IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

WRIT PETITION No19540 OF 2019

% Dated 20.01.2020

#

Dasari Venkata Srinviasa Rao

Proprietor, Shanmukha Rice Traders

Shop No.24, Muslim Complex

Akividu, West Godavari District and another

….. Petitioners

Vs.

$

State of Andhra Pradesh

Rep. by its Principal Secretary

Department of Consumer Affairs

Food and Civil Supplies,

Secretariat, Velagapudi, Amaravati and two others

..Respondents

JUDGMENT PRONOUNCED ON: 20.01.2020

THE HON’BLE SRI JUSTICE M. SATYANARAYANA MURTHY

1. Whether Reporters of Local newspapers

may be allowed to see the Judgments?

2. Whether the copies of judgment may be marked

to Law Reporters/Journals

3. Whether Their Ladyship/Lordship wish to see

the fair copy of the Judgment?

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WP No.19540 of 2019

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* THE HON’BLE SRI JUSTICE M. SATYANARAYANA MURTHY

+ WRIT PETITION No19540 OF 2019

% Dated 20.01.2020

#

Dasari Venkata Srinviasa Rao

Proprietor, Shanmukha Rice Traders

Shop No.24, Muslim Complex

Akividu, West Godavari District and another

….. Petitioners

Vs.

$

State of Andhra Pradesh

Rep. by its Principal Secretary

Department of Consumer Affairs

Food and Civil Supplies,

Secretariat, Velagapudi, Amaravati and two others

..Respondents

! Counsel for the petitioner : M/s. Balaji Medamalli

^ Counsel for the respondent :

1. Learned Government Pleader for Civil Supplies

2. Learned Government Pleader for Home

<GIST:

> HEAD NOTE:

? Cases referred

1. AIR 1963 SC 666

2. AIR 2009 SC 3250

3. (1981) 2 SCC 45

4. (1998) 3 PLJR 911

5. AIR 1982 SC 58

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WP No.19540 of 2019

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THE HON’BLE SRI JUSTICE M.SATYANARAYANA MURTHY

WRIT PETITION No.19540 OF 2019

ORDER:

This writ petition is filed under Article 226 of the Constitution

of India, to issue Writ of Mandamus, declaring the action of the

respondent authorities in seizing 150 Quintals (50 kgs x 30 bags) of

broken rice along with lorry bearing No.AP 16Y 3886, initiating

proceedings under Section 6-A of the Essential Commodities Act,

pursuant to the panchanama dated 06.11.2019 and also registering

Crime No.282 of 2019 for the offence punishable under Section 420

of Indian Penal Code (for short ‘I.P.C’) and Sections 7(1) and 7(A) of

the Essential Commodities Act,1955, as highly illegal, arbitrary and

violative of provisions of Essential Commodities Act and Andhra

Pradesh State Targeted Public Distribution System (Control) Order,

2018 (for short ‘Control Order, 2018’), consequently direct the

respondent authorities to release the seized stock under cover of

panchanama dated 06.11.2019 and lorry bearing No.AP 16Y 3886

forthwith.

The first petitioner herein is a proprietor and trader of rice and

the second respondent is the owner-cum-driver of lorry bearing

No.AP 16Y 3886. Both the petitioners jointly filed this petition for the

relief stated above, alleging that the first petitioner is carrying on rice

business for the past seven years and the second petitioner is the

owner-cum-driver of lorry bearing No.AP 16Y 3886. The broken rice

purchased from various persons was sold in favour of M/s. Maruthi

Poultry Farm, Khandavalli, Peravalli Mandal, as the stock of 150

Quintals was sold under a bill dated 05.11.2019 and the entire stock

of 300 bags weighing 50 kgs each was loaded in the lorry bearing

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No.AP 16Y 3886. While the lorry was on its way, the fourth

respondent intercepted the vehicle and seized entire stock of broken

rice along with the lorry, suspecting that this stock in transit is

Public Distribution System (PDS) rice and after the seizure, rice and

lorry bearing No.AP 16Y 3886 was handed over to the third

respondent. The third respondent initiated proceedings under Section

6-A of Essential Commodities Act before the second respondent.

Aggrieved by the same, the present writ petition is filed before this

Court.

The main ground urged before this Court is that the rice was

taken out of the Essential Commodities Act, 1955, by way of an order

passed by the Ministry of Consumer Affairs, Food and Public

Distribution, Government of India in G.S.R.104(E) dated 15.02.2002

by exercising powers conferred under Section 3 of Essential

Commodities Act, 1955, under Removal of (Licensing Requirements,

Stock Limits and Movement Restrictions) on Specified Food Stuffs

Order, 2002. The same has been extended from time to time.

