Shankarlal Purnimal Vs. Commissioner of Civil Supplies, Hyderabad and anr. - Court Judgment

Excerpt:
commercial - claim of interest - sections 6-a (2) and 6-c of essential commodities act, 1955 - petitioner's goods were seized - enquiry held by collector revealed no contravention of act - petitioner filed writ for declaration that the action of respondent refusing to pay interest was arbitrary, illegal and also for direction to pay petitioner interest at 6% on sum involved - petitioner's case was well within ambit of section 6-a where there is no statutory obligation to pay any interest - only obligation is to return goods or sale proceeds - held, in absence of any statutory liability respondent cannot be fastened with any liability. - maximssections 2(xv) & 3(1) & (3): [v.v.s. rao, n.v. ramana & p.s. narayana, jj] ghee as a live stock product held, [per v.v.s. rao & n.v. ramana, jj - majority] since ages, milk is preserved by souring with aid of lactic cultures. the first of such resultant products developed is curd or yogurt (dahi) obtained by fermenting milk. dahi when subjected to churning yields butter (makkhan) and buttermilk as by product. the shelf life of dahi is two days whereas that of butter is a week. by simmering unsalted butter in a pot until all water is boiled, ghee is obtained which has shelf life of more than a year in controlled conditions. ghee at least as of now is most synthesized, ghee is a natural product derived ultimately from milk. so to say, milk is converted to dahi, then butter. scientifically or common sense point of view, even though ghee is not directly obtained from milk (which is certainly a product of cow/buffalo), it is certainly a product of a product of livestock i.e., cow or buffalo. it would be rather illogical or irrational to say that ghee is not a milk/dairy product or to say that it is not a product of livestock. section 2(x) and 2(iv) of the act used the plural products of livestock. the legislative intention is very clear that not only a product of livestock like milk (when notified by government), butter etc., are products of livestock but even derivative items (derived from a product of livestock) are intended to be product of livestock for the purpose of the act. thus the term ghee is to be interpreted on the basis of expression products of livestock as defined in section 2(xv) of the act. whatever products are declared as such by the government by notification, they become products of livestock for purpose of the act. consequently it was held that ghee is the product of livestock and by reason of power conferred under section 3(1) read with section 3(3) of the act on them it is competent for the government to declare ghee as product of livestock for the purpose of regulating its purchase and sale, in any notified market area. [per p.s. narayana, j,(dissenting)]if livestock or agricultural produce and the categories thereof had been specified in the statute itself by appending in the schedule or otherwise, that would stand on a different footing from the present provisions of the act which contemplate the issuance of notifications in accordance with the procedure ordained by the provisions specified supra. in view of the clear definition of the livestock and products of livestock, the ghee being derivative of butter or cream, if the language employed in definition to be taken as they stand, the only conclusion would be is that the ghee would not fall within ambit of the definitions aforesaid. sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] declaration of notified area held, it is only under section 3 that government are required to publish draft notification inviting objections and section 3(3) mandates to consider objections and suggestions before issuing declaration order. it is very conspicuous that section 4 does not contemplate any draft notification inviting objections and suggestions before either constituting market committee, establishing notified market area or declaring notified market area for the purpose of levy of market fees. thus, except ordaining government to issue preliminary/draft notification inviting objections at the time of issuing declaration order under section 3(3) of the act nowhere much less under section 4 contemplates issuing a notification inviting objections. when the legislature has chosen to exclude principles of natural justice, the court cannot introduce rule of audi alteram partem and render statutory provisions unworkable. in such a case, maxim, expressum facit cessare tacitum (when there is express mention of certain things, then anything not mentioned is excluded) would apply. section 7: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] levy of market fee element of quid pro quo - held, levying fees and tax are two forms of exercise of sttaes taxing power. there is no quid pro quo between tax payer and public authority as tax is a part of common burden. it is also well settled that fee is charge for special service or a benefit given to a class of individual fee payers and fee collected need not have correlation with actual service in exactitude but if it is shown that substantial portion of the fee is expended or the purpose for which it is levied, it would be justified. expressum facit cessare tacitum sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] meaning when there is express mention of certain things, then anything not mentioned is excluded. order1. the petitioner is a business partnership. this writ petition is filed claiming payment of interest from the respondent state authorities under the essential commodities act. the case of the petitioner is that it has sent a consignment of 320 bags of wheat by railways to kachiguda railway station and those goods were seized by the authorities under the essential commodities act at kachiguda for alleged contravention of the essential commodities act and the rules into which it is not necessary to go in this writ petition. all that we should notice is that after the goods were seized, the collector held an inquiry into the alleged contravention under the act and the rules. the collector held under s. 6-a of the f-c. act that there was no contravention of the act or the rules committed by the petitioner. accordingly he passed no