M/S PRECIOUS OIL CORPORATION AND ORSversusSTATE OF ASSAM

                         [2009] 1 S.C.R. 762


A        MIS PRECIOUS OIL CORPORATION AND ORS
                              v.
                      STATE OF ASSAM
              (Criminal Appeal No. 212 of 2008)
                       FEBRUARY 5, 2009
B
          [DR. ARIJIT PASAYAT, P. SATHASIVAM AND
                       AFTAB ALAM, JJ.]

      LUBRICATING OIL AND GREASES (PROCESS/NG,
C SUPPLY AND DISTRIBUTION REGULATION) ORDER,
  1987:

       Clauses 3,4 and 5(3) - Accused found carrying on
  business of processing lubricating oil without licence, keeping       r

0 huge quantity thereof and sample taken found to be
  adulterated - Accused not maintaining proper books of             ~ ....
  account - Sentence of one month's simple imprisonment and
  fine of Rs. 3, 0001- imposed on each of the accused uls
  7(1)(a)(i) of Essential Commodities Act, 1955, affirmed by
E High Court - Conviction and sentence upheld - In such white-
  collar offences accused cannot be let off on probation -
  Essential Commodities Act, 1955 - s. 7(1)(a)(i} - Probation
  of Offenders Act, 1958.

      Appellant no.1 concern, its proprietor A-2 and
F employee A-3 were prosecuted for commission of
  offences punishable u/s 7(1 )(a)(i) of the Essential
  Commodities Act, 1955. The prosecution case was that
  when the Inspector of Food and Civil Supplies inspected
  the premises of the appellant concern, he found that
G though the accused were in the business for over six
  months, they did not possess the necessary licence as
  required under the Lubricating Oil and Greases
  (Processing, Supply and Distribution Regulation) Order,
  1987; that on an analysis of the sample of the lubricating
H                               762
        PRECIOUS OIL CORPORATION AND ORS v. STATE OF 763
                           ASSAM

        oil taken from th«;i premises of the appellant concern, the     A
        same was found to be adulterated; though a large
        quantity of lubricating oil was found stored in the
        premises of the concern, proper books of account were
        not found to have been maintained by it; and, thus, the
        accused were found to have violated Clauses 3, 4, and           B
        5(5) of the Order. The trial court convicted the accused
        of the offences charged and sentenced them to simple
        imprisonment for one month and to pay a fine of Rs.
        3000/- each. The High Court affirmed the conviction and
        the sentence.                                                   c
             In the appeal filed by the accused, it was contended
        for the appellants that there was no mens rea and no sale
        was involved and, therefore, the appellants could not be

....
~-
        said to have violated provisions of the 1987 Order. It was
        alternatively pleaded that, in any event, the appellants        D
        were entitled to benefit of the Probation of Offenders Act,
        1958.
            Dismissing the appeal, the Court
             HELD: 1.1. Although the accused took the plea that         E
        there was no sale, but there was display board showing
        stocks and prices of the articles. This itself was indicative
        of the fact that sale transactions were being carried on.
        The allegations against the accused, inter-alia, were that
        no licence was obtained, proper books of account were           F
        not maintained and adulterated lubricating oil in a large
        quantity was stored. The trial court found the appellants
        guilty and the High Court rightly affirmed the conviction
        and sentence. [Para 5, 11 and 12] [766-G; 768-A, E-F; 767-
        G-H]                                                            G

   ~'
            lshar Das v. State of Punjab 1973 (2) SCC 65 and
        Pyarali K. Tejani v. Ma.hadeo Ramchandra Dange and ·Ors.
        1974 (1) sec 167, relied on.

            2. The plea relating to Probation of Offenders Act,         H
    764          SUPREME COURT REPORTS             [2009) 1 S.C.R.


