[2009] 1 S.C.R. 762

MIS PRECIOUS OIL CORPORATION AND ORS

ST ATE OF ASSAM (Criminal Appeal No. 212 of 2008)

FEBRUARY 5, 2009

[DR. ARIJIT PASAYAT, P. SATHASIVAM AND

AFTAB ALAM, JJ.]

LUBRICATING OIL AND GREASES (PROCESS/NG,

C SUPPLY AND DISTRIBUTION REGULATION) ORDER,

1987:

Clauses 3,4 and 5(3) - Accused found carrying on business of processing lubricating oil without licence, keeping r

0 huge quantity thereof and sample taken found to be adulterated - Accused not maintaining proper books of .... account - Sentence of one month's simple imprisonment and fine of Rs. 3, 0001imposed on each of the accused uls 7(1)(a)(i) of Essential Commodities Act, 1955, affirmed by E High Court - Conviction and sentence upheld - In such whitecollar offences accused cannot be let off on probation - Essential Commodities Act, 1955 - s. 7(1)(a)(i} - Probation of Offenders Act, 1958.

Appellant no.1 concern, its proprietor A-2 and F employee A-3 were prosecuted for commission of offences punishable u/s 7(1 )(a)(i) of the Essential Commodities Act, 1955. The prosecution case was that when the Inspector of Food and Civil Supplies inspected the premises of the appellant concern, he found that G though the accused were in the business for over six months, they did not possess the necessary licence as required under the Lubricating Oil and Greases (Processing, Supply and Distribution Regulation) Order, 1987; that on an analysis of the sample of the lubricating

H 762

ASSAM

oil taken from th"; i premises of the appellant concern, the A same was found to be adulterated; though a large quantity of lubricating oil was found stored in the premises of the concern, proper books of account were not found to have been maintained by it; and, thus, the accused were found to have violated Clauses 3, 4, and B 5(5) of the Order. The trial court convicted the accused of the offences charged and sentenced them to simple imprisonment for one month and to pay a fine of Rs. 3000/- each. The High Court affirmed the conviction and the sentence. c

In the appeal filed by the accused, it was contended for the appellants that there was no mens rea and no sale was involved and, therefore, the appellants could not be .... said to have violated provisions of the 1987 Order. It was alternatively pleaded that, in any event, the appellants D ~-

were entitled to benefit of the Probation of Offenders Act, 1958.

Dismissing the appeal, the Court

HELD: 1.1. Although the accused took the plea that E there was no sale, but there was display board showing stocks and prices of the articles. This itself was indicative of the fact that sale transactions were being carried on.

The allegations against the accused, inter-alia, were that no licence was obtained, proper books of account were F not maintained and adulterated lubricating oil in a large quantity was stored. The trial court found the appellants guilty and the High Court rightly affirmed the conviction and sentence. [Para 5, 11 and 12] [766-G; 768-A, E-F; 767-

G-H] G

~' lshar Das v. State of Punjab 1973 (2) SCC 65 and Pyarali K. Tejani v. Ma.hadeo Ramchandra Dange and Ors. 1974 (1) sec 167, relied on.

2. The plea relating to Probation of Offenders Act, H

A 1958 raised by the accused was rightly rejected by the High Court holding that the offence alleged was a whitecollar offence. Application of the probation principles is negatived by the imperatives of social defence and the improbabilities of moral proselytisation. No chances can B be taken by society with a man whose anti-social

operations, disguised as a respectable trade, imperil numerous innocents. He is a security risk. Besides, the white-collar criminals committing economic offences are unlikely to be dissuaded by the gentle probationary C process. In the circumstances, the accused cannot be let

off on probation.[Para 5, 14 and 15] [766-H; 769-D-E; 767-

A; 770-C]

Case Law Reference:

1913 (2) sec 65

1974 (1) sec 167

relied on

relied on

para 13

para 16

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 212 of 2009.

From the final Judgment and Order dated 14.9.2007 of the Gauhati High Court in Crl. Appeal No. 28 of 2002.

Ashok K. Srivastava and lndrajeet Das for the Appellants.

F Avijit Roy (for M/s. Corporate Law Group) for the Respondent.

The Judgment of the Court was delivered by

DR. ARIJIT PASAYAT, J. 1. Leave granted.

