IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY SECOND DAY OF AUGUST TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE D.S.R.VARMA and THE HON'BLE MR JUSTICE K.C. BHANU WRIT PETITION Nos: 23107 of 2007 and 18093 of 2007 WRIT PETITION No.23107 of 2007 Between: Elluru Chandra Obul Reddy, S/o. Pedda Dasthagiri Reddy, R/o. Annavaram Village, Chapada Mandal, Kadapa District. ..... PETITIONER AND 1 The Joint Collector, Kadapa, Kadapa District. 2 The Deputy Tahsildar (Enforcement), Proddutur, Kadapa District.. 3 The Sub-Inspector of Police Rural, Proddutur, Kadapa District.. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to issue any writ, order or direction more particularly one in the nature of Writ of Mandamus, declaring the seizure of 166 bags of rice (each 50 kgs.) belonging to the petitioner made by the respondents under punchanama dt. 24-5-2007 in the premises of bearing No. 3/365 in its Room No. 7, is as illegal, arbitrary, without jurisdiction and contrary to notiﬁcation issued by the Government of India dt. 15-2-2002 and also provisions of Essential Commodities Act and consequently direct the respondents to release the seized 166 bags of rice by setting aside the order of seizure covered under Punchanamam, dt.24-5-2007 and pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case Counsel for the Petitioner: MR.S.LAKSHMINARAYANA REDDY Counsel for the Respondents: GP FOR CIVIL SUPPLIES WRIT PETITION NO : 18093 of 2007 Between: Nellisetti Sarveswara Rao, S/o.Raghavaiah, R/O.Navabpeta, Eluru, W.G.Dist. ..... PETITIONER AND 1 The Joint Collector, W.G.District, Eluru, 2 The Assistant Grain Purchasing Officer, Eluru, West Godavari District. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to Issue an appropriate writ order or direction more particularly one in the nature of writ of Mandamus declaring the impugned memo of the 1st respondent in Roc.CS-1/49/2007 dated 19-7-2007 in directing the petitioner to furnish a bank guarantee for Rs.70,256/-duly obtaining in favour of the Joint Collector, W.G.Dt.Eluru, for a period of 3 years validity, from any nationalized bank of Eluru city, for considering release of the stocks seized in the case, as illegal, arbitrary, biased unconstitutional, against the principles of natural justice, violative of the provisions of the Essential Commodities Act and Control orders of the Government of Andhra Pradesh and consequently direct the respondent No 2 to release the seized stocks of 70 quintals of rice in 142 bags of the petitioner with out insisting upon the bank guarantee and to pass such other order or orders which are deemed ﬁt and proper in the circumstances of the case. Counsel for the Petitioner: SMT.D.LALITHA PRASAD Counsel for the Respondents: GP FOR CIVIL SUPPLIES The Court made the following : WRIT PETITION NO : 18093 of 2007 Between: Sri Nellisetti Sarveswara Rao, S/o.Raghavaiah, R/O.Navabpeta, Eluru, W.G.Dist. ..... PETITIONER AND 1 The Joint Collector, W.G.District, Eluru, 2 The Assistant Grain Purchasing Officer, Eluru, West Godavari District. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to To Issue an appropriate writ order or direction more partucularly one in the nature of writ of Mandamusm declaring the impugned memo of the 1st respondent in Roc.CS-1/49/2007 dated 19-7-2007 in directing the petitioner to furnich a bank guarantee for Rs.70,256/-duly obtaining in favour of the Joint Colloector, W.G.Dt.Eluru, for a period of 3 years validity, from any nationalized bank of Eluru city, for considering release of the stocks seized in the case, as illegal, arbitrary, biased unconstitutional, against the principles of natural justice, voilative of the provisions of the Essential Commodities Act and Control orders of the Government of Andhra Pradesh and consequently direct the respondent No 2 to release the seized stocks of 70 quintals of rice in 142 bags of the petitioner with out insisting upon the bank guarantee and to pass such other order or orders which are deemed ﬁt and proper in the circumstances of the case. Counsel for the Petitioner:SMT.D.LALITHA PRASAD Counsel for the Respondent No.: GP FOR CIVIL SUPPLIES The Court made the following : THE HON’BLE SRI JUSTICE D.S.R.VARMA AND THE HON’BLE SRI JUSTICE K.C.BHANU WRIT PETITION NOs. 23107 of 2007 & 18093 of 2007 COMMON ORDER: (per the Hon’ble Sri Justice K.C.Bhanu) 1. This is a reference made by a learned Single Judge in Writ Petition No.23107 of 2007, for an authoritative pronouncement to answer the question as to whether the seizure of 166 bags of rice (each 50 Kgs) belonging to the petitioner by the third respondent herein viz. Sub Inspector of police, Rural, Proddatur, Kadapa district, is legal or not. 2. Similarly, the learned Single Judge, in Writ Petition No.18097 of 2007, made reference on the ground that the view expressed by another Single Judge would require reconsideration. 