Facts of the Case

The petitioner, Mohammed Shafeek, was the proprietor of MS Traders Kollam and was engaged in the wholesale and retail dealership of food grains.

On 20 June 2022, an inspection team headed by the second respondent seized large quantities of boiled rice, matta rice, raw rice and wheat from the petitioner’s godown. The seizure was made on the allegation that the food grains were being re-bagged for sale in the black market.

According to the petitioner, the seizure had been effected without following the prescribed procedure and without even preparing a mahazar. The petitioner asserted that all the food grains seized from his godown had been purchased from the open market and were supported by invoices.

The petitioner further contended that the food grains seized from a mini lorry parked outside the godown, bearing tags of FCI and SUPPLICO, did not belong to him. According to him, the mere fact that the mini lorry was parked in proximity to his godown could not justify an assumption that the food grains in the vehicle had been brought for storage in his godown.

The petitioner submitted Ext.P8 representation before the second respondent, raising these contentions and requesting immediate release of the seized food grains.

Aggrieved by the delay on the part of the second respondent in considering Ext.P8 representation and releasing the seized food grains, the petitioner approached the High Court under Article 226 of the Constitution of India.

Issues Involved

The principal issues arising in the matter were:

  1. Whether the disputed factual questions regarding ownership, source and alleged re-bagging of the seized food grains could be adjudicated in writ proceedings under Article 226 of the Constitution of India.
  2. Whether confiscation proceedings under Section 6A of the Essential Commodities Act, 1955 could be completed without first issuing written notice to the owner of the essential commodity or the person from whom it was seized, as contemplated under Section 6B.
  3. Whether the petitioner was entitled to an opportunity of hearing before an order of confiscation could be passed.
  4. Whether the allegedly perishable nature of the seized food grains justified expeditious completion of proceedings under Sections 6A and 6B of the Essential Commodities Act, 1955.
  5. Whether the petitioner’s representation seeking release of the seized food grains required consideration in the circumstances of the case.

Petitioner’s Arguments

The petitioner contended that:

  • The seizure of the food grains was carried out without following the prescribed procedure.
  • No mahazar was prepared at the time of seizure, according to the petitioner’s case.
  • The food grains seized from the godown had been lawfully purchased from the open market.
  • The purchases were supported by invoices.
  • The food grains found in the mini lorry parked outside the godown did not belong to the petitioner.
  • The presence of the mini lorry near the godown could not, by itself, lead to an assumption that the goods in the vehicle were intended to be stored in the petitioner’s godown.
  • The petitioner had submitted Ext.P8 representation seeking immediate release of the seized articles.
  • The delay in considering the representation and releasing the food grains warranted interference by the High Court.

Respondents’ Arguments

The second respondent filed a counter affidavit and contended that:

  • The inspection conducted on 20 June 2022 was based on secret information that ration goods had been brought to a godown and were being re-bagged in plastic bags.
  • When the inspection team reached the spot, the employees allegedly engaged in the re-bagging activity ran away.
  • The inspection team had directly witnessed the alleged re-bagging of rationed articles.
  • The petitioner was not present at the premises during the inspection.
  • The petitioner had never approached the second respondent for obtaining a copy of the mahazar.
  • Since prolonged storage could damage the food grains, emergent action was necessary under Section 6A of the Essential Commodities Act, 1955 for disposal of the food grains through the Public Distribution System.
  • The genuineness of the invoices relied upon by the petitioner was disputed and treated as suspect because, according to the respondents, those invoices were produced twenty-five days after the seizure.
  • The respondents also stated that the petitioner was an accused in a crime registered in 2017 involving an allegation of an attempt to sell rationed articles in the black market.
  • The petitioner’s contention that the rationed articles found in the mini lorry did not belong to him was disputed.
  • According to the respondents, the inspection team had directly witnessed transfer of food grains from the mini lorry to the petitioner’s godown.

Court’s Findings

After hearing the petitioner’s counsel and the learned Government Pleader, the High Court held that the case involved disputed questions of fact which could not be resolved in a writ petition under Article 226 of the Constitution of India.

The Court further examined the statutory safeguards contained in the Essential Commodities Act, 1955.

