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PETITIONER: STATE OF WEST BENGAL & ORS.

       Vs.

RESPONDENT: CALCUTTA HARDWARE STORES & ORS.

DATE OF JUDGMENT20/02/1986

BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) RAY, B.C. (J)

CITATION:  1986 AIR  614            1986 SCR  (1) 364  1986 SCC  (2) 203        1986 SCALE  (1)256

ACT:      Constitution of  India  -  Article  226  -  Ad  interim exparte orders  - Grant  of - Restraint and circumspection - Necessary.

HEADNOTE:      600 metric tonnes of tin plates worth about Rs.60 lakhs were  seized   from  the  respondent-firm.  Prosecution  was launched by  the State  Government against  the  respondents under ss.7  and 8  of the Essential Commodities Act 1955 for violation of  paragraph 3(2)  of the West Bengal Declaration of Stocks and Prices of Essential Commodities Order 1977 and under ss.120B  and 420  of the  Indian Penal Code 1860. Show cause notices for confiscation of the seized goods were also issued by the Additional Collector under s.6A of the Act.      In the  Writ Petition under Article 226 before the High Court the  respondents moved  an application  for release of the seized  goods which  was rejected  by a Single Judge. In appeal the  Division Bench set aside the interlocutory order of the  Single Judge  and directed the release of the seized goods to  the respondents  on their  furnishing  of  a  bank guarantee of  Rs.5  lakhs  in  the  form  of  fixed  deposit recepits  and  also  on  furnishing  security  of  immovable property being  0.71 acre  of land situate at Police Station Titaghur District 24 pargana.      Allowing the appeal of the State to this Court, ^      HELD: 1.  Although the  powers of  the High Court under Art.226 are  far and  wide  and  the  Judges  must  ever  be vigilant to protect the citizens against arbitrary executive action, nonetheless, the Judges have a constructive role and therefore, there  is always  the need  to use such extensive powers with  due circumspection.  There has  to  be  in  the larger  public   interest  an   element   of   self-ordained restraint. It  was distressing  that despite  a long line of decisions of Supreme Court deprecating the cursory manner of passing such  interlocutory orders  for the mere asking, the High Court 365 should have  passed the impugned order in the manner that it did. [370 C-D; 367 B-C]      2. The  ad interim  order of  the Division Bench of the

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High Court  was illegal and invalid. The result of the order was that  the respondents  under threat  of contempt secured release of  valuable seized  material practically furnishing little or  no security.  The observations  of  the  Division Bench which  had the  effect of  prejudging the  whole issue before the Single Judge who was seized of the writ petition, as  also  foreclosing  the  trial  of  the  respondents  for commission of  the alleged offences had also no legality and propriety. [367 C; 367 G-H; 368 A]      Siliguri Municipality  & ors.  v. Amalendu  Das & Ors., [1984] 2  S.C.C. 436; Assistant Collector of Central Excise, Chandan Nagar  west Bengal v. Dunlop India Pvt. Ltd. & Ors., [1985] 1  S.C.C. 260;  State of  Rajasthan &  Ors.  v.  M/s. Swaika Properties  & Anr.,  [1985] 3  S.C.C.  217;  Siliguri Municipality,      Titaghur Paper Mills Co. Ltd. v. State of Orissa, [1983] 2 S.C.C. 433; Union of India v. Oswal Woollen Mills Ltd.,  [1984] 2  S.C.C. 646;  Union of  India v.  Jain Shudh Vanaspati  Ltd., C.A.No. 11450/83 and Samarias Trading Co. Pvt.  Ltd. v.  S. Samuel,  [1984] 4  S.C.C. 666;  relied upon.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION : Civil Appeal No. 627 of 1986.      From the  Judgment and  Order dated 11th December, 1985 of the Calcutta High Court in F.M.A.T. No. 4053 of 1985.      D.N. Mukherjee and H.K. Puri for the Appellants.      Bhola Nath  Sen, Bhasker Sen, B.P. Singh, V. Sheker, S. Roy and L.P. Agarwala for the Respondents.      The Order of the Court was delivered by      SEN, J.  We had allowed the appeal at the conclusion of hearing of  January 31,  1986. We  now proceed  to give  the reasons therefor.      In this  appeal by  special leave the short point is as to the legality and propriety of an ad-interim order dated 366 December 11, 1985 passed by a Division Bench of the Calcutta High Court consisting of R.N. Pyne and Ajit Kumar Sen Gupta, JJ. setting  aside an interlocutory order of Padma Khastgir, J. dated  November 6,  1985.  By  the  impugned  order,  the learned Judges  have directed the release to the respondents of more  or less  600 metric  tonnes of  tin  plates  which, according to  the State  Government, are  worth nearly about Rs.60 lakhs,  seized from  them for alleged contravention of item 24, schedule 1 to the West Bengal Declaration of Stocks and Prices  of Essential  Commodities Order, 1997 and which, according  to   the  respondents,   are  nothing  but  waste material, on  condition set  out by  them,  namely,  on  the furnishing of  bank guarantee  of Rs.5  lakhs in the form of fixed deposit  receipts and  also on  furnishing security of immovable property being 0.71 acre of land situate at Police Station Titaghur, District 24 Pargana.      The learned Judges while making the impugned order have unfortunately  made   certain  observations  which  seek  to prejudge the  issues involved  in the  prosecution  launched against  the   respondents  by   the  State  Government  for committing alleged  offences punishable  under ss.7 and 8 of the Essential  Commodities Act,  1955 for  violation of  the mandatory provisions  of paragraph  3(2) of  the West Bengal Declaration of  Stocks and  Prices of  Essential Commodities Order,  1977   and  of  having  committed  alleged  offences punishable under  ss.120B and  420 of the Indian Penal Code, 1860. They  have gone  to the  extent of  observing that the

