Judgment:
ORDER
S.L. Kochar, J.
1. The petitioner has filed this petition, under Articles 226/227 of the Constitution of India, challenging the order dated 16-7-1997 Annexure 'P-7' passed by Collector, Rajgarh whereby, the Collector has cancelled the licence of the petitioner granted to him under Provisions of Madhya Pradesh Kerosene Dealers Licensing Order, 1979 (for brevity 'the Order') and also forfeited the security amount of Rs. 100/- and also confiscated seized 2510 litres kerosene. Against this order, the petitioner went up in appeal before the Commissioner (Revenue) and the same was dismissed by its order dated 7th September, 98 Annexure 'P- 10'. This order was challenged in Revision before the State Government (Ministry of Food Civil Supplies & Consumers Protection Department) vide case No. F/6-45/98/29/2. This revision has also been dismissed.
2. Facts in brief, giving rise to this petition are that on 1st February, 1996, Food Inspector, Mr. Gupta, inspected Fair Price Shop of the petitioner at 2.15 p.m. On verification, he found that on stock board, stock of 2540 litres kerosene was shown and on daily stock register, opening stock on 1-2-1996 was not written and closing stock on 31 -1 -1996 was shown 2540 litres. On asking the petitioner/Kerosene dealer, could not produce duplicate copy of weekly statement, which was required to be sent to the Food Department of the concerned District by the petitioner. He also found, as disclosed by the petitioner, deposit of price of kerosene oil of Rs. 5146/- in the month of December, 1995 through challan No. 91 dated 1-2-1996 but no challan was deposited for the month of Nov. 1995. On inspection of daily sale-register on 31-1-1996, 2383 litres of kerosene oil was shown to be sold, therefore, he found difference between the stock register and physical verification of the stock. On physical verification, stock was found 2510 litres of kerosene oil. 30 litres of kerosene oil was found less than the closing sock and thereafter opening stock. The Food Inspector prepared Panchnama Ex. P-2, mentioning all these details. He seized 2510 litres kerosene oil; stock register; and sale register; the same were given on Supurtginama to the petitioner in presence of witnesses. Collector, Rajgarh/Li-ccnsing Authority issued notice dated 6-3-1996 Annexure 'P-4' to the petitioner, to show cause as to why his licence be not cancelled; security be not forfeited and seized kerosene oil be not confiscated as per provision under Section 6A of the Essential Commodities Act, 1955 (for brevity 'the Act') and the matter be not sent to Court for prosecution. The petitioner was also asked to submit his reply within 7 days from the date of service of this notice.
3. Mr. Piyush Mathur, learned Counsel for the petitioner, has submitted that the show-cause notice, Annexure 'P-4' itself was defective for the purpose of initiation of confiscation proceedings of the the seized essential commodity, i.e., Kerosene. He has submitted that the Collector has power under Section 6A of the Act after receipt of report of seizure of kerosene oil as per Order made under Section 3, whether or not the prosecution is instituted for contravention of such order, Collector may, if he thinks it expedient so to do, direct the essential commodity so seized to be produced for inspection before him and if he satisfies that there has been contravention of the order, may order for confiscation. In the instant case, the Collector has issued show-cause notice dated 6-3-1996, Annexure 'P-4'. On perusal of this notice, it is found that no where it is mentioned about production of material or document before him for consideration by the Food Inspector or Inspecting Authority of the Food Department. It has also not been mentioned that the Collector perused the documents prepared by the Food Inspector at the time of Inspection of the shop of the petitioner. It has also not been indicated therein that the report of Inspector or seizure of kerosene oil, was produced for inspection before him without unreasonable delay by the Food Inspector. He has simply mentioned that on 1-2-1996, Food Inspector, Mr. Gupta, along with other officials of the Food Department, inspected the shop of the petitioner and [bund certain discrepancies/illegalities.
