Kishori Lal Bihani v. Additional Collector And District Magistrate (Ra) Kanpur

Satish Chandra, J.:— Sec. 6-A of the Essential Commodities Act, 1955, authorises the Collector to order the confiscation of foodgrains, edible oil seeds or edible oils in pursuance of an order made under Sec. 3 of that Act if he is satisfied that there has been a contravention of such order. For the same contravention the dealer is liable to be punished under Sec. 7 of the Essential Commodities Act to the punishments mentioned therein. Under clause (b) of Sec. 7(1) any property in respect of which the order has been contravened or such part thereof as the Court may deem fit shall be forfeited to the Government. Under the proviso the Court can refrain from directing the forfeiture of the seized property if it is of the opinion that it is unnecessary to direct it.

2. The question is whether the contravention spoken of in Sec. 6-A has the same legal incidence and consequences and has the same nature and character as the contravention made punishable by Sec. 7. In Nathu Lal v. State of Madhya Pradesh A.I.R 1966 S.C 43. the Supreme Court held that mens rea was an essential ingredient of an offence under Sec. 7 of the Essential Commodities Act. An intentional contravention of an order made under Sec. 3 of that Act has to be established. If it is proved that the breach of an order under Sec. 3 was under a bona fide belief that the dealer could legally store the foodgrains seized, without infringing any order there would be no “contravention” under Sec. 7 of the Act.

3. In my opinion the contravention attracting the provisions of Sec. 6-A is of the same character. It is to be seen that the same transaction of seizure of food-grains on the ground that an order under Sec. 3 has been violated attracts liability to forfeiture under Sec. 6-A as well as punishment under Sec. 7. Sec. 6-A as well as Sec. 7 expressly use the same word “contravention” on the existence of which the power to take action arises. Under Sec. 6-A the Collector has to be satisfied that there has been a contravention of the order. Under Sec. 7 the Court has to find contravention of the same order. The two provisions are in pari materia. They should bear the same significance and legal incidents. Thus for satisfying himself that the provisions of an order under Sec. 3 have been contravened, the Collector would be entitled to take into consideration the question whether there was an intentional contravention of the order, or whether the conduct of the dealer was bona fide, under the belief that the was acting legally. These considerations would not be outside the purview of the satisfaction of the Collector that there has been a contravention of the order.

4. This view is strengthened by the scheme of the Act. Under Sec. 7 after the Court finds that there has been a contravention, the property in relation to which there has been a contravention is to stand forfeited to the Government, subject to the Court directing to the contrary. The Court can for reason to be recorded refrain from directing the forfeiture if in its opinion it is not necessary to do so. So, in a case where initially an order of confiscation has been passed under Sec. 6-A, and the dealer is subsequently prosecuted, the Court is entitled to look into the whole matter and to see whether there were reasons for not directing so. If it finds that it is not necessary to order for forfeiture of the goods, it can direct that the goods need not be forfeited. In that case the initial order of the Collector would stand modified or abrogated. Thus the order under Sec. 6-A is provisional, that is they are subject to the orders passed by the Court. Sec 7 does not require that the contravention, for which the dealer was liable to be punished under it, was something different in nature and character than the contravention for which an order of forfeiture is to be passed by the Collector in the first instance u/Sec. 6-A. That shows that the contravention which entails forfeiture is of the same kind as that for which a dealer can be punished. I am, therefore, of the opinion that the question whether there was mens rea was relevant at the stage of passing an order of forfeiture under Sec. 6-A.

5. In this case the U.P Food-grains (Restriction on Hoarding) order, 1966, which came into force on June 30, 1966, provided that a licensed dealer shall not have in his possession at any time, a quantity of any one of the mentioned food-grains exceeding 1,000 quintals or of all kinds of food-grains exceeding 2,500 quintals. This order was amended by the U.P Food-grains (Restriction or Hoarding) (Amendment) Order, 1967, which came into force on 1st February, 1967. Under this amendment for the words “1,000 quintals and 2,500 quintals” the words “250 quintals and 1,000 quintals” were substituted with the result that a dealer could not keep more than 250 quintals of any particular variety of food-grain. On 16th March, 1967, the authorities conducted a raid on the petitioner's premises and seized 539.26 quintals of paddy. Subsequently on 7th July, 1967, a notice was issued to the petitioner to show cause why the seized quantity of paddy be not confiscated. Ultimately on 29th July, 1967 the Additional Collector passed an order confiscating 289.26 quintals of paddy which was found with the petitioner in excess of the permissible maximum of 250 quintals. The Additional Collector held that he was not empowered to lake into consideration the bona fides or otherwise of the conduct of the petitioner. He had only to see whether there was any violation of the provisions of law.

6. The petitioner went up in appeal under Sec. 6-C to the Commissioner. The Commissioner held that it was true that there was no guilty intention on the part of the petitioner because the amendments introduced on 1st February, 1967, had not come to the notice of the officials as well as the public until much later, but the question of bona fides may have bearing in criminal proceedings and would be liable to be considered there if any criminal prosecution is launched against the petitioner. At this stage of confiscation these considerations are out of place. The Commissioner further found that the petitioner was sending regular reports about his stock to the Marketing Inspector even though they were in excess of the maximum prescribed by the amendment. That shows that he had no intention of committing a breach of the order. On this finding, it could not in my opinion, be said that the petitioner had contravened the order. No liability of confiscation accordingly arose.

7. As explained above the officials below misdirected themselves in law in taking the view that the consideration of mens rea or bona fides were irrelevant while passing an order under Sec. 6-A confiscating the seized goods.

8. The petition, therefore, succeeds and is allowed. The impugned order confiscating the goods seized from the petitioner's premises on 16th March, 1967, are set aside. Under the circumstances, the parties will bear their own costs.

Petition allowed.