Holding

Section 6A confers a power coupled with a public duty, not a discretionary discretion, and the mandatory declaration under Clause 3(2) must be filed before dispatch irrespective of the day, making the confiscation of the entire consignment valid.

Summary

The State of Karnataka appealed against the High Court's setting aside of a confiscation order of a 7,200 kg consignment of groundnut oil. The oil had been seized because the transporter failed to file the mandatory Form II declaration with the Tehsildar before the consignment left the place, as required by Clause 3(2)(a) and (b) of the Edible Oil Declaration of Stocks Order, 1976. The Deputy Commissioner, invoking Section 6A of the Essential Commodities Act, confiscated the oil and the truck, after issuing a Section 6B show‑cause notice and granting a hearing. The High Court had held that the Sunday dispatch excused the non‑filing of the declaration. The Supreme Court rejected that view, holding that the word "may" in Section 6A does not make the power discretionary, that the declaration must be filed before dispatch even on a Sunday, that the purchaser is a "stock‑holder" under the Order, and that the procedural requirements of Section 6B were satisfied. Consequently, the confiscation was upheld.

Issues considered

The meaning of the word 'may' in Section 6A of the Essential Commodities Act and whether it renders the confiscation power discretionary.
Whether the requirement to file Form II before dispatch is excused when the dispatch occurs on a Sunday.
Whether the definition of 'stock‑holder' includes the purchaser in transit.
Whether the Deputy Commissioner complied with the procedural requirements of Section 6B (show‑cause notice and hearing).
Whether the goods were lawfully seized, making Section 6A applicable.

Legislation cited

Edible Oil, Edible Oil Seeds and Oil Cakes (Declaration of Stocks) Order, 1976s. clause 3(2)(a), s. clause 3(2)(b)
Essential Commodities Act, 1955s. 6A, s. 6B, s. 6C
Mysore Sales Tax Act, 1957
Sale of Goods Act, 1930s. 25

Subjects

Essential commoditiesConfiscationDeclaration Form IIStock‑holder definitionPublic dutyDiscretionary powerSunday dispatchSection 6B procedural compliance

Judgment

829 A
STATE OF KARNATAKA
v.
KRISHNA BHIMA WALVAKAR & ANR.

May 7, 1981 B
(0. CHINNAPPA REDDY, A.P. SEN AND
BAHARUL !SLAM, JJ.]

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

Clause 3(2)(a) of the Edible Oil, Edible Oil Seeds and Oil Cakes (Declaration
of Stocks) Order, 1976 enjoins that before a consignment of oil leaves a place a D
stock holder who transports edible-oils shall make a declaration in Form II to
the specified officer of the place (in this case the Tehsildar of the) Taluk from
where such edible oils are transported. Clause (b) enjoins that the declaration
shall be shown at every check post on the route immediately after arrival there.

A police officer seized in transit a truck carrying a large quantity of ground-
nut oil on the ground that the requisite declaration in Form II had not been fur-
nished to the Tehsildar of the place of despatch of the consignment. E
The Deputy Commissioner, after issuing a notice to the respondent under
section 6B of the Essential Commodities Act, 1955, released the truck and the
consignment on taking from him an indemnity bond and a bank guarantee
towards the price of oil. The respondent however produced before the Deputy
Commissioner a copy of the invoice issued by the seller and a declaration in
Form 39 prescribed under the Mysore Sales Tax Act, 1957. F
The Deputy Commissioner ordered confiscation of the truck and the oil on
the view that the respondent had contravened the provisions of clause 3(2) (a)
and (b) of the Order. On appeal the Sessions Judge affirmed this order.

A single Judge of the High Court in revision held that there was no con-
travention of the requirement of the Order because the day on which the goods G
were despatched being a Sunday, it was impossible for the respondent to deliver
on that day to Tehsildar the declaration in Form II and that the law would not
expect a citizen to do the impossible.

The respondent in the State's appeal to this Court contended that: (I) the
'~onfiscation of the entire consignment was arbitrary and excessive in that the use H
of the word "may" in section 6A made exercise of that power discretionary; (2)
Bince there was nothing to show that the goods had been seized, the power of
830 SUPREME COURT REPORTS [1981] 3 S.C.R.

