Case: Nathmal Vs. The State of Rajasthan &amp; Others

. From June 29, 1974 to July 1, 1974 shop and other premises of the petitioners were searched and large quantities of certain commodities were recovered. In the opinion of the District Magistrate it became necessary to detain the two brother under the Maintenance of Internal Security Act. He, therefore, passed separate orders against them but in identical terms on July 8, 1974 under subclause (iii) of clause (a) of(1) of Section 3. The grounds served are also identical and are as follows :1. You are a partner of the firm M/s. Ramesh Kumar Bhagwandas in town Sikar, and you are dealing in business of essential and useful commodities for life like soaps, tea, blades, battery cells and matches. From the date June 29, 1974 to July 1, 1974, district police, Sikar, raided and look search of your house, shop and godowns situated at Sikar and from your possession recovered 94, 981 matchsticks (sic boxes), 1, 724 bathing soap cakes, 10, 645 cloth washing soap cakes, 4, 815 cloth washing soap bars, 10, 745 blades and 2, 465 battery cells. You had no displayed price list and stock position on your KAROBAR (Business) which was necessary to be displayed under Essential Commodities Act, 1955 read with the Rajasthan (Display of Prices of Essential Commodities) Order, 1966.2. On June 29 and 30, 1974 the Drug Inspector took search of your godown situated at Sikar and recovered therefrommedicines i.e. 1301 tablets of Novalgin, 980 tablets of Seridon, 620 tablets of Avedan, 900 tablets of Analzin, 2000 tablets of Anandkar; for possessing and selling which you had not obtained a licence. You had unlawfully hoarded thesemedicines which are useful for life, for profiteering in view the scarcity of these in the market.3. You had hoarded unlawfully these essential articles useful for life in such large quantity with the intention of profiteering by selling them in the black market, so that, you may create an artificial scarcity with the object of charging any price you like from the customers. Because there is scarcity of these articles in the market at this time and the public is feeling difficulty in procuring them, and as such you have made their availability difficult for the public by hoarding them for your selfish and unlawful profiteering.4. In this way you have created a great obstruction in the supply of essential articles useful life to the public. Hence for the purpose of preventing you from carrying on such activities in future and for the purpose of facilitating the availability of these essential to detain you and therefore you have been detained under Section 3(1)a)(iii) of the Maintenance of Internal Security Act, 1971. By this you are informed of the grounds of detention as required by Section 8 of the said Act.3. The case of the petitioners is that the two brothers along with their father migrated to Sikar from Pakistan as refugees. They started business under the name and style of M/s. Ramesh Kumar Bhagwan Das. Their father Gopal Das started the business of selling carried on in the name of the aforesaid firm on or from the month of January, 1970. They have been carrying on the business of general merchandise. According to the petitioners case the business was carried on in the wooden cabins (thadies) in Jatia Bazar, Sikar, where several refugees from Pakistan started carrying on their business in wooden thadies. It is claimed that petitioner Bhagwandas was the President of the Association of Thadi Merchants. It is stated that the Administrator, Municipal Council, Sikar without giving any notice to any of the holders of the shops in thadies with the help of a large number of employees of the Municipal Council, police constable and official removed all the thadies by force on June 28, 1974. The petitioners show was removed in such a brutal and ruthless manner that all the articles of the merchandise in the shop were scattered here and there in the bazar. They assert that they had to collect the same and shift them to their godown, house and a shop which is said to be in occupation of their father. Theunder the leadership of one of the petitioners carried on an agitation against the demolition of the thadies. Meetings were held, deputations were taken to the officials and the shopkeepers went on a strike from June 29,se circumstances as also on some other grounds the petitioners challenged their detention.

Court's reasoning:
8. As regards recovery of many drugs from the petitioners premises as mentioned in ground No. 2 it was presumed that they were kept for the purpose of sale without a licence in violation of the Drugs and Cosmetics Act, 1940. In neither of the ground, however, it was alleged that the petitioners had refused to sell any of the articles to any of the customers. Even assuming that the violation of the law coupled with recoveries of large quantities of essential commodities and medicines could lead to the inference that the petitioners intended to hold them for profiteering yet one thing is plain. On the special facts and in the circumstances of this case we find no clear averment that the petitioners shop was open for transacting any business. In the background of the event of demolition of thadies followed by deputation to the District Magistrate it is quite legitimate to assume that the petitioners case that there was a strike on June 29, 1974, is correct. We do not accept their case that shop below Dr. Taks residence was not theirs but of their father. But in absence of a specific denial in the further affidavit filed on behalf of the District Magistrate in reply to the petitioners rejoinder we believe that their shop was not open for transacting any business. Whether the petitioners were, otherwise, justified in closing their shop or not surely they were not expected to display the price and stock list in the shop when as a protest to the demolition of their thadi they had gone on strike and had refused to transact any business in the shop. The search of the petitioners premises was in such a close juzta position of the demolition of their thadi that the whole conspectus of events does not leave a happy impression in our minds as to the justifiability and legality of the detention orders made against the petitioners. It appears to us that the power of detention was not exercised in this case in a fair, proper and legal manner. On the particular facts of this case, even though the satisfaction of the detaining authority was to be subjective under the law, it seems to us that extraneous factors introduced an infirmity which can justify the Courts interference with the order ofwill be noticed from the facts of that case that grounds in effect stated that the petitioner had hoarded and concealed the essential commodities in his business premises as also in his residential house and that he did not display the stock position in his business premises and further when the customers wanted to purchase soaps and matchboxes he refused to sell them saying that he had no stock. In such a situation it was alleged that the petitioner had hoarded the stock with the intention of selling them in blackmarket with a view to make undue profit. It is no doubt true that in paragraph 6 of the judgment it is said that from the mere fact that the petitioner did not display the stock of matchboxes and soaps in the business premises the only possible conclusion was that he was hoarding the stock for the purpose of selling it in blackmarket and thus make undue profit. But the said dictum had to be appreciated in the background of the entire facts of Kamla Prasads case (supra). The refusal to sell to the customers clearly showed that even though the business was being carried on in the premises the stock position was not displayed. On the other hand, on the fact of this case, we are not satisfied that there was failure on the part of the petitioners to display the price and stock list in their shop or that it could lead to the conclusion that their intention necessary was to hoard the good and do any blackmarketing or profiteering. No instance of any sale at blackmarket rates was given.