orders of confiscation of the goods earlier seized by the department. thus the petitioner was entitled for the return of the goods. but while the proceedings were pending before the collector, the authorities acting in pursuance of certain directions given by this court, sold away those goods. as a result the goods were not available to be returned. the department has, therefore, paid only the sale proceedings of those goods. now in this writ petition the petitioner says that he must be paid not only the sale proceeds of the goods but also interest at 6% on the price of the goods. this writ petition is filed for a declaration that -the action of the respondent in refusing to pay interest is arbitrary and illegal and also for a direction to pay the petitioner interest at 6% on a sum of rs.67,000/- which represents the value of 320 quintals of goods sold. 2. this writ petition is opposed by the respondent government wholly on the basis of law. the facts stated above are not in dispute. the government's contention is that on the agreed facts of this case the petitioner would not be entitled to be paid under law any interest. according to it the petitioner would be entitled to be paid only the value of the goods seized and sold. 3. the petitioner who appeared as party in person did not refer to any provisions of the act. he merely relied upon a judgment of a learned single judge of this court in w.p. nos. 16514 of 1984, 326 of 1985 and 327 of 1985 wherein this court has directed in similar circumstances payment of interest. but i am sorry to say that that judgment has not discussed the provisions of the essential commodities act. it must be noted that the petitioner's case for payment of interest is based upon the statutory provisions of the essential commodities act. this court can merely direct the payment of interest if it finds the statute created such an obligation against the petitioner. the question therefore is to be examined on the point of the provision whether s. 6-a of the ec. act deals with the confiscation proceedings to be conducted by the collector. the collector has power under that section to decide whether a trader has committed any contravention of law with respect to those goods seized. if he finds any such contravention as having been committed by the trader he will confiscate the goods. on the other hand if he finds there and no contravention he would refuse to pass the order of confiscation. in the latter situation the trader would be entitled for the return of the goods. section 6-a of the e.c. act deals with that situation. section 6-a also deals with the situation that may arise by reason of sale of goods. in that case s. 6-a directs the authorities to return the sale proceeds to the trader after deducting reasonable expenses incurred in conducting the sale. thus under s. 6-a there is no provision for payment of any interest to the trader if the goods had been seized and later sold but was finally found no contravention of any provision of law. it is, therefore, clear that in the case of the petitioner which falls under s. 6-a, there is no statutory obligation to pay any interest. the only obligation is to return the goods or sale proceeds. 4. it is under s. 6-c the statute imposed a duty upon the authorities to pay interest. under sub-s.(2) of s. 6-c, when an order of confiscation passed under s. 6-a is modified or annulled by the state government in appeal or where in a prosecution instituted for the contravention of the order in respect of which an order of confiscation has been made under s. 6-a the person concerned is acquitted the authorities shall return the goods seized or pay the sale proceeds of the goods seized together with reasonable interest in case the goods were already sold. it is plain that the case of the petitioner does not fall within the parameters of s. 6-c of the essential commodities act. section 6-c deals with post- confiscation situation whereas a consequence of allowing of an appeal filed by the trader against the orders of confiscation passed by the collector under s. 6-a, the question of return of goods or their value becomes relevant. the situation arising out of mere disposal of goods followed by their sale is not within the scope of s. 6-c. where an essential commodity is sold under sub-sec.(2) of s. 6-a pending disposal of the confiscation proceedings which ended in passing no confiscation order by the collector, section 9a merely directs return of the goods or its value subject to the deduction of expenses of any sale. thus s. 6-a does not contemplate payment of any interest' it is only s. 6-c of the act that deals with the situation arising out of the appeal filed by the trader when an order of confiscation was passed, the section authorises payment of interest. section 6-c will have no application to the present case since no order of confiscation has been passed by the collector. in view of the above the petitioner whose case attracts s. 6-a without. reaching the appellate stage of s. 6-c, is not entitled to payment, of any interest. he is merely entitled to refund of sale proceeds. the petitioner's reliance on the judgment in w.p. 16514 of 1984 etc., is wholly incorrect. the learned single judge merely observed without noticing the distinction between s. 6a and s. 6-c that the petitioner before him was 'entitled to the value of the seized wheat at the rate of rs.210/- per quintal' and 'also entitled to interest at the rate of 6/o p. a. from the date of seizure till the date of payments, as contemplated under sub-cl. (2) of s. 6-a of the essential commodities act.' with respect i cannot agree with this view. section 6-a never contemplates payment of interest. it must be mentioned that the writ petition is not an appeal in equity. it is doubtful whether a suit could be maintained at all in this case. it is clear that the writ petitioner is this case seeks enforcement of statutory liability. since i do not find any such liability created by the statute, i think even a writ court cannot fasten that liability to the state. in view of the fact that statutory liability to pay interest attaches itself only to a case failing under s. 6-c and not s. 6-a, i dismiss this writ petition. no costs. advocate's fee rs.250/-. 5. petition dismissed.

