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Kathuria: Supreme Court on Criminal Law, 8th Edition > E > EARLIER DECISION
1. The fixation of ex-factory prices of sugar mills in the main surplus areas would have the effect of establishing sugar prices for the general public which is the ultimate consumer, and a fair level and make sugar available at fair prices.
D.S. & G. Mills vs Union of India AIR 1959 SC 626 [LNIND 1959 SC 10]: (1959) 2 (Supp) SCR 123 . 2. It would be the duty of the licensing authority to ignore all instructions which are not in consonance with the provisions of law by which it is tobe guided.
Manna Lal Jain vs State of Assam AIR 1962 SC 386 [LNIND 1961 SC 320].
3. The sharbat was fruit product. It is wrong to say that it is medicinal product. S 3(1) of the Essential Commodities Act , 1955 authorised the Central Government to regulate the qualitative and quantitative production of essential commodities.
Held : The Fruit Products Order, 1955 was clearly to regulate the qualitative production of fruit products.
In regard to essential commodities, the Central Government is given the power to direct how certain essential commodities should be produced and in what quantity. This power, of course, can be exercised only if the condition precedent prescribed by S 3(1) is satisfied, and that is that the Central Government should be of opinion that it is necessary or expedient to regulate the production of any essential commodity for one of the purposes mentioned by it. The condition prescribed by the first part of S 3(1) of the Act is a condition precedent and it is only when and after the said condition is satisfied that the power to issue a regulatory order can be exercised by the Central Government.
In the absence of any specific averment made by the Fruit Order that the Central Government had formed the necessary opinion, no presumption can be drawn that such opinion had been formed at the relevant time; and it cannot be suggested that the failure to mention that fact expressly in the Fruit Order itself would preclude the respondents from proving the said fact independently.
Note : Non-recital of the formation of the requisite opinion in the Order or notification is of no consequence.
Hamdard Dwakhana vs Union of India AIR 1965 SC 1167 [LNIND 1964 SC 326]: (1965) 2 SCR 192 [LNIND 1964 SC 326] .
4. S. 3 of the Essential Commodities Act , 1955 can be used for controlling the payment of the prices of food crops. Food crops include crops of sugarcane. These provisions certainly bring within the scope of Central legislation, the regulation of the production of sugarcane as also the controlling of the price at which sugarcane may be bought or sold, and in addition to the Sugar Control Order, 1955, on the same date investing it with the power to fix the price of sugarcane and direct payment thereof as also the power to regulate movement of sugarcane.
A.K. Jain vs Union of India AIR 1970 SC 267 [LNIND 1969 SC 224]: 1970 Cr LJ 367 : (1970) 1 SCR 673 [LNIND 1969 SC 224] .
5. Accused who was a driver of a truck which was loaded with 75 bags was intercepted by the Police at a place fourteen miles away the Punjab-Delhi border in the area which is in Punjab.
Held : It is, therefore, evident that there has been no export of paddy outside the State of Punjab boundary.
Held further that this act of the accused does not tantamount to commit an offence but is merely a preparation to commit an offence. But there is no provision in the Act which makes a preparation to commit an offence punishable. It follows, therefore, that the appellants should not have been convicted under S. 7 of the Essential Commodities Act , 1955.
Malkiat Singh vs State of Punjab AIR 1970 SC 713 [LNIND 1968 SC 334]: 1970 Cr LJ 750 : (1969) 2 SCR 663 [LNIND 1968 SC 334] .
6. Scheme violations– S. 3 deals with powers to control production, supply, distribution etc. of essential commodities. Exercise of such powers, can be done by ‘order’. According to S 2(c) ‘notified order’ means an order notified in the official Gazette, and S 2(cc) provides that ‘order’ includes a direction issued there under. Certain scheme cannot be equated with an order notified under S 2(c) , EC Act. An accused cannot be prosecuted/convicted under Ss. 3/7, EC Act for violating a scheme.
Prakash Babu Raghuvanshi vs State of Madhya Pradesh 2004 Cri LJ 4612 (4613) : (2004) 7 scc 490 : (2004) 4 Crimes 83 . Madhya Pradesh Ration Vikreta Sangh Society vs State of M.P. AIR 1981 SC 2001 [LNIND 1981 SC 394]: (1981) 4 SCC 535 [LNIND 1981 SC 394] .
7. EC Act 1955, Section 7 and Kereosene Control Order 1969,Cl. 13. Prosecution of the Firm, a wholesale dealer, its partner, driver and cleaner on the allegations that the driver and the cleaner sold the kerosene oil. There was unsigned statement of the driver and the cleaner to that effect. Held, the statement in no way implicated the Firm and its partner. The acquittal of the firm and its partner was proper.
Ipour GKC and RKC & Sons vs State Rep. by S.H.O., Pondicherry 2008 Cri LJ 4590 (SC).
Essential Commodities Act , 1955, S. 7 .
8. District Supply Officer seized the rice and the books of account including the stock register, cash and credit memo books. Stock register was marked as Ex 1/1.
The Magistrates found against the appellants mainly on the case made by the prosecution that there had been tampering with Ex 1 while in the custody of the Supply Department.
Held : The evidence points to the manipulation having been made while the document was in the custody of the Supply Officer or his department and the filing of a copy of Ex 1 as interpolated before attestation by a Magistrate was with a sinister motive. The withholding of the books of account of the appellants for a period of more than two months was not justified on the facts of the case. It appears that a false case was deliberately launched against the appellants and that the manipulation in Ex 1 was done in the office of the supply officer.
Note : The appeal was allowed.
Ganga Prasad vs State of Bihar AIR 1970 SC 989 : 1970 Cr LJ 895 .
9. The circumstance that the two respondents were in management of the affairs of the Company and the Firm and were aware of the arrival of goods could create suspicion against the respondents, but that suspicion could not take the place of proof. In order to justify conviction of respondents, evidence was required to show that they knew of the sale or were parties to it, no such evidence was available.
State of Madras vs C. VS Parekh AIR 1971 SC 447 : 1971 Cr LJ 418 .
10. The liability of the persons in charge of the company only arises when the contravention is by the company itself. Since, in this case, there is no evidence and no finding that the company contravened C1.