2. Challenge in this appeal is to the judgment of a learned Single Judge of the Guwahati High Court upholding the conviction of the appellants for offence punishable under Section 7(1 )(a)(i) of the Essential Commodities Act, 1955 ( in short the 'Act'). The allegation was that the appelldnt had H violated Clause 3 of the Lubricating Oil and Greases

(Processing, Supply and Distribution Regulation) Order, 1987 A (in short the 'Control Order'). Simple imprisonment of one month and fine of Rs.3,000/- each with default stipulation was awarded to the accused persons.

3. The prosecution against the accused-appellants was 8 initiated on the basis of an offence report submitted by Sir Dhiraj Choudhury, Inspector of Food and Civil Supplies, Assam, Guwahati PW-3 alleging inter-alia that on 1-10-1996 he along with two other Inspectors of Food and Civil Supplies Department visited the processing industry of lubricating oil C belonging to the appellant no.2, situated near Lankeswar, Jalukbari, Guwahati and on such inspection, it was found that the concern did not possess necessary license as required under the Control Oraer and also proper books of account etc as required under the law were not produced. The inspecting team found that no license could be produced for the D processing unit and thereby violated Clause 3 of the Control Order. The accused had failed to obtain proper license as required under law within 6 months of commencement of processing and thereby has violated clause 5(5) of the Control Order. The inspecting team collected and sent the samples of E lubricating oil for necessary analysis to thee approved laboratory. After such analysis, it was found that the said lubricating oil could not be considered as Automotive Lubricating Oil, thereby violating Clause 4 of the Control Order attracting punishment for sale of adulterated lubricating oil. The F team seized from the appellants re-refined lubricating oil in 380 sealed tins of 1 litre each, 1,210 litres in 6 barrels containing 205 litres each, 19,475 litres of used lubricating oil in 95 barrels containing 205 litres in each, 20 kgs. of grease in one loose barrel, 920 numbers of empty tins of 1 litre capacity for TOPOL G 20 W/40, one book of accounts, an extract copy of the Display Board of Stock and Prices displayed in the office premises, 3 litres of TOPOL, 20 W/46 contained in 3 sealed tins. The inspector having found prima facie violation of Clauses 3, 4 and 5(5) of the Control Order punishable under Section 7 of the Act, H

A submitted the offence report against the appellants in the Court

of the learned Sessions Judge, Kamrup for necessary prosecution under the law. The accused-appellant no.1 is the concern itself and the accused No.2 is the Proprietor of the concern and accused no.3 is an employee of the concern. On B the basis of the aforesaid offence report, Sp1. Case No.5 of 97 was registered in the Court of the learned Sessions Judge, Guwahati.

4. Summons having been served, the appellants appeared C in the case and vide order dated 19.8.1997, the learned trial judge explained the offences to them about allegations of contravention of Clauses 3, 4 and 5(5) of the Control Order punishable under Section 7(1 )(a)(i) of the Act.

5. Accused persons pleaded not guilty and therefore trial D was held. Three witnesses were examined to further the prosecution version. Appellant No.2 examined himself as DW-

1. The stand of the appellants was that appellant No.2 the proprietor of the concern had applied for issuance of license under the Control Order to the competent authority. Since no E action was taken even though all formalities were complied with, the High Court was approached by filing Civil Rule 2185 of 1997 for necessary directions to issue the license. The High Court by its order dated 20.5.1997 disposed of the writ petition directing the appellant to consider the case of the writ F petitioners in the matter of issuance of license for processing lubricating oil and grease. It was further submitted that Inspector of Food and Civil Supplies was not authorized to conduct the inspection and/or to submit the offence report in terms of Clause 8 of the Control Order. Strong reliance was G placed on a decision of this Court in Murari/al Jhunjhunwala

v. State ofBiharand Ors. (AIR 1991SC515). The trial Court found the appellants guilty and the High Court affirmed the same. The High Court noted that different stands were taken before it. A plea relating to Probation of Offenders Act, 1958 H (in short the 'Probation Act') was rejected holding that the

' I

offence alleged was a white-collar offence.

6. Stand of the appellants in the present appeal is that no mens rea was involved. There was no sale involved and, therefore, Clause 4 of the Control Order does not apply. Even though the trial Court held that Clause 4 was not violated, it 8 went wrong in holding that clause 3 was violated. Though the trial Court appreciated the bona tides of the appellants, yet the -+ sentence of one month was imposed.

7. Learned counsel for the respondent on the other hand

J supported the judgment.

8. Clauses 3 of the Control Order read as follows:

"Restriction on Processing and Storage of Lubricating Oils and Greases-No person shall carry on the 0 business of a processor except under and in accordance with the terms and conditions of a valid licence granted to him under this order."