4. The show cause-notice Annexure 'P-4' is also not revealing the fact that on oral and documentary information without any delay, he came to know about the event or action of Food Inspector and before issuing show-cause notice, he recorded his opinion about initiation of confiscation proceedings against the petitioner, but no such findings arrived at, by the Collector. Therefore, there is clear breach of Provision of Section 6A of the t. After receiving the information of seizure of essential commodity, i.e., kerosene oil, he should have taken notice of the same and should have given thought ewer the matter and if fount it expedient to proceed for contravention against dealer only then follow the procedure under Section 6B of the Act.
5. Learned Counsel for the petitioner, has also submitted that confiscation proceedings of seized essential commodity is an independent proceedings as envisaged under Sections 6A, 6B of the Act. For this purpose, an independent notice is required as per Section 6B(a) of the Act and an opportunity of making representation in writing as per Provision under Section 6B(b) should have been given. But the petitioner served with a composite show-cause notice Annexure 'P-4' regarding compliance of Section 6B(a)(b) as well as under Provisions of Clauses 10 and 14 of the order, for cancellation of licence and for forfeiture of deposited security. Learned Counsel for the petitioner, has submitted that both the proceedings should not have been clubbed together. Both the proceedings should have been initiated independently and separate show-cause notice and an opportunity for showing t he cause for filing representations mentioned hcreinabove, should have been given to the petitioner. Learned Counsel has further submitted that though these points did not raise in the reply to the show-cause notice Annexure P-5 but the same were raised before the Appellate and Revisional Authority as well as before Confiscating Authority, while arguing the matter as well as before this Court in this petition, as there was pure question of law as well as exercise of jurisdiction by the authority judiciously vested in it.
6. Mr. Anand Pathak, learned Deputy GA appearing for the respondents, has submitted that there is no bar for issuance of composite show-cause notice for initiation for confiscation proceedings as per Section 6A of the Act for cancellation of licence and for forfeiture of security deposit as per Clauses 10 and 14 of the order. He further contended that the contents of the show-cause notice itself are showing that the matter was reported to the Collector and on the basis of the same he had issued show-cause notice. Mr. Anand Pathak, learned Counsel, has further contended that though the combined show-cause notice Annexure 'P-4' was issued for initiation of an action under the Act and under Order, but appropriate, sufficient and effective opportunities were afforded to the petitioner, therefore, he can not claim any relief on this ground.
7. Having heard learned Counsel for the parties and after perusing the record available, this Court is of the opinion that the Collector should have initiated independent proceedings for confiscation of seized kerosene as per Provisions under Section 6A of the Act and the moment, seizure was reported to him, he should have recorded his opinion regarding initiation of confiscation proceedings and thereafter should have issued notice in writing for the purpose of confiscation of essential commodity as per Provision under Section 6B(a) and an opportunity for making representation in writing, should have been afforded to the petitioner as per Provision under Section 6B(b) of the Act. The non-compliance of these provisions would render whole proceedings of Collector about initiation of confiscation proceedings, illegal, as same has caused prejudice to the petitioner by not affording opportunity of submitting representation and separate reply in the matter of cancellation of licence and forfeiture of security amount.