5 of the Iron and Steel (Control) Order, 1956, the two respondents could not be held responsible.
State of Madras vs C. VS Parekh AIR 1971 SC 447 : 1971 Cr LJ 418 .
11. In the instant case the charges under S 7(1)(a)2 ., EC Ad were against the Production Manager and Director of a company, of manufacturing substandard quality of vegetable oil. The High Court came to the conclusion that as the respondent accused was not in-charge or responsible for the conduct of the business, therefore, the order summoning the accused was bad in law and was quashed. The Supreme Court held that at the stage of summoning when evidence was yet to be led by the parties, the High Court could not on assumption of facts come to a finding of fact that the respondent was not responsible for the conduct of the business. Accordingly, the order of the High Court quashing the charge framed was set aside.
State of Punjab vs Kasturi Lal 2004 Cri LJ 3866 : AIR 2005 SC 4087 : (2004) 12 SCC 195 [LNIND 2004 SC 720] : (2004) 3 Crimes 216 .
12. The object and the purpose of the Prevention of Food Adulteration Act , 1954 is to eliminate the danger to human life and health from the sale of unwholesome articles of food. It is covered by Entry 18, List III of the 7th Schedule to the Constitution , while the Essential Commodities Act , 1955 is covered by Entry 33 of List III. In spite of this difference in their main objects, control of production and distribution of essential commodities may, to an extend from a broader point of view include control of the quality of the essential articles of food and, thus considered, it may reasonably be urged that to some extent it covers the same field as is covered by the provisions of the Adulteration Act. It is needless to point out that they can stand together if the power are intended to be exercised for different purposes without fatal inconsistency or repugnancy.
Municipal Corporation of Delhi vs Shiv Shanker AIR 1971 SC 815 [LNIND 1971 SC 95]: 1971 Cr LJ 680 : 1971 Cr App R 192 (SC) (SC).
13. The omission to prepare a proper plan showing the distance from the border of West Bengal as also the exact situation from where the carts were seized is the most serious infirmity.
Further, it is highly unsatisfactory feature of this case that the distance had not been given either in the first information report or in any of the other documents which were contemporaneously prepared.
It is true that the appellants did not posses any permit but at the earliest opportunity while they were well within the border of the State of Bihar they had explained that they were taking the paddy to village Faridpur. In the absence of a proper plan and the informations in respect of the correct geographical
position of Faridpur which was suppressed by A.S.I. on whose testimony the High Court largely relied, it was not safe to convict the appellants of a breach of Cl. 3 of the Bihar Foodgrains (Movement Control) Order, 1957.
Nasu Sheikh vs State of Bihar AIR 1972 SC 1610 : 1972 Cr LJ 1039 .
14. Unless the dealers are in a position to know with certainty that the items of tyres and tubes of motor cars are included in the scheduled items of which the price list and the stock position are to be displayed in a conspicuous part of their business premises, they cannot be held guilty in a Criminal Court of an offence under the Essential Commodities Act , 1955 for violation of any such mandate.
Note : State appeal against acquittal was dismissed.
State of Bihar vs Bhagirath Sharma AIR 1973 SC 2198 [LNIND 1973 SC 120]: 1973 SCC 809 (Cr):
(1973) 2 SCC 257 [LNIND 1973 SC 120] : 1973 Cr LJ 1184 .
15. There is a proviso to S. 7 of the Essential Commodities Act , 1955 which says that the Court may for any adequate and special reasons, to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than three months. Now, in the present case, the appellant has already undergone imprisonment for a period of one month and 8 days. The appellant believed that the three permits issued to him by the Mamlatdar were sufficient authority to him to export the specified quantities of foodgrains.
It is true that the Mamlatdar had no authority to issue an authorisation for export under Cl. 3 or the Order, 1966, but under that clause any officer could be authorised by the State Government or by the Collector to issue such authorisation, so the appellant might well have believed that the Mamlatdar was an Officer authorised to issue such authorisation. In the circumstances, this is a fit case in which Court would be justified in acting under the proviso to S 7(1)(a)2 . of the Essential Commodities Act , 1955 in reducing the sentence of imprisonment to that already undergone by the appellant though it would be less than three months.
Sopana Trimbak Wani vs State of Maharashtra AIR 1977 SC 696 : 1976 SCC 611 (Cr): (1976) 4 SCC 299 : 1977 Cr LJ 337 : 1977 Cr LR 49 (SC): 1977 UJ 64 (SC).
16. Where one has permit to sell foodgrains within the State, but cannot export or cause to be exported outside the State, exports and sells to a firm of different States on the basis of a permit issued by an authority not authorised by the State, commits an offence under S. 3 of the Essential Commodities Act , 1955.
Yaduraj Singh vs State of U.P. AIR 1977 SC 698 : 1976 SCC 604 (Cr): (1976) 4 SCC 310 : 1976 Cr LJ 340 .
17. The appellant was acquitted in a separate proceeding of the charge that he had acquired any stocks of iron, steel or scrap. In that view of the matter, it is impossible to hold that the appellant can still be convicted under S. 7 of the Essential Commodities Act , 1955 for violation of Cl. 28(a ) of the Iron and Steel (Control) Order, 1956.
Held : The High Court committed error in holding that a person can be held guilty of the violation of Cl.
28(a ) of the Iron and Steel (Control) Order even if he has not acquired the stock of iron, steel or scrap.
Note : The appeal was allowed.
Surendra Nath Jena vs State of Orissa AIR 1977 SC 1616 : (1977) 2 SCC 583 : 1977 Cr LJ 1120 : 1977 Cr App R 331 (SC): 1977 Cr LR 256 (SC): 1977 UJ 364 (SC).
18. The Essential Commodities Act , 1955 envisages two independent proceedings against a person charged with contravention or violation of an order made under S. 3 in relation to an essential commodity.
Under S. 7 , such contravention is made punishable. The Collector can proceed to seize the essential commodity and cancel the licence and forfeit the security deposit. A prosecution can be launched and the Court will have to deal both with the question of punishment and forfeiture of the property in respect of which an offence appears to have been committed. Further, even if the Collector has confiscated the property, it would be still open to the competent authority to launch prosecution and the Court would have to deal with the person who is charged with the offence but in such a situation the question of forfeiture of the property would not arise because the Collector has already confiscated the same.