A confiscation under section 6A had not been properly exercised and (3) the order
of confiscation was a nullity in that the Deputy Commissioner had not issued a
proper show cause notice under section 6B of the Act.

Allowing the State's appeal

HELD : l (a) The word '·may" used in section 6A does not mean that
the Deputy Corn.missioner could not order confiscation of the entire consignment
B of an essential commodity l where he found contravention of any of the orders
issued under section 3 of the Act. The power conferred on the Deputy Com-
missioner under section 6A is a power coupled with public duty. [834 H]

(b) In difecting confiscation of the entire consignment which was being
transported without furnishing the declaration I in Form II the Deputy Com-
missioner acted in public interest. The whole purpose of the control order was
c to maintain control over the stock of essential commodities at a place with a view
to securing their equitable distribution and availability at fair prices. The require·
rnents of clause 3 (2) (a) and (b) are mandatory. [835 C-Dl

(c) "Stock bolder" as defined in the Order includes the purchaser of oil
who is in possession or control thereof. By a legal fiction the explanation treats
the owner to have control over the oil in transit. Respondent 4 being the pur-
D chaser fell within the definition of "stock holder". Moreover there was nothing
to show that the consignor had reserved the jus disponendi by the terms of the
contract or appropriation and, therefore, the property in the goods passed to
respondent 4 (purcha£er) on delivery to a common carrier under section 25 of the
Sale of Goods Act, 1930. [836 A-Bl

(d) The peputy Commissioner was right in holding that the declaration
E in Form II was required to be filed before the specified officer before the goods
left a place and that the declaration should be produced at every check post in
transit as required by law. The respondent having contravened the provisions of
clause 3 (2) (a} and (b) of the order the truck and the consignment of oil were
rightly confiscated. [837 A-Cl

(e) It is not correct to say that since the date of despatch of the goods was
a Sunday there was no need to comply with the requirements of clause 3 of the
F Order. If the consignment had to be despatched on Sunday nothing prevented
the parties from furnishing the declaration a day earlier. In a transaction of such
a
a magnitude duty was cast on the party to comply with the requirements of the
Order before the consignment left the place. [834 A-Bl

2. The very fact that the seized groundnut oil was released only after the
respondent furnished the requisite bank guarantee clearly showed that the con-
G signment had been seized. Therefore power under section 6A had been correctly
exercised. [837 E-F]

3. There was no breach of the requirement of section 6B. In response
to the show cause notice issued by the Deputy Commissioner respondent 4
appeared before him and filed a copy of the invoice and declaration in Form 39
H of the Mysore Sales Tax Act. The Deputy Commissioner gave a hearing to the
parties. That being so, validity of the confiscation under section 6C could not be
challenged. [837 G-H]
KARNATAKA v. K.B. WALVAKAR (Sen, J.) 831

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 669 A
of 1980.

Appeal by special leave from the judgment and order dated
the 2nd February, 1979 of the Karnataka High Court in Criminal
Revision Petition No. 320 of 1978.
B
B.R.L. Iyengar and N. Nettar for the Appellant.

A.L. Wahi and K.C. Dua for Respondent Nos. 1-3.

Ram Jethmalani and Miss Rani Jethmalani for Respondent
No.4. c
The Judgment oft he Court was delivered by
SEN, J. In this appeal, by special leave, from the judgment of
the Karnataka High Court, the only issue between the parties is as
to the legality and propriety of the order of confiscation passed by
the Deputy Commissioner, Belgaum, of a consignment of 7,200 kg. D
of groundnut oil seized for contravention of sub-els. (2) (a) and (b)
of cl. 3 of the Edible Oil, Edible Oil Seeds and Oil Cakes (Declaration
of Stocks) Order, 1976 (hereinafter called the Order).

