HON’BLE SRI JUSTICE G.V.SEETHAPATHY Rev.WPMP.No.6943 of 2011 IN W.P.No.181 of 2011 ORDER: This review application is filed under Order XLVII Rule 1 CPC seeking review of the order dated 12-02-2011 in W.P.No.181 of 2011, wherein the said writ petition filed by the respondent herein was disposed of following the order dated 25-08-2010 in W.P.No.21120 of 2010 and holding that that the direction contained in the impugned order to furnish bank guarantee in a sum of Rs.2,87,622/- is unsustainable and directing the petitioners herein (respondents in the writ petition) to release the vehicle bearing No. AP 04 V 1679 to the respondent herein, subject to his furnishing bank guarantee for Rs.31,958/- for a period of one year and subject to proof of ownership of the vehicle by him. 2. Heard the learned Government Pleader representing the petitioners and the learned counsel for the respondent. Perused the record. 3. The respondent herein claims to be the owner of the lorry bearing No.AP 04 V 1679. The said vehicle was used for transportation of PDS rice meant for public distribution. It is alleged that on 17-12-2010, when the lorry was transporting rice from Adusumalli village to Guntur, the second petitioner herein intercepted the lorry and seized 159.79 quintals (332 bags) of rice and also the lorry. Thereafter, proceedings under Section 6-A of the Essential Commodities Act (for short ‘the Act’) were initiated before the Collector (Civil Supplies), Ongole. By the impugned order dated 03-01-2011, the Collector, by way of interim disposal, directed that the seized stock of 332 bags of PDS rice be distributed to card holders through public distribution system and further directed the respondent herein to furnish bank guarantee for the amount of Rs.2,87,622/- for a period of three years from any nationalized bank for release of the lorry. Questioning the said order, the respondent herein filed W.P.No.181 of 2011 contending that the value of the seized rice, even according to the petitioners herein, is only Rs.31,958/- which is also noted in the impugned order and, therefore, directing the respondent herein to furnish bank guarantee for a sum of Rs.2,87,622/- is unwarranted. When the matter came up for hearing on 12-01-2011, the order dated 25-08-2010 in W.P.No.21120 of 2010 passed by another bench of this Court in similar situation was produced by the learned counsel for the respondent herein wherein it was held that there cannot be any demand more than the value of the commodity, which was being transported and as such there is no reason or justification for imposing the condition of bank guarantee for Rs.3,00,000/- for release of the vehicle, when the value of the seized stock of 1600 litres of kerosene was only Rs.20,800/-. Following the rationale adopted in the said order, W.P.No.181 of 2011 was also disposed of directing the petitioners herein to release the vehicle subject to the respondent herein furnishing bank guarantee for the value of the seized stock in a sum of Rs.31,958/-. 4. Complaining that the order passed by this Court on 12-01-2011 has not been complied with, the respondent herein filed contempt case in C.C.No.207 of 2011. Thereafter, the petitioners herein filed the present review application. The learned Government Pleader appearing for the petitioners would contend that under the second proviso to Section 6A of the Act, among other things, in the case of any conveyance used for the carriage of goods or passengers, the owner of the vehicle or conveyance shall be given an option to pay, in lieu of its confiscation, a fine not exceeding the market price at the date of seizure of the essential commodity sought to be carried by such vehicle or conveyance. Relying upon the said proviso, the learned Government Pleader would contend that the upper limit for imposition of fine is the market price of the vehicle by which the essential commodity was sought to be carried, but not the market price of the commodity. 5. The learned counsel for the respondent, on the other hand, would submit that the maximum amount of fine that can be collected under the proviso to Section 6A is the market price of the essential commodity on the date of the seizure, but not the vehicle. The learned counsel also produced copies of certain other orders passed by various Benches of this Court in similar matters where the vehicles were directed to be released on execution of the bonds for the amounts equivalent to the market price of the seized commodity. 6. Section 6A of the Act deals with confiscation of essential commodity and states that where any essential commodity is seized in pursuance of an order made under Section 3, a report of such seizure shall, without unreasonable delay, be made to the Collector of the District and whether or not a prosecution is instituted for the contravention of such order, the Collector may direct the essential commodity so seized to be produced for inspection before him, and if he is satisfied that there has been a contravention of the order may order confiscation of - the essential commodity so seized; any package, covering or receptacle in which such essential commodity is found; and any animal, vehicle, vessel or other conveyance used in carrying such essential commodity. The second proviso to Section 6A contemplates that option be given to the owner to pay in lieu of its confiscation of the vehicle a fine not exceeding the market price at the date of seizure of the essential commodity sought to be carried by such vehicle. 7. The learned Government Pleader for the petitioners would contend that the expression ‘market price’ be referable to the market value of the item of seizure viz., the essential commodity or the vehicle, as the case may be, whereas the learned counsel for the respondent would contend that the said expression invariably refers to the market value of the essential commodity and that too the market value as on the date of seizure of such commodity. 