Therefore, there is no restriction in the movement, stocking of rice,

but the fourth respondent has intercepted the vehicle and seized the

entire stock and initiated proceedings apart from proceedings under

Section 6-A of the Essential Commodities Act. Therefore, the very

seizure of rice or broken rice under the cover of panchanama on the

pretext that it is Public Distribution System (PDS) rice and also

seizure of lorry bearing No.AP 16Y 3886 is illegal and arbitrary.

It is further contended that the lorry bearing No.AP 16Y 3886 is

having valid permit and the driver is also having a valid license and

that apart, the Government of India exempted paddy and rice from

the purview of Essential Commodities Act with a liberty to the State

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Government concerned to save any of the Control Orders which are

required to be continued. Except the Rice Procurement Levy Control

Order, 1984, no other control order including the Public Distribution

Order, 2008 was saved. Even the present Control Order, 2018 is also

not saved. Thus, there is no restriction either on the movement or on

stocking of the rice, but, seized the stock and lorry, initiated criminal

prosecution and so also proceedings under Section 6-A of Essential

Commodities Act, erroneously and contrary to the law and requested

to declare the action of the respondent authorities in seizing 150

Quintals (50 kgs x 30 bags) of broken rice along with lorry bearing

No.AP 16Y 3886 and also initiating proceedings under Section 6-A of

the Essential Commodities Act, pursuant to the panchanama dated

06.11.2019 and also registering Crime No.282 of 2019 for the offence

punishable under Section 420 of I.P.C and Sections 7(1) and 7(A) of

the Essential Commodities Act,1955, as highly illegal, arbitrary and

violative of provisions of Essential Commodities Act and Control

Order, 2018 and consequently to direct the respondent authorities to

release the seized stock under cover of panchanama dated

06.11.2019 and lorry bearing No.AP 16Y 3886 forthwith.

At the stage of admission, Sri Balaji Medamalli, learned

counsel for the petitioner vehemently contended that, when there is

no restriction on movement and stocking of rice/broken rice, in view

of G.S.R.104(E) dated 15.02.2002, registration of crime and initiation

of proceedings, seizing the rice/broken rice and vehicle is illegal.

Whereas, learned Assistant Government Pleader for Civil

supplies placed on record, written instructions dated 02.12.2019

received by him, admitting seizure of both stock and lorry bearing

No.AP 16Y 3886, as the stock being transported is PDS rice. Since

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the lorry is transporting PDS rice distributed to Below Poverty Line

Cardholders in Ajjamuru and neighbouring villages of Akiveedu

Mandal and in turn selling the same in bulk is nothing but illegal

transportation of PDS rice from Akiveedu to the poultry farms in

Khandavalli Village of Peravali Mandal, Eluru, West Godavari

District. Therefore, illegal procurement and transportation of PDS

rice is violative of Clauses 19 (e)(f) and 20(j) of the Control Order,

2018 and thus violated Control Order, 2018. Therefore, seizure of

lorry bearing No.AP 16Y 3886 and PDS rice collected from B.P.L.

cardholders is in accordance with the provisions of the Control

Order, 2018, initiation of proceedings under Section 6-A of Essential

Commodities Act is also in accordance with law and requested to

dismiss the petition.

The undisputed facts are that, the first petitioner is

transporting rice of 150 Quintals (300 bags x 50 kgs) in lorry bearing

No.AP 16Y 3886, stock and lorry were seized in the mid-way while

transporting to M/s. Maruthi Poultry Farm of Khandavalli Village of

Peravali Mandal of West Godavari District, so also proceedings wee

initiated under Section 6-A of Essential Commodities Act, Crime

No.282 of 2019 on the file of Undi Police Station was registered

against these petitioners. The only dispute is whether such

transportation of P.D.S rice is violative of Control Order, 2018, and

attracts Section 6-A of Essential Commodities Act.

Clause 19 of the Control Order, 2018 deals with Prohibition

against applying for fresh/duplicate ration card or misuse of

commodities. According to Sub-clause (e) of Clause 19, no person

shall resort to resale the commodities drawn under Targeted Public

Distribution system either with collusion of fair price shop

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dealer/other person leading to recycling/change of quality, exchange

etc. According to Sub-clause (f) of Clause 19, no purchase shall

purchase rice supplied/intended for supply through Public

Distribution System either from the cardholder or from the fair price

shop dealer or any middle man or other source. Otherwise, such fair

price shop dealer or middle man or other person involved shall be

liable for criminal action and imposition of penalty as may be fixed by

the competent authority.

