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PETITIONER: STATE OF KARNATAKA

       Vs.

RESPONDENT: KRISHNA BHIMA WALVAKAR & ANR.

DATE OF JUDGMENT07/05/1981

BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) REDDY, O. CHINNAPPA (J) ISLAM, BAHARUL (J)

CITATION:  1981 AIR 1468            1981 SCR  (3) 829  1981 SCC  (3) 301        1981 SCALE  (1)913

ACT:      Essential Commodities  Act, 1957-Sections  6A, 6B & 6C- Scope of-Consignment  moved on  a Sunday-Whether  exonerates the consignee  from making  the requisite declaration before the specified authority.      Interpretation-Power coupled  with public  duty-Whether use of word ’may’ in an order makes the power discretionary.

HEADNOTE:      Clause 3(2)(a)  of the Edible oil, Edible oil Seeds and oil Cakes  (Declaration of  Stocks) order, 1976 enjoins that before a  consignment of  oil leaves  a place a stock holder who transports  edible-oils shall make a declaration in Form II to  the specified  officer of the place (in this case the Tehsildar of  the) Taluk  from where  such edible  oils  are transported. Clause  (b) enjoins  that the declaration shall be shown  at every check post on the route immediately after arrival there.      A police  officer seized  in transit a truck carrying a large quantity  of ground.  nut oil  on the  ground that the requisite declaration  in Form  II had not been furnished to the Tehsildar of the place of despatch of the consignment.      The Deputy  Commissioner, after issuing a notice to the respondent under  section 6B  of the  Essential  Commodities Act, 1955,  released the truck and the consignment on taking from him  an indemnity bond and a bank guarantee towards the price of  oil. The  respondent however  produced before  the Deputy Commissioner  a copy  of the  invoice issued  by  the seller and  a declaration  in Form  39 prescribed  under the Mysore Sales Tax Act, 1957.      The Deputy  Commissioner ordered  confiscation  of  the truck and  the oil  on the  view  that  the  respondent  had contravened the provisions of clause 3(2) (a) and (b) of the order. On appeal the Sessions Judge affirmed this order.      A single  Judge of the High Court in revision held that there was  no contravention  of the requirement of the order because the  day on  which the goods were despatched being a Sunday, it  was impossible  for the respondent to deliver on that day  to Tehsildar  the declaration  in Form II and that the law would not expect a citizen to do the impossible.      The respondent  in the  State’s appeal  to  this  Court

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contended  that:   (1)  the   confiscation  of   the  entire consignment was  arbitrary and  excessive in that the use of the word  "may" in  section 6A  made exercise  of that power discretionary; (2)  since there was nothing to show that the goods had been seized, the power of 830 confiscation  under   section  6A   had  not  been  properly exercised and (3) the order of confiscation was a nullity in that the  Deputy Commissioner  had not  issued a proper show cause notice under section 6B of the Act.      Allowing the State’s appeal ^      HELD: 1  (a) The word "may" used in section 6A does not mean  that   the  Deputy   Commissioner  could   not   order confiscation of  the  entire  consignment  of  an  essential commodity where  he found contravention of any of the orders issued under  section 3  of the  Act. The power conferred on the Deputy  Commissioner under section 6A is a power coupled with public duty. [834 H]      (b) In directing confiscation of the entire consignment which  was   being  transported   without   furnishing   the declaration in  Form II  the Deputy  Commissioner  acted  in public interest.  The whole purpose of the control order was to maintain  control over the stock of essential commodities at  a   place  with  a  view  to  securing  their  equitable distribution  and   availability   at   fair   prices.   The requirements of clause 3 (2) (a) and (b) are mandatory. [835 C-D]      (c) "Stock holder" as defined in the order includes the purchaser of oil who is in possession or control thereof. By a legal  fiction the  explanation treats  the owner  to have control over  the oil  in transit.  Respondent 4  being  the purchaser fell  within the  definition  of  "stock  holder". Moreover there  was nothing  to show  that the consignor had reserved the  jus disponendi by the terms of the contract or appropriation and,  therefore, the  property  in  the  goods passed to  respondent 4  (purchaser) on delivery to a common carrier under section 25 of the Sale of Goods Act 1930. [836 A-B]      (d) The  Deputy Commissioner  was right in holding that the declaration  in Form  II was required to be filed before the specified officer before the goods left a place and that the declaration  should be  produced at  every check post in transit  as   required  by   law.  The   respondent   having contravened the  provisions of  clause 3  (2) (a) and (b) of the order  the truck and the consignment of oil were rightly confiscated. [837 A-C]      (e) It  is not  correct to  say that  since the date of despatch of  the goods  was a  Sunday there  was no  need to comply with  the requirements  of clause  3 of the order. If the consignment  had to  be  despatched  on  Sunday  nothing prevented the  parties from furnishing the declaration a day earlier. In  a transaction  of such  a magnitude  a duty was cast on  the party  to comply  with the  requirements of the order before the consignment left the place. [834 A-B]      2. The  very fact  that the  seized groundnut  oil  was released only  after the  respondent furnished the requisite Bank guarantee  clearly showed that the consignment had been seized. Therefore  power under section 6A had been correctly exercised. [837 E-F]      3. There  was no  breach of  the requirement of section 6B. In  response to  the show  cause notice  issued  by  the Deputy Commissioner  respondent 4  appeared before  him  and filed a  copy of  the invoice  and declaration in Form 39 of the Mysore  Sales Tax  Act. The  Deputy Commissioner  gave a

