The principles of natural justice, including the right to a fair hearing, apply to administrative decisions that have civil consequences, such as the sale of seized property.

Headnote:
ESSENTIAL COMMODITIES ACT - SECTION 6A - CEMENT - SPEEDY AND NATURAL DECAY - NOTICE - PRINCIPLES OF NATURAL JUSTICE - SALE - CONFISCATION - CIVIL CONSEQUENCES - FAIR HEARING - REASONABLE OPPORTUNITY - JUDICIAL REVIEW - INTERPRETATION OF STATUTE - ADMINISTRATIVE ACTION - FAIRNESS - IMMEDIACY - EXIGENCY - SITUATIONAL MODIFICATIONS - MODICUM OF HEARING - TYRANNICAL TOOL - ABUSE OF POWER - SUBSTANTIVE JUSTICE - DEMOCRATIC POLITY - RULE OF LAW - INFRACTION OF RIGHT TO PROPERTY - PERSONAL RIGHTS - COMPULSORY SALE - DEPRIVATION OF DOMINION - POSSESSION - ENJOYMENT - SUBSTITUTE PROPERTY - REALISED SALE PROCEEDS - LIMITED PERSPECTIVE - QUASHING OF ORDER - RESTORATION OF PROPERTY - APPEAL - FINAL ORDERS - COSTS.
Fact of the Case:

Petitioners claimed ownership of a ginning factory in Sindhi, Wardha district. They applied for and obtained a permit to purchase 24 M.T. of cement for construction purposes. The cement was delivered in two trucks and unloaded at the godown of petitioner No. 2 in Nagpur. Petitioners informed the Inspector of Industries, Wardha, about the receipt and storage of the cement. On 29th June 1981, officials of the Civil Supplies Department raided the godown and seized 529 bags of cement, including 49 bags of sagol, a commodity used for building purposes. Petitioners appeared before the Collector of Nagpur, who issued a notice under section 6B of the Essential Commodities Act, 1955, calling upon petitioner No. 2 to show cause why the cement should not be confiscated. Petitioners filed their replies. On 31st August 1981, the Collector passed an order confiscating the cement. Petitioners approached the Collector for a stay of the order and were informed that the cement had already been sold and disposed of. Petitioners filed a petition under Article 226 of the Constitution of India, challenging the confiscation order and the order of sale and disposal of the cement.
Finding of the Court:

1. Cement is not a commodity subject to "speedy and natural decay" within the meaning of section 6A(2) of the Essential Commodities Act, 1955. 2. Section 6A of the Act contemplates a notice to the person concerned before making an order of disposal of seized essential commodities. 3. The Collector's opinion that the seized commodity is subject to speedy and natural decay is justiciable and must be formed on the basis of objective facts and in a reasonable manner. 4. The provisions of section 6A of the Act postulate an enquiry before an order of sale can be passed. 5. The principles of natural justice, including the right to a fair hearing, apply to administrative decisions that have civil consequences, such as the sale of seized property. 6. The sale of seized property without giving a notice to the person concerned is a violation of the principles of natural justice and is, therefore, illegal.
Issues: 1. Whether cement is a commodity subject to "speedy and natural decay" within the meaning of section 6A(2) of the Essential Commodities Act, 1955. 2. Whether section 6A of the Act contemplates a notice to the person concerned before making an order of disposal of seized essential commodities. 3. Whether the Collector's opinion that the seized commodity is subject to speedy and natural decay is justiciable. 4. Whether the provisions of section 6A of the Act postulate an enquiry before an order of sale can be passed. 5. Whether the principles of natural justice, including the right to a fair hearing, apply to administrative decisions that have civil consequences, such as the sale of seized property.
Ratio Decidendi: 1. The words "speedy" and "natural" in section 6A(2) of the Essential Commodities Act, 1955, must be construed in their normal and natural meaning. Cement does not turn into stone unless it comes into contact with water, which is not a natural commodity in cement. Cement is manufactured to withstand ordinary humidity, and it is only when there is an external application of water that it solidifies. Therefore, cement cannot be said to be a commodity subject to speedy and natural decay. 2. Section 6A(1) of the Act empowers the Collector to inspect or cause to be inspected a seized essential commodity and, if satisfied that there has been a contravention of the order under which the commodity was seized, to order its confiscation. This provision contemplates an enquiry before the Collector can pass an order of confiscation. Section 6A(2) provides that where the Collector forms an opinion that the seized commodity is subject to speedy and natural decay, he may order its sale. However, this provision must be read in conjunction with section 6A(1), which requires an enquiry before an order of confiscation can be passed. Therefore, section 6A of the Act contemplates a notice to the person concerned before making an order of disposal of seized essential commodities. 3. The Collector's opinion that the seized commodity is subject to speedy and natural decay is justiciable. The Collector must form this opinion on the basis of objective facts and in a reasonable manner. The person concerned has a right to challenge the Collector's opinion and to demonstrate that the commodity is not subject to speedy and natural decay. 4. The provisions of section 6A of the Act postulate an enquiry before an order of sale can be passed. This is evident from the fact that the Collector is required to inspect or cause to be inspected the seized commodity before forming an opinion that it is subject to speedy and natural decay. The Collector is also required to take and preserve samples of the commodity before its sale or auction. These provisions indicate that the Collector must conduct an enquiry before passing an order of sale. 5. The principles of natural justice, including the right to a fair hearing, apply to administrative decisions that have civil consequences, such as the sale of seized property. The sale of seized property without giving a notice to the person concerned is a violation of the principles of natural justice and is, therefore, illegal.
Final Decision: The Court quashed the order passed by the Collector directing the sale and disposal of the seized cement. The Court also directed the respondents to make available the seized property to the petitioners on the final orders passed in the appeal against the confiscation order.