9. A bare reading of Clause 3 shows that no person is authorized to carry on business of a processor except and in accordance with the terms and conditions of a valid license granted to him under the order. The evidence of PW-3 who led the inspecting team clearly established that processing was being undertaken.

10. Clause 5 deals with application for grant or renewal of a licence. Clause 5(5) provided that all existing processors shall obtain licence under the Control Order within 6 months of the commencement thereof. Clause 6 (5) provides for making

an application for renewal of licence before three months of its G expiry. The Control Order has been promulgated under Section 3 of the Act.

11. At the time of inspection, large quantity of stocks and/ or products was stored. Though the allegations inter-alia were that no licence was obtained, proper books of accounts were H

A not maintained and adulterated lubricating oil was stored. The .)r following articles were seized during inspection:

(1) Re-refined lubricating oil (TOPOL 20-40) 380 sealed tins of one litre each, Grade-II.

(2) Re-refined lubricating oil 1, 210 litre in six barrel containing 205 litres in each. ,.

(3) 19,475 litres of used lubricating oil in 95f barrels +-

containing 205 litres in each. c

(4) Greases 20 Kgs. in one loose barrel. ..

(5) 920 numbers of empty tins of one litre capacity for

TOPOL 20W/40.

(6) One book of accounts having incomplete accounts of finished products. + -

..__

(7) An extract copy of the display board of stocks and -- prices displayed in the office premises of the firm.

(8) 3 litres of TOPOL-20W/40 contained in 3 sealed tins of one litre each (for sample)

12. Although the accused persons took the plea that there was no sale, but interestingly there was display board showing

F stocks and prices of the articles. This itself was indicative of the fact that sale transactions were being carried on. The trial Court and the High Court had rightly decided that there has been contravention of Clause 3 of the Control Order. In that view of the matter the conclusions cannot be faulted. Coming to the

i G question whether the Probation Act can be applied, this Court had an occasion to with the same.

13. The rehabilatory purpose of the Probation Act is pervasive enough technically to take within its wings an offence even under the Act. The decision in lshar Das v. State of H Punjab (1973 (2) SCC 65) is authority for this position.

Certainly, "its beneficial provisions should receive wide A interpretation and should not be read in a restricted sense". But in the very same decision this Court indicated one serious limitation:

"Adulteration of food is a menace to public health. The

Prevention of Food Adulteration Act has been enacted with the aim of eradicating that anti-social evil and for ensuring purity in the articles of food. In view of the above object of the Act and the intention of the Legislature as revealed by

the fact that a minimum sentence of imprisonment for a C period of six months and a fine of rupees one thousand has been prescribed, the courts should not lightly resort to the pro'visions of the Probation of Offenders Act in the case of persons above 21 years of age found guilty of offences under the Prevention of Food Adulteration Act .... " D

14. The kindly application of the probation principles is negatived by the imperatives of social defence and the improbabilities of moral proselytisation. No chances can be taken by society with a man whose anti-social operations, disguised as a respectable trade, imperil numerous innocents.

E He is a security risk. Secondly, these economic offences committed by white-collar criminals are unlikely to be dissuaded by the gentle probationary process. Neither casual provocation

;>( nor motive against particular persons but planned profit-making from numbers of consumers furnishes the incentive - not easily F humanised by the therapeutic probationary measure. It is not without significance that the 47th report of the Law Commission of India has recommended the exclusion of the Act to social and economic offences by suitable amendments. It observed:

"We appreciate that the suggested amendment would be G in apparent conflict with current trends in sentencing. But ultimately, the justification of all sentencing is the protection of society. There are occasions when an offender is so anti-social that his immediate and sometimes prolonged confinement is the best assurance of society's protection.

The consideration of rehabilitation has to give way, because of the paramount need for the protection of society. We are, therefore, recommending suitable amendment in all the Acts, to exclude probation in the above cases." (p. 85).

15. In the current Indian conditions the probation movement has not yet attained sufficient strength to correct these intractables. Maybe, under more developed conditions a different approach may have to be made. For the present we cannot accede to the invitation to let off the accused on C probation.

16. The aforesaid position was also highlighted in Pyarali K. Tejani v. Mahadeo Ramchandra Dange and Ors. (1974 (1) sec 167).

17. Above being the position, there is no merit in this appeal which is accordingly dismissed.

RP.

Appeal dismissed.