Case: State Of Karnataka Vs. Krishna Bhima Walvakar &amp; Anr

On 6-6-1977 at about 11-30 a.m., the Sub-Inspector of Police, Hukeri, intercepted a truck bearing registration No. MHL 2675 laden with 40 barrels of groundnut oil weighing 7, 200 kg. which were being transported from Kampli to Nippani without furnishing a declaration Form II to Tahsildar, Hospet, as required under sub-clauses (2)(a) and (b) of Clause 3 of the Order. The Sub-Inspector of Police, after seizing the vehicle and the oil registered a case and thereafter reported to the matter to the Deputy Commission Belgaum. He forwarded the report together with the seized vehicle and the oil to the Deputy Commissioner, Belgaum for taking action under S. 6-A of the Essential Commodities Act, 1955 (hereinafter called the Act). The truck was released to the owner on his executing an indemnity bond, and the groundnut oil released to the Respondent 4, Gopinath Manikchand Dharia, Proprietor, Messers Anant Oil Mills, Nippani on his furnishing a bank guarantee for Rs. 70, 000/- towards the price thereof. The Deputy Commissioner gave notices as required under S. 6-B of the Act to the parties concerned. During the enquiry, the respondent No. 4 produced before him copy of the invoice dated 5-6-1977 issued by Sri Satyanarayana Oil Mills, Bellary Road, Kampli, showing the sale of 7, 200 Kg. of groundnut oil to Messers Anant Oil Mills, Nippani. He also produced a copy of the declaration in Form No. 39 prescribed under the Mysore Sales Tax Act, 1957. The Deputy Commissioner, after affording the parties an opportunity of hearing, held that the respondents had contravened the provisions of sub-clauses (2)(a) and (b) of Cl. 3 of the order and accordingly confiscated 40 barels of groundnut oil and the truck bearing registration No. MHL 26753. The respondents preferred an appeal under S. 6-C of the Act before the II Additional Sessions Judge, Belgaum who was the Appellate Authority. But he, by his well-considered judgment, confirmed the order of confiscation passed by the Deputy Commissioner under S. 6-A of the Act. Thereupon, the respondent preferred a revision before the High Court and a learned single Judge has, by his judgment, set aside the order of the Appellate Authority as well as the Deputy Commissioner on the ground that there was substantial compliance of the requirements under sub-clauses (2)(a) and (b) of Clause 3 of the Order inasmuch as the respondents had sent the prescribed declaration in Form II to the Tahsildar, Hospet on 7-6-1977. According to the High Court, no such declaration could be furnished on 5-6-1977 as it was a holiday being Sunday, Upon that view, the High Court set aside the order of confiscation passed by the Deputy Commissioner under S. 6-A of the Act and directed restoration of all the properties to the persons concerned. Hence this appeal by special leave

Court's reasoning:
9. As to point No. (1), It is axiomatic that the power of confiscation of an essential commodity seized for contravention of an order issued under S. 3, is a discretionary power. The use of the word may, however, does not necessarily meant that the Deputy Commissioner cannot in the given circumstances of a particular case, direct the confiscation of the entire consignment of an essential commodity in relation to which there is a contravention of any of the orders issued under S. 3 of the Act. It all depends on the facts and circumstances of each case whether the confiscation should be an of entire consignment or part of it, depending upon the nature of the contravention. The power conferred on the Deputy Commissioner under S. 6-A of the Act by the use of the word may, makes the power coupled with a public duty. Some times it may be in the public interest to direct confiscation of the entire consignment of an essential commodity when there is deliberate contravention when there is deliberate contravention of the provisions of an order issued under S. 3 of the Act10. In the facts and circumstances of the present case, it cannot be doubted, for a moment that the Deputy Commissioner acted in the public interest to direct confiscation of the entire consignment of the groundnut oil, as it was being transported from one place to another without furnishing the requisite declaration in Form II. All systems of control, supply and distribution of essential commodities would fail unless the various control orders issued by the Central Government under S. 3 of the Act in relation thereto are strictly observed. These control orders are issued under S. 3 when the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of essential commodities or for securing equitable distribution and availability at fair prices etc. Sub-clauses (2)(a) and (b) of Clause 3 of the Order enjoin that the stock-holder shall make a declaration in Form II in relation to movement of edible oil, edible oil seeds and oil cakes, to the Tahsildar incharge of the taluka of the place from where such edible oil, edible oil seeds and oil cakes are transported before such edible oil, edible oil seeds or oil cakes leave the place. The whole purpose is to maintain a control over the stock of such essential commodities at a place with a view to secure their equitable distribution and availability at fair prices. The requirements of sub-cls. (2)(a) and (b) of Clause 3 of the Order are clearly mandatory14. As to point No. (2), there is no warrant for the submission that there was nothing to show that the groundnut oil had been seized and, therefore, the power of confiscation was not exercisable by the Deputy Commissioner under section 6-A of the Act. It is manifest from the order of the Deputy Commissioner that there was a contravention of sub-clauses (2)(a) and (b) of Clause 3 of the Order and that the Sub-Inspector of Police seized both the truck and the consignment of groundnut oil, and forwarded the same to him along with his report for taking action under S. 6-A of the Act. The contention of the Public Prosecutor before the Deputy Commissioner was that the seized truck and the groundnut oil were liable to be confiscated. The very fact that the seized groundnut oil was released to the respondent No. 4 on his furnishing a bank guarantee for Rs. 70, 000/- for the price of the consignment of the groundnut oil clearly shows that it had been seized. It is, therefore, idle to contend that the power of confiscation under S. 6-A of the Act was not exercisable for want of seizure15. As to point No. (3), from the narration of facts above, it is amply clear that there was breach of the requirements of S. 6-B of the Act of the part of the Deputy Commissioner. The record shows that the Deputy Commissioner, on receipt of the report of the Sub-Insector of Police mentioning the fact of contravention of sub-clauses (2)(a) and (b) of Clause 3 of the Order and forwarding the seized truck and the consignment of groundnut oil, issued notice to the parties concerned under S. 6-B of the Act to show cause against their confiscation. In response to the notice, the respondent No. 4 appeared before the Deputy Commissioner and filed a copy of the invoice together with a copy of the declaration in Form 39 under the Mysore Sales Tax Act, 1957. The Deputy Commissioner sent for the declaration in Form II as furnished to the Tahsildar which did not bear a date. He also gave hearing to the parties. That being so, the validity of the or of confiscation under S. 6-C cannot be challenged on the ground that the requirements of S. 6-B had not been fulfilled