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                     REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS. 1075-76 of 2012 (Arising out of SLP(Crl.) Nos(s). 8334-8335/2011)

State of Bihar & Anr.        …Appellants

        Versus

Arvind Kumar & Anr.                  …Respondents

J U D G M E N T

Dr. B.S. CHAUHAN, J.

       Leave granted.

1. These  appeals  have  been  preferred  against  the  impugned  

judgments and orders dated 15.3.2011 in Cr.WJC No. 215 of  

2011 and dated 29.4.2011 in Crl. Misc. No. 14629 of 2011 of  

the  Patna  High  Court,  by  which  a  huge  quantity  of  wheat  

seized by the appellant from the premises of the respondents  

under  the  provisions  of  Essential  Commodities  Act,  1955  

(hereinafter referred to as ‘EC Act’) has been released.  

2. Facts and circumstances giving rise to these appeals are that:

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A. On  15.2.2011,  a  secret  information  was  received  by  the  

department  of  the  appellants  in  respect  of  illegal  storage  of  

subsidized  food  grains  of  Public  Distribution  Scheme  by  the  

respondents which led to the raid upon the premises of M/s Harsh  

Tejas Nutrition Pvt. Ltd., (Flour Mill of the respondents) situate at  

Patna,  New Bypass  Road near  Petrol  Pump.   The Sub-Divisional  

Officer, Patna City and other officers from the local police raided the  

premises of the said flour mill and found  off loading of wheat from  

Truck  bearing  registration  No.  BHI  1899.  The  driver  and  other  

workers fled away. It was found that the grains bags had the seal of  

Food  Corporation  of  India,  (hereinafter  called  `FCI’),  U.P.  

Government  Food  Department,  Food  and  Supply  Department,  

Haryana; and Government of Punjab. The seized material made it  

apparent that there had been diversion of FCI grains for the purpose  

of black marketing. Appellants seized 5923 bags filled with more  

than 2991 quintals wheat.

B. None from the company where the raid was conducted came  

forward to claim the seized material or to justify the storage of same.  

Thus, the FIR bearing case No. 15/2011 dated 18.2.2011 was lodged  

under Sections 7 and 10 of the EC Act in addition to the appropriate  

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Sections 421/424 of the Indian Penal Code, 1860 (hereinafter called  

‘IPC’) in respect of the said seizure.  

C. The respondents herein preferred Criminal Writ Petition No.  

215/2011 for quashing confiscation proceedings and/or release of the  

confiscated goods.  

D. The High Court allowed the said writ petition within a very  

short  span  vide  order  dated  15.3.2011  and  subject  to  certain  

procedural  compliances  observed  that  continuing  seizure  of  the  

seized articles for a long time may not be justified and therefore the  

High Court issued direction for release of the  said wheat.  

E. The  respondent  approached  the  Chief  Judicial  Magistrate,  

Patna, for releasing the wheat in pursuance of the order passed by  

the High Court on 15.3.2011 by moving an application. The learned  

CJM dismissed the application of the respondent on 7.4.2011 on the  

ground that he could not produce any document which may show  

their ownership to the said seized material.  

F. The respondent again approached the High Court by filing  

Criminal  Miscellaneous  No.  14692/2011 which had been allowed  

vide order dated 29.4.2011.  

         Hence, these appeals.  

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3. Mr. Gopal Singh, learned counsel appearing for the State of  

Bihar has submitted that  the orders had been passed by the High  

Court  in  a  mechanical  manner  in  utter  disregard  of  the  statutory  

provisions of the EC Act, particularly, the provisions of Sections 6-A  

and  6-E.  Therefore,  the  impugned  judgments  and  orders  dated  

15.3.2011 and 29.4.2011 are liable to be set aside.  