Briefly stated the facts are these: On 6.61977 at about
11.30 a.m., the Sub Inspector of Police, Hukeri, intercepted a truck E
bearing registration No. MHL 2675 laden with 40 barrels of ground·
nut oil weighing 7,200 kg. which were being transported from
Kampli to Nippani, without furnishing a declaration in Form II to

- Tahsildar, Hospet, as required under sub-els. (2) (a) and (b) of cl.3
of the Order. The Sub Inspector of Police, after seizing the vehicle
and the oil registered a case and thereafter reported the matter to
the Deputy Commissioner, Belgaum. He forwarded the report
F

together with the seized vehicle and the oil to the Deputy Com-
missioner, Belgaum for taking action under s. 6-A of the Essential
Commodities Act, 1955 (hereinafter called the Act). The truck was
released to the owner on his executing an indemnity bond, and the
groundnut oil released to the Respondent 4, Gopinath Manikchand
G
Dharia, Proprietor, Messrs Anant Oil Mills, Nippani on his furni-
shing a bank guarantee for Rs. 70,000/- towards the price thereof.
The Deputy Commissioner gave notices as required under s. 6-B of
the Act to the parties concerned. During the enquiry, the respondent H
No. 4 produced before him a copy of the invoice dated 5.6.1977
issued by Sri Satyanarayana Oil Mills, Bellary Road, Kampli, show-
832 SUPREME COURT REPORTS [1981] 3 S.C.R.

A ing the sale of 7,200 kg. of groundnut oil to Messrs Anant Oil Mills,
Nippani. He also produced a copy of the declaration in Form
No. 39 prescribed under the Mysore Sales Tax Act, 1957. The
Deputy Commissioner, after affording the parties an opportunity of
hearing, held that the respondents had contravened the provisions of
sub-cl. (2) (a) and (b) of cl.3 of the Order and accordingly confiscated
B 40 barrels of groundnut oil and the truck bearing registration No.
MHL 2675.

The respondents preferred an appeal under s. 6-C of the Act
before the II Additional Sessions Judge, Belgaum, who was the
Appellate Authority. But he, by his well-considered judgment,
c confirmed the order of confiscation passed by the Deputy Com-
missioner un,der s. 6-A of the Act. Thereupon, the respondents
preferred a revision before the High Court and a learned Single
Judge has, by his judgment, set aside the order of the Appellate
Authority as' well as the Deputy Commissioner on the ground that
D there was substantial compliance of the requirements under sub-els.
(2) (a) and (b) of cl. 3 of the Order inasmuch as the respondents had
sent the prescribed declaration in Form II to the Tahsildar, Hospet
on 7.6.1977. According to the High Court, no such declaration
could be furnished on 5.6.1977 as it was a holiday being Sunday.
Upon that view, the High Court set aside the order of confiscation
E passed by the. Deputy Commissioner under s. 6-A of the Act and
directed restoration of all the properties to the persons concerned.
Hence this appeal by special leave.

The State was not interested in the confiscation of the truck
and, therefore, special leave is confim:d to the question of the
F legality and' propriety of the order of confiscation passed by the
Deputy Comn:iissioner under s. 6-A of the Act in respect of the
seized groundnut oil.
On the admitted facts, there can be no doubt whatever that
there was a contravention of sub-els. (2) (a) and (b) of cl.3 of the
order. Sub-els. (2) (a) and (b) of cl. 3 are as follows :
G
3. (2) A stock holder who transports Edible-Oils,
Edible Oil Seeds and Oil Cakes shall make a declaration
in Form II to the Officer specified in Sub-Clause (1) in
respect of such Edible Oils, Edible Oil Seeds and Oil
Cakes,-
H
(a) at the place from where such Edible Oils, Edible Oil
Seeds and Oil Cakes are transported, before such
KARNATAKA v. K.B. WALVAKAR (Sen, J.) 833

Edible Oils, Edible Oil Seeds and Oil Cakes leave the A
said place; and

(b) at every check post on the route, immediately after
their arrival there;

Provided that the declaration at a check post shall be made B
in person by the stock holder or by the person in charge of such
Edible Oils, Edible Oil Seeds and Oil Cakes to such Officer, as
the Government may by special or general order specify.