Clause 20 of the Control Order, 2018, deals with power of

entry, inspect, search and seize the scheduled commodities, ask

questions for production of documents etc. According to Sub-clause

(j) of Clause 20 of the Control Order, 2018, the inspecting authorities

as and when found any vehicle involved in diversion of scheduled

commodities shall send a report to the concerned Transport

Department Officials recommending for cancellation of driving license

of the driver and goods carrier certificates of such vehicle besides

seizing of scheduled commodities along with vehicle involved and file

complaint under Section 6-A of Essential Commodities Act, 1955,

before the District Collector/Joint Collector as the case may be and

file complaint under Section 7 of Essential Commodities Act, 1955

and the provisions of Criminal Procedure Code attracts to this case

before the Station House Officer concerned.

On overall consideration of this provision of Control Order,

2008, equivalent to the provisions referred above of Control Order,

2018, purchase of resale of rice supplied under Public Distribution

System is an offence. Though, the movement of stocking of rice is

deleted from the provisions of Essential Commodities Act, still,

purchase of essential commodities i.e P.D.S rice is an offence.

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Therefore, initiation of proceedings for violation of Clause 19(e) & (f)

by the inspecting authorities in terms of Clause 20(j) of the Control

Order, 2018 cannot be declared as illegal and arbitrary.

Thus, transporting Public Distribution System Rice before it

reaches the intended beneficiaries i.e. card-holders amounts to

interruption of Public Distribution process under A.P. State Public

Distribution System (Control) Order 2008. Similarly, purchase or

resale of PDS rice is an offence under Clause 19 of the Control Order,

2019. The word 'any person' referred in Clause 19 of the Control

Order, 2018 indicates every person, who purchases or resales the

P.D.S. rice and such Public Distribution Process is liable for

punishment under Sub-clause (f) of Clause 19 of the Control Order,

2019. At the same time, if any person contravenes any provisions of

the Control Order, he/she shall be liable for punishment under

Section 7 of the Act. Vide Clause 21(d) of Control Order. Any

authorized fair price shop dealer or any other person who interfere

with the process of distribution or abet the contravention of any of

the provisions of this Order or the terms and conditions of

authorization or the directions issued by the State Government,

Commissioner or appointing authority, shall be prosecuted by the

respective Station House Officer on receipt of report from the

inspecting authority vide Clause 22(2).

Section 7 deals with penalties against a person, who

contravened any of the order made under Section 3 of the Essential

Commodities Act.

Section 3 of the Essential Commodities Act deals with powers

to control production, supply, distribution, etc. of essential

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commodities and it permits the Central Government to pass any

control order for securing equitable distribution of essential

commodities and availability of fair prices or for securing any

essential commodity for the defence of India or the efficient conduct

of military operations, and provide for regulating or prohibiting the

production, supply and distribution thereof and trade and commerce

therein by any order. Thus, A.P. State Public Distribution System

(Control) Order, 2008 is a control order issued by the Government in

exercise of power conferred under Section 3 of the Essential

Commodities Act.

In any prosecution for any offence under the Essential

Commodities Act which requires a culpable mental state on the part

of the accused, the Court shall presume the existence of such mental

state but it shall be a defence for the accused to prove the fact that

he had no such mental state with respect to the act charged as an

offence in that prosecution as per Section 10-C of the Essential

Commodities Act. "Culpable mental state" includes intention, motive,

knowledge of a fact and the belief in, or reason to believe, a fact. For

the purpose of Section 10-C of the Act, a fact is said to be proved only

when the Court believes it to exist beyond reasonable doubt and not

merely when its existence is established by a preponderance of

probability. Thus, the statutory presumption shall be drawn as per

Section 10-C of the Act, when the petitioners are found transporting

PDS rice. In the prosecution, if any, launched against them by filing

Charge Sheet would give raise to a defence that he had no mens rea

and in the event of his failure to rebut the presumption, the Court

can presume that the petitioners/accused have committed an

offence.

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Learned counsel for the petitioner would contend that, when no

enquiry is conducted to find out whether the rice seized is a broken

rice is P.D.S rice, seizure of stock and lorry for the alleged

contravention of Sub-clauses (e) & (f) of Clause 19 of the Control

Order, 2018, is a serious illegality, more particularly, movement of

rice is removed from Section 3 of Essential Commodities Act.

