COLLECTOR OF GANJAM AND ANR.versusRAMESH CHANDER PADHI

                         (2009] 1 S.C.R. 957


               COLLECTOR OF GANJAM AND ANR.                         A
                                 v.
                   RAMESH CHANDER PADHI
                  (Civil Appeal No. 755 of 2009)
                        FEBRUARY 6, 2009
                                                                    B
            [DR. ARIJIT PASAYAT AND ASOK KUMAR
                         GANGULY, JJ.]

         Essential Commodities Act, 1955:
                                                                    c
          s.6-A(1), Second proviso - Confiscation of essential
     commodity - Offending vehicle seized - Release of vehicle
     - Fine - Held: Measure of fine in lieu of confiscation would
     be relatable to market price of vehicle and not of seized
     essential commodity - Matter remitted to High Court for        D
     decision afresh.

          In a case of contravention of clause 8 of Orissa
     Kerosene Control Order, 1962 read with Kerosene Control
     (Registration on Use and Fixation of Ceiling Price) Order,
     1993, 42 liters of Kerosene and the vehicle (a bus) were       E
     seized. The Collector directed confiscation of the vehicle
     in terms of s.6-A of the Essential Commodities Act, 1955.
     However, in view of the second proviso to s.6-A(1) of the
     Act, the Collector directed the owner of the vehicle to pay
     a fine of Rs.20,000/-. The plea of the owner of the vehicle    F
     that in view of the second proviso to s.6-A(1) of the Act,
     the fine imposed in lieu of confiscation could not exceed
     the market price of the essential commodity seized, found
     favour with the High Court.
                                                                    G
         In the appeal filed on behalf of the State, it was
-~
     contended for the appellants that the High Court erred in
     not keeping in view the true scope and ambit of the
     second proviso to s.6-A(1) of the Act.
                                 957                                H
    958          SUPREME COURT REPORTS             [2009) 1 S.C.R.


A       Allowing the appeal and remitting the matter to the
    High Court, the Court

       HELD:This Court has held that the measure of fine
  which is required to be levied in lieu of confiscation under
  the second proviso to s.6-A(1) of Esential Commodities
8
  Act, 1955 would be relatable to the market price of the
  vehicle and not of the seized essential commodity. The
  High Court does not appear to have considered the
  scope and ambit of the second proviso of s.6-A(1) of the
  Act in its proper perspective. The High Court would
C accordingly consider the matter afresh. [Para 7, 9 and 10]
  (964-C-D-F-G]

      Deputy Commissioner, Dakshina Kannada District v.
  Rudolph Fernandes (2000) 3 SCC 306 and Shambhu Dayal
0 AgarNala v. State of W.B (1990) 3 sec 569, relied on.
                          Case Law Reference:

           (2003) 3 sec 306          relied on           para 7

          (1190) 3 sec 569           relied on           para 7
E
         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 755
    of 2009.

      From the Order and Judgment dated 24.7.2006 of the High
F Court of Orissa at Cuttack in W.P.(C)No. 9459 of 2006.

          Sibo Sankar Mishra for the Appellants.

          The Judgment of the Court was delivered by

          DR. ARIJIT PASAYAT, J.1. Leave granted.
G
       2. Challenge in this appeal is to the judgment of a learned
  Single Judge of the Orissa High Court setting aside part of the
  order imposing fine in lieu of confiscation and directing the
  Collector, Ganjam to pass orders under second proviso to
H Section 6-A(1) of the Essential Commodities Act, 1955 (in short
              COLLECTOR OF GANJAM AND ANR. v. RAMESH                    959
                CHANDER.PADHI [DR. ARIJIT PASAYAT, J.]

          the 'Act'). The writ petition was filed against the order dated      A
--+---    29.5.2006 of Collector, Ganjam in a proceeding under Section
          6-A of the Act.

               3. Facts leading to initiation of the aforesaid case is that
          on 21.12.2004 while the Marketing Inspector, Jaganathprasad
                                                                               B
          Block, while following the Sub-Collector, Bhanjanagar during
          tour to Jaganathprasad Block, found one bus bearing
          registration No.OIG-185 parked at the Bus Stand and kerosene
          oil was being poured in the oil tank of the bus. Looking at them,
          both the driver and the conductor of the vehicle fled away. He
          drained out the kerosene oil from the oil tank of the bus which
                                                                               c
          contained 42 liters of kerosene, and prepared the sample list
          by taking 2 liters out of the seized kerosene oil for its chemical
          examination. The bus as well as kerosene were seized and a
          proceeding bearing EME No.37 of 2004 was initiated against
          the respondent and another under Section 6-A of the Act. The         D
   ...    proceeding was initiated for contravention of Clause 8 of
          Orissa Kerosene Control Order, 1962 read with Clause 3 of
          Kerosene Control (Restriction on use and Fixation of Ceiling
          Price), 1993. In the said proceeding, the respondent who is the
          owner of the bus filed an application for release of the vehicle.    E
          While deciding the aforesaid application, the Collector
          concluded the proceeding under Section 6-A of the Act and
          directed confiscation of the vehicle. However, the Collector in
          view of the provisions contained in Section 6-A of the Act
    ,I.
          directed the respondent to pay a fine of Rs.20,000/-.                F