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hearing to  the parties.  That being  so,  validity  of  the confiscation under  section 6C could not be challenged. [837 G-H] 831

JUDGMENT:      CRIMINAL APPELLATE  JURISDICTION: Criminal  Appeal  No. 669 of 1980.      Appeal by  special leave  from the  judgment and  order dated the  2nd February, 1979 of the Karnataka High Court in Criminal Revision Petition No. 320 of 1978.      B.R.L. Iyengar and N. Nettar for the Appellant.      A.L. Wahi and K.C. Dua for Respondent Nos. 1-3.      Ram Jethmalani  and Miss Rani Jethmalani for Respondent No. 4.      The Judgment of the Court was delivered by      SEN, J.  In this  appeal, by  special leave,  from  the judgment of the Karnataka High Court, the only issue between the parties is as to the legality and propriety of the order of confiscation  passed by the Deputy Commissioner, Belgaum, of a  consignment of  7,200 kg.  of groundnut oil seized for contravention of  sub-cls. (2)  (a) and  (b) of cl. 3 of the edible oil,  edible oil  Seeds and oil Cakes (Declaration of Stocks) order, 1976 hereinafter called the order).      Briefly stated  the facts  are these:  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 in Form II to Tahsildar, Hospet, as required under  sub-cls. (2)  (a) and  (b) of  cl. 3  of the order. The  Sub  Inspector  of  Police,  after  seizing  the vehicle  and  the  oil  registered  a  case  and  thereafter reported the  matter to the Deputy Commissioner, 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,  Messrs 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 a  copy   of  the  invoice  dated  5.6.1977  issued  by  Sri Satyanarayana Oil Mills, Bellary Road, Kampli, show- 832 ing the  sale of  7,200 kg. of groundnut oil to Messrs 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-cl. (2) (a) and (b) of Cl. 3 of the order and accordingly confiscated 40 barrels of groundnut Oil  and the  truck bearing  registration No.  MHL 2675.      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 respondents preferred a revision before the High Court and a

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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-cls.  (2) (a) and (b) of  cl. 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.      The State was not interested in the confiscation of the truck and,  therefore, special  leave  is  confined  to  the question of  the legality  and propriety  of  the  order  of confiscation passed  by the Deputy Commissioner under s. 6-A of the Act in respect of the seized groundnut Oil.      On the  admitted facts,  there can be no doubt whatever that there  was a  contravention of sub-cls. (2) (a) and (b) of cl.  3 of the order. Sub-cls (2) (a) and (b) of cl. 3 are as follows:           3. (2)  A stock holder who transports Edible-Oils,      Edible Oil Seeds and Oil Cakes shall make a declaration      in Form  II to  the officer specified in Sub-Clause (I)      in respect  of such  Edible Oils,  Edible Oil Seeds and      Oil Cakes,-      (a)  at the  place from  where such Edible Oils, Edible           Oil Seeds  and Oil  Cakes are  transported, before           such 833           Edible Oils,  Edible Oil Seeds and Oil Cakes leave           the said place; and      (b)   at every  check post  on the  route,  immediately           after their arrival there:      Provided that  the declaration at a check post shall be      made in  person by the stock holder or by the person in      charge of  such Edible  Oils, Edible  Oil Seeds and Oil      Cakes to such officer, as the Government may by special      or general order specify.      The expression  ’stock-holder’ has  been defined in the order as  meaning "Every  person who  is  in  possession  or control of  150 kilograms  or more of groundnut oil.. (b) 15 quintals or  more of groundnut oil or cake.. (c) 15 quintals or  more  of  groundnut  seeds..  and  (d)  20  quintals  of groundnut  shell.  The  Explanation  thereto  provides  that edible oil,  edible oil seeds and oil cakes in transit shall be presumed to be under the control of the owner thereof. D      The order  passed by  the High  Court setting aside the order of  r confiscation  made by  the  Deputy  Commissioner under s. 6-A of the Act can hardly be supported. In reaching the conclusion  that it  did, the  High Court  observes that 5.6.1977 being  Sunday, the declaration in Form II could not be delivered  to the  Tahsildar since  the Taluka office was closed.  Nor   could  it   be  sent   by   registered   post acknowledgement due  as the  Post office could not have been working on that day. It then goes on to observe:           Then, the  question  is,  whether  a  stock-holder      should not  at all  transport his  stock on  a  Sunday,      though the  contractual terms  of his  business of such      transaction required  that it  should be  done, as  the      stock should  reach the consignee on a particular date.      It is  impossible to  conceive  that  law  expects  any      citizen to  perform what  is impossible to be performed      in law.  Now the fact that Form II has been received in

