IN THE HIGH COURT OF JUDICATURE AT PATNA Criminal Miscellaneous No.40785 of 2007 ====================================================== Arjun Paswan, son of late Biltu Paswan, resident of Village – Daudpur, P.S. – Noorsarai, District - Nalanda .... .... Petitioner/s Versus The State of Bihar .... .... Opposite Party/s with Criminal Writ Jurisdiction Case No.1191 of 2008 ====================================================== Shravan Kumar, son of late Biseshwar Sao, resident of Village / Mohalla – Katrapar, P.S. – Laheri, District - Nalanda .... .... Petitioner/s Versus 1. The State of Bihar through the District Magistrate, Nalanda at Biharsharif, 2. The Superintendent of Police, Nalanda at Biharsharif, 3. The Sub Divisional Officer, Sadar, Biharsharif, Nalanda, 4. The Circle Officer, Harnaut, Nalanda .... .... Respondent/s ====================================================== with Criminal Miscellaneous No.2159 of 2009 ====================================================== Biranchi Yadav, son of late Ramautar Yadav, resident of Village Mohali, P.S. Hasanpur, District - Samastipur .... .... Petitioner/s Versus 1. The State of Bihar 2. Sri Gangadhar Mandal, son of late Gaya Ram Mandal, resident of Village Asanbali, P.S. Gobindpur, District – Dhanbad (Jharkhand), at present posted as Block Supply Officer, Hasanpur Block, District - Samastipur .... .... Opposite Party/s ====================================================== Appearance : Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 2 / 11 2 (In CR. WJC No.1191 of 2008) For the Petitioner/s : Mr. Sanjay Prasad Mr. Yugendra Prasad Mr. Jagnnath Prasad and Mr. Sanjiv Kr. Chandhariyavi, Advocates. For the Respondent/s : Mr. S.D. Sanjay, AAG 12 and Mr. Sanjay Kumar, GA 5. (In Cr. Misc. No.2159 of 2009) For the Petitioner/s : Mr. Ashok Kumar Mishra and Mr. Rishit Deo Kumar Singh, Advocates. For the Opposite Party/s : Mr. S.D. Sanjay, AAG 12 and Mr. P.K. Jha, APP. (In Cr. Misc. No.40785 of 2007) For the Petitioner/s : Mr. Murari Narain Choudhary, Advocate. For the Opposite Party/s: Mr. P.K. Jha, APP. ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE BIRENDRA PRASAD VERMA ORDER (Per: HONOURABLE THE CHIEF JUSTICE) 12 21-07-2011 These three matters arising out of complaints lodged under the Essential Commodities Act, 1955 (hereinafter referred to as `the 1955 Act’ or `the said Act’) have been placed before us under the Reference made by the learned single Judge in each case. The matter at issue is whether a licensee of a fair- price shop under the Public Distribution System is liable to be prosecuted under Section 7 of the 1955 Act for violation of any Order issued under Section 3 of the said Act or whether such licensee is exempt from prosecution by virtue of Clause 31(2)(c) of the Bihar Trade Articles (Licences Unification) Order, 1984 (hereinafter referred to as `the 1984 Order’) or whether such licensee is an agency of the State Government Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 3 / 11 3 within the meaning of Clause 31(2)(c) of the 1984 Order. The References came to be made to the Division Bench on account of two diverse opinions expressed by the Bench of the learned single Judge of this Court. In the matter of Md. Waizuddin Vs. The State of Bihar [2007(1) PLJR 714], a Bench of this Court (Coram: Abhijit Sinha, J) held that the dealers under the Public Distribution System are the agents of the Government. In view of the provisions contained in Clause 31(2)(c) of the 1984 Order, such dealers are exempt from the application of the provisions contained in the 1984 Order. As the said Order does not apply to such dealers, no penal action can be taken against such dealers for the alleged violation of the provisions of the 1984 Order. The said view has been reiterated in the matters of Bhola Sah Vs. State of Bihar [2008 (3) PLJR 400], of Siddhi Sadan Giri Vs. State of Bihar [2008(4) PLJR 177], of Ranjeet Paswan Vs. The State of Bihar [2009 (1) PCCR 148] and of Jaso Devi Vs. State of Bihar (Cr. Misc. No. 46669 of 2007, decided on 22nd January 2009). Contrary to the above decisions, another Bench of this Court (Coram: Samarendra Pratap Singh, J) in the matter of Ramanand Prasad Vs. State [2007(4) BBCJ V-211] held that the dealers under the Public Distribution System are not the agents of the State; they are not exempt from the application of the 1984 Order nor are they exempt from any penal action for violation of the provisions of the 1984 Order. The said view has been reiterated in the matter of Shiv Narayan Mandal Vs. State of Bihar & Ors. [2009(2) PLJR 657]. In the above three cases, the petitioners, the licensees of fair price shops, are alleged to have committed Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 4 / 11 4 irregularities in respect of kerosene oil, an essential commodity, governed by the 1984 Order and the Public Distribution System (Control) Order, 2001 (hereinafter referred to as `the 2001 Control Order’). Each of them has challenged the maintainability of the prosecution lodged against them or the order taking cognizance of the offence on the ground, inter alia, that they are exempt from prosecution as stated hereinabove. They have prayed that the First Information Reports filed against them be quashed. The submission is that the petitioners, the dealers under the Public Distribution System, are the agents of the State Government. In view of the provisions contained in Clause 31(2)(c) of the 1984 Order, such dealers are exempt from application of the provisions contained in the 1984 Order. The petitioners, therefore, cannot be answerable for the alleged violation