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notices for  confiscation of the seized goods were issued by the Additional  Collector, 24 Paragana Alipore under s.6A of the Act  without any  basis in  that they  do not answer the description  of  tin  plates,  tin  plates  waste  waste  or defective tin  free steel  sheets  and  therefore  were  not essential commodities  within the  meaning of  s.2(a) of the Act and the said Order issued thereunder.      Looking to  the seriousness  of  the  charges  and  the circumstances  attendant   upon  the  seizure  of  the  huge quantity of  tin plates,  the learned  Single Judge had very rightly and  properly refused  to grant  the application for release of  the seized  goods. It  is rather surprising that the  learned   Judges  in   hearing  an   appeal   from   an interlocutory order  should have  passed the  impugned order directing release  of the  seized goods without affording an opportunity to  the State Government to file a return to the writ petition. There is material on 367 record  to   show  that   the  seized  goods  are  essential commodities, namely,  Notification  No.SO.508(E)/ESS/Iron  & Steel-2A dated  1.7.1985 issued  by the Government of India, Ministry of  Steel, Mines  & Coal,  and  examination  report dated November 13, 1985 by the Appraiser (Metal Expert).      We are  greatly  distressed  that  the  learned  Judges despite a long line of decisions of this Court starting from Siliguri Municipality & Ors. v. Amalendu Das & Ors. [1984] 2 S.C.C. 436 to Assistant Collector of Central Excise, Chandan Nagar West  Bengal v.  Dunlop India  Ltd. &  Ors.  [1985]  1 S.C.C. 260,  down to State of Rajasthan & Ors. v. M/s Swaika Properties &  Anr.  [1985]  3  S.C.C.  217  deprecating  the cursory manner  of passing such interlocutory orders for the mere asking,  should have  passed the  impugned order in the manner that  they did.  It seems  that the pronouncements of this Court  have had  little effect  on them.  The result of this has  been that the respondents under threat of contempt secured release of such valuable seized material practically furnishing little  or no security. We are really amazed that the State  Government should  have been compelled to release the goods  as per the directions of the learned Judges. What makes  it   worse  is   that  the   respondents  are  facing prosecutions under s.3 read with ss.7 and 8 of the Essential Commodities Act  as also under ss.120B and 420 of the Indian Penal Code,  and have  also been served with a notice by the Additional Collector under s.6A of the Act to show cause why the seized material should not be confiscated to Government. It is  needless to  stress that  the  question  whether  the seized goods  answer the  description  of  tin  plates,  tin plates waste  waste or  waste material  etc. or  whether the respondents had  committed a contravention of paragraph 3(2) of the  West Bengal  Declaration of  Stocks  and  Prices  of Essential Commodities  Order issued under s.3(1) of the Act, which is  an offence  punishable under  ss.7 and  8, are all questions to  be gone  into and  tried  before  the  learned Special Judge, 24 Paragana, Alipore before whom the trial is pending. That  apart, the  observations call in question the validity of  the  action  of  the  Additional  Collector  in serving a  notice of confiscation under s.6A of the Act with respect to  the seized  goods. We  do not  see legality  and propriety of making these observations by the learned Judges which have  the effect  of prejudging the whole issue before the learned Single Judge who is seized of the writ petition, as also 368 foreclosing the  trial of  the respondents for commission of the alleged offences.

