Khandsari. The matter came up before Shri S. P. Bansal, Collector, Food and Supplies Department. He issued a notice to the aforesaid dealers to show cause why the sugar seized from their possession be not confiscated because they had contravened the provisions of Delhi Sugar Dealers Licensing Order 1963 by keeping with them more than 1,000 quintals of sugar. The representations made by them were considered by him but found to be without substance. In result the sugar in question was ordered to be confiscated and directed to be disposed of through Fair Price Shops. The dealers felt aggrieved by the aforesaid Orders and filed appeals in the Court of Session under section 6C of the Essential Commodities Act, 1955. Shri P. K. Bahri, Additional Sessions Judge, heard the appeals and dismissed the same under his order dated April 21, 1980. The five firms aforesaid have now come up to this Court with reference to the provisions of Sections 397/401 of the Code of Criminal Procedure, read with section 482 of the said Code and Article 227 of the Constitution of India.

(3) I have heard the learned counsel for the petitioners, and the Delhi Administration. Because the points involved in the five cases (Criminal Revisions Nos. 104 to 108 of 1980) are identical the same shall be disposed of together by this order.

(4) The most important issue arising before me is whether the commodity seized through the joint effort of the officials of Food and Supplies Department and the Police is sugar for the purpose of the Delhi Sugar Dealers licensing Order, 1963, as amended up to date. According to the petitioners the article described in the proceedings as 'suspected sugar' was just Khandsari and Khandsari is not sugar for the purpose of the said Order. Sub-clause 2(f) of the aforesaid Order reads as follows :

'(F)(i) 'Sugar' means any form of sugar including Khandsari sugar obtaining more than 90 per cent of sucrose. (ii) 'Controlled Sugar' means the sugar made available at fixed price to the Central Government by Sugar factories for sale through regulated channels. (iii) 'Free Sale Sugar' means the sugar other than controlled sugar.'

It is true that we find the definitions of 'controlled sugar' and 'free sale sugar' following the one of sugar, but they in no way nullify the definition of 'sugar' which precedes them. What appears to be meant is that the two varieties of sugar i.e. 'controlled sugar' and 'free sale sugar' mentioned in the clause shall be identified as per the definitions given in the two respective paras but 'sugar' in general shall be taken to be 'any form of sugar, including Khandsari sugar contaning more than 90 per cent of sucrose'. I see no conflict in the three definitions finding place in clause (f) the way the petitioners do. If a particular quantity of Khandsari contains more than 90 per cent of sucrose it is sugar within the ambit of Delhi Sugar Dealers Licensing Order, 1963 and if its sucrose content is 90 per cent or below that figure it is not.

(5) It has been urged by Shri Marwaha, the learned counsel who has argued the case on behalf of all of the petitioners, that sugar manufactured by open pan process is not supposed to be sugar, it is the produce of the mills only which is intended to be governed by the provisions of the Order in question. Reference has been made in this behalf to certain orders issued by the Central Government, 'i.e. Sugar (Retention and Sale by Recognised Dealers) Order, 1979, Sugar (Price Determination for 1978-79 Production) Order 1979 and Sugar (Price Determination for 1979-80 Production) Order 1979 wherein it was the method of manufacture which determined whether a particular type of sugar was or was not sugar coming within the scope of those orders but those orders were issued with specific objectives and the Licensing Order of 1963 under reference having been promulgated with a view to serve a different purpose the definition of sugar in the first mentioned orders would not be relevant for the purposes of these cases. It will be pertinent to note that the Delhi Sugar Dealers Licensing Order, 1963 was made in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 and this Act also contains, by virtue of the amendment made by Act 36 of 1967, a definition of sugar (clause (e) of section (2) in the following terms :

'(E)'Sugar' means (i) any form of sugar containing more than ninety per cent of sucrose, including sugar-candy; (ii) Khandsari sugar or bura sugar or crushed sugar or any sugar in crystalline or powdered form; or Ciii) sugar in process in vacuum-pan sugar factory or raw sugar produced therein.'