Thakur Das (dead) by LRs vs State of Madhya Pradesh
AIR 1978 SC 1 [LNIND 1977 SC 299]: 1978 SCC 21 (Cr): (1978) 1 SCC 27 [LNIND 1977 SC 299] : 1978 Cr LJ 1 : 1978 Cr App R 381 (SC).
19. The EC Act was enacted to safeguard the public interest considering it necessary in the interests of the general public to control the production, supply and distribution of, trade and commerce in, certain commodities through the legislation. It was in the light of the aforesaid public policy that Section 3 of the EC Act empowered the Government to issue notifications and once a notification is issued, it enables the competent authority to confiscate the goods under Section 6-A and prosecution leading to punishment provided under Section 7 of the EC Act. The Collector has been empowered under Section 6-A , if it is found to be expedient to sell the seized commodity which is subject to natural decay, at a controlled price or by public auction or dispose of through Public Distribution System to avoid artificial shortages, maintain the price line and secure equitable distribution thereof through fair price shops as it is in the interest of the general public. Where wheat seized in pursuance of notification issued under Section 3 of the Act, was released without following the provisions of Sections 6A and 6E of the Act without deciding ownership of the wheat on the mere undertaking given by the respondents that they were ready to furnish adequate security to the satisfaction of the Court, the order was held illegal, was set aside.
State of Bihar vs Arvind Kumar 2012 Cri LJ 3756 (3758, 3759) (SC): 2012 AIR SCW 4239 : AIR 2012 SC 1345 (Crl): 2012 (6) Scale 616) .
Essential Commodities Act (10 of 1955 ), Ss. 6A, 6E .
20. The Essential Commodities Act , 1955 has been placed in the 9th Schedule; none of its provisions, including S 3(1) , is open to attack on the ground that it ever was or is inconsistent with or takes away or abridges any of the rights conferred by any provision of Part III of the Constitution . But there is no justification for extending the protection of that immunity to an order passed under S. 3 of the Act like the Mustard Oil (Price Control) Order, 1977. It is, therefore, open to the petitioners to invoke the writ jurisdiction of the Supreme Court for determination of the question whether the provisions of the Price Control Order violate Arts. 14 , 19(1)(f) and 19(1)(g) of the Constitution .
The mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of operators, the processual basis of price fixation has to be accepted in the generality of cases as valid.
Note : In this case, the validity of the Mustard Oil (Price Control) Order, 1977 issued by Ministry of Civil Supplies and Co-operation was challenged. The order has been declared to be valid and not ultra vires of Arts. 14 and 19 of the Constitution .
Held : Further that the Parliament having entrusted the fixation of the prices to the expert judgment of the Government, it will be wrong for the Court to examine each and every minute detail pertaining to the Government’s decisions.
Notes :
(a )The price Rs. 10 per kg., exclusive of cost of container and inclusive of taxes, was fixed for whole of India without keeping in view the places near and far to the sources (manufacturing place). The Price Control Order was declared valid.
(b )The above is based on the majority judgment.
Prag Ice & Oil Mills vs Union of India AIR 1978 SC 1296 [LNIND 1978 SC 69]: (1978) 3 SCC 459 [LNIND 1978 SC 69] : 1978 Cr LJ 1281 : 1978 Cr LR 120 (SC): (1978) 3 SCR 296 .
21. S. 7 refers to contravention of any order made under S. 3 , it is essential for bringing in application of S. 7 to show that some order has been made under S. 3 and the order has been contravened. S. 3 deals with powers to control production, supply, distribution etc. of essential commodities. Exercise of such powers, can be done by ‘order’. According to S 2(c) ‘notified order’ means an order notified in the official Gazette, and S 2(cc) provides that ‘order’ includes a direction issued there under. Since no order which was alleged to have been violated was brought on record, the conviction of the accused appellant was set aside and the case was remanded for fresh disposal.
Prakash Babu Raghuvanshi vs State of Madhya Pradesh 2004 Cri LJ 4612 (4613) : (2004) 7 SCC 490 [LNIND 2004 SC 924] : (2004) 4 Crimes 83 . Madhya Pradesh Ration Vikreta Sangh Society vs Stateof Madhya Ptadesh AIR 1981 SC 2001 [LNIND 1981 SC 394]: (1981) 4 SCC 535 [LNIND 1981 SC 394] . 22. S. 11 of the Essential Commodities Act , 1955 precludes a Court from taking cognizance of the offence punishable under the Act except upon a report in writing of the facts constituting such offence made by a person who is a public servant as defined in S. 21 of the I.P.Code . If Police Officer investigating into an offence which is cognizable, submits a report to the Magistrate that would satisfy the requirement of S. 11 of the Act as Police Officer is a “public servant” within the meaning of S. 21 of the I.P.Code .
Facts : One Mahesh Kant Jha, presumably an Executive Magistrate at Jamtara in Santhal Parganas District of Bihar State after a raid and search of the residential house in possession of appellant 1, submitted a report to the Sub-Divisional Magistrate, Jamtara, complaining therein that appellant 1 contravened the provisions of the Bihar Foodgrains Dealers Licensing Order, 1967, and he may be proceeded against under S. 7 of the Essential Commodities Act , 1955. The Sub-Divisional Magistrate, on receipt of this report made a cryptic order directing the report to be forwarded to the officer-in-charge of Police Station having jurisdiction in the area to take “legal action”. On receipt of this report with the direction of the Sub-Divisional Magistrate, the Police Officer, Jamtara, registered an offence and commenced investigation and on completion thereof submitted a report under S. 173 of the Cr.P.Code , 1973 to the Sub-Divisional Magistrate, who had directed investigation in the matter. The Sub-Divisional Magistrate took cognizance of the offence on this report.
Held : The Magistrate rightly took the cognizance on Police report.
Satya Narain Musadi vs State of Bihar AIR 1980 SC 506 : 1980 SCC 660 (Cr): (1980) 3 SCC 152 : 1980 Cr LJ 227 : 1979 Cr LR 11 (SC): 1980 Cr App R 28 (SC).