The expression 'stock-holder' has been defined in the Order as
meaning "Every person who is in possession or control of 150
kilograms or more of groundnut oil. ........ (b) 15 quintals or more
c
of groundnut oil or cake ......... (c) 15 quintals or more of groundnut
seeds ......... and (d) 20 quintals of groundnut shell. The Explanation
thereto provides that edible oil, edible oil seeds and oil cakes in
transit shall be presumed to be under the control of the owner
thereof. D
The order passed by the High Court setting aside the order of
confiscation made by the Deputy Commissioner under s. 6-A of the
Act can hardly be supported. In reaching the conclusion that it did,
the High Court observes that 5.6.1977 being Sunday, the declaration
in Form II could not be delivered to the Tahsildar since the Taluka
Office was closed. Nor could it be sent by registered post acknowledg-
E
ment due as the Post Office could not have been working on that
day. It then goes on to observe:

Then, the question is, whether a stock-holder should
not at all transport his stock on a Sunday, though the F
contractual terms of his business of such transaction
required that it should be dorie, as the stock should reach
the consignee on a particular date. It is impossible to
conceive that .law expects any citizen to perform what is
impossible to be performed in law. Now the fact that Form
II has been received in the office of the Tahsildar on G
7.6.1977, clearly indicates that it must have been sent by
registered post on 6.6.1977. Anyhow, when once it is seen
that it was impossible for the stock-holder (petitioner-4)
to submit Form-II on 5.6.1977 before transporting
groundnut-oil in that truck on that day, it cannot at all be
said that petitioner-4 has committed any breach of the H
provisions of the order.
834 SUPREME COURT lltEPORTS [1981] 3 s.c:a.

A It is difficult to subscribe to the view expressed by the High Court.
When the parties were entering into a transacti.on of such magnitude
there was a duty cast on them to comply with the requirements of
sub-els. (2) (a) and (b) of cl. 3 of the Order before the consignment
left the place. If the consignment was to be loaded on 5.6.1977
which was a Sunday, nothing prevented the parties from furnishing
B a declaration on 4.6.1977. The High Court appears to be labouring
under a belief that there need be no strict observance of the laws
on a Sunday. There is no warrant for this view.
Faced with the situatiop. that it was rather difficult, if not
impossible, to support the view taken by the High Court, Shri Ram
Jethmalani, learned counsel for the respondent No. 4 made a valiant
c effort to avert the order of confiscation passed under s.6-A of the
Act, by advancing the following thrt:e contentions: (I) The po~er
conferred on the Deputy1Commissioner under s. 6-A of the Act, by
the use of the word 'may', makes it a discretionary power which had
·to be used according to sound judicial principles. It is urged that
Messrs Anant Oil ·Mills to whom the groundnut oil belonged had
D committed no breach of sub-els. (2) (a) and (b) of cl.3 of the
order and therefore, the order of confiscation of the entire con-
signment passed by the Deputy Commissioner was wholly
arbitrary and excessive. (2) The power of confiscation entrusted to
the Deputy Commissioner under s.6-A of the Act is exercisable in
relation to an essential commodity seized in pursuance of an order
made under s. 3. There was nothing to show that the groundnut oil
in question had been seized or that a report of such seizure had
been made without unreasonable delay to the Deputy Commissioner
under the Order and, therefore, the Deputy Commissioner had no
power to direct its confiscation under s. 6-A of the Act. (3) It is not
established that the Deputy Commissioner had complied with the
F statutory requirements of s. 6 ·B of the Act, by giving a show cause
notice to the persons concerned against the action proposed to be
taken or afforded them an opportunity of hearing and, therefore,
the order of confiscation passed by him under s. 6-A was a nullity.
We are afraid, none of these contentions can prevail.
As to point No. (!), it is axiomatk that the power of confisca-
G
tion of an essential commodity seized for contravention of an order
issued under cl.3, is a discretionary power. The use of the word
'may', however, does not necessarily mean that the Deputy Com-
. missioner cannot, in the given circumstances of a particular case,
H direct the confiscation of the entire consignment of an essential
commodity in relation to which there is a contravention of any of
the orders issued under s.3 of the Act. It all depends on the facts
KARNATAKA v. K.B. WALVAKAR (Sen, J,) 835

and circumstances of each case whether the confiscation should be A
of an entire consignment or part of it, depending upon the nature
of the .contravention. The power conferred on the Deputy Com-
missioner under s.6-A of the Act, by the use of the word 'may',
makes the power coupled with a public duty. Sometimes it may be
in the public interest to direct confiscation of the entire consignment
of an essential commodity when there is deliberate contravention of B
the provisions of an order issued under s.3 of the Act.