If reference were to be made to the Essential Commodities Act, 1955, every bit. of Khandsari sugar would be 'sugar' falling under clause (e) aforesaid, but there is relaxation to an extent made by the Delhi Sugar Dealers Licensing Order, 1963 in that its provisions would treat as 'sugar' only that Khandsari sugar which contains more than 90 per cent of sucrose.

(6) It has been brought to my notice that the officials of the Food and Supplies Department visited the premises of the petitioners some time in December 1979 and they simply ignored the stocks of Khandsari sugar which the petitioners had with them at that time and in this manner left a positive impression that Khandsari was not being treated as sugar. But the fact of the matter is that the checking of stocks of the sugar dealers made in December 1979 was conducted for fulfillment of the object of the Sugar (Retention and Sale by Recognised Dealers) Order, 1979 whereunder the dealers were required to give 65 per cent of their stock of sugar manufactured by vacuum- pan process to the Government for sale through Fair Price Shops and the rest was to be left with them for free sale. Since Khandsari sugar is not manufactured by vacuum-pan process the officials did not concern themselves with the said type of sugar stocked by the petitioners.

(7) Reference has been made by Shri Marwaha to a letter written by the Secretary, Delhi Grain Merchants Association (Regd.) on 20-10-1979 to the Commissioner, Food and Supplies Department of Delhi Administration, in order to know for certain as to what orders issued by the Central Government were at the relevant time in force on the subject of licensing, stocking and pricing of sugar and the reply sent to that letter by Shri P. Chakravorty, Deputy Commissioner (Food and Supplies). It has been pointed out that Shri Chakravorty had given the Association to understand that only the Sugar (Price Control) Order 1979 issued by the Government of India, Ministry of Agriculture and Irrigation (Department of Food) was relevant to the issue. Since that order did not deal with Khandsari the sugar trade came to believe that there were no limits placed on the stocks of Khandsari sugar. The original of the letter written by the Association is not before me and in the absence of that letter it would not be possible to ascertain the true meaning of the reply given by Shri Chakravorty. What I gather from the copy of the letter produced by Shri Marwaha from his brief (I overlook for the moment the absence of proof of this document in the legal manner) is that the question posed by the Association was confined to the orders issued by the Central Government and as pointed out by Shri K. L. Arora, the learned counsel for the Delhi Administration, Shri Chakravorty could not have referred to the Delhi Sugar Dealers Licensing Order, 1963 because it was issued by the Delhi Administration. Marwaha has banked also upon a letter written by a Member of the Parliament on 18-2-1980 to the Lt. Governor of Delhi whereby it was urged that Khandsari had never been treated as sugar for control of stock. But Shri Marwaha knows so well that the interpretation placed on a provision of law by a Member of the Parliament would not be of any help to a court of law. Shri M. L. Khurana, who was the Executive Councillor in December 1979, advised the Lt Governor vide his letter dated 25-1-1980 against taking any action against the dealers in respect of excess stocks of Khandsari sugar on the ground that the said type of sugar had not up to that time been considered as sugar for the purpose of licensing but he conceded in the letter under reference that Khandsari with 90 per cent sucrose content was, so far as the letter of the law was concerned, sugar within the meaning of the Delhi Sugar Dealers Licensing Order, 1963.

(8) It has been argued by Shri Marwaha that the licenses issued to the petitioners bear the heading 'licenses for purchase, sale or storage for sale of free sale sugar' and yet it is mentioned therein that separate register shall be maintained for Khandsari sugar. The argument proceeds that if Khandsari and sugar were to be treated at par such a stipulation would have been redundant. There could, however, be no difficulty about the maintenance of separate accounts regarding the two types of sugar i.e., mill-made and Khandsari and the presence of the aforesaid clause in the license does not, thereforee, lead to any contradiction in the terms of the license. It is laid down. rather pointedly that returns will be submitted separately for each quality of sugar. Shri Marwaha submits that even in the license for controlled sugar there is a requirement for the separate maintenance of a register for Khandsari sugar, nobody is permitted to have a license for controlled sugar as well as free sale sugar and if Khandsari sugar was to be treated as 'free sale sugar' the provision for separate register being maintained for Khandsari sugar would not have occurred in the license for 'controlled sugar'. I am not concerned in this case with any license for 'controlled sugar' and would not, thereforee, indulge in any academic discussion. Moreover, if there is any confusion that is confined to a license for 'controlled sugar' and the petitioner cannot benefit there from because their licenses are only for 'free sale sugar'. At the moment the police is investigating the crime alleged to have been committed by the petitioners and so long as a charge-sheet is not submitted to the court the statutory powers of the police to investigate into the said offence cannot be interfered with. [See Jehan Singh v. Delhi Administration, : 1974CriLJ802 and State of West Bengal v. S. N. Basak Air 1936 S. C. 447.