23. Sub-Cls. (2)(a ) and (b ) of Cl. 3 of the Karnataka Edible Oil, Edible Oil Seeds and Oil Cakes (Declaration of Stocks) Order, 1976 enjoin that the stockholder shall make a declaration in Form 11 in relation to movement of edible oil, edible oil seeds and oilcakes, to the Tehsildar in charge of the Taluka of the place from where such edible oil, edible oil seeds and oilcakes are transported before such edible oil, edible oil seeds or oilcakes, 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.
State of Karnataka vs Krishana Brima Walvakar AIR 1981 SC 1468 [LNIND 1981 SC 281]: 1981 SCC 714 (Cr): (1981) 3 SCC 301 [LNIND 1981 SC 281] : 1981 Cr LJ 867 : 1981 Cr LR 468 (SC).
24. 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.
State of Karnataka vs Krishna Bhima Walvakar AIR 1981 SC 1468 [LNIND 1981 SC 281]: 1981 SCC 714 (Cr): (1981) 3 SCC 301 [LNIND 1981 SC 281] : 1981 Cr LJ 867 : 1981 Cr LR 468 (SC).
25. What is required to be placed before the Parliament under S 3(6) of the Essential Commodities Act , 1955 is an order made by the Central Government or by any officer or authority of the Central Government. An order made by the State Government in exercise of the powers delegated to it by the Central Government under S. 5 is not required to be placed before Parliament.
Sarkari Sasta Anaj Vikreta Sangh, Tehsil Bemetra vs State of Madhya Pradesh AIR 1981 SC 2030 . 26. Complaint does not mention the statutory order compelling the dealer in the commodity to display a list of price and declare the stock. This would not make the complaint not maintainable. The Order can be produced in the Court.
Held : It would be unwise to ignore the existence of a subsisting Order and to dispose of a proceeding as if no such Order is there.
Note : In this case the relevant Order, i.e. , the Bihar Essential Articles (Display of Prices and Stocks) Order, 1977 was produced in the Supreme Court.
State of Bihar vs Gulab Chand Prasad AIR 1982 SC 58 : 1981 SCC 827 (Cr): (1981) 4 SCC 248 : 1982 Cr LJ 198 : 1982 Cr LR 24 (SC): 1982 Cr App R 243 (SC).
27. Rice bran is a food-stuff and is, thus, essential commodity. So the power conferred by S. 3 of the Essential Commodities Act , 1955 can be used to regulate its production, sale or supply.
Rice bran is commonly used as poultry feed and not uncommonly as cattle feed. This is undisputed. Rice
bran is a by-product of the husking and milling process of paddy and consists of the layer which lies between the husk and the kernel.
Any stuff which is commonly used as food by the generality of living beings is food-stuff, it is not legitimate to restrict the meaning of that word to things which are used as food by human beings. The animal kingdom is not anythe-less important in the cosmic scheme than the human empire and it is a distortion to say that it is a matter of little or no concern to the State whether the cattle and the poultry get their due ration of the means of their subsistence. Cattle feed and poultry feed are food to the cattle and the poultry, and therefore, they are food-stuffs.
These dictionary meanings of the word “food” are not restricted to what is eaten by human beings for nourishment and sustenance. According to them, what one takes into the system to maintain life and growth or what is taken into the body of an organism in order to sustain growth is food.
Note : The appeal was dismissed.
Sat Pal Gupta vs State of Haryana AIR 1982 SC 798 [LNIND 1982 SC 37]: 1982 SCC 327 (Cr): (1982) 1 SCC 610 [LNIND 1982 SC 37] : 1982 Cr LR 83 (SC): 1982 UJ 178 (SC): 1982 Cr App R 93 (SC).
28. Sugar, which term includes khandsari, is an essential commodity and over the years it has become a scarce commodity. In the public interest it became essential to pass the impugned order to secure its equitable distribution and availability at fair prices. To that end it became necessary to prevent hoarding and black-marketing. The expression “to secure their equitable distribution and availability at fair prices”
is wide enough to cover the impugned order. Likewise, the expression “storage and distribution” used in Cl. (b ) of sub-S. (2) of S. 3 should be given a liberal construction to give effect to the legislative intent of public welfare. So construed, the impugned order is fully protected and is not ultra vires of S. 3 of the Essential Commodities Act , 1955.
Note : By the impugned order Central Government laid down certain restrictions on the possession of stock.
P.P. Enterprises vs Union of India AIR 1982 SC 1016 [LNIND 1982 SC 67]: 1982 SCC 341 (Cr): (1982) 2 SCC 33 [LNIND 1982 SC 67] : 1982 UJ 236 (SC).
29. The expression “food-stuff” as used in the Essential Commodities Act , 1955 comprehends cooked food.
Welcome Hotel vs State of Andhra Pradesh AIR 1983 SC 1015 [LNIND 1983 SC 206]: (1983) 4 SCC 575 [LNIND 1983 SC 206] : 1983 UJ 691 (SC).
30. There is a technical non-compliance, but since the provision was amended a year after the commission of the offence, the policy of the law seems to be that the price list should be exhibited only during business hours which was made clear by the amendment made after the commission of the offence. In these circumstances, therefore, the appellant can be said to have only committed a technical offence.
Krishna vs State of Uttar Pradesh 1983 SCC 105(1) (Cr).
31. It is wrong to contend that S. 10 of the Essential Commodities Act , 1955 precludes the prosecution of the Directors, of the officers and servants of the company or other person unless the company itself is prosecuted.
Facts : A complaint was laid by the State of Madhya Pradesh through the Inspector Food & Civil Supplies, Dewas against the Reghunandanlal Chaturvedi, the Managing Director and the Production Manager of M/ s 5-S Limited, a public limited company with its registered office at Calcutta.
Further that if the Contravention of the Order under S. 3 of the Essential Commodities Act , 1955 is by a company, the Company alone may be prosecuted or the conniving officer may individually be prosecuted.
One, some or all may be prosecuted. There is no statutory compulsion that the person-in-charge or an officer of the company may not be prosecuted unless he be ranked alongside the company itself. S. 10 indicates the persons who may be prosecuted, where the contravention is made by the company. It does not lay down any condition that the person-in-charge or an officer of the company may not be separately prosecuted if the company itself is not prosecuted. Each or any of them may be separately prosecuted or alongwith the company.