Judgment:
ORDER

1. The petitioner is a business partnership. This Writ Petition is filed claiming payment of interest from the respondent State authorities under the Essential Commodities Act. The case of the petitioner is that it has sent a consignment of 320 bags of wheat by Railways to Kachiguda Railway Station and those goods were seized by the authorities under the Essential Commodities Act at Kachiguda for alleged contravention of the Essential Commodities Act and the Rules into which it is not necessary to go in this Writ Petition. All that we should notice is that after the goods were seized, the Collector held an inquiry into the alleged contravention under the Act and the Rules. The Collector held under S. 6-A of the F-C. Act that there was no contravention of the Act or the Rules committed by the petitioner. Accordingly he passed no orders of confiscation of the goods earlier seized by the department. Thus the petitioner was entitled for the return of the goods. But while the proceedings were pending before the Collector, the authorities acting in pursuance of certain directions given by this court, sold away those goods. As a result the goods were not available to be returned. The department has, therefore, paid only the sale proceedings of those goods. Now in this Writ Petition the petitioner says that he must be paid not only the sale proceeds of the goods but also interest at 6% on the price of the goods. This Writ Petition is filed for a declaration that -the action of the respondent in refusing to pay interest is arbitrary and illegal and also for a direction to pay the petitioner interest at 6% on a sum of Rs.67,000/- which represents the value of 320 quintals of goods sold.

2. This Writ Petition is opposed by the respondent Government wholly on the basis of law. The facts stated above are not in dispute. The Government's contention is that on the agreed facts of this case the petitioner would not be entitled to be paid under law any interest. According to it the petitioner would be entitled to be paid only the value of the goods seized and sold.