(9) The confiscation of sugar has indisputably been made under section 6A(1) of the Essential Commodities Act, 1955. The said section reads as under :

'WHEREessential commodity is seized in pursuance of an order made under Section 3 in relation thereto a report of such seizure shall, without unreasonable delay, be made to the Collector of the district or the Presidency-town in which such essential commodity is seized and whether or not a prosecution is instituted for the contravention of such order, the Collector, may, if he thinks it expedient so to do, direct the essential commodity so seized to be produced for inspection before him, and if lie is satisfied that there has been a contravention of the order, may order confiscation of (a) the essential commodity so seized.

(10) According to the Delhi Administration there was a contravention of the Delhi Sugar Dealers Licensing Order, 1963 for the reason each of the petitioners had stocked more than 1,000 quintals of sugar and the Khandsari part of the stock was sugar within the meaning of that Order because this sugar contained more than 90 per cent of sucrose. It is a matter of record that the officials of the Food and Supplies Department and the Police took samples from the stock of either variety of sugar from the ^remises of each of the five aforesaid dealers. These samples were claimed to be representative, representative in the sense that there were three samples of Khandsari lifted from the godown of each licensee and one of those samples was sent to the Public Analyst. Same was the case with the analysis of mil-made Sugar. For instance, only two samples of sugar reached the Food Laboratory at Alipur Road from the sugar found with Messrs Suraj Bhan Sarad Kumar; one of them was of Khandsari sugar and the other of the mill-made sugar. The sugar described in the Public Analyst's report dated 21-2-1980 as type B can be presumed to be Khandsari because it had sulphur dioxide in concentration 38.4 P.P.M. On the other hand, type A sugar was mill-made sugar because it was free from sulphur dioxide in concentration. Otherwise, so far as physical appearance went, both samples were described as white crystalline substance. It is not disputed that the solitary sample of Khandsari examined by the Food Laboratory was taken out of one bag of sugar and there were no less than 1503 bags of that very size said to be filled with Khandsari lying in the same premises. Shri Arora has quoted State of Kerala etc. v. Alasseirry Mohammed etc. [ : 1978CriLJ925 j in order to urge that a representative sample need not be representative of the entire stock, but he forgets that the said case arose under sections 7 and 16 of the Prevention of Food Adulteration Act, 1954 and the court held that if the food sold to the Inspector is proved to be adulterated it is immaterial whether the sample purchased by him is a representative sample or not of the entire stock in possession of the person. In this case, on the contrary, the prosecution shall have to prove whether the petitioners were in possession of more than 1,000 quintals of sugar and for the establishment of that fact the contents of each bag seized will be relevant. I put a question to the learned counsel for the Delhi Administration at the Bar whether he could affirm that all the said bags were opened at the time of the seizure and he could not reply in the affirmative. Because