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    In somewhat  similar circumstances, Chinnappa Reddy, J. speaking for  the Court  in Dunlop  India Ltd.’s case, after referring to the earlier decisions in Siliguri Municipality, Titaghur Paper  Mills Co.  Ltd. v.  State of Orissa [1983] 2 S.C.C. 433 Union of India v. Oswal Woollen Mills Ltd. [1984] 2 S.C.C.  646, Union  of India  v. Jain Shudh Vanaspati Ltd. C.A.No.11450/83, and  Samarias Trading  Co. Pvt.  Ltd. v. S. Samuel [1984]  4 S.C.C. 666, expressed strong disapproval of the practice  prevailing in  the High Court of granting such ad-interim orders  which practically  have the effect of the grant of  the main  relief in the petition under Art. 226 of the constitution, and observed :           "We have come across cases where the collection of           public revenue  has been seriously jeopardised and           budgets  of   governments  and  Local  Authorities           affirmatively   prejudiced   to   the   point   of           precariousness consequent upon interim orders made           by courts.  In fact,  instances have  come to  our           knowledge where  Governments have  been forced  to           explore  further   sources  for  raising  revenue,           sources which  they would  rather well leave along           in the  public  interest,  because  of  the  stays           granted by courts. We have come across cases where           an entire Service is left in a stay of flutter and           unrest because of interim orders passed by courts,           leaving the  work they  are supposed  to do  in  a           state of  suspended animation. We have come across           cases where  buses and lorries are being run under           orders of  court though  they were  either  denied           permits or  their permits  had been  cancelled  or           suspended by  Transport Authorities.  We have come           across cases  where liquor  shops  are  being  run           under interim orders of court. We have come across           cases where  the  collection  of  monthly  rentals           payable by excise contractors has been stayed with           the result  that  at  the  end  of  the  year  the           contractor has  paid nothing  but made his profits           from the  shop and walked out. We have come across           cases where  dealers in  food grains and essential           commodities have been allowed to take 369           back the  stocks seized  from them as if to permit           them to  continue to indulge in the very practices           which were to be prevented by the seizure. We have           come across  cases where land reform and important           welfare legislations  have been  stayed by courts.           Incalculable harm  has been  done by  such interim           orders. All this is not to say that interim orders           may never  be  made  against  public  authorities.           There are,  of course,  cases  which  demand  that           interim orders  should be made in the interests of           justice. Where  gross violations  of the  law  and           injustices are  perpetrated or  are  about  to  be           perpetrated, it  is the  bounden duty of the court           to intervene  and give appropriate interim relief.           In cases  where denial  of interim relief may lead           to  public  mischief,  grave  irreparable  private           injury  or   shake  a   citizen’s  faith   in  the           impartiality of public administration, a court may           well  be  justified  in  granting  interim  relief           against  public   authority.  But  since  the  law           presumes that public authorities function properly           and bona  fide  with  due  regard  to  the  public           interest, a  court must be circumspect in granting           interim  orders   of  far-reaching  dimensions  or

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         orders    causing    administrative,    burdonsome           inconvenience or  orders preventing  collection of           public revenue  for no better reason than that the           parties have come to the court alleging prejudice,           inconvenience or  harm and that a prima facie case           has been shown. There can be and there are no hard           and  fast  rules.  But  prudence,  discretion  and           circumspection are  called for.  There are several           other  vital   considerations   apart   from   the           existence of  a prima  facie case.  There  is  the           question of  balance of  convenience. There is the           question  of  irreparable  injury.  There  is  the           question of  the public  interest. There  are many           such factors worthy of consideration."      Quite recently,  this court  in Swaika Properties’ case reiterated :           "It is  to be  deeply  regretted  that  despite  a           series of  decisions of this Court deprecating the           practice 370           prevalent  in  the  High  Court  of  passing  such           interlocutory orders  for  the  mere  asking,  the           learned  Single   Judge  should  have  passed  the           impugned ad  interim exparte prohibitory order the           effect of  which, as  the learned Attorney-General           rightly complains,  was virtually  to bring  to  a           standstill  a  development  scheme  of  the  Urban           Improvement  Trust,   Jaipur  viz.   Civil   Lines           Extension Scheme, irrespective of the fact whether           or  not   the  High   Court  had  any  territorial           jurisdiction to entertain a petition under Article           226 of  the Constitution.  Such arbitrary exercise           of power  by the  High Court at the public expense           reacts against  the development  and prosperity of           the country  and is  clearly  detrimental  to  the           national interest."      Although the  power of  the High Court under Art.226 of the Constitution  are far  and wide and the Judges must ever be  vigilant  to  protect  the  citizens  against  arbitrary executive   action,   nonetheless,   the   Judges   have   a constructive role  and therefore there is always the need to use such extensive powers with due circumspection. There has to be  in the  larger public  interest an  element of  self- ordained restraint.  We hope  and trust  that the High Court would hereafter  use its powers to grant such ad-interim ex- parte orders with greater circumspection.      The appeal  must therefore  succeed and is allowed. The order passed  by the  Division Bench dated December 11, 1985 is set  aside and  that of  the learned  Single Judge  dated November 6,  1985 dismissing  the application for release of the seized  goods is restored. We direct that the High Court shall take  immediate  steps  to  recover  back  the  seized property from  the respondents  including the  two  vehicles bearing registration nos. USY 6342 and WBQ 6688 if they have been delivered  in pursuance  of the  orders passed  by  the learned Judges to respondents. The respondents shall pay the costs of the appellants. Costs quantified at Rs.5,000. A.P.J.                                       Appeal allowed. 371