Case Note & Summary
The matter concerned a writ petition filed by exporters engaged in the export of various seeds and grains, challenging the seizure of Safflower seeds, Sesame seeds, and Rice from their godown and seeking quashing of FIR No.II/22/2013 registered by Turbhe Police Station. The petitioners claimed valid IEC and export licences and were storing commodities for export in compliance with Central Government's Export Promotion Policies. They applied for a licence under Maharashtra Scheduled Commodities Wholesalers Licensing Order 1998 in 2010 as a precaution but received no decision. On 8 March 2013 authorities seized the goods and registered FIR, followed by a final confiscation order under Section 6-A of Essential Commodities Act 1955 on 17 May 2013. Petitioners contended no order under Section 3 existed, no allegation of hoarding or local sale, no mens rea, and that exporters did not require state wholesale licence. Respondents relied on affidavit and orders prior to 2014 requiring licence; also noted failure to comply with interim bank guarantee order. The High Court found merit in petitioners' submissions, noted that the FIR did not allege hoarding or price rise, and that without a Section 3 order, Section 6-A confiscation and Section 7 penalty could not be sustained. It also noted the respondents had suppressed a prior High Court stay order dated 20 April 2010 and proceeded in breach. The court deprecated unsubstantiated action based on suspicion and allowed the petition in terms of prayer clause (b), quashing the FIR and setting aside confiscation.
Headnote
A) Essential Commodities - Prosecution and Confiscation - Necessity of Order Under Section 3 - Essential Commodities Act, 1955, Sections 3, 6-A, 7 - The final Order of Confiscation dated 17 May 2013 under Section 6-A mentioned violation of Section 3 but no supporting control order was referenced or annexed - Court held that without an order under Section 3, neither an order under Section 6-A can be passed nor penalty under Section 7 can be levied; confiscation was arbitrary, illegal and unwarranted (Paras 5, 13). B) Essential Commodities - Licensing Requirement for Exporters - Maharashtra Scheduled Commodities Wholesalers Licensing Order, 1998 - Exporters holding valid IEC and export licences, storing commodities for export, not required to obtain wholesale licence - Court found Respondents failed to demonstrate any violation as petitioners were exporters and no allegation of hoarding or sale within State; also noted application for licence pending since 2010 without decision, suggesting lack of certainty (Paras 2, 3, 11, 12, 17). C) Administrative Law - Judicial Discipline and Arbitrary Action - Stay Order and Suppression of Material Facts - Constitution of India - Respondents suppressed High Court order dated 20 April 2010 which stayed further proceedings in similar export commodity matters, and proceeded to confiscate goods on 8 March 2013 in breach of that order - Court deprecated action based on suspicion alone as sheer harassment and held action illegal (Paras 14, 15, 16, 17). D) Essential Commodities - Export Policy and Seizure Restrictions - Removal of (Licensing Requirements, Stock Limits and Movement Restrictions) on Specified Foodstuffs (Amendment) Order, 2014 - Para 2.42.1 of Export Promotion Policy prohibits seizure disrupting export schedules; stock meant for exports excluded from stock limits after 10 January 2014 - Court relied on these provisions and absence of any order to quash FIR and allow petition (Paras 3, 8, 9, 18).
Issue of Consideration
Whether prosecution under Sections 7 and 10 of Essential Commodities Act, 1955 can be maintained in absence of any order under Section 3; Whether confiscation order under Section 6-A of Essential Commodities Act, 1955 can be passed without a supporting order under Section 3; Whether exporters storing commodities for export require licence under Maharashtra Scheduled Commodities Wholesalers Licensing Order, 1998; Whether State action was arbitrary due to suppression of stay order and non-processing of licence application
Final Decision
The Writ Petition was allowed in terms of prayer clause (b). The High Court quashed and set aside the FIR bearing Crime No.II/22/2013 registered by Turbhe Police Station and held the seizure and confiscation of commodities from the petitioners' godown to be illegal and arbitrary. The final Order of Confiscation passed under Section 6-A of the Essential Commodities Act, 1955 was set aside.
Law Points
- Confiscation under Section 6-A of Essential Commodities Act
- 1955 requires an order under Section 3
- penalty under Section 7 requires Section 3 order
- exporters holding valid IEC and storing commodities for export need no wholesale licence under Maharashtra Scheduled Commodities Wholesalers Licensing Order
- 1998
- authorities cannot act on suspicion alone
- suppression of High Court stay order renders action illegal
