P.S. Brahme, J.
1. Heard the learned counsel for the parties. Perused the record.
2. The petitioners have approached this Court challenging the orders passed by the respondent No. 2, suspending the licences of the petitioners as also the orders passed by the appellate authority, confirming the said orders.
3. The petitioners are the licensees for sale, stock or exhibit for sale or distribution of Insecticides holding licence Nos. AMT/203, AMT/283, AMT/320, AMT/336 and AMT/66 respectively issued under Section 13 of the Insecticides Act, 1968 read with Sub-Rule (4) of Rule 10 of the Rules framed thereunder. On 29th August, 1990, the petitioners received two packages each of sealed containers of insecticides called as 'Nuvacron' (Monocrotophos) from Harhar Mahadeo Garage (Motor Transport Agency) of Amravati. It is not disputed that the packing material of the labels on the packages including the labels on the sealed containers were the same as of original packing material and labels of Hindustan Ciba Geigy Ltd. Bombay. Subsequently, the petitioners received bills for the said packages from M/s Datta Krushi Mandir, Amravati. The petitioners, in fact, had never placed any order with M/s Datta Krushi Mandir Amravati, for supply of any insecticides. The petitioners, therefore, made a report to Police that there was a fraud in sending the said two packages.
4. However, some information was received by Fertilizer Inspector and on the basis of that information, he raided the shop of M/s Datta Krushi Mandir, Amravati and seized the Nuvacron Insecticides of Hindustan Ciba Geigy Ltd. and found that containers with Batch No. 0013 were containing misbranded Insecticides and on collecting information about the shops to which M/s Datta Krushi Mandir, Amravati had sent packages of the said insecticides with label of Batch No. 0013, claimed to have collected sealed containers from the shops of the petitioners and also claimed to have got contents of such sealed containers analyzed and found them misbranded. After all the enquiry, the said Inspector made report to City Kotwali Police Station, Amravati, against Mr. Gopal Ratanlal Soni, the Proprietor of M/s Datta Krushi Mandir, Amravati, on the basis of which, an offence was registered under Section 420 read with Section 486 of the Indian Penal Code, alleging that the said Distributor had cheated and defrauded the petitioners by sending to them packages of sealed containers wherein the insecticides packed were substandard, without giving them any idea of such nature of the insecticides. It was on the basis of this factual position, the petitioners contended that they were innocently in possession of the sealed containers sent to them through Motor Transport.
5. On the basis of the report of analysis, the District Quality Control Inspector (Seeds/Fertilizers/Insecticides), Amravati, issued a show cause notice to the petitioners, under Section 17(i)(a), 17(i)(c) and 18(i)(c) of the Insecticides Act read with Rule 10 of the Insecticides Rules. 1971, calling upon the petitioners to explain why action as per the provisions of the said Act should not be taken against them. The petitioners gave reply to the show cause notice, contending that they never placed any order for supply of Insecticides and that they were not knowing as to the nature of the containers much less of the fact that the insecticides were misbranded.
6. The District Quality Control Inspector had forwarded the case papers to the Agricultural Development Officer, Zilla Parishad, Amravati without giving any opportunity of hearing to the petitioners. The Agricultural Development Officer, who was then Licensing Authority within the meaning of the Insecticides Act, who is joined as the respondent No. 3 in this petition, issued show cause notice to the petitioners. The petitioners gave replies to the show cause notices. The Licensing Authority, however, without giving any hearing to the petitioners, passed order dated 17-12-1990, suspending, the licences of the petitioners. The petitioners being aggrieved by the order passed by the Licensing Authority, filed appeals and also prayed for stay of the orders suspending their licences. The Additional Director of Agriculture, Pune, the respondent No. 3 herein, decided the appeals on 4-7-1991, confirming, the orders passed by the Licensing Authority. It is to be noted that during the pendency of the appeals before the appellate authority, stay was operating and as such, the petitioners continued their business. The orders of suspension of licences of petitioners remained to be stayed,
7. This petition came to be admitted by this Court on 9-8-1991. This Court has also passed the order in terms of prayer clause (2), thereby staying the operation of the orders of suspension of the licences.