A 1958 raised by the accused was rightly rejected by the
  High Court holding that the offence alleged was a white-
  collar offence. Application of the probation principles is
  negatived by the imperatives of social defence and the
  improbabilities of moral proselytisation. No chances can
B be taken by society with a man whose anti-social
  operations, disguised as a respectable trade, imperil
  numerous innocents. He is a security risk. Besides, the
  white-collar criminals committing economic offences are
  unlikely to be dissuaded by the gentle probationary
C process. In the circumstances, the accused cannot be let
  off on probation.[Para 5, 14 and 15] [766-H; 769-D-E; 767-
  A; 770-C]

                          Case Law Reference:

D         1913 (2) sec 65             relied on           para 13
          1974 (1) sec 167           relied on            para 16
        CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
    No. 212 of 2009.
E      From the final Judgment and Order dated 14.9.2007 of the
    Gauhati High Court in Crl. Appeal No. 28 of 2002.

          Ashok K. Srivastava and lndrajeet Das for the Appellants.

F       Avijit Roy (for M/s. Corporate Law Group) for the
    Respondent.

          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 Guwahati High Court upholding the
  conviction of the appellants for offence punishable under
  Section 7(1 )(a)(i) of the Essential Commodities Act, 1955 ( in
  short the 'Act'). The allegation was that the appelldnt had
H violated Clause 3 of the Lubricating Oil and Greases
 PRECIOUS OIL CORPORATION AND ORS v. STATE OF 765
          ASSAM [DR. ARIJIT PASAYAT, J.]

(Processing, Supply and Distribution Regulation) Order, 1987        A
(in short the 'Control Order'). Simple imprisonment of one month
and fine of Rs.3,000/- each with default stipulation was
awarded to the accused persons.

       3. The prosecution against the accused-appellants was
                                                                     8
 initiated on the basis of an offence report submitted by Sir
 Dhiraj Choudhury, Inspector of Food and Civil Supplies,
 Assam, Guwahati PW-3 alleging inter-alia that on 1-10-1996
 he along with two other Inspectors of Food and Civil Supplies
 Department visited the processing industry of lubricating oil C
 belonging to the appellant no.2, situated near Lankeswar,
 Jalukbari, Guwahati and on such inspection, it was found that
 the concern did not possess necessary license as required
 under the Control Oraer and also proper books of account etc
 as required under the law were not produced. The inspecting
 team found that no license could be produced for the D
 processing unit and thereby violated Clause 3 of the Control
 Order. The accused had failed to obtain proper license as
 required under law within 6 months of commencement of
processing and thereby has violated clause 5(5) of the Control
 Order. The inspecting team collected and sent the samples of E
  lubricating oil for necessary analysis to thee approved
laboratory. After such analysis, it was found that the said
lubricating oil could not be considered as Automotive
Lubricating Oil, thereby violating Clause 4 of the Control Order
attracting punishment for sale of adulterated lubricating oil. The F
team seized from the appellants re-refined lubricating oil in 380
sealed tins of 1 litre each, 1,210 litres in 6 barrels containing
205 litres each, 19,475 litres of used lubricating oil in 95 barrels
containing 205 litres in each, 20 kgs. of grease in one loose ·
barrel, 920 numbers of empty tins of 1 litre capacity for TOPOL G
20 W/40, one book of accounts, an extract copy of the Display
Board of Stock and Prices displayed in the office premises, 3
litres of TOPOL, 20 W/46 contained in 3 sealed tins. The
inspector having found prima facie violation of Clauses 3, 4 and
5(5) of the Control Order punishable under Section 7 of the Act, H
    766          SUPREME COURT REPORTS             [2009] 1 S.C.R.


A submitted the offence report against the appellants in the Court
  of the learned Sessions Judge, Kamrup for necessary
  prosecution under the law. The accused-appellant no.1 is the
  concern itself and the accused No.2 is the Proprietor of the
  concern and accused no.3 is an employee of the concern. On
B the basis of the aforesaid offence report, Sp1. Case No.5 of
  97 was registered in the Court of the learned Sessions Judge,
  Guwahati.