the bags were not opened the officials who had undertaken the inspection of the godown could not say with any amount of confidence that all the said bags were filled with Khandsari. For all that I know, some of the said bags might have contained coins or currency notes concealed by the concerned dealer for evasion of tax assessment or they might have contained some contraband say poppy heads. Even if it is assumed for a moment, that all the said bags had Khandsari, it would be impossible to treat that Khandsari as sugar as defined by the Delhi Sugar Dealers Licensing Order, 1963 for the reason the un-opened bags might have contained such Khandsari as did not have more than 90 per cent sucrose. It has been argued by Shri Arora that the petitioners themselves have been asserting that there can be no Khandsari with sucrose content of 90 per cent or less. But there is no denying the fact that the authority ordering seizure has to satisfy itself about the character of the commodity and not to seize it first and then seek justification of its action from his admissions by the trader. One of the pleas raised by the petitioners, of course, was that Khandsari contains more than 90 per cent sucrose in any case and yet it has not been treated as sugar even. in the past. Controlled sugar and free sale sugar mentioned in clause 2 of the Licensing Order of 1963 is mill-made sugar and Khandsari remains untouched by its provisions. But this plea is not acceptable to the respondent. Delhi Administration which can be presumed to be better informed than the lay traders knows for certain that every bit of Khandsari sugar cannot contain more than 90 per cent sucrose otherwise it would not have been necessary to mention the said percentage in the definition of 'sugar' in sub-clause (f) quoted above. The Khandsari in each of the cases here was not lying in aheap, it was contained in numerous separate bag?. The premises were those of a dealer, not of a mill and it cannot be said from how many sources the stock of each peti- tioner was derived. 1500, 15000 or even more cakes of a particular brand of soap may be identical in their contents if they are produced at a factory at one time by one process but as is conceded by Shri Arora, -Khandsari is produced in thousands of villages in Northern India and there is no question of Khandsari produced in one village being identical in all respects with Khandsari produced in another village. This identicality must be absent even in the produce of the farmers of the same village because the sugarcane raised in one field may differ in quality because of dissimilarities in seed, manure, etc., from the sugarcane grown in another field. One crop might have been damaged by pests or drought and not the other one. It was incumbent upon the officials of the Administration in the circumstances to lift a sample from each bag and because this was not done, we cannot exclude the possibility of quite a large number of Khandsari bags not containing sugar with 90 per cent sucrose and those filled with Khandsari satisfying the definition of 'sugar' may be within the limits of the license held by the particular stock-holder. The order of confiscation will not, thereforee, stand because there is no proof at present as to any of the petitioners having kept with him more than the permissible quantity of sugar i.e. sugar containing more than 90 per cent sucrose.