               4. Stand of the writ petitioner was that while considering
          the application for release of the vehicle, the Collector could
          not have concluded the proceedings under Section 6-A(1) of
          the Act. It was also pointed out that if the Collector concluded
                                                                               G
          the proceedings under Section 6-A(1) of the Act, there was no
          reason for him to impose conditions such as payment of fine
          of Rs.20,000/-. With reference to second proviso to section 6-
          A(1) of the Act it was submitted that if fine is imposed in lieu
          of confiscation, the same shall not exceed the market price of
                                                                               H
    960           SUPREME COURT REPORTS                (2009) 1 S.C.R.


A the essential commodities seized. This plea found favour with
  learned Single Judge.

         5. In support of the appeal, learned counsel for the
    appellants submitted that the true scope and ambit of second
    proviso to Section 6-A(1) of the Act has not been kept in view.
8
         6. There is no appearance on behalf of the respondent in
    spite of service of notice.

          7. The true scope and ambit of second proviso to Section
c   6-A(1) of the Act was examined by this Court in Deputy
    Commissioner, Dakshina Kannada District v. Rudolph
    Fernandes (2000 (3) SCC 306). It was inter-alia observed as
    follows:

          "4. The short question involved in these appeals is -
D         whether fine in lieu of confiscation contemplated under the
          second proviso to Section 6-A(1) of the Essential
          Commodities Act, 1955 (hereinafter referred to as "the
          Act") provides for levy of fine on the basis of market value
          of the confiscated vehicle or on the basis of the market
E         price of the essential commodity sought to be carried by
          such vehicle. Section 6-A of the Act is as under:

          "6-A Confiscation of essential commodity.-(1) Where
          any essential commodity is seized in pursuance of an order
F         made under Section 3 in relation thereto, a report of such
          seizure shall, without unreasonable delay, be made to the
          Collector of the district or the presidency town in which
          such essential commodity is seized and whether or not a
          prosecution is instituted for the contravention of such order,
          the Collector may, if he thinks it expedient so to do, direct
G
          the essential commodity so seized to be produced for
          inspection before him, and if he is satisfied that there has
          been a contravention of the order may order confiscation
          of-
H         (a) the essential commodity so seized;
COLLECTOR OF GANJAM AND ANR. v. RAMESH                    961
  CHANDER PADHI [DR. ARIJIT PASAYAT, J.]

 (b) any package, covering or receptacle in which such            A
 essential commodity is found; and

 (c) any animal, vehicle, vessel or other conveyance used
 in carrying such essential commodity:

        Provided ....                                             B

       Provided further that in the case of any animal,
 vehicle, vessel or other conveyance used for the carriage
 of goods or passengers for hire, the owner of such animal,
 vehicle, vessel or other conveyance shall be given an option     C
 to pay, in lieu of its confiscation, a fine not exceeding the
 market price at the date of seizure of the essential
 commodity sought to be carried by such animal, vehicle,
 vessel or other conveyance."

                                        (emphasis supplied)       D

 5. At the outset it is to be stated that the object of the Act
 is to deter a person from illegally dealing in an essential
 commodity and consequently, impose a deterrent penalty
 against a person dealing in them illegally. While doing so,      E
 the law takes care to prevent the owner of any vehicle from
 aiding or assisting such an illegal activity. As per the
 Preamble of the Act, the Act is to provide, in the interest
 of the general public, for the control of the production,
 supply and distribution of, and trade and commerce, in           F
 certain commodities. For this purpose, Section 3
 empowers the Central Government to provide for
 regulating or prohibiting the production, supply and
 distribution of the essential commodity and trade and
 commerce therein if the same is considered necessary or          G
 expedient inter-alia for maintaining or increasing supply of
 any essential commodity or for securing their equitable
 distribution and availability at fair prices by passing an
 appropriate order. Section 6-A as quoted above provides
 for seizure and confiscation of the essential commodity for      H
    962           SUPREME COURT REPORTS                 [2009] 1 S.C.R.