The High Court specifically observed that under Section 6B of the Essential Commodities Act, no order confiscating any article can be made under Section 6A unless the owner of the essential commodity or the person from whom the commodity was seized is given a written notice informing him of the grounds on which confiscation is proposed.

The Court also took note of the respondents’ own stand that the seized articles were perishable and required immediate distribution.

Considering these circumstances, the High Court held that it would be in the interest of both sides for the notice contemplated under Section 6B to be issued to the petitioner at the earliest and for the proceedings under Section 6A to be completed without delay.

Court Order

The High Court disposed of the writ petition with the following direction:

  • The respondents were directed to complete the proceedings under Section 6A of the Essential Commodities Act, 1955.
  • Before completing such proceedings, notice was required to be issued to the petitioner.
  • The petitioner was required to be afforded the opportunity contemplated under Section 6B of the Essential Commodities Act, 1955.
  • The entire proceedings were directed to be completed within one month from the date of receipt of a copy of the judgment.

Important Clarification

The judgment is significant for the distinction it maintains between disputed factual controversies and mandatory statutory procedural safeguards.

The High Court did not decide whether the seized food grains actually belonged to the petitioner, whether they were rationed articles, whether they had been lawfully purchased in the open market, whether the invoices were genuine, or whether black-market re-bagging had actually occurred. Those questions involved disputed facts and were held unsuitable for resolution in writ proceedings under Article 226.

At the same time, the Court made it clear that the existence of factual disputes does not dispense with the statutory safeguard contained in Section 6B of the Essential Commodities Act, 1955.

Therefore, before an order of confiscation is made under Section 6A, the prescribed notice and opportunity under Section 6B must be afforded to the concerned person.

The fact that the seized commodities may be perishable does not eliminate the requirement of statutory notice. Rather, the circumstances justified expeditious initiation and completion of the statutory proceedings.

Sections Involved

Section 6A of the Essential Commodities Act, 1955 — Confiscation of Essential Commodities

Section 6A concerns confiscation proceedings in relation to essential commodities seized in connection with contravention of an order made under Section 3 of the Essential Commodities Act, subject to the statutory framework and applicable requirements.

In the present case, the respondents relied upon the need for emergent action under Section 6A, particularly because prolonged storage could damage the seized food grains.

Section 6B of the Essential Commodities Act, 1955 — Issue of Show-Cause Notice Before Confiscation

Section 6B provides an important procedural safeguard before confiscation. The High Court emphasised that no confiscation order under Section 6A can be made unless the owner of the essential commodity or the person from whom it was seized is given written notice informing him of the grounds on which confiscation is proposed and is afforded the statutory opportunity contemplated by the provision.

This safeguard formed the central legal basis of the Court’s direction.

Article 226 of the Constitution of India — Writ Jurisdiction

The Court held that disputed factual issues concerning ownership, source of goods, alleged re-bagging, genuineness of invoices and the alleged movement of food grains from the mini lorry to the godown could not appropriately be resolved in writ proceedings under Article 226.

Legal Principle Emerging from the Judgment

The judgment establishes that where essential commodities are seized and confiscation proceedings are proposed under Section 6A of the Essential Commodities Act, 1955, the statutory procedural safeguard under Section 6B must be followed.

A confiscation order cannot be made without written notice informing the concerned person of the proposed grounds of confiscation and without affording the opportunity contemplated by law.

Further, disputed questions of fact concerning ownership, source and nature of seized commodities are generally unsuitable for adjudication in writ jurisdiction under Article 226.

Practical Significance of the Decision

This decision is relevant in matters involving:

  • seizure of food grains;
  • alleged diversion of ration commodities;
  • alleged black-market sale of essential commodities;
  • confiscation proceedings under Section 6A;
  • mandatory notice under Section 6B;
  • procedural safeguards before confiscation;
  • Public Distribution System commodities;
  • disputed ownership of seized goods;
  • seizure of allegedly rationed articles;
  • writ petitions involving disputed questions of fact; and
  • expeditious proceedings concerning perishable essential commodities.

Link to download the order -https://mytaxexpert.co.in/uploads/1783417078_1365compressed.pdf

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