IMPORTANT POINT
The procurement of PDS rice from cardholders does not violate the Essential Commodities Act, as it does not interrupt the public distribution system.

ORDER :

(Venkateswarlu Nimmagadda, J.) :

1. This writ petition is filed claiming the following relief :

“…To issue Writ of Certiorari calling for the records from the file of the Court of the Sessions Judge, Krishna Division, Machilipatnam relating to the judgment dated 22.03.2018 made in E.C.Appeal No.157/2017 and quash the same to the extent of confirming the order of the Collector (CS), Krishna, Machilipatnam, the 2nd Respondent herein passed in E.C.P.No.287/2013, dated 07.03.2017 by declaring it as illegal, arbitrary and violative of the provisions of the Essential Commodities Act, 1955 and the orders mader there under and also set aside the order in E.C.P.No.287/2013, dated 07.03.2017 of the 2nd Respondent and to pass such order or orders...”

2. The case of the petitioners is as follows:

3. The 1st petitioner herein was engaged in doing business in rice both wholesale and retail. While so, he got an order from Sri Kalyan Chakravarthi Rice Mill, Ethakota, East Godavari District for supply of 170.00 Qtls of fine variety of raw rice. Accordingly, the 1st petitioner engaged the lorry bearing No. AP 27 W 6288 belongs to the 2nd petitioner to transport 170.00 Qtls of rice and got loaded 340 bags each weighing 50 kgs on 15.10.2013 in the said lorry covered by bill and way bill. While the lorry was proceeding to its destination it was intercepted at Ramavarappadu Village, Vijayawada Rural Mandal by the Regional Vigilance and Enforcement Officials, Vijayawada, Krishna District and the Respondent No.3 herein. Though the driver of the lorry produced the bill and way bill and informed that the rice in the lorry is fine variety of raw rice and the same is being transported to Ethakota village, the inspecting officials did not look into the records produced by the driver and seized the lorry and stock illegally under the cover of Panchanama which was prepared with concocted allegations that the rice in the lorry is PDS rice, that the petitioners and others indulged in clandestine business of purchasing and selling the PDS rice and booked a case U/s.6-A of the Essential Commodities Act, 1955 (for short “the EC Act, 1955”)and submitted a report to the Respondent No.2.

4. Then the petitioners filed petitions before the Respondent No.2 for interim release of the stock as well as the lorry. But, the Respondent No.2 ordered to release the lorry on furnishing bank guarantee of Rs.2,00,000/- and directed the Respondent No.3 to sell the seized stock by conducting public auction and remit the sale proceeds under Revenue Deposits. Accordingly, the 2nd petitioner herein furnished the bank guarantee and got the lorry released whereas the stock is concerned the 3rd Respondent conducted public auction and kept the sale proceeds i.e., an amount of Rs.2,93,250/- in Revenue Deposits. Thereafter, the Respondent No.2 issued a notice, dated 26.07.2014, U/s.6-B of the EC Act, 1955. In pursuance of the same, the petitioners submitted their detailed explanation stating that the rice in the lorry is not PDS rice and they have not contravened any of the provisions of Control Orders and particularly clause 17(A) of the A.P. State Public Distribution System (Control) Order, 2008 (for short “the Control Order, 2008”)and that the petitioners have not contravened clause 2 (K) (4), 3 of A.P. Scheduled Commodities Dealers (Licensing, Storage and Regulation) Order, 2008 (for short “the Licensing Order, 2008”) as a licensed dealer.

5. Unfortunately, the Respondent No.2, without there being any evidence seized the PDS rice and without considering the explanation in proper perspective and ignoring the documentary evidence such as the copy of Challan No.20052739, dated 12.02.2013 of Sub-Treasury Office, Narasaraopet evidencing the payment of fees for obtaining the whole sale and retail license and the bill and way bill relating to the transaction, came to a wrong conclusion that the petitioners have interrupted in the smooth functioning of Public Distribution System duly viol