of any of the provisions of the 1984 Order. Consequently, they cannot be prosecuted for the alleged breach of any of the provisions of the 1984 Order. The Essential Commodities Act, 1955 has been enacted by the Parliament to provide for the control of production, supply and distribution of, and trade and commerce in certain commodities. The essential commodities are the commodities specified in the Schedule to the said Act. Section 3 of the said Act empowers the Central Government, inter alia, to make order to provide for regulating or prohibiting the production, supply and distribution of any essential commodity and for regulating and prohibiting the trade and commerce in essential commodity. Section 7 of the said Act provides, inter alia, for penal action against a person, who contravenes any order made under Section 3 of the said Act. Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 5 / 11 5 Under the powers conferred by Section 3 of the said Act read with the orders made by the Government of India, the State of Bihar has, with the prior concurrence of the Central Government, made the Bihar Trade Articles (Licences Unification) Order, 1984. The Central Government has, in exercise of power conferred by Section 3 of the 1955 Act, made the Public Distribution System (Control) Order, 2001. Clause 7 of the 2001 Control Order, inter alia, provides for procedure for issue of licences or authorization of Fair Price Shops under Public Distribution System as per paragraph 5 of the annexe to the said order. Paragraph 5 of the annexe to the 2001 Control Order enjoins the State Governments to issue order under Section 3 of the 1955 Act, inter alia, for regulating sale and distribution of essential commodities, to issue licences for Fair Price Shops, to lay down duties and responsibilities of Fair Price Shop owners. Under the mandate issued under the said paragraph, the State of Bihar has, under Section 3 of the 1955 Act, made order on 20th February 2007 (hereinafter referred to as “the 2007 Control Order”) in connection with Fair Price Shops; issuance of licence, suspension/cancellation, terms and conditions and regulation of the sale and distribution of the essential commodities. The 1984 Order, inter alia, prohibits a dealer from carrying on business in respect of articles mentioned in Schedule I thereto except in accordance with the terms and conditions of the licence issued in that behalf by the licensing authority under the said order. The articles mentioned in Schedule I are various food grains, pulses, kerosene oil, cotton cloth, yarn and liquefied petroleum gas. Clause 31(1) of the Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 6 / 11 6 said order provides for exemption as under: “31. Exemptions. – (1) The State Government may, by general or special order by notifications in the official gazette, and subject to such conditions or restriction, as may be specified in such order, exempt any person or class of persons or firm or association of persons or any Co-operative Society from the operation of all or any of provisions of this Order and may at any time suspend or rescind such exemption: Provided that no notification under this clause shall be issued except with the previous approval of the Central Government. (2) Nothing in this Order shall apply to the purchase, sale or storage for sale of any trade article by or on behalf of – (a) The Central Government. (b) The State Government. (c) The officers, departments, institutions or other organizations of the State Government or such agencies as may be approved by the State Government. (d) any Central or State level Co-operative Society.” On behalf of the petitioners, reliance is placed on the above Clause 31(2)(c) of the 1984 Order, the above referred judgments and Clause 16 of the 2007 Control Order. It is submitted that sub-clause (2)(c) of the above Clause 31 expressly excludes the agencies of the Government from application of the 1984 Order in respect of purchase, sale or storage for sale of any trade article by such agency. The Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 7 / 11 7 contention is that the licensee of a fair price shop or a dealer under the Public Distribution System is an agent of the State. It is also submitted that Clause 16 of the 2007 Control Order also expressly excludes such agencies from application of the 2001 Control Order. The said Clause 16 reads as under: “16. Exemption - The provisions of “Public Distribution System (Control) Order 2001” shall not be applicable to the purchase, sale or storage for sale of any trade article by or on behalf of: (i) The Central Government. (ii) The State Government. (iii) The officers, Departments, Institution or other organization of the State Govt. or such agencies approved by the State Govt. (iv) Any Central or State Level Co-operative Society (except the P.D.S. shops).” We have considered the provisions contained in the aforesaid 1984 Order, 2001 Control Order and the 2007 Control Order. We are in respectful disagreement with the view that the dealers under the Public Distribution System / licensees of the fair-price shops are the agencies of the State Government. Exemption under Clause 31(1) of the 1984 Order is not automatic. The Government has to make order of exemption and to notify the same in the Official Gazette. It is the Central Government, the State Government, its officers, departments, institution or other organization and the Central or the State Level Co-operative Societies which are exempt from application of the provisions contained in the 1984 Order under Clause 31(2) thereof. As to the agencies