8. Hon'ble Supreme Court in case of N. Nagendra Rao & Co. v. State of A.P. : AIR1994SC2663 while discussing aims and objects of the whole scheme and Provisions of Essential Commodities Act, has held that as per Provisions under Section 6A, every contravention can not entail confiscation that is why Section uses words 'may'. A trader indulging in black marketing or selling adulterated goods, etc. should not in absence of any violation, be treated at par with technical violations such as failure to put the price list etc. or even discrepancies in stock. It is also observed that satisfaction for initiation of proceedings must be made on material on record and can not be arbitrary, capricious and whimsical. In the instant case, in the show-cause notice, nowhere it is mentioned as to what kind of report was submitted by the Food Inspector, which were the documents perused by the Collector for the purpose of recording his satisfaction to initiate confiscation proceedings and thereafter for issuance of show-cause notice. On factual aspect, seizure memo Exh. P-2 filed by the petitioner and authenticity and genuineness of this document, has not been denied by the respondents and is showing difference of stock of kerosene oil on physical verification was 30 litres. In closing stock dated 31-1-96 the stock was 2540 litres and this could be opening stock on 1-2-1996 and on physical verification stock was found 2510 litres. On the date of inspection and seizure, no sell was shown by the petitioner, therefore, difference of 30 litres was found recorded in seizure memo Ex. P-2 but in the show-cause notice, some different quantities are available. In Paragraph 2 of the Panchnama Exh. 'P-2' it is mentioned that on 31-1-1996 2383 litres of kerosene oil was sold as per sale-register and in daily stock register quantity was mentioned as 2420 and 37 litres kerosene was found in excess. From where this figure has come, is not shown in the show-cause notice issued by the Collector whereas in the Panchanama Ex. P-2 is disclosing the difference of 30 litres in excess. If the Collector would have mentioned in the show-cause notice about the documents perused by him, the same would have cleared the position. At this juncture, learned Counsel for the petitioner, pointed out the reply to the show- cause notice Annexure P-5 in which he has explained that according to show-cause notice, excess sale was found 37 litres and on 1-2-1996 shortage was of 30 litres, therefore, on 1-2-1996 only 7 litres excess of kerosene was found and the same occurred because at the time of inspection customers were present at the shop and the distribution was going on, the distribution was being done on the basis of approximate measurement. All these facts are clearly suggesting that the Collector did not peruse original record, i.e., seizure memo, Panchnama and Final report prepared by the Food Inspector. Panchnama Ex. P-2 is also clearly mentioning the fact that stock register and sale-register were seized but their production before the Collector and perusal by the Collector arc not at all reflected in the show-cause notice, according to Section 6B(b) of the Act, which reads as under :-
6-B. Issue of show-cause notice before Confiscation of Essential Commodity.-
(1) No order confiscating any (essential commodity), package, covering, receptacle, animal, vehicle, vessel or other conveyance shall be made under Section 6A, unless the owner of such (essential commodity), package covering, receptacle, animal, vehicle, vessel, or other conveyance or the persons from whom (it is seized)-
(a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the essential commodity package, covering, receptacle, animal, vehicle, vessel or other conveyance;
(b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation; and
(c) is given a reasonable opportunity of being heard in the matter.
9. When Collector, after receiving information about seizure of essential commodity, he was required to apply its mind. This is clear by the words enumerated in Section 6A of the Act, i.e., 'may if he thinks it expedient so to do'. On the basis of receiving information of seizure of essential commodity, he has to apply its mind and if he finds it necessary direct concerned authority to produce seized essential commodity for inspection before him but this was not at all done by the Collector and no opportunity was given to the petitioner for making representation in writing against the ground of confiscation which is mandatory under Section 6B(1)(b) of the Act. In compliance of Section 6B of the Act, in the instant case, only one show-cause notice was served for the purpose of initiation of confiscation proceedings under Section 6A of the Act and also for initiation of proceedings of cancellation of licence and for forfeiture security amount as per Clauses 10 and 14 of the Order.
10. Under all these non-compliance of mandatory provisions, this Court is of the considered view that order of confiscation suffers from mechanical application of mind and without following required mandatory provisions for giving reasonable opportunity of hearing to the petitioner. The non compliance of the aforesaid mandatory Provisions impliedly depriving the petitioner from his fundamental rights enshrined under Article 19(1)(g) of the Constitution of India, to practise any profession or to carry on any occupation, trade or business as well as Article 21; right to livelihood. Therefore, order of confiscation Annexure 'P-7' dated 16-7-1997 as well as order of cancellation of licence and forfeiture of security amount, are liable to be quashed. Therefore, the same are hereby quashed. In consequence thereof, order dated 7-9-96 Annexure P-10 passed by the Additional Commissioner and order dated 27-3-2000 Annexure P-12 passed by the State Government in revision, are hereby quashed.
11. Seized kerosene oil is ordered to be returned back to the petitioner and if the same has been sold during pendency of confiscation proceedings, its sale proceeds be paid to the petitioner.