8. Mr. Naik, the learned counsel for the petitioners, submitted that the authorities below passed orders without affording opportunity of hearing to the petitioners. He submitted that none of the authorities below has assigned any reason for holding that the insecticides found to have been in possession of the petitioners, were misbranded, and for suspending licences of the petitioners. He also submitted that as regards possession of the alleged misbranded insecticides by the petitioners, there had been criminal prosecutions and the petitioners were tried in Regular Criminal Case No. 143 of 1993 in the Court of Judicial Magistrate, First Class, Anjangaon Surji and Regular Criminal Case No. 174 of 1993 in the Court of Judicial Magistrate, First Class, Achalpur. But the learned Judicial Magistrates, First Class acquitted the accused persons of the charges for which they were tried.
9. The learned counsel pointed out that the Criminal Courts, after trial, found on facts that the prosecution has failed to prove that the insecticides which were found in possession of the petitioners, were misbranded. The learned counsel further submitted that the appellate authority proceeded to dismiss the appeals preferred by the petitioners only on the affidavit of the petitioners to the effect that they have received alleged contraband insecticides. He submitted that the admission of the petitioners was not considered by the authorities in right perspective.
10. The learned counsel for the petitioners, placing reliance on sub-section (3) of Section 30 of the Insecticides Act, 1968, submitted that a person not being an importer or a manufacturer of an insecticide or his agent for the distribution thereof, shall not be liable for a contravention of any provision of the Act, if he proves; (a) that he acquired the insecticide from an importer or a duly licensed manufacturer, distributor or dealer thereof; (b) that he did not know and could not, with reasonable diligence, have ascertained that the insecticide in any way contravened any provision of the Act; and (c) that the insecticide, while in his possession, was properly stored and remained in the same state as when he acquired it. The learned counsel further submitted that it was the basic contention of the petitioners before the authorities below that they came to be in possession of the insecticides as had been received from the transporter. It was their contention that they had not placed any order for the supply of said insecticides much less, they were not knowing that the insecticides supplied were misbranded. The insecticides in the container were in the same sealed condition when they were seized by the Inspector. Therefore, it is submitted that the petitioners cannot be accounted for alleged misbranded insecticides merely because same were found in their possession and as such authorities below landed in error in suspending the licences of the petitioners.
11. Mr. Naik, the learned counsel for the petitioners, placed reliance on the decision of the Apex Court in the case of M/s Kisan Beej Bhandar, Abohar v. Chief Agricultural Officers, Ferozepur and Anr. . The Apex Court was dealing with a case wherein the licence of the appellant was cancelled on the ground of possession and keeping for sale misbranded insecticides. The Apex Court found that once appellant's claim that he had purchased a full sealed tin from authorised distributor and that the seal had not been tampered with when tin was recovered from his shop, was established, burden under Section 30(3) is discharged and he became entitled to protection thereunder even against cancellation of his licence.
12. Mr. Sonare, the learned A.G.P. supported the orders giving emphasis on the fact that the petitioners have admitted in their replies to the show cause notices that the misbranded insecticides have been received by them and have been kept in their shops for sale.
13. It is not disputed that the containers containing the alleged misbranded insecticides, which came to be seized by the Inspector from the shops of the petitioners, were in same sealed condition. It is not disputed that the petitioners came to be prosecuted in the Courts of Judicial Magistrate, First Class, Anjangaon Surji, in Regular Criminal Case No. 143 of 1993 and Judicial Magistrate, First Class, Achalpur, in Regular Criminal Case No. 174 of 1993, in respect of the same alleged misbranded insecticides, for offences under Sections 420, 486 r/w 34 of the Indian Penal Code and Section 29 of the Insecticides Act, 1968. Mr. Naik, the learned counsel for the petitioners has placed before the Court the judgments of the said Courts dated 5th May, 2000 and 15th May, 2001, in the criminal cases wherein, the petitioners who were accused, were acquitted of the offences with which they were charged.
