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Andhra Pradesh High Court
Judges : K.MADHAVA REDDY, MADHUSUDHAN RAO
Nabikanti Panduranga Rao, Managing Partner of Vijaya Commercial Corporation - Appellant
Versus
State OF A.P. - Respondent
Decided On : 09-26-75
The court held that the impugned clause 11(1)(d) of the Andhra Pradesh Foodgrains Dealers Licensing Order, 1964 (the Order) is intra vires of Section 3(1) of the Essential Commodities Act, 1955 (the Act) and does not violate Articles 14 and 19(1)(f) of the Constitution of India. The court also held that a dealer who has been granted a license to deal in some foodgrains is not entitled to deal in all the foodgrains mentioned in Schedule I of the Order. Further, the court held that broken rice is a foodgrain within the meaning of the Order and any person dealing in broken rice must possess a license under the Order. The court also held that the storage of foodgrains in the premises other than the one mentioned in the license is a contravention of the conditions of the license. Finally, the court held that the absence of mens rea would not entitle the petitioners to escape the penalty altogether.
Fact of the Case:
The petitioners, who are licensees under the Andhra Pradesh Foodgrains Dealers Licensing Order, 1964 (the Order), were found to be dealing in foodgrains other than those for which a license was granted under the Order. The entire stock of foodgrains held by them was seized and confiscated under Clause 11(1)(d) of the Order read with Section 6-A of the Essential Commodities Act, 1955 (the Act). The petitioners challenged the seizure and confiscation of their foodgrains by filing writ petitions and criminal revision cases.
Finding of the Court:
The court held that Clause 11(1)(d) of the Order is intra vires of Section 3(1) of the Act and does not violate Articles 14 and 19(1)(f) of the Constitution of India. The court also held that a dealer who has been granted a license to deal in some foodgrains is not entitled to deal in all the foodgrains mentioned in Schedule I of the Order. Further, the court held that broken rice is a foodgrain within the meaning of the Order and any person dealing in broken rice must possess a license under the Order. The court also held that the storage of foodgrains in the premises other than the one mentioned in the license is a contravention of the conditions of the license. Finally, the court held that the absence of mens rea would not entitle the petitioners to escape the penalty altogether.
Issues: 1. Whether Clause 11(1)(d) of the Andhra Pradesh Foodgrains Dealers Licensing Order, 1964 (the Order) is intra vires of Section 3(1) of the Essential Commodities Act, 1955 (the Act) and does not violate Articles 14 and 19(1)(f) of the Constitution of India? 2. Whether a dealer who has been granted a license to deal in some foodgrains is entitled to deal in all the foodgrains mentioned in Schedule I of the Order? 3. Whether broken rice is a foodgrain within the meaning of the Order and any person dealing in broken rice must possess a license under the Order? 4. Whether the storage of foodgrains in the premises other than the one mentioned in the license is a contravention of the conditions of the license? 5. Whether the absence of mens rea would entitle the petitioners to escape the penalty altogether?
Ratio Decidendi: 1. The court held that Clause 11(1)(d) of the Order is intra vires of Section 3(1) of the Act and does not violate Articles 14 and 19(1)(f) of the Constitution of India. The court reasoned that Section 3(1) of the Act vests a very wide authority in the Central Government to issue orders controlling production, supply and distribution of essential commodities. The court further reasoned that Clause 11(1)(d) of the Order is intended to achieve the purposes mentioned in Section 3(1) of the Act and is therefore intra vires of the powers of the Central Government. 2. The court held that a dealer who has been granted a license to deal in some foodgrains is not entitled to deal in all the foodgrains mentioned in Schedule I of the Order. The court reasoned that the definition of a “dealer” under Clause 2(a) of the Order does not declare that every applicant is entitled to the grant of a license for all the foodgrains mentioned in Schedule I. The court further reasoned that the Order itself declares that the license should be granted in Form B which specifically authorises the grant of a license in respect of all or any of the foodgrains. 3. The court held that broken rice is a foodgrain within the meaning of the Order and any person dealing in broken rice must possess a license under the Order. The court reasoned that the definition of “foodgrains” includes not only the foodgrains specified in Schedule I of the Order, but also the products of such foodgrains other than husk and bran. The court further reasoned that broken rice is a product of rice and is therefore a foodgrain within the meaning of the Order. 4. The court held that the storage of foodgrains in the premises other than the one mentioned in the license is a contravention of the conditions of the license. The court reasoned that Condition No. 2 of the license prohibits the storage of foodgrains at any place other than any of the godowns mentioned in the license. The court further reasoned that the note appended to Condition No. 2 authorises the licensee to store foodgrains in places other than those specified in the license only if he gives intimation thereof within 48 hours of the actual occupation of the godowns and submits the license for necessary entry therein. 5. The court held that the absence of mens rea would not entitle the petitioners to escape the penalty altogether. The court reasoned that Section 7 of the Act, as amended in 1967, declares that any contravention of the provisions of the Act, Order or conditions of license is punishable whether knowingly or otherwise.