of the State Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 8 / 11 8 Government, such agencies can claim exemption from the application of the provisions of the 1984 Order only in case they are approved by the State Government. Hence, even if the dealers under the Public Distribution System were presumed to be the agencies of the State Government, they cannot claim exemption ipso facto. Unless they are specifically approved for such exemption, the 1984 Order will govern them. It is not the case of the petitioners that the Government has approved fair price shops for exemption under Section 31(2)(c) of the 1984 Order. In our opinion, it is too far fetched to hold that the dealers under the Public Distribution System are the agencies of the State Government. In any case, as discussed hereinabove, the dealers under the Public Distribution System / licensees of the fair-price shops cannot be held exempt from the rigours of the 1984 Order. In case of violation of any of the provisions of the 1984 Order, such dealers or licensees will be subject to the penal consequences under the 1955 Act. The exemption claimed under Clause 16 of the 2007 Control Order is total anachronism. The 2007 Control Order is essentially made for control and regulation of the Public Distribution System. Every dealer under the Public Distribution System is regulated by the provisions made in the said Control Order. Moreover, Clause 16 of the said Control Order that provides for exemption expressly excludes the Public Distribution System shops (fair-price shops) from such exemption. The learned single Judge (Coram: Samarendra Pratap Singh, J) has in the matter of Ramanand Prasad (supra) Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 9 / 11 9 succinctly discussed the meaning of the term “Agency” occurring in the 1984 Order. It is held, “The general meaning of term “Agency” is a business or an organization that provides a particular service especially on behalf of other business or organization. As per Law Lexicon the word “Agency” has been defined as an Entity which acts on behalf of his principal and often uses his name, and his acts in that capacity are attributable to principal. An agent has been defined in the Indian Contract Act as a person employed to do any act for another or to represent another in dealing with the third person.” We agree with the above proposition of law. The proposition that the dealers under the Public Distribution System / the licensees of the fair price shops are exempt from prosecution under Section 7 of the 1955 Act is totally misconceived. We hold that the dealers under the Public Distribution System / the licensees of the fair price shops are not the agencies of the State Government; they are governed by the provisions contained in the 1984 Order and the 2007 Control Order made under Section 3 of the 1955 Act. For violation of any of the provisions of the said Orders, they are liable to penal action under Section 7 of the 1955 Act. The Reference is answered accordingly. The petitioner in Cr. Misc. No. 40785 of 2007 has raised a contention that the First Information Report lodged against him is in respect of the alleged irregularities in supply of kerosene oil is false. It is the case of the petitioner that he is falsely implicated by the Block Supply Officer in collusion with one Sidheshwar Paswan. The said Sidheshwar Paswan being Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 10 / 11 10 interested in securing a dealership under the Public Distribution System, with a view to making room for himself, instigated the consumers to make complaint against the petitioner which resulted into an enquiry and consequent criminal complaint. The petitioner in Cr.W.J.C. No. 1191 of 2008 has challenged the institution of the criminal proceeding against the petitioner in connection with Harnaut P.S. Case No. 250 of 2008 for violation of the Control Order in respect of kerosene oil also on the ground that there was no evidence to make accusation against the petitioner; that he had distributed kerosene oil in presence of the Ward Commissioner and the members of the Watch Committee; that no consumer had ever complained against the petitioner and that the blue kerosene oil recovered from the shop of one Yogendra Sah was not the kerosene oil supplied to the Public Distribution System dealers. We are afraid, this is too early a stage to hold that there is no evidence against the petitioner to make accusation against him. The availability of evidence, adequacy of the available evidence and the probative value of such evidence will have to be tested by the trial court. The petitioner in Cr. Misc. No. 2159 of 2009 has raised a contention that initially in the First Information Report it was one Narayan Sao who was arraigned as accused. The petitioner’s name was added later after the investigation. As the petitioner did not oblige the concerned authority, the authority has falsely implicated the petitioner. We see no substance in the aforesaid allegation. The allegation is vague. The concerned authority is not named nor the authority against whom the allegation is made has been Patna High Court CR. WJC No .40785 of 2007 (12) dt.21-07-2011 11 / 11 11 impleaded as party respondent. We are afraid the aforesaid defence cannot be countenanced at this stage. The evidence has to be examined and appreciated by the trial court. For the aforesaid reasons, the petitions are dismissed. Stay of the proceedings, if any, shall stand vacated. Registry will send the writ forthwith. AFR Dilip. (R.M. Doshit, CJ) I agree. Birendra Prasad Verma, J.- (Birendra Prasad Verma, J)