Notes :
(a ) State of Madras vs CVS Parekh. AIR 1971 SC 447, explained.
(b )First there should be finding that the contravention was by the company before the accused could be convicted.
Sheoratan Agarwal vs State of Madhya Pradesh AIR 1984 SC 1824 [LNIND 1984 SC 247]: (1984) 4 SCC 352 [LNIND 1984 SC 247] : 1984 Cr LR 388 (SC): (1984) 2 Crimes 566 .
32. S.10 of the EC Act is plain enough. If the contravention of the order made under S. 3 is by a company, the persons who may be held guilty and punished are (1) the company itself, (2) every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company whom for short we shall describe as the person-in-charge of the company, and (3)_ any director, manager, secretary or other officer of the company with whose consent or connivance or because of neglect attributable to whom the offence has been committed, whom for short we shall describe as an officer of the company. Any one or more or all of them may be prosecuted and punished. The company alone may be prosecuted. The person-in-charge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person-in-charge or an officer of the company may not be prosecuted unless he be ranged alongside the company itself. Section 10 indicates the persons who may be prosecuted where the contravention is made by the company. It does not lay down any condition that the person-in-charge or an officer of the company may not be separately prosecuted if the company itself is not prosecuted. Each or any of them may be separately prosecuted or along with the company. S. 10 lists the person who may be held guilty and punished when it is a company, that contravenes an order made under S. 3 of the Essential Commodities Act . Naturally, before the person-in-charge or an officer of the company is held guilty in that capacity it must be established that there has been a contravention of the order by the company.
State of Punjab vs Kasturi Lal 2004 Cri LJ 3866 (3867,3868) : AIR 2005 SC 4087 : (2004) 12 SCC 195 [LNIND 2004 SC 720] : (2004) 3 Crimes 216 : AIR 2005 SC 4135 [LNIND 2004 SC 720];
Government of NCT of Delhi vs D.A.M. Prabhu
2009 Cri LJ 1747 (1749, 1750) (SC): AIR 2009 SC 1891 [LNIND 2009 SC 302]: (2009) 3 SCC 264 [LNIND 2009 SC 302] .
33. Section 10 -Offences by Company. If the congtravention of the order made under Section 3 of Essential Commodities Act is by a company, the person who may be held guilty and punished are (1) the company itself. (2) every person who, at the time the contravention was committeed, was in charge of, and was responsible to, the company for the conduct of the business of the company whom, for short, we shall describe as the person in-charge of the company, and (3) any director, manager, secretary or other officer of the company with whose consent or connivance or becausee of neglect atributable to whom the offence has been committed, whom, for short, we shall describe as an officer of the company. Any one or more or all of them may be prosecuted and punished. The company alone may be prosecuted. The person- in-charge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person-in-charge or an officer of the company may not be separately prosecuted if the company itself is not prosecuted. Each or any of them may be separately prosecuted or along with the company. Section 10 lists the persons who may be held guilty and punished when it is a company that contravenes an order made under Section 3 of the Essential Commodities Act . Naturally, before the person-in-charge or an officer of the company is held guilty in that capacity it must be established that there has been a contravention of the order by the company.
Government of NCT of Delhi vs D.A.M. Prabhu 2009 Cri LJ 1747 (1749, 1750) (SC): AIR 2009 SC 1891 [LNIND 2009 SC 302]: (2009) 3 SCC 264 [LNIND 2009 SC 302] .
34. Associate unit is an “association of individuals” within the ambit of Explanation (a) to Section 10 of the EC Act, hence person in charge of a unit can be prosecuted for offence under Section 7 of the EC Act.
Order quashing the proceedings against the respondent was set aside.
Government of NCT of Delhi vs D.A.M. Prabhu 2009 Cri LJ 1747 (1749, 1750) (SC): AIR 2009 SC 1891 [LNIND 2009 SC 302]: (2009) 3 SCC 264) [LNIND 2009 SC 302] .
Essential Commodities Act , 1955, Ss. 10 and 7 .
35. The words used S 7(1) of the Essential Commodities Act are “if any person contravenes whether knowingly, intentionally or otherwise any Order made under S. 3 ”. The section is comprehensively worded so that it takes within its fold not only contraventions done knowingly or intentionally but even otherwise, i.e. , done unintentionally. The element of mens rea in export of fertilizer bags without a valid permit is, therefore, not a necessary ingredient for convicting a person for contravention of an order made under S. 3 if the factum of export or attempt to export is established by the evidence on record.
The respondents in each case were actually caught in the act of exporting fertilizer bags without a permit therefor from Madhya Pradesh to Maharashtra. The trucks were coming from Indore and were proceeding towards Maharashtra. The interception had taken place at Sendhwa Sales Tax Barrier which is only 8 miles away from the border of Maharashtra State. If the interception had not taken place, the export would have become a completed act and the fertiliser bags would have been successfully taken to Maharashtra State in contravention of the Fertilisers (Movement Control) Order, 1973. It was not, therefore, a case of mere preparation viz . the respondents trying to procure fertiliser bags from someone or trying to engage a lorry for taking those bags to Maharashtra. These were cases where the bags had been procured and were being taken in the lorries under cover of sales invoice for being delivered to the consignees and the lorries would have entered the Maharashtra border but for their interception at the Sendhwa Sales Tax Barrier.
Surely, no one can say that the respondents were taking the lorries with the fertiliser bags in them for innocuous purposes or for mere thrill or amusement and that they would have stopped well ahead of the border and taken back the lorries and the fertiliser bags to the initial place of despatch or to some other
place in Madhya Pradesh State itself. They were, therefore, clearly cases of attempted unlawful export of the fertiliser bags and not cases of mere preparations alone.
Facts : A truck bearing registration No. M.P. 3068 carrying 200 bags of fertilisers and proceeding from Indore to Maharashtra was intercepted on 12-2-1974 at Sendhwa Sales Tax Barrier situated at a distance of 8 miles from the border of Maharashtra State on the Agra Bombay Road, viz . National Highway No. 3.
The lorry driver was in possession of invoices and other records but they did not include a permit issued under the said Order.