(11) Another grievance agitated by the petitioners is that they were not given a proper hearing by the Commissioner of Food and Supplies before their goods worth lacs of rupees were confiscated. The confiscation, as we have seen, was ordered under section 6-A of the Essential Commodities Act. Section 6-B deals with issue of show cause notice before confiscation of foodgrains, etc. and sub-section (1) thereof reads as under :

'(1).No order confiscating any essential commodity, package, covering receptacle, animal, vehicle, vessel or other conveyance shal be made under section 6-A unless the owner of such essential commodity, package, covering, receptacle, animal, vehicle, vessel or other conveyance or the person from whom it is seized (a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the essential commodity, package, covering, receptacle, animal, vehicle, vessel or other conveyance; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation: and (c) is given a reasonable opportunity of being heard in the matter.'

In the cases before me the notices to show cause why the goods in question be not confiscated were issued on 28-2-1980 and the petitioners were required to make a reply in this behalf on the 1st of March, 1980. Thus there was only one day between the date of the issue of the notice and the date of hearing, i.e. 29th of February. On 1-3-1980 Shri S. N. Marwah, counsel for the petitioners, was required to make his submissions at I p.m. and the Comissioner continued the hearing up to 2.30 P.M thus totally ignoring the lunch interval. Shri Marwaha obtained permission to leave at the aforesaid hour and returned late in the afternoon. By that time an order for the stay of the confiscation proceedings had been passed by the High Court. The Commissioner could not go on with the proceedings for a few ' days because of an order of stay and on resumption of the same he issued a notice to the petitioners on 13-3-1980 for 17-3-1980. On the last mentioned date the petitioners submitted a detailed reply to the show cause notice already issued to them and submitted at the end of their representation that they may be allowed to cross-examine certain persons and to adduce their own evidence. This request was admittedly brushed aside, the oral hearing was concluded on 17-3-1980 itself and the orders were announced on 19-3-1980. The petitioners, as would be seen, had posed several material questions for the consideration of the Commissioner and they could not be disposed of in the cavalier manner adopted by him. Now, one of the very material pleas taken by the petitioners was that Khandsari beyond 1,000 quintals had been stocked by them bona-fide under the belief that there was no license necessary for the possession of that food article and all that they were required to do was to maintain a stock register which they were doing faithfully. They were required to submit a return as to the free sale sugar bought, stocked and sold by them and it could be shown by the perusal of those returns side by side with the stock register for Khandsari that they never concealed the tact of their being in possession of more than 1,000 quintals of Khandari sugar and the authorities never took exception to the total stock of mill-made sugar and Khandsari sugar exceeding 1,000 quintals. I would not hold that the Delhi Sugar Dealers Licensing Order, 1963 had become ineffective because of non-enforcement and if some practice is in conflict with the law, the former would not supersede the latter and yet the circumstance was certainly relevant for decision of the issue whether the Commissioner should have ordered confiscation and if so of the whole stock or only a part of it. It is a fact, however, that. as already stated, the proceedings were concluded with extraordinary haste and there was no substantial compliance with the provisions of section 6-B(l)(c) of the Essential Commodities Act. While interpreting the words 'reasonable opportunity' as appearing in Article 311(2) of the Constitution of India, their Lordships of the Supreme Court held in Khem Chand v. Union of India and others : (1959)ILLJ167SC that the reasonable opportunity includes an opportunity to defend himself by cross-examining the witnesses produced against him and by examining himself or any other witness in support of his defense. R. N. Misra, J. of Orissa High Court held in Satyanarayan Agarwalla v. The State (1978 Cri L. J. 1315(5) that in a case of proposed confiscation an appropriate opportunity has to be given to the person affected and that opportunity would not be issuing a notice in a bald form. His Lordship observed further that the scheme of the statute is such that even if evidence is offered it has to be taken.

(12) To sum up, there was no proper proof that more than 1,000 bags treated as those of Khandsari with sucrose content in excess of 90 per cent were, in fact, sugar of that type and there was no reasonable hearing afforded to the petitioners. The proceedings of the Commissioner ate vitiated by a flagrant defect of procedure and the court would not be justified in maintaining the order in question despite the laudable object which seems, primafacie, to have prompted the said officer to deprive the dealers of their goods i.e. to make them available to the lay consumers through Fair Price Shops. 'The order of confiscation must, thereforee, be set aside.

(13) It was contended by the learned counsel for the petitioners that an order meant to control production, supply, distribution, etc., of essential commodities can be made by the Central Government under section 3 of the Essential Commodities Act only if it is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution or availability at fair price shops, etc., and because there is no proof available as to any such opinion having been formed by the Central Government the Delhi Sugar Dealers Licensing Order, 1963 relied upon by the Delhi Administration is void and of no effect. The issue whether the opinion referred to by the petitioners was or was not formed by the Central Government is an issue of fact and the same having not been raised before the authorities below and no occasion for adducing evidence with regard thereto having occurred it will not be possible for me to take it up in these revisional proceedings.