Learned Assistant Government Pleader for Home contended

that when the crime is registered under Section 420 of I.P.C., proof of

possession of PDS rice is sufficient and the Court can conclude that

it is only for wrongful gain. In support of his contention, he placed

reliance on a judgment of the Apex Court rendered in Tulsi Ram v.

State of U.P

1, wherein it is held that it was not necessary to prove

that there occurred wrongful gain and wrongful loss; establishment

of one of them either wrongful gain or wrongful loss is sufficient to

convict the accused for the offence of cheating.

Learned Assistant Government Pleader for Home further

contended that when the petitioner sought for quashing of

proceedings at the threshold i.e. proceedings initiated under Section

6-A of the Essential Commodities Act and Crime No.282 of 2019,

instead of release of P.D.S. rice and lorry bearing No.AP 16Y 3886

which was transporting the alleged P.D.S rice stock, the Court has to

exercise its discretionary power sparingly keeping in mind various

principles laid down by the Apex Court and in support of this

contention, he placed reliance on a judgment reported in Chunduru

Siva Ram Krishna and Another. v. Peddi Ravindra Babu and

Another

2, where the Apex Court held that when at an initial stage a

1 AIR 1963 SC 666

2

AIR 2009 SC 3250

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prosecution is asked to be quashed, the test to be applied by the

court is as to whether the uncontroverted allegations as made in the

complaint filed prima facie establish the offence. But at this stage,

the principle laid down in the above said judgment is not relevant to

the present facts of the case.

Learned Assistant Government Pleader for Home placed

reliance on K. Janardhan Pillai and another v. Union of India and

others

3 to contend that rice being transported is recycled PDS rice

and it is food stuff within the definition of section 2 (a) (v) of the

Central Act and the Apex Court defined the food stuff as follows:

"'Foodstuffs' in the wider sense as including all

articles of food which may be consumed by human

beings after processing. It is in this wider sense that

the said term has been understood by Indian Courts

as can be seen from some of the decisions to which

the Court shall presently refer."

Having regard to the history of legislation relating to foodstuffs

dealt with above and the object of the Central Act which regulates the

production, supply and distribution of essential commodities

amongst the poverty-stricken Indian people, the expression

'foodstuffs' should be given a wider meaning as including even raw

materials which ultimately result in edible articles. Any interpretation

that may be given in this case should not be governed by its

consequence on the impugned Order but in the light of the

importance of the Central Act in the context of the national economy.

A narrow interpretation may result in the exclusion of several articles

from the purview of the Central Act although nobody has entertained

any doubt so far about their being essential commodities. Further, in

the said judgment, the Apex court held that, it is well known that the

3

(1981) 2 SCC 45

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food eaten by human beings consists of cereals like wheats rice of

other coarse grains, pulses, oilseeds, vegetables, sugar, fruits and

nuts, animal foodstuffs and sea food like meat, beef, mutton and fish

and dairy products like milk, butter, eggs etc. According to Webster's

Third New International Dictionary, the word 'food' means fodder'

also. One of the meaning of the word 'food' given in that Dictionary is

'material consisting of carbohydrates, proteins and supplementary

substances (as minerals, vitamins) that is taken or absorbed into the

body of an organism in order to sustain growth, repair, and all vital

processes and to furnish energy for all activity of the organism'. In

the same Dictionary 'foodstuff' is defined as 'a substance with food

value' and 'the raw material of food before or after processing'. One of

the usages of the said word is given as 'a bountiful crop of cereal

foodstuffs'. Therefore, 'foodstuff' need not necessarily mean only the

final food product which is consumed. It also includes raw food

articles which may after processing be used as food by human

beings.

By relying on the above judgment, learned Assistant

Government Pleader for Civil Supplies contended that the petitioners

found transporting recycled PDS rice, which is food stuff and also

comes within the definition of ‘Food Stuff’. Thereby, transporting

such food stuff is nothing but contravention of A.P. State Public

Distribution System (Control) Order, 2018. Same principle was laid

down by the Patna High Court in Raj Kiran Das v. The State of

Bihar & Another

4.

Finally, it is contended by the learned Assistant Government

Pleader for Home that, when it is alleged that the petitioners

4

(1998) 3 PLJR 911

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contravened a particular control order, which is in force and covered

by the Essential Commodities Act, they have to comply with the same

and failure to comply with the specific control order would amount to

an offence and in support of his contention he placed reliance on a

judgment of the Apex Court rendered in State of Bihar v. Gulab

Chand Prasad

5, wherein the accused violated the statutory order

covering Soda ash, which is in force by then, and the dealer violated

Clauses 3 and 4 of the Order. When the accused approached the

Court to quash the proceedings, High Court quashed the complaint,

but the matter carried to the Supreme Court. The Supreme Court

made a serious comment that it is unwise to ignore the existence of a

subsisting order and to dispose of a proceeding as if no such order

was there and set aside the order of High Court quashing the

complaint.

