Point of law: fine amount in lieu of confiscation is not to exceed the market price of the vehicle on the date of seizure of essential commodity. More over it is within the discretion of the competent authority to fix such reasonable amount considering the facts and circumstances of each case

ORDER :

1. This writ petition is filed “to declare the action of the 2nd respondent in passing orders dated 31.12.2020, contrary to the proviso to sub-section (1)(c) of Section 6-A of the Essential Commodities Act, 1955 (for short ‘the Act 1955’) as illegal and arbitrary.”

2. Case of the petitioner is that, he is the owner of the mini lorry bearing No. AP-21Y-2694 and doing transport business; on 26.08.2020 the said lorry was intercepted on the allegation that the lorry is carrying public distribution rice; Cr. No. 393 of 2020 was registered under E.C. Act of 1955; the driver of the petitioner do not have knowledge about the nature of the rice; subject vehicle was handed over to the 4th respondent for safe custody; petitioner filed an application before the 2nd respondent seeking release of the subject vehicle and the 2nd respondent passed an order dated 31.12.2020 directing the petitioner to produce bank guarantee for an amount of Rs. 7,00,000/- from any nationalized bank pending finalization of the 6-A proceedings for interim release of the vehicle in the said order, it is stated that the market value of the seized stock from the lorry in the open market is Rs. 61,500/- and the value of the subject vehicle as Rs. 5,00,000/- but the respondent has sought bank guarantee for Rs. 7,00,000/- for release of the vehicle.

3. Learned counsel for the petitioner submits that as per the second proviso to sub-section (1)(c) of Section 6-A of the Act, 1955, the value of the stock has to be taken into account and not the value of the vehicle for interim release of the vehicle. In support of his contention, he relied upon a decision in G. Subbarama Naidu vs. The Joint Collector, Chittoor, AIR 1986 A.P. 82, wherein, the Division Bench of this Court held that the vehicle should be released if the owner is prepared to furnish security equivalent to the value of the seized essential commodity.

4. Section 6-A of the Act, 1955, deals with confiscation of essential commodity. Second proviso to 6-A(1) reads as follows:

“Provided further that in the case of any animal, vehicle, vessel or other conveyance used for the carriage of goods or passengers for hire, the owner of such animal, vehicle, vessel or other conveyance shall be given an option to pay, in lieu of its confiscation, a fine not exceeding the market price at the date of seizure of the essential commodity sought to be carried by such animal, vehicle, vessel or other conveyance.”

5. As seen from the above proviso, the owner of the vehicle shall be given an option to pay, in lieu of its confiscation, a fine not exceeding the market price at the date of seizure of the essential commodity sought to be carried by such vehicle, which means that in lieu of confiscation of the vehicle, the owner of the vehicle will be given an option to pay fine not exceeding the market price of the vehicle at the date of seizure of the essential commodity. The market price as on the date of seizure of the essential commodity is that of the vehicle and not that of seized commodity.

6. Today, when the matter came up for hearing, learned Government Pleader for Civil Supplies placed reliance on the subsequent judgment rendered by the Hon'ble Supreme Court in Deputy Commissioner, Dakshina Kannda District vs. Rudolph Fernandes, (2003) 3 SCC 306, wherein, the Hon'ble Supreme Court held as follows:

“The question was whether for releasing the vehicle sought to be confiscated, the second proviso to Section 6-A(1) of the Essential Commodities Act provide for levy of fine on the basis of market value of the confiscated vehicle or on the basis of the market price of the essential commodity sought to be carried by such vehicle. The Karnataka High Court on the analogy of Section 115(2) of the Customs Act held that in such cases, the provision in question provided for levy of fine on the basis of the price of the relevant essential commodity.

Allowing the Government's appeals, the Supreme Court held: In the light of the Preamble and Sec