Note : State’s appeal allowed.
State of Madhya Pradesh vs Narayan Singh AIR 1989 SC 1789 .
36. If the contravention of the order made under S. 3 is by a company, the persons who may be held guilty and punished are (1) the company itself, (2) every person who, at the time the contravention was committed, was in charge of and was responsible to, the company for the conduct of the business of the company whom for short (the person in-charge of the company), and (3) any director, manager, secretary or other officer of the company with whose consent or connivance or because of neglect attributable to whom the offence has been committed whom for short, an officer of the company. Any one or more or all of them may be prosecuted and punished. The company alone may be prosecuted. The person in-charge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person-in-charge or an officer of the company may not be prosecuted unless he be ranged alongside the company itself. Each or any of them may be separately prosecuted or along with the company. Section 10 lists the person who may beheld guilty and punished when it is a company that contravenes an order made under S. 3 of the Essential Commodities Act . Naturally, before the person-in-charge or an officer of the company is held guilty in that capacity it must be established that there has been a contravention of the order by the company.
State of Punjab vs Kasturi Lal 2004 Cri LJ 3866 : AIR 2005 SC 4135 [LNIND 2004 SC 720]: AIR 2004 SC 4087 [LNIND 2004 SC 720]: (2004) 12 SCC 195 [LNIND 2004 SC 720] : (2004) 3 Crimes 216 . 37. There is no vicarious liability in criminal law unless statute takes that also within its fold.
S. 10 of the Essential Commodities Act , 1955 does not make all the parties liable for the offence whether they do business or not.
More often it is common that some of the partners of a firm may not even be knowing of what is going on day to day in the firm. There may be partners, better known as sleeping partners who are not required to take part in the business of the firm. There may be ladies and minors who were admitted for the benefit of partnership. They may not know anything about the business of the firm. It would be a travesty of justice to prosecute all partners and ask them to prove under the proviso to sub-S. (1) that the offence was committed without there knowledge. It is significant to note that the obligation for the accused to prove under the proviso that the offence took place without his knowledge or that he exercised all due diligence to prevent such offence arises only when the prosecution establishes that the requisite condition mentioned in sub-S. (1) is established. The requisite condition is that the partner was responsible for carrying on the business and was during the relevant time in charge of the business. In the absence of any such proof, no partner could be convicted.
Sham Sundar vs State of Haryana AIR 1989 SC 1982 [LNIND 1989 SC 405].
38. S 6-B of the Essential Commodities Act posits that no order of confiscation of any essential commodity or conveyance, etc., shall be made unless the owner or the person from whom it is seized has been served with a notice informing him of the grounds on which it is proposed to confiscate the same and he has been given reasonable time to make a representation in writing against the grounds on which it is proposed to confiscate the same and he has been given reasonable time to make a representation in writing against the grounds set out in the notice and has been given a reasonable opportunity of being heard. This section incorporates the principles of natural justice to ensure that the owner or person from whom the essential commodity is seized has the fullest opportunity to satisfy the Collector against passing a confiscation order under S 6-A .
Shambhu Dayal Agarwala vs State of West Bengal 1990 SCC 489 (Cr): (1990) 3 SCC 549 [LNIND 1990 SC 299] : JT (1990) 2 SC 314 [LNIND 1990 SC 299].
39. It is pertinent to note that sub-S. (2) of S 6-C uses the words “return the essential commodity seized”.
It seems that having regard to the scheme of the Act, the object and purpose of the statute and the mischief it seeks to guard against, the word “release” is used in the limited sense of release for sale, etc., so that the same becomes available to the consumer public. There could be no question of releasing the commodity in the sense of returning it to the owner or person from whom it was seized even before the proceeding for confiscation stood completed and before the termination of the prosecution in the acquittal of the offender.
Note : The Collector cannot return the confiscated good to the owner or from whose possession it was taken when the prosecution is pending. Only the Criminal Courts in accordance with the provisions of sub-S. (5) of S. 452 of the Cr.P.Code has the power.
Shambhu Dayal Agarwala vs State of West Bengal 1990 SCC 489 (Cr): (1990) 3 SCC 549 [LNIND 1990 SC 299] : JT (1990) 2 SC 314 [LNIND 1990 SC 299].
40. The foodgrains were required to be distributed on the shandy day at Kotetara. He lifted the foodgrain at Badadwara in the evening of such a day. So there was no question of distribution of the foodgrains on that day itself. He has to wait for the next weekly shandy day. He has not attempted to sell the same at Baradwara. He has stored it at the cycle-shop. It is, therefore, not legitimate to infer that the appellant has kept concealed the foodgrains for sale in the black market.
Jayant Kumar Sharma vs State of Madhya Pradesh AIR 1991 SC 1501 : 1991 SCC 1056 (Cr): (1991) 2 (Supp) SCC 414 .
41. Mere expiry of period of Control Order does not make any difference.
From the facts stated it can be seen that the Haryana Milk and Products Control Order, 1975 was made only for a period of about 2 months only. The offence was committed in the year of 1975. Further, the case of the appellant is that he has not made the cream for selling or for storing, etc. It was made only for the purpose of preparing ghee which was used in preparation of sweets. From this it cannot be said that he did not commit any offence. From the record it appears that the Supreme Court granted bail while issuing notice and that the same shows that the petitioner was in Jail for some days. Under the circumstances, the conviction is confirmed but the sentence is reduced to the period already undergone.
Isher Dass vs State of Haryana AIR 1992 SC 1595 : (1993) 1 (Supp) SCC 644 : 1992 Cr LJ 2327 .
42. As the offence under S 7(1)(a)2 . of the Essential Commodities Act is punishable with imprisonment up to 7 years, the offence would not attract the bar of limitation under S. 468 of the Cr.P.Code .
Nirmal Kanti Roy vs State of West Bengal AIR 1998 SC 2322 [LNIND 1998 SC 477]: 1998 SCC 1100 (Cr): (1998) 4 SCC 590 [LNIND 1998 SC 477] : 1998 Cr LJ 3282 : JT (1998) 3 SC 436 [LNIND 1998 SC 477]: 1998 Cr App R 203 (SC): 1998 Cr LR 573 (SC): (1998) 2 Crimes 267 .