A           contravention of any order issued under Section 3. Further
            Section 6-8 provides for issuance of show-cause notice
            and the procedure for confiscation of the seized essential
            commodity as well as any package, covering or receptacle
            in which the essential commodity is found or any animal,
B          vehicle, vessel or other conveyance used in carrying such
           essential commodity. Section 6-C provides for appeal
           against the confiscation order and the procedure for return
           of the confiscated article in case where appeal filed
           against the confiscation order or the order passed under
c          Section 7 forfeiting the essential commodity is set aside.
           Thereafter, Section 6-D provides that the order of any
           confiscation under the Act shall not prevent the infliction of
           any punishment to which the person affected thereby is
           liable under the Act. Therefore, even if the essential
           commodity or the vehicle is confiscated, the person can
D
           be prosecuted and the penalty provided under Section 7
           can be imposed. Section 7{1)(a) provides for punishment
          to any person who contravenes any order made under
          Section 3. Section 7(1)(b) and (c) empowers the court to
          forfeit to the Government any property in respect of which
E         the order has been contravened or to forfeit any package,
          covering or receptacle in which the property is found and
          also any animal, vehicle, vessel or other conveyance used
          in carrying the property.

F     6. In the light of the aforesaid provisions, the second
      proviso to Section 6-A [sic 6-A(1)] is required to be
      considered. First it is to be stated that the proviso limits
      the power of the competent authority to recover fine up to
      the market price for releasing the animal, vehicle, vessel
G     or other conveyance sought to be confiscated. So
      maximum fine that can be levied in lieu of confiscation
      should not exceed the market price. For our purpose, the
      relevant part of the proviso would be "in the case of ...
      vehicle ... the owner of such ... vehicle ... shall be given an
H     option to pay, in lieu of its confiscation, a fine not
COLLECTOR OF GANJAM AND ANR. v. RAMESH                 963
  CHANDER PADHI [DR. ARIJIT PASAYAT, J.]

exceeding the market price at the date of seizure of the A
essential commodity sought to be carried by such ...
vehicle". Question is-whether fine should not exceed the
market price of the seized essential commodity or whether
it should not exceed the market price of the vehicle. For
this purpose, it appears that there is some ambiguity in B
the section. It is not specifically provided that in lieu of
confiscation of the vehicle a fine not exceeding the market
price of the vehicle or of the seized essential commodity
is to be taken as a measure. Still however, it is difficult to
say that the measure of fine is related to the market price c
of the essential commodity at the date of its seizure. It
nowhere provides that fine should not exceed the market
price of the essential commodity at the date of seizure of
the vehicle. The proviso requires the competent authority
to give an option to the owner of such vehicle to pay in lieu
                                                               0
of confiscation a fine not exceeding the market price.
What is to be confiscated is the vehicle and, therefore, the
measure of fine would be relatable to the market price of
the vehicle at the date of seizure of the essential
commodity sought to be carried by such vehicle. This E
would also be consistent with the scheme of Section 7
which provides for levy of penalty. It empowers the court
trying the criminal case to pass an order forfeiting to the
Government any property in respect of which the order
under Section 3 has been contravened. It also empowers
forfeiture to the Government of any package, covering or F
receptacle in which the property is found and in addition
any animal, vehicle, vessel or other conveyance used in
carrying the commodity. Therefore, not only the essential
commodity which is seized is to be forfeited, but the vehicle
also could be forfeited to the Government. Hence, the G
measure of fine which is required to be levied in lieu of
confiscation under the second proviso to Section 6-A(1)
would be relatable to the market price of the vehicle and
not of the seized essential commodity. And, the fine
amount in lieu of confiscation is not to exceed the market H
    964            SUPREME COURT REPORTS               (2009] 1 S.C.R.


A          price of the vehicle on the date of seizure of the essential
           commodity. That is to say, the 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
B          circumstances of each case.

           7. In Shambhu Dayal Agarwala v. State of WB (1990 (3)
           SCC 569) after considering the scheme of Sections 6-A
           and 7 and dealing with the proviso (ii) to sub-section (2)
           of Section 6-A, this Court observed: (SCC p. 555, para 6)
c
                  "Section 6-A, therefore, merely confers power of
                  confiscation and not the power of release, disposal,
                  distribution, etc., except to the limited extent
                  permitted by sub-section (2) thereof. Of course, the
D                 second proviso to sub-section (1) of Section 6-A
                  permits the grant of an option to pay, in lieu of
                  confiscation of any animal, vehicle, vessel or other
                  conveyance, a fine equal to its market price at the
                  date of seizure." (emphasis added)
E
        8. As a matter of fact in Shambhu Dayal Agarwala's case
    (supra) (at para 6) this Court dealt with the position and
    observed as quoted above.

       9. Learned Single Judge does not appear to have
F considered the scope and ambit of second proviso to 'section
  6-A( 1) of the Act in its proper perspective.

       10. Accordingly, we set aside the impugned order and
  remit the mater to the High Court to consider the· matter afresh
G in view of what has been stated in Deputy Commissioner,
  Dakshina's case (supra).

           11. The appeal is allowed.

    R.P.                                             Appeal allowed.
H