Final Decision: The court dismissed the writ petitions and allowed the criminal revision cases to the extent indicated. The court ordered that one-fifth of the stock seized be confiscated.
MADHAVA REDDY, J,., J.
( 1 ) THESE three Criminal Revision cases and the two writ petitions which are by the licensees under the Andhra pradesh Foodgrains Dealers Licensing order. 1964 (hereinafter referred to as the order ) came up before us on a reference by our learned brother P. C. Reddy, J. Confiscation of foodgralns belonging to the licensees was ordered under the provisions of the Andhra Pradesh Foodgrains dealers Licensing Order inter alla on the ground that they carried on business in foodgrains for dealing in which they were not specifically granted licence. In Crl. R. C. No. 510/74 our learned brother. Muktadar, j. , by his judgment dated 8-11-1974 had held that a dealer is entitled to deal only in the food- grains specified in the licence issued to him and that purchase, sale or storage for sale of foodgrains not specifically mentioned in the licence would amount to a contravention of the provisions of cl. 3 of the Order. In referring these cases to a Bench our learned brother, p. C. Reddy J. , while not expressing any dissent with that view, observed that there no specific provision in the order itself which enjoins that a separate licence should be taken for each one of the foodgrains specified in Schedule I of the Order. "having regard to the importance of the question involved in the case" he referred these cases to be decided by a Division Bench of this court.
( 2 ) IN all these Criminal Revision cases, the premises of the licensees were inspected and they were found to be dealing in foodgrains other than those for which a licence was granted under the Order. Therefore, the entire stock of foodgrains held by them was seized and confiscated under Cl. II (I) (b) and (d) of the Order read with Section 6-A of the ESSENTIAL COMMODITIES ACT, 1955 hereinafter. referred to as the "act".
( 3 ) IN order to appreciate the several contentions raised which are common (6 all these Crimirial Revision Cases and the Writ Petitions, it is enough at this juncture to notice the facts in Crl. Rc, no. 753/73 and the circumstances which led to the filing to Writ Petitions.
( 4 ) THE petitioner in Crl. Rc. No. 753/73, who holds a v/hole sale licence no. 768 and a retail licence No. 769 under the Order was carrying on business as a dealer in Foodgrains at Jaggayyapet in Krishna District. In his licence. "paddy" and "jawar" were not entered. Year after year, he has been submitting fortnightly returns to the authorities showing the stocks of different food- grains including paddy and jawar held by him and duly applying for renewal of the licence. However, the licence was not returned to the petitioner after renewal; it was retained by the Licensing Authorities.
( 5 ) ON 31-3-1975 the Deputy Tahsildar, jaggayyapet visited his godowns and sead them. Subsequently on 12-4-1975 the Special Tahsildar (Land Acquisition) bandar issued an order seizing 451. 25 quantals of paddy, 796 qualntals of Jowar and 199. 92 quintals of broken rice alleging (I) that paddy was not included in the licence issued to the petitioner and his dealing in paddy constitutes a contravention of crndition No. I of the licence, (2) that accounts were not properly maintained and stocks were found not tallying with the entries which amounts to a contravention of condition No. 3 of the licence and (3) that stocks were found stored in an unlicensed premises contituting a contravention of condition No. 2 (a) and (b) of the licence. These being contraventions liable to be dealt with under Cl. 3 of the Order and Section 7 of the ESSENTIAL COMMODITIES ACT, 1955 a show cause notice dt. 4-5-1973 was issued to the petitioner by the District Revenue officer under Section 6-A of the Essential commodities Act. In response to the show cause notice issued to him he submitted an explanation Inter ala pleading that he had applied for the grant of licence under the Foodgrains Dealers in all licensing order for dealing foodgrains and the petition was not rejected that no separate licence wa
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