(14) It has been argued next that before the premises of the petitioners could be searched for the suspected sugar, it was obligatory on the part of the officials concerned to place it on record that they had reason to believe that any contravention of the provisions of the Delhi Sugar Dealers Licensing Order, 1963 or of the conditions of the licenses issued to the petitioners had been, was being or was about to be committed and since it was not done the searches, the seizures and the confiscations made to the detriment of the petitioners are illegal and the goods must be restored to the petitioners. In the Commissioner of Commercial Taxes, Board of Revenue, Madras and another v. Ramkishan Shrikishan Jhaver etc. : [1968]1SCR148 ] relied upon by the petitioners, the seizure had been effected under the warrant of a Magistrate which was found to be invalid, the relevant provision of the Madras General Sales Tax Act 1959 contemplating seizure and confiscation was struck down and in consequence there was no option to the return of the goods seized to their owner. In K. L. Subbayya v. State of Karnataka, : 1979CriLJ651 , the mandate carried by section 54 of the Karnataka Excise Act, 1966 had not been carried out, in that the search was conducted by the officer concerned without prior recording of the grounds for his belief that an offence under Mysore Act 21 of 1966 was being committed or was likely to be committed. In Abdur Rahaman v. The State : AIR1955Cal631 the accuesd had sold a quantity of yarn without preparing or giving a cash memo to the purchaser and thus violated the Essential Supplies (Temporary Powers) Act, 1946, and West Bengal Cotton Cloth and Yam Control Order, 1948. The police seized 34 bundles of cotton yarn from the premises of the dealer but these bundles had not admittedly been sold and there was no question of preparing of a cash memo in respect thereof. In these premises the Court naturally held that no offence having been committed in respect of the said bundles their forfeiture was illegal. The Collector, Central Excise, Allahabad and others v. L. Kashi Nath Jewellers : AIR1972All231 is also distinguishable because section 66 of the Gold (Control) Act 1968 could come into play only after the condition (which was a condition precedent) that there was a reasonable belief that the provisions of the Act had been or were being attempted to be contravened, was fulfillled. In that case the dealer required to maintain vouchers and accounts had failed to post G.S. forms for a certain period and his failure to do so did not justify seizure of his entire stock-in-trade of the gold ornaments. In Subhas Motichand Sheth v. The State of Karnataka 1977 M L J, C, 581 a dealer in sugar had taken delievery of 90 bags of sugar from a particular factory and disposed of 57 bags to his customers while the same were in transit thus bringing to his shop only 33 bags. The offence was committed with regard to the 57 bags aforesaid but instead of them what was seized from his premises was the remaining 33 bags which had been duly entered in the accounts. In this situation the order of the Deputy Commissioner confiscating those 33 bags confirmed by the Sessions Judge was found by the High Court to be perverse or illegal and liable, thereforee, to be set aside. In Hindustan Aluminium Corporation Ltd. v. The Controller of Aluminium and others : AIR1976Delhi225 , 2032.512 metric tonnes of aluminium products were seized by the Central Excist authorities on 16-7-1975 from the premises of Hindustan Aluminium Corporation Limited whereas contravention of the Aluminium Control Order 1970 was said to have been committed in violation to 1525 metric tonnes said to have been withheld from sale as on 1-7-1975. Patently enough, there was no offence committed with regard to the goods actually seized and their confiscation could not as such be justified. The provision about 'reason to believe' also does not figure in clause 9(1) (d) here as was the position in that case. In State of Rajasthan v. Rehman, : 1960CriLJ286 it was found that as per section 165 of the Code of Criminal Procedure recording of reasons is an important steps in the matter of search and a search without such recording would be one made in contravention of the provisions of the Code. Section 165 aforesaid, however, does not apply to this case and the observations of the Supreme Court in the case cited will be of no avail to the petitioners. Another case quoted by Shri Marwaha in the same context i.e. Shyam Lal Sharma v. State of Madhya Pradesh : 1972CriLJ638 is also clearly distinguishable.

(15) On the other hand, the counsel for the Delhi Administration relies on para (d) of sub-clause (1) of clause 9 of the Order for the contention that there was no statutory requirement for the recording of any reasons and if there was an omission in this behalf no irregularity much less illegality ensued. The provision referred to by Shri Arora would read that the Commissioner or any other officer authorised by him in this behalf may, with such assistance, if any, as he thinks fit, search, seize and remove stocks of sugar and the animals, vehicles, vessels or other conveyances used in carrying the said sugar in contravention of the provisions of this order or of the conditions of the licenses issued there under and thereafter take or authorise the taking of all measures necessary for securing the production of stocks of sugar and the animals, vehicles, vessels or other conveyances so seized in Court and for their safe custody pending such prosecution. Thus for searching stocks of sugar or for seizing them or for removing them no condition as to the concerned officials having reason to believe that any contravention was being committed existed. It is sub-clause (b) which refers to has reason to believe' but even in that clause it has not been stated that any record of such a reason has to be made.