4. On the contrary, Mr. Nagendra Rai, learned senior counsel  

appearing for the respondents has vehemently opposed the appeals  

contending that Sections 6-A and 6-E apply only where the goods  

are seized in pursuance of an order issued under Section 3 of the EC  

Act.  In the instant case, no order had ever been issued under Section  

3, therefore, the said provisions are not attracted.  Respondents were  

able to show their ownership in respect of the seized materials. The  

High Court in the impugned judgments made it clear that release of  

the wheat was only an interim measure subject to the final decision  

in the case. Therefore, no interference is warranted by the court, the  

appeals are liable to be dismissed.   

5. We have considered the rival submissions made by learned  

counsel for the parties and perused the record.  

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6. The  EC Act  was  enacted  to  safeguard  the  public  interest  

considering  it  necessary  in  the  interests  of  the  general  public  to  

control  the  production,  supply  and  distribution  of,  trade  and  

commerce in, certain commodities through the legislation. It was in  

the light of the aforesaid public policy that Section 3 of the EC Act  

empowered  the  Government  to  issue  notifications  and  once  a  

notification is issued, it enables the competent authority to confiscate  

the goods under Section 6-A and prosecution leading to punishment  

provided under Section 7 of  the EC Act.  The Collector  has been  

empowered under Section 6-A, if it is found to be expedient to sell  

the  seized  commodity  which  is  subject  to  natural  decay,  at  a  

controlled price or by public auction or dispose of through Public  

Distribution System to avoid artificial shortages, maintain the price  

line  and  secure  equitable  distribution  thereof   through  fair  price  

shops as it is in the interest of the general public.    

7. Admittedly, the High Court has not even taken a prima facie  

view  that  the  State  Government  had  not  issued  twice  any  

order/notification under Section 3 of  EC Act though the FIR made  

reference to clause 6(a) of the Public Distribution System (Control)  

Order, 2001 issued under Section 3 of the EC Act.  Respondent also  

referred to the said Control Order 2001 in Para 3 of the Crl.W.J.C.  

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No. 215 of 2011 filed by them.  More so, the question of ownership  

of the goods seized is a question of  fact which ought not to have  

been gone into by the High Court in its revisional or extra-ordinary  

jurisdiction. Further, there is nothing on record on the basis of which  

the issue of ownership has been decided  by the High Court. There  

was no cogent material on record before the High Court on the basis  

of which direction to release the goods so seized could be issued.

 8. We are at pains to observe that the High Court has dealt with  

the issue in most casual and caviler manner without any application  

of mind showing complete disregard of the legislature  enacting the  

provisions for general welfare.  

9. This Court while dealing with a similar issue in  Shambhu  

Dayal Agarwala v. State of West Bengal & Anr., (1990) 3 SCC  

549, held that whenever any essential commodity is seized, pending  

confiscation under Section 6-A, the Collector has no power to order  

release of the commodity in favour of the owner. Having regard to  

the scheme of the Act, the object and purpose of the statute and the  

mischief it seeks to guard,  it was further held that the word “release”  

in Section 6-E is used in the limited sense of  release for sale etc. so  

that the same becomes available to the consumer public.  The court  

held as under:

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“… No unqualified and unrestricted power   has been conferred on the Collector of releasing   the commodity in the sense of returning it to the   owner  or  person  from whom it  was seized  even   before  the  proceeding  for  confiscation  stood   completed  and  before  the  termination  of  the   prosecution in the acquittal of the offender. Such a   view  would  render  Clause  (b)  of  Section  7(1)   totally nugatory and would completely defeat the   purpose and object of the Act. The view that the   Act  itself  contemplates  a  situation  which  would   render Section 7(1)(b) otiose where the essential   commodity is disposed of by the Collector under   Section 6-A(2) is misconceived. Section 6-A does   not  empower  the  Collector  to  give  an option  to   pay, in lieu of confiscation of essential commodity,   a  fine  not  exceeding  the  market  value  of  the   commodity on the date of seizure, as in the case of   any  animal,  vehicle,  vessel  or  other  conveyance   seized along with the essential commodity. Only a   limited  power  of  sale  of  the  commodity  in  the   manner prescribed by Section 6-A(2) is granted.   The power conferred by Section 6-A(2) to sell the   essential commodity has to be exercised in public   interest  for  maintaining  the  supplies  and  for   securing the equitable distribution of the essential   commodity.”