3. Writ Petition No.23107 of 2007 is ﬁled, inter alia, contending that the third respondent-Sub Inspector of Police, Rural, Proddatur, Kadapa district, has no jurisdiction and he misused the power in seizing the rice of petitioner; that by virtue of notiﬁcation issued by the Government of India dated 15.02.2002 and further memo dated 27.3.2003 issued by the Government of Andhra Pradesh, there are no restrictions as regards to stock or transport of paddy and rice, and as such, the seizure is illegal and without jurisdiction. The allegation of the respondents is that the petitioner purchased 166 bags of rice meant for public from the dealer of Public Distribution System. It is alleged that on 24.5.2007, the third respondent raided the petitioner’s premises bearing no.3/365 and seized the 166 bags of rice. The third respondent registered a case in crime no.58/2007 under Sections 406 of the Indian Penal Code and Section 7(1) of the Essential Commodities Act, 1955. 4. Whereas, Writ Petition No.18093 of 2007 is ﬁled to declare the memo dated 19.7.2007 issued by the Joint Collector, West Godavari, directing the petitioner to furnish bank guarantee for Rs.70,256/- for a period of 3 years from any Nationalised Bank, for considering release of the stocks seized, as illegal and arbitrary, and for consequential direction to the respondent no.2 to release the 70 quintals of rice to the petitioner without insisting upon bank guarantee. 5. The learned counsel for the petitioners contends that by virtue of notiﬁcation dated 15.02.2002 issued by the Government of India, there are no restrictions as to stock or transport of paddy and rice; that if any person or dealer is indulging in purchase of rice meant for Food for Work or Public Distribution System, the only course left open to the authorities is to initiate proceedings under the Code of Criminal Procedure, 1973 (for short, ‘Cr.P.C.’). In support of his contention, he placed strong reliance on a decision in Sheela Srinivas v. District Collector, Karimnagar & another[1]. 6. On the other hand, the learned Government Pleader for Civil Supplies contended that the Andhra Pradesh Rice Procurement (Levy) Order, 1984 (for short, ‘Levy Order, 1984’), is promulgated by the Governor of Andhra Pradesh with the prior concurrence of the Central Government, and clause 14 thereof, the Enforcement Oﬃcer is empowered to search and seize any essential commodity; that there are certain restrictions imposed by the Levy Order, 1984; that this Order is on the Statute Book as on today; that the notiﬁcation issued by the Government of India dated 15.02.2002 was subsequently amended, and so the notiﬁcation which was relied upon by the petitioner would not aﬀect the operation of the Levy Order issued by the State Government; therefore, the Enforcement Oﬃcer is authorized to search and seize any essential commodity, if there is any contravention; that the Levy Order, 1984 has not been brought to the notice of the Hon’ble Single Judge of this Court. Hence, he prayed to dismiss the Writ Petitions. 7. In view of the aforesaid rival contentions, the points for determination are - i) Whether rice or paddy is an essential commodity requiring any licence or permit to stock or transport; ii) Which authority is empowered or competent to search and seize the paddy or rice from any premises, in case of any violations of any provisions of law or the Levy Order, 1984 ? 8. I n Sheela Srinivas’s case (1 supra), a learned Single Judge of this Court held thus: (para 8). “Even assuming that the petitioner has purchased or has come into possession of rice meant for Food for Work, the only action to be taken in this regard is to initiate proceedings under the Criminal Procedure Code. The clariﬁcation issued by the Commissioner of Civil Supplies, through the recent proceedings dated 12.8.2002 is as under: ‘With reference to the letter cited, it is clariﬁed that Rice Millers who indulge in purchase of rice like Food for Work rice, action has to be taken under Criminal Procedure Code as there is no licencing system. Insofar as the Fair Price Shop dealdes are concerned, they are governed by the conditions of the authorization issued under the Andhra Pradesh State PDS Control Order, 2001.’ Admittedly, the petitioner is not a fair price shop dealer. Therefore, the seizure eﬀected cannot be sustained. 9. Another learned Single Judge of this Court in order dated 26.10.2005 in Writ Petition No.12151 of 2004, held that if that be so, as per the clariﬁcation issued by the Commissioner of Civil Supplies, vide proceedings dated 12.8.2002, even assuming that the petitioner had indulged in purchase of rice meant for Food for Work Programme, the only course open was to initiate criminal proceedings against him, since admittedly, there was no licensing system. 