In the facts· and circumstances of the present case, it cannot
be doubted for a moment that the Deputy Commissioner acted in
the public interest to direct confiscation of the entire consign-
ment of the groundnut oil, as it was being transported from one
place to another without furnishing the requisite declaration in
Form II. AU systems of control, supply and distribution of essen-
c
tial commodities would fail unless the various control orders issued
by the Central Government under s. 3 of the Act in relation there-
to are strictly observed. These control orders are issued under
s. 3 when the Central Government is of opinion that it is necessary D
or expedient so to do for maintaining or increasing supplies of
essential commodities or for securing equitable distribution and
availability at fair prices etc. Sub-els. (2) (a) and (b) of cl. 3 of the
Order enjoin that the stock-holder shall make a declaration in From
II in relation to movement of edible oil, edible oil seeds and oil
cakes, to the Tahsildar in-charge of the taluka of the place from E
where such edible oil, edible oil seeds and oil cakes are trans-
ported before such edible oil, edible oil seeds or oil cakes, leave the
place. The whole purpose is to maintain a control over the stock of
such essential commodities at a place with a view to secure their

- equitable distribution and availability at fair prices. The require-
ments of sub-els. (2) (a) and (b) of cl. 3 of the the Order are
clearly mandatory.
F

We fail to comprehened the contention that there was only a
technical breach. Under sub-els. (2)(a) and (b) of cl. 3 of the order,
a stock-holder is required to furnish a declaration in Form II in
relation to movement of edible oil, edible oil seeds and cakes, to the
G
Tahsildar in-charge of the taluka at the place from where such
commodity is sought to be transported before sucb commodity leaves
the place. The definition of 'stock-holder' certainly means the con-
signor who holds such stock of edible oil, oil seeds and cakes and
also may include a purchaser of such oil, seeds and cakes who is in
H
possession or control thereof. Explanation to the definition of
836 SUPREME COURT REPORTS (1981] 3 S.C.R

A 'stock-holder', by a legal fiction, treats the owner to have control
over the edible oil, edible oil seeds and cakes, in transit. The res-
pondent No. 4, being the purchaser, also comes within the definition
of 'stock-holder' by reason of the said Explanation. There is nothing
to show that the consignor had reserved the }us disponendi by the
terms of the contract or appropriation and, therefore, the property
B in the goods passed to the respond1mt No. 4 on their delivery to a
common carrier under s. 25 of the SaJe of Goods Act, 1930.

The allegation in the complaint is that 40 barrels of ground-
nut oil weighing 7,200 kg. were being transported by the truck bea-
ring No. MHL 2675 without furnishing the requisite declaration in
c Form U and it was intercepted at the Hukeri check-post by the Sub-
Inspector of Police. In response to a notice issued by the Deputy
Commissioner under s. 6-B of.the Act, the respondent No. 4 produ-
ced before him the documents of title in relation to the goods. From
these documents, it is clear that the consignor was Sri Satyanarayana
Oil Mills, Kampli and the consignee was Messrs Anant Oil Mills,
D Nippani and that the truck was laden with the consignment. These
facts were also borne out by the particulars furnished in the declara-
tion in Form 39 under the Mysore Sa]es Tax Act, 1957.