        The said judgment was followed and approved by this Court  

after explaining the scope of the statutory provisions in Oma Ram v.  

State of Rajasthan & Ors., (2008) 5 SCC 502.  

10. What  we  found  shocking  in  the  instant  case  is  that  the  

petition was filed before the High Court  for quashing of the FIR and  

alternatively  for  releasing  the  seized  items  and  the  High  Court  

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without  giving  any  reason  whatsoever   disposed  of  the  petition  

observing as under:  

“Considering the submissions of the parties, in the  opinion of the  court, continuing the seizure of the  seized items for a long time may not be justified at  least the seizure of the wheat.”         

         This is the only reason given by the High Court without even  

considering what were the averments on behalf of the parties and  

without considering the requirement of the statutory provisions.  

11. In the subsequent order dealing with the ownership of the  

wheat  the High Court  has only taken note of  the fact  that  as  the  

respondents  herein  were  prepared  to  furnish  adequate/sufficient  

security  to  the  satisfaction  of  the court  below  for  release  of  the  

wheat in question, the wheat could have been released by the CJM.  

In case the learned CJM came to the conclusion after appreciating  

the evidence on record that the respondents/applicants were not in a  

position to show any document which may show their ownership to  

the  wheat,  there  was no justification for  the High Court  to  issue  

directions  for  release  of  such  material  merely  because  applicant  

could furnish the security.  

            If it is so, any stranger or third party may give sufficient   

security and get the seized goods release in his favour. Such a course  

is not permissible even while deciding the application under Section  

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451/457 of the Code of Criminal Procedure, 1973.  A person having  

no  title/ownership  over  the  seized  material  may  get  the  same  

released on furnishing security and sell it in black market and earn  

profit several times more than the amount of security furnished by  

him. We fail to understand as how such an order of release which  

defeat the very purpose for which the EC Act was enacted, could be  

passed.    

12. The High Court has totally ignored the fact that any order  

passed under Section 6-A is appealable under Section 6-C of the EC  

Act.  Therefore,  to  consider such an application for  release  of  the  

goods was totally unwarranted at least at that stage.

 13. In  Manish Goel v. Rohini Goel, AIR 2010 SC 1099,  this  

Court has held that generally, no Court has competence to issue a  

direction contrary to law nor the Court can direct an authority to act  

in contravention of the statutory provisions.  The courts are meant to  

enforce the rule of law and not to pass the orders or directions which  

are  contrary  to  what  has  been  injected  by  law.  (See  also:  Vice  

Chancellor,  University  of  Allahabad  &  Ors.  v. Dr.  Anand  

Prakash Mishra & Ors., (1997) 10 SCC 264; and Karnataka State  

Road Transport Corporation  v.  Ashrafulla Khan & Ors.,   AIR  

2002 SC 629).  

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14. Learned counsel for the parties are not in a position to reveal  

the  status  of  the  criminal  proceedings  initiated  against  the  

respondents.   In  such  a  fact-situation,  as  has  been  suggested  by  

learned counsel for the parties we set aside the aforesaid judgments  

and orders dated 15.3.2011 and 29.4.2011 and remand the case back  

to the High Court to consider  afresh after examining all factual and  

legal issues involved in the case.  Till the disposal of the case afresh,  

interim  order  passed  by  this  Court  on  31.10.2011  shall  remain  

operative.   

           The appeals stand disposed of accordingly.  

  ……..……………………….J.    (Dr. B.S. CHAUHAN)

   ....….……………………….J.     (SWATANTER KUMAR)

New Delhi, July 23, 2012

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