2012 (7) TMI 1105 - SC - Indian Laws

Release of wheat - illegal storage of subsidized food grains - Quashing of confiscation proceedings - Essential Commodities Act 1955 - No legal owner or claimant of confiscated goods - black marketing - In the present case The SDO and other officers from the local police raided the premises of the said flour mill (respondent) and found off loading of wheat from Truck. It was found that the grains bags had the seal of Food Corporation of India (FCI). The seized material made it apparent that there had been diversion of FCI grains for the purpose of black marketing. HELD THAT - We are at pains to observe that the High Court has dealt with the issue in most casual and caviler manner without any application of mind showing complete disregard of the legislature enacting the provisions for general welfare. In the subsequent order dealing with the ownership of the wheat the High Court has only taken note of the fact that as the respondents herein were prepared to furnish adequate/sufficient security to the satisfaction of the court below for release of the wheat in question the wheat could have been released by the CJM there was no justification for the High Court to issue directions for release of such material merely because applicant could furnish the security. The High Court has totally ignored the fact that any order passed under Section 6-A is appealable under Section 6-C of the EC Act. Therefore to consider such an application for release of the goods was totally unwarranted at least at that stage. Learned counsel for the parties are not in a position to reveal the status of the criminal proceedings initiated against the respondents. In such a fact-situation as has been suggested by learned counsel for the parties we set aside the aforesaid judgments and orders dated 15.3.2011 and 29.4.2011 and remand the case back to the High Court to consider afresh after examining all factual and legal issues involved in the case. Till the disposal of the case afresh interim order passed by this Court on 31.10.2011 shall remain operative. The appeals stand disposed of accordingly.

Issues Involved:
1. Seizure of wheat under Essential Commodities Act, 1955
2. Legal validity of High Court orders releasing seized wheat
3. Interpretation of Sections 6-A and 6-E of Essential Commodities Act
4. Ownership of seized goods and release procedures
5. Judicial discretion in releasing seized goods

Analysis:

1. The appeals were filed against the judgments of the Patna High Court releasing a large quantity of wheat seized under the Essential Commodities Act, 1955. The raid on the flour mill revealed the diversion of Food Corporation of India grains for black marketing, leading to the seizure of wheat by the appellants.

2. The respondents filed a writ petition seeking the release of the confiscated goods, which was granted by the High Court. However, the Chief Judicial Magistrate dismissed the application for release due to lack of ownership proof. Subsequently, another petition was filed and allowed by the High Court for the release of the wheat.

3. The State contended that the High Court's orders disregarded statutory provisions of the EC Act, specifically Sections 6-A and 6-E. On the other hand, the respondents argued that these sections apply only when goods are seized under Section 3 of the Act, which was not the case here. They also claimed ownership of the seized materials.

4. The Supreme Court analyzed the provisions of the EC Act, emphasizing the government's power to control commodities for public interest. It noted that the High Court did not establish whether an order under Section 3 was issued and questioned the High Court's decision on ownership without sufficient evidence.

5. Referring to previous judgments, the Court clarified that the release of seized commodities is limited to public interest and sale for equitable distribution. It criticized the High Court's casual approach and lack of reasoning in releasing the wheat, highlighting the potential misuse of such releases by unauthorized parties.

6. The Court emphasized that courts should not issue directions contrary to law and must uphold statutory provisions. It highlighted the appeal process under the EC Act for orders issued under Section 6-A, indicating that the High Court's intervention for release was premature.

7. Ultimately, the Supreme Court set aside the High Court's judgments and remanded the case for a fresh examination of all legal and factual aspects. The interim order was to remain in effect until the case was reconsidered, emphasizing the importance of a comprehensive review of the issues involved.

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