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    the  office  of  the  Tahsildar  on  7.6.1977,  clearly      indicates that  it must  have been  sent by  registered      post on  6.6.1977. Anyhow, when once it is seen that it      was impossible  for the  stock-holder (petitioner-4) to      submit  Form-II   on   5.6.1977   before   transporting      groundnut-oil in  that truck  on that day, it cannot at      all be  said that petitioner-4 has committed any breach      of the provisions of the order. 834 It is  difficult to  subscribe to  the view expressed by the High  Court.   When  the   parties  were   entering  into  a transaction of  such magnitude there was a duty cast on them to comply  with the requirements of sub-cls. (2) (a) and (b) of cl. 3 of the order before the consignment left the place. If the  consignment was to be loaded on 5.6.1977 which was a Sunday, nothing  prevented the  parties  from  furnishing  a declaration on  4.6.1977.  The  High  Court  appears  to  be labouring under  a belief  that  there  need  be  no  strict observance of  the laws on a Sunday. There is no warrant for this view.      Faced with  the situation that it was rather difficult, if not  impossible, to  support the  view taken  by the High Court,  Shri   Ram  Jethmalani,   learned  counsel  for  the respondent No. 4 made a valiant effort to avert the order of confiscation passed  under s.  6-A of  the Act, by advancing the following  three contentions: (1) The power conferred on the Deputy  Commissioner under s. 6-A of the Act, by the use of the  word ’may’, makes it a discretionary power which had to be  used according  to sound  judicial principles.  It is urged that  Messrs Anant Oil Mills to whom the groundnut oil belonged had committed no breach of sub-cls. (2) (a) and (b) of  cl.   3  of  the  order  and  therefore,  the  order  of confiscation of  the entire consignment passed by the Deputy Commissioner was  wholly arbitrary  and excessive.  (2)  The power of  confiscation entrusted  to the Deputy Commissioner under s.  6-A of  the Act  is exercisable  in relation to an essential commodity  seized in  pursuance of  an order  made under s. 3. There was nothing to show that the groundnut oil in question had been seized or that a report of such seizure had been  made without  unreasonable  delay  to  the  Deputy Commissioner under  the order  and,  therefore,  the  Deputy Commissioner had  no power  to direct its confiscation under s. 6-A of the Act. (3) It is not established that the Deputy Commissioner had complied with the statutory requirements of s. 6-B  of the  Act, by  giving a  show cause  notice to the persons concerned against the action proposed to be taken or afforded them  an opportunity of hearing and, therefore, the order of  confiscation passed  by him  under s.  6-A  was  a nullity. We  are  afraid,  none  of  these  contentions  can prevail.      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  cl.  3,  is  a discretionary power.  The use  of the  word ’may’,  however, does not  necessarily mean  that the  Deputy  Com  missioner 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 835 and circumstances  of each  case  whether  the  confiscation should be  of an 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