3. The petitioner who appeared as party in person did not refer to any provisions of the Act. He merely relied upon a judgment of a learned single Judge of this Court in W.P. Nos. 16514 of 1984, 326 of 1985 and 327 of 1985 wherein this Court has directed in similar circumstances payment of interest. But I am sorry to say that that judgment has not discussed the provisions of the Essential Commodities Act. It must be noted that the petitioner's case for payment of interest is based upon the statutory provisions of the Essential Commodities Act. This Court can merely direct the payment of interest if it finds the statute created such an obligation against the petitioner. The question therefore is to be examined on the point of the provision whether S. 6-A of the EC. Act deals with the confiscation proceedings to be conducted by the Collector. The Collector has power under that Section to decide whether a trader has committed any contravention of law with respect to those goods seized. If he finds any such contravention as having been committed by the trader he will confiscate the goods. On the other hand if he finds there and no contravention he would refuse to pass the order of confiscation. In the latter situation the trader would be entitled for the return of the goods. Section 6-A of the E.C. Act deals with that situation. Section 6-A also deals with the situation that may arise by reason of sale of goods. In that case S. 6-A directs the authorities to return the sale proceeds to the trader after deducting reasonable expenses incurred in conducting the sale. Thus under S. 6-A there is no provision for payment of any interest to the trader if the goods had been seized and later sold but was finally found no contravention of any provision of law. It is, therefore, clear that in the case of the petitioner which falls under S. 6-A, there is no statutory obligation to pay any interest. The only obligation is to return the goods or sale proceeds.

4. It is under S. 6-C the statute imposed a duty upon the authorities to pay interest. Under sub-s.(2) of S. 6-C, when an order of confiscation passed under S. 6-A is modified or annulled by the State Government in appeal or where in a prosecution instituted for the contravention of the order in respect of which an order of confiscation has been made under S. 6-A the person concerned is acquitted the authorities shall return the goods seized or pay the sale proceeds of the goods seized together with reasonable interest in case the goods were already sold. It is plain that the case of the petitioner does not fall within the parameters of S. 6-C of the Essential Commodities Act. Section 6-C deals with post- confiscation situation whereas a consequence of allowing of an appeal filed by the trader against the orders of confiscation passed by the Collector under S. 6-A, the question of return of goods or their value becomes relevant. The situation arising out of mere disposal of goods followed by their sale is not within the scope of s. 6-C. Where an essential commodity is sold under sub-sec.(2) of S. 6-A pending disposal of the confiscation Proceedings which ended in passing no confiscation order by the Collector, Section 9A merely directs return of the goods or its value subject to the deduction of expenses of any sale. Thus S. 6-A does not contemplate payment of any interest' It is only S. 6-C of the Act that deals with the situation arising out of the appeal filed by the trader when an order of confiscation was passed, the Section authorises payment of interest. Section 6-C will have no application to the present case since no order of confiscation has been passed by the Collector. In view of the above the petitioner whose case attracts S. 6-A without. reaching the appellate stage of S. 6-C, is not entitled to payment, of any interest. He is merely entitled to refund of sale proceeds. The petitioner's reliance on the judgment in W.P. 16514 of 1984 etc., is wholly incorrect. The learned single Judge merely observed without noticing the distinction between S. 6A and S. 6-C that the petitioner before him was 'entitled to the value of the seized wheat at the rate of Rs.210/- per quintal' and 'also entitled to interest at the rate of 6/o p. a. from the date of seizure till the date of payments, as contemplated under sub-cl. (2) of S. 6-A of the Essential Commodities Act.' With respect I cannot agree with this view. Section 6-A never contemplates payment of interest. It must be mentioned that the writ petition is not an appeal in equity. It is doubtful whether a suit could be maintained at all in this case. It is clear that the writ petitioner is this case seeks enforcement of statutory liability. Since I do not find any such liability created by the Statute, I think even a writ court cannot fasten that liability to the State. In view of the fact that Statutory liability to pay interest attaches itself only to a case failing under S. 6-C and not S. 6-A, I dismiss this writ petition. No costs. Advocate's fee Rs.250/-.

5. Petition dismissed.