JUDGMENT - Tulpule R.D.J.-Petitioner No. 1 claims to be an owner of a ginning factory at Sindhi in District Wardha. According to him he applied to the Ministry of Industries and the office of the Cement Controller for grant of a permit to purchase cement for purpose of construction of certain buildings, which he wanted to do at the said ginning factory. He applied for 24 M. T. of cement. The said permit was granted to him in accordance with the provisions of Cement Control Order, 1967 and which permit he got in the first week of June 1981. He says that he deposited the amount of Rs. 11,640 which was the price and arranged to take delivery of this cement which was released ex-Chanda factory of Associated Cement Companies. The cement was to be obtained and taken delivery of before 10-6-1981. It is his case that accordingly cement was obtained delivery of on 10-6-1981 by means of two gate passes of 240 bags each. The transport permitted was by road and the cement bags were, therefore, according to petitioner No. I loaded in two trucks Nos. M.H.G. 1880 and M.T.G. 9351.

2. It is the further case of petitioners that since those were rainy days and since the approach road to the ginning factory at Sindhi was full of slush and not negotiable in the rainy season and further since no construction work would be undertaken during the rainy season, he decided to store those 480 bags of cement with his brother-in-law, petitioner No. 2, in his godown at Nagpur. Accordingly the trucks reached Nagpur on the 12th and 13th June 1981 and upon due payment of octroi, the goods were unloaded at the godown of petitioner No. 2 situated at plot No. 7, Laxminagar, Nagpur.

3. It is the case of petitioner No. 1 that since this cement was released to him by the Ministry of Industries, Department of Industrial Development and, therefore, under the orders of Central Government he was responsible to communicate the fact of receipt and storing of this cement to the Inspector of Industries at Wardha. It is contended that petitioner No. 1 had accordingly done so on 16-5-1981 which is disputed on behalf of the respondents. For the reasons which we shall set out later in our judgment, it is unnecessary for the disposal of this petition for us to go into that question.

4. On 29th June 1981, the officials of the Civil Supplies Department

raided the godown of petitioner No. 2. When the godown was opened,

according to the respondents 529 bags of cement were found. It is the peti tioner's case that all that was found in the godown was 480 bags of cement received against the permit consisting of 24 M. T. by petitioner No. 1 and 49 bags of sagol, a commodity used for building purposes, in which petitioner No. 2 trades. It is the case of petitioners, that petitioner No. 2 was the person who produced the material before these officers and also told them that the bags were 480 bags of cement belonging to petitioner No. 1 and 49 bags of sagol in which he was entitled to trade and for which no permission was necessary and was not an essential commodity. It is the further case of the petitioners that this explanation and evidence produced before these officers were discarded and the officers proceeded to seize the commodity and handed it over on supratnama to the Maharashtra State Co-operative Market ing Federation, Apna Bhandar, Sitabuldi, Nagpur to which the cement was removed.

5. The next thing which the petitioners say about this cement is that on 14-7-1981, a notice was issued by respondent No. 2 calling upon petitioner No. 2 to show cause as to why the cement should not be confiscated as it was stored in violation of clauses 8, 8A and 15 of the Maharashtra Cement (Licensing and Control) Order, 1973 read with Maharashtra Cement (Licens ing and Control) (Amendment) Order, 1978. Petitioner No. 2 appeared before respondent No. 2, who is the Collector of Nagpur, and petitioner No. 1 came to know of this seizure of the bags, says the

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