8. What all the second proviso to Section 6-A contemplates is giving an option to the owner to pay a fine in lieu of confiscation. The maximum limit up to which a fine can be imposed is the market value as on the date of seizure of the essential commodity sought to be carried by the vehicle. When the vehicle is sought to be confiscated, the owner of the vehicle is entitled for an option to pay fine not exceeding the market price as on the date of seizure of the commodity. The proviso does not, however, specifically state that the market price is of the animal, vehicle or vessel or other conveyance as the case may be. 9. Be that as it may, the order impugned in the writ petition is in respect of release of the vehicle to the interim custody of the respondent herein. The stage of confiscation or imposition of fine in lieu of confiscation has not reached. The respondent herein is seeking interim custody of the vehicle pending further proceedings in the matter. 10. The learned Government Pleader relied upon a decision in DEPUTY COMMISSIONER, DAKSHINA KANNADA DISTRICT V. RUDOLPH FERNANDES[1], wherein the Apex Court while dealing with the question - whether fine in lieu of confiscation contemplated under the second proviso to Section 6-A (1) of the Act provides for levy of fine on the basis of market value of the confiscated vehicle or on the basis of the market price of the essential commodity sought to be carried by such vehicle, held as follows: “Therefore, not only the essential commodity which is seized is to be forfeited, but the vehicle also could be forfeited to the Government. Hence, the measure of fine which is required to be levied in lieu of confiscation under the second proviso to Section 6-A(1) would be relatable to the market price of the vehicle and not of the seized essential commodity. And, the fine amount in lieu of confiscation is not to exceed the market price of the vehicle on the date of seizure of the essential commodity. That is to say, the limit of such fine would be up to the market price of the vehicle on the relevant date and it is within the discretion of the competent authority to fix such reasonable amount considering the facts and circumstances of each case.” In view of the above decision of the Apex Court clarifying the ambit and scope of the second proviso to Section 6- A(1), the limit of the fine amount in lieu of confiscation would be up to the market price of the vehicle on the relevant date and it is within the discretion of the competent authority to fix such reasonable amount considering the facts and circumstances of each case. The above decision was reiterated in a subsequent decision in COLLECTOR OF GANJAM AND ANR. V. RAMESH CHANDER PANDHI[2] wherein also it was held that the amount of fine is relatable to market price of vehicle and the view that fine imposed cannot exceed the market price of the commodity seized is improper. The decision in Rudolph Fernandes (1 supra) also is in respect of application for interim release of the vehicle and the same was granted directing the owner of the vehicle to furnish bank guarantee of Rs.1 lakh. When that order was challenged before the High Court of Karnataka, the High Court directed release of the vehicle accepting the bank guarantee to the extent of Rs.500/- which is the market price of the essential commodity. The Apex Court has held that the fine amount that can be imposed under the proviso to Section 6-1(A) is up to the market price of the vehicle as on the date of seizure of the commodity. It was further held as under: “The explanation provides that the market price means market price at the date when the goods are seized. As against this, Section 6-A second proviso does not refer to payment of fine not exceeding the market price of the essential commodity but apparent reference is to a fine not exceeding the market price of the vehicle sought to be confiscated. This appears to be obvious because in a case where the market price of the seized essential commodity is more than the price of the conveyance then the owner of the conveyance would not come forward to take it back if he asked to pay something more than its market price. Similarly, when the market price of the seized vehicle is much more than of the essential commodity, it cannot be said that instead of confiscation it should be released at a price which is less than its market price. Further, it is required to be noted that under Section 6-B(2) no order confiscating the vehicle or other conveyance can be passed if the owner proves to the satisfaction of the competent authority that it was used in carrying the essential commodity without his knowledge or connivance.” 11. The above decisions viz., Rudolph Fernandes’s case (1 supra) and Ramesh Chander Pandhi’s (2 supra) are not brought to the notice of the Court when W.P.No.181 of 2001 was disposed of on 12-01-2011. The order dated 25-08-2010 in W.P.No.21120 of 2010 basing on which the present writ petition was disposed of also does not refer to the above two decisions of the Apex Court. Apparently, they were not brought to the notice of the Court at the time of passing the said order. 12. In those circumstances, in view of the above two decisions of the Apex Court laying down the law pertaining to the interpretation of second proviso to Section 6-A(1) of the Act, it is held that for release of the vehicle the owner thereof shall be required to furnish bank guarantee for the amount equivalent to the value of the vehicle as on the date of seizure of the essential commodity but not the market price of the essential commodity seized. 13. Under those circumstances, it is held that the order under review directing the petitioners herein to release the vehicle subject to the respondent furnishing bank guarantee for Rs.31,958/- is liable to be reviewed and the same is accordingly reviewed. The learned counsel for the respondent would submit that the vehicle is old one and a reasonable amount may be fixed for furnishing the bank guarantee. In the circumstances, the petitioners herein are directed to release the vehicle bearing No. AP 04 V 1679 for the interim custody of the respondent herein, subject to his furnishing a bank guarantee for a sum of Rs.2,00,000/- (Rupees Two lakhs only) for a period of one year from a nationalized bank towards the value of the vehicle and subject to proof of ownership of the vehicle. 14. In the result, the review petition is accordingly allowed. There shall be no order as to costs. _______________________ G.V.SEETHAPATHY, J 15th March 2011 Lrkm. [1] (200)3 SCC 306 [2] AIR 2009 SC 1850