       4. Summons having been served, the appellants appeared
C in the case and vide order dated 19.8.1997, the learned trial
  judge explained the offences to them about allegations of
  contravention of Clauses 3, 4 and 5(5) of the Control Order
  punishable under Section 7(1 )(a)(i) of the Act.

          5. Accused persons pleaded not guilty and therefore trial
D   was held. Three witnesses were examined to further the
    prosecution version. Appellant No.2 examined himself as DW-
    1. The stand of the appellants was that appellant No.2 the
    proprietor of the concern had applied for issuance of license
    under the Control Order to the competent authority. Since no
                                                                       '
E   action was taken even though all formalities were complied with,
    the High Court was approached by filing Civil Rule 2185 of 1997
                                                                       I
    for necessary directions to issue the license. The High Court
    by its order dated 20.5.1997 disposed of the writ petition
    directing the appellant to consider the case of the writ
F   petitioners in the matter of issuance of license for processing
    lubricating oil and grease. It was further submitted that
    Inspector of Food and Civil Supplies was not authorized to
    conduct the inspection and/or to submit the offence report in
    terms of Clause 8 of the Control Order. Strong reliance was
G   placed on a decision of this Court in Murari/al Jhunjhunwala
    v. State ofBiharand Ors. (AIR 1991SC515). The trial Court
    found the appellants guilty and the High Court affirmed the
    same. The High Court noted that different stands were taken
    before it. A plea relating to Probation of Offenders Act, 1958
H   (in short the 'Probation Act') was rejected holding that the
          PRECIOUS OIL CORPORATION AND ORS v. STATE OF 767
                   ASSAM [DR. ARIJIT PASAYAT, J.]

          offence alleged was a white-collar offence.                         A

                6. Stand of the appellants in the present appeal is that no
          mens rea was involved. There was no sale involved and,
          therefore, Clause 4 of the Control Order does not apply. Even
          though the trial Court held that Clause 4 was not violated, it
                                                                              8
          went wrong in holding that clause 3 was violated. Though the
          trial Court appreciated the bona tides of the appellants, yet the
    -+    sentence of one month was imposed.

              7. Learned counsel for the respondent on the other hand
J         supported the judgment.                                             C

              8. Clauses 3 of the Control Order read as follows:

                     "Restriction on Processing and Storage of
              Lubricating Oils and Greases-No person shall carry on the
                                                                              0
              business of a processor except under and in accordance
'             with the terms and conditions of a valid licence granted to
              him under this order."

              9. A bare reading of Clause 3 shows that no person is
         authorized to carry on business of a processor except and in         E
         accordance with the terms and conditions of a valid license
         granted to him under the order. The evidence of PW-3 who led
         the inspecting team clearly established that processing was
         being undertaken.
                                                                              F
               10. Clause 5 deals with application for grant or renewal
         of a licence. Clause 5(5) provided that all existing processors
         shall obtain licence under the Control Order within 6 months of
         the commencement thereof. Clause 6 (5) provides for making
         an application for renewal of licence before three months of its     G
         expiry. The Control Order has been promulgated under Section
         3 of the Act.

              11. At the time of inspection, large quantity of stocks and/
         or products was stored. Though the allegations inter-alia were
         that no licence was obtained, proper books of accounts were          H
                                                                            ..
    768         SUPREME COURT REPORTS             [2009] 1 S.C.R.


A not maintained and adulterated lubricating oil was stored. The      .)r
  following articles were seized during inspection:

          (1) Re-refined lubricating oil (TOPOL 20-40) 380 sealed
          tins of one litre each, Grade-II.
B         (2) Re-refined lubricating oil 1, 210 litre in six barrel
          containing 205 litres in each.                                     ,.

          (3) 19,475 litres of used lubricating oil in 95f barrels     +-
          containing 205 litres in each.
c         (4) Greases 20 Kgs. in one loose barrel.
                                                                              ..
          (5) 920 numbers of empty tins of one litre capacity for
                                                                              "'
          TOPOL 20W/40.