14. We have perused the judgment of the Judicial Magistrate, First Class, Anjangaon Surji, in Regular Criminal Case No. 143 of 1993 dated 5-5-2000 and the judgment of the Judicial Magistrate, First Class, Achalpur, in Regular Criminal Case No. 174 of 1993, dated 15-5-2001. It is needless to say that the orders of acquittal came to be passed only on the ground that the prosecution failed to prove that the insecticides which were seized from the possession of the accused were not misbranded. The Judicial Magistrates recorded a finding that the prosecution has failed to prove that the accused persons, in furtherance of their common intention, sold, or had been in possession of the insecticides with a counterfeit mark. In our opinion, these judgments of acquittal of the accused persons in criminal cases, have certainly bearing on the orders passed by the authorities below, suspending the licences of the petitioners.
15. It is also significant to note that in respect of acceptance of the statements made by the petitioners in their reply to the show cause notices, wherein they have admitted that the alleged misbranded articles were seized from their shops, the Licensing Authority as also the appellate authority, has found that the petitioners have contravened the provisions of the Insecticides Act, as they have admitted in their replies that the misbranded insecticides were received by them in their shops. It is needless to say that even the admissions made by the petitioners in their replies, did not absolve the authorities to get established that the seized articles were, in fact, misbranded insecticides. Moreso when the criminal Courts have not accepted the report of the analysis for the reasons stated in the judgments and particularly because the required procedure was not followed. The fact remains that before the authorities, there was no tangible material to hold that the insecticides seized were, in fact, misbranded. If that is so, then the orders suspending the licences of the petitioners, arc obviously erroneous and cannot sustain in the eyes of law.
16. The learned counsel for the petitioners has drawn our attention to the orders passed by the licensing authority. A bare perusal of the orders which are at Annexure-32 to Annexure-36, shows that the orders came to be passed without application of mind. No reasons arc assigned. What is significant is that it is not even reflected in the orders that the petitioners were heard before passing the orders. This was significant in the sense, there is nothing to show that the contentions raised by the petitioners in their replies to the show cause notices, were taken into consideration by the authorities before passing impugned orders, which, in our opinion, is sufficient ground for setting aside the orders passed by the licensing authority.
17. Insofar as the orders passed by the appellate authority are concerned, the position is the same. The orders are at pages 103 to 122 Annexure-43 to Annexure-47. The perusal of these orders passed by the appellate authority goes to show that the emphasis was on the writing submitted by the petitioners, wherein they have admitted to have committed the alleged offence unknowingly and they have prayed that their act be condoned. The appellate authority also did not go into the question whether, in fact, the insecticides seized from the possession of the petitioners, were misbranded or not.
18. The licensing authority and the appellate authority have ignored the provision contained in sub-section (3) of Section 30 of the Insecticides Act, 1968 where under the presumption is to protect the licensee if the conditions laid down therein are fulfilled. In earlier part of the judgment, we have, while narrating the case of the petitioners, stated that right from inception, it was their contention that the containers were in sealed condition when received by them and remained in same condition when seized by the Inspector. Provisions under sub-section (3) of Section 30 of the Act is very much clear wherein the person who is not an importer or manufacturer of an insecticide or his agent for the distribution, shall not be liable for contravention of any provision of the Act, if he proves that he acquired the insecticides from an importer or duly licensed manufacturer and that he did not know and could not, with reasonable diligence, have ascertained that the insecticides in any way contravened any provision of the Act, and this condition is very material that the insecticides, while in his possession, was properly stored and remained in the same state as when he acquired it.
19. The Apex Court in the case of M/s Kisan Beej Bhandar (cited supra) has gone to the extent of holding that when there is no contravention and the licensee is entitled to protection under Section 30(3) of the Act, he is entitled to protection thereunder even against cancellation of his license. The case in hand is on a better footing inasmuch as the authorities below have only passed orders suspending the licenses of the petitioners.
20. In this context, it is also pertinent to note that after the petition came to be filed in this Court, while admitting the same, the orders passed by the authorities below have been stayed. The least that could be said is that the authorities below have passed the orders ignoring the provisions contained in Section 30(3) of the Act. The order of suspension of licenses of the petitioners, are patently illegal and cannot sustain in law for the reasons assigned earlier. The petition, therefore, will have to be allowed.
21. For the aforesaid reasons, the petition is allowed. The impugned orders passed by the licensing authority so also the appellate authority, are quashed and set aside. Rule made absolute in the aforesaid terms with no order as to costs.