43. The effect of proviso to Cl. (f ) of S 12-AA(1) is not to amend S. 7 by making the offence punishable only up to two years. The effect of the proviso is to limit the jurisdiction of the Special Court in awarding sentence. That is different from understanding the extent of the sentence, whether the offence had been reduced by the Parliament through a process other than amendment of the provision. One has to look at the punishing provision to know the extent of the sentence prescribed and not at the limit fixed for a particular Court in the matter of awarding sentence, e.g. , S. 326 of the I.P.Code deals with an offence punishable with imprisonment for life or with imprisonment for a term which may extend to 10 years, but that offence is triable by a Magistrate of first class, the upper limit of whose powers in the matter of awarding sentence is restricted by S 29(2) of the Cr.P.Code as 3 years. By reason of that section, it cannot be assumed that the offence under S. 326 , I.P.Code is punishable only with imprisonment for 3 years.
Nirmal Kanti Roy vs State of West Bengal AIR 1998 SC 2322 [LNIND 1998 SC 477]: 1998 SCC 1100 (Cr): (1998) 4 SCC 590 [LNIND 1998 SC 477] : 1998 Cr LJ 3282 : JT (1998) 3 SC 436 [LNIND 1998 SC 477]: 1998 Cr App R 203 (SC): 1998 Cr LR 573 (SC): (1998) 2 Crimes 267 .
44. The measure of fine which is required to be levied in lieu of confiscation under the second proviso to S 6-A(1) of the Essential Commodities Act , 1955 would be relatable to the market price of the confiscated vehicle and not on the basis of the market price of the essential commodity sought to be carried by such vehicle.
So, limit of such fine would be up-to the market price of the vehicle on the relevant date and it is within the discretion of the competent authority to fix such reasonable amount considering the facts and circumstances of each case.
Dy. Commr., Dakshina Kannada District vs Rudolph Fernandes AIR 2000 SC 1132 [LNIND 2000 SC 396]: 2000 SCC 632 (Cr): (2000) 3 SCC 306 [LNIND 2000 SC 396] .
45. During the period the Essential Commodities (Special Provisions) Act was in force, the special Court constituted for trial of offences under Essential Commodities Act had exclusive jurisdiction to try such cases. The special Court had also the power to pass order of remand under S. 167 , Cr.P.Code but the provision changed after the Essential Commodities (Special Provisions) Act lapsed by efflux of time.
Thereafter, the position that used to prevail before the Essential Commodities (Special Provisions) Act was enforced, stood restored and the Judicial Magistrates who were previously competent to try the Essential Commodities Act cases got the jurisdiction to deal with such cases. Thus, the remand orders passed by the special Court at Madurai, long after it had ceased to exercise jurisdiction in cases under the Essential Commodities Act are incompetent. Coming to the question whether the special Court constituted for trial of cases under the NDPS Act could exercise the power of remand of an accused in the Essential Commodities Act case which it was doing when the special Court constituted for the Essential Commodities Act cases was in existence, the answer to the question is in the negative; for the simple reason that the special Court constituted for NDPS Act cases is a Court of exclusive jurisdiction for trial of the particular class of cases provided under the NDPS Act and it has not been vested with power of Judicial Magistrate for the purpose of dealing with Essential Commodities Act cases. To accept the
contention raised on behalf of the appellant in this regard would be contrary to the scheme of things under the Criminal Procedure Code which specifically vests the power of remand under S. 167 , Cr.P.Code in Judicial Magistrate.
State of Tamil Nadu vs Parmasiva Pandian AIR 2001 SC 2972 [LNIND 2001 SC 265]: 2002 SCC 62 (Cr): (2002) 1 SCC 15 [LNIND 2001 SC 265] : (2001) 4 Crimes 391 .
46. E.C. Act, S. 7(1)(a)2.–Seeds (Control ) Order 1983, Cls 3 (1 ), 8 (a ), (b ), 181.–Sentence reduction–
Accused appellant was found guilty for carrying seed business without obtaining a valid licence. Keeping in view the fact that only small quantity of seeds had been seized and the fact that the accused was aged 17 years of age, a young boy at the time of the commission of the offence, the sentence was reduced to the period already undergone.
S. Chinnasamy vs Seed Inspector, Coimbatore 2006 Cri LJ 4761 (4761) : AIR 2007 SC 109 [LNIND 2006 SC 1464]: (2006) 11 SCC 486 [LNIND 2006 SC 1464] : (2006) 4 Crimes 145 .
47. The entire field of regulating the purchase and sale of paddy or the rice produced out of paddy is not covered under the Control Order. The provisions of the Marketing Act do not trench up the field covered by the Control Order. There is no inconsistency between the Control Order and the Marketing Act. They do not cover the same field and, therefore, the question of any inconsistency, repugnancy or the Marketing Act being ineffectual in terms of S. 6 of the Essential Commodities Act in view of the Control Order issued under S. 3 of the Essential Commodities Act , would not arise. The Control Order deals with the compulsory acquisition of 1/3rd of rice of each variety produced by a miller at a purchase price fixed by the Government. It requires the miller to supply to the Government or its purchase agent and deliver the procured rice at a notified place. It does not deal with the sale and purchase of the remaining 2/3rd rice except that the miller is not permitted to remove the stock of rice from the mill premises without delivery of rice to the Government or its purchase agent and without obtaining a release certificate required to be taken under Cl. 8 of the said Order. It does not deal with the marketing or the facilities to be provided to the grower, seller and purchaser of paddy in the market area or to the seller or purchaser of rice. The Control Order is, thus, limited in operation. The Marketing Act provides for the regulation of marketing of agricultural produce (which rice is) and the establishment and administration of markets for agricultural produce and matters connected therewith in the State of Karnataka. The Marketing Act deals with the entire gamut of marketing of agricultural produce starting from the establishment of the Market Committees, markets, declaration of market area, market yard, market sub-yard, regulation of marketing of specified agricultural produce therein and for obtaining a licence under the Act, the process of appointing/electing the Market Committees, the powers and duties of the Market Committee [ S 63(1) ], the facilities to be provided by the Market Committee [ S 63(2) ] and the levy of market fee (S. 65 ). The Marketing Act does not deal with any of the provisions made in the Control Order. The Control Order and the Marketing Act do deal with the same subject but do not cover the same field. There is no conflict between them. They do not occupy the same field. The Marketing Act deals with a cognate matter on the same subject but not the field which is already occupied by the Control Order.