D         (6) One book of accounts having incomplete accounts of
          finished products.                                            + -

          (7) An extract copy of the display board of stocks and
          prices displayed in the office premises of the firm.
                                                                       --    ..__




E         (8) 3 litres of TOPOL-20W/40 contained in 3 sealed tins
          of one litre each (for sample)

       12. Although the accused persons took the plea that there
  was no sale, but interestingly there was display board showing
F stocks and prices of the articles. This itself was indicative of
  the fact that sale transactions were being carried on. The trial
  Court and the High Court had rightly decided that there has
  been contravention of Clause 3 of the Control Order. In that view
  of the matter the conclusions cannot be faulted. Coming to the
                                                                                   i=
  question whether the Probation Act can be applied, this Court
G
  had an occasion to with the same.

       13. The rehabilatory purpose of the Probation Act is
   pervasive enough technically to take within its wings an offence
   even under the Act. The decision in lshar Das v. State of
 H Punjab (1973 (2) SCC 65) is authority for this position.
      PRECIOUS OIL CORPORATION AND ORS v. STATE OF 769
               ASSAM [DR. ARIJIT PASAYAT, J.]

      Certainly, "its beneficial provisions should receive wide               A
      interpretation and should not be read in a restricted sense". But
      in the very same decision this Court indicated one serious
      limitation:

           "Adulteration of food is a menace to public health. The            B
           Prevention of Food Adulteration Act has been enacted with
           the aim of eradicating that anti-social evil and for ensuring
           purity in the articles of food. In view of the above object of
           the Act and the intention of the Legislature as revealed by
           the fact that a minimum sentence of imprisonment for a             C
           period of six months and a fine of rupees one thousand
           has been prescribed, the courts should not lightly resort to
           the pro'visions of the Probation of Offenders Act in the case
           of persons above 21 years of age found guilty of offences
           under the Prevention of Food Adulteration Act .... "
                                                                              D
           14. The kindly application of the probation principles is
      negatived by the imperatives of social defence and the
      improbabilities of moral proselyti- sation. No chances can be
      taken by society with a man whose anti-social operations,
      disguised as a respectable trade, imperil numerous innocents.           E
      He is a security risk. Secondly, these economic offences
      committed by white-collar criminals are unlikely to be dissuaded
      by the gentle probationary process. Neither casual provocation
;>(   nor motive against particular persons but planned profit-making
      from numbers of consumers furnishes the incentive - not easily          F
      humanised by the therapeutic probationary measure. It is not
      without significance that the 47th report of the Law Commission
      of India has recommended the exclusion of the Act to social
      and economic offences by suitable amendments. It observed:

          "We appreciate that the suggested amendment would be                G
          in apparent conflict with current trends in sentencing. But
          ultimately, the justification of all sentencing is the protection
          of society. There are occasions when an offender is so
          anti-social that his immediate and sometimes prolonged
          confinement is the best assurance of society's protection.          H
    770          SUPREME COURT REPORTS            (2009] 1 S.C.R.


A                                                                     )r
          The consideration of rehabilitation has to give way,
          because of the paramount need for the protection of
          society. We are, therefore, recommending suitable
          amendment in all the Acts, to exclude probation in the
          above cases." (p. 85).
B
        15. In the current Indian conditions the probation movement
  has not yet attained sufficient strength to correct these
  intractables. Maybe, under more developed conditions a              +
  different approach may have to be made. For the present we
  cannot accede to the invitation to let off the accused on
C probation.

        16. The aforesaid position was also highlighted in Pyarali
    K. Tejani v. Mahadeo Ramchandra Dange and Ors. (1974 (1)
    sec 167).
D
        17. Above being the position, there is no merit in this
    appeal which is accordingly dismissed.

    RP.                                        Appeal dismissed.