Case Note & Summary
The applicant, Chirag Jagdish Agarwal, held a license to run a petrol and diesel pump named 'Vinayak Petrol Pump' at Mota Kapaya, Taluka Mundra. On 29 August 2005, a surprise inspection was conducted by the Mamlatdar, Mundra, who suspected irregularities and seized 2267.84 liters of diesel (worth Rs. 74,022) and 3757.60 liters of petrol (worth Rs. 1,65,146), totaling Rs. 2,39,168. A show-cause notice was issued alleging irregularities in the diesel stock, including illegal transportation of 12,000 liters of diesel (exceeding the permissible limit of 2,500 liters) and sale of 4,000 liters to Balaji Lifter, as well as interpolation in diesel bills. However, no irregularities were alleged regarding the petrol stock. Despite this, the Collector, Bhuj, passed an order under Section 6-A of the Essential Commodities Act confiscating both petrol and diesel. The applicant appealed to the Sessions Court, which dismissed the appeal by judgment dated 14 November 2011. The applicant then filed a revision application under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973. The High Court considered the submissions of the applicant's counsel, who argued that the confiscation of petrol was illegal as the show-cause notice only pertained to diesel irregularities, and the Sessions Court had misinterpreted the law in M.D. Agency vs. State of Gujarat. The State opposed, arguing that irregularities were found in the diesel stock. The High Court held that the confiscation of petrol was without basis as no irregularities were alleged or found in respect of petrol. The court allowed the revision application, set aside the confiscation of petrol, and directed the release of the petrol stock or its value to the applicant. The confiscation of diesel was upheld.
Headnote
A) Essential Commodities Act, 1955 - Confiscation of Goods - Section 6-A - Specific Irregularities Required - The confiscation of petrol was held invalid as the show-cause notice alleged irregularities only in respect of diesel, and no irregularities were found in the petrol stock. The court held that goods not liable to confiscation cannot be seized merely because other goods are irregular. (Paras 2, 4, 6) B) Criminal Procedure Code, 1973 - Revision - Section 397 read with Section 401 - Appellate Court's Duty - The appellate court must consider the defense raised by the party and cannot ignore specific submissions. The Sessions Court erred in not addressing the applicant's defense that petrol was not liable to confiscation. (Paras 4, 6) C) Essential Commodities Act, 1955 - Seizure - Section 6-A - Proportionality - The seizure of petrol worth Rs. 1,65,146/- was set aside as the irregularities pertained only to diesel, and the confiscation of petrol was disproportionate and without basis. (Paras 2, 6)
Issue of Consideration
Whether the confiscation of petrol was valid when the show-cause notice alleged irregularities only in respect of diesel, and whether the appellate court erred in not considering the applicant's defense.
Final Decision
Revision application allowed. The order of confiscation of petrol is set aside. The respondent is directed to release the petrol stock or its value to the applicant. Confiscation of diesel is upheld.
Law Points
- Confiscation of goods must be based on specific irregularities found
- not on general suspicion
- goods not liable to confiscation cannot be seized merely because other goods are irregular
- show-cause notice must specify the goods alleged to be irregular
- appellate court must consider defense raised by the party.