H.S. Jayanna & Bros. vs State of Karnataka AIR 2002 SC 1285 [LNIND 2002 SC 178]: (2002) 4 SCC 125 [LNIND 2002 SC 178] : JT (2002) 2 SC 549 [LNIND 2002 SC 178].
48. It is not disputed that the method of grant of licence as well as the conditions of licence and its renewal are provided in the Statutory Order framed under the Essential Commodities Act . Cl. 2(d ) of the Statutory Order provides that “dealer” means a person engaged in the business of purchase, sale or storage for sale of High Speed Diesel Oil or Light Diesel Oil or both but does not include an oil company. Cl. 2(h ) of the Statutory Order provides that the “licensee” means a dealer holding a licence granted under the
provisions of this Order. Cl. 4 of the Statutory Order further provides that for grant or renewal of a licence, an application in Form “B” attached to the Order, shall be given to the Licensing Authority. Every licence granted or renewed under this Order shall be in Form “C” and shall be subject to the conditions specified therein. Cl. 8 of the Statutory Order further provides that the Licensing Authority may, for reasons to be recorded in writing, suspend or cancel any licence if it is satisfied that the licensee has contravened any provisions of this order or the conditions of the licence or any direction issued thereunder. It is not disputed that the respondent was granted licence under the Statutory Order. Form “B”
attached to the Statutory Order does not show that the licence to vend Diesel Oil can be refused if the applicant has place of business within the radius of 5 kms. of a retail outlet. Similarly, neither Cl. 4 nor Form “C” attached to the Statutory Order provides that no licence shall be renewed if the place of business of a licensee falls within a radius of 5 kms. of a Government retail outlet. It is, therefore, manifest from the provisions of the Statutory Order that insofar as conditions of grant of licence for sale of Diesel Oil and its renewal are concerned, the Statutory Order is a complete code in itself and there is no provision in the Statutory Order under which a Licensing Authority could refuse to renew a licence if licensee’s place of business falls within a radius of 5 kms. of a Government run retail outlet.
State of U.P. vs Daulat Ram Gupta AIR 2002 SC 1633 [LNIND 2002 SC 246]: (2002) 4 SCC 98 [LNIND 2002 SC 246] : JT (2002) 3 SC 431 [LNIND 2002 SC 245].
49. S. 10 of the Essential Commodities Act , 1955 is plain enough. If the contravention of the order made under S. 3 is by a company, the persons who may be held guilty and punished are: (1 ) the company itself;
(2 ) every person who, at the time the contravention was committed, was in charge of and was responsible to the company for the conduct of the business of the company whom for short we shall describe as the person-in-charge of the company; and (3 ) any director, manager, secretary or other officer of the company with whose consent or connivance or because of neglect attributable to whom the offence has been committed, whom for short we shall describe as an officer of the company. Anyone or more or all of them may be prosecuted and punished. The company alone may be prosecuted. The person-in-charge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person-in-charge or an officer of the company may not be prosecuted unless he be ranged alongside the company itself. S. 10 indicates the persons who may be prosecuted where the contravention is made by the company. It does not lay down any condition that the person-in-charge or an officer of the company may not be separately prosecuted if the company itself is not prosecuted. Each or any of them may be separately prosecuted or alongwith the company. S. 10 lists the person who may be held guilty and punished when it is a company that contravenes an order made under S. 3 of the Essential Commodities Act . Naturally, before the person-in-charge or an officer of the company is held guilty in that capacity it must be established that there has been a contravention of the order by the company.
State of Punjab vs Kasturi Lal AIR 2004 SC 4087 [LNIND 2004 SC 720]: JT (2004) 6 SC 137 [LNIND 2004 SC 720]: (2004) 2 JCC 1195 : (2004) 3 Crimes 216 .
50. S 3(2)1 . of the Essential Commodities Act , 1955 confers power upon the State Government to issue an order requiring a person to maintain books of accounts and records relating to their business. The appellant is said to have violated the provisions of the Bihar Trade Articles (Licences Unification) Order, 1984 whereunder a licence is issued to a dealer and one of the terms and conditions of the licence is that a person shall be required to maintain stock register. This provision in the said Order has been made in the exercise of powers under S 3(2)1 . of the Act and if there is any violation of the said provision, the same would make it punishable under S 7(1)(a)1 . of the Act. In case the violation alleged is in relation to discrepancy in the entry made in the stock register vis-a-vis actual stock found on physical verification, the same is punishable under S 7(1)(a)1 . of the Act. Thus, the conviction of the appellant under S 7(1)(a)2
. was wholly unwarranted rather as a matter of fact, the appellant should have been convicted under S 7(1)(a)1 . of the Act whereunder no minimum sentence has been prescribed.
Gurudeo Prasad Gupta vs State of Bihar 2004 SCC 1738 (Cr): (2004) 6 SCC 28 .
51. S. 7 refers to contravention of any order made under S. 3 . It is essential for bringing in application of S. 7 to show that some order has been made under S. 3 and the order has been contravened.
Prakash Babu Raghuvanshi vs State of M.P. (2004) 7 SCC 490 [LNIND 2004 SC 924] : (2004) 4 Crimes 832004 SCC 1966 (G).
52. The provisions of Maharashtra Control of Organized Crime Act , 1999 can be applied to the offence committed under Ss. 3, 7 of the Essential Commodities Act , 1955.
State of Maharashtra vs Lalit Somdatta Nagpal 2007 Cri LJ 1678 (1687) : 2007(2) SCR 473 [LNIND 2007 SC 152] : 2007(4) SCC 171 [LNIND 2007 SC 152] . 2007(3) JT 466 : 2007(2) Supreme 1018 . 2007(2) SLT 428 : 2007 CrLJ 1678 : 2007(2) SCC 241 (Cr): 2007(3) SCALE 49 [LNIND 2007 SC 152] . See also “Control Order”, “Rice”.
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