10. Similarly, in Sri Sai Traders rep. by its Proprietor & others v. Assistant Supply Oﬃcer, Circle-I, Vijayawada & others[2] case, another learned Single Judge of this Court held thus: “From a reading of the above, it would indicate that absolutely there is no restriction on movement of rice in the State of Andhra Pradesh and the authorities were supposed to take action against those cases of violation under the Andhra Pradesh Paddy and Rice (Requisitioning of Stocks) Order, 1966, but not by invoking the provisions of Section 6-A of the Act. Admittedly, in these two cases, the seizure was eﬀected after 29.6.2005 i.e. much after rescinding the Andhra Pradesh Paddy and Rice (Requisitioning of Stocks) Order, 1966. Therefore, there is no scope for invoking Section 6- A of the Act against the seized goods of the petitioners. ..” 11. Similarly, another learned Single Judge of this Court in order dated 25.07.2007 in Writ Petition No.14903 of 2007, held thus: “On a perusal of the panchanama dated 30.5.2007 and the FIR in Cr.No.19/2007 of Halagunda P.S., it is clear that the seizure was eﬀected only on the allegation that the rice which was meant for ‘food for work scheme’ was being transported illegally. It is not in dispute that the Government of India, New Delhi issued GSR 104(E) dated 15.2.2002 removing all restrictions on stocking and movement of paddy and rice in the State of Andhra Pradesh. Pursuant thereto, the Government of Andhra Pradesh has issued corresponding memo dated 27.3.2002. The eﬀect of the said orders was subsequently clariﬁed by the Commissioner of Civil Supplies, vide proceedings dated 12.8.2002 stating that in view of the change in law on the subject, even where a trader is found to have indulged in purchasing rice meant for ‘food for work scheme’, the only course open to the authorities is to initiate proceedings under the Code of Criminal Procedure.” 12. Before adverting to the reference to be answered in the two Writ Petitions, it is intrinsically necessary to refer to the provisions of the Essential Commodities Act, 1955 (for short, ‘the EC Act, 1955’) for better appreciation of the case. The EC Act, 1955, provides, in the interest of general public, for the control of production, supply and distribution of trade and commerce in certain commodities, which have been declared as essential under the Act. To achieve these objectives, the Government of India has been vested with the powers under the Act to issue orders for regulating production, storage, transport and distribution of such essential commodities, and for controlling prices, etc. Section 3 of the EC Act empowers the Central Government, under the circumstances stated in that Section, to issue notiﬁed orders providing for the regulation of production, supply and distribution of any essential commodity. Under Section 5 of the EC Act, the Central Government can delegate its powers to State Government or Oﬃcer or an authority subordinate to it. Section 7 of the EC Act makes the contravention of any order made under Section 3 of the Act, criminally punishable. In exercise of the power under Section 5 of the EC Act, 1955, the Central Government issued notiﬁcation on 24.7.1967 delegating to the State Governments, the power conferred upon it by Section 3 of the Act. Issue of any order by the State Governments under powers delegated in G.S.R. No.452(E), dated 25.10.1973 and G.S.R. No.800, dated 09.06.1978 issued by the Government of India for regulating by licence, permit or otherwise the storage, transport, distribution, disposal, acquisition, use of consumption of any of the commodities viz. wheat, paddy/rice, coarse grains, sugar, edible oil seeds and edible oils, shall require the prior concurrence of the Central Government. In exercise of such powers, the State of Andhra Pradesh promulgated the Levy Order, 1984 on 25.1.1984. The said order was admittedly promulgated with the prior concurrence of the Central Government. It is true that the power conferred by Section 3(1) of the Act, 1955 can be exercised by the Central Government or its delegate, only if it is of the opinion that it is necessary or expedient to provide for the regulation of any essential commodity. 