In the present case, though, the movement of rice is removed

from Section 3 of the Essential Commodities Act, but still, the

Control Order, 2018 controls such resale and purchase of PDS rice

either directly from dealer or middlemen or the cardholders and

prescribed penalties besides criminal prosecution against the person

against who flouted Clause 19 of the Control Order, 2018. But, the

allegations made in the mediators report and F.I.R in Crime No.282

of 2019 are suffice to conclude prima facie that the petitioners

contravened Sub-clauses (e) & (f) of Clause 19 of the Control Order,

2018, which is penal in nature, such person who interrupted public

distribution is liable for prosecution as per Clause 19(f), 21(d) and

22(2) of the Control Order, 2018.

5

AIR 1982 SC 58

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The allegations made in the F.I.R discloses commission of an

offence and when the officials under the Control Order, 2018

intercepted the vehicle and found transporting PDS rice in

contravention of Sub-clauses (e) & (f) of Clause 19 of the Control

Order, 2018, by exercising power under Article 19(f), 21(d) and 22(2)

of the Control Order, 2018, the same cannot be said to be an

illegality. If, the prosecution is able to prove that the PDS rice was

diverted to the black market or otherwise in contravention of Sub-

clauses (e) & (f) of Clause 19 of the Control Order, 2018, by

producing satisfactory evidence that the rice being transported was

PDS rice, the prosecution may succeed unless presumption under

Section 10(c) of Essential Commodities Act is rebutted. Therefore,

mere release of the rice i.e. ordinary rice in the movement of rice in

the public market would not enure any benefit to transport PDS rice

by purchase or resale in contravention of Sub-clauses (e) & (f) of

Clause 19 of the Control Order, 2018. Therefore, initiation of

criminal prosecution against these petitioners vide Crime No.282 of

2019 and proceedings under Section 6-A of the Essential

Commodities Act for seizure of PDS rice stock allegedly found being

transported and the lorry, exercising power under Section 6-A of

Essential Commodities Act cannot be said to be a serious illegality

and therefore, I am unable to accept the contention of the learned

counsel for the petitioners, while upholding the contention of the

learned Assistant Government Pleader for Civil Supplies holding that

there is prima facie material that these petitioners contravened

Sub-clauses (e) & (f) of Clause 19 of the Control Order, 2018, as

seizure of both rice stock and lorry is in consonance with the power

conferred by Clause 20 of the Control Order, 2018, subject to

establishing that the stock seized is PDS rice purchased from the

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cardholders or middlemen or from the fair price shop dealer(s). Such

question would arise only during trial, but not at this stage.

Therefore, on any of the grounds, more particularly, that movement

and stocking of rice is outside the purview of Section 3 of Essential

Commodities Act, the proceedings initiated against these petitioners,

both criminal and proceedings under Section 6-A of Essential

Commodities Act cannot be set-aside and if the petitioner is entitled

to claim interim custody of the rice stock of the vehicle, the

petitioners are at liberty to file appropriate application under Sub-

Section (2) of Section 6-A of Essential Commodities Act before the

Joint Collector, where Section 6-A of Essential Commodities are

pending or before the jurisdictional Magistrate before whom the lorry

and stock is seized is produced by the authorities concerned in

connection with Crime No.282 of 2019 by filing an application under

Section 451 of Cr.P.C and on filing such application either before the

Joint Collector under Sub-section (2) of Section 6-A of Essential

Commodities Act or before the jurisdictional Magistrate, the same

shall be disposed of in accordance with law, within a week from the

date of filing such application.

On overall consideration of the entire material on record, I find

no ground to quash the proceedings in Crime No.282 of 2019 on the

file of Undi Police Station, West Godavari District or proceedings

initiated before the Joint Collector under Section 6-A of the Essential

Commodities Act and also do not find any ground to release both the

stock and lorry bearing No.AP 16Y 3886. Consequently, the writ

petition is liable to be dismissed, as it is devoid of merits, leaving it

open to the petitioners to take appropriate steps, as discussed above.

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In the result, writ petition is dismissed. No costs.

Consequently, miscellaneous petitions pending if any, shall

stand dismissed.

__________________________________________

JUSTICE M. SATYANARAYANA MURTHY

Date:20.01.2020

sp