(16) It has been urged on behalf of the petitioners that they held valid licenses for the possession of free sale sugar to the extent of 1,000 quintals, sugar in their possession up to that limit at least could not be seized and because the Government officials concerned exceeded their jurisdiction in seizing the entire stock of the petitioners the whole seizure was, because of the aforesaid excess, invalid. But what the officials of the Food and Supplies and the Police Departments suspected in this case was that the petitioners were in possession of sugar beyond the terms of their licenses and so long as all of the different bags of sugar were not tested by taking samples there from the said suspicion could not be resolved. Because of undue haste or inadvertence they took three samples only from more than 1,000 bags of Khandsari in the case of each dealer and due to this haphazard sampling it has been found the confiscation of sugar ordered by the Commissioner, Food and Civil Supplies, wa.s bad. The whole stock of suspected sugar is, however, still in the possession of the police, the investigation is yet incomplete and the lacuna mentioned above may perhaps be filled up even now. Had the authorities seized only as many bags of sugar as were in excess of the number stipulated by the respective licenses of the petitioners the bags within the permissible limit would have been disposed of by now and there would have been no proof left as to the petitioners' ever having kept sugar in breach of the conditions of their licenses. A Division bench of the Patna High Court held in Narendra Kumar v. The State of Bihar and others 1977 Cri. L.J. 1955 that failure to maintain correct account of sugar stocks is a contravention of one of the conditions of license and thus contravention of the order under Section 3 of the Essential Commodities Act in respect of the entire stock and not only in respect of quantity not entered in stock register and in such a case entire stock would be liable to confiscation.

(17) Another argument raised by Shri Marwaha is that the petitioners were keeping the stocks of sugar found with them under the bona-fide belief that there was no limit placed by their license as to the quantity to be kept by them, that means read was totally absent and unless the breach of the provisions of the Delhi Sugar Dealers Licensing Order, 1963 was committed with a guilty mind there would be no cause for confiscation of the goods. He has cited in support of this plea State of Maharashtra v. Hansraj Depar Parle Oil Centre etc. 1977 C A R 113 where it was held that according to the fundamental principle of criminal jurisprudence which reflects fair play, a dealer must know with reasonable certainty and must have a fair warning as to what his obligation is, and what act of commission or omission on his part would constitute a criminal offence. In that case the accused were acquitted because the State Government had not expressed its intention clearly and unambiguously as to hydrogenated oils being included in vanaspati for the purposes of Maharashtra Scheduled Articles (Display and Marking of Prices) Order, 1966. In Nathual v. State of Madhya Pradesh, : 1966CriLJ71 , it was held that means read is an essential ingredient of a criminal offence unless it is excluded by the statute creating the offence. On the other hand, Shri Arora relies upon section 10-C of the Essential Commodities Act. Sub-section (1) of the said section reads as under :

'(1)In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state, but it shall be a defense for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution. Explanationn. In this section 'culpable mental state' includes intention, motive, knowledge of a fact and the belief in, or reason to believe, a fact.'

But it is to be noticed that the provision on which Shri Arora banks is concerned with a prosecution for an offence whereas the matter before me relates to confiscation of the goods alleged to have been stocked in contravention of the provisions of Delhi Sugar Dealers Licensing Order, 1963. With the setting aside of the order of confiscation the issue will be re-opened and it will be for the authorities seized of the matter to see whether or not means read was there and if so how will it affect the decision. At this juncture the working of the traders' mind may as well be ignored.

(18) The petitioners claim that even if the worst view of the situation is taken only that quantity of sugar which they stocked in excess of the limit fixed by the license was liable to confiscation and the rest should have been returned to them. In M/s. Motibhai Fulabhai Patel and Co. v. R. Prasad, Collector of Central Excise, Baroda and others A.I.R. 1970 S.C. 829 a quantity of tobacco on which duty had been duly paid got mixed with tobacco in respect whereof a default in payment had been committed and the Supreme Court ruled that so much of the mixture as represented non-duty paid tobacco could only be confiscated. I will .not, however, hazard any opinion, on this point because according to the findings recorded above it has yet to be seen how much of the bags seized by the Delhi Administration contained sugar within the ambit of the definition contained by the Delhi Sugar Dealers Licensing Order, 1963 and any pronouncement on the subject will, thereforee, be premature.