It appears from these documents that Sri Satyanarayana Oil
Mills, after despatching the consignment, purported to furnish 'the
E declaration in Form II to the Tahsildar, Hospet, which was received
by him on 7.6.1977, requesting for the release of the groundnut oil
in question. The respondent No. 4 contended before the Deputy
Commissioner that there was substantial compliance of the require-
ments of sub-els. (2)(a) and (b) of cl. 3 of the_ Order and, therefore,
the seized groundnut oil be released, but he re]epted the contention
F on the ground that the declaration in Form II was required to be
filed before the specified officer before the goods left the place. The
Deputy Commissioner requisitioned the form produced before the
Tahsildar, but it did not bear any date. He was of the view that
the declaration was not sent by registered post on 6.6.1977 as asser-
ted, but had apparently been handed over in the Taluka office and
G acknowledgment obtained for the same. The Deputy Commissioner
observed that the requirement of law was that the declaration in
Form II had to be produced at every check-post during transit, and
this was not done. The driver of the truck did not have a copy of
the declaration in Form II, but only the declaration in Form 39
H which could not be taken to be in compliance of law. Obviously,
the stock-holder, Sri Satyanarayana Oil Mills, after despatching the
KARNATAKA v. K.B. WALVAKAR (Sen, J.) 837

consignment of groundnut oil, purported to furnish the declaration A
in Form II. This was in complete breach of the requirements of
sub-els. (2) (a) and (b) of cl. 3 of the Order. The Deputy Commis-
sioner, therefore, held that the respondents having con•ravened the
provisions of sub-els. (2) (a) and (b) of cl. 3 of the Order, the seized
truck alongwith the entire consignment of the groundnut oil was
liable to be confiscated under s. 6-A of the Act. The learned Sessions B
Judge, in our opinion, rightly confirmed the order of confiscation
passed by the Deputy Commissioner under s. 6-A of the Act as it
was unassailable. At no point of time was there a contention raised
that the Deputy Commissioner had failed to exercise his discretion
as to the quantity of the groundnut oil liable to be seized. It is now
too .late in the day to urge the point before this Court. c
As to point No. (2), there is no warrant for the submission
that there was nothing to show that the groundnut oil had been
seized and, therefore, the power of confiscation was not exercisable
by the Deputy Commissioner under s. 6-A of the Act. It is manifest
from the order of the Deputy Commissioner that there was a contra- D
vention of sub-els. (2) (a) and (b) of cl. 3 of the Order and that the
Sub Inspector of Police seized both the tru~k and the consignment of
groundnut oil, an.d forwarded the same to him along with his report
for taking action under s. 6-A of the Act. The contention of the
Public Prosecutor before the Deputy Commissioner was that the
seized truck and the groundnut oil were liable to be confiscated. The E
very fact that the seized groundnut oil was released to the respon-
dent No. 4 on his furnishing a bank guarantee for Rs. 70,000 for
the price of the consignment ofthe groundnut oil clearly shows that
it had been seized. It is, therefore, idle to contend that the power
of confiscation under s. 6-A of the Act was not exercisable for want
of seizure. F
As to point No. (3), from the narration of facts above, it is
amply clear that there was no breach of the requirements of s. 6-B of
the Act on the part of the Deputy Commissioner. The record shows
that the Deputy Commissioner, on receipt of the report of the Sub
Inspector of Police mentioning the fact of contravention of sub-els. G
(2) (a) and (b) of cl. 3 of the Oroer and forwarding the seized true!<
and the consignment of groundnut oil, issued notice· to the parties
concerned under s. 6-B of· the Act'to show cause against their confis-
cation. In response to the notice, the respondent No. 4 appeared
before the Deputy Commissioner and filed a copy of the invoice H
together with a copy of the declaration in Form 39 under the Mysore
838 SUPREME COURT REPORTS [1981] 3 S.C.R.

A Sales Tax Act, 1957. The Deputy Commissioner sent for the decla-
ration in Form II as furnished to the Tahsildar which did not bear
a date. He also gave a hearing to the parties. That being so, the
validity of the order of confiscation under s. 6-C cannot be challen-
ged on the ground that the requirements of s. 6-B had not been ful-
filled.
B
The result, therefore, is that the appeal succeeds and is allowed.
The judgment of the High Court is set aside and that of the II Addi-
tional Sessions Judge, Belgaum, upholding the order of confiscation
passed by the Deputy Commissioner, Belgaum, is restored, insofar
as it relates to the confiscation of the consignment of groundnut oil
c weighing 7,200 kg. under s. 6-A of the Essential Commodities Act,
1955.

P.B.R. Appeal allowed.