13. Now, it has to be seen whether rice and paddy can be termed as ‘essential commodities’ because in Sri Sai Traders case (2 supra), it was held that ‘rice’ was taken out of the EC Act, 1955 by way of an order passed by the Ministry of Consumer Aﬀairs, Food and Public Distribution, Government of India, New Delhi in G.S.R. 104(E), dated 15.2.2002, issued in exercise of the powers conferred under Section 3 of the Act, 1955. It is further held that rice is one of the scheduled commodities, though not an essential commodity, under the Control Orders. Classes of certain commodities, which come under the purview of ‘essential commodity’, have been delineated in clause (a) of Section 2 of the EC Act, 1955. Sub-clause (v) of the above provision is relevant to answer the reference of this case, whereunder ‘food stuﬀ’ is one of the classes of commodities come within the meaning of the ‘essential commodity’. 14. ‘Food stuﬀ’ is deﬁned in a decision in M/s. Sat Pal Gupta & another v. State of Haryana & others,[3] wherein it is held thus: (para 6) “By ‘foodstuﬀs’ is meant food of any kind. The Shorter Oxford English Dictionary (Third Edition) says that, ‘food’ is ‘what one takes into the system to maintain life and growth’. According to Webster’s Third New International Dictionary, ‘food’ means ‘material consisting of carbohydrates, fats, proteins and supplementary substances, that is taken or absorbed into the body of an organism in order to sustain growth, repair and all vital processes and to furnish energy for all activity of the organism; something that nourishes or develops or sustains”. These dictionary meanings of the word ‘food’ are not restricted to what is eaten by human beings for nourishment and sustenance. According to them, what one takes into the system to maintain life and growth or what is taken into the body of an organism in order to sustain growth, is food.” 15. I n Welcome Hotel & others v. State of Andhra Pradesh & others[4] case, the Apex Court held thus: “.. Cl. (a) of Section 2 deﬁnes ‘essential commodity’ to mean any of the items which include … (v) foodstuﬀs, including edible oilseeds and oils. The submission is that the expression ‘foodstuﬀs’ in its etymological and grammatical sense would mean raw foodstuﬀs or appropriately called foodgrains such as wehat, rice, jawar, bazra, maize, etc. but not cooked food which is a perishable commodity. We see no justiﬁcation for giving a restricted meaning to the expression ‘foodstuffs’. If power to control prices of raw foodstuﬀs such as rice or wheat is conferred by Section 3, we see no justiﬁcation for that power not comprehending within its fold the power to regulate prices of articles made out of such raw foodstuffs. Expression such as ‘foodcrops’, ‘spices’ and ‘condiments’ indicates diﬀerent species of articles of food but the general expression ‘foodstuﬀs’ was interpreted to include spices and condiments also.” From the above decisions, it is clear that raw food material come within the meaning of foodstuﬀ. Similarly, the articles derived from the raw food, can be termed as ‘foodstuﬀ’. There cannot be any dispute that rice, after cooking, is meant for human consumption and therefore, it can be stated to be a ‘foodstuff’. Similarly, paddy is a food crop, which is a raw product of rice, and therefore, it can also be termed as ‘food stuﬀ’ within the meaning of Section 2(a)(v) of the EC Act, 1955. Therefore, paddy or rice is an essential commodity. 16. The object and scheme of Levy Order, 1984 is for maintaining the supplies of paddy and rice, for securing its equitable distribution and availability at fair price. The Constitutionality or vires of the Levy Order, 1984 is not under challenge before this Court. Unless and until it is repealed, varied or modiﬁed, the said Order would operate the ﬁeld of maintaining supplies of rice and for equitable distribution and availability at fair price, within the State of Andhra Pradesh. As per the said Levy Order, 1984, ‘paddy’ and ‘rice’ means paddy and rice of the varieties described in Schedule I and Schedule II respectively. 17. Clause ‘3’ of the Levy Order, 1984 deals with regard to miller selling of rice to Food Corporation or State Corporation at procurement price seventy ﬁve percentage of total quantity of certain varieties of rice. Clause ‘4’ deals with regard to selling of rice to Food Corporation/State Corporation by every dealer. Clause ‘6’ deals with delivery of rice by miller or dealer to the Food Corporation. Clause ‘7’ puts restriction on the miller or dealer to sell or agree to sell or otherwise dispose of rice recovered by milling, other than the quantity speciﬁed in clause ‘3’ or ‘4’, except in accordance with the Release Certiﬁcate issued by the Collector in this behalf. Clause ‘8’ deals with issuance of Release Certiﬁcate to every miller and dealer by competent authority. Clause ‘14’ deals with powers of Enforcement Officer to enter, search and seize any stock of rice or paddy or broken rice, from the mill or other premises of the miller or dealer, when he has reason to believe that contravention of any of the provisions under this Order has been committed. Under clause ‘15’, provisions of Cr.P.C. relating to search and seizure shall apply, so far as may be, to searches and seizures under clause ‘14’. Clause ‘16’ deals with maintenance of accounts by miller or dealer. 