(19) Surajmal Roopchand and Co. v. The State of Rajasthan and others is an authority on the point that where an order issued by the Central Government is inconsistent with another passed by the State Government, the former should hold the field. There is, however, no such conflict between any Central Government and Delhi Administration orders and no use can, thereforee. be made of the aforesaid pronouncement for the purpose of this case.

(20) Shri Arora has referred to Radha Kishan v. State of Uttar Pradesh, : (1963)IILLJ667SC where their Lordships observed that it may be that where the provisions of sections 103 and 165 of the Code of Criminal Procedure are contravened the search could be resisted by the person whose premises are sought to be searched and it may also be that because of the illegality of the search the court may be inclined to examine carefully the evidence regarding the seizure. In a very recent case, State of Maharashtra v. Natwarlal Damodardas Soni : 1980CriLJ429 their Lordships held that even if the search was illegal because of non-compliance with the provisions of section 165 of the Code of Criminal Procedure it will not affect the validity of the seizure and further investigation by the Customs Authorities or the validity of the trial which followed on the complaint of the Assistant Collector of Customs. A reference was made in this case to the case of Shyam Lal v. State of Uttar Pradesh (supra) and it was noted that even if the search is illegal, being in contravention of the requirements of section 165 Criminal Procedure Code . 1898 that provision ceases to have any application to the subsequent steps in the investigation. Reference was also made to State of Kerala etc. v. Alasserry Mohmmed etc. ' : 1978CriLJ925 where the Food Inspector had failed to comply strictly with the statutory provisions and the question whether such failure would vitiate the trial and conviction of the accused was answered in the negative. In the cases under consideration, as we have seen, clause 9(l)(d) does not stipulate any recording of reasons. Sub-clause (2) of this clause makes applicable to the searches and seizures under the clause the provisions of sections 102 and 103 of the Code of Criminal Procedure 1898 only and not section 165 which speaks of recording in writing the grounds of police officer's belief effecting the search.

(21) Shri Marwaha has tried to make a lot of capital out of the fact that the license issued to Messrs Suraj Bhan Sarad Kumar on 18-1-1972 continued to be renewed up to 23-11-1980 and no changes were made in any of its terms (the position in the other four cases is almost identical) but the license was issued subject to the provisions of the Delhi Sugar Dealers Licensing Order, 1963 and each and every change that was made in the said Order after 1963 was undoubtedly to govern the same. The changes in the law concerned with the stock and sale of sugar became applicable to this license automatically. Now for instance, Food and Supplies Department of Delhi Administration promulgated on 11-9-1979 the Delhi Sugar Dealers Licensing (Third Amendment) Order 1979 in exercise of its powers under Section 3 of the Essential Commodities Act 1955 read with Government of India, Ministry of Agriculture and Irrigation (Department of Food Order, Gsr 800 dated 9th June 1978 and thereby a new clause was substituted for sub-clause (5) of clause (3) of the Delhi Sugar Dealers Licensing Order, 1963 to the effect that no wholeseller of free sale sugar shall at any time store more than 1,000 quintals of sugar. Not a word has been said on behalf of the petitioners about the validity of this amendment and its applicability to the licenses held by the petitioners and this in spite of the fact that no correction has been made in the licenses held by the petitioners. It is mentioned in clause (4) of the license that the licensee will submit to the Commissioner a true return in Form C of the stock, receipt and deliveries of each quality of sugar every month and that leaves no room turn doubting that Khandsari was treated as sugar in the same manner as mill-made sugar.

(22) For the reasons stated, the petitions are granted, and the orders of confiscation of the relevant sugar passed by the Collector- cum-Deputy Commissioner (Food and Supplies) and affirmed by the Additional Sessions Judge, Delhi, are set aside. The order of stay passed by this Court on 24-4-1980 shall stand vacated, and the disposal of the sugar seized from the petitioners shall be subject to further orders by the competent authorities in accordance with law. The petitions are disposed of accordingly.


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