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of the  word ’may’,  makes the  power coupled  with a public duty. Sometimes  it may  be in the public interest to direct confiscation of  the  entire  consignment  of  an  essential commodity when  there is  deliberate  contravention  of  the provisions of an order issued under s. 3 of the Act.      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-cls. (2)  (a) and  (b) of cl. 3 of the order enjoin that the stock-holder  shall make  a declaration  in From  II  in relation to movement of edible oil, edible oil seeds and oil cakes, to the Tahsildar in-charge 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 cl. 3 of the order are clearly mandatory.      We fail  to comprehend  the contention  that there  was only a  technical breach.  Under sub-cls.  (2)(a) and (b) of cl. 3  of the order, a stock-holder is required to furnish a declaration in  Form II  in relation  to movement  of edible oil, edible  oil seeds and cakes, to the Tahsildar in-charge of the  taluka at  the place  from where  such commodity  is sought to  be transported  before such  commodity leaves the place. The  definition of ’stock-holder’ certainly means the consignor who  holds such stock of edible oil, oil seeds and cakes and  also may  include a  purchaser of such oil, seeds and  cakes   who  is   in  possession  or  control  thereof. Explanation to the definition of 836 ’stock-holder’, by a legal fiction, treats the owner to have control over  the edible oil, edible oil seeds and cakes, in transit. The  respondent No.  4, being  the purchaser,  also comes within  the definition  of ’stock-holder’ by reason of the said  Explanation. There  is nothing  to show  that  the consignor had  reserved the  jus disponendi  by the terms of the contract  or appropriation  and, therefore, the property in the  goods passed  to  the  respondent  No.  4  on  their delivery to  a common  carrier under  s. 25  of the  Sale of Goods Act, 1930.      The allegation  in the  complaint is that 40 barrels of groundnut oil  weighing 7,200  kg. were being transported by the truck  bearing  No.  MHL  2675  without  furnishing  the requisite declaration  in Form  II and it was intercepted at the Hukeri  check-post by  the sub-Inspector  of Police.  In response to a notice issued by the Deputy Commissioner under s. 6-B  of the Act, the respondent No. 4 produced before him the documents  of title in relation to the goods. From these documents,  it   is  clear   that  the   consignor  was  Sri Satyanarayana Oil Mills, Kampli and the consignee was Messrs Anant Oil  Mills, Nippani  and that the truck was laden with the consignment.  These facts  were also  borne out  by  the

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particulars furnished  in the  declaration in  Form 39 under the Mysore Sales Tax Act, 1957.      It appears  from these documents that Sri Satyanarayana Oil Mills,  after despatching  the consignment, purported to furnish the declaration in Form II to the Tahsildar, Hospet, which was  received by  him on  7.6.1977, requesting for the release of the groundnut oil in question. The respondent No. 4 contended  before the  Deputy Commissioner  that there was substantial  compliance  of  the  requirements  of  sub-cls. (2)(a) and  (b) of  cl. 3  of the  order and, therefore, the seized groundnut  oil  be  released,  but  he  rejected  the contention on the ground that the declaration in Form II was required to be filed before the specified officer before the goods left  the place. The Deputy Commissioner requisitioned the form produced before the Tahsildar, but i t did not bear any date.  He was  of the  view that the declaration was not sent by  registered post  on 6.6.1977  as asserted,  but had apparently  been  handed  over  in  the  Taluka  office  and acknowledgment   obtained   for   the   same.   The   Deputy Commissioner observed  that the  requirement of law was that the declaration  in Form  II had  to be  produced  at  every check-post during transit, and this was not done. The driver of the  truck did not have a copy of the declaration in Form II, but  only the  declaration in Form 39 which could not be taken to  be in  compliance of  law. Obviously,  the  stock- holder, Sri Satyanarayana Oil Mills, after despatching the 837 consignment of  groundnut  oil,  purported  to  furnish  the declaration in  Form II.  This was in complete breach of the requirements of  sub-cls. (2)  (a) and  (b) of  cl. 3 of the order. The  Deputy Commissioner,  therefore, held  that  the respondents having  contravened the  provisions of  sub-cls. (2) (a)  and (b)  of cl.  3 of  the order,  the seized truck alongwith the  entire consignment  of the  groundnut oil was liable to  be confiscated  under s.  6-A  of  the  Act.  The learned Sessions  Judge, in  our opinion,  rightly confirmed the order  of confiscation passed by the Deputy Commissioner under s.  6-A of the Act as it was unassailable. At no point of time  was there  a  contention  raised  that  the  Deputy Commissioner had failed to exercise his discretion as to the quantity of the groundnut oil liable to be seized. It is now too late in the day to urge the point before this Court. C      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 s.  6-A of  the Act,  It is manifest from the order of the Deputy  Commissioner that  there was  a contravention of sub-cls. (2)  (a) and (b) of cl. 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 seizure.      As to point No. (3), from the narration of facts above, it  is   amply  clear  that  there  was  no  breach  of  the requirements of  s. 6-B of the Act on the part of the Deputy Commissioner. The record shows that the Deputy Commissioner,

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on receipt  of the  report of  the Sub  Inspector of  Police mentioning the  fact of  contravention of sub-cls. G (2) (a) and (b)  of cl.  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 838 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 a hearing to the parties. That being  so, the  validity of  the order  of confiscation under s.  6-C cannot  be challenged  on the  ground that the requirements of s. 6-B had not been fulfilled.      The result,  therefore, is that the appeal succeeds and is allowed.  The judgment of the High Court is set aside and that of the II Additional Sessions Judge, Belgaum, upholding the order of confiscation passed by the Deputy Commissioner, Belgaum,  is   restored,  insofar   as  it  relates  to  the confiscation of  the consignment  of groundnut  oil weighing 7,200 kg.  under s.  6-A of  the Essential  Commodities Act, 1955. P.B.R.    Appeal allowed. 839