18. ‘Dealer’ is deﬁned under clause 2(d) of the Levy Order, 1984, which means a person, who is engaged in the business of purchase, store and sale of paddy or rice or both. ‘Enforcement Oﬃcer’ is deﬁned under clause 2(e) of the Levy Order, 1984, which means: “Any oﬃcer of the Revenue Department not below the rank of Deputy Tahsildar or any oﬃcer of the Civil Supplies Department not below the rank of a Food Inspector or Upper Division Cadre appointed as such by the Collector concerned and any oﬃcer authorized in this behalf by the State Government not below the rank of a Sub Inspector of Police (of the Vigilance Cell of the Civil Supplies Department) and any oﬃcer authorized in this behalf by the State Government and not below the rank of a Sub Inspector of Police.” 19. As seen from the deﬁnition of ‘dealer’, it is clear that any person, who is engaged in the business of purchase, store and sale of paddy or rice or both, is a ‘dealer’. Even an agriculturist, who produces paddy for the purpose of sale, can be termed as ‘dealer’ within the meaning of clause 2(d) of the Levy Order, 1984. Similarly, an ‘Enforcement Oﬃcer’ as deﬁned would mean, an oﬃcer not below the rank of the Deputy Tahsildar in Revenue Department, and an oﬃcer, not below the rank of Food Inspector in Civil Supplies Department, and an oﬃcer not below the rank of Sub Inspector of Vigilance Cell of Civil Supplies Department, or any other oﬃcer authorized by the State Government not below the rank of Sub Inspector of Police. So far as the Levy Order, 1984 is on the Statute Book, an Enforcement Oﬃcer can search and seize paddy, rice or broken rice, but the only prerequisite condition is that such oﬃcer has to follow the procedure contemplated under Cr.P.C. relating to the search and seizure. 20. The learned counsel for the petitioners placed strong reliance on the order issued by the Ministry of Consumer Aﬀairs, Food and Public Distribution, Government of India, New Delhi in G.S.R. 104(E), dated 15.2.2002, which may be called as ‘Removal of (Licensing requirements, Stock limits and Movement Restrictions) on Speciﬁed Foodstuﬀs Order, 2002 (for short, ‘the Foodstuffs Order, 2002’). The said order was issued in exercise of powers conferred under Section 3 of the Act, 1955, for securing availability of commodities speciﬁed in the Order at fair prices through out the country. The learned counsel for the petitioners mainly relied upon clause ‘3’ of the Food Stuﬀ Order, 2002, which reads that with the coming into eﬀect of the said Order, any dealer may freely buy, sell, stock, sell, transport, distribute, dispose, acquire, use or consume any quantity of wheat, paddy/rice, coarse grains, sugar, edible oil seeds and edible oils and shall not require a permit or licence therefor under any order issued under the Act, 1955. The aforementioned clause would clearly contemplate that no permit or licence for the essential commodities is required for the purposes as mentioned therein. The said clause in its sweep in regard to the orders issued by the State Governments or Central Government, under the Act, 1955, totally eliminates the permit or licence system in respect of the essential commodities mentioned therein for the purpose of buying, stocking, selling, transporting, distributing, etc. But, this provision does not take away the various other aspects under the Levy Order, 1984, except to the limited extent of taking away the permit or licence system in transporting or storage of the essential commodities mentioned therein. Foodstuﬀ Order, 2002 does not take away, expressly or by necessary implication, the powers of the Enforcement Officer as depicted under the Levy Order, 2002. 21. Clause 5 of the Foodstuﬀs Order, 2002, contemplates that issue of any orders by the State Governments for regulating licences, permit or otherwise, the storage, transport, distribution, disposal, acquisition, use or consumption of any of the commodities speciﬁed in clause 3, shall require the prior concurrence of the Central Government. By virtue of the said provision, a person cannot be prosecuted under the Act, 1955, or violation of any Control Order for not taking a licence or permit for transporting or storing, etc. of paddy and rice. But, that does not mean that a dealer can carry on business of illegal possession, storage or transport of rice. When a dealer is authorized to do business legally, then only the permit or licence for carrying on business of rice or paddy is not required with effect from 15.2.2002. Clause ‘6’ of the Foodstuﬀs Order, 2002